ANALYST€¦ · curb the menace of tax-evasion, terrorism financing etc. in the beginning of this year, head of European Central Bank, Mario Draghi announced that the bank is thinking

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November (1 to 15), 2016Current ANALYST

Current

With the changing pattern of IAS and preparation methodology,now the aspirant is facing the issue of information overload. Theproper articulation of information is important for penning downone’s thoughts in the Mains answer.

Thus GSSCORE is coming up with “CURRENT ANALYST” – amagazine that provides material on contemporary issues withcomplete analysis.

The material has been designed in lucid and QnA format sothat an aspirant can develop thinking process from Basic toAdvance while reading the topic.

This will enhance the informative and analytical knowledgeof aspirants.

All the best !!!

Objective

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Current ANALYSTNovember (1 to 15), 2016

• Joint Military Exercises and India's Military Readiness

• Nuclear Deal with Japan

• Assessment of State Implementation of Business Reforms 2016

• Energy Efficiency Implementation Readiness Index

• Sendai Framework on Disaster Risk Reduction

• “PROGRESS PANCHAYAT” Initiative

• Niti Aayog Launches Agricultural Marketing & Farm Friendly Reforms Index

• Smog and its impact

• India-Sri Lanka Fishermen Issue

• Northeast key to ‘Act East’

• Make in India- “Electronics & IT Sector”- Achievement Report

• Media: Role and Censorship issue

• Indo-Bhutan Bilateral Trade Agreement

• National food security Act implemented

• Miscellaneous news

Contents

Current ANALYST

COVER STORY

5-10SPECIAL ISSUES 11-57

DEMONETISATION ANDBLACK MONEY

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In a special broadcast on 8 November, PM Modi declared to the country that in lessthan four hours, Rs. 500 and Rs. 1,000 bills would be demonetized, thereby withdrawingtheir status as legal tender. PM Modi pointed out that the objectives behind such abold measure of demonetisation were to curb terror financing, limit corruption anddiscourage tax evasion on undeclared income, colloquially known as “black money”

DEMONETISATION AND BLACKMONEY

COVER STORY

Context

The Indian economy has continuously

recorded high growth rates and has become an

attractive destination for investments. However,

corruption is the biggest bane for us. India is on

number 70 on corruption index. Corruption and

black money through decades is pushing the

country backwards. The recent unearthing of

corruption cases has thrown light on the dark

side of the growth that is rise of the black money

circulation in the economy.

In the past, despite several official efforts to

trace and recover black money, India has not

registered any major success. But now the noose

is tightening around tax evaders. Be it the

implementation of the goods and services tax

(GST) or the greater use of technology to link and

profile translations or the stepped up international

exchange of information between countries, the

chances of tax evaders coming under the tax

department’s scanner is increasing.

In a special broadcast on 8 November, PM

Modi declared for the demonetisation of Rs. 500

and Rs. 1,000 thereby withdrawing their status

as legal tender. PM Modi pointed out that the

objectives behind such a bold measure of

demonetisation is to curb terror financing, limit

corruption and discourage tax evasion on

undeclared income, colloquially known as “black

money”.

New rules and guidelines issued by the

government:

Cash deposits in bank and post office

accounts above a certain limit—between

9 November and 30 December 2016—will get

reported to the income tax department. The

Central Board of Direct Taxes (CBDT) has

amended certain income tax rules to track the

unaccounted money making its way into bank

and post office accounts post demonetization.

All public sector banks and some private sector

ones have agreed to waive the transaction

cost for all payments made through debit

cards till 31 December.

The government announced for providing that

it will provide Rs. 21,000 crore to district

central cooperative banks (DCCBs)

through NABARD to provide loans to

farmers to meet their credit requirements

during the winter crop season. The Reserve

Bank of India has prohibited DCCBs from

dealing with old currencies after demonetization

of Rs. 500 and Rs. 1,000 banknotes was

announced.

Indian Railways also has agreed to waive

service charges on online ticket booking

till 31 December.

For smoother digital payments at the toll

plazas and to avoid waiting time, vehicle

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manufacturers have been advised to provide

Electronic toll collection (ETC) compliant Radio-

frequency identification (RFID) facility in new

cars.

Telecom operators have decided to dropa fee levied on mobile bankingtransactions, supporting the government’sdemonetization of high-value currency notesand the consequent spike in cashlesstransactions.

Parallel economy in India

Black money or unaccounted moneycirculating is a big menace to the economy.

In a common parlance, black money refersto the money which is generated throughillegitimate means or by bypassing taxation system.Generation of black money in social, economicand political space has a debilitating effect onthe conduct of public policy and the institutionsof governance in the country. Black moneytogether with counterfeit currency is alsoassociated with crime and terrorism. While thereis no official estimate of quantum of black moneyin India or abroad, a 2010 World Bank Report onshadow economies estimated it at 31 per cent ofGDP of 162 countries in 2007 with India’s estimatepegged at 20.7 per cent of GDP comparingfavourably with the world average. There havebeen other estimates which have placed size ofIndia’s parallel economy at higher levels includinga recent FICCI report which has estimated it toas high as 75 per cent of GDP.

What are the various measures taken byGovt to curb Black Money?

The Union Cabinet on May 2014, approved theconstitution of a Special Investigating Team(SIT) to implement the decision of theHonourable Supreme Court on large amountsof money stashed abroad by evading taxes orgenerated through unlawful activities.

The Black Money (Undisclosed Foreign Incomeand Assets) and Imposition of Tax Act, 2015’came into force on July 1, 2015, to specificallyand more effectively deal with undisclosedincome.

For the investigation of Panama Paper leaks,the government brought in Constitution of Multi-Agency Group (MAG) with officers of the CentralBoard of Direct Taxes (CBDT), Reserve Bank ofIndia (RBI), Enforcement Directorate (ED) andFinancial Intelligence Unit (FIU).

India has been collaborating with foreigngovernments to facilitate and expand theexchange of information. For this, the DoubleTaxation Avoidance Agreements (DTAAs). hasbeen signed with tax havens like Mauritius andCyprus.

Global efforts to combat tax evasion and blackmoney were taken by joining the MultilateralCompetent Authority Agreement in respect ofAutomatic Exchange of Information (AEOI) andhaving an information sharing arrangement withthe US under its Foreign Account TaxCompliance Act (FATCA).

Impacts of Black Money

Loss of Taxes

Because of the growing black economy,policies fail both at the macro-level andthe micro-level.

Targets for education, health, drinkingwater and so on are not achievedbecause “expenditures do not meanoutcomes.”

Much investment goes into wasteful andunproductive channels, like holding goldor real estate abroad.

The inflation rises while the black moneycirculates in the market.

At the social level, the cost is a loss offaith in society and the functioning ofinstitutions.

What are the Reasons for Growth ofBlack Money?

Controls and licensing system

Price and distribution controls

High tax rates and defective tax

structure

Donation to political parties

Generation of black money in the publicsector

Deterioration in the moral and civicstandards

Corruption is pervasive from the lowest

to the highest levels of publicadministration

Collusive corruption

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The government is also trying to automateinformation exchange with several countries,including Switzerland, to clamp down on blackmoney. For this, so far, both India andSwitzerland have agreed to speed up work onthe Automatic Exchange Of Information (AEOI)and make it possible by 2018.

The Lok Sabha passed the Benami TransactionBill 2015 which was predominately an anti-blackmoney measure with the purpose to seizeunknown property and prosecute thoseindulging in such activities, according to a PTIreport.

An information technology based ‘ProjectInsight’ was introduced by the Income TaxDepartment to strengthen the non-intrusiveinformation-driven approach for improving taxcompliance and effective utilization of availableinformation.

The Income Declaration Scheme, 2016 wasannounced recently wherein domestic taxpayerscould declare their undisclosed income andescape prosecution by paying a total tax andpenalty of 45%. It’s a one-time chance toholders of income and assets that had illegallyescaped taxes, to come clean by paying a taxesand penalty of 45 per cent. Under the IncomeDeclaration Scheme (IDS) which opened onJune 1, black money holders can come cleanby declaring the assets by September 30 andpaying tax and penalty of 45 per centthereafter. Those who fail to take advantageof the scheme will have to face stringentactions, including imprisonment.

The chances of tax evaders coming under thetax department’s scanner is increasing with theimplementation of the goods and services tax(GST) or the greater use of technology to linkand profile translations or the stepped upinternational exchange of information betweencountries. This probably explains why the recentIDS received such a phenomenal responsefrom tax evaders with almost 65,000 taxpayerscoming forward to declare their undeclaredincome.

Demonetization for curbing black money

Demonetization of the notes of higherdenomination has also been one of the recentstep of the Government to unearth black-money.

Demonetisation is a radical monetary step inwhich a currency unit is declared as an invalidlegal tender. This is usually done whenever thereis a change in the national currency of a nation.

On November 8, 2016 Prime Ministerannounced that Rs. 500 and Rs. 1000denomination notes will become invalid and allnotes in lower denomination of Rs. 100, Rs. 50,Rs. 20, Rs. 10, Rs. 5, Rs. 2 and Re. 1 and allcoins will continue to be a valid legal tender.

He also added that new notes of Rs. 2,000and Rs. 500 will be introduced. There was also nochange effected in any other form of currencyexchange like cheque, Demand draft (DD), paymentsmade through credit cards and debit cards.

As per RBI Handbook on Statistics of IndianEconomy 2015-16, a total of Rs. 16.42 lakh croreworth of currency was in circulation as at end-March 2016. Of this, Rs. 14.18 lakh crore was inform of Rs. 500 and Rs. 1000 denominationnotes, representing around 86 per cent of thevalue of total currency and coins in circulation. Interms of number of notes in circulation, Rs. 500and Rs. 1000 denomination notes representabout 2200 crore notes, which were about 26per cent of total notes in circulation. Therefore, itcan be seen that the step would cause immobilityof a major chunk of currency in the system whichis expected to result in short term inconveniencefor the public but in long run may help in curbingblack money.

Is the idea of demonetising higher valuenotes new?

The idea of demonetisation is not unique ornew. Example of demonetisation is when theEuropean Monetary Union nations decide toadopt Euro as their currency. Other countrieslike Zimbabwe, Fiji, Singapore and Philippineshave also opted for currency demonetisationin the past.

It has been advocated in the past few years byvarious think-tanks and international bodies tocurb the menace of tax-evasion, terrorismfinancing etc. in the beginning of this year, headof European Central Bank, Mario Draghiannounced that the bank is thinking to abolishthe region’s most-valuable bank note, the 500euro bill in order to curb tax evasion andterrorism financing.

Similarly, former US treasury secretary LarrySummers has also called for thedemonetisation of $100 bill.

Was this the first time the government isdemonetising?

No, this is not the first time the governmentis following the policy of demonetisation of high-

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value currency. The first instance ofdemonetisation by the government wasimplemented in 1946 when the RBI demonetisedRs. 1,000 and Rs. 10,000 notes. Later, higherdenomination bank notes (Rs. 1000, Rs. 5000and Rs. 10000) were reintroduced in 1954.

Later government demonetised these notesin 1978. According to data provided by RBI Rs10,000 note was printed in 1938 and 1954 andwas subsequently demonetised in 1946 and 1978respectively.

Why there was a need to launchDemonetisation scheme now?

The decision was taken keeping in view theneed for continuous pressure for theeradication of black money, in line withsuccessive action being taken since the lasttwo years, starting with formation of SIT in June2014, provisions for declaration of undisclosedforeign income

In June 2015, the approval of the measuresto incentivise digital payments and movetowards a less cash economy in February 2016and the introduction of the income declarationscheme in July 2016 were the list of successiveactions in the regime of current government.

The move was taken to curb the menace offake notes and corruption by reducing theamount of cash available in the system. It hasbeen observed that the fake Indian currencynotes of higher denomination have rapidlyincreased making it difficult for ordinary citizensto distinguish them from genuine notes.

These fake notes have been heavily misusedby terrorists for anti-national and illegalactivities. Since India is largely a cash basedeconomy, containing the circulation of blackmoney and fake notes requires the introductionof schemes like this

Why the government has banned Rs. 500and Rs. 1000 notes particularly?

Some 68% of all transactions in the countryare cash-based, and the Reserve Bank of Indiahas estimated that the banned currency notesformed over 86% of all currency in circulation.

As per the data provided by the RBI, there are16.5 billion (45% of currency stock in 2014-15) ‘500 rupee’ note and 6.7 billion (39% ofcurrency stock in 2014-15) ‘1000 rupee’ notesare in circulation at present. It has been pointedout that any economic cost in printing thesenotes is likely to outweigh in terms of benefitit would bring to India and Indian economy.

In India, the rationale behind banning Rs. 500and Rs. 1000 notes is that unaccounted moneyused in corruption or any deals takes place inthe form of high-value notes of Rs. 500 andRs. 1000 bills. These higher denomination notesare often found to be used for funding terrorismand corruption.

The Financial Action Task Force (FATF), a globalbody that monitors the criminal use of theinternational financial system has observed thathigh-value currency units are often used inmoney laundering schemes, racketeering, anddrug and people trafficking.

In addition, these notes constitute a hugepercentage of money spent during generalelections by political parties, candidates inIndia.

Fig. 1

Why Rs. 2,000 note has been issued ifthe objective is to combat black moneyand corruption by removing large valuenotes?

It is felt that the small businesses and IndiaInc still needs to use cash and in such casesRs. 2,000 denomination notes would comehandy. The government has added that thecentral bank would cautiously monitor andregulate the issuance of Rs. 2,000 notes inthe system. So, it is expected that the Rs.2,000 notes will not be issued in large numbers.

Impact of demonetisation on blackmoney

Better tax compliance

This move is likely to lead to better taxcompliance, raise the Tax to GDP ratio andimproved tax collection. This could lead to lowerborrowing and better fiscal management. Also withlower cash transactions in the near term, inflationmay see downtrend in the near term. Also withhigher tax to GDP ratio, the government may alsoget enough headroom to reduce the income tax

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rates, which can lead to higher disposable incomewith people and can improve consumptiondemand in the medium to long term.

Real Estate Check

Demonetisation is seen as a check on thereal estate sector where prices get pushed upartificially, reducing the availability of affordablehousing for the poor and the middle class. Claimingthat removal of high denomination currency notesof Rs. 1,000 and Rs. 500 would lead to declinein real estate prices making affordable housingavailable to all.

At present, there is excessive use of cash inreal estate sector due to large cash transactionsin areas such as purchase of land and housingproperty. The real estate prices get pushed upartificially. This reduces the availability of affordablehousing for the poor and middle class.

So now, greater over-the-board transactionwill lead to a decline in real estate prices makingaffordable housing available to all.

Parallel economy burst

The move is expected to curb the paralleleconomy as the owners of black money will notbe in a position to deposit the money with themin the banks. It is likely to temporarily stall thecirculation of large volume of counterfeit currencyand prevent funding for anti-social activities likesmuggling, terrorism, espionage etc.

The Income Tax department will be benefitedwith the move, as there will be more specific datagathered in the process which could help incatching the defaulters.

Check Terror Funding

It will put a stop to the neighbouring countriesdrug cartels and terrorists of supplying high valuecurrency into India.

Check Fake notes

The move will also reduce the flow of fakecurrency in Indian markets as data shows thatmost of the counterfeit currency in circulationexists in high-denomination notes of Rs. 500 andRs. 1000.

According to the Reserve Bank of India’sannual report published this year, more than 2.61lakh counterfeit notes in the denomination of Rs.500 were detected by banks in the year 2015-2016 while another 1.43 lakh fake notes of Rs.1000 were detected. By value, counterfeit notesof Rs. 500 and Rs. 1000 accounted for morethan 92% of all the fake currency detected bybanks across the country.

SOFT MONEY surge – Online transactionsand other modes of payment

There is a massive surge in the onlinetransactions and other modes of payment. E-wallets, digital transaction systems, e-banking,usage of plastic money are expected to seeincrease in demand. Eventually this would lead tostrengthening of these systems and the concernedinfrastructure.

Under the cash crunch situation in Banks,the role played by Automated Teller Machines(ATMs) in dispensing cash is hugely important andtheir success in disbursing the cash effectively is,to a great extent, going to decide the fate of thedemonetisation scheme.

With the demonetisation move resulting in adrop in donations, some of the famous templesin Gujarat have started introducing e-wallets, ATMswith deposit facility and swipe machines to acceptcashless donations.

Criticisms

The decision to demonetize Rs. 500 andRs. 1000 notes is misconceived and willnot address the problem of black moneyfor the following reasons:

Demonetisation will only affect those whoconduct transactions in cash, are not a part ofthe formal banking system or have notconverted their cash into assets.

Black money is generated through evasion oftaxes on income from lawful activities andmoney generated from illegal activities. In theabsence of steps to curb the generation ofblack money, demonetization is a futileexercise, as it proved to be in 1978.

As per The Indian Statistical Institute, Kolkatastudy done on behalf of the NationalInvestigation Agency (NIA), Rs. 400 crores worthof fake currency is in circulation in the Indianeconomy. This is only .028% of Rs. 14,180billion worth currency demonetised in Rs. 500and Rs. 1000 notes.

Two of the most vulnerable sectors that havetraditionally been exploited for parking crimeproceeds and black money is the property, andgems and jewellery market. These sectors havealso been used for the temporary investmentof terror funds. Unless transactions are madetransparent and reflect real market value, blackmoney and terror funds will continue to findtheir way into these businesses.

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FICN can potentially be reintroduced into Indiaafter a break by Pakistan. In order to sustainaction, the following are suggested:

Enhance detection measures at publicsector banks which have lagged behindsome of the private banks over the years.

Establish a forensic cell which monitors eachcase of counterfeit currency to betterunderstand the technology being applied tocounterfeit notes. This must contribute tofuture measures to enhance security againstcounterfeiting.

The involvement of Pakistan establishedthrough a Special Court judgement in 2014should be built upon to enhanceinternational diplomatic pressure.

Conclusion

While this move will help in cleansing theexisting stock of black money, there is a need toensure that black money does not resurface inanother form in due course of time. For thispurpose, stringent measures and monitoring wouldbe required. This would include regulating theissuance of new large denomination notesespecially of Rs. 2000. Simultaneously, a set ofpolicies will have to be put in place so that thereis little incentive for black money. This may includeencouraging electronic based transactions insteadof cash based, discouraging high value cashtransactions, keeping tax levels moderate andadministration simple and transparent, closermonitoring of real estate and bullion transactions,combating corruption, ensuring greatertransparency in public procurement, providingGovernment benefits in a seamless mannerthrough Direct Benefit Transfer with beneficiarydatabase seeded with Aadhaar numbers and soon. Migrating to Goods and Services Tax is a goodopportunity to bring about simplicity in the taxation

system which can encourage businesses to shunblack money transactions. These measures,together with use of advance InformationTechnology and stricter vigilance will take thecountry to newer heights, reduce incomedisparities and help realize the dream of inclusivegrowth more sooner than later. Meanwhile, RBIhas prescribed incremental Cash Reserve Ratiofor scheduled commercial banks at 100% on theincrease in NDTL (net demand and time liabilities)between September 16 and November 11,effective the fortnight beginning November 26,2016. This is intended to be a temporary measureto absorb surplus liquidity from the system.

Demonetization provides an opportunity toencourage a shift to a digital economy. This is anessential requirement to not only reduce corruptionbut also create an electronic trail for transactions.This will help in bringing transparency into thefinancial transactions of individuals andorganizations thereby constraining corruption,criminal proceeds, money laundering and thefinance of terrorism, which are all linked giventhe common channels employed for transferringfunds. While demonetization is likely to encourageit, incentives by the government for payment ofbills can further encourage people to take upplastic and e-money options. This is also likely tobe enhanced by the forces of market economywhich are already offering money back options.

Demonetisation is an important step in thefight against the finance of terrorism. However, itshould neither be the first nor the last, if theinterlinked threats of corruption, crime and thefinance of terrorism have to be controlled. Thesemust also not be addressed simply withindepartmental and ministerial silos. Instead, an all-of government approach is imperative if each ofthese challenges is to be met.

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SPECIAL ISSUES

JOINT MILITARY EXERCISES AND INDIA'SMILITARY READINESS

THE INDIA-BANGLADESH Joint Military Exercise, SAMPRITI 2016 is beingconducted at Tangail, Dhaka, Bangladesh from 05 to 18 November 2016.

Context

India’s prime national concerns sinceindependence have been its territorial integrity,social and economic well being, and myriad internalsecurity threats. Securing these interestsnecessitates protecting the country againstexternal and internal threats. The Indian armedforces have met these challenges with extremecourage and professionalism in the past, andensured that the nation’s core values andprinciples are indeed preserved. India’s risingeconomic clout and international stature will makeincreasing demands on the country’s armed forcesin times to come, and they will need to anticipatethese many security threats and challenges, andmust prepare themselves to tackle a range ofmilitary conflicts and contingencies.

To improve one’s capability military exercisesare conducted.

A military exercise is the employment ofmilitary resources in training for military operations,either exploring the effects of warfare or testingstrategies without actual combat. This serves thepurpose of ensuring the combat readiness ofdeployable forces and ensures the security of ournation.

Why was it in the news recently?

India recently concluded Joint Militaryexercises with Nepal SriLanka, Bangladesh andChina

Joint Exercise Surya Kiran 2016 – India andNepal

Joint Military Exercise Mitra Shakti 2016 – Indiaand Sri Lanka

Joint military exercise SAMPRITI 2016 – Indiaand Bangladesh

Joint Military Exercise Hand-in-Hand 2016 –India China

Military exercise means to create war likescenarios and maneuver war plans to test theireffectiveness. Joint exercises create stability andunderstanding between nations, build personal andinstitutional links between the countries' militaryforces, and reinforce political, economic andcommercial, and cultural linkages between thecountries.

Fig. 2

India is lagging “far behind” the neighbours

in terms of Defence capabilities

Indian Military is short of warplanes,

submarines and artillery guns.

It even lacks basics such as ammunition,

bulletproof jackets and vehicles.

DRDO, the country’s top military

researcher has not been able to make a

pistol properly but takes away thousands

of Crore every year in budget.

The army pointed out that it didn’t have

“enough ammunition to fire”.

Vehicles were in short supply, putting

into doubt the military’s capability to

tackle external threats.

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The need for military exercises withother Armies

Armies around the world have facednumerous wars which are different from each otherin means of resources they fought with, terrain inwhich they carried out operations and the timeneeded to accomplish the objectives.

On the operational side, militaryexercises enable militaries

To understand each other’s drills andprocedures, overcome language barriers, andfacilitate familiarisation with equipmentcapabilities.

It also facilitates understanding andfamiliarisation with new technologies that othercountries may be utilising and enables on-the-job training of each other’s crews.

This is particularly useful in the event of jointoperations whether in war or in operations otherthan war (OOTW) - humanitarian aid, disasterrelief, anti-piracy, etc – when nations cometogether for a common cause. A fine examplewas the aid assistance provided by a host ofnations during the tsunami in South East Asiawhere a massive land, air and sea rescue effortwas successfully executed to provide relief tothe affected countries.

Perhaps, the most important advantage of jointmilitary exercises is ‘strategic signalling’. A jointexercise with one or more nations serves thepurpose of signalling to a third country of theinfluence they have in the region and ademonstration of their resolve to further theirdiplomatic objectives.

On the intangible side, military

exercises

Promote brotherhood and camaraderie

between soldiers and militaries.

Besides goodwill, it is a tool for projection of a

nation’s soft power – culture, language,

customs, beliefs, food habits and lifestyle.

Soldiers all over the world have almost similar

rank and organisational structures, which helps

establish a unique spirit of bonding and

friendship between their communities

irrespective of the country of origin.

Geostrategic Significance of Joint

Military Exercises

In the domain of international relations,

military diplomacy has, in recent years, emerged

as a major tool to further diplomatic interests of

nations. Participation in international level military

exercises is an indication of the highest level of

trust and confidence between the member

nations. It is a key confidence building measure

(CBM) and an indication of the faith reposed by a

country on another nation or a group of member

nations.

India is rising on the world stage and having

the ambition of playing significant role in shaping

the world of tomorrow.

It has become necessity for us to have plans

to support its ambitions. As nation is looking

for greater role in Afghanistan and in South

China Sea it is essential to have joint military

exercises on regular basis for better

collaboration with friendly nations so in the time

of need our army can work jointly with other

armies to address nation’s interest.

As the world scenario is changing there is a

possibility of Indian Armed forces working with

other armies. So these exercises will keep

armed forces in good shape and prepared for

future challenges.

Indian Military Exercises

To provide the Indian Armed forces with the

first hand experience against World’s renowned

Forces and to ensure its preparedness India

started the process of joint military exercises and

is carrying out various joint military exercises with

US, UK, Russia, Israel, China, Japan, Australia,

Malaysia and many other countries.

India desperately needs to moderniseits aging Russian-era equipment as Chinaand Pakistan upgrade their arsenal withlatest technology and purchases. Indiahas fought four wars with Pakistan andone with China.

The country was short of fighter planes,an Indian Air Force officer told thepanel that periodically reviews thefunctioning of the defence ministry. Asagainst the “desirable strength” of 42squadrons needed to fight off acombined threat from Pakistan andChina, the force was down to just 33squadrons. An air force squadron has18 fighter jets.

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Conclusion

India was one of the founding members of

non-aligned movements (NAM) and has remained

neutral since then which has adversely affected

Indian armed forces and limited India’s military

contact with other nations. But with the changing

world and regional scenario in regard of military

the Indian government has changed its stance

and has took steps to meet the demanding

situations. One of them is to have joint military

exercises with other countries.

The country has embarked upon a major

military modernisation programme for increasing

the size and capability of its armed forces. The

scale of defence funding reflects both on its desire

to make up for lost time and the changing security

environment.

Modern militaries consider military readiness

as an important facet of the overall policy, planning

and decision making process. For our military to be

ready to fight effectively - today and in the future -

we have to have the right people in the right roles

with the right equipment and the right training.

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NUCLEAR DEAL WITH JAPAN

India and Japan signed a historic bilateral civil nuclear cooperation agreementduring Prime Minister Narendra Modi's two-day visit to Tokyo. Bilateral civilnuclear cooperation agreement is seen as crucial for energy-starved India toaccess sensitive nuclear technologies to generate clean electricity. It's a movethat will boost bilateral economic and security ties and facilitate leading U.S.-based players to set up atomic plants in India.

Context

India has emerged as an important variablein Japanese security discourse and has beenfeatured in Japan’s first ever ‘National SecurityStrategy’ (NSS).

Since long, the United States (US) alliancestructure continues to remain at the nucleus ofJapanese defence and security policy. China’semergence as a key variable in shaping theregional security architecture coupled with thevigour of US commitment in the backdrop ofChinese push for a G2 formulation is making Japandiversify her options. Consequently, Japan isinvesting in countries like Australia and India,besides reinforcing its alliance with the US.

PM Modi visited Japan on a three-day visitfor the annual summit between the two primeministers. During the visit, India and Japan signeda bilateral civilian nuclear cooperation agreementseen as crucial for energy-starved India to accesssensitive technologies to generate clean electricity.

The pact is a major achievement for India asit is Japan’s first civilian nuclear cooperation pactwith a country that has not signed the nuclearNon-Proliferation Treaty.

India signed a landmark nuclear deal withthe US in 2008, clearing the path for the countryto source nuclear power plants and technologyfrom international markets. But with Japanesecompanies in possession of critical technologies,such as steel shields covering a nuclear reactorcore, an accord with Japan was pivotal for India.

As of 2016, India has signed civil nuclearagreements with 12 countries so far, includingArgentina, Australia, Canada, France, Japan,Kazakhstan, Mongolia, Namibia, Russia, SouthKorea, the United Kingdom and the United States.

The 48-nation Nuclear Supplier Group granteda waiver to India on 6 September 2008 allowingit to access civilian nuclear technology and fuel

from other countries. India is the only knowncountry with nuclear weapons which is not a partyto the Non-Proliferation Treaty (NPT) but is stillallowed to carry out nuclear commerce with therest of the world.

The recent agreement with Japan could bethe most significant as Japan is the only countryto have been the victim of a nuclear attack, andits decision to sign an agreement with India, acountry that has not signed the Treaty on theNon-Proliferation of Nuclear Weapons (NPT), wouldbe a first.

India currently has 5.7 Gigawatts (GW) ofnuclear power generation capacity. This accountsfor 2% of the total power capacity, but this isexpected to change with a sharp increase in powergeneration from atomic plants over the next 16years as Asia’s third largest economy moves awayfrom fossil fuels for its energy needs.

Fig. 3

Indo-Japan Relations

Evolving trends

The friendship between India and Japan has along history rooted in spiritual affinity andstrong cultural and civilization ties. The modernnation states have carried on the positive legacyof the old association which has beenstrengthened by shared values of belief in

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democracy, individual freedom and the rule oflaw. Over the years, the two countries havebuilt upon these values and created apartnership based on both principle andpragmatism. Today, India is the largestdemocracy in Asia and Japan the mostprosperous.

In the recent times, the complementary natureof Indian and Japanese economies, and theirconverging political and security interests haveled to the enhancement of India-Japan relationsin the recent times.

The rising India-Japan relations got a boost fromthe launch of strategic and global partnershipbetween the two countries in 2006. Thepartnership between the two countries is basedon five pillars of cooperation:

Political, Defence and Security cooperation

Comprehensive Economic Partnership

Science and Technology Initiative

People to people exchanges

Cooperation in Regional and Multilateralforums.

While the emergence of a new India has openedup many business opportunities for Japan, andthe world at large; also the increasing threat inthe East and South East Asia region on accountof a resurgent China, has led India and Japanto strengthen their relationships in the politicaland strategic spheres.

While the rise of the Chinese economy hasopened up many opportunities for India andJapan in the economic sphere, China’sincreasing assertiveness particularly in theSouth China Sea, and its increasing cooperationwith Pakistan and Myanmar, has concernedJapan and India respectively.

These concerns get reinforced from the factthat both the countries have boundary disputeswith China. Both the countries also feel veryrealistic threat which can accrue from nuclearPakistan and North Korea, which are beingsupported by China, making it a country ofcommon concern.

Nuclear Cooperation and recent CivilNuclear Agreement

Capping years of negotiations, India andJapan finally signed a bilateral civilian nuclearcooperation agreement seen as crucial for energy-starved India to access sensitive technologies togenerate clean electricity.

The pact is a major achievement for India asit is Japan’s first civilian nuclear cooperationpact with a country that has not signed thenuclear Non-Proliferation Treaty.

It was signed with Shinzo Abe at the helm ofaffairs in Japan is also key as ties betweenIndia and Japan have warmed considerablysince Abe returned to office in 2012. Abe hasbeen keen to forge close links with India tocounter the rise of China.

The deal has been many years in the makingbecause India was reluctant to limit its optionto carry out more atomic weapons’ tests—inaddition to the ones carried out in 1998—incase the need arose. And Japan—being theonly country in the world to have suffered theimpact of nuclear weapons being dropped onit—was uncomfortable with India having anuclear weapons programme outside thenuclear non-proliferation regime.

Beyond symbolic reasons, Japanese nuclearenergy technology and safety parameters arewidely considered to be cutting-edge, and manycritical parts needed for Indian reactors aremade by Japanese manufacturers. These willnot be available to India until the agreement isdone.

Although India has even considered trying tomanufacture them locally, there won’t bealternatives to Japan for several years. Eventhe U.S. civil nuclear deal, that is yet to beactualised, is contingent on the deal with Japan,given that the current discussions for sixreactors in Andhra Pradesh are withWestinghouse, which is owned by the Japanesecompany Toshiba.

Key highlights of the Agreement

The ‘Cooperation in the Peaceful Uses ofNuclear Energy’ pact provides for “thedevelopment of nuclear power projects in Indiaand thus strengthening of energy security ofthe country.

The present agreement would open up the doorfor collaboration between Indian and Japaneseindustries in India’s Civil Nuclear programme.

The pact enables India to obtain high-qualitycomponents for nuclear reactors, especiallyones that we are negotiating for withWestinghouse (Electric Co.) and (French) ArevaSA. Westinghouse Electric Company is asubsidiary of Japan’s Toshiba Corp. Areva, too,accesses key reactor components fromJapanese firms.

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Among the other agreements signed was oneto skill “30,000 Indian youth in the Japanesestyled manufacturing in the next 10 years. Thiswould be achieved through the programmes ofJapan-India Institute for Manufacturing (JIM)and the Japanese Endowed Courses (JEC) inselect Engineering colleges.

Pacts on cooperation in space, earth sciences,agriculture, forestry and fisheries, transport andurban development and sports were alsosigned.

In fact, India and Japan share many multilateralplatforms, including membership of the G-4group that is knocking at the UN SecurityCouncil’s door for reform.

The accord stipulates nuclear fuel andequipment provided can only be used for peacefulpurposes, and a separate document signedalongside the nuclear agreement has a clauseallowing Japan to terminate the pact if Indiaconducts a nuclear test.

Why the deal has taken so long?

Opposition in Japan: Reservations in Japanagainst nuclear energy have hardened afterthe Fukushima accident. Tokyo’s support to thedeal so far is an indication of the importanceit accords to relations with India.

NSG Issue for India: Nuclear Suppliers Group(NSG) is a group of nuclear supplier countriesthat seek to prevent nuclear proliferation bycontrolling the export of materials, equipmentand technology that can be used tomanufacture nuclear weapons. The civil nuclearagreement with Japan is especially importantfor the message of trust it would convey toNSG members as in a year India hopes to haveits admission accepted into NSG.

NPT Issue: The NPT is a landmark internationaltreaty whose objective is to prevent the spreadof nuclear weapons and weapons technology,to promote cooperation in the peaceful usesof nuclear energy and to further the goal ofachieving nuclear disarmament and general andcomplete disarmament. On this front the mainsticking point has been India’s refusal to signthe NPT, as it considers the treaty unfair to thedeveloping world. This is why India was keenon ensuring that in the haste to seal the dealwith Japan, and doesn’t give in to pressure toadhere to anything more than its own self-declared moratorium on testing. India issued aunilateral moratorium on testing many yearsago.

Nullification clause in the Agreement:The Japanese insistence on a “nullification”clause that the agreement would cease as soonas India conducts nuclear tests. Japan havebeen insisting that the nuclear supplies will becut off. But India has resisted this move, asthis would disrupt its nuclear power programmeand compromise on security threats fromneighbours

Liability Issue: Particularly post-Fukushima,Japanese manufacturers will also be expectedto be more generous with India on the liabilityissue, given their own experience with theenormous cost of cleaning up nuclear waste.

Japanese Parliament (Diet) approval:Once the agreement is signed the Japanesegovernment will take it to the Diet in “early2017”.

Conclusion and the Way Forward

Taking all economic and strategic dimensionsinto account it is necessary for India and Japanto enhance their relations from the nascent levelit stands at present. Being apprehensive aboutthe efficacy of partnership with the decliningeconomic clout of Japan is premature. As withJapan’s high domestic savings, a well diversifiedeconomy of $5 trillion, which is 3.5 times theIndian GDP, and a huge current account surplus,it is premature to write Japan’s epitaph. It is theonly Asian country, which has excess capacity inthe form of technological prowess, and theeconomic might which will keep it as a significanteconomic player in the world for a long time tocome.

From Japan’s perspective it is not onlynecessary for Japan to hedge its stakes byinvesting in India, it makes sound economic senseto invest in India taking into account the increasinglabour costs and near saturation of China’smarket.

On the Nuclear Cooperation front, recent dealwith Japan, the world’s only victim of nuclearweapons as well a country deeply scarred by the2011 Fukushima nuclear accident, would be apowerful vote of confidence in India’s nuclearprogramme, as in a year it hopes to push its bidto join the Nuclear Suppliers Group. This nucleardeal with Japan is the part of India’s plan to rampup nuclear capacity more than ten times by 2032.

India is also keen on Japanese funding forits clean energy projects. India and Japan alsoneed to develop their cooperation in the high

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technology sectors, such as space research,biotechnology, supercomputers, etc. as their jointefforts shall enable them to find solutions tovarious other problems plaguing the regional andglobal community.

In a nutshell, India and Japan’s failure to

involve each other earlier let them lose significant

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opportunities to benefit each other in botheconomic and strategic spheres. However, the

complementary nature of Indian and Japanese

economy, and their converging security and political

interests, make them “natural allies” with

“common causes”, and therefore, mandatory

partners in the long run.

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ASSESSMENT OF STATE IMPLEMENTATION OFBUSINESS REFORMS 2016

The Department of Industrial Policy and Promotion (DIPP) in partnership withthe World Bank Group, has released the Assessment of State Implementationof Business Reforms Report 2015-16.

Context

The Department of Industrial Policy andPromotion (DIPP), Ministry of Commerceand Industry, in partnership with the World BankGroup, have released the results of theAssessment of State Implementation of BusinessReforms 2015-16.

These Assessment studies are based onimplemented DIPP’s 340-points Business ReformAction Plan (BRAP) and results are in forms ofimplementation percentage for e.g. Delhi’simplementation ratio is 47.62% (Rank-19) and thecalculation is based on ratio of implemented BRAP(160 in case of Delhi) & applicable BRAP i.e. totalBRAP minus non applicable BRAP (340–4 = 336in case of Delhi).

The Assessment studies are done for allStates/UTs for period 2015-16, i.e., covering theperiod from July 1, 2015 to June 30, 2016.

The results of the assessment demonstratethat States have increasingly risen to addressingthe challenge of making it easier to dobusiness. The national implementationaverage stands at 48.93%, significantly higherthan last year’s national average of 32%.

Some of the features of Business ReformAction Plan

Develop and make publicly available acomprehensive checklist of all required pre-establishment No Objection Certificates (NOCs),licenses, registrations and other mandatoryState approvals required for setting up of abusiness.

Establish a dedicated physical body/ bureauthat functions as the sole point of contact forthe purpose of setting up a business.

Ensure that the single window body/bureau hasbeen set up through a legislation/Statenotification.

Implement an online Common Application Form(CAF) for all required clearances/approvals inthe single window.

Ensure information on land banks for industrialuse are made publicly available online.

Define objective criteria for evaluating anapplication for land allotment.

Enact a comprehensive formal building codeapplicable to the entire State.

Enact a list of green industries applicable forthe State.

Exempt selected green industries from pollutioncontrol board clearances.

Ensure information on the procedure and acomprehensive list of all documents that needto be provided are available on the web site.

Mandate the submission of a single integratedreturn under all Labour Laws.

Ensure that users are provided assistance fore-filing at service centers.

Design and implement a system to allow fore-filing for commercial disputes in Districtcourts/Commercial courts.

Parameters of Ease of Doing Business

Starting a business – Procedures, time,

cost and minimum capital to open a new

business

Dealing with construction permits –

Procedures, time and cost to build a

warehouse

Getting electricity – procedures, time and

cost required for a business to obtain apermanent electricity connection for a

newly constructed warehouse

Registering property – Procedures, time

and cost to register commercial real

estate

Getting credit – Strength of legal rights

index, depth of credit information index

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Protecting investors – Indices on theextent of disclosure, extent of directorliability and ease of shareholder suits

Paying taxes – Number of taxes paid,hours per year spent preparing taxreturns and total tax payable as share ofgross profit

Trading across borders – Number ofdocuments, cost and time necessary toexport and import

Enforcing contracts – Procedures, timeand cost to enforce a debt contract

Resolving insolvency – The time, costand recovery rate (%) under bankruptcyproceeding

Highlights of Implemented Reforms

Single Window Systems: Various Stateshave created a dedicated body/bureau as aone-stop system for State level regulatory andfiscal incentive approvals with powers to grantapprovals. States are: Andhra Pradesh,Chhattisgarh, Gujarat, Haryana, Jharkhand,Madhya Pradesh, Maharashtra, Punjab,Rajasthan, Telangana and Uttarakhand.

Tax Reforms: Many States have made goodprogress in tax reforms viz. e-registration forValue Added Tax (VAT). Central Sales Tax (CAT),Entry Tax etc. States are: Bihar, Chhattisgarh,Gujarat, Karnataka, Madhya Pradesh,Maharashtra, Odisha, Punjab,Rajasthan, Uttar Pradesh,Uttarakhand and West Bengal.

Construction permits: ManyStates have allowed applicantsto apply online and uploadbuilding plans for automatedconstruction permit approval.States are: Andhra Pradesh,Chhattisgarh, Gujarat,Haryana, Madhya Pradesh,Maharashtra, Rajasthan,Telangana and Uttrakhand.

Environment and LabourReforms: States have alsoimplemented advanced automated (internetbased) real-time solutions to deal withenvironmental and pollution related applicationsand approvals. States are: Andhra Pradesh,Bihar, Chhattisgarh, Gujarat, Haryana,Jharkhand, Karnataka, Madhya Pradesh,Maharashtra, Odisha, Punjab, Rajasthan, Tamil

Nadu, Telangana, Uttar Pradesh, Uttarakhandand West Bengal.

Inspection Reforms: A number of inspectionreforms with regard to labour, tax andenvironment related compliances have beenintroduced with transparency across the Statesto help businesses comply with inspectionrequirements in a user-friendly manner. Statesare: Andhra Pradesh, Chhattisgarh, Gujarat,Haryana, Jharkhand, Karnataka, MadhyaPradesh, Odisha, Punjab, Rajasthan, Punjab,Telangana, Uttar Pradesh and Uttarakhand.

Commercial Disputes and Paper-lessCourts: To address the concern of time andcosts associated with various legal processes,District Courts in various states have also madethe provision of making online payments,e-filing and e-summons. Few States have alsofilled up vacancies in District Courts/commercialcourts to ensure availability of adequatecapacity for dealing with various cases. Statesare: Andhra Pradesh, Chhattisgarh, Gujarat,Haryana, Jharkhand, Madhya Pradesh,Maharashtra, Rajasthan and Telangana.

Major outcomes of the assessment

Data for this assessment was collected fromState Governments. At least, 32 State and UTGovernments submitted evidence of implementationof 7,124 reforms which were reviewed by the WorldBank team and validated by DIPP’s team to studywhether they met the objectives of the BRAP. Majoroutcomes of the assessment:

Fig. 4

The National implementation average standsat 48.93%, significantly higher than last year’snational average of 32%.

Andhra Pradesh and Telangana are the bestimplementers with implementation ratio of98.78%.

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Arunachal Pradesh, Jammu & Kashmir,Chandigarh, Meghalaya, Andaman & NicobarIsland and Lakshadweep are at the bottomwith 0.30%.

Uttarakhand took highest leap of 14 ranks asit reached at 9th position from 23rd from lastyear.

Karnataka scores maximum in terms ofinvestment. However, it ranks 13 on ease ofdoing business with a score of 88.39%.

South Indian states have done phenomenallywell in terms of implementation of singlewindow clearing and tax reforms.

16 states implemented more than 75% of thereforms, whereas last year not a single stateimplemented more than 75% of reforms.

There is also a lesson to be learnt from this

assessment. The assessment results are based

on an online dashboard created by the DIPP that

tracks implementation in real time. The dashboard

updates rankings every time a response by a state

is validated by the DIPP. This kind of real time

data collection should be adopted for compiling

other statistics such as employment data.

The exercise is aimed at promoting

competition among states with a view to improve

business climate to attract domestic as well as

foreign investments.

In the World Bank’s latest ‘Doing Business’

report, India’s place remained unchanged from

last year’s original ranking of 130 among the 190

economies that were assessed on various

parameters. But the last year’s ranking was

revised to 131 from which the country has

improved its place by one spot.

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ENERGY EFFICIENCY IMPLEMENTATIONREADINESS INDEX

World Bank in collaboration with Energy Efficiency Services Limited (EESL) -a public sector undertaking - and PwC has released Energy EfficiencyImplementation Readiness Index.

Context

World Bank has released studies on India’senergy efficiency and how different parts of thecountry are making efforts to make the best useof the limited energy available.

The report titled ‘India's State LevelEnergy Efficiency Implementation Readi-ness’ is prepared by the World Bank incollaboration with Energy Efficiency ServicesLimited (EESL) – a public sector undertaking –and PwC (Price waterhouse Coopers) – a privatelyowned professional services company.

The study developed an evaluation frameworkand comparative analysis for assessing thereadiness for energy efficiency (EE) implementationin various states under three broad readinesscategories:

Policy and Incentives,

Market Maturity, and

Institutional Capacity.

Key Findings of Report

Andhra Pradesh toped in energy efficiency byachieving an energy saving of 1,500 millionunits in two years through use of LED lighting.

Andhra Pradesh (42.01 readiness index),Rajasthan (41.89), Karnataka (39.34) andMaharashtra (39.29) are the top four states interms of EE implementation readiness.

Kerala, Gujarat, NCT Delhi, Punjab, Odisha andUttar Pradesh respectively are the other statesin the top ten ranking.

The study suggests adoption of achievableenergy savings targets against the identifiedenergy efficiency interventions and set atimeframe to pursue these targets.

The report recommended that State ElectricityRegulatory Commissions should notify targetsto utilities (in the case of thermal powergeneration) to achieve an optimal level ofstation heat rate (SHR) in power generation

along with the penalty provisions in the case ofnon-compliance.

It also recommend for notifying the urban localbodies (ULBs) to take energy efficiencymeasures in public uses such as energy efficientstreet lighting (LED), water supply pump sets(Star labelled).

Its recommendations also wants directions forstate transport corporations to include fueleconomy in their vehicle procurement criteria.

In another report titled ‘Utility Scale DSM(demand side management) Opportunitiesand Business Models in India’, the WorldBank has marked India’s efficiency market at Rs.1.6 lakh crore, which is four times the Rs. 44,000crore in 2010 against the backdrop of the successof the government’s UJALA (Unnat Jyoti byAffordable LEDs for ALL) scheme to distribute LEDbulbs.

According to the study, rapidly changing DSMmarket potential is capable to deliver 178 billionunits of electrical energy savings per annum. Thisdelivery will roughly reduce India’s annual electricityconsumption at around 18-20 per cent of thecurrent level.

The report also pointed out the tremendouspotential of solar photovoltaic (SPV) rooftopsystem along with emerging smart gridtechnologies for utility DSM in India.

Why focus on energy efficiency?

Energy efficiency is “using less energy toprovide the same service”. Energy efficiency isnot energy conservation. Energy conservation isreducing or going without a service to save energy.

Focus on energy efficiency is importantbecause of the following reasons

National economy & growth: Energyefficiency will bring down the demand of energy,which will lead economical benefit at individual

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level and at national level, it will give leverageto government to divert money spent on energytowards other requirements of nation. It willalso enhance productivity and employment dueto availability of energy.

Sustainable Development: If we didn't haveenergy efficiency, we would have to produce orimport energy sources like oil, natural gas, andcoal. So, energy efficiency helps us keep moreresources on the earth longer.

Global Warming (EnvironmentalConcern): From power plants to cars,consuming energy can produce emissions thatharm our environment and can raise globaltemperature.

Key energy efficiency initiatives in India

Perform Achieve and TradeScheme (PAT): An innovative marketbased mechanism to enhance energyefficiency of energy intensive industriesthrough trading of energy savingcertificates (ESCerts). All identifiedindustrial units are mandated to reducetheir Specific Energy Consumption. Thereduction targets are based on theircurrent energy efficiency (average plantreduction target is ~4.8%) Industrialunits that are able to achieve theirtargets can receive energy savingscertificates, which can be traded on thepower exchanges and bought by non-compliant units to meet their compliancerequirements. Industrial units that areunable to meet the targets (through theirown actions or through the purchase ofESCerts) are liable to financial penalty.

Market Transformation for EnergyEfficiency (MTEE): Aims ataccelerating the shift to energy efficientappliances through measures to makethe products more affordable. Two keyprograms:

Bachat Lamp Yojna (BLY) for energyefficient lighting. Over 29 millionincandescent bulbs have been replacedby Compact fluorescent lamps (CFLs)under this scheme. In the next phase,the Bureau of Energy Efficiency (BEE)will promote the use of LED lights usingthe institutional structure of BLYProgram2; and

Bachat Super Efficient EquipmentProgram (SEEP).

Energy Efficiency FinancingPlatform (EEFP): Ensures availabilityof finance at reasonable rates for energyefficiency project implementation. Thescheme also involves creating demandfor energy efficient products andservices through the preparation ofbankable projects and markets.Additionally, the scheme aims to buildcredible monitoring and verificationprotocols to capture energy savings; andbuilding capacity of banks and FIs(Financial Institutions).

Framework for Energy EfficientEconomic Development (FEED):Involves development of fiscalinstruments to promote energyefficiency. For instance, the followingfunds have been created:

Partial Risk Guarantee Fund for EnergyEfficiency (PRGFEE): a risk sharingmechanism for partial risk coverage forbanks extending loans for energyefficiency projects; and

Venture Capital Fund for EnergyEfficiency (VCEE): provides equitycapital for energy efficiency projects(limited to government buildings andmunicipalities).

Renewable Purchase Obligations(RPO): Under this program, electricitydistribution companies are mandated toprocure a certain percentage of theirenergy from renewable energy sources.To meet this target, the obligated entitycan either purchase renewable energy orit can purchase equivalent RenewableEnergy Certificates (RECs). RECs area market based instrument to help addressthe mismatch between availability ofrenewable energy resources in the stateand the requirement of distributioncompanies to meet their obligations.Under a proposed policy amendment,distribution companies in India could beobliged to purchase 8% of solar powerby March 2019, up from the originaltarget of 3% by 2022.

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Barriers for Energy Efficiency

Cross-subsidized electricity prices leading towastage in residential and agricultural sectors.Limited information about the benefit of energyefficiency investments and technologies.

Lack of enforcement of standards, codes, andlabelling.

Mistrust of counter-parties in the context ofweak contract enforcement.

Bias against the counter intuitive disposal ofexisting plant and equipment.

Difficulty of measuring ‘negawatts’ (or efficiencysavings) in the context of project cash flows.

Asymmetric risk/reward distributions (mostly inthe building sector for owner/investors versustenants).

Competing objectives in complex planningsituations involving new investments anddevelopment.

Inadequate investment in supportiveinstitutional mechanisms and human resources.

High transaction costs from legal, technical,and transactional complexities, like non-standardized deal structures and substantialtechnical content of project appraisal,development, and monitoring.

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SENDAI FRAMEWORK ON DISASTER RISKREDUCTION

New Delhi (India) hosted three days 6th Asian Ministerial Conference on DisasterRisk Reduction (AMCDRR)-2016 from 3rd to 5th November'16, which wasattended by ministers from 61 countries of Asian and Pacific region.

Context

A disaster is an event or series of eventsthat leads to sudden disruption of normal life,causing severe damage to life and property to anextent, that available social and economicprotection mechanism are inadequate to cope.

Disasters could be, natural (geological, hydro-meteorological and biological) or induced by humanprocesses (environmental degradation andtechnological hazards).

Disasters proceed by cause-effect due toendogenous (inherent) and exogenous (external)factors, which combine to excite the phenomenoninto a large-scale destructive event.

Disaster risk reduction is the concept andpractice of reducing disaster risks throughsystematic efforts to analyse and reduce thecausal factors of disasters. Reducing exposure tohazards, lessening vulnerability of people andproperty, wise management of land and theenvironment, and improving preparedness andearly warning for adverse events are all examplesof disaster risk reduction.

Disaster risk reduction is a part of sustainabledevelopment, so it must involve every part ofsociety, government, non-governmentalorganizations and the professional and privatesector. It therefore requires a people-centred andmulti-sector approach, building resilience tomultiple, cascading and interacting hazards andcreating a culture of prevention and resilience.Consequently DRM includes strategies designed to:

Avoid the construction of new risks

Address pre-existing risks

Share and spread risk to prevent disasterlosses being absorbed by other developmentoutcomes and creating additional poverty

Why in news?

6th Asian Ministerial Conference on DisasterRisk Reduction (AMCDRR)-2016 was organized by

the government of India in collaboration with theUnited Nations Office for Disaster Risk Reduction(UNISDR). Main outcomes of this conference wereadoption of the New Delhi Declaration and theAsian Regional Plan for implementation of theSendai Framework endorsed by Asian countries.

Highlights of New Delhi Declaration

This declaration illustrated the commitment ofparticipating nations towards preventing andreducing disaster risk and strengthening theresilience.

It recognize the need to accelerate theimplementation of the agreed globalframeworks, i.e. Sendai Framework.

It commit to the principle of a people-centredand whole-of-society approach towards disasterrisk reduction and the need to support thecoordination role of UNISDR.

Highlights of Asian Regional Plan forSendai Framework

In order to implement Sendai Framework 2015-30, Asian Regional Plan stratified targets ofSendai Framework into five time frames viz.targets By-2016, By-2018, By-2020, By-2022& By-2030.

For implementation of Sendai Framework itdivided action plans into ‘Regional Level’ &‘National and Local Level’.

Besides, it also has a two-year action plan tofurther disaster risk reduction with specific,actionable activities.

What is Sendai Framework on DisasterRisk Reduction?

The “Sendai Framework for Disaster RiskReduction 2015-2030” (SFDRR) was adoptedduring the Third United Nations (UN) WorldConference on Disaster Risk Reduction (WCDRR)held in Sendai, Japan on 14-18 March, 2015.

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It is the first major agreement of the post-2015 development agenda, with seven targetsand four priorities for action. The SendaiFramework is the successor instrument to theHyogo Framework for Action (HFA) 2005-2015:Building the Resilience of Nations and Communitiesto Disasters.

The Sendai Framework’s primary focus onrisk reduction and resilience is a common elementhighlighted in all the 2030 development agendasadopted by all member states of the UnitedNations, such as the Addis Ababa Action Agendaon Financing for Development, the SustainableDevelopment Goals, the Paris Agreement onClimate Change, the Agenda for Humanity andNew Urban Agenda.

The Sendai Framework introduces sevenglobal targets to assess global progress towardthe expected outcome. The seven global targetsrepresent a means to quantify and qualify the“substantial reduction” indicated in the expectedoutcome.

Global Targets

Substantially reduce global disaster mortalityby 2030, aiming to lower average per 100,000global mortality rate in the decade 2020-2030compared to the period 2005-2015.

Substantially reduce the number of affectedpeople globally by 2030, aiming to loweraverage global figure per 100,000 in thedecade 2020-2030 compared to the period2005-2015.

Reduce direct disaster economic loss in relationto global gross domestic product (GDP) by2030.

Substantially reduce disaster damage to criticalinfrastructure and disruption of basic services,among them health and educational facilities,including through developing their resilience by2030.

Substantially increase the number of countrieswith national and local disaster risk reductionstrategies by 2020.

Substantially enhance international cooperationto developing countries through adequate andsustainable support to complement theirnational actions for implementation of thisFramework by 2030.

Substantially increase the availability of andaccess to multi-hazard early warning systemsand disaster risk information and assessmentsto the people by 2030.

Priorities Areas for Action

SFDRR defined four priorities areas whereaction is needed:

Understanding disaster risk.

Strengthening disaster risk governance tomanage disaster risk.

Investing in disaster risk reduction forresilience.

Enhancing disaster preparedness for effectiveresponse and to “Build Back Better” in recovery,rehabilitation and reconstruction.

Disaster risk management involves activitiesrelated to:

Prevention

The outright avoidance of adverse impactsof hazards and related disasters (often lesscostly than disaster relief and response). Forinstance, relocating exposed people and assetsaway from a hazard area.

Mitigation

The lessening or limitation of the adverseimpacts of hazards and related disasters. Forinstance, constructing flood defences, plantingtrees to stabilize slopes and implementing strictland use and building construction codes.

Transfer

The process of formally or informally shiftingthe financial consequences of particular risksfrom one party to another whereby ahousehold, community, enterprise or stateauthority will obtain resources from the otherparty after a disaster occurs, in exchange forongoing or compensatory social or financialbenefits provided to that other party. Forinstance, insurance.

Preparedness

The knowledge and capacities of governments,professional response and recoveryorganisations, communities and individuals toeffectively anticipate, respond to, and recoverfrom the impacts of likely, imminent or currenthazard events or conditions. For instance,installing early warning systems, identifyingevacuation routes and preparing emergencysupplies.

Incorporation of the seven goals and fourpriorities of SFDRR, India has released theNational Disaster Management Plan

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(NDMP) on 1st June’2016. This is the first evernational plan prepared in the country in the fieldof Disaster Management.

The vision of the Plan is to “Make India disasterresilient, achieve substantial disaster risk reduction,and significantly decrease the losses of life,livelihoods, and assets – economic, physical, social,cultural and environmental – by maximizing theability to cope with disasters at all levels ofadministration as well as among communities.

Salient Features of NDMP

The plan covers all phases of disastermanagement: prevention, mitigation, responseand recovery.

The plan has a regional approach, which will bebeneficial not only for disaster managementbut also for development planning.

The plan spells out the roles and responsibilitiesof all levels of Government right up toPanchayat and Urban Local Body level in amatrix format.

It is designed in such a way that it can beimplemented in a scalable manner in all phasesof disaster management.

It also identifies major activities such as earlywarning, information dissemination, medicalcare, fuel, transportation, search and rescue,evacuation, etc. to serve as a checklist foragencies responding to a disaster.

Conclusion

The framework or guidelines for disaster riskmanagement should not just remain on paperrather it should be dynamic and working. The planshould ensure that it addresses the responsibilitiesof the task force members as well as the families/individuals living in that area.

The planning should be a continuous process.Further there should be an effective convergenceof the plan prepared by the community with thelarger programmes/development plans of theregion.

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“PROGRESS PANCHAYAT” INITIATIVE

The government has launched Progress Panchayat, a campaign to reach outto the minorities, particularly Muslims, to create awareness in these communitiesabout the government's policies and programmes.

Context

India is a multi-religious country and hersociety is pluralistic in nature from the religiousand other points of view. Not only major religiouscommunities are spread all over the country, butthe people belonging to all religious communitiesreside in each village and town in the country.

Religious minority groups in India are chieflythe Muslims, the Christians, the Sikhs, theJains and the Buddhists, who have been ableto preserve their group identities and have alsostayed in the mainstream of national policies.

India now has

Hindus 79.8% - 966.3 million

Muslims 14.23% - 172.2 million

Christians 2.3%

Sikhs 1.72%

The Muslims in India constitute the largestreligious minority in the country. Though a minorityin its numerical strength, it is as big as to makeit the second biggest Muslim population in theworld, next to Indonesia. The Muslims constituted14.2 per cent of the Indian population accordingto the 2011 census, and form an importantsegment in the social fabric of the country. Buteconomically, Muslims are the most backwardcommunity with the lowest employment rate. Withsuch backward economic status, there isimmediate need of government incentive for theirempowerment and development.

Why was it in the news recently?

The government launched ProgressPanchayat, a campaign to reach out to theminorities, particularly Muslims, to createawareness in these communities about thegovernment’s policies and programmes andremove “fears and misconceptions” about thegovernment.

Problems of Religious Minorities

The problems of minorities, who are relativelylesser in numerical strength than the majority

community, have been gaining too muchimportance in the policies of many nations in theworld. Both the developed and developingcountries are also caught in the problemsassociated with the minorities.

The minority communities have to faceseveral problems in India.

Disintegrated in Society: The minoritiesare not able to integrate properly in the Hindu-dominated society.

Conversions: There is apprehension amongsome sections that for enlarging its base, theChristian community is involved in convertingthe low caste Hindus or tribes to its owncommunity or religion, resulting in the killingand intense conflict between the majorityHindus and the Christian minority. This hascreated too much insecurity and fear amongthe Christian minority in India.

Less Development Package: The minoritiesclaim that unlike their Hindu counterpart, theyare relatively deprived in areas like employment,politics and social facilitation. According to them,they are poorly represented in civil services aswell as in medical and engineering colleges.

Riots: The serious communal riots especiallyafter 1960s have instilled a sense of insecurityamong the minorities and tend to push theminto their narrow communal shell.

Caste Conflicts: During the caste conflicts,the minority groups seek police protection. Butthe government in power also finds it difficultto provide such protection for all the membersof minorities.

Arbitrary Arrests of Muslims in TerrorismCases Many Muslim men have been arbitrarilydetained, interrogated, and tortured afterbombing attacks, especially between 2006 and2008. (Later investigations found that membersof Hindu extremist groups were actuallyresponsible for some of these attacks.)Authorities have also used draconian andabusive laws, including the Sedition Law and

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Unlawful Activities (Prevention) Act, to targetMuslims. Indian human rights groups haverepeatedly expressed concerns over profilingof Muslims and the use of prolonged detention

Impunity in Communal Violence Cases:Threats of communal violence increase whenlocal forces wait for orders before acting, orworse, are instructed not to act. Theseproblems are compounded when responsibleofficials are not held accountable after the fact.The recurring theme in the aftermath of all thetragic events is impunity. When state authoritiesfail to investigate incidents properly, courts orgovernment human rights commissions step in,document potential complicity, and recommendor order state authorities to redouble effortsto hold people responsible. The results areoften anaemic—only partial, incomplete justiceat best.

Impunity for Military Forces: The Indianarmed forces continue to commit human rightsviolations in Muslim-majority Jammu andKashmir state, and in the north-eastern statesthat are home to many ethnic minority groups.Human rights groups have long documentedserious abuses by members of the Indianmilitary, including torture, extra-judicial killings,and enforced disappearances. But membersof the military are rarely investigated orprosecuted. Indian military personal areeffectively shielded from prosecution forincidents in Jammu and Kashmir and the north-east under the Armed Forces Special PowersAct, which provides military personnel immunityfrom prosecution when deployed in areas underemergency rule. Despite repeated domestic andinternational condemnations calling for repealof the law, it remains in force, due largely tomilitary opposition.

Now, secularism is used merely as a sloganof opportunism. The politicians found it easy toalign a large number of multi-cultural citizens intoculturally distinct groups for the realization of theirvested interests. Most of the communal riots inthe country have been the handiwork ofdisgruntled politicians, anti-social elements andcriminals. Demolition of the Babri Masjid inDecember 1992, the Mumbai riots, and theGodhra carnage and subsequent massacres in2002 revealed the serious weakness andsusceptibility of India’s commitments towardsdemocracy and secularism. Thus, the condition ofreligious minorities in India continues to be verycomplex and critical.

Case Study: Violence against Minorities

In the run-up to 2014 year’s elections in India,it appears that tensions have escalatedbetween Hindu and Muslim communities,leading to a 30 percent increase in incidentsof communal violence as compared to 2012.The central government’s Ministry of HomeAffairs reported 823 incidents of communalviolence in 2013, in which 133 people diedand over 2,000 were injured.

One of the worst such incidents involved massviolence in September 2013 in Muzaffarnagardistrict in Uttar Pradesh, events in which atleast 60 people died. The events began withan altercation on September 7, which led tothe deaths of two Hindus and a Muslim.Inflammatory speeches by right-wing Hinduleaders and allied groups led to three days ofviolence, which spread to neighbouring districtsand only ended after a curfew was imposedand the Indian army was deployed to restorelaw and order.

In addition to the 60 people killed, at least sixcases of gang rape and sexual violence werereported. Muslim citizens from more than 150villages were compelled to flee their homes,and even today, thousands of them remaindisplaced, fearful to return. The stategovernment claimed in December that 5,000people were then still displaced, but local aidgroups have said the number is more thanfive times that, about 27,000 people.

In the aftermath of this violence, the stategovernment failed to provide adequate aid tothe displaced, and have in fact forcibly closeddown some of the camps set up for thedisplaced, many of whom have now relocatedto various villages and are living in tents onother people’s property, or on scraps ofotherwise unused land.

At some of the camps in January, anddisplaced Muslims were living in deplorableconditions, and facing shockingly high ratesof childhood mortality. According to onegovernment commission, as of January at least34 children had died in camps sinceSeptember.

The Supreme Court issued a ruling that theUttar Pradesh state government had beennegligent during the September 2013 violence,by not taking necessary steps to stem the

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Constitutional Position of Minorities

The Preamble of the Constitution describesthe concept of secularism which means that theState has no religion of its own, and there isequal respect for and protection to all religions.

No one is to be discriminated on grounds ofreligion and everyone is guaranteed full andequal freedom of religion.

Article 30 of the Indian Constitution states thatthe minorities have rights to establish andadminister educational institutions of theirchoice. This includes the right to choose themedium of instruction, curricula, and subjectto be taught. Minorities can impart instructionsto their children in their own languages.

The National Commission for Minoritiesundertakes review of the implementation ofthe policies formulated by the Union and stategovernments with regard to minorities. It looksinto specific complaints regarding deprivationof rights and safeguards of minorities, andconducts research and analysis on the questionof avoidance of discrimination against theminorities.

Achievement of the Ministry of MinorityAffairs (Government of India)

Schemes of the Minority Affairs Ministry

“Seekho aur Kamao” - Under “Seekho AurKamao” (Learn and Earn) schemes, about 2200people had been provided training from 2014.

“Nai Manzil”

“Nai Raushni” - Under “Nai Raushni” scheme,3300 people had been provided job-orientedtraining.

“Ustaad” - Initiative to preserve, protect andpromote ancient art, culture of the Minoritycommunities.

“Nai Udaan”

“Pradhanmantri Jan Vikas Karykram” (MsDP) -has been providing basic amenities such asschool, hospitals, roads and other infrastructurein Minority concentrated areas.

Minority Affairs Ministry has been working

on different strategies for welfare of Muslim

community which include:

Protection and Development of WAQF

properties: Efforts to free the WAQF

properties from the clutches of "WAQF mafias"

across the country and establishing a one-man

“Board of Adjudication” at the Centre level to

deal with complaints regarding WAQF properties.

The Board will be headed by a retired Supreme

Court Justice. Three-member tribunals are

being established in the states. About 15-16

states have established these tribunals. Other

states should also do this soon.

Infrastructure: Minority Affairs Ministry, in

cooperation with the state governments, will

construct schools, colleges, malls, hospitals, skill

development centres etc and revenue

generated will be utilized for educational and

other developmental activities for the Muslim

community.

Community Centres: Multi-purpose

community centres “Sadbhav Mandap” will also

be constructed on WAQF land which will be

utilized for marriage ceremonies, exhibitions and

also relief centres during a calamity.

Culture and Heritage Preservation:

Ministry of Minority Affairs has also taken

initiative to preserve, protect and promote

ancient art, culture of the Minority communities

under “Usttad” scheme. Artisans belonging to

Minority Communities from across the country’s

far-flung corners will display their traditional arts

and skills at India International Trade Fair

(IITF).This will provide an excellent platform to

thousands of artisans belonging to Minority

communities from across the nation to display

their arts and skills before the domestic and

international visitors.

Skill Development: The exhibition “Hunar

Haat” (Skill Haat), will be an amazing gathering

of artisans from every corner of the country. It

will be for the first time that these talented

artisans/craftsmen from far-flung areas of the

country are being provided an opportunity to

showcase their skills at national-international

level under one roof.

rising violence. The court then ordered thegovernment to undertake rigorous efforts toinvestigate and prosecute persons involved inthe violence.

Government failures to address communalviolence extend beyond religious minorities andnon-Hindus. The government has also failedto ensure the safe return of Hindus fromJammu and Kashmir state displaced in the1990s after being targeted by militant groups.

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Recent Developments: Progress Panchayat

Government has launched its first of theProgress Panchayats in Mewat region of Haryana.Mewat has a significant Muslim population. Thiscomes after a series of violence against weakerssections in recent times.

There is no dearth of schemes and funds fordevelopment of Muslim and other Minoritycommunities but the need is to inform the peopleabout these welfare measures and alreadycampaigns launched on war-footing. “ProgressPanchayat” will prove to be an effective missionfor this purpose.

Required approach

Clean, honest and transparent system has beenresulted into socio-economic-educationalempowerment of poor, weaker sections,Minorities on the ground level.

Also, only preparing policies and schemes onpaper is not sufficient. It is to be ensured thatthese schemes, aimed at welfare of the needy,are producing results on the ground.

Govt should go to the people, listen to theirproblems and resolve them. Then only, the fruitsof development will reach even to the lastperson of the society.

The officials should visit villages to ensurebenefits of welfare schemes are reaching toevery needy person.

Progress Panchayats

Govts Progress Panchayat is aimed at trying tobuild the confidence of the Muslims and othersections of society. It is a measure to create avote of trust.

The panchayats would analyse the level ofprogress reached by the communities.

Govt is drawing attention to the community’sproblems to ensure the Dalits and minoritiesshould not be lumped into a political monolith.

Suggestion to deal with Problems ofreligious Minorities

Enact a stronger law to prevent communalviolence. A draft Prevention of CommunalViolence Bill is floundering because somepolitical parties want to dilute its provisions.

Strengthen existing human rights commissionssuch as the National Commission for Minorities

and the National Commission for ScheduledCastes, which monitor the rights of religiousminorities, Dalits, and tribal groups. In somecases, the effectiveness of these commissionshas been compromised after the governmenthas staffed them with non-expert, politicalappointees.

Repeal the Armed Forces (Special Powers) Act.

Discipline or prosecute responsible membersof the security forces, regardless of rank, whounjustifiably fail to stop violence or do not actimpartially during events of communal violence.

Enact a strong law against torture thatconforms with the Convention against Tortureand Other Cruel, Inhuman or DegradingTreatment or Punishment. (A pendingPrevention of Torture bill is under considerationin India’s parliament.)

The government should seriously consider theSachar Committee Report without any delayand implement its recommendations.

People-to-people contact, social consciousness,abolition of illiteracy etc. may prove usefulconfidence-building measures.

The secular values must be internalised by thepeople and political parties. No political partyshould be permitted to contest election byexploiting the emotions of a particularcommunity.

Efforts should also be made to promote liberalsocial reforms to deal effectively withcommunalism and the influence of communalistleaders.

The secular political class of India shouldcampaign for widening the base of educationfor Muslims. The religious minorities have tobe empowered educationally and economically.

Conclusion

In order to improve the condition of thereligious minorities in India, the government inpower should make every effort to restore theirconfidence. It is also necessary to createconditions in which the minorities are assured thattheir constitutional and legal rights aresafeguarded. The government should seriouslyrespond to the real needs and requirements ofthe poor and needy minority groups. The progressof the country can be achieved if all the religiouscommunities in India live in perfect harmony.

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NITI AAYOG LAUNCHES AGRICULTURALMARKETING & FARM FRIENDLY REFORMS

INDEX

NITI Aayog has launched first-ever index on reforms in the farm sector.Maharashtra has been ranked first in the country on reforms in agriculturalmarketing, followed by Gujarat and Rajasthan. On the other side Uttar Pradesh,Punjab, West Bengal, Assam, Jharkhand and Tamil Nadu performed poorly, noteven reaching the halfway mark.

Context

Agriculture is the backbone of IndianEconomy. Agriculture is the core sector for foodsecurity, nutritional security, sustainabledevelopment & for poverty alleviation in India.

It employs almost 60% of the population.

Feeds 130 Crore people.

It contributes about 14% to the GDP.

The annual growth of agriculture in the longterm has been around 2.5%.

Milestones in agriculture development in Indiasince independence includes:

Green revolution

Evergreen revolution

Blue revolution

White revolution

Yellow revolution

Bio technology revolution

3rd Green revolution in Agriculture - The mostrecent one is Information and communicationtechnology revolution in Agriculture.

The low levels of productivity, growth andincomes is ailing the farm sector in India andcausing immense agrarian distress. Withoutundertaking radical reform it is impossible totransform agricultural sector and double farmers’income. However, state governments have beenextremely lax in implementing much needed reformsto modernize agriculture and create a favourablepolicy and market environment for farmers.

Recently, NITI Aayog launched AGRICULTURALMARKETING & FARM FRIENDLY REFORMS INDEX.It’s first-ever index on reforms in the farm sector.Maharashtra has been ranked first in the countryon reforms in agricultural marketing, followed byGujarat and Rajasthan. On the other side UttarPradesh, Punjab, West Bengal, Assam, Jharkhand

and Tamil Nadu performed poorly, not evenreaching the halfway mark.

Fig. 5

Constitutional Provisions

Agriculture is a state subject in IndianConstitution. Union Governments can'tlegislate on activities of cultivation ofagriculture produce. Through legislation it can'tcompel states to produce a particular crop

Central government intervene throughpromotional schemes for particularproduce by providing financial incentivesfor particular crops like pulses etc.

Also Centre may legislate on inter-statetrade and quality of agriculture produceand its distribution.

Centre can make laws on those statesubjects who are related to internationaltreaties for e.g. commerce andagriculture. Though agriculture andcommerce belong to state law, centre ispermitted to make laws under state listfor giving effect to international treaties.

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Government Initiatives - Recent Budgetand Farm Sector

The most significant aspect of this Budgetlies in the:

Seismic shift in Govt Approach which movesagriculture away from being a “survival”industry to one that should generate“significant returns.”

For the first time in post-Independence India,there is explicit recognition that agriculture neednot be just about food security and povertyreduction but about income generation andgrowth.

This thinking could potentially see agricultureas a conduit for greater international trade.M.S. Swaminathan, father of India’s GreenRevolution, welcomed the income orientationof this year’s budget saying, “The dawn of anew era in farming is in sight”.

The private sector must play a part but will notdo so unless it sees signals from thegovernment that it is serious about agriculturalchange. Agriculture-Industry and Public-Privatepartnership is the key to deepening R&D in thesector, and to developing markets.

Public spending on basic infrastructure –irrigation, roads, electrification, storage andaccess to markets – as well as priority sectorlending are requisites to inducing the privatesector to invest in areas such as supply chaininfrastructure and services (e.g. R&D and globalmarkets) for value addition.

Monetary allocation highlights for improvedagricultural income growth:

Government set a target to double farmerincomes by 2022.

These include the development of a long-termirrigation fund valued at INR 20,000 Crore.

Raising agricultural credit to INR 9 lakh Crorefor the fiscal year 2016-17.

0.5% Krishi Kalyan Cess – a dedicated levy forthe improvement of agricultural facilities – onall taxable services.

A doubling of incomes will require large-scalechanges such as:

First, there must be greater diversificationtowards high-value crops and enterprises.Staple crops alone will not raise farm incomes.Indian National-level data reveals that shiftingto high-value crops can quadruple income fromthe same piece of land.

Second, more cutting-edge technologies andnew approaches to farming must be broughtin. IT and biotechnology alongside irrigation areintegral to raising productivity.

Third, farmers must receive better prices butthis can only be done through more competitivemarkets, better value chains and improvedlinkages between field and fork. The fourthrequires a re-skilling of farmers away fromcultivation. Fifth, the Minimum Support Priceneeds review because at present, funding isunsustainable and will be put to better useelsewhere.

Case Study : India vs. China

If Govt wants further incentive forchange then it needs look no furtherthan our neighbour.

China has outperformed India inagriculture even though China has lessarable land (135.4 million hectares toIndia’s 159.7 million hectares).

Wheat in India and China is grown onirrigated land but the Chinese yield(output per hectare) is 60% higher thanIndia’s. In the U.S., wheat is onmarginal, non-irrigated land, and U.S.wheat yield is the same as India’s.

In dairy, sugarcane and oilseeds, Indiaoutstrips China.

How has China managed this? Chinainvests more than India on Researchand Development (R&D) fortechnological innovation. Sustained publicinvestment in rural infrastructure andintensive cropping practices have allowedfor superior yields. China also followedan increasingly liberalised agriculturalpolicy focussing on competitiveadvantages. Support to farmers wasthrough investment rather than subsidies.

Criticism of Government planning

The year 1991 marked a new era for India inthe global economy but agriculture got leftwoefully behind. Twenty-five years on, playingcatch-up is not easy and requires commitment.

In the long term, real increase in incomematter. There must be an urgent rethink ofthe labour force in agriculture. Alongsideinvestment, reform and private sectorengagement, the government should consider

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pursuing policies that aren’t just aboutincreased farm incomes but also on makingfarming less-labour intensive and thuspromoting non-farm employment in rural areas.

The sums announced in the budget appearimpressive but closer inspection reveals thatthe increases are modest and certainly notenough to spearhead a revolution.

Last year the Ministry of Agriculture andFarmers’ Welfare was allocated INR 16,000crore. This went up INR 36,000 Crore this year;a whopping increase of 127% but much of thiswas simply a transfer from the Ministry ofFinance.

There are, of course, genuine increases andnew allocations to agriculture but after takingall inter-ministerial transfers into account thetotal allocation is not as large as figures initiallysuggested.

This put forward the question whether thebudget announcements were aimed atgarnering political support following droughtyears rather than part of an operationalstrategy needed to transition the sector. If thegovernment’s budget focus on agricultureincome is to have meaningful effect, thespending and reforms need to work ataddressing underlying structural issues for thenext five years.

This year’s budget is one step in the rightdirection with a clear focus on the supply-sidefactors needed to increase productivity.However, increased agricultural output needsto find itself in markets beyond domesticborders to avoid potential price collapses inthe home market. Both supply and demandissues have to be at the heart of thegovernment’s program for change. Agriculturalreforms such as the e-trading initiative havestarted to address these issues but moreneeds to be done.

That Indian agriculture has been in a time warpfor over 40 years comes as no surprise.Although India has made tremendous progresstowards achieving food security sinceIndependence, crop yields in India are 30%-60% of those achieved in other developingcountries.

Out-dated farming practices, shrinking averageplot size (from nearly 2.3 hectares in 1970 toless than 1.2 hectares at present); untenableland leasing arrangements, poor infrastructureand inadequate insurance facilities haveinhibited sector development.

India has one of the world’s highest levels ofpost-harvest food loss because of poorinfrastructure and access to markets. Growththis year stands at 1.2%, up from -0.2% last year.

Recent Initiatives by NITI Aayog

Addressing the issue, NITI Aayog has identifiedthree key areas for reform and is nowpersuading states to undertake the reforms.The areas identified for immediate reforms are:

Agricultural market reforms

Land lease reforms

Reforms related to forestry on privateland – felling and transit of trees.

Today, marketing is extremely crucial and almostevery sector has embraced marketing principlesto ensure best possible outcomes. However,agricultural development in India has entirelyignored the potential of marketing and hascontinued to follow its old trajectory.

Therefore, the benefits that can be accruedfrom agriculture are largely untapped.Productivity in some states is regrettably lowand there is a vast disconnect between pricesreceived by farmers and the prices paid byconsumers.

Moreover, private capital and modernizationhave completely evaded agriculture, resultingin barely any addition to the value chain. Thepoor state of reforms in the sector is also theprimary reason for the non-performance ofagricultural food processing industry in India.

This, despite very favourable demand-sidefactors spread across the country. Much ofthe potential that post-harvest value additioncan bring to agriculture has been ignored.

Reforms in this area can bring out an enormousincrease in employment by creating jobs incleaning, processing and marketing of graindirectly by the farmer. This will also resolveunderemployment encountered in agriculture.

Three crucial reforms pertaining tomarketing in agriculture have beenrecommended by NITI Aayog

First is the immediate need to amend existingregulations in order to liberalize markets.Farmer should be given the freedom to decideto whom, where and how he wants to sell hisproduce. Seven indicators have been developedby NITI in this regard. The reforms also suggestspecial treatment of fruits and vegetables fromother farm produce as they are perishable andproduced in small quantities.

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Importantly, the recommended reforms placeimportance on IT in marketing for the creationof a ‘national market’ for agriculture, so thatfarmers across the country may benefit frominterconnected markets, through the use ofappropriate technology. This important reformhas so far eluded the country due to stronglobbies of middlemen and the reluctance ofpolitical class to take favourable steps.

Taking note of increasing incidents of leasingin and out of land and suboptimal use of landwith lesser number of cultivators, NITI hasreformed the land leasing law to recognize thetenant and safeguard interest of land owners.The reforms also lay stress on the untappedscope of agro forestry in supplementingfarmers’ income.

Agricultural Marketing and FarmerFriendly Reforms INDEX

NITI Aayog has launched an index torank States and UTs that is based onimplementation of seven provisions proposedunder model Agricultural Produce MarketingCommittee Acts (APMC) Act, joining NationalAgricultural Marketing Portal (eNAM) initiative,special treatment to fruits and vegetables formarketing and level of taxes in mandis.

These indicators reveal ease of doingagribusiness as well as opportunities forfarmers to benefit from modern trade andcommerce and have wider option for sale ofher/his produce. These indicators alsorepresent competitiveness, efficiency andtransparency in agri markets.

The second area of reforms included in theindex is relaxation in restrictions related to leasein and lease out agricultural land and changein law to recognise tenant and safeguard landowners liberalisation.

The third area included in the index representfreedom given to farmers for felling and transitof trees grown on private land. This representsopportunity to diversify farm business.

Index

The Index is named as “AgriculturalMarketing and Farmer Friendly ReformsIndex” and it has a score which can haveminimum value “0” implying no reforms andmaximum value “100” implying completereforms in the selected areas. States and UTshave been ranked in terms of the score of theindex.

The index is aimed at helping states identifyand address problems in the farm sector, whichsuffers from low growth, low incomes andagrarian distress.

Detailed study of the reforms in various statesand UTs show that reforms have remainedpatchy, partial, sporadic and implemented invery diluted form.

Outcomes

Maharashtra got 81.7 and Gujarat was secondat 71.5. Puducherry, Delhi and Jammu &Kashmir got the lowest three grades of 4.8,7.3 and 7.4, respectively.

The state of Maharashtra achieved first rank inimplementation of various reforms. The statehas implemented most of the marketing reformsand it offers best environment for doingagribusiness among all the states and UTs.

Gujarat ranks second with a score of 71.5 outof 100, closely followed by Rajasthan andMadhya Pradesh. Almost two third states couldnot reach even halfway mark of reforms score.Major states like U.P., Punjab, West Bengal,Assam, Jharkhand, Tamil Nadu and J&K are inthis group.

Three states and four Union Territories did notfigure in the list, as these do not have anyAgricultural Produce Marketing Committee Act.They include Bihar, Kerala, Manipur, Damanand Diu, Dadra and Nagar Haveli, Andamanand Nicobar.

Fig. 6

APMCs & e-NAM

The central government first introduced reformsin the APMCs or wholesale markets (mandis)through the model APMC law in 2003, urgingstates to adopt it; agri-marketing is a statesubject under the Constitution. In the pastdecade, a majority of states have partly adoptedthe model law and some have ignored it.

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The Centre has since decided to bring another

model APMC Act to address all the concerns of

states, including the subject of contract, andto facilitate the setting up of private mandis.

It has also launched the electronic agriculturemarket (e-NAM) portal but success here has

been slow in the absence of big Mandi

Reforms.

NITI Aayog finds that it would take time for

states to amend their APMC laws in line with

the requirement of e-NAM. While some states

have demanded fruits and vegetables to not

be included under the Act, others have askedfor the commodities not to be taxed.

Conclusion and Way Forward

India’s agriculture has the potential to be abig hitter. India comes second only to the U.S. in

arable land. India is the world’s second largestproducer of fruits and vegetables yet only rankstenth among exporting countries.

Government has to play a major role inproviding support to farmers. This is true all overthe world and there is hardly any country wheregovernment intervention is not present. There mayof course be variations in the extent ofintervention but government facilitation is essentialfor sound agricultural development.

Recent shift in Govt approach can set theball rolling and herald in a new era for Indianagriculture. With the right mix of public sectorinvestment and reform to engage the privatesector more seriously in agriculture, Govt canmove closer to – taking Indian agriculture out ofa time warp, doubling farmer incomes in real termsand putting Indian agriculture firmly on the globalmap.

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SMOG AND ITS IMPACT

High levels of smog has grappled Delhi with a heavy smog blanket with poorvisibility and the air quality index reaching alarming levels across the city. Herewe are analyzing the environmental and economic impact of smog.

Context

Smog is a mixture of air pollutants — nitrogenoxides and volatile organic compounds — thatcombine with sunlight to form ozone.

Hence the term “smog” describes a mixtureof emissions under specific climate conditions.These emissions include:

Industrial pollutants

Car and other vehicle pollutants

Open burning

Difference between Smog and Fog

Fog is basically a cloud on the ground. Theatmosphere is made up of many gases, oneof which is water vapor. It can hold a certainamount of water as invisible water vapor atany given temperature. If air is cooled it canhold less water and becomes super saturated.At saturation point, some of the water has tocondense to form water droplets, which formscloud. Fog occurs as a function oftemperature, humidity and atmosphericpressure. If the water particles are large, theybecome mist or rain. So the basic differenceis that fog is natural and smog is created bypollution produced by cars and factories.

Climate and smog formation

Autumn And Winter Smog (Particles):When the weather is cooler, the horizon showslot of low laid buildup of fine particles thatreturn from automobile emissions, woodsmoke, alternative combustion processes andphotochemical processes within the air.Temperature inversions in winter mean that hot

air higher within the atmosphere trapspollutants inside the layer of cold air nearer tothe bottom. These inversions will last for manydays and cause 'scummy' brown hazed horizonstill dispersed by wind or rain. The fine particlescause scattering of daylight, and cut backvisibility and provoke existing respiratorydiseases and alternative health issues.

Photochemical/Summer Smog: In thehotter months, summer smog or photochemicalsmog is caused by the action of daylight on acombination of hydrocarbons and nitrogenoxides. This smog comprise of secondarypollutants like ozone, aldehydes and fineparticles. Because the smog levels assemble,polluted air gets trapped and re-circulates fordays. Hence, during the evening you might findyourself inhaling exhaust fumes emitted by yourautomotive in the morning.

How is it measured?

An air quality index (AQI) is a numberused by government agencies to communicate tothe public how polluted the air currently is or howpolluted it is forecast to become. As the AQIincreases, an increasingly large percentage of thepopulation is likely to experience increasinglysevere adverse health effects. Different countrieshave their own air quality indices with respect totheir air quality standards.

India

The National Air Quality Index (AQI) waslaunched in New Delhi on 17 September 2014under the Swatch Bharat Abhiyan. It comes under

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the Ministry of Environment, Forests & ClimateChange. The table below shows the categorizationof air quality by the National AQI.

As seen from the table, air pollution is

measured in PM (Particulate Matter). Particulate

matter is the sum of all solid and liquid particles

suspended in air many of which are hazardous.

This complex mixture includes both organic and

inorganic particles, such as dust, pollen, soot,

smoke, and liquid droplets. These particles in air

are either:

Directly emitted, for instance when fuel is burnt

and when dust is carried by wind, or

Indirectly formed, when gaseous pollutants

previously emitted to air turn into particulate

matter.

Consequences of smog

A. Health Effects

Ground-level ozone, sulfur dioxide, nitrogen

dioxide and carbon monoxide are especially

harmful for senior citizens, children, and people

with heart and lung conditions such as

emphysema, bronchitis, and asthma.

It can inflame breathing passages, decrease

the lungs working capacity, cause shortness of

breath, pain when inhaling deeply, wheezing, and

coughing.

It can cause eye and nose irritation and it

dries out the protective membranes of the nose

and throat and interferes with the body's ability

to fight infection, increasing susceptibility to illness.

Hospital admissions and respiratory deaths often

increase during periods when ozone levels are

high.

In a report last year, the CSE (Centre for

Science and Environment) had said that air

pollution is responsible for around 10,000-30,000

deaths in Delhi annually.

B. Economic Consequences

The economic consequences are huge. Takingexample of a particular incident, especially thesmog during the first week of November 2016(after Diwali) – The air pollution was 40 timeshigher than the permissible safety limits set bythe World Health Organization (WHO) andapproximately 15 times higher than Indianstandards. The economic effects of such incidentsare enormous. Schools, construction works, Coalbased power plants in and around Delhi wereclosed. Transportation takes the biggest hitespecially the rail and aviation industry leading toflights getting cancelled and trains getting delayed.It would also have a long term effect on tourismsector. Road transportation also takes a hit withaccidents becoming more common leading to lossof life and property.

Smog can also accelerate the deteriorationof rubber, plastics, paints and dyes, Damage tometals, stone, concrete, clothing, rubber andplastic is directly related to contaminants in theair. The typical culprits are sulphur dioxide,sulphuric acid, ozone (photochemical smog), andnitric acid (HNO3).

Conclusion

There is also a need for inter-statecooperation as the crop burning in Punjab, Haryanaand Uttar Pradesh are also responsible for rise inpollution levels. An action was directed by theSupreme Court as well as the National GreenTribunal for subsidy to farmers to buy appropriatetechnology that will prevent burning of straw aswell as the infrastructure for reuse of straw whichis yet to be in place.

The Ministry of Science and Technology onDecember 7, 2016 launched a program to betterunderstand the element of fog, in order to dealwith it in an effective manner. This new programwill help the Indian Meteorological Department(IMD) in proper monitoring of the fog from variouscenters within Delhi leading to better predictionslessening the burden of rail, road and air transport.

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INDIA-SRI LANKA FISHERMEN ISSUE

India and Sri Lanka held Ministerial level talks to sort out the long standingissues pertaining to fishermen as the talks between the fishermen associationsof the two countries failed to yield any results.

Context

After getting independence around same timefrom their common colonial master, both Indiaand Sri Lanka have always maintained very cordialrelations between them. In fact the relationshipbetween them dates back to even Ashokan era.Both countries share a legacy of intellectual,cultural, religious and linguistic interactions. Therelations have gone many ups and downs sincetheir independence.

Recently an issue which has been unresolvedfor a long time has cropped up again. The issueis regarding livelihood and security of fishermenof both the sides who have been carrying outtheir traditional fishing activities in Palk Bay sincemany generations.

About the issue

In 1974 an international maritime boundarywas delineated between these two countries.Since then both the countries invoke theirsovereignty in their own maritime territories. Formany years there have been instances of arrestof Indian fishermen who have crossed into theSri Lankan waters by Sri Lankan coast guards.Similar instances of arrest of Sri Lankanfishermen have also been there but it iscomparatively less. Though both countries releaseeach other’s prisoners on humanitarian groundsbut such thing impose a great loss to India,particularly Tamil Nadu state which is and will belosing its working force and many physical assetstoo till the time a permanent solution is notachieved.

Indian fishermen are said to be more efficienttechnologically in getting a good fish catch in PalkBay. Sometimes they knowingly or unknowinglypenetrate into Sri Lankan water for fishing. Allthis is affecting severely to the fishermen ofNorthern Province in Sri Lanka. This region is muchunderdeveloped and fishing is the only source oflivelihood for them. During Elam War especiallythe period of 2006-09 Indian fishermen are saidto have done a lot of such damage in Sri Lankan

waters. Now after the end of war, Sri Lanka istrying to assert its sovereign rights and fishingcommunity is trying to increase their fish catch.

There is also another associated issue aboutthe sovereignty over Kachhiteevu island. Thisisland was never demarcated on ground as perthe 1974 agreement. Hence Government of Indiaconsidered it as a disputed territory with Sri Lanka.Later on India decided to cede this territory to SriLanka in order to keep the bilateral relationsundisturbed and ignored the concerns expressedby Tamil Nadu fishermen. Presently Tamil Nadugovernment cited this action as the reason behindthe sufferings of their local fishermen community.

Thus the reasons for dispute are:

There is no well defined boundary line betweenthe two nations.

Territorial waters overlap in some areas:Maritime border between the two countries isabout 400 kilometres spreading along threedifferent areas: the Bay of Bengal in the north,the Palk Bay and the Gulf of Mannar in the centreand the Indian Ocean in the south. In the PalkBay region, distances between the coasts of thetwo countries varies between 16 and 45 kms.This means territorial waters of each country insome areas strays into the other’s if 12 nauticalmile criteria is strictly applied.

LTTE issue has raised vigilance: The issueof fishermen came to existence with theemergence of violent ethnic conflict betweenthe Tamil militants and the Sri Lankangovernment in the mid 1980s. Increasedvigilance by the Sri Lankan Navy to checkintermittent flow of Tamil refugees into Indiaand flow of arms and supplies to Tamil militantgroups made fishing difficult and risky. Due tothese fishermen from both nations suffered.

Security concerns: The monitoring is stillaimed at preventing possible return of LTTEcadres, who fled from the island during theheight of the conflict in 2009, to revive theinsurgency all over again.

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Thus the Indian fishermen, who thus farenjoyed monopoly of resource-rich waters, havenow got competitors in massive numbers. Attimes, this leads to confrontations between thetwo fishing communities and in turn drawingintervention of either of naval forces. The maincomplaint of Sri Lankan fishermen has beenagainst Indian mechanised trawlers that indulgein pair, mid-water, pelagic, and bottom trawlingseverely damaging marine resources and the seabed. Ironically, most of the trawlers from TamilNadu are owned by merchant capitalists from non-fishing and other social backgrounds. The entryof ‘outsiders’ has not only threatened the localcustomary laws of fishing communities, but alsoturned several traditional fishermen from ownersto labourers. Trawler sector in Tamil Nadu is alsopolitically influential and financially sound makingit more obdurate to solutions that could cut downits profit margins.

India’s request to provide her fishermencommunity in phased manner during which theywill be withdrawn from the disputed waters wasrejected by Sri Lankan counterparts instead theydemanded a compensation for the damage causedby Indian side till now. Nevertheless their demandon ban on bottom trawling and other destructiveactivities seems very much genuine.

Benefits of resolving the issue

The dispute between the two nations iseffecting the basic livelihoods of fishermen. Thelivelihood security of fishermen of both the sides,especially the Sri Lankan part of Northern Provincewhich is high deprived of economic developmentand is the home to Indian origin Tamils for thewelfare and security of whom various governmentsof India have expressed their concerns is at stake.

Second thing is the sovereign rights of theboth the Republics and their bilateral relationswhich each one has to respect.

Third thing is the ecological balance of thePalk Bay which may get damaged irreversibly bythe bottom trawling if such a mad race continuesby both the sides.

Fourth thing is about the traditional rightsover the island in Palk Bay especially theKachiteevu island.

Fifth thing is in Indian side where the centralgovernment has to take Tamil Nadu governmentinto confidence and keep up the spirit ofcooperative federalism.

Steps needed

Being a major player in South Asian politics,India should invite Sri Lankan counterparts to forma joint working group where all the majorstakeholders like Fishermen Association, Navy,coast guards, government representatives, etc areto be invited. Both the countries should showmutual respect for each other. Fortunately thepresent government in Sri Lanka led by Mr.Sirisena is India friendly and show balancedapproach towards India vis-à-vis China unlike itspredecessor Mr. Rajpaksha.

Meanwhile Indian government should assistthe state government to carry out certaindevelopmental programmes in these coastaldistricts. This will divert much of the working forceinto non-fishing activities or other agro basedactivities.

Possible solutions:

Avoid shooting incidents due to “mistakenidentity”, ‘coordinated patrolling’ between

marine forces.

Developing fish farming extensively in

Indian waters would prevent itsfishermen from venturing into otherwaters in search of a ‘big catch’.

India can also consider leasing fishingblocks, especially those identified as‘surplus total available catch’, from Sri

Lanka.

To preserve marine resources, imposestrict and complete ban on mechanized

trawlers.

Proper fisheries management.

Educate the Indian fishermen to keep tothe Indian side of the Palk Bay and notto transgress Sri Lankan waters.

District administration should carry outtraining and counseling programmmes forfishermen community to provide them knowledgeabout international maritime boundary. They canrefer to a similar arrangement which is alreadythere among coastal states of India for carryingout fishing in Bay of Bengal where fishermen ofeach state stay within their allotted share in India’sterritorial waters.

Similarly government of both the countries cancarry out certain developmental programmes in

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Northern Province too. Proper institutionalarrangement should be there to exchange eachother’s fishermen upon their arrest. This issueshould be dealt on humanitarian grounds which arepossible through each other’s mutual respect andconsent. Hence the coastal guards of both thecountries are to be trained accordingly. Both thecountries have to issue certain clear guidelines totheir fishermen, thereby putting genuine restrictionson their own activities. They should be encouragedfor deep sea fishing. We have to ensure availabilityof natural resources for not only present generationbut also for future generations too. As said byGandhiji, “Nature has enough for everyone’s needbut not for anyone’s greed”.

Indian is emerging as a regional leader inAsia. Hence the bilateral relations are to be keptin accordance with the long term foreign policy.The issue has to be handled carefully. What hashappened with India and Nepal during Madhesicrisis should not be repeated again here. Thesekinds of issues give a golden opportunity to ourrival country China to interfere in South Asianpolitics and contain India in the region. For Indianmaintaining good relations with neighbours is anuntold pre-requisite for getting permanentmembership in United Nations Security Council.Meanwhile the concerns of Indian fishermen hasto be taken care, otherwise it may result intosocial unrest in the region.

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NORTH EAST KEY TO ‘ACT EAST’

Union Minister of State (Independent Charge) for Development of North EasternRegion (DoNER) at the International Seminar on “Economic Dependence onNorth-Eastern States of India and its bordering nations” has emphasized onthe importance of North East India.

Context

North East of India

The North East of India (Comprises 8 states)is left behind in the developmental path sinceindependence due to narrow connectivity, difficultphysical terrain and language diversity. This led togrowing of anti-India sentiments and feeling ofinsecurity among the dwellers of the region. Thereis also a sense that the North Eastern states arediscriminated against by the Central governmentin resource-sharing and in terms of prioritizing.

Fig. 7

This has resulted in the form of variousuprisings such as Nationalist Socialist Council ofNagalim (NSCN), United National Liberation Front(ULFA), National Democratic Front of Bodoland(NDFB), National Liberation Front of Tripura (NLFT)etc.

Development issues in North East

The politico-administrative arrangementsmade by the Centre have also been lacking. Forinstance, the introduction of the Sixth ScheduleAutonomous Councils (currently there are ten suchCouncils in the region and many more demandingsuch status) ended up creating multiple power

centers instead of bringing in a genuine processof democratization or autonomy in the region.

The AFSPA became a powerful measure forthe central and the state government to actagainst actors challenging the political andterritorial integrity of India. As a result, the Indianarmy for the first time since independence wasdeployed to manage an internal conflict. But,instead of resolving the problem, it led to anongoing escalation of the conflict by bringing it ona military level. The regular violations of humanrights has led to a radicalization and militarizationof the region and also weakened the supportersof a political solution.

The North-east region has also been afflictedby persistent and vexatious illegal immigrants fromBangladesh, especially in Assam, where thereemerged a strong anti-foreigner’ movement in thelate 1970s to the mid 1980s which was soughtto be contained by the Assam Accord betweenthe Assom Gan Parishad and the Uniongovernment under Prime Minister Rajiv Gandhi in1985. The implementation of the terms of theAccord remained problematic and the solution ofthe problem of infiltration persists.

Development of North East as key to ActEast Policy

There has been a focus from decades tobolster harmonious ties with South East AsianCountries in order to revive political engagement,forge regional security cooperation anddevelopment, economic linkages by increasingintegration with these countries. In 1991 the thenPrime Minister P V Narsimha Rao devolved astrategy to engage with the countries of SouthEast Asia in the form of ‘Look East’.

The current Government has shown itsenthusiasm by rechristening the name of ‘LookEast’ as ‘Act East’ and sending out an

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unequivocal message that the Government is keennot just to strengthening connectivity and economicties with countries in South East Asia, but also tobuild strong strategic ties.

It has been observed that the North Eastregion of India is the Key to this Act East Policybecause India is in the process of engaging inserious trade and economic activities with thecountries on the Eastern Borders includingMyanmar, Bangladesh and Bhutan. Its successwill depend largely on the extent to which thegrowth and development occurs in this region.

There has been a consensus in India cuttingacross the political spectrum in support of therevision of the ‘Look East Policy’ . Thisenthusiasm and intensity in momentum of variousactors in the economy is marking another shift inthis foreign policy, of ‘Thinking East’ too.

Various Engagements with the South EastAsian Countries:

Organizing “Milan”—a congregation of naviesorganized by the Indian Navy biennially since1995 in Port Blair involving social andprofessional interactions, including combinedexercises. In 2008 eleven Navies includingAustralia participated.

Becoming a member of the ASEAN RegionalForum (ARF)—1996.

Completion of the 160 Km India-MyanmarFriendship Road from Tamu to Kalemyo toKaletwa built by the Border RoadsOrganisation—2001.

Finalising the Kaladan MultimodalTransport project especially in the contextof Bangladesh being reluctant to allow transitfacilities. By this the port of Sittwe in Myanmar(250 Km from Mizoram border) will beconnected to the Indian ports and Kaletwa(Myanmar) will be linked with the NationalHighway 54 at Nalkawn in Mizoram.

Mekong Ganga Cooperation which comprisessix member countries (India, Thailand, Myanmar,Cambodia, Laos and Vietnam) emphasised onfour areas of cooperation: Tourism, Culture,Education and Transport linkages in order tobe solid foundation for future trade andinvestment cooperation in the region.

Development of India-Myanmar-ThailandTrilateral Highway is a game changer toconnect India’s North-east with ASEAN.

India would be connected to the railwaynetwork of neighbouring Myanmar to link upwith the ambitious 81,000 km long Trans-AsianRailway Network (TARN). This TARN willmake north-eastern states the gateway toSouth-east Asian Countries.

India-Vietnam engagement in bilateral anddefence cooperation. Indian Navy and VietnamNavy will cooperate in sharing of white shippinginformation. India also gave its naval patrolvessel to Vietnam. Further agreement onestablishment of a Software Park in theTelecommunication University in Nha Trang cityin Vietnam.

History behind Look East Policy:

The collapse of the Soviet Union in 1991marked the end of the Cold War and theworld order that anteceded it. The dynamicspost the era saw a swift global reconstruction.United States of America became the mostpowerful country in the world and Chinaemerged as the face of the ‘East’, a onceunderdeveloped country was on the path tobecoming a global super power. In a worldthat was rapidly globalizing, the ‘Look EastPolicy’ was a course correction in India’sforeign policy.

In 1990, when India sensed the change in thelocus of world economic power from the‘west’ to the ‘east’ as necessitated by theevolving geo-politics and trends in the Asia-Pacific. The aim was to revive political ties,forge regional security cooperation anddevelop economic linkages by increasingintegration with South-east Asia. Over theyears, India joined ASEAN-led arrangementssuch the ASEAN Regional Forum (ARF),ASEAN Defence Ministers’ Meeting Plus(ADDM+) and also ASEAN-India AnnualSummit and the East Asia Summit (EAS)which has institutionalized India’s associationwith South-east Asia.

Look East to Act East:

In 2014, the Government decided toemphasize the implementation aspect byadding “Acting East”. This decision wasprobably made in light of the realisation that

although many plans and policies have beenformulated, their execution has been less thansatisfactory. Now is an opportune time toboth “look” and “act” East as India’s relationswith Myanmar and Bangladesh are good andare projected to improve from here on.

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India-Japan agreement on areas like Nucleartrade, bullet train technology, military & defenceand infrastructure reflects convergence ofrelations between both the countries.

India’s negotiation on the RegionalComprehensive Economic Partnership(RCEP) agreement with ASEAN and China,Japan, South Korea, Australia, New Zealandwhich represents 40% of global population with23% of global GDP is significant in enhancingIndia’s export to the market due to countriesinherent strength in the services sector.

Signing up of Civilian Nuclear Deal with Australiais significant step in India’s interest as it seeksto enhance its energy generation from NuclearReactor from the current 5,000 MW to 20,000MW by 2022 and 62,000 MW by 2032.

Policy towards North East:

Universities and think-tanks from Yunnan havealso sought to enhance track two interactionswith important neighbouring countries likeBangladesh and India, for giving a fillip to theBangladesh-China-India-Myanmar BCIM Corridor.

India too needs to focus more on the role ofthe North-East, and apart from enhancingconnectivity with the mainland, it needs todispel the notion that the mainland will benefitat the cost of the North East, which will berelegated to the sidelines.

Some of the important steps which can betaken are not making policies for the North-East as a mere gateway to South East Asia,but addressing its political concerns andrealising that a few development projectscannot obliterate the distrust which existsbetween New Delhi and the region.

It is also important, to make policies whichensure that North-Eastern states emerge asimportant manufacturing hubs, and not justproviders of raw materials to neighbouringcountries and other parts of India.

The most important change required off courseis a change in mindset, and to stop looking at

the region as a periphery as has been the casefor very long.

Conclusion

India's Act East Policy must continue to focuson strengthening collaboration with the ASEAN.Partnerships must aim at promoting economic

revival through implementation of India-ASEANFTA in services and investment and strategiccooperation to fight terrorism, freedom ofnavigation, maritime security and defencecooperation.

Indian PM’s use of soft power such as Buddhism,

tourism, people-to-people contacts, and culturalties with the region must also be harnessed. TheAct East Policy should also improve Indianconnectivity with ASEAN, particularly betweenNorth-east India and Myanmar.

Projects including the Trilateral Highway and

Kaladan Multi-modal Trade Transit Project, andthe Bay of Bengal Initiative for Multi Sectoral

Technical and Economic Cooperation (BIMSTEC)are projected to not only increase mutual

economic productivity but also promote peaceand prosperity in the Northeast region.

Beyond ASEAN, India must work to strengthen

ties with East Asia, particularly Japan andRepublic of Korea and Australia, which are both

relevant for India's strategic and economicinterests. Technology transfer, civilian nuclear

cooperation, defence, and innovation are

important sectors that need to be targeted

further.

Continuous engagement with China too is

necessary to expand cooperation, particularlyon the economic front. With India being thesecond largest shareholder of the Asian

Infrastructure Investment Bank (AIIB) and anequal partner in the National Development

Bank (NDB), the forthcoming decades mustensure that areas of conflict are minimized andeconomic integration for the benefit of both

nations are fully leveraged.

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MAKE IN INDIA- “ELECTRONICS & IT SECTOR”-ACHIEVEMENT REPORT

Department of Industrial Policy and Promotion (DIPP), Ministry of Commerceand Industry in collaboration with Ministry of Electronics & InformationTechnology, KPMG and Make in India published an achievement report ofElectronics & IT sector.

Context

The electronics market of India is one of thelargest in the world and is anticipated to reachUS$ 400 billion in 2022 from US$ 69.6 billion in2012. The market is projected to grow at acompound annual growth rate (CAGR) of 24.4 percent during 2012-2020.

Total production of electronics hardwaregoods in India is estimated to reach US$ 104billion by 2020. The communication andbroadcasting equipment segment constituted 31per cent, which is the highest share of totalproduction of electronic goods in India in FY13,followed by consumer electronics at 23 per cent.

Electronic exports from India was expectedto reach US$ 8.3 billion in FY13, a CAGR of 27.9per cent during FY07–12. Technologicalimprovements and competitively costeffectiveness are main drivers for demand ofIndian electronics products abroad.

The Government is driving forward reformsin IT and electronics manufacturing sector throughmajor initiatives like ‘Make in India’ and by creatingfavourable policies to enable an investor friendlyenvironment.

The Government of India has set upElectronic Hardware Technology Parks (EHTPs),Special Economic Zones (SEZs) and brought abouta favourable climate for foreign direct investment(FDI). It has also increased liberalisation andrelaxed tariffs to promote growth in the sector. Inaddition, the government gave its green signal tothe Modified Special Incentive Package Scheme(MSIPS) under which the central government willbe offering up to US$ 1.7 billion in benefits to theelectronics sector in next five years.

The growing customer base and the increasedpenetration in consumer durables segment hasprovided enough scope for the growth of the Indianelectronics sector. Also, digitisation of cable couldlead to increased broadband penetration in the

country and open up new avenues for companiesin the electronics industry.

Features of Achievement Report

According to the Achievement Report, theGovernment is driving forward reforms in IT andelectronics manufacturing sector through majorinitiatives like ‘Make in India’and by creatingfavourable policies to enablean investor friendlyenvironment. The Electronic system Design &Manufacturing (ESDM) sector has ample growthopportunities as Indian ESDM sector is projectedto grow at a Compound Annual Growth Rate(CAGR) of 24% from USD 70 billion in 2014 toUSD 400 billion by 2020.

With a target of ‘Net Zero Imports’ by 2020,the government of India has taken several stepsand achievements related to those fields arehighlighted under the following heads.

Steps Taken for the Improvement ofElectronics & IT Sector

Investments

100% FDI is allowed under the automaticroute in ESDM sector subject to all theapplicable regulations and laws and in caseof defence electronics items, FDI up to 26%is under the government approval route andabove 26% is allowed through approval ofcabinet committee on security.

It led to total FDI inflows in Electronics andComputer Software & Hardware sector grewby 155.5% in FY 2015-16 to USD 6.1 billionfrom USD 2.4 billion in FY 2014-15.

Fiscal Incentives

Basic Customs Duty (BCD) and specialadditional duty have been withdrawn formobile handset components importers &reduced for medical device manufacturersand other products such as LCD.

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Duty advantages for local mobile parts &accessories manufacturers.

Under zero duty Export Promotion CapitalGoods (EPCG) scheme, imports of capital

goods for pre-production, production andpost production enter at zero custom duty.

Modified Special Incentive Package Scheme

(M-SIPS) scheme, developed to boostmanufacturing and attract investments inthe electronics sector, was modified inAugust 2015 by extending the scheme for5 more years to 2020, and adding 15 new

product categories like smart cards, liquidcrystal modules, consumer appliances,Internet of Things products, multi-functionalelectronic devices and optical fibre etc.

Innovation & R&D

Government has approved the setting upof two semi conductor wafer fabrication

(FAB) manufacturing facilities in India,

because of the opportunities in the semiconductor and component industries, whichwould create the necessary ecosystem for

design and manufacturing of telecomequipment. Proposed FAB locations are at

Yamuna Expressway, Uttar Pradesh andPranjit, Gujarat.

Setting up of National Centre of Excellence

in Technologies for Internal Security (NCETIS)at IIT Bombay.

Setting up of National Centre of Excellencefor Large Area Flexible Electronics (NCFlexE)at IIT Kanpur.

Setting up of first Centre of Excellence forInternet of Things at Bengaluru, it is a jointlyset up in Public Private Partnership (PPP)

mode by NASSCOM, MeitY, Education andResearch Network (ERNET) and Government

of Karnataka.

Promoting Collaborative Industrial R&DFunding through Global Innovation andTechnology Alliance (GITA). The Request forProposals (RFP) have been launched

bilaterally with South Korea, Finland, UK,Spain and Canada.

Electropreneur Park on the concept ofstartups in the field of electronics at DelhiUniversity.

R&D Achievements supported by Ministryof Electronics & Information Technology(MeitY).

Development of Indian Conditional AccessSystem (iCASTM) for Set Top Boxes (STBs)under a project funded by MeitY.

Mobile handset manufacturing units

38 new Mobile manufacturing units with over20million units/month capacity have beenset up since September 2015. These unitshave generated 38,300 employmentopportunities.

Skill Development

Under Digital Saksharta Abhiyan (DISHA) andNational Digital Literacy Mission, around80.47 lakh candidates have been trainedand more than 44.06 lakh candidates havebeen certified so far.

Fellowship scheme ‘Visvesvaraya PhDScheme’ for Electronics & IT- ElectronicSystem Design and Manufacturing (ESDM)and IT Enabled Services (ITES).

48,300 seats have been approved underIndia BPO scheme (IBPS) and over 5000

seats have been approved for BPOs in NorthEast.

Ease of Doing Business

Setting up of an Investment Facilitation Cell

under MeitY to handhold and help investorsduring their various stage of transition.

In view to simplify the rules, Customs Rules1996 (Import of Goods at Concessional Rate

of Duty for Manufacture of Excisable Goods)has been substituted with the Customs Rules-

2016 (Import of Goods at Concessional Rateof Duty for Manufacture of Excisable Goods),effective from April 1, 2016.

Challenges

Increasing the investor confidence is oneimportant area in which government of India

should focus by bridging the gaps ininfrastructure and their by making way forproper utilization of capital.

Adequate measures needed to address Red

Tapism by complete overhauling of governmentmanagement system.

Investor confidence is directly proportional topresence of world class infrastructure. It is verydifficult to gain business confidence unlessthere is enough gaps in infrastructure. Accordingto IMF estimates with better management ofpublic wealth globally it is possible to accrueenough funds to develop world class

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infrastructure globally. So it is essential that aproper mechanism is put in place for bettermanagement of public wealth in India.

Labour Laws: The biggest challenge for Makein India is to create better opportunity for theroughly 16 million masses that enter labourmarkets every year.

Our investments in R&D need to scale newlevel as we are spending only 0.8 percent ofour GDP. With greater emphasis on research itis possible to scale up investments domesticallyand also from outside.

High cost of financial transactions is anotherissue that is hugely reported so it is time tohave better reforms in financial sector to maketransactions more easy and simple.

Way forward

We must focus on building competitiveadvantage and global scale in sectors where wehave a large domestic market and certain inherentcapabilities. It is of paramount importance thatthe foreign investment, foreign trade andintellectual property rights (IPR) policies are viewedin a holistic manner to ensure that they mutuallyreinforce each other in achieving the policyobjective of world-class domestic manufacturing.

We should focus on improving the ease ofdoing business in India by stopping tax terrorism,improving infrastructure, reforming labour laws,investing in skills development, making it easierto acquire land, implementing Goods and ServicesTax (GST) and fast track approvals.

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MEDIA: ROLE AND CENSORSHIP ISSUE

Recently the Ministry of Information and Broadcasting has banned NDTV Indiafor one day on the pretext that channel's coverage of the Pathankot terrorattack on January 2, 2016 that the government claims gave out sensitiveinformation to the handlers of terrorists.

Context

Media is a communication channels throughwhich news, entertainment, education, data orpromotional messages are disseminated. Mediaincludes every broadcasting and narrowcastingmedium such as newspapers, magazines, TV,radio, billboards, direct mail, telephone, fax andinternet.

although it is considered overbearing andobnoxious other times. One beneficial feature ofmedia is its use to promote education. This isachieved using several methods of communicationincluding television shows, radio programs andliterature.

In a large consumer-driven society, electronicmedia (such as television) and print media (suchas newspapers) are important for distributingadvertisement media. In addition to“advertizing” role, media is nowadays a tool toshare knowledge all around the world and alsofor the promotion of e-commerce.

Fig. 8

In the world of today, media has becomenecessary as it play a significant role instrengthening the society. Media is considered as“mirror” of the modern society, infact, it is themedia which shapes our lives.

In India media emerged as a dominant socialfigure in the 19th century. Since then, media hasserved the purpose of providing members of thepublic with real-time information on issues and newssurrounding local, national and international events.

Media plays an important role in every walkof our day to day life by connecting us with thescenarios in the world and informs us about manythings like news, history, entertainment, educationetc. which helps us a lot in being an upgradedpersonality.

The role of media is complex and varied.Sometimes, media is viewed positively by society,

What is Censorship?

Censorship is the suppression of freespeech, public communication or otherinformation which may be consideredobjectionable, harmful, sensitive,politically incorrect or inconvenient asdetermined by governments, mediaoutlets, authorities or other groups orinstitutions.

“Censorship is when a work of artexpressing an idea which does not fallunder current convention is seized, cutup, withdrawn, impounded, ignored,maligned, or otherwise madeinaccessible to its audience.”

Society is influenced by media in so manyways. It is the media for the masses that helpsthem to get information about a lot of things andalso to form opinions and make judgmentsregarding various issues. It is the media whichkeeps the people updated and informed aboutwhat is happening around them and the world.Everyone can draw something from it.

Censorship on Media

As a community, we are heavily influencedby the media and other sources of information.

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However, we tend to overlook the fact that thereare not only much bias but also skewedperceptions of events and reports in the newstoday. Media has the ability to manipulate itsviewers in many ways that are often unseen.

The media does a poor job portraying thingsas they really are in order to follow a sort ofconvention and to keep their show on air or theirpapers in stores. Sometimes these activities of

media aggravate the law and order situationinflicting the bloodshed in society.

In order to control such situations there is aneed to impose censorship (or certain restriction)on media for particular information being madepublic.

The Constitution of India guarantees

freedom of expression but places certainrestrictions on content, with a viewtowards maintaining communal and

religious harmony, given the history ofcommunal tension in the nation.

According to the Information TechnologyRules 2011, objectionable content includesanything that “threatens the unity, integrity,

defence, security or sovereignty of India,friendly relations with foreign states or

public order".

Today, censorship has become a globalphenomenon. Time and again, there have emergednews of something getting banned somewhere inthe world for reason that seem unreasonable tomany while a necessary to the rest.

In 1975, the Indira Gandhi governmentimposed censorship of press during theEmergency. It was removed at the end ofemergency rule in March 1977.

On 2 October 2016 the Srinagar-based

Kashmiri newspaper, Kashmir Reader (anewspaper) was asked to stop production by theJammu & Kashmir government. The ban orderissued by Deputy Commissioner of Srinagar citedthe reason that the newspaper contains material

and content which tends to incite acts of violenceand disturb public peace and tranquility.

Recently the Ministry of Information andBroadcasting has banned NDTV India for one dayon the pretext that channel's coverage of thePathankot terror attack on January 2, 2016 that

the government claims gave out sensitiveinformation to the handlers of terrorists.

With the introduction of television, Internetand social networking sites like twitter andfacebook, many important developments havetaken place in the field of censorship around theworld. A number of countries like Syria, Australia,Cuba, UAE, Yemen, Pakistan and Burma havecensored the Internet.

China has imposed stringent censorshipregulations. A military censor was also laid on thefreedom of press and Internet in Egypt lately.WikiLeaks, the sensational international whistleblowing website was closed down several timesunder the pretext of censorship. Satellite phones,Internet and freedom of press were also censoredin Libya during Gaddafi’s rule.

A classic example of censorship in India isthe Central Board of Film Certification or CensorBoard, which comes under the purview of Ministryof Information and Broadcasting. The Boardregularly orders, directors to remove anything itdeems offensive or subjects considered to bepolitically subversive. The censorship of films isgoverned by the Cinematograph Act, 1952. Itassigns certification as Universal, Adults, andParental Guidance to films in India before publicexhibition.

Around the world the utmost concern ofcensors is the depiction of violence and physicalintimacy. The censor board’s job is to control the“corruption of the mind” and to stop

Editors Guild of India response ofmedia ban

It stated that the decision to take the channeloff the air for a day is a direct violation of thefreedom of the media and therefore thecitizens of India and amounts to harshcensorship imposed by the governmentreminiscent of the Emergency. This first-of-its-kind order to impose a blackout has seenthe Central government entrust itself with thepower to intervene in the functioning of themedia and take arbitrary punitive action asand when it does not agree with the coverage.There are various legal remedies available toboth a citizen and a state in the Court of Lawto have action taken for any irresponsiblemedia coverage. Imposing a ban withoutresorting to judicial intervention or oversightviolates the fundamental principles of freedomand justice. The Editors Guild of India callsfor an immediate withdrawal of the ban order.

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pornographic films. But with the deep penetrationof internet and its easy availability makes easyfor everyone to watch obscene materials by justclicking on internet device while the censor boardhas long discussions on the permissible durationof a kissing scene in a movie.

Conclusion

China being a Communist country, there arereally strict laws for public speaking and speechesand it is impossible to speak anything against thegovernment. However, India should not be madeChina in restricting certain fundamental freedom,though, arbitrary use of Article 19(1)(a) should beprevented, while at the same time healthydiscussion on anything should be promoted forwider idea generation and further course of action.The period of renaissance which gave birth tosearch, research, argumentative ideas etc. basedon practicality should be adhered to for largerbenefits.

The communist and dictatorship ideologyshould not take place in Indian Democracy andfreedom of speech and expression given underconstitution should be respected keeping in mindthe feelings and sentiments of others or everyindividuals. The State’s notion of over Indiannessand Nationhood should be promoted according tothe dynamism of time and circumstances. Themodern society is well aware for their rights.Publishers should avoid relying too heavily on anyone platform otherwise, playing the role ofwatchdog becomes difficult. Unlike individuals whofeel they are unjustly censored and have no wayto appeal, journalists and news sites have a publicplatform, thereby what should and should not beprotected speech back into the public sphere.

Now is the time to look into the role thatcan be played by healthy criticism, analysis, andcinema literacy, rather than relying on a CensorBoard that acts as a moral police, stopping thedissent.

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INDO-BHUTAN BILATERAL TRADE AGREEMENT

India and Bhutan signed a new bilateral trade agreement to enhance tradebetween the two countries through trade facilitation by improving procedures.

Context

The Himalayan Kingdom of Bhutan isconsidered to be closest ally of India since thetimes of Treaty of Friendship of 1949. India hasbeen playing a very pro-active role in the mattersof external affairs, defense and commerce forBhutan. India has been providing budgetarysupport to the Five Year Plans of Bhutan. Bhutanhas availed technical as well as financialassistance in setting up many of the Hydel powerplants. Hence Bhutan remains the largestbeneficiary of India.

Areas of Cooperation

By the early half of the 20th century,developments in the Himalayan region promptedBhutan to re-evaluate the usefulness of itsisolationist policy. The geopolitical scene in theentire Himalayan region and Indian sub-continentunderwent great change following the proclamationof the People’s Republic of China in 1949 and thetakeover of Tibet by the People’s Liberation Armyin 1950. These events, plus the presence ofChinese troops near Bhutan’s border, theannexation of Bhutanese enclaves in Tibet andChina led Bhutan to develop its lines ofcommunications with India. Consequently, Bhutanwas more inclined to develop relations with India,and the process of socio-economic developmentbegan thereafter with Indian assistance. For India’sown security too, the stability of Himalayan statesfalling within its strategic interest was a crucialfactor to consider.

The important areas of cooperation arediscussed as below:

Mutually beneficial economic inter-linkagesbetween India and Bhutan have been animportant element in bilateral relations. Indiacontinues to be the largest trade anddevelopment partner of Bhutan. Planneddevelopment efforts in Bhutan began in theearly 1960s. The First Five Year Plan (FYP) ofBhutan was launched in 1961. Since then, Indiahas been extending financial assistance toBhutan’s FYPs. So far, nine Five Year Plans ofBhutan have been completed.

Some of the major projects in Bhutan carriedout with Indian assistance in the past include1020 MW Tala Hydroelectric Project, 336 MWChukha Hydroelectric Project, 60 MW KurichhuHydroelectric Project, Penden Cement Plant,Paro Airport, Bhutan Broadcasting Station,Major Highways, Electricity Transmission andDistribution System, Indo-Bhutan MicrowaveLink, Exploration of Mineral Resources, andSurvey and Mapping.

The Government of India had committedassistance worth Rs.3400 crores during the10th FYP. This includes Project tied Assistance(Rs.2000 crore for about 70 projects in keysocio-economic sectors such as agriculture, ICT,media, health/ hospitals, education/ schools,capacity building, energy, culture andinfrastructure etc), Programme Grant (Rs.700crore) and the Small Development Projects (Rs.700 crore).

Bilateral cooperation in the hydropower sectorhas been carried forward with the formalinauguration of the 60 MW KurichhuHydroelectric project in April 2006, andcommissioning of the 170 MW first unit of 1020TALA Hydroelectric Project in July 2006. All sixunits have been commissioned by the end ofMarch 2007. GOI has agreed to provideassistance to Bhutan in developing thehydropower sector and to purchase at least10,000 MW of power from Bhutan by 2020.

Currently, the major items of exports fromBhutan to India are electricity (from Tala,Chukha and Kurichhu Hydroelectric Project),base metals and articles, minerals, vegetablefat and oils, alcoholic beverages, chemicals,cement, timber and wood products, cardamom,fruit products, potatoes, oranges and apples,raw silk, plastic and rubber products. Majorexports from India to Bhutan are petroleumproducts, mineral products, base metals andarticles, machinery, automobiles & spares,vegetable, nuts, spices, processed food andanimal products, chemicals, wood, plastic andrubber.

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The Agreement on Trade and Commerce alsoprovides for duty free transit of Bhutanesemerchandise for trade with third countries.Sixteen exit/entry points in India identified inthe Protocol for Bhutan's third country tradeare: Jaigaon, Chamurchi, Ulta Pani, Hathisar(Gelephu), Darranga, Kolkata, Haldia, Dhubri,Raxaul, Panitanki, Changrabandh, Phulbari,Dawki, New Delhi, Chennai and Mumbai. Ofthese, Kolkata, Haldia, Mumbai and Chennaiare the designated seaports, Dhubri is theriverine route, New Delhi, Chennai, Mumbai andKolkata are the air routes and Raxaul is therail route.

GoI has extended a standby credit facility ofRs. 1000 crore to Royal Government of India(RGoB) to help Bhutan overcome the rupeeliquidity crunch. Under this facility, Governmentof India provides credit to Royal Governmentof Bhutan at a concessional interest rate of5% per annum. The facility is valid for 5 years.

Besides trade, Indian involvement extends intomany other areas of Bhutan’s private and publicsector activities. In the area of Foreign DirectInvestment, Bhutan has so far pursued aconservative policy, and the first and onlyforeign investor in Bhutan for almost twodecades since 1971 was the State Bank ofIndia (SBI). The SBI has worked in collaborationwith the Bank of Bhutan (BOB) since itsidentification as partner in management andshare holding in the capital of BOB, in additionto imparting banking expertise.

In addition, Indian nationals operate a rangeof small-scale trading and service activities onlicenses issued by the Ministry of Trade andIndustry in Bhutan. Such ventures include smallshops trading in a variety of products likegrocery, auto parts and furniture, as well asscrap dealers, distribution and dealershipagencies. Indians in Bhutan also run hotels/restaurants, saloons, tailoring and cobblerservices. On a larger scale, Indian investmentin Bhutan exists in the manufacturing andprocessing industries, construction, service,engineering, steel and electronic industries, andconsultancy.

There is close bilateral cooperation in theeducational and cultural fields between Indiaand Bhutan. India provides technical expertiseand services of specialists to Bhutan in variousfields. Government of India scholarships aregranted to Bhutanese students atundergraduate and postgraduate levels everyyear in Indian Institutions of higher learning.

Currently, there are more than 800 Bhutanesestudents studying in India under scholarshipschemes.

The institutional cooperation has beenformalised through signing of an MoU betweenthe two Election Commissions. Several teamsof officials from the Election Commission ofBhutan including Dzongdas (District Collectors)and Dzongkhag (district officials) have visitedIndia to observe various state and localelections. India has extended full assistance toBhutan in formulating its election laws.

In the international fora too, India and Bhutancan be seen to be supportive of each other.While Bhutan has not always voted identicallywith India on every issue, thereby expressingits own choices, it has maintained a consistentpattern of support to India on many occasionsand significant issues. To name a few, theseinclude the vote on the Comprehensive TestBan Treaty (CTBT), the establishment of NuclearWeapons Free Zone in South Asia, India’saspirations to be a permanent member of theUN Security Council, India’s candidature tovarious international bodies, negotiations in theWTO, and the importance of India in thesuccess of SAARC.

Trade and commerce relation

Both the countries too have institutionalizeda healthy trade and commerce between them.Currently another new dimension has been addedup to this friendship in the form of renewal ofexisting Bilateral Trade Agreement.

Though the first agreement was signed in1972, since then it has been renewed periodicallyfour times, latest being in 2006 which was validtill 2016. The validity of this agreement wasextended till the new agreement comes into force.Thus the new agreement ‘Agreement on Trade,Commerce and Transit’ was signed in November2016 between Commerce Minister Smt. NirmalaSitharaman from Indian side and her counterpartH.E Tengye Lyonpo Dorji from Bhutan.

The new trade agreement focuses onincreasing the trade volume between twocountries mainly through trade facilitation. Itinvolves improving procedures, cutting down ondocumentation and adding additional entry andexit points for Bhutan’s trade with other countries.It will help in enhancing trade of both thecountries, thus giving a huge support to economyof both the country especially that of Bhutan whichis still an infant economy. Bhutan has very lowscope for trade with countries other than India

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owing to its geographical location. Bhutan is alandlocked country, thus trade and commerce withIndia is a major commercial activity for her.

Currently India’s export to Bhutan were$441.5 million in 2015-16 while imports were$279.6 million. Balance of trade has been formost of the time in favour of India. However Indiahas been refunding the excise duty on Bhutaneseimports from India, especially owing to huge surgein imports of motor vehicles into Bhutan. For India,this trade is more than just a commercial activity,rather it is a long term strategy to keep a stronghold over an neighbourhood ally.

Salient features of existing tradeagreement

There will be free trade and commerce betweenIndia and Bhutan.

Bhutan may impose such non-tariff restrictionson the entry into Bhutan of certain goods ofIndian origin which may be necessary for theprotection of its own industries.

Both countries can impose non-tariff restrictionson entry of goods of third country origin.

All the imports and exports of Bhutan will befree from trade restrictions and custom dutiesby India.

Transaction to be in Indian rupees andBhutanese Ngultrums, which is fully convertible.

Merchants ship sailing from Bhutan shall beaccorded no less favourable treatment thanthat of any other country.

Agreement to be renewed by mutual consent.

Now look at some of the figures on bilateraltrade.

Particulars 2011 2012 2013 2014 2015

Exports to Bhutan (Rs Cr) 3520 4180 4389 4785 5374

%age of total Bhutanese import 72.3% 79.4% 82.4% 84.1% 79%

Imports from Bhutan (Rs Cr) 2640 2780 2898 3180 3180

%age of total Bhutanese export 83.8% 93.9% 91% 89.4% 90.3%

It is clearly evident from the table above thattrade in absolute as well as relative terms hasbeen increasing between two countries. But it isstill much less than its full potential. That is whythe current renewal of the pact aims to enhancetrade facilitation. It aims at increasing the shareof India in Bhutanese trade.

It also shows the Bhutan’s dependence onboth imports from and exports to India. A verylarge share of import requirements is from India.Hence Bhutan can hardly miss out the opportunityprovided by India in terms of new trade agreement.In case of Bhutanese exports to India, electricity

forms around one-third. Other export items includeminerals, cement, etc. Bhutan surely will try toincrease its export in order to finance its import.Nevertheless trade enhancement between anytwo countries give an impetus to their bilateralrelations too.

Since 1990s Gujral Doctrine has been a corephilosophy of India’s policy towards herneighbourhood. The present renewal of tradeagreement is an another step towards thisdirection. India and Bhutan both should workclosely in full implementation of the agreementwhich surely benefits both the countries in amultifaceted way.

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NATIONAL FOOD SECURITY ACTIMPLEMENTED

The National Food Security Act (NFSA), which envisages supply of subsidisedfoodgrains, has been now has been implemented in all the States and UnionTerritories.

Context

India has the largest number of hungry peoplein the world; despite various programs the numberof undernourished people today is similar as 20years ago. Hunger and malnutrition in India arestill major human and social issues despite thefact that the politicians never fail to swear toeliminate poverty and the accompanying hunger.

Hunger remains the No.1 cause of death inthe world. Over 10 million people die every yearof chronic hunger and hunger-related diseases,of which a quarter deaths take place in India. Incomparison, less than 10 percent death is claimedby earthquakes, floods, droughts and wars whichget the most media attention.

There are 900 million chronically hungrypeople in the world; one-third of them live in India.Almost 50 percent of Indian children areunderweight, 30% of newborn have low weight atbirth, and over 55% of married women and about80% of young babies in the age group 6-35months are anemic.

The problem of malnutrition is complex, multi-dimensional and inter-generational in nature, andcannot be improved by a single sector alone. Thecauses are varied and include inadequateconsumption of food, frequent infections, lack ofavailability of safe drinking water and propersanitation, illiteracy specially in women, pooraccess to health services, low purchasing power,socio-cultural factors such as early marriages ofgirls, lack of care during pregnancy and infancy,ignorance about nutritional needs of infants andyoung children, etc.

Thus in order to provide food grains tocommon people at affordable prices, in 1965 theuniversal Public Distribution System (PDS) wasintroduced in India. It also served the aim of:

Maintaining stability in the prices of essentialcommodities across regions, and

Keeping a check on private trade, hoardingand black-marketing.

In the mid-nineties the central governmentbegun to see the PDS program as a tool to providefood security to the poor. In 1997, the PDS wasconverted into Targeted PDS (TPDS) throughclassification of its population into Above PovertyLine (APL) and Below Poverty Line (BPL) categories.Only those households classified as BPL were madeeligible for subsidized purchase of commoditiesfrom the ration shops. Since early 2000, it has alsorecognized the destitute as a separate categoryamong the poor. All this has culminated in food-based security as an entitlement.

But as is the status of governance in India,nothing materialized on the ground. The food crisisis not due to lack of sufficient food grainproduction; but largely a reflection of government’smisplaced priorities and mismanagement skills.

Thus to improve the food security situationin India National Food Security Act has beenpromulgated.

The Act provides for coverage of up to 75% ofthe rural population and up to 50% of the urbanpopulation for receiving subsidized food grainsunder Targeted Public Distribution System (TPDS),thus covering about two-thirds of the population.Under the Act, the eligible persons will be entitledto receive 5 Kgs of food grains per person permonth at subsidized prices of Rs. 3/2/1 per Kg forrice/wheat/coarse grains respectively.

To ensure the food security of poorest ofpoor, the existing Antyodaya Anna Yojana (AAY)households will continue to receive 35 Kgs offoodgrains per household per month. Pregnantwomen and lactating mothers are entitled to anutritious “take home ration” of 600 Calories,18-20 grams of protein and a maternity benefitof at least Rs.6,000 for six months. Children 6months to 14 years of age are to receive free hotmeals or “take home rations”.

The Central Government will be responsibleto provide funds to states in case of short suppliesof food grains; the states are responsible for

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determining eligibility criteria & will provide a foodsecurity allowance to the beneficiaries in case ofnon-supply of food grains.

In order to address the concern of the Statesregarding additional financial burden, CentralGovernment will provide assistance to the Statestowards cost of intra-State transportation,handling of foodgrains and FPS dealers’ margin,for which norms will be developed. This will ensuretimely transportation and efficient handling of foodgrains.

The Public Distribution System is to bereformed like doorstep delivery of foodgrains,application of information and communicationtechnology (ICT) including end to endcomputerisation, leveraging ‘Aadhaar’ for uniqueidentification of beneficiaries, diversification ofcommodities under TPDS etc for effectiveimplementation of the Food Security Act. Someof these reforms are already underway.

The eldest woman in the household, 18 yearsor above, is the head of the household for theissuance of the ration card. There will be state- anddistrict-level redress mechanisms; and State FoodCommissions will be formed for implementation andmonitoring of the provisions of the Act. Provisionshave also been made for disclosure of recordsrelating to PDS, social audits and setting up ofVigilance Committees in order to ensuretransparency and accountability. The cost of theimplementation is estimated to be $22 billion (1.25lac crore), approximately 1.5% of GDP.

Recently (from November) Kerala and TamilNadu have also rolled out the NFSA. With this,now the Act has been implemented in all theStates and Union Territories.

As a result, 81.34 crore persons will getwheat at Rs. 2 per kg and rice at Rs. 3 per kg.

Other Welfare Schemes under NFSA 2013

The Act contains entitlements for meal topregnant women and lactating mothers and for

children up to 14 years of age, through the ongoingICDS and MDM schemes. The MDM schemeprovides hot cooked meals to all children (10.54crore children in 2011-12) attending classes I-VIIIin government and government aided-schools,Education Guarantee Scheme/Alternative andInnovative Education Centres (EGS/AIE). Thisscheme is run primarily with a view to enhanceenrolment, retention, attendance and to alsoimprove nutritional levels among primary schoolstudents. The Wheat Based Nutrition Programme(WBNP), run under the ICDS, is implemented bythe Ministry of Women and Child Development,which provides nutritious/energy food to childrenbelow the age of six years and to expectant/lactating women. Even though the scheme isreferred to as a wheat-based nutrition scheme,more than 30 per cent of grains allocated to thisscheme are in terms of rice.

Conclusion

The ultimate objective of developmentplanning is human development or to increasesocial welfare and well-being of the people.Increased social welfare of the people requires amore equitable distribution of developmentbenefits along with better living environment.

NFSA gives a legal character to per personentitlement. In the case of non-supply of theentitlement, the centre commits to giving a foodsecurity allowance. Based on population coverageand the distribution commitment, TPDS forms thelargest component of the NFSA. There are twotypes of TPDS beneficiaries under NFSA – namelyAntyodaya (AAY or the poorest-of-poor) and priority– who are entitled to 35 kg/family/month and to5 kg/person/month of grain respectively. Rice,wheat and coarse cereals are to be distributed atthe central issue prices (CIPs) of Rs. 3/2/1 perkg respectively.

Providing food security to all can be a stepforward towards inclusive growth.

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MISCELLANEOUS NEWS

Hereby compiling the important short notes of November (1 to 15), 2016.

Context

A. ‘Ek Bharat Shreshtha Bharat’ Scheme

On the occasion of 140th birth anniversaryof Sardar Vallabhbhai Patel government haslaunched “Ek Bharat, Shresth Bharat” scheme.

According to the scheme, two states willundertake a unique partnership for one year whichwould be marked by cultural and studentexchanges. Under this every state will chooseanother state each year and then promote itslanguage and culture.

Students of a particular state would travelto another state to learn each other's culture.

The main objective of this program is topromote the different cultures our nation carries.There are more than thousand languages beingspoken in India. A lot of people are not aware ofother societies, cultures and the variety oflanguages. So this program has been started tolet people know about the other parts of thenation.

The benefit of starting such project is thatnow one state will promote the other state everyyear. Also it will be quite beneficial for the studentswho will travel to other states to meet new peopleand experience new life. This initiative will helpthem to understand the life and people moreclosely than before.

B. IISc produces a salt to combat bacterialinfections

Using crystal engineering, a team ofresearchers from the Indian Institute of Science(IISc) Bangalore has successfully produced a highlyefficacious binary salt of two commonly used drugs— norfloxacin (antibacterial) and sulfathiazole(antimicrobial).

The combination of antibacterial andantimicrobial medications are used to treatinfections, these can differ in their properties,some of which may not have the desired result.However the salt is more effective than a physicalmixture of the two drugs.

The underlying reason for the salt’s improvedefficacy is the better solubility and diffusion of

the drugs, particularly norfloxacin and, therefore,enhanced bioavailability and pharmaceuticalactivity.

Even if a smaller amount of the salt isprescribed, the amount of drug entering thebacterial cells will be more than the usual dose.

Crystal engineering is the design andsynthesis of molecular solid state structureswith desired properties, based on anunderstanding and use of intermolecularinteractions.

C. James Webb Space Telescopedeveloped by NASA

The James Webb Space Telescope, also calledWebb or JWST, is a large, space-based observatory,optimized for infrared wavelengths, which willcomplement and extend the discoveries of theHubble Space Telescope. It will have longerwavelength coverage and greatly improvedsensitivity. The longer wavelengths enable Webbto look further back in time to find the first galaxiesthat formed in the early Universe, and to peerinside dust clouds where stars and planetarysystems are forming today.

JWST is an international collaborationbetween NASA, the European Space Agency (ESA),and the Canadian Space Agency (CSA). The NASAGoddard Space Flight Center is managing thedevelopment effort. The main industrial partner isNorthrop Grumman; the Space Telescope ScienceInstitute will operate JWST after launch.

Why space telescope needed?

The Earth's atmosphere is nearly opaque andglows brightly at most of the infrared wavelengthsthat Webb will observe, so a cold telescope inspace is required. For those wavelengths that aretransmitted to the ground, the Earth's atmosphereblurs the images and causes stars to twinkle.Currently, adaptive optics systems can correct forthis blurring only over small fields of view nearbright stars functioning as reference beacons,allowing access to only a small fraction of the sky.

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Artificial light beacons created with strong lasersmay provide better access to the sky, but thetechnology to provide a wide field of view is stillfar in the future. Finding the earliest galaxies willrequire very low foreground light levels, ultra-sharpimages over large areas, and studies at manyinfrared wavelengths, a combination of observingconditions only available from space.

Salient features

It is 100 times powerful than the Hubble SpaceTelescope and may find the first galaxies thatwere formed in the early universe.

The Webb telescope’s infrared cameras are sosensitive that it needs to be shielded from therays of the Sun. A five-layer sunshield of the sizeof a tennis court will prevent the heat frominterfering with the telescope’s infrared sensors.

The layers work together to reduce thetemperatures between the hot and cold sidesof the observatory by about 298 degreesCelsius. Each successive layer of the sunshield,made of kapton, is cooler than the one below.

New technologies inbuilt in it

These include a primary mirror made of 18separate segments that unfold and adjust toshape after launch. The mirrors are made of ultra-lightweight beryllium. JWST’s biggest feature is atennis court sized five-layer sunshield thatattenuates heat from the Sun more than a milliontimes. The telescope’s four instruments - camerasand spectrometers - have detectors that are ableto record extremely faint signals. One instrument(NIRSpec) has programmable microshutters, whichenable observation up to 100 objectssimultaneously. JWST also has a cryocooler forcooling the mid-infrared detectors of anotherinstrument (MIRI) to a very cold 7 K so they canwork.

D. Pradhan Mantri Surakshit MatritvaYojana

Pradhan Mantri Surakshit Matritva Abhiyanenvisages to improve the quality and coverage ofAntenatal Care (ANC), Diagnostics and Counsellingservices as part of the Reproductive MaternalNeonatal Child and Adolescent Health (RMNCH+A)Strategy.

Under the Pradhan Mantri Surakshit MatritvaAbhiyan, the pregnant ladies will be given freehealth check-up and required treatment for freeon 9th of every month. The scheme will beapplicable for pregnant women to avail servicesin all Government hospitals across the country.

Objectives

Provide a healthy life to the pregnant women.

Lowering the maternity mortality rate.

Making pregnant women aware of their healthissues/diseases.

Making sure safe delivery and healthy life ofthe baby.

Main features of Surakshit MatritvaAbhiyan

The scheme is applicable only for the pregnantwomen in their pregnancy period of 3 to 6months.

The free checkup will take place on 9th ofevery month.

All kinds of medical checkups under thisscheme will be completely free.

Tests will take place at the medical centers,government and private hospitals and privateclinics across the country.

Women will be marked differently based ontheir health problems so that doctors can easilydetect the problem.

E. India’s first LNG-powered bus rolledout in Kerala

LNG is a clear, colourless and non-toxic liquidwhich forms when natural gas is cooled to -162ºC(-260ºF). The cooling process shrinks the volumeof the gas 600 times, making it easier and saferto store and ship. In its liquid state, LNG will notignite.

When LNG reaches its destination, it is turnedback into a gas at regasification plants. It is thenpiped to homes, businesses and industries whereit is burnt for heat or to generate electricity.

Natural gas is the cleanest burning fossil fuel.It produces less emissions and pollutants thaneither coal or oil.

India’s first ever LNG fuel bus for the testrun has been rolled out at Thiruvanthapuram.

It has been a joint effort of Petronet LNGLimited (PLL), Indian Oil Corporation Ltd and TataMotors Ltd to introduce LNG as a fuel incommercial vehicles in the state capital.

F. Surya Jyoti

In order to capture day light and concentratethe same inside a dark room, particularly in urbanslum or rural areas which lack electricity supply, alow cost and energy efficient Micro Solar Domeknown as Surya Jyoti has been tested anddeveloped.

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The Micro Solar Dome (MSD) is a day and

night lighting single device unique in its features,

that has a transparent semi-spherical upper dome

made of acrylic material which captures the

sunlight and the light passes through a sun-tube

having a thin layer of highly reflective coating on

the inner wall of the passage. It also contains a

lower dome made of acrylic. There is a shutter in

the bottom of the lower dome which can be closed,

if light is not required in the daytime. It is leak

proof and works throughout the day and 4 hours

continuously after sunset.

Proposed benefits:

It is estimated that if this technology is

adopted in 10 million households only, it has the

potential of saving 1750 million units of energy. It

would also lead to an emission reduction of about

12.5 million ton of CO2.

G. PUSA Arhar

ICAR-Indian Agriculture Research Institute(IARI), New Delhi has developed extra earlymaturing (120 days), semi-dwarf (95 cm to 120cm tall), determinate, high yielding new plant typegenetic material viz., Pusa Arhar 16 which is semi-erect compact plant type. This plant type allowsdense plant population of 3,30,000 plants/hawhen planted with Row X Row spacing of 30 cmand Plant X Plant spacing of 10 cm. High densityplanting is important to realize higher yield andmechanization. Traditional varieties do not allowhigh density planting as their plant type isindeterminate and spreading type. Thus, suitabilityto high population density of this line allowsuniform plant density and ultimately uniform plantstand and thereby reduces losses in yield due toseedling mortality.

Pusa Arhar 16 allows effective spraying ofinsecticide even with Knapsack sprayer for effectivecontrol of insects due to compactness anddwarfness. This new plant type, with synchronousmaturity, is also suitable for combine harvesting andthus does not require manual laborers forharvesting and threshing. Harvesting and threshingin traditional varieties require more manpower andtime thereby increasing the cost of cultivation andchances of losses due to damage by untimely rains.This extra early line also allows growing of mustard/potato/wheat in rabi after harvest of pigeon-peasuccessfully. Moreover, as this line is extra earlymaturing (120 days) it allows flexibility of sowingfrom onset of monsoon (5th June) to even up to1st week of July.

Photovoltaics (PV) covers the conversionof light into electricity using semiconductingmaterials.

A typical photovoltaic system employs solarpanels, each comprising a number of solarcells, which generate electrical power. Thefirst step is the photoelectric effect followedby an electrochemical process wherecrystallized atoms, ionized in a series,generate an electric current.

Solar PV generates no pollution.

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Documents

ANALYST€¦ · curb the menace of tax-evasion, terrorism financing etc. in the beginning of this year, head of European Central Bank, Mario Draghi announced that the bank is thinking