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IASbaba’s Daily Current Affairs [Prelims + Mains Focus] – 25th January 2018

  • IASbaba
  • January 26, 2018
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IASbaba's Daily Current Affairs Analysis
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IASbaba’s Daily Current Affairs (Prelims + Mains Focus)- 25th January 2018

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(PRELIMS+MAINS FOCUS)


India in bottom five in the Environmental Performance Index, 2018 

Part of: Mains GS Paper III- Environment, pollution and degradation

Key pointers:

  • India is among the bottom five countries on the Environmental Performance Index 2018, plummeting 36 points from 141 in 2016.
  • While India is at the bottom of the list in the environmental health category, it ranks 178 out of 180 as far as air quality is concerned.
  • Its overall low ranking — 177 among 180 countries — was linked to poor performance in the environment health policy and deaths due to air pollution categories.
  • The report deaths attributed to ultra-fine PM2.5 pollutants have risen over the past decade and are estimated at 1,640,113 annually in India.
  • Switzerland leads the world in sustainability, followed by France, Denmark, Malta and Sweden in the EPI, which found that air quality is the leading environmental threat to public health.
  • Overall, India (at 177) and Bangladesh (179) come in near the bottom of the rankings, with Burundi, Democratic Republic of the Congo and Nepal rounding out the bottom five.\
  • Despite government action, pollution from solid fuels, coal and crop residue burning, and emissions from motor vehicles continue to severely degrade the air quality for millions of Indians.

The EPI report:

  • It is a biennial report released by Yale and Columbia Universities along with the World Economic Forum.
  • The 10th EPI report ranks 180 countries on 24 performance indicators across 10 categories covering environmental health and ecosystem vitality.

Article link: Click here


Reforms roadmap for public sector banks

Part of: Mains GS Paper III- Indian Economy

Key pointers:

  • The government has announced a reforms roadmap for public sector banks and details of how Rs 80,000 crore of funds raised through recapitalisation bonds will be allocated to 20 PSBs.
  • Alongside the fund infusion, the government announced a set of measures to keep a close watch on the asset quality of the banks, including “specialised monitoring” by agencies for corporate loans of more than Rs 250 crore.
  • A total of around Rs 1 lakh crore will be infused in the PSBs by March-end, which comprise Rs 80,000 crore via recapitalisation bonds, Rs 8,139 crore through gross budgetary support and Rs 10,312 crore of funds raised from the market.
  • Banks have been asked to ring-fence cash flows of corporate borrowers,to ensure that their earnings are not diverted for other purposes.
  • The government has also mandated each of the PSBs to have a stressed assets management vertical and monetise their non-core assets such as real estate to boost their capital adequacy.
  • To ensure that banks comply with the reforms parameters, the government said that an independent agency will conduct an Annual EASE (Enhanced Access & Service Excellence) Index Survey of banks, the results of which will be made public.
  • As per the EASE plan, the government wants to ensure that there is a banking facility within 5 km of every village in the country.

Article link: Click here


ECONOMY

TOPIC:

General Studies 3:

  • Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

General Studies 2:

  • Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Credibility of Ease of doing business index in question

In news:

Earlier this month, the World Bank announced that it would revise the methodology it uses to calculate the ease of doing business index, a move that is expected to affect the rankings of countries in the last four years.
The decision to revise the methodology comes after the Bank’s chief economist Paul Romer raised concerns that the rankings could have been influenced by politics.
Chile’s overall ranking has see-sawed between 25 and 57 since 2006, going down in periods when Socialist Party was in power, and rising when Conservative was at the helm.
Incidentally, India recorded its best-ever improvement in the latest ease of doing business rankings.

What is the ranking about?

The annual report, now in its 15th year, ranks countries on quantitative and qualitative parameters that relate to ease of doing business – such as time to obtain a construction permit; the time, cost and procedures in getting a power connection; ease of getting tax refund and so on.
In broad terms, it is considered a measure of how bad red tape is in a country, and how easy (or difficult) it is to do business.

It’s significance:

The ease of doing business index has become a popular tool tracked by governments trying to show the world that they offer a favourable investment climate for private businessmen.

Meanwhile, some critics have pointed to Chile which has seen its ranking fluctuate widely based more on the ideology of the government in power than on underlying business conditions. 

Other issues:

  • A common criticism of the ranking is that it limits its sample size to just a few major cities, thus projecting an imperfect picture of overall business conditions.
  • It can be that governments may be tailoring their policies to specifically fit the World Bank’s criteria instead of trying to enact wider structural reforms.
  • The bank measures a country’s business environment based on written legal rules rather than investigating the actual ground conditions in which businesses operate.

Conclusion:

Given the significance of the rankings, the world bank needs to restore the credibility of the ease of doing business rankings. This can be done by bringing in transparency and bringing certain methodological changes.

Connecting the dots:

  • Discuss the significance of Ease of doing business index. Also mention the criticisms of the rankings.

INTERNATIONAL

TOPIC: General Studies 2:

  • India and its neighbourhood- relations.
  • Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
  • Effect of policies and politics of developed and developing countries on India’s interests

Making India-ASEAN relationship functional

In news:

The year 2017 was an important landmark as India and the ASEAN commemorated 25 years of their partnership, 15 years of summit-level interaction, and five years of strategic partnership.
The challenge now is to map out next steps in the India-ASEAN partnership at this time of unprecedented geopolitical flux in the wider Indo-Pacific.

Sense of disillusionment:

There has been a sense of disillusionment on both sides about the present state of play in the relationship.
While the ASEAN member states have been disappointed that India performs less than its potential in the region, New Delhi’s expectations regarding a more robust support for its regional outreach too have not been met.
India’s capacity to provide development assistance, market access and security guarantees remains limited and ASEAN’s inclination to harness New Delhi for regional stability remains circumscribed by its sensitivities to other powers.
The interests and expectations of the two sides remain far from aligned, preventing them from having candid conversations and realistic assessments.

Other issues:

  • Though the government’s ‘Act East’ policy is aimed at enhancing India’s strategic profile in East and Southeast Asia, New Delhi’s main focus remains on South Asia and the Indian Ocean region.
  • India’s economic focus is not in tune with other regional powers which view ASEAN as an important market for exports and investments.
    India’s export sector remains weak and the government’s focus has shifted to boosting manufacturing domestically.
  • India’s interest in ASEAN as a multilateral forum remains lacklustre.
    Myanmar and Thailand have emerged as key players in India’s southeastern outreach. The hope is to use these nations as a bridge to ASEAN.
    Prioritising these countries over others in ASEAN may also prevent others from looking at India as a regional stakeholder.

Making the cooperation functional:

It is important for India and ASEAN to chart out a more operational, though modest, agenda for future cooperation.
The three Cs of commerce, connectivity and culture have been highlighted but a more granular perspective is needed in terms of a forging a forward-looking approach.

  • Enhancing trade and economic linkages between India and ASEAN is quintessential.
  • They also need to focus on areas such as digital technologies.
    India, as a fast-emerging major player, has significant comparative advantages.
    As Chinese giants begin to dominate the digital space in Southeast Asia and concerns rise about their ability to own data, the Indian IT sector may take some advantage.
    India as a facilitator of the ASEAN-wide digital economy would not only challenge China but also emerge as an economic guarantor of its own.
  • New Delhi needs to focus on effective delivery of projects it is already committed to.
    In this context, prompt completion of the India-Myanmar-Thailand Trilateral Highway, which will run from Moreh in Manipur to Mae Sot in Thailand via Myanmar, is key.
    The plan is to extend this highway to Cambodia, Laos and Vietnam in an attempt to project India’s role in the emerging transportation architecture.
  • With China having three times more commercial flights than India to Southeast Asia, improving air connectivity between India and ASEAN countries should also be high on the agenda.
  • The Bay of Bengal can be used as an exploratory ground for the development of an India-ASEAN maritime framework.
  • The cultural connect between the two needs strengthening.
    While India offers scholarships to students from ASEAN states to study at Nalanda University, this initiative should be extended to the IITs and the IIMs.
    Tourism too can be further encouraged between India and the ASEAN with some creative branding by the two sides.

Conclusion:

While India and the ASEAN have been very ambitious in articulating the potential of their partnership, they have been much less effective in operationalising their ideas. The need now is to focus on functional cooperation.

Connecting the dots:

  • India and ASEAN relationship has great potential. There have been many ideas but only few have operationalized effectively. Analyze. 

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