IASbaba’s Daily Current Affairs (Prelims + Mains Focus)- 16th February 2018

Archives

(PRELIMS+MAINS FOCUS)

Verdict on Cauvery dispute

Part of: Mains GS Paper II- Inter-state water disputes

Key pointers:

• In the much-awaited verdict on Cauvery dispute, the Supreme Court pronounced that Karnataka be given additional 14.75 TMC of the river water while 177.25 TMC of water be released for Tamil Nadu.
• The allocation of Karnataka which used to be 270 TMC has been increased to 284.75 TMC.

Background:

• The verdict was announced on the appeals filed by Karnataka, Tamil Nadu and Kerala against the 2007 order of the Cauvery Water Dispute Tribunal (CWDT) on sharing of water.
• The dispute dates back to the Madras-Mysore agreements of 1924. It was in 1990 when the Centre created a tribunal to examine the conflict and address the water shortage.
• The CWDT had unanimously passed an order on how the water should be shared between the states after determining the total availability of water in the Cauvery basin.

Article link: Click here

Plans to launch National Energy Storage Mission

Part of: Mains GS Paper III- Energy Security

Key pointers:

• After a Solar and Wind Mission, the government now plans to launch a National Energy Storage Mission. The government is looking to establish this mission in financial year 2018-19.
• The Ministry of New and Renewable Energy has set up the Energy Storage Expert Committee to propose creation of the National Energy storage Mission for India.
• A viable commercial plan for storing renewable energy is required.
• Energy storage will help us significantly cut down import of fossil fuels once the storage of renewable energy is commercially viable.

Policy push:

• The NITI Aayog has proposed a three-stage solution for promoting battery manufacturing in the country.
• The incentives on offer include land grants for direct awarding of land free of charge or at highly discounted cost to companies to develop manufacturing capacity.
• Sales and use tax exemptions, or tax credits per job created and lowering the number of permits required and lowering bureaucratic hurdles.

Article link: Click here

Dramatic decline in the Orangutan population

Part of: Mains GS Paper III- Environment, conservation

Key pointers:

• Hunting and killing have driven a dramatic decline in the orangutan population on Borneo where nearly 150,000 animals have been lost from the island’s forests in 16 years, conservationists warn.
• While the steepest percentage losses occurred in regions where the forest has been cut down to make way for palm oil and acacia plantations, more animals were killed by hunters who ventured into the forest, or by farm workers when the apes encroached on agricultural land, a study found.
• Researchers estimate that the number of orangutans left on Borneo now stands at between 70,000 and 100,000, meaning the population more than halved over the study period which ran from 1999 to 2015.

Reasons behind:

• The forests of Borneo are being fragmented by new plantations and building projects.

• Female orangutans are occasionally killed for their young, which are sold on as pets.
• Far more of the apes die when they venture on to plantations, and into people’s gardens, where they are shot or killed with machetes.

Note: Students can quote this an an example. More relevant for students with Geography as optional paper.

Article link: Click here

(MAINS FOCUS)

NATIONAL/ECONOMY

TOPIC: General Studies 3:

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

Where does India stands in the Global Value Chain?

Background: Vulnerable exports

Indian exports have failed to evolve.
India’s imports during April-December 2017 grew 21 per cent vis-à-vis an export growth of 12 per cent. The trade deficit increased by $3.6 billion as compared to the previous year.
Despite India’s GDP being almost eight to ten times as that of Thailand’s or Vietnam’s, there is not much difference in their contribution to global exports.

Exports and global slowdown:

India often unfairly attributes its export movement to global slowdown. For example, while on the one hand India’s exports exhibited a negative growth of 1.5 per cent in 2016 over 2015, Vietnam’s increased by a whopping 35.5 per cent.

Reasons behind declining exports:

• India’s increasing reliability on commodity-based exports does not contribute to the global value chain (GVC) and are highly susceptible to price sensitivity.
• Today, India faces increasing competition in its core exports segments such as textiles and agri-based products where costs and product compliance are a concern. This Budget definitely was a good opportunity to do a course correction and

Where does India stands in the global value chain?

According to OECD-WTO’s TiVA database, India’s GVC participation index stands at 43.1, as compared to 52.3 for Vietnam and 60.4 for Malaysia.

The GVC index:

The GVC participation index takes into account both goods and services. It displays a country’s integration into the GVC and is the sum of forward and backward linkages divided by total exports.

Forward linkage– When industries of the exporting country provide inputs into exports of industries in the importing country, it is called forward linkages.

Backward linkage– When industries in the importing country import intermediate products to be used in its exports, it is known as backward linkages.

The value chain problem?

An analysis of countries’ manufacturing share in gross exports shows India has the lowest share of the countries analysed in Asia.
Within manufacturing, the foreign value-added (FVA) component for India remains as low as 18 per cent (29 per cent for Vietnam, 32 per cent for Thailand, and 33 per cent for Malaysia).
The FVA exhibits the level of global participation in a country’s exports and constitutes imported intermediate goods utilised in the domestic industry’s exports.

Why moving up the value chain matters?

• If India fails to move up the value chain, the products on the lower end of the value chain could be taken up by other emerging economies benefiting from scale and cost.
• Moving up in value chain is required to stay competitive. Competition from island economies such as Vietnam, Indonesia, Thailand, and Malaysia, leaving Indian trade vulnerable.
  The textile sector is a good example; with a 12-per cent share, it has the second highest share in India’s exports today. But this was was 25 per cent in 2000.
• The manufacturing sector integrated into the GVC, producing specialised items of a finished product, has potential to create more employment and contribute more to global export.
• Integrating into GVC gains more prominence given the negotiations on trade facilitation agreement under the WTO and India’s eagerness to participate in mega trade agreements.

What needs to be done?

• Today, complex goods such as automobiles, aeroplanes and computers are made of inputs that are produced in various countries, which are finally assembled in yet another country.
  India in similar vein needs to get integrated in the GVC and produce specific and specialised products.
• Indian manufacturing requires being competitive and efficient, and take sustained, holistic reforms to exploit the advantages of integrating with GVCs.
• There is a need to attract global investors to value-added manufacturing sectors.

Connecting the dots:

• A decline in Indian exports has been witnessed in recent times. One reason is the gloabl slowdown. But the major reason is failure of India to rise up in the global value chain. Discuss.

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

India-Canada relationship: Issues & Potential

Introduction:

Justin Trudeau, Canada’s Prime Minister visiting India on February 17.
This would be his first trip to India after he became Prime Minister in 2015.

During Prime Minister Narendra Modi’s visit to Canada in April 2015, both sides agreed to elevate their bilateral relations to a strategic partnership. The strategic cooperation is yet to be strengthened.
The ties essentially rest on 3Es — economy, energy and education.

Indian diaspora in Canada:

• Indian diaspora comprising 3.6% of the Canadian population is well-educated, affluent and politically suave.
• 19 persons of Indian origin have been elected to the House of Commons, of which 17 (15 Sikhs) represent Mr. Trudeau’s Liberal Party.
  He has rewarded four Sikhs with key Cabinet berths.

The Khalistan issue:

In recent times there has been resurgence in anti-India activities by emboldened Khalistani elements in Canada.

Recent instances-

• The Ontario Provincial Parliament adopted a resolution terming the 1984 anti-Sikh riots as ‘genocide’.
  India described it as a “misguided motion based on a limited understanding of India, its Constitution, society, ethos, rule of law and its judicial process.”
• Mr. Trudeau once showed up at the Toronto nagar kirtan where Khalistani flags and pictures of slain terrorists like Jarnail Singh Bhindranwale were displayed.
  Former Prime Minister Stephen Harper had avoided such platforms during his years in office.

The ‘Khalistani’ issue has figured prominently between India and Canada at all levels.
However, Canadian political leaders and parties continue to protect the Khalisanti elements in the quest for electoral gains.
The issue is that the current Liberal government seems to be going beyond the needs of political and electoral arithmetic in courting the radicals.
This has naturally impacted bilateral relations.

India-Canada cooperation: Potential-

Canada has truly been a land of opportunity for the Indian diaspora:

• They have earned the affection and respect of Canadians, who are very inclusive.
• There many iconic rags-to-riches stories, like that of Prem Watsa, Chairman of Fairfax Financial Holding, who migrated from Hyderabad in the 1970s with a few dollars and is now known as the Warren Buffett of Canada.

Economic relations:

• There has been a spike in investments by the well-endowed Canadian Pension Funds like CPPIB and CDPQ into India.
• Together, Canadian companies have have pumped in some $12-15 billion Canadian in India in sectors including real estate, financial services, distressed assets, modern logistics facilities and e-commerce.

Way ahead:

Early conclusion of the bilateral Comprehensive Economic Partnership Agreement (CEPA) and Investment Promotion and Protection Agreements (BIPPA), which have been under negotiation for several years, would boost our economic partnership.
It would particularly open up the services sector allowing highly skilled Indian professionals, for whom there is a ready demand, to work in Canada.

Energy security for India:

• India has started importing uranium from Canada, beginning 2015.
• Canada also has sizeable reserves of oil and gas.

Over time Canada could become a key partner in India’s quest for energy security.

Attractive for Indian students:

• With declining interest in Britain and some uncertainty over the U.S.’s policies, Indian students have begun heading for vocational and higher education to Canada in larger numbers.
• An added attraction for them is that Canada routinely provides a three-year work visa upon completion of studies, which opens up avenues of gainful employment and citizenship.
• Canada also continues with a liberal immigration policy. In 2016, some 40,000 Indian immigrants were admitted into the country.

In agricutural sector:

• Till recently, significant quantities of Canadian pulses were being imported by India.
• Both nations also have some collaboration in agri-tech.

Much more can be done. There exists complementary economies and capable human resources.

Conclusion:

There exists enough potential for stepping up cooperation in areas like information technology, science and technology, clean and green tech, aviation and outer space, cold-climate warfare, cybersecurity, counterterrorism and tourism.
The need of the hour is to strengthen mutual trust and confidence, by taking a long-term view of the relationship.

Connecting the dots:

• Discuss the potential of India-Canada relationship. Also analyze how Khalistan issue in recent times has impacted our bilateral ties.

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