IASbaba's Daily Current Affairs Analysis

IASbaba’s Daily Current Affairs (Prelims + Mains

Focus)- 20th September 2018

(PRELIMS+MAINS FOCUS)

Triple Talaq is criminal offence

Part of: Prelims and Mains II – Constitution and Governance

In news

Union Cabinet cleared an ordinance that makes talaq-e-biddat, or instant triple talaq, a criminal offence that will attract a maximum jail term of three years.

Why ordinance is needed?

The practice of triple talaq continues in spite of the Supreme Court having annulled it and the Lok Sabha having passed a Bill that is pending in the Rajya Sabha.
201 cases had been reported from across the country after the Supreme Court banned triple talaq in August 2017. Since January 2017, 430 cases had been reported until September 13 this year.

Concerns

Once husband is in jail, who will pay maintenance and/or subsistence allowance to the woman and children?
Why should the woman and children not have a right to proceed against the estate i.e. movable and immovable property of the husband?

Provisions and safeguards

Magistrate could exercise discretion to grant bail “after hearing the wife”. The magistrate would also have power to decide the quantum of compensation and subsistence allowance for the victim and her minor children.
Another safeguard that had been added is that the police can lodge an FIR (first information report) only if the complaint is filed by the wife (victim), her blood relations or her relatives by virtue of her marriage.
Non-relatives or neighbours cannot lodge a complaint under the proposed law.
The offence of instant triple talaq has also been “compoundable” or a provision that allows the wife to withdraw a complaint or approach the magistrate for a disputes.

S. Korea wants to elevate ties with India

Part of: Prelims and Mains III – International Relations

In news

One of the major foreign policy initiatives of President of South Korea is the government’s ‘New Southern Policy’, with a goal of deepening ties with South East Asian nations as well as India and building an inclusive regional architecture in Asia.

Concerns about China

India wants to be more vocal about maritime security in the region.
There are increasing activities by China in the Indian Ocean region.
There are concerns about the BRI (Belt and Road Initiative) and the South China Sea.
China is the largest trading partner of most countries in Asia. Whether we like China or not, we have to live with it but a confrontational approach is not good.

South Korea’s stand on US – China

South Korea’s main policy objective is not to get subsumed into the U.S.-China rivalry in Asia.
Korea wants an inclusive regional architecture in Asia. Therefore, it wants to build stronger ties with ASEAN and India on multiple fronts — economic, bilateral and strategic.

South Korea and India

Korea views India as a main partner to expand its economy in the South.
India and South Korea have agreed to boost bilateral trade to $50 billion by 2030 from $20 billion now.
Seoul wants to elevate ties with India to the level of those with four other major powers around the Korean Peninsula — the U.S., China, Russia and Japan.
India has huge potential to play a bigger role in international politics. Expert says Seoul wants to strengthen ties on economic and strategic fronts.

South Korea on BRI

South Korea welcomes BRI. But China is pursuing BRI projects unilaterally or bilaterally. South Korea wants BRI to be more open and transparent.
Countries that are part of the BRI projects and borrow money from China should be cautious, referring to allegations of debt trap weaker countries get into while welcoming China to build big-ticket infrastructure projects.
There has to be some kind of rules to deal with debt trap, etc.

Rationalisation of CS schemes mooted

Part of: Prelims and mains II – Government policies and issues arising due to their design and implementation

In news

Several Centrally Sponsored Schemes (CSS) are just boutique in nature with ‘dubious’ outcomes, the 15th Finance Commission of the Union Government has noted while calling for urgent rationalisation of the CSSs.
The pruning of such schemes would give the State governments greater measure of flexibility in financing.

‘High costs incurred’

There are far too many of these boutique schemes with dubious outcomes in the States.
Even the ones which are operational do not justify the high establishment cost being incurred on them.
The commission noted the general status of public financing in States remains ‘stressed’ owing to payments made towards the Seventh Pay Commission, loan waivers given to farmers and debt restructuring under the UDAY scheme.
The commission is looking at ways to restrict some of these schemes even as the Reserve Bank of India has pointed towards the stress on State finances as result.
State governments have already demanded an increased flow of untied fiscal resources in place of tied resources that come with CSS.

Mergers in 2013

The proliferation of the CSSs was debatable until the Ninth Five-Year Plan, when the total number of schemes shot up to 360, accounting for about 60% of Central assistance.
In 2013, the Planning Commission announced the merger of several CSSs, reducing the count to 66. These were further pruned to 27 following the report of a committee of CMs led by Shivrajsingh Chauhan recently.

Do you know? Finance commission

Article 280 of the Indian Constitution defines the scope and functions of the commission:
The President will constitute a finance commission at the end of every fifth year or earlier, as the deemed necessary, which shall include a chairman and four other members.
Article provides for, the President shall cause every recommendation made by the Finance Commission under the provisions of this Constitution together with an explanatory memorandum as to the action taken thereon to be laid before each House of Parliament

Cabinet clears ₹3,466 crore dam improvement project

Part of: Prelims and mains II – Governance and infrastructure

In news

The government has approved a 65% hike, and extended by two years, a project to improve the stability and working of dams in 11 States.
The Cabinet Committee on Economic Affairs (CCEA) has approved the Dam Rehabilitation Improvement Project (DRIP) project.
Out of the ₹3,466 crore cleared, ₹2,628 crore would be funded by the World Bank and ₹747 crore by the States and Implementing Agencies (IAs), and the balance ₹91 crore by the Central Water Commission (CWC).
Originally, the total cost of DRIP was scheduled closing on June 30, 2018. This has now been extended to June 2020.
A dam safety Bill that sets directives on how the States and the Centre ought to have an institutional mechanism to better manage dams is still to be discussed in Parliament.

Do you know?

Dam Rehabilitation Improvement Project (DRIP)

In April 2012, the Central Water Commission (CWC) under Ministry of Water Resources, River Development & Ganga Rejuvenation with assistance from the World Bank, embarked upon the six year Dam Rehabilitation and Improvement Project (DRIP) at an estimated cost of Rs. 2100 crore.

The project originally envisaged the rehabilitation and improvement of about 223 dams within four states namely, Kerala, Madhya Pradesh, Odisha, and Tamil Nadu and later Karnataka, Uttarakhand (UNVNL) and Jharkhand (DVC) joined DRIP and total number of dams covered under DRIP increased to 250; due to the addition / deletion of dams during implementation by partner agencies, presently 223 dams are being rehabilitated.

The project will also promote new technologies and improve Institutional capacities for dam safety evaluation and implementation at the Central and State levels and in some identified premier academic and research institutes of the Country.

(MAINS FOCUS)

ECONOMY

TOPIC: General Studies 3

Global economy and its impact on India

Introduction

There have been various economic crises in the past over which economists the world over have deliberated upon and have submitted their observations and analysis.
The most notable crisis was that of the financial crisis of 2007.

A look at the causes of the financial crisis of 2007

There were multiple causes to the crisis of 2007. Among them included;

Global macroeconomic imbalances,
A loose monetary policy system followed by the U.S.,
The housing bubble in the U.S.
A misplaced belief in efficient markets, greedy bankers, and the existence of incompetent rating agencies.

All of these factors played their part. However, a major causative factor for the implosion of the financial sector in 2007-08 was in the failure of regulation.

The Failure of Regulation:

Firstly, banks were allowed very high levels of debt in relation to equity capital.
Secondly, banks in advanced economies moved away from the business of making loans to investing their funds instead in complex assets known as “securitised” assets.
These securitised assets consisted of bundles of securities derived from sub-prime loans, i.e, housing loans of relatively higher risk.
The switch which was made from loans to securitised assets had enormous implications for banks. It is important to note that with a loan, losses are recognised over time.
As housing prices began falling and securitised assets lost value, it translated into enormous losses for the banks. As a consequence, these losses eroded bank capital and created panic among those who had lent funds to banks.
The third element in the failure of regulation was allowing banks an excessive dependence on short-term funds.
Besides this, there were other failures of regulation. These included: Banks had low standards for making housing loans.
These were not confined only to the U.S. They were witnessed across banks in Europe and some in Asia as well.

How did such a massive failure of regulation occur?

Experts attribute this to two things a) ‘regulatory capture’ b) ‘revolving door’ syndrome.
The term regulatory capture refers to the ability of financial institutions to influence policies of governments and regulators. These financial institutions are a big source of political funding.
‘Revolving door’ syndrome: This refers to the situation wherein we observe that bankers in the U.S. and Europe hop on to jobs in government and regulation. On the other hand, we also witness that government officials and regulators land lucrative jobs and assignments with banks.
As a consequence of the ‘revolving door’, we witness havoc in matters concerning regulation. This also explains the lack of accountability of bankers for the havoc they created. No top banker has been prosecuted or jailed.
As a matter of fact, banks have paid up massive fines for assorted violations- with the fines coming from the pockets of shareholders.

The Indian Perspective:

India hasn’t suffered much on account of the financial crisis.
Although growth has slowed down to 7%, but these figures are in line with the trend rate over the past two decades.
Many forward-looking policies have helped India. For example, she has not embraced full capital account convertibility. India has kept short-term foreign borrowings within stringent limits.
Further, India did not open up to foreign banks despite pressure from the U.S. and the international agencies. In the wake of the crisis, foreign banks retreated from overseas markets- this caused a severe credit crunch in places such as Eastern Europe. India was insulated from this.

Core Issues that need to be Addressed:

Firstly, there has been a tradition wherein some banks, just by the virtue of them being large, are deemed to be such that they cannot be allowed to fail. This notion needs to be changed.
The second aspect is the very size of debt itself in various forms in the world economy. As a matter of fact, the overhang of debt itself for the global economy as a whole, poses some serious challenges.
The third aspect is that financial globalisation makes the world vulnerable to U.S. monetary and fiscal policy.

Conclusion

The present crisis in emerging economies highlights how vulnerable emerging markets are to the unpredictability of American economic policy.
The world needs to be weaned away from its dependence on the dollar. An alternative global financial architecture is nowhere in sight.
Economists are free to draw their lessons from financial crises but the world is ultimately shaped by political and business interests, not by economists.

Connecting the dots:

What were the reasons that Indian Economy survived the 2008 crisis, unhurt? Do you think that speedily falling currency values across the developing world is forecast of another global crisis? What is the probability, whether India will survive this crisis too?

SCIENCE AND TECHNOLOGY

TOPIC: General Studies 3

Science and technology; Space research

Celestial misfit: Debate on Pluto

Introduction

In the year, 2006 the International Astronomical Union (IAU) voted to remove Pluto’s planetary status. This decision ended years of debate on whether or not Pluto is a planet.
The IAU, in 2006, designated Pluto as a ‘dwarf planet’. This designation was done along with Ceres in the asteroid belt and Xena, which is an object in the Kuiper belt.
Some researchers are challenging the decision made by the International Astronomical Union (IAU) in the year 2006. These researchers cite the manner in which scientific tradition has dealt with the taxonomy of planets.

What is the Kuiper belt?

The Kuiper belt is an icy ring of frozen objects that circle the solar system beyond Neptune’s orbit.
The Kuiper Belt is a doughnut-shaped ring of icy objects around the Sun, extending just beyond the orbit of Neptune from about 30 to 55 AU.
Short-period comets (which take less than 200 years to orbit the Sun) originate in the Kuiper Belt.

Criteria for a celestial object to be called a planet:

There are three conditions for a celestial object to be called a planet:

It must orbit the Sun;
It should be massive enough to acquire an approximately spherical shape;
It has to ‘clear its orbit’, which means that the object that exerts the maximum gravitational pull within its orbit.

Case of Pluto:

Pluto is affected by Neptune’s gravity. Further, Pluto also shares its orbit with the frozen objects in the Kuiper belt. Based on this, the IAU deemed that Pluto did not ‘clear its orbit’.
Dwarf planets, on the other hand, need only satisfy the first two conditions.

A counter-narrative:

The above rationale was questioned by Philip Metzger who is a planetary physicist. He and his team have come up with several exceptions to the third rule.
In a paper published in the journal Icarus, they point out that the only work in history that used this rule to classify planets was an article by William Herschel in 1802.
They further argue that this work was based on reasoning and observations that have since been disproved.

Concluding Remarks:

If Pluto were to be re-designated a planet, many more complications would arise.
Charon, Pluto’s moon, is much too large to be called a satellite. Judging by this, the Charon-Pluto system should then rightly be called a binary planet system.
This would then lead to classifying several other sets of bodies as binary planets.
Recent research shows that both the Kuiper Belt and the Oort cloud, a shell of objects that surrounds the entire solar system far beyond the Kuiper belt, contain objects that can then be called planets, thereby complicating the issue.
Denying planetary status to Pluto is then nothing less than a sweep of Occam’s razor, and Pluto remains a dwarf planet, albeit an exceptional one.

Do you know?

The Oort Cloud is essentially an extended shell of icy objects that exist in the outermost reaches of the solar system. It is a shell of objects that surrounds the entire solar system far beyond the Kuiper belt.
This region of space is named after astronomer Jan Oort, who was the first who theorised its existence.
The Oort Cloud is roughly spherical, and is thought to be the origin of most of the long-period comets that have been observed till date.

Connecting the dots:

What is the difference between a Planet and a Dwarf planet? What are the reasons behind declaring Pluto as dwarf planet?

(TEST YOUR KNOWLEDGE)

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

Note:

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Q.1) Which article of Indian Constitution lays down that a Finance Commission (FC) should be constituted “…within two years from the commencement of this Constitution and thereafter at the expiration of every fifth year or at such earlier time as the President considers necessary…”?

Article 180 (1)
Article 280 (1)
Article 380 (1)
Article 80 (1)

Q.2) Consider the following statements with reference to Finance Commission

It is a quasi-judicial body.
The chairman of the commission is not eligible for reappointment.
The qualifications of the members of commission are not specified in the Constitution.

Which of the statements given above are correct?