IASbaba's Daily Current Affairs Analysis

IASbaba’s Daily Current Affairs (Prelims + Mains Focus)- 10th April 2018

(PRELIMS+MAINS FOCUS)

Maritime trade to use electronic mode

Part of: Mains GS Paper III- Infrastructure

Key pointers:

The government has made the use of e-Invoices, e-Payments and e-Delivery orders mandatory across the maritime trade as it seeks to push digitisation of trade processes to improve the ease of doing business.
Stakeholders across major ports (owned by the Central government) and terminals therein, private ports, private terminals, container freight stations (CFS) and inland container depots (ICD) have been directed to use e-Invoices, e-Payments and e-Delivery orders.
The government has also directed stakeholders to use the Port Community System (PCS), a centralised web-based message exchange platform for the Indian maritime community run by the Indian Ports Association (IPA), to exchange the documents.
The move will help improve the turnaround time of shipments, bringing it down to a couple of hours.

Article link: Click here

‘Prompt Corrective Action’ Framework for RRBs

Part of: Mains GS Paper III- Indian Economy

Key pointers:

The National Bank of Agriculture and Rural Development (Nabard) has come out with a ‘Prompt Corrective Action (PCA) Framework’ framework for regional rural banks (RRBs).
The framework is aimed at enabling RRBs that fail to meet prudential requirements relating to capital adequacy, net non-performing assets (NNPAs) and return on assets (ROA) to take self-corrective action to arrest further deterioration in their financial position.
The PCA will be invoked if RRBs breach trigger points on three parameters: capital to risk-weighted assets (CRAR) ratio, assets (NPAs), and profitability (ROA).
The PCA framework will be implemented based on the findings of Nabard’s inspection with reference to RRBs’ FY2019 financial performance.

About RRBs:

RRBs are jointly owned by the Central government, the State government concerned and sponsor (usually public sector) bank with the issued capital shared in the proportion of 50 percent, 15 per cent and 35 per cent, respectively.
As at end-March 2017, there were 56 RRBs.

Article link: Click here

(MAINS FOCUS)

NATIONAL

TOPIC:

General studies 1:

Urbanization and related issues

General studies 2:

Important aspects of governance and e-governance
Issues regarding services relating to Health, Education, Human Resource

Improving the representation of urban constituencies in decision-making

Background:

The present delimitation of constituencies in India has been done on the basis of the 2001 census under the provisions of Delimitation Act, 2002.
Delimitation commissions have been set up four times in the past—1952, 1963, 1973 and 2002—under Delimitation Commission Acts of 1952, 1962, 1972 and 2002.
The government had suspended delimitation in 1976 until after the 2001 census so that states’ family planning programmes would not affect their political representation in the Lok Sabha.
This had led to wide discrepancies in the size of constituencies, with the largest having over three million electors, and the smallest less than 50,000. The Constitution of India was specifically amended in 2002 not to have delimitation of constituencies till the first census after 2026.

Delimitation of constituencies and Urban governance:

The above is extremely relevant to the urban governance in India, where the national and state governments hold the power and purse strings to urban planning and policy.
This has led to inefficient governance and even neglect of cities, a dangerous trend in a nation that is urbanizing somewhat quickly.
The government should re-examine the way constituencies are re-drawn based on population growth in India’s next delimitation exercise, to be held after 2026.

Urbanization rate in India:

33% of Indians lives in cities. By 2040, the urbanization will be at 40%.
China will grow from being 50-70% urban.
Latin American, North American and European counterparts are already over 70% urban.
All indications and future projections suggest that India will not urbanize as quickly as some Latin American nations. Several uniquely Indian factors, such as a lack of jobs and land holdings in villages, however small, are all reasons for a slower rate.
The period of transition will likely be 30-50 years, and governance during this time will be complicated and challenging.

Issues:

At present, local governments and urban dwellers don’t have much say in the urban planning apparatus, and urban under-representation at state and national levels is leading to political neglect.
For example, in Maharashtra, India’s most urbanized state, 47% of the populace lives in urban constituencies and yet, these constituencies hold only 31% of assembly seats.
According to India’s 11th Five Year Plan (2005-2011), between 2005 and 2011, national funds allocated for rural development were 11 times the amount allocated for urban development.
In that period, urban population growth surpassed rural population growth for the first time in India’s history.
In India, the lack of proportional representation of cities in state governments is a big challenge.
Even if we have elected mayors, they will not have the ability to seek necessary resources from states due to the lack of representation and will always be dictated by the state’s chief minister.
For truly empowered mayors to get elected, political representation has to align with population representation at the state and national level.

Conclusion:

One way to address this challenge would be to improve the representation of urban constituencies in decision-making. This can be done through delimitation, the process of redrawing constituency boundaries based on population. India should ensure that the delimitation process is not delayed too much beyond 2026.

Connecting the dots:

There is a need to improve the representation of urban constituencies in decision-making. This can be attained by ensuring the delimitation process is not delayed by 2026. Discuss.

INTERNATIONAL

TOPIC:General Studies 2:

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

Reducing differences over BRI

Introduction:

At the annual Boao forum in Hainan this week, Chinese leader Xi Jinping is expected to present himself as the new champion of globalisation and castigate the unilateral economic actions of US President Donald Trump. While demonstrating his readiness to confront Trump measure for measure on trade, Xi is likely to signal some flexibility on key issues raised by the US.
US has raised various concerns regarding Chinese trade. These include concerns over-restrictive approaches to trade and investment, limited market access, and theft of intellectual property.
Earlier this year, Premier Li Keqiang had promised that China will open its door wider to foreign investment as part of Beijing’s new phase in economic liberalisation.

Reasons behind skepticism in India:

Delhi has struggled hard to cope with the massive trade deficit in favour of Beijing.
Currently, at nearly $52 billion, it accounted for nearly 45 per cent of India’s total trade deficit last year.
Despite Delhi’s repeated efforts to seek Chinese cooperation in reducing the trade deficit, it has run into a wall in Beijing.
Delhi has been deeply troubled by Xi’s Belt and Road Initiative.
Last May, Delhi refused to attend Xi’s Belt and Road Forum, despite considerable persuasion from Beijing. India argued that that the China-Pakistan Economic Corridor (CPEC), the flagship project of the BRI, violates India’s sovereignty in Kashmir.
It added that the BRI projects are pushing recipient countries into indebtedness, do not transfer skills or technology and are environmentally unsustainable.

China is planning to extend the CPEC to Afghanistan. Meanwhile, Maldives, Nepal, Myanmar and Sri Lanka are eagerly pursuing potential BRI projects.

Recent Indian advances include:

On its part, Delhi is stepping up its effort to promote connectivity with the neighbours.

The Chabahar port project in Iran.
The recent agreement on building a rail link to Kathmandu.
India is also in discussion with Japan and the US to pool resources and coordinate approaches to sustainable infrastructure development in the Indo-Pacific.

Reducing the differences over the BRI:

Both Delhi and Beijing have an incentive to reduce their differences on the BRI and find ways to work together on at least a limited agenda of connectivity.

As both Delhi and Beijing push for mega trans-border connectivity around the Subcontinent, the viability of the projects would significantly improve if there is cooperation between India and China.
Consider the fact that financing for China’s hydroelectric projects in Nepal would be lot easier if the power plants are linked to North Indian markets.
Similarly, the proposed Indian and Chinese rail lines in Nepal would be more efficient if they are part of sensible trade and transit agreements between Delhi, Kathmandu and Beijing.
The Subcontinent’s geography and the size of India’s market make it plain that many BRI projects will be hugely successful if India is part of them.
Persistent competition and conflict between India and China on regional connectivity would make many projects of both countries less efficient.

On its part, Delhi has said it is open to consultations with China on the development of regional trans-border infrastructure.
Beijing, in turn, has floated a number of new proposals for Delhi’s consideration. These include extension of the CPEC to India, promoting connectivity across the Himalayas in J&K, Nepal, Sikkim and other places.

Conclusion:

India’s broader concerns on the BRI can be addressed if Delhi and Beijing move from the abstract discussion of the BRI as a single grand initiative, to specific connectivity projects.
In any such negotiation, all dimensions of the project — from fiscal to environmental — should be jointly finalised by Delhi and Beijing.

Connecting the dots:

Both Delhi and Beijing have an incentive to reduce their differences on the BRI and find ways to work together on at least a limited agenda of connectivity. Discuss.