Newspaper notes for UPSC 28-06-18

Hello friends, this is Newspaper notes for UPSC of 28-06-18, Please do leave your valuable comments , feedback and suggestions, , telegram: @naylak . Do subscribe to our website and please share this post with your friends.

No-fly list has cut down unruly flyers

(Governance : laws and acts.)  IMP of the article 3/10

  • Incidents involving unruly passengers have seen a dramatic drop ever since the government announced rules for a national no-fly list, according to Minister of State for Civil Aviation.
  • before the no-fly list was brought out there were a lot of incidents where people were misbehaving on aircraft. But, once we issued a whole set of regulations, the number of incidents dropped dramatically.
  • People recognise now that if you compromise safety onboard an aircraft, we will not take it lightly and the consequences are going to be severe.
  • Last year, the Ministry of Civil Aviation unveiled the first-ever set of guidelines imposing a ban on flying, ranging from three months up to a lifetime, on passengers found guilty of misbehaving inside a plane.
  • Background:The domestic airlines in the country collectively urged the government for a no-fly list in the country after an incident in March last year involving Shiv Sena MP Ravindra Gaikwad who hit an Air India staffer with a slipper 25 times for being denied a business class seat in an all-economy plane.

U.S. postpones 2+2 dialogue with India

(P2 IR) IMP of the article 1/10

  • The much anticipated dialogue, between the defence and foreign ministers of India and the United States scheduled for July, has been postponed.
  • Both Countries agreed to identify new mutually convenient dates to hold the dialogues at the earliest in India or the US.

Centre may scrap UGC, proposes new regulator

GS, P2 : Polity : regulator bodies, Higher education . IMP of the article 6/10

  • Initiating major reforms in higher education, the Centre has placed in the public domain a draft Bill for a Higher Education Commission of India (HECI).
  • Objective: replace the University Grants Commissionand for eliciting suggestions from educationists.
  • The draft Higher Education Commission of India (Repeal of University Grants Commission Act) Act, 2018, takes away funding powers from the proposed regulator and gives it powers to ensure academic quality and even close down bogus institutions.
  • There is no plan to merge all higher education regulators, as was proposed through a planned agency called HEERA, which was supposed to be put in place as a super regulator.
  • Funding: The new regime separates the academic and funding aspects of higher education. While HECI will be in charge of ensuring academic quality in universities and colleges, the Ministry of Human Resource Development (MHRD) – or another mechanism that will be put in place later – will be responsible for funding universities and colleges.
  • Closure: Another key feature of the draft legislation is that “the Regulator will have powers to enforce compliance to the academic quality standards and will have the power to order closure of sub-standard and bogus institutions. Non-compliance could result in fines or even a jail sentence.
  • Till now, the UGC had no such powers. All it could do was to release a list of bogus institutions and not recognise their degrees.
  • HECI is tasked with the mandate of improving academic standards with specific focus on learning outcomes, evaluation of academic performance by institutions, mentoring of institutions, training of teachers, promote use of educational technology, etc.
  • It will develop norms for setting standards for opening and closure of institutions, provide for greater flexibility and autonomy to institutions, lay standards for appointments to critical leadership positions at the institutional level irrespective of university started under any law (including state list).

Nepal welcomes ‘2+1’ dialogue mechanism

GS P2:  IR : India – Nepal IMP of the article 3/10

  • Nepali officials are mulling over China’s proposal of a “two-plus-one” mechanism, where China  and India can jointly hold a dialogue with a third country in South Asia.
  • The Chinese side has been emphatic that its relations with the Nepal will be conducted according to the five principles of peaceful coexistence — the basis for a foreign policy among equals.
  • Nepal’s two big neighbours are developing very fast. It is a big opportunity for us if we can manage our relations with both countries properly.In this way Nepal wants to be a bridge between India and China.

Rupee tumbles to 19-month low on oil

GS P3: Economy  IMP of the article 5/10

  • The rupee slid to a 19-month low against the dollar as concern that rising crude oil prices could widen the country’s current account deficit and stroke inflation combined with fears of a trade war that could spur capital outflows to weigh the Indian currency down.
  • The rupee fell 0.54%, or 37 paise, against the dollar on Wednesday to settle at 68.61, the currency’s lowest close since November 24, 2016, when it ended at 68.73.
  • The Indian rupee has slumped almost 7% against the dollar so far this year, making it one of Asia’s worst performing currencies.
  • Forex traders said the rupee’s depreciation is in line with other emerging market currencies as the dollar index has strengthened in the wake of the S. Federal Reserve raising interest rates.
  • Elevated oil prices are also weighing on rupee as India’s dependence on oil imports is very high. Other factors that are impacting Indian currency are the political uncertainty in the wake of upcoming State elections and the general elections of 2019. This combined with the concerns over earnings outlook has led to FPI [foreign portfolio investor] outflows.

Editorial and Opinion articles :

Rethinking the referendum

Article is about Brexit IMP of the article 3/10 

  • On Saturday, June 23, just two years to the day since the referendum in which Britain and Gibraltar voted to leave the European Union (EU), over 100,000 people marched through London to call for a second referendum on Britain’s decision to leave.
  • Why the change in mind now: a range of promises made during the course of the referendum campaign by the Leave side that had been unfulfilled, such as £350 million a week extra for the National Health Service (NHS) as well as the difficulties related to Northern Ireland and other matters that voters had not been aware of at the time of the vote.
  • Two years on, as Britain remains as divided over the issue of leaving the EU, public debate has continued and gained ground on the virtues of a second referendum.
  • The House of Commons, the MPs last week had voted by a slim majority to pass the central plank of Brexit legislation, the EU Withdrawal Bill.
  • The Brexit referendum was won by a slim majority of 51.9% to 48.1%

Important questions to consider: 

  • Arguments are focused on the closeness of the margin, and what was voted on. Was a 50% threshold high enough, and was a mere 3-4% gap wide enough for such a fundamental and irreversible decision that was to determine the future of generations to come?
  • Did it necessarily involve leaving the single market (the elimination of tariffs, quotas, and the free movement of goods, services, capital and people)? Or the customs union (the clubbing together of countries to apply identical tariffs at the border)? Norway, Iceland and Liechtenstein are part of the single market but not the EU, while non-member Turkey is part of a customs union with the EU, while also not a member.
  • New problem areas have continued to arise particularly over the Irish question, which has proved to be one of the issues hardest to resolve at the heart of Brexit. Leaving the single market and the customs union would result in a “hard” border on the island of Ireland, jeopardising the fragile peace process under way that has heavily relied on the fluid boundary and deep economic and social links.
  • Business groups have become more and more vocal over their concerns.

Things to learn : What is referendum ? what are the problems with it.  also an opp to know the background of brexit and issues involved.

Reality check

GS P3 :  Economy , NPA, IMP of the article 10/10

  • The financial stability report released by the Reserve Bank of India has warned that the gross non-performing assets (GNPAs) of scheduled commercial banks in the country could rise from 11.6% in March 2018 to 12.2% in March 2019, which would be the highest level of bad debt in almost two decades.
  • This puts at rest the hope of a bottoming out of the NPA crisis that has affected the banking system and impeded credit growth in the economy.
  • The GNPA of banks under the prompt corrective action framework, in particular, is expected to rise to 22.3% in March 2019, from 21% this March.
  • The RBI believes that this will increase the size of provisioning for losses and affect the capital position of banks.
  • In fact, the capital to risk-weighted assets ratio of the banking system as a whole is expected to drop from 13.5% in March 2018 to 12.8% in March 2019.
  • A major highlight of the financial stability report is the central bank’s finding that public sector banks (PSBs) are far more prone to fraud than their private sector counterparts. This is significant in light of the huge scam unearthed at a Punjab National Bank branch earlier this year. The RBI notes that more than 85% of frauds could be linked to PSBs, even though their share of overall credit is only about 65%.
  • This should come as no surprise given the serious corporate governance issues faced by public sector banks, which to a large extent also contributed to the lax lending practices that are at the core of the NPA crisis.
  • The RBI, however, has warned about the rising external risks that pose a significant threat to the economy and to the banks. The tightening of monetary policy by the United States Federal Reserve and increased borrowing by the U.S. government have already caused credit to flow out of emerging markets such as India.


  • In his foreword to the report, RBI Deputy Governor has noted that governance reforms at PSBs, if implemented, can help improve their financial performance and also reduce their operational risks.
  • For now, the RBI expects the government’s recapitalisation plan for banks and the implementation of the Insolvency and Bankruptcy Code to improve the capital position of banks.These reforms can definitely help.
  • Unless the government can gather the courage to make drastic changes to aspects of operational autonomy and the ownership of PSBs, future crises will be hard to prevent.

The increasing stress in the banking system Livemint -Opinion

GS P3 :  Economy , NPA, IMP of the article 10/10

  • The Reserve Bank of India (RBI) has put 11 public sector banks on a special watch list because their balance sheets have almost been overwhelmed by a mountain of bad loans. Senior officials from the 11 banks under preventive corrective action (PCA) reportedly told a parliamentary committee this week that they were confident that these banks would get back on track by 2020.
  • Most of the headlines after the release of the new RBI Financial Stability Report on Tuesday focused on the fact that the banking regulator expects bad loans to go up even more this year. That is sobering in itself. However, there is more.
  • Nearly a quarter of the loans given out by these banks will have turned bad while the capital needed to support the loan book will be lower than the regulatory minimum. Remember that these 11 banks in the PCA watch list—Central Bank of India, Bank of India, IDBI Bank, UCO Bank, Indian Overseas Bank, United Bank of India, Dena Bank, Oriental Bank of Commerce, Corporation Bank, Bank of Maharashtra and Allahabad Bank—collectively account for 18.4% of total bank assets in India.
  • The Indian banking regulator has in effect converted the 11 banks from lenders into narrow banks that will only use depositor money to buy safe government bonds. Narrow banking is not much of an option in the long run. If depositor money is to be parked in government securities, then why do it through an expensive banking system.
  • Solution: There are no easy answers, but the government must stick to its original intent of providing fresh capital only to those banks that have viable strategies for the future. The Indian economy is clearly on the path of recovery, and economic activity needs to be supported with bank lending. The biggest companies have alternative sources of funding such as equity issues, bond issuance and overseas borrowing. Smaller enterprises have fewer financing options. They need a healthy banking system. It is also important to point out that some of the banks on the PCA watch list are clustered in specific regions, such as the eastern states. There are potential regional imbalance issues as well.
  • Indian households continue to put money into these damaged banks because of an implicit sovereign guarantee that all their money is protected. Such a variant of adverse selection means that fresh money continues to pour into organizations that are bad at financial intermediation.
  • The RBI has done well to divide banks into two categories in its analysis of financial stability. It now needs to take the next step by providing information about how individual banks have performed in its stress testsso that citizens have a better idea of the true financial health of their banks.

prompt corrective action

Reserve Bank, under its supervisory framework, uses various measures/tools to maintain sound financial health of banks. PCA framework is one of such supervisory tools, which involves monitoring of certain performance indicators of the banks as an early warning exercise and is initiated once such thresholds as relating to capital, asset quality etc. are breached. Its objective is to facilitate the banks to take corrective measures including those prescribed by the Reserve Bank, in a timely manner, in order to restore their financial health.

Encouraging mediation to settle disputes

GS P3 :  Economy , IMP of the article 3/10

  • Beginning this week, India will participate in deliberations at the United Nations Commission on International Trade Law (UNCITRAL) in New York on an important issue concerning resolution of commercial disputes.
  • Commercial disputes are resolved not only through courts and arbitration but also through The deliberations will consider how these settlement agreements in disputes in international commercial transactions will be implemented by courts in different countries.

Why is this draft important for India and its businesses:

  • Mandatory pre-litigation mediation has been introduced in commercial disputes. The adoption of the convention will address a policy gap on outcomes from the mediation process involving cross-border disputes.
  • With a definitive legal framework recognising and enforcing mediated settlement agreements, businesses will be encouraged to consider mediation in managing and resolving disputes that arise in their commercial transactions.
  • India has lost substantial earnings as a result of international disputes being taken for resolution outside the country. Strengthening the dispute resolution policies will encourage dispute resolution in India.
  • International transactions involve the application of different laws, by virtue of the persons from different countries being involved, or their undertaking a business in a third country.
  • The convention will link laws adopted by countries to recognise domestic mediation and extend them beyond their boundaries. UNCITRAL has formulated principles on which countries should recognise and enforce mediation agreements arising from cross-border disputes.

How it works?

  • The draft convention defines mediation as aprocess whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person (the mediator). The mediator lacks the authority to impose a solution upon the parties to the dispute.
  • Courts of a country before which a mediated settlement agreement is brought must ensure implementation of the terms of settlement.
  • When the settlement agreement comes up before the court for implementation or enforcement, the court will review it on the basis of certain conditions. These include the capacity of the parties to enter into the agreement, the question whether the subject matter of the agreement is one that can be settled through mediation in terms of its domestic laws, and so on. Once the agreement has been reviewed, the court must enforce the agreement on the terms agreed. Courts can decline enforcement only on these conditions. The importance of the draft convention is in the identification of these conditions after careful deliberation.
  • With this convention comes the certainty that settlement agreements through mediation will be acknowledged as a resolution of the dispute, and will be respected and enforced.
  • 174 countries recognise mediation and conciliation as a method of resolving disputes, and as an alternative to going to courts.
  • International business and dispute resolution institutions all have established rules and assist businesses in resolving disputes through mediation. Businesses, in turn, have turned to mediation as the first step in resolving differences that arise in their international disputes. The convention is opportune and will facilitate legal reform to ease dispute resolution.

Ujjwala revolution

IMP of the article 2/10

  • Last month, the Pradhan Mantri Ujjwala Yojana (PMUY) completed two years of operation. During this time the number of LPG connections has crossed 4 crore, and LPG penetration in India has risen from 56% in 2014 to 80%.
  • The greater challenge for the mission lies in refills.
  • It is worth considering the usage pattern of PMUY customers who have been in the system for a year or more and have been buying four or more cylinders a year.
  • Data from the Indian Oil Corporation Limited (IOCL), which has given out almost half of the Ujjwala connections says that the average cylinder consumption of these customers was 4.4 per year, including the installation cylinder.
  • One in five Ujjwala customers who enrolled in May 2016 is using seven cylinders annually, thus matching the national per capita consumption of 6.8 cylinders in 2017-18.
  • The adoption of LPG has received a boost with supplies ramping up and service improving. In April 2014, there were 13,896 LPG distributors across India. This number is now 20,227. Another 3,750 distributorships will be commissioned in 2018-19.
  • Similarly, the loan deferment policy, which has allowed the recovery of loan amounts from Ujjwala customers, has been deferred for their next six refills starting April 1, 2018. This allows customers to avail of the subsidy during this period.

Stranded on migration

  • What is the issue?: More than 1.8 million migrants have come to Europe since 2014, mostly from West Asia and Africa. This has become a contentious electoral issue across Europe with right-wing populists capitalising on an anti-migrant sentiment for electoral gains.
  • EU countries are now grappling with (and fighting over) the treatment of migrants within their territories and related policies. The temporary migrant resettlement system of 2015, which was formulated to distribute migrants across the EU, failed when many countries refused to meet their quotas. Migration is top of the agenda.
  • Why is migration in Europe in the news again? Earlier this month, Italy’s Interior Minister, Matteo Salvini, refused to grant MV Aquarius , a ship that had rescued 629 migrants, docking permission. The ship was finally allowed to dock at Valencia, Spain, after food had run out and the UN refugee body had made appeals.
  • Salvini wants to deport 500,000 of those who are in Italy, fix the migrant resettlement system, build migrant reception centres in Africa, and do away with the Dublin Regulation which says refugees must apply for asylum in the EU country where they first landed.
  • How does issue affect the German government? More than 1.6 million migrants have made their way to Germany since 2015, the bulk of them arriving when Chancellor Angela Merkel suspended EU migration rules in 2015 to accept migrants stranded in other countries. This issue has since been used to attack Ms. Merkel politically, and last year helped the far-right Alternative for Germany win seats in the German parliament for the first time. It now threatens the coalition government headed by Ms. Merkel’s Christian Democratic Union (CDU)

Citizens, non-citizens, minorities

IMP of the article 5/10. It gives a diff perspective of the issue and IR .

  • The Citizenship (Amendment) Bill, 2016, is intended to be supportive of religious minorities facing persecution in neighbouring Bangladesh, Pakistan and Afghanistan.
  • But members of those communities living in the three countries do not seem to welcome the proposed amendment. Only those who have moved to India, and now live their lives as members of the majority community, do.
  • The Bangladesh Hindu Buddhist Christian Unity Council for example, has expressed fears that the proposed amendment would make the communities it represents more insecure, not less. It would embolden political forces that would like to evict them from their lands and force them to leave Bangladesh and cross into India.
  • Organisations like the these have had to fight back rumours that the bill is the result of their reaching out to friendly political forces in India.
  • Developments in India have long affected the plight of minorities across the border. The suspicion of dual loyalty has been a persistent source of anxiety and fear for minority communities in the Subcontinent.
  • Given this history, it is not unreasonable for the religious minorities in Bangladesh to expect India to be attentive to their predicament and not make their situation worse.
  • In the updating of the National Register of Citizens (NRC) — the Supreme Court has set June 30 as the deadline — as well as the citizenship amendment bill, there is an illusion of unilateralism that marks Indian policy.
  • The NRC exercise and the citizenship amendment bill, in their eyes, are meant only to serve domestic constituencies; they do not belong to the high table of diplomacy and strategic affairs.
  • One can hardly blame Bangladeshi officials for treating the NRC exercise as a matter of Indian domestic politics with no implications for their country. Even as the process nears completion, the official position of Bangladesh remains that there are no unauthorised Bangladeshi migrants in Assam.
  • This illusion of unilateralism is the main reason why people whose names will not appear in the final NRC in Assam are likely to face a gloomy future. They have long been subjects of suspicion of being false nationals. The NRC will now officially bestow on them the status of stateless citizens or of non-citizens with no rights.
  • It is worth recalling that the landmark Nehru-Liaquat Pact of April 1950 was a bilateral agreement between the two governments on the security and the well-being of minorities.
  • The two governments not only made a commitment to mutual accountability, the Pact even provided an institutional infrastructure — including provincial and district minority boards — to address the concerns of threatened minorities.
  • In the world of diplomacy, the bilateral way of approaching the question of minorities has a long history. Even the Peace of Westphalia of 1648 — conventionally thought of as the foundational event of the modern international state system — included safeguards for religious minorities. Concluding minority treaties was the instrument of choice for the protection of minorities during the early part of the 20th century.
  • The then chairman of the National Human Rights Commission of Bangladesh, painted a grim picture of the condition of minorities in that country. He was very critical of “the way the religious minorities are being treated” and the response of the Bangladeshi state institutions. “If it goes on,” he said, “I think within 15 years there will be no Hindus in Bangladesh.”
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