The HINDU Notes – 05th October 2019 - VISION

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Saturday, October 05, 2019

The HINDU Notes – 05th October 2019

📰 In a first, U.S. lawmakers take a step against India on Kashmir

Senate panel adds appeal to end the “humanitarian crisis” in Kashmir in its report.

•In what could become the first step towards legislative action by American lawmakers against India on the situation in Jammu and Kashmir, the United States Senate Committee on Foreign Relations has added an appeal to end what it calls a “humanitarian crisis” in Kashmir in its report ahead of the annual Foreign Appropriations Act for 2020.

•The amendment was proposed by Senator Chris Van Hollen, who visited Delhi this week as a part of a congressional delegation that discussed the Kashmir situation as well as India-U.S. bilateral relations, trade ties and defence purchases with key officials.

‘Restore communication’

•According to the report, which was submitted to the Senate by Lindsey Graham, senior Senator and key Republican leader known for his close ties to President Donald Trump, the committee on Appropriations “notes with concern the current humanitarian crisis in Kashmir and calls on the Government of India to: fully restore telecommunications and Internet services; lift its lockdown and curfew; and release individuals detained pursuant to the Government's revocation of Article 370 of the Indian constitution.”

•What makes the report as well as the tough language on Kashmir more startling is that the document was submitted on September 26, while Prime Minister Narendra Modi was still in the US, and came just a few days after his joint address at the ‘Howdy, Modi!’ event in Houston with Mr. Trump, as well as their bilateral meeting in New York.

Expression of concern

•“This amendment, which was accepted unanimously by the bipartisan committee, is a strong expression of concern by the Senate about the situation in Kashmir and sends the signal that we are closely monitoring the human rights situation there, and would like to see the Government of India take those concerns seriously,” Mr. Van Hollen told The Hindu here, adding that he had “hoped to share his concerns privately” with Prime Minister Modi, but had not been able to meet him.

•Mr. Van Hollen had met with External Affairs Minister S. Jaishankar in Washington last week and Senator Bob Menendez, also a part of the delegation, met with Commerce and Industries Minister Piyush Goyal this week in Delhi. Both Senators have made public statements in the last two months on the Kashmir situation.

Denied permission

•While it is unclear whether their concerns over Kashmir elicited any responses from the government, The Hindu has learnt that Senator Van Hollen was rebuffed when requested permission to visit Srinagar in an effort to assess the situation on the ground.

•When asked, MEA officials said the Ministry of Home Affairs handled such requests. No diplomat or foreign journalist has yet been given clearance to visit Kashmir since the government’s decision on Article 370 on August 5.

•Speaking at the World Economic Forum’s India Economic Summit in Delhi on Friday, Mr. Jaishankar said many key decision-makers in the US had been “misinformed by their media” and that he had spent considerable efforts in the past few weeks to clear misconceptions on the government’s decision to drop the “temporary” Article 370.

📰 Web of deception: On NEET impersonation scam

The government must monitor the NEET admission process to guard against fraud

•What the embittered relationship between Tamil Nadu and the National Eligibility-cum-Entrance Test (NEET) required was a salve, but instead things just got more complicated and murkier. The recent expose of what has come to be known as the NEET examination scam has placed further stress on the State’s experience with the exam in more ways than one. A couple of mails sent to the administrators of the Theni Government Medical College in south Tamil Nadu blew the lid off a scam with far-reaching consequences. A student of the college had gained his seat through subterfuge — by having someone impersonate him at the NEET. This turned out to be only the tip of the iceberg, and as investigators began unravelling the spool, more skeletons tumbled out. A number of students and their parents were investigated for possible impersonation fraud in the NEET, for operating with the help of middlemen to hire a medical student to write the test for them, for a hefty consideration. This, no doubt, required spinning a careful web of deception, right from submitting photos of the impersonator in the NEET application forms, to actually appearing for the examinations and single-window counselling for admissions, to submitting the application with the original student’s photo at the allotted college. Further probe cast a shadow on the admission of more students, including in private medical colleges. With the CB-CID tasked with investigating the case, bits and pieces of the puzzle are falling in place, revealing a multi-State operation. While the larger picture, with all its many nuances, is not yet clear, it is evident that fraud has been committed, and serious lapses in procedures and processes were exploited by students eager to score a medical seat by hook or by crook. They might have got away with it, but for an anonymous tip-off.

•Given that NEET was intended to standardise testing for admission into medical colleges and ensure a certain minimum quality, such lapses erode the very core of its raison d’étre. The Ministry of Health and Family Welfare and the National Testing Agency, which conducts the examination, must exhibit zero tolerance to such attempts to frustrate the integrity of the test. Both these agencies must immediately set their energies to identifying lacunae in the existing system and ensure that a foolproof testing methodology is in place. Using biometrics to identify students taking NEET has been suggested, and its value in adding a further layer of checks and balances is indisputable. Parents and students too would do well to temper their vaulting ambition for an MBBS seat with a measure of rationality. There are only a limited number of MBBS seats available, and while that number is slowly growing, it will never equal the demand.

📰 In search of the Wuhan spirit

At the Mamallapuram summit, India must ensure that it does not provoke China, leading it to indulge in ‘adventurism’

•The second informal summit between leaders of India and China is scheduled to take place in the second week of October in the coastal town of Mamallapuram, south of Chennai. Among the decisions taken at the Wuhan Summit held in April last year was to hold more such summits, aimed at ensuring “higher levels of strategic communications.” The Mamallapuram meet adheres to the Wuhan Summit in letter but one wonders whether in the past 18 months the two leaders did succeed in enhancing strategic communications.

•When China agreed to an informal summit in 2018, there was considerable scepticism as to what would be on offer from the Chinese side while agreeing to such a move. China was riding the crest of a wave of achievements, and did not think it needed to make concessions to anyone, least of all India. Since then, however, China has met with certain setbacks — geo-politically and economically — while India, though beset by a host of economic woes, seems better positioned today than in the spring of 2018. It, however, remains to be seen whether it will ensure that this summit is more productive.

Symbolic choice of venue

•The choice of Mamallapuram was, perhaps, not as arbitrary as it might seem. If Wuhan was picked by President Xi Jinping as the venue last year to demonstrate China’s economic resilience and might, Mamallapuram is symbolic of India’s ‘soft power’. Mamallapuram, an important town of the erstwhile Pallava dynasty that ruled this part of south India from 275 CE to 897 CE, is renowned for its architecture, widely admired across the world.

•Mamallapuram and the Pallava dynasty are also historically relevant, for the earliest recorded security pact between China and India (in the early 8th century) involved a Pallava king (Rajasimhan, or Narasimha Varma II), from whom the Chinese sought help to counter Tibet, which had by then emerged as a strong power posing a threat to China. The Chinese side is unlikely to miss this subtle hint, concerning the changing fortunes of nations and the importance of sustaining relationships.

•Informal summits have their use as trust-building exercises. It has to be acknowledged, however, that since the Wuhan Summit, little has changed as far as India-China relations are concerned. Doklam and the disputed border between the two countries remains an issue of concern. Hopes raised at the Wuhan Summit that the two countries would jointly work together on an economic project in Afghanistan have proved to be evanescent. Instead, even as the political situation in Afghanistan deteriorates, China, along with countries like Pakistan, remains more intent than ever on ensuring that India has no role to play there.

Contradictory outlook

•Meanwhile, China and India continue to compete and have a contradictory outlook on many strategic and civilisational issues. These include the nature of Asian security, regional stability and the role of the U.S. in the region. The China-Pakistan axis has, if anything, been further cemented — the UN designating Jaish-e-Mohammad chief Masood Azhar as a global terrorist a mere blip in the wider scheme of China-Pakistan relations.

•After the Wuhan Summit, many things have changed, altering the circumstances surrounding India-China relations. For instance, relations between China and the U.S. have sharply deteriorated. Apart from the U.S., a vast majority of nations in the West have cooled off towards China. While in 2018, the China-Russia axis appeared to be carving out an exclusive zone of influence in East Asia, by mid-2019, new alignments, including a further strengthening of India-Russia ties, as also a new triangular relationship of Russia, India and Japan, appear to be altering equations in the East Asian region. China’s Belt and Road Initiative (BRI) has also come under increasing attack, even from countries which previously viewed China as a munificent nation.

•China’s domestic scene is again marked by heightened anxiety today. The economy is far more fragile than in early 2018, as exemplified by the jitters emanating from China’s equity and currency markets, and the decline in growth rates. Internal security concerns such as unrest in Tibet, inroads made by radical extremist groups in Xinjiang and the latest turn of events in Hong Kong are also reinforcing fears about the leadership’s ability to control the situation. The relentless attack by the U.S. and President Trump on China’s economic practices has only aggravated this mood of pessimism.

China’s concerns

•India, on the other hand, has reasons to be more optimistic than a year ago. India’s relations with the U.S. have attained a new high. Relations with Russia have acquired a fresh dimension, incorporating economics alongside a longstanding military relationship. India’s line of credit to develop Russia’s Far East has fundamentally changed the nature of India-Russia relations. India’s relations with Japan have greatly strengthened. The Quadrilateral (the U.S., India, Japan and Australia) has gained a new lease of life.

•All this is certain to make China pause and rethink issues. Additionally, certain recent actions by India are likely to arouse China’s suspicions about India’s intentions, which could impact the summit outcome. While India’s efforts to ‘dumb down’ the Dalai Lama will have appeased China to an extent, other events in Ladakh and Arunachal Pradesh, where it takes a keen interest, will be seen as a provocation at this juncture. For example, the recent announcement by India of an “all arms integrated” exercise ‘codenamed Changthang Prahar (assault)’ in a “super high altitude” area near Chushul in eastern Ladakh, featuring tanks, artillery guns, drones, helicopters and troops, as well as para-drops, is almost certain to be read suspiciously by China. Simultaneously, the reopening of the Advance Landing Ground at Vijoynagar in Arunachal Pradesh for the use of military aircraft and a proposed major combat exercise, also in Arunachal Pradesh, in which the new Integrated Battle Groups will be seen in operation will add to, and aggravate, China’s concerns.

•Anyone familiar with the way the Chinese mind works will recognise that the concatenation of circumstances spelt out here is almost certain to make China even more intransigent as far as its negotiating stance is concerned. India, hence, needs to proceed with utmost caution, lest China reacts in a manner that would undermine the ‘Wuhan spirit’. India must ensure that it does not provoke China to the point where it would be inclined to indulge in ‘adventurism’.

Treading with caution

•As part of the preparations for the summit, Mr. Modi’s advisers would be well advised to try and arrive at a multi-faceted understanding of China and the Sinophone world in 2019. Achieving a more holistic understanding of China’s sense of itself is even more important today than in 2018.

•Blowing his ‘conch’ well ahead of the 70th anniversary of the republic, President Xi has already begun talking of the “great struggle” needed to build a new China. He is obliquely seeking a reversion to the Maoist period of “struggle to achieve victory.” For India-based China experts, it may be worthwhile to decipher how this translates in terms of international relations. In the meantime, it would be best to adhere to the dictum, the medium is the message.

•India can try and seek answers on how to deal with today’s China, from the “wisdom of the orient.” Reading up on treatises such as Sun Tzu’s ‘Art of War’ would help. “Subduing the enemy without fighting” has been a recurrent theme in Chinese thinking, and while informal summits have their uses, it is imperative not to overlook this aspect. China’s efforts are more than likely to be directed towards ‘disruption’, primarily concentrating on disrupting the strategic alliances that India has forged, or strengthened, recently.

•If India does not proceed with care and caution, the Mamallapuram summit could well prove to be a step back from Wuhan. With preparations and proper handling, the forthcoming meet could, on the other hand, provide India’s leaders with a realistic estimate as to where India-China relations are headed.

📰 RBI’s 25-bps rate cut leaves market disappointed

RBI’s 25-bps rate cut leaves market disappointed
FY20 GDP forecast revised down to to 6.1% from 6.9% due to slowing growth.

•The Reserve Bank of India (RBI) delivered another rate cut on Friday — the fifth in as many policy review meetings to boost a slowing economy. However, the move failed to cheer the market which was betting on a bigger rate reduction.

•The six-member monetary policy committee decided to cut interest rates by 25 basis points (bps) to 5.1% with five members voting in favour of the quantum while R.H. Dholakia voted for a 40 bps cut. [100 bps = 1 percentage point]

•“The MPC also decided to continue with an accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target,” the RBI said.

Forecast trimmed

•The central bank also revised its growth forecast for the current financial sharply, from 6.9% projected in the August policy, to 6.1%. Growth forecast for the first quarter of the next financial year was also trimmed to 7.2% from 7.4%.

•Inflation forecast for the second half of FY20 has been retained at 3.5-3.7%.

•“Noting that the output gap has widened since its last meeting, the MPC was of the view that the continuing slowdown warrants intensified efforts to restore the growth momentum... as long as the growth momentum remains as it is and till the growth is revived, RBI will continue to remain in an accommodative mode,” Shaktikanta Das, Governor, RBI, said in the post-policy interaction with the media.

•The rate cut comes after GDP growth for the first quarter of the current financial year plunged to a 25-quarter low of 5%.

•Between February and now, the central bank has reduced the policy rate by 135 bps.

•“The lowering of the GDP growth outlook to 6.1% for FY20 also reflects a realistic projection in view of the weak domestic demand, slowing global growth and the continuing trade tensions,” Rajnish Kumar, chairman, SBI, said.

•Equated monthly instalments on retail loans, such as home and auto loans, as well as credit to micro, small and medium-sized enterprises will become cheaper as banks have linked those loans to the repo rate, following a regulatory order.

Sensex tumbles

•The market was clearly disappointed as it was expecting a bigger rate cut. Equity indices ended in the red with the Sensex shedding over 434 points or 1.14%, led by a fall in financial sector stocks.

•“While markets were somewhat disappointed, as they were expecting a larger cut, the recent move needs to be seen cumulatively with the 110 bps cut that the RBI has already delivered in this rate cut cycle,” said Abheek Barua, chief economist, HDFC Bank.

•Mr. Barua said RBI had clearly signalled its continued focus on reviving growth, implying that more rate cuts are in the offing.

•“We expect 25-40 bps more cuts in this fiscal,” he said.

•The bond market also did not hide its disappointment with the yields on the benchmark 10-year government bond spiking 8 bps to 6.69%.

📰 Charging infra guidelines for electric vehicles get nod

One charging station in 3x3 km grid in all cities mandated

•Under the new guidelines for the electric vehicle charging infrastructure approved by Power Minister R.K. Singh on Friday, there must be at least one charging station in a grid of 3 x 3 km in all megacities and one charging station every 25 km on both sides of highways.

•“In order to address the range of issues of electric vehicle owners, a phase-wise installation of an appropriate network of charging infrastructure throughout the country has been envisaged in the guidelines, ensuring that at least one charging station should be available in a grid of 3 km X 3 km in the cities and one charging station at every 25 km on both sides of highways/roads,” the government said in a release.

First phase is 1-3 years

•The first phase of the plan (1-3 years) will cover all megacities with a population of more than four million as per the 2011 Census, and all expressways and highways connected to these megacities. The second phase (3-5 years) will cover other big cities such as State capitals.

•“To address concerns in inter-city travel and long range and heavy duty EVs, fast-charging stations for [vehicles] like buses/trucks shall be installed every 100 km,” the release said.

•“Assuming that most of the charging of EVs would take place at homes or offices where the decision of using fast or slow chargers would rest with consumers, private charging at residences/offices shall be permitted.”

•The guidelines also reiterate the Power Ministry’s earlier stance that the setting up of public charging stations will be a de-licensed activity and any individual or entity is free to set up public charging stations.

📰 India’s first e-waste clinic to be set up in Bhopal

Central Pollution Control Board to offer technical support

•The Bhopal Municipal Corporation (BMC) and the Central Pollution Control Board (CPCB) have joined hands to set up the country’s first e-waste clinic here, that would enable segregation, processing and disposal of waste from both household and commercial units.

•After inspecting the garbage and plastic recovery centres in Bhanpur here, CPCB officials discussed the clinic with BMC officials. A three-month pilot project, the clinic, if successful, would be replicated elsewhere in the country.

•“Electronic waste will be collected door-to-door or could be deposited directly at the clinic in exchange for a fee. The CPCB will provide technical support at the unit,” BMC Additional Commissioner Rajesh Rathore told The Hindu.

•At present, there was no estimate of the quantity of electronic waste generated in the city, he added. “Hazardous waste will be sent to Bengaluru for recycling,” he said.

•Door-to-door collection will happen in two ways. Either separate carts for the collection of e-waste will be designed, or separate bins will be attached to existing ones meant for solid and wet waste. The clinic is being conceived in compliance with the Solid Waste Management Rules, 2016.

•In the absence of a safe disposal mechanism, electronic waste at present is being disposed of along with other waste, said Mr. Rathore. “A suitable site for the unit is yet to be identified,” he added.

📰 Moderate expectations: On RBI rate cut

There are limits to what RBI can do with rates; the government needs to prod investment

•After the unconventional 35 basis points cut in interest rates in August, the Reserve Bank of India (RBI) returned to a normal 25 basis points cut on Friday. While a rate cut was a foregone conclusion, the speculation was over whether it would be 25 or 40 basis points, going by the August experience. With this, the central bank has pruned rates by 135 basis points in just seven months since the rate cut cycle started in February. Of this, until August, banks had passed on 29 basis points to borrowers. But with the shift to an external benchmark by major banks recently — mostly linked to the repo rate — the transmission could be quicker from here onwards. The RBI has also sharply marked down the GDP growth projections for the current fiscal to 6.1% from the 6.9% that it had projected in the August policy. This was inevitable after the shocking 5% growth reported in the first quarter but it could be argued though that even the revised estimate is a trifle optimistic. If the projection of 6.1% for 2019-20 is to be met, the economy has to grow by about 7% in the second half which does not look very likely. If the high frequency data of the last couple of months are any indication, the second quarter may well end up mirroring the first in terms of GDP growth. The basis for RBI’s optimism, therefore, appears unclear at this moment.

•The central bank has done the heavy lifting in the last few months and monetary policy may well be nearing its limits in so far as its ability to influence growth prospects is concerned. Inflation is well within the target giving space to the RBI to focus on growth. Crude oil prices are back in the comfort zone, retreating from the spike in mid-September, and food prices are projected to remain soft on the back of a good monsoon. The monetary policy statement is unambiguous that the RBI will continue with its accommodative stance “as long as it is necessary to revive growth”. While this statement is credible, the problem is that the central bank can only facilitate lower rates and push banks to lend. It cannot force borrowers to borrow and this is evident from the soft trends in credit offtake in the last few months. As per latest available data, bank credit is growing at just 10.3%. The onus, therefore, is on fiscal policy which alone can prod borrowing and investment. To be fair, the government has been engaging the levers, and the corporate tax cut last month is a major move to get private investment going. However, the ₹1.45 lakh crore giveaway has set off fears in the market of a fiscal slippage and higher borrowings by the government. These concerns also explain the unenthusiastic response of the stock and bond markets to Friday’s rate cut. The ongoing festival season consumption holds the key to revival of the economy this fiscal.