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Wednesday, August 19, 2020

The HINDU Notes – 19th August 2020

11:19




📰 Time for India and Nepal to make up

The mending of the most exemplary inter-state relationship of South Asia must be as dramatic and rapid as the rupture

•When the Nepal-India dispute over the Himalayan territory of Limpiyadhura flared up in May, New Delhi opinion-makers presented it as the doing of an upstart nation run by a renegade Prime Minister thumbing its nose at India, that too at Beijing’s instigation. Kathmandu’s polity bristled at the accusation and the entire political spectrum came together in nationalist climax to adopt a new map which included Limpiyadhura.

•There has been much blood-letting over the past four months, with one side (India) petulant, the other angry. New Delhi pointedly says it will sit for talks only after the COVID-19 pandemic and some north Indian TV channels have targeted Nepal’s Prime Minister K.P. Oli with revolting coverage. In turn, he abandoned diplomatic decorum to question India’s commitment to ‘satyameva jayate’ and then claimed the true birthplace of Lord Ram was situated in present-day Nepal.

•This tailspin must be halted so that the most exemplary inter-state relationship of South Asia may recover. De-escalation must happen before the social, cultural and economic flows across the open border suffer long-term damage.

Fear of abandonment

•Right off the bat, New Delhi analysts must try and understand why Nepal does not have an ‘independence day’. It would help them in unravelling the Limpiyadhura tangle and accepting the need to go back to the archival papers (and misdemeanours) of the East India Company and the successive Viceroys and Governors General — right down to the imperious present.

•From the Kathmandu perspective, Indian diplomacy seems increasingly unresponsive under the centralised control of the Prime Minister’s Office. As geopolitical capacity dwindled, Indian commentators have returned to lambasting hapless Pakistan while ignoring China, the true would-be adversary.

•With regard to China, New Delhi has nurtured a paralysing paranoia regarding the Himalayan range that goes back to the 1962 debacle, a condition now worsened by the Galwan intrusion. Nepal, Bhutan and India’s own Himalayan tracts are regarded merely as strategic buffers under this ossified policy. In addition, there is the constant preoccupation with neighbours who have supposedly ‘sold out’ to China. A confident nation-state without fear of abandonment would have behaved differently on Limpiyadhura.

•The cause of the chasm that has opened up between Kathmandu and Delhi relates to the disputed ownership of the triangle north of Kumaon, including the Limpiyadhura ridgeline, the high pass into Tibet at Lipu Lek, and the Kalapani area hosting an Indian Army garrison.

•New Delhi’s position on the dispute is based on its decades-long possession of the territory, coupled with Kathmandu’s implied acquiescence through its silence and the omission of Limpiyadhura on its own official maps.

•Nepal’s claim is centred on the Treaty of Sugauli (1815), whose language reads the “Rajah of Nipal renounces all claim to the countries lying to the west of the River Kali”. No agreement has superseded that treaty, and so no subsequent cartographic chicanery by the Company Sarkar or successor governments can undermine the 1815 document. Essentially, Nepal wants to stay with what was considered the upstream Kali at the time of the treaty’s signing 205 years ago.

•While the colonised parts of South Asia have had to deal western surnames that pervade their maps and frontiers, such as Radcliffe, McMahon and Durand, a historically evolved country such as Nepal would tend to rely more on proof of continuous state administration.

•Journalist Bhairab Risal (who celebrated his 93rd birthday on August 13) was the government official conducting the 1953 national census in the Limpiyadhura villages, whose citizens also voted in the first democratic elections of 1959. Land records were kept in Nepal’s district headquarters of Darchula and Baitadi until access was blocked in the 1960s by the Indian base at Kalapani.

•Kathmandu responded with sensitivity to Indian strategic concerns before and after the 1962 China-India war by allowing the Indian army post to be stationed within what was clearly its territory at Kalapani and not publicly demanding its withdrawal. However, following the advent of democracy in 1990, the demand for evacuation of Kalapani gained momentum.

•Kathmandu’s diplomats deny the accusation of passivity over the decades, saying that as the weaker power, Nepal preferred quiet diplomacy and that Kalapani had never been off the table since talks began in the early 1980s. As for the ‘possession’ argument, if control of a disputed region were to confirm ownership, then what of China’s continuous hold over Aksai Chin since Independence? Regarding the suggestion of Nepal acting on China’s ‘behest’, in fact Kathmandu considers China complicit on Lipu Lek, and has lodged strong protests with Beijing regarding its joint plans with New Delhi on use of the high pass.

Road to Lipu Lek

•From the time when a joint communiqué was issued in 1997 during I.K. Gujral’s prime ministership down to the present time of Prime Minister Narendra Modi, the two governments have agreed that a territorial dispute exists on upstream Kali and have assigned negotiators. A border demarcation team was able to delineate 98% of the 1,751 km Nepal-India frontier, but not Susta along the Gandaki flats and the upper tracts of the Kali.

•In 2014, India’s External Affairs Minister Sushma Swaraj agreed to the establishment of a Border Working Group, which was announced by Prime Minister Modi and Prime Minister Sushil Koirala. It too failed to make headway. In August 2019, India’s Minister for External Affairs S. Jaishanker and Nepal’s Minister of Foreign Affairs Pradip Gyawali assigned the task to the two Foreign Secretaries. That was where matters rested, with India dragging its feet on the Foreign Secretaries’ meeting, when things went awry.

•Nepal has been keen to sort out the matter away from the limelight. It was after India published its new political map in November following the bifurcation of Jammu and Kashmir and Ladakh that the pressure arose for Kathmandu to put out its own map incorporating the Limpiyadhura finger. The government cartographers got busy.

•Knowing full well the dangers of taking on the Indian lion, Prime Minister Oli held off on the map release while waiting for New Delhi to come to the table. But diplomacy did not get a chance, with the Ministry of Defence evidently having kept even South Block in the dark until India’s Defence Minister Rajnath Singh, with much fanfare, digitally ‘inaugurated’ the unfinished track to Lipu Lek on May 8.

•Prime Minister Oli’s position became untenable, and he proceeded with the constitutional amendment to certify the new map. Indian diplomats lobbied to keep Nepal’s Parliament from adopting the amendment, but Kathmandu needed it for the sake of cartographic parity with India in future talks.

•Truth be told — that the Limpiyadhura triangle exists now on the maps of both countries should not obstruct negotiations, when you consider that the smaller area of Kalapani, too, has remained on the maps of both countries for decades. And, life has gone on.

Dousing the volcano

•The ice was broken on August 15 when Prime Minister Oli called Prime Minister Modi on the occasion of India’s Independence Day, but that is just the beginning. Talks must be held, for which the video conference facility that has existed between the two Foreign Secretaries must be re-activated.

•Delay will wound the people of Nepal socially, culturally and economically. As the larger country, India may think it will hurt less, but only if it disregards its poorest citizens from Purvanchal to Bihar and Odisha, who rely on substantial remittance from Nepal.

•India does have experience of successfully resolving territorial disputes with Bangladesh, Sri Lanka and even Pakistan bilaterally and through third-party adjudication. Given political will at the topmost level, it should be possible to douse the Limpiyadhura volcano just as quickly as it has erupted.

•One difficulty is the apparent absence of backchannel diplomacy between the two capitals, which helped in ending the 2015 blockade. Today, India’s Prime Minister’s Office exercises such exclusive power that all channels have dried up. The Rashtriya Swayamsevak Sangh leadership might have been approached, but that was the very category Prime Minister Oli riled with his Ayodhya-in-Nepal claim.





•There is an immediate need to de-escalate and compartmentalise. The first requires verbal restraint on the part of Prime Minister Oli and India’s willingness to talk even as the pandemic continues. While India’s Foreign Office has thankfully remained restrained in its statements, India is required to maintain status quo in the disputed area. This means halting construction on the Lipu Lek track, which is the immediate cause of the present crisis.

•With the Prime Ministers setting the tone, the negotiating teams must meet with archival papers, treaties and agreements, administrative records, communications, maps and drawings. The formal negotiations should begin with ab initio public commitment by both sides to redraw their respective maps according to the negotiated settlement as and when it happens.

•Not to prejudge the outcome, if Nepal were to gain full possession of Limpiyadhura, it should declare the area a ‘zone of peace and pilgrimage’. The larger area must be demilitarised by both neighbours to ensure security for themselves, while the Kailash-Manasarovar route is kept open for pilgrims. The idea is certainly worth a thought: a Limpiyadhura Zone of Peace and Pilgrimage.

📰 Aiming to decolonise through colonial logic

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THE HINDU NEWSPAPER IMPORTANT ARTICLES 19.08.2020

Tuesday, August 18, 2020

Daily Current Affairs, 18th August 2020

17:26





1) Ministry of Tribal Affairs launches “Swasthya” & “ALEKH”
•Ministry of Tribal Affairs has launched the Tribal Health and Nutrition Portal “Swasthya” and e-newsletter on health and nutrition “ALEKH”. The ministry has also announced the opening of National Overseas Portal and National Tribal Fellowship Portal.

•e-portal on Tribal health and nutrition named ‘Swasthya’ will offer health and nutrition related information of the tribal population of India on a single platform. “Piramal Swasthya” has been recognized by the Ministry of Tribal Affairs as the Centre of Excellence for Knowledge Management (CoE for KM) for Health and Nutrition. “ALEKH” is a quarterly e-newsletter on health and nutrition.

2) Chhattisgarh government to launch “Padhai Tuhar Para” scheme
•Chhattisgarh government has announced to launch a student centric scheme named as “Padhai Tuhar Para”. The scheme will enable the school students to study with the help of community in their localities and villages, in view of the suspension of classes due to coronavirus outbreak.

Along with “Padhai Tuhar Para” scheme, the state government also announced to launch three other schemes which are as follows:

•“Bultu Ke Bol”, a Bluetooth-based programme will be rolled out to provide study materials to students living in remote areas and do not have access to internet facility.

•Mukhyamantri Slum Swasthya Yojana will be launched to offer health facilities to the people at their doorstep with the help of 70 mobile medical units in all the 14 municipal corporations.

•Radhabai Diagnostic Centre Scheme will be rolled out to offer pathology and other testing facilities to people at concessional rates.

3) UK launches £3 Million Innovation Challenge Fund in India
•An “Innovation Challenge Fund” of £3 Million has been launched by the government of United Kingdom (UK) in India. The newly launched fund aims to support research and development (R&D) proposals to address the challenges posed to the economy and the environment, by the COVID-19 pandemic. Hence, the fund will help scientists in academia and industry to address the COVID-19 pandemic and climate change.

•Innovation Challenge Fund requests tech innovators having links with the AI-Data cluster in Karnataka and the Future Mobility cluster in Maharashtra, to present research and development plans for tackling Covid-19 or which encourages a greener planet. This will help to catalyse innovation and technology, which will address global challenges to drive innovation-led inclusive growth.




4) MPEDA launches Quality Control Lab in Porbandar
•Quality Control Lab has been set up by the Marine Products Export Development Authority (MPEDA) in Porbandar, Gujarat. The Quality Control Lab will offer tests for seafood processors as well as exporters to confirm to product safety as per international regulatory requirements.

•Quality Control Lab is empowered with advanced testing instruments to evaluate antibiotic residues, heavy-metals, namely cadmium, lead, mercury and arsenic in seafood samples and histamine in fish such as tuna and mackerel.

5) GP Garg becomes SEBI’s new executive director
•The Securities and Exchange Board of India (Sebi) has appointed GP Garg as executive director (ED). Prior to this, he was Chief General Manager in Sebi and has handled several assignments since joining in January 1994. He has been closely associated with Sebi’s initiatives on financial literacy and investor education in the country.

6) Rakesh Asthana becomes new DG of BSF
•Government of India has appointed Rakesh Asthana as the new director-general of the Border Security Force (BSF). Currently, DG Indo-Tibet Border Police (ITBP) chief S S Deswal was holding the additional charge of BSF since March this year.

•Asthana is currently heading the Bureau of Civil Aviation Security (BCAS) with an additional charge of Narcotics Control Bureau (NCB), will assume full-time charge of the border guarding force deployed at the approximately 2,280 km long border with Pakistan.

7) 13th Session of the India-UAE Joint Commission Meeting
•The 13th Session of the India-UAE Joint Commission Meeting on Trade, Economic and Technical Cooperation was held to review the continuing growth of broad based cooperation between the two countries. The session was co-chaired by Dr. Subrahmanyam Jaishankar, Minister of External Affairs of India and Sheikh Abdullah Bin Zayed Al Nahyan, Minister of Foreign Affairs and International Cooperation of the United Arab Emirates.

•During the session, both countries accepted to strengthen cooperation in ongoing areas and agreed to consider cooperation in newer areas reflecting the changing times. India also requested UAE for further investments in various sectors including renewable energy, logistics, food parks, defence, ports, highways as well as airports. They also deliberated on the regional issues related to their neighbourhood and cooperation at the United Nations as well as other multilateral meetings. The next session has been planned to held in Abu Dhabi in 2021.

8) Google partners CWC for flood forecasting initiative
•Google and Central Water Commission(CWC) of India have launched the flood forecasting initiatives across India for the past several months. The Central Water Commission is the first governmental partner of Google to measure water levels on an hourly basis using around 1000 stream gauges across India.

9) MCX to launch India’s first bullion index named “Bulldex”
•Multi Commodity Exchange of India (MCX) will launch India’s first bullion index named “Bulldex”, on August 24, 2020. Bullions, viz. gold and silver are already being traded as individual commodities on the country’s premier commodity exchange. With gold and silver as underlying, Bulldex will have a market lot size of 50 and be cash-settled futures contract. MCX had tested bullion index futures trade in mock trading exercises in July.

10) A book titled “Full Spectrum: India’s Wars, 1972-2020″ by Arjun Subramaniam
•Retired Air Vice Marshal, Arjun Subramaniam has authored a new book titled, “Full Spectrum: India’s Wars, 1972-2020″. It is the sequel to his 1st book, ‘India’s Wars: A Military History, 1947-1971’. The book portrays the comprehensive account of war and conflict in contemporary India over the past five decades next month. It will be published by HarperCollins Publishers India Pvt. Ltd.



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The HINDU Notes – 18th August 2020

13:29




📰 Reimagining and reinventing the Indian economy

‘India needs to minimise the damage caused by the pandemic while rebooting the country by exploiting new opportunities unleashed by evolving business scenarios’

•The COVID-19 pandemic has disrupted the global economy and India is no different. The significant reduction in domestic demand caused by the nationwide lockdown has pushed the economy towards contraction in the first quarter of 2020-21, and the impact is likely to be felt in subsequent months as well.

•In this regard, Honourable Prime Minister Shri Narendra Modi has taken decisive and commendable action to mitigate the impact of the virus outbreak, from both a health and an economic perspective.

•On May 12, 2020, Mr. Modi unveiled a mammoth stimulus package totalling Rs. 20 lakh crore, which works out to about 10% of GDP, making it one of the most substantial relief plans in the world.

•The stimulus package can help revive businesses, which are finding it difficult to operate without adequate availability of credit. This is especially true for India’s 60,000-odd start-ups, which are facing an acute liquidity crunch. The situation presents an opportunity to take bold action to promote investments, protect existing jobs and create new jobs.

•A lot more needs to be done, however, to resuscitate the country’s growth engine.

•At this juncture, what India needs is a two-pronged strategy to successfully navigate the current crisis. First, minimise the damage caused by the COVID-19 and clear a path to recovery and second, rebooting and reimagining India by promptly exploiting new opportunities unleashed by evolving business scenarios. The three mantras should be bigger, bolder and faster execution of this strategy.

Key strategies

The strategy should address four major economic cylinders: a) Big Business Houses which are a major contributor to GDP and large employment generators. b) MSMEs which are the lifeline of the country, generating wealth for the middle class. c) Start-ups, which bring innovation and transformation to our country’s economy. d) Our Indian brothers and sisters living abroad, the NRIs and OCIs — they not only serve as unofficial ambassadors of India, but their heart beats for India and through their contacts, can bring huge investments into India.

1. Big business houses should be supported by the government to reopen their operations by way of tax incentives or ease of procurement of raw materials or other goods and services on credit as this will energise consumer demand and boost the functioning of vendor or ancillary industry in the MSME sector (which has potential for job creation).

2. The RBI should consider single one-time window for restructuring business loans, as required, by all banks. There is a high probability that non-performing assets are likely to rise once the prevailing moratorium is lifted by RBI. The government and RBI also urgently need to assure banks, that their business decisions will not be questioned, to encourage credit flows.

3. The Centre can prepare a five-year plan on getting at least 60% of those companies, desiring to move manufacturing out of China to India.

4. Making India a global trading hub — devise an incentive regime for companies setting up global trading operations from India.

5. The States should think of establishing self-contained “industrial cities” that earmark space for manufacturing, commercial, educational, residential and social infrastructure.

6. The 10 sectors identified by the government fit into the Make in India campaign — electrical, pharmaceuticals, medical devices, automotive, mining, electronics, heavy engineering, renewable energy, food processing, chemicals and textiles. Japan, the U.S. and South Korea have already shown interest.

Sunrise sectors

7. It should also encourage sunrise sectors as part of re-imagining Indian economy such as battery manufacturing (storage systems)/ solar panel manufacturing. The government can also consider giving impetus to “Deep Tech”-leveraged businesses — blockchain, robotics, AI, machine learning, augmented reality, big data analytics, cyber security, etc.

8. India is amongst the top start-up ecosystems globally. Several of them are in pre-Angel or Angel-Funding stages and are under significant pressure to stay afloat in view of a lack of adequate liquidity. Start-ups not only help drive innovation, but also create jobs. The government needs to provide support to the start-up ecosystem.

9. The auto industry which contributes significantly to GDP (nearly 9%) deserves special treatment. In addition to reducing GST rate, old vehicle scrap policy with tax incentives for creating a demand for new vehicles may be formulated. There is need to recognise Auto Sales Industry channel partners as MSMEs

10. Plug-and-Play model: Maharashtra has created a turnkey ‘plug-and-play’ model for foreign investors. Similarly, other States must get their act together, be it on land acquisition, labour laws and providing social, environment and other infrastructure. Land should be made available for projects with all necessary pre-clearances — at Centre’s level (including Environmental), State’s and Municipal dispensations.

11. Reforms in labour laws do not only mean permission to hire and fire. Leeway should be given to strictly enforce discipline within the factory premises and demand higher productivity. The moves by U.P., M.P. and Gujarat are welcome signals. The government should provide health insurance for migrant labourers as experimented by certain States.

12. Investments of NRIs and OCIs in India should be treated on par with those of Resident Indians as regards interest and dividend repatriation and management control of Indian companies. It may be mentioned that the Chinese government had called on rich overseas Chinese to invest in China with minimum government control, and massive investments followed. This has contributed to China’s prosperity and economic rise. A similar investment boom can take place in India through NRIs and OCIs.





Indian diaspora’s direct investment should be incentivised, perhaps in terms of a plug-and-play model to ensure that they do not end up spending lots of time in getting approvals to start a business.

One-time repatriation of foreign earning: The proposition is to reduce the current rate of 15% on a gross basis on dividends from foreign subsidiaries to 5%. This would lead to more influx of funds and thereby be expected to support local projects.

Tax exemptions

The government may also consider providing tax exemption on passive income like dividends, interest on bank deposits, income from mutual funds earned by NRIs from India, if such income is reinvested back in India. Also, capital gains should be taxed at 50% of applicable rates for next 3 years.

Incentives for attracting new investments: We need to reconsider the approach to taxing interest, dividends and royalty paid to overseas investors. For instance, though interest on several forms of debt qualifies for a concessional 5% tax rate, this is limited by fairly stringent thin capitalization norms. The government could consider a 3 to 5-year moratorium on the applicability of thin capitalization norms to ensure that businesses are able to leverage on low cost borrowings from group entities abroad.

The government may consider relaxation of norms pertaining to issue of shares to resident entities owned by NRIs. Further, relaxation should be provided for any funds received from NRIs, subject to production of simple documents such as Bank Foreign Inward Remittance Certificate (FIRC) /KYC documents.

13. An off-shore investment centre like Singapore can be opened in Mumbai, where Indian domestic laws and taxation will not be applicable. MNCs may route their investments into India through the centre. Foreign legal firms and banks along with domestic institutions can be invited to have a presence in the centre.

📰 India’s GDP to shrink 16.5% in Q1: SBI report

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