SECURE SYNOPSIS: 10 May 2017
SECURE SYNOPSIS: 10 May 2017
NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.
General Studies – 1;
Topic: History of the world will include events from 18th century such as industrial revolution, world wars, redrawal of national boundaries, colonization, decolonization, political philosophies like communism, capitalism, socialism etc.- their forms and effect on the society
Japan’s prime minister, Shinzo Abe, has called for a debate on rewriting the country’s pacifist constitution after his Liberal Democratic party [LDP] and its allies secured a supermajority in upper house elections.
How did the end of 2nd WW shape Japanese constitution?
- On 26 July 1945, Allied leaders Winston Churchill, Harry S. Truman, and Chiang Kai-shek issued the Potsdam Declaration, which demanded Japan’s unconditional surrender. This declaration also defined the major goals of the post-surrender Allied occupation: “The Japanese government shall remove all obstacles to the revival and strengthening of democratic tendencies among the Japanese people. Freedom of speech, of religion, and of thought, as well as respect for the fundamental human rights shall be established”
- Post-surrender measures taken by Douglas MacArthur, the Supreme Commander for the Allied Powers(SCAP), suggest that neither he nor his superiors in Washington intended to impose a new political system on Japan unilaterally.
- Instead, they wished to encourage Japan’s new leaders to initiate democratic reforms on their own. But by early 1946, MacArthur’s staff and Japanese officials were at odds over the most fundamental issue, the writing of a new Constitution. Emperor Hirohito, Prime Minister Kijūrō Shidehara and most of the cabinet members were extremely reluctant to take the drastic step of replacing the 1889 Meiji Constitution with a more liberal document
- The document drafted by the Supreme Command of the Allied Powers (SCAP) divided the Japanese Diet between the conservatives and nationalists on the one hand and the social democrats on the other. Whereas the former view the Constitution as an imposition on Tokyo, the latter see the text as a canon of progressive and forward-looking principles.
- At the heart of these divisions lies Article 9 through which Japan renounced the use of force in the resolution of international disputes and proclaimed never to maintain land, sea and air forces. The charter merely made provision for the country’s own defence, which resulted in the establishment of the Self-Defence Forces (SDF).
Why Japan wants to revise its constitution?
- Rewriting the constitution, imposed by the US occupation authorities after the second world war, has been the ideological driving force behind Abe and other conservatives who believe it unfairly restricts Japan’s ability to respond to new threats such as international terrorism or external aggression.
- External threat
North Korea- North Korea has vehemently rejected all the regulation of the western powers and has conducted many missile and nuclear tests threatening the regional stability. Japan who is traditionally hostile Korea sees it as threat to their sovereignty and security.
China– The aggressive posturing of China into Indo-pacific and South China region has alarmed the Japanese leaders.
Though US has traditionally guaranteed the security to Japan, it cannot rely on it particularly in the wake of election of Donald Trump who seems to reluctant to provide security at the cost of US resources.
In the wake of rising terrorist threat all over the world, Japan wants to be in position where it can confidently and dominantly able to tackle it. The execution in January 2015 of two Japanese hostages by the Islamic State (IS) may have strengthened the voices that have been eager to see the end of the ‘no war clause’.
The 2015 law on collective self-defence nearly ensured that. The measure authorises Japanese forces to join a battle to defend the nation’s allies, even where its territory is not at threat.
Though there is intense debate on the changing article 9 of the Japanese constitution, it needs 2/3rd majority in both the houses of the parliament. Further huge number of people are against the changing of the pacifist nature of the Japanese constitution. In such conditions there would be uphill task in front of Shinjo Abe to move amendments to Constitution.
Topic: Role of women
2) Five years after India’s official statistics recorded a sharp decline in the share of women in India’s labour force, a new large-scale survey conducted in 2016 shows that the proportion of working women in the country has barely improved. Discuss the findings. (200 Words)
The proportion of women in the urban labour force is 24%, while that in the rural labour force is a bit higher at 29%, according to the Household Survey on India’s Citizen Environment & Consumer Economy (ICE 360° survey), conducted last year.
- Overall, the proportion of women in India’s labour force (rural and urban put together) is 27.4%, according to the survey. Out of every 10 persons in the country’s labour force, only 2 are women. These findings broadly corroborate the findings of the National Family Health Survey (NFHS) conducted in 2015-16, which shows that the proportion of working women who were paid for their work fell 4 percentage points over the past decade to 24.6%.
- Unlike its Asian peers, which saw a sharp increase in the proportion of women workers as their growth rates picked up, the Indian economy has seen the share of women in the labour force decline precisely when it has been growing the fastest.
- India’s female labour force participation rate at 27% is among the lowest in the world, and far lower than Asian peers such as China (63.9%) or Nepal (79.9%), World Bank data shows. Only in Pakistan (24.6%) and the Arab World (23.3%), the proportion of women in the labour force is lower.
- One reason for the lower participation of women in the Indian labour force is the rise in enrolment rates, which has led many young women to pursue education.
- Another reason could be rising prosperity itself, research suggests. For many women workers in India, the decision to seek work is often driven by necessity rather than economic opportunities. Thus, economic prosperity allowed women to reduce distress-driven employment.
- The very rich households are an exception to the trend and report a higher proportion of female earners. Such a ‘U-shaped’ pattern in women’s workforce participation gets starker when one considers their educational qualifications. In both rural and urban areas, women who are either illiterates or graduates are most likely to work or to seek work. Those with middle-level educational qualifications are unlikely to be in the labour force, the data shows.
- The survey shows that 71% of illiterate urban women reported catering to “domestic duties” as their main (or “principal”) activity (excluding women who are pursuing education or too old or too young or unfit to work). This ratio is higher for urban matriculate women at 82% and lower for urban graduate women at 68%.
- On average, 76% of women were primarily engaged in “domestic duties” in urban India, while 71% reported being engaged in such activities in rural India. Although female labour force participation is higher in rural areas, it is mostly in casual labour. The share of salaried women is much higher in urban areas, the survey shows.
- The findings of the latest survey seem to indicate that apart from the poorest and richest households, most women in India tend to forsake job opportunities in favour of their domestic duties.
Although such societal attitudes may be changing, the process has been slow. While India’s youth has become more liberal than before, on questions relating to gender roles, a majority still retains conservative attitudes. Less than half of young men and women under the age of 35 believe that it is all right for women to work after marriage, according to the recently published findings of a national youth survey conducted jointly by the Centre for the Study of Developing Societies (CSDS) and Konrad Adenaeur Stiftung (KAS) in 2016.
General Studies – 2
Topic: Important International institutions, agencies and fora- their structure, mandate.
3) Recently the International Court of Justice (ICJ) at The Hague stayed death sentence of Kulbhushan Jadhav, the former naval officer sentenced to death in Pakistan. What’s the composition, mandate and jurisdiction of ICJ? Also discuss significance of this stay order for India. (200 Words)
International Court of Justice-
- The International Court of Justice (ICJ) is the principal judicial organ of the United Nations (UN). It was established in June 1945 by the Charter of the United Nations and began work in April 1946.
- The seat of the Court is at the Peace Palace in The Hague (Netherlands). Of the six principal organs of the United Nations, it is the only one not located in New York (United States of America).
- The Court’s role is to settle, in accordance with international law, legal disputes submitted to it by States and to give advisory opinions on legal questions referred to it by authorized United Nations organs and specialized agencies.
- The ICJ is composed of fifteen judges elected to nine-year terms by the UN General Assembly and the UN Security Council from a list of people nominated by the national groups in the Permanent Court of Arbitration. The election process is set out in Articles 4–19 of the ICJ statute. Elections are staggered, with five judges elected every three years to ensure continuity within the court. Should a judge die in office, the practice has generally been to elect a judge in a special election to complete the term.
- No two judges may be nationals of the same country. According to Article 9, the membership of the Court is supposed to represent the “main forms of civilization and of the principal legal systems of the world”. Essentially, that has meant common law, civil law and socialist law (now post-communist law).
- There is an informal understanding that the seats will be distributed by geographic regions so that there are five seats for Western countries, three for African states (including one judge of francophone civil law, one of Anglophone common law and one Arab), two for Eastern European states, three for Asian states and two for Latin American and Caribbean The five permanent members of the United Nations Security Council (France, Russia, China, the United Kingdom, and the United States) always have a judge on the Court, thereby occupying three of the Western seats, one of the Asian seats and one of the Eastern European seats.
- As stated in Article 93 of the UN Charter, all 193 UN members are automatically parties to the Court’s statute. Non-UN members may also become parties to the Court’s statute under the Article 93(2) procedure. For example, before becoming a UN member state, Switzerland used this procedure in 1948 to become a party, and Nauru became a party in 1988. Once a state is a party to the Court’s statute, it is entitled to participate in cases before the Court. However, being a party to the statute does not automatically give the Court jurisdiction over disputes involving those parties. The issue of jurisdiction is considered in the two types of ICJ cases: contentious issues and advisory opinions.
- Contentious issues-
In contentious cases (adversarial proceedings seeking to settle a dispute), the ICJ produces a binding ruling between states that agree to submit to the ruling of the court. Only states may be parties in contentious cases. Individuals, corporations, parts of a federal state, NGOs, UN organs and self-determination groups are excluded from direct participation in cases although the Court may receive information from public international organizations. That does not preclude non-state interests from being the subject of proceedings if a state brings the case against another. For example, a state may, in cases of “diplomatic protection”, bring a case on behalf of one of its nationals or corporations
- Advisory opinions-
An advisory opinion is a function of the Court open only to specified United Nations bodies and agencies. On receiving a request, the Court decides which states and organizations might provide useful information and gives them an opportunity to present written or oral statements. Advisory opinions were intended as a means by which UN agencies could seek the Court’s help in deciding complex legal issues that might fall under their respective mandates.
Significance of the stay order for India-
- The stay order has created the hopes for the suspension of death sentence awarded to the Kulbhushan Jadhav.
- The ruling in favor of India shows that Pakistan had failed to uphold the provisions of Vienna convention on consular access which India sought as its legitimate right.
- The order would obliged Pakistan to follow due process of law and provisions of other international treaties while dealing with the case of Kulbhushan Jadhav in future.
- India has been skeptical of taking the bilateral issues to the multilateral forums like ICJ. However the positive award from the ICJ could make India to take help of ICJ in other matters too.
The ICJ has only stayed the death sentence for particular period and final order is still awaiting. Thus there are no strong grounds to come to a definite conclusion at the moment. Hence India will have to present strong reasons to convince ICJ that the death sentence given by military court of Pakistan is malafied and without any strong evidences.
General Studies – 3
Topic: Achievements of Indians in science & technology; indigenization of technology and developing new technology.
4) SPARK (Sustainable Progress through Application of Research and Knowledge) is a proposed initiative to synergise science activity in India. Critically comment on the objectives of this initiative. (200 Words)
Introduction :- Top administrators in Indian science submitted a detailed project report to Prime Minister Narendra Modi. This paper has reviewed portions of the 48-page report, titled Vigyan 2030: Science and Technology.
- One of its key recommendations is to have an independent science and technology authority that will have two parallel arms.
- One, a ‘discovery arm’ that can organise the expertise of various organisations across states and regions to solve a basic research problem.
- Two, a ‘delivery’ arm that will closely work with industry and evolve public private partnerships. Such an authority, the report envisions, will report directly to the Prime Minister.
- SPARK (Sustainable Progress through Application of Research and Knowledge), as the body is tentatively named, will be overarching yet have “light touch” governance.
- The existing systems of science governance in this country are robust with departments reporting to ministers who in turn report to the Union Cabinet. There is no lack of sound advisory bodies and committees within these departments. As for overarching bodies, we already have the Scientific Advisory Committee to the Prime Minister and the Principal Scientific Adviser to the Government of India
- The science departments are too different from one another to come under the purview of one “overarching” body like SPARK. The Department of Science and Technology and Department of Biotechnology are purely funding and outreach organisations. The Council of Scientific & Industrial Research (CSIR) has a special and tricky mandate which involves interaction with industry.
- The Department of Atomic Energy, Defence Research and Development Organisation, Department of Space and others are into mission-mode projects. There is hardly a government department or ministry that science does not touch.
- What one needs is a management technique that effectively identifies scientific challenges and links the resulting breakthroughs with national problems.
- There is a lack of scientific expertise across all levels. We have failed in our educational system to harness the enormous latent talent in our country and build a solid foundation of science.
- Even if SPARK is constituted, it needs financial independence; given the relationship between the Ministry of Finance and its Department of Expenditure on the one hand and the science departments on the other, this remains a moot point.
Topic: Indian economy
Introduction :- NPAs are not a new phenomenon. They have been a part of our system over the years and have come up during certain economic cycles with prominence. China’s NPAs in the early 2000s were far higher than India’s were from the period 2001-2005. Since then, China has made a significant effort to fine-tune NPAs; today, they are much less than in India. During the same period, lending by Chinese banks has been far higher than by Indian banks, which have been historically reluctant to extend credit and even more reluctant lenders post the 2008 financial crisis. Hence few things need to be learn.
They adopted a four-point strategy to address the problems.
- The first was to reduce risks by strengthening banks and spearheading reforms of the state-owned enterprises (SOEs) by reducing their level of debt. The Chinese ensured that the nationalized banks were strengthened by raising disclosure standards across the board.
- The second important measure was enacting laws that allowed the creation of asset management companies, equity participation and most importantly, asset-based securitization. The “securitization” approach is being taken by the Chinese to handle even their current NPA issue and is reportedly being piloted by a handful of large banks with specific emphasis on domestic investors. According to the International Monetary Fund (IMF), this is a prudent and preferred strategy since it gets assets off the balance sheets quickly and allows banks to receive cash which could be used for lending.
- The third key measure that the Chinese took was to ensure that the government had the financial loss of debt “discounted” and debt equity swaps were allowed in case a growth opportunity existed.
- The fourth measure they took was producing incentives like tax breaks, exemption from administrative fees and transparent evaluations norms. These strategic measures ensured the Chinese were on top of the NPA issue in the early 2000s, when it was far larger than it is today.
Relevance for India:-
- The role of asset reconstruction companies becomes very important. There need to be more structural protections for fair valuations, especially in the context of the bankruptcy law.
- Another important point that has bypassed the domestic policy narrative is securitization. The thinness of the domestic investor base needs to be overcome, coupled with a robust securitization structure. In addition, this process should involve the transfer of debt to privately managed specialist vehicles that have a clearer mandate and expertise to engage in corporate restructuring. Only this method has the potential to drive faster restructuring of a debtor company, otherwise securitization will merely change the ownership of its debt.
- The RBI must make a concerted effort to distinguish between genuine performance-related loan issues and companies that are taking the system for a ride.
- It is important that schemes such as the Pradhan Mantri Mudra Yojana are promoted in tandem to provide credit to genuine SMEs and stricter measures are first directed at the big companies that own large chunks of NPAs at the national level. This distinction is important to address the problem in a more targeted manner and find effective solutions without affecting genuine business professionals and entrepreneurs at large.
Conclusion:- Iit is important to look at some of the key measures taken by other countries to address the NPA issue. China’s NPA rescue mission is one such case study. India should learn from it, especially in the context of valuation, securitization and more targeted NPA redressal mechanisms.
Additional information :-
According to RBI October to December report, the gross Non-Performing Assets (NPAs) of Public Sector Banks are just under Rs. 4 lakh crore, and they collectively account for 90% of such rotten apples in the country’s banking portfolio. In terms of net NPAs, their share is even higher – at 92% of the total bad loans reported so far in the banking system.
What is NPA?
- The assets of the banks which don’t perform (that is – don’t bring any return) are called Non Performing Assets (NPA) or bad loans. Bank’s assets are the loans and advances given to customers. If customers don’t pay either interest or part of principal or both, the loan turns into bad loan.
- According to RBI, terms loans on which interest or installment of principal remain overdue for a period of more than 90 days from the end of a particular quarter is called a Non-performing Asset.
- However, in terms of Agriculture / Farm Loans; the NPA is defined as under-For short duration crop agriculture loans such as paddy, Jowar, Bajra etc. if the loan (installment / interest) is not paid for 2 crop seasons, it would be termed as a NPA. For Long Duration Crops, the above would be 1 Crop season from the due date.
Reasons for the rise in NPA in recent years
- GDP slowdown -Between early 2000’s and 2008 Indian economy were in the boom phase. During this period Banks especially Public sector banks lent extensively to corporate. However, the profits of most of the corporate dwindled due to slowdown in the global economy, the ban in mining projects, and delay in environmental related permits affecting power, iron and steel sector, volatility in prices of raw material and the shortage in availability of. This has affected their ability to pay back loans and is the most important reason behind increase in NPA of public sector banks.
- One of the main reasons of rising NPA is the relaxed lending norms especially for corporate honchos when their financial status and credit rating is not analyzed properly. Also, to face competition banks are hugely selling unsecured loans which attributes to the level of NPAs.
- 5 sectors Textile, aviation, mining, Infrastructure contributes to most of the NPA, since most of the loan given in these sector are by PSB, They account for most of the NPA.
- Public Sector banks provide around 80% of the credit to industries and it is this part of the credit distribution that forms a great chunk of NPA. Last year, when kingfisher was marred in financial crisis, SBI provided it huge amount of loan which it is not able to recover from it.
- There is a myth that main reason for rise in NPA in Public sector banks was Priority sector lending, However according to the findings of Standing Committee on Finance NPAs in the corporate sector are far higher than those in the priority or agriculture sector. However, even the PSL sector has contributed substantially to the NPAs. As per the latest estimates by the SBI, education loans constitute 20% of its NPAs.
- The Lack of Bankruptcy code in India and sluggish legal system make it difficult for banks to recover these loans from both corporate and non-corporate.
- Banks did not conducted adequate contingency planning, especially for mitigating project risk. They did not factor eventualities like failure of gas projects to ensure supply of gas or failure of land acquisition process for highways.
- Restructuring of loan facility was extended to companies that were facing larger problems of over-leverage& inadequate profitability. This problem was more in the Public sector banks.
- Companies with dwindling debt repayment capacity were raising more & more debt from the system.
Steps taken by RBI and Government in last few years to curb NPA:
- Government has launched ‘Mission Indradhanush’ to make the working of public sector bank more transparent and professional in order to curb the menace of NPA in future.
- Government has also proposed to introduce Bankruptcy code.
- RBI introduced number of measures in last few years which include tightening the Corporate Debt Restructuring (CDR) mechanism, setting up a Joint Lenders’ Forum, prodding banks to disclose the real picture of bad loans, asking them to increase provisioning for stressed assets, introducing a 5:25 scheme where loans are to be amortized over 25 years with refinancing option after every 5 years, and empowering them to take majority control in defaulting companies under the Strategic Debt Restructuring (SDR) scheme.
How to curb the menace of Public Sector Banks (PSB)
(a) Short Term measures
- Review of NPA’S/Restructured advances- We need to assess the viability case by case. Viable accounts need to be given more finance for turnaround and unviable accounts should either be given to Asset Reconstruction Company or Management/ownership restructuring or permitting banks to take over the units.
- Bankruptcy code should be passed as soon as possible. Bankruptcy code will make it easier for banks to recover loans from unviable enterprises.
- Government should establish Asset Reconstruction Company (ARC) with equity contribution from the government and the Reserve Bank of India (RBI). The established ARC should take the tumor (of non-performing assets or NPAs) out of the banking system. An ARC acquires bad loans from banks and financial institutions, usually at a discount, and works to recover them through a variety of measures, including sale of assets or a turnaround steered by professional management. Relieved of their NPA burden, the banks can focus on their core activity of lending.
(b) Long term Measures
- Improving credit risk management- This includes credit appraisal, credit monitoring and efficient system of fixing accountability and analyzing trends in group leverage to which the borrowing firm belongs to:
- Sources/structure of equity capital-Banks need to see that promoter’s contribution is funded through equity and not debt.
- Banks should conduct necessary sensitivity analysis and contingency planning while appraising the projects and it should built adequate safeguards against such external factors.
- Strengthen credit monitoring-Develop an early warning mechanism and comprehensive MIS(Management Information System) can play an important role in it. MIS must enable timely detection of problem accounts, flag early signs of delinquencies and facilitate timely information to management on these aspects.
- Enforce accountability- Till now lower ring officials considered accountable even though loaning decisions are taken at higher level. Thus sanction official should also share the burden of responsibility.
- Restructured accounts should treated as non performing and technical write offs where Banks remove NPA’S from their balance sheets Permanently should be dispensed with.
- Address corporate governance issues in PSB. This include explicit fit and proper criteria for appointment of top executives and instituting system of an open market wide search for Chairman.
Topic: Achievements of Indians in science & technology; indigenization of technology and developing new technology.
Introduction :- India has been involved in research activity in the polar region since 1981. So far, it has carried nearly 8 expeditions to Arctic and around 33 to Antarctica. The country sends around 75 scientists in a year for carrying out polar research, mostly to Antarctica.
The two major areas that India hopes to gain research ground are the study of climate change and microbiological research in the Antarctica.
A look at Indian research facilities in the Antarctica and Arctic:
- Dakshin Gangotri (1983) – India’s first permanent station in Antarctica. Built on an ice shelf, this was completely lost to the ice by 1990.
- Maitri (1989) – India’s second permanent station in Antarctica. Situated on an ice-free area in the central Dronning Maud Land, this facility has been the mainstay of Indian Antarctic research for the past 25 years.
- Bharati (2012) – India’s third and most modern permanent research station in Antarctica. Situated in an ice-free area of Larsmann Hills.
- Himadri (2008) – India’s first research station in the Arctic.
India’s interests & their significance in the region
- a) Access to shipping routes, oil & gas exploration where India has partnered with Russia & Norway,
b) Marine resources have potential for medicines
- c) Chemicals & Minerals exploration.
- Environmental- conservation, Understanding & mitigating global warming.
The acquired data would be of vital importance to the Indian climate researchers as well as the international fraternity. In addition to providing for an increased understanding of the response of the Arctic to climatic variabilities, the data would also provide a good handle in our understanding of the Arctic processes and their influence on the Indian monsoon system through climate modelling studies. Study of ice core records provide one of the most direct and accurate method to study climate change beyond the instrumental data availability (typically few decades in Antarctica). Ice cores contain an abundance of scientific information about past climate and climate change
- Micro-biology:- Some scientists will also study the microbiological components of the ice and snow brought back from the latest expedition to Antarctica.
- Atmospheric Sciences like explaining the phenomenon of cloud formation, Co2 concentration can also be addressed with the Polar research.
- The research regarding glaciers will also be important to study and correlate the Himalayan glaciers