Daily News Analysis – September 1, 2018

Source: The Hindu and Indian Express

Prepared and Presented by
Sahil Malhotra
Faculty of current Affairs, Chrome IAS Academy


Page 1: Uniform Civil Code

  • Article 44 of the Constitution says that “The state shall endeavour to secure for the citizens a uniform civil code throughout the territory of India”.
  • The term civil means to wrap all the laws governing the rights relating to property and personal matters like religion, marriage, adoption, inheritance and succession.
  • The essentiality for the demand of the uniform civil code is unifying the citizen of India under one set of secular law which deals with these aspects.
  • It is to note that in India there is a uniform criminal code which is equal to all irrespective of the caste, religion, gender or domicile.
  • However, when it comes to the uniform civil code, there doesn’t exist any common code with respect to the marriage, divorce, succession, maintenance and inheritance.
  • The Supreme Court for the first time directed the parliament to frame a UCC in the year 1985 in the case of Mohammad Ahmed Khan v. Shah Bano Begum.

Page 1: What is gross value added (GVA)? 

  • GVA provides the rupee value for the amount of goods and services produced in an economy after deducting the cost of inputs and raw materials that have gone into the production of those goods and services.
  • It also gives sector-specific picture like what is the growth in an area, industry or sector of an economy.
  • A sector-wise breakdown provided by the GVA measure can better help the policymakers to decide which sectors need incentives/stimulus or vice versa.
  • Some consider GVA as a better gauge of the economy because a sharp increase in the output, only due to higher tax collections which could be on account of better compliance or coverage, may distort the real output situation.
  • But GDP is a key measure when it comes to making cross-country analysis and comparing the incomes of different economies.
  • Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.
  • GDP = private consumption + gross investment + government investment + government spending + (exports – imports)
  • Gross value added = GDP + subsidies on products – taxes on products.
  • While GVA gives a picture of the state of economic activity from the producers’ side or supply side, the GDP gives the picture from the consumers’ side or demand perspective.

Remember:

GVA is for a particular sector.

GVAs from all sectors (∑ GVA) is for the economy.

GDP is for the economy.

  • April 2018: The Reserve Bank of India has decided to use Gross Domestic Product (GDP), instead of Gross Value Added (GVA) to measure economic activity in the country.
  • Globally, the performance of economies is gauged in terms of GDP.

Page 2: Brahmaputra River (Tsangpo)

  • The Brahmaputra passes through the Tibet Autonomous Region of China, the Indian States of Arunachal Pradesh and Assam, and Bangladesh.
  • For most of its length, the river serves as an important inland waterway. It is not, however, navigable between the mountains of Tibet and the plains of India.
  • The Brahmaputra’s source is the Chemayungdung Glacier.
  • From its source the river runs for nearly 700 miles (1,100 km) in a generally easterly direction between the Great Himalayas range to the south and the Kailas Range to the north.
  • Just west of the town of Sadiya (in Assam), the river is joined by two mountain streams, the Lohit and the Dibang.
  • Below that confluence, the river conventionally known as the Brahmaputra (“Son of Brahma”).
  • Islands and sizable newly deposited lands (chars) in the river appear and disappear seasonally. The chars are valuable to the economy of Bangladesh as additional cultivable areas.
  • Because of the speed and volume of water in the northern tributaries that flow down from the rain-soaked Himalayan slopes, their silt load is much heavier than that carried by the tributaries crossing the hard rocks of the old plateau to the south.
    • In Assam the deep channel of the Brahmaputra follows the southern bank closer than the northern.
    • This tendency is reinforced by the silt-laden northern tributaries pushing the channel south.

Page 8: Section 124A of Indian Penal Code is concerned with sedition.

Page 8: India-U.S. relations in the recent past

Two-plus-two dialogue mechanism

  • India has institutionalised the two-plus-two dialogue mechanism with Australia and Japan. It is also in the process of doing so with U.S. as well.
  • The two-plus-two dialogue involves the discussion among the defence and foreign secretaries/ministers of the two participating countries.
  • India will host the inaugural round of the two-plus-two dialogue with the United States on September 6. The ministerial-level meeting will cover bilateral, regional and global issues.
  • The dialogue will be led by External Affairs Minister and Defence Minister from the Indian side and the Secretary of State and Secretary of Defence from the U.S.

Foundational Agreements between India and U.S.

  • India has already signed the General Security Of Military Information Agreement (GSOMIA) and the Logistics Exchange Memorandum of Agreement (LEMOA). The most significant of them is LEMOA, which gives both nations access to each other’s military facilities. But it does not make it automatic or obligatory.
  • But U.S. is pressing India to sign Communications Compatibility And Security Agreement (it facilitates transfer of encrypted communication systems) and Basic Exchange and Cooperation Agreement for Geospatial Information and Services Cooperation.
  • India fears that signing these agreements would mean compromising India’s age-old military-ties with Russia and access to their weaponry system.
  • These foundational agreements are essential to take high technology cooperation to the next level like allowing India to purchase Guardian Avenger armed drones from the U.S.
  • Today, the U.S. is the country with which India undertakes the largest number of military exercises.
  • In 2016, India was designated as a ‘Major Defence Partner’ country.
  • Recently, India has been included in the Strategic Trade Authorisation-1 (STA-1) category, putting it on a par with allies in terms of technology access.
    • The new U.S. legislation, CAATSA (Countering America’s Adversaries Through Sanctions Act), under which U.S. can impose sanctions on any company which engages with Russia in the defence/intelligence or energy sector.

Page 8: Stopping the rupee’s free fall

  • The rupee’s value against the dollar is continuously declining as there are concerns in the international market that:
  • Rising crude oil prices could widen the India’s current account deficit (as India has to shell out more dollars to fund its purchases) and stroke inflation and cause fiscal deficit;
  • A burgeoning fiscal deficit raises the risk of the Reserve Bank of India (RBI) printing rupees to fund the expenses of the government, thus weakening the rupee.
  • A trade war that could spur capital outflows to weigh the Indian currency down;
  • Political uncertainty in the wake of upcoming State elections and the general elections of 2019;
  • The U.S. Federal Reserve raising interest rates (also called tightening of U.S. monetary policy – When central banks increase official interest rates, it is known as “monetary tightening”. This is because the central banks typically try to restrict (or tighten) economic growth by making it more expensive to borrow money. It helps to control the rate of inflation).
  • The tightening of monetary policy by the U.S. Federal Reserve has caused the price of American debt to fall and yields to rise (bond prices and yields move in opposite directions). This, in turn, has pushed investors to pull money out of India and other emerging market economies in order to invest in the U.S., where they can get higher returns.

Note: The value of rupee against the dollar will decrease whenever the demand of dollar in the international market increases.

  • The rupee is the worst performing currency in Asia.

Effects of Weakening rupee:

  • The bond yield will increase (Bond yield is the amount of return an investor realizes on a bond. Bond yield increases when investors sell them off aggressively and the issuer of bonds has to increase the amount of return to attract more investors).
  • The equity market in India (Stock Exchanges) will lose value.
  • The RBI will raise interest rates to tighten the supply of money. This may help contain dollar outflows from investors seeking higher yields in the U.S., thus shoring up the value of the rupee.
  • The RBI might also look to intervene directly in the foreign exchange market to prop up the value of the rupee by selling the dollars from its foreign exchange reserves.

Q. The common factor underlying the recent weakening of the value of the currencies of emerging markets is:

  • A) Rising crude oil prices.
  • B) Trade war.
  • C) The increasing demand for the dollar across the globe.
  • D) Political uncertainty.

Page 9: The fourth BIMSTEC Summit concludes with signing of 18-point Kathmandu Declaration

  • The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is a regional organization comprising seven Member States lying in the littoral and adjacent areas of the Bay of Bengal constituting a contiguous regional unity.
  • This sub-regional organization came into being in June 1997 through the Bangkok Declaration.
  • It constitutes seven Member States: five deriving from South Asia, including Bangladesh, Bhutan, India, Nepal, Sri Lanka, and two from Southeast Asia, including Myanmar and Thailand.
  • Initially, the economic bloc was formed with four Member States with the acronym ‘BIST-EC’ (Bangladesh, India, Sri Lanka and Thailand Economic Cooperation).
  • The regional group constitutes a bridge between South and South East Asia and represents a reinforcement of relations among these countries.
  • BIMSTEC has also established a platform for intra-regional cooperation between SAARC and ASEAN members.
  • Unlike many other regional groupings, BIMSTEC is a sector-driven cooperative organization.
  • Starting with six sectors—including trade, technology, energy, transport, tourism and fisheries—for sectoral cooperation in the late 1997, it expanded to embrace nine more sectors—including agriculture, public health, poverty alleviation, counter-terrorism, environment, culture, people to people contact and climate change.

Objectives of BIMSTEC:

  • To accelerate the economic growth and social progress in the sub-region through joint endeavours in a spirit of equality and partnership.
  • To promote active collaboration and mutual assistance on matters of common interest in the economic, social, technical and scientific fields.
  • To provide assistance to each other in the form of training and research facilities in the educational, professional and technical spheres.
  • To maintain close and beneficial cooperation with existing international and regional organizations with similar aims and purposes.

BIMSTEC’s Principles:

  • Cooperation within BIMSTEC will be based on respect for the principle of sovereign equality, territorial integrity, political independence, no-interference in internal affairs, peaceful co- existence and mutual benefit.
  • Cooperation within BIMSTEC will constitute an addition to and not be a substitute for bilateral, regional or multilateral cooperation involving the Member States.

18-point Kathmandu Declaration: Key Points

  • Nepal handed over the chairmanship of the grouping to Sri Lanka.
  • The Kathmandu Declaration was unanimously adopted by the member states.
  1. Deplore terrorist attacks in all parts of the world including in BIMSTEC countries.
  2. Establishing a BIMSTEC Development Fund (BDF).
  3. Acknowledge the importance of enhancing the visibility and stature of BIMSTEC in international fora.
  4. The declaration underlined the importance of multidimensional connectivity, which promotes synergy among connectivity frameworks in the region, as a key enabler to economic integration for shared prosperity.

Page 9: Pakistan has objected to India’s Pakal Dul and Lower Kalnai hydroelectric projects. These projects are located on Chenab river.


Page 10: North American Free Trade Agreement (NAFTA)

  • North American Free Trade Agreement (NAFTA), was signed in 1992 that gradually eliminated most tariffs and other trade barriers on products and services passing between the United States, Canada, and Mexico.
  • The pact effectively created a free-trade bloc among the three largest countries of North America.
  • NAFTA also contained provisions aimed at securing intellectual-property rights.
  • Other provisions instituted formal rules for resolving disputes between investors and participating countries.

Page 10: The Donetsk People’s Republic (DPR or DNR) is a self-proclaimed state in the Donetsk Oblast of Ukraine.

  • It has only been recognized by the partially recognized Republic of South Ossetia.
  • It receives humanitarian and military backing from Russia.

Page 11: U.S. Dollar Index (DXY)

  • The U.S. Dollar Index tracks the strength of the dollar against a basket of major currencies.
  • DXY was developed by the U.S. Federal Reserve in 1973 to provide an external bilateral trade-weighted average value of the U.S. dollar against global currencies. U.S. Dollar Index goes up when the U.S. dollar gains “strength” (value), compared to other currencies.

The following six currencies are used to calculate the index: 

  1. Euro 57.6% weight
  2. Japanese yen 13.6% weight
  3. Pound sterling 11.9% weight
  4. Canadian dollar  9.1% weight
  5. Swedish krona 4.2% weight
  6. Swiss franc 3.6% weight

Page 18: Ramon Magsaysay Award

  • Two Indians Bharat Vatwani and Sonam Wangchuk are among the winners of this year’s Ramon Magsaysay Award, regarded as the Asian version of the Nobel Prize.
  • The Ramon Magsaysay Award is an annual award established to perpetuate former Philippine President Ramón Del Fierro Magsaysay’s example of integrity in government, courageous service to the people, and pragmatic idealism within a democratic society.
  • The Ramon Magsaysay Award was created by the trustees of the Rockefeller Brothers Fund based in New York City with the concurrence of the Philippine government.
  • The Ramon Magsaysay Award (RMA) embraces the citizens residing in East, Southeast, and South Asia and any citizen living in Asia regardless of race, creed, sex or nationality.
  • The people who receive this prestigious award are those who have achieved distinction in their respective fields and have helped others generously without anticipating public recognition.
  • Traditionally, the RMA was given in five categories:
    1. Government Service
    2. Public Service
    3. Community Leadership
    4. Journalism, Literature, and Creative Communication Arts
    5. Peace and International Understanding
  • But during the 2000 Magsaysay Awards the sixth Award category, Emergent Leadership was created.
  • This award can be given to both individuals and organizations.
  • Some of the prominent Indian personalities to receive the prestigious Ramon Magsaysay award are: Kiran Bedi, Baba Amte, Vinoba Bhave, Verghese Kurien, Arvind Kejriwal, R.K Laxman, C.D. Deshmukh and T.N. Seshan.

Q. Consider the following statements regarding the fourth BIMSTEC Summit and the Kathmandu Declaration:

  • Members unanimously declared that fight against terrorism should target not only terrorists, terror organisations and networks but also identify and hold accountable states and non-state entities that encourage it.
  • The declaration specifically mentioned Pakistan, which is often accused by its neighbours, including India, of providing safe havens to terrorists.
    • Select the correct answer using the code given below:
    • A) 1 only
    • B) 2 only
    • C) Both 1 and 2
    • D) Neither 1 nor 2
  • The declaration did not name any specific country, but Pakistan is often accused by its neighbours, including India, of providing safe havens to terrorists.

 

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