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When:
October 24, 2016 @ 1:00 am
2016-10-24T01:00:00+05:30
2016-10-24T01:15:00+05:30

NEWS

24 October 2016

1.                   

GS II: POLITY – JUDICIARY

Justice delay keeps investors away: CJI

2.                   

GS II: BILATERAL – INDIA-NEW ZEALAND

John Key arriving today as NSG buzz is back

3.                  

GS II: SOCIAL – EDUCATION

India falls short in female literacy

4.                   

GS II: POLITY – CIVIL SERVICES

IPS forum demands pay parity with IAS cadre

5.                  

GS II: INTERNATIONAL – AFGHANISTAN

Opium cultivation in Afghanistan up by 10%

6.                  

 GS II: INTERNATIONAL – USA – PAKISTAN

Won’t hesitate to act alone against terror groups in Pak., warns U.S.

7.                  

GS III: ENERGY

‘World Bank must aid countries to manage shift away from coal’

8.

GS III: ECONOMY

Rate cut: Economic panacea for all ills?

9.

GS III: CYBER SECURITY

Using crib monitors to power Internet attacks

GS II: POLITY – JUDICIARY

Justice delay keeps investors away: CJI

  • Prime Minister Narendra Modi and Chief Justice of India T.S. Thakur shared the dais and mutually agreed that India is a “bright spot” in the global economy.
  • Chief Justice Thakur said foreign investors continue to be wary of India’s labyrinthine and delayed justice delivery mechanism.
  • “We have over 3,000 foreign companies with operations in India. In 2015-16, there has been a 29 percent increase in foreign direct investments. We wish to overtake China and the United States by 2050… Yet we are ranked 130 among a total 189 countries in the Ease of Doing Business,” Chief Justice Thakur said.
  • According to him, alternative dispute resolution mechanisms like arbitration, mediation and conciliation would become effective only if backed by a robust justice delivery system steered by conventional courts.
  • Civil courts should be able to hear and decide challenges to arbitration awards in a time-bound manner, Chief Justice Thakur said.
  • But in India, an average 18,000 judges deal with 50 million cases annuallyof which 20 million cases are disposed of.
  • “The avalanche of cases constantly puts the judiciary under great stress. Courts from the apex court to the Munsiff are overburdened. Judges are over-worked,” he said.
  • Just a few months ago in April 2016, the Chief Justice Thakur broke down several times in front of Prime Minister Modi as he squarely blamed the Centre for stalling appointment of judges to the High Courts. He had accused the Centre of doing nothing to increase the number of courts and judges in the country, thus denying the poor man and under trial prisoners justice.
  • Mr. Modi, who spoke after the Chief Justice, said the government was deeply engaged in clearing the roadblocks towards a smooth justice delivery mechanism.
  • Indicating that the rush of litigation to the courts reflected the immense public faith in the judiciary, the Prime Minister said it was time for initiatives like arbitration to be aggressively pushed to match the changing scenario in business and investments.

GS II: BILATERAL – INDIA-NEW ZEALAND

John Key arriving today as NSG buzz is back

  • The government will once again focus on its push for India’s membership of the Nuclear Suppliers Group (NSG) with the three-day visit of New Zealand Prime Minister John Key.
  • Negotiators, meanwhile, are gearing up for the second round of talks with China followed by an NSG session in Vienna — expected in November 2016.
  • New Zealand is among the countries led by China that have demanded a set criteria for non-signatories of the nuclear Non-Proliferation Treaty (NPT), holding up India’s membership.
  • India insists that its entry to the group was tied to its need for clean energy and climate change commitments.
  • Apart from China, countries such as Ireland, Austria, New Zealand and members of the ‘New Agenda for coalition’ take a hard line on the NPT.
  • Meanwhile, Prime Minister Narendra Modi has sought, but not received, outright declarations of support from two other members of the coalition —South Africa and Brazil — at last week’s BRICS summit in Goa.
  • Both Brazil and South Africa fought hard and domestically controversial battles to join the NSG, and could only do so after they agreed to sign the Non-Proliferation Treaty. Therefore, they have resisted full-fledged membership for India without it signing the NPT, or a formal procedure being set. Significantly, in 2008, both Brazil and South Africa had backed India’s bid for an NSG waiver, as part of the IBSA grouping.
  • Meanwhile U.S. officials have said they will make “all efforts” to resolve India’s NSG status by the end of this year, although given the U.S. election, ensuring all the fence-sitters over whom Washington has influence will vote in favour of India, maybe more difficult.

GS II: SOCIAL – EDUCATION

India falls short in female literacy

  • Data from new research on female literacy show that India’s school education system is under-performing in terms of quality when compared to its neighbours, Pakistan, Bangladesh and Nepal.
  • The research studies changes in female literacy over a number of schooling years.
  • The proportion of women who completed five years of primary schooling in India and were literate was 48 per centmuch less than 92 percent in Nepal, 74 per cent in Pakistan and 54 per cent in Bangladesh.
  • These findings, which are part of a forthcoming background paper, were released in a blog-post by New York-based International Commission on Financing Global Education Opportunity (or Education Commission).
  • The data also revealed that, female literacy rates went up by one to 15 per cent after completing two years of schooling. Corresponding numbers for Pakistan and Nepal were three to 31 per cent and 11 to 47 per cent respectively. “This implies that schooling is roughly twice as productive at generating literacy for women during the early grades in Pakistan when compared to India. Or, it could also mean thatIndian schools are much more lenient about promoting students who cannot read,” Mr. Sandefur said.

GS II: POLITY – CIVIL SERVICES

IPS forum demands pay parity with IAS cadre

  • The Indian Police Service (Central) Association has said it expects the government to address its “legitimate needs.”
  • At its annual general body meeting, the association highlighted the issue of the delay in granting the IPS officers the pay and promotion parity with their IAS counterparts, as recommended by the Seventh Pay Commission.
  • The association said that after the Pay Commission acknowledged the importance and challenges of the work done by the IPS officers and recommended parity among services in the pay, empanelment and opportunities to compete for senior positions, it was endorsed by the Ministry of Home Affairs, the cadre-controlling authority. The proposal was pending with the Department of Personnel, it said.
  • “The meeting resolved to submit a memorandum to the government to demand early implementation of the remaining recommendations of the Pay Commission,” the statement said.

GS II: INTERNATIONAL – AFGHANISTAN

Opium cultivation in Afghanistan up by 10%

  • Afghanistan saw a 10 per cent jump in opium cultivation in 2016 because of bumper harvests, collapsing eradication efforts due togrowing insecurity and declining international aid to combat drugs, the United Nations (UN) said.
  • Cultivation dropped in 2015 due to drought but it has been on the rise in the past decadefuelling the Taliban insurgency and spurring a growing crisis of drug addiction despite costly U.S.-led counter-narcotics programmes.
  • Ninety-three per cent of the cultivation took place in the southern, western and eastern parts of the country — all hotbeds of insurgent activity.

GS II: INTERNATIONAL – USA – PAKISTAN

Won’t hesitate to act alone against terror groups in Pak., warns U.S.

  • In a blunt message, the U.S. has warned Pakistan that it will not hesitate to act alone, when necessary, to disrupt and destroy terror networks as the country’s powerful spy agency ISI was not acting against all terror groups operating on its soil.
  • “The problem is that there are forces within the Pakistani government — specifically in Pakistan’s Inter-Services Intelligence or ISI — that refuse to take similar steps against all the terrorist groups active in Pakistan, tolerating some groups — or even worse,” Adam Szubin, Acting Under Secretary on Countering the Financing of Terrorism said.
  • The U.S. has been saying that Pakistan has not yet placed adequate pressure on the Haqqani network to prevent them from plotting attacks in Afghanistan. This was also stressed by the commander of U.S. and NATO forces in Afghanistan, General John Nicholson last month.

GS III: ENERGY

‘World Bank must aid countries to manage shift away from coal’

  • The World Bank and other global development lenders like the Asian Development Bank must help countries such as India to finance the shift of their coal production to more efficient technologies so they can meet their COP21 commitments, World Coal Association Chief Executive Benjamin Sporton said.
  • By not financing coal projects, the World Bank is actually pushing countries to use inefficient technologies leading to higher emissions.
  • “The World Bank has taken a policy view that they don’t want to finance coal,” Mr. Sporton said in an interview. “But we have seen evidence from some countries where, because the World Bank does not invest in coal and so does not invest in super critical and ultra super critical plants, these countries invested in sub-critical plants, which have much higher CO2 and particulate matter emissions.”
  • Super critical and ultra super critical (USC) plants (USC) substantially reduce carbon dioxide emissions and virtually eliminate particulate matter emissions, Mr. Sporton added, saying that India must invest in them despite their higher upfront cost.
  • The Intended Nationally Determined Contributions submitted by 19 countries — India included — said they were going to use coal, Mr. Sporton said. “India basically said in its INDC that coal would be the backbone of its energy mix for decades to come.”
  • “Even if you look at the U.S., their Clean Power Plan says that coal would be about a quarter of their energy mix by 2030,” he said. “So, even developed nations need coal. In my mind, the Paris agreement is about reducing the emissions from coal, rather than reducing coal itself. The problem is carbon dioxide, not coal.”
  • India’s push towards renewable energy, while lowering the share of coal in the overall energy mix, does not mean that coal is going to be done away with, Mr Sporton said. “Between now and 2040, electricity supply will triple, coal will almost double and non-hyrdo renewables will see a 10-times increase.”

GS III: ECONOMY

Rate cut: Economic panacea for all ills?

  • The 25-basis points cut in the policy rate by the RBI has brought the policy repo rate to 6.25 per cent – a six-year low.
  • The RBI expects the transmission of this cut in lowering the costs of new borrowing in the economy will be more effective than the earlier cuts.
  • The decision was taken at the fourth bi-monthly policy review exercise this year is historic: it involved the maiden decision-making by RBI’s first Monetary Policy Committee(MPC), in pursuance of a primary mandate to keep consumer inflation between 2 per cent and 6 per cent.
  • That the adoption of a legally backed inflation-targeting discipline and the constitution of an MPC will enhance both the process and quality of monetary policy-making is widely acknowledged.
  • However, it is equally important for the MPC to establish its institutional credibility by demonstrating that its decision-making framework is logical, consistent, transparent and effective. Gauged by those standards, the first rate decision of the MPC does not inspire much confidence, though.
  • In the recent past, however, despite a reduction in inflation, both current and future inflation expectations are elevated
  • It is hard to figure out how, under an inflation-targeting paradigm, a rate cut can be justified when the projected inflation over the next six months is close to the upper limit of 6 per cent and the projected GDP growth is close to 8 per cent – considered the highest sustainable rate over the medium term.
  • The fact that the decision was unanimous will raise doubts whether all relevant issues were debated and discussed by the MPC. One wonders if the MPC felt a need to distance itself from the legacy of Dr. Rajan.

Three-fold impact of the rate cut:

  • As regards the impact of the rate cut, three issues loom large: credit growth, stressed assets/NPAs of banks and corporate investment.
  • Extremely sluggish credit growth on the part of PSU banks to sectors other than retail borrowers is going to last for quite some time. And so long as the credit cost by way of provisioning for NPAs remains high, as is the case now, the likelihood of a reduction in borrowing cost in response to cuts in the policy rate will continue to be low.
  • Transmission of monetary policy will continue to remain sub-optimal till the estimated Rs.13.3 trillion (or Rs.13.3 lakh crore) of stressed assets/NPAs of banks are resolved. While RBI has done a good job in pushing banks to recognise their NPAs, it has been quiet on the lack of progress in the resolution of stressed assets/NPAs. While the government expects a good number of NPAs to become regular over the next few years, thereby making possible reversal of provisions made against them, there is little evidence of any progress on the ground in this regard.
  • Various schemes for debt resolution such as Corporate Debt Restructuring (CDR), Strategic Debt Restructuring (SDR) and the recentScheme for Sustainable Structuring of Stressed Assets (S4A) have not had any noticeable impact so far. Illustratively, between 2009-10 and 2014-15, the total number of cases referred to CDR was 253 with an aggregate exposure of Rs.2.76 trillion (Rs 2.76 lakh crore), out of which only 5 cases involving Rs.16 billion (Rs.1,600 crore) have so far exited CDR successfully.SDR has been a non-starter and S4A has yet to take off.
  • The fundamental flaw in current debt resolution schemes is the lack of an enabling mechanism for infusion of fresh equity in the debtor companies. In most cases, fresh equity is unlikely without a repricing of the companies’ assets and liabilities that would lead to proper price discovery of its equity. This will entail an appropriate reduction in the companies’ debt owed to banks. Debt resolution by banks cannot happen if RBI relies only on its directives that are issued in a ‘command and control’ fashion. RBI and government must empower boards of PSU banks to take decisions on one-time settlements and debt write-off on commercial considerations alone, based on well-defined policies and the procedure to be formulated for this purpose.
  • Finally, the government should enable PSU banks to devise a solution to the following asymmetric incentives faced by in relation to stressed assets/NPAs: the downside of a loan becoming an NPA and unrecoverable is much less compared to thedownside of a vigilance enquiry in respect of genuine debt resolution.
  • An unjustified rate cut has hurt the credibility of the newly formed MPC. It will do precious little with regard to problems associated with very high stressed assets/NPAs of banks, the resolution of which alone can spur credit growth and corporate investment that would lead to job creation for the youth of India.

GS III: CYBER SECURITY

Using crib monitors to power Internet attacks

  • When surveillance cameras first began popping up in the 1970s and ‘80s, they were welcomed as a crime-fighting tool, then as a way to monitor traffic congestionfactory floors and even baby cribs.
  • Later, they were adopted for darker purposes, as authoritarian governments like China’s used them to prevent challenges to power by keeping tabs on protesters and dissidents.
  • But now those cameras — and many other devices that today are connected to the Internet — have been commandeered for anentirely different purposeas a weapon of mass disruption.
  • The Internet slowdown that swept the U.S. East Coast recently, when many Americans were already jittery about the possibility that hackers could interfere with Presidential election systems, offered a glimpse of a new era of vulnerabilities confronting a highly connected society.
  • The attack on the infrastructure of the Internet, which made it all but impossible at times to check Twitter feeds or headlines, was a remarkable reminder about how billions of ordinary web-connected devices — many of them highly insecure — can be turned to vicious purposes. And the threats will continue long after Election Day for a nation that increasingly keeps its data in the cloud.
  • new kind of malicious software exploits a long-known vulnerability in those cameras and other cheap devices that are now joining up to what has become known as the internet of things.
  • The advantage of putting every device on the internet is obvious. It means your refrigerator can order you milk when you are running low, and the printer on your home network can tell a retailer that you need more ink. Security cameras can alert your cellphone when someone is walking up the driveway, whether it is a delivery worker or a burglar. When Google and the Detroit automakers get theirdriverless cars on the road, the internet of things will become your chauffeur.
  • But hundreds of thousands, and maybe millions, of those security cameras and other devices have been infected with a fairly simple program that guessed at their factory-set passwords — often “admin” or “12345” or even, yes, “password” — and, once inside, turned them into an army of simple robots.
  • Each one was commanded, at a coordinated time, to bombard a small company in Manchester, New Hampshire, called Dyn DNS with messages that overloaded its circuits.
  • Few have heard of Dyn, but it essentially acts as one of the Internet’s giant switchboards. Bring it to a halt, and the problems spread instantly. It did not take long to reduce Twitter, Reddit and Airbnb — as well as the news feeds of The New York Times — to a crawl.
  • Entities like the North Korean government and extortionists have long used “distributed denial-of-service” attacks to direct a flood of data at sites they do not like.

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