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Question and Answer
Q. 270. India's naval build-up
In over half a century of naval development, maritime forces have based their combat strategy and modernization on two principal concepts of operations: “sea control” and “sea denial”.
A maritime power either dominates the adversary by controlling the littoral seas or denies their use to the adversary. Sea control and Sea denial
Sea control is the strategy of choice for an ascendant force but entails a higher operational commitment in dictating the tempo of operations in littoral spaces over prolonged durations. In contrast, a weaker force focuses all its combat efforts in denying the adversary the use of the near-seas—a strategy called “sea denial”. Flat-top
In peace and in war, there is no platform that provides access to littoral spaces as thoroughly and emphatically as the aircraft carrier. Not only does it allow a superior maritime force to establish effective sea command, it ensures a continuous and visible presence that influences the cost-benefit calculus of the enemy commander and his political masters.
The importance of flat-top operations cannot be overstated, because apart from the ability to surveil and strike littoral targets, aircraft carriers enable crucial tactical air-cover, an operational imperative in littoral conflict. Powerful navies the world over, thus, regard aircraft carriers—and not battleships (or submarines)—as the core of their war-fighting plans and power-projection strategies.
But the flat-top is also an article of faith with India’s naval elite because of its ability to alter the psychological balance in the Indian Ocean littorals.
A potent symbol of a nation’s pride and power, an aircraft carrier projects strength.
It could be replaced by lesser platforms that might do the job, but none can replicate its demonstrative impact. For naval commanders, therefore, the aircraft-carrier debate is more than a question of “utilitarian” value, because the flat-top is the “beating heart” that provides all naval combat effort with its essential vigour.
This is not to say all criticism of the navy’s modernization plans is invalid. The move to induct modern air carriers and other costly platforms has indeed imposed a huge financial burden on the state, slowing investment in other key areas of military development.
Yet, the suggestion that air power must substitute naval aviation is patently misplaced, as the air force has shown itself to be an unreliable source of tactical action at sea. It does provide a measure of fleet support but is incapable of crisis response in the far littorals. The real dilemma
The real dilemma for India’s maritime planners is that their mission set of raising fighting efficiency and interdiction potential in the near-littorals is constantly in competition with the broader strategic objective of expanding regional political influence.
The navy’s deployment plans must deter adversaries, but also establish a visible footprint in the far seas to project ambition and influence through presence operations. If particular aspects of the maritime blueprint are found to be lacking—as indeed is the case with the limited success of the MiG-29K aircraft—the navy cannot discard its broader strategy in favour of an ad-hoc plan built around particular assets of relative operational superiority.
Indian naval power in the Indian Ocean region would be robbed of its vitality if the aircraft carrier is replaced with a few more destroyers, corvettes and shore-based air power—regardless of the latter’s perceived tactical advantages in battle.
As Gorshkov noted in his thought-provoking and intellectually stimulating treatise The Sea Power Of The State, ideas on the deployment of maritime power need to be grounded in the logic of geopolitics and long-term state interests, and not on any contingent assessments of imminent needs.
Q. 269. What is Li-Fi technology
Light Fidelity or Li-Fi technology is a ground-breaking light-based communication technology, which makes use of light waves instead of radio technology to deliver data.
Li-Fi can compensate as the radio spectrum becomes overloaded
Using the visible light spectrum, Li-Fi technology can transmit data and unlock capacity which is 10,000 times greater than that available within the radio spectrum.
The visible light spectrum is plentiful, free and unlicensed, mitigating the radio frequency spectrum crunch effect.
How it works?
Li-Fi and Wi-Fi are quite similar as both transmit data electromagnetically. However, Wi-Fi uses radio waves while Li-Fi runs on visible light.
As we now know, Li-Fi is a Visible Light Communications (VLC) system. This means that it accommodates a photo-detector to receive light signals and a signal processing element to convert the data into 'stream-able' content.
An LED lightbulb is a semi-conductor light source meaning that the constant current of electricity supplied to an LED lightbulb can be dipped and dimmed, up and down at extremely high speeds, without being visible to the human eye.
For example, data is fed into an LED light bulb (with signal processing technology), it then sends data (embedded in its beam) at rapid speeds to the photo-detector (photodiode).
The tiny changes in the rapid dimming of LED bulbs is then converted by the 'receiver' into electrical signal.
The signal is then converted back into a binary data stream that we would recognise as web, video and audio applications that run on internet enables devices.
Li-Fi vs Wi-Fi
While some may think that Li-Fi with its 224 gigabits per second leaves Wi-Fi in the dust, Li-Fi's exclusive use of visible light could halt a mass uptake.
Li-Fi signals cannot pass through walls, so in order to enjoy full connectivity, capable LED bulbs will need to be placed throughout the home. Not to mention, Li-Fi requires the lightbulb is on at all times to provide connectivity, meaning that the lights will need to be on during the day.
What's more, where there is a lack of lightbulbs, there is a lack of Li-Fi internet so Li-Fi does take a hit when it comes to public Wi-Fi networks.
But it's not all doom and gloom! Due to its impressive speeds, Li-Fi could make a huge impact on the internet of things too, with data transferred at much higher levels with even more devices able to connect to one another.
What's more, due to its shorter range, Li-Fi is more secure than Wi-Fi and it's reported that embedded light beams reflected off a surface could still achieve 70 megabits per second.
The future internet
Li-Fi technology will in future enable faster, more reliable internet connections, even when the demand for data usage has outgrown the available supply from existing technologies such as 4G, LTE and Wi-Fi. It will not replace these technologies, but will work seamlessly alongside them.
Using light to deliver wireless internet will also allow connectivity in environments that do not currently readily support Wi-Fi, such as aircraft cabins, hospitals and hazardous environments.
Light is already used for data transmission in fibre-optic cables and for point to point links, but Li-Fi is a special and novel combination of technologies that allow it to be universally adopted for mobile ultra-high speed internet communications.
A dual use for LED lighting
The wide use of solid state lighting offers an opportunity for efficient dual use lighting and communication systems.
Innovation in LED and photon receiver technology has ensured the availability of suitable light transmitters and detectors, while advances in the modulation of communication signals for these types of components has been advanced through signal processing techniques, such as multiple-input-multiple-output (MIMO), to become as sophisticated as those used in mobile telecommunications.
An integrated communication solution
Li-Fi technology is being developed into a ubiquitous systems technology, consisting of application specific combinations of light transmitters, light receivers including solar cells, efficient computational algorithms and networking capabilities that can be deployed in a wide range of communication scenarios and in a variety of device platforms.
Q. 268. New world order in flux
The polycentric new world order, which was gradually emerging after the end of the Cold War, has begun to fray at the edges. The primary causes are:
the growing friction among the major powers,
the triumphant rise of the ultra-right wing political parties,
dilution in the forces of globalisation and free market economies, and
the world’s inability to comprehensively defeat the Islamic State (IS) group.
While the progress made in liberating Mosul and Aleppo has forced IS to retreat somewhat, its virulent ideology continues to flourish unabated. In fact, a “cyber caliphate” is emerging gradually. It is more dangerous than its geographical counterpart due to the ability to radicalise vulnerable youth using the Internet.
The unstable security environment in Afghanistan and along the Af-Pak border is the greatest cause of instability in southern Asia.
The strategic stalemate between the Afghan government and the remnants of the North Atlantic Treaty Organisation (Nato) forces on the one side and the Taliban and Pakistan-sponsored terrorist organisations like the Haqqani network on the other, is likely to endure.
China’s growing nexus with Pakistan and the two countries’ unresolved territorial disputes with India pose a formidable national security threat to India. In 2016, the intensity of this threat did not diminish – as has been the case since the Kargil conflict of 1999.
Despite misgivings in both countries, the China-Pakistan economic corridor (CPEC) has begun to take shape. Passing through Gilgit-Baltistan in Pakistan occupied Kashmir (PoK), the CPEC will link Xingjian province of China with Gwadar on the Makran coast west of Karachi.
Though Pakistan is raising a division of approximately 12,000 personnel to provide security for the CPEC against terrorist attacks, eventually Chinese soldiers are bound to be inducted for this purpose like in Gilgit-Baltistan. Large-scale presence of the Chinese People’s Liberation Army in Pakistan will further vitiate the security environment.
Surprisingly from India’s point of view, New Delhi’s long-time strategic partner Russia has expressed its support for CPEC, though denied later in a Facebook post. Russia also held a low-level military exercise with Pakistan and has offered to sell arms to the country. These developments are detrimental to India’s interests and could, to some extent, be attributed to the Obama administration’s policies that drove Russia closer to China.
India’s red lines were repeatedly crossed by Pakistani terrorists in 2016. India conducted surgical strikes over a broad front across the Line of Control in September and also launched targeted fire assaults. India must continue to inflict punishment on the Pakistan Army for every act of terrorism planned and directed by the Inter-Services Intelligence (ISI). India should adopt a policy of tactical assertiveness under the umbrella of strategic restraint as war with Pakistan is not in New Delhi’s interest.
India must adopt a policy of tactical assertiveness under strategic restraint as war with Pakistan is not in New Delhi's interest.
The nuclear deal that Iran signed with the US has held for over a year despite strong opposition from several regional neighbours like Israel and Saudi Arabia. It is not yet clear whether the nuclear deal will survive the advent of the Trump administration. If it is abrogated by either signatory, the world is likely to soon witness the arrival of another nuclear power – with attendant consequences. Iran’s nuclear weapons are unlikely to be acceptable to the Trump administration or Israel Prime Minister Benjamin Netanyahu or to the Saudis.
Forgotten in the shadow of the conflict in Syria and Iraq is the civil war in Yemen. The Houthis and their allies, who seized Sanaa in September 2014, are locked in a bitter fight with a Saudi-led coalition comprising mainly Arab nations from the Gulf.
Varying degrees of turmoil in other countries around India, including Bangladesh, Maldives, Myanmar, Nepal and Sri Lanka, also contributes to regional instability. Narco-terrorism, the proliferation of small arms, the circulation of fake currency, trans-border money laundering and the availability of sanctuaries for insurgents – often aided and abetted by neighbouring states – enable non-state entities to challenge duly elected governments. The insurgent movements in India’s North-eastern states are an example of this phenomenon.
The prevalence of volatility in the region leads to the inevitable conclusion that southern Asia will continue to remain unstable for some more time to come. The countries of the region must come together in their own interest and agree to systematically plug the loopholes that enable cross-border insurgent movements to flourish.
Sadly, there is too much mistrust among the neighbours. With the South Asian Association for Regional Cooperation (SAARC) virtually defunct, no viable umbrella is available to enable the conduct of long and hard negotiations that would be required.
Q. 267. India scales up ties with distant Latin America
India's ties with Latin America have received a clear direction since 2015. Latin America and the Caribbean are the source of 20 percent of this country's crude imports. Right from the time Prime Minister Narendra Modi met the leaders of 11 Latin American countries in 2016 on the margins of the BRICS Summit in Brazil, the new government has kept up a steady engagement with high-level visits.
India imports 20 percent of its crude from Venezuela, Columbia, Mexico and Brazil. In 2012, India overtook China as the largest Asian buyer of Venezuelan crude. India's trade with LAC has grown from less than $2 billion in 2000-01 to $46 billion in 2013-14.
The advantages of close commerce with the Latin America region are many:
It has a combined GDP of $5.5 trillion.
It has a population of around 600 million.
It comprises of six percent of the world's merchandise trade.
It received US$179 billion of FDI in 2013, the highest record for any region in the world.
It is also a peaceful region, with few inter-state conflicts.
Unlike China that is pouring in billions of dollars in infrastructural investment in the energy and commodity-rich region, India - like in Africa - is taking the human resource route by upgrading skills and imparting technological education to the needy population in some of these countries.
India has reached out to the region by setting up centres of excellence in IT.
India is also setting up vocational training centres in Jamaica and Belize.
India offered a $15 million line of credit.
India, a cricket loving nation, has also provided the floodlights at the famous Sabina Park Cricket Stadium in Kingston.
About Community of Latin American and Caribbean States (CELAC)
The Community of Latin American and Caribbean States is a regional bloc of Latin American and Caribbean states created in 2011, in Caracas, Venezuela, with the signature of The Declaration of Caracas. It consists of 33 sovereign countries in the Americas representing roughly 600 million people. Due to the focus of the organization on Latin American and Caribbean countries, other countries and territories in the Americas, Canada and the United States, as well as the territories of France, the Netherlands, Denmark and the United Kingdom in the Americas are not included.
CELAC was created to deepen Latin American integration and by some to reduce the significant influence of the United States on the politics and economics of Latin America. It is seen as an alternative to the Organization of American States (OAS), the regional body that was founded by United States and 21 other Latin American nations originally as a countermeasure to potential Soviet influence in the region. CELAC is the successor of the Rio Group and the Latin American and Caribbean Summit on Integration and Development (CALC).
Q. 266. How New NITI Aayog recruitment rules will trigger a revamp of the Indian states human capital
Jawaharlal Nehru once said the Indian Civil Service was “Neither Indian, nor Civil, nor a Service”.
Sardar Patel said the civil service was the “steel frame of government machinery”.
Thankfully, this team of rivals worked together to create a model for non-elected civil servants that served India well when the primary task was nation-building. But now that the task has shifted to poverty reduction, most citizens do not perceive the Indian state as a high-performance organisation.
As the Indian state responds by finally raising its performance ambitions for 30 lakh central government and 120 lakh state government employees, it must recognise that high-performance organisations get four levers right around human capital:
performance management and
It must also recognise that changing culture (accepted and rejected behaviour like punctuality, hard work, corruption, collaboration, etc.) and performance management (the fear of falling and the hope of rising) will take five years, but changing how senior roles are staffed is immediately impactful because personnel is policy.
NITI Aayog’s new recruitment rules for senior people (Additional and Joint Secretary rank) are a good template for hiring senior technocrats — a more accurate job description than bureaucrat — but they should be the thin end of a thick wedge to reboot government human capital on these four fronts.
First, fresher hiring for central government officers in the IAS, IPS, RBI, etc, is probably better than any private sector management trainee programme because of the high quality and quantity of applicants, the UPSC’s institutional integrity, starting compensation, process rigour, etc. Overall, this lever needs the least reform. However, replicating this transparency, process and institutional ability to non-officer hiring (85 per cent of government hiring) and state government hiring (75 per cent of government employees) could rapidly improve legitimacy, competence and trust.
Second, any organisation whose leadership pipeline depends on a line (seniority) or a monopoly (only staffed by insiders) cannot be effective; such leadership selection needs thoughtful design, pathways to top jobs for young insiders, lateral entry at scale, specialisation opportunities by tenure and training for insiders. In the US, when a new political CEO takes over, 4,000 technocrats resign. In India, 10 people do. Both 4,000 and 10 are extremes and the right number is somewhere in-between.
An immediate tweak could be making 25 per cent of all senior appointments through open advertisements and giving insiders a real shot at these jobs when they are 45 years old.
Third, culture eats structure for breakfast. The obvious downside of poor role models, excessive political interference and the lack of accountability in government is poor work culture around punctuality, hard work, integrity, etc. A more important victim has been collaboration. The government is organised vertically but important horizontal problems like urbanisation and industrialisation seem unsolvable because of the lack of teamwork across departments.
One of the most interesting questions in government today is: How do you get something done when everybody who matters agrees with you? A culture of accountability is heavily influenced by structure, the huge overlap in central ministry mandates creates policy orphans and needs reducing the number of ministries in the Central government to 20 (from 50-plus right now) and cutting people with Secretary to Government of India in Delhi rank to 50 (from 200-plus right now). Obviously, role models and narratives are more potent than rules. The corruption culture change in Delhi is not a child of new laws.
Finally, any organisation that does not punish its poor performers punishes its high performers. All hierarchies need a pyramid but currently, almost all officers rise to the top rank unless you hit a senior officer or your corruption is caught on video. The pyramid becoming a cylinder is brutal for the motivation of high performers and corrosive to a culture of performance. It is difficult to measure performance in multi-dimensional senior government jobs but 95 per cent being ranked outstanding is mathematically impossible because everybody can’t be above average. Pending a revamp of appraisal systems, all central and state officer cadres should adopt the “colonel threshold” of the army under which, if you are not shortlisted from promotion, you retire at age 50.
The new recruitment rules of NITI Aayog are thoughtful. Their hiring context is different from large frontline government organisations and tweaking leadership selection will be ineffective without tackling culture and performance management. But these rules are interesting because:
They create a level playing field for outsiders and insiders and
Confront issues like cost-to-government, promotion, equivalence, employment contract format, etc.
Most importantly, their five-year contract, extendable by two years, should become standard for all senior positions.
The Indian state aims to be a high-performing organisation but faces the punishing combination of weak human capital, higher competition for talent and an entrenched status quo.
Corporate India began changing in 1991. Politics began changing in 2008, because voter preferences shifted to honesty, competence and ambition. Honest and competent civil servants — and there are many — must initiate human capital reform as their contribution to creating a high-performing Indian state that does fewer things but does them better. India is on the move and if self-healing is delayed further, it will be imposed from the outside. Civil service reform is inevitable, unstoppable and overdue.
Q. 265. Water Management Index (WMI)
The Niti Aayog will soon start a process to sensitise states towards preparing a Water Management Index (WMI) which will ultimately lead the Centre's think-tank to rank them on the basis of their efforts in efficient management of water resources.
The states' performance will be judged on the basis of 28 key indicators.
It will cover:
Water use efficiency
Availability of drinking water for both rural and urban areas
Other sustainable practices in water-related sectors.
The Niti Aayog has, in fact, developed a composite WMI as a tool to assess and further improve the performance in efficient management of water resources.
Different weightage is allocated to identified performance indicators to arrive at the composite index.
The final scorecard of a particular state will carry both quantitative and qualitative aspects of indicators during 2016-17.
The WMI is one of the six indices which the Niti Aayog has introduced for ranking states. The others include:
Q. 264. Rubella vaccine
Ans. What is Rubella?
Rubella is a mild viral infection that mainly occurs in children. But a woman infected with the rubella virus during the early stage of pregnancy has a 90% chance of transmitting it to the foetus. The virus can cause hearing impairments, eye and heart defects and brain damage in newborns, and even spontaneous abortion and foetal deaths.
Why is the measles-rubella vaccine being administered to children?
Buoyed by the elimination of polio six years ago and maternal and neonatal tetanus and yaws in 2016, India has set an ambitious target of eliminating measles and controlling congenital rubella syndrome (CRS), caused by the rubella virus, by 2020.
It is the first time that the rubella vaccine has been included in the programme. Since the rubella vaccine will piggy-back on the measles elimination programme, there will be very little additional cost.
All children aged nine months and 15 years will be administered a single dose of the combination vaccine.
Of the 1,10,000 children born with CRS every year globally, an estimated 40,000 cases occur in India alone.
According to the World Health Organisation (WHO), a single dose of rubella vaccine gives more than 95% long-lasting immunity.
Why opt for a campaign?
With the target set for 2020 to eliminate measles and control CRS, there is a compelling need to create a solid wall of immunity in all children up to 15 years in one go at the earliest. That can be achieved only if immunisation is carried out in a campaign mode.
The measles-rubella vaccination campaign is being introduced in phases. Karnataka, Tamil Nadu, Puducherry, Goa and Lakshadweep are covered in the first phase.
The entire country will be covered in four phases in 18 months. Following the campaign, two doses of the combination vaccine will become a part of the national immunisation programme. All children will receive the vaccine free at 9-12 months and 16-24 months of age.
Is it possible to achieve the goal by 2020?
Though the goal is only to eliminate measles and control rubella by 2020, both viruses can be eliminated if their transmission can be broken.
For that to happen, the vaccine coverage has to be over 95% during the campaign and in the immunisation programme that follows it.
India has to ramp up surveillance of both diseases, maintain outbreak preparedness, respond rapidly to outbreaks by vaccinating all children in a community and ensure effective and timely treatment of cases anywhere in the country.
Q. 263. India-Africa health cooperation
Ans. New Delhi will host leading health researchers and policymakers from Africa and India.
This India-Africa Health Sciences Meet (IAHSM) is a follow-up of the India-Africa Summit in October 2015. To accomplish this, there is: a proposed a $100-million India-Africa Development Fund, a $10-million Health Fund and 50,000 scholarships for African students to study in India.
Africa and India together cover about a quarter of the world’s land area, support over a third of its population and harbour about half of its disease burden.
Infectious diseases such as tuberculosis, malaria, HIV/AIDS, childhood diarrhoea and respiratory infections remain big challenges. However, both regions are witnessing a shift towards non-communicable diseases such as diabetes, cardiovascular disease, mental illness, etc.
While Africa is quite diverse, the numbers show poor capacity in the health sector, especially human resource. It has a very low density of physicians and nurses, which stand at 2.7 and 12.4 per 10,000 people, respectively, against a world average of 13.9 and 28.6. This is also reflected in hospital beds and specialised medical equipment.
India’s engagement with Africa is growing at a rapid pace in the sunrise sector of health care. Besides the private sector, Government of India initiatives such as ‘Focus Africa’, ‘Team-9 Initiative’ and ‘Pan-African e-Network Project’ have a significant investment on health care.
The telemedicine initiative has enabled a number of super-specialty hospitals in India to be connected with physicians in Africa, impacting not just health tourism in India, but also capacity building in Africa through continuing medical education (CME) credits.
In 2014 India exported medicines worth $3.5 billion to Africa and the foreign direct investment (FDI) by Indian pharmaceutical companies in Africa was $67.4 million.
Affordable anti-retroviral drugs from India have been instrumental in containing Africa’s HIV/AIDS epidemic.
India is also a frequent destination for Africans seeking specialised treatment for cancer and other ailments.
India has clear strengths in its generic pharmaceuticals industry, and due to early development of its higher education sector, it has a large human resource in the health sector as well. These can be leveraged for capacity building in Africa.
The health challenges facing Africa, India and other developing countries are not attractive for big pharmaceutical companies due to low profit margins.
India has developed not just high quality institutions in basic, clinical and public health research, its alternative models of drug discovery, such as the Open Source Drug Discovery (OSDD), can provide interesting options. The Council of Scientific and Industrial Research (CSIR, India) is already championing the OSDD model for TB and malaria, both highly relevant for Africa as well.
For an aspiring global power, the India story will mean more if “Make in India” is extended to “Make with Africa”.
The Health Science Meet should discuss the
Challenges and partnerships for Africa-based manufacturing,
Alignment of the regulatory frameworks and
How best to leverage the funds announced by PM last year
Research capacity in the two regions and identify strengths, weaknesses and potential partnerships.
Disease priorities and areas of research focus should be outlined for future collaboration.
India’s ‘Look Africa’ policy can be a game changer if it also becomes an engine for knowledge generation and innovation. Capacity building, biomedical research and innovation should become central themes for discussion at the IAHSM. This will make the partnership sustainable and valuable.
Q. 262. New Steel Policy
The government has come up with a new National Steel Policy 2017 that envisages increasing the capacity in the country, more than 2 fold from 122 million tonnes per annum (mtpa) to 300 mtpa, by 2030.
The draft policy lays out two alternatives of its vision — “to create a globally competitive steel industry that promotes inter-sectoral growth” or “to create a self-sufficient steel industry that is technologically advanced, globally competitive and promotes inclusive growth.”
While it focuses on impediments like high input costs, availability of raw materials, import dependency and financial stress plaguing the sector, projections made under the policy for a couple of factors are all still under discussion, such as the demand and production of sponge iron.
To cut down reliance on expensive imports of coking coal, the policy has mooted gas-based steel plants and technologies such as electric furnaces to bring down the use of coking coal in blast furnaces.
Establishment of steel plants along the coast under the aegis of Sagarmala project will be undertaken.
Such plants would be based on the idea of importing scarce raw materials and exporting steel products,” the policy stated, adding that a cluster-based approach will be pursued, especially for micro, small and medium enterprises to ensure optimum land use, easy availability of raw materials and economies of scale.
This kind of capacity expansion will require investment to the tune of Rs 10 lakh crore.
Global scenario and India
Global steel industry is in a fragile state right now and a severe glut in China, world's largest steel producing country, has made a mockery of pricing mechanisms.
In many ways, steel is no longer a global commodity anymore as prices vary significantly from Europe and US to India, China, Middle East Asia Latin America and Africa.
In the last few years, India has provided the only silver lining.
While other markets have either stagnated or declined, consumption of steel in India has grown continuously at a steady pace.
It has resulted in expansion of the capacity by domestic companies even as new players have found it next to impossible to start operations.
In 2015, India overtook US to become the third largest steel producing country and lags only China and Japan. By the turn of this decade there are chances it may overtake Japan too.
Steel policy history in India
The government came up with its first steel policy that projected capacity to rise to 110 MT by 2019-20. Post the heady days of 2006-08 when the sector was at an upswing and global majors like Posco and ArcelorMiital were lining up with big ticket tens of billions dollar investments in India, the government came up with another policy in 2012. It then set a target capacity of 300 MT by 2025-26.
This new policy in 2017, merely extends the deadline by 5 years keeping in mind the troubled market scenario.
The erstwhile planning commission and ministry of steel had drawn up plans to ramp up capacity to 300 mt by 2025-26 on the assumption that at that time total steel production was 100 MT and per capita consumption was 62-63 kg per person. The world average is 250 kg plus. But it was too soon, too early and too large. It was about doubling capacity. We did not have the wherewithal then.
The policy, like its earlier versions, however, does not address or suggests ways to deal with the core issues facing the industry.
Setting up a steel plant is capital intensive and takes a minimum 3-4 years, provided the land acquisition process itself is smooth. Within that time span, the dynamics of the market often change.
So when the capacity actually comes on-stream, there may not be enough demand to absorb it. The lack of certainty coupled with high interest burden leads to the problem of non-performing assets that the industry is currently grappling with.
It may not be as bad elsewhere, but the domestic steel industry is not exactly flying.
Today, the sector's exposure to banks is Rs 3.13 lakh crore and more than a third of it is already classified as non-performing asset.
Given a chance, many would like to exit the sector and the policy provides little incentive to stay put or join in.
No Greenfield or Brownfield investments are underway today which will be commissioned in the next few years.
Private sector investment will take time. Any of the top 30-40 private companies in India engaged in 4-5 capital intensive sectors in the country, they are not in a position to invest because their existing plants are not fully operational, and their balance sheets require correction.
With the industry in a trough, this is perhaps the best time to set up a steel plant. By the time the capacity is ready in 2021-22, the fortunes would have changed. Yet, nobody has the cash or the tenacity to invest today. The lenders prefer to stay away and the Poscos and ArcelorMittals have long gone and are busy fighting their own bigger battles.
Q. 261. The China-Pakistan-Russia Troika
Triangularity has lately become the flavour of the season in international relations discourse. Major powers, beyond their usual bilateral engagements, have been embracing the tripartite mode of engagement in recent times to establish a tactical thread for a twofold advantage:
gain more in their foreign policy; and
influence collectively the regional balance of power in their favour.
A prominent example is the China-Pakistan-Russia triangulation. Its avowed intent is to address regional security problems, primarily the security conditions in the Afghanistan-Pakistan region. For India, however, the emergence of this troika forebodes disturbance in its geopolitical standing in the region. However, this trilateral arrangement is more of a geopolitical alignment that is aimed to influence regional security conditions to the three countries’ strategic advantage, at a possible cost to Indian strategic autonomy and challenging the India-US strategic bonhomie in the region. All the three powers concerned are in close proximity to India. China and Pakistan are its bordering adversaries whereas Russia is a traditional partner.
Officially, India has stated that the troika is a “third country relationship” and that India’s relations with Russia stay “very strong”. The strategic community in India however has been wondering if there is going to be permanent damage to India-Russia relations with Moscow’s strategic shift.
The troika has few significant bearingsfor India: First, the connectivity politics involving the China-Pakistan Economic Corridor (CPEC) would significantly influence the geopolitics of the region. Second, isolating India’s advocacy in the fight against terrorism. Third, addressing the alignments that are taking place regionally, in the backdrop of an expanded Shanghai Cooperation Organisation (SCO). Fourth, distancing India and China multilaterally.
The troika seems to have a serious influence over CPEC and a consensus appears to have emerged between them on how to advance the Russian and Chinese regional planning. Russia’s strategic intention of establishing a link between the Eurasian Economic Community (EEC) and CPEC gets fulfilled through Pakistani and Chinese backing.
Russia’s engagement with Pakistan comprises aspects that eventually endorse China’s “belt and road” initiative and supplements CPEC. The North-South gas pipeline link is one such aspect which might not be directly linked to CPEC but it endorses Putin’s vision of linking the Eurasian region with South Asia, where Pakistan is emerging as a connecting bridge. This becomes alarming for India when the strategic community in Pakistan notes that Russia might overtly support CPEC. Russia’s partaking with Pakistan bilaterally, as well as with Pakistan and China trilaterally in the region, reduces India’s standing as regards CPEC. India maintains that CPEC runs through a disputed territory that is of concern to India and China and Pakistan have unilaterally taken a decision on CPEC. China’s unilateral decision to engage with Pakistan to invest in Pakistan-Occupied Kashmir (POK) under CPEC affects India’s sovereignty over POK, and brings into question India’s historical claim on POK.
Importantly, the troika poses a new set of strategic challenges for India in its fight against terrorism, a phenomenon which has primarily been sponsored by Pakistan all these years. Pakistan has been protected in this regard at the UN by its “all-weather” friend China. Russia’s joining the troika would further strengthen Pakistan’s standing against India. Also, a coordinated China-Pakistan effort has blocked the Indian effort to list Masood Azhar on a UN terror roll. India needs to search for new grounds on these issues and also needs to discuss with Afghanistan in length on how to offset the troika’s agenda.
As it appears now, it is not India but Pakistan that is emerging as the converging location between South Asia and Eurasia. This is significant when India has been making inroads into the SCO as a member along with Pakistan. The balance of power within SCO seems to stay very much China-Russia centric and the main beneficiary of this could be Pakistan. This must induce India to rethink the advisability of becoming a member of the SCO. The China-Russia strategic alignment with Pakistan would corner India within SCO, posing a new set of challenges for it regionally.
The emergence of the troika will not only distance China and India from each other but will also severely undermine the significance of the China-India-Russia (CIR) tripartite network. From the Indian point of view, the relevance of CIR and BRICS stands to be reviewed with the arrival of the troika. This severely changes India’s equation with China since one of the stabilising aspects of India-China relations is the multilateral chain of contacts like the CIR, BRICS and SCO. The arrival of the troika empowers Beijing’s regional outreach in South Asia, and that conflicts with India’s core strategic interests. Also, the Chinese leadership has not seen South Asia and Afghanistan in isolation from its vision of linking Eurasia with South Asia. Tacitly acknowledging the existing differences between China and India on several matters like listing Azhar Masood as a terrorist under the UN and on the prospects of India’s inclusion in the Nuclear Suppliers’ Group (NSG), Beijing has officially stated recently that “China would like to work with India” for an important consensus in 2017.
The troika will be a game-changer in swaying the regional balance of power against India’s strategic interest. India seems to have been cornered by this tactical regional understanding where Pakistan has emerged as the pivotal point of regional politics. The change of guard in the United States has further complicated the situation for India. Much will depend upon how India approaches the entire spectrum of regional politics against the backdrop of its relations with Russia and China. The troika is surely a development that India cannot afford to ignore. New Delhi needs a serious policy rethink on how to respond to the troika and deal with the powers of this configuration, either bilaterally or collectively.
Q. 260. What is the twin balance sheet problem?
India's Twin Balance Sheet problem as referred by Economic survey are: overleveraged and distressed companies and the rising NPAs in Public Sector Bank balance sheets. The issue is important because it is holding up private investment in the country and therefore, growth in all sorts of sectors. It has identified most of the issues that prevented many measures introduced by the government - from Sarfaesi Act, to Asset Reconstruction Companies, to Strategic Debt Restructuring and the Sustainable Structuring of Stressed Assets.
But it is the prescription, a Public Sector Asset Reconstruction Agency (PARA), that is disappointing because it offers nothing new. The twin balance problem required a coordinated approach to debt management, which was lacking. NPAs are largely the result of the stressed cash flows of a few large companies, mainly in core industry and infrastructure, caused by economic downturn rather than bad governance.
Therefore, the solution lies in trimming debt to sustainable levels, including through write-offs or conversion to equity. While the RBI introduced several schemes on exactly the same lines, they did not work because banks were apprehensive about writing off loans or taking strategic stakes.
First, the vast bulk of the NPA problem was caused by unexpected changes in the economic environment, which is at odds with its statement that growth will not solve the problems of the stressed firms. The sectoral distribution of NPAs of PSU banks reveals a widespread issue, not confined to a few sectors, which makes it hard to accept that economic distress was the main cause.
Second, if most of the distressed loans are concentrated only in a few large companies and in a few sectors such as infrastructure, the debt restructuring that banks undertook should have borne some results, but that was not the case.
Which leads us to the real problems with financing this sector. It needs long-term financing (10 years and above) with long start-up periods (three-five years) — a remit that is clearly unviable for banks that have an average liability profile of less than two years, and limited project financing capabilities.
It is not the debt levels that are unviable, but the terms of the debt — the cost, the repayment. It is no coincidence that banks’ exposure and NPA levels in the infrastructure sector shot up after the demise of specialised term lending institutions such as the IDBI and ICICI.
Finally, the operational model of PARA is unclear. Although several assumptions are offered, most are variants of old themes — funding through transfer of government securities and not cash, or government support, capital market issues etc. The report says that private asset reconstruction companies (ARCs) failed because they probably did not see value in the debts, reflected in the low prices offered. But, this can hardly be the rationale for setting up a public ARC, unless it implies that PARA will pay higher prices irrespective of loan quality. Another stated objective of PARA appears to be to do what banks hesitated to do — write off unviable debts and take over companies.
When the reluctance of PSU banks came from their very public character — fear of retribution from investigating agencies and political fallout — one wonders how a new public sector agency will confront these issues.
Credit delivery and appraisal are two clear areas crying for reforms. Either fit-for-purpose specialised agencies need to be revived or serious attempts have to be made to develop debt markets to meet the needs of large corporates, failing which the root causes of the NPA problem will remain unaddressed.
Q. 259. Five govt. cyber security tools
Ans. Ministry of Electronics and Information Technology has launched five cyber-security tools, as part of its Cyber Swachhta Kendra (CSK), to prevent users from facing threats on the web.
These tools are:
Bot Removal Tool
Even though all these tools will be provided free of cost, four of these tools, which are meant to guard computers, would only run on Microsoft’s Windows operating system, a move which experts have pegged to be against the government’s open source policy. The open source policy calls for adoption of open standards for government procurement.
The Indian Computer Emergency Response Team (CERT-In), which has developed the CSK, would collect data of infected systems that are connected with the internet service providers and banks that have come on-board and send inform them of any threats.
Bot Removal Tool
Developed by Pune-headquartered Quick Heal Technologies.
It would detect and remove botnet infection (A botnet, or a robot network, is a number of devices connected to the internet, which are used by a botnet owner to perform various tasks such as performing Distributed Denial of Service Attack, steal data, send spam, allow the attacker access to the device and its connection. A device is compromised when it is penetrated by software from a malicious software, also known as malware) from computers.
However, it does not provide any protection against other malware, or prevent data theft, making it necessary for a user to have an anti-virus software.
Apart from this, the four other tools that have been launched were developed by the Centre for Development of Advanced Computing (C-DAC).
A software solution, which controls unauthorised usage of portable USB mass storage devices.
Through this software, user can add or remove devices to the database, and also bind one or more USB devices to be accessed using a username and password.
Any unauthorised new USB device cannot be accessed, unless it is registered. Whenever a USB device gets plugged in, the user would need to authenticate it. The software also detects and deletes malware from the mass storage device plugged into a computer.
A software to white-list executable files (Executable files are those which end with an extension .exe, .class, .war, .jar, are often loaded with Trojans and viruses. Upon execution of these files, they infect the computers) that would run on a computer, as opposed to the method adopted by anti-virus software to black-list files that may contain viruses.
One advantage that the white-listing method presents is that it does not require frequent updates.
Through this software, users can choose to add trusted executable files to the white-list, and only those files will be allowed to run.
A mobile device security application for Android devices.
Addresses threats related to misuse of resources such as Wi-Fi, Bluetooth, camera and mobile data by preventing unauthorised access to these resources.
It also offers options such ‘anti-theft’, by which a user can remotely wipe the phone of its data in case the device is stolen or is lost.
It also helps in tracking SIM card changes on the device.
M-Kavach app also allows users to restrict access to critical applications like mobile wallets, social media apps, etc.
The software learns from previous threats to understand potential future threats, and alerts the user when a malicious web page is visited by providing a detailed analysis, and threat report of the web page.
Q. 258. Oceans are fast losing oxygen
Ans. The oxygen content in global oceans has reduced by more than two per cent since 1960, with large variations in oxygen loss in different ocean basins and at different depths. The current study has predicted a decline in the dissolved oxygen inventory of the global ocean of one to seven per cent by the year 2100.
Just a little loss of oxygen in coastal waters can lead to a complete change in ecosystems.
In fact, such a decline in oxygen content could affect ocean nutrient cycles and the marine habitat.
It can have detrimental consequences for fisheries and coastal economies.
It must be noted that the only organism in the ocean that thrives with little or no oxygen is bacteria.
While the largest volume of oxygen was lost in the Pacific Ocean, the largest percentage of oxygen loss was witnessed in the Arctic Ocean. Hence, oxygen in the world's oceans is not evenly distributed.
Southern Indian Ocean and parts of the eastern tropical Pacific and Atlantic basins have already started noticing climate-linked deoxygenation.
Western tropical Indian Ocean has been warming for more than a century and at a rate faster than any other region of the tropical oceans. It is the largest contributor to the overall trend in the global mean sea surface temperature.
Cause of depleting oxygen content in oceans:
This oxygen depletion is mostly a result of climate change.
More warming on the surface of water makes the surface water less dense. Such stratification prevents the surface water from mixing with the sub-surface water. This, in turn, prevents the sub-surface water from absorbing oxygen from the atmosphere.
At times, more rain and runoffs from rivers bring in more freshwater into the sea. Due to the lack of salinity, the freshwater floats on the surface, leading to stratification.
While ocean warming is a widely identified reason for depletion of oceanic oxygen, changes in salinity can also contribute to oxygen loss.
Q. 257. Discuss the evolving trends of Digital Transactions in India. What are the risks involved and what measures can be taken to make digital space more secure for its users?
Digital lending consists of lending through Web platforms or mobile apps, by leveraging technology for authentication and credit assessment.
Digital lending promises to be a respite for the “ordinary Indian” who is starved of institutional credit.
Three out of five Indians continue to remain primarily dependent on informal credit. There is a huge unmet credit need (approximately $400 billion plus per year), particularly in the microenterprise and low-income consumer segment. Indians continue to borrow from family and friends, and moneylenders, sometimes at usurious rates, primarily because these loans are more flexible and convenient. Institutional lenders are unable to lend without appropriate collateral, and the high costs of lending limit the flexibility of lending products.
This is where digitization can be instrumental in enabling inclusive lending. India is the only country in the world with a billion unique digital IDs and more than 600 million mobile-phone users.
The emergence of digital data trails—the histories of an individual’s past digital activity, such as phone call and SMS records, remittance data, social media footprint—that can be tracked, archived and used for credit assessments, opens up the potential of inclusive digital lending. Emerging business models are already leveraging these digital data trails—digital data credit-scored lending, peer-to-peer platforms and invoice discounting—to lend to lower-income Indians. “India Stack”—a set of digital application programming interfaces (APIs), which can transition consumer lending to cashless, presence-less and paperless transactions by leveraging their digital data trails.
It builds on the Aadhaar platform and has the potential to unleash digital lending by reducing the cost of lending, and channelizing access of data trails for credit assessments. Digital lending has the potential to be a remarkably positive force for inclusion.
However, there are three major risks in the digital lending space that the Indian borrowers may face.
Over lending: Because there is no centralized tracking of lenders and borrowers in the digital lending space, it is possible that people will end up borrowing “too much” from multiple lenders that they cannot pay back.
Unsuitable lending: Indians—especially the marginalized, less literate consumers—may choose the wrong loan because of unclear disclosure of terms around, for example, interest, repayment time, and qualifying terms and conditions.
Misuse of personal data: Sensitive data can be shared or sold without proper consent, as data is controlled by under-regulated non-state actors. These risks loom large on the digital lending space—and if they continue unaddressed, may very well lead to another lending bubble, with unintended consequences, like the one that India witnessed with the microfinance institutions crisis in 2010.
Four measures that regulators should consider to address the risks involved in digital lending.
Institute strong data-sharing protocols. Because several players will have access to sensitive consumer data, there must be clear guidelines around, for example, the type of data that can be held, the length of time data can be held for, and restrictions on the use of data.
Put in place a code of conduct for lenders. Like the Microfinance Institutions Network code of conduct, digital lenders should proactively develop and commit to a code of conduct that outlines the principles of integrity, transparency and consumer protection, with clear standards of disclosure and grievance redress.
Explore the possibility of creating a “super credit bureau” that tracks all digital loans and consumer/lender credit history.
Strengthen and scale the Digi Locker initiative, which has the potential to be a safe repository of individual data, with access rights controlled by the individual.
In addition, it is incumbent upon providers to invest in more user-friendly products: developing intuitive products that will help consumers better understand loans and consent protocols so they can make truly informed choices.
India stands on the cusp of a digital lending revolution. Ensuring that this lending is done responsibly can ensure the fruits of this revolution are realized.
Q. 256. The building blocks of economic policy
Economic policy choices are not easy in a country like India. At present, the complication has increased because of the currency swap and deceleration in economic growth.
Here are five themes that should guide economic policy.
First, the policy should focus on market failures. Free markets work in enhancing prosperity but there are areas where state intervention is needed. However, in India, the state is dominant in sectors where it is not required and lacks capacity in areas where the intervention is actually desired. It often intervenes with no evidence of market failure, which affects resource allocation. This needs to change.
Second, policy intervention should be seen from the perspective of general equilibrium. Often, policy changes are made with narrow objectives, focusing on one sector or area. For example, in the context of the budget, India has a history of random tinkering with tax rates to promote one sector or the other, which has resulted in distortions. The most recent example is the suggestions made by the committee of chief ministers on digital payments—a host of fiscal measures that will further distort the tax system. The government should avoid such ideas.
Third, the government should spend more efficiently. There are demands for increasing spending in various sectors of the economy and they are often legitimate as India needs improvement in a number of areas. However, public spending has a cost. The marginal cost of one rupee of public spending to society is around Rs3. Therefore, the government should spend carefully as the cost to society is much higher than what gets recorded in the books.
Fourth, individuals, including politicians, are driven by incentives. Policy changes should factor in the possibility that people can change their behaviour. Insights from public choice theory show that politicians and bureaucrats also work in self-interest. One of the reasons why India has had a high fiscal deficit bias is because higher government spending can lead to higher growth in the short run and could electorally benefit the ruling party. Therefore, it’s important to build checks in the system. As India has moved to a rule-based monetary policy framework, it also needs a better fiscal architecture. Even though India has the Fiscal Responsibility and Budget Management Act in place, experience shows that it is not sacrosanct. What is needed is an agency like the US Congressional Budget Office which independently reviews government finances so that the public in general is better informed. This will help reduce fiscal profligacy.
Fifth, policy should promote competition. A high level of competition is desirable in a market economy as it leads to efficient allocation of capital. The government has done well by getting the bankruptcy code passed as it will facilitate the closing of firms and the shifting of capital to more productive sectors of the economy.
Following these broad principles in policymaking will help build credibility and lead to better economic outcomes in the medium to long run.
Q. 255. Invasive Alien Species
An alien species is a species introduced by humans – either intentionally or accidentally - outside of its natural past or present distribution, however not all alien species have negative impacts, and it is estimated that between 5% and 20% of all alien species become problematic. It is these species that are termed ‘invasive alien species’ (IAS). "An invasive alien species (IAS) is a species that is established outside of its natural past or present distribution, whose introduction and/or spread threaten biological diversity” Convention on Biological Diversity.
Invasive alien species are a major driver of biodiversity loss. In fact, an analysis of the IUCN Red List shows that they are the second most common threat associated with species that have gone completely extinct, and are the most common threat associated with extinctions of amphibians, reptiles and mammals.
Invasive alien species can also lead to changes in the structure and composition of ecosystems leading to significant detrimental impacts to ecosystem services, affecting economies and human wellbeing. For example, the water hyacinth Eichhornia crassipes, a native to South America is spreading across Africa, Asia, Oceania and North America. It is a fast growing floating aquatic plant forming dense mats on the water surface, limiting oxygen and preventing sunlight reaching the water column. Infestations have led to reduced fisheries, blocked navigation routes, increased cases of vector bourne diseases, reduced hydropower capacity and affecting access to water.
Due to the increase in the movement of people and goods around the world, the opportunity for the introduction of species outside of their natural range is on the increase. The different ways in which species are transported from one place to another, are called ‘pathways’. Common pathways include the release of fish for fisheries into the wild, escape from farms and horticulture, within ship ballast water and the spread through man-made corridors such as canals.
What is being done?
In 2010 almost all of the world’s governments adopted the Convention on Biological Diversity Strategic Plan for Biodiversity, which included 20 headline ‘targets’ referred to as the Aichi Targets. One of these targets (#9) is specifically related to IAS.
This international commitment to addressing IAS was re-affirmed in 2015 through the 2030 Agenda for Sustainable Development which includes 17 goals (SDGs) each with specific targets.
What is IUCN doing to address IAS?
IUCN’s work on IAS is focused primarily on achieving Aichi T9. To do this IUCN has been working in three major areas, providing scientific knowledge, engaging in and supporting national and regional policy development, and action on the ground.
The overarching aim of all IUCN policy engagement work related to IAS is to provide technical and scientific advice to work towards achieving Aichi Target 9. IUCN aims to encourage and mainstream invasive species issues across different fora, including national governments, international policy instruments such as the Convention on Biological Diversity, the private sector and civil society.
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