DAILY CURRENT AFFAIRS 13 SEPTEMBER 2019

DAILY CURRENT AFFAIRS

13 SEPTEMBER 2019

IMPORTANT TOPICS FOR TODAY

BY SUMIT BHARDWAJ

1.U.S., China tariffs could lower global GDP by 0.8% in 2020, says IMF(GS-3)

CONTEXT:Tariffs imposed or threatened by the United States and China could shave 0.8% off global economic output in 2020 and trigger more losses in future years, the International Monetary Fund said on Thursday.
IMF spokesman Gerry Rice said trade tensions were beginning to affect a world economy already facing challenges including a weakening of manufacturing activity not seen since the global financial crisis of 2007-2008.
U.S. Treasury Secretary Steven Mnuchin told Reuters he had not seen the new IMF forecast, but did not expect the impact to be as significant in the United States.“I don't see it in U.S. as that big an impact,” he said, when asked about the IMF forecast after an event hosted by the New York Times
The IMF had previously forecast that the U.S.-China trade war and other trade disputes threatened future global growth, but Rice said the impact was now being felt.
That forecast is more gloomy than one earlier this year, when the IMF said tariffs already imposed and those planned could shave 0.5% off global economic output in 2020

Gross domestic product:

Gross domestic products (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period, often annually. GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries; therefore using a basis of GDP per capita at purchasing power parity (PPP) is arguably more useful when comparing differences in living standards between nations

Gross world product:

The gross world product (GWP) is the combined gross national product of all the countries in the world. Because imports and exports balance exactly when considering the whole world, this also equals the total global gross domestic product (GDP).According to the World Bank, the 2013 nominal GWP was approximately US$75.59 trillion.[1] In 2017, according to the CIA's World Factbook, the GWP was around US$80.27 trillion in nominal terms and totaled approximately 127.8 trillion international dollars in terms of purchasing power parity (PPP)

International Monetary Fund (IMF):

The International Monetary Fund (IMF) is an organization of 189 member countries, each of which has representation on the IMF's executive board in proportion to its financial importance, so that the most powerful countries in the global economy have the most voting power.

Objective

Foster global monetary cooperation
Secure financial stability
Facilitate international trade
Promote high employment and sustainable economic growth
And reduce poverty around the world

History

The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944.
The 44 countries at that conference sought to build a framework for economic cooperation to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.
Countries were not eligible for membership in the International Bank for Reconstruction and Development (IBRD) unless they were members of the IMF.
IMF, as per Bretton Woods agreement to encourage international financial cooperation, introduced a system of convertible currencies at fixed exchange rates, and replaced gold with the U.S. dollar (gold at $35 per ounce) for official reserve.
After the Bretton Woods system (system of fixed exchange rates) collapsed in the 1971, the IMF has promoted the system of floating exchange rates. Countries are free to choose their exchange arrangement, meaning that market forces determine the value of currencies relative to one another. This system continues to be in place today.
During 1973 oil crisis, IMF estimated that the foreign debts of 100 oil-importing developing countries increased by 150% between 1973 and 1977, complicated further by a worldwide shift to floating exchange rates. IMF administered a new lending program during 1974–1976 called the Oil Facility. Funded by oil-exporting nations and other lenders, it was available to nations suffering from acute problems with their balance of trade due to the rise in oil prices.
IMF was one of the key organisations of the international economic system; its design allowed the system to balance the rebuilding of international capitalism with the maximisation of national economic sovereignty and human welfare, also known as embedded liberalism.
The IMF played a central role in helping the countries of the former Soviet bloc transition from central planning to market-driven economies.
In 1997, a wave of financial crises swept over East Asia, from Thailand to Indonesia to Korea and beyond. The International Monetary Fund created a series of bailouts (rescue packages) for the most-affected economies to enable them to avoid default, tying the packages to currency, banking and financial system reforms.

Global Economic Crisis (2008):

IMF undertook major initiatives to strengthen surveillance to respond to a more globalized and interconnected world. These initiatives included revamping the legal framework for surveillance to cover spill-overs (when economic policies in one country can affect others), deepening analysis of risks and financial systems, stepping up assessments of members’ external positions, and responding more promptly to concerns of the members.

Functions

Provides Financial Assistance: To provide financial assistance to member countries with balance of payments problems, the IMF lends money to replenish international reserves, stabilize currencies and strengthen conditions for economic growth. Countries must embark on structural adjustment policies monitored by the IMF.
IMF Surveillance: It oversees the international monetary system and monitors the economic and financial policies of its 189 member countries. As part of this process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to stability and advises on needed policy adjustments.
Capacity Development: It provides technical assistance and training to central banks, finance ministries, tax authorities, and other economic institutions. This helps countries raise public revenues, modernize banking systems, develop strong legal frameworks, improve governance, and enhance the reporting of macroeconomic and financial data. It also helps countries to make progress towards the Sustainable Development Goals (SDGs).

Governance

Board of Governors: It consists of one governor and one alternate governor for each member country. Each member country appoints its two governors.
It is responsible for electing or appointing executive directors to the Executive Board.
Approving quota increases, Special Drawing Right allocations,
Admittance of new members, compulsory withdrawal of member,
Amendments to the Articles of Agreement and By-Laws.
Board of Governors is advised by two ministerial committees, the International Monetary and Financial Committee (IMFC) and the Development Committee.
Boards of Governors of the IMF and the World Bank Group normally meet once a year, during the IMF–World Bank Annual Meetings, to discuss the work of their respective institutions.
Ministerial Committees: The Board of Governors is advised by two ministerial committees,
International Monetary and Financial Committee (IMFC): IMFC has 24 members, drawn from the pool of 189 governors, and represents all member countries.
It discusses the management of the international monetary and financial system.
It also discusses proposals by the Executive Board to amend the Articles of Agreement.
And any other matters of common concern affecting the global economy.
Development Committee: is a joint committee(25 members from Board of Governors of IMF & World Bank), tasked with advising the Boards of Governors of the IMF and the World Bank on issues related to economic development in emerging market and developing countries.
It serves as a forum for building intergovernmental consensus on critical development issues.
Executive Board: It is 24-member Executive Board elected by the Board of Governors.
It conducts the daily business of the IMF and exercises the powers delegated to it by the Board of Governors & powers conferred on it by the Articles of Agreement.
It discusses all aspects of the Fund’s work, from the IMF staff's annual health checks of member countries' economies to policy issues relevant to the global economy.
The Board normally makes decisions based on consensus, but sometimes formal votes are taken.
Votes of each member equal the sum of its basic votes (equally distributed among all members) and quota-based votes. A member’s quota determines its voting power.

IMF Management:

IMF’s Managing Director is both chairman of the IMF’s Executive Board and head of IMF staff. The Managing Director is appointed by the Executive Board by voting or consensus.
IMF Members: Any other state, whether or not a member of the UN, may become a member of the IMF in accordance with IMF Articles of Agreement and terms prescribed by the Board of Governors.
Membership in the IMF is a prerequisite to membership in the IBRD.
Pay a quota subscription: On joining the IMF, each member country contributes a certain sum of money, called a quota subscription, which is based on the country’s wealth and economic performance (Quota Formula).
It is a weighted average of GDP (weight of 50 percent)
Openness (30 percent),
Economic variability (15 percent),
International reserves (5 percent).
GDP of member country is measured through a blend of GDP—based on market exchange rates (weight of 60 percent) and on PPP exchange rates (40 percent).
Special Drawing Rights (SDRs) is the IMF’s unit of account and not a currency.
The currency value of the SDR is determined by summing the values in U.S. dollars, based on market exchange rates, of a SDR basket of currencies
SDR basket of currencies includes the U.S. dollar, Euro, Japanese yen, pound sterling and the Chinese renminbi (included in 2016).
The SDR currency value is calculated daily (except on IMF holidays or whenever the IMF is closed for business) and the valuation basket is reviewed and adjusted every five years.
Quotas are denominated (expressed) in SDRs.
SDRs represent a claim to currency held by IMF member countries for which they may be exchanged.
Members’ voting power is related directly to their quotas (the amount of money they contribute to the institution).
IMF allows each member country to choose its own method of determining the exchange value of its money. The only requirements are that the member no longer base the value of its currency on gold (which has proved to be too inflexible) and inform other members about precisely how it is determining the currency’s value.

IMF and India

International regulation by IMF in the field of money has certainly contributed towards expansion of international trade. India has, to that extent, benefitted from these fruitful results.
Post-partition period, India had serious balance of payments deficits, particularly with the dollar and other hard currency countries. It was the IMF that came to her rescue.
The Fund granted India loans to meet the financial difficulties arising out of the Indo–Pak conflict of 1965 and 1971.
From the inception of IMF up to March 31, 1971, India purchased foreign currencies of the value of Rs. 817.5 crores from the IMF, and the same have been fully repaid.
Since 1970, the assistance that India, as other member countries of the IMF, can obtain from it has been increased through the setting up of the Special Drawing Rights (SDRs created in 1969).
India had to borrow from the Fund in the wake of the steep rise in the prices of its imports, food, fuel and fertilizers.
In 1981, India was given a massive loan of about Rs. 5,000 crores to overcome foreign exchange crisis resulting from persistent deficit in balance of payments on current account.
India wanted large foreign capital for her various river projects, land reclamation schemes and for the development of communications. Since private foreign capital was not forthcoming, the only practicable method of obtaining the necessary capital was to borrow from the International Bank for Reconstruction and Development (i.e. World Bank).
India has availed of the services of specialists of the IMF for the purpose of assessing the state of the Indian economy. In this way India has had the benefit of independent scrutiny and advice.
The balance of payments position of India having gone utterly out of gear on account of the oil price escalation since October 1973, the IMF has started making available oil facility by setting up a special fund for the purpose.
Early 1990s when foreign exchange reserves – for two weeks’ imports as against the generally accepted 'safe minimum reserves' of three month equivalent — position were terribly unsatisfactory. Government of India's immediate response was to secure an emergency loan of $2.2 billion from the International Monetary Fund by pledging 67 tons of India's gold reserves as collateral security. India promised IMF to launch several structural reforms (like devaluation of Indian currency, reduction in budgetary and fiscal deficit, cut in government expenditure and subsidy, import liberalisation, industrial policy reforms, trade policy reforms, banking reforms, financial sector reforms, privatization of public sector enterprises, etc.) in the coming years.
The foreign reserves started picking up with the onset of the liberalisation policies.
India has occupied a special place in the Board of Directors of the Fund. Thus, India had played a creditable role in determining the policies of the Fund. This has increased the India’s prestige in the international circles.

2.IIP growth rebounds, retail inflation surges(GS-3)

CONTEXT:Industrial activity rebounded in July to 4.3% on a broad-based recovery across key sectors such as mining, manufacturing and construction, official data released on Thursday showed.

In a separate release, data showed retail inflation rose in August to hit a 10-month high of 3.21% on quickening food price rises.

Growth in the Index of Industrial Production (IIP) accelerated in July after a slump in June when it touched 1.17%. Within the index, the mining sector accelerated to 4.92% in July compared with 1.53% in June. The manufacturing sector, similarly, saw growth quicken to 4.15% from 0.23% over the same period.

Growth in the Consumer Price Index (CPI) touched 3.21% in August, compared with 3.15% in July. Within the index, inflation in the food category touched a 14-month high of 2.96% in August, up from 2.33% in the previous month.

UNDERSTANDING IIP:

Index of Industrial Production (IIP) is an index which helps us understand the growth of various sectors in the Indian economy such as mining, electricity and manufacturing.

IIP is a short term indicator of industrial growth till the results from Annual Survey of Industries (ASI) and National Accounts Statistics (Eg: GDP) are available.

The base year of the index is given a value of 100. The current base year for the IIP series in India is 2011-12. So, if the current IIP reads 180, it means that there has been 80% industrial growth compared to the base year, ie 2011-12.

IIP IS RELEASED BY:

Index of Industrial Production (IIP) is released by the Central Statistics Office (CSO) of the Ministry of Statistics and Programme Implementation.

IIP is published monthly, six weeks after the reference month ends.

Industry vs Manufacturing

Though often interchangeably used, the terms industry and manufacturing are different.

The term industry is comprehensive and may be considered as a superset of manufacturing. Industry, in general, refers to an economic activity that is concerned with the production of goods, extraction of minerals and sometimes even for the provision of services. Thus we have iron and steel industry (production of goods), coal mining industry (extraction of coal) and tourism industry (service provider).

So what is manufacturing then?

Manufacturing: Production of goods in large quantities after processing from raw materials to more valuable products is called manufacturing.

Industry = Manufacturing + Mining + Electricity + much more.

Share of Industrial Sector in the total GDP of India

The total Industrial sector has only around 27 percent share in the total GDP of India. Over the last two decades, the share of the manufacturing sector has stagnated at 17 per cent of GDP – out of a total of 27 per cent for the industry which includes 10 per cent for mining, quarrying, electricity and gas.

The share of Manufacturing in the GDP of India – 17%.

The share of Mining, quarrying, electricity and gas in the GDP of India – 10%.

Total share of Industrial Sector = 27%

Steps to boost manufacturing

National Manufacturing Competitiveness Council (NMCC): The National Manufacturing Competitiveness Council (NMCC) has been set up by the Government to provide a continuing forum for policy dialogue to energise and sustain the growth of manufacturing industries in India.

Make in India Initiative.

National Investment and Manufacturing Zones (NIMZs).

Delhi-Mumbai Industrial Corridor (DMIC).

UNDERSTANDING Consumer Price Index (CPI) :

The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.

Changes in the CPI are used to assess price changes associated with the cost of living; the CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.

The CPI measures the average change in prices over time that consumers pay for a basket of goods and services, commonly known as inflation. Essentially it attempts to quantify the aggregate price level in an economy and thus measure the purchasing power of a country’s unit of currency. The weighted average of the prices of goods and services that approximates an individual’s consumption patterns is used to calculate CPI.

Consumer Price Index CPI(Measurement of Inflation in India)

It measures price changes from the perspective of a retail buyer.

It measures changes over time in the level of retail prices of selected goods and services on which consumers of a defined group spend their incomes.

Four types of CPI are as follows:

CPI for Industrial Workers (IW).

CPI for Agricultural Labourer (AL).

CPI for Rural Labourer (RL).

CPI (Rural/Urban/Combined).

Of these, the first three are compiled by the Labour Bureau in the Ministry of Labour and Employment. Fourth is compiled by the Central Statistical Organisation (CSO) in the Ministry of Statistics and Programme Implementation.

Base Year for CPI is 2012.

3.IRCTC plans a slew of goodies for Tejas Express(GS-2)

CONTEXT:The Delhi-Lucknow Tejas Express will be the first train that will not be operated by the Railways, perhaps as early as the first week of October.

The Ministry of Railways plans to allow private players to operate certain trains, and as part of its 100-day agenda, the Indian Railway Catering and Tourism Corporation (IRCTC) has been asked to run two trains. The second, the Mumbai-Ahmedabad Tejas Expess, is likely to start operations this December.

IRCTC:

Indian Railway Catering and Tourism Corporation is a subsidiary of the Indian Railways that handles the catering, tourism and online ticketing operations of the Indian railways, with around 5,50,000 to 6,00,000 bookings every day is the world's second busiest and highest of 15 to 16 lakh tickets every day. Its tagline is "Lifeline of the nation.

Tejas Express:

The Tejas Express is India’s first semi-high speed fully air-conditioned train Introduced by Indian Railways. It features modern onboard facilities with automatic doors. Tejas means "sharp", "lustre" and "brilliance" in many Indian languages. These trains are among the fastest trains in India along with Rajdhani Express, Gatimaan Express, Shatabdi Express, Vande Bharat Express and Duronto Express and get the highest priority on the Indian railway network

The Tejas Express is the first train of Indian Railways to have automatic doors and secured gangways for all coaches. At present automatic doors are also operational in metro trains in the country. The coaches of Tejas Express have integrated braille displays, digital destination boards, and electronic passenger reservation charts. . The Tejas Express is having ire and smoke detection and suppression systems as well as improved aesthetics. The other facilities include tea and coffee vending machines, magazines and snack tables. In addition, passengers can enjoy the taste of choicest cuisine curated by celebrity chefs. All the coaches will have water level indicators in the bio-vacuum toilets. Individual LCD screens have been made available for all the passengers for entertainment purpose and for disseminating passenger related information and safety instructions.

4.Tirumala to get ‘temple experience gallery’ soon(GS-1)

CONTEXT:Devotees can soon experience the thrill of being inside the famous hill temple of Lord Venkateswara if the efforts of the Tirumala Tirupati Devasthanams (TTD) to set up a “temple experience gallery” at its Sri Venkateswara Museum is any indication.The TTD has decided to set up an exclusive gallery, wherein devotees can have an augmented reality experience of being inside the hill temple. Banking on digital technology, pilgrims can walk through the temple precincts and enjoy the rich experience of watching various Arjitha Sevas being performed to the deity with 3D visualisations.

A separate gallery will be set up on the first floor of the museum where there will be pictorial depiction of all 17 vahanams used during the nine-day annual Brahmotsavams, besides the ancient ivory palanquin. The process of ‘Parakamani’ (sorting of hundi offerings) and preparation of laddus, which the devotees are barred from witnessing, will also be on display.

Tirupati Temple:

Lord Venkateswara Temple at Tirumala (Tirupati) is one of the most famous temples in India. With more than 35 million pilgrims visiting the temple every year, it is one of the most visited holy places and also one of the richest temples in the world. Built on the Venkata Hill, which is a part of the famous Seshachalam Hills, Tirupati Temple is considered as one of the holiest shrines by the Hindus. According to a legend, Lord Vishnu assumed the form of Sri Venkateswara to save mankind from the adversities of Kali Yuga.

There are many legends associated with the origin of this age-old temple. The larger than life statue of the main deity is said to have formed on its own, making it one of the eight ‘Swayambhu Kshetras’ (self-manifested image) of Lord Vishnu. Many ancient texts, including the Rig Veda mention the existence and prominence of the temple. Written texts, which are dated back to the Mauryan and Gupta era, refer the temple as ‘Aadhi Varaha Kshetra’. In fact, many other texts and theories link the history of Tirupati Temple to Lord Varaha, one of the ten avatars of Lord Vishnu. According to a legend, Lord Varaha created the entire Seshachalam Hills so that Adisesha, the seven-headed snake on which Vishnu rests, could rest on earth. Interestingly, Seshachalam Hills has seven peaks, which are said to be the representation of the heads of Adisesha.

As far as the construction of the temple is concerned, King Thondaiman of Tondaimandalam kingdom constructed the precincts and the towering gateway (Gopuram) of the temple. He also made sure his subjects worshipped the Lord regularly.

Architecture

Built in accordance with the Dravidian style of architecture, the temple has three entrances, which lead to the sanctum sanctorum. The first entrance is called as ‘Mahadwaram.’ A towering gateway (Gopuram), measuring 50 feet high, is placed right in front of the first entrance. The temple has two circumambulation paths. While the first path houses many pillared halls, flagstaffs and a dedicated area to distribute the offertories, the second path has many sub-shrines, main kitchen, main hundi and many other important edifices.

Guest houses and various food counters have been recently constructed for the benefit of the pilgrims. A gold-plated tower inside the main shrine is called ‘Ananda Nilayam’ and is the most important part of the temple. The inner temple of ‘Ananda Nilayam’ houses the main deity and was constructed around the 12th Century A.D.

It was later reconstructed throughout late the 1950s to 1960s. The temple also has a holy pond called Swami Pushkarni, located towards the northern side. Pushkarni, which covers a huge area of 1.5 acres, is one of the most sacred places of the temple. A legend has it that the pond was carried to the hills all the way from Vaikuntham (Lord Vishnu's abode) by Garuda. Saluva King Narasimha Raya constructed a pillared hall at the center of the pond in 1468.

5.PRIME MINISTER Modi launches pension scheme for farmers, shopkeepers(GS-2)

CONTEXT:Prime Minister Narendra Modi on Thursday launched a pension plan targeted at farmers, traders, shopkeepers and the self-employed, offering an old-age safety net to people dependent for a livelihood on such largely unorganised sectors, as the Centre eyes upcoming assembly elections in Jharkhand.

“Jharkhand has become a launch pad for big and welfare schemes for the poor and tribals. The national health protection scheme, Ayushman Bharat, was launched from Jharkhand, which has benefited over 4.4 million people, including 300,000 in Jharkhand,” Modi told a public meeting attended by an estimated 100,000 people.

Mr. Modi also inaugurated a newly constructed building of Jharkhand Assembly at Kute gram here. The threestorey building has been constructed at a cost of rs465 crore. It is dubbed as the fi??rst paperless Assembly in the country

‘Pradhan Mantri Kisan Maan Dhan Yojana’:

Salient Features

The scheme has been started to provide social security to all landholding Small and Marginal Farmers (farmers whose land holdings are less than two hectares of land in the country).

Under this scheme, a fixed pension of Rs.3,000/- will be provided to all eligible small and marginal farmers.

It is a voluntary and contribution based pension scheme.

Pension will be paid to the farmers from a Pension Fund managed by the Life Insurance Corporation of India.

Farmers will have to contribute an amount between Rs.55 to Rs.200 per month in the Pension Fund till they reach the retirement date i.e. the age of 60 years.

The Central Government will also make an equal contribution of the same amount in the pension fund.

Those farmers who are of the age of 18 years and above and upto 40 years are eligible to join the scheme.

Spouses of the Small and Marginal farmers are also eligible to join the scheme separately and they will also get separate pension of Rs.3000 when they reach the age of 60 years.

The eligible farmers can enroll in the scheme at the nearest Common Service Centre (CSC).

It can be noted that, to augment the income of the Small and Marginal Farmers (SMFs), the government has recently launched the new Central Sector Scheme, namely, “Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)’

Pradhan Mantri Laghu Vyapari Maan Dhan Yojana:

All shopkeepers and self-employed persons, as well as retail traders with GST turnover below Rs 1.5 crore and aged between 18-40 years, can enrol for the scheme. Government has earmarked Rs 750 crore for the scheme in the Union Budget 2019-20. Interested persons can enrol themselves through over 3.25 lakh common service centres spread across the country.

The government will make a matching contribution in the subscribers' account, the statement added. “The scheme may be called the Pradhan Mantri Laghu Vyapari Maan-dhan, Yojana 2019 and shall come into force on the 22nd day of July, 2019,” according to the government official document.

6.NATGRID wants to link social media accounts to central database(gs-3)

CONTEXT:The ambitious National Intelligence Grid (NATGRID) project wants to link social media accounts to the huge database of records related to immigration entry and exit, banking and telephone details among others.

The project, initially started in 2009 with a budget of RS2,800 crore, is an online database for collating scattered pieces of information and putting them on one platform. At least 10 central agencies like Intelligence Bureau (IB), Research and Analysis Wing (R&AW) and others will have access to the data on a secured platform.

The proposal has received resistance from the intelligence agencies, whose officials fear that linking the social media accounts to sensitive government data could expose the system to “trojan attacks.”

Home Minister Amit Shah reviewed the progress of NATGRID at North Block on Thursday.

The project gathered pace in 2016, when the NDA government appointed an IB officer Ashok Patnaik as the Chief Executive Officer (CEO). After Mr. Patnaik retired, NATGRID is now headed by IAS officer Ashish Gupta.

Mr. Shah was given a presentation on the present status of NATGRID but no decision was taken on structural issues.

An official explained that NATGRID links intelligence and investigation agencies.

The 10 user agencies will be linked independently with certain databases that would be procured from 21 providing organisations and include telecom, tax records, bank, immigration, etc. to enable the generation of intelligence inputs.

An expression of interest (EOI) issued by NATGRID in 2017 had said “NATGRID is intending to set up an Entity Extraction, Visualization and Analytics (EVA) system that would collect and analyse information available from various data sources.”

While NATGRID’s data recovery centre in Bengaluru has been constructed, its office complex in South Delhi is nearing completion.

In January, NATGRID revived its EOI to select a System Integrator (SI) to provide a software solution, recommend hardware specification for running the solution and integrating and implementing the composite EVA solution. The EOI specified that the company bidding for the project should have a turnover of at least RS 1,600 crore.

What is the NATGRID?

NATGRID is an ambitious counter terrorism programme, which will utilise technologies like Big Data and analytics to study and analyse the huge amounts of data from various intelligence and enforcement agencies to help track suspected terrorists and prevent terrorist attacks. It will connect, in different phases, data providing organisations and users besides developing a legal structure through which information can be accessed by the law enforcement agencies.

Background:

NATGRID is a post Mumbai 26/11 attack measure. It aims to mitigate a vital deficiency — lack of real time information, which was considered to be one of the major hurdles in detecting US terror suspect David Headley’s movement across the country during his multiple visits between 2006 and 2009.

It’s role:

NATGRID will become a secure centralised database to stream sensitive information from 21 sets of data sources such as banks, credit cards, visa, immigration and train and air travel details, as well as from various intelligence agencies.

The database would be accessible to authorised persons from 11 agencies on a case-to-case basis, and only for professional investigations into suspected cases of terrorism.

Developments so far:

In the first phase, 10 user agencies and 21 service providers will be connected, while in later phases about 950 additional organisations will be connected. In subsequent years, over 1,000 additional organisations will be connected.

While the clearance for the Rs 3,400-crore project from the Cabinet Committee on Security (CCS) came in 2011, execution of the project slowed down after the exit of then home minister P Chidambaram in July 2012.
Currently, there are around 70 personnel, drawn from both the government and private sectors, in NATGRID.

How is it different from NCTC and NIA?

Unlike the NCTC and the NIA which are central organisations, the NATGRID is essentially a tool that enables security agencies to locate and obtain relevant information on terror suspects from pooled data of various organisations and services in the country. It will help identify, capture and prosecute terrorists and help preempt terrorist plots.

Criticisms:

NATGRID is facing opposition on charges of possible violations of privacy and leakage of confidential personal information.

Its efficacy in preventing terror has also been questioned given that no state agency or police force has access to its database thus reducing chances of immediate, effective action.

According to few experts, digital databases such as NATGRID can be misused. Over the last two decades, the very digital tools that terrorists use have also become great weapons to fight the ideologies of violence.

The Snowden files have already revealed the widespread misuse in recent years of surveillance capabilities to compromise individual privacy and even violate national sovereignty.

Why do we need NATGRID?

The danger from not having a sophisticated tool like the NATGRID is that it forces the police to rely on harsh and coercive means to extract information in a crude and degrading fashion. After every terrorist incident, it goes about rounding up suspects—many of who are innocent. If, instead, a pattern search and recognition system were in place, these violations of human rights would be much fewer.

Natgrid would also help the police and the Intelligence Bureau keep a tab on persons with suspicious backgrounds. The police would have access to all his data and any movement by this person would also be tracked with the help of this data base.

Conclusion:

In its present form, NATGRID suffers from few inadequacies, some due to bureaucratic red tape and others due to fundamental flaws in the system. If the government takes enough measures to ensure that information does not fall through the firewalls that guard it, NATGRID has the potential to become India’s go-to grid for a 360-degree perspective to prevent and contain crises

7.All 16 nations set for final RCEP deal: Australian negotiator(GS-2,3)

CONTEXT:Amidst conflicting signals from the government over whether India will join the Regional Comprehensive Economic Partnership (RCEP) this year, Australia’s lead negotiator for the 16-nation free trade agreement (FTA) says all countries have “committed” to completing talks in time for the RCEP summit on November 1.

“What I can tell you is that in Bangkok last weekend, all ministers including India reiterated their commitment to concluding the negotiations in full by the time of the leaders summit in November,” negotiator James Baxter said, referring to an RCEP trade ministers’ meeting held in Thailand on September 8, attended by Union Commerce Minister Piyush Goyal.

On Friday, negotiating teams and diplomats from all 16 RCEP countries which include the 10 ASEAN states, and six ASEAN-FTA partners China, India, Australia, New Zealand, Japan and South Korea, will meet for a “Track 1.5” round table on “Global and Regional Trade and Economic Integration Issues”. The meeting will be inaugurated by Minister of State for Commerce & Industry, Hardeep Singh Puri, who is expected to articulate India’s continuing concerns about signing on to the agreement.

Regional Comprehensive Economic Partnership (RCEP) :

RCEP is proposed between the ten member states of the Association of Southeast Asian Nations (ASEAN) (Brunei, Burma (Myanmar), Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, Vietnam) and the six states with which ASEAN has existing FTAs (Australia, China, India, Japan, South Korea and New Zealand).

RCEP negotiations were formally launched in November 2012 at the ASEAN Summit in Cambodia.

Aim: RCEP aims to boost goods trade by eliminating most tariff and non-tariff barriers — a move that is expected to provide the region’s consumers greater choice of quality products at affordable rates. It also seeks to liberalise investment norms and do away with services trade restrictions

Why India should not miss RCEP?

If India is out of the RCEP, it would make its exports price uncompetitive with other RCEP members’ exports in each RCEP market, and the ensuing export-losses contributing to foreign exchange shortages and the subsequent extent of depreciation of the rupee can only be left to imagination. Some of the sectors that have been identified as potential sources of India’s export growth impulses under RCEP to the tune of approximately $200 billion.

There are more compelling trade and economic reasons for RCEP to become India-led in future, than otherwise. India would get greater market access in other countries not only in terms of goods, but in services and investments also.

Free trade agreement (FTA) :
FTAs are arrangements between two or more countries or trading blocs that primarily agree to reduce or eliminate customs tariff and non tariff barriers on substantial trade between them. FTAs, normally cover trade in goods (such as agricultural or industrial products) or trade in services (such as banking, construction, trading etc.). FTAs can also cover other areas such as intellectual property rights (IPRs), investment, government procurement and competition policy etc.
India’s trade theory and patterns

The export performance is mainly measured along the following lines:

Diversification across destinations, products and services

Overall trade (exports plus imports) ~ 40% of GDP.

Its trade deficit has grown from USD 6bn in FY01 to USD 109bn in FY17.

Exports have diversified since 1990s, both geographically and product wise.

Export to developed countries has declined and that to emerging economies has increased.

Composition of export basket

More high-value products like manufactured goods and petroleum products (together ~85% of total exports in FY17) being exported

Foreign value addition in the exports has also more than doubled across all the industries.

India’s export potential

According to International Trade Centre (ITC)

India’s untapped export potential = USD 201.4bn

India’s untapped import potential = USD 181.8bn

Markets with greatest potential for INDIA, USA, China and UAE

Drivers of India’s export

India now exports more income sensitive items like engineering goods, petroleum, gems and jewelry and chemical products.

Indian exports are sensitive to:

Price changes

Global demands

Supply side bottlenecks like energy shortages

External demands

Higher logistic costs

Indian export is more sensitive to changes in external demands than to price changes.

India ranked 40, while China ranked 27 in Global Competitiveness Index 2017-18.

India’s CIP (Competitiveness of Industrial Production) score improved from 0.04 in 2000 to 0.07 in 2010, and yet the improvement rate is far behind that of China.

India’s experience with Free Trade Agreements

Regional Trade Agreements today go beyond tariff cuts in trade in goods and incorporate various other components like liberalization in services, investment etc.

The first RTA of which India became a member was the Bangkok Agreement in 1975. In 2005, this reincarnated as Asia Pacific Trade Agreement (APTA).

India’s first bilateral FTA with Sri Lanka (ISFTA) came into effect in March 2000.

India’s first bilateral FTA with Sri Lanka (ISFTA) came into effect in March 2000.

India's exports to FTA countries has not outperformed overall export growth or exports to rest of the world.

FTAs have led to increased imports and exports, although the former has been greater.

India’s trade deficit with ASEAN, Korea and Japan has widened post-FTAs.

According to Economic Survey 2016-17, FTAs have had a bigger impact on metals on the importing side and textiles on the exporting side.

Utilisation rate of FTAs by exporters in India is very low (between 5 and 25%).

Diversification of India’s export basket is more responsible for India’s export surge than RTAs.

8.Water found on a potentially life-friendly alien planet(GS-3)

Waterworld: up to 50% of the atmosphere of K2-18b may be composed of water

CONTEXT:A super-Earth about 111 light-years away is “the best candidate for habitability that we know right now,” astronomers say.

In a first for astronomers studying worlds beyond our solar system, data from the Hubble Space Telescope have revealed water vapor in the atmosphere of an Earth-size planet. Although this exoplanet orbits a star that is smaller than our sun, it falls within what’s known as the star’s habitable zone, the range of orbital distances where it would be warm enough for liquid water to exist on a planet’s surface.

The discovery, announced this week in two independent studies, comes from years of observations of the exoplanet K2-18b, a super-Earth that’s about 111 light-years from our solar system. Discovered in 2015 by NASA’s Kepler spacecraft, K2-18b is very unlike our home world: It’s more than eight times the mass of Earth, which means it’s either an icy giant like Neptune or a rocky world with a thick, hydrogen-rich atmosphere.

K2-18b’s orbit also takes it seven times closer to its star than Earth gets to the sun. But because it circles a type of dim red star known as an M dwarf, that orbit places it in the star's potentially life-friendly zone. Crude models predict that K2-18b’s effective temperature falls somewhere between -100 and 116 degrees Fahrenheit, and if it is about as reflective as Earth, its equilibrium temperature would be roughly the same as our home planet’s.

The fact that researchers have detected water on this type of planet bolsters hope for finding habitable worlds beyond our solar system.

“This is the only planet right now that we know outside the solar system that has the correct temperature to support water, it has an atmosphere, and it has water in it—making this planet the best candidate for habitability that we know right now,” University College London astronomer Angelos Tsiaras, a coauthor of one of the two studies, said during a press conference.(SOURCE:BBC)