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Current Affairs Analysis

6th May 2016 Current Affairs Analysis

By IT's Current Affairs Analysis Team
May 06, 2016

Contents

Polity & Governance

  • Commerce Ministry’s visa plan runs into MHA wall
  • 100-cr. fine proposed for wrong India map
  • LS clears decks for MPC

Economy

  • India eyes bad debt cleanup as wary state-run banks balk
  • Market coverage for export incentives extended to all countries

Art & Culture

  • Mogao caves reveal pivotal India-China Buddhist link

Science & Technology

  • Nasscom partners with Facebook to build a ‘product design initiative’

 

Polity & Governance

Commerce Ministry’s visa plan runs into MHA wall

The Union Commerce Ministry has proposed an ambitious scheme to waive the visa requirement for business visitors and tourists from 18 countries, which are considered critical to economic and trade strategy.

  • The 18 countries belong to BRICS and the Asia Pacific group that is part of the proposed Regional Comprehensive Economic Partnership (RCEP).

Significance of this proposal:

  • The visa procedure for foreign business visitors will contribute towards making India an attractive destination for investors from RCEP countries, keeping in mind the ‘Make in India’ policy.
  • It will also boost India’s services trade and help earn foreign exchange. Visa waiver for business visitors and tourists is very important, given the stakeholders’ feedback regarding the time-consuming onerous visa application processes which deter business travellers and tourists.

Objections:

  • The Home Ministry has raised objections to this omnibus exemption. It has raised strong objections to granting such benefits to citizens of China and Pakistan due to security concerns.

Present scenario:

  • Currently, India has a visa-free entry regime for Nepal, Bhutan and the Maldives.
  • The e-Tourist Visa Scheme (for tourism, healthcare, business and family visits) is available to citizens of around 113 countries, including some 40 countries for whom India has already granted visa on arrival facility.

About RCEP:

The RCEP agreement (FTA) 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.
  • The Regional Comprehensive Economic Partnership (RCEP) is among the proposed three mega FTAs in the world so far. The other two are:
  1. The TPP (Trans Pacific Partnership, led by the US) and
  2. The TTIP (Trans-Atlantic Trade and Investment Partnership between the US and the EU).
  • RCEP is viewed as an alternative to the TPP trade agreement, which includes the United States but excludes China.
[Ref: Hindu]

Rs.100-cr. fine proposed for wrong India map

The government has proposed a law where wrong depiction of the map of India could land the violators in jail with a maximum term of seven years and fine up to Rs. 100 crore.

  • The new draft bill is named ‘The Geospatial Information Regulation Bill, 2016’.

Key features of the draft bill:

  • The new draft bill basically aims to regularize critical information on Maps services that affect “the security, sovereignty and integrity” of the country.
  • The draft Bill will ensure that online platforms like Google will have to apply for a licence to run Google Maps or Google Earth in India.
  • According to the draft, it will be mandatory to take permission from a government authority before acquiring, disseminating, publishing or distributing any geospatial information of India.
  • Also, no person shall depict, disseminate, publish or distribute any wrong or false topographic information of India including international boundaries through internet platforms or online services or in any electronic or physical form.
[Ref: Hindu]

LS clears decks for MPC

The Lok Sabha recently approved the Finance Bill 2016 which included an amendment to the RBI Act clipping the central bank governor’s powers to set monetary policy.

  • The amendment made to the RBI Act through the Finance Bill removed the governor’s powers to singularly set monetary policy vesting them in a six-member Monetary Policy Committee.
  • After the Finance Bill is approved by the Rajya Sabha, the process of setting up of the Monetary Policy Committee (MPC) will be set in motion.

About the Monetary Policy Committee (MPC):

Last year, the government and the Reserve Bank of India (RBI) had agreed to adopt a monetary policy framework, which will make taming inflation the primary priority of the central bank’s policy decisions.

  • The MPC will set interest rates to keep retail inflation within targets. Inflation targets will be set once every five years.

MPC’s composition:

The committee will have six members. Of the six members, the government will nominate three. The RBI Governor will chair the committee.

  • The governor, however, will not enjoy a veto power to overrule the other panel members, but will have a casting vote in case of a tie. No government official will be nominated to the MPC.
  • Members of the MPC will be appointed for a period of four years and shall not be eligible for reappointment
  • The other three members would be from the RBI with the governor being the ex-officio chairperson. Deputy governor of RBI in charge of the monetary policy will be a member, as also an executive director of the central bank. Decisions will be taken by majority vote with each member having a vote.
  • The government nominees to the MPC will be selected by a Search-cum-Selection Committee under Cabinet Secretary with RBI Governor and Economic Affairs Secretary and three experts in the field of economics or banking or finance or monetary policy as its members.

Presently how policy rates are decided?

  • At present, the RBI’s Monetary Policy Department (MPD) assists the governor in formulating the monetary policy.
  • Views of all key stakeholders in the economy, advice of the Technical Advisory Committee (TAC) contribute to the process for arriving at the key decision on policy repo rate — the rate at which the central bank lends to banks. The governor, however, has overriding powers to decide on interest rates.
[Ref: Hindu]

 

Economy

India eyes bad debt cleanup as wary state-run banks balk

India is considering setting up an independent panel to help state-owned banks negotiate settlements with big businesses on bad loans.

  • The proposal envisages setting up a panel comprising leading bankers and government and central bank officials, to review some larger outstanding loans and try to arrive at a settlement. There is also a suggestion to include judges in the panel. The decision-making will be much better under an independent panel.
  • The proposal would give the panel power to define the “haircut” a bank should face on a loan gone sour.

Reason for set up of an independent panel:

  • Bad debt has hampered banks’ ability to lend, threatening to throttle a nascent economic recovery.
  • RBI Governor Raghuram Rajan has also set a deadline of March 2017 for banks to clean up their books.

Background:

  • India’s $121 billion troubled debt pile, over $100 billion of which is on the books of state-owned banks, has come under close scrutiny from prosecutors, media and politicians. Some have blamed banks for going too easy on corporate tycoons, and do not want taxpayers propping up the struggling banking sector.

 [Ref: Hindu]

Market coverage for export incentives extended to all countries

To make easier doing business in India, the government has announced revocation of the earlier requirement of landing certificates to be submitted by exporters under the Merchandise Export from India Scheme (MEIS).

  • The government has also decided to extend the market coverage to all countries.
  • Aimed to incentivise merchandise exports, MEIS was introduced in the Foreign Trade Policy (FTP) 2015-20, approved in April last year.
  • The current trade policy has merged all the earlier export promotion projects under two plans –
  1. MEIS and
  2. Served from India scheme (SFIS) – for services exporters.
  • As a measure to boost special economic zones, units within them have also been permitted to avail the benefit of the two merged schemes.

What is landing certificate?

  • Landing certificate is the proof of landing of the consignment in the designated market.

 [Ref: ToI]

 

Art & Culture

Mogao caves reveal pivotal India-China Buddhist link

Studies have revealed that Dunhuang in China was a major point of intersection along the ancient Silk Road.

  • Studies also show that Silk Road had played a foundational role in bringing about the Indian-China confluence of the past.
  • From this oasis town, the Silk Road, which had started from the not-so-distant Xian, and after having passed through the Gansu corridor, stood at a prominent junction.

Dunhuang houses the famous Mogao caves.

About Mogao caves:

Mogao caves

The ‘Caves of the Thousand Buddhas’ (Qianfodong), also known as Mogao, are a magnificent treasure trove of Buddhist art.

  • They are located in the desert, about 15 miles south-east of the town of Dunhuang in north western China.
  • Mogao cave-temples of Dunhuang are a World Heritage Site.
  • The early caves show greater Indian and Western influence, while during the Tang dynasty (618-906 C.E.) the influence of the Chinese painting styles of the imperial court is apparent.
  • In the early caves, jataka tales (previous lives of the Historical Buddha) were commonly depicted. During the Tang dynasty, Pure Land Buddhism became very popular.
  • In terms of art, it was the Graeco-Buddhist Gandhara School, known for depicting Buddha in human form, that finally reached China, heavily influencing the emergence of what became known as Serendian art, embodying a powerful Chinese artistic tradition as well.
  • The Mogao Caves are the best known of the Chinese Buddhist grottoes and, along with Longmen Grottoes and Yungang Grottoes, are one of the three famous ancient Buddhist sculptural sites of China.
[Ref: Hindu]

 

Science & Technology

Nasscom partners with Facebook to build a ‘product design initiative’

NASSCOM (National Association of Software and Services Companies) has inked a partnership agreement with social networking site Facebook to build a ‘product design initiative’ in the country.

  • This nation-wide initiative by NASSCOM is aimed at offering focused programmes to build awareness around product design, training on design tools, design lab, awards, design sprints and mentorship.
  • This will be a flagship programme of the NASSCOM Product Council.
  • This will aim at supporting over 500 product start-ups on product design. It will also focus on training over 5,000 product designers in the next two years.

 [Ref: Hindu]

 

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