nomadic-communities
Current Affair Analysis

2nd February 2019 Current Affairs Analysis -IASToppers

Denotified, Nomadic and Semi-Nomadic Tribes (NCDNSNT); Idate commission; Renke Commission; 'Environmental Rule of Law, First Global Report'; 'Pradhan Mantri Shram-Yogi Mandhan'; Transparency International; INSTEX (Instrument in Support of Trade Exchanges); Iran nuclear deal framework; What is INF (Intermediate-Range Nuclear Forces) treaty? What is Prompt Corrective Action (PCA)? Pradhan Mantri Kisan Samman Nidhi (P.M. Kissan); New rules for e-commerce; Rashtriya Gokul Mission; Gokul Gram Project; Milan-2T anti-tank missiles; etc.
By IT's Current Affairs Analysis Team
February 08, 2019

Contents

Polity & Governance

  • Assam tops in budgetary practices followed by states: Transparency International

Government Schemes & Policies

  • New panel for welfare of nomadic communities
  • ‘Pradhan Mantri Shram-Yogi Mandhan’
  • Pradhan Mantri Kisan Samman Nidhi (P.M. Kissan)
  • New rules for e-commerce

Economy

  • RBI Lifts Restrictions on BoI, Bank of Maha, Oriental Bank
  • Allocation for Rashtriya Gokul Mission increased to Rs 750 crore this year

Environment, Ecology & Disaster Management

  • ‘Environmental Rule of Law, First Global Report’

Bilateral & International Relations

  • Europe launches sanctions-busting Iran payment vehicle
  • US to withdraw from Intermediate-Range Nuclear Forces (INF) Treaty

Key Facts for Prelims

  • Milan-2T anti-tank missiles

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Polity & Governance

Assam tops in budgetary practices followed by states: Transparency International

Assam tops the ranking of best practices followed by states in Budget formulation in a survey conducted by Transparency International.

Highlights of the report:

  • The survey is based on 4 parameters which include public disclosure, budgetary process, post budget fiscal management and efforts to make budget more transparent and citizen friendly.
  • Assam is the only state which has published a Citizens Budget in the public domain.
  • The Assam government is the only government that has conducted budget awareness campaigns across 17 districts.
  • Assam was followed by Andhra Pradesh and Odisha in the ranking.
  • Meghalaya, Manipur and Punjab figured in the bottom list.

All about Transparency International:

2012-transparency-international-logo-blue

  • Transparency International (TI) is an international non-governmental organization which is based in Berlin, Germany, and was founded in 1993.
  • Its non-profit purpose is to take actions to combat global corruption with civil societal anti-corruption measures and to prevent criminal activities arising from corruption.
  • It has the legal status of a German registered voluntary association (Eingetragener Verein) and serves as an umbrella organization.
  • Its members have grown from a few individuals to more than 100 national chapters which engage in fighting corruption in their home countries.
  • TI’s mission is to create change towards a world free of corruption.
  • Since 1995, Transparency International has issued an annual Corruption Perceptions Index (CPI), a Global Corruption Report, a Global Corruption Barometer, and a Bribe Payers Index.

Corruptions Perceptions Index (CPI): It is an index published annually by TI since 1995 which ranks countries by their perceived levels of public sector corruption, as determined by expert assessments and opinion surveys. India stands at 78th out of 180 countries in Corruption Perceptions Index, 2018.

Global Corruption Report: It is one of the Transparency International’s flagship publications, bringing together experts from all over the world to discuss and analyse corruption in a specific sector.

Global Corruption Barometer: It is the largest survey in the world tracking public opinion on corruption.

Bribe Payers Index: It is a measure of how willing a nation’s business sector appears to engage in corrupt business practices.

[Ref: Business Standard]

 

Government Schemes & Policies

New panel for welfare of nomadic communities

Presenting the Budget for 2019-20 in the Lok Sabha, Finance Minister Piyush Goyal announced that a committee under NITI Aayog will be set up to complete the task of identifying de-notified, nomadic and semi-nomadic communities not yet formally classified.

nomadic-communities

  • The committee will follow up on the work of the Renke Commission and the Idate Commission.
  • A Welfare Development Board will also be set up under the Ministry of Social Justice and Empowerment to design and implement programmes for these hard-to-reach communities.
  • A substantial increase in 2019-20 budget is proposed in the allocation for welfare of the scheduled castes and scheduled tribes.

What are Denotified, Nomadic and Semi-Nomadic Tribes (NCDNSNT)?

  • Denotified Tribes (DNTs), or Vimukta Jati, are the tribes that were listed originally under the Criminal Tribes Act of 1871 enforced by Britishers whereby entire population were identified as criminals by birth. i.e. Hereditary criminals.
  • Nomadic tribes are those tribes who travel from place to place for their livelihood such as acrobats, snake charmers, ayurvedic healers etc.
  • On the other hand, Semi-nomadic tribe are those who are on the move but return to a fixed habitation once a year especially for occupational reasons.

Various Laws enacted on these communities:

  • After the revolt of 1857, as a preventive step to keep India under Britishers control, the Criminal Tribes Act (CTA) of 1871 was enacted.
  • First tribe that was notified under this act was ‘Hur of Sindh’. Subsequently, 198 tribes were brought under this law.
  • With idea of rehabilitation gaining ground, the British Government passed the Criminal Tribes Settlement Act, 1908 for reformation of such communities.
  • In 1952, the Criminal Tribes act was repealed by the Criminal Tribes (Repeal) Act, 1952 and the communities were de-notified.
  • This Act, however, was replaced by a series of Habitual Offenders Acts, and the denotified tribes were reclassified as “habitual offenders” in 1959.
  • After the Independence, the people who had been historically disadvantaged were put under different social categories, such as the Scheduled Castes (SCs), Scheduled Tribes (STs), and Other Backward Classes (OBCs).
  • In this categorisation, the communities that were earlier part of the Denotified, Nomadic and Semi-Nomadic Tribes were also included in the lists of SC, ST, and OBC categories.

Idate commission:

  • The Ideate commission was constituted in January 2015 for a three-year temporary term.
  • It was headed by Dada Idate to mandate identification of De-notified, Nomadic and Semi-Nomadic communities (NCDNSNT) state-wise, assessing their development status, and recommending ways to uplift them.
  • However, it was criticised that the Idate commission lacked the scientific data necessary to bring out a comprehensive classification of denotified, Nomadic and Semi-Nomadic Communities.

Recommendations of Idate commission:

  • The committee has proposed to give protection of ‘NCDNSNT’ communities under Scheduled Caste and Scheduled Tribe (Prevention of Atrocities) Act, 1989.
  • The report Identified – Denotified, Nomadic and Semi-Nomadic Tribes as “poorest of the poor, most marginalised and most downtrodden communities who are subject to social stigma, atrocity and exclusion”.

Renke commission:

  • The Renke National Commission was appointed by the government of India in 2003 and headed by Balkrishna Renke, to suggest measures to improve the Denotified, nomadic and seminomadic tribes to facilitate their assimilation in the national mainstream.
  • It recommended that same reservations as available to Scheduled Castes and Scheduled Tribes should be available to denotified and nomadic or semi nomadic tribes in India.

Recommendations of Renke Commission:

  • Union Government initiate steps to enumerate DNTs in the next census due in 2011.
  • For implementation of welfare Schemes for DNTs State-wise list of such tribes should be prepared.
  • State Government may take special steps to issue Caste Certificates and ration cards to every member of DNT, and BPL Certificates to the concerned members, expeditiously.
  • Union of India may take special campaign for issue of voter ID to the eligible members of DNT.
  • Central should modify the existing Housing Schemes in urban/rural areas and provide basic civic amenities be provided to the DNTs living in colonies and clusters.
  • Special drive be made for awareness of DNTs particularly among women to avail the benefit of various schemes for educational empowerment. Special Residential Schools for DNT Boys and Girls be made to encourage education among them.
  • Skill Development Programmes be taken up for DNTs to improve their self-employability and wage employment, in collaboration with National Small Industries Corporation (NSIC), Khadi & Village Industries Commission (KVIC), the Central Cottage Industries Corporation of India Limited, and the Handicrafts and Handlooms Exports Corporations of India Limited.
  • Separate Finance and Development Corporation for DNTs, like National Scheduled Castes Finance & Development Corporation, may be set up at the centre.
  • Research Institutes should be set up by the States/UTs for DNTs.
  • A multicultural complex/Academy may be set up in every State/UT to develop, preserve and exhibit the diverse and rich cultural heritage of DNTs.
  • It is necessary that the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989 be, mutatis mutandis, made applicable to DNTs, and the implementation of the same be reviewed and monitored from time to time.
  • Constitution may be amended to include “Scheduled Communities” under Article 330 and Article 332 to enable these communities to be eligible for reservation of seats in the Houses of the People and in the Legislative Assemblies of the States.
  • Seats may be reserved in Block/Taluka Panchayats and Zila Pandhayats/Zila Parishads, and the Urban Local Bodies for DNTs wherever their population is concentrated.
  • To mobilise additional resources to improve the socio-economic conditions of DNTS, it is suggested that 10% of the funds earmarked for M.P. Local Area Development Fund.
  • It is suggested that the DNTs be given 10% reservation in Government jobs even if the total reservation exceeds 50%.

Key facts:

  • NCDNSNT tribe celebrates ‘Mukti Divas’ on 31st August to mark the occasion when in 1952 the first Prime Minister of India, Jawahar Lal Nehru, abolished the law of Criminal Tribes Act.
[Ref: PIB]

 

‘Pradhan Mantri Shram-Yogi Mandhan’

The government announces mega pension yojana – ‘Pradhan Mantri Shram-Yogi Maandhan’ for the unorganised sector workers with monthly income upto Rs. 15,000.

'Pradhan-Mantri-Shram-Yogi-Mandhan'-2

  • A sum of Rs. 500 crore has been allocated for the Scheme assuring additional funds as needed by the government.
  • The scheme will be implemented from the current year 2019.

Key features of the scheme:

'Pradhan-Mantri-Shram-Yogi-Mandhan'

  • Assured pension of Rs 3,000 per month after 60 years of age on a small monthly contribution during their working age.
  • An unorganised sector worker joining pension yojana at the age of 29 years will have to contribute Rs. 100 per month till the age of 60 years.
  • A worker joining the pension yojana at 18 years, will have to contribute Rs. 55 per month.
  • The government will deposit equal matching share in the pension account of the worker every month.

Need/Significance of the scheme:

  • It is expected to benefit 10 crore labourers within next five years.
  • It aims for one of the largest pension schemes of the world.
  • The intension of this scheme is to provide social security to 42 crore workers in the unorganised sector from which half of India’s GDP comes from.
[Ref: PIB]

 

Pradhan Mantri Kisan Samman Nidhi (P.M. Kissan)

In the Interim budget of 2019-20, Government has announced the ‘Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)’ for providing an assured income support to the small and marginal farmers.

Pradhan-Mantri-Kisan-Samman-Nidhi-2

Highlights of Programme:

Pradhan-Mantri-Kisan-Samman-Nidhi-3

  • Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs. 6,000 per year.
  • This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of Rs. 2,000 each.
  • This programme will be funded by Government of India.
  • This programme will entail an annual expenditure of Rs. 75,000 crores.

Pradhan-Mantri-Kisan-Samman-Nidhi-1

Significance of Programme:

  • Around 12 crore small and marginal farmer families are expected to benefit.
  • PM-KISAN would not only provide assured supplemental income to the most vulnerable farmer families, but would also meet their emergent needs especially before the harvest season.
  • PM-KISAN would pave the way for the farmers to earn and live a respectable living.
[Ref: PIB]

 

New rules for e-commerce

The government announced new e-commerce rules restricting players from selling the products of companies in which they have a stake, and capping the percentage of inventory that a vendor can sell through a marketplace entity.

New rules for e-commerce

  • The U.S. government has been concerned and suggesting to protect Walmart and Amazon’s investments in India, citing “good relations” between the two countries.

Key highlights:

  • From February 1, 2019, e-commerce companies running marketplace platforms cannot sell products through companies in which they hold equity stake.
  • The policy mandates that no seller can sell its products exclusively on any marketplace platform, and that all vendors on the e-commerce platform should be provided services in a “fair and non-discriminatory manner”.
  • Moreover, the policy prohibits e-commerce players to control the inventory of the vendors. Any such ownership over the inventory will convert it into inventory based model from marketplace based model, which is outside the scope of FDI.
  • “fair and non-discriminatory manner
  • The e-commerce retailer shall be deemed to own the inventory of a vendor if over 25 % of the purchases of such a vendor are through it.
  • The policy has also prohibited marketplaces from influencing prices in a bid to restrict large discounting.
  • Also, e-commerce players who have their private labels, will not be able to sell them on their platforms if they hold equity in the company manufacturing them.
  • Special offers like cashback, extended warranties, faster deliveries to some brands will be banned, in order to provide a level playing field.

Objectives:

  • The main objective behind the revising the FDI rules for the e-commerce giants is to level the playing field in the retail space, as large discounting on online retail sites was key reason heavy losses to the small and medium stores.
  • Small traders accused e-commerce giants for using their buying power and control over inventory from affiliated vendors to create an unfair competition where they can offer deep discounts on some products.
  • The arrangements will be curbed under the new policy which will force the big e-sellers to change their business strategy raising their compliance costs.

Impact on E-commerce Giants:

  • Most of E-commerce giants source goods from sellers who are related party entities. The suppliers will not be permitted to sell their products on the platform run by such marketplace entity.
  • The policy move has jolted Walmart, which last year invested $16 billion in Flipkart in its biggest ever deal, and Amazon, which has committed $5.5 billion in India.
  • This will impact backend operations, as Group entities would have to be removed from the e-commerce value chain.
  • Franchise channels are given more weight compared to equity investments channels for doing business in India.

Impact on consumers and small retailers:

  • Consumers may no longer enjoy the deep discounts offered by retailers that have a close association with marketplace entities.
  • However, absence of large retailers will bring relief to small retailers selling on these platforms.
  • Traders running traditional brick-and-mortar stores, who now find it difficult to compete with the large e-commerce retailers, could gain.

Impact on business rankings:

  • While FDI is linked to the Ease of Doing Business (EODB) index, it is limited to a relatively smaller segment of businesses and hence lower impact on FDI policies.
  • According to the World Bank report, India had undertaken a series of reforms which made it easier for companies to do business permits, however, FDI was not directly contributing factor in this improvement.

Background

  • The government has modified foreign direct investment (FDI) rules for its growing e-commerce sector, which has drawn major bets from not only Amazon.com but also the likes of Walmart Inc, which bought a majority stake in homegrown e-commerce player Flipkart in 2018.
  • India’s small traders had complained that large e-commerce companies used their control over inventory from their affiliates to create an unfair marketplace that allowed them to offer deep discounts on some products.

Key facts:

  • India ranks 77th in Ease of Doing Business (EODB) in a list of 190 nations in 2018.
[Ref: Indian Express]

 

Economy

RBI Lifts Restrictions on BoI, Bank of Maha, Oriental Bank

The Reserve Bank of India (RBI) removed three state-owned banks from ‘Prompt corrective action (PCA)’, a move that will lift lending restrictions on them.

RBI_0

  • Bank of India (BoI) and Bank of Maharashtra (BoM) which meet the regulatory norms including Capital Conservation Buffer (CCB) and have Net NPAs (non-performing assets) of less than 6 %, are taken out of the PCA (prompt corrective action) monitoring.
  • In case of Oriental Bank of Commerce, the net NPA has come down to less than 6 % from 7.15 % after government has infused sufficient capita which lifted the restriction on the bank.
  • Financial Services Secretary Rajiv Kumar praises banks for sustaining 4R’s strategy for banking transformation.

What is Prompt Corrective Action (PCA)?

  • PCA norms allow the regulator to place certain restrictions such as halting branch expansion and stopping dividend payment.
  • It can even cap a bank’s lending limit to one entity or sector.
  • Other corrective action that can be imposed on banks include special audit, restructuring operations and activation of recovery plan.
  • Banks’ promoters can be asked to bring in new management, too.
  • Under PCA, the RBI can also supersede the bank’s board.

What_is_Prompt_Correction_Action_PCA_iastoppers

When is PCA invoked?

  • The PCA is invoked when certain risk thresholds are breached.
  • There are three risk thresholds which are based on certain levels of asset quality, profitability, capital and the like.
  • The third such threshold, which is maximum tolerance limit, sets net NPA at over 12% and negative return on assets for four consecutive years.

Prompt-Correction-Action-sanctions-iastoppers

What are the types of sanctions?

  • There are two types of restrictions, mandatory and discretionary.
  • Restrictions on dividend, branch expansion, directors compensation, are mandatory while discretionary restrictions could include curbs on lending and deposit.
  • In the cases of two banks where PCA was invoked after the revised guidelines were issued — IDBI Bank and UCO Bank — only mandatory restrictions were imposed. Both the banks breached risk threshold 2.

What will a bank do if PCA is triggered?

  • Banks are not allowed to renew or access costly deposits or take steps to increase their fee-based income.
  • Banks will also have to launch a special drive to reduce the stock of NPAs and contain generation of fresh NPAs.
  • They will also not be allowed to enter into new lines of business.
  • RBI will also impose restrictions on the bank on borrowings from interbank market.

4R’s strategy of banking transformation:

  • For any bank to take a challenge comprehensively would require Recognition, Recapitalisation, Resolution, and Reform (4R’s).
[Ref: The Hindu]

 

Allocation for Rashtriya Gokul Mission increased to Rs 750 crore this year

Union Finance Minister Piyush Goyal has allotted ₹750 crores to the Rashtriya Gokul Mission (RGM) for the financial year 2018-19.

Rashtriya gokul mission cows

  • In the last year budget, the RGM had been allocated ₹301.5 crore out of which it managed to spend only ₹187.73 crore in 2017-18.
  • Interestingly, even as Union Finance Minister increased the allocation for 2018-19, he decreased the outlay for 2019-20, down to ₹302 crores, comparable to the amount allocated last year.

Rashtriya Gokul Mission:

rashtriya-gokul-mission

  • The RGM was launched in December 2014 on an outlay of ₹500 crore (2014-15 to 2016-2017) for developing and conserving indigenous breeds through selective breeding and genetically upgrading ‘nondescript’ bovine population.
  • RGM is managed by the Department of Animal Health and Husbandry (DAHD).
  • The RGM doesn’t address the issue of cattle past their reproductive or useful age.
  • Scheme is implemented on 100% grant-in-aid basis.
  • RGM is being implemented through “State Implementing Agencies (SIA) viz Livestock Development Boards.
  • All Agencies having a role in indigenous cattle development are “Participating Agencies” like CFSPTI (Central Frozen Semen Production and Training Institute), CCBFs (Conservation and Promotion of Indigenous Cow Breeds) , Universities, NGO’s and Cooperative Societies.

Objectives:

  • Development and conservation of indigenous breeds.
  • Breed improvement programme for indigenous cattle breeds to improve their genetic makeup and Increase the stock.
  • Enhancement of milk production and productivity.
  • Upgradation of nondescript cattle using elite indigenous breeds like Gir, Sahiwal, Rathi, Deoni, Tharparkar, Red Sindhi.
  • Distribution of disease free high genetic merit bulls for natural service.
  • To create e-market portal for bovine germplasm for connecting breeders and farmers.
  • To increase trade of livestock and livestock products by meeting out sanitary and phyto sanitary (SPS) issues.
  • To arrange quality Artificial Insemination (AI) services at farmers’ doorstep.

Significant initiatives under RGM:

  • Gopal Ratna awards: For farmers maintaining the best herd of Indigenous Breed(s) and practicing best management practices.
  • Kamdhenu awards: For Best managed Indigenous Herd by Institutions/Trusts/ NGOs/ Gaushalas or best managed Breeders’ Societies.\

Components of the Scheme:

  • Establishment of Village level Integrated Indigenous Cattle Centres viz “Gokul Gram”
  • Establishment of Field Performance Recording (FPR) in the breeding tract.
  • Assistance to Institutions/Institutes which are repositories of best germplasm.
  • Implementation of Pedigree Selection Programme for the Indigenous Breeds with large population.
  • “Gopalan Sangh”: Establishment of Breeder‟s Societies: Gopalan Sangh.
  • Incentive to farmers maintaining elite animals of indigenous breeds.
  • Heifer rearing programme.

All about Gokul Gram Project:

  • Under this scheme, it is proposed to establish Integrated Indigenous Cattle Centres or Gokul Grams in the breeding tracts of indigenous breeds.
  • Gokul Grams will be established in: i) the native breeding tracts and ii) near metropolitan cities for housing the urban cattle.
  • It is established by the State Implementing Agency/End Implementing Agency or under a Public Private Partnership.
  • It generates economic resources from sale of A2 milk, organic manure, vermi-composting, urine distillates, and production of electricity from bio gas for in house consumption.
  • It also functions as state of the art in situ training centre for Farmers, Breeders and MAITRI’s.
  • It maintains milch and unproductive animals in the ratio of 60:40.
  • It has the facility for practical training of MAITRIs (Ministry of Agriculture Animal Husbandry & Fisheries), and farmers.
  • DAP (Draught Animal Power) run turbines is used to generate electricity at the Gokul Gram.

Objectives:

  • To increase economic returns from animal products in a sustainable manner.
  • To encourage appropriate technology for use of Draught Animal Power (DAP).
  • To provide balanced nutrition and integrated animal health care.
  • To optimize modern Farm Management practices and promote Common Resource Management.
  • To promote Green Power and Eco technology.
[Ref: PIB, The Hindu]

 

Environment, Ecology & Disaster Management

‘Environmental Rule of Law, First Global Report’

UN publishes ‘Environmental Rule of Law, First Global Report’ to which reflects flaws in implementation of environmental laws.

'Environmental Rule of Law, First Global Report'

  • The UN report praises an order of the National Green Tribunal (NGT) which ordered an interim cessation of unsafe “rat hole” mining in Meghalaya.

Highlights of the report:

  • The report highlights the vast gaps between legislation and implementation for environmental laws which account for the lack of political will.
  • According to UN report, implementation challenge has been a major obstacle in the mitigation of climate change, the reduction of pollution, and the prevention of widespread species and habitat loss.

Global scenario:

  • The report revealed that both developed and developing countries have stumbled in the implementation of environmental laws.
  • Another aspect that report covered is rising attacks on environmental defenders. Between 2002 and 2013, 908 people — including forest rangers, government inspectors, and local activists — were killed in 35 countries, and in 2017 alone, 197 environmental defenders were murdered.
  • The report uses ‘treaty congestion’ to describe 500 internationally recognised agreements in the past 50 years.
  • United Nations Environment Programme (UNEP) examined 90 of the most important of these agreements and found that 40 projects have some progress while 24 projects have little or no progress.
  • As many as 88 countries have adopted the constitutional right to a healthy environment and more than 350 environmental courts and tribunals exist in around 50 countries.
  • Poor coordination across government agencies, weak institutional capacity, lack of access to information, corruption and stifled civic engagement are the key factors behind the poor effectiveness of environmental regulations across the globe.

Indian scenario:

  • Addressing specifically for India, inability of laws to give the government civil enforcement authority/sanctions is a key reason for limited traction of environmental laws.
  • The report also found numerous cases in India which shows the use of the constitutional right-to-life provision, article 21, to elevate environmental concerns.
  • Report also refers to the importance of training to those charged with implementing public participation mechanisms. Report stated that in India, 60% of public information officers had not received any training despite India mandates training of officials in its public information laws.
  • The report cites examples of lack of enforcing environmental laws in India such as Impotence of municipal council to build sanitation facilities, public consultation to keep intact the rights of tribes in the Niyamgiri Hills and Inadequate compensation to victim of Bhopal.
  • India ranked 177th out of 180 countries in the 2018 Global Environment Performance Index (EPI) rankings of the Yale University for being unable to improve its air quality, protect its biodiversity, and cut its greenhouse gas emissions. It also slipped by 36 points in 2018 from 141 in 2016.
  • Despite all its flaws, India is among the 31 countries rated ‘Very Good’ by the Environmental Democracy Index, 2015 which is based on assessments of 70 countries conducted in 2014.
  • India is among the countries which have dedicated laws for whistleblowers.
[Ref: DownToEarth]

 

Bilateral & International Relations

Europe launches sanctions-busting Iran payment vehicle

Britain, France and Germany will launch a special payment mechanism – INSTEX (Instrument in Support of Trade Exchanges) which will help save the Iran nuclear deal by bypassing US sanctions.

INSTEX-(Instrument-in-Support-of-Trade-Exchanges)

What’s the issue?

  • In July 2015, an agreement was concluded with Iran, China, France, Germany, Russia, the United Kingdom, the United States and the European Union. It provided that Iran’s nuclear activities would be limited in exchange for reduced sanctions.
  • According to the JCPOA (Joint Comprehensive Plan of Action) or Iran Nuclear deal, every 90 days the President of the United States would certify that Iran was adhering to the terms of the agreement.
  • The US inspectors had verified that Iran had implemented its nuclear-related commitments since the agreement leading to withdrawal of US from Iran Nuclear deal.
  • Now, EU has decided to shield European companies doing business in Iran from US sanctions.

What is INSTEX?

  • INSTEX (Instrument in Support of Trade Exchanges) is a payment vehicle which will support legitimate European trade with Iran.
  • The special purpose vehicle INSTEX aims to facilitate trade between the EU and Iran to get around US sanctions.
  • Germany, France and Britain have launched an EU-backed system to facilitate trade with Iran to help European businesses circumvent unilateral US sanctions on Iran.
  • As the European signatories to the nuclear accord, Germany, France and Britain set up and will manage the clearing house.
  • The entity is based in France with German governance and financial support from all three countries.
  • The three countries have sought broader support for the mechanism from all 28 EU member states to show European good faith in implementing commitments under the nuclear accord and to present a united front against any retaliation from Washington.

What led to formation of INSTEX?

  • To doge U.S. Penalties, INSTEX would receive payments from companies that want to trade with Iran, either by receiving waivers for oil imports or permissible trade in goods like food and medicine.
  • As a result, there would be no direct transfer of funds between Iran and European companies.
  • This would theoretically insulate firms from U.S. penalties.

US’ response regarding the Sanction:

Iran_nuclear_deal_us_response

  • Iran cautiously welcomed the news as a “first step” but US officials dismissed the idea that the new entity would have any impact on efforts to exert economic pressure on Tehran, and fired a fresh warning at anyone thinking of trading with the Islamic republic.
  • Washington has warned the EU against trying to sidestep its sanctions on Tehran, while the Europeans – along with the deal’s other signatories Russia and China – say Iran has not broken its side of the deal and should be allowed to trade.
  • Washington has also warned it will vigorously pursue any company breaching its sanctions against the Islamic republic, and a number of major international corporations have already pulled out.

Way ahead:

  • INSTEX is not yet operational and needs Iran to set up a parallel structure of its own.
  • The new European scheme- INSTEX was originally intended to allow Iran to sell oil to the EU on a barter basis but, with Europe now buying very little Iranian oil, it is now aimed at small and medium-sized companies.

Iran nuclear deal framework:

  • The Iran nuclear deal framework was an agreement reached in 2015 between the Iran and the P5+1 (the permanent members of the United Nations Security Council—the United States, the United Kingdom, Russia, France, and China—plus Germany) and the European Union.
  • It came after years of tension over Iran’s alleged efforts to develop a nuclear weapon.
  • According to this deal, Iran would redesign and reduce its nuclear facilities in order to lift all nuclear-related economic sanctions, freeing up tens of billions of dollars in oil revenue and frozen asset.
  • Sanctions previously imposed by the UN, US and EU in an attempt to force Iran to halt uranium enrichment crippled its economy, costing the country more than $160bn in oil revenue from 2012 to 2016 alone.
  • If Iran violate any aspect of the deal, the UN sanctions will automatically “snap back” into place for 10 years, with the possibility of a five-year extension.
[Ref: The Hindu]

 

US to withdraw from Intermediate-Range Nuclear Forces (INF) Treaty

US has announced that it will withdraw from the ‘Intermediate-Range Nuclear Forces (INF)’ Treaty with Russia.

trump-us-Intermediate-Range-Nuclear-Forces-(INF)-Treaty

  • The US accuses Russia responsible for the violation and collapse of the treaty and will reconsider treaty only if Russia limit their forces.
  • The withdrawal process will take six months to complete.

What is INF (Intermediate-Range Nuclear Forces) treaty?

Intermediate-Range-Nuclear-Forces-treaty

  • It was an arms control agreement between the United States and the Soviet Union during 1987 signed by President Ronald Reagan and Soviet General Secretary Mikhail Gorbachev.
  • It prohibited the US and the Soviet Union from possessing, testing and deploying ground-launched cruise and ballistic missiles of ranges between 500 and 5,500 km.
  • The treaty did not cover air- or sea-launched missiles.
  • Under the treaty, US and Russia has destroyed 846 and 1,846 missiles, respectively.

Violation claim on Russia:

  • US accuses Russia of violating treaty first in 2014 with missile 9M729. According to US, Russia has deployed this cruise missile system operationally in 2017.
  • However, US do not have any firm evidence to prove their claim.

Military Implications of withdrawal:

  • US has not developed any land-based missiles outside INF range for decades but started funding a new ground-launched cruise missile similar to Russian 9M729 missile.
  • Russia could deploy more operational 9M729 missiles as it released from its official obligations under the treaty.
  • Russia could also effectively reclassify the ‘RS-26 Rubezh’, an experimental system that has been tested just above the INF Treaty’s 5,500-kilometer limit.

Diplomatic Implications of withdrawal:

  • Western European NATO members favor retaining the INF Treaty resulting in worsening of divisions within NATO when the US officially withdraws from the INF.
  • There is little desire for a new arms race in Europe, and few NATO countries are likely to want to host any new U.S. systems.
  • This Withdrawal will probably not lead to a new INF deal.
  • China will not take up Trump’s offer of talks with the United States and Russia.
  • Trump’s move is also likely to undermine the New START treaty,2010 governing U.S. and Russian long-range nuclear systems.

Evolution of INF Treaty:

  • The deployment of IRBMs (Intermediate-range ballistic missiles) in Europe first became an arms-control issue in the late 1970s.
  • The Soviet Union began producing more accurate SS-20s missiles, which could deliver three nuclear warheads apiece from a distance of 5,000 km.
  • Under pressure from ‘North Atlantic Treaty Organization (NATO)’, the US in 1979 deployed intermediate-range weapons system named Pershing II in western Europe.
  • Both system can target prime military command structure of each other which became the base to curtail such weapons through arms-control negotiations.
  • INF negotiations began in October 1980 which based upon the “zero option” proposed by the United States in November 1981.
  • Under this proposal, NATO would forgo deploying its intermediate-range missiles if the Soviets dismantled their SS-20s missiles.
  • After five years of negotiation, the Soviet Union proposed double-zero” option in 1987 which called for the elimination not only of all of the intermediate-range missiles but also of shorter-range missiles as well.
  • The Soviet Union and US agreed to the treaty and each country was given the right for 13 years to permanent elimination of intermediate-range missiles.

Key facts:

  • ‘New START treaty’ is another Nuclear Arms Reduction Treaty / Strategic Arms Reduction Treaty between the US and the Russia signed on 2010 in Prague.
[Ref: The Hindu]

 

Key Facts for Prelims

Milan-2T anti-tank missiles

Milan-2T-anti-tank-missiles

  • It is an anti-tank missile is aimed at destroying the vehicles that are heavily armoured.
  • It is a portable medium-range, anti-tank missile produced by Euromissile, based in Fontenay-aux-Roses in France.

Why in news?

  • Recently, the Defence Acquisition Council headed by Defence Minister Nirmala Sitharaman has approved the acquisition of the Rs 1,200 crore Milan-2T anti-tank missiles.
  • The DAC has given approval for the procurement of Milan-2T Anti-Tank Missile to meet the urgent requirements since the indigenous anti-tank missile Nag being developed by Defence Research and Development Organisation (DRDO) is still under development.

 

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