Weekly Current Affairs Prelims (30th Sep to 5th October, 2019)

State Finances

Weekly Current Affairs Prelims (30th Sep to 5th October, 2019)

(Info-graphic Summary at the end)

 

Topic: State Finances

Topic in Syllabus: Indian Economy

State Finances

Context:

The Reserve Bank of India (RBI) has released a report titled “State Finances: A Study of Budgets of 2019-20”.

It is an annual publication that provides information, analysis and an assessment of the finances of state governments.

Key Findings

  • States’ Gross Fiscal Deficit (GFD) has remained within the Fiscal Responsibility and Budget Management Act (FRBM) threshold of 3% of Gross Domestic Product (GDP) during 2017-18 and 2018-19.
  • For 2019-20, States have budgeted a consolidated GFD of 2.6% of GDP.

Concerns:

  • Outstanding debt of States have risen over the last five years to 25% of GDP, making sustainability of debt the main fiscal challenge.
  • States’ GFD was within the threshold of FRBM Act due to sharp reduction in capital expenditure by states.
  • Sharp reduction in capital expenditure by states has potentially adverse implications for the pace and quality of economic development. This is because states employ about five times more people and spend around one and a half times more than the Centre.
  • Moreover, public expenditure by states influences the quality of physical and social capital infrastructure of the economy.

Challenges:

  • States’ revenue prospects are confronted with low tax buoyancies, shrinking revenue autonomy under the Goods and Services Tax (GST) framework and unpredictability associated with transfers of the Integrated GST (IGST) and grants.
  • Unrealistic revenue forecasts in budget estimates thereby leave no option for states than expenditure compression in even the most productive and employment-generating heads.
  • States may have to take over higher losses of power distribution companies if they do not show a turnaround in their performance.

Way Forward:

  • States need to gradually harness the GST database to expand the tax base.
  • They also need to review their tariff policies relating to power and irrigation, keeping in mind the break-even user charges.
  • States need to combine efforts towards mobilising higher revenues with strategies to maximise efficiency gains rather than mere increase in tax rates.

The Fiscal Responsibility and Budget Management (FRBM) Act

  • The Act was enacted in 2003 which set targets for the government to reduce fiscal deficits. The targets were put off several times.
  • Hence, in May 2016, the government set up a committee under NK Singh to review the FRBM Act.
  • The committee recommended that the government should target a fiscal deficit of 3% of the GDP in the years up to March 31, 2020, cut it to 2.8% in 2020-21 and to 2.5% by 2023.

 

Sample Question:

The rate which the income tax is imposed in India is called….

(a) Digressive rate

(b) Progressive rate

(c) Regressive rate

(d) Proportionate rate

Answer; a

Explanation: In India, income tax is imposed at digressive rate. Under the digressive rate the rate of tax increases as the income increases initially while after a certain level of income it becomes proportionate.


Topic: Commute the Death Sentence

Topic in Syllabus: Indian Polity

death sentence

Context:

Recently, the President of India has decided to commute the death sentence of an accused (convicted over the assassination of then Punjab Chief Minister) as a humanitarian gesture ahead of the 550th birth anniversary celebrations of the founder of Sikhism, Guru Nanak Dev Ji.

In the last nine years, the President commuted at least 20 death sentences to life imprisonment, based on the recommendations of the Ministry of Home Affairs (MHA).

Constitutional Provision to Grant Pardon: Article 72

Article 72 of the Constitution empowers the President to grant pardons to persons who have been tried and convicted of any offence in all cases where the:

  • Punishment or sentence for an offence against a Union Law,
  • Punishment or sentence is by a court-martial (military court), and
  • Punishment is a Death sentence.

Pardoning Power of President

Article 72 empowers the President the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence.

The meaning of these terms is as follows:

  • Pardon: It removes both the sentence and the conviction and completely absolves the convict from all sentences, punishments, and disqualifications.
  • Commutation:It denotes the substitution of one form of punishment with a lighter form of punishment. For example, a death sentence may be commuted to rigorous imprisonment.
  • Remission:It implies reducing the period of the sentence without changing its character. For example, a sentence of rigorous imprisonment for five years may be remitted to rigorous imprisonment for one year.
  • Respite: It denotes awarding a lesser sentence in place of one originally awarded due to some special fact, such as the physical disability of a convict or the pregnancy of a woman offender.
  • Reprieve:It implies a stay of the execution of a sentence (especially that of death) for a temporary period. Its purpose is to enable the convict to have time to seek pardon or commutation from the President.

Procedure Followed for Granting Pardon

  • The process starts with filing a mercy petition with the President under Article 72 of the Indian Constitution.
  • Such a petition is then sent to the Ministry of Home Affairs for consideration which is then consulted with the concerned State Government.
  • After the consultation, recommendations are made by the Home Minister and the petition is sent back to the President.

Purpose of Granting Pardon

Pardon may substantially help in saving an innocent person from being punished due to miscarriage of justice or in cases of doubtful conviction.

The object of conferring this power on the President is two-fold:

  • To keep the door open for correcting any judicial errors in the operation of law;
  • To afford relief from a sentence, which the President regards as unduly harsh.

Judicial Stand on Pardoning Powers

In Maru Ram v Union of India case (1980), the constitutional bench of the Supreme Court of India held that the power under Article 72 is to be exercised on the advice of the Central Government and not by the President on his own at his discretion. And that the advice of the Government is binding on him.

The Supreme Court in Epuru Sudhakar v Ors. case (2006) to rule out any case of arbitrariness or executive mala fide upheld that the granting of clemency by the President or Governor can be challenged in court on various grounds such as, the order has been passed without application of mind, or the order is mala fide, or the relevant material has been kept out of consideration.

Difference Between Pardoning Powers of President And Governor

  • The scope of the pardoning power of the President under Article 72 is wider than the pardoning power of the Governor under Article 161 which differs in the following two ways:
  • The power of the President to grant pardon extends in cases where the punishment or sentence is by a Court Martial but Article 161 does not provide any such power to the Governor.
  • The President can grant pardon in all cases where the sentence given is the sentence of death but the pardoning power of the Governor does not extend to death sentence cases.

 

Sample Question:

Which of the following refers to the power to reduce a sentence, to commute a life sentence to a term of years, or to commute a death sentence to life?

  1. pardon
  2. acquittal
  3. discretion
  4. clemency

Answer: d


Topic: School Education Quality Index

Topic in Syllabus: Indian Society

school education quality index

Context:

The index is jointly released by the NITI Aayog, the Ministry of Human Resource Development, and the World Bank.

It is to evaluate the performance of States and UTs in the school education sector.

It assesses States based on learning outcomes, access, equity and infrastructure and facilities, using survey data, self-reported data from States and third-party verification.

Criteria:

The ranking is based on 30 indicators in 2 broad categories,

  1. Outcomes that consisted of learning, access, infrastructure & facilities, and equity outcomes
  2. Governance processes aiding outcomes

Some of the parameters are,

  • The number of schools with the largest number of toilets for girl children
  • The average score of students in mathematics and language in classes III, V, and VIII,
  • The transition rate of students from primary to upper primary levels and also from upper primary levels to secondary level
  • It used 2016-17 as the reference year and 2015-16 as the base year.

Performance of States :

  • Among 20 large States, Kerala was the best performer with a score of 76.6%, while Uttar Pradesh came in last with a score of 36.4%.
  • Among smaller States, Manipur emerged as the best performer, while Chandigarh topped the list of UTs

Top performers –

  • Tamil Nadu was the top performer in access and equity outcomes
  • Karnataka led in learning outcomes
  • Haryana had the best infrastructure and facilities.
  • Haryana, Assam and Uttar Pradesh showed the most improvement in their performance.
  • Karnataka, along with Uttarakhand, saw the biggest drop.
  • West Bengal refused to participate in the evaluation process and has not been included in the rankings.

 education index overall performance ranking

Sample Question:

Why might a school be unable to maintain adequate educational quality and student discipline?

  1. similarities between parental and school norms.
  2. students’ success in school
  3. ease of teaching
  4. segregation

Answer: d


Topic: India – US WTO Dispute

Topic in Syllabus: International Affairs

Ind - US Trade blows

Context:

A WTO dispute settlement panel has upheld a US complaint that export subsidy programmes provided by the Indian government violated provisions of the trade body’s subsidies and countervailing measures (SCM) pact.

The Issue:

  • In 2018, the US complained that India’s export-related programmes violated Article 3.1(a) of WTO’s SCM agreement.
  • Under Article 3.1, developing countries with gross per capita of $1,000 per annum are not entitled to provide export subsidies that are contingent upon export performance.

Reasons:

  • WTO has struck down Indian export promotion schemes because India is not entitled to provide such subsidies because its per capita gross national product (GNP) has crossed $1,000 per annum.

What Next:

  • Once the panel’s final report is made public, India will have a month to challenge the ruling before an appellate body, the highest court for global trade disputes.
  • If the appellate body upholds the panel’s ruling, India will be required to discontinue the existing export promotion schemes.

Impact:

The programmes that could be affected are export-oriented units scheme, electronics hardware technology parks scheme, bio-technology parks scheme, merchandise exports from India scheme, export promotion capital goods scheme, special economic zones and duty-free imports for exporters.

WTO SCM (Subsidy and Counter-veiling) Agreement:

 It covers subsidation by WTO members and counter-vailing measures.

It follows traffic light approach for subsidies.

  • Red Subsidy (Prohibited)
  • Yellow or Amber (Actionable): These subside are allowed if does not have adverse impact on other members. Otherwise, other members can apply counter vailing measures.
  • Green (Non-Actionable): These subside are allowed which cover mostly research subsidy, environmental subsidy and assistance to other nations.

Prohibited subsidies

Prohibited subsidies are those, which are contingent on export performance (Export Subsidies) except agreement on agriculture. It also prohibits Import substitution subsidies, which allow use of domestic products over imported goods.

Sample Question:

Which of the following institution is associated with Dunkel Proposals?

(A) World Bank

(B) International Monetary Fund

(C) World Trade Organization

(D) United Nations Organization

Answer C

Explanation: Uruguay Round of the GATT on multilateral trade negotiations has given birth to the Dunkel Draft. World Trade Organization was also given birth by the Uruguay Round.


Topic: Wayanad Protest

Topic in Syllabus: Ecology & Environment

waynand protest

Context:

Over the last one week, Kerala’s Wayanad district has witnessed a series of protests against a ban on night trac on the forest stretch of NH 766, a key highway between Karnataka and Kerala that passes through the Manipur Tiger Reserve in Karnataka.

The immediate trigger for the current agitation was a recent Supreme Court direction to the Ministry of Environment, Forest & Climate Change and the National Highway Authority of India (NHAI) to suggest alternative routes so that NH 766 could be shut down permanently.

Court judgement:

In 2010, the court upheld the night trac ban.

  • The court observed that it is important to protect interest of wildlife. There is the need to protect the interest of the public, who are daily commuters and traders.
  • Court directed authorities to use an alternative road, that is 35 km longer than travelling through NH 766.
  • Kerala’s suggestion for an elevated highway through the forest reserve was turned down by the ministry.

Impact of Night Ban:

  • Before the ban, the stretch was reporting 100-odd animal deaths in accidents, but now it has come down to ve to ten.
  • If the highway is opened, fatalities would increase manifold.

Reasons behind the Protest:

  • On August 8, the Supreme Court upheld the night trac ban, which was supported by Karnataka and Tamil Nadu while Kerala wanted it lifted.
  • The protest in Wayanad, which picked up with the hunger-strike starting September 25, is backed by all political parties in Kerala, religious organisations, traders and youth organisations.
  • People fear that a blanket ban on trac would impact the economic development of Wayanad.
  • With 150-odd registered resorts and hundreds of homestay facilities, Wayanad has emerged as a major hill destination, catering tourists from Bengaluru.
  • NH 766 is a major link between Kerala and the rest of the country.
  • The alternative road is 35 km away, which would cost time and money besides raising prices of commodities.

About Bandipur Tiger Reserve: Bandipur Tiger Reserve is part of interconnected forests that include Mudumalai Wildlife Sanctuary (Tamil Nadu), Wayanad

Wildlife Sanctuary (Kerala) and Nagarhole National Park (Karnataka).: A large variety of wildlife including the elephant moves from one stretch to another, cutting the states.  Bandipur is one of the oldest tiger reserves in the country, having been declared as such in 1973 and a national park in 1984.

Indian Policy for Highway through Forest:

  • National Board for Wildlife (NBWL), the apex advisory body to the central government on all wildlife-related matters, said no to new roads through protected forests, but was open to the widening of existing roads with adequate mitigation measures irrespective of the cost, only if alternative alignments were not available.
  • The NBWL made it mandatory for every road/rail project proposal to include a wildlife passage plan as per guidelines framed by Wildlife Institute of India, an autonomous wildlife research body under the Environment Ministry.

Impacts of Highway through Forest area:

  • Highway stretches passing through forests cause severe fragmentation of habitats. This disruption of ecological connectivity curtails or restricts gene ow that is crucial for sustaining healthy wildlife populations and ecosystems.
  • Highway creates new edges that are highly vulnerable to re and incursion by pernicious weeds.
  • They attract ancillary developmental activities.
  • They provide poachers and timber smugglers an easy access to the forest

Future Planning:

  • The apex court held that our approach to development should be eco-centric, rather than focussing only on what is good for humans.
  • As for existing highways through forests, particularly those for which bypasses are absolutely not feasible, we need to retrot them with state-of-the-art, science-based solutions for minimising road kills.
  • Carefully conceived underpasses, overpasses, yovers and canopy bridges, which take animal behaviour and traditional wildlife movement patterns into consideration, can help provide a safe passage for animals.
  • Exemplary work done on the Trans-Canada Highway passing through Banff National Park, where an 80 per cent reduction in large mammal deaths is achieved, thanks to its extensive system of wildlife underpasses and overpasses that act as guide.
  • There is a need to plan Smart Highways that will traverse the country with the least disturbance to our last remaining natural habitats.
  • By making use of all the sophisticated mapping technology at our disposal today, it is possible to ensure roads are clear of wildlife areas.

Sample Question:

Where has the India’s first specialised hydrotherapy treatment for elephants suffering from arthritis, joint pain and foot ailments been opened ?

(a) Jorhat, Assam

(b) Bangalore, Karnataka

(c) Mathura, Uttar Pradesh

(d) Wayanad, Kerala

Answer: c


Topic: ‘Right to be Forgotten’

Topic in Syllabus: Indian Governance

rights of data subjects under the GDPR

Context:

The European Union’s highest court ruled that an online privacy rule known as the ‘right to be forgotten’ under European law would not apply beyond the borders of EU member states.

The ruling comes as an important victory for Google, and lies down that the online privacy law cannot be used to regulate the internet in countries such as India, which are outside the European Union.

About Right to Forgotten:

  • The right to be forgotten empowers individuals to ask organisations to delete their personal data.
  • It is provided by the EU’s General Data Protection Regulation (GDPR), a law passed by the 28-member bloc in 2018.
  • The data subject shall have the right to obtain from the controller the erasure of personal data concerning him or her without undue delay and the controller shall have the obligation to erase personal data without undue delay.
  • Personal data means, any information relating to an identified or identifiable natural person (“data subject”) and “controller means the natural or legal person, public authority, agency or any other body which… determines the purposes and means of the processing of personal data.
  • After a search engine company as if Google gets requests under the privacy law to get information deleted, it first reviews and then removes links on country-specific sites within the European Union.
  • Google has so far received more than 8.45 lakh requests to take down 33 lakh internet links, and 45% of the latter have been delisted.

Recent Ruling:

  • Petitioner required that Google go beyond its practice of region-specific delinking, and ordered the search engine company to delete links from its global database.
  • Google refused to abide by the order, arguing that following the same would impede the free flow of information across the world.

Internet Rights in EU:

Right to Forgotten in India:

The draft bill framed by the Justice B. N. Srikrishna Committee has made an explicit reference to the right to be forgotten. The draft bill makes it clear that the right to be forgotten is not an absolute right and provides for certain exemptions.

Section 27 provides an individual with a right to restrict or prevent continuing disclosure of personal data.

The bill provides that an adjudicating officer think such disclosure can override the freedom of speech and the citizen’s right to information. The adjudicating officer would decide based on:

  • Sensitivity of the personal data.
  • Scale of disclosure and the degree of accessibility sought to be restricted or prevented.
  • Role of the data principal in public life.
  • Relevance of the personal data to the public.
  • Nature of the disclosure and of the activities of the data fiduciary.

 

Cases not allowing the Right to Forgotten:

  • Right to be forgotten, are exempted if the purpose of data processing is in the interest of the security of state.
  • It asks parliament to frame a law wherein the processing of data is in the interests of prevention detection and prosecution of any of other contravention of law

 

Sample Question:

Conditions for cloud penetration and development in developing and emerging countries

A.  IT infrastructure maturity and business culture

B.  Legislation and regulation base to fight cybercrimes

C.  Acceptance of and compliance to international security standards

D.  Potential number of cloud users

Answer: C


Topic: Single-Use Plastics

Topic in Syllabus: Ecology & Environment

single use plastic

Context

  • On 73rd Independence Day, PM appealed to the citizens to make the country free of single-use plastics (SUPs) and to work towards this mission whole heartedly.
  • Earlier this month, at the UNCCD, the PM said recalled that the time has come for the world to say goodbye to single-use plastics.
  • This has not only bought plastics in the national spotlight but has also started debates around the ban being a good proposition or bad.

Single-use plastic

  • As the name suggests, single-use plastics (SUPs) are those that are discarded after one-time use.
  • Besides the ubiquitous plastic bags, SUPs include water and flavoured/aerated drinks bottles, takeaway food containers, disposable cutlery, straws, and stirrers, processed food packets and wrappers, cotton bud sticks, etc.
  • Of these, foamed products such as cutlery, plates, and cups are considered the most lethal to the environment.

 Poor response from states

  • The 2019 CPCB report remarked that states/UTs were not furnishing information regarding Plastic Waste Management Rules, 2016 in their jurisdiction.
  • This included PW generation records, creating state level advisory body, framing bylaws, marking and labelling of MPLs, plastic manufacturing/recycling units etc.
  • States/UTs were not taking concrete steps to take preventive and regulatory measures envisaged under the rules.

Why are states reluctant?

  • A bigger debate over the SUP ban issue is on the fact that more than a million workers will lose jobs.
  • According to a 2018 estimate, there are more than 3,500 organised recycling units and more than 4,000 unorganised units.
  • Approximately, 7 crore workers are employed in the industry.
  • This is a critical number and there needs to be a clear roadmap on how these workers will be transitioned to any other industry.

What could work to phase out plastics?

I. Baseline and inventory

  • There is a need for a thorough analysis of environmental, social and economic impacts of SUPs.
  • Inventorization studies in order to estimate how much fraction of single use plastics is there in our plastic waste, how much of this fraction comprises packaging waste, cutlery items, carry bags, PET bottles, etc., are to be done.
  • These numbers shall help assess the scale of such waste and look for a clear alternative.
  • There needs to be an initiative at state level to push cities to inventorize their dry waste. Since the composition of our waste has changed drastically with more plastics, it is important that this be done.
  • Only then we can assess the extent of their impact before imposing bans. Such a study has not been done so far and has now become the need of the hour.

II. Clear definition of SUPs

  • For this ban to be successful, we need a clear definition of SUPs. Currently, different definitions are used by governments.
  • Single use simply means products that are used once and then discarded. This includes a huge amount of packaging waste, including water bottles and so a clear definition is critical.
  • Any plastic that is made from polymers of HDPE, LDPE, PET, PS, PP, EPS is single use plastics, according to the United Nations.
  • The definition in Australia is that single-use plastic includes shopping bags, cups, straws and packaging.
  • The IEEP’s and European Commission’s definition says single-use plastics can include any disposable plastic item designed to be used only once.
  • Therefore, specific definitions pertaining to the composition, uses and categories of single-use plastics should be framed.

III. National Action Plan for phasing out SUPs

  • There is a need for a National Action Plan or guidelines that should focus to implement plastic ban in a phase-wise manner in terms of urgency.
  • This means products that have alternatives available should be phased out earlier than those that don’t have alternatives, simultaneously reinforcing R&D funding for different alternatives and eco-friendly products.
  • The phase-wise banning should be developed based on materials, recyclability, availability of alternatives and livelihood security to the informal sector.
  • Keeping this and current post-consumption patterns in mind, a framework indicating range of SUP products needs to be devised to assist the policy makers in ideating, planning and executing the phase-wise SUP ban.

IV. Strengthening waste management systems

  • Imposing a ban on SUPs is only a part and not the whole solution. However, better waste management systems with focus on segregation incentive models can help achieve long-term impacts.
  • If cities segregate waste into three fractions — wet, dry, and domestic hazardous waste — and if municipalities create infrastructure in terms of material recovery facilities or sorting stations, dry waste can be sorted into different fractions.
  • This then has value and a market and will not end up as litter. We need to source segregate.

V. Recycling

  • Establishing and monitoring domestic recycling units in every state and Union territory, incentivising the recyclers in the unorganised sectors should be promoted.
  • There should be training of low-skilled recyclers, setting up effective grievance redressal mechanisms, life cycle and cost analysis of plastic alternatives should be formulated and explored by the legislative bodies.
  • This is to increase the recycling efficiency in the country and implement effective and sustainable solutions at every stage of banning single-use plastics.

VI. Effective EPR implementation

  • Extended Producer Responsibility (EPR) policy tools and its implementation is still lax in the country.
  • An effective EPR framework, therefore, should be formulated keeping into context the applicability of EPR for certain items like PET, PP or dairy industry.
  • However, EPR implementation for multi-layered plastic (MLP) can still be a constraint considering the vast unorganised industry and present waste management systems.
  • The roadmap can, therefore, let producers implement their EPR obligations utilising the flexibility of brand and geography neutrality.

VII. Discourage small pack MLP sachets

  • Lighter, portable and cost-effective nature of single serve sachets/pouches makes them a major environmental menace as it is one of the major sources of plastic waste and litter, as their collection is economically non-viable.
  • Hence, the production of small packs such as single-use pouches and sachets should be discouraged and a regulation be enforced.
  • Instead Polypropylene packaged items can be brought into the stream to cater to low-income groups and also have a high recyclability.

VIII. Reducing plastic content in MLP

  • Ideal packaging materials were tailored by combining different materials with customised functionality to sufficiently protect sensitive food products and thus obtain extended shelf life.
  • Latest feasible techniques and technologies may be employed to cut down the use of multiple polymers/plastics.
  • More research in this area must be done. Use of single polymer/layer recyclable packaging materials should be encouraged.

Alternatives to single-use plastics

  • Devising feasible alternatives for single-use plastic items and targeting consumers and retailers for better marketing is needed.
  • However, their availability and affordability remain a challenge.
  • Solutions: providing robust infrastructures, strengthening market, innovation and entrepreneurship, subsidy or incentives to consumers at domestic level.
  • Also, a thorough analysis on the alternatives versus their carbon footprint as compared to SUPs needs to be done to push for any kind of alternative.
  • For instance, cotton bags sourced from virgin cotton, kulhad cups baked in kilns have a higher environmental footprint than plastics.
  • Also, options of giving enough time of transition to industry along with tax rebates for alternative industry need to be explored.
  • In the present context, jute and upcycled cloth bags, bamboo and wooden cutlery, leaf-based plates, glass and metal containers etc. are some of the immediate alternatives available.

Way forward

  • Presently, consumer awareness about negative impacts of littering single-use plastics and available reuse systems and waste management options for all these products are still limited.
  • This further need to be strengthened through communication, strategic planning, consumer awareness, media outreach, scientific research, constructive amendments in legislation(s) and sustainability.
  • These mechanisms will not only improve eco-consciousness among citizens but will also empower and encourage widespread actions.

 

Sample Question:

Which of the following is used to manufacture carrier bags?

a)    LDPE ( Low Density PolyEthylene)

b)    HDPE (High Density PolyEthylene)

c)    Polycarbonate

d)   PVC

Answer: a


Topic: India-China Strategic Economic Dialogue

Topic in Syllabus: International Affairs

Ind - China economic Dialogue

Context:

The Dialogue was held from 7-9 September 2019 in New Delhi which comprised of round table meetings of JWGs followed by technical site visits and closed door G2G meetings.

 

Background:

  • The 5th India-China SED between NITI Aayog and NDRC, was held in Beijing, China in April, 2018.
  • Both sides had agreed to cooperate in the areas of waste to energy, wastewater treatment, desalination, water usage efficiency and related areas.
  • Both sides had agreed for further cooperation in renewable energy promotion and for speeding up of cooperation in solar cell/module manufacturing in India.
  • Both sides had also discussed the possibility of aligning the Make in India Initiative and Made in China 2025. 

Highlights:

  • Discussions were held reviewing trade and investment climates in order to mutually identify complementarities and harness synergies.
  • Potential areas of collaboration across innovation and investment focusing on fintech and related technologies were highlighted.
  • The two sides agreed to exchange annual calendar of activities to further activate regular channels of communication.
  • Both sides noted the significant progress made in the feasibility study on Chennai-Bangalore-Mysore railway upgradation project and personal training of Indian senior railway management staff in China, both of which have been completed.
  • They held discussions on taking forward the study project exploring the possibility of Delhi-Agra high speed railway.
  • Effective utilization of novel concepts in low cost construction technology, methods of flood and erosion control, air pollution was discussed.
  • Both countries identified future areas of collaboration such as Renewable Energy space, Clean coal technology sector, Smart Grid & Grid integration and Smart meters & E-mobility sectors.
  • Both sides have agreed to explore cooperation for promoting Indian generic drugs and Chinese Active Pharmaceutical Ingredients (APIs).

Significance:

  • SED has emerged as an over-arching and permanent instrument to address outstanding issues and identify potential areas of collaboration. It provides an important platform for both sides to discuss key economic issues impacting both countries and areas of mutual interest. 
  • The bilateral trade between the countries stood at USD 87 billion in 2018-19. The trade deficit stood at USD 50 billion in favour of China. Hence India must utilise SED as a crucial mechanism to facilitate bilateral trade and investment flows and enhance economic cooperation between the two sides.
  • The Dialogues till date have played a positive role for the two countries to seize opportunities, enhance mutual trust, expand consensus, strengthen strategic coordination and cooperation, and boost sustainable economic development. 
  • India holds a special place in Chinese economic diplomacy that can be seen by the fact that besides India, the only other country with which China has a SED is the United States. India must recognize the importance of this opportunity in engaging with China.

Challenges ahead:

  • Concerns remain on the Indian side over closer cooperation with China due to a hangover of China’s past actions. There are apprehensions among policy makers over inviting Chinese capital in critical infrastructure projects like railways. 
  • Chinese opposition to India’s admission in the Nuclear Suppliers Group (NSG) and technical hold on India’s move to get Pakistan-based Jaish-e-Mohammad chief Masood Azhar listed as a terrorist by the UN are few examples of India’s breach of trust by China.
  • Political diplomacy aside, both India and China must realize that as two of the largest emerging economies in the world they cannot do so without engaging with each other. In this respect, the SED platform provides a powerful instrument of communication.

 

Sample Question:

Consider the following statements

  1. India-China Strategic Economic Dialogue(SED) was established in December 2010 between NITI Aayog and National Development and Reform Commission (NDRC) of China.
  2. India is hosting 6th India-China Strategic Economic Dialogue (SED) in New Delhi.

Choose correct/s statements

(A) Only 1
 (B) Only 2
(C) Both
(D) None

Answer: b


Info-graphic Summary


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