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SECURE SYNOPSIS: 27 NOVEMBER 2017


SECURE SYNOPSIS: 27 NOVEMBER 2017


NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.


General Studies – 1


 

Topic:   Post-independence consolidation and reorganization within the country. 

1) Discuss briefly the nature of national consolidation process that took place in the decade from 1947 right up to the India-China war of 1962. (250 Words)

The Hindu

 

The post independence era till 1962 was a period of nation building, integration and consolidation. The broad outline of national consolidation after 1947 involved;

 

Enactment of constitution

  • The constitution of India had consolidated people and the territory they were residing into, in one unit called “India that is Bharat” under Article 1. 

 

Territorial Integration

  • Sardar Patel with great skill and masterful diplomacy integrated more than 556 princely states and 11 British provinces in India. 
  • Such political unity was unprecedented on this scale in an otherwise culturally coherent Indian civilisation.

 

Reorganization of state

  • True consolidation of a nation is not possible until its people are consolidated for cooperation in nation building. 
  • Thus, keeping in mind the aspirations and endevours of distinct cultures and regions in mind, linguistic division of states was approved. This acted as a conduit to sublime subnational tendencies for the broader project called India.

 

Mobilization of political and institutional resources

  • The bureaucracy of the British era was intended to perpetuate status quo. Sardar Patel transformed it to direct its efforts toward socio-economic development of people.

 

Economic development

  • To ensure rapid economic development of all regions of the nation, centralized planning was introduced. It allowed consolidation of far-flung places in nation development. 
  • The core goal of planning was to distribute the economic gains to all regions unlike the British rule.
  • Heavy machine industries and dams were established by second five year plan as centers of growth which were expected to spread prosperity in different regions

 

Making modern India

  • To mainstream India at the world stage require adoption of science and technology. 
  • Thus, investment in IITs, atomic and space technology was done. 

 

Foreign policy for the international peace

  • Theorising of foreign policy emanated the policy of non-alignment in polarised international relations. It acted as a voice of the post colonial countries with focus on development than military ambitions.
  • Also before it faltered in 1962 war, India envisaged Panchseel in respect of relations with China and other countries which is significantly enduring even today.

 

The process of consolidation that started 70 years back is yet to be complete

  • Regional aspirations in the form of autonomy and independence still brewing. 
  • Mass poverty and unemployment undermine the ideals of Constitution like social and economic justice.

 

To conclude, India strides for higher endevours after independence. The time is now to make new, strong and consolidated India.


 

Topic:  World geography

2) What is Gulf dust storm? Why is it caused? Examine its consequences. (250 Words)

The Indian Express

 

Introduction:

  • Dust storm is a climatic phenomena occurring over the Arabian peninsula. It occurs as loose sand and dirt particles are blown from the surface resulting in saltation, suspension, transportation and finally deposition of sand particles in other regions.
  • Gulf dust storm began as a giant swirl over Iraq, Kuwait and Saudi Arabia in the last week of October, and was then propelled eastward by a set of peculiar atmospheric conditions.
  • The late October-early November dust storm was carried (eastward) by relatively cool winds, shamal winds and westerlies.

 

Mechanism of their pouring towards the east

  • As air temperatures dropped, winds and dust were likely to slowly diminish, but by that time, it got into the upper part of atmosphere (1.5-3 km, 700-850 hpa) where winds became very strong (15-20 km/hr) and direction became towards India (westerly, north-westerly) and dust affected the larger region of NCR including Delhi.
  • The strong NW shamal winds entrained an enormous amount of mineral particles (with diameter of some tens of micrometres) into the atmosphere. 

 

Causes

  • While dust storms are normal in Iran, Saudi Arabia, Kuwait and Iraq, there has been an increase in their frequency, especially in Iraq, over the past decade. 

 

  1. Prevailing drought conditions
  • The arid zone which has scarce rain coupled with the advancing desertification makes more erodible materials available for the storm. This increases the intensity of the storm. 

     2.Regional climatic conditions

  • The N-W winds funneled into the Persian gulf by the mountains of Turkey and Iraq to the N-E and the plains of Saudi Arabia to the S-W increases the frequency of the storms.

    3.Diversion of water resources

  • Water resources for the agriculture pumped from the source site increases the aridity of a region.

    4.Shamal winds

  • These are N-W winds blowing over the Persian gulf. They create a triggering effect for the dust storms into a large sandstorms picking up from Jordan and Syria.

    5.Pressure gradient

  • A high pressure developed over the Persian gulf and low pressure over the peninsula increases the velocity of wind.

    6.Abandonment of agricultural lands

    7.Climate Change

 

Consequences of dust storms

 

  1. Diseases
  • Dust storms carry virus spores to the atmosphere from the ground which when carried over other regions interact with urban air pollution.
  • The fine dust and particulate matter present in the storm creates pulmonary diseases like asthma. They can also create dust pneumonia, silicosis, dry eyes etc.

     2.Soil degradation

  • It loosens the sand particles which are then carried away. Thus there is a condition of top soil loss resulting in loss of organic matter ultimately affecting agricultural productivity.

    3.Halt economic activities

  • Post-dust storm health conditions and reduced visibility decreases industrial output and also affects transportation due to reduced visibility.

    4.Damage infrastructure

  • The abrasion phenomena of the dust particles damages the external infrastructure such as signboard, lamppost etc.

    5.Pollution in north India

  • A high-pressure centre developed above the Gulf of Oman and the strong anticyclonic (clockwise) flow at 5,500 metres (above sea-level) transported atmospheric dust into the direction of Delhi. A high-pressure zone over Delhi and its neighbourhood and the absence of strong winds kept pollutants trapped close to the surface. 
  • The very calm surface wind conditions which do not allow to disperse pollution was due to anti-cyclonic circulation connected with late withdrawal of monsoon, persisting at about 700 hPa lower troposphere over northwest India with its centre near Delhi.
  • It is one of the reason behind the smog that had smothered Delhi and its neighbourhood. 

 

 


General Studies – 3


 

Topic:   Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

4) Any attempt to outlaw all high-interest, or usurious, lending will make life worse for borrowers who genuinely benefit from informal lending. Comment. (150 Words)

The Hindu

 

Introduction:

  • Informal lending has been a bone of contention from historical times due to the high interest rates charged, yet they exist in the contemporary times too. Many steps have been taken by the authorities such as ‘Operation Kubera’ in Kerala against the high lending and physical torture related to the informal lending. 
  • But the informal lending has its advantages too such as

 

  1. Avenue for poor
  • Low income coupled with consumption decreases savings which are not attractive to the formal banking sector. Informal credit group such as ‘mahila mandal’ facilitates low income group savings.

    2.Based on relationships

  • They provide loans based on close realtionship thus adding flexiblity to the personalised services.
  • Banks require collateral while money lenders may lend on the basis of trust.

     3.Timely repayment due to social pressure

  • Borrowing from the informal lender as a group increases the peer presure for an individual to pay back resulting in timely payment.

     4.Complement formal banking in unbanked areas

  • They provide localised services offering better competition and interest rates in areas where formal banking has not penetrated.

     5.Flexibility for both lender and borrower

  • Being non-regulated from the norms of RBI intensify priorty sector lending and prevents excessive auditing and processing of applications and collateral adding to the flexibility of operations.
  • Banks require documents, difficult for less educated person to compile. Money lender do not require such documents.

    6.SHGs lending also count as informal credit

  • Some of the credit is provided by self help groups which are non-profit motivated based on solidarity and individuality of actions and democratic decision making process.

 

However the informal sector lending has its drawbacks such as

  • It helps in accumulation of black money.
  • Profit motivated informal lenders may play their hand in acquiring borrower assets through high interest rates.
  • Lenders may cause physical torture to the borrowers in case of non-payment.
  • Psychological distress on non-payment may lead to suicide.
  • It can affect the formal economy as its effect on inflation cannot be calculated.

 

Thus it is evident that informal sector lending cannot be outlawed due to its inherent advantages underlying it, what needs to be done is in creating an effective structural framework to prevents vices of informal money-lending.


Topic: Science and Technology- developments and their applications and effects in everyday life 

5) Bitcoin is a digital currency that liberates innovation which helps consumers free themselves from punishing government regulations globally. Critically comment. (250 Words)

The Indian Express

 

What is bitcoin?

  • Bitcoins are “mined” by players by solving complex mathematical puzzles that require combining guesses with running algorithms. Each step creates a block of transactions linked or chained to the puzzle in the previous block—hence the term “blockchain”. When the puzzle is solved the miner is rewarded with an allocation of bitcoins.
  • However, the process of generating new bitcoins is planned and the total volume to be generated is capped. 
  • The cap is 21 million bitcoins and the pace of their generation is adjusted downwards so that the cap is reached only in 2140. As of now, around 16.7 million bitcoins have been released.
  • Launched in 2009, the role of bitcoin has always been in question

 

Arguments in favour

 

  1. Competition to national currencies good
  • Enthusiasts argue that cryptocurrencies like bitcoin are rapidly transforming into mainstream money that will offer serious competition to national currencies issued by central banks.
  • Decentralised management by a community that can ensure integrity through verification of transactions over a “public”, peer-to-peer network

    2.Excellent returns

  • Extraordinary return the digital currency has given investors as its price has witnessed a meteoric rise, from just a few cents in 2010 to hit a lifetime high of over $11,000 last week. In 2017 alone, bitcoin price has increased by over 1000%.
  • Other cryptocurrencies like Ethereum too have shown equally impressive gains and falls, particularly over the last year.
  • Therefore they see bitcoin’s current price rise as merely a reflection of its bright future as a stateless currency.

    3.Protect identity

  • One advantage of the currency is that transactions involving movements of large volumes of money across space and borders can be conducted without revealing the identity of the transactor.

 

Arguments against

 

  1. Financial bubble
  • Sceptics, however, have pointed to the Tulip Bubble of the 17th century and Internet stocks of the late 1990s as cautionary examples.
  • Prices are clearly being driven by speculation, as there is no underlying asset to back them. Further, rising prices will attract more people to start such currencies and invest in them. This will increase the contact of virtual currencies with formal finance, and developments in this market would affect the financial system.

     2.Acceptability low

  • Bitcoin, or any other cryptocurrency, is nowhere close to widespread use as a medium that helps in the exchange of goods and services.
  • A Morgan Stanley research note concluded that bitcoin’s acceptance “is virtually zero”.
  • In itself there was no reason to expect that bitcoin would emerge as an alternative asset, since there was nothing endowing it with value other than the state of demand relative to the limited quantity being put into the market. 
  • So long as that demand was restricted to those from the “bitcoin community”, the virtual currency had little value in terms of real currency.

    3.Affects investment in areas wherever required

  • An increase in the use of such instruments could also affect financial intermediation, investment and growth. Therefore, it is important for policymakers to carefully evaluate the potential costs and benefits of a possible rise in the use of unregulated cryptocurrencies.

    4.Financial instability

  • If automated risk management, smart contracts, and similar tools are deployed across a network, cascades of rapid and hard-to-control obligations and liquidity flows could propagate across a network
  • This interdependence will likely call for creative organizational thinking to address the need for governance and strong risk management.
  • A central bank manages the supply and cost of money in the system to attain maximum growth with price stability. But in the world of unregulated cryptocurrencies, central banks may find it difficult to manage the level of economic activity.

    5.Financial avenue for criminals due to identity security

  • Criminals of various kinds have been using the currency to transfer funds. 
  • For example, demand for bitcoins initially rose because drug dealers were making payments with the currency on the Silk Road website. Since then there have been many reports about the links between illegal activities and the bitcoin market.

Topic:  Issues relating to intellectual property rights. 

7) Geographical Indications (GIs) support local production and are an important economic tool for the uplift of rural and tribal communities. However, India’s GI law has loopholes which make it an ineffective economic tool. Comment. (250 Words)

The Hindu

 

Introduction:

 

Geographical Indicatons(GI) refers to special tag given to a product owing to the specific geographical origin and possessing unique property and quality . The law of Geographical Indications (GIs) is linked to terroir, that is the quality of a product is essentially attributable to the territory where the product originates. For eg, Darjeeling Tea , Kashmir Pashima wool etc.

 

Important tool for uplift of rural and tribal population

  • GIs support local production and are an important economic tool for the uplift of rural and tribal communities. 
  • Unlike other Intellectual Property Rights (IPRs) which guarantee the protection of individual interest, GI is a collective right.
  • It can potentially boost MSME sector.
  • The unique nature of the goods under GI van bring huge export gains and thus foreign exchange
  • It also promotes tourism given the fact that the region get fanfare automatically.
  • The preservation of traditional skills can also be effected through this mechanism as adequate economic procurements are being done.

 

Loopholes in India GI Act

 

  1. Proof of origin clause
  • Against this backdrop, proof of origin is a mandatory criterion for registering GIs in India. This provision is borrowed from the EU’s regulations on GI protection. 
  • The focus on historical proof in the form of documentary evidence (such as gazetteers, published documents, news articles, advertisement materials) to bring out the historical development of GIs as laid down under GI Rules, 2002, and clarified by the GI Manual of the Office of the Controller General of Patents, Designs and Trademarks, and Registrar of Geographical Indications to establish proof of origin. 
  • However it is not mandated under TRIPS to do so.
  • Documentary evidence as proof of origin may be a foolproof mechanism to ensure the link between the product and territory, but in a country such as India where there are regions like the Northeast where oral history is cited besides written history, this provision will prove to be a formidable hurdle.

    2.Definition of Producer ambigious 

  • The Act does not distinguish producer between real producer, retailer or dealer.

    3.Adjudicatory provision inadequate

  • The Act is silent on mechanism and provision to fight against infringement.

    4.Quality checks are absent

  • There is inadequate emphasis on quality control measures , marketing strategies and promoting awareness.

 

There is urgent need to upgrade the India GI Act 1999 to more it more inclusive and responsive to contemporary challenges. It should be more comprehensive, in resonance with best international practices to make it an effective economic tool for rural and tribal upliftment.

 


General Studies – 4


Topic:  Corporate governance. 

 

Insider trading is defined as the buying or selling of security by someone who has access to material non-public information about the security.

 

Why insider trading is unethical?

 

  1. Information is critical for investors, particularly small ones
  • Active investors regularly track company disclosures and adjust their portfolios depending on the nature and substance of announcements. As disclosures are often price sensitive, insiders are always in a better position to make bigger trading gains
  • But since this will be unfair to other investors, and in order to maintain trust and confidence in the market, trading on the basis of unpublished price-sensitive information is illegal.

     2.Affects investor confidence

  • If some market participants make profits on the basis of insider information, it will put others in an unfavourable position and can affect investor confidence. 
  • At the macro level, lack of trust in the market can impede mobilization of capital, which can affect investment and economic growth in the long run. Therefore, it is important that investors don’t lose faith in the market.

     3.Credibility of institution like SEBI at stake

  • It undermines credibility of an organisation i.e. SEBI in the minds of investors
  • Thus it impacts the morale of the staff which is already low in number, coupled with challenges of effective deterrent and technological changes.

    4.Principles of transparency and accountability

  • It highlights lack of transparency and accountability in the security market, which is particularly bad for the potential of investments and economy.

    5.Corporate governance compromised

  • The entire structure of investment is based upon the information available with the investors before they invest in shares of a company. It is premised on the fact that corporate governence is working well to make them available true information.
  • Insider trading is a blow to the corporate governance when the information becomes available to the powerful investors.

 

SEBIs insider trading rules are steps in right direction towards curbing menace of insider trading. However those who get access to security information should act morally,responsibly etc to provide a level playing field to all the investors.