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Daily Current affairs 17 NOVEMBER 2018

UPSC - Daily Current Affair

[op-ed snap] Bhutan’s Elections & Their Significance To India’s Foreign Policy



Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests

From the UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: India’s time-tested strong relationship with Bhutan and how to ensure that it remains the same


Elections in Bhutan

  1. Bhutanese democracy and electoral process are unique in several ways
  2. The Constitution declares Bhutan to be a sovereign Kingdom, where the form of government is that of a Democratic Constitutional Monarchy
  3. The Parliament – Chi Tshog has two Houses: National Council (Gyelyong Tshogde) and National Assembly (Tshogdu), both with a five-year term
  4. The National Council has 25 members of which 20 are elected while five are nominated by the King; candidates contest the Council elections as independents and not as party nominees
  5. However, elections to the National Assembly which has 47 members are held on party lines
  6. National Assembly elections are held first in a primary round where registered political parties contest on party symbols
  7. The two parties that get the highest number of votes in the primary nominate candidates for the 47 seats in the General Elections which are held after nearly one month
  8. Bhutan argues that the process helps multiparty contests in the primary while ensuring that the “tyranny of two-party system” is avoided

Lessons which India can adopt from Bhutanese Election System

  1. The Election Commission of Bhutan (ECB) has, over the last decade, put in place clear-cut guidelines, rules and regulations for conducting elections, as per Constitutional directives and the Election Act, 2008
  2. The ECB provides for public campaign finance through elaborate guidelines for allocation of finances, monitoring, auditing, and strict penalties for misuse
  3. The Constitution, under Article 3, specifically enjoins upon religious institutions and personalities to remain away from and above politics
  4. The Election Act, 2008 bars such personalities from joining a political party or participating in the electoral process
  5. They also cannot take part in the election campaign or show any electoral preference, thereby ensuring a secular political system
  6. The ECB provides for common forums for parties to address the electorate at a specified venue for electioneering
  7. Later, two public debates are organized in which the presidents of the parties or their nominees take part
  8. The first public debate is based more on party ideology and the second on election manifestos
  9. The ECB has strict guidelines, with all media outlets having to submit an undertaking on responsible reporting and to ensure a level playing field
  10. Social media rules and regulations were issued this year, emphasising accountability and responsibility
  11. The election advertising regulations, media coverage of elections rules and regulations and code of conduct for media persons strive to put a check on misuse of mass media during election times

Importance of election results for India

  1. For India, Bhutanese elections have a special significance, considering the very close relations that New Delhi shares with Thimphu, especially in the context of increased Chinese involvement and the Doklam stand-off
  2. Keeping the 79-day Doklam standoff between the Indian and Chinese armies in view, the leanings of the Bhutanese PM are crucial
  3. India will be eagerly looking at the outcome of the third parliamentary elections in Bhutan, a country that has been a positive constant in its foreign policy framework
  4. Some of the Bhutanese concerns include access and connectivity, their currency Ngultrum being pegged to the Rupee, the share of trade to total trade, the Rupee Reserve, etc., besides the China factor
  5. Prime Minister Tobgay had developed a very good rapport with Indian leaders, especially with a change of government in New Delhi
  6. People’s Democratic Party (PDP), led by Tobgay in its manifesto describes India as “our closest neighbour and friend”, and says it will ensure further engagement with New Delhi
  7. It talks of striving to foster good relations with neighbouring West Bengal, Arunachal Pradesh, Sikkim, Assam and Bihar
  8. It will also explore possibilities of creating infrastructural linkages with Indian railway networks to boost export

Druk Phuensum Tshogpa (DPT), of Dr Pema Gyamtsho in its manifesto, says it remains committed to maintaining and furthering excellent bilateral relations by deepening economic ties and carrying forward the mutually beneficial cooperation

  1. Some doubts, though, have been expressed if DPT’s vision of “sovereignty, security and self-sufficiency” is intended as a thinly veiled reference to Indian interests

Why India’s chances are better in Bhutan?

  1. The Chinese will offer greater funding than Indians can afford but Bhutan may not be looking for huge investments
  2. It has propagated the concept of Gross National Happiness Index over that of GDP, to the whole world
  3. Recently, they declined to ratify the Bhutan-Bangladesh-India-Nepal Motor Vehicles Agreement
  4. The reasons advanced by Bhutan are the reservations of a section of its population on environmental grounds
  5. As such, huge Chinese investments shouldn’t be Bhutan’s priority
  6. The country and its people are not focused on rapid industrialisation

Bhutan-China relations not that strong

  1. China has a disputed border with Bhutan that includes Doklam and a few more areas
  2. The Chinese have reportedly offered Bhutan other areas in exchange of approximately 100sqkm at Doklam
  3. As per the old Indo-Bhutanese Agreement of 1949 Bhutan was to be guided by India in regard to its external relations
  4. The treaty signed in 2007 lays down that the two governments will cooperate with each other on issues relating to National Interests
  5. PM Tshering Tobgay and his party were with India during the Doklam standoff
  6. The Bhutanese government had given a statement clearly stating that the Chinese were on Bhutanese territory
  7. A change in guard at Thimphu does not necessarily mean a pro-China tilt, however, it could lead to Bhutan trying to pursue a more equated relationship with both India and China

Way forward for India

  1. Bhutan has supported the Indian stance on most issues except for a few affirmations of independent strategic policy making on a few occasions
  2. Bhutanese politics, despite the transition to democracy, respect the monarchy heavily. For India, this is a major pivot to ensure continuity in India-Bhutan relations and mutually arrived at geopolitical stances
  3. With our longstanding relationship with Bhutan, the Indian focus needs to be on contributing in areas that affect the populace more and in areas that are a priority for the man on the street
  4. Such issues include education, healthcare, agriculture, development of the tourism industry
  5. India already purchases hydropower from Bhutan and is committed to constructing additional hydropower projects in Bhutan
  6. In fact, the sale of power to India is Bhutan’s biggest foreign exchange earner
  7. India-Bhutan relationship has a huge ancient cultural linkage which needs to be leveraged. The revered Guru Padmasambhava associated with Vajrayana Buddhism that has a huge following in Bhutan was from India
  8. The Indian approach to Bhutan has necessarily to be tailored while being sensitive to the growing Bhutanese aspirations of being considered as an equal

Original Article: Bhutan’s Elections & Their Significance To India’s Foreign Policy

With inputs from the article: Why Bhutan’s 2018 general election results could concern India

Foreign Policy Watch: India-SAARC Nations

[op-ed snap] The Maldives Election: A Renewed Chance for India?



Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests

From the UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Recent elections in the Maldives and its impact on India


Change of guard in the Maldives

  1. In the recently held elections in  the Maldives’ Joint Opposition Coalition candidate, Ibrahim Mohamed Solih emerged victorious in the presidential elections
  2. The win came as a surprise both to the opposition in the Maldives and to international observers, as the election was believed to be rigged
  3. In the third multi-party presidential election, democratic values, institutions and the survival of both were at stake
  4. New President-elect Solih is viewed as a clean and efficient lawmaker in the Maldives, where corruption and nepotism remain prominent issues

Why this change is in favour of India?

  1. The overwhelming triumph of Ibrahim Mohamed Solih is considered an important strategic victory for India
  2. Within hours of the political upset, Solih had spoken to Indian prime minister Narendra Modi and publicly declared that India was the Maldives’s “closest ally”
  3. The outcome is all the sweeter for New Delhi, given that it had resisted calls from exiled Maldivian opposition leaders – and security hawks at home – to intervene militarily in February, after Yameen imposed a state of emergency and rounded up his critics and political rivals
  4. India was under a lot of pressure from the Maldivian opposition – and public opinion at home – for intervention in the Maldives
  5. India’s non-kinetic approach to the Maldives was offset by US and EU  both of whom threatened to put the Maldives under sanctions if the election process was tampered with

New ground of tussle between India & China

  1. The Maldives has emerged as the latest arena for the intensifying geostrategic rivalry between China and India – two Asian giants vying for influence in the Indian Ocean
  2. New Delhi has watched with alarm as Beijing, through its ambitious Belt and Road Initiative, has made deep inroads into what India once considered its natural sphere of influence

The strategic importance of Maldives

  1. Despite its small size, the Maldives has an outsized strategic importance for India, given its location astride the sea lanes through which much of India’s shipping cargo passes
  2. The northernmost tip of the Maldives is just 70 nautical miles from the southernmost point of India’s own Lakshadweep archipelago, where the Indian navy has a base
  3. China has this ambition – if it were to turn one of the leased islands into a military base, it would open a maritime front against India and complete India’s strategic encirclement

India-Maldives ties in the recent past

  1. Traditionally, the two countries have had close ties, but relations frayed after 2012, when the Maldives’ first democratically elected president, Mohamed Nasheed, was forced out in a coup by the old ruling establishment
  2. Yameen – in power since a controversial 2013 election – paid lip service to ties with India, and in 2016 even agreed to expand maritime security cooperation with New Delhi
  3. But he also forged much stronger ties with Beijing, which built a 2km bridge from the airport to the capital city; forged a free trade deal; and took long-term leases on several small Maldivian islands
  4. Alarm bells rang loud in New Delhi in August 2017 when three Chinese warships docked at a Maldivian port, crossing what New Delhi described as a “red line”, and prompting India to step up its contacts with the Maldivian opposition
  5. Yameen began to edge India out, which became a problem as India found China was trying to take over the southern atolls which are crucial for India’s Indian ocean security
  6. China was trying to take control of the one-and-half degree channel which would allow its submarines unimpeded access into the Indian Ocean
  7. Since the 45-day-state of emergency in February, Yameen’s government became more overtly hostile to India, which had called for free and fair elections to resolve the country’s deepening political crisis
  8. The government in Malé stopped renewing or issuing visas for an estimated 25,000 Indian workers in the Maldives
  9. Joint maritime patrols were cancelled, and Malé asked New Delhi to take back two helicopters – and the 48 Indian pilots and engineers that kept them flying – that had been provided to the country, ostensibly for humanitarian purposes

China’s influence to continue despite new leadership

  1. China will remain an influential player in the Maldives, given its financial leverage over the country. Indian analysts say an estimated 80 per cent of the Maldives’ total debt – equivalent to about 25 per cent of gross domestic product – is owed to China
  2. Although Solih and other opposition leaders have vowed to review contracts with China, analysts say the Maldives may find it hard to wriggle out of even unfavourable commitments made by the previous government
  3. It will not be easy to push aside China’s hard economic power and its “debt-trap” diplomacy

Way forward for India

  1. India has been a timely friend for the Maldives, which is evident from numerous efforts by New Delhi in helping maintain stability in Male
  2. From “Operation Cactus” in 1988 to fending off a severe water crisis in the island nation, India has played the role of a responsible neighbour
  3. It is in India’s interest to continue with such critical engagements and work toward building confidence and assurances to the extent that the Maldives emerges out of its “Big Brother Syndrome”
  4. Moreover, strengthening democratic institutions, infrastructure support, and capacity building should remain India’s priorities in engagement with the Maldives
  5. India should act responsibly by allowing the internal equations in the Maldives to settle first and then engage constructively in the process of restoring democratic institutions
  6. The stable Maldives is essential for a stable neighbourhood across South Asia

Original Article from The Diplomat

The Maldives Election: A Renewed Chance for India?

With inputs from the articles:

India’s influence over Maldives strengthened by new president’s election

Yameen’s loss puts India back in the strategic game in Maldives

Foreign Policy Watch: India-Maldives

Explained: The reserves in Reserve Bank



Mains Paper 3: Economy | Mobilization of resources

From UPSC perspective, the following things are important:

Prelims level: Economic Capital of RBI

Mains level: Debate regarding the independence of RBI and Fiscal Strain on Govt.



  1. The government and the RBI are engaged in fixing an appropriate economic capital framework for the central bank.
  2. The central government is expecting from RBI to re-distribute its surplus for recapitalization process to counter NPA crisis.

What is Economic Capital?

  1. Banks and financial institutions are faced with long-term future uncertainties that they intend to account for.
  2. Economic capital (EC) is the amount of risk capital that a bank estimates in order to remain solvent at a given confidence level and time horizon.
  3. The concept of economic capital has gained significance especially after the global financial crisis in 2008.
  4. The crisis exposed many central banks in the world to multiple risks, which forced many of them US Federal Reserve, Bank of England and European Central Bank to pump in liquidity.
  5. They tempted to buy securities and expand their balance sheets to boost confidence in the financial system and to ensure that critical institutions did not collapse.

What drives balance sheet of Central Banks?

  1. The balance sheet of central banks is unlike that of the institutions that it regulates or supervises.
  2. They are not driven by the aim of boosting profits given their public policy or public interest role.
  3. Their aim is primarily ensuring monetary and financial stability and maintaining confidence in the external value of the currency.
  4. Central banks do make money or the profits earned by issuing currency which is passed on to the owner of the central bank, the government.
  5. But they are typically conservative and the crisis prompted a review of the capital buffers that central banks and commercial banks needed.

Potential Risks to Central Banks

  1. Traditionally, central banks have been factoring in risks such as credit risk when there could be a potential default by an entity in which there has been an investment or exposure.
  2. There is also interest rate risk when interest rates either move up or slide, depending on the price of which securities or bonds held by a central bank or banks can be impacted.
  3. Besides, there is operational risk when there is a failure of internal processes.
  4. To measure these risks, both quantitative and qualitative methods are typically used.

The RBI proposal

  1. RBI holds a huge pile of foreign exchange reserves, and as the lender of last resort it described as contingent risks arising from its public policy role in fostering monetary and financial stability.
  2. In 2015, the RBI discussed this and put in place a draft Economic Capital Framework, or ECF.
  3. The rationale for such a capital framework was that there were increased risks to its balance sheet.
  4. RBI sought for an adequate capital buffer, critical not only to achieving its objectives, but also to ensuring the credibility of the central bank.

Concerns of RBI

  1. RBI pointed out that a weak balance sheet could force the central bank to rely more on excessive seigniorage (profit made by issuing currency) income, which would run in conflict to its price stability mandate.
  2. A compelling reason for RBI to build large capital buffers is to try and preempt a situation where they have to approach their governments for putting up their capital for recapitalization.
  3. That is seen by them as an erosion of their operational independence.
  4. The sovereign governments themselves are under fiscal strain.
  5. This strengthens the case for ex-ante capitalization (based on forecasts) than ex-post capitalization i.e. better to build a capital framework way ahead of a crisis.

Capital Buffer: A Case in England

  1. In June this year, the Bank of signed a MoU on a capital framework and on distributing its surplus.
  2. This new capital framework would ensure that the bank’s policy work is fully funded.
  3. The bank is to be equipped with capital resources consistent with monetary and financial stability remits given by Parliament.
  4. It provides a robust and transparent system that ensures the credibility of the bank’s policy action in even the most stressed environment, and reflects the new way in which the bank provides liquidity.

How it works

  1. The Bank of England’s capital will be capped by a ceiling above which all net profits are transferred to the treasury as dividend.
  2. It also ensures that there is a floor below which a rapid recap to the target is triggered.
  3. When the cap is below the target, no dividend is paid; when the cap is between the ceiling and the target, 50% of net profits is paid as dividend.
  4. These parameters are to be reviewed every five years.

Challenges in India

  1. The Bank of England has said that its capital framework takes into account its wide remit.
  2. That’s an argument the RBI can easily take, for its mandate too is wider than many central banks.
  3. There is also the fact that in India, the government that owns a large number of banks is itself struggling to recapitalize
  4. The govt. is under fiscal strain to meet fiscal targets and to spend adequately on infrastructure and on social welfare schemes.

Way Forward

  1. The heart of the capital framework is a risk-based capital target reflecting forward-looking risks to the balance sheet over the next five years.
  2. Its level is determined by evaluating the loss impact of severe stress scenarios.
  3. In September 2016, then outgoing RBI Governor said the RBI board has adopted a risk-management framework which indicates the level of equity the RBI needs citing potential risks it faces.
  4. The dividend policy of the RBI is a technical matter of how much residual surplus is available each year after bolstering equity.
  5. Such frameworks thus reduce the space for differences.

Monetary Policy Committee Notifications

Maternity Leave Incentive Scheme



Mains Paper 2: Governance | Mechanisms, laws, institutions & Bodies constituted for the protection & betterment of the vulnerable sections

From UPSC perspective, the following things are important:

Prelims level: Maternity Benefit (Amendment) Act, 2017

Mains level: Impact of the proposed incentive scheme


  • In a section of media, there have been some reports about Maternity Leave Incentive Scheme. In this regard, the Ministry of Labour & Employment has clarified about the scheme.

Maternity Benefit (Amendment) Act, 2017

  1. The Maternity Benefit Act, 1961 applies to establishments employing 10 or more than 10 persons in Factories, Mines, Plantation, Shops & Establishments and other entities.
  2. The main purpose of this Act is to regulate the employment of women in certain establishments for certain period before and after child birth and to provide maternity benefit and certain other benefits.
  3. The Act was amended through the Maternity Benefit (Amendment) Act, 2017 which, inter alia, has increased the paid maternity leave to women employees from 12 weeks to 26 weeks.

Ground Reality of Implementation

  1. While the implementation of the provision is good in Public Sector, there are reports that it is not good in Private Sector and in contract jobs.
  2. There is a wide perception that private entities are not encouraging women employees because they may have to provide maternity benefit to them, particularly 26 weeks of paid holiday.
  3. It is not rare when the employers come to know that their women employee is in the family way or applies for maternity leave, the contracts are terminated on some flimsy grounds.
  4. The extended maternity leave has become a deterrent for female employees who are asked to quit or retrenched on flimsy grounds before they go on maternity leave.

Proposal for an Incentive Scheme

  1. The Ministry is working on an incentive scheme wherein 7 weeks’ wages would be reimbursed to employers.
  2. It would be applicable to employers who employ women workers with wage ceiling upto Rs. 15000/- and provide the maternity benefit of 26 weeks paid leave, subject to certain conditions.
  3. It is estimated that approximately an amount of Rs. 400 crores would be the financial implication for the for implementing the proposed incentive scheme.

Expected Outcomes

  1. The proposed Scheme, if approved and implemented shall ensure the women an equal access to employment and other approved benefits along with adequate safety and secure environment.
  2. Also, the women shall continue to bear the major share of household work as well as child care.
  3. The work places will be more and more responsive to the family needs of the working women.

Defying False Rumors

  1. There are some media reports that this Scheme has been approved/notified.
  2. However, it is clarified that Ministry is in the process of obtaining necessary budgetary grant and approvals of Competent Authorities.
  3. The reports that it will be funded from Labour Welfare Cess, is also incorrect, as no such cess exists under this Ministry.

Which Cess Media is talking about?

  1. The Building and Other Construction Workers’ Welfare Cess (BOCW) Act provides for collection of cess for construction workers by states/union territories.
  2. The states/UTs are required that the welfare schemes funded from cess fund should be exclusively for building and other construction workers only.
  3. Diversion of cess fund for welfare of other category of workers is not permissible under the BOCW Act.

Women empowerment issues: Jobs,Reservation and education

13th East Asia Summit



Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: East Asia Summit

Mains level:  India-ASEAN Relations


  • India reiterated it’s commitment to a peaceful and prosperous Indo-Pacific region at the 13th East Asia Summit in Singapore.

13th East Asia Summit (EAS)

  1. The EAS consists of 10 ASEAN nations (Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, Myanmar, Cambodia, Brunei and Laos), Australia, China, India, Japan, New Zealand, South Korea, Russia and the U.S.
  2. It was formed to further the objectives of regional peace, security and prosperity.
  3. India has been participating in the EAS since its very inception in 2005.
  4. PM Modi reiterated India’s commitment to a balanced Regional Comprehensive Economic Partnership (RCEP).
  5. The RCEP, involving 10 ASEAN members as well as China, Japan, Australia, India, New Zealand and South Korea, would cover about half the world’s population and a third of its GDP.



[pib] 26th Conference of Central and State Statistical Organizations (COCSSO)



Mains Paper 2: Polity | Ministries & Departments of the Government

From UPSC perspective, the following things are important:

Prelims level: COCSSO

Mains level: Not Much


  • The 26th edition of Central and State Statistical Organizations (COCSSO) Conference was organized by the Ministry of Statistics and Programme Implementation (MoSPI) was held in Dharamshala, Himachal Pradesh.


  1. COCSSO is an annual conference which provides a platform for the Central and State statisticians to exchange views and discuss common issues relating to statistical activities.
  2. The theme of the 26th Conference was “Quality Assurance in Official Statistics”.
  3. A number of papers related to theme were presented by Central Ministries/Departments at the conference.
  4. A number of recommendations were made during the conference on the issues of ensuing and enhancing quality of data brought out by Central and State Governments.

[pib] Aadi Mahotsav



Mains Paper 2: Governance | Mechanisms, laws, institutions & Bodies constituted for the protection & betterment of these vulnerable sections

From UPSC perspective, the following things are important:

Prelims level: Aadi Mahotsav

Mains level:  Tribal development


  • Aadi Mahotsav is a National Tribal Festival being organized in New Delhi by the Ministry of Tribal Affairs and TRIFED to celebrate, cherishes and promote the spirit of tribal craft, culture, cuisine and commerce.

Aadi Mahotsav

  1. Theme: A Celebration of the Spirit of Tribal Culture, Craft, Cuisine and Commerce”.
  2. The Mahotsav will comprise of display and sale of items of tribal art and craft, tribal medicine & healers, tribal cuisine and display of tribal folk performance.
  3. Tribal artisans, chefs, folk dancers/musicians from 23 States of the country shall participate and provide glimpse of their rich traditional culture.
  4. The festival will feature exhibition-cum-sale of tribal handicrafts, art, paintings, fabric, jeweler and much more through 100 stalls.
  5. Over 200 tribal artisans and artists from different States creating a Mini-India will be participating in the festival.