• CURRENT AFFAIR

    POLITY

    1. Centre to contest tribunal order on military pay

    “Judicial overreach”

    • The Defence Ministry has decided to challenge in the Supreme Court the ruling of the Armed Forces Tribunal to grant non-functional upgrade (NFU) for the armed forces.
    • Government is not against the upgrade for the services; its challenge is on principle as a tribunal has no authority to take such a decision.

     

    Tribunal’s Decision

    • In December 2016, the Principal Bench of the tribunal in New Delhi granted the upgrade to the armed forces personnel in pay and allowances in response to a petition filed by over 160 officers.
    • The upgrade entitles all officers of a batch who are not promoted to draw the salary and grade pay that the senior-most officer of their batch would get after a certain period. For instance, batch mates of a Secretary to the Government of India who have not been promoted will be entitled to the same pay after a certain time lapse.
    • The Sixth Pay Commissionhad granted the upgrade to most Group ‘A’ officers but not the military.
    • Since then, the armed forces had been demanding a one-time notional upgrade to ensure parity.
    • The Seventh Pay Commission (SPC)gave a mixed verdict on it and the issue has since been referred to the Anomalies Committee. A decision is expected by March-end.

     

    2. India to attend Lahore meet on Indus Waters Treaty

    • A meeting of the Permanent Indus Commission (PIC) to be held in Lahore in March.
    • The commission has experts who look into issues and disputes on the ground over the utilisation of the waters of six rivers of the Indus system.
    • Under the treaty, India has full use of the three “eastern” rivers (Beas, Ravi, Sutlej), while Pakistan has control over the three “western” rivers (Indus, Chenab, Jhelum), although India is given rights to use these partially as well for certain purposes.
    • World Bank officials played the mediator in encouraging Pakistan to extend an invitation and for India to accept it.
    • Last PIC meeting was last held in July 2016.
    • It is a “positive” sign, given that India had announced it was “suspending” the talks after the Uri attacks in September.
    • In November, the World Bank decided to constitute a Court of Arbitration to look into complaints from Pakistan over India’s construction of Kishenganga and Ratle river water projects.
    • India said the World Bank decision was biased in Pakistan’s favour, threatening to “take steps” against it.
    • World Bank suggested putting some of the key issues on Kishenganga and Ratle hydel projects on the agenda for the Lahore meeting.

     

    3. The mystery of police reform

    Why in news?

    • Supreme Court said that “Police reforms are going on and on. Nobody listens to our orders”, while declining the plea of a lawyer demanding immediate action to usher in major police reforms in the country.
    • National Police Commission(1977-79), set up by the Janata government kick-started reforms.
    • Prakash Singh, former Director General of Police (DGP) of Uttar Pradesh and a former Border Security Force chief, filed a PIL in 1996 and sought major changes to the police structure.
    •  His accent was on autonomy and more space for police professionalism by giving a fixed tenure for police officers in crucial positions beginning with the DGPs in the States.
    • The ‘police’ being a State subject under the Constitution, the process of consultation was tortuous and time-consuming.

     

    SC’s directions to States in 2006

    • a fixed tenure of two years for top police officers in crucial positions,
    • Setting up of a State Security Commission (in which the leader of the Opposition party also had a role, and would give policy directions to the police),
    • The clear separation of law and order and crime functions of the police
    • Creation of a Police Establishment Board to regulate police placements.
    • It also mandated a new Police Act on the basis of a model Act prepared by the Union government and circulated to the States.

     

    Developments

    • Several State governments devising their own means to dilute if not wholly sabotage what the Supreme Court had laid down.
    • Many States brought in quick hotchpotch legislation to water down the essentials of the Supreme Court direction.
    • A few States have made officers temporarily in charge of the post of DGP without having to obey the SC direction. Commissioners of Police and IGs (Intelligence) have also suffered the same fate.
    • The objectives of the Police Establishment Board, conceived only to depoliticise appointments and transfers, have been set at naught by the DGPs getting informal prior political approval from the Chief Minister/Home Minister with a view to placing politically amenable officers in vital places in the police hierarchy.

     

    Other steps required

    • Upgrading the quality of recruits
    • Ensuring dedication and honesty in the day-to-day delivery of service to the public.
    • All police ills are not traceable only to political interference in police routine.
    • Sections of the police leadership are not contributing enough to the cause of consumer-sensitive policing. They are either selfish or dishonest, or indifferent.
    • Many young IPS officers lose their idealism early in their careers, because of fear of vengeful politicians or disloyal subordinates.

     

    4. CAG to undertake audit of demonetisation fallout

    • Demonetisation per se is a banking and money supply issue and as such, outside the CAG’s audit jurisdiction.
    • But the CAG is well within its rights to seek audit of fiscal impact of demonetisation, largely its impact on tax revenues.
    • There are other linkages of demonetisation with the public exchequer that will also be covered by the audit. This would be “expenditure on printing of notes, RBI dividend to the Consolidated Fund, etc.
    • The huge amount of data generated by banks and the Income-Tax Department in the wake of demonetisation would also be covered.
    • This banking transaction data and the follow-up by the Revenue Department can also be subjected to CAG audit.
    • Audit can look into various risks, such as errors and omissions in identifying the potential tax evaders, failures to pursue the identified suspects, selective and arbitrary pursuance of leads and consequences thereof.

     

     

    ECONOMICS

    1. Resilience reaffirmed

    • Central Statistics Office stuck with its January advance estimate for gross domestic product in the 12 months ending March 2017 to post a healthy 7.1% growth,
    • It projected GDP to have expanded 7% in the fiscal third quarter,
    • A marginal slowdown from the 7.3% registered in the preceding three-month period.
    • Undergirding this better-than-expected performance were the agriculture, mining and manufacturing sectors and, interestingly, government expenditure.
    • It is only the financial, real estate and professional services segment, which is linked to consumption that lagged, with the pace of expansion more than halving from the July-September quarter to a modest 3.1% increase.
    • There could be correction in the fourth quarter, primarily to factor the impact of the informal sector. It has never been easy to capture real time data on economic activity in the informal sector.

     

    Assessing the impact of Demonetisation

    • The most affected parts of the economy — informal and cash based — are either not captured in the national income accounts or, to the extent they are, their measurement is based on formal sector indicators.
    • Government decided to change the base year for GDP calculation from 2004-2005 to 2011-2012 under Prime Minister Modi’s regime. We are still not sure about the quantum of notional increase as against the real increase in GDP because of this shift.
    • To have a comparative analysis, we need data that are aligned to a set of rules and categories without introducing a new variable. But this was not available even for the latest Budget figures.
    • The informal sector in India accounts for about 45% of gross domestic product (GDP) and nearly 80% of employment. If this sector is not taken into account, then the metadata not only remains inadequate but also may be seen as a deliberate move to mislead.

     

    2. No time for complacency

    IMF and OECD reports

    • It will accelerate the pace of financial inclusion and formalisation of the informal economy.
    •  Article IVConsultations 2017 of the International Monetary Fund (IMF) and the biennial Economic Survey of the Organisation for Economic Cooperation and Development (OECD) concluded that Indian economic growth is robust, propelled by consumption demand and accelerated structural reforms.
    •  Both favourably allude to a rule-based framework of aligning macroeconomic policies with global standards.
    • The overall macroeconomic framework, notwithstanding challenges, remains robust and credible.
    • Continued fiscal consolidation, a modest current account deficit, subdued inflation, enhanced public and private consumption somewhat offsetting the depressed private investment.
    • The downside risks of exogenous shocks from sharp increases in commodity prices, particularly oil, a sudden global slowdown impacting remittances and exports or unpredictability relating to the Chinese economy now look modest.
    • The growth projection of 7.5% for the next fiscal is however contingent on resolving several short-term challenges.
    • First, the OECD’s survey raises concerns about India’s large interest payments due to the high levels of public debt as compared to other emerging economies.
    • Second, the health of the banking and financial sector. The twin balance sheet problem of both corporates and banks, highlighted in the Economic Survey, has a relationship but would need differentiated actions.
    •  The concept of a centralised Public Sector Asset Rehabilitation Agency (PARA) envisaged as a ‘Band Bank’ spin-off model has gained some traction.
    • The classic issues of not confusing between the stock and the flow would need to be addressed.
    • The governance architecture embedded in several actions and intended autonomy cannot be totally divorced from the ownership pattern.
    • Creating an enabling political milieu for deeper reforms is inescapable.
    • The present trajectory of banking reforms is inadequate to address the deeper malaise of the sector.
    • The Indradhanush I has distinct positives. The Indradhanush II is in the offing, post the Asset Quality Review to be completed by March 31.

     

    Rule-based management

    • Creating an institutional framework or mechanism to seek broader consensus. The constitution of the Monetary Policy Committee, GST Council, Banks Board Bureau, are robust examples.
    • Consider the constitution of a Banking Council to facilitate a dialogue with political parties and stake holders on a new banking road map
    • Extensive analytical work by several committees and commissions like the Narasimham Committee, P.J. Nayak Committee, Gopalakrishna Committee, to mention a few, have critically examined the past and suggested future actions.
    • This Council could debate, discuss, and seek to fortify the ingredients of the ongoing initiatives.
    • The problem is somewhat complicated, by the Reserve Bank acting as the principal banking ombudsman with inherent conflict of interest.
    • In the long run, we need an alternative mechanism for the banking sector.
    • Finally, for a change, balanced regional development and combining growth with employment has received extensive attention in both these reports.
    • The GST (Goods and Services Tax) regimeand decisive move towards formalisation of the economy using technology would reduce disparities.
    • Local government entities need greater empowerment. Making grants available in two parts — a basic grant and performance grant — will make a difference.
    • Enabling local bodies to impose and realise property taxes and other levies would strengthen their financial viability.
    • Seeking to replicate best governance practices in labour and product markets among the States could also prove beneficial in mitigating inter-State growth divergence.
    • There are other recommendations in the IMF and OECD reports relating to education, health, and tax changes, to name a few, which deserve separate treatment.

    3. GST Council clears draft laws

    • GST Council gave its formal approval to the Central GST (CGST) and Inter-State GST (IGST) laws, with the Compensation Law already having been approved during the previous meeting on February 18.
    • The Council will meet again on March 16 to deliberate on the final versions of the remaining two laws — the State GST law and the Union Territories GST Law.
    • The SGST law will apply to all States and Union Territories with legislatures (Delhi and Puducherry), but will not apply to those Union Territories without a legislature.

     

     GST Bill: Last mile concerns

    • As these bills secure assent from State Assemblies and Parliament, and swiftly, the operational rules for the GST must be readied.
    • Industry would need at least three months after that to prepare for the transition from the present system of myriad State, Central and local levies on goods and services.
    • Moreover, switching to a new indirect tax system in the middle of a financial year will bring its own subset of accounting complications.
    • Clearer communication of intent is equally essential. What started out as a single tax, single market dream for industry has now degenerated into five tax rates, a cess on top, with additional uncertainty about tax rates.
    • The GST’s anti-profiteering penal provisions are far too vague and draconian, and could discourage companies from making efficiency improvements in supply chains if they are required to pass on the entire benefit to consumers.
    • Lastly, the Chief Economic Adviser has made an impassioned plea to bring real estate under the GST net, linking it to the war against black money.

     

    GST levy may go up to 40%, 4-slab structure to remain

    • GST Council proposed raising the peak rate in the Bill to 20%, from the current 14%, to obviate the need for approaching Parliament for any change in rates in future.
    • The model Goods and Services Tax Bill will replace the clause which states the tax rate “not exceeding 14%, with “not exceeding 20%”.
    • The change in the peak rate will not alter the 4-slab rate structure of 5, 12, 18 and 28% agreed upon last year for the moment.
    • The revised draft of model GST law, which was made public in November 2016, provides for a maximum rate of tax under the new regime at 14% (14% central GST and an equal state GST, taking the total to 28 %).
    • The GST Council, headed by Finance Minister Arun Jaitley and comprising representatives of all states, has agreed to keep the upper band of the rate in the law at 20%.
    • Mirroring the model GST law, the CGST, the SGST and the UTGST law will be firmed up by the Centre, states and Union Territories, respectively.
    • The Centre plans to introduce in Parliament the Central GST (CGST) Bill in the forthcoming session beginning March 9.
    • After it is ratified, the states will introduce the State GST (SGST) Bill in their respective legislative Assemblies.
    • The central and state officials will soon start the exercise to determine which goods and services should fall in which tax bracket and the same will be taken to the Council for approval soon.
    • Together with this, they will also decide the goods and services that would attract a cess on top of the peak rate to create a corpus that can be used to compensate states for any loss of revenue from implementation of GST in the first five years.

     

    4. ‘Public procurement needs to be opened up’

    • Public procurement in India should gradually be opened up in a fair manner to ensure greater competition.
    • Privatisation of public assets has to be done keeping in mind the country’s socio-economic needs and objectives, Commerce Minister Nirmala Sitharaman said.
    • Public procurement(procurement by government/its agencies for their own consumption and not for commercial resale) in India is estimated to be about 30% of the country's GDP.
    •  With sectors such as defence, railways and telecom — having state-owned enterprises — accounting for a major portion of it.
    • Collusive biddingand cartelisation (in public procurement) are very serious. The CCI has an important role to play to prevent them and to ensure that there is fair trade and ultimately the consumer benefits.
    • Privatisation per se will not lead to greater competition. In Russia and China privatisation led to oligarchy.

     

    5. No economy for women

    Why in News?

    • According to a recent report by the International Labour Organisation (ILO), India and Pakistan have the lowest rates of women’s labour force participation in Asia
    • Nepal, Vietnam, Laos and Cambodia have the highest, with richer nations like Singapore, Malaysia and Indonesia falling in between.
    • Moreover, even this low rate of labour force participation seems to be declining.
    • The National Sample Survey found that while in 1999-2000, 25.9% of all women worked, by 2011-12 this proportion had dropped to 21.9%.
    • This is in stark contrast to worldwide trends.
    • Of the 185 nations that are part of the ILO database, since the 1990s, 114 countries have recorded an increase in the proportion of women in the workforce, and only 41 recorded declines, with India leading the pack.

     

    Major Issues

    • With declining farm sizes, rising mechanisation, and consequently dwindling labour demands in agriculture, women are being forced out of the workforce.
    • Research has shown that when women have access to more work opportunities, they gladly take them.
    • The provision of work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has brought more rural women into wage labour.
    • Among MGNREGA workers in 2011-12, a whopping 45% were not in wage labour before the scheme was initiated.
    • Moreover, the provision of MGNREGA work has far greater impact on women’s paid work than that of men.
    • Increased availability of wage work also enhances women’s control over household decision-making.
    • Since NREGA work by itself cannot be expected to provide consistent stable employment for women, it is imperative to explore other avenues.
    • We need to create opportunities for women to move from agricultural to non-agricultural manual work.
    • We must foster a work environment that allows more women, especially urban and educated women, to take up salaried jobs.
    • Villages where roads were constructed between the first (2004-05) and second (2011-12) waves of IHDS, both men and women were more likely to undertake non-agricultural work but this effect was greater for women.
    • Such work has a cascading effect as construction of concrete roads also improves transportation services such as buses, which, in turn, could facilitate movement of the rural workforce, especially women, into non-agricultural work in neighbouring villages and towns.
    • At the other end of the employment spectrum, however, there is a need to make it possible for educated women to continue to work even while raising families.
    • The prevalence of a rigid work environment in India and the dearth of family-friendly work institutions create impediments to women’s access to white-collar jobs in the formal sector.
    • Long distances between the home and the workplace increase both commuting time and work burdens, leaving workers with even less time for family duties.
    • Another aspect of the skewed work-family equation for women in India is the demand for investing in children’s education over professional achievement.
    • Research highlights the contrast between the reasons for fertility decline in the West, where it was fuelled by the desire for self-fulfilment among both men and women, and in India, where small families have emanated from the desire to promote future achievements of children by focusing on their education rather than on better employment prospects for the parents.
    • This has led to urban and educated Indian women dropping out of the labour pool in contradistinction to their counterparts in Japan and Korea, for example, who have instead opted out of marriage.
    • Neither of these, however, seems an optimal outcome for society.
    • Need to encouraging workplaces to become more responsive to family needs and to promote sharing of household responsibilities between both genders, something that Scandinavian countries have emphasised.
    • Economic Survey 2016-17 expressed concern that the demographic dividend is already receding, reducing the opportunity for the Indian economy to catch up with its East Asian counterparts.
    • It is thus high time to talk of the gender dividend rather than the demographic dividend.

     

    6. Centre mulls modifying definition of start-up

    • Bharat Navodaya: StartUp India Reform Report,’ suggested that the start-up definition be simplified.
    • The Centre is considering the proposal and looking to review applications seeking benefits of start-up policy which were rejected
    • A provision in Start-up India policy states that for the purpose of claiming the benefits of the government schemes, ‘start-up’ means an entity, incorporated or registered in India: (a) not prior to five years, (b) with annual turnover not exceeding Rs. 25 crore in any preceding financial year and (c) working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property.
    • There may not be any need to have a single time period for all sectors.
    • Maybe there is a need to have different time period(like five years) and different turnover(like Rs. 25 crore)  for different sectors.
    • The government would retain the criterion of “innovation” as it is deliberately kept in the policy to differentiate between a traditional firm and a start-up.
    • Entrepreneurs from the biotechnology and medical devices sectors have informed the government of the need for relaxation of the five-year time period to eight or ten years as more time was required in such sectors for an entity to take off financially.
    • Instead of ‘turnover,’ the policy should consider the number of employees in a firm or investment in plant and machinery.
    • Out of all the applications, only ten start-ups have been approved for availing tax benefit and therefore there is a need for review.

     

    Tax benefit

    • “The revenue threshold should be raised; subjectivity should be removed and the additional layer of approval from the IMB should be dispensed with.
    • There should be automatic certification of start-ups upon approval from a few pre-designated bodies
    • Establishment of a single window clearance for obtaining approvals and licences from all departments, adding that the frequency of filing under labour and tax laws should be reduced.

     

    7. NIIF in talks with two sovereign funds

    National infrastructure fund eyes overseas co-investors in the wake of Centre’s $3-billion commitment

    • The National Investment and Infrastructure Fund (NIIF) has begun talks with two sovereign wealth funds to become the first investors to come on board,
    • The NIIF plans to leverage the Centre’s financing – equivalent to $3 billion – to invest a far higher amount in infrastructure firms and projects,
    • In partnership with global, long-term investors eyeing infrastructure assets, and fund managers that could create dedicated infra sector funds.
    • A big milestone was cleared two weeks ago when the Centre signed off on its initial commitment of ?20,000 crore to the NIIF
    • Stressing that this would be sticky, long-term capital unlike volatile global portfolio flows. The anchor investment by the government in NIIF will be split into two buckets – a billion dollars will be earmarked for a ‘NIIF Direct’ fund that could directly invest in existing or new infrastructure firms or projects.
    • Sovereign funds, pension and insurance companies would bring in a similar amount, while the government’s stake would be kept at 49% of this fund

     

    $600-billion opportunity

    • India is more attractive to foreign investors interested in infrastructure investments in emerging markets as it now has several privately executed projects that are operational or are close to completion.
    • Some investors prefer post-construction assets, some like to take a risk on construction but require a higher return. There are estimates that about $600 billion equivalent of operating or mostly constructed assets are available
    • The NIIF will also back ‘platform companies’ that can scale up and deliver bigger projects as the sector has seen fragmented players
    • There have not been many large firms coming up. Now we see firms like IDFC alternatives starting the concept of platform companies that can be scalable and become strong counter-parties to government in PPP structures

     

    About NIIF

    The objective of NIIF would be to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects. It could also consider other nationally important projects, for example, in manufacturing, if commercially viable.

     

    Functions of NIIF

    The functions of NIIF are as follows:

    1.     Fund raising through suitable instruments including off-shore credit enhanced bonds, and attracting anchor investors to participate as partners in NIIF;

    2.     Servicing of the investors of NIIF.

    3.     Considering and approving candidate companies/institutions/projects (including state entities) for investments and periodic monitoring of investments.

    4.     Investing in the corpus created by Asset Management Companies (AMCs) for investing in private equity.

    5.     Preparing a shelf of infrastructure projects and providing advisory services.

    NIIF

    1.     Provides equity/quasi-equity support to those Non Banking Financial Companies (NBFCs)/ Financial Institutions (FIs) that are engaged mainly in infrastructure financing. These institutions will be able to leverage this equity support and provide debt to the projects selected.

    2.     Invest in funds engaged mainly in infrastructure sectors and managed by Asset Management Companies (AMCs) for equity/quasi-equity funding of listed/unlisted companies.

    3.     Provides Equity/quasi-equity support/debt to projects, to commercially viable projects, both greenfield and brownfield, including stalled projects.

     

    INTERNATIONAL RELATIONS

    1. Elusive reconciliation

    Colombo must do much more to address the concerns of the Tamil minority

    ·       A United Nations report raised serious concerns about the delay in addressing allegations of war crimes and in meeting other promises Colombo made when it co-sponsored a resolution at the UN Human Rights Council in 2015,

    ·       The report warns the government that the lack of accountability threatens the momentum towards lasting peace.

    o   It also alleges that cases of excessive use of force, torture and arbitrary arrests still continue in Sri Lanka, almost eight years after the country’s brutal civil war ended.

    o   In 2015, when Sri Lanka agreed to a host of measures at the UNHRC, including a judicial process to look into the war crimes, hopes were high.

    ·       The govt. of Sri Lanka has passed enabling legislation to establish an Office of Missing Persons to help find some of the 65,000 people reported missing during the war.

    ·       But on key issues such as establishing a hybrid judicial mechanism with domestic and foreign judges and returning the military-occupied lands to Tamil civilians in the north and east, there has been no tangible progress.

    ·       The latest UN report comes at a time when over a hundred displaced Tamil families are protesting at administrative offices in the north and east asking for their lands to be returned.

    ·       This delay is alienating the government’s allies, eroding the faith of the public, especially war victims

    ·       On issues such as continuing use of excessive force and arbitrary arrests the government is either not serious in changing the way the police system works or is incapable of doing so.

     

    2. Half of India-Bangladesh border fenced

    BSF to go in for cameras and lasers on riverine stretches; aim is to curb infiltration and smuggling of cattle and currency

    ·       Half of the 4,096-km border India shares with Bangladesh has been fenced. Land acquisition is a major challenge to completing the work by the 2019 deadline.

    ·       The border runs along West Bengal for 2,216.7 km, Assam 263 km, Meghalaya 443 km, Tripura 856 km and Mizoram 318 km.

    ·       The aim of the project is to curb infiltration and smuggling of cattle and fake Indian currency notes.

    Land acquisition

    ·       A major issue is to bring states on board for land acquisition.

    ·       Another important issue in West Bengal is that a large part of the border is riverine: rivers running along the border serve as the border. For instance, 70 km of the south Bengal frontier — from South 24 Parganas to Malda — is riverine.

    ·       Where fence is not possible, there are technological solutions such as cameras and lasers

    ·       Fake currency note syndicates are “...located in Malda and Churiantpur areas.”

     

    3. Finally, Pakistan gets its official elected as SAARC Secretary General

    ·       Pakistan succeeded in getting its official elected to the post of Secretary General of the South Asian Association for Regional Cooperation (SAARC).

    ·       Pakistan was backed by all members, including India, which made the selection consensus- based.

    ·       Election was of administrative nature and there is no diplomatic intent in it.

    ·       As the incoming chair, Pakistan was supposed to provide the next Secretary General and all members of the SAARC allowed the smooth transition from Nepal to Pakistan

     

    4. INDIA-CHINA Relations: Dalai Lama’s Arunachal visit irks China

    Warns of ‘serious damage’ to relations with India

    ·       The China-India border dispute came into sharp focus after the Chinese Foreign Ministry warned New Delhi not to allow the Dalai Lama to visit Arunachal Pradesh — the State which is at the heart of the Sino-Indian dispute in the eastern sector.

    ·       China’s sharp response against the visit by the Tibetan leader in exile followed a call by a former Chinese boundary negotiator, who stressed that if the two sides managed to overcome their differences in the eastern sector, the final settlement of the boundary dispute would be well within grasp.

    ·       Both sides decided to abide by important consensus the two sides have reached on the boundary question, refrain from actions that might complicate the issue, not provide a platform to the Dalai clique and protect the sound and stable development of the Sino-India relations

    ·       If the eastern border problem is solved China was likely to reciprocate in the western sector, which includes the disputed Aksai Chin, if India demonstrated flexibility along the eastern boundary.

    ·       The “eastern sector” dispute is over territory south of the McMahon Line in Arunachal Pradesh, which includes Tawang. The McMahon Line was the result of the 1914 Simla Convention, between British India and Tibet, and was rejected by China.

    ·       Cina believes Tawang, is inalienable from China’s Tibet in terms of cultural background and administrative jurisdiction.

    ·       China says from the perspective of international law, the Simla Accord, as well as the ‘McMahon Line’ which it created, are not only unfair and illegitimate, but also illegal and invalid

    ·       Agreement on the Political Parameters and Guiding Principles for the Settlement of the India-China Boundary Question that was signed in 2005 has been “fundamental” in advancing the boundary talks.

    ·       It says two countries should make “meaningful and mutually acceptable adjustments to their respective positions on the boundary question in order to reach a package settlement.”

    ·       Beijing has been touchy about visiting delegations from Taiwan and the grant of visas to those it perceives as dissident activists.

    ·       The bid for Nuclear Suppliers Group membership and having Masood Azhar placed on the UN terrorists’ list have occupied much of the bilateral canvas, while the larger issue of the boundary resolution hasn’t been addressed adequately.

     

    New possibilities on regional cooperation are emerging, which India should not hesitate to explore

    ·       Afghanistan has again emerged as a platform providing new possibilities on the India-China cooperation front.

    ·       The strategic dialogue between China and India, which was divided into five sub-groups of which Afghanistan was one, focussed significantly on the country.

    ·       China expressed admiration for India’s developmental work in Afghanistan amidst a broader understanding that New Delhi and Beijing need to strengthen the government in Kabul.

    ·       This development comes against a backdrop of the growing threat of the Islamic State (IS) to China. The IS released a video this week of Chinese Uighur Muslims vowing to return home and “shed blood like rivers” even as the Chinese military displayed its military might as a show of force in Xinjiang.

    ·       China is calling for greater global cooperation against the IS, which is also a reason why China has joined ranks with Russia in a bid to engage the Taliban in Afghanistan.

    ·       China has for years blamed exiled Uighur “separatists” for violence in Xinjiang and has warned of the militants’ potential to link up with global jihadist groups. It is worried about the spillover effect of continuing instability in Afghanistan. The impact of Afghanistan’s destabilisation will be felt not only in Kashmir but also in Xinjiang where the East Turkistan Islamic Movement is active. Moreover, China’s mega investment plans in Pakistan are predicated on a measure of regional stability.

    ·       India and China were not able to “cooperate as effectively” as they should in countering terrorism as China is putting on hold the inclusion of JeM chief Masood Azhar’s name in the United Nation’s list of global terrorists.

    ·       The Sino-India counter-terrorism dialogue was initially viewed as a promising bilateral initiative for dealing with terrorism. But nothing of consequence emerged from these dialogues.

    ·       For India, the main source of terrorism is Pakistan where the state machinery continues to view terrorism as a legitimate tool of national policy. For China, Pakistan is an important asset in its South Asia policy and an all-weather friend.

     

    5. Rameswaram fumes at fisherman’s killing

    ·       Sri Lankan Navy allegedly shot dead a 21-year-old fisherman, K. Britjo, in Rameshwaram waters.

    ·       Britjo was one of the six fishermen on board a mechanized boat fishing on the high seas between Katchatheevu and Danushkodi.




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