1.

US China Trade War

Quotas on imports.
Short term, protectionism gives a boost to domestic industry.

Political / strategic reasons:

(i) Dependence on imported metals threatens the U.S. ability to make weapons.
(ii) A trade deficit occurs when exports are less than imports. And the US has a massive trade
deficit with China. Last year, it stood at about $375bn.

What US wants:
Stop stealing U.S. intellectual property.
Cut tariffs on U.S. goods by 2020.
Open China to more U.S. investment.

Hidden Agenda
70% of World Trade is done using dollars.
The dollar’s position as the reserve currency is under strain. Many countries including China are
taking steps to denominate their trade contracts in local currency

Tit for Tat

China retaliated hours later. It announced 25 percent tariffs on $50 billion of U.S. exports to China.

India
India’s trade surplus of $21 billion with the US has often attracted the ire of US President Trump,
who claims India follows discriminatory trade practices against US exports.

India had deferred tit-for-tat tariffs for the third time against 29 American products worth $235
million by 45 days.

Implications for China

The trade war with the U.S. could cut China’s export growth by almost half next year, putting
around 4.4 million jobs at risk. Economists expect the trade war will cut China’s export growth by
almost half to 5.1 percent in 2019 ,denting GDP growth by 1.04 percentage points.

Implications for India

India has spotted an opportunity to boost its exports in sectors such as chemicals, pharmaceuticals
and electrical parts, where India could have a comparative advantage.

Global Implications
Mr Trump’s decision to take on China could lead to adverse effects for consumers in the US and in
China, but also worldwide.
An economic showdown between the world’s biggest economies doesn’t look good for anyone.
Consultant Oxford Economics predicted the trade war could cost the global economy $800billion in
reduced trade.
That could slow growth by 0.4 percent. It’s occurring at the same time that oil prices and interest
rates are rising.
 2. Saradha Chit fund Scam

Sudipto Sen set up the Saradha Group.

collective investment scheme.
tap small investors, promising them very high returns.
Saradha’s raised about Rs 2,500 crore.

How Saradha operated

issuing secured debentures and redeemable preferential bonds.

in violation of SEBI rules that bar companies from raising capital from more than 50 people without
issuing a proper prospectus and balance sheet.
After SEBI raised a flag in 2009, the Group diversified, opening 239 companies, and building a
complex corporate structure.
Chit funds are regulated by the state government.
When the Saradha scam broke
January 2013, when for the first time, the Group’s cash inflow was lower than its outflow.
Mamata Banerjee’s government set up a Special Investigation Team (SIT) to probe the case after
clubbing all the FIRs.
In May 2014, the Supreme Court transferred all cases to the CBI, given the inter-state nature of the
alleged scam.
The Trinamool connection
Saradha gifted patrol motorcycles to Kolkata Police.
distributed ambulances and motorcycles sponsored by Saradha in Naxalism-hit areas.
When the Cop Comes In
Kolkata Police Commissioner Rajeev Kumar headed the SIT
CBI Joint Director Pankaj Srivastav, who is in charge of the Kolkata zone, Rajeev Kumar alone has
been sent five notices and summons to appear before CBI since October 2017
According to CBI, the SIT had not handed over a diary of Sudipta Sen that has details of payments
made to prominent people, apart from other evidence.

3. PNB scam
Mama-bhanja duo of Mehul Choksi and Nirav Modi used the services of a deputy manager,
Gokulnath Shetty
defraud the bank of Rs 11,397 crore.
Shetty repeatedly issued fraud banking instruments called Letters of Undertaking (LoU) in favour
of Modi’s and Choksi’s firms
Allowed correspondent Indian bank branches abroad to pay for their diamond imports.
Shetty remained at the same critical post for seven years.
Fourth, most of these LoU-based transactions occurred outside PNB’s core banking system (CBS)
None of the correspondent bank branches abroad appear to have officially acknowledged PNB’s
LoUs that they were honouring.
The fraud came to light after Shetty had retired
 4. Aadhar and Privacy Issues
Quick facts about Aadhar
A 12-digit unique identification number which stores demographic and biometric information of the
resident
Issued by Unique Identification Authority of India (UIDAI) on behalf of Government of India
World’s largest biometric ID system
Primary Concerns:
i.Identification of individuals without consent using the global Aadhaar number.
ii. Identification and authentication without consent using demographic and biometric data.
iii. Surveillance, tracking or profiling of people beyond legal sanctions using the centralized
database, either through external hacks or through insider leaks and
collusion.
Controversies that raised concerns
1) Dhoni’s Aadhaar details published
2) Jharkhand’s more than million leaks
4) Punjab leaks
5) Techie gets illegal access to Aadhaar database
All the concerns became more evident when Facebook data breach incident came into light.
FOR:
Direct Benefit Transfer
LPG Subsidy, Income tax return easily when aadhar is linked to bank account
Avail New Bank account
A major document of proof while opening a new bank account
Also acts as an address proof
Unique identity for every individual
Helpful in eliminating wrong/fake beneficiaries
Gives identity to the unprivileged
Helps in getting benefits of various schemes directly
AGAINST:
Foreign Handling of the data
May compromise on the privacy of the individuals of India.
Problems Arising due to Centralization
Misuse in Banking Transactions
 5. 10% Reservation to Upper Class EWS
10 percent reservation for ‘economically backward’
Introduction
The stunning speed with which the government’s proposal to provide 10 per cent reservation for
EWS passed the test of both houses of parliament has led to questions being asked about the
government’s motive behind the move, the legal challenge it is likely to face and the logical
inconsistencies it suffers.
Surprising aspect of the move is the redefinition of poverty itself.
What is it about?
Economically Backward Class (EBCs) in India is a category of extremely poor people having an
annual income less than Rs 8 lakh and who do not belong to any social category such as
SC/ST/OBC. They actually are General.
The Government of India doesn't give any reservations to EBC.
Many political parties due to vote bank politics are not doing enough to uplift EBC.
EBC certificate for different purposes
EBC certificates can be used to get free or concessional fees in education and job oriented training
courses.
Schemes for the Economically Backward Classes (EBCs)
Loans for Overseas Studies.
As of 7th January 2019
This would be over and above the existing 50% reservation.
Articles 15 and 16 of the Constitution will have to be amended for implementing the decision.
As of 12th January 2019
EWS bill cleared by the President of India, Ram Nath Kovind.
Gujarat is supposed to be the first state to enact this law on 14th of January 2019.
Contradictions
An NGO 'Youth For Equality' has questioned and challenged the bill in the Apex court on grounds
that it breaches the ceiling of 50% reservations set by Supreme Court.
Several SC/ST groups have showed dissent over such economic based reservations to be provided
to the poor people who don't fall under SC/ST/OBC categories
Hidden Motives
Election stunt that may not benefit them eventually?
Until we create an environment where everyone is guaranteed some minimum capabilities through
the guarantee of reservation, we cannot claim to have fair competition.

6. Rafale Deal Controversy

28 August 2007 India’s Defence Ministry accepted proposals for 126 Medium Multi-Role Combat
Aircraft (MMRCA) fighter jets. India needed to buy fighter jets to revamp their Air Force (Indian
Air Force) fleet.
Various companies submitted their bids.
In May 2011 2 companies were shortlisted after the introspection namely ‘Eurofighter Typhoon’ &
‘Dassault Rafale’.
The reason for selecting this company was their lowest bidding rates for dealing 126 fighter jets.
On 3 rd March 2014 HAL and Dassault Aviation signed a ‘Work Share Agreement’. In this inked
agreement it was mentioned that 70% of these 108 aircraft had to be manufactured in India and the
remaining 30% aircrafts by Dassault Aviation.
During this time Indian Government changed, because of which these negotiations continued even
till the end of 2014.
But on 8 th April 2015 Indian PM’s visit to France and on 10 th April 2015 a sudden joint statement
was issued by Indian and French Governments stating the whole new deal. The deal mentioned that
then 36 Rafale fighter jets will be purchased by Indian Government, all in the ‘Fly Away Off the
Shelf Condition’
Signing the deal, the 2 new companies were made on 25 th & 28 th March’2015 with the names
‘RelianceDefence Ltd’ & ‘Adani Defence Systems and Technologies Ltd.’
Here one big question was raised by the opposition party of India that How can ‘PM’ inked this
defence deal without the approval of ‘Cabinet Committee on Security’ and what happened to the
old deal of manufacturing 108 Rafale aircrafts?
Accusation#1
Aviation and Indian Government authorities are biased toward this Reliance Group.
Claimed that Modi govt. had chosen Anil Ambani as offset Partner and the French Govermnment
has no choice in it.
On this Dassault responded that the offset partner was chosen by their own accord.
Now comes the Controversy of Rafale Cost/Pricing:
The congress spokesperson and Rahul Gandhi claimed the deal in all was of Rs.54000 Crore which
stands for 126 fighter jets, that comes around Rs. 526 crore per fighter jets.
On 13 th April,2015, The then Defence Minister of India Manohar Parikar said that 126 fighter jets
standoff cost will be around Rs. 90000 crore i.e., around 714 crore per fighter jets.
Accusation#2:
According to the very latest deal, there were only 36 fighter jets ordered by Indian Government
which stands for 59000 crore INR.
Opposition is asking that how the price escalated to 1638 crore from 526 crore INR
Indian Government is ready to disclose the basic cost per plane but it is not ready to unveil the
overall cost which includes all the weaponized spare accessories etc. stating the national security
reasons.
Supreme Court Verdict
On 12 th November 2018 Central Government handed over the details to the Supreme Court as
directed.
SC stated that to investigate such a sensitive deal is beyond its jurisdiction.

7. Chanda Kochhar and ICICI Controversy

What is the allegation?
An ICICI Bank shareholder, Arvind Gupta, wrote to the Prime Minister, Finance Minister and all
investigating agencies accusing the Kochhars of wrongful gains from loans sanctioned to Videocon
in 2012.
ICICI Bank was part of a Rs 40,000 crore loan extended to Videocon by a consortium of 20 banks.
Chanda Kochhar is accused of having favoured the sanctioning of the loan to the company to
benefit her husband.
The Kochhar-Dhoot connection
Deepak Kochhar along with Venugopal Dhoot, Chairman of the Videocon Group, set up NuPower
Renewables Pvt Ltd (NRPL) in December 2008.
Soon after, in January 2009, Dhoot resigned as the director of this company and transferred his
shares (24,999 shares) in NuPower to Deepak for Rs 2.5 lakh.
He alleges that Chanda Kochhar abused her position as the CEO and MD and facilitated the
‘unscrupulous domestic offshore funding’ to make private gains, which resulted in wrongful losses
to ICICI Bank.
ICICI Bank’s stance
The Bank’s board gave Chanda Kochhar a clean chit.
In a statement the Board said that there was no quid pro quo, nepotism or conflict of interest in the
loans extended.
How has the issue affected ICICI’s shares?
After news of the CBI inquiry into the loans extended to Videocon came out, shares of ICICI Bank
tanked by 7%, wiping off Rs 11,353 crore from its market capitalisation.
Videocon’s shares too fell 4.97% to Rs 12.42.
For ICICI, this isn’t the only issue to have hit it recently. RBI, on March 29, imposed a penalty of
Rs 58.9 crore on the bank for failing to adhere to the guidelines of held-to-maturity (HTM) category
in its bonds portfolio.

8. Budget 2019
1. No tax on individuals having income upto Rs. 5 lac.
2. Standard deduction for salaried employees raised from Rs. 40,000 to Rs. 50,000.
3. Threshold limit for TDS on rent increased from Rs.180000 to Rs.240000.
4. No tax-ability on deemed basis under the head "house property" even if an assessee has two self-
occupied houses.
5. Farmers owning land up to 2 hectares to get Rs. 6000 per annum under PM Kissan Samman
Nidhi and 75000 crore per year to be spent on PM Kisan Yojna.
6. Persons working in unorganised sector and having income upto Rs.15000 per month will get
pension of Rs. 3,000 per month under Pradhan Mantri Shram Yogi Maandhan Yojana.
7. GST registered SME will get 2% rebate on interest on loan upto 1 Cr.
8. Farmers severely affected by natural calamities will get 2% interest subvention and additional 3%
interest subvention on timely repayment of loan.
9. Anti-black money measures have brought Rs.1.30 lac crore under tax net.
10. Fiscal deficit for 2018/19 seen at 3.4% of GDP.
11. India is the second biggest hub for start-ups.
12. JAN Dhan, Aadhar and mobile have been game changers.
13. Poised to become a $5 trillion economy in 5 years.
14. Aspire to become a $10 trillion economy in 8 years.
15. The 4R approach has been implemented to ensure clean banking
Recognition, Resolution, Recapitalisation, Reforms.

9. GST
Launched on 1 July 2017
Indirect tax which replaced multiple cascading taxes levied by central and state govt.
Governed by GST council (chairman-finance minister)
Taxation slabs:
0%|5%|12%|18%|28%
Taxes replaced:
Central excise duty, commercial tax, vat, food tax, sales tax, introit, octroi, entertainment tax, entry
tax, purchase tax, luxury tax, advertisement tax, service tax, customs duty, surcharges
Pros:
• Estimate of 0.9%-1.4% boost in GDP
• Rid of multitier taxation, easy taxation system now
• Reducing productions costs leads to more competition
Cons:
• Basic exemption of Rs. 1.5 crore taken away from small businesses
• GST required to be paid once the invoice is generated even if there is no certainity of payment for
the services rendered
• Increased inflation in short term
Key updates:
• Small businesses with less than 1.5 crore turnover able to file GST returns on quarterly basis
instead of monthly basis
• Reduced GST rates on many products and services
10. Alok Verma v/s Rakesh Asthana OR CBI v/s CBI
 11. US Mexico Border Wall
What is the Issue?
The continental border between the U.S. and Mexico stretches for nearly 2,000 miles.
The entire border between U.S. and Mexico extends from the Gulf of Mexico to the Pacific Ocean.
Issue
U.S Departmente estimated that 170,000 people successfully enteredthe U.S. illegally from the
southern border in 2015.
There were approximately 5.6 million "unauthorized immigrants" from Mexico by 2016.
There were 10.7 million unauthorized immigrants in the U.S. in 2016, representing 3.3% of the total
U.S. population that year.
About two-thirds (66%) of unauthorized immigrant adults in 2016 had been in the U.S.
Why do Immigrants Come to America?
Better standard of living
Better wages
Unemployment in their native country/countries
Politics
Throughout his 2016 presidential campaign, Donald Trump called for the construction of a much
larger and fortified border wall, claiming that if elected, he would “build the wall and make Mexico
pay for it.”
Some estimates show an $8 to $12 billion cost for such a project, while others find there are
enoughuncertainties to drive the cost to between $15 and $25 billion.
Trump Marching Ahead
In January 2017, Mexican President Enrique Peña Nieto said his country would not pay for the wall.
On January 25, 2017, the Trump administration signed Executive Order 13767, which formally
directed the USgovernment to begin attempting to construct a border wall using existing federal
funding, although actualconstruction of a wall did not begin at this time due tothe large expense and
lack of clarity on how it would be paid for.
Shutdown and Possible Emergency
Recently, Trump wants Congress to approve $5 billion for the project, but
Democrats are offering only $1.3 for border security. Hence, a shutdown was triggered after the
U.S. President was refused fundingfor his border wall by the Congress.
He also threatened to call a national emergency and urged to build the wallvery quickly, even
though the legality of such a step is uncertain.
Thus, the federal government partially shut down on December 22 and if it were to last beyond
January 12, it would be the longest shutdown in UnitedStates history.
What if Trump declares emergency in US?
Congress hasn't provided any definition of national emergency or required the president to make
any showing.
Analysis
The U.S wall can be an excuse for the Trump administration to impose emergency and abuse
power.
Although this move can be challenged in the court, the President will still be the one in complete
control.
This could damage democratic institutions world wide and set a very bad example.

12. Citizenship Amendment Bill

Relevance
Updation of NRC and its implications on demography as well as security situation of Assam as well
as otherneighbouring states
Why in news?
Union government has proposed amendment to the Citizenship Act of 1955.
Citizenship Act of 1955
In India, the Citizenship Act, 1955 prescribes five ways of acquiring citizenship
• Birth
• Descent
• Registration
• Naturalization
• Incorporation of the territory.
Who cannot be considered as citizen of India?
Unless their birth is registered
Recent proposal
Hindus, Sikhs, Buddhists, Jains, Parsis and Christians from Afghanistan, Bangladesh and Pakistan
will not be treated as illegal immigrants.
• No deportation
• Shortens the period of residency from 12 years
Need for the amendment?
The Bill states that such a long-drawn process denies illegal immigrants from these sixminority
communities of the three nations “many opportunities and advantages thatmay accrue only to the
citizens of India, eventhough they are likely to stay in India permanently”.
What are few issues needs to address?
• The proposed bill violates the basic tenets of theConstitution, By distinguishing illegal immigrants
on the basis of religion, the proposed law goes against the fundamental right to equality under
Article 14.
• The protection of Article 14 applies equally to both citizens and foreigners.
• The Bill would hamper what the Assam National Register of Citizens seeks to achieve in the
State.
• The NRC does not distinguish on the basis of faith unlike the 2016 Bill.
• As the Bill is a threat to the cultural and linguistic identity of the people of Assam.
• The Bill, if passed as law, would be challenged in the Supreme Court on the grounds of Article
14and as a move to disturb the NRC process.
Update (as on 14 Feb)

With Rajya Sabha adjourned sine die on Wednesday, all Bills that have been passed by Lok Sabha
but not by Rajya Sabha have lapsed. This includes The Citizenship (Amendment) Bill, 2016.
 13. Section 377 Scrapped
The section 377 of the Indian Penal Code (IPC) is an act that criminalizes homosexuality and was
introduced in 1861 during the British Rule.
It referred to “Unnatural Offences” and stated that whoever voluntarily has carnal intercourse
against the order of the nature with any man, woman or animal shall be punished with
imprisonment for life.
However, the Supreme Court of India on 6 th September 2018 decriminalized this section.
Chronology of events –
2004 – NAZ foundation appeals to the Supreme Court.
2008 – Family Welfare insisted that the continuance of Section 377 IPC has hampered the
HIV/AIDS prevention efforts.
2009 2 nd July – Delhi HC overturns Section 377 , legalizing consensual homosexual activities
between adults. This decision faced fierce resistance and many appeals were filed in the SC
challenging the Delhi HCs decision.
2014 May – Government Changed. BJP comes into power.
2017 February – SC agrees to review all the petitions afresh by a 5-member constitutional bench
headed by CJI Dipak Mishra.
2018 6 th September – “Consensual sexual acts between adults can’t be a crime. Section 377 is
irrational, arbitrary and incomprehensible”
Decriminalization of Homosexuality: A progressive step or an affront to Indian Culture
Notably, 25 countries, all of which being developed democracies or developing democracies,
recognized same-sex marriage as of 2018.
By contrast, 10 countries or jurisdictions, allof which are Islamic and ruled by sharia, were
imposing the death penalty for homosexuality.
8% of India’s population – 104 million people – might be LGBT, one of the largest such
populations in the world. Throughout Hindu and Vedic texts there are many descriptions of saints,
demigods, and even the Supreme Lord transcending gender norms and manifesting multiple
combinations of sex and gender.
Against
1. Gay Couples Can’t produce children, and further same sex marriages undermine the institution of
marriage that has traditionally been defined between a man and woman.
2. Legalizing same-sex marriage will put us on the slippery slope toward legalizing polygamy.
Historians find, for instance, that it destabilizes a society when some men take many wives and
leave large numbers of other men without the opportunity to mate. It also leads to increase in
chances of leading to other unacceptable and non-traditional marriages such as incest and bestiality.
3. There are absolutely no grounds for considering homosexual unions to be in any way similar or
even remotely analogous to God's plan for marriage and family. Marriage is holy, while
homosexual acts go against the natural moral law.
In Favour
1. Couples are couples, whether same-sex or not. Thus, same-sex couples should be afforded the
same access to the same benefits enjoyed by heterosexual married couples
2. The families of LGBT people will no longer face shame and stigma due to external orientation of
their ward. Mockery of LGBT people exists because we have permitted it to prevailso. LGBT
people will come in mainstream sharing equal rights and opportunities in every sphere of life.
3. Inability to have a child in natural ways will push couples to adopt orphans. About 20 million
children in India, i.e. almost 4% of India’s population are orphans.
4. Not a single study has found children of lesbian or gay parents to be disadvantaged in any
significant respect relative to children of heterosexual parents.
5. Same-sex marriage leads to a host of social and even public health benefits, including a range of
advantages for mental health and wellbeing. The benefits accrue to society as a whole, whether you
are in a same-sex relationship or not.
 14. Sabrimala Temple Case
Sabarimala is a Hindu pilgrimage centre located at the Periyar Tiger Reserve in the Western Ghat
mountain.
It is one of the largest annual pilgrimages in the worldwith an estimated 45–50 million devotees
visiting every year.
Basics
The shrine at Sabarimala is an ancient temple ofAyyappan also known as sasta and Dharmasasta.
AYYAPPAN – HINDU GOD
Belief - the deity is a ‘naishtikabrahmachari’ (eternal celibate)
Purity
• The devotees are expected to follow a Vratham (41-day austerity period) prior to the pilgrimage.
• During the 41 days of Vratham, the devotee who has taken the vow, is required to strictly follow
the rules that include follow only a lacto-vegetarian diet, follow teetotalism, not use any profanity
and have to control the anger, allow the hair and nails to grow without cutting.
Who runs the Temple?
• The Travancore Devaswom Board (TDB) manages the temple.
• They argued that only women of a certain age are barred from entering the temple and that it is
okay to wait till 50 to enter the holy shrine.
The issue of Discrimination - 1991
In 1991, the Kerala High Court restricted entry ofwomen above the age of 10 and below the age of
50from offering worship at Sabarimala Shrine as they were of the menstruating age.
The Sabrimala Case
• A group of five women lawyers has challenged Rule 3(b) of the Kerala Hindu Places of Public
Worship(Authorisation of Entry) Rules, 1965, which authorises restriction on women “of
menstruating age”.
• They moved the apex court after the Kerala HCupheld the centuries-old restriction, and ruled that
onlythe “tantri (priest)” was empowered to decide ontraditions.
• This went against Articles 14, 15 and 17 of the Constitution.
Sabrimala Verdict
The Supreme Court in September 2018 allowed women of all ages in the Ayyappa temple at
Sabarimala in Kerala.
The five-judge constitution bench headed by Chief Justice Dipak Misra, in a 4:1 verdict, said
banning the entry of women in Sabarimala temple is genderdiscrimination and the practice violates
the rights of Hindu women.
Observations of Indu Malhotra
“Notions of rationality cannot be invoked in matters of religion,” said Justice Malhotra, adding:
“What constitutes essentialreligious practice is for the religious community to decide, not for the
court.
India is a diverse country. Constitutional morality would allow allto practise their beliefs. The court
should not interfere unless ifthere is any aggrieved person from that section or religion.”
Now what?
The temple is open for worship only duringthe days of Mandalapooja (approximately 15November
to 26 December), Makaravilakku or
"Makara Sankranti" (14 January) and MahaVishuva Sankranti (14 April), and the first fivedays of
each Malayalam month.
In favor of Women’s Rights:
4:1 Verdict – SC ruled that not allowing women was in violation of the Constitution.
(JusticeInduMalhotra dissented)
•Patriarchy of religion cannot be permitted to triumph over faith
•Dualistic approach against women degrades the status of women.
•The right guaranteed under article 25 has nothing to do with gender or physiological factors.
•Devotees of Ayyappa do not constitute a separate religious denomination.

Articles 25 to 28 of Indian Constitution guarantee the right to freedom of religion to all

citizens within the territorial boundaries of the country.
1.Freedom of conscience and free profession of religion (Article 25)
2.Freedom to manage religious affairs. (Article 26)
3.Freedom from payment of taxes for promotion of any particular religion. (Article 27)
4.Freedom to attend religious instructions. (Article 28)

•Rules disallowing women in Sabarimala are unconstitutional and violative of Article 21(Article 21
of the Indian Constitution guarantees life and personal liberty. No personshall be deprived of his life
or personal liberty except according to procedures establishedby law.)
•The fact that women have physiological feature to menstruate has nothing to do withher right to
pray.
•To treat women as children of lesser god is to blink at the constitution.
The KHC had further held that only the chief priest was empowered to decide on traditions.

In favor of tradition:
•Issues of deep religious sentiment should not be interfered in by the court.
•Notion of rationality should not be seen in matters of religion.
•Worshippers of Sabarimala have attributes of religious denomination.

A pluralistic society and secular polity would reflect that the followers of various sects have the
freedom to practise their faith in accordance with the tenets of their religion.

Equality is not the problem in Sabarimala. Instead, it is an issue concerning the holiness and the
rituals of the temple. In Kanyakumari, there is a temple where men are not allowed to enter.
Muslim mosques don’t allow men and women to pray together in the same space. The Catholic
Church does not permit female priests. Some Shinto monasteries are off-limits to women altogether.
Thereare Hindu temples which do not allow men to enter during specified periods, and the Kumari
Amman temple situated in Kanyakumari does not permit them at all. The law does not interfere in
such matters.

15. Farm Loan Waiver

Doubling farmer incomes was a key promise made by the Narendra Modi led government after it
assumed power.

“Loan waivers are a band-aid solution, but necessary at times to provide some immediate relief.”

They help little to solve the fundamental problem of rising costs and falling profitability.

It is not a solution but is palliative.

4 Reasons why economists are not in favour of farm loan waivers

1. In poorer states, only 10-15 per cent of farmers are benefited from loan waiver as farmers get
institutional loans in such states. Nearly 90% of the farmers had taken loans from private money
lenders. That’s because loan waivers apply only to formal credit.
2. Moral Hazard: farmers willfully defaulting on loans in the hope of waivers. Recently, former RBI
Governor Urijit Patel also spoke against farm loan waivers saying, “Waivers undermine an honest
credit culture.

3. Affects Availability of credit & support to agriculture: Bank lending moved away from districts
with greater exposure to the loan waiver. Thus, farm loan waivers suck out much-needed public
investments in agriculture (say, inirrigation and research)

4. Waivers are almost always conditional. In Punjab and Uttar Pradesh, for instance,the waivers
were allowed only for small and marginal farmers, who own less than 5 acres. So, there is a degree
of ambiguity built into allpromises of debt relief.

While farmers’ distress is acute and help is warranted, remedial measures must gobeyond debt
waivers

Alternatives to farm loam waivers:

The burden on farmers on account of just three items

1.lack of compensation during drought and disasters,

2.the failures of the crop insurance scheme, and
3.the deficit due to prices falling below the announced Minimum Support Prices) runs totens of
thousands of crores every season.

A few specific models/schemes implemented that can address the root issues are :

1.Widening of weather-based crop insurance schemes could be a quicker method of alleviating

farmer distress.

2. Telangana model of farmer income support: All farmers to get Rs 8,000 per acre(in twotranches)
— irrespective of crop grown, price or quantity sold. The amount is expected to meet a major part
of their seed, fertiliser, pesticide and field preparation expenses.

3.Shivraj Singh Chauhan-led BJP government in Madhya Pradesh (MP) has, from the 2017-18
kharif season, been implementing a Bhavantar Bhugtan Yojana. This, too, is anincome support
scheme for farmers, wherein they are paid the difference between the official minimum support
price and the average mandi rate for crops during themarketing season.

4.Along with these schemes plans, a lot of work needs to be done at the systemic/institutional level
- these include

a.Making institutional credit available to all farmers ( including tenant farmers)

b.Strengthening of the MSP ( Minimum Support Price) program
c.Infrastructural facilities ( irrigation, cold storage, warehousing facilities)

Conclusion

Ground realities of the ongoing farm loan waivers show many fault lines. Concomitant after-effects
of loan waivers affect the sector and the economy. Giventhe upcoming 2019 general elections it can
trigger competitive populism to waive farm loans.
 16. Government v/s RBI
RBI and the Government
Former RBI governor Y.V. Reddy once joked: “Yes I am independent and the RBI is an
autonomous institution. This, I am saying after getting permission from the Finance Minister”.
RBI and Finance Ministry
RBI - main function is Monetary policy. Monetary policy involves changing the interest rate and
influencing the money supply.
Finance Minister’s main function is Fiscal policy. Fiscal policy involves the government changing
tax rates and levels of government spending to influence aggregate demand in the economy.
Issues between RBI and Government
Regulation of PSBs
The influence or non-influence of the RBI over public sector banks (PSBs) has been a contentious
issue that has played out in two different ways.
The first was in the aftermath of the Nirav Modi-Punjab National Bank scam, with finance minister
Arun Jaitley laying the majority of the blame for the controversy at the door of “supervisory
agencies”, a reference that many saw as the government indirectly rebuking the RBI.
Diluting PCA framework
‘Prompt corrective action’ (PCA) framework, a set of rules that central bank applies for weaker
banks that have serious or structural problems.
As it stands right now, 11 state-owned lenders are under restrictions placed by the PCA framework.
The Centre is clear in what it wants: if weaker banks are allowed to lend again, it could boost credit
growth in certain areas of the Indian economy.
The RBI’s defence is also equally clear: if the Centre wants state-owned banks to exit PCA, as a
majority owner, it needs to infuse more capital, which is something the Modi government is
reluctant to do beyond a certain point.
Government's Big Move
On October 31, India woke up to multiple media reports saying the government has decided to
invoke Section 7 of the RBI Act in order to get its way.
What is Section 7?
Section 7 of the RBI Act, when invoked, allows the government to consult with and give
instructions to the Governor of the RBI on certain issues that it believes are serious and are in public
interest.
Interestingly, Section 7 has never been invoked in independent India.
Big Impact
The government invoking Section 7 would essentially result in the central bank losing its autonomy
temporarily.
Even in the country's darkest days as an economy, say in 1991 or in the period that followed the
2008 financial crisis, the government never went down that road.
 17. BrExit
Great Britain leaving the European Union (EU)

What is the European Union (EU)

This includes being part of a “single market”, which means that countries can trade with one
another and people can move around freely – as if we were all living together in one big country.
The EU has its own parliament, laws and currency.

Note: Britain never fully accepted the legitimacy of European control over British institutions. It
refused to join the Schengen Area, which eliminates internal border controls and opted out of the
common currency Euro.

The referendum
The United Kingdom (UK) voted to leave the European Union(EU) by 52% to 48%.
Technically speaking, the referendum was not legally binding.

Possible reasons for Britons deciding to leave EU:

•Financial: As regards the UK, the amount is around $12 billion dollars (£9billion).
•Immigration: It is believed that almost 1 million people have moved to the UK due to the free
labour laws.
•Control & Autonomy: the European Parliament decides on many rules and standards that EU
countries have to follow and critics felt that UK was losing control of our own affairs and laws.

In essence, it was about autonomy, monetary benefits, & immigration that got 52% of the Britons
voting to leave the EU.

Immediate impact

The then Prime Minister David Cameron had vociferously campaigned for ‘Remain’. The British
Prime Minister shocked everyone by resigning from the post. His chair has become the first
casualty of Brexit. Teresa May was then elected as the next leader of the Conservative Party& the
Prime Minister.

Spooked financial markets

In India, the Sensex was down 1000 points on fears that Britain without the EU may not be good for
India’s business interests.

The two kinds of Brexits

The two different terms essentially refer to the kind of relationship and level of participation the
country will have with the EU’s Single Market – the free movement of people, goods and services –
and the Customs Union
A soft Brexit is generally more favoured by Remain supporters – second to no Brexit, of course–
and a hard Brexit is typically more likely to be supported by those who voted Leave.
Key elements of a soft Brexit:
UK would still be bound by some of the rules of the bloc, but it would have less of a say in how the
rules are made.

Key elements of a hard Brexit:

It essentially means taking the UK completely out of the EU – including both the single market and
the customs union, so it is free from its regulations and tariffs. It would give the UK more control
over its borders and immigration.

It could cause more economic damage to both the UK and the EU but supporters think this would
be worth it for the country to be able to then draw up its independent trade agreements.

When is the UK due to leave the EU?

UK is scheduled to leave EU on Friday, 29 March 2019

Ground Already Covered:

The discussions have been mainly over the “divorce” deal, which sets out exactly how the UK
leaves - not what will happen afterwards. This deal is known as the withdrawal agreement.

Another, much shorter, document has also been drawn up that gives an overview of what the UK
and EU’s future relationship will be in the longer term. This is the political declaration.

So is Brexit definitely happening?

The UK is due to leave the European Union on 29 March, 2019 - it’s the law, regardless of whether
there is a deal with the EU or not.

The Uncertain Future

A second referendum?

The PM has publicly denied a possibility of a second referendum but it seems most MPs are
backing a second referendum.

As of 26th Dec, a soft Brexit, no deal and a referendum ( in favour of Remain) look to be the
possible outcomes but it is a very complex issue and events during the first quarter of 2019 may
well be the most important event in Britain’s Post-world War history.