01 FEB 2016 (Indo-France relation,CORAL,Priority Sector)

Deepening the French connection:-

Background :-President François Hollande’s visit is the fifth such by a French leader to have been honoured as the chief guest at the Republic Day, more so than any other country. Equally significant, this was his second state visit (the first was in 2013), a trend that was started by his predecessor, Nicolas Sarkozy, who was chief guest at the 2008 Republic Day and returned for another state visit in 2010. With corresponding visits by Indian Prime Ministers, this annual summitry highlights the expanding areas of cooperation and convergence between the two countries.

Details :-

In recent years, India has entered into more than three dozen “strategic partnerships”, but France remains the original one. President Jacques Chirac had a long-standing interest in India and undertook three visits to India, in 1976, 1998 and 2006, the only leader to have been chief guest at the Republic Day twice, first as Prime Minister in 1976 and then as President in 1998

The second visit saw the establishment of the “strategic partnership” which was tested months later in May when India conducted a series of nuclear weapon tests. France was the first major power to open a dialogue with India. Within weeks, Brajesh Mishra (accompanied by the writer) was in Paris as Special Envoy of Prime Minister Atal Bihar Vajpayee. We were received by Mr. Chirac, who not only gave us a patient hearing, but also responded with a keen appreciation of India’s security predicament arising from the unbridled nuclear proliferation that had taken place in our neighbourhood.

Robust strategic partnership:-

This is the strategic dialogue that became institutionalised at the level of the National Security Advisers. The agenda has also expanded to include counter-terrorism, intelligence sharing and cyber-security issues, in addition to the original nuclear, space and defence related matters. The 57-paragraph-long Joint Statement covers these and also a wide range of other areas of cooperation — climate change and sustainable development, economic cooperation, urban development, human resource development, heritage preservation and cultural cooperation.

The terrorist attacks last year, on the Charlie Hebdo office in January and at multiple locations in Paris in November, have changed the way France looks at global terrorism. There is a realisation of vulnerability on account of the alienation in the French Muslim community. Radicalisation and the growing appeal of the ideology of global jihad is a real threat. This resulted in a standalone Joint Statement on counter-terrorism which seeks to do away with the caste system in terror strikes.

If New York, London and Paris were horrific, so must Mumbai, Beirut and Nairobi be, and the statement makes that point effectively. It underlines the need for a comprehensive approach, removes any distinction between al-Qaeda and the terrorist groups targeting India like Lashkar-e-Toiba, Jaish-e-Mohammed and Hizbul Mujahideen, calls on Pakistan to bring to justice the perpetrators of the Mumbai attacks and calls for a dismantling of sanctuaries and safe havens in Pakistan’s border areas that can destabilise Afghanistan.

A push has been given to the Jaitapur nuclear plant negotiations by seeking to conclude these by the end of 2016, coupled with the affirmation that there will be six European pressurised reactors which should help in bringing the cost to below $5 billion for each reactor. To mark 50 years of India-France space cooperation, new projects for cooperation between the Indian Space Research Organisation and the French government space agency, Centre national d’études spatiales (CNES) have been announced, dealing with environment and weather monitoring, mapping of water resources and a joint Thermal Infrared Earth observation mission.

The implementation of the announcement made during Prime Minister of India’s visit to Paris last April about the decision to purchase 36 Rafale combat aircraft in a flyaway condition, has been taken forward by signing a memorandum of understanding (MoU) which freezes the technical parameters, weapon payloads and lifetime servicing and spares needed. It is expected that the negotiations of the financial terms will be concluded in coming months. More significant are the joint ventures (JV) proposed to be set up between private sector entities in both countries that can provide a much needed boost to “Make in India” in defence. This should give greater content to the Agreement on Defence Cooperation, originally signed in 2006 and now extended till 2026, providing a framework for cooperation in defence production, research and development and procurement of defence materials.

Among the emerging areas of cooperation are homeland security, cyber security, special forces like the National Security Guard and its French counterpart GIGN, and intelligence sharing to tackle the common threats of terrorism and global criminal networks. Closely linked are concerns about Internet governance, surveillance by external powers and the dominance of U.S. companies in this field.

Maritime security in the Indian Ocean region is another sector ripe for greater cooperation, given French presence by virtue of its territories (the Reunion Islands) for maintaining safety of sea lanes, tackling piracy and enhancing maritime domain awareness.

Business and educational ties

Cooperation in “strategic” areas is growing and the government-to-government relationship is the principal driver for this. Two areas that have been lagging are economic and trade relations as well as the people-to-people exchanges. The Hollande visit has sought to fix these by announcing a range of new measures. Bilateral trade between the two countries has been languishing at $8 billion, well below potential.

French foreign direct investment has picked up and there are more than 800 French enterprises operating in India. These include industry leaders like Alstom, Airbus, Schneider, Alcatel, Total, BNP Paribas, L’Oréal, Renault, Sanofi Aventis, Veolia, Engie (GDF Suez), Thales, Vinci, etc. Capgemini, an IT major has a large workforce in India.

With a large number of MoUs signed in sectors like urban development, solar energy, sewage and sanitation, urban transport including railways, water supply and entertainment, there appears to be a determined effort to make the business-to-business link more robust. Dovetailing the Smart Cities initiative is a good move in this regard. Nagpur, Chandigarh and Puducherry have been identified as three cities where French technical assistance and funding has also been promised. However, the challenge will be to develop viable public-private partnerships that can generate long-term funding and also make the projects self-sustaining in the long run.

An attempt has also been made to energise the people-to-people relationship by focusing on educational exchanges and skill development which creates a resource pool as Indo-French JVs generate greater employment opportunities. The number of Indian students going to France annually is 2,500 while the number of Chinese students is 10 times larger. Allowing larger number of French youth to intern in enterprises in India and easing visa norms for Indian students to work for two years after completing their education in France are steps in the right direction. Linkages between educational institutions need to be built up as more and more French institutions begin to offer bilingual courses.

Traditionally, the people-to-people relationship has been driven at the elite level of artists, musicians, dancers, writers and film-makers as eminent Indians in these fields have engaged with their French counterparts, but at a popular level, it lacks a buzz. Out of seven million foreign tourists visiting India annually, the number of French tourists is less than 3,00,000! Direct air links between India and France are a fourth of those between India and Germany. An Indo-French Centre for the Promotion of Advanced Research has been in existence for nearly three decades but limited budgetary resources hamper its activities. It needs to be restructured to permit it to raise resources from Indian and French industry; for this, the scope of projects needs to be broadened. Cultural festivals have been a regular feature but events need to be planned outside the metropolises, taking local calendars into account.

The strategic relationship between the two countries has developed over the years generating a sense of comfort between the relevant government agencies. What are needed are initiatives that can strengthen business-to-business linkages and people-to-people contacts which can, in turn, provide a broader underpinning to the overall bilateral relationship. The Hollande visit has rightly sought to focus on these sectors. If these can be effectively implemented, it will help establish a more balanced relationship between the two countries, with overlapping networks of stakeholders from all sections in both societies.

Source- The Hindu

Government may ask central bank to consider roads as a priority sector:-

Background :-One of the main reasons behind the delay in highway projects is shortage of funds. While the road contractors said banks were reluctant to fund projects due to mounting non-performing assets, the government officials said the ‘managerial inefficiencies’ of developers have stalled these projects.


The government will soon approach the Reserve Bank of India (RBI) Governor Raghuram Rajan with a proposal to include road projects under the priority sector list for lending purposes and review the non-performing assets norms to revive Rs. 40,000-crore worth of highway projects that have not taken off due to bureaucratic delays and cost overruns.

The banks provide a certain portion of ‘priority sector’ lending in the form of small value loans to farmers for agriculture, micro and small enterprises, poor people for housing, students for education and low income groups and weaker sections.

At present, 40 per cent of loans given by banks should go to priority sectors defined by the RBI. Out of this, 18 per cent should go toward agriculture lending.

What is meant by Priority Sector?

Priority sector refers to those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation. Typically, these are small value loans to farmers for agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections.

What are the different categories under priority sector?

Priority Sector includes the following categories:

(i) Agriculture
(ii) Micro and Small Enterprises
(iii) Education
(iv) Housing
(v) Export Credit
(vi) Others

Targets and Sub-targets for banks under priority sector:-


Domestic commercial banks / Foreign banks with 20 and above branches (As percent of ANBC or Credit Equivalent of Off-Balance Sheet Exposure, whichever is higher)

Foreign banks with less than 20 branches (As percent of ANBC or Credit Equivalent of Off-Balance Sheet Exposure, whichever is higher)

Total Priority Sector



Total agriculture


No specific target.

Advances to Weaker Sections


No specific target.

Source- The Hindu and RBI

NASA’s airborne survey of coral reefs :-

Background :- Coral reefs are home to a quarter of all ocean fish species.If 33-50 per cent of the world’s coral reefs have already been degraded or lost due to climate change and human impacts, most of the functioning reef ecosystems may well disappear by mid-century, say reef scientists.


As a first step to estimate the extent of damage to coral reefs, NASA has embarked on an air-borne three-year field experiment called The COral Reef Airborne Laboratory (CORAL), which aims to survey the conditions of the major reefs of the world through remote-sensing.

Dr. Erich Hochberg’s team will survey the condition of entire reef systems in Hawaii, Palau, the Mariana Islands and Australia. The regions were chosen because they represent a wide range of reef types (fringing, barrier, atoll, oceanic and continental) and a wide range of environmental conditions (from pristine to heavily impacted).

CORAL will involve the aerial deployment of a spectrometer called PRISM (Portable Remote Imaging Spectrometer) developed and managed at NASA’s Jet Propulsion Laboratory in Pasadena, California, which will detect the spectral signature of the various components of a reef such as coral, algae, sand etc. which will enable assessment of the condition of the reef.

For example, as coral is degraded, it is replaced by algae and hence the ratio of algae to coral is an indicator of reef condition. PRISM records the spectrum (all the different colours) of incoming light from the ocean below, across the ultraviolet, through the visible region and up to the near infrared. The CORAL data processing takes into account the complex interactions of sunlight with the atmosphere, ocean, and reef.

The signatures are used for identifying reef areas that are coral, algae, etc. CORAL also uses those signatures to model photosynthesis.

The PRISM data are validated by in-water measurements. There are three fundamental types of data to be gathered by PRISM: optical, reef benthic cover (area of the ocean-bottom covered by the reef), and reef primary productivity.

Measuring the oxygen concentration is very important as productivity is indicated by the change in oxygen over time for a given area of the reef. A more productive reef releases more oxygen.

Coral reefs are home to a quarter of all ocean fish species. They protect shorelines from storms and provide food for millions of people, yet very little of the world’s reef area has been studied scientifically. Virtually all measurements have been made by expensive, labour-intensive diving expeditions. Many reefs have never been surveyed, and those reefs that have been studied were measured only at a few dive sites.


Source- The Hindu






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By | 2016-02-01T11:23:20+00:00 February 1st, 2016|Daily Current Events|8 Comments
  • gangireddyone

    Hi Team, I have written an essay, if it’s possible, please do review. On a different, schedule is not out yet?? Thanks!!

    The invisible hand was believed to bring unintended social benefits in income distribution and production. This was the trust that the father of Economics, Adam Smith had in capitalism, which propagated the idea of self corrective markets. A little over 2 centuries after his proposition today, we live in a world where the top 1% hold half the wealth of the world. The very idea that led to two world wars, the idea that made America the richest country in the world, and the idea that is adopted by most countries in the world in varied degrees.

    Capitalism propagated the philosophy of perfectionism, where the best are supported and the rest are benefited by the actions of the best lot, unintendedly. It has put forward the top down approach, reducing the state to a mere regulator, leaving it to the markets. The growth of economies and the wealth, was the brightest spot of capitalism. With all it’s successes, it failed to feed those 2 billion population, who still live under abject poverty, those 4 million children who die before reaching the age of one year, those children who never happened to go school and those countries whose GDPs are much lesser than the Market Capital of MNCs.

    The unintended benefits:

    The unintended benefits the are believed to be accrued are growth, innovation, effective utilisation of resources, redistribution of incomes and the benefits of perfect competition in an economy. Capitalism has indeed been successful in bringing about growth, this is evident especially in case of China, which has growth continuously for over three decades and India whose economy has grown over 4 times it’s GDP since liberalisation. It has even led to innovation in every sphere of life,competition has largely prevailed. The distribution of income and the effective utilisation of resources which is at the root of inclusive growth and development remains afar.

    What is hindering the distribution of income and effective utilisation of resources ?

    As Thomas Picketty, in his book Capital in 21st Century points out , the return on capital, is much higher than the growth rates in wages and other factors of production. This led to a situation where wealth has started to accumulate in the hands of a few people. The taxes have been cut down drastically and the tax benefits to the corporates has been increasing significantly. In india for instance, the corporate taxes are at 34%, which is slightly on the higher side but the tax subsidies of over 5,76,000 crore brings down the benefits of growth and the corporate taxes. This accounts to 5% of GDP, which is on par with the social investments in India, which stand at 6% of GDP.

    The effective distribution of resources, has failed owing to the crony capitalism, wrong policies of the governments in allocating resources to the people and allowing their concentration in the hands of a few corporates. This is most evident in the case of Chattisgarh and Jharkhand States, the mineral rich state of india, which are the abode for the poorest in the country.

    Is capitalism at logger heads with inclusive growth?

    The Kuznets curve proposes that in a capitalisist economy first increases and then decreases economic inequality, which is being opposed today. This is evident from the increasing genie index. The gini index has increased to 0.36 post liberalisation in india, this shows increasing inequality and failure to foster inclusive development. This can be attributed to a number of factors such as :

    Lack of effective democratic institutions,
    Lack of effective redistribution mechanisms,
    Lack of absorption capacities and state capabilities,
    Corruption and crony capitalism.

    With effective mechanisms, capitalist policies can effectively foster inclusive growth and also supplement the efforts, through increased incomes and GDP.

    Has india taken necessary steps to foster inclusive growth?

    India has many mechanisms, in place such as the subsidies, the devolution of finances to the Panchayats and local bodies, progressive taxation, social programme such as NREGS, RTE and other accountability mechanisms such as RTI. Along with these the measures, the steps such as rationalisation of tax holidays for corporates, CSR spend of 2% being made mandatory, setting up District Mineral Foundations and cesses for development. While these measures have had both positive and negative impact, their effective implementation can go a long way in fostering inclusive growth in a capitalist economy.

    The fall in poverty levels, increased education health, percapita incomes and indeed reflect that the steps are in the right direction. These have to be more efficient and targeted.

    For capitalism to be effective, inclusive development is must and vice versa :

    Growth has to be comprehensive, in economic, social, human and even the environment. This can only be achieved through inclusive developmental efforts. India has to channelise the benefits of economic growth in developing the social, human and environment. The efforts of skilling and increased spending in the social sector, by increased flexibility to the States in implementation of policies etc. This increases the productivity of the economy as a whole, in turn increasing the consumption across the radar, which forms the basis for capitalism.

    The other major aspect of inclusive development in india is investment in agriculture, as more than 50% are involved in agriculture and reside in the rural areas, growth can be inclusive only if it has a positive impact on agriculture and rural areas.

    India has to a certain reaped the benefits of capitalism and could foster inclusive growth to an extent. For this to be continuous, we should have effective democratic institutions, developed state’s absorption and capabilities with a bottom up approach whereever necessary. While india is moving in the right direction a lot more has to be done.

    • This is a very well written essay and shows your understanding of the subject. The introduction part is very good. The later half of body part of the essay needs improvement as it appears little repetitive. Conclusion can be better… Your introduction is very good so conclusion has to be good too. Little discussion on the alternatives such as communism and socialism vs capitalism could have been made. Overall its a vety good effort Gangi.

      • gangireddyone

        Hi sir, do not want to bother further but one last feedback would help. I was told, the essay looks academic and technical, is that so? Because all I have used is from news papers and basic concepts of economics. Please do reply. Thanks!

        • Yes, keep in mind that it will be checked by English professor not an economist.However if you explain the concepts/technical terms in a line or two it might be enjoyable for the examnier. Nevertheless, you can’t write an economic essay without using economic words , you just have to moderate it little bit. That will do

          • gangireddyone

            Thank you!!

  • HIM

    sir please compile an article on WETLAND DEGRADATION AND ITS CONSERVATION.

    • that’s a good idea. we will do it on a Roll-on-News-Day.Thanks

  • gangireddyone

    Hi sir, do not want to bother further but one last feedback would help. I was told, the essay looks academic and technical, is that so? Because all I have used is from news papers and basic concepts of economics. Please do reply. Thanks!