Old friends (The Hindu)

A Nepal-India win-win (The Hindu)

Fixing delivery (The Hindu)

 

Old friends

(The Hindu)

Synoptic line: It throws light on the issue that India need to strengthen ties with Iran.

(GS paper II)

Overview

 

 

  • Iranian President Hassan Rouhani recently visited India, exactly a month after Israel Prime Minister Benjamin Netanyahu, Iran’s biggest rival, made a historic visit. Which send out a message that India aims for balance in its ties in the neighbourhood.

 

 

The visit

 

  • The visit came amid uncertainty over the U.S.’s next move on Iran, given the Trump administration’s line on the Iran nuclear deal.

 

 

  • During the recent visit India and Iran signed agreements and memorandums of understanding on a wide variety of issues. Among the announcements was the decision to award India the contract to operate the Chabahar Shahid Beheshti port terminal after the project is completed.

 

 

  • The $500-million Beheshti port project in Chabahar, where India is expected to complete development of berths later this year. India is already routing a consignment of 1.1 million tonnes of wheat to Afghanistan through the existing facilities at Chabahar.

 

 

  • Though there was no announcement made on the Farzad-B gas field that India has expressed an interest in, the joint statement indicates that positive deliberations may follow. There were discussions on enhancing trade and investment and ease of doing business between India and Iran, including a double taxation avoidance agreement and an expert group to recommend “trade remedy measures”.

 

 

  • Iran is likely to seek India’s support at the upcoming meeting of the UN’s Financial Action Task Force, where Tehran is hoping to exit a blacklist on money laundering and terror finance, even as India hopes to see Pakistan put on a “grey-list” at the meeting.

 

 

  • Before the visit, India had announced, that it would allow Indian investment in Iran to be done in rupee terms. The concession, which has so far been extended only to Bhutan and Nepal, allows money lying in Indian banks as payment for imports from Iran, mostly oil, to be repatriated.

 

 

 

  • Till now these funds have been blocked because international banks and insurance companies refuse to facilitate trade to Iran fearing further U.S. sanctions on Iranian entities. In turn, Iran is understood to have reversed last year’s decision to slash the credit period for oil payments from India, and issue more generous guidelines.

 

 

  • The visit also highlights the importance of bilateral ties between the two countries, stressing the strategic imperative for their growth. Mr. Rouhani also endorsed India’s bid for a permanent seat at the UN Security Council with the veto, and praised India as a “living museum of religious diversity”. 

 

  • Iran is likely to seek India’s support at the upcoming meeting of the UN’s Financial Action Task Force, where Tehran is hoping to exit a blacklist on money laundering and terror finance, even as India hopes to see Pakistan put on a “grey-list” at the meeting.

 

Way ahead

 

 

  • India need to maintain a steady course on its strategic interests with Iran, a key source of energy, as it is the “golden gateway” to Afghanistan and Central Asia.

 

 

Question- Iran is after all, not just important for India’s energy needs but also its only route for access to Central Asia. Explain in the context of recent India-Iran meet.

A Nepal-India win-win

(The Hindu)

Synoptic line: It throws light on the issue to maintain mutually beneficial stability and growth between India and Nepal.

(GS paper II)

Overview

 

  • Like every nation-state, India also seeks its own advantage in international relationships, including within the South Asian region. And because of global preoccupations, New Delhi seems to constantly under-estimate Kathmandu’s fierce sense of self. The stratagem over the decades has been to try to influence Kathmandu’s politicos, forgetting that they too survive within the milieu of Nepali politics.

 

India- Nepal

 

 

  • In the case of Nepal, a country where friendship with India comes naturally even more than being a necessity, due to cultural, social and economic linkages over the open border. The legacy of ‘big brother’ started with Jawaharlal Nehru.

 

 

  • Recently, India became progressively interventionist as Nepal got mired in internal crisis during and after the Maoist ‘people’s war’, and as the hill-plain polarisation escalated during the constitution-writing. India has tended to speak loudly while wielding a big stick, based on a sense of entitlement and exceptionalism. But evidently, Indian nationalism for all its vigour cannot suppress nationalism across the frontier.

 

  • Though there are various domestic factors, but a key reason for political instability in Nepal has been India’s overt and covert intercessions. Also Indian analysts fail to appreciate how political stability in Nepal can deliver economic bounty to the bordering Indian States on its three sides.

 

  • The economists should study the ‘Pew Research Centre’s  figures showing Nepal as one of the larger sources of remittances to India, that too to the poorest regions such as north Bihar, east Uttar Pradesh and Odisha.

 

  • India is understandably apprehensive as the Chinese geo-economic juggernaut infiltrates the Sub-continental countries, including Nepal. Rather than imperious warnings against consorting with Beijing, however, better to leave each society to develop its own method on dealing with China. In the case of Nepal, the arrival of the Qinghai-Tibet Railway at the northern border point in 2020 will be a game-changer, and the Indian market too is set to benefit.

 

  • Recently as Khadga Prasad Sharma Oli sworn in as Prime Minister, there is now opportunity to start afresh on India-Nepal. It is true that India has never had as adversarial a Prime Minister in Kathmandu as Mr. Oli, but this is mainly the result of New Delhi’s own short-sightedness.

 

  • New Delhi may be surprised to find Mr. Oli more than willing to reciprocate its overtures, providing reassurance that Kathmandu will never act against India’s security interests, while insisting that in all areas Nepal will take its own decisions. Nepal’s politicians are masters at realpolitik, and the art of balancing India vis-a-vis China is not outside of Mr. Oli’s personal skill-set.

 

  • Nepal is now a federal and secular republic, experimenting with three levels of fully empowered government, central, provincial and local. But there is confusion on the division of powers between the tiers, and foot-dragging by the national bureaucracy and many powerful politicians, besides an untested Constitutional Bench of the Supreme Court.

Way ahead

 

  • Apart from maintain internal politics, Prime Minister Oli is tasked today to reset the relationship with India at a new normal.  The new Prime Minister in Kathmandu needs a hands-off New Delhi to ensure mutually beneficial stability and growth.

 

Question India cannot and should not prevent Nepal from developing closer links with China so long as Kathmandu remains cognizant of vital Indian interests, critically analyse.

 

Fixing delivery

(The Hindu)

Synoptic line: It throws light on the issue of the direct benefit transfer in fertilizers.

(GS paper III)

Overview

 

 

  • Across the country, a silent revolution is taking place, as each time a farmer purchases fertilizers from a dealer, he/she presses his or her thumb at a point-of-sale (PoS) device and an authenticated receipt comes out giving details of the purchase and subsidy to be paid by the government directly to the manufacturer. The records of dealers are automatically updated and payment is made digitally or in cash.

 

 

 

  • Farmers, especially those purchasing urea, who were facing constraints of availability and occasionally overcharged in the past, now receive it at a printed price with complete transparency. This mechanism is seems to the world of direct benefit transfer (DBT) in fertilizers.

 

 

What is a PoS terminal?

 

  • A point-of-sale (POS) terminal is a computerised replacement for a cash register which can process credit and debit cards. A customer needs to enter a card PIN to complete the transaction using the PoS terminal.

 

Direct benefit transfer (DBT) in fertilizers

 

  • Unlike DBT in LPG where subsidy is directly transferred to the consumer’s bank, and in food where pilot projects of DBT replacing physical delivery of rations have taken place, DBT in fertilizer envisages transfer of subsidy to manufacturers upon authentication of purchase by farmers. In this way it restricts diversion, prevents leakages, and brings about greater transparency, accountability and efficiency.

 

  • Given the complex nature of fertilizer subsidies, with multiple producers and varying cost structures, this was perhaps the best option to begin with. The Standing Committee on Chemicals and Fertilizers (2016-17), in its 36th Action Taken Report, has recently emphasised that while implementing DBTs, subsidy should be disbursed directly to the farmer’s bank account. This requires serious consideration while Phase-I is implemented and stabilised.

 

  • The committee set up by NITI Aayog decided to roll out the pilot on DBT in fertilizers in 16 districts, since then DBT in fertilizers has been rolled out in 19 States and Union Territories and 12 States are expected to come on board this month.

 

  • In another three months, DBT in fertilizers is expected to expand its footprint in the entire country. These initiatives have been supplemented with allied processes set in motion by the Department of Fertilizers including appointment of 24 State DBT co-coordinators, and organising about 4,500 training sessions across India. 

 

Challenges

 

  • DBT in fertilizers has had its challenges, for example an important issue has been connectivity, like other IT-based initiatives, especially in rural areas. While this has been addressed through flexibility in choosing the connectivity option (Wifi, LAN, PSTN) or use of external antenna to improve signal strength, other options have also been considered. Developing the systems and sensitising all stakeholders to migrate to the new system was an arduous task but it was successfully implemented.

 

  • A major concern is of some dealer attrition, which is probably on account of declining margins and reduced possibility of diversion or sale at a higher price. This would need to be addressed on priority, if necessary, by revising the dealer margins.

 

  • An independent evaluation agency appointed by NITI Aayog conducted two rounds of surveys of the pilot districts to get ground-level feedback. In the latest round, they surveyed 5,659 farmers and 427 retailers across 14 districts in addition to government officials and stakeholders in six States.

 

  • The key findings included that ‘The Aadhaar authentication strike rate increased to as high as 97% in three attempts; 85% of farmers received transaction receipts, and 98% were charged the same amount as mentioned in the receipt; and the grievance redress mechanism has improved and 79% retailers are satisfied’.

 

Way ahead

 

  • The challenges posed during implementation are need to be addressed in real time. Innovative solutions, such as making the application device agnostic so that retailers can use desktops, laptops, tablets, smartphones, etc. to run the application — are expected to help.

 

  • The revamped toll-free number will soon allow conversations in regional languages. Reducing the waiting time for farmers purchasing fertilizers is important. While Aadhaar is the preferred form of identification of buyers, other forms of identification may also be used.

 

  • The broad and overriding goal is to ensure that under no circumstances should any farmer be denied or refused the opportunity to purchase fertilizers.

 

Question Explain how the direct benefit transfer (DBT) in fertilizer is different from the other DBT programmes? Also highlight some of the challenges and measures.