Mitras Analysis of News : 04-03-2017

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  1. The road to China is through Kabul (The Hindu)
  2. Treated, but partly (Down to Earth)
  3. Conditions for a cashless India (The Hindu)
  4. Crossing a bridge(The Hindu)

1.The road to China is through Kabul (The Hindu)

 Synoptic line: It throws light on Sino-India relations under the lens of Afghanistan (GS paper II, India and its neighbourhood- relations.)

Overview 

  • India-China had recently concluded India china strategic dialogue which focussed on key areas concerning the ambient relations and stability in the region.
  • The Dialogue provides an opportunity to cooperate on array of issues and between both the countries. Moreover, Afghanistan can be window for improving cooperation and enhancing stability in the region.

What Is India China Strategic Dialogue:

  • India and China shares strategic partnership since 2005
  • It is first ever strategic dialogue since both countries commenced their formal diplomatic relations.
  • However, several bilateral agreements have been taken place in recent years over variety of topics such as border dispute, economic ties etc.
  • Strategic dialogue is more enhanced then usual bilateral meetings where both sides exchange the conflicting views they hold on a range of issues and then issue a joint statement that includes how parties expressed their concerns about some particular issue. Strategic dialogue endeavours to progress from merely expressing concerns to attempting to find common ground along with differences and discussing ways and means of expanding on common grounds.
  • It focussed on several key areas such as including JeM chief Masood Azhar’s name in the United Nation’s list of global terrorists, NSG membership for India and most importantly cooperation on stabilising Afghanistan.

Importance of Afghanistan

  1. Afghanistan’s location at the strategic crossroads between South Asia and Central Asia and South Asia and the Middle East makes the country extremely important for India.
  1. It has funded some major Afghan reconstruction and development plans and has invested US$1.5 billion so far. It has recently committed another US$500 million. The funds have been spent on building the 218 km-long Zaranj-Delaram road linking the Iranian border with the Garland Highway, electric power lines including one from the CARs to Kabul, hydroelectric power projects, school buildings, primary health centres and the new building for the Afghan Parliament.
  1. Afghanistan is also important for India’s Energy security as various hydrocarbon pipelines will transit through Afghanistan.
  1. Moreover, both China and India are grappling with terrorism radiating from Afghan soil. India faces terror footprint in Kashmir valley which also has afghan connections via Pakistan.

Why China concerned over Afghanistan:

  • There is a growing threat of the Islamic State (IS) to China. It is feared that Uighur muslim community (which lives in north-west china) is being influenced by IS to terrorise China.
  • China is fearful of East Turkistan Islamic Movement which aims to gain independence for Xinxiang region of china and it is supported by Afghanistan.
  • China’s mega investment plans in Pakistan are also dependent on a measure of regional stability.
  • USA is yet to clarify its position on Afghanistan, and with it looking unlikely to add more American troops to the depleting reserves of Western forces in the country, it is not surprising that China is keen to engage India, the one country that has built a reservoir of goodwill in Afghanistan and has demonstrated some ability to deliver concrete results on the ground.
  • Moreover, being regional giants it is the responsibility of both countries to cooperate to stabilize the Afghanistan.

Possible irritants between India and China

  1. China bleives in stabilising role of Taliban in Afghanistan whereas India discards such an approach.
  2. Synergy is lacking between two countries due to persisting irritants such as Chinese opposition to India’s NSG membership and China’s adamant position to put a UN ban on Azha .
  3. Moreover, India considers Pakistan as a pivot for terrorism whereas China does not recognise this fact and keep on supporting Pakistan in its endeavours.
  4. India china also faces hostility over China- Pak. Economic corridor (CPEC) which will pass from disputed region in POK.

Way ahead

  • The fact that China is interested in working with India on Afghanistan suggests that new possibilities on regional cooperation are emerging, which India should not hesitate to explore.
  • Both the countries should assist capacity building in Afghanistan via equipping and training afghan forces along with developing the basic infrastructure to speed up development in country.
  • Pakistan should be engaged constructively as terrorism and Taliban affiliates are also hurting itself as evident by the recent bombings in Pakistan.

2.Treated, but partly  (Down to Earth)

 Synoptic line: It throws light on government’s decision o slash the prices of stents and how it will impact the health scenario.(GS paper II and III, Health)

Overview

  • Government has recently slashed the prices of coronary stents by upto 85% which will have huge implications in making health affordable.
  • It will help in reducing the out of pocket expenditure incurred on treating the coronary artery disease (CAD). Thousands of people with heart problems will be benefitted with this move

What are stents and what are their uses

  • A stent is a small mesh tube usually made up of metal or fabric which are used to treat narrow or weak arteries. Arteries are blood vessels that carry blood away from your heart to other parts of your body.
  • Stents are usually necessary when plaque blocks a blood vessel. Plaque is made of cholesterol and other substances that attach to the walls of a vessel.
  • Doctors also may place stents in weak arteries to improve blood flow and help prevent the arteries from bursting.
  • Stents are of two types i.e. bare metal stents (BMS) and their advanced variants, the drug-eluting stents (DES). Unlike BMS, DES emits a drug over time to help keep the blockage from recurring.
  • The procedure of placing the stent in an artery is called angioplasty.

Government’s move :

  • Recently NPPA announced to slash the price of both BMS and DES by up to 85%.
  • According to a report by National Commission on Macroeconomics and Health, coronary artery disease (CAD) is responsible for 90-95 per cent of the cardiovascular deaths in the country. At least 61.5 million people suffer from CAD.
  • A market survey by NPPA has revealed that the nexus between manufacturers, distributors and hospitals. For instance, patients are charged more than Rs 1 lakh, and at times Rs 1.98 lakh, for a DES, which costs only Rs 5,126 to the importer.
  • Hence, government’s move can be seen as a great respite for out of pocket expenditures.

Areas of concern :

  • Looking at price reductions of stents, it seems as the benefits of decreased price are getting passed from manufacturers to distributors and from distributors to hospitals, but the benefits may not entirely pass from hospitals to patients as stents cost less than 25% of total expense incurred in an ang Thermoplasty while other substantial charges are composed of hospital fees and doctor fees.
  • There is a concern as hospitals may not increase the price of angioplasty procedure, doctor’s fee and prolong the patient’s stay in hospital to recover the curtailed cost of stents. However,The NPPA order already has a few safeguards to ensure this. It directs hospitals and nursing homes to bill the patients separately, detailing particulars of costs, name of the maker and batch details.
  • It is also feared as it may lead to artificial shortages by suppliers, importers and hospital authorities. Consequently, patients will suffer the pain
  • It is also also being alleged that the decision will leave a negative impact on nascent stent industry and will hamper the further improvisation.

Way ahead :

  • Along with capping the prices of stents, it should also be ensured that patients are not often needlessly suggested to undergo angioplasty only because doctors and hospitals want more profit. According to MoHFW, 473,000 stents were implanted in India in 2015 up from 135,000 in 2010. This shows the growing importance of stents and also the eagerness of hospitals to implant stents for monetary benefit.
  • Along with capping the price of stents, a comprehensive multi-stakeholder approach is required that involves contributions from other stakeholders to address the problem more efficiently.

3.Conditions for a cashless India (The Hindu)

Synoptic line: It provides the ways and issues associated with cost related to digital payments and its impact on move towards cashless economy. (GS paper III)

Overview

  • India’s push for Digital Economy calls for less reliance an paper money and more reliance on plastic money or net transactions.
  • However, India is not being able to drive the behaviour towards cashless modes due to problems

Key Issues

(A) Cost:

  1. India is a sensitive country where small changes may bear huge results. In the case of cash less transactions there are three “C”(s) which should be considered to drive India cash less.
  2. These are: cost, convenience and confidence.
  3. Currently, there are various charges on digital transactions. Irrespective of who (purchaser or seller) pays, it will have an impact on the cost of goods/services.
  4. The charge payable for card transactions is known as merchant discount rate (MDR) which initially came to be levied on credit cards. In that situation, the institution issuing credit cards (the issuer), the sponsoring bank of the point-of-service (PoS) device with the merchant (the acquirer) and the settlement provider (typically VISA, Mastercard or more recently, RuPay) all charge for a transaction. The MDR, charged from the merchant, is divided among these three parties. It is now being levied on debit card payments as well.
  5. In case of card payments there can be some costs (MDR) owing to acquisition and Maintenance of POS machines but the same concept is continuing for mobile transactions as well, though there are no cards or PoS devices. While there were proposals for rationalising this system, not much has happened thus far in a sustainable manner.
  6. There can be no justification for MDR charges on mobile payment applications as in the mobile app world, users’ smartphones act as PoS machines. Hence no cost is incurred on any third party.

(B) Convenience charges:

  1. Various public and private entities tend to levy convenience charges for online transactions, citing the factor of convenience that is being availed by a consumes via opting for online transactions
  2. However, convenience is rather being availed by service providers as consumers tend to save various costs for service provider such as cost of printing ticket or invoice, cost of handling staff , bandwidth cost etc.

(C) Confidence

  1. Boosting confidence of consumers in Digital payments mode will require building secure architecture for online payments .
  2. Issues such as recent cyber threat to almost 2 Mn. Card holders erodes the user confidence.
  3. Secured and user friendly applications can tend to ease the fear associated with online transactions.

Way forward:

  • Cashless transactions and a digital India is indispensable to the growth of the country. It will mean more liquidity, better tax-compliance and GDP growth.
  • Moreover, it will create a robust inventory of credit histories which will facilitate availability of credit to poor at reasonable interest rates and digital credit dispensation will be boosted
  • Hence, banks should not look at MDRs as an income source but should step back to look at the larger picture in form of larger gains like more liquidity/float and less cash handling costs. Even a paper released by Govt. also claimed that cash costs around 21,000 cr. Annually in form of handling cash, security etc.

 

4.Crossing a bridge   (The Hindu)

Synoptic line:  Indus Water Treaty and its arbitration measures are seen to be a model for dispute management. (GS paper II, India and its neighbourhood relations.)

Overview

  • Even in the times of adversity Indus water Treaty has been materialized successfully. Permanent Indus Commission assigned to implement the Indus Water Treaty (IWT) has been met with operational regularity
  • Both the countries should take a cue from IWT and should work toward an amicable solution .

Indus Water Treaty (IWT)

  • The Indus Waters Treaty is a water-sharing arrangement signed by then Indian Prime Minister Jawaharlal Nehru and then President of Pakistan Ayub Khan in 1960, which was brokered by World Bank
  • It covers the water distribution and sharing rights of six rivers – Beas, Ravi, Sutlej (eastern rivers), Indus, Chenab and Jhelum (western rivers).
  • Under the treaty India has full use of three eastern rivers, while Pakistan has control over the three western rivers, although India is given rights to use western rivers partially for certain purposes.
  • Though Indus originates from Tibet, China has been kept out of the Treaty. If China decides to stop or change the flow of the river, it will affect both India and Pakistan.
  • A Permanent Indus Commission was set up as a bilateral commission to implement and manage the Treaty.

Recent move

  • India has accepted Pakistan’s invitation to the next round of talks for the Permanent Indus Commission in Lahore.
  • It shows India’s resolve and spirit to the treaty that has stood the test of time and war, and also exhibits country’s sincerity on the issue of water- sharing, given that the IWT is seen to be a model in dispute management.
  • It can also lead to the softening of hostility at other issues such as border dispute and recent ongoing standoff along the border.

Way Ahead

  • Neighbors may be adverse but can never be changed. Whatever may be the course of Pakistan but it has to be involved in negotiations in order to secure the stability of the region.
  • The ceasefire pact of 2003 ensured a period of relative stability for a decade. Hence, the dialogue and subsequent peace agreements can bring the peace for country
  • Moreover, involving Pakistan is also crucial to stabilize the Afghanistan in the era of post troop withdrawal by USA.
Kishen Ganga project

·         The Kishenganga Hydro Electric Project (KHEP) is a run-of-the-river project located on a tributary of River Jhelum in the northern district of Bandipora in the Himalayan state of Jammu & Kashmir.

·         The project has been designed to divert water from the Kishenganga river through a 24-kilometre-long tunnel for generating electricity and then send the water back to the Kishenganga. Pakistan is building the 969 MW Neelum-Jhelum hydroelectric project downstream which, Islamabad contends, will be affected by the KHEP.

·         Pakistan has demanded that the World Bank set up a Court of Arbitration to hear its objections over the Kishanganga hydroelectricity project by India, which has asked the international lender to appoint a neutral expert to settle the dispute.

·         The international court of arbitration gave its final verdict, allows India to go ahead with the construction of Kishenganga project, but specifies to maintain natural flow of river at all times to maintain the environment downstream and to change Drawdown flushing technique for management of sedimentation in the dam.

 

 

 

 

 

 

 

 

 

 

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