UPSC Mains Questions on Current Affairs: 23-09-2017
- The proposed India-Japan Asia-Africa Growth Corridor (AAGC) is being seen as a potential alternative to the One-Belt-One-Road (OBOR) initiative of China. How the former is different from later? What will be the practical difficulties faced by AAGC?Category – GS-II- India and its Neighborhood Relations
Answer:Asia-Africa Growth Corridor is the Indo-Japanese joint initiative which was launched in 2017. The idea behind the project is to revive ancient sea routes and creating new sea corridors which link African continent with India and countries of South Asia and South-East Asia. The prime focus of this project is on four areas as follows:
- Development and cooperation project
- Quality infrastructure and institutional connectivity
- Capacity and skill enhancement
- People-to-people partnerships.
Though China’s OBOR also intends to develop ties by reviving the ancient Silk Route, however, there are certain fundamental difference between OBOR & AAGC:
- One of the most crucial difference is the consultation of all stakeholders, in fact, one of the reasons cited by India regarding OBOR was that India was not consulted by China for OBOR.
- However, AAGC stresses on strong local ownership by many African countries of projects which are a component of AAGC.
- Apart from that OBOR envisages the development of a land corridor, AAGC focus on the development of sea corridors.
- Also, there is the difference in finance model, on one hand, OBOR is “government-funded model”, AAGC, on the other hand, would involve large participation from the private sectors of India, Japan, and African countries.
The journey of AAGC is not going to be easy specifically keeping OBOR in mind and there are certain challenges.
- First and foremost challenge is to beat China in terms of trade and investment in Africa will not be easy. Presently, China is Africa’s biggest trading partner and also its top source of export with trade value almost four times to that of India with Africa.
- Another challenge is the issue of political stability in Africa as many African nations are still struggling from colonial past and are therefore subject to political turmoil at any time.
AAGC can provide a platform for Asian and African economic integration. Asia Africa Growth Corridor will be instrumental for Indo-Pacific region as it can be growth multiplier and trust multiplier program for Asia Africa relations.
- While putting latest budget figures in focus, examine the role of Income Tax in overall revenue mobilization. In the light of these figures, do you agree with the view that time has come to abolish the personal income-tax?
Answer:As per Economic survey only around 5.5% of earning Indians pay taxes. Due to this the taxpayers to voters ratio is around 4%, making India a poor performer in tax to GDP ratio which is about 16.6 %, much lower than emerging market economies and OECD nations.
Since the contribution of income tax in revenue collection is limited a section of economists contend that India should abolish the Income tax. This will give a boost to the savings and will help in revival of the investment cycle. The loss of revenue due to the abolition of income tax can be balanced with spectrum auction and coal block auction. Apart from the revival of the economy, once the income tax is abolished, this will wipe out a lot of black money.
However, there are various issues associated with the abolition of income tax. One of the major issues is that the Government would lose tax revenues of over ₹3 lakh crore if income tax is abolished. Another issue is that progressive income tax can help reducing inequality. If income tax is abolished income inequity would grow.
Therefore focus should be on widening the tax net and minimizing the tax exemptions. Apart from that, the tax slabs should be made more progressive. Apart from that more revenue can be collected from proper utilization of property and wealth tax.
Post demonetization it is expected that tax net will widen with higher tax compliance. Instead of the abolition of income tax, the focus should be on minimizing exemptions, progressive tax structure, and better compliance. This will help in additional revenue collection which can be invested in health and education sector.
- While analyzing the relevence of Thailand for India’s Look East Policy, discuss the recent progress in bilateral relations of the two countries.Category – GS-II- India and its Neighborhood Relations
Answer:India and ASEAN relationship have shown great progress in last two decades, in economic as well as strategic spheres. India- ASEAN trade is around $70 billion and ASEAN is India’s fourth largest trading partner. Thailand is a very vital component of India ASEAN relationship.
Thailand is the key pillar of Act East Policy and both sides co-operate on a wide variety of issues including bilateral, regional and multilateral aspects.
Because of its strategic geographic location, India is the connector between South Asia and Southeast Asia. The India-Myanmar-Thailand trilateral highway is a key project in this direction. This will also help in the development of North East.
Apart from IMT highway, Dawei port(Southeastern Myanmar) which is a special econimic zone is very important. India is also planning to connect the port with Chennai, this will provide an alternative sea route to Southeast Asia, reducing the dependency on Malacca Strait.
Trade Agreement provides immense business opportunities and will boost bilateral ties. Apart from that investor from both India and Thailand are welcomed in each other nations. Both nations are also working on a renegotiation of a new Bilateral Investment Treaty. South East Asia has immense business opportunities and Thailand can be a forward base for Indian investors in ASEAN.
- Regional cooperation
Apart from Act East, Various dialogue platforms Such as RCEP, BIMSTEC, Mekong-Ganga cooperation provides dialogue opportunity where India and Thailand co-operate each other.
- Cultural cooperation
India Thailand does have historic ties, specifically through Buddhism, and along with that, there is huge Indian diaspora in Thailand. Also people to people contact further strengthen this Indo Thailand relationship. The People-to-people contacts are strong.
Both Thailand and India are working towards cooperation in the maritime domain including anti-piracy cooperation. There is a negotiation for the White Shipping Agreement between the two countries.
Apart from that India and Thailand are involved in Joint military exercises and combined counter-terrorism exercise and Cooperating in controlling Narcotics. Both nations are also part of the extradition treaty and recently Jagtar Singh Tara was extradited from Thailand.
- Multilateral Co-operation
India and Thailand has time and again reiterated the support for United Nations reform. Apart from that, both nations are working together in the context of climate change and disaster management.
Thailand is very crucial from India’s perspective and there has been significant progress in bilateral ties. There is convergence in India’s Act East and Thailand’s Look West which provides for immense opportunities for co-operation.
- “For UN reforms India will have to expand its diplomatic capital and need to balance its national interest along with responsibilities as rising power.” Discuss.
Answer:In order to promote co-operation and prevent further conflict like the world war, United nation was formed in 1945.The major issue with UN is that it still represents the world of that period and it does nor reflects present global geopolitical realities. Also, various regions are inadequately represented for example Asia-Pacific region which have around 55% of the world’s population but represents only 20% (out of 15 only 3 seats are for Asia Pacific) of security council seats.
Since the end of the Cold War, India has played an active role to push for reforms to make United Nations more representative. India and other nations group like G4 need to push for reforms. However, the real challenge is how to operationalize these reforms. The decision-making in UN is distributed leading to often competing and contradictory views and interests. For example, China and Russia did not attend the UN meeting on reforms.
India, along with various other nations, has been skeptical of the slow pace of process of reforms. India needs to expand its diplomatic capital and should involve nations from South America, Africa and Asia for active co-operation for reforms.
Apart from that India needs to balance between India’s national interest and its roles and responsibility as an aspiring global power to maintain global peace and stability. For example, India cannot be a mute spectator in Rohingya Crisis and India should persuade Myanmar through diplomatic means to resolve the matter.
UN reforms are a long-drawn process and India along with other nations need to work on a collaborative strategy to negotiate UNSC reforms.
- Discuss the potential of digital technologies in bringing structural changes in world economy. In the light of these disruptions, do you agree with the view that reports of end of globalization are highly exaggerated? Opine.Category – GS-III: Indian Economy & Development
Answer:Globalization has led to the integration of national economies into a global market. Access to global products, the transformation of business technologies, and reducing trade and travel barriers have redefined life over the last two-three decades.
Though, due to rising nationalism and protectionism, there are apprehensions that now the era of globalization is over, however it may not be the true representation of the picture. Globalization isn’t ending, it’s changing. The new global economy has emerged, an economy without borders which is dependent on digital technologies. Using technological platforms companies are spreading in connected at the rapid pace. For example, Uber tapped the potential markets in more than 80 countries in just six years.
Present business models are different from past. In the early phases of globalization, some countries emerged as the economic center, for example, UK, however now in the era of digital technologies, however, in later phases of globalization there are various structural changes in the global economic market. For example, digital platforms and advanced digital manufacturing systems have enabled businesses to change their global production and distribution networks by making it possible to operate smaller, more flexible facilities near to end customers, instead of mass production in large plants in the nations with low labor costs.
Because of information technology platforms and networks of local partners, the global market is expanding, both traditional companies, such as General Electric, and relative newcomers business companies, such as Uber, Flipkart are able to gain access to borderless global markets.
Therefore such shifts due to technological platforms are giving rise to a very new and different kind of globalization, which is more-fragmented and the supply chains are decentralized.
Though new globalization model has emerged, it does not mean that era of globalization is over. In fact, the present era of globalization which is dependent on technology has opened more and more avenues in the global market. Therefore the apprehensions regarding the end of globalization era are an exaggeration.