2014 CGS 7 - 53be221977454

Target 2014 Current General Studies-7
www.gktoday.in March 5 to March 20, 2014
Contents
Environment: WGEEP and HLWG on Western Ghats ............................................................................. 1
Indian Economy: Understanding Indian Crude Basket ........................................................................... 8
Internal Security and Development: The Kamtapur Movement ........................................................... 10
Indian Society: Denotified & Nomadic Tribes (DNTs) of India ............................................................ 11
World Economy: Global Competitiveness Report 2013-14................................................................... 14
Indian Economy: CPSE Exchange Traded Funds .................................................................................. 20
Indian Polity: Review-Political Parties under RTI ................................................................................ 23
Indian Economy: Essay on Scope for Wealth Tax in India.................................................................... 24
List of Model Questions

1. Write an elaborative note on flora and fauna of Western Ghats.
2. Critically compare the WGEEP and HLWG reports on protection of the Western Ghats throwing light on various
concerns and government action in this regard.
3. What are the various factors affecting Indian Crude Basket? Elaborate its composition.
4. Differentiate between Sweet, Sour and Brent Crude Oil. Which is more important for Indian imports and why?
5. Critically assess the Kamtapur movement from security perspective and development angle.
6. To what extent, the British colonialist regime was responsible for the discrimination, abuse, and social and economic
marginalization faced by millions of Indians belonging to 'denotified and nomadic tribes'. Dicuss critically.
7. What are the De-notified,MemberNomadic and Semi Nomadic tribes? Give examples. Discuss the recommendations of
Name: Anand Mohan Member's Email address: dubledoreslair@gmail.com 61.8.129.229
National Commission for De-notified, Nomadic and Semi Nomadic tribes for their upliftment.
8. What do you mean by competitiveness? Discuss various factors needed to make a country / economy competitive in
today's globalization era.
9. "Quality of institutional environment has a strong impact on productivity and in turn competitiveness". Comment.
10. With reference to the Global Competitiveness Report, discuss the difference between Factor Driven, Efficiency
Driven and Innovation Driven economies, throwing light on position of India.
11. What is Technical Readiness? Do you think that India has required technical readiness to take on global competition?
Assess.
12. Switzerland is getting top slot for five consecutive years in the Global Competitiveness Reports. Discuss the reasons.
13. "India's performance has been dismal with regard to the basic drivers underpinning competitiveness." Discuss.
14. Differentiate between a stock, mutual fund and Exchange Traded Fund. Which one is better for small investors and
why?
15. Exchange Traded Funds provide best of both worlds viz. Fund Market as well as Stock Market. Amplify.
16. The ETF route to disinvestment seems to be much more efficient and novel way than traditional routes. Discuss.
17. What is the CPSE Index? Discuss various sectors included in this index.
18. Discuss various issues and implications of bringing the political parties under RTI act throwing light on recent CIC
decisions and government reaction in this context.
19. Throw light on the position of Wealth Tax in taxation in India. Do you agree with the view that in a country like
India, a tax on wealth would be a more useful supplement to income tax? Argue giving reference to J.Chelliah tax
reforms committee report.
GKTodays Reader Supported Online Assistance Programme for General Studies Papers of Civil Services Examination 2014
2014 Suresh Soni | E-Mail: gktoday.in@gmail.com | Website: http://ias.gktoday.in
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Environment: WGEEP and HLWG on Western Ghats

Introduction
There are two biodiversity hotspots in our country viz. Eastern Himalayas and Western Ghats. Western Ghats are home to over 5000 species of
flowering plants, 139 mammal species, 508 bird species and 179 amphibian species, many undiscovered species lives. At least 325 globally
threatened species occur in the Western Ghats. In recent times, we have seen two panels under Madhav Gadgil and Kasturirangan for protection of
the Western Ghats. In this study, we review the basics, the reports, comparisons of these reports, and controversies and legal and practical hurdles
with current status.
Western Ghats Geography

The Western Ghats or Sahydri runs north to south along the western edge of the Deccan Plateau, and
separates the plateau from a narrow coastal plain along the Arabian Sea. The range starts near the border of
Gujarat and Maharashtra, south of the Tapti River, and runs approximately 1600 km through the states of
Maharashtra, Goa, Karnataka, Tamil Nadu and Kerala ending at Kanyakumari. These hills cover 160,000 km
(roughly 6% of Indias total geographical area) and form the catchment area for complex riverine drainage
systems that drain almost 40% of India. The average elevation is around 1,200-1300 metres. Western Ghats are
home to 30% of flora and fauna species found in India.
Mountains
Western Ghats are known as Sahyadri in northern Maharashtra, Sahya Parvatam in Kerala and Nilagiri Malai in
Tamil Nadu. Western Ghats are home to many hill stations like Matheran, Lonavala-Khandala, Mahabaleshwar,
Panchgani, Amboli Ghat, Kudremukh and Kodagu.
The extreme northern parts of Western Ghats falls in the Dangs district of Gujarat, known for Dang (Bamboo)
forests. The confluence of the Eastern and the Western Ghats is at Biligirirangan Hills in Karnataka. Anamudi
2,695 metres in Kerala the highest peak in Western Ghats. Mullayanagiri is the highest peak in Karnataka 1,950
meters. The smaller rangesMember
of the Western Ghats include the Cardamom Hills and the Nilgiri Hills. Cardamom
Name: Anand Mohan Member's Email address: dubledoreslair@gmail.com 61.8.129.229
hills are located in southeast Kerala and southwest Tamil Nadu. They conjoin the Anaimalai Hills to the
northwest, the Palni Hills to the northeast and the Agasthyamalai Hills to the south as far as the Ariankavu pass.
The crest of the hills forms the boundary between Kerala and Tamil Nadu. Anamudi is also located in Cardamom
Hills. The Nilgiri Hills are home to the hill station Ooty.
There are many important passes in Western Ghats such as Tamhini Ghat, Palakkad Gap, Naneghat, Kasara ghat
etc.
The northern portion of the narrow coastal plain between the Western Ghats and the Arabian Sea is known as
the Konkan Coast, the central portion is called Kanara and the southern portion is called Malabar region or the
Malabar Coast. The foothill region east of the Ghats in Maharashtra is known as Desh, while the eastern foothills
of the central Karnataka state is known as Malenadu.
Geology
There are two views regarding the Geology of the Western Ghats. One view says the mountains of the Western
Ghats are Block Mountains formed due to the down warping of a part of land into the Arabian Sea. Other view
says that the mountains of the Western Ghats are not true mountains, but are the faulted edge of the Deccan
Plateau. Major rocks found in the region include Basalt, charnockites, granite gneiss, khondalites, leptynites,
metamorphic gneisses with detached occurrences of crystalline limestone, iron ore, dolerites and anorthosites.
Rivers
The rivers that originate in Western Ghats and flow towards west are Periyar, Bharathappuzha, Netravati,
Sharavathi, Mandovi etc. The west flowing rivers of Western Ghats are fast-moving, owing to the short distance
travelled and steeper gradient. This makes Western Ghats more useful than Eastern Ghats in terms of
production of hydroelectricity. The steep gradient makes the Jog Falls on Shravasthi River in Karnataka as one of
the most spectacular waterfalls in India. Narmada and Tapti although dont rise from Western Ghats but flow
westwards.
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The rivers that originate in Western Ghats and flow towards east include three major rivers viz. Godavari,
Krishna and Kaveri, and many smaller / tributary rivers such as Tunga, Bhadra, Bhima, Malaprabha,
Ghataprabha, Hemavathi, Kabini. These east flowing rivers are comparatively slower moving and eventually
merge into larger rivers such as the Kaveri and Krishna.
Climate
In comparison to the eastern side, the western side of the Western Ghats is area of high rainfall because the
mountains intercept the rain-bearing westerly monsoon winds. The dense forests also contribute to high
orographic precipitation. The climate is humid and tropical in the lower reaches tempered by the proximity to
the sea. Elevations of 1,500 m and above in the north and 2,000 m and above in the south have a more
temperate climate. Average annual temperature here is around 15 C. In some parts frost is common, and
temperatures touch the freezing point during the winter months. Mean temperature range from 20 C in the
south to 24 C in the north. It has also been observed that the coldest periods in the south Western Ghats coincide
with the wettest.
During the monsoon season between June and September, the unbroken Western Ghats chain acts as a barrier
to the moisture laden clouds. The heavy, eastward-moving rain-bearing clouds are forced to rise and in the
process deposit most of their rain on the windward side. Rainfall in this region averages 3,0004,000 mm. The
eastern region of the Western Ghats which lie in the rain shadow, receive far less rainfall averaging about 1,000
mm bringing the average rainfall figure to 2,500 mm.
Vegetation
Due to a sharp contrast in precipitation between western and eastern slopes of the Western Ghats, there is a
clear difference between the vegetation of the two sides. Similarly, there is also a clear contrast between the
northern and southern Western Ghats. Moreover, the vegetation found on the high hills is also different from
Member Name: Anand Mohan Member's Email address: dubledoreslair@gmail.com 61.8.129.229
the low hills. Thus, there are various different kinds of vegetations found in Western Ghats as follows:
8 The western slopes have tropical and subtropical moist broadleaf forests marked predominantly by
Rosewood, Mahogany, Cedar etc. These slopes appear green in almost all parts of the year. No time is
fixed when these trees would shade their leaves.
8 The eastern slopes of the Western Ghats have dry as well as moist deciduous forests marked
predominantly by Teak, Sal, Shisham, Sandalwood etc. trees.
8 Further, on the northern side of the Wayanad forests; we find dry deciduous forests while on the
southern side there are wet deciduous
The forest in the Western Ghats has been severely affected due to human
forests. The evergreen Wayanad forests activities, especially clear felling for tea, coffee, and teak plantations during
1860 to 1950. Species that are rare, endemic and habitat specialists are more
of Kerala mark the transition zone adversely affected and tend to be lost faster than other species. Complex and
species rich habitats like the tropical rainforest are much more adversely
between the northern and southern
affected than other habitats. The area is ecologically sensitive to development.
ecoregions of the Western Ghats. The Though this area covers barely five percent of India's land, 27% of all species of
higher plants in India (4,000 of 15,000 species) are found here. Almost 1,800 of
southern ecoregions are generally these are endemic to the region.
wetter and more species-rich. South

Western Ghats Montane rain forests are the most species-rich ecoregions in peninsular India. Eighty
percent of the flowering plant species of the entire Western Ghats range are found in this ecoregion.
8 The areas which are high in elevation are cooler and wetter in the north and so the forests there are
called North Western Ghats Montane rain forests. The vegetation here is evergreen characterized by
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trees of family Lauraceae. Such plants include Litsea glutinosa or Maida lakri in Hindi (a plant of
medicinal value), Cinnamomum (Tejpatta) etc.
8 There are montane grasslands as well as stunted forests also in the Western Ghats.
Protected Areas
Western Ghats is home to India's two biosphere reserves, 13 National parks, several wildlife sanctuaries and
many Reserve Forests. The Nilgiri Biosphere Reserve comprising 5500 km of the evergreen forests of
Nagarahole, deciduous forests of Bandipur National Park and Nugu in Karnataka and adjoining regions of
Wayanad and Mudumalai National Park in the states of Kerala and Tamil Nadu forms the largest contiguous
protected area in the Western Ghats. The Silent Valley National Park in Kerala is among the last tracts of virgin
tropical evergreen forest in India.
Fauna
Following four species are endemic to Western Ghats.
8 Malabar Large-spotted Civet
8 Lion-tailed Macaque
8 Brown Palm Civet
8 Nilgiri Tahr
Malabar Large-spotted Civet is a critically endangered nocturnal mammal. The Lion-tailed Macaque is
endangered and is arboreal (lives on trees). Only 2500 members of this species are remaining. The largest
population of Lion Tailed Macaque is in Silent Valley National Park. Kudremukh National Park also protects a
viable population. Nilgiri tahr is a goat antelope found high up in the mountains of southern India, it is known
locally as the 'Nilgiri ibex'. Its largest population is found within the Eravikulam National Park. Outside breeding
seasons, males are found lower down in the best grazing fields, whilst female herds are found on the exposed
cliff ledges. It has been classified as Endangered (EN) on the IUCN Red List. The brown palm civet's distribution
extends from the southern tip of Western Ghats in Kalakkad Mundanthurai Tiger Reserve to Castle Rock in Goa
to the north. They are nocturnal, and not as rare as previously thought and come under Least Concerned
Category.
These hill ranges serve as important wildlife corridors, allowing seasonal migration of endangered Asian
Elephants. The Nilgiri Bio-sphere is home to the largest population of Asian Elephants and forms an important
Project Elephant and Project Tiger reserve. Brahmagiri and Pushpagiri wildlife sanctuaries are important
elephant habitats. Karnataka's Ghat areas hold over six thousand elephants (as of 2004) and ten percent of
India's critically endangered tiger population.
Panels for protection of Western Ghats
Western Ghats are home to over 5000 species of flowering plants, 139 mammal species, 508 bird species and
179 amphibian species, many undiscovered species lives. At least 325 globally threatened species occur in the
Western Ghats. In recent times, we have seen two panels under Madhav Gadgil and Kasturirangan for protection
of the Western Ghats.
Madhav Gadgil Panel (WGEEP)
Western Ghats Ecology Expert Panel (WGEEP) headed by Madhav Gadgil was formed by MoEF in 2010 to study
the impact of population pressure, climate change and development activities on the Western Ghats. The Panel
was asked to perform the following functions:
B To assess the current status of ecology of the Western Ghats region.
B To demarcate areas which need to be notified as ecologically sensitive and to recommend for
notification of such areas as ecologically sensitive zones under the Environment (Protection) Act, 1986.
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B In doing so, the Panel shall review the existing reports such as the Mohan Ram Committee Report,
Hon'ble Supreme Court's decisions, recommendations of the National Board for Wildlife and consult all
concerned State Governments.
B To make recommendations for the conservation, protection and rejuvenation of the Western Ghats
Region.
B To suggest measures for effective implementation for declaring specific areas in the Western Ghats
Region as eco-sensitive zones under the Environment (Protection) Act, 1986.
8 Recommendations of Madhav Gadgil Panel
The Madhav Gadgil Panel recommendations can be summarized in the following:
Turn entire Western Ghats region into an Ecologically Sensitive Area (ESA); it should be called Western
Ghats ESA. This area should be divided into two parts:
o Protected areas which would contain Wildlife Sanctuaries and National Parks
o Three Ecological Sensitive Zones (ESZ) viz. ESZ-1, ESZ-2 and ESZ-3, with varying degrees of
protection. These are outside the existing protected areas.
Divide the entire Western Ghats ESA into 2200 grids and each grid assigned ESZ on the basis of
composite scores of ecological significance derived from the database generated by WGEEP.
Since Western Ghats is spread in six states, treat Western Ghats regions of each state separately.
Final demarcation of theName:

Member ESZs and
Anand the
Mohan final
Member's regulatory
Email regime should
address: dubledoreslair@gmail.com be based on extensive inputs
61.8.129.229
from local communities and local bodies viz. Gram Panchayats, Taluk Panchayats, Zill Parishats, and
Nagar Palikas, under the overall supervision of a Western Ghats Ecology Authority (WGEA), State level
Ecology Authorities and the District Ecology Committees.
A Western Ghats Ecology Authority (WGEA) should be established as a statutory authority appointed
by the Ministry of Environment and Forest, GOI under Environment (Protection) Act 1986 to focus on
promoting transparency, openness and participation in every way for development and sustainability
of these areas.
The panel recommended highest degree of protection in ESZ-1 and ESZ-2 categories. It recommended
that the government should put
o An indefinite moratorium on new environmental clearances for mining in ESZ-1 and ESZ-2
o Phasing out of mining from ESZ-1 by 2015
o Continuation of existing mining in ESZ-2 under strict regulation with an effective system of
social audit.
(click here to know about Red, Orange and
o In ESA-1 and ESA-2, no new red and orange category industries
Green),
should be allowed.
o Development plans should not be cast in a rigid framework, but ought to be tailored to
prevalent locality and time specific conditions with full participation of local communities; a
process that has been termed adaptive co-management.
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o Ecological sensitivity is not merely a scientific, but very much a human concern. In particular, a
great deal of locality specific understanding of what has been happening and what is desirable,
is simply not part of any scientific databases and resides with local communities. Hence, set of
regulations tailored to the needs of the locality should be put in place if the area were to be
formally declared as being ecologically sensitive
The above description makes it clear that Gadgil panel recommended something which was indigestible to
politicians and businesses although it was supported by ecologists. The report was first not released in public by
central government and once it appeared in public domain, it was also criticized by states where the mountain
range stretches along with politicians and farmers organisations that feared it would hamper development.
Kasturirangan Panel (HLWG)
The next problem solving committee was K. Kasturirangan-led 10-member High-Level Working Group (HLWG).
The panel was tasked with finding a holistic way of protecting the biodiversity of the Ghats and addressing the
rightful aspirations for inclusive growth and sustainable development of the indigenous residents.
8 Recommendations of Kasturirangan Panel
The panel concluded that:
The Kasturirangan panel had the advantage of using a finer remote-sensing technology to make a
distinction between the so called cultural landscape and natural landscape. According to this
distinction:
o 41 per cent of the Western Ghats is natural landscape, having low population impact andrich
biodiversity.Member Name: Anand Mohan Member's Email address: dubledoreslair@gmail.com 61.8.129.229
o But the remaining 59 per cent is cultural landscape dominated by human settlements and
agricultural fields
Thus, instead of declaring entire Western Ghats as ESA, the panel said that 90 per cent of the natural
landscape should be protected. The identification of ESA was based on the fragmentation of the
forests, population density of villages and the richness of the biodiversity in villages. This would be
around 60,000 Km ecologically sensitive area spread over six states. Thus, it diluted the protection of
137000 Km areas as stipulated in the Gadgil report. This implies that according to Kasturirangan
committee, around 37.5 % of the total area of the Western Ghats is ecologically sensitive.
This committee said that economic options (Businesses and Livelihood) should not be forbade (i.e.
allowed to continue), but answer to protection of the Western Ghats lies in providing better incentives
to move businesses / livelihoods towards greener and more sustainable practices. For this it made a
case for:
o Supervising forests and bettering their productivity to ascertain inclusive growth and
economical gains for local communities. The committee recommended removing the cash crop
plantations such as rubber, agricultural fields and settlements should be from the protection
regime.
o Integrating forest accounts into state and national economic assessments
o Initiating an ecosystem service fund to help villages around the forests
o Promoting sustainable agriculture
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o Encouraging ecotourism for local benefits.

Establish a Decision Support and Monitoring Centre for Geospatial Analysis and Policy Support in the
Western Ghats, which will supervise changes and propose state government on policy reform and all
such reports must be in the public domain.
High-resolution map, delimiting ecologically sensitive areas, down to each village settlement, must be
put in the public domain so that people can be involved in taking decisions about environment.
A ban on all polluting industries (including mining) categorised as most hazardous in the Water
(Prevention and Control of Pollution) Act, 1974, and Air (Prevention and Control of Pollution) Act, 1981.
The Forest Rights Act, 2006, that recognises the rights of dwellers on forest resources, will be
implemented in letter and spirit and the consent of Gram Sabhas concerned will be mandatory for any
project.
Strict regime for Hydro-power projects. These include cumulative impact assessment of such projects
and ensuring minimum water flow in the rivers in the lean season.
Set up a body to assess and report on the ecology of the region and to support the implementation of
ESA to be set up.
The Kasturirangan report recommended ban on mining, quarrying, thermal power plants and highly
polluting industries within 60,000 sq km of the Ghats.
Projects will be allowed only after the approval of the gram Sabhas concerned.
Comparison of the two panels

The above description makes it clear that there
are three key differences between the Gadgil Gadgil versus Kasturirangan: Key Differences
C While Gadgil panel advocated for declaring entire Western Ghats
report and the Kasturirangan report.
region into ESA, the Kasturirangan panel brought the area down
B Firstly, both differ in the extent of the to 37.5%.
area that should be brought under C While Gadgil panel recommended disallowing and moratorium
on new environmental clearances, Kasturirangan panel focussed
protection. While the Gadgil panel on development of ecotourism and green growth.
C Kasturirangan panel moved away from the blanket approach of
identified the entire Ghats as an ESA, it
the Gadgil Panel.
created three categories of protection
regimes (ESZ-1, 2 and 3) and listed activities that would be allowed in each based on the level of
ecological richness and land use. On the other hand, the Kasturirangan panel used a different method.
It recommended removing the cash crop plantations such as rubber, agricultural fields and settlements
from the ESZ. Moreover, Kasturirangan panel also removed already modified areas under private
control from the protection regime. This was to avoid any sort of conflict between government
(licensor) and private parties (licensees).
B Secondly, the Gadgil panel puts in place a blanket ban on all such activities which may have harmed or
will harm the environment including ban of pesticide use, ban on GM crops, decommissioning the
hydropower projects and gradual shift from plantation to the natural forests. On the other hand, the
Kasturirangan panel removed all such modifications from the protection regime and looked forward on
how to protect what is still left and untouched by human activities. It recommended restrictions on
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highly damaging activities including mining (and quarrying), red-category industries, construction in
around 20,000 Km area.
B Thirdly, the two committees differ on governance framework. While the Gadgil panel recommended a
national level Western Ghats Ecology Authority (WGEA), the Kasturirangan panel recommended
strengthening the existing framework of environmental clearances and setting up of a state-of-the-art
monitoring agency.
Concluding Remarks
Western Ghats are a victim of neo-liberalism where the level of environmental degradation due to reckless
exploitation of natural resources by corporate houses has increased manifold. The above description makes it
clear that both Gadgil Committee and its successor Kasturirangan Committee ran into controversy and were not
implemented. Gadgil report was criticised for being too environment-friendly and not in tune with the ground
realities. The Kasturirangan Committee tried to balance development and environment, but was labelled as
being anti-environmental.
As soon as the Gadgil report was in public, various peasant organisations, socio-political movements and all the
six state governments started widespread criticism that certain recommendations for conservation of nature
and environment were against the fundamental rights and livelihood of the local residents, and would impede
local development. Under pressure, the central government hastily established the HLWG to revisit the WGEEP
report. Once the HLWG report was out, government hastily initiated steps to implement its recommendations
and declared 4,156 villages in six States (99 in Goa, 64 in Gujarat, 1576 in Karnataka, 123 in Kerala, 2159 in
Maharashtra and 135 in Tamil Nadu) as Ecologically Sensitive Areas (ESA). The intention was to impose the
Indian Environment (Protection) Act on all these villages. This bureaucratic step invited widespread resistance
and protest actions from the local population, which are still continuing.
Model Questions for Mains
1. Write an elaborative note on flora and fauna of Western Ghats.
2. Critically compare the WGEEP and HLWG reports on protection of the Western Ghats throwing light on
various concerns and government action in this regard.
Links
8 "Farmers to protest against Gadgil report." The Hindu. Web. 7 Apr. 2014.
8 "Peoples Democracy." WESTERN GHATS: On Gadgil-Kasturirangan Reports. Web. 7 Apr. 2014
8 Business Standard: Sunita Narain: Western Ghats: lessons in protection. Web. 7 Apr. 2014.
8 "'The Kasturirangan Report is a disaster for the Western Ghats'." Rediff. Web. 7 Apr. 2014.
Indian Economy: Understanding Indian Crude Basket

8 Sweet, Sour and Brent Basics
All of us are aware about the sweet and sour crude oils. Less the amount of sulphur in oil, sweeter it is. The oil
which contains sulphur amount less than 0.5% is called Sweet Crude Oil. If the Sulphur content is more than
0.5%, it will be called Sour Crude Oil.
The cost of sweet oil is more than sour oil. The sweet oil is of High quality, low sulphur crude oil used for
processing of gasoline. The more amount of Sulphur in sour crude makes it toxic, and production of Gasoline is
more expensive in case of sour crude. The word "sweet" since a gently sweet taste and pleasing aroma due to
the little level of Sulphur gives the oil with. That is the reason that sweet crude tends to be costlier than sour
crude.
The Brent crude is one category of sweet crude oil, which has 0.37% Sulphur content. It is sourced from the
North Sea. There are four blends of Brent Crude viz. Brent, Forties, Oseberg and Ekofisk, collectively called BFOE.
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8 Various Benchmarks and Baskets

The crude oil prices about which we generally read in newspapers are the spot price per barrel (159 litres). The
rate at which Crude Oil is sold in market is highly dependent on its grade, its specific gravity, its sulphur content,
and its location of production as well as delivery.
Regarding Specific gravity, there is an API (American
Since based upon these parameters there can be a lot of
Petroleum Institute) gravity which measures how heavy or
types of crude oil, there are some benchmark crude oils light petroleum liquid is compared to water. If the API
gravity is greater than 10, Crude oil is lighter and floats on
used for pricing of the oil. This means that a benchmark water; if less than 10, it is heavier and sinks.
crude oil serves as a reference point for many other
types of crude available. The important benchmark crude oils are Argus Sour Crude (ASC), Bonny Light , Brent,
Dubai , Indonesian, Isthmus-34 Light , Japan Cocktail , OPEC Reference Basket , Tapis , Urals and West Texas
Intermediate (WTI). Out of them, the three most important benchmarks are WTI, Brent Blend, and Dubai /Oman.
The OPEC basket is used by OPEC, Tapis Crude is traded in Singapore, Bonny Light is used in Nigeria and
Isthmus-24 light is used in Mexico. WTI, traded at the New York-based commodity exchange (NYMEX), a superior
variety of crude oil, is mainly available in the US market
The oil price reporting agencies (PRAs) are an
OPEC Basket important component of the oil industry. The
The OPEC basket price represents an index of 12 grades: Algeria's prices that these agencies identify or assess
Saharan Blend, Angola's Girassol, Iran's Iranian Heavy, Iraq's underlie the basis of long-term contracts; spot
Basra Light, Kuwait's Export, Nigeria's Bonny Light, Libya's Es
market transactions, futures markets contracts and
Sider, Qatar's Marine, Saudi Arabia's Arab Light, Murban of
derivatives instruments. PRAs use a wide variety of
UAE, Ecuador's Oriente, and Venezuela's Merey.
methods to identify
Member Name: Anand Mohan Member's Email address: dubledoreslair@gmail.com
the oil price which may include
61.8.129.229
the volume weighted average system, low and high deals done, and market-on-
close (MOC).
8 Indian Basket Composition
Similar to other baskets, there is a Crude Basket quote C-IN-BASKET, which is a
weighted average of price of mix of crude oil consumed in India. This is called
Indian Basket and it is used as an indicator of the price of crude imports in India,
and is one of the elements watched by the government when deciding on
domestic price issues.
The Indian Basket has three elements as follows:
Brent, Forties, Oseberg Brenchmark (BFO) or North Sea Benchmark: it
makes 38.60 percent of the calculation.
Dubai Benchmark (DUB-1M) : it makes 30.70 percent of the calculation
Oman Benchamark (OMA-1M-A): it makes 30.70 percent of the calculation.
8 Importance of Indian Crude Basket
The composition of Indian Crude Basket shows that Crude oil prices in India rely heavily upon the oil prices in
Middle East / North Sea in comparison to US or other regions as Dubai and Oman benchmarks hold 61.40% of
total weightage and remaining is held by BFO benchmark. Similarly, the international oil prices have a direct
impact on the Indian economy as the country imports 80 percent of its crude requirements. Though Brent is
light and sweet, it's not as light and sweet as the West Texas Intermediate (WTI). But WTI prices have relatively
lower impact on Indian Crude Oil prices. At the same time, a fall in rupee will result in high rises. It was in 2008
when the international prices were higher and prices were seen higher in rupee terms. This in turn has impacts
on Current account deficit, inflation and also under recoveries of public sector undertakings.
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3. What are the various factors affecting Indian Crude Basket? Elaborate its composition.
4. Differentiate between Sweet, Sour and Brent Crude Oil. Which is more important for Indian imports and why?
Internal Security and Development: The Kamtapur Movement

th
On 26 December 2013, a blast was carried out at Paharpur in Jalpaiguri district of West Bengal which resulted
in six deaths. This is just one of the three major violent attacks that had been carried out last year by the
Kamtapur Liberation Organisation (KLO).
Formed in the year 1995, KLO is an organisation responsible for piloting the Kamtapur movement. For last one
and half decade, this organisation has been disrupting civic life and undermining civil administration particularly
in the area of North West Bengal. Many cases of extortion from traders and industrialists have also been
highlighted against KLO in its area of operation. Reports reveal that the organisation has developed an implicit
relation with Kamtapur Peoples Party (KPP), a political party formed way back in 1997. KPP is known for its
demands of a unified territory and statehood for the Koch Rajbanshis inhabiting the North West Bengal and
west Assam, with no cessation from India. The economic conditions of the above mentioned areas are not very
ideal. However, the present government has also not yet taken up an effective strategy for rejuvenating these
areas.
Analysis
The KLO has been apparent with respect to its demands relating to cessation and is campaigning for restoration
of the so-called past independence of a notional Koch Kamta kingdom (believed to have existed during the 12th
to the 15th century under the control of the Khen dynasty with capital near Moynaguri in present Alipurduar
sub-division of Jalpaiguri district). Though the movement led by KLO has not yet become a menace to Indias
security since the organisation does not have the armed might of outfits like the ULFA, NSCN (IM) and the NDFB,
nevertheless, it has a enough potential to threaten the Indian security system as it has gradually developed
operational and logistical coordination with these outfits. The impact of the KLOs activities is more in West Bengal;
therefore, an internal proactive and long-term multifaceted policy is required to be adopted by the West Bengal
government soon. The scenario is little different in Assam where management is the main concern, specifically
in the region inhabited by different ethnic groups, as it may stir up the convergence of interests between Koch-
Rajbanshis and other ethnic groups. Any such situation can however be tackled by providing certain special
benefits to Koch-Rajbanshi community through specific targeted government investments.
8 Security Concerns
The movement, led by the KLO, had carried out at least three violent attacks in the latter part of 2013. The last
one on December 26 at Paharpur in Jalpaiguri district of West Bengal. This movement has potential serious
security implications, not only in West Bengal, but also the sensitive eastern and north eastern part of India.
Besides disrupting civil and administrative life in north districts of West Bengal , it has developed logistical and
operational linkages with militant organizations like ULFA, NSCN(IM) and the NDFB (anti-accommodation
Songbijit faction) etc.
8 Development Angle:
Underdevelopment and economic distress incentivize the spread of dissatisfaction and separatist
sentiment among people. The economic conditions prevailing in the Dooars and Buxa Reserve areas of
North West Bengal, substantially inhabited Koch Rajbangshis further adds to their discontent. The West
Bengal budget (2013-14) does not have an appropriate area development sub-plan covering the areas
inhabited by this community. The KPP`s demands concern among others, cultural protection of the
Koch-Rajbangsis.
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Therefore, current situation demands a strategic approach both from the security perspective and development
angle.
8 To tackle security issues, ground-level coordination towards intelligence sharing and prophylactic
operations between the Assam Police and its West Bengal counterparts is required. There is a dire
need to revive state-level police action like Operation Shadow which was undertaken jointly by West
Bengal and Assam Police in 1990.
8 Coordination with Bhutan will also be indispensable e.g. Operation Flush Out in 2003 to evict the
militant outfits from India who were regrouping and training in Bhutan.
8 Since the impact of the KLO`s activities is more in West Bengal, the state government will have to adopt
an internal proactive and long-term multifaceted policy to contain the outfit.
8 On development angle, a package which enables comprehensive economic development on the lines
of the Saranda Action Plan, in respect to Naxalism affected areas in Jharkhand, could also be
considered for the affected West Bengal districts.
Moreover, the demands of KPP such as cultural protection of the Koch-Rajbanshis and the inclusion of
Kamtapuri (Rajbangsi) language in the Eighth Schedule of Indias Constitution can be suitably accommodated
without affecting the interests of other communities living in the region.
Questions for Mains
5. Critically assess the Kamtapur movement from security perspective and development angle.
Indian Society: Denotified & Nomadic Tribes (DNTs) of India

Introduction
Crime was never absent in human society and our country is no exception to this. Right since the Vedic period,
we find ample references about crimes and anti-social behaviors. The Vedic literature mentions thieves as
Taskars and Stayus. The degeneration of the early religion and morals is recorded in later Vedic literature.
According to Manusmriti, there was an age when Dharma prevailed in perfection but gradually Adharma made
its headway giving rise to theft, falsehood and fraud. An ancient sage called Kamandaka wrote about the need of
danda (punishment). He advocated that King should uphold the Dharma by means of danda for men of criminal
tendencies.
Going ahead; Megasthenes while writing about the Maurya Empire says that theft was rare occurrence in India.
However, even that period was not devoid of crimes. Kautilya has said that thieves and robbers are the pests of
the society and suggested various steps to contain such criminal elements. The Sanskrit dramas Mrichhkatika (of
Sudraka), Charudatta (of Bhasa) and Dashkumarcharita (of Dandin) mention professional thieves called Sharvilaks.
Similarly, Chauryashashtra (Art of Thievery) was assigned a place among the 18 Vidyas and 64 Kalas!
There were people who excelled in this Chauryashashtra and adopted it as passion. Similarly, The word "Thug" is
derived from "Sthag" of Sanskrit, which means "sly". The ancient Indian society was tolerating towards the petty
crimes and there were regimes to punish the professional criminals in ancient India. However, by the time of
colonial rule, the menace of professional crimes was costing too much to the society.
Hereditary Crimes
It is not clearly documented if some particular communities were habitually engaged in crimes. However, as we
have been told, the Thugs in medieval / early modern India were the groups of (hereditary?) assassins whose
profession was to deceive people and strangle them to death with their Pugree or scarf.
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These thugs used to travel in Gangs, disguised as merchants or pilgrims. They were bound together by an oath
on the rites of their deity goddess Kali. Rather than ordinary thieves, they were the bands of the people who were
first recorded by Barni, when he mentions that Firoz Shah Tughlaq captured the Thugs. But none of them was
killed and Sultan put them in boats and sent them to Lakhnauti where they were set free, so that they don't
trouble the elite "Delhites".
The thugs were brutally suppressed in
Thugi
British India. In suppression of Thugs, In the colonialist mythology describing the savagery of the East
along with Lord William Bentinck, one and the demonic qualities of Hinduism, one of the most compelling
stories is that of the Thugs, a group of robbers who were devotees
more name cherished is William Henry (bhakta) of the goddess Kali. According to popular belief, the Thugs
Sleeman. Sleeman was initially a soldier were widespread throughout India and frequented the highways,
seeking travelers as their prey. They would travel with their
and later became the administrator. In victims, sometimes for days on end, and then kill them
1835, the 'Thugee and Dacoity Dept' was sometimes after giving them sweets laced with drugs, and
sometimes simply by taking them by surprise. The victims would
created by William Bentinck and William be strangled with a silken scarf, and whenever possible, no blood
Henry Sleeman was made its would be shed, for the victims blood was considered an offering to
the goddess Kali and thus should not be spilled and wasted. The
superintendent. He was later promoted as victims worldly possessions were claimed by the Thugs
its Commissioner in 1839. The rigorous themselves, in a division of the spoils between deity and devotee.
This demonic practice persisted until the 1830s, when it was
operations under Sleeman led to capture finally uprooted and destroyed by the British.
of 1400 Thugs who were hanged by the Source: The Illustrated Encyclopedia of Hinduism, James G. Lochtefeld p.p. 696
government or transported for life. A
special prison was established at Jabalpur for Thugs. The reason of this success was the awareness creation by
the Government. The department started disseminating information about the Thugee and at every Police
Station or Thana, the information about the new techniques by the Thugs would be sent. The travelers were
warned.
Since, Thugs could be recognized only by evidence, the department started "King's Evidence Programme". In this
programme the Thugs, who turned evidences of the and provided into about the Gang members & peers would
be provided protection and incentives. This was used by the government to break the code of silence, which
kept the members of the gang silent.
Apart from Thugs, multi-ethinic bands of robbers, dacoits such as Pendharis, Uchale, Ghantichor etc. prevailed in
India. These were multi-ethinc and not always people by birth took up crimes. But a fallacious British
understanding of the Indian society particularly the caste system led to what may be called a dark chapter for
the tribes of India.
The Criminal Tribes Act (CTA) of 1871
After the revolt of 1857, the British needed to take a number of preventive steps to keep India in their clutches. A
foolish officer of Law and Order Commission recommended that certain communities in India were
professionally criminal and their occupation as well as religion was to commit crimes. On such
recommendations, the Criminal Tribes Act (CTA) of 1871 was enacted.
This extremely oppressive act notified certain communities as criminal tribes. Once a tribe became "notified" as
criminal, here is what it meant for its members:
8 Every member of the notified community was forced to register himself/herself at the local police
station and had to give Hazri (attendance) at a specified time of the day.
8 Their movements were curtailed. They could not shift their residence at will and had to take proper
permission before any travel or movement.
8 Severe punishments were put in place for breaking these rules.
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8 The local police could easily round up any member of the community upon mere suspicion.
First tribe that was notified under this act was Hur of Sindh. Gradually, as many as 198 tribes were brought in its
ambit.
The act was amended in 1897 and more stringent penalties were brought in. The act was draconian and slowly
started getting criticism from all around. With idea of their rehabilitation gaining ground, the British Government
passed the Criminal Tribes Settlement Act, 1908. This act made provisions for settlements of these communities
so that they could be reformed.
This was followed by a modification of the act in 1911 and a major modification in 1923-24 with objective to
integrate the criminal tribes with the mainstream society. But these acts did not change the ground realities. The
notified tribes became more and more oppressed by local administration and village officials / police etc.
In 1937, the Governor of Bombay Province appointed K M Munshi committee to review the act. The Munshi
Committee thoroughly and comprehensively reviewed the situation and made a number of suggestions. The
most notable contribution was that the committee, for the first time, defined various terms like tribe, gang, class,
habitual offender, criminal and so on.
The act started getting repealed by the provincial governments. After independence, the Criminal Tribes Act was
repealed in 1952. After the repeal, the tribal were denotified and thus were known as Denotified Tribes.
Habitual Offenders Act 1952
But revoking the CTA act did not end the misery of those who were affected by this act. The CTA act was
replaced by Habitual Offenders Act 1952. The major difference between the previous act and new act was that
the later targeted individuals and not communities. But on ground, the same procedure kept following. The
whole communities kept branded or stigmatized on the colonial model. Whenever a crime took place, the police
round up all the male members of the community in the vicinity and apply third degree to extract information. It
is being followed even till date. Such communities include Pardhis, Kanjars, Kanjarbhats etc. The problem is
complicated because some members of these communities are still involved in crimes.
The act has attracted criticism from civil society as well as United Nations on the ground that it negates the
principle of the criminal justice system innocent until. The UN Committee on the Elimination of Racial
Discrimination (CERD) had asked India to repeal the Habitual Offenders Act (1952) and effectively rehabilitate the
denotified and nomadic tribes. proven guilty.
National Commission for De-notified, Nomadic and Semi Nomadic tribes
There are 1500 Nomadic / Semi-Nomadic
Tribes and around 150 Denotified Tribes, Tribes like Pardhi, Baori, Sansi, Berad and Kanjar Bhat fall under the
which make about 11 Crore of Indias Denotified tribes while Nat, Dombari, Sapera, Madari, Gadi-Lohar and
Kalandar fall under Nomadic Tribes. Van Gujar, Rebari, Maldhari and
population. Traditionally the tribes wander
Dhangar are some of the tribes falling under the semi-nomadic tribes.
and therefore could not integrate into
Indian society. These tribes also dont have livelihood means. As mentioned above, some members of these
tribes are still involved in a crime, which makes the problem more complicated.
The constitution of India identifies only scheduled castes, scheduled tribes and backwards. It does not make any
special provision for denotified tribes as such. Some of the denotified and nomadic tribes got status of SCs in
some states while others got status of STs. But many of them are neither SCs nor STs. In 2005, the Government
of India established the National Commission for De-notified, Nomadic and Semi Nomadic Tribes (NCDNT) to
study various developmental aspects of these Tribes. The Commission made several recommendations,
enumerated as follows:
8 Reservations as available to Scheduled Castes and Scheduled Tribes should be extended to denotified,
nomadic or semi-nomadic tribe categories.
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8 Extension of Prevention of Atrocities Act to them. The Act currently applies to only SCs and STs.
8 Government should get a "tent to tent" survey done within the next six months and also a community-
wise census so as to gather specific data about 1,500 nomadic and semi-nomadic tribes and 150
denotified tribes.
8 Initiation of a special housing scheme to ensure that families are provided with "small pucca houses" in
the next five years. Provide permanent shelter by helping them settle down as villages. The
Government should be facilitating the settlement of such tribes as villages by acquiring land for the
purpose.
8 A Minimum Land Holding Act should be put in place to guarantee land to these tribes in case they want
to settle down and engage in agriculture.
8 Suitable training should be provided to these tribals to develop their existing skills and develop
livelihood options.
Conclusion
The DNTs being a transient and mobile group have always remained at the periphery of Indian society and have
not received due attention. There is a need make efforts on a wider scale to bring them back to social
mainstream.
6. To what extent, the British colonialist regime was responsible for the discrimination, abuse, and social and economic
marginalization faced by millions of Indians belonging to 'denotified and nomadic tribes'. Dicuss critically.
7. What are the De-notified, Nomadic
Member Name: andMember's
Anand Mohan Semi Nomadic
Email address: tribes? Give examples.
dubledoreslair@gmail.com Discuss the recommendations of
61.8.129.229
National Commission for De-notified, Nomadic and Semi Nomadic tribes for their upliftment.
World Economy: Global Competitiveness Report 2013-14

India has dropped a place in the latest Global Competitiveness Report of the World Economic Forum (WEF). According to the report, Indias
competitiveness is consistently on decline since 2009. In this study, we look into competitiveness basics along with some salient features of this
report. The original report is located here. Relevant information has been sources from this report in the following article.
Defining Competitiveness
The ability to compete is competitiveness. Although, competitiveness is incorporated in business strategy, either
implicitly or explicitly, its formal definition is often vague. In simple
Competitiveness is a set of institutions,
words, it can be defined by the productivity with which a nation
policies, and factors that determine the
utilizes its human, capital and natural resources. The term can also level of productivity of a country.
be used to refer in a broader sense to the economic World Economic Forum
competitiveness of countries, regions or cities or firms.
Depending on how productively a country uses available
resources, the competitiveness denotes the ability of countries to provide high levels of prosperity to their
citizens. Thus, competitiveness, as defined by World Economic Forum, is set of institutions, policies, and factors
that set the sustainable current and medium-term levels of economic prosperity.
The concept of competitiveness has become vital to the economy and to business. The ability of the individual
businesses to compete is strongly influenced by the economic competitiveness of a region, sector, industry or a
nation as whole. The competitiveness of a region or economy can and does change over time depending upon
the policy decisions, institutions and level of productivity of a country. This implies that competitiveness is
neither static nor a one-dimensional but is a dynamic, ever-changing and multidimensional concept.
12 Pillars of Global Competitiveness Report 2013-14
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The Global Competitiveness Report (GCR) is an annual publication of the World Economic Forum. The report
ranks the nations on the basis of a Global Competitiveness Index (GCI).
GCI scores are calculated by drawing 12 Pillars of GCI
together country-level data covering 12 1 Institutions
categories, which are called 12 pillars of 2 Infrastructure
competitiveness that together make up a
3 Macroeconomic environment
comprehensive picture of a countrys
4 Health and primary education
competitiveness. The 12 pillars are shown
5 Higher education and training
in the adjacent diagram.
The 2013 Report has placed Switzerland at 6 Goods market efficiency
the top of the ranking for the fifth year running. Singapore and Finland 7 Labour market efficiency
remain in second and third positions respectively. The top 10 countries are 8 Financial market development
Switzerland, Singapore, Finland, Germany, US, Sweden, Hong Kong (SAR), 9 Technological readiness
Netherlands, Japan and UK. 10 Market size
1. Institutions 11 Business sophistication
8 The GCI takes into account how sound and fair institutional 12 Innovation
environment has been provided in a particular country. By
Institutional environment we mainly mean the legal and administrative framework within which
individuals, firms, and governments interact to generate wealth. It is not only concerned with
government but also the private institutions. Its importance becomes apparent in current times when
the world is struggling with a fragile recovery after the financial crises.
8 Quality of institutional environment has a strong impact on productivity and in turn competitiveness.
Institutional framework affects investment decisions and consequently development.
8 The factors that negatively affect the Government institutional environment include excessive
bureaucracy and red tape, overregulation, corruption, dishonesty in dealing with public contracts, lack
of transparency and trustworthiness, inability to provide appropriate services for the business sector,
and political dependence of the judicial system. All these impose significant economic costs to
businesses and slow the process of economic development.
8 Similarly, frauds, mismanagement, scandals, opacity etc. negatively affect the private institutional
environment. An economy is well served by businesses that are run honestly, where managers abide
by strong ethical practices in their dealings with the government, other firms, and the public at large.
Private-sector transparency is indispensable to business; it can be brought about through the use of
standards as well as auditing and accounting practices that ensure access to information in a timely
manner.
2. Infrastructure
8 Extensive and efficient infrastructure is critical for ensuring the effective functioning of the economy, as
it is an important factor in determining the location of economic activity and the kinds of activities or
sectors that can develop within a country.
8 Well-developed infrastructure reduces the effect of distance between regions, integrating the national
market and connecting it at low cost to markets in other countries and regions. In addition, the quality
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and extensiveness of infrastructure networks significantly impact economic growth and reduce income
inequalities and poverty in a variety of ways.
3. Macroeconomic environment
8 The stability of the macroeconomic environment is important for business and, therefore, is significant
for the overall competitiveness of a country. The economy cannot grow in a sustainable manner unless
the macro environment is stable.
4. Health and primary education
8 A healthy workforce is vital to a countrys productivity and in turn competitiveness. Workers who are ill
cannot function to their potential and will be less productive. Poor health leads to significant costs to
business, as sick workers are often absent or operate at lower levels of efficiency. Quantity and quality
of the basic education received by the population is increasingly important in todays economy.
5. Higher education and training
8 Quality higher education and training is crucial for economies that want to move up the value chain
beyond simple production processes and products. Todays globalizing economy requires countries to
nurture pools of well-educated workers who are able to perform complex tasks and adapt rapidly to
their changing environment and the evolving needs of the production system.
6. Goods market efficiency
8 Countries with efficient
Member goods markets
Name: Anand areEmail
Mohan Member's well positioned
address: to produce
dubledoreslair@gmail.com the right mix of products and
61.8.129.229
services given their particular supply-and-demand conditions, as well as to ensure that these goods can
be most effectively traded in the economy. Healthy market competition, both domestic and foreign, is
important in driving market efficiency, and thus business productivity, by ensuring that the most
efficient firms, producing goods demanded by the market, are those that thrive. The best possible
environment for the exchange of goods requires a minimum of government intervention that impedes
business activity. For example, competitiveness is hindered by distortionary or burdensome taxes and
by restrictive and discriminatory rules on foreign direct investment (FDI)which limit foreign
ownershipas well as on international trade.
7. Labor market efficiency
8 The efficiency and flexibility of the labor market are critical for ensuring that workers are allocated to
their most effective use in the economy and provided with incentives to give their best effort in their
jobs. Labor markets must therefore have the flexibility to shift workers from one economic activity to
another rapidly and at low cost, and to allow for wage fluctuations without much social disruption.
8 The importance of the latter has been dramatically highlighted by events in Arab countries, where rigid
labor markets were an important cause of high youth unemployment, sparking social unrest in Tunisia
that then spread across the region.
8. Financial market development
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8 The financial and economic crisis has highlighted the central role of a sound and well-functioning
financial sector for economic activities. An efficient financial sector allocates the resources saved by a
nations citizens, as well as those entering the economy from abroad, to their most productive uses.
8 It channels resources to those entrepreneurial or investment projects with the highest expected rates
of return rather than to the politically connected.
9. Technological readiness
8 In todays globalized world, technology is increasingly essential for firms to compete and prosper. The
technological readiness measures the agility with which an economy adopts existing technologies to
enhance the productivity of its industries, with specific emphasis on its capacity to fully leverage
information and communication technologies (ICTs) in daily activities and production processes for
increased efficiency and enabling innovation for competitiveness.
10. Market size
8 The size of the market affects productivity since large markets allow firms to exploit economies of
scale. Traditionally, the markets available to firms have been constrained by national borders.
8 In the era of globalization, international markets have become a substitute for domestic markets,
especially for small countries. Evidences show that trade openness is positively associated with growth,
especially for countries with small domestic markets.
11. Business sophistication
8 Sophisticated business practices are conducive to higher efficiency in the production of goods and
services. Business sophistication concerns two elements that are intricately linked: the quality of a
countrys overall business networks and the quality of individual firms operations and strategies.
8 These factors are particularly important for countries at an advanced stage of development when, to a
large extent, the more basic sources
Interdependence of 12 Pillars
of productivity improvements have All the mentioned pillars are not independent but are related to each
been exhausted. other. A weakness in one area often has a negative impact in others. For
example, strong innovation capacity (Pillar 12) will be very difficult to
12. Innovation achieve without a healthy, well-educated and trained workforce (pillars 4
8 Although substantial gains can be and 5) that is adept at absorbing new technologies (pillar 9), and without
sufficient financing (pillar 8) for R&D or an efficient goods market that
obtained by improving institutions, makes it possible to take new innovations to market (pillar 6).
building infrastructure, reducing
macroeconomic instability, or improving human capital, all these factors eventually run into
diminishing returns. The same is true for the efficiency of the labor, financial, and goods markets. In
the long run, standards of living can be largely enhanced by technological innovation.
8 Technological breakthroughs have been at the basis of many of the productivity gains that our
economies have historically experienced. These range from the industrial revolution in the 18th
century and the invention of the steam engine and the generation of electricity to the more recent
digital revolution.
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Sub-indexes of Global Competitiveness Report

The computation of the GCI is based on aggregations of scores from 12 pillars combined into three sub-indices.
These three sub-indices are Basic requirements sub-index, Efficiency Enhancers sub-index and Innovation and
sophistication factors sub-index. These sub indices represent a successive development of competitiveness in an
economy or a nation. Further, not all countries can have simultaneous development in all these pillars. Thus, on
the basis of three sub indices, there are three kinds of economies as per GCI.
8 For example, the first achievements towards global competitiveness require proper institutions,
infrastructure, macroeconomic environment and health and primary education in a country. Without
achieving these, a country cannot step up on the ladder of competitiveness. Such economies are called
factor driven economies.
8 Once a country has these in place, the other next pillars viz. higher education, Goods market efficiency,
Labour Market efficiency, financial market developments, technological readiness and market size work
as efficiency enhancers. Such economies are called Efficiency driven economies.
8 A country with most optimum efficiency enhancers would finally need innovation and sophistication
factors to remain competitive. These pillars are keys for innovation driven economies.
This is being shown in the below diagram.
By dividing the countries into three different types of economies, the report wants to convey for example, that
best way for Cambodia to improve its competitiveness is not the same as the best way for France to do so. This
is because Cambodia and France are in different stages of development. While Cambodia needs to focus on sub-
index-1, France would nedd to focus on Sub-index-3. According to the latest report, there are 38 Factor driven
economies and India is also one of them.
Why Switzerland on Top?
The report cites the following reasons behind Switzerland getting top slot for five consecutive years:
I Switzerland has displayed an impressive growth performance, despite turmoil in Europe.
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I Switzerlands macroeconomic environment is among the most stable in the world at a time when
many neighbouring economies continue to struggle
in this area. Debt Brake in Switzerland
I Switzerland had successfully implemented the debt Due to the unhealthy development of budget
expenditures in the 1990s, the Swiss parliament and
brake which immensely contributed toward a stable subsequently the people, voted in favour of a new
macroeconomic environment. fiscal instrument to reduce government debt in 2001.
The so-called debt brake was enacted in 2003 and
I Among many qualities, three most important drivers
reinforced the constitutional principle that
of Swiss competitiveness are expenditures have to be mainly financed by revenues and
not through an increase in public debt. It introduced a
o Its excellent institutions
ceiling on spending that is being calculated on a
o Dynamism of its markets yearly basis. There are adjustment punishments for
exceeded budgets, which in turn will force public
o Its capacity for innovation.
debt down in following years. Importantly all sorts of
I Moreover, Switzerland has a unique governance government expenditures are equally covered by the
structure. In addition to its highly decentralized form debt brake. The only exception to this rule is
extraordinary spending that has to be approved by
of federalism, seven members of the Federal Council both chambers of parliament. This exception is
act as a collective head of state. The political system supposed to allow the government to react to
emergency situations such as for example disaster
ensures cohesive and inclusive leadership across
relieve or the 2008 UBS bailout. The debt brake has
political boundaries, which enables the country to had reasonable success so far. Despite slow economic
implement a long-term economic agenda. Also growth (even negative in 2009), the budgetary debt
of Switzerland 61.8.129.229
Member Name: Anand Mohan Member's Email address: dubledoreslair@gmail.com has declined from 130.3 billion CHF
important is the countrys strong collaborative in 2005 to 110.5 billion CHF in 2010. It has finally
culture among stakeholders. contributed toward a stable macroeconomic
environment in Switzerland.
I Government, business, and civil society work
Source: Wikipedia
together in a coherent way to find solutions for the
country. This effort is facilitated by the strong involvement of its population, which votes on major
decisions directly.
Where is Our Country?
Down one position from 59 in 2013, India now ranks 60th, (31 ranks lower than China) continuing its downward
trend that began in 2009. India has been penalized for very disappointing performance in the basic drivers
underpinning competitiveness, the very ones that matter the most for India given its stage of development (factor
driving economy). Some points cited in the report are as follows:
8 Indias supply of transport, ICTs, and energy infrastructure remains largely insufficient and ill-adapted
to the needs of the economy despite the steady improvement that has been made since 2006.
8 The Indian business community repeatedly cites infrastructure as the single biggest hindrance to doing
business, ahead of corruption and cumbersome bureaucracy.
8 Notwithstanding improvements across the board over the past few years, very poor public health and
education levels remain a prime cause of Indias low productivity.
8 The quality of higher education is better, but enrolment rates at that level remain very low, even by
developing country standards.
8 Turning to the countrys institutions, discontent within the business community remains high about the
lack of reforms and the perceived inability of the government to push them through. Public trust in
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politicians has been eroding since 2009 and has now reached an all-time low, while bribery remains
deeply rooted. Indeed, India has lost almost 30 ranks on this indicator since 2010.
8 Meanwhile, the situation has deteriorated further on the macroeconomic front. The inflation rate and
public deficit-to-GDP ratio were dangerously close to double digits in 2012, and the debt-to- GDP ratio
is the second highest among the BRICS.
8 Another major concern is the countrys low level of technological readiness (98th). Although businesses
adopt new technologies relatively promptly, penetration rates of fixed and mobile Internet and
telephony among the population remain among the lowest in developing Asia.
8 Furthermore, the situation has worsened in terms of labor market efficiency, where the most salient
problem remains the dismally low participation of women in the workforce. With ratio women-to-men
of 0.36, India has the lowest percentage of working women outside the Arab world.
Concluding Remarks
India's name is near to bottom in various such reports, whether ease of doing business, or corruption or
transparency or human development or infrastructure quality and we have become used to it by now. The
latest Global Competitive Report is no exception to this. Now 60th on the list, India has slid 11 places since it
peaked in 2009. Once ahead of Brazil and South Africa, the country now trails them and is lagging behind China
by 31. Lack of infrastructure is single biggest hindrance to doing business, well ahead of corruption and
bureaucracy. The other key factors that keep India hold back are low education and health standards, poor
transportation, and the insufficient reach of information and communications technology, poor energy
infrastructure, supply, and transport. Looking at the dismal governance in last few years, we should get
surprised to see such ratings.
8. What do you mean by competitiveness? Discuss various factors needed to make a country / economy competitive in
today's globalization era.
9. "Quality of institutional environment has a strong impact on productivity and in turn competitiveness". Comment.
10. With reference to the Global Competitiveness Report, discuss the difference between Factor Driven, Efficiency
Driven and Innovation Driven economies, throwing light on position of India.
11. What is Technical Readiness? Do you think that India has required technical readiness to take on global competition?
Assess.
12. Switzerland is getting top slot for five consecutive years in the Global Competitiveness Reports. Discuss the reasons.
13. "India's performance has been dismal with regard to the basic drivers underpinning competitiveness." Discuss.
Indian Economy: CPSE Exchange Traded Funds

The government has recently given its go-ahead to the CPSE ETF comprising stocks of 10 large government-owned companies. This article discusses
this topic, emphasizing your examination.
Introduction
Investing in shares cannot be everybody passion. A person who wants to invest in equity shares would need to
know and analyze the market, understand the economy, sectors and the company itself. He would need to go
thru the financial documents of the company such as balance sheets, profit and loss accounts etc. Thus, not
everybody can make best investment decisions owing to the nature of the stocks market, which are example of
perfect competition.
A person, who is used to swimming in a pool cannot willingly jump in a ocean, because it is far more difficult and
full of risks. It would need higher skills and capability to face the perils of the ocean, including but not limited to
the dangers of surging currents, sharks, whirlpools etc. The swimming pools represent a controlled
environment. The ocean is uncontrolled.
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The above example is an analogy to stocks and funds. Most people are small Individual investors and they dont
have the capability, skills or willingness to invest directly in stocks. They need something like a controlled
environment of a swimming pool.
Collective Investment Schemes (CIS)
The Investment schemes in which money from investors is pooled and then invested are known as Collective
Investment Schemes. The idea behind pooling money is to reduce investment amount per head, reduce risks and
derive benefits of working as part of a group
In a collective investment scheme or a fund the shares or units represent ownership in a pool of investments
(shares, bonds or a combination of both) that is managed by a professional fund management company, which
are called Fund Managers. The Funds are generally not traded on a stock exchange but investors buy and sell
units in funds to the manager at any time. Funds are normally structured as open-ended. By Open ended, we
mean that whenever the fund manager receives new monies, additional units are created. Similarly, when the
investors withdraw the money from the fund, the units are cancelled in exchange of their cash value. Some
funds are Closed ended also. By close ended, we mean that these funds have a finite amount of capital in issue
and new units cannot be created or cancelled on a day-to-day basis.
Exchange Traded Funds
The Exchange Traded Funds (ETF) are also like Mutual funds and are a kind of collective investment schemes.
But the ETFs are different from Mutual Funds in the
sense that while we need to buy the mutual funds from
the Fund Managers only, ETF can be purchased from
another investor. Thus, ETF have a major feature, that
they can be traded among investors, very much similar to
the stocks. The adjacent graphics and following table

makes it clear.
Mutual Fund ETF
MFs are not traded ETFs are traded on stock
on stock exchanges exchanges and you can
and we have to buy buy and sell them on the
them directly from exchange.
the fund house.
We dont need a Since ETFs trade on the
share trading market, we need a trading
account to buy a account to transact in
mutual fund. them.
In this way, an Exchange Traded Fund (ETF) is primarily a mutual fund scheme which is listed and traded on a
stock exchange. An ETF can invest in the following:
8 Equities replicating the composition
and performance of an equity index (e.g.
CNX Nifty, CNX Junior Nifty)
8 Commodities tracking the actual price
of a commodity (e.g. Gold ETF)
8 Money market instruments which
include short-term government
securities and call money.
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The ETFs have become very popular these days.

The adjacent graphics sourced from Goldman Sachs website shows the growth of ETF in India in recent times.
The reason of their popularity is that The ETF has more liquidity, more transparent, involve lesser costs, involve
lesser investments per units and they provide best of both worlds viz. Fund Market as well as Stock Market.
Constructed to track an index

Open ended mutual fund
ETF Like a Fund Lower expense ratio generally as compared to an active equity fund
Lower turnover
More transparent
Trading flexibility intraday on the exchange

Real time price
ETF like a Stock Put limit orders
Minimum trading lot is just 1 unit
Delivery into investors Demat account
Exchange Traded Funds: A New Route to Disinvestments

The hitherto popular disinvestment routes included either FPO (Follow on public offer), which was a more time
consuming process and at higher cost, or later through OFS (Offer for sale). Government sorted to strategic sale,
minority sale etc. and it was observed that there was an immediate pressure on price the moment a
disinvestment was announced. These routes were not for swimming pool swimmers. This also meant
disinvestments only in individual companies, and hence it was difficult to prioritise and reach a larger target.
Consequently, we have seen that government has not been able to achieve targeted success in that. We note
here that in the last budget, Finance Minister P Chidambaram had estimated to mobilise Rs. 40,000 crore by
selling minority stakes in state-owned companies. As per the interim Budget 2014-15 presented in Parliament,
the receipts from disinvestment for 2013-14 have been revised downward to Rs. 16,027 crore from Rs 40,000
crore. What were the reasons of this flop show? Some of the reasons are as follows:
B Unfavourable market conditions / Investor (read big investors) mood
B Offers made by government not attractive enough
B Stringent bureaucratic procedures
B No investor friendly policies
B Retail investors almost absent from disinvestment programme
In February 2012, the Goldman Sachs Asset Management (GSAM) started having conversations with the
government and Department of Disinvestment. They made a presentation to the government and pointed out
what exactly the department was missing by ignoring retail investors. The company showed how participation by
a large number of investors could be encouraged as well as how to leverage the prevalent nationwide stock
exchange network. GSAM is an expert organization in Exchange Traded Funds (ETFs). They proposed that an ETF
could be an elegant route for disinvestment and can be an instant hit. It can provide a low-cost, transparent,
rules-based, diversified vehicle that could be used by a wide variety of investors. This is how CPSE ETF concept
was born.
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Finally, the CPSE ETF was issued recently and Government is startled with the good investor response to the
current CPSE-Exchange Traded Fund. Centre is expected to reach its revised disinvestment target of Rs 16,000
crore for the current fiscal after the new fund offer closes in this month.
Advantages of New Route
The CPSE ETF provides ability to participate in the long-term development of India, by purchasing stocks in
Infrastructure and Natural Resources arena. It provides small retail and HNI investors with the ability to diversify
exposure across a number of Public Sector companies through a single instrument. They can be traded on stock
exchange terminals across the country. They enable large investment in blue chip Public Sector enterprises
without the constraint of market liquidity on the underlying individual stocks.
Type of Scheme
CPSE ETF is an Open Ended Index
Scheme, listed on the Exchanges in
the form of an Exchange Traded
Fund (ETF) tracking CPSE Index.
This scheme is in compliance with
the provisions of Rajiv Gandhi
Equity Savings Scheme, 2013
(RGESS).
CPSE Index
A CPSE Index has been constructed
in order to facilitate Government
initiative to dis-invest some of its stake in selected

CPSEs through the ETF route. It is made of 10 Blue-chip
CPSEs with varying weightage shown in adjacent table.
All these companies are listed at National Stock
Exchange of India Ltd. (NSE); having more than 55%
government holding and have a market capitalization
of more than Rs. 1000 crore.
The above table makes it clear that maximum
weightage in the CPSE Index is given to the energy
sector i.e. ONGC and GAIL. The sector wise breakup is shown in adjacent pie diagram.
14. Differentiate between a stock, mutual fund and Exchange Traded Fund. Which one is better for small investors and
why?
15. Exchange Traded Funds provide best of both worlds viz. Fund Market as well as Stock Market. Amplify.
16. The ETF route to disinvestment seems to be much more efficient and novel way than traditional routes. Discuss.
17. What is the CPSE Index? Discuss various sectors included in this index.
Indian Polity: Review-Political Parties under RTI

Any entity under RTI act will be deemed to be a public authority if it gets substantial funding from the state. The
question of whether the political parties come or not under the RTI has been a major issues in recent times. In a
landmark decision, the CIC in 2013 had held that political parties are indeed public authorities observing that
political parties have substantial funding from the state in following manner
8 Income tax exemptions
8 Huge tracts of land in prime areas of Delhi have been lend to Political parties at very low rents
P a g e | 23
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8 Free air time of Doordarshan and radio is given to political parties

Further CIC also observed that political parties directly or indirectly impact public life. The CIC questioned if
transparency can be good for state organs then how it can be bad for political parties. With this decision, it was
clear that:
8 Political parties will now become accountable to CIC.
8 It will help in better decision making by citizens as they will be more informed now
8 Even if some embarrassing information is released it will lead to improvement in functioning and
enrichment of democracy
8 More transparency leading to Lesser corruption
Issues and controversies with CIC decision
G RTI act is citizen empowerment tool and not commission empowerment tool. This decision might lead
to too much power in hands of the commission
G It would be difficult to implement this decision as Public information Officers of the political parties are
not on salary unlike the government officials. So the maximum penalty of 25,000 if ever imposed
cannot be recovered.
G RTI act was enacted keeping in mind the government functioning. Therefore, max disclosure (section 4),
and exemption from disclosure (section 8) would become irrelevant for political parties
G Some people might interfere into ticket distribution by political parties which is important for
competitiveness andMember
secrecy of the
Name: Anand political
Mohan decision
Member's Email making
address: dubledoreslair@gmail.com 61.8.129.229
G This had widened the scope of RTI act too much, which was not the original objective of the RTI act.
Government Reaction
Implications
None of the six national parties has complied with the CIC's decision to appoint information officers and
appellate authorities under the RTI. Infact the government has been looking for ways to annul the decision of
the CIC.
RTI Amendment Bill
Government introduced The Right to Information (Amendment) Bill, 2013, and tried to insert an explanation in
Section 2 of the Act which states that any association or body of individuals registered or recognised as political
party under the Representation of the People Act, 1951, will not be considered a public authority. It is suggested
that The Representation of the People Act should be amended to make it mandatory for all recognized parties,
national or state, to set up the necessary RTI machinery.
18. Discuss various issues and implications of bringing the political parties under RTI act throwing light on recent CIC
decisions and government reaction in this context.
Indian Economy: Essay on Scope for Wealth Tax in India

In India, wealth tax is a regular stream of tax collection. The underlying principle for imposing wealth tax as
well as its continuance comes out of the socialistic objectives of Indian planning. Wealth tax is basically a direct
tax levied on the ownership of certain assets by individuals and Hindu Undivided Families (HUFs) even though
these assets may not generate any income. It targets unproductive, non-essential and idle assets. Presently,
wealth tax is levied at 1 per cent of the net taxable wealth exceeding Rs 30 lakh. It is paid when an individual's
net taxable wealth minus his total outstanding debt on all such assets (that are eligible for wealth tax) is more
P a g e | 24
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than Rs 30 lakh on valuation date (March 31 of a financial year). Last year, it contributed Rs 866 crore to the total
revenue collection of Rs 1,038,036 crore.
Scope
In India, the scope of taxable wealth for individuals differs with their residential status. Net taxable wealth for a
resident Indian will include all assets in India and abroad while net taxable wealth for non-resident Indians
includes only those assets which are in India. The assets chargeable to wealth tax are residential house,
guesthouse, farmhouse, motor cars, precious metals including those in the form of jewellery, gold, furniture,
utensils or other articles, aircrafts, yachts, boats, urban land and cash in hand in excess of Rs 50,000. In addition
to these, all assets transferred by individuals to their minor children and to a spouse for inadequate
consideration also attract wealth tax. It is pertinent to mention here that assets such as financial instruments, a
house held for business or profession, any property in nature of commercial complex, a house let out for more
than 300 days in a year, gold deposit bond, etc., are exempted from taxation under the Wealth Tax Act.
In India, the concept of wealth tax was introduced to wipe out excess gains arising out of property and wealth to
reduce inequalities of income and wealth. Interestingly, the Indian taxpayers consider wealth tax as trivial. This
approach is prevalent probably because the Central Board of Direct Taxes gives more preference to other
important taxes, such as income tax, corporate tax, excise, etc. However, evasion of wealth tax may attract strict
penalty. Incorrect declaration of wealth can invite a fine of up to 500% of the evaded tax. One can also be jailed
for up to seven years if the tax due is over 1 lakh. Moreover, wealth tax evasion can easily be detected as the
assets are tangible and undervaluation is not difficult to prove.
Wealth tax, just like income tax, has always cleared the considerations of benefits and ability to pay. This is the
reason why it can be viewed as a useful supplement to income tax. Taking social considerations into account, it
cannot be denied that taxing wealth along with income tax is absolutely prudent as it provides horizontal equity.
When the concept of wealth tax was initially introduced, rate of wealth tax was 15 percent, combined with
income tax. This made the affluent section opt for extensive evasion and avoidance of wealth tax. However,
later the rate was reduced to 2 percent. After 1993, the wealth tax rate was further reduced and it was now
chargeable in respect of net worth exceeding Rs 15 Lakhs to 1 percent only. This ended up ensuing substantial
reduction in tax collection from this source and it somewhat also reflected governments casual approach
towards wealth tax.
In India, wealth tax on unproductive assets was introduced on the lines of recommendations made by the
Chelliah committee. It was further stated by the committee that taxable wealth would not be liabilities incurred
in acquiring such assets. By making real investments unproductive, the committee aimed at directing all the
resources towards financial savings. However, the committee while making recommendations overlooked the
capability of Indian households to invest in highly unpredictable stock market. In addition, the very definition of
productive assets was also flawed. The policy is obviously not growth favoring since financial flows by
themselves do not add to productive capacity of economy, its the real investment through which capital
formation is done. Present situation demands the continuance of wealth tax along with income tax. It is further
advised that the distinction between productive and unproductive assets should be done away with. This will
make the wealth tax equitable also on the grounds of vertical equity.
19. Throw light on the position of Wealth Tax in taxation in India. Do you agree with the view that in a country like India,
a tax on wealth would be a more useful supplement to income tax? Argue giving reference to J.Chelliah tax reforms
committee report.
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Target 2014 Current General Studies-7

www.gktoday.in March 5 to March 20, 2014

Indian Economy: Understanding Indian Crude Basket ........................................................................... 8

Internal Security and Development: The Kamtapur Movement ........................................................... 10

Indian Society: Denotified & Nomadic Tribes (DNTs) of India ............................................................ 11

World Economy: Global Competitiveness Report 2013-14................................................................... 14

Indian Economy: CPSE Exchange Traded Funds .................................................................................. 20

Indian Polity: Review-Political Parties under RTI ................................................................................ 23

Indian Economy: Essay on Scope for Wealth Tax in India.................................................................... 24

List of Model Questions

Environment: WGEEP and HLWG on Western Ghats

Western Ghats Geography

wetter and more species-rich. South

Final demarcation of theName:

o Encouraging ecotourism for local benefits.

Comparison of the two panels

Indian Economy: Understanding Indian Crude Basket

8 Various Benchmarks and Baskets

Model Questions for Mains

Internal Security and Development: The Kamtapur Movement

Indian Society: Denotified & Nomadic Tribes (DNTs) of India

World Economy: Global Competitiveness Report 2013-14

Sub-indexes of Global Competitiveness Report

Member Name: Anand Mohan Member's Email address: dubledoreslair@gmail.com 61.8.129.229

Indian Economy: CPSE Exchange Traded Funds

the stocks. The adjacent graphics and following table

The ETFs have become very popular these days.

Constructed to track an index

Trading flexibility intraday on the exchange

Exchange Traded Funds: A New Route to Disinvestments

initiative to dis-invest some of its stake in selected

Indian Polity: Review-Political Parties under RTI

8 Free air time of Doordarshan and radio is given to political parties

Indian Economy: Essay on Scope for Wealth Tax in India

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