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Updated: Sep 26, 2019


A big bank theory that won’t suffice

GS Paper 3 : Indian Economy

News Bite

India’s GDP growth slumped for the fifth straight quarter to 5%, a six-year low.


  • India is faced with job losses, the absence of fresh employment opportunities, farm crisis, a severe investment drought, and the financial sector’s myriad malaises. This has resulted in sluggish aggregate demand and slowing growth.

  • The government announced four mergers among public sector banks (PSBs). It involves 10 banks and reduces the total number of state-owned banks to 12.

Problem with the move

  • Will it reverse the slowdown?

  • At this time, lenders have become lending-averse and bankers are wary of witch-hunts over commercial judgment calls.

  • Mergers of this scale are likely to focus on institutional and professional energies on executing these unifications successfully.

  • It could detract attention from the critical task at hand of identifying unmet credit needs and keeping India’s loan pipelines humming.

  • Interms of the other governance reforms announced for PSBs, the government did not distance itself from the appointment of chairpersons and managing directors.

  • Of the three PSBs based in Kolkata, two—Allahabad Bank and United Bank of India—will lose their identities and be subsumed into other larger banks, leaving the city as the home base of only one PSB (UCO Bank) and the private lender (Bandhan Bank).

  • The government has not provided a rationale, or eligibility criteria, for its selection of PSBs.

  • At a strategic level, the merger will partially ease pressure on government finances from the over-sized bank recapitalization bill.

  • It is unlikely to set a credit supply rolling. The government allocated a mere ₹70,000 crore in this year’s budget.


The mergers are unlikely to generate any immediate benefits for the economy in the absence of appropriate government spending.


A polar region we must keep on the radar in a multipolar world

Mains Paper 3 : Conservation, Environmental Pollution & Degradation, Eia (Climate change- -Geo Politics)

News Bite

Recent offer by the US president to buy Greenland is indicative of the emerging geopolitics of the Arctic region. Climate change and China are fast destabilizing the status quo and throwing up political, security, legal, and environmental challenges. Autonomous vehicles and robots can populate uninhabitable regions and the next few decades could see the Arctic emerge as a hotspot of great power competition.


  • Rising global temperatures are causing the frozen Arctic ocean to melt, opening up new sea routes and opportunities to extract hydrocarbons and minerals from the seabed and the newly exposed land surfaces.

  • Countries of the Arctic are trying to take advantage of these opportunities.

  • China declared itself a “near Arctic” country and is making determined efforts to extend its footprint in the polar region. Chinese firms have tried to purchase large tracts of land in Iceland, Norway and Denmark.

  • There are concerns that Chinese investments in Greenland’s natural resource economy might persuade the local population to secede from Denmark, creating a Laos-like Chinese satellite state between North America and Europe. 

History of superpower behavior

  • In the 19th century, the US acquired Louisiana, Florida, Alaska and parts of Arizona and New Mexico through purchases.

  • China drew dashed lines on a map around the South China Sea it coveted and claimed that it had always belonged to Beijing.

  • Russia annexed Crimea by sending unmarked, masked troops to just take over the place.

Arctic politics

  • How should the region be shared among the eight Arctic countries – Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the US as there are overlapping territorial claims among them.

  • Should these countries be allowed to assert territorial claims at all? They have formed the Arctic Council to institutionalize their self-assigned rights, but many in China, the European Union, India are against conceding sovereignty to the Arctic countries. 

  • Russia, Canada and Denmark are all claimants to the ownership of the Arctic pole.

  • Russia is both building up its military capabilities in the region and promoting the Northern Sea Route (NSR) as a new artery of global shipping. It  recently announced that it will impose rules on commercial and naval vessels using the route. Both China and the US will contest Russia’s jurisdiction on this water. 

  • China’s position in the Arctic is all for freedom of navigation, while its position over the South China Sea is denial of freedom to other countries.

  • China has declared that it wants to be a polar great power. To be considered a polar great power, it must have high levels of polar scientific capacity,scientific research funding, presence in the polar regions, economic, military, political, and diplomatic capacity and international engagement in polar governance.

  • Russia is keen for India to get involved in the Russian Far East and the Arctic. It liberalized visa procedures to enter Vladivostok, invited Prime Minister as the chief guest at this week’s Eastern Economic Forum.

Indian position

  1. So far, Indian involvement in the Arctic has centred around scientific and environmental studies, mostly in partnership with Norway. 

  2. Indian and Russian energy companies have signed agreements worth billions of dollars on exploration and joint production. 

  3. Conditions are favourable for private Indian investors to go beyond these and explore the Siberia and further North.


Automatic Exchange of Information (AEOI) Regime

GS Paper 2 : Governance, Transparency & Accountability, Citizens Charters |

News Bite

  • Banking details of Indians with accounts in Switzerland will be available to tax authorities as the automatic exchange of information regime kicks off between the two countries.

  • In 2016, India and Switzerland had signed an information-sharing deal on bank accounts, which was to come in effect from September 2019.Both countries intend to start collecting data in accordance with the global AEOI standard in 2018 and to exchange it from 2019 onwards.

About AEOI

  • This automatic exchange of information (AEOI) is to be carried out under the Common Reporting Standard (CRS), the global reporting standard for such exchange of information.

  • It takes care of aspects such as confidentiality rules and data safeguards.The CRS has been developed by the Organisation for Economic Cooperation and Development (OECD).

  • Under the agreement, India will not receive information on bank accounts prior to 2018.

  • Under the agreement both jurisdictions will inform each other of any relevant developments in respect to the implementation of the OECD Common Reporting Standard in their respective domestic laws.

  • Each jurisdiction confirms that it has informed the other jurisdiction about the modalities made available to persons making a voluntary disclosure of their financial assets.

Benefits of the regime

  • In 2018, data from Zurich-based Swiss National Bank (SNB) had shown that after declining for three years, money parked by Indians in Swiss Banks rose 50 per cent to CHF (Swiss Franc) 1.02 billion (Rs 7,000 crore) in 2017 over the previous year.

  • The step is likely to shed more light on the wealth Indians have stashed away in Swiss bank accounts, for so long governed by strict local rules of secrecy.

  • It is a significant step in the government’s fight against black money and the era of “Swiss bank secrecy” will finally be over.


The Munich Agreement

GS Paper 1 : Modern Indian History |

News Bite

Beginning of WW II

  • On this day 80 years ago — September 1, 1939 — German troops marched into Poland, triggering the beginning of World War II, the deadliest military conflict in the history of mankind.

  • Great Britain and France, which had assured help to Poland, declared war on Germany and its allies two days later, on September 3.

  • The beginning of the War exposed to the world the folly of the Munich Agreement that was signed less than a year previously — a deal that has been seen as a disastrous act of appeasement of Adolf Hitler’s Nazi regime.

  • This event is marked as historical evidence that expansionist totalitarianism cannot be dealt with through placation.

The Sudeten crisis

  • Hitler had threatened to bring war to Europe unless the German-majority areas in the north, south, and west of Czechoslovakia were surrendered to Germany.

  • The German-speaking people living in the area referred to in German had found themselves part of the new country that was created after the German-dominated Austro-Hungarian Empire collapsed at the end of WW I in 1918.

  • The annexation of Sudetenland, home to over three million Sudeten Germans, was part of Hitler’s plan to create a “Greater Germany”.

  • Following the Munich Agreement, German troops occupied these areas between October 1 and October 10, 1938.

The Munich Agreement

  • The Agreement was signed among Germany, France, Italy, and Great Britain on September 29-30, 1938.

  • Hitler’s appeasement in an attempt to keep the peace in Europe was strongly supported by Great Britain’s Prime Minister at the time, Neville Chamberlain.

  • After coming back from Munich, Chamberlain waved the piece of paper signed by Hitler and called it a declaration of “peace with honour”.

  • In return for European peace, the Sudetenland region was permitted to be annexed by the Germans.

What changed with the treaty?

  • The Agreement, signed after Hitler met Chamberlain and French PM along with Italy’s Mussolini in Munich, allowed for the cessation to Germany of Sudetenland.

  • The German occupation was to be done in four stages from October 1-10, 1938.

  • The cessation in some places was subject to a plebiscite.

  • The Czechoslovak government was supposed to release from their military and police forces within four weeks of the signing of the Agreement, any Sudeten Germans who wished to be released, and all Sudeten German prisoners.

  • Six months after the Munich Agreement was signed, Hitler went back on his commitments and invaded the whole of Czechoslovakia. War was on its way.


A new ethics for a sustainable planet

GS Paper 3 : Conservation, Environmental Pollution & Degradation, Eia

News Bite

Brazil’s Amazon forests are ablaze with dozens of fires mostly set intentionally by loggers and others seeking greater access to forest land. They are paving the way for a global climate catastrophe.

Climate Change

  • Energy and transport are mainly responsible for the accumulation of greenhouse gases (GHGs) in the atmosphere.

  • Changes in land use patterns also have made significant contributions.

  • Deforestation, industrial agricultural systems and desertification are major drivers of climate change.

  • Agriculture, forestry and other land use activities accounted for a little less than a quarter (23%) of the total net anthropogenic emissions of GHGs between 2007-2016.

  • The Intergovernmental Panel on Climate Change (IPCC) recently brought out a special report on Climate Change and Land that covers desertification, land degradation, sustainable land management, food security and greenhouse gas fluxes in terrestrial ecosystems. It makes it clear that unless land is managed in a sustainable manner, the chances for humanity to survive climate change will become smaller.

Examples of Climate Change

  • Many cities in Europe and elsewhere have seen high temperatures never before experienced.

  • Heat waves have also accelerated melting of glaciers in Greenland at a rate that was not anticipated by scientific models until much later this century.

  • The burning of the world’s largest forest reserves as witnessed in Amazon recently.

Problems in tackling climate change action

  1. The USA has withdrawn from the Paris Climate Agreement stating that it is against the national interests of the U.S.

Importance of Land Management

  1. Land is part and parcel of people’s lives. It provides food, water, livelihoods, biodiversity and a range of other benefits from its ecosystems.

  2. Decades of poor land management in the agricultural system destroyed farm systems

  • soils have become depleted with heavy use of chemicals

  • farms have few or no friendly insects

  • monoculture has led to a reduction in the use of indigenous crop varieties with useful characteristics

  • groundwater is depleted

  • polluted farm runoff is contributing to contaminated water bodies while destroying biodiversity

Efficient land management

  • Implementing more sustainable agricultural practices:

  • reducing chemical input drastically

  • food production through natural methods of agroecology to reduce emissions and enhance resilience to warming

  • avoiding conversion of grassland to cropland

  • bringing equitable management of water in agriculture

  • crop diversification

  • agroforestry

  • investment in local and indigenous seed varieties that can withstand higher temperatures

  • practices that increase soil carbon and reduce salinisation

  • Sustainable food systems reduce food waste, which is estimated to be a quarter of the food produced.

  • It also necessitates eating locally grown food and cutting meat consumption.

  • It is important to put an end to deforestation, conserve mangroves, peatland, and other wetlands.

Examples of change

To address the transnational challenges of climate change and land, the narrow lens of nationalism is not serving us. La Via Campesina, The Transition Network, and Ecoregionalism are civil society movements in that direction. Fridays for Future and Fossil Fuel Divestment are part of such evolving sensibilities.


  • Land use policy should incorporate better access to markets for small and marginal farmers, empower women farmers, expand agricultural services and strengthen land tenure systems.

  • In the Great Transition Initiative, Paul Raskin has said that seeing our place as part of the web of life, instead of at its center, requires a Copernican shift in world views.

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