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Daily Current Affairs [Prelims + Mains Focus] – 2nd June 2018

Daily Current Affairs (Prelims + Mains Focus)- 2nd June 2018


PM Modi’s visit to Singapore

Part of: Mains GS Paper II- International relations

Key pointers:

  • Prime Minister Narendra Modi recently visited Singapore.
  • India has formalised a Mutual Recognition Agreement (MRA) in nursing with Singapore which would allow nurses trained in seven nursing institutions across India to gain employment in the South-East Asian country.
  • India and Singapore concluded the second review of India-Singapore Comprehensive Economic Cooperation Agreement (CECA). India and Singapore agreed to expand the coverage of tariff concessions, liberalise the rules of origin and incorporate new product specific rules (PSRs) to further enhance trade between the two countries.
  • Both countires agreed to deepen their economic and defence ties as they signed eight agreements including one on logistics cooperation between their navies.

Cess on sugar

Part of: Mains GS Paper II- International relations

Key pointers:

  • The proposal to introduce a cess on sugar has been green-lighted by the Law Ministry. The cess will come into effect only if and when the GST Council approves it.
  • Cess is different from GST. It used to be an additionality during the VAT (Value added Tax) regime; so it (the cess) can be applied.
  • The Finance Ministry will now file a special leave petition in the Supreme Court as there is an interim order on a petition challenging the constitutional validity of the Goods and Services Tax (Compensation to States) Act, 2017.
  • The proposal envisages the imposition of cess at a rate not exceeding Rs. 3 per kg on supply of sugar” (over and above GST at 5 per cent). The fund collected will be used to create a fund, which will enable the Centre to make prompt interventions to protect the interests of farmers, in view of the extreme cyclical nature of industry.
  • Before the GST introduction, a cess was being collected under the Sugar Cess Act, 1982, as excise duty for the purpose of a Sugar Development Fund. The money thus collected was used to help the industry on various fronts, including settling farmer dues. This cess was subsumed in the GST.



TOPIC: General Studies 2:

  • India and its neighbourhood- relations.
  • Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
  • Effect of policies and politics of developed and developing countries on India’s interests

India-ASEAN: India needs to play a bigger role in the region

In news:

Prime Minister Narendra Modi visited Singapore recently to focus on three increasingly interconnected themes — the strategic, economic and technological.
On all three, there is a new dynamism to the east of India and Singapore is at the heart of it.

The Shangri La Dialogue:

  • It is the annual conclave in Singapore that brings together the region’s defence ministers and senior military officials.
  • The Dialogue is organised by the London-based International Institute of Strategic Studies (IISS) with the support of the Singapore government.
  • For nearly two decades, the Shangri La Dialogue had provided a useful venue for the Indian defence establishment to engage its counterparts in Asia. Yet Delhi’s participation in this forum has turned out to be erratic.

Rapid deterioration in US-China relations:

  • Reacting to China’s relentless militarisation of the South China Sea, Washington has uninvited Beijing from the world’s largest maritime exercises, called RimPac, held every two years.
  • A trade war between Washington and Beijing is also ongoing. There is no sign of an early resolution of the economic disputes between the world’s two largest economies.
  • The current conflict is not limited to the question of trade deficits but has also enveloped the high technology sector, which has seen growing interdependence between US and Chinese companies in recent decades.
  • On the political front, Trump has accused Beijing of sabotaging the US efforts to resolve the nuclear dispute with North Korea. China, apparently, is quite anxious of being cut out of a political settlement in the Korean Peninsula brokered by the US.
  • The Southeast Asian region had benefited immensely from traditional security cooperation with the US and the deepening economic engagement with a rising China in recent decades. The uncertain trajectory of US-China relations has cast a dark cloud over ASEAN’s benign economic and political environment of the last three decades.
  • Much of the region to the east of India is scrambling to adapt to the new dynamic between China and the US.

India and ASEAN: Issues

  • Since the end of the Cold War, the ASEAN has sought to draw India into the region as a stabilising force.
    But it has been disappointed by the tentativeness of India’s defence diplomacy in the region at the bilateral as well as multilateral levels.
    The government needs to bridge the gap between Delhi’s rhetoric on being a “net security provider” in the region and the lack of concrete matching actions.
  • The Trump Administration’s approach to trade has taken the logic of globalisation for granted.
    As the South Asian region seeks to secure its interests through consolidation of trade agreements with other nations, it finds India a frustrating interlocutor.
    Delhi is widely seen in the region as a spoiler in the trade negotiations.

Way ahead:

  • The government needs to assure the South Asian region India is flexible and prepared to bring the negotiations to an early closure.
  • Concluding the long-pending review of the Comprehensive Economic Cooperation Agreement with Singapore will send out a positive signal to its Asian partners.
  • Formal integration of the digital payments systems of the two countries is also planned. Once it is done, Indian holders of the “RuPay” cards will be able to make financial transactions in Singapore. Similarly, residents of Singapore could use the local NETS cards to make purchases in India and its e-commerce portals.
  • India’s overly complex regulations prevent the full realisation of the potential for digital financial connectivity between India and Singapore. They also limit the possibilities for a greater alignment between the expansive innovation ecosystem in Singapore and the technology hubs in India.
    India needs to significantly improve the policy environment for innovation in India and discard the bureaucratic defensiveness about global engagement on advanced technologies.


An India that misses the current opportunities for technological advancement will inevitably diminish its ability to shape the regional economic, political and military order. The pace and effectiveness of adaptation to the current technological revolution will define the future power hierarchy in Asia.

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