 Welcome to the Hindu News Analysis by Shankar Iyer's Academy. The list of topics chosen for today's discussion along with the page numbers is given here for your reference. Here is the first news article. Let us look into this opiate column which discusses the issues associated with foreigners tribunal. First, let us have a brief recap on foreigners tribunals and then the issues discussed by the authors. The relevant syllabus is given here for your reference. See, many of us know that the NRC was published in Assam on 31st August 2019. So, in that NRC, out of more than 3.2 crore applicants, 19 lakh people were excluded from the final NRC. So, an individual whose name is missing in final NRC can represent their case to appellate authority. This appellate authority is nothing but the foreigners tribunals. So, these tribunals are based on foreigners tribunals order of 1964. And the objective of these tribunals is to identify whether a person is a foreigner or not. And a foreigner is defined as who is not a citizen of India. So, in order to prove citizenship, the individual has to provide evidence and the tribunals would take decision accordingly. So, burden of proof lies with the accused. And going further, know that these tribunals have the power of civil court while trying a suit under civil procedure code of 1908. And there was a recent amendment that is last year. And after the amendment, the power to constitute tribunals was even given to state government, UT or even to district collector also. Previously, only center can for establish tribunals. Now, the district collectors or district magistrates can set up foreigner tribunals. The amendment also empowers individuals to approach the tribunals. Earlier, only state administration could approach a tribunal against an illegal foreigner. And the final order of tribunal on whether person is foreigner or not shall be given within a period of 120 days from the date of production of records. So, this is the brief background on foreigners tribunals. We have covered the same topic multiple times in the recent months. Today, we are going to discuss what are the issues surrounding these tribunals. Firstly, the authors have analyzed more than 800 orders passed by foreigner tribunals during 2017 to 2019. And according to them, 96% of the orders were given exparte, which means the judgment was made without the presence of parties to the dispute. It means the affected people are not present while the judgment is being delivered. Also, it is said that the orders were inconsistent, vague and biased. For example, most of the orders of these tribunals followed a set template. So, just to the names of persons, police stations and dates were changed. So, this shows that individual cases were not given enough importance. The authors also disbelieve the description given by the police in many cases, such as the suspects failed to produce documents for their citizenship. But considering the seriousness of citizenship, it is very hard to believe that the several hundreds of people failed to provide proof. In majority of cases, police reported that they were unable to locate the suspected foreigners. In such cases, F.T. passes an exparte order. So, as we said, here the burden of proof lies with the accused. So, those who couldn't represent themselves at F.T.s are declared as illegal foreigners. So, we can sense that many people, many villagers in northeastern areas are not aware of these legal proceedings. So, they are facing very difficult to represent themselves in these tribunals. So, to ensure complete justice, the suspected foreigners should be allowed to refute the allegations made against them. But unfortunately, this is not happening often, even though F.T.s are quasi-judicial bodies. The author also cites unnecessary delays at the hand of police in serving notice to the accused and unnecessary haste by judges in passing exparte order. So, all these indicates an urgent need to make the procedure followed by these tribunals more fair, more equitable, more inclusive and more transparent. Because if even one person is not given adequate chance to prove his citizenship, then we cannot call this process completely genuine and transparent. So, this is all about the discussion of this news article. Before going further, there is a small question to you. There is something called Parichai, P-A-R-I-C-H-A-Y, which is relating to these Assam's NRC. Try to find out what is Parichai and post your answer in the comment section. Let us move on to next news article discussion. Let us take up this lead column from today's editorial page, which discusses some of the issues in the defense acquisition procedure 2020. As the name suggests, defense acquisition procedure means the procedure to buy defense equipment. So, this new policy that is 2020 procedure focuses on simplifying the defense acquisition procedure and institutionalizing monitoring mechanism with actions using digital technologies, database, etc. It also focuses on increasing participation of Indian vendors, including MSMEs, in line with governments making India initiative. It also has certain change to the offset clause in the defense procurement. In this regard, you need to know what is meant by offset policy in defense procurement. If you remember, on September 24th, we have talked about offset clause in detail. We will have a brief recap today. See in the defense sector, the concept of offset primarily aims to provide additional benefits to buyer of a product from a foreign supplier. As we know, India is one of the world's greatest importer of defense goods. So, the potential value of offset is very high. See, the main objective of this offset policy is to make the defense sector self-sufficient and not dependent on imports. But in order to manufacture indigenously, Indian industries need access to modern technology. So, this is where the significance of offset condition comes. See, under the offset clause, a foreign company which wins a defense deal is supposed to invest a part of the contract value in our country, thereby developing skills and bringing in technology which also generating employment. If this policy is implemented correctly, offset conditions can change the indigenous defense industry and provide a much-needed boost to the R&D sector. In such kind of defense deals with an offset clause, price is also a major factor. Buyers from developing countries often lack an industrial base and R&D facilities which take a long time to mature. For example, in India, still we don't have many critical technologies required for defense production. And also, the price and terms of contract also reflect the government's relative bargaining strength. For example, large buyers like India seek to exercise their buying power to secure not just the lower price. They also try to acquire the technology to upgrade domestic production and build R&D capabilities. And this offset clause is the instrument for securing these goals. See, simply put, we are spending a lot of billions on defense inputs. So this offset clause mandates the foreign suppliers to source some material from India or to train local industries or provide technology transfer, thereby developing local industries also. In India, the offset clause was initiated in 2005. For example, the requirements are like sourcing 30% of value of contract domestically, indigenization of reduction in a stripped time frame, and training Indian professionals in high tech skills for promoting domestic R&D. See, with the introduction of offset policy in 2005, things improved a lot in India. For contracts valued more than 300 crores, 30% of it will result in offsets. So for 300 crores, 90 crores of inputs should be sourced domestically. As aerospace imports increased rapidly, the exports via the offsets also increased a lot. For example, in 2007 compared to 2006, the exports increased by 544%. And by 2014, exports from India increased to 6.7 billion dollars from a very small amount of 62 million dollars in 2005. So because of these offset clauses, domestic industry is also getting orders. As I said before, 30% of inputs should be sourced from India. As a result, domestic industry is getting too many orders. And with the help of this offset clause, India was able to join the League of Worlds Top 10 Aerospace Exporters. And this is very surprising because India is the only country without a major domestic aerospace company in the top 10. However, the success story was short lived. This is mainly because the exports significantly reduced after the offset clause was relaxed. Initially in 2016, the threshold, that is 300 crores, was increased to 2000 crores. So from 2016, the 30% offset clause works only if the defense order is more than 2000 crores. If you see the 2005 policy, help to promote a vibrant aerospace cluster, mostly MSME companies around Bangalore. And as I said before, this policy has undergone a lot of changes in the last decade. As we told on September 24th, the recent CAG report mentioned that between 2007 and 2018, the government has signed 46 offset contracts costing around 66,000 crores. However, the realized investments were as low as 8%, which means the offset clauses are not being respected or honored by the foreign companies. Also, the technology transfer agreements in the offsets are also not implemented. This thing we have discussed on September 24th, to make it even more disastrous. On September 28th, the government has brought in new changes which has diluted this offset policy further. So after this dilution, the offset clause will not be applicable to bilateral deals and deals with single seller. So this policy dilution is further going to affect India's R&D in defense sector, as well as India's goal of self-reliant India. This is why because most defense deals are bilateral. Or a single supplier deal. For example, we have bought S 400, which is a bilateral deal. We are buying Chinook, which is also a bilateral deal. So most of the deals which we are going to make in the future will not have any offset clause. So the dilution means practically we are giving away the offset clause. As a result, this is going to be very disastrous for defense production and technological self-reliance in the country. However, government is saying that by diluting this offset clause, we can claim a cost advantage. Which means if you are not enforcing 30% sourcing from domestic companies, foreign companies may provide defense equipment at even more cheaper rate. But this reason does not do any good for the country because the higher cost of the agreement due to offset clause, that is the cost of defense agreement will be higher because of offset clause, would pay for itself. So which means reducing cost in the long term by indigenization of production and the potential technologies billowers for domestic industry. So even though we are paying more money because of offset clause at the time of agreement, if these offset policies are implemented properly, they will have a very good impact on domestic manufacturing of defense equipment. So giving up the offset clause is a severe setback to indigenization of defense manufacturing. And not just that, India has voluntarily given up a powerful instrument of bargaining to acquire advanced technologies. And as many people say, this move of government is a setback for augmenting domestic capabilities or for realizing the goal of Atma Nirbar Bharat or self-reliant India mission. See, this kind of problem in our country exists in almost all the departments. On one side, we say we need to improve our indigenization of technologies and to become self-reliant. But on the other side, we are giving away the offset clause, which is primary driver of indigenization of defense manufacturing. So this policy inconsistency is not going to benefit India, especially in defense procurement. So this is all about the discussion of this news article. Let us move on to next news article discussion. Let us take up this comment column from today's editorial page. This article is authored by experts from Nithya Yoke. They talk about the reasons to focus more on innovation and how India can become an innovation hub of the world. See, in today's discussion, we are going to discuss different aspects of innovation, different schemes of government. So this discussion will help you in your main answer writing. Before going further, the relevant syllabus is given here for your reference. Firstly, what do we mean by innovation? See, innovation literally means a new method or idea or a product. See, it rearranges the existing elements into various ways that benefit society. For example, from the Indian innovation of zero by Brahma Gupta around 650 CE, till now many innovations have reordered the history. Why we are saying zero is, the zero has changed the face of mathematics. So authors are urging to focus on innovation in this pandemic, which provides an opportunity for similar reordering of history for future generations. And current context, that is, entire world is in chaos, is the best opportunity to innovate something. If we see reasons, first reason is, India provides a rich ground to be a technology-led innovation, a technology-led innovation base. This is clear as India is the fastest growing economy in terms of internet usage. And as said in the last economic survey, the number of internet subscribers was around 66 crores in India. So, India is now the global leader in monthly data consumption and not just that, cost of data has also reduced substantially, enabling affordable internet access for millions of Indians. So, according to authors, the current 66 crores of internet subscribers could rise to 97 crores by 2025. So, this augments the Jam Trinity. What is Jam? Jam stands for Jandan Yojana, A for Adar and M for Mobile. So, we are integrating all the three programs that is Jandan, Adar and Mobile. So, by integrating these three technologies, a modern and modernizing digital infrastructure of financial inclusion, unique identification system and a well-developed mobile infrastructure can be established. Along with this, the recent sensation or recent buzzword is artificial intelligence. And according to recent reports, there is a potential to add over $957 billion to India's GDP by 2035. $957 billion means close to $1 trillion. So, based on this, authors say that India provides a rich ground to be a technology-led innovation station. And second reason is that because innovation in India is structured around the triad of collaboration, facilitation and responsible regulation. And if we go further with respect to collaboration, government of India organized events for collaborative knowledge creation. For example, Vaishvik Bharatiya Vaigyanic, shortly Vaibhav. This Vaibhav celebrates science and innovation from India and as well as the world. It is a collaborative initiative by science and tech and academic organizations of India. So, it enables deliberations on thought process, practices, R&D culture with a problem-solving approach for well-defined objectives. So, simply put, it aims to bring out the comprehensive roadmap to leverage the expertise and knowledge of global Indian researcher for solving emerging challenges. So, in collaborative sphere, we are having Vaibhav. Similarly, there was also responsible AI, that is artificial intelligence for social empowerment, 2020 summit on artificial intelligence. This program is also called RACE 2020 Summit. And if you come to a second aspect of triad, that is facilitation, the requirement in innovation is the risk capital in terms of resources and also psychological security for researchers. So, what does it mean? It means there is need for an environment where it is safe to fail. So, even if you are failing, we do not need to worry about the consequences. Only then people start taking risks to innovate. So, for this, government is incentivizing research and development with several schemes. For example, we are having Inspire Scholarship, which promotes school students to innovate something. And also, it aims at enhancing research fellowships for doctoral students. Then we have National Mission on Interdisciplinary Cyber Physical Systems. The cyber physical systems is going to be the next global trend. See, the CPS are a new class of engineered systems, which integrate computation and physical processes in a dynamic environment. See, for example, now we are having a lot of IoT devices. See, many of us might have seen the Alexa. Sometimes we say, Alexa, turn on the light. So, the command we are giving through artificial intelligence is helping us to work in a physical environment. With the help of Alexa, we can control many physical devices, like motors, engines, domestic appliances, etc. So, these systems encompass technology areas of IoT, big data, artificial intelligence, machine learning, robotics, quantum computing, etc. It means all the current technological inventions are being grouped together to make our lives even more better. Apart from this, we also have other schemes, missions, fellowships. For example, Ramanujam Fellowship, Adel Innovation Mission. We are also having Stars Program, Spark Program, Impress, Inspire. So, there are many programs government has brought in to inculcate innovation in citizens. And talking about third aspect is regulation. The government is actively supporting collaborative and lenient regulatory practices to promote innovation and incentivize risk taking. For example, Troy has recently introduced recommendations for regulating cloud services in India. It suggests a lenient regulation which balances both commercial freedom and principles adherence. And coming to third reason, innovation facilitates recombination from multiple sources. Thus, it brings diverging benefits of products and services, sometimes even differing from their initial purpose. For example, founders of Twitter wanted to be a platform for people to find podcasts. But now it is a micro blogging and social at working site. Similarly, we have something called Swiggy Dunzo wherein they have come up with innovations integrating the off-range stores and online technologies. Plus, in the current technological world, innovation has the potential to build a strong future which provides ease of living for citizens. As of now, we have technologies like artificial intelligence which will transform education, healthcare, machine learning and blockchain, which will make commerce robust and resilient and obviously gene-editing the current buzzword. It would help us bring back extinct species and repair depleted ecosystems. So innovation in any field when grouped together will make our lives even more better. So because of all these merits offered by innovation, it needs a relentless and continued focus. Best example can be VSA. And because of its technology, its economy developed and became a global superpower. And current example can be China. This is all about the discussion of this news article wherein we have discussed many points regarding innovation and how India can be an innovation hub of the world. This news article mentions that the Department of Expenditure, which is under the Finance Ministry, has recommended to divest or to remove the autonomous status of Wildlife Institute of India. So this is the result of the review by the department of 194 autonomous bodies across 18 ministries. So we'll try to understand why autonomous bodies are established and what are the consequences of divesting or stripping the autonomous status. See, autonomous bodies are set up whenever it is felt that certain functions need to be discharged outside the governmental setup with some amount of independence and flexibility. And there should not be any day-to-day interference from governmental machinery. In most of the cases, they are registered as Societies under Societies Registration Act. And in some cases, they are also set up as statutory bodies. And coming to their funding, they are funded through grants in aid either fully or partially, depending on the extent to which such institutes generate the internal resources of their own. So if they are unable to develop their own resources, government provides the funding. So these grants are regulated by Ministry of Finance, which is why the department under this ministry has given the recommendation. The department has recommended to merge 109 bodies out of 194 into 26 bodies. Then it also recommended government to disengage from 23 autonomous bodies, including Wildlife Institute of India, Indian Institute of Forest Management, etc. So disengaging in the sense, government will not provide money to this body. Here, know that Wildlife Institute of India was established in 1982 and was made autonomous in 1986. So it is an internationally acclaimed institution which offers training programs, academic courses, and mainly advisory in wildlife research and management. It is also actively engaged in research on biodiversity related issues. And coming to its mandate, it is to build capacity through training, education, and research in the field of wildlife conservation, and also to advise central and state governments in wildlife matters. So simply put, it is an expert's body which looks into wildlife welfare and research. And here are the objectives. As you can see, building of scientific knowledge on wildlife resources, training the personnel, carrying out research, and providing information on advice on wildlife management problems, etc. And as we said before, Wildlife Institute of India set up as a society which is headed by Union Environment Minister, that is, Ministry of Environment, Forest and Climate Change. So this recommendation of finance ministry has triggered anxiety among the scientists of Wildlife Institute of India because according to the article, the diversity will happen in the way of cutting the funding of Wildlife Institute of India. So the government is going to cut 25% funding every year. So after four years, government is not going to provide any money to Wildlife Institute of India. So after that, Wildlife Institute of India is expected to become a deemed university which is primarily engaged in teaching and research. But unfortunately, if this happens, it would affect the institution's ability to be seen as an unbiased opinion generator in which both government and public sector units consulted for assessing the impact of development projects on wildlife. And not just that, it would also lead to destruction of the prestigious organization. This is due to fact that it is difficult for Wildlife Institute of India to qualify as a deemed university. Why? Because there are only few students and only few courses are offered. Because of this reason, already UGC, that is University Grants Commission, rejected to offer deemed university status to Wildlife Institute of India. So one side government is cutting funding and on the other side, as proposed, WII may not become a deemed university. So the funding will be choked and the ability of the organization to work will be disturbed. So this is all about the discussion of this news article. If you ever find a main question like how independent bodies are losing their significance, you can write about this example. We already had a CSO example, that is Central Statistics Organization and NSSO, which were merged into NSO. There also, one independent body was brought under control of a government machinery. So this is all about the discussion of this news article. This news article mentions that foreign direct investment inflows into India in the first five months of this financial year, that is 2020-2021, have hit a record high. In this, the total FDI inflows increased to 35.7 billion dollars by the end of August and very particularly, equity FDI has more than quadrupled and India received about 50 billion dollars in equity FDI in last financial year. Thus both total FDI and equity FDI when viewed in isolation were the highest ever for the five month period. The reason for this is a result of FDI policy reforms, investment facilitation and ease of doing business. So what do we mean by terms total FDI, equity FDI? See, for that, we need to understand what is FDI. FDI refers to a direct investment made by a foreign company or a foreign individual in any business that are located in the other country. In our case, if the foreign company or individual invest in India, then it is called foreign direct investment. Very importantly, foreign direct investment provides the investor a controlling interest in a foreign company. For example, we have seen that Google has invested around five billion dollars in reliance to geo-platforms. So that is called foreign direct investment. And know that FDI is a major driver of economic growth of any nation because it is source of non-debt finance for the economic development of any country. If you have seen the 2020 prelims paper, which of the following is the major characteristic of FDI in India, one of the options is it is non-debt creating. And according to IMF's definition, FDI has three components equity capital, reinvested earnings and other direct capital. So equity capital is the foreign direct investors purchase of share of an enterprise in a foreign country. While reinvested earnings is the retained earnings of foreign subsidiaries and affiliates of a company. That is the reinvested earnings comprise the direct investor share of earnings that are non-distributed as dividends by affiliates or also the earnings that are not limited to direct investor. Such retained profits by affiliates are reinvested. Say for example, Google has invested in geo-platforms that comes under equity capital. So let us assume that after one year Google got some amount of profits for their investment in geo-platforms. But Google does not take the money back to home country that is America. So they are investing the same money again in geo. Then it is called reinvested earnings. Then the other capital covers the borrowing and lending of funds including debt securities supplier securities between direct investors and subsidiaries branches and associates. For example, Google is having an Indian subsidiary here that is Google India. So they are extending some amount of capital or credit to its subsidiary in India. Then it is called other capital. So based on this, the data of foreign direct investment provided by government is given in two types. One is total FDI which covers all the three things equity inflows, reinvested earnings and other capital. And the second one is FDI equity inflows which includes only the equity capital component. As you can see in this table, first one is about total FDI, second one is FDI equity inflows. So this is all about the discussion of this news article wherein we have learned what is FDI, what is the subclassification of FDI and we also said that the equity component in FDI is quadrupled in the recent period. Let us move on to next news article discussion. Let us move on to practice questions discussion session. Consider the following statements with reference to Wildlife Institute of India. Statement one, it is an autonomous organization of Ministry of Environment, Forest and Climate Change. Yes, as of now, the statement one is correct. But in the future, if autonomous status is removed, the statement may go incorrect. Statement two, it was established under provisions of Wildlife Protection Act of 1972. This statement is so incorrect because this body is not set up under WLPA of 1972. Coming to statement three, it provides advice to central and state governments in wildlife matters. Yes, statement three is correct. So which of the statements given above is or are incorrect? Correct answer is option B, two only. Consider the following statements. Under the Foreigners Act 1946, the burden of proof of citizenship lies with the state government. This is incorrect because the burden of proof lies with the accused. Statement two, the power to constitute foreigners tribunal is vested solely with the central government. This statement is also incorrect because after the amendment brought in last year, even state governments, UTs, district collectors, and magistrates can constitute foreigners tribunal. So both statements are incorrect. Therefore, correct answer is option D, neither one nor two. Let us take one 2020 prelims question regarding foreign direct investment. With reference to FDI in India, which one of the following is considered its major characteristic? Option A, it is the investment through capital instruments essentially in a listed company. This statement is incorrect because the FDI need not to be essentially in a listed company and coming to India's FDI, it is not the major characteristic. Coming to option B, it is largely non-debt creating capital flow. Yes, the statement is correct because FDI come as investment into private sector and it is not considered as a debt because if company goes down, their investment is also lost and there is no need to pay it back. So option B is the correct answer. Coming to option C, it is the investment which involves debt servicing. As we said before, mostly FDI does not involve debt servicing. So what is debt servicing? Debt servicing means cash that is required to cover the repayment of interest and principal on a debt for a particular period. If a foreigner is investing in an Indian company, the Indian company, if it get profits, it just shares the profits with foreigner company. It does not pay any interest. And coming to option D, it is the investment made by foreign institutional investors in government securities. This is incorrect because the investment made by foreign institutional investors is called FYI or FPA, that is foreign portfolio investment. So the correct answer is option B. Let us take main questions. The question reads, what do you understand by the term offset clause in defense deals? Discuss its role in achieving self-sustenance in defense production in India. This is a 10 marks question and so the word limit is 150. Let us take one more main question. Government is putting in place a framework for collaboration, facilitation and regulation in India's innovation horizon, elucidate. This is a 15 marks question and the word limit is 250. Write the answers and post them in comment section. With this, we conclude today's news analysis. If you find this session resourceful, click on the like button, show your appreciation in the comment section and don't forget to subscribe to our YouTube channel.