 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. Now let us take up this lead column from today's editorial page which talks about the issues pertaining to central state relations. See in the recent period we have covered many news articles wherein central and states are having lot of issues mainly due to finances. Before going further the relevant syllabus is given here for your reference. See in this discussion we are going to discuss how nature of the party system and party linkages decided the course of central state relations in our country. For example in the era of Congress dominance that is until 1980s the economic management was highly centralized in nature which means all major financial decisions were made by central government. We also know about the five year plans which gave the center an upper hand in deciding on development of the nation and states had very minimal say in this regard. But the author says that even in those times states did not have much tussle with the center because the ruling political party is same in both center and states that is congress party. So this was the trend until 1980s 1990s but after the defeat of congress party in 1989 and the death of Rajiv Gandhi the coalition era started that is multi party system has evolved in the country and according to the author the coalition era saw a more cordial period of central state relations mainly based on recognition of mutual interests. See this is because the coalition parties demanded it in order to bring in a stable government. Central government cannot make unitary decisions because state governments are also the coalition partners in the center. So states were made to feel that they were being represented. See for example in 1999 when NDA came to power with BJP at the focus the speaker of the Lok Sabha belonged to a coalition party that is TDP of Andhra Pradesh. So generally we know that the speaker of Lok Sabha comes from the major ruling party but in 1999 because of coalition government the speaker of Lok Sabha came from a regional party. So this gave states a good hand in deciding on national policies. So here author describes the advantage of coalition governments in bringing stability to center state relations. First state based parties can influence national level decision making. Second it gives state level politicians a greater space and may secure their career prospects. Similarly it gives greater access to resources to state based parties and influencing national level decisions. As we said a member of regional party went on becoming the speaker of Lok Sabha. But now what is happening according to author the center state relations are not smooth as it was previously. See author explains this with example of GST. See we all know that with the arrival of GST the states had to give up almost all their powers in taxation and in exchange of this center assured them full compensation for 5 years for all losses arising due to transition to the GST. Few states are at losing end because of implementation of GST. So center promised that which all states are losing money because of implementation of GST will be compensated for the 5 years. But according to author the general economics load on as well as covid 19 exposed the greater handoff central government the GST regime. See we know that economics load on reduced the available resources in the GST compensation fund due to poor tax collections. So here author opines that center is no longer committed to compensation agreement because central government is asking the states to borrow the money by themselves to meet the shortfall. So states were offered two options in this regard. We have discussed about these two options in our September 1st Hindu news analysis. Simply put instead of center borrowing money and giving it to states it is now asking states to borrow the money. But states especially which are ruled by opposition parties were reluctant to accept this offer. So author tries to prove that party linkages between different levels of government are crucial to both the making and maintaining the federal complex. Simply talking about federalism the framers of Indian constitution perceived the need for a strong central government in order to keep the disintegrating forces in check and also to safeguard the integrity of the nation. So our constitution is unitary as well as federal according to requirements. We know about emergency provisions wherein the government becomes unitary whenever required. So it is federal in form but unitary in spirit. But the issue is that there can be a lot of tussles in it and as author of this article rightly says a diversity of interest is the badge of federalism and there will be a constant negotiation and renegotiation of interest. But still there should be a balance in everything. States should be given more autonomy to decide on what they need. If this does not happen it can seriously hamper the unity and integrity of the nation. What we need is cooperative federalism where center and states negotiate for the best interests of people and the country. So this is all about the discussion of this news article wherein we have talked about the trends of federalism in the last 70 years. Let us move on to next news article. Let us take up this comment column from today's editorial page which talks about the stress in the electricity distributing companies which are shortly called as DISCOMs. Here author talks about the real issues behind financial stress among DISCOMs. If you remember few years back government has come up with Uday scheme which is Ujjwal DISCOM Assurance Ujjna. So wherein the state governments will take over the debt of distribution companies. This scheme was brought in to ensure that distribution companies balance sheet will be clear and to give them a new lease of life. But even after 5 years of Uday scheme still the distribution companies are suffering with severe debt crisis. So today we are going to understand why DISCOMs or distribution companies are in financial stress. The relevant syllabus is given here for your reference. See firstly when we say distribution companies they are the companies which operate and maintain a distribution system for supplying electricity to the consumers in a particular area. At present DISCOMs are mostly the state owned companies and we all know that central government is planning to bring in private players to distribute electricity as distribution sub licenses by amending the electricity act of 2003. So this is all the basic background most of us know about. So the question is what are the various reasons because of which DISCOMs are under severe financial stress. See first reason is inefficiency in power distribution which is called aggregate technical and commercial losses or shortly AT&C losses. See AT&C losses is a combination of energy loss and commercial loss and if this loss accounts to around 15% this is considered as acceptable and losses are minimum. But various reports show that in the UT of Jemun Kashmir AT&C losses are as high as 48%. It means around 50% of power produced is lost in form of AT&C that is technical and commercial losses. So this is one of the reasons for loss of revenue for distribution companies. So mainly because of these losses distribution companies are unable to pay the money to electricity generators. And secondly the electricity regulators have failed to fix cost reflective tariffs. See to have a reasonable revenue power tariff for consumption will have to be based on distribution and transmission cost and other costs. But in many states the tariffs do not reflect the cost involved in the process. See for example if the cost for production, transmission and distribution of one unit of electricity is say 5 rupees then tariff paid by the consumer for that one unit should be at least more than 5 rupees. But in many states the tariff for consumption is less than 5 rupees. So because of this there is creation of regulatory assets and again one more difficult word. So what do we mean by regulatory assets which is mentioned in today's news article. See regulatory assets are discount expenses which are recoverable in power tariff hikes in the future. See in above example if consumer is paying only 4 rupees so distribution companies are losing 1 rupee. So these 1 rupee will be converted into regulatory asset. So according to an estimate by ministry of power, discounts lose around 22,000 crore rupees annually due to creation of regulatory assets. And next important reason why discounts are unable to pay the generators is around 14% of discount cost structures is to be covered through explicit subsidies by state governments. See we often hear about farm subsidies wherein farmers get free power for agriculture and we are often hearing that these subsidies should be eliminated. But sometimes do note that subsidies are required and there should be a rationalization of subsidies. See for example in Tamil Nadu first 100 units of electricity consumption is free for a domestic card holder. Here there are 2 questions. Whether this free subsidy of power really reach and benefits the poor and the vulnerable that is a question. Secondly whether those who cannot afford to pay charges for the first 100 units are also included under the subsidy that is also a question but we don't know the answer. And actually giving subsidies is not an issue for discounts. In fact they will be happy if the state governments pay the subsidized amount to them fully and on time. But what is the track record of state governments paying the subsidy amount to the discounts? The track record is very poor. So that is why the author says that state governments are the biggest defaulters and they do not pay subsidies in full or they do not pay subsidies on time. And then not just governments, even consumers also owe money to discounts. See consumers owe around 1 lakh crore rupees to discounts in the financial year of 2018-19. And we could observe that this is well before the arrival of COVID-19 and COVID-19 has completely shattered incoming cash flows to discounts as it has impacted revenues from even paying customers from commercial and industrial segments. So this spending amount from consumers is further going to increase. So all these challenges have to be resolved in addition to reduction of AT&C losses if we want to see financially healthy discounts. So authors call for a complete overhaul of regulation of electricity companies and their deliverables that is power distribution. And know that government has proposed to amend electricity act of 2003 to address these issues among others. One solution is privatization of discounts and also replacing subsidies with direct benefit transfer. But others say that even this is unlikely to solve the problems overnight. Now let us see about another important government step in relation to this issue. See central government has year marked 90,000 crore rupees for distribution companies under Atma Nirbar Bharat Abhyan. This amount was later increased to 1 lakh 25,000 crore rupees. But others says that while it was called as stimulus it is really a loan. See these loans are of near market term and they are not soft loans. Soft loans means loans at very low interest rate and with extended repayment period. But market loans are similar to that of what we get in the market. That is high interest rates and strict repayment periods. And this loan is to be used by discounts to pay off generators. This task is very tedious and authors of opinion that this move by central government may not yield better results. So these are the different issues that discounts are facing right now. There are AT&C losses and there is problem of non-reflective cost tariffs. And there is a problem of state governments not paying subsidies in time. And we have also talked about how even consumers are unable to pay the current bills on time. And today we will conclude this news article discussion with Prapti which is mentioned in today's news article. See Prapti stands for payment ratification and analysis in power procurement for bringing transparency in invoicing of generators. See this is a portal of union ministry of power. It displays dashboard for discounts of states, UTs and the dues they have to pay. So it provides the summary of outstanding due amount of distribution companies and payments that are made by discounts in the last 12 months. So simply put it is an online portal wherein we can find out how much discounts have to pay to power generators. So this is all about the news article discussion. Let us move on to next news article. Now let us take up this editorial which talks about the Pakistan's plan in declaring Gilgit-Baltistan as a province. In this context let us have a brief understanding about this region in exam perspective and we will try to grasp some important points from the article. See as shown in this map the blue part including Siachen glacier is under Indian administration. While the green part is called Pakistan-occupied Kashmir and the bottom part is called Azad Kashmir and the top is Gilgit and Baltistan together called Gilgit-Baltistan and this is Shagzam valley which was illegally ceded to China by Pakistan and most of us might know this as Siachen which is occupied by China. See this Gilgit-Baltistan was originally known as Balwaristan or Baloristan. It was originally a part of erstwhile princely state of Jammu-Kashmir and after 1947 this Gilgit-Baltistan along with Azad Kashmir was occupied by Pakistan. See this Gilgit-Baltistan because of its location is of immense strategic importance. This is because it shares borders with several countries. The Punjab and Khyber-Pakhtunkhwa in Pakistan to the west, the Wakhan corridor of Afghanistan in northwest, Xinjiang province of China to the north and this Gilgit-Baltistan comprises of 86% of total area of Pakistan occupied Kashmir. It is a huge tract of territory as of almost 72,000 square kilometers and this area is very scenic and ecologically fragile. It is considered one of the most beautiful places on this earth but due to conflict between India and Pakistan this area remained mostly unexplored by travelers and many reports suggest that ISI, Al-Qaeda and Taliban maintain a strong presence in this Gilgit-Baltistan area. So this is the brief background regarding POK and especially regarding Gilgit-Baltistan. So in this context other mentions the reasons why PAK government has decided to make Gilgit-Baltistan as a complete province of Pakistan. See until 2018 the region was administered under Gilgit-Baltistan empowerment and self-governance order and after 2018 the entire administration of Gilgit-Baltistan was interested with Prime Minister of Pakistan. And now Pakistan is trying to make this Gilgit-Baltistan a complete province. It means a proper integration. First reason cited by other for POK's action to make Gilgit-Baltistan a province is abrogation of Article 370 by India and also the bifurcation of Jammu Kashmir has sent a clear message to Pakistan that Kashmir dispute is over. Secondly Islamabad feels that by declaring Gilgit-Baltistan as a province it will reduce domestic dissertification present in the region against the POK government. And third is the encouragement from China because China-Pakistan economic corridor runs through Gilgit-Baltistan area and we all know that under CPEC China has invested heavily in this region. So China also wants to react to New Delhi's decision to separate Ladakh from Jammu Kashmir. So China views the Indian move as a step towards India attempting to enforce its climb on Aksai Chin. So to counter India China is supporting Pakistan in making Gilgit-Baltistan as a province. In addition to CPEC China considers Gilgit-Baltistan very important because of its strategic location for staging post against India if a major conflict erupts in Ladakh. It means if India-China conflict leads to a full blown war China make it advantage by using Gilgit-Baltistan area. So these are the reasons given by the author for Pakistan's action to make Gilgit-Baltistan a complete province. And author also opines that India must calibrate its response carefully and improve our capabilities. Let us move on to next news article. See this news article from page one talks about the changes made to the land laws in the UT of Jammu and Kashmir. Let us see these important changes in this discussion. The relevant syllabus is given here for your reference. See as we all know last year the union government has nullified the articles 370 and 35A of the Indian constitution. By nullification of these two articles it removed the special status of state of Jammu-Kashmir. Then through Jammu-Kashmir reorganization act the state was bifurcated or divided into two UTs of Jammu and Kashmir and Ladakh. So since then center has been making changes to the laws of erstwhile state of JNK which has to be made applicable to the current two UTs which are JNK and Ladakh. Here changes mean both amendment and also repealing of acts. In this regard center has notified two orders recently which are given here and our focus is on this second order. See this second order has repealed many laws of erstwhile state of JNK. As you can see here next it has amended certain acts which has created lot of political discussion and anger among political sections. In this the main changes have been made to land. For example JNK development act of 1970 was amended and now enables the people and investors from outside of Jammu-Kashmir to purchase land in the UT. This is because the permanent resident clause has been removed from this act. See the article 35A which was abrogated last year actually allowed the legislature of Jammu-Kashmir to define permanent residents. So thus it was defined as any person who belongs to state of JNK before May 14th of 1954 or a resident who has been residing for 10 years before this state. And this permanent resident provision was used in many land laws of JNK. It means the citizens living in other states could not buy any immobile property like land in Jammu-Kashmir. So this was the scenario so far but this has been changed now. And in this JNK development act the provision of a permanent resident of the state has been omitted. So even people from other states can now buy land in the Jammu-Kashmir. This assumes significance because under this act economically weaker sections and low income groups were provided at least 10% reservations of land for housing in schemes and projects developed by development authority or private player. It means that now the AWS and low income groups from all over India can avail this provision and land reserved in JNK will be equally available to all these sections from India. Next under JNK land revenue act of 1996 new sections are inserted. For example transfer of land for the promotion of healthcare education has been inserted. Similar provision allowing transfer of land for industrial purpose, commercial housing agriculture purposes is also inserted. This is allowed for industrial and commercial development of Jammu-Kashmir. Based on this only the news article states that investors outside JNK can now purchase land in the beauty of Jammu-Kashmir. The reason for this provided by JNK administration is that for peace, progress and prosperity of Jammu-Kashmir industry should be set up in Jammu and Kashmir like other parts of the country. And further a new section has been inserted which prohibits the transfer of land to non-agriculturists. So generally transaction regarding land to a non-agriculturist is not valid under this act. There is an exception that if one obtains the permission of government then land can be transferred to even non-agriculturists. Then an existing section has been substituted with a new section under which land used for agriculture purposes shall not be used for any non-agriculture purposes except with the permission of district corrector. So we can say that safeguards have also been provided to the land resources of Jammu-Kashmir by changes to the land loss. But the political parties in the Jammu-Kashmir have condemned these amendments. They call this move as grossly unconstitutional and feel that changes are repealing of laws disempower or deprives the right of people of Jammu-Kashmir. So what should be understood from this discussion is with these amendments or changes even people out of Jammu-Kashmir can now buy immobile properties like land in the UT of Jammu-Kashmir. And also know that there are few safety provisions to protect the agriculture land. So this is all about the discussion of this news article wherein we have talked about abrogation of article 35a, article 370 and the consequences associated with abrogation of these articles and also recent changes to the land laws made by the union government. Let us move on to next news article discussion. This editorial is about how people in Chile have earned the referendum to write in new constitution for them. The existing constitution was introduced during the military dictatorship of Augusto Penachet in 1970s. This was criticized as anti-democratic. While dictatorship transformed to democracy in 1990, the constitution introduced during 1970s did not undergo substantial transformation. So now people of Chile have chosen to write a new constitution through referendum. So probably by 2022, Chile is expected to have new democratic constitution that is to be written by elected member assembly. Importantly, half of this assembly will be women. So in this context, let us discuss the physical geography of Chile. See, Chile is located in the southwest of South American continent. On the west side, it borders South Pacific Ocean. In the north, we could see Peru. And then if you move clockwise, Chile borders with Bolivia and then Argentina. We could find the Andes Mountains in Chile. The Andes Mountains run along the length of west coast of South America. It ranges about 7000 kilometers and passes through Argentina, Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela. These mountains have been formed as a result of convergence of Nazca Plate and South American Plate. This can be related with the formation of Himalayas as well, wherein Indo-Australian Plate met with Eurasian Plate. And as a result, Himalayas have formed. And also know that tropic of Capricorn passes through Chile. Coming to climate, overall climate is temperate. And importantly, the Atacama Desert, which is the driest desert in the world, is spread across the northern part of the country. And do note that Ojos del Salado in the Atacama Desert is the highest active volcano in the world. Chile is the longest north-south trending country in the world, as it extends across 39 degrees of latitude, as you can see here. The southern part of Chile is a strategic location with respect to sea lanes between Atlantic and Pacific oceans. Yes, we are referring to Strait of Magellan, Beagle Channel and Drake Passage. See, the Strait of Magellan was the only safe way to move between the Atlantic and Pacific oceans until the Panama Canal was finished in 1914. And the Drake Passage is the relatively narrow stretch of ocean that separates South America from Antarctica. And waters in the Drake Passage are notoriously turbulent, unpredictable and frequented by icebergs and sea ice. As you can see here, this is the Drake Passage and this dotted line is Beagle Channel. Also know that Chile is one of the countries along the Ring of Fire. So what is Ring of Fire? See, Ring of Fire is a belt of active volcanoes and earthquake epicenters bordering the Pacific Ocean. Up to 90% of world earthquakes and some 75% of world volcanoes occur within the Ring of Fire. So these are the few important points with respect to geography of Chile. We have talked about Andes, Atacama Desert, the climate of Chile as well as the bordering countries of Chile. So let us move on to next news article. Let us take up this news article from Business Page. This news article is about the Finance Minister remarks regarding India's GDP growth. We all know that the COVID-19 has impacted India's GDP growth rate. And IMF has projected that India's GDP would shrink by 10.3% in the current financial year that is 2020-2021 and likely rebound to grow at 8.8% in the next financial year. So it means this year the GDP is going to shrink or reduce by 10.3% that is minus 10.3% and next year it is likely to grow at 8.8%. The Finance Minister also said that the purchasing managers' index for the manufacturing sector in the September is around 56.8. What is PMI? We all know that PMI is an indicator of business activity in both manufacturing and services sector. So PMI is a number from 0 to 100. PMI above 50 means expansion, under 50 means contraction. So for the month of September, PMI for manufacturing sector is around 56.8. It means the economy is expanding. And the Finance Minister also talked about the government measures to revive the economy. The Finance Minister said that the government is planning to scale up public spending on infrastructure and boosting agriculture, also relaxing the farm produce exports. And very importantly, the Finance Minister talked about India should have a greater role in setting global fuel prices. See, we all know that India is one of the largest consumers of energy in the world, but India does not have any say in setting up of global fuel prices. So Finance Minister said that India is planning to invest in strategic reserves not just in India, even outside the country. So this will help in India becoming a part of supply chain of fuel and may also have a role in setting up of global fuel prices. So these are the important points from this news article which can be used in our main answers. Let us move on to practice questions discussion session. It is one of the countries along the ring of fire. It is also the longest North-South trending country in the world. Equator does not pass through it. The driest desert in the world is located in the north part of this country. The above characteristics suit which of the following countries. As we all know, the correct answer is option D, Chile. Here you can eliminate options A and B very easily because the driest desert in the world is Atacama Desert. And if you know that it is in South America, you can remove options A and B. And coming to option C and D, here we can use the first line that is it is one of the countries along the ring of fire. As you can see in this picture, Brazil is not along the ring of fire. So the correct answer is option D, Chile. Consider the following statements with reference to Gilgit Baltistan. Statement one, it is located in the Aksai Chin region. The statement is incorrect because Aksai Chin is in the east side of Estuar State of Jammu Kashmir and is under Chinese control. But we all know that Gilgit Baltistan is in Pakistan control and is in the left side of Estuar State of Jammu Kashmir. Statement two, it shares border with Pakistan, Afghanistan and China. Yes, the statement is correct. Statement three, Pankangso Lake is located in this region. This statement is also incorrect because Pankangso is in Ladakh. So which of the statements given above is or are correct? So statements one and three are incorrect and statement two is correct. So the correct answer is option C, two only. Let us take up main questions. This is based on that GST article. In a country as diverse as India, party level linkages between center and states play a crucial role in determining the stability of federal system. In light of our statement, analyze the trends in center state relations in India since independence. So in the introduction, you can write how party linkages are crucial in the federal system. And in the body, we have to analyze the trends of center state relations. So here we can analyze the trends in three headings that is until 1990s and after a coalition era and especially after the implementation of GST. And you can end with a proper conclusion how negotiation and renegotiation between center and states will lead to better federal structure and betterment of the people. Let us take up one more main question. This question is based on that Discoms news article. Long on are the days of scarcity of power while the physical situation has mostly improved, the financial picture of Discoms has not brightened much discuss. So here we have to talk about how the power availability to the public has improved in the last few decades in the country and main part of the answer should contain the financial stress of distribution companies. Today we have talked about different points why Discoms are in financial stress. So you can discuss those points and end with a proper conclusion. 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.