 Welcome to the Hindu News Analysis by Shankar A.S. Academy for the date 1st of June 2019. Displayed are the list of news articles taken up for today's analysis, along with the respective page numbers of Chennai, Bengaluru, Delhi, and Tiruvananthapuram editions. The handwritten notes in PDF format and the time-stamping of all the news articles taken up for today's analysis will be available in the description section and also in the comment section below for the benefit of the smartphone users. Let us now start our analysis. Firstly, we shall be seeing two economy-related news articles. One is on fiscal deficit and the next one is on GDP. Now, the analysis of both these news articles will be relevant in your problems preparation under current events of national importance and also under economic development and it will be relevant in your mains preparation and general studies paper 3 under Indian economy. First, let us see about fiscal deficit. If you see in the news article, they have mentioned various heads like tax revenue, non-tax revenue, total receipts, total expenditure, etc., which are all concerned with the fiscal deficit. Now, you need not know all these values but just know the different heads which we have seen for your exam preparation. Now, to know about fiscal deficit, we shall see about the concept of government budgeting. The general budget of the government is nothing but the annual financial statement of the government. This involves the money earned by the government and also the money spent by the government. If you see, the money earned by the government is called as the revenue or the receipts and the money that is spent by the government for various purposes is called as the expenditure. So, the general budget that is laid by the government in the parliament consists of two major heads, the receipts and the expenditure. Now, under receipts, there are two kinds of receipts namely revenue receipts and capital receipts. If you see, revenue receipts means the money which the government need not give back to anyone and the capital receipts means the money that the government has to pay someone because the government would have borrowed some amount for its usage. Similarly, expenditures of the government can be classified into two types namely the revenue expenditure and the capital expenditure. Now, let us focus more on revenues we shall not be seeing about the expenditure. The revenue receipts which are a part of the total receipts can be classified into three types as tax revenues, non-tax revenues and other non-tax receipts. If you see the tax revenues means the money that the central government collects by levying taxes or duties on its citizens for the goods and services that are traded. Now, there are different types of taxes or duties that exist in India. These include your GST which is nothing but the goods and services tax, then your income tax, excise duties, customs duties and other minor taxes and duties by the central government. Next, let us see the non-tax revenues. These non-tax revenues are nothing but the money that the central government gets as a revenue other than the taxes which it gets from the people. So, this can be in the form of interest or in the form of dividends and profits and the third classification is about the other non-tax receipts. They include the money that the government gets as a contribution from other foreign nations in the form of grant in aid, then the money which is earned through fiscal services, social services and other general services. Now, just have an idea about the three different types of revenue receipts for this topic discussion. Next, there are two types of capital receipts. One is the debt capital receipts and the next is the non-debt capital receipts. The debt capital receipts means the money earned by the government by borrowing from someone, here it can be from the bank or from the market. We shall focus more on debt capital receipts here. So, this debt capital receipts can be classified into borrowings and other liabilities. Again, here the borrowing is classified into internal borrowings and external borrowings. Here, the internal borrowing means the money that the government borrows within the country which is in the form of market loans, treasury bills and through other modes such as securities, compensation bonds, etc. And the external borrowing means the money that the government borrows as loans from outside the country from various sources. So, this can be classified into multilateral loans and bilateral loans. Next, we also have liabilities under debt capital receipts. Liability means the responsibility to pay money to someone. So, the government would have to pay money with it which is collected from the citizens or any organization in the form of small saving schemes, provident funds, other accounts and also in the form of reserve funds. Now, when the citizen or the organization wants back the money, the government is liable to pay the money to them. So, all these are called as liabilities. Next, we have the non-debt capital receipts. This refers to the amount that is received or earned by the government by disposing of or selling its assets. So this selling of assets is called as the disinvestment process of the government. So we have seen this term disinvestment often in the economy related news articles. So we have seen all the different types of revenues that the government earns. All these revenues put together are called as total revenues and the expenditures of the government are called as total expenditures. Now, know that deficit is the condition when your spending is greater than the money you earn that is nothing but your revenues. So in this context, the fiscal deficit means the total expenditure minus the total receipts except the borrowings and other liabilities. It simply means the deficit that arises when the government's expenditure exceeds its revenues. Here exclude the money generated as revenues from the borrowings and other liabilities. So, we can also tell in other terms as fiscal deficit is the total expenditure minus the total receipts except the debt capital receipts because both these borrowings and other liabilities come under this debt capital receipts head. Or you can also tell in one more way the fiscal deficit values nothing but the government borrowings and other liabilities. Now, with these basics in mind, let us see the news article. The news article tells that central government has met the fiscal deficit target. The fiscal deficit target was revised to 3.4 percentage by the government in the revised estimates of the financial year 2018-19. Now, the government has achieved a fiscal deficit of 3.39 percentage. This is marginally less than the target if you see. So, the fiscal deficit in absolute terms has gone up. Here the absolute terms means the in terms of value. They have given three reasons why the government was able to achieve this fiscal target. First one is the lower expenditures that is made by the government. Next one is the increase in the non-tax revenues. And finally the news article has also noted that the expansion of GDP in financial year 2018-19 is also one reason for a lower fiscal deficit. So, when the denominator is getting large and the numerator value remains the same or lower, the final value is going to get lower only. So, here take GDP as the denominator and the fiscal deficit as the numerator. Now, let us see the front page article that discusses about GDP. This is a very short news article. Now, let us see it now. This news article tells that India's GDP growth for the fourth quarter has reduced to 5.8 percentage, which is a 5-year low figure. Now, because of this low growth, the overall GDP growth for the financial year 2018-19 has also reduced to 6.8 percentage. Also, the news article has noted that the unemployment rate was 6.1 percentage in 2017-18. If you see this value is a 45-year high, as mentioned in the news article. Now, as you can see in this picture, the GDP values are fluctuating up and down in the last 4-4.5 years data which is given here, that is from June 2014 to March 2019. The reasons for the slowdown have been mentioned in the news article. They have told that the main reason for this slowdown in GDP growth is the stress in the NBFC sector, nothing but the non-banking financial sector. And the liquidity crunch or the improper money supply which these NBFC sector faces. Also, some sector-wise GDP values have been mentioned. If you see the mining sector saw the least growth at 1.3 percentage. Next, agriculture, forestry and fishing sector had a low growth rate of 2.9 percentage and the manufacturing sector saw growth of 6.9 percentage. Also, if you see majority of the remaining sectors that have been mentioned in the news article have seen a growth of more than 7 percentage. Now, have a look at the practice prelims question, we shall discuss at the end of the analysis session. Let us move on to the next news article. The next news article is titled as US Retreats Threats of Sanctions over Triumph Reveal. This discussion will be relevant in your prelims preparation and the current events of national and international importance. And also in your main preparation and general studies paper too, particularly in the areas bilateral and global groupings and agreements involving India and or affecting India's interests. And also under effect of policies and politics of developed countries on India's interests. This article talks about USA's reaction over India's deal with Russia to purchase the S-400 Triumph missile system. If you see India signed this deal with Russia in October 2018 for about 5 billion US dollars. Now if we need to know what is this S-400 missile is and why it is important. The S-400 is one of the most sophisticated surface to air defense systems in the world. It is a mobile meaning a moving multi-channel air defense missile system. This system is designed to engage current and future air threats. It has aircraft jammers, early warning and direction aircraft, reconnaissance aircraft and it can attack a strategic aircraft carrying airborne missiles, medium range ballistic missiles and other air attack vehicles by its heavy electronic countermeasure environment. This system has a range of 400 km and it can shoot down more than 50 targets simultaneously. Now if you see this picture it shows the working of S-400. The long range surveillance radar tracks the objects and relays the information to the command vehicle which assesses the potential targets. Then the target is identified and the command vehicle orders the missile launch. The launch data are sent to the launch vehicle and it releases the surface to air missiles. The engagement radar helps the guide missiles towards the target. Now if you may think why this deal is important for India. We know that India makes very few of its own weapons and India is the world's second largest defense importer and Russia supplies most of the military equipment and spare parts if you see. So India had to assure Russia that it still values Moscow or Russia as an important defense and strategic partner. Hence signing the deal was a demonstration of that. Also India's neighbour China has the same system. Remember that the two countries fought a war in the year 1962 and routinely India and China also sees commissions or irregular fighting over their borders. So for India it is imperative to boost its defense capabilities and an air defense missile system is the need of the heart. The new surface to air defense system will enable the Indian air force to detect and destroy missiles. Moreover India already operates different systems manufactured by Russia. So Indian officials feel that it makes sense to continue with the systems which we are familiar with. Now if you see this deal has created tensions between India and USA as USA does not want India to have the deal with Russia. So India is now worried that USA may put sanctions on India for this under the countering of America's adversaries through sanctions act or in short the CATSA. If you see this was enacted by the USA in the year 2017. It is called as countering America's adversaries through sanctions act. But know that the sanctions can be put only when the payments are made for this S-400 systems. Further the US President can also grant waivers from CATSA sanctions under certain conditions under the National Defense Authorization Act of USA which was passed last year. Now the USA officials have warned India that if India purchases this particular S-400 system missile then India should not assume that it will get this waiver from the USA. The officials have also noted that this purchase can also hamper the future of Indo-US defense relationship. Now you may think why is US so stringent about the India's defense relations with Russia. Because relations between the USA and Russia have been strained since the year 2014 when Moscow annexed Crimea from Ukraine country. Then Russia also allegedly interfered in the 2016 American presidential elections which further fuelled the tensions between USA and Russia. So USA has put several Russian firms under sanctions. Then the CATSA was introduced to target Russia, Iran and North Korea with economic and political sanctions. This particular sanction also prohibits any country from signing defense deals with these nations. Finally, these tensions have put India into a catch-22 situation. Here you should know what is meant by a catch-22 situation. It is nothing but a dilemma or a difficult circumstance from which there is no escape due to a mutually conflating or a dependent condition. If you see this phrase is often used while discussing the international relations. So remember its meaning and you can use it in your main sansa writing for enhancing your answer. Now because of this catch-22 situation, India has to walk on a diplomatic tightrope between a trusted but waning partner that is Russia and a growing a temperamental partner that is the United States. This is because USA has already been clear about sanctioning countries that sign defense deals with Russia. If you see it has also sanctioned China last September for buying S-400s from Russia. Here one more problem is that if USA allows India a waiver then other countries will also press for similar concessions or waivers. Remember that USA cannot afford to ignore India's increasing defense equipment requirements as USA has increased its own arms exports to India more than 5 times in the past 5 years. This amounts to 15% of India's defense procurement. So let us wait and watch whether the sanctions are slapped on India or not. Now in this context, let us also know about CATSA and what will be its implications on India. As we saw already CATSA is countering America's adversaries through sanctions act. It is a specially enacted legislation of USA. Its ultimate goal in the words of a senior State Department official is to prevent revenue from flowing to the Russian government. States that aim the sanctions were meant to deter significant transactions but this term is not yet been defined by the legislation. However, the US government classified the purchase of the S-400 system as a significant transaction while putting sanctions on China. Therefore, India's purchase of the S-400 system from Russia would also be regarded as a significant transaction and invite mandatory sanctions. As stated by the legislation, the sanctions are to be imposed on a person who knowingly engaged in a significant transaction. In India, if we purchase S-400, the person could either be the Defense Acquisition Council which is headed by the Defense Minister or the Defense Procurement Board which is headed by the Defense Secretary. The choice of the person to be sanctioned would be made by the US President or the Secretary of State or the Secretary of Treasury who has been delegated these powers under the CATSA Act. Now, the section 231 of CATSA does not specifically identify any particular sanction, it merely requires the President to impose five or more sanctions described in section 235 of CATSA. That section lists 12 types of sanctions, out of these many will have very little or no impact on India's current relations with either Russia or the USA. Some of these are prohibition on loans to the sanctioned person, prohibition on procurement by United States government to procure the goods or services from the sanctioned person like that etc. But there are some sanctions that may have impact in the India-Russia relations or in the India-US relations. One of these is the prohibition of banking transactions. This would make difficulties for India in making payments in US dollars to the Russian military export organization. These payments are for the purchase of the S-400 system, so this will likely have an impact on the India-Russia relations as well. Then the next sanction will have far greater consequences not for India-Russia relations but for India-US relations that is the export sanctions. This has a potential to completely derail the India-US strategic and defence partnership as this will deny the license for an export of any items controlled by the US to the sanctioned person. Now have a look at the practice problems question, we shall discuss at the end of the analysis session. Let us move on to the next news article. The next article talks about the allotment of various ministry portfolios among different ministers. This article will be relevant in your problems preparation under current events of national importance and next under Indian polity and governance. It will also be relevant in your main preparation in general studies paper 2 under structure, organization and functioning of the executive, ministries and departments of the government. This article talks about the various portfolios allocated to the members of parliament on the advice of prime minister of India. Note that it is the president who allocates portfolios to various ministers but on the advice of the prime minister. We also know that the prime minister and the council of ministers are appointed by the president of India according to article 75 of Indian constitution. This news article here highlights a few important portfolios and the ministers were given the charges of those important portfolios. Let us see them now. The prime minister Mr. Narendra Dhamodardas Modi holds a ministry of personal public grievances and pensions and also the department of atomic energy, department of space and all other portfolios which are not allocated to any minister as of now. And Mr. Amit Shah is allocated the home ministry and Ms. Nirmala Sita Raman is allocated the finance and corporate affairs ministries. And Mr. Jayashankar a former Indian Foreign Service officer has been allocated the portfolio of external affairs. Mr. Rajnath Singh was given the defense ministry portfolio. So overall these are the important ministries that have the main implications at the major level in the administration of the nation. Now if you see the union council of minister includes the prime minister, cabinet ministers, ministers of state independent charge and ministers of state. At present there are 24 cabinet ministers, 9 ministers of state independent charge and 24 ministers of state. So the total strength of the union council of ministers as of now is 58 which also includes the prime minister. The article 75 clause 1 capital A states that the total number of ministers including the prime minister and the council of ministers shall not exceed 15 percentage of the total number of members of the house of the people nothing but the Lok Chabha. This clause 1 capital A was added to the constitution by the 91st Constitutional Amendment Act of 2003, please keep this in mind. This amendment has thus limited the powers of the prime minister in having any number of ministers from Lok Chabha and the council of ministers. If you also see a new ministry has been created which is called as the ministry of Jal Shakti and this will be headed by Mr. Gajendra Singh Shekhawat. It is stated that this Jal Shakti ministry is created by merging the ministry of water resources and ministry of drinking water and sanitation. But there are still some confusions over this matter. So the issue will be made clear with the official change of allocation of business rules that are to be issued by the cabinet. Now have a look at the practice plums question we shall discuss at the end of the analysis session. Let us move on to the next news article. The next article is the editorial title outlining the first 100 days. Here the author has given some suggestions for the newly spawned prime ministers 100 day agenda. The analysis of this news article will be helpful in your mains preparation and general studies paper too under government policies and interventions for development in various sectors and issues arising out of their design and implementation and also under important aspects of governance, transparency and accountability, e-governance and its applications. And it will also be relevant in your general studies paper 4 that is your ethics paper under a probability in governance especially in the terms of work culture and quality of service delivery. Now the suggestions are on the various areas of governance that has been given by the author such as service delivery, income support scheme, technology advancements, also on investments, labour reforms, etc. So let us see all of them now. First under service delivery the author has suggested for expanding the home service delivery model for areas such as cooking gas, healthcare, multiple citizens and services. The author proposes that the Digital India program has to transform itself such that the government should be able to provide any time, anywhere, anyhow or on any device or platform delivery of services in collaboration with the private sector. Also the upgradation of technology has to happen in all the major government programs especially in the sectors of agriculture and healthcare so that the efficient service delivery is made possible by the government. Next the author has suggested the newly introduced income support scheme to farmers. He tells that it should be universally covered such that all the types of farmers in the country are included under this income support scheme irrespective of the land they hold. The unconditional cash transferred by the government should be made as an electronic transfer through banks, primary agricultural credit societies and also through post offices. At the same time the author also suggests to manage the fiscal deficit as well. Since income support to farmers means the government is spending more money and this will be a part of the budgeted expenditures of the government. Now we saw in a first news article today that if the expenditures exceed the revenue of the government then it results in the deficit. Also the author tells that the loan waivers and input subsidies have not addressed rural distress efficiently. So the key policy shift is to move away from subsidies to income support. Next the author has discussed about technology advancement. He tells that India is emerging as a major data economy with over 800 million mobile phone users. However, the author notes that India is way behind the United States and China in terms of artificial intelligence, data analytics and also blockchain. So he suggests that the new government should usually invest in these above sectors which we have seen in order to have a global advantage. Next the author discusses about the need for investments in making the economy grow. He tells that the regulatory framework or the policies of the government should be revised such that huge investments are directed towards India. For this the author recommends that the Prime Minister needs to set up an India first investment agency directly under his Prime Minister's office that is the PMO. Also he suggests that more incentives and exemptions must be given to the investors so that India receives more investments for a better. Let us see some other suggestions that the author has given. He tells that there are some 200 odd labour laws in India as of now and some of them mandate companies with 100 or more workers to get a government permission if they are going to lay off or even change their job descriptions. So if you see in India at least 75 percentage of firms are employing less than 50 workers only to escape such regressive loss. And if you see the wages of the workers are slowly rising in countries like Bangladesh and China where Bangladesh is known for its garments industry and China is known for its toys, electronics and manufacturing industries. So the author tells that if India can abolish such restrictive labour laws it would be in a position to take the business away from these two countries and it will bring in more employment to India so that India would become competitive at a global level. Next the author has suggested filling an estimated 3 million vacancies in government jobs in India. He also tells that the vacancies should be redistributed among necessary sectors like nursing, doctors etc. instead of railways. Next the author suggests that the government should fast track the privatization process. He suggests privatizing Air India and other top 10 public sector companies. Also to improve the banking sector the author has suggested for measures like recapitalization, merging of banks and reducing the priority sector lending. Finally the author suggests that the administrative efficiency of the government shall be increased by using the modern technology tools. If you see at present we have a proactive governance and timely implementation system in short it is called as Pragati system. So it is basically an ICT based multimodal platform for the administration's day-to-day working. In a similar way the author suggests to introduce new ICT tools such as Omnifocus and Slack. So this would help in program-wise and office-wise monitoring and also follow-up of all the governments department by the prime minister. The author finally tells that India should see a transformational change in the next five years of rule and not just an incremental change. Now throughout this editorial there are some statistics about India. You can use them in any of the governance or economy-related main senses. Let us see them now. If you see India see third largest economy in the world as a country in terms of purchasing power parity and where India has a consumer spending of 5.7 trillion US dollars. Next 77 percentage of India's population are under 44 years of age which means they come under the active labour age. Out of this 80 percentage belong to the middle class family. Next India will have a billion internet users by the year 2030. So if you see all these three data are quoted from World Economic Forum by the author. Also India's around 800 million mobile phone users at present and half of them are using a smartphone. So these are some of the statistics that is given in the editorial. Now let us move on to the next news article. The next news article is about e-cigarettes. It is titled as e-cigarettes post public health risk says the Indian Council of Medical Research. Now this discussion will be relevant in your prelims preparation under current events of national importance and also under general science. This discussion can also be linked to your main syllabus under general studies paper 2 in the area issues relating to development and management of social sector relating to health and it can also be linked to your general studies paper 3 in the area science and technology developments and their applications and effects in everyday life. Now on the eve of the world no tobacco day the Indian Council of Medical Research or in short ICMR has released a white paper and this white paper is on electronic nicotine delivery system in short ENDS. So ENDS is nothing but what we call as e-cigarettes. Here you have to note that ENDS or e-cigarettes were used as a tobacco control measure. This white paper has stated that the tobacco consumption especially the cigarette smoking has shown a decline in India in the recent years. This is in response to several tobacco control measures that has already been initiated by the government. At this juncture marketing of a product like ENDS or e-cigarettes is unwarranted as a tobacco control measure because the paper mentions that the e-cigarettes benefits have not been proved yet and also it poses a high potential harm to due to addiction and health risks. And also the adverse population level health impact will outweigh any presumed benefit to individual cigarette smokers. Moreover this e-cigarette smoking can open as a gateway for new tobacco addiction as well and this will become a potential threat to the country's tobacco control loss and ongoing tobacco control programs and efforts. Now in this context you need to know what is meant by ENDS or e-cigarettes. e-cigarettes are battery powered devices which are used to smoke or vape. Now a vape is a word that denotes inhalation or exhalation of the vapour that is produced by an electronic cigarette. Here inhalation means you are breathing in the air and exhalation means you are breathing out the air. Now these e-cigarettes are made up of a flavoured solution which contains a varying concentration of nicotine. The most common type is an e-cigarette that produces an aerosolised mixture of the flavoured liquids and nicotine which is inhaled by the user. Nicotine is an addictive chemical that is found in cigarettes and other forms of tobacco products. Nicotine is considered as one of the most addictive substances. The potential risk of a person being addicted to it throughout life depends on the rapidity at which the nicotine is introduced into the body like age of the first exposure and the dosage administered. ENDS or e-cigarettes are manufactured in such a way to resemble traditional tobacco products like cigarettes, pipes, cigars and common gadgets like flash drives, flash lights or pens. Now according to the Indian council of medical research currently there are more than 460 different e-cigarette brands in the market and they all have a varied design of nicotine delivery. If you see structurally most e-cigarettes contain four different components a cartridge or reservoir which holds a liquid solution. This contains varying amounts of nicotine with flavourings and other chemicals like e-liquid or e-juice and then a power source which is usually a battery. Then we have a eating element and then a mouthpiece that the person uses to inhale the vapor. The paper published by the Indian council of medical research states that the use of e-cigarettes adversely affects almost all the human body systems. The impact is across the life course of a human being that is from the womb to the tomb. These devices contain other ingredients such as flavouring agents and vaporises which are found to be harmful for health. A typical device contains about as much nicotine as a pack of 20 regular cigarettes so it can act as a potential source for nicotine addiction and the amount of nicotine and other chemicals in these products varies very widely and this the consumer remains unaware of the actual contents of the products they use. Now the studies on these nicotine solvents have showed a varied degree of release of potential carcinogens. Now some of these carcinogens names are acetaldehyde, formaldehyde and acetone and the liquid vaporising solutions also contain some other toxic chemicals and metals. So these are responsible for several adverse health effects which includes your cancers and also the heart diseases, lung diseases and brain related diseases. These e-cigarettes use can adversely affect the cardiovascular system and it will also impact the respiratory immune cell function and airways in a way similar to normal cigarette smoking and it is also responsible for severe or several respiratory diseases. It also poses risk to fetal, infant and child brain development. Then ends or e-cigarettes are also harmful to non-uses and they have adverse health impacts even when people are exposed to second hand vapors. We discussed about second hand smoking in our yesterday's video as well just have a look at it. Next it is also stated that passive exposure to vapors during the pregnancy can severely affect the health of both the mother and as well as the fetus. Now there are reports of poisoning due to accidental swallowing of ends by the children. These devices can also cause fire and explosion. Then shockingly it was also found that use of ends or e-cigarettes by the non-smokers can lead to nicotine addiction and regular smoking. Studies have also found that the youths using ends are more likely to use regular cigarettes later in their life and e-cigarettes increase the likelihood to experiment with regular tobacco products and increase the intention to indulge in cigarette smoking. Now based on the currently available scientific data from multiple streams of research, the Indian Council of Medical Research has recommended for a complete prohibition on ends or e-cigarettes in India. This is because of the potential health effects which we have already seen. The recommendation is also based on the fact that the magnitude of potential short term and long term health risks to the users is not yet determined at the population level. This is because the products are recent and they also come in diverse forms. We saw that it comes in almost 300 plus forms. And then whether e-cigarettes benefits as a tobacco cessation aid or a tobacco stopping aid or to which degree it benefits as a tobacco cessation aid is not yet definitely established. So, this tobacco cessation aid means a tobacco control measure. Also know that in India, use of nicotine as an ingredient in any food item is prohibited under the Food Safety and Standards Prohibition and Restrictions on Sales Regulation of 2011 of the Food Safety and Standards Act of 2006. Nicotine and nicotine sulphate are listed as hazardous chemicals under the Environment Protection Act of 1986. And also listed as adders in the manufacturer's storage and import of hazardous chemical rules in 1989. There are other laws and regulations which are also applicable to ends such as an advisory from the Ministry of Health and Family Welfare Government of India to all the states and union territories. This ensures that ends and similar devices are not sold, manufactured, distributed, traded, imported and advertised in their jurisdictions. Then there is also a ban on e-cigarettes import by the Department of Revenue. Also there is a ban on e-cigarettes advertisements under the Ministry of Electronics and Information Technology. Now have a look at the practice film's question. We shall discuss at the end of the analysis session. Let us move on to the next news article. The next news article is regarding the draft national education policy. The analysis of this news article will be relevant in your prelims examination under current events of national importance and also in your main examination and general studies paper 2 under government policies and interventions for development in various sectors and issues arising out of their design and implementation and also under issues relating to development and management of social sector or services relating to education. Now know that the draft national education policy has been prepared by Dr. Kasturi Rangan committee. This committee has submitted the draft policy to the newly sworn union minister of human resource and development. Let us see the key recommendations of the draft national education policy now. This policy is recommended doubling the percentage of public expenditure on education. If you see the spending at now is around 4.6 percentage of India's GDP. Next, the policy has proposed that there shall be no hard separation of learning areas in terms of curricular, co-curricular or extracurricular areas and all subjects which includes your arts, music, crafts, sports, yoga, community service etc will all be classified as curricular that is under one head. So this will promote active pedagogy which will focus on the development of life skills for the children. Here just know that pedagogy means the method and the practice of teaching. Next, the draft policy is recommended to extend the right to education act of 2009. If you see this right to education act of 2009 mandates for free and compulsory education to all the children between 6 and 14 years. Now if you see this draft policy proposes to extend the age limit from 3 to 18 years. So there will be inclusion of pre-primary levels who are in the age group of 3 to 6 years and also the children in the secondary schooling stage who come under the age group of 14 to 18 years. Next, the policies propose that early childhood care and education should be an integral part of school education. Next, this draft policy intends to transform the higher education sector by splitting the present higher education institutions into three categories as type 1, type 2 and type 3. Here type 1 institution will focus exclusively on world class research and type 2 institution will focus on high quality teaching. And it will also provide some significant contributions to research. And if you see the type 3 institutions, they will focus exclusively on high quality teaching to the undergraduate education. Next, the draft policy also intends to transform the teacher education. The draft policy proposes that the existing teacher education program should be brought under the large multidisciplinary universities and colleges for an efficient functioning. Also, the draft policy is proposed to introduce a four-year integrated BF program. Next, the draft policy is recommended setting up of Rashtriya Siksha Ayuk or National Education Commission. And this commission should function under the Prime Minister. Also, it is recommended for setting up of National Research Foundation. Next, the draft policy proposes to set up independent bodies for setting the education standards and an independent body for funding and an independent body for accreditation and also a separate body for regulation. Next, the draft policy is recommended to encourage primary school education in the children's own mother tongue. Also, this draft policy is proposed to incorporate traditional Indian knowledge systems into the school curriculum. One another recommendation is to rename the Ministry of Human Resource and Development, nothing but in short MHRD, to as a Ministry of Education. So, you just need to know all these are recommendations only. The National Education Policy will soon be released by the government. And the main policy document which is once released will be relevant for your main's preparation since this is a draft document. Meanwhile, you can use all these recommendations or any of these recommendations as suggestions in any of your main's answer on education. Now, let us move on to the next news article. The last news article of the day is about generalized system of preferences. This news article is titled as India to lose preferential trade terms with US. Now, the analysis of this news article will be relevant in your prelims preparation under current events of national and international importance and also in your main's preparation in general studies paper 2 under bilateral agreements involving India and or affecting India's interests. And also under effects of policies and politics of developed countries on India's interests. And it will also be relevant in your general studies paper 3 under Indian economy and issues relating to growth and development. Now, this article talks about the suspension of generalized system of preferences that is the GSP eligibility to India by the United States. The officials have told that the restoration of benefits remained a possibility if the underlying trade issues were resolved, but already the withdrawal of India's GSP eligibility was a done deal, which means it is closed. US has told in March 2019 that due to the persistent market access issues it faces with India, it will be suspending or withdrawing India's benefits under the generalized system of preferences program. US said that India failed to assure them that it would provide an equitable and reasonable access to the markets of India. A similar notification was issued for the Turkey country as well on the same day if you see. The US President has already terminated Turkey's GSP program effective from May 17 after the 60 days notice period, which means India's notice period is also over. But in the case of India, the decision was put on hold by US because of the Lok Sabha elections in India. But if you see May 25 lawmakers in US have written to the US administration to not to cancel the GSP benefit to India, as it would represent a step back, not a step forward, and it would also arm US companies. Now, in this context, let us understand about the generalized system of preferences or in short the GSP. The generalized system of preferences is a trade preference program of the United States. It was established in the year 1976 by the Trade Act of 1974 of the USA. GSP promotes economic development. This is done by eliminating duties on thousands of products that are imported from 120 designated beneficiary countries of United States. If the GSP designation of India under this GSP program is terminated, then India will not become a beneficiary under this trade preference program. So, this will lead to losing about 190 million US dollars to India. Then the ratio of Indian exporters to the already competitive US market will also reduce. You should note that in 2018, India was ranked number one by the United States Trade Representative as the top beneficiary of the program. So far, the program has benefited crucial Indian sectors that includes your textiles, leathers, engineering goods, gems, and also jewelry. During the years of 2017 till now, there were complaints to the US government from its daily industries, pharma and medical industries about the Indian market. So, as a result of this, the US has placed the designation of India in the eligibility review in the month of April 2018. And after that, the e-commerce giants such as Walmart and Amazon have also raised the issue that India is not giving equitable and reasonable access because if you see India came up with its own e-commerce policy norms. So, on March 2 of 2019, the US government has announced that the US will terminate the GSP beneficiary status to India. The US government also stated that India has implemented a wide array of trade barriers that causes serious negative effects on United States commerce. Also, the termination of GSP benefits to India may put huge burden on American companies that are dependent on duty-free import under this GSP program. So, as a termination of GSP, this will lead to paying huge taxes annually by these companies. If the GSP is terminated, the job, investments, all that have been planned or in process also needs to be cancelled. And this termination will also lead to India taking retaliatory steps. So, it will affect the US exports finally. The US companies that are planning export expansion to India will be hurt as a result of this, retaliatory steps that will be taken by the Indian government. The termination of GSP will also lead to a job crisis and crisis to job security as well, particularly for those companies that are heavily dependent on Indian trade. Finally, the US lawmakers who gave the letter to US trade representative feels that neither US nor India will benefit because of the termination of this program. Note that these are the reasons stated by them about what effects the termination may have on US companies and its employees. Now, have a look at the practice prelims question. But this we come to the end of the analysis of all the news articles taken up for today's discussion. Let us move on to the practice question discussion session. Question number one, which of the following are used to calculate the fiscal deficit? They have given tax revenues, borrowings, capital expenditure and revenue expenditure. And we have to choose the correct answer from the options given below. So, we saw that the fiscal deficit is the total expenditure minus the total receipts except the debt capital receipts. So, here the debt capital receipts consists of borrowings and other liabilities as we saw during our discussion. So, these borrowings and other liabilities are not taken into account while calculating the fiscal deficit. And if you see here, the total expenditure refers to both the capital and the revenue expenditure. So, if you eliminate the item B which is the borrowings, the correct answer is option D, 1, 3 and 4 only. Moving on to the next question, consider the following statements with reference to the S 400 Triumph Missile that is often seen in the news. And they have given two statements. So, if you look at the first part of the first statement, it states that S 400 is an air to air missile. This is wrong because S 400 is a surface to air missile. But the second half of the statement is correct as it is a mobile multi channel air defense missile system. Since the first half of the statement is wrong, the whole statement becomes incorrect. So, when you read about any missile, just try to remember whether it is an air to air missile or a surface to air missile or air to surface missile or a surface to surface missile. So, this will be very much important for your prelims exam. Now, if you look at the second statement, this statement is correct. We already have discussed in detail about this S 400 during analysis about how US is angry about India's S 400 system purchase deal with Russia. So, if you read the news articles regularly, you can easily attempt this second statement. Now, this question asked for the correct statements as here only statement 2 is correct. The correct answer to this question is option B 2 only. Moving on to the third question, they have given two statements and they are asking which of the statements are correct. So, here the first statement is wrong because the 86th Constitutional Amendment Act of 2002 deals with article 21A of Indian Constitution. It is nothing but regarding a fundamental right to education. So, it has no connection with the Council of Ministers. And if you see the article 75, 1A was inserted by the 91st Constitutional Amendment Act of 2003. And here the second statement is correct as the total number of ministers including the Prime Minister in the Council of Ministers shall not exceed 15 percentage of the total number of members of the House of People that is the Lok Sabha. So, here the question is asked for the correct statement. Since statement 2 is only correct, the correct answer is option B 2 only. Moving on to the fourth question, consider the following statements and these statements are about e-cigarettes. The question is asked for the correct statements. So, if you look at the first statement, it states that e-cigarettes are battery-powered devices which are used to smoke. So, this is correct. But the further statement further states that it does not contain nicotin, this is wrong. So, as we clearly discussed during our analysis that e-cigarettes are made up of a flavored solution which contains a varying concentration of nicotin. Since this part of statement 1 is wrong, it makes the whole statement wrong. Here the question asked for the correct statement and if you see the options given here, two options containing statement 1 can easily be eliminated which are options A and B. Now, the second statement is bit confusing as you may not be sure whether e-cigarettes contain all these compounds like acetaldehyde, formaldehyde and acetone. Also whether they are carcinogens or not, that is the cancer causing elements or not because we may not always remember every detail about a particular topic. But if you see the options that are given here, the option C and B, statement 2 is mentioned and only one option contains statement 3. So, try to find out if the statement 3 is correct or not since statement 2 becomes automatically correct here. We discussed that the use of nicotin as an ingredient in any food item is prohibited under the Food Safety and Standards Prohibition and Restrictions on Sales Regulation 2011 of the Food Safety and Standards Act of 2006. So, here the third statement is correct. So, finally we can arrive at the option D which is 2 and 3 only since both the statements are correct. Now, also remember that it was found that e-cigarettes contain potential carcinogens like acetaldehyde, formaldehyde and acetone that is mentioned in the second statement. Moving on to the final question of the day, with reference to the Generalized System of Preferences Program of USA, consider the following statements and the question is asked for the correct statements. Here the first statement is it was first instituted in the year 1976 and is the largest and oldest US trade reference program. This GSP program actually came into force or it was first instituted in the year 1976. So, this statement is correct. Here they have told in the second statement that in 2018 India was the second largest beneficiary under the program according to the Office of United States Trade Representative. Here the second statement is incorrect as India was the largest beneficiary under the program according to this Office of United States Trade Representative, not the second largest beneficiary. So, here the question is asked for correct statements. The correct answer is option A one only. With this we come to the end of the analysis of all the news articles taken up for today's discussion and also the practice question discussion session. Please do like, comment and share the video and please subscribe to Shankar IA's Academy YouTube channel for latest videos and updates. Stay focused and motivated friends. Thank you.