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AIR Discussions(July 3Rd Week) AIR Discussions(July 3rd week) 15th July. Significant Developments on Kartarpur Corridor ● Context: India, Pakistan held second round of talks at Wagah, to discuss on issues including pilgrims' safety, draft agreement and operationalisation of the Kartarpur corridor and related technical issues. ● Highlights of the talk: ⮚ Pakistan said that they are hopeful to have productive discussion and settlement of issues. The 70 per cent work on the corridor has been completed and that Pakistan participated in the talks with a positive mindset. ⮚ Pakistan and India agreed 80 per cent and beyond on the draft agreement and operationalisation of the landmark Kartarpur corridor. ⮚ Key issues such as connectivity at Zero Point and the number of pilgrims to be allowed through the Kartarpur corridor were discussed during the meeting. ⮚ India flagged its concerns over the security aspect. ⮚ India had earlier conveyed its strong concerns to Pakistan over the presence of a leading Khalistani separatist in a committee appointed by Islamabad on the project. ⮚ Matters related to the modalities of the corridor, who can use the corridor and its facilities, were discussed during the meeting. ⮚ The first round of talks was held in Attari on March 14 in the shadow of escalating bilateral tensions following the Pulwama terror attack. ⮚ Both sides had jointly surveyed the coordinates of the Zero Point and discussed the technical details, including finished road level, high flood level etc. ● Background: ⮚ Government of India had decided to commemorate 550th Birth Anniversary of Shri Guru Nanak Dev by building Kartarpur Corridor. ⮚ The corridor will connect Darbar Sahib in Pakistan's Kartarpur with Dera Baba Nanak shrine in Gurdaspur district and facilitate visa-free movement of Indian Sikh pilgrims, who will have to obtain a permit to visit Kartarpur Sahib, which was established in 1522 by Sikh faith founder Guru Nanak Dev. ⮚ Pakistan will build the corridor from the Indian border to the Gurdwara Darbar Sahib at Kartarpur while the other part from Dera Baba Nanak in Punjab's Gurdaspur district up to the border will be constructed by India. ⮚ Kartarpur Sahib is located in Pakistan's Narowal district across the river Ravi, about four km from the Dera Baba Nanak shrine. ⮚ Vice President M Venkaiah Naidu and Punjab Chief Minister Amarinder Singh had on November 26 last year laid the foundation stone of the Kartarpur Corridor in Gurdaspur district. ⮚ Two days later, Pakistan's Prime Minister Imran Khan laid the foundation stone of the corridor in Narowal, 125-km from Lahore. Pakistan government has earmarked Rs 100 crore in the federal budget 2019-20 for the development of the corridor. ⮚ This is considered to be a corridor of peace. ● Further Developments: ⮚ A four-lane highway linking the Gurdaspur-Amritsar road to the international border for Kartarpur Sahib gurudwara in Pakistan will be ready by the month of September this year. ⮚ The 4.19 km-long four-lane highway is being built at a cost of Rs 120 crore. ● About Gurdwara: ⮚ It was ordered by Maharaja of Patiala between 1921 and 1929. ⮚ It is believed to be a place where Nanak ji spent about last 18 years of his life. © APTI PLUS ACADEMY FOR CIVIL SERVICES ● About Guru Nanak Dev: ⮚ He was the founder of Sikhism and a Bhakti saint. ⮚ He was born in 1469 in Nanakana Sahib, Punjab, Pakistan and died in Kartarpur, Pakistan. ⮚ His ideas were influenced by the nirguni (formless God) tradition, worship of one God. ⮚ He insisted that caste, creed or gender was irrelevant for attaining liberation. ⮚ He insisted that his followers must be householders and should adopt productive and useful occupations. ⮚ They were also expected to contribute to the general funds of the community of followers. 16th July. Government action on Sovereign Bonds ● Context: Finance Minister Nirmala Sitharaman announced in the Budget speech that government plans to raise a portion of its gross borrowing from overseas markets. ● Why India opting for this route: ⮚ Finance Minister said that India’s sovereign external debt-to-GDP level is among the lowest globally at less than 5 per cent. India will raise a part of our borrowing abroad in foreign currency. It will leave some more domestic savings for the private sector. ⮚ India raises ₹ 7 lakh crore as borrowing. Currently, the government takes it all from the domestic market and so much less is left for the private sector. If about 10 percent of that is raised from elsewhere, additional ₹ 70,000 crore would be left for the private sector. ⮚ This will increase the supply of money in the domestic market. ⮚ Further, all of these measures are part of the larger story of opening of the Indian private sector and giving it more investible resources. ● Comments of the Finance Secretary on the issue: ⮚ He termed the proposed issuance of sovereign bonds in overseas markets as the “boldest announcement” of the Budget. ⮚ He indicated that about ₹ 70,000 crore could be mobilised through this route. ⮚ He said diversification of government resource mobilisation is the only way of leaving more funds for the private sector. ● What is an overseas bond issue? A government/ sovereign bond is a form of debt that the government undertakes wherein it issues bonds with the promise to pay periodic interest payments and also repay the entire face value of the bond on the maturity date. ● Benefits: ⮚ The government has been arguing that the quantum of its borrowing within India is ‘crowding out’ the private sector. ⮚ According to Finance Secretary, government borrowing accounts for about 80-85% of domestic savings. ⮚ He also said that the overseas borrowing programme allows the government to maintain its gradual reduction of the fiscal deficit. © APTI PLUS ACADEMY FOR CIVIL SERVICES ⮚ Had the government listened to some commentators and relaxed its fiscal deficit to say 4.4%, then this would have allowed it to borrow an additional ₹2 lakh crore from the domestic market. However, this would have been ₹2 lakh crore that would not be available now to the private sector for borrowing purposes. ⮚ The appetite of the international market for Indian bonds and their price will also say a lot about how India is viewed globally on the risk factor. For example, if the rate at which India can borrow overseas is low, then this would mean the global market assigns a low risk to India defaulting. ● Risks involved: ⮚ India might follow the path of some Central and South American countries such as Mexico and Brazil. ⮚ In the 1970s, several of these countries borrowed heavily overseas when the global market was flush with liquidity. But then, when their currencies depreciated sharply a decade later, these countries were in big trouble as they could not repay their debt. ⮚ It would lead to a quicker increase to its foreign exchange reserves, which would lead to a stronger rupee which would encourage imports at a time when the government is trying to curb them, and discourage exports at a time when they are being encouraged. ⮚ Further, Indian government cannot print foreign currency to repay its debt unlike domestic debt. ● The shallowness of the domestic bond market is not a good thing, especially at a time when the government needs the bond market to finance several of its commitments. Ideally, the government should have enough revenue that it does not need to borrow as much. However, at a time when both direct and indirect tax collections have disappointed, the government is forced to borrow to finance its expenditure. In such a scenario, it is a welcome move for the private sector that the government is leaving it room to borrow in the domestic market. 18th July. Verdict of ICJ on Kulbushan Jadhav ● Context: After more than two years of battle at the global court, New Delhi won a legal and diplomatic victory over Islamabad after the International Court of Justice ruled that Pakistan must review the death sentence for Indian national. ● Major Highlights of the court ruling: ⮚ The court affirmed the former Indian Navy officer’s right to consular access and slammed Pakistan for denying this. ⮚ Court made it clear that Jadhav’s death sentence should remain suspended until Pakistan effectively reviews and reconsiders the conviction and sentence in the light of its breach of Article 36 — that is denial of consular access and notification. ⮚ The court, however, rejected India’s call to annul the military court decision and ensure his release and safe passage home. ⮚ Jadhav must get access to consular and legal assistance but Court does not rule that he can be tried under the civilian court of law. ⮚ The only thing, it says, is that the review and reconsideration should be “effective”. It has even suggested to Pakistan’s government that it can take legislative action to make the process of review and reconsideration “effective” — this is right now in the military court’s domain. ⮚ The verdict was decided with 15 judges, including China’s judge, in favour while only Pakistan’s ad-hoc judge Pakistani Judge was the lone dissenter. ⮚ While all these clauses were ruled 15-1, there was unanimity on the jurisdiction issue. It said that the court “unanimously, finds that it has jurisdiction, on the basis of Article I of the Optional Protocol concerning the Compulsory Settlement of Disputes to the Vienna Convention on Consular Relations of 24 April 1963, to entertain the Application filed by the Republic of India on 8 May 2017”. ● Response to judgment: ⮚ Welcoming the ICJ verdict, Prime Minister said that truth and justice have prevailed. ⮚ While India’s Ministry of External Affairs called it a landmark judgment and said that India expects Pakistan to implement the directive immediately. ⮚ Pakistan’s Foreign Ministry said that as a responsible member of the international community, it upheld its commitment from the very beginning of the case by appearing before the honourable court for the provisional measures hearing despite a very short notice.
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