Daily Current Affairs - February 01, 2020 (The Hindu, PIB, Fact Pedia)

February 01, 2020 - Find all the important news articles and editorials from The Hindu, PIB, Fact Pedia on our Daily Current Affairs Feed.

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The Hindu – Hyderabad Edition 

  1. CEA sees growth rebounding to 6%
  • Where does it fall under UPSC Syllabus?
  • Prelims: Economic development
  • Mains: GS3: Economy
  • Synopsis:
  • The Economic Survey 2019-20 was released by the Chief Economic Advisor (CEA) Krishnamurthy Subramanian.
  • It forecasted the GDP growth for 2021 will be at 6.0-6.5%
  • It said a sharp decline in fixed investment due to slow growth of real consumption reduced the economic growth.

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  1. GDP growth revised downwards for 2018-­19
  • Where does it fall under UPSC Syllabus?
  • Prelims: Economic development
  • Mains: GS3: Economy
  • Synopsis:
  • The National Statistical Office (NSO) released the First Revised Estimates of National Income, Consumption Expenditure, Saving and Capital Formation for the financial year 2018-19.
  • Gross Domestic Product:
  • Nominal GDP: 189.71 lakh crore (11% growth)
  • Real GDP: 139.81 lakh crore (6.1% growth)
  • Nominal net national income: 167.89 lakh crore (10.8% growth)
  • Gross National Disposable Income: 192.63 lakh crore (11.2% growth)
  • Savings: 57.13 lakh (household is the highest contributor)
  • Gross Capital Formation: 61.09 lakh crore
  • Per Capita Net National Income at current prices: Rs. 1, 26,521 in 2018-19
  • Consumption Expenditure:
  • Private: 112.54 lakh crore
  • Government: 21.04 lakh crore

 

  1. A chance to chart China-like export trajectory
  • Essence of the article: Adopting successful international methods can be a good path for creating jobs and reducing unemployment in India.
  • Where does it fall under UPSC Syllabus?
  • Prelims: Economic development
  • Mains: GS3: Economy
  • Synopsis:
  • Economic Survey suggested India to adopt a Chinese strategy for creating 4 crore well-paid jobs by 2025 and 8 crore jobs by 2030.
  • It said the integration of “assemble in India for the world” with government's “Make in India” initiative can help in achieving this.
  • Expected Outcomes by doing so:
  • 4 crore well-paid jobs by 2025 and 8 crore jobs by 2030
  • Rise in export market share to about 3.5 % by 2025 and 6 % by 2030 and
  • One quarter increase in value added products required for making India a $5 trillion economy by 2025.
  • Assemble in India for the World:
  • Chinese model to create jobs
  • Strategy of the model:
  • Specialization at large scale in labor-intensive sectors especially network products
  • Focus on enabling assembling operations at mammoth scale in network products
  • Export primarily to markets in rich countries
  • Trade policy must be an enabler

 

  1. Bigger banks needed for $5 trillion economy
  • Essence of the article: If not addressed, the Public Sector Banks in India can never be part of $5 trillion economy success story.
  • Where does it fall under UPSC Syllabus?
  • Prelims: Economic development
  • Mains: GS3: Economy
  • Synopsis:
  • Economic survey studied the status & problems being faced by public sector banks and recommended some solutions to address them.
  • Status of PSBs:
  • Since 1969, India’s Banking sector did not develop in proportion with the growth in the size of the economy.
  • India needs at least eight banks in the top 100 banks globally to become a $5 trillion economy.
  • Currently, only the State Bank of India with 55th rank is in the world’s top 100 banks.
  • Issues in PSBs:
  • PSBs are inefficient compared to their peer groups on every performance parameter.
  • In 2019, investment for every rupee in PSBs on average, led to the loss of 23 paise while in private banks it led to the gain of 9.6 paise.
  • Credit growth in PSBs has been much lower than Private Banks for the last several years.
  • PSBs enjoy less strategic and operating freedom as compared to private banks.
  • Public Sector Banks are away from taking risks in lending or in renegotiating bad debt due to fears of harassment under the veil of vigilance investigations.
  • Solutions to address issues in PSBs:
  • Adopt Employee Stock Ownership Plan (ESOP) for the Public Sector Banks (PSBs) employees.
  • Incentivize employees and align their interests with that of all shareholders of banks.
  • Create a Public Sector Banking Network (PSBN) that uses technology to screen and monitor borrowers comprehensively to prevent any build-up of bad loans in the future

 

  1. Stubble burning incidents come down
  • Where does it fall under UPSC Syllabus?
  • Prelims: Environment
  • Mains: GS 3: Agriculture & Environment
  • Synopsis:
  • As per the ES, stubble-burning incidents (61,332) in 2019 was the least in four years.
  • But it highlights agricultural residue burning as a “major concern”.
  • Stubble burning:
  • Practice of intentionally setting fire to residues that remains after the harvest of a crop.
  • It is usually done to clear the field quickly for the next season and to burn off weeds and other pests.
  • Government measures to reduce stubble burning:
  • “Zero-tolerance policy” adopted by Centre and states of Punjab, Haryana and Uttar Pradesh
  • Action Plan: Punjab gave 80% subsidy to cooperative societies for straw management machinery and at 50% subsidy to individual farmers.
  • Happy Seeder: It is a tractor-operated machine developed by the Punjab and Australia for in-situ management of paddy stubble (straw)
  • Advanced Air Quality Early Warning System: It uses data of stubble burning incidents from the past 15 years to predict the date and place of the next burning.
  • Recommendations by Economic Survey:
  • To promote Agriculture conservation with “low lignocellulosic” crop residues such as rice, wheat and maize.
  • Encouraging Crop residue-based briquettes (a block of compressed coal dust or peat used as fuel).
  • Encouraging Thermal power plants in the vicinity to undertake co-firing of crop residues with coal.

 

  1. Press Information Bureau (PIB)
  2. India Should Reduce Scope for Improvement in Time Taken in Enforcing Contracts Says Economic Survey
  • Which part of UPSC syllabus covers this:
  • Prelims: Economy
  • Mains: GS3: Economy
  • Synopsis:
  • In Ease of doing business rankings:
  • India’s rank: 63 (77 in 2018)
  • Improved by 14 places
  • Improved areas: dealing with construction permits, trading across borders and resolving insolvency.
  • Turnaround time of ships in India halved to 2.48 days in 2018-19 from 4.67 days in 2010-11.
  • But India still needs to improve in Ease of Starting a Business, Registering Property, Paying Taxes and Enforcing Contracts.
  • Challenges in ease of doing business:
  • Delhi requires 26 licenses to open a restaurant whereas, China and Singapore require only four licenses to open a restaurant.
  • Setting up and operating services or manufacturing business in India is a tedious and time-consuming task.
  • How this can be improved?
  • Reducing time and cost for starting a business in India, in sectors that faces many regulatory hurdles even for routine business. Ex: Service Sector
  • Increasing digitalization and seamlessly integrating multiple agencies onto a single digital platform can reduce procedural inefficiencies in cross-border trade.
  • Finding out regulatory and process bottlenecks for tourism and manufacturing and correcting them at the central, state or municipal levels.
  • Streamlining of logistics on Indian seaports with inter-ministerial coordination.

 

  1. Address by the President of India Shri Ram Nath Kovind to the joint sitting of Two Houses of Parliament
  • Which part of UPSC syllabus covers this:
  • Prelims: Polity
  • Mains: GS2: Polity – Parliament
  • Synopsis:
  • Recently, President of India addressed the joint sitting of both the Houses of Parliament at the beginning of the Budget Session.
  • About president Address:
  • Article 87 – deals with two instances when the President specially addresses both Houses of Parliament. They are:
  • At the beginning of the first Session after each general election when the reconstituted lower house meets for the first time.
  • At the beginning of the first session of each year.
  • President’s speech highlights the government’s policy priorities and plans for the upcoming year.
  • It also provides a broad framework of the government’s agenda and direction.

 

FactPedia

  1. India ranked third in entrepreneurship
  • As per World Bank, India ranks third globally in the number of new firms created (1.28 lakh)
  • New firm (formal sector) creation in India increased dramatically since 2014 by 12.2 %
  • It is high in the services sector than in manufacturing, infrastructure or agriculture.
  • Significance of new firms: 10% increase in registration of new firms in a district yields a 1.8 % increase in Gross Domestic District Product (GDDP).
  • States with highest Entrepreneurial activity: Delhi, Mizoram, Uttar Pradesh, Kerala, Andaman & Nicobar Islands, and Haryana.
  • Major factors responsible for new firm creation:
  • Education and literacy
  • The eastern part of India has least number of new firms due to lowest literacy rate (59.6%)
  • Flexible labour laws in job creating sectors
  • Physical infrastructure

 

  1. Temasek-like model
  • It is a Singapore based disinvestment model
  • It is proposed by economic survey of 2020
  • Objective: To maximize returns from public sector enterprise
  • About Temasek:
  • Under this model, the government can transfer its stake in the listed Central Public Sector Enterprises (CPEs) to a separate corporate entity.
  • This entity will be managed by an independent board and must sell or divest the government stake in these CPSEs over a period of time.
  • This will lend professionalism and autonomy to the disinvestment programme which in turn will improve the economic performance of the CPSEs.
  • Why it is needed in India? 11 CPSEs which underwent strategic disinvestment from 1999-2000 to 2003-04, made efficient gains from privatization
  • Benefits of these disinvestment:
  • higher profitability
  • Promotes efficiency
  • Increases competitiveness
  • Promotes professionalism

 

  1. Reports/Indices/Resolutions
  1. Beijing Plan of Action (Beijing +25)
  • The Beijing Declaration was adopted by the United Nations (UN) at the Fourth World Conference on Women on 15 September 1995.
  • Objective: To promulgate a set of principles regarding the equality of men and women.
  • It covers 12 key critical matters of concern and areas for action to represent the main obstacles in women empowerment.

 

  1. Dynamic health Index
  • It is a health score index for non-banking finance companies (NBFCs)
  • Aim: To provide an early warning signs for liquidity crisis in a non-banking finance company (NBFC) to tackle the problem of financial weakness.
  • Index Range: -100 to 100 (low to high financial stability)
  • Parameters:
  • Asset Liability Management (ALM) Risk
  • Interconnectedness Risk
  • Financial and Operating Resilience of an NBFC and
  • Over dependence on short-term wholesale funding
  • Benefits: It can be used by policy makers to allocate capital to stressed NBFCs in an optimal way to alleviate a liquidity crisis.

 

  1. TERM Bank
  2. Thalinomics
  • It is seen in economic survey of 2020 as a chapter, 'Thalinomics: The economics of a plate of food in India'.
  • Thali = plate of food
  • It quantifies what a common person pays for a 'thali’ in India.
  • It assesses whether a 'thali' has become more or less affordable over the last few years.
  • From 2015-16 there was a shift in dynamics of thali prices
  • Due to reform measures introduced to enhance agricultural sector.
  • Veg 'thali' affordability has improved by 29% and non-veg Thali affordability by 18% during 2006-07 to 2019-20.

 

  1. Budget
  • It also known as the annual financial statement
  • According to Article 112 of the Indian Constitution, the Union Budget of a year is a statement of the estimated receipts and expenditure of the government for that particular year.
  • It keeps the account of the government's finances for the fiscal year that runs from 1st April to 31st March.
  • Union Budget = Revenue Budget + Capital Budget
  • Revenue Budget = Revenue Receipts (tax & nontax) – Revenue Expenditure
  • Capital Budget = Capital Receipts – Capital Expenditure

 

  1. Divestment/Disinvestment
  • It is the action of an organization (or government) selling or liquidating an asset or subsidiary.
  • Benefits:
  • Higher profitability
  • Promotes efficiency
  • Increases competitiveness
  • Promotes professionalism

 

 

  1. DATA POINT - Stats Corner

Let’s know some stats about “Service Sector”

 

  • Contribution to GDP: 55%
  • FDI share: Two-thirds of total FDI inflows into India
  • Exports share: 38% of total exports
  • Size of IT and Business Process Management (IT-BPM) Services: $177 billion
  • Share of Tourism: 24% of the world’s international tourist arrivals (India is 22nd in world)
  • Space sector: India spent about US$ 1.5 billion on space programs in 2018

 

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