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THE HINDU DAILY CURRENT AFFAIRS 1ST FEBRUARY 2020

Q.1 Consider the following statements regarding Mappila Revolt
1. The Mappilas were the Muslim tenants inhabiting the Malabar region.
2. The Mappila movement merged with the Khilafat agitation.
Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2

Q.2 Consider the following statements
1. The Calcutta Madrasah was established by Jonathan Duncan
2. The Sanskrit College was established by Warren Hastings
3. Fort William College was set up by Wellesley in 1800 for training of civil servants
Which of the statements given above is/are correct?
A. 2 only
B. 3 only
C. 1, 2 and 3
D. None

Q.3 Consider the following statements
1. Charter Act 1813 directed the company to sanction one lakh rupees annually for promoting
education
2. Wood’s Despatch recommended English as the medium of instruction for higher studies and
vernaculars at school level.
Which of the statements given above is/are correct?

A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2

ANSWERS: C,B,C

ECONOMIC SURVEY

NEWS:

The Economic Survey for 2019-2020 expects GDP growth to revive from the 5% estimated for this year to a range between 6%-6.5% next year.

The Survey hints at going easy on fiscal deficit targets to shore up growth and makes a valiant attempt to evangelise wealth creation by entrepreneurs, instead of demonising them.

It also calls for unravelling multiple regulations stifling Indian industry’s global competitiveness and urges policy makers to stop being “judgemental” about importing inputs, assembling them and re-exporting them, even if it means little value-added at home. Focusing on just six such ‘network’ sectors could generate 4 crore jobs by 2025 and 8 crore jobs by 2030 and reverse the country’s tepid job creation record, the Survey said.

What is the Economic Survey?

The Economic Survey is a report the government presents on the state of the economy in the past one year, the key challenges it anticipates, and their possible solutions.

The document is prepared by the Economic Division of the Department of Economic Affairs (DEA) under the guidance of the CEA, currently Dr Krishnamurthy Subramanian.

Once prepared, the Survey is approved by the Finance Minister.

The first Economic Survey was presented in 1950-51. Until 1964, the document would be presented along with the Budget.

For the past few years, the Economic Survey has been presented in two volumes. For example, in 2018-19, while Volume 1 focussed on research and analysis of the challenges facing the Indian economy, Volume 2 gave a more detailed review of the financial year, covering all the major sectors of the economy.

Why is the Economic Survey significant?

The Economic Survey is a crucial document as it provides a detailed, official version of the government’s take on the country’s economic condition.

It can also be used to highlight some key concerns or areas of focus — for example, in 2018, the survey presented by the then CEA Arvind Subramanian was pink in colour, to stress on gender equality.

Is it binding on the government?

The government is not constitutionally bound to present the Economic Survey or to follow the recommendations that are made in it.

If the government so chooses, it can reject all suggestions laid out in the document.

But while the Centre is not obliged to present the Survey at all, it is tabled because of the significance it holds.

CHIEF ECONOMIC ADVISOR

  1. Post in Government of India and is equivalent to rank of secretary to the Government of India.
  2. CEA is the head of the Economic Division of the Department of Economic Affairs, Ministry of Finance.
  3. CEA is the ex officio cadre controlling authority of the Indian Economic Service.
  4. Until 2009, CEA’s position was a UPSC appointment and until 1970’s almost all the CEA’s were members of the Indian Economic Service.
  5. At present CEA is appointed by the Appointments Committee of the Cabinet.

PRESIDENT’S ADDRESS

NEWS: 

President Ram Nath Kovind on Friday kick-started the Budget session of Parliament with an address to both Houses. He lauded the enactment of the Citizenship (Amendment) Act (CAA) that, he said, fulfilled the wish of Mahatma Gandhi who had said that Hindus and Sikhs of Pakistan, who didn’t want to stay there, could come to India.

He clarified that “the procedures which have existed for people from all faiths of the world who believe in India and who wish to obtain Indian citizenship remain unchanged. A person of any faith can follow these processes and become a citizen of India.”

WHAT DOES THE ACT CONTAINS?

The ACT seeks to amend the Citizenship Act, 1955 by seeking to grant citizenship to undocumented non-Muslims from Bangladesh, Pakistan and Afghanistan who came to India on or before December 31, 2014.

The ACT says the six non-Muslim communities “shall not be treated as illegal migrant” for violating provisions under Passport Act, 1920 or the Foreigners Act, 1946 that pertains to foreigners entering and staying in India illegally.

The ACT shall not apply to tribal areas of Assam, Meghalaya, Mizoram and Tripura as included in the sixth schedule of the Constitution and States of Arunachal Pradesh, Mizoram , Manipur and Nagaland protected by the Inner Line Permit (ILP).

ACT has reduce the time period required for naturalization from 11 years to 5 years for members of these communities.

BONE OSSIFICATION TEST

NEWS: 

The young man who fired at a Jamia Millia Islamia student during a protest march against the Citizenship (Amendment) Act on Thursday was sent to 28-day protective custody in a correction home by the Juvenile Justice Board a day later.

Purportedly 17 years old, a bone ossification test would be conducted to ascertain if he is indeed a little over two months shy of being an adult. Police said they have approached Ram Manohar Lohia Hospital to form a board of doctors for the test.

ABOUT BONE OSSIFICATION TEST

About:

  • Bone ossification, or osteogenesis, is the process of bone formation.
  • This process begins between the sixth and seventh weeks of embryonic development and continues until about age twenty-five; although this varies slightly based on the individual.
  • There are two types of bone ossification, intramembranous and endochondral.
    • Intramembranous ossification directly converts the mesenchymal tissue to bone and forms the flat bones of the skull, clavicle, and most of the cranial bones.
    • Endochondral ossification begins with mesenchymal tissue transforming into a cartilage intermediate, which is later replaced by bone and forms the remainder of the axial skeleton and the long bones.

    In 2016, the Bombay high court ruled that a bone ossification test is by itself not conclusive proof of age.

ARTICLE 72

NEWS:

The execution of the death sentence awarded to all four convicts in the December 16, 2012 Nirbhaya gang-rape and murder case was postponed for the second time on Friday, following an order from a Delhi court.

He told the court that a mercy petition under Article 72 of the Constitution has been filed on behalf of convict Vinay.

ABOUT Article 72

Power of President to grant pardons, etc, and to suspend, remit or commute sentences in certain cases

The President shall have the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence

  • in all cases where the punishment or sentence is by a court Martial;
  • in all cases where the punishment or sentence is for an offence against any law relating to a matter to which the executive power of the Union extends;
  • in all cases where the sentence is a sentence of death

BAITARNI RIVER

NEWS:

Odisha Chief Minister Naveen Patnaik inaugurated a 490-metre-long barrage over the Baitarani river at Anandapur in Keonjhar district on Friday.

ABOUT BAITARNI RIVER

The Baitarani River or River Baitarani is one of six major rivers of Odisha, India.

The Baitarani originates from the Gonasika/Guptaganga (Cow Nose Shaped) hills,

The beginning portion of Baitarani acts as the small part of boundary between the states of Odisha and Jharkhand.

VISVA BHARATI UNIVERSITY

NEWS:

Visva-Bharati University has issued an order prohibiting its staff from speaking to the media “until further order”, saying anything they want to express publicly should be routed through Assistant Registrar Anirban Sircar, who is the university’s spokesman as well as ‘Social Media Champion’.

“To seek the public limelight and self-importance through media for oneself is unworthy of any teacher or employee of Visva-Bharati. Visva-Bharati itself seeks no publicity,” a notification issued on Thursday said.

About Visva-Bharati University

Visva-Bharati University  is a public central university and an Institution of National Importance located in SantiniketanWest BengalIndia.

It was founded by Rabindranath Tagore who called it Visva-Bharati, which means the communion of the world with India.

Until independence it was a college. Soon after independence, in 1951, the institution was given the status of a university and was renamed Visva-Bharati University.

BHIMA KOREGAON

NEWS: 

The secretary of the Bhima Koregaon Commission, which was set up to look into the riots of January 1, 2018, in which one person lost his life, has written to the Chief Secretary recommending that the inquiry be wound up for want of funds.

After the initial budget of about ₹52 lakh, “which was hardly adequate”, was exhausted, the government either delayed sanctioning a supplementary budget or sanctioned a lower amount than was required, the letter said. “Salary and other bills were not promptly passed. Advance was never sanctioned for day-to-day expenses,” it said.

About the Bhima- Koregaon battle:

A battle was fought in Bhima Koregaon, a district in Pune with a strong historical Dalit connection, between the Peshwa forces and the British on January 1, 1818. The British army, which comprised mainly of Dalit soldiers, fought the upper caste-dominated Peshwa army. The British troops defeated the Peshwa army.

 

Outcomes of the battle:

  • The victory was seen as a win against caste-based discrimination and oppression. Peshwas were notorious for their oppression and persecution of Mahar dalits. The victory in the battle over Peshwas gave dalits a moral victory a victory against caste-based discrimination and oppression and sense of identity.
  • However, the divide and rule policy of the British created multiple fissures in Indian society which is even visible today in the way of excessive caste and religious discrimination which needs to be checked keeping in mind the tenets of the Constitution.

Why Bhima Koregaon is seen as a Dalit symbol?

  • The battle has come to be seen as a symbol of Dalit pride because a large number of soldiers in the Company force were the Mahar Dalits. Since the Peshwas, who were Brahmins, were seen as oppressors of Dalits, the victory of the Mahar soldiers over the the Peshwa force is seen as Dalit assertion.
  • On 1 January 1927, B.R. Ambedkar visited the memorial obelisk erected on the spot which bears the names of the dead including nearly two dozen Mahar soldiers. The men who fought in the battle of Koregaon were the Mahars, and the Mahars are Untouchables.

CORONA VIRUS

NEWS: 

In relief to Kerala, no new cases of novel coronavirus infection were reported on Friday. Of the 18 results of the samples received so far, 17 reported negative for the virus.

The condition of the medical student, who was tested positive for infection on Thursday, is satisfactory, according to Health Minister K.K. Shylaja. The patient, a student of Wuhan University in China, was admitted with symptoms of novel coronavirus at the Thrissur General Hospital on January 27.

ABOUT CORONA VIRUS

  • Coronaviruses (CoV) are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV).
  • Coronaviruses are zoonotic, meaning they are transmitted between animals and people.

Symptoms:

Common signs of infection include respiratory symptoms, fever, cough, shortness of breath and breathing difficulties. In more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and even death.

Transmission:

Human coronaviruses most commonly spread from an infected person to others through:

  1. the air by coughing and sneezing.
  2. close personal contact, such as touching or shaking hands.
  3. touching an object or surface with the virus on it, then touching your mouth, nose, or eyes before washing your hands.
  4. rarely, fecal contamination

EVACUATION BEGINS FROM CHINA

NEWS:

India started evacuation of its people from Wuhan (China) on Friday with a special Air India double decker Boeing 747 aircraft with 15 cabin crew and 5 cockpit crew taking off from Indira Gandhi International Airport (T3), Delhi, for Wuhan at 12.30 p.m. The evacuation started even as World Health Organisation (WHO) declared novel coronavirus a global health emergency.

The 423-seater flight is expected to return to Delhi from Wuhan (China) at 2 a.m. on Saturday and another special flight may depart from T3, Delhi on Saturday. On Friday the death toll due to coronavirus rose to 213, with 1,982 new cases pushing up the coronavirus-stricken figure to 9,692.

External Affairs Minister S. Jaishankar thanked his Chinese counterpart soon after a special Air India flight landed in Wuhan to evacuate Indian nationals from the city which is under a lock-down imposed by the Chinese authorities.

 

FIRST EDITORIAL: ECONOMIC SURVEY 2019-20

WHY  IN NEWS?

On 31st of January Economic Survey of 2019-20 was tabled in the Parliament.

EDITORIAL’S ANALYSIS

Economic Survey 2019-20 is a mixed bag of interesting diagnosis combined with some optimistic prognostication.

ACKNOWLEDGING THAT INDIAN ECONOMY IS FACING CHALLENGE: CEA, who in July projected real GDP growth rebounding to 7% this fiscal, acknowledges that 2019 was a difficult year for the global economy, including for trade and demand, and by extension a challenging period for the Indian economy as well.

REASON FOR SLOWED GROWTH: The Survey concedes that “a sharp decline in fixed investment induced by a sluggish growth of real consumption” has weighed down growth, which the National Statistical Office now estimates at 5% for the 12 months ending in March.

The stress in the non-bank financial industry and decline in credit growth that the IMF flagged in January when it cut its India growth estimate for the current fiscal to 4.8%, from October’s 6.1%, find reflection in the Survey.

CHALLENGES FOR NEXT YEAR:Listing downside risks to next fiscal’s outlook including continuing global trade uncertainties, escalation in West Asian geopolitical tensions, slow pace of insolvency resolution and the possibility of further fiscal pressure crowding out private investment,

SOLUTIONS OFFERED IN THE SURVEY

DYNAMIC HEALTH INDEX FOR NBFC: Interestingly, a chapter devoted to “Financial fragility in the NBFC sector” recommends a dynamic health index that policymakers can use as an early warning system to avert incipient liquidity crises in this key credit providing sector.

WEALTH CREATION: Featuring as a central theme of the first volume, the Survey asserts that India’s vaunted historical economic dominance was reliant “on the invisible hand of the market for wealth creation” supported by ethical practices that engendered trust.

REDUCE GOVERNMENT INTERVENTION: Contending that government interventions hurt more than they help, it recommends scrapping the Essential Commodities Act — enacted in 1955 when famines and shortages were the concern. Similarly, it asserts that the Drug (Prices Control) Order of 2013 has failed to achieve its aim of making drugs affordable and needs to go.

And the CEA wants a complete review of the policy on foodgrains, which he argues has made the government the largest “hoarder” thereby distorting these markets.

LEAD ARTICLE: IMPACT OF CORONA VIRUS ON CHINA

INTRODUCTION

The Year of the Rat has begun on an inauspicious note for China.

A new virus belonging to the Coronavirus family (now named novel coronavirus 2019-nCoV) has claimed over 200 lives in China and the numbers infected have touched 10,000 confirmed cases, as on Friday.

The World Health Organization (WHO) has declared it a global emergency, as the outbreak continues to spread outside China.

CREDIBILITY CHALLENGE

However, for Mr. Xi, it is more than a public health crisis; it is a credibility challenge, with both domestic and global dimensions.

EPICENTER OF VIRUS

Ironically, the epicentre of the outbreak is the bustling town of Wuhan, China, which also hosts a number of biotech enterprises. Early on, many of the patients in Wuhan are reported to have had some link to a large seafood and animal market, suggesting animal-to-person spread. However, a growing number of patients reportedly have not had exposure to such markets, which shows that person-to-person spread is occurring.

ABOUT CORONA VIRUS

Normally, coronaviruses is a large family of viruses that are often the source of respiratory infections, including the common cold. Most of the viruses are common among animals and only a small number infect humans. Sometimes, an animal-based coronavirus mutates and successfully finds a human host. Rapid urbanisation that forces animals and humans into closer proximity (as in the “wet market” in Wuhan) creates a perfect petri dish from where such zoonotic outbreaks can originate.

According to the World Health Organization, during previous outbreaks due to other coronavirus, human-to-human transmission occurred through droplets, contact and fomites (objects or materials which are likely to carry infection, such as clothes, utensils, and furniture), suggesting that the transmission mode of the 2019-nCoV can be identical.

More significant is the new understanding that the virus is contagious even during incubation, that is even before a patient exhibits any symptoms. This characteristic amplifies transmissibility. It also explains the travel bans across China, and the literal isolation of Wuhan, a city of 11 million and the Hubei province with a population of nearly 60 million.

Lessons from Kerala

All this provides an interesting contrast with how the Kerala government dealt with the Nipah virus outbreak in May 2018. Nipah is also zoonotic and made the jump from fruit bats to humans. Though there were 17 deaths in India, effective quarantine measures by local authorities prevented the spread. It helped that health is a state subject.

The State health machinery responded with alacrity with many put under observation. No new case was reported after June and a month later, Kerala was declared Nipah-free and travel restrictions removed. Had the district and State authorities not taken the initiative and only reported matters to Delhi and awaited instructions while Delhi sent teams to prepare plans, the outbreak would have taken a higher toll.

LESSONS FOR INDIA

There is an acute shortage of epidemiologists, microbiologists and entomologists which translates into wasteful delays in diagnostics. Given the growth potential of India’s biotech sector, it is time to put in place a robust public-private partnership model that can transform the health services sector in the country, covering disease surveillance, diagnostic kit availability and accelerated vaccine development.

SECOND ARTICLE: HOW TO HELP THE FARMERS?

The year 2019 witnessed a series of interventions and disruptions in the farm sector. The first half of the year saw the launch of a grand farm sop in the form of the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) with a record allocation of ₹75,000 crore.

The second half, however, was a disaster for the sector as many parts of the country witnessed drought and floods. The economic slowdown and the spiralling onion and vegetable prices burdened consumers (including farmers), providing a short respite to only a section of farmers.

This clearly reflects two things: one, populist measures have a low bearing on the economy. Second, despite several measures to reduce vulnerability of climate-induced disasters, the farm sector and farmers continue to suffer losses.

WHAT COULD BE DONE?

First, the disparity in agriculture expenditure and growth drivers, mainly the subsidiary sectors, must be addressed. Despite higher growth in livestock and fisheries sector, only moderate to low expenditure was recorded. Expenditure on livestock and fisheries must be increased, as they are mainly connected with resource-poor families in rural areas and also to raise the decelerating growth rate.

Moreover, the expenditure on research and development in agriculture needs to be raised from nearly 0.40% of agriculture GDP to 1% as it pays huge dividends in the long run in ameliorating poverty and improving livelihoods compared to any other investment.

Second, the Farmer Producer Organisations (FPOs), which are currently facing operational and structural issues governed by different Acts and funded by various sources, may be strengthened by bringing them under one institution, preferably an FPO Development and Regulatory Authority.

Third, large-scale investment in agriculture over several years have encouraged monoculture, threatening the environment and soil health (mainly in green revolution areas). Thus small-scale investment measures or an incentive-based system is essential to scale up sustainable practices such as agroforestry, climate-smart agriculture, ecosystem services, conservation agriculture and others. Increasing corporate social responsibility will help to tap more private investments besides encouraging private players in potential areas where production sustainability is possible.

Fourth, the government must establish a farm data agency, which can consolidate, collate and maintain farm data available at various platforms.

Fifth, commissioning ease of farming index is necessary to ascertain the progress made by national and State governments on the key indicators of farming. Possibly, the exercise can be done with active involvement of proven private/public institutions or international agencies.

Last, the need of the hour is setting up two institutions; one, a national agricultural development council on the lines of the Goods and Services Tax Council under the chairmanship of Prime Minister for effective coordination and convergence of States on key reforms and policies; two, farmers’ welfare commissions (both at the Centre and State level), as an independent institutional mechanism which will act as a neutral platform for assessing all agriculture-related issues and schemes.

 

SECOND EDITORIAL: INDIA ABROAD

WHY IN NEWS?

The European Union Parliament’s discussion recently on India’s Citizenship (Amendment) Act or CAA.

Parliamentarians in the U.K. and U.S. Congressmen, including Democratic presidential contenders, have asked India to “reconsider” the law and to “engage” with the protesters.

After India’s intense diplomatic outreach, the parliamentarians agreed to put off voting on the resolution until after External Affairs Minister S. Jaishankar and Prime Minister Modi visit Brussels; according to the EU member requesting the postponement, India will address Europe’s concerns.

UNDERMINING SOVEREIGNTY

While the government is right about India’s sovereign right, it would be deluding itself if it thinks any of these explanations are passing muster with the EU parliamentarians.

The government diluted its own case against foreign interference when it facilitated a visit by EU MEPs to Srinagar last year, when even Indian MPs were not allowed to visit.

By engaging the EU MEPs to avoid a vote in the EU Parliament this week, and offering to explain the reasons behind CAA, the government is slipping up further.

CONCLUSION

Above all, the government must reflect on the cumulative toll on its diplomatic heft following international alarm over the CAA, plans for an NRC and the dilution of Article 370. Instead of pushing a positive agenda for India or handling global challenges, Indian diplomats seem to be overwhelmed keeping out any negative references to India at official fora.

OP-ED PAGE

SATURDAY STORY: COASTAL PROBLEMS

COASTAL REGULATION ZONE

Since the notification issued on February 19, 1991, the development paradigm of coastal areas has been defined by CRZ norms.

The CRZ rules were notified by invoking Section 3 of the Environment (Protection) Act, 1986. The notifications were issued “to conserve and protect the unique environment of coastal stretches and marine areas, [the] livelihood security of fisher communities and other local communities, and to promote sustainable development” by taking into account the dangers of natural hazards and sea-level rise due to global warming.

The notification “declared the coastal stretches of the country and the water area up to its territorial water limit, excluding the islands of Andaman and Nicobar and Lakshadweep and the marine areas surrounding these islands, as Coastal Regulation Zone.”

The CRZ-1 areas are the most environmentally critical.

They are further classified as CRZ-1(A) and CRZ-I(B). CRZ-1(A) covers mangroves, corals and coral reefs, sand dunes, biologically active mudflats, inter-tidal zones, and nesting grounds of turtles and birds.

It also includes national parks, marine parks, sanctuaries, reserve forests, wildlife habitats and other protected areas, biosphere reserves, salt marshes, sea grass beds and areas or structures of archaeological importance and heritage sites.

The CRZ-1(B) category includes the intertidal zone, the area between the Low Tide Line and the High Tide Line. The High Tide Line is defined as the line on the land up to which the highest water line reaches during the spring tide. The line is demarcated by the National Centre for Sustainable Coastal Management.

REVAMPING OF EXTERNAL AFFAIRS MINISTRY

NEWS: 

The Ministry of External Affairs (MEA) has undertaken a major overhaul of departments and reporting structure that will effectively empower seven different Additional Secretaries and re-organise their tasks along themes like culture, trade and development, and consolidated geographical divisions for better coordination.

According to three orders issued on Thursday by the new Foreign Secretary Harsh Vardhan Shringla less than a day into his tenure, the silos that will be managed by the Additional Secretaries will range from cultural power, to be managed by Dinesh Patnaik, economic and trade coordination managed by P. Harish, all international organisations and summits including UN, G-20, BRICS etc. by Vikram Doraiswami, and all development partnerships by Akhilesh Mishra.

All of Europe has been merged under Suresh Reddy, all of Africa and West Asia under Nagma Mallick and all of the Indian Ocean and Indo-Pacific region under Neena Malhotra.

The restructuring was done in consultation with External Affairs Minister S. Jaishankar, who as a former foreign secretary (2015-2018) managed the Ministry himself, and authored the plans, sources said.

 

MAJOR IDEAS OF THE SURVEY 2019-20

ESSENTIAL COMMODITIES ACT MUST GO

The Centre’s imposition of stock limits in a bid to control the soaring prices of onions over the last few months actually increased price volatility, according to the Economic Survey 2019-20, tabled in Parliament on Friday.

The Essential Commodities Act has been in existence since 1955, when the economy was very different from what it is today.

In July 2019, the NITI Aayog set up a panel of Chief Ministers to suggest agriculture reforms, whose mandate included possible amendments to the ECA. However, just a few months later, in September 2019, the Centre invoked the Act’s provisions to impose stock limits on onions after heavy rains wiped out a quarter of the kharif crop and led to a sustained spike in prices.

The Survey argued that if the government had not intervened, traders would have stored part of their produce to ensure smooth availability of the commodity at stable prices throughout the year. “In the long term, the Act disincentivises development of storage infrastructure, thereby leading to increased volatility in prices following production/consumption shocks — the opposite of what it is intended for,” it said.

NO EVIDENCE OF WRONG ESTIMATION OF GROWTH

In an effort to put to rest all speculation over the accuracy and reliability of India’s GDP data, India’s Chief Economic Advisor (CEA) Krishnamurthy Subramanian on Friday asserted that there is “no evidence” of mis-estimation of growth of the Indian economy.

The debates on the issue were kicked off last year after Mr. Subramanian’s predecessor, Arvind Subramanian — in a research paper published by Harvard University last year — had said India’s GDP growth in the period from 2011-12 to 2016-17 is likely to have been over-estimated. The former CEA had argued that GDP growth during that period was 4.5% rather than the 7% presented by the official data.

‘Global mis-estimation’

It added that the models that incorrectly over-estimate GDP growth by 2.7% for India post-2011 also mis-estimate GDP growth over the same time period for 51 other countries, out of 95 countries in the sample. Several advanced economies such as the U.K., Germany and Singapore turn out to have their GDPs mis-estimated when the econometric model is incompletely specified, the Survey claimed.

Further, it added that correctly specified models that account for all unobserved differences among countries as well as differential trends in GDP growth across countries fail to find any mis-estimation of growth in India or other countries.

The Economic Survey also added that since 10% increase in new firm creation increases district-level GDP growth by 1.8%, and the pace of new firm creation in the formal sector accelerated significantly after 2014, the resultant impact on district-level growth and country-level growth must be accounted for in any analysis.

STUBBLE BURNING 

The number of stubble-burning incidents in 2019 was the least in four years, the Economic Survey says.

According to satellite data, there were 61,332 instances of stubble-burning in Punjab, Haryana and Uttar Pradesh between October and November, 2019. There were 75,532 instances in 2018, 88,948 in 2017 and 127,774 in 2016, according to data sourced from the Indian Council of Agricultural Research.

The pollution levels spike when farmers in these three States burn the residue after harvesting paddy to clear the fields of the summer harvest and make way for wheat sowing. The smoke from these fires travels to Delhi, leading to a gaseous cocktail that causes air quality to plummet.

Agriculture conservation should be promoted with “low lignocellulosic” crop residues, such as rice, wheat and maize. Crop residue-based briquettes ought to be encouraged and thermal power plants in the vicinity ought to be encouraged to undertake firing of crop residues with coal, the Survey noted.

FEWER REGULATIONS FOR START UPS

India needs to work on improving the ease of doing business, especially the ease of starting business, registering property, paying taxes, or enforcing contracts, according to the Economic Survey.

As per the Survey, it takes four years to enforce a contract in India; New Zealand, Indonesia, China and Brazil require 0.6, 1.2, 1.4 and 2.2 years respectively. “With a rank of 163 of the 190 nations in enforcing contracts, only a few countries…perform worse than India.”

He pointed out that to open a restaurant in New Delhi, one needs 45 documents to obtain the licence from the Delhi police, whereas for buying a gun just 19 documents are required.

CHINA LIKE EXPORT TRAJECTORY

The Economic Survey says India has an unprecedented opportunity to chart a China-like, labour-intensive, export trajectory by integrating “Assemble in India for the world” into the Make-in-India policy and thus can raise its export market share to 3.5 % by 2025 and 6% by 2030.

It said such a strategy could help to create four crore well-paid jobs by 2025 and 8 crore by 2030.

Network products

It said India must focus on a group of industries, referred to as “network products”, where production processes are globally fragmented and controlled by leading Multi-National Enterprises within their “producer-driven” global production networks.

The Survey has suggested a strategy similar to the one used by China to grab this opportunity, which is specialisation on a large scale in the labour-intensive sectors, especially network products.

India must have laser-like focus on assembling operations on a mammoth scale in network products, wherein production occurs across Global Value Chains operated by multi-national corporations and focusses on exports, primarily to rich countries, it said.

As per the Survey, the incremental value added in the economy from the target level of exports of network products, which is expected to equal $248 billion in 2025, would make up one-quarter of the increase required for making India a $5 trillion economy by 2025.

According to the Survey, the gap between China and India in the world market share is almost fully driven by the effect of specialisation. On the other hand, India is catching up with China in diversification across products and markets, it said.

BIGGER BANKS

The country will need much bigger banks to become a $5 trillion economy, the Economic Survey 2019-20 said. In particular, at least eight banks are needed, which are large enough to belong to the top 100 banks globally, the Survey said, noting there is now only one bank in the country, the State Bank of India, with the 55th rank, in the world’s top 100 banks.

The report highlighted that while a large economy needs an efficient banking sector to support its growth, credit growth among PSBs has declined significantly since 2013 and has also been anaemic since 2016. Credit growth for the new private banks, however, remained healthy.

Commenting that anaemic credit growth has impacted economic growth, the Survey called for enhancing the efficiency of public sector banks as they operate in the same market as the new private sector banks.

Less operating freedom

The report says the decline in the PSB market share has been largely absorbed by new private banks. The report also pointed out that the PSBs enjoy less strategic and operating freedom than private banks. It says the majority ownership by the government also subjects public sector bank officers to scrutiny of their decisions by the Central Vigilance Commission and the Comptroller and Auditor General.

THALINOMICS

For the average worker in India’s organised manufacturing sector, the affordability of a plate of vegetarian food — comprising rice or roti, dal and sabzi — has improved 29% since 2006-07, according to Thalinomics, a take on the economics of food by the Economic Survey. For non-vegetarians, affordability has risen 18%.

However, accelerating food inflation over the last few months has broken that trend, with workers now forced to use an increasing share of their wages on food, the data compiled in the Survey shows.

While Chief Economic Adviser Krishnamurthy Subramanian pitched Thalinomics as “economics for the common man”, the fine print shows that the affordability factor was calculated using daily wages derived from the Annual Survey of Industries. This deals with workers engaged in the organised manufacturing sector, who form only 28% of the total manufacturing workforce. It excludes workers from the unorganised sector, as well as rural and agricultural workers.

The Survey found that a worker who would have spent 70% of their daily wage on two vegetarian thalis a day for a household of five in 2006-07 would only have to spend 50% of their income for the meals in 2019-20. This year, the most affordable meal was in Jharkhand, where two vegetarian thalis for a household of five required about 25% of a worker’s daily wage.

PUBLIC HEALTH EMERGENCY OF INTERNATIONAL CONCERN

NEWS: 

The death toll in China from the new coronavirus reached 213 on Friday, with overall cases worldwide rising rapidly in an outbreak that the World Health Organization (WHO) declared a global health emergency.

The WHO defines a global emergency — formally, a Public Health Emergency of International Concern — as “an extraordinary event which is determined to constitute a public health risk to other States through the international spread of disease and to potentially require a coordinated international response.” This is the sixth declared in the past decade.

The WHO move will trigger tighter containment and information-sharing guidelines to all countries, but may disappoint Beijing, which had expressed confidence it can beat the “devil” virus.

ABOUT WHO

  • WHO is a specialised agency of UN
  • It is concerned with international public health
  • It acts as coordinating authority on international public health
  • Established in 1948
  • It succeeded the Health Organization, which was an agency of the League of Nations.
  • HQ : Geneva, Switzerland
  • India is a founder member of WHO.
  • It is a member of UN Development Group (UNDP).

PRIVATISATION

NEWS:

The Economic Survey has aggressively pitched for divestment in public sector undertakings (PSUs) by proposing a separate corporate entity wherein the government’s stake can be transferred and divested over a period of time.

Further, the survey has said privatised entities have performed better than their peers in terms of net worth, profit, return on equity and sales, among others.

The government can transfer its stake in listed CPSEs to a separate corporate entity. This entity would be managed by an independent board and would be mandated to divest the government stake in these CPSEs over a period of time,” stated the Economic Survey presented on Friday.

Interestingly, according to the government document, the recent approval of strategic disinvestment in Bharat Petroleum Corporation Limited (BPCL) led to an increase in value of shareholders’ equity of BPCL by ₹33,000 crore compared to its peer Hindustan Petroleum Corporation Limited.

“Aggressive disinvestment, preferably through the route of strategic sale, should be utilised to bring in higher profitability, promote efficiency, increase competitiveness and to promote professionalism in management in CPSEs,” stated the Survey.

EIGHT CORE INDUSTRIES

NEWS:

Growth of the eight core industries recovered to 1.3% in December 2019 after remaining in the negative zone in the previous four months, helped by expansion in the production of coal, fertiliser and refinery products.

ABOUT EIGHT CORE INDUSTRIES

  • The eight core industries comprise 40.27% of IIP.
  • Eight Core Industries are: Coal, Crude oil, Natural Gas, Refinery products, fertilizers, steel, cement and electricity.
  • Base year for eight core industries is 2011-12.

LOW RATES OF FORMAL ENTREPRENEURSHIP

The Economic Survey on Friday said that India currently ranks third globally in the number of new firms created with about 1.24 lakh new entities coming up in 2018. However, India has lower rates of formal entrepreneurship on a per-capita basis compared to other countries.

As per the Survey, new firm creation had gone up dramatically since 2014. While the number of new firms in the formal sector grew at a cumulative annual growth rate of 3.8% from 2006 to 2014, the growth rate from 2014 to 2018 had been 12.2%. “As a result, from about 70,000 new firms created in 2014, the number has grown by about 80% to about 1,24,000 new firms in 2018,” said Chief Economic Adviser Krishnamurthy Subramanian.

However, on a per-capita basis, India had low rates of entrepreneurship in the formal economy. “Between the 10-year period from 2006 to 2016, the mean number of new firms registered per year per 1,000 workers was 0.10. In contrast, the mean entrepreneurial intensity for the U.K. and the U.S. was 12.22 and 12.12, respectively.”

The Survey also pointed out that in contrast to the other countries, a large number of India’s enterprises operate in the informal economy which was not captured in the data.

The data showed that new firm creation in services sector (at around 85,000) was significantly higher than that in manufacturing (a little less that 15,000), infrastructure (about 5,000) or agriculture (less than 5,000).

Thus, entrepreneurship at the bottom of the administrative pyramid — a district — has a significant impact on wealth creation at the grassroots level.

It added that enhancing ease of doing business and implementing flexible labour laws in job-creating sectors, such as manufacturing, can create the maximum number of jobs in districts and thereby, in the States. Literacy, education and physical infrastructure are the other policy levers that district and State administrations must focus upon to foster entrepreneurship and thereby, job creation and wealth creation, the Survey said.

FOOD INFLATION

NEWS:

There has been a sudden change in trend so far as food inflation is concerned, in the current financial year, for urban and rural areas, the Economic Survey said, highlighting higher food inflation in urban areas.

“Since July 2019, urban areas have registered much higher food inflation when compared to rural areas. Divergence in rural-urban food inflation in 2019-20 was mainly led by cereals, eggs, fruits, vegetables etc.,” the economic survey said.

The report further noted that the divergence in rural-urban inflation was not just observed in the food component, but also in other components like clothing and footwear.

The report cautioned that if headline inflation did not completely revert to core inflation within a reasonably short span of time, it may indicate the presence of strong secondary effects.

HEADLINE VS CORE INFLATION

The headline inflation measure demonstrates overall inflation in the economy. Conversely, the core inflation measure strips the prices of highly volatile food and fuel components to distinguish the inflation signal from transitory noise.

The inflation process in India is dominated to a great extent by supply shocks. The supply shocks (e.g., rainfall, oil price shocks, etc.) are transitory in nature and hence produce only temporary movements in relative prices. The headline CPI inflation in India tends to increase whenever there is a surge in food and fuel prices.

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