National Current Affairs – UPSC/IAS Exams- 15th August 2019

Recession fears

Topic: Economy

In News: Earlier this month, researchers at Morgan Stanley, a leading investment bank, warned that if the US and China continue to raise tariff and non-tariff barriers over the next four to six months, the global economic growth rate will fall to a seven-year low of 2.8% (chart 1), and worse still, the world economy could enter a recession within the next three quarters (that is, nine months).

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• The last massive downward spiral in the global economy happened in the wake of the great financial crisis of 2008, and and continued until 2010.

What is a global recession?

• In an economy, a recession happens when output declines for two successive quarters (that is, six months). However, for a global recession, institutions such as the International Monetary Fund tend to look at more than just a weakness in the economic growth rate; instead, they look at a widespread impact in terms of employment or demand for oil, etc. The long-term global growth average is 3.5%. The recession threshold is 2.5%.

What has triggered the alarm?

• Earlier this month, the US declared China a “currency manipulator”. In other words, Washington accused Beijing of deliberately weakening the yuan to make Chinese exports to the US more attractive and undercut the effect of increased US tariffs.
• The intensifying trade war between the two has the potential to derail already weak global growth, and the signs are evident.
• For instance, the global manufacturing Purchasing Managers’ Index and new orders sub-index have contracted for the second consecutive month in July; they are already at a seven-year low.
• Further, the global capital expenditure cycle has “ground to a halt” ; since the start of 2018, there’s been a sharp fall-off in nominal capital goods imports growth. (That is, there’s a decline in capital investment in anticipation of reduced demand.)

How can this lead to a global recession?

• The absolute volume of global trade has stagnated and, in terms of percentage change, trade is contracting.
• According to Morgan Stanley, two-thirds of the goods being lined up for increased tariffs are consumer goods. Higher tariffs are not only likely to douse demand but, crucially, hit business confidence.
• The apprehension is global trade uncertainties could start a negative cycle, wherein businesses do not feel confident enough to invest more, given the lower demand for consumer goods.
• Reduced capital investment would reflect in fewer jobs, which, in turn, will show up in reduced wages and, eventually, lower aggregate demand in the world.
• What makes this scenario trickier is the fact that monetary policy is already loose that is, borrowing money is cheap. A recession now will be more difficult to salvage.

Where India Stands:

• India’s trade is already suffering, and jobs are being lost. For an economy that is struggling to find a domestic growth lever government and businesses are overextended and household (that is, private family-level) consumption is down- exports could have provided a respite.

What can India do to boost exports?

• A 2016 analysis by HSBC global research showed that domestic bottlenecks were more responsible for India’s lack of competitiveness in exports than the lack of global demand and the overvalued rupee put together.
• In other words, addressing bottlenecks such as better roads, more electricity, easier rules of doing business etc., will go a long way in boosting exports.

UPSC Mains Question: The nature of economic growth in India in described as jobless growth. Do you agree with this view?

Source: Indian Express

Jagannath temple Berhampur

Topic: Art and Culture

In News: An idol of Mahatma Gandhi is being worshipped within the complex of a Jagannath temple in Odisha’s Berhampur for the past six decades.

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• The worship of the Father of the Nation continues in this temple since its establishment at Gosaninuagaon in Berhampur in 1960.
• Like other deities, Bapu also has a separate small temple for him. It is called Bhagavat Gadi (pedestal of Bhagavat purana). In it the Mahatma’s idol is worshipped along with the Odia Bhagavat, written by poet-saint Jagannath Das, and pictures of Lord Rama and Shiva.
• During the freedom movement, Bhagavat gadi or Bhagavat tungi in Odisha villages used to be major congregation points in the evening, where people came to listen to reading of the Odia Bhagavat.
• Leaders of freedom struggle motivated commoners at these congregations. In rural areas of Odisha, Mahatma Gandhi was sometimes believed to be incarnation of Lord Krishna. So, it had been decided to worship his idol along with the Bhagavat. Odia Bhagavat is still read here every evening.

Source: Hindu, Wikipedia

Awards to armed forces personnel and members of paramilitary forces

Topic: Awards and Honours

In News: President Ram Nath Kovind, who is also the Supreme Commander of the armed forces, has approved 132 awards to armed forces personnel and members of paramilitary forces. These include two Kirti Chakras, one Vir Chakra, 14 Shaurya Chakras, 98 Sena Medals (Gallantry), five Nao Sena Medals (Gallantry), seven Vayu Sena Medals (Gallantry) and five Yudh Seva Medals.

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• Wing Commander Abhinandan Varthaman, who was caught by Pakistan after his MiG-21 Bison fighter jet went down across the Line of Control (LoC) on February 27 and was returned three days later, has been awarded Vir Chakra (VrC), the country’s third-highest gallantry award.
• During a dogfight with Pakistan Air Force jets on February 27, he shot down a Pakistani F-16 but his jet was shot down soon after. He was handed over by Pakistan to India at the Wagah-Attari border crossing on March 1.
• Kirti Chakra, the second-highest peacetime gallantry award was posthumously awarded to Sapper Prakash Jadhav for his role in counter-insurgency operations in Kashmir.

Source: The Hindu

Bone implant material from eggshells

Topic: Science and Technology

In News: Researchers from the Indian Institute of Technology-Hyderabad (IIT-H) and Dr. B.R. Ambedkar National Institute of Technology, Jalandhar, have developed a process by which bone implant materials can be synthesised from eggshells.

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• The research seeks to produce bone substitute materials such as tricalcium phosphate, a commonly-used bone substitute material, from natural sources. Eggshells are made of largely of minerals (95.1%) along with small amounts of proteins and water. Calcium is the main mineral component.
• Tonnes of eggshells are dumped as waste across the world but bioceramics(Ceramic is defined as “synthesized inorganic, solid, crystalline materials, excluding metals”. Ceramics, used as biomaterials to fill defects in tooth and bone, to fix bone grafts, fractures, or prostheses to bone, and to replace diseased tissue, are called bioceramics) made from them exhibit greater biocompatibility than other synthetic powders due to the presence of additional bioactive elemental ions. Eggshells are inexpensive and can be obtained in unlimited quantities.
• Researchers synthesised pure and thermally stable tricalcium phosphate nanopowder powder a hundred thousand times smaller than the width of a single human hair from eggshells. They used a milling process called ‘ball milling’ to produce these activated calcium phosphate powders.
• Results showed that eggshell waste is promising enough to replace the commercially available tricalcium phosphate (produced by using harmful chemicals) and has the capability to develop implantable biomaterial for tissue regeneration.

Source: Hindu

Document Identification Number (DIN) to promote transparency

Topic: Economy

In News: Cutting down on tax officials’ discretion and moving to end taxpayers’ harassment, the Central Board of Direct Taxes (CBDT) mandated all communications issued by the tax department to assessees from October 1 will carry a Document Identification Number (DIN) in order to promote transparency.

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• There have been some instances in which the notice, order, summons, letter and any correspondence were found to have been issued manually, without maintaining a proper audit trail of such communication.
• In order to prevent such instances and to maintain proper audit trail of all communication, quoting of computer-generated DIN is being made mandatory in all forms of communication being sent by income tax authorities.
• The CBDT has also specified exceptional circumstances where the communication may be issued manually but only after recording reasons in writing and with the prior written approval of the Chief Commissioner/ Director General of Income-Tax concerned. Tax officials will have to specify with reasons for manual communication along with approval date of Chief Commissioner in a particular format.
• Any communication which is not in conformity with the prescribed guidelines shall be treated as invalid and shall be deemed to have never been issued.
• Such manual communication will have to be uploaded on the system portal and regularised within 15 days, and intimated to the Principal Director General of Income-tax (Systems).
• These measures are being taken “towards better delivery of taxpayer services while ensuring accountability in official dealings”.

Source: Hindu and Wikipedia

RBI regulatory sandbox

Topic: Indian Economy

In News: The Reserve Bank of India (RBI) has issued the final framework for regulatory sandbox in order to enable innovations in the financial technology space.

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• A regulatory sandbox is a safe harbour, where businesses can test innovative products under relaxed regulatory conditions. Typically, participating companies release new products in a controlled environment to a limited number of customers for a limited period of time.
• RBI will launch the sandbox for entities that meet the criteria of minimum net worth of ₹25 lakh as per their latest audited balance sheet.
• The entity should either be a company incorporated and registered in the country or banks licensed to operate in India.
• While money transfer services, digital know-your customer, financial inclusion and cybersecurity products are included, crypto currency, credit registry and credit information have been left out.

Significance and benefits of a regulatory sandbox:

• The “regulatory sandbox” will help fin-tech companies launch innovative products at a lower cost and in less time.
• The sandbox will enable fintech companies to conduct live or virtual testing of their new products and services.
• These companies will also be able to test the viability of the product without a wider and expensive rollout.
• It will help companies to experiment with fintech solutions, where the consequences of failure can be contained and reasons for failure analysed.

India-Fintech atmosphere:

• According to NITI Aayog, India is one of the fastest growing fintech markets globally, and industry research has projected that $1 trillion, or 60% of retail and SME (small and medium sized enterprises) credit, will be digitally disbursed by 2029.
• The Indian fintech ecosystem is the third largest in the world, attracting nearly $6 billion in investments since 2014. Fintech or financial technology companies use technology to provide financial services such as payments, peer-to-peer lending and crowdfunding, among others.
• Therefore, in order to protect customers and safeguard the interests of all stakeholders, and streamline their influence on the financial system, there is need for a regulatory and supervisory framework for fintech firms.

Source: Hindu and Wikipedia

Palani panchamirtham

Topic: IPR

In News: The famous Palani panchamirtham, given as ‘prasadam’ at the Murugan temple at Palani has been granted the Geographical Indication (GI) tag.

More on the Topic:

• This is the first time a temple ‘prasadam’ from Tamil Nadu has been given the GI tag.
• The panchamirtham is a combination of five natural substances ; banana, jaggery, cow ghee, honey and cardamom. Dates and diamond sugar candies are added for flavour.

Source: The Hindu