National Current Affairs – UPSC/KAS Exams- 24th August 2019

Government Response to Boost the Growth

Topic: Economy

In News: Finance Minister Nirmala Sitharaman announced comprehensive package of measures to address growth slowdown concerns of the economy.

Highlights of the announcements:

• Increased surcharge on FPI’s scrapped. Due to the surcharge tax outgo has increased by nearly 7 per cent. FPIs stated revisiting their strategies whether to invest in Indian markets or not.
• The increased surcharge announced in the Budget would still apply to high net-worth individuals earning more than ₹2 crore a year.
• The government will not treat corporate social responsibility violations as criminal offences.
• The government decided to ₹70,000 crore of capital infusion in public sector banks This move is aimed at increasing private investment by facilitating greater credit disbursal by the banks. According to the government, this ₹70,000 crore will lead to about ₹5 lakh crore of fresh liquidity that can be loaned out.
• As a short-term bailout of the auto industry, the government will purchase new vehicles through various departments to replace old ones. Vehicles bought till March 31, 2020 will also be eligible for an additional 15% depreciation. The proposal to enhance registration fees for new vehicles will also be kept on hold till June 2020.
• The government has also significantly reined in the discretionary powers of the tax authorities. From October 1 onwards, all notices and summons by the Income Tax Department would be generated by a centralised computer and would carry a unique code.
• An additional ₹20,000 crore of liquidity to the housing finance companies was announced, over and above the ₹10,000 crore earlier announced. This will boost the sector and mitigate the reduction in the demand for housing finance.
• Angel tax has been withdrawn for the registered start-ups. This measure will boost the start-up eco system.
• The delayed payments to PSU’s will be released with immediate effect.
• All pending GST refunds to MSMEs will be paid within 30 days and going forward such refunds will be made within 60 days is a great relief for the sector.

Significance of the Announcements:

• All the announcements have all been done without any significant financial burden on the government.
• These measures will promote the ease of doing business and even the ease of living for ordinary citizens.
• Some of the smaller steps can go a long way. For Example Expediting delayed payments by government departments and public sector units is alone expected to release a massive ₹60,000 crore into the economy.
• The government declared that the government respects “wealth creators” and the measures are aimed at helping them.
• The change in the government psyche will benefit the Indian economy in a positive way and in a long run.

Model Mains Question: Finance Minister Nirmala Sitharaman announced comprehensive package of measures to address growth slowdown concerns of the economy recently. Analyse how these measures will increase the sustainable growth of the economy in a long run.

Source: The Hindu

Development financial institution

Topic: Economy

In News: Finance Minister Nirmala Sitharaman announced that government will be setting up a development financial institution for long term loans in infra-sector.

More on the Topic:

• It will improve access to long-term finance to provide credit enhancement for infrastructure and housing projects.
• This institution is expected to solve the infrastructure financing needs of the country.
• Why This move: Reserve Bank of India had released a discussion paper on wholesale and long-term finance banks in 2017 in which it was observed that there was a decline in the share of the long-term assets, relative to total assets, on the banks’ balance sheets.
• Banks do not have long-term funds. The maturity of our liabilities are five years, on an average. So, funding infrastructure projects is difficult for banks.

Source: The Hindu

NITI Ayog report on water Management practices by states

Topic: Governance

In News: According to the NITI Aayog analysis on water management practices by states thirteen of the 27 States and Union Territories have improved their water management practices from last year.

More on the Topic:

• The ‘index’ aims at capturing how well States have done on groundwater and surface water restoration, implementing major and medium irrigation projects, watershed development, participatory irrigation management, on-farm water use, rural and urban water supply, and policy and governance.
• These indicators were broken down into 28 objective indicators that include determining whether the State had policies and infrastructure in place to conserve groundwater, or its performance in providing piped water to villages.
• For the index, States were required to fill out the necessary data on a NITI Aayog portal and this data was validated by an independent firm called IPE Global.

Highlights of the Report:

• Thirteen of the 27 States and Union Territories have improved their water management practices from last year, an analysis by the NITI Aayog has revealed.
• Gujarat, though it dropped a point, topped the rankings for the second year in a row with a score of 75 out of a maximum possible 100.
• Six States did worse than last year with Delhi, which was evaluated for the first time this year garnering the lowest score — and three maintained their position from last year, according to the Composite Water Management Index, a ranking tool developed by the NITI Aayog and unveiled last year.
• Sixteen out of the 27 States and UTs assessed last year scored less than 50% of total achievable score, and remained in the ‘low-performing’ category. Haryana, Goa and Uttarakhand made remarkable gains from last year.
• The 16 low-performing States collectively account for 48% of the population, 40% of agricultural produce, and 35% of economic output for India.

Take-aways From the Analysis:

• The results of this year’s exercise reveal an overall improvement in State performance, but severe disparities remain between states, and across themes, which must be bridged with further improvement in policy implementation.
• Those States growing crops that consumed excess water need to refrain from doing so and progress would come about only through “inter-State cooperation.”
• There is need to concentrate more on the under-performed states.
• The water conservation performance should be used as a tool for formulating policies for different states under Jal Shakti ministry. An equal emphasis is needed in decentralizing water governance.

Source: The Hindu

Bharat Craft Portal

Topic: e- Governance

In News: The central government is planning to launch an e-commerce portal named “Bharat craft” for MSME’s.

More on the Topic:

• The portal is based on other e-commerce portals such as ‘Alibaba’ and Amazon. The portal will provide a platform for MSMEs to trade and sell their products and in turn promote the sector.
• The Bharat craft portal has a huge potential to generate a revenue of Rs 10 lakh crore in the next 2-3 years.

Significance of the portal:

• MSME sector currently contributes nearly 29% to the manufacturing segment and 40% to the exports. It has potential to generate additional employment of 5 crore in the next five years. Union Government has set target to increase contribution of MSMEs in the manufacturing sector to 50% in the next five years.

Source: The Hindu

Iran-new missile defence system -“Bavar-373”

Topic: International Affairs

In News: Iran has unveiled new missile defence system “Bavar-373”.

More on the Topic:

• This is also Iran’s first domestically produced long-range missile defence system which has been inducted into the country’s missile defence network. The system was unveiled at an occasion of Iran’s National Defense Industry Day.
• The unveiling takes place against a backdrop of rising tensions between and Iran and United States (US) since US President Donald Trump’s 2018 decision to unilaterally withdrew US from Joint Comprehensive Plan of Action also known Iran nuclear deal (2015) and re-imposing sanctions on Iran.

Source: The Hindu

South-South and Triangular Cooperation

Topic: Important International Groupings

In News: An international dialogue on South-South and Triangular Cooperation was recently held in New Delhi.

More on the Topic:

• South-South and Triangular Cooperation: South-South cooperation is a broad framework of collaboration among countries of the South in the political, economic, social, cultural, environmental and technical domains.
• Involving two or more developing countries, it can take place on a bilateral, regional, intraregional or interregional basis. Developing countries share knowledge, skills, expertise and resources to meet their development goals through concerted efforts
• Triangular cooperation: It is collaboration in which traditional donor countries and multilateral organizations facilitate South-South initiatives through the provision of funding, training, management and technological systems as well as other forms of support.

Objectives of the cooperation:

• Foster the self-reliance of developing countries by enhancing their creative capacity to find solutions to their development problems in keeping with their own aspirations, values and specific needs
• Create and strengthen existing technological capacities in the developing countries in order to improve the effectiveness with which such capacities are used
• Increase and improve communications among developing countries, leading to a greater awareness of common problems and wider access to available knowledge and experience as well as the creation of new knowledge in tackling development problems
• Recognize and respond to the problems and requirements of the least developed countries, landlocked developing countries, small island developing States and the countries most seriously affected by, for example, natural disasters and other crises
• Enable developing countries to achieve a greater degree of participation in international economic activities and to expand international cooperation for development.

Source: The Hindu and UN Website

Ocean energy declared as Renewable Energy

Topic: Environment and Ecology

In News: The Ministry of New and Renewable Energy has declared Ocean Energy as renewable energy.

More on the Topic:

• According to MNRE, the total identified potential of tidal energy is about 12,455 MW, with potential locations identified at Khambhat & Kutch regions (Gujrat) and large backwaters, where barrage technology could be used.
• The total theoretical potential of wave energy in India along the country’s coast is estimated to be about 40,000 MW.
• Ocean Thermal Energy Conversion (OTEC) has a theoretical potential of 180,000 MW in India subject to suitable technological evolution.
• The sector has the potential to grow, fuelling economic growth, reduction of carbon footprint and creating jobs not only along the coasts but also inland along its supply chains.

About Ocean Energy:

• Oceans cover 70% of the earth’s surface and represent an enormous amount of energy in the form of wave, tidal, marine current and thermal gradient. India has a long coastline with the estuaries and gulfs.
• Ocean energy is used in the form of Tidal, Wave, Current Energy and Ocean Thermal Energy.
• Tidal Energy: The tidal cycle occurs every 12 hours due to the gravitational force of the moon. Tidal water can be captured in a barrage across an estuary during high tide and forced through a hydro-turbine during low tide.
• Wave Energy: Wave energy is generated by the movement of a device either floating on the surface of the ocean or anchored to the ocean floor. The kinetic energy of waves pumps fluid through turbines and creates electricity.
• Current Energy: Marine current is ocean water moving in one direction. Kinetic energy can be captured from the Gulf Stream and other tidal currents with submerged turbines.
• Ocean Thermal Energy Conversion (OTEC): Ocean Thermal Energy Conversion uses ocean temperature differences from the surface to depths lower than 1,000 meters, to extract energy. A temperature difference of only 20°C can yield usable energy.

Source : The Hindu Business Line