PIB Summary- 7th January, 2021 | PIB (Press Information Bureau) Summary - UPSC PDF Download

Pravasi Bharatiya Divas 2021

Context: Pravasi Bharatiya Divas (PBD) 2021 to be held on January 9, 2021.

Details

• This is the 16th PBD to be held since the event was first held in 2003.
• The theme for PBD 2021 is “Contributing to Aatmanirbhar Bharat”.
• The Youth PBD will also be celebrated on the theme “Bringing together Young Achievers from India and Indian Diaspora”.

Pravasi Bhartiya Diwas (Non-Resident Day) is a biennial event held in January, to commemorate the return of Mahatma Gandhi from South Africa on 9th January 1915. This day marks the contribution of the overseas Indian community towards the country’s development. The below article shares some important facts and features about Pravasi Bhartiya Diwas.

Pravasi Bhartiya Samman Award
It is the highest honour conferred on a Non-Resident Indian, Person of Indian Origin; or an organisation or institution established and run by Non-Resident Indians or Persons of Indian Origin, who have made significant contribution in better understanding of India abroad, support India’s causes and concerns in a tangible way, community work abroad, welfare of local Indian community, philanthropic and charitable work, etc.

Bharat ko Janiye Quiz

It was launched in 2015-16 in order to strengthen the engagement with young overseas Indians (18-35) and encourage them to know more about their country of origin.

Central Sector Scheme for Industrial Development of Jammu & Kashmir

Context: Government approves Central Sector Scheme for Industrial Development of Jammu & Kashmir.

About the New Industrial Development Scheme for Jammu & Kashmir (J&K IDS, 2021)

• The GOI has approved the proposal of the Department for Promotion of Industry and Internal Trade (DPIIT) for the Central Sector Scheme for Industrial Development of Jammu & Kashmir.
• The scheme is approved with a total outlay of Rs. 28,400 crore up to the year 2037.
• The New Industrial Development Scheme for Jammu & Kashmir (J&K IDS, 2021) has been formulated as a central sector scheme for the development of Industries in the UT of Jammu & Kashmir.
• The main purpose of the scheme is to generate employment which directly leads to the socio-economic development of the area.

The following incentives would be available under the scheme:

• Capital Investment Incentive at the rate of 30% in Zone A and 50% in Zone B on investment made in Plant & Machinery (in manufacturing) or construction of building and other durable physical assets (in service sector) is available.
• Units with an investment up to Rs. 50 crore will be eligible to avail this incentive.
• Maximum limit of incentive is Rs 5 crore and Rs 7.5 crore in Zone A & Zone B respectively.
• Capital Interest subvention: At the annual rate of 6% for maximum 7 years on loan amount up to Rs. 500 crore for investment in plant and machinery (in manufacturing) or construction of building and all other durable physical assets (in service sector).
• GST Linked Incentive: 300% of the eligible value of actual investment made in plant and machinery (in manufacturing) or construction in building and all other durable physical assets (in service sector) for 10 years.
  • The amount of incentive in a financial year will not exceed one-tenth of the total eligible amount of incentive.
• Working Capital Interest Incentive: All existing units at the annual rate of 5% for maximum 5 years. Maximum limit of incentive is Rs 1 crore.

Impact of the scheme

• Transformation in the industrial ecosystem of J&K.
• Job creation.
• Skill development.
• Sustainable development.
• Attract investment.

Seventh Trade Policy Review of India at the WTO begins

What’s in News?
India’s seventh Trade Policy Review (TPR) began in January 2021, at the World Trade Organization in Geneva.

What is Trade Policy Review (TPR)?
The TPR is an important mechanism under the WTO’s monitoring function, and involves a comprehensive peer-review of the Member’s national trade policies. India’s last TPR took place in 2015.

• India’s Commerce Secretary stated that since the last TPR, the GOI has taken several measures to reform and transform the entire economic ecosystem to meet the socio-economic aspirations of all Indians.
• Major policy level changes include the introduction of the GST, the Insolvency & Bankruptcy Code, labour reforms, and an investor-friendly FDI policy.
• Various national programmes include Make in India, Digital India, Startup India and Skill India.
• India has improved in the World Bank’s Doing Business ranking from 142 in 2015 to 63 in 2019.
• In 2019-20, India received the highest ever FDI inflow of USD 74.39 billion.

WTO Secretariat’s Report

• A comprehensive Report issued by the WTO Secretariat on the occasion, chronicling all major trade and economic initiatives that India took over the last five years, acknowledged India’s strong economic growth at 7.4% during the period under review and made a positive note of India’s reform efforts during this period.
• The Report noted that strong economic growth led to an improvement in socio-economic indicators, such as per-capita income and life expectancy in India.
• The Secretariat report also commended India for liberalizing its FDI policy, ratifying the Trade Facilitation Agreement and implementing several trade-facilitation measures during the period under review.

Bureau of Indian Standards (BIS)

Context: Bureau of Indian Standards celebrates its 74th foundation day.

About the Bureau of Indian Standards (BIS)

• BIS is the National Standards Body of India established under the Bureau of Indian Standards Act 2016 for the harmonious development of the activities of standardization, marking and quality certification of goods and for related concerns.
• Through standardization, certification and testing, BIS provides safe reliable quality goods, minimises health hazards to consumers, promotes exports and imports substitutes, and controls over the proliferation of varieties, etc.
• The body was formed as the BIS (as a statutory body) in 1986. It was formerly called the Indian Standards Institution (ISI) which was set up in 1946. The 2016 Act positioned it as the National Standards Body.
• BIS Activities:
  • Standards Formulation
  • Product Certification Scheme
  • Compulsory Registration Scheme
  • Foreign Manufacturers Certification Scheme
  • Hall Marking Scheme
  • Laboratory Services
  • Laboratory Recognition Scheme
  • Sale of Indian Standards
  • Consumer Affairs Activities
  • Promotional Activities
  • Training Services, National & International level
  • Information Services

EDUCON-2020

Context: Union Education Minister inaugurates two-day Virtual International Akhand Conference ‘EDUCON-2020’.

About the Conference

• The two-day International Conference is being organized by Central University of Punjab, Bathinda (CUPB) in collaboration with the Global Educational Research Association (GERA).
• The focal theme of EDUCON-2020 is Envisioning Education for Transforming Youth to Restore Global Peace.
• The conference is being attended by academicians from across the globe.

Advance Estimates of GDP of 2020-21

Context: Advance Estimates of GDP of 2020-21 released by National Statistics Office.

Details

• The real GDP at 2011-12 prices in 2020-21 has been estimated to contract by 7.7 per cent and nominal GDP at current prices by 4.2 per cent.
• As per quarterly estimates of NSO, real GDP contracted by 15.7 percent in the first half of 2020-21.
• Real GDP on a quarter-on-quarter basis grew at 21 percent from Q1: FY 2020-21 to Q2: FY 2020-21.
• The AE of 2020-21 reflect continued resurgence in economic activity in Q3 and Q4 – which would enable the Indian economy to end the year with a contraction of 7.7 percent.
• The continuous quarter-on-quarter growth endorses the strength of economic fundamentals of the country to sustain a post-lockdown V-shaped recovery.
• On the demand side, real GDP in 2020-21 has been supported by an estimated increase in Government Consumption Expenditure by 5.8 percent.
• On the supply side, agriculture is estimated to register a positive growth of 3.4 percent against 4.0 percent as per the PE of 2019-20.
• In the manufacturing sector, electricity sector is estimated to register a positive growth of 2.7 percent.
• The pandemic and associated public health measures have adversely affected the contact-sensitive services sector where trade, hotels, transport & communication are estimated to contract by 21.4 percent in FY:2020-21.

V-shaped Recovery

• The government claims the difference in GDP figures between the two quarters is a sign of recovery in the economy.
• The unlocking of the economy has led to an uptick in economic activity, reflective of “the resilience and robustness of Indian economy”.
• However, this is just the beginning of the long path ahead to recovery and not the end of it.

No time for fiscal conservatism

• Lockdown meant production ceased and inventories were cutback.
• The unlocking of the economy with the lifting of lockdown restrictions led to a resumption in production, this could be explained by the expansion of industrial output by 0.6% in the second quarter.
• Production must theoretically rise to meet the demand in the economy and to restore the inventories. It is observed that there is a positive correlation between inventories restoring and demand in the economy, this, in turn, leads to a rise in production.
• The lockdown has made the businesses cut down on jobs, contributing to unemployment and also trimming their wage bills, leading to cut in wages.
• The above-mentioned factors have put people and businesses in the perils of indebtedness and bankruptcy.
• Therefore, it is not wise to assume that lifting lockdown restrictions will alone be sufficient to revive production and demand in the economy.
• Lifting of lockdown restrictions is not a magic wand to return to the pre-COVID era, it requires providing safety nets to the vulnerable sections of the society, reviving employment and taking adequate steps to spur the demand in the economy.
• The role of the state becomes prominent in these circumstances, the public expenditure becomes a major force in trying to get the economy back on its feet.
• This would thus require the Government to deploy financial resources of higher magnitude and this is a challenge especially when the revenues are declining in the times of recession.
• The government thus has to finance the economy by borrowing, and this appears to be a very popular way for governments around the world trying to overcome the pandemic challenges.

Promising performance metrics of the Indian Economy

Private final consumption expenditure

• The Private final consumption expenditure (PFCE) is defined as the expenditure incurred by the resident households and non-profit institutions serving households (NPISH) on the final consumption of goods and services, whether made within or outside the economic territory.
• Private final consumption expenditure at constant prices that accounts for over half of the GDP has had a recovery of sorts by moving from -27% in the first quarter to -11% in the second quarter, signalling a short recovery.
• This signals a recuperation in private consumption demand owing to lockdown restrictions being eased.

Inventory Stocking

• With production resuming, the inventories are getting stocked up. The numbers show a marked increase in change in stock levels.

Fixed capital formation

• Gross fixed capital formation (GFCF) refers to the net increase in physical assets (investment minus disposals). It does not account for the consumption (depreciation) of fixed capital. It is a component of the expenditure approach to calculating Gross Domestic Product (GDP).
• The fixed capital formation decline has been less concerning in the second quarter, though it is still far away from the desirable range.

Predicament of States

• The Controller General of Accounts data indicates that the first seven months of the financial year 2020-21 has had a total expenditure of 55% of what was provided in the Budget for 2020-21 from the central government.
• The total expenditure is inadequate but what is disturbing is that the expenditure is less than the 2019-20 figures for the same period. The COVID-19 pandemic has necessitated more spending from the government, something that the government has so far failed to do.
• The fall in demand has further pushed down the Goods and Services Tax (GST) collection, this has hurt the revenue of states and states have not been compensated by the centre for the shortfall. The centre has used the “Act of God” clause to move away from its responsibility.
• States have resorted to borrowing from the market, borrowing at high-interest rates, which would place higher interest burden in the future.

Government final expenditure

• The expenditure method is a system for calculating gross domestic product (GDP) that combines consumption, investment, government spending, and net exports.
• Another startling data was that the public consumption expenditure in the first half of the year of the pandemic was less than what it was in 2019-20, in what was a normal year.
• The government consumption expenditure has fallen in the second quarter, this puts welfare expenditures, social security net at risk. The pandemic has made welfare expenditures more important than ever.
• The programmes such as employment guarantee schemes, foodgrain allocation and other welfare initiatives will be squeezed.
• This has other incidental costs, like extending the recession, as the government expenditure shrinks, wages are down, unemployment is rising, demand is dipping.

Conclusion

• As there are signs of V-shaped recovery, it is important that the Government identifies the grains of recovery and take immediate steps to provide more impetus.
• The pandemic necessitates more social security expenditure from the government. The problem ahead is not just an economic one, it is a social issue as well. Inclusive growth requires no one to be left behind and one way to go about it is by raising the government consumption expenditure.

Liberalised Authorised Economic Operator Package for MSMEs

Context: CBIC introduces flagship Liberalised Authorised Economic Operator Package for MSMEs.

Details

• The Central Board of Indirect Taxes & Customs (CBIC) has taken a new initiative to introduce its flagship “Liberalised MSME AEO Package” for Micro Small and Medium Enterprises (MSMEs) for swift customs clearances.
• In order to attract MSMEs to become Authorised Economic Operators (AEOs) and avail various benefits, the CBIC has relaxed the compliance criteria provided the MSMEs have a valid certificate from their line-ministry.
• The ‘Liberalised MSME AEO Package’ scheme is a voluntary compliance programme which enables swifter Customs clearance for accredited stakeholders in the global supply chain namely importers, exporters, logistic service providers, custodians, etc.
• Which MSMEs can apply for the scheme?
  • The relaxed requirements allow MSMEs who have filed minimum 10 customs clearance documents in one year and who have a clean compliance record over 2 years to apply for the scheme.

Benefits of the scheme:

• Simplified documentation
• CBIC commits to take a decision on an application for grant of AEO status within only 15 days from electronic submission of complete documents for AEO Tier 1
• Reduction in bank guarantee requirements
• Facility of Direct Port Delivery (DPD) of imported containers
• Direct Port Entry (DPE) of Export Containers
• High level of facilitation in customs clearance of consignments thereby ensuring shorter cargo release time
• Facility of a Client Relationship Manager at the customs port as a single point of interaction

Urban Local Bodies Reforms

Context: Telangana becomes the 3rd State to complete Urban Local Bodies reforms.

Details

• Telangana has become the 3rd State in the country to successfully undertake “Urban Local Bodies (ULB)” reform stipulated by the Department of Expenditure, Ministry of Finance.
• Thus, the State has become eligible to mobilise additional financial resources of Rs.2,508 crore through Open Market Borrowings.
• Telangana has now joined two other states namely, Andhra Pradesh and Madhya Pradesh, who have completed this reform.
• Reforms in the urban local bodies and the urban utilities reforms are aimed at the financial strengthening of ULBs in the states and to enable them to provide better public health and sanitation services.
• Economically rejuvenated ULBs will also be able to create good civic infrastructure.

Background

• To meet the challenges posed by the pandemic, GOI had enhanced the borrowing limit of the states by 2 percent of their GSDP.
• Half of this special dispensation was linked to undertaking citizen centric reforms by the states.
• The four citizen centric areas for reforms identified were:
  • Implementation of One Nation One Ration Card System (done by 10 states)
  • Ease of doing business reform (done by 7 states)
  • Urban Local body/utility reforms (done by 3 states)
  • Power sector reforms