Daily Current Affairs for 1st October 2020

Center sticks to target for borrowing

Paper:

Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management

Why in news?

India’s fiscal deficit went further past the Budget target of nearly ₹8 lakh crore in the first five months of 2020-21, touching ₹8.7 lakh crore or 109.3% of the deficit target.

Key details

• Revenue receipts stood at just 18.3% of the Budget targets, while expenditure touched 41%.
• Core sector output fell harder in August than July, contracting 8.5% compared to a year ago, indicating that a recovery remains elusive.
• The plan to raise ₹2.1 lakh crore from disinvestment is waylaid, even as the Finance Ministry extended the deadline for bids to buy BPCL by two months.
• The Centre held off any expansion of its proposed borrowings of ₹12 lakh crore, the revenues are picking up with re-opening of economy.
• The Finance Ministry expects to manage the year’s spending while ‘keeping some space for some unforeseen expenditure items.

Revenue receipts

• Government receipts which neither

1. create liabilities nor
2. reduce assets are called revenue receipts.

• These are proceeds of taxes, interest and dividend on government investment, cess and other receipts for services rendered by the government.
• These are current income receipts of the government from all sources.
• Government revenue is the means for government expenditure. In the same way as production is means for consumption.
• Revenue receipts are further classified Into Tax Revenue and Non­tax Revenue.

Capital receipts

• Government receipts which either

(i) create liabilities (e.g. borrowing) or

(ii) reduce assets (e.g. disinvestment) are called capital receipts.

• Thus when govt. raises funds either by incurring a liability or by disposing off its assets, it is called a capital receipt.

Fiscal deficit

• Fiscal Deficit is the difference between the total income of the government (total taxes and non-debt capital receipts) and its total expenditure.
• A fiscal deficit situation occurs when the government’s expenditure exceeds its income.
• This difference is calculated both in absolute terms and also as a percentage of the Gross Domestic Product (GDP) of the country.
• A recurring high fiscal deficit means that the government has been spending beyond its means.

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Southwest monsoon ends with 8% surplus

Paper:

Mains: Indian Heritage and Culture, History and Geography of the World and Society

Why in news?

The southwest monsoon this year has ended with an 8.7% surplus, surpassing estimates by the India Meteorological Department (IMD).

Key details

• This was also the first time since 2010 that India has got more than 100% of its long period average. (Long Period Average (LPA) is the averages of rainfall received over a 50-year period between 1951 and 2001) of 88 cm, in consecutive years.
• Last year India saw record rainfall of 110% of the LPA, the highest in a quarter century.
• India has never got over 105% of the LPA in consecutive years in at least 30 years, according to records available since 1988 on the IMD website.

Low-pressure systems

• The heavy rains this year have been due to several long-lasting low-pressure systems in the Bay of Bengal that fuelled heavy rains over large swathes of India in August.
• A developing La Nina, the converse of an El Nino, which is a heating of the central equatorial Pacific and responsible for diminished monsoon rain over India, too contributed to munificent rains this year.
• The IMD in its forecasts had anticipated ‘normal’ rain, defined as 96-104% of the LPA.
• Rains above 110% LPA are termed ‘excess’ and this year has fallen only a tad short.
• Rainfall was well distributed across most of India this monsoon. Central India got 15% more and South India 29% more than their regional normal. Northeast India got 6% and northwest India posted a 15% deficit.

El nino

• El Niño is the warm phase of the El Niño–Southern Oscillation (ENSO) and is associated with a band of warm ocean water that develops in the central and east-central equatorial Pacific (between approximately the International Date Line and 120°W), including the area off the Pacific coast of South America.
• The ENSO is the cycle of warm and cold sea surface temperature (SST) of the tropical central and eastern Pacific Ocean.

• El Niño is accompanied by high air pressure in the western Pacific and low air pressure in the eastern Pacific.
• During the development of El Niño, rainfall develops between September–November

La Nina

• La Niña is a coupled ocean-atmosphere phenomenon that is the colder counterpart of El Niño, as part of the broader El Niño–Southern Oscillation (ENSO) climate pattern.
• It has also in the past been called anti-El Niño.
• During a period of La Niña, the sea surface temperature across the equatorial Eastern Central Pacific Ocean will be lower than normal by 3 to 5 °C (5.4 to 9 °F).

• An appearance of La Niña persists for at least five months. It has extensive effects on the weather across the globe, particularly in North America, even affecting the Atlantic and Pacific hurricane seasons, in which more tropical cyclones occur in the Atlantic basin due to low wind shear and warmer sea surface temperatures, while reducing tropical cyclogenesis in the Pacific Ocean.

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Crime against Scheduled Castes, Scheduled Tribes saw a rise of 7% and 26% in 2019: NCRB

Paper:

Mains: General Studies- II: Governance, Constitution, Polity, Social Justice and International relations

Why in news?

Crime against Scheduled Castes (SCs) and Scheduled Tribes (STs) saw an increase of over 7% and 26% respectively in year 2019 compared to 2018, according to the annual Crime in India 2019 report published by the National Crime Records Bureau (NCRB).

Key details

• A total of 45,935 cases were registered for committing crime against SCs, showing an increase of 7.3% over 2018, when 42,793 such cases were recorded.
• At 11,829 cases, Uttar Pradesh recorded the highest number of crimes against SCs in 2019, followed by 6,794 cases in Rajasthan and 6,544 cases in Bihar, the report said.
• A total of 8,257 cases were registered for committing crime against STs, an increase of 26.5% over 2018, when 6,528 such cases were registered.
• Madhya Pradesh recorded the highest number of cases against STs as it recorded 1,922 cases, followed by Rajasthan, which recorded 1,797 cases and Odisha-576 cases.

National Crime Records Bureau

• The National Crime Records Bureau, is an Indian government agency responsible for collecting and analysing crime data as defined by the Indian Penal Code (IPC) and Special and Local Laws (SLL).
• NCRB is headquartered in New Delhi and is part of the Ministry of Home Affairs (MHA), Government of India.
• NCRB was set-up in 1986 to function as a repository of information on crime and criminals so as to assist the investigators in linking crime to the perpetrators.
• It was set up based on the recommendation of the Task force,1985 and National Police Commission (1977-1981) by merging the Directorate of Coordination and Police Computer (DCPC), Inter State Criminals Data Branch of CBI and Central Finger Print Bureau of CBI.

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Current account surplus widens to $19.8 billion in Q1

Paper:

Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management

Why in news?

India recorded a surplus of $19.8 billion (3.9% of GDP) in its current account balance in the first quarter of FY21, on top of a surplus of $0.6 billion (0.1% of GDP) in the preceding quarter, according to RBI data.

Key details

• The surplus in the current account in the first quarter of 2020-21 was on account of a sharp contraction in trade deficit to $10 billion due to a steeper decline in merchandise imports relative to exports on a year-on-year basis, RBI.
• With domestic and global lockdowns to fight COVID-19 [having] a differentiated impact on exports and imports, the merchandise trade deficit shrunk to just $10 billion in Q1, most of which was accounted for by the net oil balance.

Balance of Payment

• The balance of payments (BOP) is a statement of all transactions made between entities in one country and the rest of the world over a defined period of time, such as a quarter or a year.
• The balance of payments includes both the current account and capital account.
• The current account includes a nation’s net trade in goods and services, its net earnings on cross-border investments, and its net transfer payments.
• The capital account consists of a nation’s imports and exports of capital and foreign aid.
• The sum of all transactions recorded in the balance of payments should be zero; however, exchange rate fluctuations and differences in accounting practices may hinder this in practice.

Current account Deficit

• The current account deficit is a measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the products it exports.
• The current account includes net income, such as interest and dividends, and transfers, such as foreign aid, although these components make up only a small percentage of the total current account.
• The current account represents a country’s foreign transactions and, like the capital account, is a component of a country’s balance of payments (BOP).

Balance of Trade

• Balance of trade (BOT) is the difference between the value of a country’s imports and exports for a given period and is the largest component of a country’s balance of payments (BOP).
• A country that imports more goods and services than it exports in terms of value has a trade deficit while a country that exports more goods and services than it imports has a trade surplus.

Trade Deficit

• A trade deficit is an amount by which the cost of a country’s imports exceeds its exports. It’s one way of measuring international trade, and it’s also called a negative balance of trade.
• A trade deficit occurs when a country does not produce everything it needs and borrows from foreign states to pay for the imports. That’s called the current account deficit

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Core sector shrinks for sixth month running

Paper:

Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management

Why in news?

India’s eight core industrial sectors contracted by 8.5% in August compared to August 2019, marking the sixth month in a row of shrinking output.

Key details

• The decline in August was sharper than the 8% decline in July as per revised data released by the Department of Promotion of Industry and Internal Trade, with coal and fertilizers being the only two sectors registering growth of 3.6% and 7.3% year-on-year,
• The sharpest decline on a year-on-year basis in August was registered in refinery products (19.1%), followed by cement (14.6%) and natural gas (9.5%).
• For the five months from April to August, the core sectors, which account for a little over 40% of the Index of Industrial Production, shrank 17.8%.
• Fertilizers is the only sector to have managed positive growth in the first five months of FY21, clocking a 4.6% uptick.

The Index of Industrial Production (IIP)

• The Index of Industrial Production (IIP) is an index for which details out the growth of various sectors in an economy such as mineral mining, electricity and manufacturing.
• The all India IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period.
• It is compiled and published monthly by the National Statistics Office (NSO), Ministry of Statistics and Programme Implementation six weeks after the reference month ends.

IIP is a composite indicator that measures the growth rate of industry groups classified under,

1. Broad sectors, namely, Mining, Manufacturing and Electricity
2. Use-based sectors, namely Basic Goods, Capital Goods and Intermediate Goods.

Core sector

Core sectors of an economy are the main or the key industries in the economy. In India, 8 sectors are considered the Core Sectors.

Core Sectors of the Indian Economy

The eight-core sectors of the Indian economy are:

1. Electricity
2. Steel

• Refinery products

1. Crude oil
2. Coal
3. Cement

• Natural gas
• Fertilizers
• These industries have a major impact on general economic activities and also industrial activities. They significantly impact most other industries as well. The core sector represents the capital base of the economy.
• These eight industries have a combined share of above 40% in the Index of Industrial Production (IIP).