Daily Current Affairs for 18th May 2020

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Centre throws open all sectors to private players

Paper: -III

Prelims: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

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

Why in News:

  • The fifth tranche of the Atmanirbhar Bharat Abhiyan stimulus package announced by the Finance Minister.

Key Points:

  • The major provisions of the final tranche of the Atmanirbhar Bharat Abhiyan stimulus package include the following:
  • There is an additional 40,000 crore rupees allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
  • The new Public Sector Enterprise Policy promotes the entry of private companies into every sector of industry, while limiting public sector enterprises to only strategic sectors.
  • The new policy will notify specific strategic sectors in which at least one PSU will remain, although private companies will also be allowed.
  • Even in the strategic sectors, no more than four PSUs will be allowed, with the rest being privatised, merged or brought under holding companies.
  • PSUs in all other sectors will be privatised.
  • Corporate enterprises have been offered relief via changes to the Insolvency and Bankruptcy Code (IBC) and the Companies Act.
  • Fresh insolvency proceedings would be suspended for a year.
  • COVID-19 related debt will not trigger defaults.
  • State governments have been given more fiscal room in the current crisis with the hiking of their borrowing limits from 3% to 5% of Gross State Domestic Product (GSDP). However, the hiked limits will be conditional on States implementing reforms related to ration portability, ease of doing business, power distribution, and urban local bodies.

Why it is Important?

  • The total package announced under the Atmanirbhar Bharat Abhiyan stimulus package amounts to 20.97 lakh crore rupees accounting to 9.8% of GDP.
  • The decision to allocate 40,000 crore rupees to the MGNREGA scheme in addition to the 61,000 crore rupees allocated in the Budget was widely welcomed, as a measure that will support rural livelihoods at a time when returning migrants swell unemployment in the villages.
  • The hike in borrowing limits of the state is important as GSDPs are likely to contract, further shrinking possible borrowing at a time when States are at the frontline of containment and relief operations. The increase in borrowing limits would make extra resources worth 4.28 lakh crore rupees available to States.
  • For the health sector, there is the announcement for increased public expenditure including infectious disease hospital blocks in every district and public laboratories in every block. There are provisions for higher number of health and wellness

Issues and Challenges:

  • Out of the ₹20.97 lakh crore stimulus package, only ₹2.2 lakh crore can be traced as direct additional budgetary cost to the central exchequer, while another ₹1.55 lakh crore relates to already budgeted expenditures.
  • The remaining 85% of the stimulus package is heavy on credit-related measures and comes from the RBI’s liquidity announcements (amounting to around 8 lakh crore rupees), credit guarantee schemes and insurance schemes, apart from the structural reforms which are not really stimulus or relief measures.
  • Some analysts have pointed out double counting as the credit guarantee schemes to support small companies and non-banking finance companies would also tap into the RBI’s measures.
  • The interest on the state bonds has shot up to 9% and States are having to pay a high cost for their market borrowings.

Way Ahead:

Given that the Centre’s cost is lower at about 6%, it would have been better for the Centre to borrow from the market and transfer to the States. There are concerns that privatising PSUs would find fewer buyers at a time of global recession. The process of privatization would lead to a scenario wherein the potential buyer would be spending money which could have otherwise gone into fresh investment or a financial transfer, thus effectively contracting demand in the economy.

Multiple conditions on discoms

paper: III

Prelims: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

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

Why In news:

The announcement of the ‘Special Long Term Transition Loan to Discoms for COVID-19’ under the Atmanirbhar Bharat Abhiyan stimulus package. The financial assistance is meant to help the discoms clear their dues to power producers, both belonging to the Central Public Sector Undertakings (PSUs) and the private sector, and transmission companies. The financial assistance will be paid in two tranches and the loan will have tenure of up to 10 years, including moratorium of not more than 3 years.

Key Points:

  • The central authorities have imposed a number of conditions on state governments and their power distribution companies (discoms) to avail themselves of benefits from the 90,000-crore rupees package.
  • The discoms should submit an “unconditional and irrevocable” guarantee from the respective State governments with due approval from the State Finance Departments before the first disbursement. If a State fails to pay the power bill and subsidy within 60 days of the due date, it will be charged with an additional interest of 0.25% on the outstanding loan amount.
  • As part of “pre-commitment conditions,” the discoms should have arrangements for self-assessment by end consumers and digital payment of the bills, apart from installation of “smart” or pre-paid meters at the premises of the government departments and attached offices.
  • The insistence on “smart” or pre-paid meters is being made so that the discoms get their dues regularly.

Punjab farmers to go for direct seeding of rice

Paper :

Prelims: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc

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

Why In news:

Kharif sowing of paddy in Punjab.

Key Points:

  • As the labour shortage is imminent owing to exodus of migrant labourers amid the ongoing lockdown, farmers in Punjab seem all set to go for direct seeding of rice (DSR) this Kharif season, moving away from the traditional practice of raising rice nursery and then transplanting rice seedlings in a puddled field.
  • The DSR technique called ‘tar-wattar DSR’ has been developed and successfully tested on a good scale at farmers’ fields.


  • The DSR technology recommended in Punjab as an alternative method of rice (paddy) planting offers several advantages:
  • It will help save irrigation water and energy (power) in contrast to the conventional method.
  • The DSR technique is less time consuming and labour intensive than the conventional practice.
  • There is lesser weed problem, besides the reduced incidence of nutrient deficiency, especially iron, owing to lesser leaching of nutrients and deeper root development.
  • The technology has a wide adaptability as it is suitable for medium to heavy textured soils including sandy loam, loam, clay loam and silt loam, which account for 87% area of paddy cultivation in Punjab.
  • The DSR offers avenue for groundwater recharge as well as it prevents the development of hard pan just beneath the plough layer.
  • Under DSR, the crop matures 7-10 days earlier than puddle transplanted rice, hence, it gives more time for the management of paddy straw, for the timely sowing of the next wheat crop.
  • Results from research trials and farmers’ field survey have also indicated that wheat grain yield, after DSR, is 1.0-1.2 quintal per acre higher than puddle transplanted rice.
  • The DSR involves more precision in timing and greater accuracy in operations compared to conventional transplanted rice.

Over 42,000 undertrials released

paper: II

Prelims: Indian Polity and Governance-Constitution, Political System, Panchayati Raj, Public Policy, Rights Issues, etc.

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

Why in News:

Report from the National Legal Services Authority (NALSA).


There are 1,339 prisons with approximately 4,66,084 inmates in India with the undertrial prisoners accounting for a large share of the inmates. The National Crime Records Bureau estimates the rate of occupancy of Indian prisons at 117.6%. NALSA is a statutory body providing free legal services to the weaker sections.

COVID-19 crisis:

  • The Supreme Court had observed that physical distancing, an effective measure to check the spread of the novel coronavirus, would be difficult in prisons.
  • The court issued guidelines, formed committees and asked the legal services authorities to work together and release undertrial prisoners and those on bail and parole to bring the prison population down.


  • The legal services institutions have intervened to release 42,529 undertrial prisoners as well as 16,391 convicts on parole to de-congest prisons during the COVID-19 pandemic.

Issue of domestic violence:

  • Legal assistance was provided in 658 cases of domestic violence during the lockdown.
  • NALSA, in coordination with the Ministry of Women and Child Development, has issued directions to the State legal services authorities to collaborate with OneStop Centres (OSCs) established in each State for providing legal assistance to women facing domestic violence.
  • It has been also involved in providing counselling services to victims and the needy.

Afghan President, rival sign power sharing deal


Prelims: Current events of national and international importance

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

Why in News:

  • Afghan President Ashraf Ghani and political rival Abdullah Abdullah have signed a power-sharing agreement.


Political turmoil in Afghanistan:

  • Post September 2020 elections in Afghanistan, Ashraf Ghani and Abdullah Abdullah both declared themselves the winner of the presidential election leading to political disarray in the war-torn nation.
  • They have been locked in a power struggle since then.

Afghan peace process:

  • A peace agreement between the U.S. and the Talibancalls for U.S. and NATO troops to leave Afghanistan.
  • The U.S. has been trying to get the Taliban and the Afghan Government to begin intra-Afghan negotiations, but the political turmoil and personal acrimony between Mr. Ghani and Mr. Abdullah have impeded talks.

Afghan issues:

  • Despite billions of dollars in international aid, Afghanistan remains extremely poor. The poverty level soared from 35% of the population in 2012 to more than 55% last year.
  • Poverty in Afghanistan is defined as a person who survives on $1 or less a day.
  • The country has more than 6,400 confirmed infections of COVID-19. The country’s health care system, devastated by four decades of war, is woefully unprepared for a major outbreak.

Present situation:

As per the concluded political deal, Mr. Ghani would remain President of Afghanistan, while Mr. Abdullah would lead Afghanistan’s National Reconciliation High Council and some members of Abdullah’s team would be included in Ghani’s Cabinet.

  • The Reconciliation Council has been given the authority to handle and approve all affairs related to Afghanistan’s peace process andtalks with the Taliban.
  • The agreement is expected to speed up the intra-Afghan dialogue preparations that have been delayed.

India’s response:

  • India has welcomed the agreementand hopes that the political agreement and creation of the High Council of National Reconciliation will result in renewed efforts for establishing enduring peace and stability; and putting an end to externally sponsored terrorism and violence.

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