Economy to shrink in Q2 says RBI report.
Paper:
Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management
Why in news:
The Reserve Bank of India (RBI) foresees the economic contraction triggered by the COVID-19 pandemic extending into the second quarter especially as the shock to consumption has been severe, and said government consumption would be key to the revival of demand.
Key Details:
- According to the RBI’s Annual Report for 2019-20, “High frequency indicators that have arrived so far point to a retrenchment in activity that is unprecedented in history”.
- Citing data including the total issuance of e-way bills, a marker of domestic trading activity, as reflecting the loss of momentum in July.
- Consumer confidence fell to an all-time low, with a majority of respondents reporting pessimism relating to the general economic situation, employment, inflation and income.
- Government consumption is expected to continue pandemic-proofing of demand, and private consumption is expected to lead the recovery when it takes hold, with non-discretionary spending leading the way until a durable increase in disposable incomes enables discretionary spending to catch up.
- An assessment of aggregate demand during the year so far suggests that the shock to consumption is severe, and it will take quite some time to mend and regain the pre-COVID-19 momentum.
- The Monetary Policy Committee (MPC) expected headline inflation to remain elevated in the second quarter of the current fiscal, but likely to ease in the second half, aided by favorable base effects.
Capital air quality improves but still worst among big cities.
Paper:
Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management
Why in News:
According to an analysis by the Centre for Science and Environment (CSE), throughout the COVID-19 lockdown, though air pollution in Delhi was less compared to 2019, the air quality of the city was still worst among six large cities in different parameters.
Key Details:
- Among the six “mega cities”, Delhi, Mumbai, Kolkata, Hyderabad, Chennai, Bangalore — other cities had better air quality than Delhi, in terms of PM2.5 levels, as per the analysis.
- Local meteorological events have also influenced the air quality of different cities
- 5 is fine inhalable particles, which can get deep into the lungs and even into the bloodstream and cause respiratory diseases.
Worst performer
- Among mega cities, Delhi is the worst performer. But if tier-1 cities are also included, then Lucknow and Patna are worse than Delhi.
Arunachal to seek 6th schedule status.
Paper:
Mains: General Studies- II: Governance, Constitution, Polity, Social Justice and International relations.
Why in News:
The Arunachal Pradesh government has decided to appeal to the Centre for bringing the Frontier State under the purview of the Sixth Schedule of the Constitution towards protecting the rights of its indigenous peoples.
Key Details:
- There is a revival of the demand for two autonomous councils in Arunachal Pradesh.
- The renewed demand is for Mon Autonomous Council (MAC) comprising Tawang, West Kameng and parts of East Kameng districts, and Patkai Autonomous Council (PAC) comprising Tirap, Changlang and Longding districts.
- Political parties have been seeking the inclusion of Arunachal Pradesh in the Sixth Schedule for making the State’s indigenous communities owners of all the natural resources instead of being protectors
Why is inclusion in the 6th Schedule being demanded?
- Arunachal Pradesh is under the Fifth Schedule that does not provide special rights for the indigenous communities, unlike the Sixth Schedule.
- While executive powers of the union extend in scheduled areas with respect to their administration in the 5th Schedule; the 6th Schedule areas remain within the executive authority of the state.
- While the 5th schedule envisages the creation of Tribal Advisory Council, the 6th Schedule provides for District Councils and Regional Councils with certain legislative and judicial powers.
6th Schedule of the constitution:
- The Sixth Schedule consists of provisions for the administration of tribal areas according to Article 244 of the Indian Constitution.
- The Schedule currently includes 10 autonomous district councils (ADCs) in four northeastern States — Assam, Meghalaya, Mizoram and Tripura.
- Along with ADCs, the Sixth Schedule also provides for separate Regional Councils for each area constituted as an autonomous region.
Govt. Open to tweaks in credit guarantee scheme.
Paper:
Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management
Why in News:
Finance Minister has said that the government is open to further tweaking the ₹3-lakh crore credit guarantee scheme for providing collateral-free loans to small businesses.
Key Details:
- Structural reform is a key priority for the government and it will move fast on the Cabinet-cleared disinvestment proposals, including that of banks.
- The Emergency Credit Line Guarantee Scheme was rolled out as part of the Centre’s Aatmanirbhar package in response to the COVID-19 crisis.
- It has a corpus of ₹41,600 crore and provides fully guaranteed additional funding of up to ₹3 lakh crore.
- Eligible MSMEs must have an annual turnover up to ₹100 crore, with outstanding loans of up to ₹25 crore as on February 29, 2020.
Emergency Credit Line Guarantee Scheme:
- In May 2020, the Union Cabinet, chaired by the Prime Minister, gave approval to enable additional funding of up to Rs. three lakh crores to eligible MSMEs and interested MUDRA borrowers by way of “Emergency Credit Line Guarantee Scheme.”
- Under the Scheme, 100% guarantee coverage is to be provided by National Credit Guarantee Trustee Company Limited (NCGTC) for additional funding of up to Rs. three lakh crore to eligible MSMEs and interested MUDRA borrowers, in the form of a Guaranteed Emergency Credit Line (GECL) facility.
- The Scheme would be applicable to all loans sanctioned under GECL Facility during the period from the date of announcement of the Scheme to 31.10.2020, or till an amount of Rs 3,00,000 crore is sanctioned under the GECL, whichever is earlier.
- The Scheme aims at mitigating the economic distress being faced by MSMEs by providing them additional funding of up to Rs. 3 lakh crore in the form of a fully guaranteed emergency credit line.
- The entire funding provided under GECL shall be provided with a 100% credit guarantee by NCGTC to MLIs under ECLGS.
- Tenor of loan under the scheme shall be four years with moratorium period of one year on the principal amount.
Objective of the Scheme:
The main objective of the Scheme is to provide an incentive to Member Lending Institutions (MLIs), i.e., Banks, Financial Institutions (FIs) and Non-Banking Financial Companies (NBFCs) to increase access to, and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by providing them 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers.
With eye on Indo Pacific India, Vietnam to enhance cooperation
Paper:
Mains: General Studies- II: Governance, Constitution, Polity, Social Justice and International relations.
Why in News:
At the 17th India-Vietnam Joint Commission Meeting, India and Vietnam agreed to enhance their bilateral cooperation in line with India’s Indo-Pacific Oceans Initiative (IPOI) and the ASEAN’s Outlook on Indo-Pacific to achieve shared security, prosperity and growth for all in the region.
Key takeaways
- The meeting of the India-Vietnam Joint Commission on Trade, Economic, Scientific and Technological Cooperation was co-chaired by External Affairs Minister S Jaishankar and Vietnam’s Deputy Prime Minister and Foreign Minister Pham Binh Minh through video-conference.
- Both sides reviewed the recent developments in India-Vietnam Comprehensive Strategic Partnership and discussed the future trajectory of their wide-ranging engagement.
- They exchanged views on regional and international issues of mutual interest, especially in the context of the outbreak of Covid-19 pandemic.
- India reaffirmed development and capacity building assistance to Vietnam through initiatives such as Quick Impact Projects (QIP), ITEC and e-ITEC initiatives, PhD fellowships, as well as projects in water resource management in Vietnam’s Mekong Delta region, SDGs, digital connectivity and heritage conservation.
- As many as 12 QIPs for implementation in Vietnam have been approved by the Government of India, including seven QIPs in water resource management in Vietnam’s Mekong Delta Region and five QIPs related to construction of educational infrastructure in Vietnam.
- India supported Vietnam’s chairmanship of ASEAN this year and appreciated the positive leadership provided by Vietnam to ASEAN in a year when the world is faced with the pandemic.
ASEAN:
- The Association of Southeast Asian Nations is a regional intergovernmental organization comprising ten countries in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, military, educational, and sociocultural integration among its members and other countries in Asia.
- ASEAN also regularly engages other countries in the Asia-Pacific region and beyond.
- A major partner of Shanghai Cooperation Organisation, ASEAN maintains a global network of alliances and dialogue partners and is considered by many as a global powerhouse, the central union for cooperation in Asia-Pacific, and a prominent and influential organization.
- It is involved in numerous international affairs, and hosts diplomatic missions throughout the world.
ASEAN Members
- Thailand (founding member)
- The Philippines (founding member)
- Malaysia (founding member)
- Singapore (founding member)
- Indonesia (founding member)
- Brunei (joined in 1984)
- Viet Nam (joined in 1995)
- Lao PDR (joined in 1997)
- Myanmar (joined in 1997)
- Cambodia (joined in 1999)
- There are two observer States namely, Papua New Guinea and Timor Leste (East Timor).
ASEAN Headquarters
- The body is headquartered in Jakarta, Indonesia.
- Official Languages: Burmese, Filipino, Indonesian, Khmer, Lao, Malay, Mandarin, Tamil, Thai and Vietnamese
- Working Language: English