Daily Current Affairs for 8th July 2021

GS PAPER II

India – EU Cooperation in Agriculture

Why in News

A virtual meeting was held between Union Minister for Agriculture & Farmers Welfare and Member of the European Commission, Agriculture was held on 7^th July, 2021.

Key Points

• The strong momentum of the India-EU relations especially since the last India-EU Summit in July, 2020 was acknowledged.
• Both dignitaries expressed their condolences for the loss of lives due to COVID-19 pandemic.
• Both dignitaries discussed EU Common Agriculture Policy (CAP) and the recent India market reforms; EU Farm to Fork Strategy and UN Food System Summit and bilateral cooperation; G20 Agriculture Minister process and fixation of the Maximum Residue Limit of Tricyclazole in Indian Basmati Rice by the EU.
• The Member of the European Commission, Agriculture explained in detail the recent reforms undertaken by the EU in the Common Agriculture Policy as well as the EU Farm to Fork Strategy to make agriculture green as well as sustainable. He also mentioned that the EU has set a target of bringing 25 per cent of area in the EU under Organic Farming by 2030.
• The Union Minister of Agriculture and Farmers Welfare explained the scenario of agriculture in India and the dominance of small farmers and the commitment of the Government of India towards welfare of farmers in India.
• The agriculture minister highlighted the recent initiatives taken by the Government of India to increase the incomes of the farmers, the launch of Agriculture Infrastructure Fund with a corpus of Rs One Lakh Crore for development of farm gate and agriculture marketing infrastructure in rural areas, scheme of formation of 10000 FPOs to help small and marginal farmers in marketing of agricultural produce.
• He enlisted the steps being taken by the Government of India to make agriculture sustainable and environment friendly which included encouragement of application nano-urea and Organic Farming under the Pramparagat Krishi Vikas Yojana.
• He also highlighted the initiative of encouraging organic farming on either side of Ganga River up to 5 Km through formation of clusters wherein 11 lakh farmers have already enrolled.
• The agriculture minister acknowledged India’s support to the UN Food Systems Summit and informed the EU delegation that he will be leading the India delegation to the Pre-Summit being organized from 26th to 28th July, 2021 virtually.

India-EU Cooperation

• India’s partnership with the European Union (EU) has come a long way since the signing of the strategic partnership in 2004 that led both partners to intensify and deepen their cooperation through summits, dialogues and high-level working groups.
• Their economic relation has emerged to be a cornerstone of their partnership and has evolved from that of development aid to development partnership.
• India and the European Economic Community established diplomatic relations in the 1960s, cementing it in 1983 with the establishment of the Delegation of the European Commission to New Delhi.
• The 1994 Cooperation Agreement between India and the EU opened the door for larger political and diplomatic interactions.
• The recognition of each other’s potential led to the signing of the strategic partnership in 2004 with emphasis on developing international cooperation to address issues related to multilateralism, intensification of economic interactions and furthering sustainable development.
• The signing of the strategic partnership led to the release of the first joint action plan (JAP) in 2005, which defined mutually agreed objectives and proposed a range of activities in the areas of economic, political and development cooperation.
• The high-level trade group established under the JAP recommended the initiation of negotiation of a free trade agreement (FTA); with negotiations beginning in 2007 focused one limiting up to 90 percent of tariffs and the liberalisation of services and market access.

India-EU in recent decades

• Since 2014, the India–EU partnership has changed from the donor-recipient paradigm to that of cooperation through several instruments.
• They also committed to enhance their collaboration in other countries; Roadmap 2025 lays emphasis on “launching concrete trilateral/cooperation projects in pilot partner country and to establish an India–EU Annual Review on Development partnership in third countries”.
• They can also create a toolbox of partnership that can include information sharing, regular dialogues and financial assistance to enhance their developmental partnership, and can further their dialogue platforms by identifying new areas.
• Another key area of development cooperation is the 2030 Agenda for Sustainable Development. India and the EU are working closely on several fronts that cover the Sustainable Development Goals (SDGs) — such as the smart cities initiative (SDG 11), clean water and sanitation (SDG 6) and climate action (SDG 13).
• The two have become key stakeholders in global efforts to combat climate change through the framework of Clean Energy and Climate Change Partnership, 2017.

GS PAPER II

Matsya Setu app

Why in News

Union Fisheries, Animal Husbandry and Dairying Minister launched a mobile app ‘Matsya Setu’ to disseminate the latest freshwater aquaculture technologies to the country’s aqua farmers.

Matsya Setu app

• It has been developed by the ICAR-Central Institute of Freshwater Aquaculture (ICAR-CIFA), Bhubaneswar, with the funding support of the National Fisheries Development Board (NFDB), Hyderabad.
• The app has species-wise/ subject-wise self-learning online course modules, where renowned aquaculture experts explain the basic concepts and practical demonstrations on breeding, seed production and grow-out culture of commercially important fishes like carp, catfish, scampi, murrel, ornamental fish, and pearl farming.
• Better management practices to be followed in maintaining the soil and water quality, feeding and health management in aquaculture operations have also been provided in the course platform.
• The self-learning modules will have renowned aquaculture experts explain the basic concepts and conduct practical demonstrations on breeding, seed production and grow-out culture of commercially important fishes such as catfish, carp, scampi, murrel, ornamental fish and pearl farming.
• It has been divided into small video chapters for the convenience of the farmers. It also has additional learning materials.
• The app also offers quiz/test options for self-assessment to enhance the learning experience of the farmers.
• The farmers will get an autogenerated e-certificate after the successful completion of each course module.
• Farmers can also clear their doubts and get specific advisories from the experts through the app.

Significance

• It will help the fish farmers in learning about advanced technologies and Better Management Practices at their convenience.
• This will in turn influence the adoption of scientific methods in fish farming, enhance productivity and improve income.
• The app will also be an important tool to disseminate the latest information on different schemes among the fish farmers and assist them in doing business.

PM Kisan Sampada Yojana

• The Pradhan Mantri Matsya Sampada Yojana (PMMSY) is an initiative launched by the Government of India to establish a comprehensive framework and reduce infrastructural gaps in the fisheries sector.
• It has been approved by the Government of India (GOI), a new Central Sector Scheme.
• Pradhan Mantri Kisan SAMPADA Yojana with an allocation of Rs. 6,000 crores for the period 2016-20 coterminous with the 14th Finance Commission cycle.
• The scheme implemented by Ministry of Food Processing Industries (MoFPI).
• It will not only provide a big boost to the growth of food processing sector in the country but also help in providing better returns to farmers and is a big step towards doubling of farmers income, creating huge employment opportunities especially in the rural areas, reducing wastage of agricultural produce, increasing the processing level and enhancing the export of the processed foods.

GS PAPER III

Gross Domestic Product

Why in News

Fitch Ratings has cut its projection for India’s real GDP growth in 2021­22 to 10%, from 12.8%, citing a slower recovery due to renewed COVID­19 restrictions and warned that medium-term growth hopes of about 6.5% could suffer if business and consumer activity were scarred from the pandemic.

Key Points

• The ratings agency also warned that banks’ asset quality challenges have increased and will remain under threat due to mobility restrictions, medical exigencies and rising job losses, with MSME and retail loans to low­ and moderate-income borrowers most likely at risk.
• Localised lockdowns during the second wave kept economic activity from stalling to levels similar to those during 2020 (Q1 2020­21 real GDP growth: ­24.4%), but disruption in several key business centres has slowed the recovery.
• Moderately worse 2021 outlook for Indian banks factors in muted prospects for new business due to expectation of weak corporate and consumer confidence, banks’ continuing high­risk aversion and below­trend credit demand.
• Fitch expects banks’ exposure to stressed MSME and retail borrowers to rise further with the increasing relief outlay and impaired loans to peak after 2022­23 since stress is likely to manifest from this pool over a fairly protracted time frame.

Fitch Ratings

• Fitch Ratings is an international credit rating agency based out of New York City and London.
• Investors use the company’s ratings as a guide as to which investments will not default and subsequently yield a solid return.
• Fitch bases the ratings on factors, such as what kind of debt a company holds and how sensitive it is to systemic changes like interest rates.
• Along with Moody’s and Standard & Poor’s (S&P’s), Fitch is one of the top three credit rating agencies in the world. The Fitch rating system is very similar to that of S&P in that they both use a letter system.
• The firm was founded by John Knowles Fitch on December 24, 1914, in New York City as the Fitch Publishing Company.

S&P Global Ratings

• S&P Global Ratings is an American credit rating agency (CRA) and a division of S&P Global that publishes financial research and analysis on stocks, bonds, and commodities.
• It is considered the largest of the Big Three credit-rating agencies, which also include Moody’s Investors Service and Fitch Ratings.
• Its head office is located on 55 Water Street in Lower Manhattan, New York City.

GS PAPER III

Information and Technology sector of India

Why in News

According to the ratings agency Crisil, the Indian IT industry will stage a ‘strong recovery’ in 2021­22 with a revenue growth of up to 11%.

Key Points

• The recovery will be led by increasing outsourcing and accelerating digital transformation services mainly in sectors such as banking, financial services and insurance (BFSI), healthcare, retail and manufacturing.
• According to Nasscom, the IT services industry grew 2.7% to $99 billion in 2020­21. The wider industry including e­commerce, business process management and global back offices had grown 2.3% to $194 billion in last fiscal year.
• Crisil said higher business levels, and more profitable digital deals will also help IT services players maintain healthy operating margins.
• This along with already healthy balance sheets will in turn lend a positive bias to the credit profiles of IT service providers. A Crisil Ratings analysis of 18 firms which account for 70 per cent of the IT service sector’s revenue indicates as much.

GS PAPER III

Gross Non-performing Assets

Why in News

According to the domestic rating agency, the banking system’s gross non-performing assets are set to decline to at least 7.1% by March 2022, as against 7.6% at FY21-end.

Key Points

• According to the ICRA Limited, the NPAs will go lower on higher recoveries and upgrades, and also faster credit growth.
• It also added that the fresh accretion to the NPAs will be higher in FY22 due to the absence of any regulatory dispensations like moratoriums.
• The Gross Non-Performing Assets (GNPAs) and Net Non-Performing Assets (net NPAs) are expected to decline to 6.9-7.1% and 1.9-2.0% respectively by March 31, 2022.
• The Reserve Bank’s financial stability report had said the GNPAs at March 2021 had come at 7.6 percent and estimated it to rise to 9.8 percent in FY22-end under its base-case assumptions.
• RBI Governor had said the dent on balance sheets and performance of financial institutions in India has been much less than projected earlier, but a clearer picture will emerge as the effects of regulatory reliefs fully work their way through.
• The rating agency said the fresh NPA generation declined to Rs 2.6 lakh crore or 2.7 percent of advances in FY21 compared to Rs 3.7 lakh crore or 4.2 percent in FY20 and added that the same will be higher in FY22.

Gross non­performing Asset Ratio (GNPA)

• Gross NPA stands for the Gross Non-Performing Assets. The term used by commercial banks that refer to the sum of any unpaid debt, which is classified as non-performing loans.
• Commercial banks offer loans to their non-honoured customers, and financial institutions are required to classify them as non-performing assets within ninety days because they do not receive the principal amount or net payments.