Daily Current Affairs for 9th Oct 2021

GS PAPER II NEWS

High Aspiration Coalition (HAC)

Why in News

• At a ceremony held between the French and Indian governments in New Delhi on 7 October, India officially joined the High Aspiration Coalition for Nature and People, a grouping of over 70 countries and 30×30 nations to protect for the adoption of the global goal.

Key point

• Countries of varying economic and social status around the world currently include HAC members; European, Latin American, African and Asian countries are its members.
• India is the first of the BRICS bloc of major emerging economies (Brazil, Russia, India, China and South Africa) to join the HAC.
• The announcement by India comes just before a high-level biodiversity meeting organized by China.
• The High Level Biodiversity Virtual Meeting will discuss key aspects of the Biodiversity Treaty to be finalized in 2022. The global 30×30 target is currently a focal point of the treaty.
• Government of India stated that resource mobilization will always be the cornerstone of implementation of policies and programs for the conservation of biodiversity and added that India will ensure all support to meet the Global Biodiversity Goals.

Importance

• High Aspiration Coalition for Nature and People which was launched in January 2021 at “One Planet Summit” in Paris, Ambassador of France to India Mr. Emmanuel Luna said that on the eve of inauguration of COP15, India’s High Aspiration Coalition Joining us is a real game changer and will boost our multilateral efforts.
• Stating that India attaches great importance to biodiversity conservation, the French Ambassador pointed out that the alliance aims to promote an international agreement to protect at least 30% of the world’s land and ocean by 2030.

GS PAPER III

South Asia Economic Focus Report

Why in News

• • The World Bank, in its latest South Asia Economic Focus report titled ‘Shifting Gears: Digitization and Services-led Development’ on October 07, 2021, has said that India’s GDP growth rate is expected to grow by 8.3 percent in the fiscal year 2021-22.

Key Point

• • The World Bank has kept India’s growth forecast unchanged at 8.3 per cent, as per the June forecast.
  • The report also said that India’s Gross Domestic Product (GDP) in the first quarter (April-June quarter) of FY 2021-22 showed ‘significant base effect, strong export growth and limited damage to domestic demand’. registered an increase of 20.1 percent due to
• Key findings of the World Bank for India’s economy in the fiscal year 2021-22
  • India’s economy is expected to grow by 8.3 percent in FY 2021-22, helped by increased public investment and incentives to boost manufacturing in India.
  • Successful implementation of agricultural and labor reforms will spur medium-term growth.
  • The report states that the increasing pace of vaccination will determine India’s economic prospects in the year 2021.
  • The report further states that, due to easing of supply-side bottlenecks and increased infrastructure investment and recent structural reforms, this growth are expected to stabilize at around 07 per cent from fiscal year 2023.
• Risk projections for the Indian economy outlined in the report
  • The report states that higher-than-expected inflation and a slower recovery in the informal sector are the main risks to consumer spending.
  • It has warned that persistent high inflation may also put pressure on RBI’s accommodative monetary policy stance.
  • The current GDP growth forecast is similar to the June forecast for these reasons.
  • The World Bank’s Chief Economist for South Asia, Hans Timmer, has said that India’s current GDP growth forecast at 8.3 percent is in line with the World Bank’s Global Economic Prospects report for June 2021.
  • During the COVID-19 pandemic, the World Bank has included a range of growth from 7.5 per cent to 12.5 per cent for India’s growth in 2021 due to uncertainties. As per these latest data, the growth trend of India’s economy is towards the lower end of the said range.

GS PAPER III

Air India disinvestment approved

Why in News

• • Air India Specific Alternative Mechanism (AISAM) empowered by the Cabinet Committee on Economic Affairs (CCEA) for sale of 100% equity shareholding of Government of India in Air India as well as Air India’s equity shareholding in AIXL and AISSTS to M/s. Approved the highest price bid of M/s Tales Private Limited, a wholly owned subsidiary of Tata Sons Private Limited.

Key point

• • The highest priced bid is Rs 18,000 crore in the form of Enterprise Value (EV) for Air India (including Air India’s stake in AIXL and AISATS as well as Air India’s 100% share).
  • This transaction does not include non-core assets including land and building, valued at Rs 14,718 crore and to be transferred to Air India Asset Holding Limited (AIAHL), Government of India.
    

Background

• • The process of disinvestment of Air India and its subsidiaries began in June 2017 with an ‘in-principle’ approval by the Cabinet Committee on Economic Affairs (CCEA).
  • No one expressed interest in the first round of the disinvestment process. The process resumed on 27 January 2020 with the issue of Preliminary Information Memorandum (PIM) and request for Expression of Interest (EoI).
• According to the PIM of January 2020, in its original concept

1. A pre-determined, fixed amount of debt to be held with Air India [the balance amount shall be transferred to Air India Asset Holding Limited (AIAHL) and
2. The sum of the current and non-current liabilities (other than debt) to be held with Air India and AIXL equal to the sum of certain current and non-current assets of Air India and AIXL (additional liabilities transferred to AIAHL) will be done).
   • The deadline for this process had to be extended due to the situation arising out of the COVID-19 pandemic. Given Air India’s exorbitant debt and other liabilities arising out of huge accumulated losses, the Enterprise Value (EV) in October 2020 with the objective of resizing the balance sheet and increasing the competitiveness and chances of winning bids to potential bidders. The hypothesis regarding bidding was revised in the context of
   • The provisions relating to Enterprise Value (EV) allowed bidders to bid on aggregate return for equity and debt instead of a pre-determined, fixed debt with a minimum cash return of 15 per cent for equity.
   • As per both the original and revised hypothesis, all non-core assets (land, building, etc.) are to be transferred to AIAHL and hence are not part of the transaction.
   • It was ensured that the interests of the employees and retired employees would be taken care of.
   • At the request of the bidders, the due date for bidding has been extended to 15th September, 2021 to enable them to complete all appropriate proceedings before submitting their bids.
   • Final SPA with detailed terms and conditions and obligations associated with fulfilling the antecedent conditions relating to closing the transaction process, including the issuance of Government guarantee before closing, were agreed upon before the bid submission.
     
   • Two sealed bids along with documents relating to non-financial bid and security related to the bid were received from two eligible bidders on the due date.
   • A reserve price for this transaction was fixed after receipt of sealed financial bids, based on valuation using methodology as per established procedure, in line with accepted procedure for strategic disinvestment.
   • After independent determination of reserve price, the already received sealed financial bids were opened in the presence of the bidders, which were as follows:
   • M/s Tales Pvt Ltd, a wholly owned subsidiary of M/s Tata Sons Pvt Ltd, for an Enterprise Value (EV) of Rs 18,000 crore.
   • The Group led by Mr. Ajay Singh for an Enterprise Value (EV) of Rs 15,100 crore.
   • Both the bids were above the reserve price of Rs 12,906 crore.

Conclusion

• • Confidentiality of bidders through a multi-stage decision-making process involving the Inter-Ministerial Group (IMG), the Core Group of Secretaries on Disinvestment (CGD) and the Air India Specific Alternative Mechanism (AISAM) empowered at the top level Keeping this in mind, the entire disinvestment process was carried out in a transparent manner.
  • The next step in this disinvestment process would be to issue a Letter of Intent (LOI) and then signing of the share purchase agreement, after which the company and the government that is successful in the bidding process will have to fulfill the foregoing conditions. The transaction is expected to be completed by December 2021.

GS PAPER III

Positive results of efforts to reduce the amount of paddy straw

Why in News

• • The total area under paddy in eight NCR districts of Haryana, Punjab and Uttar Pradesh has decreased by 7.72 per cent during the current year as compared to the previous year.

Key point

• • Similarly, total paddy straw content from non-basmati variety is expected to decrease by 12.42 per cent during the current year as compared to the previous year.
  • The Central Government and the State Governments of Haryana, Punjab and Uttar Pradesh are taking measures to diversify crops as well as reduce the use of Pusa-44 variety of paddy.
  • Burning of paddy straw from non-basmati varieties of crops is a major concern. Crop diversification and control of stubble burning at the site of short duration and high yielding varieties of Pusa-44 are part of the framework and action plan.
  • According to the data received from the state governments of Haryana, Punjab and Uttar Pradesh, the total amount of paddy straw will decrease this year.
  • The total quantity of paddy straw this year in Punjab is 1.31 million tonnes (decreased from 20.05 million tonnes in 2020 to 18.74 million tonnes in 2021), 0.8 million tonnes in Haryana (from 7.6 million tonnes in 2020 to 6.8 million tonnes in 2021) and Uttar Pradesh It is expected to decrease by 0.09 million tonnes (from 0.75 million tonnes in 2020 to 0.67 million tonnes in 2021) in eight NCR districts.
  • The total quantity of stubble in the respective states was 28.4 million tonnes in 2020, which is now expected to come down to 26.21 million tonnes in 2021.
  • Further reduction is expected in the non-basmati variety. The amount of paddy straw especially from non-basmati variety crops is expected to decline from 17.82 million tonnes in Punjab in 2020 to 16.07 million tonnes in 2021 and Haryana from 3.5 million tonnes in 2020 to 2.9 million tonnes in 2021.
• Significance
  • The Commission had directed the respective State Governments to promote short duration and early maturing crop varieties through a comprehensive framework, as they can be managed quite efficiently and there is a need for a system for the management of paddy straw. Broad media can be provided.
  • As per the recommendations of the Ministry of Agriculture and Farmers Welfare, Government of India, the CAQM had made a positive effort with the State Governments to promote it.
  • In addition, crop diversification programs are being implemented in the NCR districts of Uttar Pradesh as well as in the states of Punjab and Haryana by shifting the high water consuming paddy area to alternative crops.
  • Better crop residue management is expected through diversification of crops and varieties, increased focus on crop residue management including extensive use of bio-degradables, promotion of ex-situ use of straw and through extensive IEC activities and awareness programmes.

GS PAPER III

Agricultural Exports from the Union Territories of Jammu and Kashmir and Ladakh

Why in News

• • In order to promote agricultural exports in the Union Territories of Jammu & Kashmir and Ladakh, APEDA has asked producers, exporters, state government officials, and others on the export potential of agricultural products and requirements under the National Organic Production Program (NPOP) for export. Several initiatives have been taken to sensitize the stakeholders, which has led to a spurt in the activities of agri exports.

Export

• • The Union Territory of Jammu and Kashmir with the help of APEDA, a statutory body under the Ministry of Commerce and Industry, exported the Geographical Indication (GI) certified product Kashmir Saffron from Srinagar to Dubai and other Middle East markets during March-April 2021.
  • A few months after the APEDA offices in Jammu and Srinagar became functional in February 2021, a ‘Mishri’ variety of Kashmir Valley cherry was first exported from Srinagar to Dubai followed by commercial exports and then to Indian cherries. The international market for Indian Cherry was created during June-July 2021 after repeated orders for the same.
  • The export was handled by local entrepreneurs from Kashmir in collaboration with established exporters from Mumbai and their counterparts in Dubai.
  • In a major boost to the export activities in Kashmir Valley, export of aromatic rice mushkabudji and acacia honey from Kashmir Valley has been planned and samples have already been taken up by Kashmir Valley Startups/New Entrepreneurs in August 2021 at Lulu Group FMCG Dubai, have been sent to Oman and other markets in the Middle East.
  • In addition, samples of apples from Kashmir Valley are also planned for export to Oman, Qatar, Dubai, and other Middle East markets during September 2021.
  • It is expected that once the export value chain by road and then by sea container is established, regular supply will start from Kashmir Valley to the Middle East and other international markets.
  • Ladakh apricots were exported for the first time from Leh to Dubai with the assistance of APEDA, followed by commercial export of Ladakh Halman apricots during August-September 2021.
  • The export was handled by local entrepreneurs from Kargil in association with an established exporter from Mumbai and their counterpart in Dubai.

Striving for the future

• • Product samples of seabuckthorn such as juice, pulp, concentrate; oil and herbal fusion tea were obtained in September 2021 and made available to Indian corporate food producers to develop products for domestic and overseas markets. The development of these products to be launched in the international food market may take some time.
  • APEDA has also signed MoU with Shere Kashmir University of Agricultural Science and Technology and Jammu and Kashmir Trade Promotion Organization (JKTPO) for technical assistance and promotional activities to increase productivity and promote potential products from the region.
  • Considering the capacity and future requirement of export infrastructure for the region, APEDA has established Customs Clearance Facilitation Centers at Jammu, Srinagar, and Leh airports, easy X-ray and perishable operations, and issuance of phytosanitary certificates. The issue of issuance of Comprehensive Export Logistics requirement for the Union Territory of Jammu and Kashmir was taken up with the Ministry of Civil Aviation, Central Warehousing Corporation, and other concerned departments during July 2021 for setting up facilitation centers.
    
  • APEDA has developed and provided a draft Agriculture Export Scheme for Kashmir Valley and Jammu Division, both regions of the Union Territory of Jammu and Kashmir, and potential products such as Apples, Cherries, Walnuts, Honey, Saffron, Rice, and Gucci for export. has been identified.
  • The Union Territory of Ladakh is in the process of developing an Agri Export Scheme covering identified potential products such as seabuckthorn, apricots, and certified organic products for export after the draft Agriculture Export Plan is prepared by APEDA during July 2021.
• About APEDA
  • Agricultural and Processed Food Products Export Development Authority (APEDA) was established by the Government of India under the Agricultural and Processed Food Products Export Development Authority Act passed by the Parliament in December 1985.
  • This Act (2 of 1986) came into force with effect from February 13, 1986, vide Gazette of India: Extraordinary Part-II [Section 3 (II): 13.2.1986]. The Authority replaced the Processed Export Promotion Council (PFEPC).