Comprehensive Current affairs 29 August 2020

 Supreme Court says states can sub classify SC/ST’s for providing preferential treatment.

A five-judge Bench of the Supreme Court on Thursday held that States can sub-classify Scheduled Castes and Scheduled Tribes in the Central List to provide preferential treatment to the “weakest of the weak”.The Constitution Bench, led by Justice Arun Mishra, said reservation has created inequalities within the reserved castes itself.

➡With this, the Bench took a contrary view to a 2004 judgment delivered by another Coordinate Bench of five judges in the E.V. Chinnaiah case. The Chinnaiah judgment had held that allowing the States to unilaterally “make a class within a class of members of the Scheduled Castes” would amount to tinkering with the Presidential list.

➡Justice Mishra’s judgment is significant as it fully endorses the push to extend the creamy layer concept to the Scheduled Castes and Scheduled Tribes. The judgment records that “once a

mortgage always a mortgage” cannot be pressed into service for submitting that once a backward class of citizens, always such a backward class.

➡“Citizens cannot be treated to be socially and educationally backward till perpetuity; those who have come up must be excluded like the creamy layer,” the judgment said.

➡The Central List of Scheduled Castes and Tribes is notified by the President under Articles 341 and 342 of the Constitution. The consent of the Parliament is required to exclude or include castes in the List. In short, States cannot unilaterally add or pull out castes from the List.

Mock session was organised in Rajya Sabha.

In preparation of an unprecedented monsoon session of Parliament where members of both Houses will be sitting in multiple locations to adhere to the physical distancing norms, RajyaSabha Chairman M. Venkaiah Naidu held a 45-minute mock session on Thursday to check the facilities.

➡To comply with the physical distancing norms amid the COVID-19 pandemic, RajyaSabha members will be seated in the main hall and four galleries of the Upper House along with the LokSabha hall. This requires Mr. Naidu to keep an eye on six locations from where the members will be participating in the proceedings.

➡Officials of the RajyaSabha were made to sit in the chambers of both the Houses and the galleries for the mock proceedings.

ASEAN-India Business Council virtual meeting held.

Commerce and Industry Minister PiyushGoyal has said, Cooperation, Collaboration and Commitment, will guide the strategic partnership between India and ASEAN countries.

➡Addressing the ASEAN-India Business Council virtual meet yesterday, Mr Goyal said the COVID-19 pandemic period provided a unique opportunity to India to demonstrate itself as the trusted partner to the world, particularly in times of stress. The Minister also extended a hand of

friendship to the ASEAN region, which he described as deep and valuable partners and partners in the progress.

➡Mr Goyal said that Aatamnirbhar Bharat connotes a self-reliant country which is ready to engage with the world from the position of strength and confidence, and on equal and fair terms. He said India and ASEAN have not been able to harness the full trade potential, for various reasons, but now is the time to open matrix to expand trade, address concerns of all nations and businesses, and resolve the differences.

➡He extended India’s friendship and partnership to ASEAN through businesses, so that both the partners are able to succeed and achieve a target of 300 billion dollar trade.

NITI Aayog releases Export Preparedness Index.

NITI Aayog today released the Export Preparedness Index (EPI) 2020. EPI intends to identify challenges and opportunities; enhance the effectiveness of government policies and encourage a facilitative regulatory framework.

The structure of the EPI includes four pillars which are Policy, Business Ecosystem, Export Ecosystem and Export Performance.

It also includes 11 sub-pillars like Export Promotion Policy, Institutional Framework, Business Environment, Infrastructure and Transport Connectivity.

On the occasion, NITI Aayog Vice Chairman Dr Rajiv Kumar said that the Indian economy holds immense potential to become a strong exporter on the world stage.He said, to realize this vision, the Export Preparedness Index evaluates states’ potentials and capacities.

NITI Aayog, Chief Executive Officer Amitabh Kant said that the Export Preparedness Index is a data-driven effort to identify the core areas which are crucial for export promotion at the sub-national level.

He said, all the states and Union Territories have been assessed on crucial parameters that are critical for any typical economic unit to achieve sustainable export growth.

This edition of EPI has shown that most Indian states performed well on average across the sub-pillars of Exports Diversification, Transport Connectivity and Infrastructure.

Government brings in speedier disposal of goods imported by PSU’s.

Government has announced a major initiative to allow the Public Sector Undertakings to first clear the goods imported by them through Customs and then pay Customs duty later, within 14 days.

In a statement, Central Board of Indirect Taxes and Customs, CBIC said, this measure is expected to result in speedier clearance of the goods imported by the PSUs.

It said, the scheme of deferred payment of Customs duties was first introduced in November, 2016 for importers recognized by the CBIC as Authorized Economic Operators.

GIS enabled land bank system launched.

Recently the Union Minister of Commerce and Industry launched National GIS enabled Land Bank System.

➡The platform is to provide database of industrial clusters all over India. It will serve as one-stop solution to free and easy accessibility of industrial information. The platform is to be supported by National Centre of Geo-Informatics, Invest India, National E-Governance Division, Ministry of Electronics and Information Technology, Bhaskaracharya Institute for Space Application and Geo-Informatics.

➡This will help India in achieving its target of 5 trillion USD economy in five years. In order to achieve the target, the manufacturing sector has to play a major role as it has the potential to provide value addition and employment.

➡During the launch of the system, the states were called upon to adopt Public Procurement Policy. Also, the states were suggested to adopt local manufacturing to boost AtmaNirbhar Bharat Abhiyan.

➡The platform has mapped 3,300 industrial parks covering 4,75,000 hectares of land. It holds information related to forest, raw material heat maps, drainage and multiple layers of connectivity.

INS Viraat will be scrapped at a ship breaking yard at Alang Gujarat  

The decision to scrap INS Viraat was actually taken in 2019.

INS Viraat holds the Guinness World Record for being the longest serving warship of the world.

• A Centaur class aircraft carrier weighing 27,800 tonnes, served in the British Navy as HMS Hermes for 25 years from November 1959 to April 1984. It was commissioned into the Indian Navy in May 1987 after refurbishment.

• It was the last of the light fleet carrier designs started during the closing years of World War II (1939-45).

• It played a major role in Operation Jupiter in 1989 during the Sri Lankan Peacekeeping operation. It also saw action during Op Parakram in 2001-2002, post the terrorist attack on Parliament.

• The indigenous Advance Light Helicopters ‘Dhruv’ and the Russian twin rotor Kamov-31have also operated from the ship.

• It was decommissioned in March 2017, and the Navy had been incurring expenditure since then on its upkeep, such as the provision of electricity and water, and repairs. It was also taking up space in the crowded Naval dockyard.

• There had been demands from various quarters to not let Viraat go the way of Vikrant,India’s first carrier that was eventually scrapped.

• It also played a role in the 1971 war with Pakistan was broken down in Mumbai.

• It could not be handed over to any state government because of lack of “self-sustaining financially complete” proposal to preserve it. The state governments of Maharashtra and

Andhra Pradesh had planned to preserve the aircraft carrier (in the form of a museum).

• India is currently doing with only the 44,500-tonne INS Vikramaditya, the refurbished Admiral Gorshkov inducted from Russia in November 2013.

• The trials of the first indigenous aircraft carrier (IAC-I, to be named as INSVikrant) being built at the Cochin Shipyard have been derailed by the pandemic.

• The Government’s approvals for a third carrier, the65,000-tonneIAC-II (tentatively christened INS Vishal) has been pending since May 2015.

India needs aircraft carriers to secure the seas of the Indo-Pacific, to maintain peace, secure trade routes, and provide security to the region.

Natiional clean Air Programme

• Recently, the National Green Tribunal (NGT) has directed the Ministry of Environment, Forest and Climate Change (MoEFCC) to modify the National Clean Air Programme (NCAP) which proposes 20-30% reduction of air pollution by 2024.

NCAP:

• It was launched by the MoEFCC in 2019. It is the first-ever effort in the country to frame a national framework for air quality management with a time-bound reduction target.

• It seeks to cut the concentration of coarse (particulate matter of diameter 10 micrometer or less, or PM10) and fine particles (particulate matter of diameter 2.5 micrometer or less, or PM2.5) by at least 20% in the next five years, with 2017 as the base year for comparison.

• It includes 102 non-attainment cities, across 23 states and Union territories, which were identified by the Central Pollution Control Board (CPCB) on the basis of their ambient air quality data between 2011 and 2015.

• The Non-attainment cities are those that have fallen short of the National Ambient Air Quality Standards (NAAQS) for over five years.

Highlights:

• The enforcement of the ‘Sustainable Development’ principle and ‘Public Trust Doctrine’ require stern measures to be adopted to give effect to the mandate of international obligations related to environmental quality, for which the Environment (Protection) Act, 1986 was enacted.

• The Public Trust Doctrine states that the sovereign, or state, holds the trust of people to manage the designated resources for the benefit of the people.

• The Right to Clean Air stood recognized as part of Right to Life and failure to address air pollution is a denial of Right to Life under Article 21.

• Source Apportionment is the practice of Deriving Information about Pollution Sources and the amount they contribute to ambient air Pollution Levels.

• The concept of “carrying capacity” addresses the question as to how many people can be permitted into any area without the risk of Degrading the Environment there.

Special focus on mains.

Govt.of TN Notified rules for Protected Agri Zones in the state.

The State government has notified the Tamil Nadu Protected Agricultural Zone

Development Rules, 2020, which prescribed four new functions for the Tamil Nadu Protected Agricultural Zone Development Authority.

About the News:

• On February 21 2020, the State government enacted the Tamil Nadu Protected Agricultural Zone Development Act, 2020, with objectives to use the available agricultural lands for sustainable

development of agriculture and ensure that the agricultural activities were not unduly constrained by non-agricultural use or other development and several

other objectives.

• The rules were recently notified that provided for constituting a seven- member technical committee that would assist the authority.

• The committee would be headed by the Agricultural Production Commissioner and the Secretary to the Government in the Agriculture Department, who would be the ex-officio chairperson.

What are the Functions of the Committee?

• The seven-member technical committee that would assist the authority to recommend to the government whether to omit or include industries under the Second Schedule provided in the Act within the zone.

• The other functions of the authority, headed by the Chief Minister, would be “to suggest measures to safeguard the natural surface, soil and water, suggest measures to safeguard the livelihood of farmers in the protected agricultural zone, and recommend the area for inclusion in the protected agricultural zone.”

• One of the newly-included functions of the Authority is to “suggest and recommend the agro-based and allied industries that may be established in the protected agricultural zone”

• The Director of Agriculture (Member Secretary), the Director of Horticulture and Plantation Crops, the Chairperson of the Tamil Nadu Pollution Control Board, the Director of Industries and Commerce, the Director of Animal Husbandry and the Director (Research) in the Tamil Nadu Agricultural University are the ex-officio members of the Technical Committee.

What is a Protected Agriculture Zone?

• Declaring as the Protected Special Agriculture Zone ensures that particular region will not be granted permission for any new projects like those related to hydrocarbons.

• Only Agro based Industries would be Given Permission to be Built.

About Cauvery Delta Zone (CDZ):

• Cauvery Delta Zone (CDZ) lies in the eastern part of Tamil Nadu. It is bounded by the Bay of Bengal on the east and the Palk Strait on the south. In this zone, rice is the principal crop.

• The Cauvery delta region is the rice bowl of Tamil Nadu that comprises eight districts. This region produces 33 lakh tonnes of grains in 28 lakh acres.

• To guard the delta areas and end farmers’ ordeals, the special protection will be bestowed on Cauvery Delta districts such as Thanjavur, Tiruvarur, Nagappattinam, Pudukottai, Cuddalore, Ariyalur, Karur and Tiruchirappalli districts.

Why such Protection is Essential?

• The Cauvery Delta Region is an important agricultural region in Tamil Nadu and farmers continue to do agriculture, despite climate changes.

• It is just and reasonable that projects like hydrocarbon exploration have raised concerns among farmers and other agriculture-based labourers.

• Since the delta region is close to the sea, there is a need to Safeguard the region.

What would be the Benefits of this Declaration?

• The benefits that have accrued for farmers are manifold.

• Drilling for extraction of oil and gas in these regions that hampers agriculture and posing much environmental impact or health hazards will be stopped immediately.

• Whatever the project introduced by the centre, it cannot be implemented without the NOC from that state.

Significance of the Declaration:

• The delta districts contribute a substantial portion of Tamil Nadu’s food grain requirement and any threat to the cropping pattern would destabilize the food security.

• Legal obligation: The government has to maintain adequate reserves to provide five kilograms of wheat, rice or millet per month to nearly three-fourths of our population, a legal obligation under the National Food Security Act. In the coming years, food grains will not be easily available in the international market and price volatility will be high.

• Saving farmlands: In the interest of food security, there is a need to create SAZs where land will be only utilized for farming.

• Fighting climate change: A lot remains to be done to face the challenges arising from a sub-normal monsoon. One major drought can exhaust the food stocks.

SC hits out at Centre on Loan Moratorium Scheme

The Supreme Court criticised the Centre for “hiding behind the Reserve Bank of India” without making its stand clear on the loan moratorium scheme introduced during the COVID-19 Pandemic.

About :

The court wanted to know whether the deferment of loan interest to prop up borrowers through their financial crisis during the national lockdown would lead to accrual of further interest once the freeze was lifted on August 31.

• Noting that the issue had been pending indecisively for some months now, the court advised the government against adopting a blinkered vision, focussing only on matters of business of banks and not looking to the plight of people financially dented by the “problems created by lockdown”.

• The court said the government was empowered to take an independent stand under the Disaster Management Act.

What is Loan Moratorium?

It refers to a particular period of a loan tenure during which the borrower does not have to repay anything.

• It can be described as a waiting period before the borrower will have to start paying the equated monthly instalments (EMIs) for his or her loan.

• It doesn’t mean that the borrower is completely waived off his Loans.

What was the Court’s Concern?

• The court has been consistently questioning the RBI and the government whether the deferment of loan interest would lead to charging of interest on interest once the freeze was lifted after August 31.

• The court said its proceedings were focussed one question: whether the moratorium would eventually lead to payment of interest on interest deferred for six months. “Will the banks be able to bear the burden if there is no interest on interest charged”.

What was the Government’s Earlier Reply?

A complete waiver of deferred loan interests would have a “serious cascading effect” on the financial interests of the depositors.

• When no interest is charged during this [moratorium] period, it will hit the banks hard.

• Today, nobody can say when the banks will get their revenue back. Since, some companies are running on 70%, revenue for the hospitality sector is zero; the airline sector is zero there is no signs of revenue generation to take the absolute decision regarding this matter.

• So, we have to wait and check the situation persisting and according to the situations decisions will be made further.

Different Terminologies in Banking Sector:

• REPO rate (now 4%) denotes Re Purchase Option – the rate by which RBI gives loans to other banks. In other words, it is the rate at which banks buy back the securities they keep with the RBI at a later period.

• Bank gives loan to the public at a higher rate, often 1% higher than REPO rate, at a rate known as Bank Rate.

• RBI at times borrows from banks at a rate lower than REPO rate, and that rate is known as Reverse REPO rate (now 3.35%).

• CRR or Cash Reserve Ratio corresponds to the percentage of cash each bank have to keep as cash reserve with RBI (in their current accounts) corresponding to the deposits they have. For example, say if State Bank of India (SBI) got a total deposit of Rs. 1 crore with them, they need to keep 3 % of that as cash reserve with RBI (around 3 lakh rupees).

• The banks and other financial institutions in India have to keep a fraction of their total net time and demand liabilities in the form of liquid assets such as G-secs, precious metals, approved securities etc. The Ratio of these liquid assets to the total demand and time liabilities is called Statutory Liquidity Ratio (18%.

Q) Describe the major service sectors and their contribution in GDP growth during pandemic period. What are the roles of FDI in the Services Sector?

Context:

• The service sector has been a key driver of both the global and Indian economy over the last three decades.

• The economic reforms since the early Nineties unleashed the potential of the services sector by utilising available skilled manpower due to state-supported higher education.

• India is probably the only big economy that didn’t follow linear growth theories by jumping from a predominantly agricultural economy to a services-led growth economy without much improvement in manufacturing.

• The share of manufacturing in India’s GDP has remained stagnant around 16 per cent for nearly three decades and we are nowhere near the 2022 target of 25 per cent.

• As a result, India’s growth story has been driven by services, which has a 55 per cent share in the economy.

• Services exports have outperformed goods exports in the recent years.

• India’s share in the world’s commercial services exports has risen steadily over the past decade to reach 3.5 per cent in 2018— twice the sector’s share in the world’s merchandise exports,1.7 per cent.

Service provider:

• India is fast becoming a major quality service provider. Even before the COVID pandemic set in and just before the nationwide lockdown was announced at the end of March, the sector was booming.

• The widely-tracked Nikkei India PMI Index stood at 57.5 in February, up from 55.5 in January.

• However, IHS Markit India Services Index reports that the services sector has been contracting for five consecutive months since March, with an index of 34.2.

• In PMI jargon, the 50-mark level separates expansion from contraction.

• Given the uncertainty in the world market and the projected slowdown of developed economies by 8 per cent this year, India’s services-led growth has to depend mostly on the domestic economy.

• Have we done enough to revive the services sector?

• The Centre rolled out a whopping Rs 20.9 lakh crore stimulus package to pull the economy out from the ravages of the pandemic.

• The package had a strong focus on the MSME sector, employee provident fund, power distribution companies and taxation, among other affected areas.

• Most of the stimulus package is in the form of funding and loan opportunities and, injecting liquidity to the market.

Plight of service sector:

• While the package is a beam of hope for some, it has overlooked the plightof the services sector.

• The sector finds little mention or attention in the government’s Atmanirbhar Reform Package.

• The sector’s significance in the economy continues to grow with its share amounting to two-thirds of total FDI inflows into India and about 38 per cent of total exports.

• As the post-pandemic world is taking shape, the sector is struggling hard to keep its head above water.

• The tourism industry, which contributed nearly 10 per cent of GDP, is now witnessing a large-scale reduction in jobs and operating returns have plummeted to 10 per cent of previous revenues for most.

• If the CAPA Centre for Aviation is to be believed, the aviation sector is expected to have lost $3.6 billion in the three months leading up to June.

• The number of potential job losses in the sector gives an even harder jolt to an already dwindling economy.

• After holding rounds of meetings with industry representatives and making several references to its condition in speeches, the government is not aloof from the catastrophic consequences suffered by the sector. But its by-stander position would only worsen the situation.

Neglect of service sector:

• From tourism, aviation, shipping, space to call centres and delivery services, the standstill in activities is bound to have a knock-out effect on employment, production and the economy as a whole. 

• The big picture suggests that the current relief provisions for the primary and secondary sectors would also be nullified as a consequence of neglecting the tertiary sector.

• An immunity-building exercise through capital infusion and appropriate relaxation in relevant sectors will help the economy to survive the pandemic.

• Most of the services sectors are the worst affected and unfortunately, we don’t see any specific fiscal and monetary stimulus for them.

• In fact, some sectors would find it difficult to survive if the pandemic continues.

• In the short run, the government needs to make cuts in VAT, which ranges from 0-30 per cent on aviation fuel, make provisions for GST holidays, compensate for wages of workers under distress and draft flexible terms for working capital credit.

• Since no great incentives were given to this sector in the reform package, it contracted for the fifth successive month in July (34.2 PMI).

• The government is also in the process of scrapping or rationalising most of the export-incentive schemes affecting both goods and services exports — these including the Merchandise Exports from India Scheme (MEIS), Services Exports from India Scheme (SEIS), schemes related to export-oriented units and the Export Promotion Capital Goods Scheme — due to certain issues raised by the department of revenue and also to make some of these schemes WTO-compliant.

• This is expected to further hurt exporters.

Conclusion:

• The government must focus on the sector in the forthcoming Foreign Trade Policy (FTP) by announcing schemes-based export incentives and provides interim relief by continuing with the existing schemes in the short run, the sector will take a long time to revive.