DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 2nd February 2021

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(PRELIMS + MAINS FOCUS)

8th edition of the India International Silk Fair inaugurated

Part of: GS Prelims and GS- III – Economy

In news 

• Union Textiles Minister recently inaugurated the 8th edition of the India International Silk Fair virtually.

Key takeaways

• The fair is considered to be India’s biggest silk fair.
• It is the Sourcing Fair for silk and silk blend products.
• Organised by: Indian Silk Export Promotion Council 
• Ministry: Ministry of Textiles 
• Sponsored by: Department of Commerce

Important value additions

• India is the 2nd largest producer of Silk.
• India is the only country in the world that produces all four major varieties of silk i.e. Mulberry, Eri, Tassar, and Muga.
• Mulberry silk: Mainly in Karnataka
• Non-mulberry Silk: Temperate tussar silk in Maharashtra,WB, Odisha, Jharkhand, Andhra Pradesh; Tropical tussar silk in sub –himalayan belt ( Manipur, Assam, Meghalaya,etc); Muga Silk in Assam and Eri silk in Assam, Odisha, Bihar
• India has around 11 Geographical Indications (GI) such as: Pochampally Ikat, Chanderpaul Silk, Mysore Silk, Kanchipuram Silk, Muga Silk, Salem Silk, Arni Silk, Champa Silk, Bhagalpur Silk, Banaras Brocade and Sarees, etc.

Related articles:

• Types of silk and challenges of India’s silk industry: Click here

UK Special Visa Scheme For Hong Kong Residents

Part of: GS Prelims and GS- II – International relations

In news 

• The UK is opening a special visa scheme that will allow lakhs of Hong Kong residents a chance to migrate and eventually apply for British citizenship.

Key takeaways

• The visas will be issued to those in Hong Kong who hold a British National (Overseas) passport and their immediate dependents and will offer a fast track to UK citizenship.
• Applicants who get the visa can live and work in the UK for 5 years, after which they apply for settlement. Twelve months after this, they can apply for citizenship.
• The move is considered the UK’s most generous welcoming of foreign workers since the entry of new EU citizens in 2004.
• The move comes months after China imposed a sweeping national security law over the Hong Kong, aiming for pro-democracy protests that had captured global attention since 2019.

Related articles:

• Hong Kong National Security Law: Click here

Ethylene glycol: a chemical found in antifreeze

Part of: GS Prelims and GS- III – Sci & Tech

In news 

• Eleven US soldiers recently fell sick after accidentally drinking ethylene glycol, a chemical found in antifreeze.

Important value additions

• Ethylene glycol is an industrial compound found in consumer products including automotive antifreeze, hydraulic brake fluids, some stamp pad inks, ballpoint pens, solvents, paints, plastics, films, and cosmetics, and is also used as a pharmaceutical vehicle.
• It is a synthetic liquid, which is odourless. 
• It is used to make antifreeze and de-icing solutions for cars, airplanes, and boats.
• Ethylene glycol has a sweet taste and is often accidentally or intentionally ingested.
• Once ingested, ethylene glycol is chemically broken down into toxic compounds.
• These by-products then affect the central nervous system (CNS), the heart, and then the kidneys. 
• The ingestion of sufficient amounts can be fatal.
• Ethylene glycol can be disseminated through indoor air, water, food, outdoor air, and agricultural products.

Community in news: Matua

Part of: GS Prelims and GS- I – Culture

In news 

• The Matua community of West Bengal was recently in news.

Important value additions

• The Matua community has members on either side of the Bengal border.
• It is associated with a religious movement begun in the 1870s by Harichand Thakur of a Namasudra (SC) family, who hailed from Safaldanga in East Bengal.
• In the early 20th century, his son Guruchand organized the movement socially and politically. 
• In 1915, the Matua Federation was established.
• Today, Matuas constitute the second-largest SC population of West Bengal. 
• For years, the Matuas were demanding an amendment to the Citizenship Act of 2003, whose provisions made it difficult for refugees to get citizenship. 

National E-Vidhan Application (NEVA) Project

Part of: GS Prelims and GS- II – Polity and governance

In news 

• National E-Vidhan Application (NEVA) Project in Meghalaya was recently in news. 

Important value additions

• e-Vidhan is a Mission Mode Project (MMP) included in Digital India Programme.
• Nodal Ministry for its implementation: Ministry of Parliamentary Affairs (MoPA) 
• Funding of NeVA is on the pattern of Central Sponsored Scheme i.e. 60:40; and 90:10 for North East & hilly States and 100% for UTs.
• The funding for e-Vidhan is provided by the MoPA. 
• Technical support: Ministry of Electronics and Information Technology (MeitY).

Do you know?

• Paperless Assembly or e-Assembly is a concept involving electronic means to facilitate the work of Assembly. 

• It enables automation of the entire law-making process, tracking of decisions and documents, sharing of information.

• Aim of NeVA: To bring all the legislatures of the country together, in one platform thereby creating a massive data depository without having the complexity of multiple applications.
• Further, live webcasting of Lok Sabha TV and Rajya Sabha TVs is also available on this application. 
• Doordarshan has already been enabled with provision to incorporate similar facilities in respect of State Legislatures.

Art in news: Pattachitra

Part of: GS Prelims and GS- I – Culture

In news 

• ‘Pattachitra’ painting was recently in news when Prime Minister cited the example of Bhagyashree Sahu, a young student from Rourkela in Odisha for her keen interest in ‘Pattachitra’ painting, during his Mann ki Baat program.

Important value additions

• Patta means cloth, and Chitra means picture. 
• Pattachitra is a picture painted on a piece of cloth. 
• It is based in the states of West Bengal and Odisha.

• Bengal tradition: It is centered around Kalighat (in Kolkata). The theme is Not much devotional.
• Odisha tradition: It is centered around Puri. Almost all of the Chitrakar community hails from a small village in Puri district called Raghurajpur.
• Odisha paintings are based on Hindu mythology and are especially inspired by Jagannath and the Vaishnava sect.
• All colors used in the Paintings are natural.

Budget 2021-22: Science & Tech

Part of: GS Prelims and GS- III – Sci & Tech

In news 

• To strengthen the overall research ecosystem of the country, the Union Budget FY 2021-22 announced a slew of new initiatives to boost innovation and R&D in the country.

Key takeaways

• The Finance Minister proposed an outlay of Rs 50,000 crore, spread over five years, for the National Research Foundation.
• Rs 1,500 crore has been proposed for a scheme that will provide financial incentives to promote digital modes of payment and further boost digital transactions.
• A new initiative called National Language Translation Mission (NTLM) has been proposed that will digitize the wealth of governance-and-policy-related knowledge on the Internet and be made available in major Indian languages.
• New Space India Limited (NSIL), a PSU under the Department of Space, will execute the PSLV-CS51 launch, carrying the Amazonia Satellite from Brazil, along with a few smaller Indian satellites.
• Four Indian astronauts are also being trained on Generic Space Flight aspects, in Russia for the Gaganyaan Mission, slated to be launched in December 2021.
• To better understand the realm of Oceans, Finance Minister proposed to launch a Deep Ocean Mission with a budget outlay of more than Rs 4,000 crores, over five years.

Budget 2021-22: Disinvestment

Part of: GS Prelims and GS- III – Investment; Economy

In news 

• Union Minister for Finance while presenting the Union Budget FY 2021-22 announced that the government has approved a policy of strategic disinvestment of public sector enterprises that will provide a clear roadmap for disinvestment in all non-strategic and strategic sectors.

Key takeaways

• Existing CPSEs, Public Sector Banks, and Public Sector Insurance Companies shall be covered under it.

• Twofold classification of Sectors to be disinvested :

• Strategic Sector: Bare minimum presence of the public sector enterprises and remaining shall be privatized or merged or made subsidiaries with other CPSEs or closed.
• Following 4 sectors to come under it :

1. 1. Atomic energy, Space and Defence
   2. Transport and Telecommunications
   3. Power, Petroleum, Coal, and other minerals
   4. Banking, Insurance, and financial services

• Non- Strategic Sector: In this sector, CPSEs will be privatized, otherwise shall be closed.

Important value additions

• An industry is considered strategic if it has large innovative spill overs and if it provides a substantial infrastructure for other firms in the same or related industries.
• Earlier, the strategic sectors were defined on the basis of industrial policy.
• The government classified Central Public Sector Enterprises (CPSEs) as ‘strategic’ and ‘non-strategic’ on the basis of industrial policy that keeps on changing from time-to-time.
• According to this, the Strategic sector PSUs are:

1. 1. Arms & Ammunition of defence equipment
   2. Defence aircraft & warships
   3. Atomic energy
   4. Applications of radiation to agriculture, medicine and non-strategic industry
   5. Railways

• All other PSUs apart from the strategic sectors fall under Non-strategic Sector including Power Discoms.

Do you know?

• Disinvestment is the action of an organization or government selling or liquidating an asset or subsidiary. 
• The primary objective is to maximize the return on investment (ROI) related to capital goods, labor, and infrastructure.

Budget 2021-22: Minimum Government, Maximum Governance

Part of: GS Prelims and GS- III –Economy & GS – II – Governance

In news 

• Presenting the Union Budget 2021-22 in Parliament, the Union Minister for Finance outlined the plans for reforms in one of the six pillars of the budget i.e. of Minimum Government, Maximum Governance.

Key takeaways

• The forthcoming Census could be the first digital census in the history of India and has been allocated Rs. 3,768 crore in the year 2021-2022.
• It is proposed to set up a Conciliation Mechanism and mandate its use for quick resolution of contractual disputes to increase ease of doing business. 
• This will instill confidence in private investors and contractors.
• To bring about transparency, efficiency, and governance reforms in the nursing profession, The National Nursing and Midwifery Commission Bill will be introduced by the government for passing.
• It is also proposed to take further measures to rationalize the functioning of Tribunals.
• The Centre will give a grant of Rs. 300 crore to the Government of Goa for celebrating the diamond jubilee year of the state’s liberation from Portuguese rule.

(Mains Focus)

ECONOMY/ GOVERNANCE

Topic:

• GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
• GS-2: Government Budgeting

Budget 2021: The 10 biggest takeaways

Context: Union government presented its Budget for the coming financial year (2021-22) that offered not only a direction for growth but also a strong intent for reforms.

The top 10 important highlights of Budget were

1. An Expenditure Budget:Union Government has found space for imparting a fiscal impulse in 2021-22. Compared with a Capital Expenditure of Rs 4.12 lakh crore in Revised Estimate (RE) of 2020-21, government has hiked it 34.46% to Rs 5.54 lakh crore in 2021-22. 

• • Choosing capital expenditure might appear like a unsympathetic choice — because it does not involve money to be handed over directly to the needy (and there are a lot of genuinely needy people in the wake of the Covid-19 disruption). 
  • Instead, it is investment into raising the productive capacity in the economy, which is the best chance India has to return to a path of sustainable economic growth.

2. A Reform Signal:Two public-sector banks and one state-owned general insurance company to be lined up for disinvestment. FDI in insurance to be hiked to 74% from 49% now. There will also be Initial Public Offering for LIC.
3. No Populism, But Focus on Growth:Despite being a tough year for the aam admi, government has avoided giving any income tax relief. No increase in standard deduction, no raise in the tax slabs.
4. Health Gets Its Due:In a year when the world was ravaged by the Covid-19 pandemic, Union Government gives health the attention it merited. Health allocation jumped 137% to Rs 2,23,846 crore in 2021-22 compared with Rs 94,452 crore in 2020-21 that includes Rs 35,000 crore for the Covid-19 vaccine. Government has promised to provide further funds, if required.
5. Bad Bank :After dithering for almost six years, the government has finally decided to set up an asset reconstruction company that will take over the bad loans of banks, giving them flexibility to finance the economic recovery.
6. Development Finance Institutions (DFI) Reborn:The idea was dead with most earlier DFIs including IDBI and ICICI turning into banks. To provide debt to long gestation projects, a new DFI with a capital of Rs 20,000 crore. 

• • The trouble in financing infrastructure in the recent past has been that such projects typically require long-term financing. 
  • Using public sector banks to finance such projects, as India did, led to the banks being straddled with huge NPAs. 
  • For one, such banks did not have the expertise to assess risk accurately. Moreover, regular banks faced an asset-liability mismatch — in other words, they accepted deposits (their liabilities) for a short term but extended loans (their assets) over a much longer term.
  • The DFI proposed will have statutory backing, but will be professionally managed. Lending portfolio of Rs 5 lakh crore within three years.

7. Asset Monetisation :This is an ongoing exercise, where the government has not done much to inspire confidence. National Monetisation Pipeline of potential assets of NHAI, PGCIL, Railways, airports, warehouses, sports stadiums.
8. Highway Projects in Election Bound States:Four poll-bound states get major highway projects: Tamil Nadu (3,500 km – Rs 1.03 lakh crore), Kerala (1,100 km – Rs 65,000 crore), West Bengal (675 km – Rs 25,000 crore) and Assam (1,300 km – Rs 34,000 crore).
9. Strategic Disinvestment – Needs Political/ Bureaucratic Push:NITI Aayog asked to short list non-core PSUs for strategic sale. After a poor show in 2020-21, the government has estimated disinvestment receipts at Rs 1,75,000 crore.
10. Growth Vs Prudence – Tilting Towards Growth:Fiscal deficit estimated at 6.8 per cent of GDP in 2021-22; it is estimated to touch 9.5% in 2020-21. It will be brought down to 4.5 per cent of GDP by 2025-26.

What about the Atmanirbhar Bharat Abhiyan? How has it influenced the Budget?

• The sum and substance of the Atmanirbhar Abhiyan is to promote domestic industry by either preventing imported goods (by raising import duties) from undermining domestic producers or helping domestic companies to source cheap imports (by reducing import duties). 
• MSMEs and other user industries have been severely hit by a recent sharp rise in iron and steel prices. Therefore, government proposed reducing Customs duty uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and stainless steels. Further, government revoked antidumping and Countervailing Duties on certain steel products. This allows companies to source cheap imports that acts as raw materials in their production process.
• Similarly, to help MSMEs in the domestic textile industry, government reduced the basic customs duty on goods like nylon chips, nylon fiber & yarn etc. that acts a raw materials for textile sector.
• For MSMEs in the leather industry, government withdrew the exemption on imports — in other words, make imports difficult — of certain kind of leathers as they are domestically produced in good quantity and quality, mostly by MSMEs. 
• Similarly, government raised customs duty on finished synthetic gem stones to encourage their domestic processing.
• To benefit farmers, government proposed raising customs duty on cotton from nil to 10% and on raw silk and silk yarn from 10% to 15%
• Overall, with these steps the government hopes that the beleaguered MSMEs and the related informal workforce will receive a boost.

Will the Budget help in creating more employment?

• The upshot of the emerging Budget strategy is that the government would rather like to spend on building capital resources and in doing so “crowd in” private investments, which, in turn, will be the source of new jobs.
• But that is the logic on paper. In the real world, job creation will take time. For those who lost their jobs during the pandemic or those who could not get their first one, the outlook is still grainy.
• That’s because economic recovery — especially of the order which creates lots of jobs and quickly — still eludes India.
• In 2021-22, India will register fast economic growth but the fact is this will only make up for the output lost in 2020-21.
• It is significant that India was growing by just about 4% (in 2019-20) going into the Covid crisis. Growing at 7% or 8% coming out of it (that is 2022-23 onwards) is not a foregone conclusion.

Connecting the dots :

• Offbudget Borrowing
• Fiscal Council: Why India needs it?

INTERNATIONAL/ ECONOMY

Topic:

• GS-2: Effect of policies and politics of developed and developing countries on India’s interests
• GS-2: India and its neighbourhood

INDIA-SRILANKA: India Out of Colombo Port Project

Context: After the strong opposition from trade unions across the country, the Sri Lankan government was forced to renege on a 2019 agreement with India and Japan to develop the strategic East Container Terminal (ECT) at the Colombo Port.

Sri Lankan PM announced the operation of the east terminal would be done by Sri Lanka Ports Authority on its own. 

How has India reacted?

To Sri Lankan PM’s statement that ECT development and operation will be done on its own, a news that was seen as embarrassing the Indian side, India’s first response was that the island nation should not be taking a decision in a unilateral manner on an existing tripartite agreement.

What is Sri Lanka’s compensatory offer to India?

• After the Sri Lankan decision reneging on the 2019 agreement, the country’s cabinet has now approved a proposal to develop the west terminal of the Colombo port as a Public Private Partnership with Japan and India. 
• Arguments given by Sri Lanka in favour of West Terminal offer are:
  • Commercially, the west terminal offer is better for India as it gives 85% stake for developers of the West Terminal against the 49% in ECT.
  • Geo-politically too, West Terminal is almost the same if security aspect and the necessity to have a port terminal in Sri Lanka is considered
  • West Terminal is no smaller in size or depth compared to the East Terminal
  • Development of the ECT is partially completed while the development of the West Terminal has to start from scratch

What made Sri Lanka change its word on ECT?

• Agreement under earlier government: As per the agreement signed by the former Maithripala Sirisena-Ranil Wickremesinghe administration in 2019, India and Japan together was to hold 49% stake in ECT.
• Pressure from Colombo port trade unions: President was under pressure as trade unions were protesting opposing privatization of the port and demanded cancellation of the 2019 agreement. Also during the talks with government, trade unions quoted his own presidential manifesto that was contrary to this 2019 agreement.
• Support for protests from other sections of society: While there were reports and allegations among diplomatic circle that the Chinese had played a role in instigating port unions protest against India’s interest, some 223 Sri Lankan unions from different walks of life, including trade unions and civil societies groups, declared support for the port trade unions demand to cancel the ECT agreement.

Will there be similar protests and crises if India accepts the West Terminal offer?

• Ahead of “unilaterally” cancelling the ECT agreement, the Sri Lanka government also managed to get the written consent of unions in this regard, in which 22 out of 23 Unions signed and gave a letter agreeing to support the government in its plans to develop the West Terminal with private investment.
• There is a specific point in the consent letter of unions that said: “We will support a good investment decision that the government would take in future in relation to the west terminal.”
• This is commercially a better deal for Indian Company Adani. And unions had also agreed to mention both east and west terminal decisions in one cabinet paper.
• ViyathMaga (Professionals for a Better Future), a network of academics, professionals and entrepreneurs, had played a key role in the final round negotiations between the unions and the government, which had led to the latest WTC proposal

Connecting the dots :

• String of Pearl Strategy of China
• Hambantota Port Project – Leased out to China

(TEST YOUR KNOWLEDGE)

Model questions: (You can now post your answers in comment section)

Note: 

• Correct answers of today’s questions will be provided in next day’s DNA section. Kindly refer to it and update your answers. 
• Comments Up-voted by IASbaba are also the “correct answers”.

Q.1 Consider the following statements:

1. India is the largest producer of Silk.
2. India is the only country in the world that produces all four major varieties of silk.

Which of the above is/are correct?

1. 1 only
2. 2only
3. Both 1 and 2
4. Neither 1 nor 2

Q.2 Ethylene glycol is an industrial compound found in which of the following consumer products: 

1. Automotive antifreeze
2. Ballpoint pens
3. Solvents
4. Plastics

Select the correct code:

1. 1, 2, 3 and 4 
2. 2 and 3 only
3. 1 and 4 only
4. 1 only

Q.3 Pattachitra painting is based in which of the following state/states of India?

1. West Bengal
2. Odisha
3. Jharkhand
4. Maharashtra

Select the correct code:

1. 1, 2, 3 and 4 
2. 2 and 3 only
3. 1 and 2 only
4. 1 only

Q.4 Which of the following are included under the Strategic sector PSUs:

1. Arms & Ammunition of defence equipment
2. Defence aircraft & warships
3. Atomic energy
4. Applications of radiation to agriculture, medicine and non-strategic industry
5. Railways
6. Power Discoms

Select the correct code:

1. 1, 2, 3, 4 and 5
2. 2, 3 and 6 only
3. 1 and 2 only
4. 1, 3 ,4 and 6 only

ANSWERS FOR 1st  February 2021 TEST YOUR KNOWLEDGE (TYK)

Must Read

On Union Budget 2021:

The Hindu

About Budget and its failure to address hunger Pandemic:

The Hindu