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To expedite exploration activities in the country, Geological Survey of India (GSI), has embarked upon an ambitious scheme to complete some major National level surveys by 2024:
National Geochemical Mapping (NGCM): It is an all India programme to cover the entire surface area of the country by geochemical sampling. The NGCM work will generate distribution pattern of 62 elements (samples collected at 1km x 1km grid) for use in managing and developing natural resources; for application in environmental, agricultural, human health, other social concerns and to search for hidden mineral deposits.
National Geophysical Mapping (NGPM): The anomaly maps derived from the processed gravity and magnetic data provides all stakeholders a framework to design exploration strategies.
National Aero Geophysical Mapping Program (NAGMP): First of its kind project in the country, its objectives are to delineate concealed, deep seated structure/ litho-units capable of hosting mineralization, delineate extension of the existing mineralized zone and understating of shallow crustal architecture in the context of mineral occurrence. It is for the first time that the multi-sensor aero-geophysical surveys (magnetic gradiometry and spectrometric) are being carried out by adopting such large regional scale survey parameters of 300 m traverse line spacing with aircraft flown at 80 m above ground level.
GSI is also going to adopt sophisticated deep penetration geophysical techniques such as Magneto-Telluric Surveys and Deep Seismic Reflection Surveys (DSRS) in order to define the crustal architecture for deep seated mineral targeting.
GSI has also initiated its flagship initiative of National Geoscience Data Repository (NGDR) for collation of all the geoscience data of the country involving GSI, other national organizations with geoscience as a focused activities, all the state directorate of mines and geology, the academia engaged in research and development in the domain, the CPSEs engaged in exploration and geoscientific pursuits, and private sector agencies working in the domain. It aims at integrating the collected data by GSI and the similar organizations to build a repository on the digital medium entailing multiple user access.
Significance of these Programmes:
(Topic: Elections)
National Voters’ Day is celebrated all across the country on January 25 every year since 2011, to mark the foundation day of the Election Commission of India, i.e. 25th January 1950. The main purpose of the National Voters Day celebration is to encourage, facilitate and maximize enrolment, especially for new voters.
Theme: ”Making Our Voters Empowered, Vigilant, Safe and Informed”
Background
Launch of
Election Commission of India’s Web Radio: ‘Hello Voters’ – an online digital radio service.
e-EPIC (Electronic Electoral Photo Identity Card) programme: The e-EPIC is a non-editable secure portable document format (PDF) version of the EPIC (approx. 250 KB) which can be downloaded on mobile or in a self-printable form on the computer.
(Topic: India and International organisations)
The Framework for Strategic Partnership between the International Energy Agency (IEA) members and the Government of India was signed on 27th January, 2021.
Aim: To strengthen mutual trust and cooperation & enhance global energy security, stability and sustainability. This partnership will lead to an extensive exchange of knowledge and would be a stepping stone towards India becoming a full member of the IEA.
The contents of the Strategic partnership will be jointly decided by the IEA Members and India, including
The IEA Secretariat will be responsible for implementation of the cooperative activities in India and for facilitating discussion between the IEA Members and India to further develop the Strategic Partnership.
(Topic: India and International organisations)
(Topic: India and International organisations)
Agreement for the financial support of the implementation of Strengthening Teaching-Learning and Results for States (STARS) project of Ministry of Education was signed between Department of Economic Affairs (DEA) and World Bank along with Ministry of Education. The total project cost of STARS project is Rs 5718 crore with the financial support of World Bank amounting to US $ 500 million (approximately Rs. 3700 crore) and rest coming as State share from the participating States, over a period of 5 years.
The project covers 6 States viz Himachal Pradesh, Rajasthan, Maharashtra, Madhya Pradesh, Kerala and Odisha. The identified States will be supported for various interventions for improving the quality of education.
The Program envisions improving the overall monitoring and measurement activities in the Indian school education system through interventions in selected states.
STARS project will be instrumental in the implementation of various recommendations of National Education Policy 2020 i.e.
(Topic: Environment, Climate change)
Initiatives undertaken
The International Solar Alliance and the Coalition for Disaster Resilient Infrastructure show the power of global climate partnership.
Solar bank plan in India
PM Modi said in his address, “We have promised ourselves that: We will not just meet our Paris Agreement targets, but exceed them; We will not just arrest environmental degradation but reverse it; and, We will not just create new capacities but make them an agent for global good.”
(Topic: Environment, Climate change)
Objective: To strengthen Indo-French cooperation in sustainable development, increase the effectiveness of actions in favor of global environment protection and give them greater visibility.
India has made significant progress towards climate change action & has already achieved 26% of reduction of emission intensity. As of 2020 the renewable capacity in India stands at 90 GW which includes 36 GW of solar energy & 38 GW of wind energy. India looks forward to strengthen the Indo-French cooperation in sustainable development, increase the effectiveness of actions in favor of the global environment protection and give them greater visibility.
The Indo-French Year of the Environment over the period 2021-2022 would be based on five main themes:
(Topic: Environment, Climate change)
Approval has been granted to the proposal to levy a “Green Tax” on old vehicles which are polluting the environment. The proposal will now go to the states for consultation before it is formally notified.
Main principles to be followed while levying the Green Tax are:
Benefits of the “Green Tax”:
Approval has also been granted on the policy of deregistration and scrapping of vehicles owned by Government department and PSU, which are above 15 years in age. It is to be notified, and will come into effect from 1st April, 2022.
It is estimated that commercial vehicles, which constitute about 5% of the total vehicle fleet , contribute about 65-70% of total vehicular pollution. The older fleet, typically manufactured before the year 2000 constitute less that 1 % of the total fleet but contributes around 15% of total vehicular pollution. These older vehicles pollute 10-25 times more than modern vehicles.
(Topic: Biodiversity, Conservation)
Objective: To have a conservation paradigm for marine mega fauna and marine turtles
Despite the immense economic, ecological and cultural values of marine habitats in India, marine mega fauna species and marine turtles face a wide variety of challenges including stranding and entanglement. Managing such challenging situations requires coordination, action and people’s participation which would help in the long-term conservation of marine species and their habitats.
Significance
India has rich marine biodiversity along a vast coastline of over 7,500 km. From colorful fish, sharks, including Whale Sharks, turtles and big mammals like whales, dolphins and dugongs to bright corals, marine habitats not only harbor diverse species but also provide resources essential for human wellbeing.
Millions of people depend on these resources ranging from maritime trade and transport, food, mineral resources, cultural traditions, spiritual values and inspiration that draws tourists from around the world.
(Topic: Defence Technology)
DRDO conducted the successful maiden launch of Akash-NG (New Generation) Missile from Integrated Test Range off the coast of Odisha.
Prelims-oriented News
PRAGATI
PRAGATI is the multimodal platform for Pro-Active Governance and Timely Implementation involving central and state governments. It enables the PM to discuss the issues with the concerned central and state officials with full information and latest visuals of the ground-level situation.
Objective:
The PRAGATI platform uses latest technologies such as Digital data management, video-conferencing and geo-spatial technology.
Significance:
125th anniversary celebrations of ‘Prabuddha Bharata’ on 31st Jan
The journal ‘Prabuddha Bharata’ has been an important medium for spreading the message of India’s ancient spiritual wisdom. Its publication was started from Chennai (erstwhile Madras), where it continued to be published for two years, after which it was published from Almora. Later, in April 1899, the place of publication of the Journal was shifted to Advaita Ashrama and it has been continuously published from there since then.
Some of the greatest personalities have left their imprint on the pages of ‘Prabuddha Bharata’ through their writings on Indian culture, spirituality, philosophy, history, psychology, art, and other social issues. Luminaries like Netaji Subhas Chandra Bose, Bal Gangadhar Tilak, Sister Nivedita, Sri Aurobindo, Former President Sarvepalli Radhakrishnan, among others, have contributed to the Journal over the years.
The Advaita Ashrama is working towards making the entire ‘Prabuddha Bharata’ archive available online on its website.
Lala Lajpat Rai
Key Highlights of Economic Survey 2020-21
Saving Lives and Livelihoods amidst a Once-in-a-Century Crisis
An early, intense lockdown provided a win-win strategy to save lives, and preserve livelihoods via economic recovery in the medium to long-term. Strategy also motivated by the Nobel-Prize winning research by Hansen & Sargent (2001): a policy focused on minimizing losses in a worst-case scenario when uncertainty is very high
COVID pandemic affected both demand and supply:
A public investment programme centered around the National Infrastructure Pipeline to accelerate the demand push and further the recovery
Upturn in the economy, avoiding a second wave of infections – a sui generis case in strategic policymaking amidst a once-in-a-century pandemic
State of the Economy in 2020-21: A Macro View
COVID-19 pandemic ensued global economic downturn, the most severe one since the Global Financial Crisis. The lockdowns and social distancing norms brought the already slowing global economy to a standstill. Global economic output estimated to fall by 3.5% in 2020 (IMF January 2021 estimates). Governments and central banks across the globe deployed various policy tools to support their economies such as lowering policy rates, quantitative easing measures, etc.
India adopted a four-pillar strategy of containment, fiscal, financial, and long-term structural reforms:
As per the advance estimates by NSO, India’s GDP is estimated to grow by (-) 7.7% in FY21 – a robust sequential growth of 23.9% in H2: FY21 over H1: FY21
Agriculture remained the silver lining while contact-based services, manufacturing, construction were hit hardest, and recovering steadily
India remained a preferred investment destination in FY 2020-21 with FDI pouring in amidst global asset shifts towards equities and prospects of quicker recovery in emerging economies:
Buoyant SENSEX and NIFTY resulted in India’s market-cap to GDP ratio crossing 100% for the first time since October 2010
Softening of CPI inflation recently reflects easing of supply side constraints that affected food inflation
Mild contraction of 0.8% in investment (as measured by Gross Fixed Capital Formation) in 2nd half of FY21, as against 29% drop in 1st half of FY21
Reignited inter and intra state movement and record-high monthly GST collections have marked the unlocking of industrial and commercial activity
The external sector provided an effective cushion to growth with India recording a Current Account Surplus of 3.1% of GDP in the first half of FY21:
V-shaped recovery is underway, as demonstrated by a sustained resurgence in high frequency indicators such as power demand, e-way bills, GST collection, steel consumption, etc.
India became the fastest country to roll-out 10 lakh vaccines in 6 days and also emerged as a leading supplier of the vaccine to neighbouring countries and Brazil
Economy’s homecoming to normalcy brought closer by the initiation of a mega vaccination drive:
India’s mature policy response to the ‘once-in-a-century’ crisis provides important lessons for democracies to avoid myopic policy-making and demonstrates benefits of focusing on long-term gains
Does Growth lead to Debt Sustainability? Yes, But Not Vice- Versa!
Growth leads to debt sustainability in the Indian context but not necessarily vice-versa:
Negative IRGD in India – not due to lower interest rates but much higher growth rates – prompts a debate on fiscal policy, especially during growth slowdowns and economic crises
Growth causes debt to become sustainable in countries with higher growth rates; such clarity about the causal direction is not witnessed in countries with lower growth rates
Fiscal multipliers are disproportionately higher during economic crises than during economic booms
Active fiscal policy can ensure that the full benefit of reforms is reaped by limiting potential damage to productive capacity
Fiscal policy that provides an impetus to growth will lead to lower debt-to-GDP ratio
Given India’s growth potential, debt sustainability is unlikely to be a problem even in the worst scenarios
Desirable to use counter-cyclical fiscal policy to enable growth during economic downturns
Active, counter-cyclical fiscal policy – not a call for fiscal irresponsibility, but to break the intellectual anchoring that has created an asymmetric bias against fiscal policy
Does India’s Sovereign Credit Rating Reflect Its Fundamentals? No!
The fifth largest economy in the world has never been rated as the lowest rung of the investment grade (BBB-/Baa3) in sovereign credit ratings:
India’s sovereign credit ratings do not reflect its fundamentals:
Credit ratings map the probability of default and therefore reflect the willingness and ability of borrower to meet its obligations:
Sovereign credit rating changes for India have no or weak correlation with macroeconomic indicators
India’s fiscal policy should reflect Gurudev Rabindranath Tagore’s sentiment of ‘a mind without fear’
Sovereign credit ratings methodology should be made more transparent, less subjective and better attuned to reflect economies’ fundamentals
Inequality and Growth: Conflict or Convergence?
The relationship between inequality and socio-economic outcomes vis-à-vis economic growth and socio-economic outcomes, is different in India from that in advanced economies.
Both inequality and per-capita income (growth) have similar relationships with socio-economic indicators in India, unlike in advanced economies
Economic growth has a greater impact on poverty alleviation than inequality
India must continue to focus on economic growth to lift the poor out of poverty
Expanding the overall pie – redistribution in a developing economy is feasible only if the size of the economic pie grows
Healthcare takes centre stage, finally!
COVID-19 pandemic emphasized the importance of healthcare sector and its inter-linkages with other sectors – showcased how a health crisis transformed into an economic and social crisis
India’s health infrastructure must be agile so as to respond to pandemics – healthcare policy must not become beholden to ‘saliency bias’
National Health Mission (NHM) played a critical role in mitigating inequity as the access of the poorest to pre-natal/post-natal care and institutional deliveries increased significantly
An increase in public healthcare spending from 1% to 2.5-3% of GDP can decrease the out-of-pocket expenditure from 65% to 35% of overall healthcare spending
A regulator for the healthcare sector must be considered given the market failures stemming from information asymmetry
Telemedicine needs to be harnessed to the fullest by investing in internet connectivity and health infrastructure
Process Reforms
Regulatory Forbearance an emergency medicine, not staple diet!
Innovation: Trending Up but Needs Thrust, Especially from the Private Sector
JAY Ho! PM‘JAY’ Adoption and Health outcomes
Pradhan Mantri Jan Arogya Yojana (PM-JAY) – the ambitious program launched by Government of India in 2018 to provide healthcare access to the most vulnerable sections demonstrates strong positive effects on healthcare outcomes in a short time
PM-JAY is being used significantly for high frequency, low cost care such as dialysis and continued during the Covid pandemic and the lockdown.
Causal impact of PM-JAY on health outcomes by undertaking a Difference-in-Difference analysis based on National Family Health Survey (NFHS)-4 (2015-16) and NFHS-5 (2019-20) is following:
Each of these health effects manifested similarly when we compare all states that implemented PM-JAY versus the states that did not
Overall, the comparison reflects significant improvements in several health outcomes in states that implemented PM-JAY versus those that did not
Bare Necessities
Access to the ‘bare necessities’ has improved across all States in the country in 2018 as compared to 2012
Improved access to the ‘bare necessities’ has led to improvements in health indicators such as infant mortality and under-5 mortality rate and also correlates with future improvements in education indicators
Thrust should be given to reduce variation in the access to bare necessities across states, between rural and urban and between income groups
The schemes such as Jal Jeevan Mission, SBM-G, PMAY-G, etc. may design appropriate strategy to reduce these gaps
A Bare Necessities Index (BNI) based on the large annual household survey data can be constructed using suitable indicators and methodology at district level for all/targeted districts to assess the progress on access to bare necessities.
Fiscal Developments
External Sector
COVID-19 pandemic led to a sharp decline in global trade, lower commodity prices and tighter external financing conditions with implications for current account balances and currencies of different countries
India’s forex reserves at an all-time high of US$ 586.1 billion as on January 08, 2021, covering about 18 months worth of imports
India experiencing a Current Account Surplus along with robust capital inflows leading to a BoP surplus since Q4 of FY2019-20
Balance on the capital account is buttressed by robust FDI and FPI inflows:
In H1: FY21, steep contraction in merchandise imports and lower outgo for travel services led to:
India to end with an Annual Current Account Surplus after a period of 17 years
India’s merchandise trade deficit was lower at US$ 57.5 billion in April-December, 2020 as compared to US$ 125.9 billion in the corresponding period last year
In April-December, 2020, merchandise exports contracted by 15.7% to US$ 200.8 billion from US$ 238.3 billion in April-December, 2019:
Total merchandise imports declined by (-) 29.1% to US$ 258.3 billion during April-December, 2020 from US$ 364.2 billion during the same period last year:
Trade balance with China and the US improved as imports slowed
Net services receipts amounting to US$ 41.7 billion remained stable in April-September 2020 as compared with US$ 40.5 billion in corresponding period a year ago.
Resilience of the services sector was primarily driven by software services, which accounted for 49% of total services exports
Net private transfer receipts, mainly representing remittances by Indians employed overseas, totaling US$ 35.8 billion in H1: FY21 declined by 6.7% over the corresponding period of previous year
At end-September 2020, India’s external debt placed at US$ 556.2 billion – a decrease of US$ 2.0 billion (0.4%) as compared to end-March 2020.
Improvement in debt vulnerability indicators:
Rupee appreciation/depreciation:
RBI’s interventions in forex markets ensured financial stability and orderly conditions, controlling the volatility and one-sided appreciation of the Rupee
Initiatives undertaken to promote exports:
Money Management and Financial Intermediation
Accommodative monetary policy during 2020: repo rate cut by 115 bps since March 2020
Systemic liquidity in FY2020-21 has remained in surplus so far. RBI undertook various conventional and unconventional measures like:
Gross Non-Performing Assets ratio of Scheduled Commercial Banks decreased from 8.21% at end-March, 2020 to 7.49% at end-September, 2020
The monetary transmission of lower policy rates to deposit and lending rates improved during FY2020-21
NIFTY-50 and BSE SENSEX reached record high closing of 14,644.7 and 49,792.12 respectively on January 20, 2021
The recovery rate for the Scheduled Commercial Banks through IBC (since its inception) has been over 45%
Prices and Inflation
Headline CPI inflation:
Rural-urban difference in CPI inflation saw a decline in 2020:
During April-December, 2019 as well as April-December, 2020-21, the major driver of CPI-C inflation was the food and beverages group:
Thali cost increased between June 2020 and November 2020, however a sharp fall in the month of December reflecting the fall in the prices of many essential food commodities
State-wise trend:
Food inflation driving overall CPI-C inflation due to the relatively more weight of food items in the index.
Steps taken to stabilize prices of food items:
Gold prices:
Consistency in import policy warrants attention:
Sustainable Development and Climate Change
India has taken several proactive steps to mainstream the SDGs into the policies, schemes and programmes
Voluntary National Review (VNR) presented to the United Nations High-Level Political Forum (HLPF) on Sustainable Development
Localisation of SDGs is crucial to any strategy aimed at achieving the goals under the 2030 Agenda
Sustainable development remains core to the development strategy despite the unprecedented COVID-19 pandemic crisis
Eight National Missions under National Action Plan on Climate Change (NAPCC) focussed on the objectives of adaptation, mitigation and preparedness on climate risks
India’s Nationally Determined Contributions (NDC) states that finance is a critical enabler of climate change action
The financing considerations will therefore remain critical especially as the country steps up the targets substantially
The goal of jointly mobilizing US$ 100 billion a year by 2020 for climate financing by the developed countries has remained elusive
The postponement of COP26 to 2021 also gives less time for negotiations and other evidence-based work to inform the post-2025 goal
Despite overall growth in the global bond markets, green bond issuance in the first half of 2020 slowed down from 2019, possibly as a result of the on-going COVID-19 pandemic
International Solar Alliance (ISA) launched two new initiatives – ‘World Solar Bank’ and ‘One Sun One World One Grid Initiative’ – poised to bring about solar energy revolution globally
Agriculture and Food Management
India’s Agricultural (and Allied Activities) sector has shown its resilience amid the adversities of COVID-19 induced lockdowns with a growth of 3.4% at constant prices during 2020-21 (first advance estimate)
The share of Agriculture and Allied Sectors in Gross Value Added (GVA) of the country at current prices is 17.8% for the year 2019-20 (CSO-Provisional Estimates of National Income, 29th May, 2020)
Gross Capital Formation (GCF) relative to GVA showing a fluctuating trend from 17.7 % in 2013-14 to 16.4 % in 2018-19, with a dip to 14.7 % in 2015-16
Total food grain production in the country in the agriculture year 2019-20 (as per Fourth Advance Estimates), is 11.44 million tonnes more than than during 2018-19
The actual agricultural credit flow was ₹13,92,469.81 crores against the target of ₹13,50,000 crores in 2019-20. The target for 2020-21 was ₹15,00,000 crores and a sum of ₹ 9,73,517.80 crores was disbursed till 30th November, 2020:
The Pradhan Mantri Fasal Bima Yojana covers over 5.5 crore farmer applications year on year
An amount of Rs. 18000 crore have been deposited directly in the bank accounts of 9 crore farmer families of the country in December, 2020 in the 7th installment of financial benefit under the PM-KISAN scheme
Fish production reached an all-time high of 14.16 million metric tons during 2019-20:
Food Processing Industries (FPI) sector growing at an Average Annual Growth Rate (AAGR) of around 9.99 % as compared to around 3.12 % in Agriculture and 8.25 % in Manufacturing at 2011-12 prices during the last 5 years ending 2018-19
Pradhan Mantri Garib Kalyan Anna Yojana:
AatmaNirbhar Bharat Package: 5 kg per person per month for four months (May to August) to approximately 8 crores migrants (excluded under NFSA or state ration card) entailing subsidy of Rs. 3109 crores approximately
Industry and Infrastructure
A strong V-shaped recovery of economic activity further confirmed by IIP data
The IIP & eight-core index further inched up to pre-COVID levels
The broad-based recovery in the IIP resulted in a growth of (-) 1.9 % in Nov-2020 as compared to a growth of 2.1 % in Nov-2019 and a nadir of (-) 57.3 % in Apr-2020
Further improvement and firming up in industrial activities are foreseen with the Government enhancing capital expenditure, the vaccination drive and the resolute push forward on long pending reform measures
AatmaNirbhar Bharat Abhiyan with a stimulus package worth 15 % of India’s GDP announced
India’s rank in the Ease of Doing Business (EoDB) Index for 2019 has moved upwards to the 63rd position in 2020 from 77th in 2018 as per the Doing Business Report (DBR):
FDI equity inflows were US$49.98 billion in FY20 as compared to US$44.37 billion during FY19:
Government has announced a Production-Linked Incentive (PLI) Scheme in the 10 key sectors under the aegis of AatmaNirbhar Bharat for enhancing India’s manufacturing capabilities and exports:
Services Sector
India’s services sector contracted by nearly 16 % during H1: FY2020-21, during the COVID-19 pandemic mandated lockdown, owing to its contact-intensive nature
Key indicators such as Services Purchasing Managers’ Index, rail freight traffic, and port traffic, are all displaying a V-shaped recovery after a sharp decline during the lockdown
Despite the disruptions being witnessed globally, FDI inflows into India’s services sector grew robustly by 34% Y-o-Y during April-September 2020 to reach US$ 23.6 billion
The services sector accounts for over 54 % of India’s GVA and nearly four-fifths of total FDI inflow into India
The sector’s share in GVA exceeds 50% in 15 out of 33 States and UTs, and is particularly more pronounced (greater than 85%) in Delhi and Chandigarh
Services sector accounts for 48% of total exports, outperforming goods exports in the recent years
The shipping turnaround time at ports has almost halved from 4.67 days in 2010-11 to 2.62 days in 2019-20
The Indian start-up ecosystem has been progressing well amidst the COVID-19 pandemic, being home to 38 unicorns – adding a record number of 12 start-ups to the unicorn list last year
India’s space sector has grown exponentially in the past six decades:
Social Infrastructure, Employment and Human Development
The combined (Centre and States) social sector expenditure as % of GDP has increased in 2020-21 compared to last year.
India’s rank in HDI 2019 was recorded at 131, out of a total 189 countries:
The access to data network, electronic devices such as computer, laptop, smart phone etc. gained importance due to online learning and remote working during the pandemic
Major proportion of workforce engaged as regular wage/salaried in the urban sector during the period of January 2019-March 2020 (quarterly survey of PLFS)
Government’s incentive to boost employment through AatmaNirbhar Bharat Rozgar Yojana and rationalization and simplification of existing labour codes into 4 codes
Low level of female LFPR in India:
Under PMGKP announced in March, 2020, cash transfers of upto Rs.1000 to existing old aged, widowed and disabled beneficiaries under the National Social Assistance Programme (NSAP)
An amount of Rs. 500 each was transferred for three months digitally into bank accounts of the women beneficiaries under PM Jan Dhan Yojana, totalling about Rs. 20.64 crores
Free distribution of gas cylinders to about 8 crore families for three months
Limit of collateral free lending increased from Rs. 10 lakhs to Rs. 20 lakhs for 63 lakh women SHGs which would support 6.85 crore households
Wages under Mahatma Gandhi NREGA increased by Rs.20 from Rs.182 to Rs.202 w.e.f. 1st April, 2020
India’s fight against COVID-19:
