Current Affairs for BANK, IBPS Exams - 30 January 2018

::NATIONAL::

President Kovind Delivers maiden speech in parliament

• President Kovind talks about ensuring social justice and economic democracy in his first speech in parliament at a joint sitting of the first day of Budget session.
• Highest priority to agriculture, dignity of women through gas connection, toilets, maternity benefits.
• Increase the standard of living of the farmer and decrease expenditure incurred by farming.
• Govt. was able to contain Fiscal deficit and Inflation in the last 3 years.
• He also hailed the 12-digit unique identity number Aadhaar as something that helped the poor secure their rights by eliminating middlemen.
• Talking about the digital initiative, he said 2.70 lakh Common Service Centres had been set up to provide digital services at low cost, even in remote areas.
• The recent Umang App had made more than 100 public services available on mobile phones.
• Talking about employment, he said 10 crore loans under the the Pradhan Mantri Mudra Yojana had been sanctioned.
• More than Rs. 4 lakh crore had been disbursed under the scheme to promote self-employment.
• Talking about Governance, frequent elections not only impose a huge burden on human resources but also impede the development process due to the promulgation of the model code of conduct.
• A sustained debate is required on the subject of simultaneous elections and all political parties need to arrive at a consensus on this issue.
• The government’s diplomatic efforts had ensured a “new-found respect for India” and increasing role in global affairs.
• President said terrorist attacks in some parts of Jammu and Kashmir were “directly related to cross-border infiltration”.
• The government has kept open the path of dialogue with those who wish to shun violence and join the mainstream, while reposing faith in the Constitution.
• President Kovind mentioned housing for all by 2022, connecting all villages with roads, uninterrupted power supply and LPG connections to the poor.
• Called the Goods and Services Tax the biggest tax reform since Independence.
• He said the government was seeking to achieve the economic integration of the country.
• The government would “recapitalise the public sector banks by infusing more than Rs. 2 lakh crore of capital into them”, addressing NPAs of PSBs.
• He said the government believed in “empowerment and not appeasement” of the minorities.
• Intensive efforts for minorities economic, social and educational empowerment.

Modi emphasized idea of simultaneous elections

• Prime Minister Narendra Modi urged NDA constituents to “at least start a debate” on the need for “one nation, one election”.
• His oft-emphasised idea of simultaneous polls to the Lok Sabha and the Assemblies.
• Mr. Modi raised the issue of simultaneous polls.
• The NDA passed a resolution hailing the Prime Minister for his speech at the World Economic Forum in Davos and the presence of heads of 10 ASEAN countries as chief guests at the Republic Day parade, sources said.
• Urged for maximum presence of party MPs in Parliament to support the government agenda during the budget session.
• Absenteeism of a section of MPs during sessions has been a concern for the party leadership.
• In the previous session of Parliament, the OBC Bill granting Constitutional status to the Backward Classes Commission was held up because of the absence of many MPs from the Treasury benches.
• Mr. Modi spoke about the need for lawmakers to attend meetings of parliamentary panels, and underlined the importance of the budget session, which started on Monday, and said key issues would be taken up.

Ensure early passage of Triple Talaq Bill : President and PM

• President Ram Nath Kovind and Prime Minister Narendra Modi advocated the early passage of the Muslim Women (Protection of Rights on Marriage) Bill, 2017, also known as the triple talaq Bill, during the Budget session of Parliament.
• While Mr. Modi made his remarks before the start of the session, Mr. Kovind made it a part of his address to both Houses.
• The Bill had been cleared by the Lok Sabha in December last, but is hanging fire in the Rajya Sabha.
• A larger Opposition in RS group wants to send it to a Select Committee for further scrutiny, while the government wants early passage of the Bill.
• Opposition members are resisting what they term the “criminalisation of divorce”.
• The Bill proposes a three-year jail term for Muslim men if they pronounce instant triple talaq.
• Mr. Modi said it was the government’s effort as well as the expectation of the people that there would be no politics on an important issue like triple talaq and that Muslim women would get their right.

SC squashes a state law, favored reservation in promotion of SC/ST govt. employees.

• The Supreme Court on Monday took to task the Karnataka government for not complying with a judgment.
• Asked to revise its seniority list after the apex court, in a judgment in February 2017, quashed a State law favouring reservation in promotion for SC/ST government employees.
• The court had on February 9, 2017, found that Karnataka did not face any “compelling necessity” to favour quota in promotion for SC/ST in government service.
• The apex court had pronounced the judgment in a petition challenging the validity of the Karnataka Determination of Seniority of the Government Servants Promoted on the Basis of Reservation (To the Posts in the Civil Services of the State) Act of 2002.
• The law had also provided grant of consequential seniority to SC/ST government servants promoted under reservation policy.
• In its judgment in the B.K. Pavitra case, the Supreme Court held that the “exercise for determining inadequacy of representation, backwardness, and overall efficiency is a must before a State decides to provide reservation with consequential seniority under Article 16 (4A) of the Constitution for SC/ST persons in government service.
• The apex court gave Karnataka three months to revise its seniority list.
• However, the State responded by passing the Karnataka Extension of Consequential Seniority to Government Servants Promoted on the Basis of Reservation (To posts in the Civil Services of the State) Bill, 2017.
• The Bill, passed unanimously in the State Assembly, is now before the President for his assent.

::INTERNATIONAL::

SL should repeal PTA : HRW

• Human Rights Watch criticised the Sri Lankan government for its failure to repeal the draconian Prevention of Terrorism Act (PTA).
• Accused the government of being “all talk and no action”.
• Released a report titled ‘Locked Up Without Evidence: Abuses under Sri Lanka’s Prevention of Terrorism Act’.
• Based on interviews with 34 former detainees and relatives — the rights watchdog said the PTA allowed arrests without warrant for unspecified “unlawful activities,”
• Permitted detention for up to 18 months without producing the suspect in court.
• Many of the interviewees reported torture and abuse during their detention.
• The PTA, enacted in 1979 when President J.R. Jayawardene was in power, was mainly aimed at crushing the nascent armed struggle of Tamil youth outraged by the Sri Lankan state’s discriminatory policies.
• Critics have repeatedly questioned the prolonged use of the legislation, particularly after the civil war ended in 2009.
• Amid growing domestic and international pressure to repeal the legislation, the government helmed by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe promised to abolish it.
• Initiated efforts to draft a new counterterrorism law in 2016.
• However, the first draft sparked fear among lawyers and activists who noted with concern that some provisions were worse than the PTA’s.
• Reportedly, at least 11 people have been arrested under the PTA in 2016.
• The government is yet to respond to the report, and attempts to reach officials in the Law and Order Ministry for a comment were unsuccessful.
• Worryingly, the latest draft of the counterterrorism legislation, according to senior human rights lawyer K.S. Ratnavale, is “shrouded in mystery”.
• “It was neither placed as a Bill in Parliament nor presented for any public consultation or debate.
• “The PTA has to be completely repealed and the law replacing must be progressive, in keeping with international standards. There need to be legal safeguards for suspects,” he said.

New Govt. in Nepal, Indian keen on reviving ties

• In a bid to revive ties with Nepal, External Affairs Minister Sushma Swaraj will visit Kathmandu from February 1 to 2.
• The visit comes weeks after Nepal elected a Leftist coalition, which won the first historic poll under the new Constitution of the country.
• The visit is in keeping with the tradition of regular high-level political exchanges between India and Nepal,
• Reflects the expanding bilateral partnership and the importance that the two countries attach to further strengthening it across diverse sectors.
• The visit by Ms. Swaraj will be the first big diplomatic engagement by the newly elected rulers of Kathmandu.
• Significantly, only last week Prime Minister Narendra Modi had reached out to the elected Prime Minister K.P. Sharma Oli wherein both the leaders had invited each other for a visit.
• Ties between Mr. Oli and Mr. Modi had been cold since the former was the Prime Minister during the months-long economic blockade between 2015-16.
• Mr. Oli fought the election through a coalition with former Prime Minister Pushpa Kamal Dahal ‘Prachanda’ though he is yet to be formally sworn in.
• “The upcoming visit will provide an opportunity to hold discussions with political leaders of Nepal on issues of mutual interest, and to advance age-old, special ties of friendship between India and Nepal,” the release said.

Read for strong and swift hit back : EU warns Trump

• The European Union (EU) said that it stands ready to hit back “swiftly and appropriately” if U.S. President Donald Trump takes unfair trade measures against the 28-nation bloc.
• The EU’s warning comes less than 24 hours after Mr. Trump expressed his annoyance with EU trade policy, saying it “may morph into something very big”.
• The stand-off contrasts sharply with relations during the administration of Barack Obama.
• Both sides sought to create a massive free trade zone between the EU and United States that, it was argued, could yield over $100 billion a year for both sides.
• When Mr. Trump won the presidential election in November 2016, those hopes evaporated as the new President talked about protecting American jobs.
• On-going against multilateral trade deals that he portrayed as detrimental to his “America First” policies.
• Mr. Trump said in a British television interview that “the European Union has been very, very unfair to the United States, and I think it’ll turn out to be very much to their detriment”.
• Mr. Trump last week approved tariffs on imported solar-energy components and large washing machines in a bid to help U.S. manufacturers, particularly against competition from China and South Korea.
• The issues also came to the fore during last week’s World Economic Forum (WEF) in Davos, Switzerland.
• In 2016, official figures show, the EU imported €246 billion ($304 billion) in goods from the U.S. while exporting some €362 billion ($448 billion) to the country.
• In services, the U.S. deficit is much smaller, of only about €13 billion ($16 billion).
• The EU and Germany both called for cooperation.
• German government spokesman said, “an even stronger, more competitive, more self-confident EU that takes over even more international responsibility”.
• “But that is not directed against anyone, including the United States of America,” Mr. Seibert told reporters in Berlin.
• “We try for solutions, strive for cooperation that is advantageous for both partners.”

Ready to work with India, opens talks on CPEC : China

• China offered to open talks with India to resolve differences on the China Pakistan Economic Corridor (CPEC).
• Opens the door for removing a major irritant in New Delhi-Beijing ties.
• Ready to work with the Indian side through dialogue and communication for a better solution. This best serves the interests of the two countries.
• Proposed a new phase of dialogue between India and China, which would cover all differences including CPEC.
• Asked to comment on China’s alleged newly developed military infrastructure in the Doklam area, as shown in recently published satellite pictures, Ms. Hua, Chinese Foreign Ministry spokesperson reiterated Beijing’s stock response that Donglang (Doklam) was China’s sovereign territory,
• Beijing had a right to build infrastructure in the area.

Printed Study Materials for IBPS, SBI Bank Exam

::ECONOMY::

Economic Survey 2017-18

• The Economic Survey, tabled in Parliament by Finance Minister Arun Jaitley.
• The economy is set to grow at 7-7.5% in the next financial year.
• Reviving exports and investment even as the negative effects of demonetisation and the teething troubles of the Goods and Services Tax recede.
• Further predicted that GDP growth in the current financial year would touch 6.75%, higher than the 6.5% estimated by the Central Statistics Office.
• Reform measures like the implementation of the Insolvency and Bankruptcy Code and the recapitalisation plan for public sector banks would go a long way in addressing the twin balance sheet problem.
• Both corporates and banks will revive, which would in turn further boost economic growth.
• As a result of these measures, the dissipating effects of earlier policy actions, and the export uplift from the global recovery, the economy began to accelerate in the second half of the year.
• This should allow real GDP growth to reach 6.75% for the year as a whole, rising to 7-7.5% in 2018-19.
• Thereby re-instating India as the world’s fastest growing major economy.
• However, it did caution about some ongoing trends — such as rising oil prices and stock market prices — that would require vigilance and preventive action.
• Against emerging macroeconomic concerns, policy vigilance will be necessary in the coming year, especially if high international oil prices persist or elevated stock prices correct sharply, provoking a ‘sudden stall’ in capital flows.

1. Agriculture

• The Economic Survey 2017-18, said farmer income losses from climate change could be between 15% and 18% on an average, rising to anywhere between 20%-25% in unirrigated areas of the country.
• “Applying IPCC (Intergovernmental Panel on Climate Change)-predicted temperatures and projecting India’s recent trends in precipitation, and assuming no policy responses, give rise to estimates for farm income losses of 15% to 18% on average, rising to 20%-25% for unirrigated areas.
• Adding that at current levels of farm income, that translates into more than Rs. 3,600 per year for the median farm household.
• “[The] Prime Minister’s goal of doubling farmers’ incomes — increasingly runs up against the contemporary realities of Indian agriculture,
• The harsher prospects of its vulnerability to long-term climate change.
• India needed to expand irrigation – and do so against a backdrop of rising water scarcity and depleting groundwater resources.
• In the 1960s, less than 20% of agriculture was irrigated, now this number is in the mid-40s.
• The Indo-Gangetic plain, and parts of Gujarat and Madhya Pradesh are well irrigated.
• But parts of Karnataka, Maharashtra, Madhya Pradesh, Rajasthan, Chhattisgarh and Jharkhand are still extremely vulnerable to climate change on account of not being well irrigated.
• Fully irrigating Indian agriculture, that too against the backdrop of water scarcity and limited efficiency in existing irrigation schemes, will be a defining challenge for the future.
• Technologies of drip irrigation, sprinklers and water management — captured in the “more crop for every drop” campaign — may well hold the key to future Indian agriculture.
• Power subsidy needs to be replaced by direct benefit transfers so that power use can be fully costed and water conservation furthered.
• With growing rural to urban migration by men, there is ‘feminisation’ of agriculture sector.
• With increasing number of women in multiple roles as cultivators, entrepreneurs, and labourers.
• Pointing out that worldwide, there was empirical evidence that women had a decisive role in ensuring food security and preserving local agro-biodiversity.
• Rural women are responsible for the integrated management and use of diverse natural resources to meet the daily household needs.
• This requires that women farmers should have enhanced access to resources like land, water, credit, technology and training which warrants critical analysis in the context of India.
• Observed that crucial role of women in agricultural development and allied fields was a fact long taken for granted.
• For sustainable development of agriculture and rural economy, the contribution of women to agriculture and food production cannot be ignored.
• Notably, as per Census 2011, out of total female main workers, 55% were agricultural labourers and 24% cultivators.
• However, only 12.8% of the operational holdings were owned by women, which reflected the gender disparity in ownership of landholdings in agriculture.
• Women predominant at all levels — production, pre-harvest, post-harvest processing, packaging, marketing — of the agricultural value chain it is imperative to adopt gender specific interventions.
• An ‘inclusive transformative agricultural policy’ should aim at gender-specific interventions to raise productivity of small farm holdings, integrate women as active agents in rural transformation, and engage men and women in extension services with gender expertise.

2. Infrastructure

• India will require investments of about $4.5 trillion by 2040 to develop infrastructure to improve economic growth and community well-being.
• The current trend shows that India can meet around $3.9 trillion infrastructure investment out of $4.5 trillion.
• The cumulative figure for India’s infrastructure investment gap would be around $526 billion by 2040.
• There was massive under-investment in infrastructure sector until the recent past.
• Due to collapse of public private partnerships, especially in power and telecom projects; stressed balance sheets of private companies; issues related to land and forest clearances.
• The need of the hour is to fill the infrastructure investment gap with financing from private investment.
• Institutions dedicated to infrastructure financing like National Infrastructure Investment Bank and also global institutions like Asian Infrastructure Investment Bank and New Development Bank which are focusing more on sustainable development projects and infrastructure projects.
• There is scope for developing the shipbuilding industry, currently dominated by South Korea, China and Japan, in India.
• This will not only create a strong manufacturing base but also generate millions of jobs.
• On road sector, as on September 2017, out of the 1,263 total ongoing monitored projects across sectors, there were 482 projects in road transport and highways with (original) cost of Rs. 3,17,373.9 crore.
• Of these, 43 projects face cost overruns and 74 projects time overruns.
• Further, the share of Indian Railways in freight movement has been declining over a period of time primarily due to non-competitive tariff structure.
• The telecom sector is going through a “stress period with growing losses, debt pile, price war, reduced revenue and irrational spectrum costs.

3. Taxation & Litigation

• The Goods and Services Tax has resulted in a 50% increase in the number of indirect taxpayers.
• The fledgling tax regime has already revealed new data on key aspects such as inter-State trade, State-wise exports, and the extent of formalisation in the economy.
• There has been a large increase in voluntary registrations, especially by small enterprises that buy from large enterprises and want to avail themselves of input tax credits.
• In addition, the Survey showed a significant proportion of tax filers eligible for the Composition Scheme have instead opted to file their returns in the regular manner so as to avail of input tax credits.
• For this reason, about 1.9 million (24% of total regular filers) of the registrants sized between the GST threshold of Rs. 20 lakh and the composition limit… instead decided to file under the regular GST.
• So, about 54.3% of those eligible for the composition scheme chose instead to be regular filers.
• The distribution of the GST base among the States is closely linked to the size of their economies, allaying fears of major producing States that the shift to the new system would undermine their tax collections.
• Data on international exports of States (the first in India’s history) suggests a strong correlation between export performance and States’ standard of living.
• India’s internal trade is about 60% of GDP, even greater than estimated in last year’s Survey and comparing very favourably with other large countries.
• Formality defined in terms of social security provision yields an estimate of formal sector payroll of about 31% of the non-agricultural work force.
• Formality defined in terms of being part of the GST net suggests a formal sector payroll share of 53%.
• Faced with a success rate that is less than 30%, the tax department would gain from a reduction in appeals pursued at higher levels of the judiciary.
• Together, the claims for indirect and direct tax stuck in litigation by the quarter ending March, 2017, amounted to nearly Rs. 7.58 lakh crore, over 4.7% of GDP.
• The tax department is the largest litigant with almost 85% of direct tax cases arising out of its appeals.
• The Department unambiguously loses 65% of its cases.
• The government’s persistence with litigation despite high rates of failure was increasing the workload of the judiciary and adding to delays and pendency of cases.
• Taking a severe toll on the economy in terms of stalled projects, mounting legal costs, contested tax revenues, and reduced investment.
• While it is difficult to estimate the costs of pendency and delay, found that more than Rs. 52,000 crore worth of government infrastructure projects have been stalled by various orders of the courts.
• The Ministries of Power, Roads and Railways have been the hardest hit.
• As project costs have risen by close to 60% during the stalled period.
• The dedicated subject-matter courts could have “profound benefits” as seen in the apex court’s recent experiment with constituting an exclusive bench for taxation produced impressive results.
• This may be replicated for other subject matters, and emulated by other high courts.

4. Manufacturing

• The Goods and Services Tax (GST) Council should comprehensively review ‘embedded taxes’ and expeditiously eliminate the embedded export taxes to boost India’s manufacturing exports.
• Referring to the Rs. 6,000-crore package for the apparel sector announced in June 2016, the Survey observed that the largest component of that package was rebates on state levies to offset indirect taxes levied by the states (the VAT) that were ‘embedded’ in exports.
• The Survey found that the package in fact increased exports of ready-made garments made of man-made fibres.
• A policy implication (arising from this example) was that the GST Council should conduct a comprehensive review of embedded taxes arising from products left outside the GST (petroleum and electricity) and those that arose from the GST itself.
• For example, Input Tax Credits that get blocked because of “tax inversion,” whereby taxes further back in the chain are greater than those up the chain.
• This review should lead to an expeditious elimination of these embedded export taxes, which could provide an important boost to India’s manufacturing exports.
• It suggested the formulation of a National Integrated Logistics Policy to bring in greater transparency and enhance efficiency in logistics operations.
• Improving logistics sector has huge implication on exports and it is estimated that a 10% decrease in indirect logistics cost can increase 5-8% of exports,
• The document has also thrown up some interesting findings on India’s export sector.
• This included data on the international exports of states, the first in India’s history, showing that five states — Maharashtra, Gujarat, Karnataka, Tamil Nadu and Telangana — in that order account for 70% of India’s exports.
• Similarly, for the first time, the Survey did a firm-level analysis on exports and found that export concentration by firms was much lower in India than in the U.S., Germany, Brazil, or Mexico.
• This meaning that India had no ‘exports superstars’ and that its export structure was “egalitarian” in nature.

5. Rural India

• The number of people defecating in the open in rural India had reduced to less than half of what it was in 2014.
• Claiming success in rural sanitation due to Swachh Bharat Mission (SBM), the flagship scheme of the Centre.
• As per baseline survey conducted by Ministry of Drinking Water and Sanitation, the number of persons defecating in open in rural areas, which was 55-crore in October, 2014, declined to 25-crore in January, 2018, at a much faster pace compared to the trend observed before 2014.
• So far, 296 districts and 3,07,349 villages all over the India have been declared as Open Defecation Free (ODF).
• Eight States and two Union Territories, i.e., Sikkim, Himachal Pradesh, Kerala, Haryana, Uttarakhand, Chhattisgarh, Arunachal Pradesh, Gujarat, Daman & Diu and Chandigarh have been declared as ODF completely.
• More than 90% of the individuals, who had access to toilets, were using them in 2016 and 2017.
• The surveys conducted by National Sample Survey Office (NSSO, 2016) and Quality Council of India (QCI, 2017) on usage of toilets by the individuals who have access to toilets reported more than 90% of individuals using toilets in 2016 and 2017.
• According to UNICEF, the lack of sanitation is responsible for the deaths of over 100,000 children in India annually and for stunting of 48 % children.
• A pilot study, conducted by the Bill and Melinda Gates Foundation in selected open-defecation free (ODF) and non-ODF districts, showed that households in ODF districts had “significantly better health indicators”.
• The Survey also says that there are economic benefits in becoming open-defecation free.
• According to the World Bank estimates, the lack of sanitation facilities costs India over 6-% of GDP.
• In a report ‘The Financial and Economic Impact of SBM in India (2017)’ UNICEF estimated that a household in an ODF village in rural India saves Rs. 50,000 ($800) every year.

6. Renewable energy

• The government needs to revisit subsidies and incentives for renewables because its tariff is approaching grid parity and some discoms are insisting for renegotiation of already inked PPAs.
• Suggested setting up a payment guarantee fund or a foreign exchange fund for renewable developers to reduce risks along with affordable financing.
• As per experts, the tariff’s free fall last year would result in a situation where renewables would be cheaper than coal-based thermal power and thus would affect thermal plants to create another lot of bad loans or NPAs.
• The discovery of very low (renewable) tariffs through the auctioning process, though a welcome news, possibly contributed to some demands for renegotiation of the already signed PPAs.
• Some discoms have hinted at possibility of renegotiating the PPAs signed by them at tariffs higher than those in the recent bids.
• Mentioned a CRISIL (2017) remark that renegotiating the tariffs could result in risk for investments worth Rs. 48,000 crore.

7. Savings

• Following the demonetisation, Indian households are moving away from savings in cash to financial assets.
• The pattern of household savings was significantly different in 2016-17 as compared with the previous five years.
• The overall financial savings of the households increased more than 20% in 2016-17, which was significantly higher than the growth witnessed in any of the preceding five years.
• There was a decline in savings in the form of currency by more than 250% (of about Rs. 5 lakh crore).
• This decline primarily owed to the withdrawal of high denomination currency notes in November 2016 and partial remonetisation by end March 2017.
• The savings of households were channeled into financial assets like bank deposits, life insurance funds and shares and debentures.
• The growth of savings in mutual funds registered a phenomenal increase of more than 400% over and above the growth of 126% witnessed in 2015-16.
• Thus within a span of 2 years, savings in the form of mutual funds registered more than 11-fold increase.
• That this happened in a period when the BSE Sensex increased by an average of just about 1.5% per annum needs to be analysed in more detail.
• The story on overall savings and investment rate in the economy was not ‘heartening’.
• The investment rate as a share of GDP in the economy declined by nearly 5.6 percentage points between 2011-12 and 2015-16.
• The savings rate declined by two and half percentage points between 2011-12 and 2013-14 and has remained range bound thereafter.

8. Housing

• The government needs to address issues such as rent control and unclear property rights.
• More important than focussing on building more homes under its scheme to provide ‘Housing for All’ by 2022.
• More holistic approach that takes into account rentals and vacancy rates.
• In turn, this needs policymakers to pay more attention to contract enforcement, property rights and spatial distribution of housing supply versus demand.
• The policies on housing needed to recognise that India has an increasingly fluid population.
• A successful housing policy should enable the ability to move to, between and within cities as job opportunities arise.
• It should also deliver vertical mobility, so that an aspirational population can climb the socio-economic ladder.
• It highlighted that two important areas that need to be looked at are the rental segment and vacancy rates.
• Rental housing is important for both horizontal and vertical mobility as it allowed people to access suitable housing without actually having to buy it.
• However, the share of rental housing has actually been declining in Indian cities since independence from 54% in 1961 to 28% in 2011.
• As a proportion, renting accommodation is more prevalent in urban areas than in rural.
• According to the 2011 Census, the share of households living in rented houses was only 5% in rural areas, but 31% in urban areas

9. Science & Technology

• This is the first time the annual survey of the economy earmarked a dedicated chapter on the state of science and technology in India.
• Stressing that India needed to work hard to improve its output.
• India currently spends far below its economic capacity on research.
• India spent only 0.5% of its Gross Domestic Product (GDP) on research and development in 2015.
• In comparison, China and the U.S. spent 1% and 2.5%, when their per capita GDP were similar to that of India.
• Currently China’s GDP is five times and the U.S.’ about eight times that of India.
• At this rate, India would barely reach 1% of GDP by the time it [becomes] as rich as the USA.
• Need to increase the R&D, and perhaps need to do this much more in mission mode.
• It’s also very important to have a scientific temper of debate and openness without religious obscurantism.
• In the last two decades, India had improved its output of scientific publications and was currently sixth in the world.
• However, in quality, India was still woefully short.
• For instance, in 2001, China had 174 high quality scientific publications and India 103.
• By 2011, China had soared ahead at 980 and India was still only at 153.
• To fix this, India needed to unveil programmes in “mission mode.
• The Survey also proposed missions in mathematics as well as genomics.
• The latter involved emulating projects in Finland and the U.K. and creating a detailed gene map of a sample of Indians.
• This can be used as reference to better understand disease patterns. The government also ought to be reaching out more to scientists based abroad.
• There were more than 100,000 people with PhDs, who were born in India but now live and work outside (more than 91,000 in the U.S. alone).
• With the strength of India’s economy and growing anti-immigrant atmosphere in some Western countries, India has an opportunity to attract back more scientists.
• There has been an increase in the number of Indian scientists returning to work in India during the last five years, but the numbers are still modest.

10. Investment

• The current episode of investment slowdown is ongoing, and one that is impacting growth.
• Therefore investment revival needs to be prioritised urgently to arrest more lasting impact on growth.
• The policy conclusion is urgent prioritisation of investment revival to arrest more lasting growth impacts.
• The government plans for resolution of bad debts and recapitalistion of public sector banks.
• To help India regain 8-10% growth, the measures, that need to be taken soon, should include easing further the cost of doing business and creating a clear and stable tax and regulatory environment.
• The focus of investment-incentivising policies has to be on the big and small alike. The ‘animal spirits’ need to be conjured back.
• Raised concerns over slowdown in savings saying that too was ongoing.
• However, investment slowdown was more detrimental to growth than savings slowdown.
• The question is - Should policies that boost investment (substantial infrastructure push, reforms to facilitate the ease of doing business or the ‘Make in India’ programme) be given greater priority over those that boost saving?
• CEA on Monetary stance and Stock Market
• Chief Economic Adviser Arvind Subramanian acknowledged that the country’s monetary authorities to adopt a policy stance.
• This will let them tamp down promptly on re-emerging inflationary pressures.
• Change in stance, warranting a reappraisal of the central bank’s policy stance.
• The Indian economy, for about a period of 18 months, could have benefited from lower interest rates.
• Now clearly the cycle has turned, inflationary pressures have re-emerged.
• So it is not just the fact inflation is picking up but also the fact if growth happens the output gaps will also start narrowing.
• From both those perspectives the stance of the monetary policy naturally has to change.
• As Keynes famously said, as facts change, I change my opinion. So there is a change in the underlying facts.
• The economic survey flagged the risks from rising oil prices.
• Consumer price index based inflation, the central bank’s primary yardstick for monetary policy formulation, accelerated to a 17-month high of 5.21% in December, driven by surging food prices.
• The reading for retail inflation was just below the Reserve Bank of India’s (RBI’s) upper tolerance limit of 6%.
• The monetary policy committee of the RBI has held its key policy rate, the repo rate, unchanged at 6% at its last two meetings while retaining a ‘neutral’ stance.
• The panel is set to meet next to review policy on February 7.
• The rise in stock market indices have to be monitored closely and investors need to exercise caution.
• The statement comes in the backdrop of the Indian equity markets touching new peaks on an almost daily basis.
• We have seen around the world that when asset prices go up very much, they always tend to come back so we have to be watchful.
• The BSE Sensex gained 232.81 points to close at a new high of 36,283.25. It had gained more than 2,000 points in the last one month.
• The broader Nifty of the National Stock Exchange (NSE) closed at a record 11,130.40, gaining 60.75 points or 0.55%.

  Printed Study Materials for IBPS, SBI Bank Exam

  Current Affairs is Part of Online Course of IBPS Exams.

  Click Here for Daily News Archive