DAILY CURRENT AFFAIRS (August 18, 2021)

INDIAN ECONOMY

1. GOVT ANNOUNCES RATES FOR RODTEP SCHEME FOR EXPORTERS; TO COVER 8,555 ITEMS

THE CONTEXT: To boost exports, the government on Aug 17 announced rates of tax refunds under the export promotion scheme RoDTEP for 8,555 products, such as marine goods, yarn, dairy items.

Analysis:

• The government has set aside Rs 12,454 crore for refunds under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for the current fiscal
• Under the RoDTEP, various central and state duties, taxes, and levies imposed on input products, among others, would be refunded to exporters.
• Rs 19,400 crore would be available for 2021-22 for both the RoDTEP and the Rebate of State and Central Taxes and Levies (RoSCTL).
• The RoSCTL scheme was announced for the export of garments and apparels.
• However, three sectors of steel, chemicals and pharmaceuticals would not get the benefit of RoDTEP as they have “done well without” incentives.
• The tax refund rates range from 0.5 per cent to 4.3 per cent for various sectors.
• The rebate under the scheme would not be available in respect of duties and taxes already exempted or remitted or credited
• RoDTEP support will be available to eligible exporters at a notified rate as a percentage of Freight On Board (FOB) value. Rebates on certain export products will also be subject to value cap per unit of the exported product.
• According to the guidelines, certain categories which would not avail the benefits include export goods which are subject to minimum export price, restricted and prohibited items, deemed exports, supplies of goods manufactured by domestic tariff area units to SEZs, and products manufactured or exported by units situated in special economic zones.
• Although, the Scheme’s nodal ministry is Min of Commerce and Industry, the Customs department will implement the scheme

Reference: Indian express

2. FINANCIAL INCLUSION INDEX (FI-INDEX) BY RBI

THE CONTEXT: The Reserve Bank of India (RBI) has introduced the financial inclusion index (FI-Index) to capture the extent of financial inclusion in the country.

Analysis:

• The annual FI-Index for the period ending March 2021 is 53.9 as against 43.4 for the period ending March 2017.
• The FI-Index has been conceptualized as a comprehensive index incorporating details of banking, investments, insurance, postal, and the pension sector in consultation with government and respective sectoral regulators
• The index captures information on various aspects of financial inclusion in a single value ranging between 0 and 100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion.
• The FI-Index comprises three broad parameters, including access, usage and quality with each of these consisting of various dimensions computed on the basis of on several indicators.
• The index is responsive to ease of access, availability and usage of services, and quality of services, comprising 97 indicators in all.
• A unique feature is the quality parameter, which captures the quality aspect of financial inclusion as reflected by financial literacy, consumer protection, and inequalities and deficiencies in services.
• The FI-Index, which will be published in July every year, has been constructed without any ‘base year’ and as such it reflects cumulative efforts of all stakeholders over the years towards financial inclusion.

Reference: Live mint

3. OIL BONDS AND REDUCTION OF TAXES ON PETROL

THE CONTEXT: The Centre has argued that it cannot reduce taxes on petrol and diesel as it has to bear the burden of payments in lieu of oil bonds issued by the previous UPA government to subsidise fuel prices.

Analysis

• Before fuel prices were deregulated, petrol and diesel as well as cooking gas and kerosene were sold at subsidised rates during UPA rule.
• Instead of paying direct subsidy to oil marketing companies from the Budget, the UPA government issued oil bonds totalling Rs 1.34 lakh crore to the state-fuel retailers in a bid to contain the fiscal deficit.
• Citing the need to repay interest and principal components on these bonds, the Centre has now argued that it needs higher excise duty to help its finances.
• The NDA government too has used a similar strategy to inject capital into state-owned banks and other institutions by issuing recapitalisation bonds worth Rs 3.1 lakh crore, which will come up for redemption between 2028 and 2035.

WHY WERE OIL PRICES DEREGULATED, AND HOW HAS IT IMPACTED CONSUMERS?

• Fuel price decontrol has been a step-by-step exercise, with the government freeing up prices of aviation turbine fuel in 2002, petrol in 2010, and diesel in 2014.
• Prior to that, the government would intervene in fixing the price at which retailers were to sell diesel or petrol.
• This led to under-recoveries for oil marketing companies, which the government had to compensate for.
• The prices were deregulated to make them market-linked, unburden the government from subsidising prices, and allow consumers to benefit from lower rates when global crude oil prices tumble.
• While oil price deregulation was meant to be linked to global crude prices, Indian consumers have not benefited from a fall in global prices as the central as well as state governments impose fresh taxes and levies to raise extra revenues.
• This forces the consumer to either pay what she’s already paying, or even more
• Price decontrol essentially offers fuel retailers such as Indian Oil, HPCL or BPCL the freedom to fix prices based on calculations of their own cost and profits.
• However, the key beneficiary in this policy reform of price decontrol is the government.

HOW MUCH TAXES/DUTIES HAS THE GOVERNMENT COLLECTED?

• The Centre’s revenue from taxes on crude oil and petroleum products jumped 45.6% in 2020- 21 to Rs 4.18 lakh crore.
• Excise duty on petroleum products jumped over 74% year-on-year to Rs 3.45 lakh crore in 2020-21, according to government data.
• The Centre’s share in taxes on petroleum products has progressively increased from Rs 2.73 lakh crore in 2016-17 to Rs 2.87 lakh crore in 2019-20.
• On the other hand, the share of states in taxes on crude oil and petroleum products decreased 1.6% to Rs 2.17 lakh crore in 2020-21 from Rs 2.20 lakh crore in 2019-20.
• The Centre and a number of states have significantly increased duties on petrol and diesel as a way to boost revenues in view of the Covid-induced restrictions that curtailed economic activity.
• State and central levies account for about 55.4% of the retail price of petrol and 50% of the price of diesel in Delhi. Central levies alone account for about 32.3% of the retail price of petrol and 35.4% of the pump price of diesel in Delhi.
• The Centre hiked the excise duty on petrol to Rs 32.98 per litre in May 2020 from Rs 19.98 per litre, and on diesel to Rs 31.83 from Rs 15.83.
• Fuel prices have increased steadily over the last one year.
• The country has already seen a 21.7% increase in the prices of petrol and diesel since the beginning of the year.
• Petrol is currently retailing at Rs 101.8 per litre in Delhi and diesel at Rs 89.87 per litre.
• The price of petrol has been increased 39 times and decreased once in 2021-22, while that of diesel has been increased 36 times and decreased twice.
• In 2020-21, the price of petrol was hiked 76 times and decreased 10 times and that of diesel increased 73 times and decreased 24 times.

TO WHAT EXTENT HAVE THE OIL BONDS BEEN SERVICED BY THE GOVERNMENT?

• The interest on oil bonds paid in the last seven years totalled Rs 70,195.72 crore.
• Of the Rs 1.34 lakh crore worth of oil bonds, only Rs 3,500 crore principal has been paid and the remaining Rs 1.3 lakh crore is due for repayment between this fiscal and 2025-26.
• The government has to repay Rs 10,000 crore in the current fiscal year, another Rs 31,150 crore in 2023-24, Rs 52,860 crore in 2024-25, and Rs 36,913 crore in 2025-26.
• But this is less than a tenth of the excise duty on petroleum products at Rs 3.45 lakh crore, a majority of which accrues to the Centre.

WHAT IS THE CURRENT GOVERNMENT’S BOND STRATEGY FOR BANKS?

• In October 2017, then Finance Minister had announced that recapitalisation bonds would be issued as a one-time measure to inject equity into PSU banks that were stressed by bad loans.
• This instrument does not impact the fiscal deficit, with only interest payment being reflected in deficit calculations.
• Initially, the government had indicated that a total of Rs 1.35 lakh crore worth of recap bonds would be issued, but this later became routine and a convenient practice.
• The government so far has issued recapitalisation bonds to public sector banks and EXIM Bank, IDBI Bank and IIFCL worth Rs 3.1 lakh crore, as per Budget document

NOTE: STUDENTS NEED TO REMEMBER ONLY MACRO TRENDS, GRANULAR DATA GIVEN TO PROVIDE CONTEXT.

Reference: Indian express

INDIAN POLITY, GOVERNANCE AND SOCIAL JUSTICE

4. IMPACT OF DELAY IN CENSUS 2021

THE CONTEXT: The Ministry of Home Affairs has informed the Lok Sabha that Census 2021 has been postponed indefinitely.

Analysis:

• The decennial exercise came to a halt due to the advent of the COVID-19 pandemic.
• Apart from being used to demarcate constituencies, the Census data is also vital to the administration, and planning of key welfare schemes could be affected by the delay.

WHAT WAS THE ORIGINAL TIMELINE OF THE CENSUS AND HOW IS IT BEING DELAYED?

• The Centre’s intent to conduct Census 2021 was notified in the Gazette of India on March 28, 2019.
• The exercise was to have been conducted in two phases, with the housing Census from April to September 2020 and population enumeration from February 9, 2021, but did not take place due to the spread of COVID-19.
• In March 2021, the Home Ministry gave a Parliamentary panel a tentative alternative timeline.
• The fieldwork for the first phase, which would provide data on housing conditions, household amenities and assets possessed by households, is expected during 2021-22.
• While the fieldwork to count the population and provide data on demography, religion, Scheduled Castes and Tribes (SC/ST), language, literacy and education, economic activity, migration and fertility would be done in 2023-24.

HOW WILL THE DELAY AFFECT THE PUBLIC DISTRIBUTION SYSTEM?

• The National Food Security Act, 2013, says that 75% of the rural population and 50% of the urban population — adding up to 67% of the country’s total population — are entitled to receive subsidised food grains from the government under the targeted public distribution system (PDS).
• Under the 2011 Census, India’s population was about 121 crores, hence PDS covered approximately 80 crore people.
• However, economists have pointed out that population growth over the last decade means that if the 67% ratio is applied to 2020’s projected population of 137 crores, PDS coverage should have increased to around 92 crore people.
• The current delay in Census data would continue to deprive more than 10 crore people of subsidised food entitlements, with the biggest gaps in Uttar Pradesh and Bihar, with 2.8 crore and 1.8 crore projected exclusions respectively.
• In March, 2021 the centre had said that any revision could only be considered once Census data was available.
• Meanwhile, NITI Aayog has proposed a reduction in NFSA coverage to curb the food subsidy budget.

WHAT OTHER WELFARE SCHEMES COULD BE AFFECTED BY THE DELAY?

• Census data have been initially used to estimate the coverage of the National Social Assistance Programme,
• NSAP provides basic pension to 3.09 crore widows, disabled and elderly people below the poverty line.
• But the Centre had announced its intent to shift to the Socio-Economic Caste Census data of 2011 instead to determine beneficiaries of the scheme.
• According to SECC data, coverage should double to six crore people although the Centre has failed to allocate a sufficient budget for any such expansion.
• Most other Central schemes, from health insurance to housing entitlements, use SECC data to estimate their beneficiary coverage, although it is also outdated by almost a decade.
• Census data may not be used to calculate the beneficiaries of most schemes, but it is critical to policy planning, budgeting and administration.

HOW ABOUT CENSUS DATA ON MIGRATION?

• The migrant workers plight during Covid 19 raised questions about their numbers, causes and patterns of migration, which could not be answered using outdated 2011 Census data.
• The Census measures migration by counting those whose current residence is different from their place of birth, which would give the overall number of migrants.
• By asking for the last place of residence and the reasons for moving allows an understanding of movements and trends over the last decade when compared with previous Census data.
• Given that the data is available at the village and block level, and includes analysis of the age, education level and socio-economic status of migrants, it allows for a granular, high-resolution understanding.
• Apart from the One Nation, One Ration card scheme which now allows for portability of food subsidy entitlements, the migration data is actually not used too much in broader economic policy and planning
• One of the problems is the huge lag in migration data. For example, the data on migration from the 2011 Census were only released in 2019, so it’s outdated by the time it came out
• The new Census is likely to capture the extent of the observed movement in migration trends towards smaller two-tier towns apart from the large metropolitan centres.
• It could help answer questions of what kind of healthcare and social services are most needed for migrants and where Census data on the reasons for migration — whether economic or otherwise — could also help assess the impact of schemes such as MGNREGA on preventing distress migration

Reference: The Hindu

ENVIRONMENT, GEOGRAPHY AND AGRICULTURE

5. A THIRD OF INDIA’S COASTLINE UNDERWENT EROSION IN 28 YEARS, BENGAL WORST AFFECTED

THE CONTEXT: As much as 32 per cent of India’s coastline underwent sea erosion and 27 per cent of it expanded between 1990 and 2018, according to a recent technical report by the National Centre for Coastal Research (NCCR) under the Union Ministry of Earth Sciences.

ANALYSIS:

• The West Bengal coastline has been particularly vulnerable: 60 per cent of the coastline underwent erosion during the period, followed by Puducherry (56 per cent); Kerala (41 per cent); and others
• Odisha coast expanded by 51 per cent
• This was followed by the coast of Andhra Pradesh, which expanded 48 per cent; Karnataka (26 per cent);
• The country’s coastline is 6,631.53 kilometres long: 2,135.65 kilometres was subject to varying degrees of erosion and 1,760.06 km expanded during this period.
• Nearly 2,700 km of the coastline is stable.
• As many as 98 coastal pockets of the country have been facing sea erosion. Tamil Nadu has 26 coastal areas vulnerable to sea erosion, followed by West Bengal (16); Kerala (12);and others
• Some stretches of India’s shoreline are subject to varying degrees of erosion due to natural causes or anthropogenic activities.
• The coastal erosion does impact coastal communities residing in the erosion prone areas, including fishermen communities.

ABOUT NCCR

• The NCCR is an attached office of the Ministry of Earth Sciences
• It monitors shoreline changes along the Indian coast.
• It has carried out a national shoreline change assessment mapping for Indian coast along nine coastal states and two Union territories (UT) to provide information for coastal management strategy

Reference: Down to earth

6.ODISHA PLANS ‘ODYSSEY’ TO WILD CATTLE ISLAND

THE CONTEXT: The Odisha Forest and Environment Department is set to begin ‘Island Odyssey’ and ‘Hirakud Cruise’ ecotourism packages for tourists to islands inside the reservoir when COVID-19 restrictions are lifted.

Analysis:

• ‘Cattle island’, one of three islands in the Hirakud reservoir
• It has been selected as a sight-seeing destination.
• When large numbers of people were displaced from their villages when the Hirakud dam was constructed on the Mahanadi river in 1950s, villagers could not take their cattle with them.
• They left their cattle behind in deserted villages.
• As the area started to submerge following the dam’s construction, the cattle moved up to Bhujapahad, an elevated place in the Jharsuguda district.
• Subsequently named ‘Cattle island’, the piece of land is surrounded by a vast sheet of water.
• The cattle show wild characteristics. They are not ferocious, but shy. If a person comes near, the animals just run away.

Reference: The Hindu

INTERNATIONAL RELATIONS

7. INDIA ANNOUNCES EMERGENCY  E- VISA FOR AFGHANS

THE CONTEXT: India on August 17 announced that it will issue an emergency e-visa to Afghan nationals

Analysis:

• All Afghans, irrespective of their religion, can apply for the ‘e-Emergency X-Misc Visa’ online and the applications will be processed in New Delhi.
• The announcement came two days after the Taliban captured power in Afghanistan.
• Since Indian missions in Afghanistan are shut, the visa can be applied online and applications will be examined and processed in New Delhi.
• The visa will initially be valid for six months,
• Security issues will be looked into while processing the applications and granting the visa to Afghan nationals
• All Afghans, irrespective of their religion, can apply for the travel document

Reference: The Hindu

SCIENCE AND TECHNOLOGY

8.GLOBAL GEOSPATIAL INFORMATION COMMUNITY SENSITIZED ABOUT UNWGIC  TO BE ORGANIZED IN INDIA 

THE CONTEXT: The second United Nations World Geospatial Information Congress (UNWGIC) will be organized by India in October next year.

Analysis:

ABOUT UNWGIC

• The United Nation Committee of Experts on Global Geospatial Information Management (UN-GGIM) organizes the United Nations World Geospatial Information Congress (UNWGIC) every four years
• The objective is to enhance international collaboration among the Member States and relevant stakeholders in Geospatial information management and capacities.
• The first UNWGIC was organized by China in October 2018.
• The second United Nations World Geospatial Information Congress (UNWGIC) will be held in Hyderabad.
• The theme of the Congress will be “Geo-enabling the Global Village”

Reference: PIB

 

Q 1. Financial Inclusion Index (FI-Index) is launched recently. Consider the following statements about it:
1. It is launched by Ministry of finance.
2. The index will be released in the month of July every year.
3. Financial inclusion will be measured in a single value ranging between 0 and 100.
Which of the statements given above is/are correct?
a) 1 and 2 only
b) 2 and 3 only
c) 3 only
d) 1, 2 and

Q.2 ‘Cattle Island” recently seen in the news is located near the vicinity of which of the following river?
a) Mahananda
b) Godavari
c) Mahanadi
d) d) None of the above.

ANSWER FOR AUGUST 17, 2021 PRELIMS PRACTICE QUESTIONS (REFER RELEVANT ARTICLE)
Q.1 Answer D. Iran, Pakistan and Afghanistan are part of Golden Crescent infamous for illegal drug production and trafficking. Iraq is not part of it.
Q.2 Answer D. The Project BOLD (Bamboo Oasis on Lands in Drought) is an initiative of Khadi and Village Industries Commission (KVIC). The project aims to boost the income of the tribal people and solve environmental concerns such as land desertification and land degradation by creating bamboo-based green patches in drylands.

Spread the Word