08 Jan 2021: UPSC Exam Comprehensive News Analysis

8 Jan 2021 CNA:- Download PDF Here

TABLE OF CONTENTS

A. GS 1 Related
B. GS 2 Related
INTERNATIONAL RELATIONS
1. USTR slams India’s digital tax, holds off on tariffs
C. GS 3 Related
ECONOMY
1. GDP is likely to contract by 7.7% this fiscal: govt.
2. India’s fiscal deficit may exceed 7% in current fiscal, say sources
INFRASTRUCTURE
1. New freight corridor a big boost: PM
D. GS 4 Related
E. Editorials
HEALTH
1. Getting ready for vaccination
2. Flu in full flight
INTERNATIONAL RELATIONS
1. Fruits of incitement
F. Prelims Facts
G. Tidbits
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions

Nothing here for today!!!

Category: INTERNATIONAL RELATIONS

1. USTR slams India’s digital tax, holds off on tariffs

Levy to ensure fair competition: govt.

Context:

• The USTR’s Section 301 has called out India’s digital taxation regime, claiming it is not in sync with international tax principles.

Details:

• The Office of the United States Trade Representative (USTR) is an agency of professionals dealing with trade issues.
• The Office of the U.S. Trade Representative (USTR) is responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and overseeing negotiations with other countries.
• The Section 301 report, a flagship publication of USTR has said that the digital services taxes adopted by India, Italy and Turkey discriminate against U.S. companies and are inconsistent with international tax principles.

India’s Digital Service Tax

• India’s DST imposes a 2% tax on revenue generated from a broad range of digital services offered in India, including digital platform services, digital content sales, digital sales of a company’s own goods, data-related services, software-as-a-service, and several other categories of digital services.
• India’s DST explicitly exempts Indian companies—only “non-residents” must pay the tax.

‘Tax impacts U.S. firms’

• USTR has concluded the digital taxes imposed by France, India, Italy and Turkey discriminate against big U.S. tech firms, such as Google, Facebook, Apple and Amazon.com, referred to as the GAFA tax.
• The issues of contention are the application of taxation to revenue rather than income, extraterritorial application, and failure to provide tax certainty.

India’s defence

• India has defended the 2% equalisation levy saying that it does not discriminate against U.S. companies as it applies uniformly across all non-resident e-commerce operators.
• The Commerce and Industry Ministry has said the intention of imposing such a levy is to create an ecosystem that fosters fair competition and reasonableness.
• Another reason behind the levy is to exercise the sovereign right of the government to tax businesses that have a close nexus with the Indian market through their digital operations.
• The charge of extraterritorial application is not accurate as it applies only to the revenue generated from India.

2. India’s fiscal deficit may exceed 7% in current fiscal, say sources

Context:

• The COVID-19 pandemic has meant that the economy has gone into a tailspin.
• Government finances are in poor condition because of a shortfall in tax receipts.

Details:

• The revenue shortfall from tax and divestment of state-run firms could be ₹7 trillion.

Fiscal Deficit

• The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included.
• India’s fiscal deficit for the year ending in March is likely to exceed 7% of gross domestic product according to certain studies.
• The reason for a bulged fiscal deficit has been a shortfall in revenue collections suffered from a lockdown and restrictions to rein in the spread of COVID-19.

Fiscal deficit projection

• The government at the close of the last fiscal had projected a deficit of 3.5% for the current year.
• The estimated government borrowing initially was of ₹7.8 trillion, but later was revised to ₹12 trillion, to enable relief measures at the time of pandemic to millions of people and businesses.
• The fiscal deficit is expected to be higher than what was projected because of the shortfall in revenue collections suffered owing to the complete lockdown in the first quarter.
• Estimates and projections have hinted at a huge shortfall of close to ₹7 trillion, from tax and divestment of state-run companies.
• The pandemic and the strict combative measures like lockdown impacted India adversely.
• The first quarter and second quarter data attest the poor state of the Indian economy, further going forward, the economists have estimated that the GDP is likely to contract by 7.7% in the full fiscal year.
• India could witness its highest ever fiscal deficit numbers in the current financial year, some of the sources have predicted that the fiscal deficit could touch 8% of GDP.
• A senior government source said that the finances were in poor shape as there has been a huge shortfall in tax receipts, but the government can ill-afford to resort to austerity measures and instead, it has to continue spending to spur the growth.

Category: INFRASTRUCTURE

1. New freight corridor a big boost: PM

Context:

• Indian Prime Minister flagged off the world’s first 1.5 km-long electrified double-stack container train and inaugurated the New Rewari-New Madar section of the Western Dedicated Freight Corridor.

Details:

• The Prime Minister has highlighted the need to modernize the country’s infrastructure and said it was pivotal to India’s growth aspirations.
• The portion of the Western Dedicated Freight Corridor is expected to benefit farmers, industrialists and businessmen in the National Capital Region, Haryana and Rajasthan.

Western Dedicated Freight Corridor

• A Dedicated Freight Corridor (DFC) is a high speed and high capacity railway corridor that is exclusively meant for the transportation of freight or in other words goods and commodities. DFC involves the seamless integration of better infrastructure and state of the art technology.
• The corridor would catalyze the development of growth centres and points in several cities. The corridor is also expected to have positive spillovers like the creation of job opportunities and acting as an enabler for attracting new investments.
• The corridor will provide the much-needed impetus to the local industries and manufacturing units by securing them faster and cheaper access to the national and international markets.
• Access to ports in the states of Gujarat and Maharashtra will also be made more convenient and easy.

Eastern Dedicated Freight Corridor

• The Eastern Dedicated Freight Corridor (EDFC) with a route length of 1856 km runs from Dankuni in West Bengal to Ludhiana (Punjab).
• It covers Punjab, Haryana, Uttar Pradesh, Bihar, Jharkhand and West Bengal.
• Through a portion of the Eastern Dedicated Freight Corridor, the New Bhaupur-New Khurja section, farm produce can be transported from Punjab and coal from Jharkhand is being supplied to the National Capital Region, Haryana and Punjab.
• Besides connectivity, there is an element of increased speed with the current maximum speed of 90 kilometres per hour.
• About 133 railway stations in nine States would be impacted by the Dedicated Freight Corridor. New multi-model logistic parks, freight terminals, container depots/terminals and parcel hubs would be developed at these places.
• The list of beneficiaries would include villages, farmers, the poor and the small businesses and also will help attract big manufacturers.

Northeast link

• Connectivity has been a persistent problem with the North-east region, the current rapid infrastructural expansion will be linking all the Northeast State capitals to the national rail network.
• The work of indigenously developing high-speed tracks was also underway.

Conclusion

• The Prime Minister also took up the opportunity to announce a digital payment of ₹18,000 crores to farmers under the direct benefit transfer scheme.
• The Government initiatives at improving infrastructure have to be applauded, especially when these projects have been completed on a priority basis despite the pandemic disrupting several activities.

2. Flu in full flight

Context:

• The breakout of avian influenza in several states in India has become a cause for concern.

Details:

• India declared itself to be free of the avian influenza outbreak, the highly pathogenic avian influenza subtypes, H5N1 and H5N8.
• Himachal Pradesh, Rajasthan, Madhya Pradesh, Kerala have reported several cases of the highly pathogenic avian influenza subtypes, H5N1 and H5N8,
• Check more on this in PIB dated Jan 6, 2021.

Geographical spread

• The current bird-flu outbreak has not just been restricted to the above mentioned four states, there has been reporting of the same from other parts of the country.
• Thousands of poultry birds have died in Haryana, and Jharkhand and Gujarat, too, have sounded an alarm; the cause in these three states has still not been verified.
• The two subtypes have targeted different birds, with crows being the victims in Rajasthan and Madhya Pradesh, victims in Himachal Pradesh are migratory birds and in Kerala, it is poultry.
• The cause for deaths of over 2000 migratory birds has been attributed to the H5N1 by test results.
• The H5N8 has been zeroed-in for causing the deaths of thousands of poultry in Kerala, and hundreds of crows in Rajasthan and Madhya Pradesh.

Preventive measures

• Culling of over 69,000 birds, including ducks and chickens, was carried out in Alappuzha and Kottayam of Kerala, this was done as per India’s 2015 National Avian Influenza Plan.
• The other States are forewarned about the risk and have been advised to stay vigilant of any incidences of unusual deaths or disease outbreak signs amongst birds, particularly migratory ones.

Vectors of virus

• Migratory birds have been the carriers of the virus across continents and hence contributing to the long-distance transmission of the virus into India during winter. It then further spreads via local movement of residential birds and poultry.
• Movement of men and material from poultry farms too has been a cause for further spread. This is why States have been instructed to strengthen biosecurity of poultry farms, disinfection and proper disposal of dead birds. With backyard rearing of poultry birds common, the task of elimination will be particularly difficult.
• Recently the European Food Safety Authority report revealed that 561 avian influenza detections were recorded in the time interval between August-December in 15 European countries and the U.K.
• The virus was found predominantly in wild birds, and a few in poultry and captive birds. H5N1 and H5N8 were two of three subtypes found in Europe.
• Genetic analysis attests the spread from Asia to west-central Europe, suggesting a consistent movement of this virus strain.
• Avian influenza virus has rarely crossed the species barrier and have occasionally been seen directly infecting humans, the human-to-human spread has been rare.

Conclusion

• The possibility of mutations or genetic reassortment of an avian influenza A virus and a human influenza A virus in a person creating a new influenza A virus cannot be ruled out and this could lead to sustained transmission between humans, thus increasing the risk of pandemic influenza.
• Hence, efforts must be directed towards stamping out the outbreaks in the affected States without allowing it to cross the borders.
• It is also very much essential to carry out the genome sequencing of virus samples to establish the evolution of the virus.

Category: INTERNATIONAL RELATIONS

1. Fruits of incitement

Context:

• The USA witnessed an ugly attempted coup led by a mob bearing slogans of support for outgoing President Donald Trump.

Details:

• The Capitol witnessed scenes that were inappropriate for any country, let alone the United States.

Incident

• Scenes of hundreds of supporters stormed the Capitol building, as police were outnumbered and members of Congress, who were to gather to certify the results of the 2020 presidential election, had to take evasive actions.
• The mob was slowly displaced, subsequently, the lawmakers went on to reconvene and formally certify the results, and Mr Trump finally resigned to his fate and called for an “orderly transition”.
• Major social media platforms locked his accounts for violating their civic integrity policies, namely inciting violence with months of contentious posts that made baseless allegations about electoral fraud.

Immediate cause

• The immediate trigger for the mob is believed to have been the victory of two Democratic candidates in the run-off election in Georgia. The attack was methodically planned well in advance using the social media platform.
• That election was necessitated as no candidate secured 50% of the popular vote in the general election. Their win gives Democrats 50 seats in the Senate, handing over the control of the Senate, because the incoming Vice-President, Kamala Harris, will cast a deciding vote in a tie.

Responsibility of the incoming President

• The violent mob attack would mean the task of building bipartisan consensus is that much harder. The last two months have been witnessing a lot of hate exchanged between the two parties and its supporters, especially on social media.
• Thus, political America is deeply polarised, divided, filled with anger and disenchanted at the ground realities.
• The “unprecedented assault” has been brewing for more than four years, the excessive nationalistic agenda portrayed during the election campaign by the outgoing president seemed to tap into the frustration that grips middle America, including the white middle class and blue-collar workers, over the inevitable changes to the U.S. economy and society.
• There is an argument that the forces of immigration and globalisation have fueled racial prejudice and economic insecurity.

Conclusion

• Mr Trump’s strident rhetoric was successful in exploiting this sense of alienation and socioeconomic dysfunction for narrow political and personal gains.
• The task on Mr Biden’s hands is to adopt a more nuanced and balanced approach, as the faultlines have become deeper than ever before.
• A nuanced and balanced approach is required not just at the societal level but also at the political level, with bipartisanship a key tool in tackling the contentious issues of comprehensive immigration reform, and redressing the ills of runaway free-market liberalisation and forging a post-COVID-19 economic vision that can truly deliver on the American dream.

Nothing here for today!!!

Nothing here for today!!!

Q1. The ‘Section 301’ report is a flagship publication of which of the following?

Q2. Consider the following statements:

1. Real GDP has steadily increased in the last decade.
2.  GDP at current market prices has steadily increased in the last decade.

Which of the above is/are correct statements?

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

Q3. The Western dedicated freight corridor passes through which of the following states?

1. Punjab
2. Haryana
3. Uttarakhand
4. Rajasthan
5. Maharashtra

Choose the correct option:

1. 1, 2 and 4 only
2. 2, 3 and 4 only
3. 2, 4 and 5 only
4. All of the above

Q4. Project ECHO is associated with

1. Wildlife conservation
2. Promotion of women rights
3. Tribal rights
4. Healthcare

1. “The relief package to offset the pandemic impact has led to a bulged fiscal deficit, however, that doesn’t mean its time for austerity measures yet.” Critically examine. (10 marks, 150 words) [GS 3, Economy]
2. Discuss the need to focus on building up a cadre of trained healthcare workers along with improving the health infrastructure. (15 marks, 250 words) [GS2, Health]

Read previous CNA here.

8 Jan 2021 CNA:- Download PDF Here