02 Jun 2020: UPSC Exam Comprehensive News Analysis

2 June 2020 CNA:- Download PDF Here

TABLE OF CONTENTS

A. GS 1 Related
GEOGRAPHY
1. Monsoon hits Kerala with cyclone in the background
B. GS 2 Related
HEALTH
1. HC bats for RT-PCR method to test frontline staff in Vidarbha
C. GS 3 Related
ECONOMY
1. Pulses, oilseeds see sharp hike in MSP
2. Street vendors to get credit without collateral
3. Cabinet committee okays ₹50,000 cr. infusion for MSMEs
4. ‘Can allow non-profit organisations to list on social stock exchanges’
D. GS 4 Related
E. Editorials
INTERNATIONAL RELATIONS
1. India, China and fortifying the Africa outreach
DISASTER MANAGEMENT
1. A new architecture in quake-prone areas
ECONOMY
1. Ominous signals
F. Prelims Facts
1. INS Jalashwa sets out from Colombo
2. Congo declares new Ebola epidemic
G. Tidbits
1. Moody’s downgrades India’s rating
2. SC to hear petition on nation’s name
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions

2. Street vendors to get credit without collateral

Context:

The Ministry of Housing and Urban Affairs has launched Pradhan Mantri Street Vendor’s Atmanirbhar Nidhi Scheme or PM Svanidhi Scheme.

Details:

  • Pradhan Mantri Street Vendor’s Atmanirbhar Nidhi Scheme, a micro-credit scheme for street vendors, was announced as part of the economic package for those affected by the COVID-19 pandemic and lockdown.
  • The scheme is aimed at benefiting over 50 lakh vendors who had their businesses operational on or before March 24, 2020.
  • The scheme is valid till March 2022.
  • The vendors will be able to apply for a working capital loan of up to ₹10,000, which is repayable in monthly instalments within a year.
  • On timely/early repayment of the loan, an interest subsidy of 7% per annum will be credited to the bank accounts of beneficiaries through direct benefit transfer on a six-monthly basis.
  • There will be no penalty on early repayment of loan.
  • The loans would be without collateral.
  • The scheme is meant to help kick-start activity for vendors who have been left without any income since the lockdown began.
  • Small Industries Development Bank of India is the technical partner for implementation of this scheme and will manage the credit guarantee to the lending institutions through Credit Guarantee Fund Trust for Micro and Small Enterprises.

Read more about Atmanirbhar Bharat Scheme.

3. Cabinet committee okays ₹50,000 cr. infusion for MSMEs

Context:

Several steps have been taken towards facilitating ease of doing business in the MSME sector, in order to help in attracting investments and creating more jobs in the sector.

Details:

  • The Cabinet Committee on Economic Affairs approved ₹50,000 crore equity infusion for micro, small, and medium enterprises (MSMEs) with an aim to help them enhance capacity, while also encouraging them to get listed.
    • The government will set up ₹10,000 crore fund, which, with leverage, will be able to finance equity infusion of about ₹50,000 crores in small businesses.
    • The move is expected to expand size as well as capacity of MSMEs and will encourage them to get listed on main board of domestic bourses.
  • Besides, approval was given for a subordinate debt of ₹20,000 crore to provide equity support to stressed MSMEs. This is likely to benefit two lakh MSMEs.
  • The CCEA, headed by Prime Minister Narendra Modi, also approved the new definition of MSMEs increasing the investment limit to ₹50 crore and turnover to ₹250 crore for medium enterprises. Read more on this topic covered in 20th May 2020 CNA.
    • The new definition will not distinguish between manufacturing and service sector.
  • For micro enterprises, the investment limit will be ₹1 crore and turnover ₹5 crore, while for small enterprises, the investment limit will be ₹10 crore and the turnover ₹50 crore.
  • It has also been decided that the turnover with respect to exports will not be counted in the limits of turnover for any category of MSME units, be it micro, small or medium.

4. ‘Can allow non-profit organisations to list on social stock exchanges’

Context:

A working group constituted by the Securities and Exchange Board of India (SEBI) on social stock exchanges has recommended allowing non-profit organisations to directly list on such platforms while allowing certain tax incentives to encourage participation on the platform.

Details:

  • According to a release issued by the capital markets regulator, the group has recommended allowing non-profit organisations to directly list through issuance of bonds while recommending a range of funding avenues, including some of the existing mechanisms such as Social Venture Funds (SVFs) under Alternative Investment Funds (AIFs).
  • The idea of a social stock exchange (SSE) for listing of social enterprise and voluntary organisations was mooted by the Finance Minister while presenting the Union Budget 2019-20.
    • It was announced for social enterprises and voluntary organisations working for social welfare to help them raise capital through debt, equity and mutual funds.

Suggestions by the Working Group:

  • The group has also suggested a new minimum reporting standard for organisations that raise funds on social stock exchanges.
  • It also suggested that for-profit social enterprises be allowed to list on the platform but with enhanced reporting requirements.
  • The working group has also suggested that the social stock exchange (SSE) can be housed within the existing national bourses like the BSE and the National Stock Exchange.
    • This will help the SSE leverage existing infrastructure and client relationships of the exchanges to onboard investors, donors, and social enterprises [for-profit and non-profit], the report said.

Social Stock Exchange:

  • Social Stock Exchange is a platform which allows investors to buy shares in social enterprises vetted by an official exchange.
  • Social Stock Exchange would provide a platform where investors would invest in social enterprises authorised by the exchange. Such enterprises would have to share with the public the details of their activities and investments in a transparent manner.

Category: DISASTER MANAGEMENT

1. A new architecture in quake-prone areas

Context:

  • The author analyzes India’s vulnerability to earthquakes and suggests measures for better resilience to earthquakes.

Details:

India’s Vulnerability:

  • The fact that the Indian plate is pushing against the Eurasian plate makes cities, towns and villages on and around the Himalayas vulnerable to earthquakes.

Major earthquakes in India:

  • Latur (1993)
  • Kutch (2001)
  • Jammu and Kashmir (2005)

Steps taken:

  • India has a sophisticated set of monitors embedded beneath the soil’s surface in many vulnerable points. This provides an opportunity to better understand the seismic activity and further research in this domain.
  • India also has collaborations with other countries in the field of seismic research.

Predicting Earthquakes:

  • Recent studies have thrown light on earthquake prediction.
  • Many small tremors are witnessed on a frequent basis which are only recorded on the seismometers. The behaviour, frequency and the velocity of these small tremors can help predict the occurrence of a larger earthquake.

Way forward:

  • India needs to be alert to the threat of earthquakes. India needs to undertake short-, medium- and long-term actions.
    • The short term actions would involve identifying vulnerable buildings and planning for their occupants’ safety.
    • The medium term actions could involve mandating a new earthquake proof architecture regime in earthquake prone areas for all builders and developers. This would help reduce the destruction and devastation caused by the earthquakes.
    • The long-term actions could involve the following measures.
      • There is a need to decongest the cities which are most prone to earthquakes. This could remove the threat posed by the high density areas, vulnerable heights, clogged accesses in congested cities.
      • There is a need to regulate high-rise constructions in zones of high vulnerability like Delhi and hill stations.
      • There needs to be seismic planning for all major infrastructure and construction projects which could help lessen the impact of the earthquakes.
        • There should be seismic studies involved during the construction of dams and nuclear power installations for their quake-resistant standards.
      • India could work on a system for prediction of earthquakes.

Category: ECONOMY

1. Ominous signals

Context:

  • Economic challenges for India.

Details:

  • India’s economy is in a slowdown that is only going to get worse due to the COVID-19 pandemic.
  • The GDP growth estimates for the January-March quarter and the full fiscal year have been low despite the fact that these numbers still do not reflect the impact of the public health crisis and the stringent lockdowns.
    • The NSO’s estimates show fourth-quarter and fiscal 2019-20 growth slumped to 3.1% and 4.2%, respectively, the slowest pace in 11 years.
    • Manufacturing sector contracted for a third straight quarter and shrank by 1.4% in the fourth quarter.
    • Construction sector, which is a major job generating activity, has continued to weaken and contracted 2.2%.
  • Output at the eight core industries that represent 40% of the Index of Industrial Production contracted by an alarming 38% in April 2020. Merchandise exports shrank 60% in the same month.
  • The Indian economy seems to face demand drought that is unlikely to abate any time soon.
    • Private consumption spending, which accounts for 55-60% of GDP, extended a downtrend as growth slid to 2.7%.
    • Investment activity which is reliant on demand in the economy contracted for a third consecutive quarter and shrank 6.5%.

Way forward:

  • The recently announced economic stimulus package is focused on credit enhancement measures, easing supply side constraints and structural reforms that may bear fruit only over a longer horizon.
  • But for the short term, there is a need for a massive fiscal stimulus which could actually put cash in the hands of consumers and the millions of jobless youth in order to help revive demand and subsequent economic growth.

For more information on this issue, refer to:

CNA dated 13 May, 2020

F. Prelims Facts

1. INS Jalashwa sets out from Colombo

What’s in News?

INS Jalashwa set sail from Colombo in Sri Lanka to Thoothukudi in Tamil Nadu with Indian citizens on, under Phase 2 of Operation Samudra Setu by the Navy.

Operation Samudra Setu has been covered in 6th May 2020 Comprehensive News Analysis. Click here to read.

2. Congo declares new Ebola epidemic

What’s in News?

Democratic Republic of Congo declared a new Ebola epidemic in the western city of Mbandaka, more than 1,000 km away from an outbreak of the same virus.

  • Congo was about to declare an official end to an Ebola epidemic on the eastern side of the country that had lasted nearly two years and killed more than 2,275 people.
  • A fresh outbreak of the deadly Ebola virus has flared up in the Democratic Republic of Congo, a country that was already contending with the world’s largest measles epidemic, as well as the coronavirus.
  • It is unclear how Ebola emerged in Mbandaka, which is about 750 miles west of the nearly-vanquished outbreak on the country’s eastern edge.
  • Congo is the largest country in sub-Saharan Africa, and has been under travel restrictions to prevent the spread of the coronavirus.

Read more about Ebola Virus Disease.

G. Tidbits

1. Moody’s downgrades India’s rating

What’s in News?

Rating agency Moody’s downgraded India’s foreign currency and local currency long term issuer ratings to Baa3 from Baa2, while maintaining a negative outlook, citing prolonged period of low growth and further deterioration in the government’s fiscal position.

Details:

  • Moody’s said the negative outlook reflects dominant, mutually-reinforcing, downside risks from deeper stresses in the economy and financial system that could lead to a more severe and prolonged erosion in fiscal strength.
  • Baa3 is the lowest in investment grade in Moody’s rating ladder. This means, India is just one notch above the non-investment grade or junk grade.
  • The rating agency expects the country’s GDP to contract by 4% in the current financial year due to the shock from the pandemic and related lockdown measures.
  • The GDP growth, however, is expected to pick up in the next fiscal to 8.7% and closer to 6% in the year after.

2. SC to hear petition on nation’s name

What’s in News?

The Supreme Court will hear on June 2, 2020, a plea which has sought a direction to the Centre to amend the Constitution and replace the word India with ‘Bharat’ or ‘Hindustan’, claiming it will instil a sense of pride in our own nationality.

  • The plea has sought a direction to the government to take appropriate steps to bring amendment in Article 1 of the Constitution, which deals with name and territory of the Union, to the effect that the same refers to the country as Bharat/Hindustan, to the exclusion of India.
  • The plea, filed by a Delhi-based man, has claimed that such an amendment will ensure the citizens of this country to get over the colonial past.
  • The removal of the English name though appears symbolic, will instil a sense of pride in our own nationality, especially for the future generations to come. In fact, the word India being replaced with Bharat would justify the hard fought freedom by our ancestors, the plea claimed.
  • Referring to the 1948 Constituent Assembly debate on Article 1 of the then draft constitution, the plea said even at that time, there was a strong wave in favour of naming the country as ‘Bharat’ or ‘Hindustan’.
  • The plea says that the time is ripe to recognize the country by its original and authentic name i.e., Bharat especially when our cities have been renamed to identify with the Indian ethos.

H. UPSC Prelims Practice Questions

Q1. Consider the following statements with respect to Bar Council of India:
  1. It is a constitutional body.
  2. The Attorney General of India and the Solicitor General of India are its ex officio members.
  3. It sets standards for legal education and grants recognition to Universities whose degree in law will serve as qualification for enrolment as an advocate.

Which of the given statement/s is/are incorrect?

  1. 3 only
  2. 1 only
  3. 2 and 3 only
  4. 1 and 2 only
See
Answer
Q2. Consider the following statements with respect to Minimum Support Price (MSPs):
  1. Minimum Support Price is the price at which government purchases crops from the farmers.
  2. Government announces MSPs for 14 Kharif crops, 6 Rabi crops and 2 commercial crops.
  3. MSP is recommended by the Cabinet Committee on Economic Affairs and approved by the Commission for Agricultural Costs and Prices (CACP).

Which of the given statement/s is/are correct?

  1. 1 and 2 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3
See
Answer
Q3. Consider the following statements:
  1. The Constitution provides that the Rajya Sabha shall consist of 245 members, of which 12 members shall be nominated by the President.
  2. Elections to the Rajya Sabha are conducted in accordance with the system of proportional representation by means of the single transferable vote.
  3. The Third Schedule to the Constitution provides for the allocation of seats to the States and Union Territories in Rajya Sabha.

Which of the given statement/s is/are correct?

  1. 1 only
  2. 2 and 3 only
  3. 2 only
  4. 1, 2 and 3
See
Answer
Q4. “Earthquake Swarm” refers to:
  1. A series of earthquakes occurring in a region within a relatively short period of time, without a major earthquake.
  2. The point where the energy is released during an earthquake.
  3. A mild earthquake preceding the violent shaking movement of an earthquake.
  4. Earthquakes of volcanic origin.
See
Answer

I. UPSC Mains Practice Questions

  1. Discuss the features of India’s diplomacy in the African continent and compare and contrast it with China’s diplomatic approach to Africa. (15 marks, 250 words)
  2. Analyze the vulnerability of India to the hazard of earthquakes and suggest short, medium and long-term actions to mitigate the risks involved. (10 marks, 150 words)

Read the previous CNA here.

2 June 2020 CNA:- Download PDF Here

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