21 Jun 2022: UPSC Exam Comprehensive News Analysis

Quote for the day Set 5 05

CNA 21 June 2022:- Download PDF Here

TABLE OF CONTENTS

A. GS 1 Related
B. GS 2 Related
C. GS 3 Related
ECONOMY
1. El Salvador’s Bitcoin bet
2. India faces near-term challenges: FinMin
D. GS 4 Related
E. Editorials
POLITY AND GOVERNANCE
1. A case of the court straying into the legislative sphere
2. Resurrecting a dead law
ECONOMY
1. At the centre of job creation
F. Prelims Facts
1. Dutch disease
2. Summer Solstice
G. Tidbits
1. Shah flags importance of data protection
2. EC deletes 111 ‘non-existent’ parties from list
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions
FIP Magazine

2. India faces near-term challenges: FinMin

Syllabus: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Prelims: Important economic terminologies – Fiscal deficit and Current account deficit

Mains: Challenges to the Indian economy and recommendations

Context:

  • Finance Ministry’s monthly economic report.

Near-term challenges to the Indian economy:

  • The report warns of near-term challenges in reining in inflation, managing fiscal deficit and current account deficit, sustaining economic growth and maintaining a fair value of the rupee.
    • The elevated global prices of crude and edible oil are contributing to high retail inflation in the economy. The effect of the summer heat wave on crop production has only added to this inflation pressure by resulting in a rise in food prices domestically.
    • The recent cut in excise duties on diesel and petrol to control inflation levels in the economy presents upside risks to the fiscal deficit as it will significantly decrease government revenue. The additional welfare and subsidy spending only has increased the pressure on the gross budget deficit.
    • An increase in the fiscal deficit may cause the current account deficit to widen, compounding the effect of costlier imports, and weakening the value of the rupee thereby further aggravating external imbalances and creating the risk of a cycle of wider deficits and a weaker currency.
    • The Indian economy which was under pressure due to the pandemic-induced disruption remains to face challenges to its growth due to global factors. The supply chain bottlenecks contributing to rising commodity prices and the faster than projected withdrawal of monetary accommodation remain major concerns for India. The quantitative tightening in advanced economies is leading to large outflows in Foreign Portfolio Investment from India. This is contributing to the risk of rupee depreciation.
    • The prospect of high inflation and low growth gives rise to possible concerns of stagflation. Stagflation is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high.

India well placed to face the near-term challenges:

  • The report notes that India is relatively better placed to meet the near-term challenges better as compared with other nations. It notes the following reasons for this.
    • Relatively better financial sector stability in the Indian economy.
    • The rapid vaccination of the population has enabled the economy to reopen faster.
    • India continues to be the quickest growing major economy in 2022-23. India’s economy grew 8.7 per cent in the last fiscal year (2021-22), against a 6.6 per cent contraction in the previous year. This is being seen as indicative of post-pandemic economic recovery. The sustained growth in the agricultural sector and increasing investments along with the rise in exports seem to strengthen this argument.
    • India’s medium-term growth prospects remain bright as pent-up capacity expansion in the private sector is expected to drive capital formation and employment generation in the coming decade.
    • The emphasis on capital expenditure will help provide much-needed impetus to economic growth and employment generation.

Recommendations:

  • The report stresses the need to address the near-term challenges without sacrificing macroeconomic stability in India. It calls for prioritizing macroeconomic stability over near-term growth.
  • The government should seek to control spending. This would require rationalising non-capex expenditure by the government. This will not only help the government protect growth-supportive capex but also help avoid fiscal slippages.
Nut Graf

There continue to remain multiple near-term challenges to the Indian economy which will require a fine balancing between maintaining growth momentum, keeping the fiscal deficit within budget and restraining inflation objectives through tactful policies.

1. At the centre of job creation

Syllabus: Indian Economy and issues relating to Employment.

Mains: Concerns with employment scenario in India

Context:

  • Prime Minister has announced that 10 lakh government jobs will be provided over the next 18 months. This is being seen as acceptance of the challenge of unemployment in the economy and the importance of government in creating employment opportunities.

Concerns with employment scenario in the Indian economy:

Employment trends:

  • Even though the labour force and workforce participation rates have increased marginally, the educated unemployment rate (secondary school and above) in general and youth unemployment (15-29 years) in the urban areas are in double digits.

Decreasing role of government in employment segment:

  • There continue to remain large vacancies in the government both at the state as well as the Union government levels. The number of existing vacancies in Central government departments currently stands at a whopping 8,72,243. Also, central public sector enterprises (CPSEs) have been shedding jobs in recent years. These trends do not augur well for future employment trends in the government sector.

Limited ability of the private sector to create jobs:

  • The private sector has not been able to create enough jobs. This is indicative of jobless growth in the Indian economy. Though the Information Technology sector and the modern gig economy have created jobs, these are either very high-skilled jobs or low-skilled ones.

Decline in quality of job opportunities:

  • There has been a decline in the quality of jobs.
  • There has been a rise in the unpaid segment of the self-employed and a rise in the share of the agricultural sector in total employment over the last few years. This segment characterized by low productivity does not augur well for a healthy economy.
  • Employment shares in the informal enterprises have increased — for men (71% to 75%), women (55% to 57%) and all persons (68% to 71%) from 2017-18 to 2020-21.

Lack of reliable employment data:

  • There is a lack of sufficient and quality employment data in the Indian economy. The reliance on the Employees’ Provident Fund Organisation/National Pension System/Employees’ State Insurance Scheme registrations and exits as indicators of the formal labour market could be misleading and are more indicative of formalisation rather than employment generation.

Lack of social security protection:

  • Even though the share of regular salaried workers who did not have a formal employment contract, paid leave and eligibility for any form of social security has declined for both genders, the level is still high.

Recommendations:

  • The government should re-establish its role as the principal employment generator through jobs in its ministries and CPSEs and through assured employment generation programmes like MGNREGA. This will go a long way in ensuring a sustainable labour market.
  • There is also the need to ensure decent work apart from the usual emphasis on the number of jobs generated. These jobs should ensure a living wage and also offer social security protection.
Nut Graf

With the concerning employment scenario in the Indian economy along with the phenomenon of jobless growth being observed, it becomes important for the government to re-establish its role as the principal employment generator in the Indian economy.

2. Summer Solstice

Syllabus: GS Paper 1 – Important geography terminology

  • June 21 marks the longest day of the year for the Northern hemisphere and the shortest day in the Southern Hemisphere. It is called the summer solstice. This is the day when the sun is directly overhead the Tropic of Cancer. The Tropic of Cancer is the most northerly circle of latitude on earth at which the sun can be directly overhead.
  • On this day, the north pole is tilted towards the sun, and the south pole is tilted away from the sun. Hence the days are longer in Northern Hemisphere and shorter in Southern Hemisphere.

G. Tidbits

1. Shah flags importance of data protection

  • Speaking at the inauguration of the national conference on cybersafety and national security, the union home minister noted the increasing instances of cyber crimes such as malware attacks, phishing and attack on critical infrastructure. He noted that the number of cybercrimes registered in 2012 was 3,377 and in 2020, it had increased to more than 50,000 cases and by 2025, the crime rate was projected to go up by 231%.
  • The national conference was organised by the Home Ministry as part of the efforts to create mass awareness for the prevention of cybercrimes in the country.
  • The Minister called for upholding data privacy and protection of critical infrastructure from cyberattacks.

2. EC deletes 111 ‘non-existent’ parties from list

  • The Election Commission has ordered the deletion of 111 registered unrecognised political parties.
    • Newly registered parties or those which have not secured enough percentage of votes in the assembly or general elections to become a state party, or those which have never contested elections since being registered are considered unrecognised parties.
  • This action is because these parties had been found violating sections of the Representation of the People Act, 1951.
  • Also, three of these parties have been referred to the Department of Revenue for necessary legal and criminal action for indulging in serious financial impropriety. These parties are suspected of indulging in money laundering. The poll panel believes that most of them exist on papers to help people convert their black money into white by accepting donations.

H. UPSC Prelims Practice Questions

Q1. Consider the following statements with regards to single use plastics: 
(Level – Difficult)
  1. According to the Plastic Waste Management Rules, 2016, there is a complete ban on sachets using plastic material for storing, packing or selling gutkha, tobacco and pan masala in India.
  2. Bangladesh became the first country to ban thin plastic bags in 2002.
  3. Vanuatu and Seychelles have banned plastic straws outright.

Choose the correct code:

  1. 1 & 2 only
  2. 2 & 3 only
  3. 1 & 3 only
  4. All of the above
CHECK ANSWERS:-

Answer: d

Explanation:

  • As per the Plastic Waste Management (PWM) Rules, 2016, there is a complete ban on sachets using plastic material used for storing, packing or selling gutkha, tobacco and pan masala. As per PWM (Amended) Rules, 2021, the manufacture, import, stocking, distribution, sale and use of carry bags made of virgin or recycled plastic less than seventy-five microns has been banned with effect from 30th September 2021 as opposed to fifty microns recommended earlier under PWM Rules, 2016. Additionally, the notification of 12th August 2021, prohibits the manufacture, import, stocking, distribution, sale and use of select single-use plastic items, which have low utility and high littering potential with effect from the 1st July 2022.
  • In 2002, Bangladesh became the first country in the world to ban thinner plastic bags after they were found to have choked the drainage system during devastating floods.
  • Only two countries, Vanuatu and Seychelles, have so far banned plastic straws outright.
Q2. ‘Black Swan event’ is a phrase used in the news quite frequently. What does it mean? 
(Level – Easy)
  1. A natural disaster induced by human activities
  2. A rare, unpredictable event with a significant impact on society or the world
  3. A law which is considered against the interests of wildlife
  4. An initiative specially designed to preserve marine life in the country
CHECK ANSWERS:-

Answer: b

Explanation:

  • A black swan is a rare, unpredictable event that comes as a surprise and has a significant impact on society or the world.
Q3. Consider the following statements with regards to the transgender athletes: 
(Level – Difficult)
  1. In October 2021, World Rugby became the first international sports governing body to institute a ban on transgender women competing in global competitions like the Olympics and the women’s Rugby World Cup.
  2. Recently, the International Swimming Federation (FINA) voted against allowing transgender athletes to participate in female competitions – the exception being that the transgender athlete must have completed their transition before the age of 12.
  3. In the 2021 Tokyo Olympics, Canadian athlete Quinn became the first-ever transgender athlete to win a medal at the Olympics.

Choose the correct code:

  1. 1 & 2 only
  2. 2 & 3 only
  3. 1 & 3 only
  4. All of the above
CHECK ANSWERS:-

Answer: d

Explanation:

  • The International Swimming Federation (FINA) has voted against allowing transgender athletes to participate in female competitions. In October 2021, World Rugby became the first international sports governing body to institute a ban on transgender women competing in global competitions.
  • Quinn is a Canadian professional soccer player and Olympic gold medallist who plays for the Canada national team.
Q4. Which of the following nations had adopted Bitcoin as an official currency? 
(Level – Easy)
  1. Ecuador
  2. St. Kitts and Nevis
  3. El Salvador
  4. San Marino
CHECK ANSWERS:-

Answer: c

Explanation:

  • The Central American country of El Salvador had adopted Bitcoin as an official currency in September 2021.
Q5. Consider the following statements in respect of the Laureus World Sports Award which was 
instituted in the year 2000: (Level – Difficult)
  1. American golfer Tiger Woods was the first winner of this award.
  2. The award was received mostly by ‘Formula One’ players so far.
  3. Roger Federer received this award maximum number of times compared to others.

Which of the above statements are correct?

  1. 1 and 2 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3
CHECK ANSWERS:-

Answer: c

Explanation:

  • The Laureus Sports award honours the greatest and most inspirational sporting triumphs of the year.
  • The American golfer, Tiger Woods was the first winner of this award.
  • The award has been mostly won by Tennis players so far and Roger Federer has received this award the maximum number of times so far (5 times).

CNA 21 June 2022:- Download PDF Here

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