Daily Prelims Notes 30 January 2021

January 30, 2021
Posted by: OptimizeIAS Team
Category: DPN

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Daily Prelims Notes

30 January 2021

By

Santosh Sir

All 6 Prelims qualified

4 CSE Mains qualified

If I can do it, you can too

Table Of Contents

1. ECONOMIC SURVEY PREDICTION

Subject: Economics

Context : After an estimated 7.7 per cent contraction in 2020-21, the Finance Ministry’s Economic Survey projects that India’s real GDP would record a growth of 11 per cent in 2021-22.

Concept:

The nominal GDP growth has been estimated at 15.4 per cent, implying an assumption of 4.4 per cent inflation during the year.

Basis for Growth Projections

One of the factors is the low base while calculating the year-on-year inflation rate, given the contraction this fiscal.
The Survey noted that the “conservative estimates” of growth in FY22 “reflect upside potential that can manifest due to the continued normalisation in economic activities as the rollout of Covid-19 vaccines gathers traction”.
This will further be supported by a supply-side push from reforms and easing of regulations, push to infrastructural investments, boost to manufacturing sector through the Productivity Linked Incentive Schemes, recovery of pent-up demand for the services sector, increase in discretionary consumption subsequent to the roll-out of the vaccine and pick up in credit given adequate liquidity and low-interest rates, the survey noted.
This path would entail a growth in real GDP by 2.4 per cent over the absolute level of 2019-20 – implying that the economy would take two years to reach and go past the pre-pandemic level.
India is expected to emerge as the fastest growing economy in the next two years as per IMF, the Survey has noted.

2. MAHARASTRA – KARNATAKA BORDER DISPUTE

Subject: Polity

Context: Maharashtra has staked claim to over 7,000 sq km area along its border with Karnataka, comprising 814 villages in areas predominantly Marathi-speaking.

Concept:

Maharashtra has staked claim to over 7,000 sq km area along its border with Karnataka, comprising 814 villages in the districts of Belagavi (Belgaum), Uttara Kannada, Bidar, and Gulbarga, and the towns of Belagavi, Karwar, and Nippani.
All these areas are predominantly Marathi-speaking, and Maharashtra wants them to be merged with the state.

What is the dispute?

According to the State Reorganization Act of 1956, Belagavi was handed over to the Mysore state, which was renamed as Karnataka in 1973.
In 1957, slighted by the implementation of the States Reorganization Act, 1956, Maharashtra demanded readjustment of its border with Karnataka.
Maharashtra invoked Section 21 (2) (b) of the Act and submitted a memorandum to the Ministry of Home Affairs stating its objection to Marathi- speaking areas being added to Karnataka.
The central government constituted the Mahajan Committee in 1966 to assess the situation. Representatives from both sides, Maharashtra and the then Mysore state were part of the committee.
In 1967, the committee recommended that some villages in Karwar, Haliyal and Suparna talukas of Karnataka be given to Maharashtra but left Belagavi with the southern state.
In 2006, the Supreme Court held that the issue should be resolved through mutual negotiation and that linguistic criterion should not be considered as it may create more practical problems.
The case is still being heard by the Supreme Court.

The Mahajan Commission report:

While demarcating borders, the Reorganization of States Commission sought to include talukas with a Kannada-speaking population of more than 50 per cent in Mysore.
Opponents of the region’s inclusion in Mysore argued, and continue to argue, that Marathi-speakers outnumbered Kannadigas who lived there in 1956.
In September 1957, the Bombay government echoed their demand and lodged a protest with the Centre, leading to the formation of the Mahajan Commission under former Chief Justice Mehr Chand Mahajan in October 1966.

Recommendations of the Commission:

The Commission in its report in August 1967 recommended that 264 villages be transferred to Maharashtra (which formed in 1960) and that Belgaum and 247 villages remain with Karnataka.
Maharashtra rejected the report, calling it biased and illogical, and demanded another review.
Karnataka welcomed the report, and has ever since continued to press for implementation, although this has not been formally done by the Centre.

3. DOOMSDAY CLOCK

Subject: Science & tech

Context : The hands of the ‘Doomsday Clock’, a visual depiction of how vulnerable the world is to a climate or nuclear catastrophe, remained at ‘100 seconds to midnight’ for the second consecutive year — the closest it has been to the symbolic annihilation of humanity.

Concept:

The Bulletin of the Atomic Scientists, founded by Albert Einstein and students from the University of Chicago in 1945, created the ‘Doomsday Clock’ as a symbol to represent how close the world is to a possible apocalypse.
This clock represents that the closer the minute hand is to midnight, the closer the world is to disaster.
This clock is maintained by the members of the “Bulletin of the Atomic Scientists” since 1947.
The scientists of this organization are attributed for the forward or backward movement of the needles of the clock.
When scientists think that humanity is at risk, the needles of the clock are set closer to 12 O’clock and when the danger passes away, the needles are set a few minutes away from the 12 O’clock.
For example, after the two years of nuclear attack on Hiroshima and Nagasaki by the USA; the Doomsday Clock was set at just 7 minutes to midnight i.e. 12 O’clock for the first time.

4. JOY BANGLA

Subject: History

Context: Even as the All India Trinamool Congress (TMC) accused the Bharatiya Janata Party (BJP) of religious politics by repeating the ‘Jai Shri Ram’ chant, the latter has countered that the ruling party in the state was engaging in Bengal sub-nationalism with its use of the slogan ‘Joy Bangla’.

Concept:

‘Joy Bangla’, which translates as ‘victory to Bengal’ or ‘hail Bengal’ is the national slogan of Bangladesh and that it has a special place in the country’s memory of the 1971 Liberation war.
But the roots of the slogan go way back to 1922, when a nationalist movement against the British was raging in India.

Origins of ‘Joy Bangla’

The phrase ‘Joy Bangla’ is taken out of a poem written by Bengali poet, musician and writer KaziNazrul Islam.
The poem written in 1922 spoke about the spirit of revolutionaries in Bengal, who shattered the shackles of oppression through generations.
His writings were of inspiration to Bengalis of East Bengal during the 1971 Bangladesh Liberation war, when the country broke away from West Pakistan.
In 1972, Nazrul was crowned the titled ‘national poet of Bangladesh’.

5. CENTRAL ISSUE PRICE

Subject: Agriculture

Context : Observing that the food subsidy is becoming “unmanageably large”, the Economic Survey 2020-21 has recommended the revision of Central Issue Prices (CIP) of food grains released from the central pool, which have been unchanged for the last several years.

Concept:

The CIP is the price at which the government makes available food grains for beneficiaries of the National Food Security Act, 2013 and other welfare schemes to the states from the central pool.
The issue price for wheat and rice has not been revised since the introduction of the National Food Security Act in 2013, the survey observed.
It noted that the economic cost to the Food Corp. of India (FCI) for wheat rose to ₹27 per kg in 2020-21 from ₹19 per kg in 2013-14, while for rice it increased to ₹37 per kg from ₹26 per kg in 2013-14.
The centre procures food grains from farmers at a minimum support price (MSP) and sells it to states at central issue prices. It is responsible for transporting the grains to godowns in each state.
States bear the responsibility of transporting food grains from these godowns to each fair price shop (ration shop), where the beneficiary buys the food grains at the lower central issue price. Many states further subsidise the price of food grains before selling it to beneficiaries.

Public Distribution System in India

The Public distribution system (PDS) is an Indian food Security System established under the Ministry of Consumer Affairs, Food, and Public Distribution.
PDS evolved as a system of management of scarcity through distribution of food grains at affordable prices.
PDS is operated under the joint responsibility of the Central and the State Governments.
The Central Government, through Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation and bulk allocation of food grains to the State Governments.
The operational responsibilities including allocation within the State, identification of eligible families, issue of Ration Cards and supervision of the functioning of Fair Price Shops (FPSs) etc., rest with the State Governments.
Under the PDS, presently the commodities namely wheat, rice, sugar and kerosene are being allocated to the States/UTs for distribution. Some States/UTs also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oils, iodized salt, spices, etc.

6. PERSONAL INFORMATION UNDER RTI

Subject : National Legislations

Context : The court had on January 12 observed that the disclosure of interest regarding information being sought under RTI law would be necessary to establish the bonafides of an applicant.

Concept :

The Delhi High Court Friday clarified its recent observation regarding the necessity for disclosure of interest by an applicant about the information being sought under the RTI Act, and said that it only pertained to the seeking of personal information under the law.
The order had come under criticism, with many pointing out that it contradicts the Section 6(2) of the RTI Act .
It states that “an applicant making request for information shall not be required to give any reason for requesting the information or any other personal details except those that may be necessary for contacting him”.

Other Important sections under RTI Law

Section- 2(j): “Right to Information” means the right to information accessible under this Act which is held by or under the control of any public authority and includes the right to:

Inspection of work, documents, records;

Taking notes, extracts or certified copies of documents or records;

Taking certified samples of material;

Obtaining information in the form of diskettes, floppies, tapes, video cassettes or in any other electronic mode or through printouts where such information is stored in a computer or in any other device.

Section 4:It requires Suomotu disclosure of information by each public authority. However, such disclosures have remained less than satisfactory.
Section 8 (1) mentions exemptions against furnishing information under RTI Act.
Section 8 (2) provides for disclosure of information exempted under Official Secrets Act, 1923 if larger public interest is served.
Section 8(1)(j):“The information which cannot be denied to the Parliament or a State Legislature shall not be denied to any person” under the RTI Act.

7. BARE NECESSITIES INDEX

Subject : National Index / Economy

Context : The Survey has underlined the need to focus on reducing variations in the access to bare necessities across states, between rural and urban areas, and between income groups.

Concept :

The Economic Survey 2020-21 has constructed a Bare Necessities Index at rural, urban & all India level, with 26 indicators on 5 dimensions- sanitation, water, housing,micro-environment, & other facilities.
The BNI builds on the idea of Thalinomics in the Economic Survey for 2019-20, through which it had sought to examine the access to food in the country.
The BNI summarises 26 indicators on five dimensions — water, sanitation, housing, micro-environment, and other facilities — and has been created for all states for 2012 and 2018 using NSO data.
The index classifies areas on three levels of access — high, medium, low — to bare necessities.

Key Findings

The survey showed that all states have increased access to bare necessities in 2018 in comparison to 2012. The highest access was recorded in states like Punjab, Kerala, Gujarat, Punjab and Haryana and lowes was recorded in Jharkhand, Odisha, West Bengal and Tripura.
The inter-state disparities in the access to “the bare necessities” also showed a decline in 2018 in comparison to 2012 across rural & urban areas.
Further, the annual survey noted that the access to the bare necessities has improved disproportionately more for the poorest households in comparison to the richest households across rural & urban areas.
Lastly, the survey noted that improved access to “the bare necessities” correlates with improvement in health indicators such as infant mortality and under-5 mortality and improvement in education indicators.

Thalinomics: The Economics of a plate of food in India. It is an attempt to quantify what a common person pays for a Thali across India.

8. STRATEGIC SECTOR

Subject : Economy

Context : Highlighting the need for strong indigenous pharma companies, a Parliamentary panel has recommended that the pharma industry should be categorised as a “strategic sector” and called for a necessary follow-up action in this regard.

Concept :

The Committee said it was of the strong opinion that pharma sector plays a very important role to keep the nation healthy and strong, and this has been quite apparent during the current pandemic when the need for strong indigenous pharma companies has been realised with more intensity.

Strategic Sectors of India

An industry is considered strategic if it has large innovative spillovers and if it provides a substantial infrastructure for other firms in the same or related industries.
Earlier, the strategic sectors were defined on the basis of industrial policy.
The government classified Central Public Sector Enterprises (CPSEs) as ‘strategic’ and ‘non-strategic’ on the basis of industrial policy that keeps on changing from time-to-time.

According to this, the Strategic sector PSUs are:

Arms & Ammunition of defence equipment
Defence aircraft & warships
Atomic energy
Applications of radiation to agriculture, medicine and non-strategic industry
Railways
Banking, insurance, defence, and energy are likely to be part of the strategic sector list.
All other PSUs apart from the strategic sectors fall under Non-strategic Sector including Power Discoms.

9. C.SUBRAMANIUM

Subject : Important Personalities

Context : C. Subramaniam’s call for ‘science for the economic freedom of humanity’ echoes on his birth anniversary today.

Concept :

Subramaniam is best known as the architect of India’s modern agricultural development policy.
After the success of his programme which led to a record production of wheat in 1972 – an achievement termed as the Indian Green Revolution.
As Minister for Food and Agriculture, he played a decisive role in the introduction of high-yielding varieties of seeds and more intensive application of fertilizers which paved the way for increased output of cereals in the late 60s and attainment of self-sufficiency in food-grains in the country.
He appointed M. S. Swaminathan, who played a major role in green revolution and VergheseKurien as the chairman of National Dairy Development Board when he ushered the Indian White Revolution.
Shri Subramaniam is an institution-builder of the Institute of Mathematical Sciences and the Madras Institute of Development Studies owe their inception to his encouragement and support.
Shri Subramaniam has an international standing which is equalled by few of his compatriots. He was closely associated with the UNO and its organs, the. FAQ and the UNESCO.
He was awarded India’s highest civilian honour, Bharat Ratna in 1998.

10. GIG ECONOMY

Subject : Economy

Context : The lockdown gave a boost to the gig economy, while it had an “inevitable impact on the vulnerable and informal sector,” the Economic Survey for 2020-21 noted.

Concept :

In a gig economy, temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees.
A gig economy undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career.
The drivers of Uber, the delivery boys of Zomato, the plumbers and electricians of Urban Clap make up the gig world.
Global Gig Economy Index report has ranked India among the top 10 countries.

Advantages:

The gig economy can benefit workers, businesses, and consumers by making work more adaptable to the needs of the moment and demand for flexible lifestyles.
The result of a gig economy is cheaper, more efficient services.

Concerns

The gig economy is largely unregulated, therefore workers have little job security and few benefits.
Unless a person is extremely talented, his bargaining power will necessarily be limited.
While companies routinely invest in training employees, a gig-economy workers will have to upgrade his skills on his own at his own cost.
There are already many more potential online independent workers than jobs, and this demand-supply mismatch will only get worse over time, depressing wages.

11. PM- JAY

Subject : Government Schemes

Context : The Pradhan Mantri Jan ArogyaYojana (PM-JAY) contributed to improvement in many health outcomes in States that implemented the ambitious programme to provide healthcare access to most vulnerable sections, according to the Economic Survey 2020-21.

Concept :

States that joined the PM-JAY, compared to those that did not, experienced greater penetration of health insurance, reduction in infant and child mortality rates, realised improved access and utilisation of family planning services and greater awareness of HIV/AIDS.
Across all the States, the proportion of households with health insurance increased by 54% for States that implemented PM-JAY while falling by 10% in States that did not.

Pradhan Mantri Jan ArogyaYojana (PMJAY)

PMJAY offers a sum insured of 5 lakh per family for secondary care (which doesn’t involve a super specialist) as well as tertiary care (which does). For the beneficiaries, this is a free scheme.
It is an entitlement-based scheme that targets the beneficiaries as identified by latest Socio-Economic Caste Census (SECC) data.
Individuals can walk into any empanelled hospital that can process cashless payments.
Once identified by the database, the beneficiary is considered insured.
The insurance cost is shared by the centre and the state mostly in the ratio of 60:40.
Empanelled hospitals agree to the packaged rates under PMJAY—there are about 1,400 packaged rates for various medical procedures under the scheme.
These packaged rates also mention the number of average days of hospitalization for a medical procedure and supporting documents that are needed.
National Health Agency has been constituted as an autonomous entity under the Society Registration Act, 1860 for effective implementation of PMJAY in alliance with state governments.

12. NOVOVAX VACCINE

Subject : Science & tech

Context : American company Novavax, whose COVID-19 vaccine is set to be made in large numbers by the Pune-based Serum Institute of India (SII), has reported that its vaccine has proved to have 89% efficacy in preventing the infection in some trial volunteers in the United Kingdom.

Concept :

In January 2020, Novavax announced development of a vaccine candidate, named NVX-CoV2373, to establish immunity to SARS-CoV-2.
NVX-CoV2373 is a protein subunit vaccine that contains the spike protein of the SARS-CoV-2 virus.
Novavax’s work is in competition for vaccine development among dozens of other companies.
The company released phase 3 trials showing that it has 89% efficacy against Covid-19. It also provides strong immunity against new variants. It has applied for emergency use in the US and UK.

13. REGULATORY FORBEARANCE

Subject : Economics

Context : The Economic Survey 2020-21 has prescribed an early withdrawal of the regulatory forbearance that was adopted in the wake of the pandemic to ward off the threat of financial sector failures impacting the real economy.

Concept :

Regulatory forbearance

A regulatory policy (i.e., a policy implemented by central banks and other regulatory authorities) that permits banks and financial institutions to continue operating even when their capital is fully depleted.
Regulators give banks extended periods of time during which they have to comply with regulatory requirements (by securing new capital funds).
This inaction reflects the unwillingness of regulators to take disciplinary action against problem banks for some period of time.
Regulatory forbearance is also known as capital forbearance

14. COUNTER CYCLICAL FISCAL POLICY

Subject : Economics

Context : CEA says it is time to switch fiscal gears from cautious stance to ‘counter-cyclical’ push.

Concept :

Counter-cyclical fiscal policy refers to the steps taken by the government that go against the direction of the economic or business cycle.
Thus, in a recession or slowdown, the government increases expenditure and reduces taxes to create a demand that can drive an economic boom.
On the other hand, during a boom in the economy, counter-cyclical fiscal policy aims at raising taxes and cutting public expenditure to control inflation and debt.

Pro-cyclical fiscal policy

In a pro-cyclical fiscal policy, the government reinforces the business cycle by being expansionary during good times and contractionary during recessions.
Pursuing a pro-cyclical fiscal policy is generally regarded as dangerous. It could raise macroeconomic volatility, depress investment in in real and human capital, hamper growth and harm the poor, say economists.