Daily Prelims Notes 8 January 2022
- January 8, 2022
- Posted by: admin1
- Category: DPN
Daily Prelims Notes
8 January 2022
Table Of Contents
- Securities and Exchange Board of India (SEBI)
- First Advance Estimate FY 2022
- Constitutions of India and South Africa
- Mayan Civilization Collapse
- Uniform Civil Code
- Collective Security Treaty Organisation
- National Mission for Green India
- Ramakrishna Mission
- Sovereign Gold Bond Scheme
- India as Asia’s 2nd largest Economy
- Strategic Areas in J&K
Subject – Economy
Context – SEBI shortlists seven for the posts of 2 whole time members
- The Securities and Exchange Board of India was established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
- The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and commodity market in India under the ownership of Ministry of Finance, Government of India.
- The basic functions of the Securities and Exchange Board of India is to protect the interests of investors in securities and to promote and regulate the securities market.
- Before SEBI came into existence, Controller of Capital Issues was the regulatory authority; it derived authority from the Capital Issues (Control) Act, 1947.
- In April, 1988 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India.
- Initially SEBI was a non statutory body without any statutory power.
- It became autonomous and given statutory powers by SEBI Act 1992.
- The headquarters of SEBI is situated in Mumbai. The regional offices of SEBI are located in Ahmedabad, Kolkata, Chennai and Delhi.
- SEBI Board consists of a Chairman and several other whole time and part time
- SEBI also appoints various committees, whenever required to look into the pressing issues of that time.
- Further, a Securities Appellate Tribunal (SAT) has been constituted to protect the interest of entities that feel aggrieved by SEBI’s decision.
Subject – Economy
Context – FY22 GDP growth put at 9.2% as agri, manufacturing shine
- The government estimated the economic growth for the 2021-22 fiscal year at 2 per cent, expecting limited impact of the third Covid wave on the economy.
- Last financial year, FY21, the GDP had contracted by 7.3%.
- With this, the size of India’s economy is expected to swell to $3.2 trillion. Also, this estimate is the highest in nearly two decades.
- The NSO, however, made clear that these were “early projections” that did not factor in actual performance of various indicators as well as measures that may be taken to contain the spread of the pandemic.
- The government number is, however, lower than the RBI estimate of 9.5 per cent, closer to India Ratings & Research revised forecast of 9.3 per cent, but higher than the projections by global and domestic agencies; some had put it under 9 per cent.
- “GDP at constant prices (2011-12) in the year 2021-22 is estimated at ₹147.54 lakh crore, as against the provisional estimate of GDP for the year 2020-21 of ₹135.13 lakh crore,” the NSO said, adding that growth in real GDP is pegged at 9.2%.
What are the First Advance Estimates of GDP?
- The FAE, which were first introduced in 2016-17, are typically published at the end of the first week of January.
- They are the “first” official estimates of how GDP is expected to grow in that financial year.
- But they are also the “advance” estimates because they are published long before the financial year (April to March) is over.
- It is important to note that even though the FAE are published soon after the end of the third quarter (October, November, December), they do not include the formal Q3 GDP data, which is published at the end of February as part of the Second Advance Estimates (SAE).
What is their significance?
- Since the SAE will be published next month, the main significance of FAE lies in the fact that they are the GDP estimates that the Union Finance Ministry uses to decide the next financial year’s budget allocations.
- From the Budget-making perspective, it is important to note what has happened to nominal GDP — both absolute level and its growth rate. That’s because nominal GDP is the actual observed variable. Real GDP, which is the GDP after taking away the effect of inflation, is a derived metric. All Budget calculations start with the nominal GDP.
- Real GDP = Nominal GDP — Inflation Rate
- However, from the perspective of the common people, real GDP is what matters. The difference between the real and nominal GDP shows the levels of inflation in the year.
How are the FAE arrived at before the end of the concerned financial year?
- The FAE are derived by extrapolating the available data.
- According to the MoSPI, the approach for compiling the Advance Estimates is based on Benchmark-Indicator method i.e. “the estimates available for the previous year (2020-21 in this case) are extrapolated using relevant indicators reflecting the performance of sectors.”
- For instance, for these FAE, the MoSPI has extrapolated sector-wise estimates using indicators such as Index of Industrial Production (IIP) up to October, inflation — both retail and wholesale — data up to November, sale of commercial vehicles data up to September, so on and so forth.
Key Takeaways –
- Real GDP Growth: At 9.2%, the real GDP growth rate for FY22 is slightly lower than most expectations, including RBI’s, which pegged it at 9.5%.
- Aggregate GDP in FY22 is estimated to cross the pre-Covid level. This also holds true for the absolute level of Gross Value Added (GVA).
- While the GDP maps the economy from the expenditure (or demand) side — that is by adding up all the expenditures, the GVA provides a picture of the economy from the supply side.
- GVA maps the “value-added” by different sectors of the economy such as agriculture, industry and services.
- Role of High Inflation: For FY22, while real GDP (that is, GDP calculated using constant 2011-12 prices) will grow by 9.2%, nominal GDP (that is GDP calculated using current market prices) will grow by a whopping 17.6%.
- The difference between the two growth rates — about 8.5 percentage points — is essentially a marker of inflation (or the rate at which average prices have increased in this financial year).
- Low Private Consumption: An analysis of the three main contributors to GDP — private consumption demand, investments in the economy, and government expenditures — shows that while the latter two are expected to claw back to the pre-Covid level, the first engine will continue to stay in a slump.
- Private consumption expenditures typically account for more than 55% of all GDP.
Subject – Polity
Context – constitutions of India and South Africa shaped their cricket
- The Indian Constitution offers for a Parliamentary form of government which is federal in structure with certain unitary characteristics.
- Derived from various sources. Primarily from the Government of India Act, 1935.
- From South Africa:
- Procedure for amendment of the Constitution.
- Election of the members of the Rajya Sabha.
- From South Africa:
Evolution of Indian and South African constitution
- Both Indian and South African constitution evolved through a long struggle against colonialism and imperialism.
- While drafting constitution both countries closely observed constitutions of other countries and made their own constitutions as the best in the world.
- In both Constitution, every citizen has got equal rights and equal opportunities.
- Both Countries Constitution’s “Preamble” starts with wordings “We the People”, meaning People are Sovereign and constitution draws its authority from the People of the nation.
- Both Fundamental Rights and Bill of Rights form the bedrock of the constitution and democracy under the Indian and SA Constitutions respectively.
- Neither the Fundamental Rights nor Bill of Rights are absolute both are subject to reasonable restrictions and limitations.
- Both allow certain degree of freedom to the State to work for upliftment of the marginalized and downtrodden.
- Like the constitution of South Africa certain articles of Indian constitution are amended by two-thirds majority of parliament.
- Right to vote which finds a place in the Bill of Rights is only a statutory/legal right in India., it does not have the status of a Fundamental Rights.
- Right to property, which finds a place in the Bill of Rights was removed from Part III of the Constitution by the 44nd Constitutional Amendment and has been placed under Art 300A thereby reducing its status to that of a legal right.
- Right to information, which is included in Bill of Rights is only a statutory right in India.
Subject – History
Context – The mystery behind Maya civilisation’s sudden fall from glory still eludes us. Scientists have long suspected that drought pushed its people towards starvation.
- The Maya civilisation originated in the Yucatan Peninsula. Known for its monumental architecture and an advanced understanding of mathematics and astronomy, it flourished between 600 and 800 AD.
- But then, suddenly, between 800 and 950 AD, many of the southern cities were abandoned. This period is called the collapse of the Classic Maya civilisations, puzzling modern-day scientists.
- Scientists think that this period saw significant droughts. This seeded a theory: The Maya people faced starvation because of their dependence on drought-sensitive crops such as corn, beans and squash.
Role of Climate change
- The lead authors of the new study were not convinced. So, they dug deeper to understand if the droughts were severe enough to hamper food production at the time.
- The study draws attention to exploiting various plants to survive drought and climate change.
- Climate change is already hampering food security.
- The central Yucatan lowland, site of most major Mayan cities, was abandoned due to the stresses of deforestation and drought.
Subject – Polity
Context – Uniform Civil Code: Legislators to decide policy, not court, Centre tells Delhi HC
To know about UCC, please refer November 2021 DPN.
Subject – IR
Context – CSTO helping Kazakhstan President deal with protesters
- When the Cold War drew to a close in 1991, the Warsaw Pact, an alliance of eight socialist states, and the Soviet Union’s answer to NATO, dissolved. Less than a year later, Russia and five of its allies in the Commonwealth of Independent States, which was nothing but a loose club of post-Soviet countries, signed a new Collective Security Treaty, which came into force in 1994.
- Although it wasn’t as powerful as the Warsaw pact, in 2002, as Central Asia loomed larger in geopolitics — America had invaded Afghanistan the previous year — it declared itself the Collective Security Treaty Organisation, a full-blown military alliance.
- Today it has six members: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. Uzbekistan had quit the alliance in 2012.
- This week, though, was the first time that the organsation invoked Article 4, which is very similar to NATO’s Article 5.
- Article 5 says that the response may include armed force, but it does not mandate it.
- All that NATO actually promises is to take “such action as it deems necessary” to restore and maintain security. That could be anything from nuclear war to a stiff diplomatic protest.
- For Russia, the CSTO is a useful tool to tighten its grip on Central Asia, against both Western and Chinese encroachments. It justifies Russian military facilities in member countries, while also giving Russia a veto over any other foreign bases in the region.
To know more about CSTO, please refer September 2021 DPN.
Subject – Environment
Context – For carbon sequestration, India must revisit its policy framework and reverse fading participation of local communities
- The National Mission for a Green India or the commonly called Green India Mission (GIM), is one of the eight Missions under the National Action Plan on Climate Change (NAPCC).
- It was launched in February, 2014 with the objective to safeguard the biological resources of our nation and associated livelihoods against the peril of adverse climate change and to recognise the vital impact of forestry on ecological sustainability, biodiversity conservation and food-, water- and livelihood-security.
- It aims at protecting, restoring and enhancing India’s diminishing forest cover and responding to climate change through adaptation and mitigation measures. It envisages a holistic view of greening that extends beyond tree planting.
- At the national level implementation is done by the Ministry of Environment and Forests.
- The State Forest Development Agency to guide the mission at the state level.
- At the district level, the implementation to be done by the Forest Development Agency.
Subject – History
Context – Ramakrishna Mission clarifies on FCRA nod
To know about it, please refer June 2021 DPN.
Subject – Economy
Context – Gold bond issue priced at ₹4,786/gm
To know about the scheme, please refer August 2021 DPN.
Subject – Economy
Context – ‘India to surpass Japan as Asia’s 2nd largest economy by 2030’
- India is likely to overtake Japan as Asia’s second-largest economy by 2030 when its GDP is also projected to surpass that of Germany and the U.K. to rank as the world’s No.3, IHS Markit said.
- Currently, India is the sixth-largest economy, behind the U.S., China, Japan, Germany and the U.K.
- “India’s nominal GDP… is forecast to rise from $2.7 trillion in 2021 to $8.4 trillion by 2030,” IHS Markit said.
- By 2030, the Indian economy would also be larger in size than the largest Western European economies of Germany, France and the U.K.
- The rapidly growing consumer market as well as its large industrial sector has made India an increasingly important investment destination for multinationals in many sectors, including manufacturing, infrastructure and services.
Subject – Defence and Security
Context – 1.3k kanal Valley land declared strategic area; up for Army ops use
- The Jammu and Kashmir administration has provided its sanction to declare over a thousand kanals of land in Gulmarg and 354 kanals in Sonamarg areas of the Valley as “strategic areas”.
How strategic area is to be declared?
- While defining “strategic areas” in J&K, Section 3 of the law states that the government may “on written request of an Army officer not below the rank of Corp Commander declare an area as Strategic Area within a local area, only for direct operational and training requirements of armed forces”.
- Government issued such notification for the first time since two acts “Control of Building Operations Act, 1988, and J&K Development Act, 1970” were amended in 2020.
- In July 2020, the administration had removed a 1971 circular that required a no-objection certificate (NOC) from J&K home department for requisition or acquisition of land in favour of the Army, CRPF, BSF, and other similar organisations.
- Such acquisition is being covered under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, since July 2020.
- Administration had also approved an amendment to Control of Building Operations Act, 1988, and J&K Development Act, 1970. The amendment provides for special dispensation to carrying out construction activities in “strategic areas” by armed forces.
Jammu and Kashmir Development Act 1970
- The 1970 Act deals with zonal development plans to determine land use for public buildings, housing recreation and roads. It also looks after development plans of industry, markets, business, schools, hospitals etc.
- An amendment to the act deleted the “permanent resident” provision in the act. Now, economically deprived people from across the country will be eligible to buy such housing sites.