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12th August 2017 Part-1: Daily News Analysis
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Economic Survey: What is Leveraging and De-leveraging

Jatin Verma is teaching live on Unacademy Plus

Jatin Verma
Have appeared in UPSC CSE thrice. Have been taking Unacademy Plus courses Academics- Polity, Economics & Current Affairs.

Unacademy user
Thanks Jatin for rescuing from this stormy subject of economics , being a newbie in this surely has its challenges . and i wanted to ask u , will NCERT be sufficient or any other book do i need to follow ??
Aneesh Menon
2 years ago
You can read 11th and 12th NCERT to create a base and then read Ramesh Singh.You will have a broader view of the subject then.
Aneesh Menon
2 years ago
But for Economics,most important is the current affairs and Economic survey than the textbook knowledge.PIB is a must for better analysis and answer writing.
Kanu K
2 years ago
Thanks @Aneesh :)
I always feel your heart when you occasionally say "we lost our great PM" but when you were talking about the 30 lost lives, your voice modulation and tone made me a little sad. yes I know it's exam point of view and academic analysis but humanitarian qualities are much much much above dreams/achievements of any UPSC does not mean that you just don't case about them or the poor people (you always do) but today, that tone made me a little sad. another less important thing..plural of software is software itself
Sir, thank you so much for the DNA. Can you please tell, what kind of questions can be asked in relation to the points in this DNA?
Jatin Verma
2 years ago
will create some questions on Economic survey under DAILY MCQ COURSE Lessons. Thanks:)
Ankita Dudhraj
2 years ago
Thank YOU sir.
sir, thanks for your works.. Sir, when I'm preparing notes from Hindu, it takes a lot of time..very much time.. should I continue this? or instead should I go through weekly or monthly current affairs materials? anyone pls help
Sir, can you please create a separate google drive where you upload all the necessary PDFs, maps etc. It's difficult to find them on FB. It would be very convenient for everyone of us. Hope you consider giving it a try.
  1. DAILY NEWS ANALYSIS from THE HINDU, TO 2TH AUGUST 2017 By JATIN VERMA Educator Unacademy For Daily The Hindu News & Editorial analysis- Visit my Unacademy profile-

  2. Page-I : Growth likely to be in the lower range, closer to 6.5%. [G.S.-3: Economy] Second volume of the Economic Survey tabled in Parliament. The Indian economy's growth in 2017-18 is more likely to be closer to 6.5% than 7.5%, according to Chief Economic Adviser Arvind Subramanian. Many indicators all point to the same direction of deceleration in growth [i]. credit growth, [i] index of industrial production, [ii] Gross Value Added(GDP), manufacturing, [v] investment. Growth forecast has not been changed (a range of 6.5%-7.5% estimated in February), it is just that because of all these risks, it's less likely that we will see outcomes towards the upper end of the forecast. . The balance of risks to the growth outlook has clearly shifted to the downside. . It would be premature to say that growth can rebound very quickly unless there is a 'clean-up' and significant 'deleveraging' in the Indian economy . There has been an 'across-the-board deceleration in real activity since the first or second quarter of last year,' which could have intensified owing to demonetisation.

  3. . The economy grew by 7 1 % in 201 6-17 There are various steps taken with medium-term benefits. . The real challenge now is short- term growth and we need to bring to bear all the policy tools that we have to revive short-term growth Loan waivers:waivers will act as a 'drag on growth' rather than have an inflationary impact. To accommodate the loan waiver, States will have to cut down either expenditure or raise taxes which will be deflationary. Look at the Uttar Pradesh Budget-capital expenditure has been slashed by l 3% or so."That represents less demand, less growth, suggesting this could impact demand by as much as 0.7% of GDP, drag down growth in the short run and worsen States' aggregate fiscal deficit indicators Page-l:30 children die in Gorakhpur hospital Day Meal (MDM) scheme is beginnings in Madras Presidency in pre-independent India. The scheme has again been given impetus in most states in the last two decades. Critically examine its twin objectives, latest mandates and success. [UPSC Mains 2013]

  4. *Page-5: Political storm hits Athirappilly project G.S.-2 Polity & Governance: Development vs. Dispalcement Dilemma] . Attempts of the Kerala State Electricity Board (KSEB) Limited, to beat the August 18 deadline set by the Ministry of Environment for beginning work on the controversy-marred Athirappilly hydel project, has sparked a political storm in the State. The attempt is to establish that they have already started the project before the expiry of the environmental clearance Objections: [I]The KSEB had done this even as a writ petition is pending at the Kerala High Court, and without going through the tender process. [IIThe hydel power project, which proposes the construction of the seventh dam along the 145 km course of Chalakudy river, will sound the death knell for what remains of endemic species of flora and fauna in the region. [Il]According to Western Ghats Hornbill Foundation, all studies, including that by the Western Ghats Ecology Expert Panel, had noted that the project, which would affect 138 hectres of forest land and dry up the already thin Athirappilly waterfall, was environmentally unfeasible. Though handing over of 138 hectares of forest was cleared in 1999, the land had still not been handed over to the KSEB. The technical and economic clearance granted for the project had also expired in 2008.

  5. Page-8:Let House work:Vice President. [G.S. -2: Polity & Governance- Constitution] President administers the oath of office to Vice President. The Vice-President Of India (Articles 63-73) . Article 69 (Oath or affirmation by the Vice-President): Every Vice-President shall, before entering upon his office, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation in the prescribed form . Page-9: Law itself allows cattle slaughter, SC tells govt.[G.S. -2: Polity & Governance] . If slaughtering cattle for food or religious sacrifice is allowed under the Prevention of Cruelty Act, why did the government ban the sale of cattle for these purposes in the new livestock market rules, the Supreme Court asked the Centre. food and religious sacrifices require a person coming to the market to give a written undertaking that he will not sell his cattle for . A Bench of S.C. pointed out that the Prevention of Cruelty to Animals Act,1960 allowed slaughter for . On the other hand, the Prevention of Cruelty to Animal (Regulation of Live- stock Market) Rules of 201Z slaughter. . How can the Centre insist that a person should give a written under- taking that he is not bringing cattle to the market for sale for slaughter? This is an interference of his funda- mental right to carry on trade, protected under the Prevention of Cruelty Act.

  6. Nihalani removed as CBFC chief: Mukul Mudgal Committee was constituted to review the mandate and functionary of CBFC. [G.S. -2: Polity & Governance- Statutory Bodies] Classification of films: Committee suggested a shift to the internationally prevalent practise of age-related classifications and certifications. As against the current practise of 'U, 'U/A, and A' certification, the Committee has proposed to break-up U/A' by age to 12+' and '15+' while retaining "U'and 'A TheS' classification for restricted circulation has been retained. No State government can order the suspension of a film. The Central government can only invoke this clause only after a show-cause notice has been given in writing to the film-maker setting out the grounds for proposing such a move and giving him/her reasonable opportunity to respond. Entry 60 of List I of the Seventh Schedule to the Constitution categorically places legislation relating to sanction of film for exhibition in the domain of the Central government. Further, the specific language of Entry 33 of List-II of the same Schedule Provides that this entry is subject to the provisions of Entry 60. . What do understand by the concept "freedom of speech and expression"? Does it cover hate speech also? Why do the films in India stand on a slightly different plane from other forms of expression? Discuss. [UPSC CSM G.S. Paper-2;2014]

  7. Page-9:System lighter by 3.5 lakh crore of cash: Economic Survey Demonetisation has reduced 3.5 lakh crore of cash from the amounts available in the system before, and digitisation has increased across the board, even among the poor. In levels, and as a share of GDP and money, there seems to have been a sharp and equilibrium decline in the use of cash: as of July, the holding of cash is about 3.5 lakh crore (20%) less than what might have been the case had pre-demonetisation trends prevailed, consistent with the calculations presented in Volume l. The report analysed the effect of demonetisation on the informal sector via two proxies: [i]demand for MGNREGA work, and [ii]two-wheeler sales -since the economic indicators collected by the government themselves do not include data from the informal sector . Growth of Taxpayers. The growth of taxpayers post-demo netisation was significantly greater than in the previous year (45% versus 25%). The addition amounted to about 5.4 lakh taxpayers or 1% of all individual taxpayers in just a few months. It is, however, interesting that the average income reported of the new taxpayers 2.7 lakh- was not far above the tax threshold of 32.5 lakh, so the immediate impact on tax collections was muted.

  8. S. Page-I 1 :The challenge is growth rebound in short term, . The Reserve Bank of Indian and the government have substantially overachieved on infation. For the last 10 months, our estimate is that we have done better than whatever target we set ourselves by about 150 basis points on an average for almost a year. . Our assessment, if you put all of this together, is that by March 2018, we would be well within the inflation target and average inflation for the year as a whole would be well below target. Even if you reach about 4% by end-March, inflation for the year as a whole,which is a more important number, that will be closer to the 3% mark. There's been an across-the-board deceleration in real activity since the first or second quarter of last year & it is quite telling that for the first time, many indicators credit growth, IIP, GVA, manufacturing, investment all point to the same direction of deceleration in growth. . A number of countries that experienced a credit boom, growth boom and then a credit and growth collapse . India didn't de-leverage at all. So it is almost premature to say that growth can rebound very quickly unless we clean up and do the de-leveraging.

  9. /Push for law to ensure transparency rules [G.S.-2&3: Governance & Ease of Doing Business] Anage citizen could easily access the latest rules and Need for Transparency of Rules Arguing that India would benefit enormously if the average citizen could easily access the latest rules and regulations in a comprehensible format, the survey suggests a Transparency of Rules Act (TORA) as a possible solution. Rationale: [i] opaque mesh, of regulations prevalent in India not only make life difficult for citizens who cannot feign ignorance of rules as a valid defence, but also act as a magnet for corruption and endless litigation [i] It is not easy for ordinary citizens [and businesses] in India to navigate the multitude of rules, regulations,forms, taxes and procedures imposed by various tiers of government. . It is solely about the ease of finding out what the citizen is expected to do, the Survey said even . 'Attempt to change': The TORA is an attempt to change in some ways the relationship between the . All forms of governance are based on citizens being expected to follow the rules. Unfortunately, in India, [ii] Moreover, these rules frequently change and sometimes contradict each other government officials struggle to keep up with 'the latest version' of complicated rules. average normal citizen and the State. very often, the rules are not so transparent.

  10. Page-l1:Survey backs U.P model on farm loan waivers The Economic Survey assumes that other States will follow Uttar Pradesh's example and waive farm loans, taking the full waiver amount to 32.2-2.7 lakh crore. The Survey's own calculations find that only a few States have the fiscal space for such waivers, and so most will have to either cut expenditure or increase taxes.The total impact of waivers could be to lower demand by as much as 0.7% of the GDP . . It is assumed that waivers will apply at the loan rather than household level, since it will be administratively difficult to aggregate loans across households. "It is also assumed that other States will follow the U.P model of waivers up to lakh for all small and marginal farmers. On this basis, an upper bound of loan waivers at the All-India level would be between 32.2 and 32.7 lakh crore . The Survey says the waivers will have four effects on aggregate demand: [ilon private consumption impact via increases in private sector net wealth, [i]public sector impact via changes in government expenditure/taxes, [ii] crowding out impact via higher borrowings by State governments,and [iv]crowding in impact via higher credit availability as bank NPAs fall. . Loan waivers will increase the net wealth of farm households. Since loan waivers are assumed to increase aggregate income by 28%, consumption is estimated to increase by 7% or about 55,000 crore

  11. . The survey estimated that for States with fiscal space, loan waivers would add about 76,350 crore to demand via the additional interest costs and for States without space, waivers could reduce demand by about? I .9 lakh crore. The Survey's calculations show that while Andhra Pradesh, U.P, Rajasthan, Himachal Pradesh, Kerala, Odisha, and Chhattisgarh have no fiscal room to waive farm loans, States such as Maharashtra, West Begal, Karnataka and Gujarat have ample space.

  12. The year-on-year contraction in capital goods output for the third consecutive month highlights the continuing sluggishness in private sector investment activity. The outlook, however, seems more optimistic with a favourable monsoon and the Seventh Pay Commission payout projected to bolster consumer demand. . Since GST has already kicked in, the restocking of inventories will take place that is likely to boost industrial output.

  13. Ease norms for airlines to fly abroad, . The Economic Survey has suggested a mix of protectionism for domestic airlines and liberal norms for flying abroad to bolster their share in international air traffic. . The Survey said a large increase in capacity entitlements under bilateral air service agreements with foreign countries has helped foreign carriers in gaining a large share in the international traffic to and from India as domestic carriers have under-utilised their rights. About 38% people fly in and out of India through Indian carriers as per estimates for January-March 2017 . Indian domestic airlines have a very low share in international traffic to and from India. Reasons:[] foreign airlines utilising the sixth freedom of the air, [ilexpansion of capacity entitlements under bilateral air service agreements with foreign countries, [iij lower utilisation of India's own capacity entitlements, [iv]the 0/20 rule and fleet constraints are responsible for the same. 'Sixth freedom': Sixth freedom is the bilateral air traffic right to fly from a foreign country to another foreign country while stopping in one's own country.For instance, Emirates operates flights betweern India and the U.K. while stopping at Dubai, its home state. Sixth freedom traffic constituted 61.14% of the total international traffic in 20 l 5-16, increasing from 59.15% in 2014-1 5.The Survey said this had reduced the share of direct, long-haul flights for Indian carriers from 25% in 201 1-12 to 20.5% in 2015-16. hile stopping atDubaiaitinho oms 9.15%in2014-151112 to 20.5%)

  14. . Capacity entitlements between Dubai and India have increased sixfold between 2003 and 2017.It increased ninefold in the case of Oman and 12-fold in the case of Qatar. . While capacity entitlements are reciprocal in nature, the benefit of such increases in capacity entitlements have accrued more to the foreign partner vis-a-vis India. This is because Indias utilisation of these rights is lower than the foreign counterparts . Solution: The Survey said the 0/20 rule to allow for overseas operations should be further diluted. According to the present norm, known as the 0/20 rule, a domestic airline needs to deploy at least 20 planes in the domestic sector before getting the right to fly on international routes from India. . In its 2016 policy, the Central government had diluted the contentious 5/20 rule' that required an Indian airline to have five years of domestic flying experience and 20 aircraft in its fleet before it could fly to overseas destinations. The Survey said that the government should focus on building its own aviation hubs as "India is as advantageously placed in terms of geographic location as Dubai or Singapore."

  15. Chrome File Edit View History Bookmarks People Window Help 70% Wed 9:53 PM a E UPSC ( dh Secure Jatin Search O credits Jatin Verma Follow Worked at Citi Bank. Books, movies, travelling, share trading. Have appeared in UPSC CSE twice. Preparing again. Activity 29 Counses 128.9k Followers 5 Following Impact Jatin Verma added a new lessorn th 3,024,634 9th August 2017 Editorial-1: Food for Action (on NFSA) National Food Security Act 2013: A Complete Analysis Jatin Verma replied on a comment 2h "sir will this state food commission be a quasijudicial body??" Harpreet Singh Kalsi Jatin Verma 2h you can say.. in loose sense of the term, though. Show All

  16. O socio e secure : atin verma Searching for "jatin verma" EDUCATORs Jatin Verma Mahesh verma COURSES The Hindu Daily News Analysis July 2017 By Jatin Verma (Hind) The Hindu Daily News Analysis July 2017 ay Jatin Verma Hind) The Hindu Daily Editorial Analysis for June 2017 By Jatin Vermna The Hindu Daily News Analysis for June 2017 ay Jatin Verma The Hidu Daily Editorial Analysis for July 2017 By Jatin Verma For Daily PRESS INFORMATION BUREAU updates, Visit my Unacademy profile-

  17. Other Courses by me: Mediumm 1. The Hindu News Analysis 2. The Hindu Editorial Analysis 3. Daily PIB Summary Live Now. 4. Daily MCQs on Current Affairs 5. Yojana/Kurukshetra Analysis Coming son. [Hindi & English] 6. Indian Polity Crash Course 7. Most Important Current Affairs. [Hindi & English] [Hindi & English] [Hindi & English] [Hindi & English] [Hindi for now] [Hindi & English]. Sunday-weekly DNA Review: Sunday-weekly Editorial Review: A re-cap of Most Important News of the week A re-cap of Most useful Editorials of the week