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DAILY NEWS ANALYSIS from THE HINDU September 2017 By Jatin Verma Educator Unacademy
Business Pagel3-Rupee, gold widen current account gap A stronger rupee, in addition to gold imports before the Goods and Services Tax regime kicked in, has led to a sharp widening of the current account deficit (CAD) to $14.3 billion in the April June period, which was 2.4% of the GDP. In the year earlier period, the CAD was $0.4 billion, which was 0.1% of GDP ion or 0.6% of GDP in the January-March period. The widening of the CAD on a year-on-year basis was primarily on account of: -A higher trade deficit ($41.2 billion) brought about by a larger increase in merchandise imports relative to exports. -The rise in CAD was due to a spike in gold imports before the GST kicked in from July I. -The stronger rupee had encouraged imports
Effect of Rupee appreciation on import price of Goods: Rs70,000 I$ equal to Rs 70]. Rs 63,000 I$ eual to Rs. 63] Result: More Imports Price $ 1000 Effect of Rupee appreciation on Exporters Cost= 6500 Rs Intex Phone Rs. 7000 in India I$-Rs 70. Price in 100 Intex Phone Rs. 7000 in India. I$Rs 63. Price in 100 Rs. 6300
Business Pagel 1:Exports climb 10.3% reversing 5-month slowdown India's merchandise exports grew 1 0.3% year-on-year to $23.8 billion in August, reversing a declining trend witnessed for five straight months. Goods imports grew 21.02% during August to $35.46 billion. This resulted in the trade deficit widening to $11.6 billion, from $7.7 billion in August 2016. However, the shortfall was lower than the $11.45 billion seen in July. Trade Deficit-Goods Imports-Goods Exports. Reasons behind the increase: [iIThe jump in shipments was driven mainly by engineering goods, petroleum products and chemicals. [i]Indian exporters who seem to be benefiting from recovery in major global markets, including the key economies of the U.S. and Europe. 26 out of 30 major product groups were in positive growth territory in August, Labour intensive sectors such as gems and jewellery,leather, apparel and handicraft either posted negative growth or modest growth, which is a worrisome sign.
. August data was in continuance with the positive growth exhibited by goods exports since September 2016.While their performance has been staying in the positive growth territory for the previous I I months, what gave a greater relief to the exporting community was that the 10.3% growth in August had reversed the trend of a fall in growth for five consecutive months since 27.6% in March-down to a minuscule 3.9% in July mainly due to the weakness in many labour-intensive segments. In August 2017,the major commodity groups of exports showing positive growth over the corresponding month of last year were -engineering goods (19.53%). -Petroleum Products (36.56%) -organic and inorganic chemicals (32.41 %), -drugs and pharmaceuticals (4.21 %), and -ready-made garments of all textiles (0.56%). Non-petroleum and non gems & jewelry exports rose 14.47% to $17.74 billion, Major commodity group of imports showing high growth in August 201 7 were -petroleum, crude & products (14.22%) -electronic goods (27.44%) -machinery, electrical & non-electrical (18.35%) -gold (68.90%) and -pearls, precious & semi-precious stones (30.88%). I
Oil imports during August jumped 14.22% to $7.75 billion, while non-oil imports during the month rose 23.07% to $27.7 billion. Goods exports during April-August 2017-18 increased by 8.57% to $ 1 18.57 billion, while imports for the same period grew 26.63% to $ 1 81 .71 billion. . Trade deficit during April-August was $63.I billion almost double the $34.3 billion in the corresponding period of the last fiscal GST challenges flagged: Federation of Indian Export Organisations (FIEO) said it was worried about future growth as the order booking position from October was not encouraging due to: [i]rising global uncertainties, [ii]rupee volatility and s on the domestic front including those stemming from the Goods and Services Tax (GST): Exporters have stopped taking orders with least or no working capital at their disposal due to blockage of funds under GST and uncertainties looming large on refunds for the months of July to October. FIEO called for an in-depth sectoral analysis to pinpoint factors responsible for decline in such sectors to help all employment generating, small and micro exporters
Business Page l 3: External debt dips 2.7% to $471.9 bn as NRI deposits fall Long-term debt declines 4.4%, short-term debt drops 5.5% Total external debt for the financial year 2016-17 stood at $471.9 billion, declining 2.7% from the previous year's level. . India's external debt stock stood at $471.9 billion at end-March 2017, decreasing by $13.1 billiorn (2.7%) over the level at end-March 2016. . The decline in external debt was due to the decrease in long-term debt particularly NRI deposits and commercial borrowings. At end-March 2017, long-term external debt was $383.9 billion, showing a decrease of 4.4% over the level at end-March 2016," the release said Long-term external debt accounted for 81.4% of total external debt as compared to 82.8% at end-March 2016. Short-term external debt increased by 5.5% to $88 billion as of the end of March 2017 This was due to the increase in trade related credits.
An inter-country comparison based on 'International Debt Statistics 2017'of the World Bank, which presents the debt data for 2015, shows that India continues to be among the less vulnerable countries with its external debt indicators comparing well with other indebted developing countries The ratio of India's external debt stock to gross national income at 23.4% was the fifth lowest and in terms of the cover provided by foreign exchange reserves to external debt, India's position was sixth highest at 69.7% in 2015. . Question: There has been a persistent deficit budget year after year.Which action/actions of the following can be taken by the government to reduce the deficit? [Prelims 2016] I.Reducing Revenue Expenditure 2.Introducing new welfare scheme 3.Rationalizing subsidies 4.Reducing import duties
Business Page-13:Unions toughen stand on reforms A Group of Ministers on labour reforms led by Finance Minister asked the Labour Ministry to discuss five contentious proposals in the Code on Industrial Relations Bill with central trade unions.These include: [i] allowing bigger companies to retrench workers without the government's permission, [ii]increasing the severance pay by three times, in trade union leadership. [iv]changing the definition of workers' and [vlprocedure for recognition of trade unions. Central trade unions continue to oppose the government's plans to ease retrenchment norms and to restrict trade union membership under the Industrial Disputes Act. What are the demands of Trade Unions: -The government should discuss the industrial relations Bill in full detail. -It should not interfere [with] the trade union composition and -not allow factories to retrench workers without the government's nod
. With the Centre's plans to amend the Industrial Disputes Act 1947 taking time, States are going ahead with their own labour law changes to ease retrenchment norms in a bid to attract business locally with Assam joining the race recently. Since labour is a concurrent subject, the Assam Assembly passed amendments to the Industrial Disputes Act to allow companies with a staff of up to 300 to retrench workers without government permission, up from the present requirement of up to 100 workers giving industries with large workforce more flexibility in retrenchment. However,the Assam government's approved Bill will need the Centre's nod to become a law. '3 Codes into one The proposed Bill will combine: [i] Trade Unions Act, 1926, [ilthe Industrial Employment (Standing Orders) Act, 1946, and [ii]Industrial Disputes Act, 1947, into a single code. Till date, apart from Assam, Madhya Pradesh, Haryana, Rajasthan, Andhra Pradesh, Uttarakhand and d have allowed larger firms to retrench workers without seeking its permission by bringing their own amendments to the Industrial Disputes Act.
Entry 22: Trade unions; industrial and labour disputes. Entry 24: Welfare of labour includingconditions of work,provident funds, employers' liability, workmen's compensation, invalidity and old age pensions and maternity benefits. Question. Which of the following is/are included in the capital budget of the Government of India? I.Expenditure on acquisitions of assets like roads, buildings, machinery, etc. 2.Loans received from foreign governments 3.Loans and advances granted to the States and Union Territories.
. It looks like re-curving Western Pacific tropical cyclones may have played a role in reducing the August rainfall. . In April, the IMD had said that India would get 96% of the normal rainfall during July-September. In August, it updated its forecast to 98%. Since August, however,rainfall across central India and north India was much lower than expected, and as of today, monsoon rains are 6% short of what they should have been for this time of the year Nearly 22% of the country faces drought-like conditions Question. The frequency of the cyclones is lower in Arabian sea when compared to Bay of Bengal. This is because I.Arabian sea surface temperature is higher compared to that of Bay of Bengal. 2. Bay of Bengal receives the remnants of the typhoons originated in Northwestern Pacific ocean. 3.Arabian sea receives the remnants of cyclones from Bay of Bengal
Page-8: SC issues notice on student safety A plea seeking framing of "non- negotiable" child safety conditions and implementation of guidelines to protect school children from sexual abuse and murder prompted the Supreme Court to seek responses from the Centre and all State governments A Bench of SC sought the responses within three weeks from the Union Human Resource Development Ministry and all State governments and union territories on the plea filed by two women lawyers. What the Public Interest Litigator wants: [i] raised the issue of children "being exploited and subjected to child abuse repeatedly within the boundaries of the schools" and demanded that Central and State governments notify a set of [ii] sought proper implementation of existing guidelines of authorities including the Delhi [ii] Referring to the guidelines, it said every school is required to have a "child protection [iv]All new employees must go through a day-long orientation programme on issues relating to "non-negotiable" child safety conditions for schools Commission for Protection of Child Rights (DCPCR) on prevention of child abuse in schools. policy which should be understood, explained and signed by all employees or recruits. child protection within a month of their joining.
Deportation row Adding to the complications for the MEA is the Ministry of Home Affairs's move to deport 40,000 Rohingyas who fled to India during violence in 2012. The UNHRC has criticised the move and the Supreme Court will deliberate on it on September 18. . The MHA's move has been particularly perplexing, as it has been unable to explain where the Rohingyas would be deported to, given that Myanmar has reportedly mined its borders to ensure they cannot return, and Bangladesh is filled to capacity with more than 800,000 refugees already. Myanmar refuses to accept around 1.3 million Rohingya that lived in its Rakhine state, bordering Bangladesh, as Myanmar citizens, and consequently, has refused to allow about 5,00,000 that fled earlier and 4,00,000 more that have fled in the last few weeks, to return. Question: Consider the following pair: [Prelims-2016] Community sometimes mentioned in the news In the affairs of I.Kurd Bangladesh 2.Madhesi - Nepal 3.R ohingya Myanma
Page-9: Indigenous artillery gun sets new record in range. [Balancing CAG criticism] . An indigenous artillery gun, Advanced Towed Artillery Gun System (ATAGS), being jointly developed by the Defence Research and Development Organisation (DRDO) and the private sector has set a new world record in range by hitting targets at a distance of 48 km. surpassing the maximum ranges of 35-40 kms fired by any artillery gun system in this category. Developed by DRDO as a part of the Army's artillery modernisation Programme. During trial firings at Pokhran ranges, ATAGS registered the longest ever distance of 48.074 kms, . Technical Details: ATAGS is a l 55mm, 52 calibre towed artillery gun. The gun has several significant features including an all-electric drive, high mobility, quick deployability, auxiliary d and control system. power ->It has a six round magazine instead of a standard three round magazine. Also, the gun weighs slightly more than normal due to the larger chamber. The record was achieved with special ammunition, "high explosive - base bleed" (HE - BB) by the ATAGS variant developed by Kalyani Group