Current Affairs (1st April 2021)
Small savings instruments
- The government has sharply slashed the rates on all small savings instruments for the first quarter of 2021-22.
- New changes brought the rate of return on the Public Provident Fund down from 7.1% to 6.4% and effecting cuts ranging from 40 basis points (0.4%) to 110 basis points (1.1%).
- The sharpest cut was seen in the quarterly interest rate paid on one-year term deposits, from 5.5% in the January to March quarter to 4.4% in this quarter.
- The rate of return on the Senior Citizen Savings’ Scheme was cut from 7.4% to 6.5%, while the Sukanya Samriddhi Account Scheme’s return was reduced from 7.6% to 6.9%.
- While the government resets the interest rate on small savings instruments every quarter, this round of rate cuts assumes significance as retail inflation has been breaching the 6% mark and the government is keen to lower interest rates to make it easier to execute its borrowing plans for the year and spur growth.
- The revised rates will come into effect from April 1 and remain in effect till June 30.
- Small savings have emerged as a key source of financing the government deficit, especially after the Covid-19 pandemic led to a ballooning of the government deficit, necessitating higher need for borrowings.
- In the 2020-21 Revised Estimates, the government estimated it would raise Rs 4.8 lakh crore through small savings, against the budget estimates of Rs 2.4 lakh crore. In 2021-22, borrowings through small savings have been pegged at Rs 3.91 lakh crore.
GDP to grow 7.5%-12.5% in FY22
- Recently, South Asia Economic Focus South Asia Vaccinates report has been released by the World Bank.
- India’s economy is expected to grow at 10.1% for the year starting April 1, 2021, as the vaccine roll-out drives activity in contact-intensive sectors.
- However, given the significant uncertainty around epidemiological and policy factors, real GDP growth could range from 7.5% to 12.5%, stabilising at 6-7% in the medium term.
- The Bank expects public consumption to contribute positively, but pent-up private demand to fade by end 2021, as investment will pick up very gradually as a result of a large government capital expenditure push.
- Negative spillovers from financial sector distress (particularly concessions to debtors) are a risk to the growth outlook.
- However, the Reserve Bank of India is expected to maintain an accommodative monetary policy stance during FY22. So a big bounce back in India, but not completely out of the woods yet.
Comprehensive Economic Cooperation and Partnership Agreement (CECPA)
- India and Mauritius signed the CECPA on 22 February 2021.
- The CECPA is the first trade Agreement signed by India with a country in Africa.
- Both sides have completed their internal legal procedures and the India-Mauritius CECPA will enter into force on 01 April 2021.
- The Agreement is a limited agreement, which will cover Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures,Dispute Settlement, Movement of Natural Persons, Telecom, Financial services, Customs Procedures and Cooperation in other Areas.
- The CECPA between India and Mauritius covers 310 export items for India, including food stuff and beverages (80 lines), agricultural products (25 lines), textile and textile articles (27 lines), base metals and articles thereof (32 lines), electricals and electronic item (13 lines), plastics and chemicals (20 lines), wood and articles thereof (15 lines), and others.
- Mauritius will benefit from preferential market access into India for its 615 products, including frozen fish, speciality sugar, biscuits, fresh fruits,juices, mineral water, beer, alcoholic drinks, soaps, bags, medical and surgical equipment,and apparel.
- More than 300 domestic goods from agriculture, textiles, electronics and other sectors will get market access at concessional customs duties in Mauritius.
- Indian service providers will have access to around 115 sub-sectors from the 11 broad service sectors, such as professional services, computer related services, research & development, other business services, etc.
WHAT IS CECPA?
- It is a kind of free trade pact that aims to provide an institutional mechanism to encourage and improve trade between the two countries.
- Under this agreement, countries reduce or eliminate the duties on the products. The countries also give relaxation in the norms to promote the services trade.
INDIA AND MAURITIUS: ECONOMIC RELATIONSHIP
- Bilateral trade between the countries had dipped to $690 million in 2019-20 from $1.2 billion in 2018-19.
- While India’s exports in 2019-20 aggregated to $662 million, imports stood at just $27.89 million.
- Mauritius imports petroleum products, pharmaceuticals, cereals, cotton, electrical machinery, apparel and clothing accessories, while India’s imports include iron and steel, pearls, precious/semi-precious stones, etc.
- Mauritius was also the second largest source of foreign direct investment into India in 2019-20, accounting for around $8.24 billion (about Rs 57,785 crore) for the year.
- India had extended a ‘Special Economic Package’ of USD 353 million to Mauritius in 2016.
- The New Mauritius Supreme Court building project is one of the projects implemented under this package. This was jointly inaugurated by both the countries in 2020.
- India and Mauritius have jointly inaugurated the Phase-I of the Metro Express Project and the 100-bed state of the art ENT hospital project in Mauritius, also built under the special economic package.
- India and Mauritius signed a USD 100 million Defence Line of Credit agreement
- Mauritius would get a Dornier aircraft and an Advanced Light Helicopter Dhruv on lease which would build its maritime security capabilities.
- Minister of State for Ports, Shipping & Waterways (I/C) flagged off the Cruise service from Hazira Port of Surat to Diu via video conferencing.
- Development of cruise tourism is the prime focus of the Government of India under the visionary leadership of Prime Minister.
- Before 2014, there were 139 cruise calls at the Indian Ports but today India have 450 cruise calls in the country despite the COVID-19 pandemic.
- There has been a steady growth in the number of tourists traveling by Cruise Services since 2014. The number before 2014 was one lakh and the number of tourists in 2019-20 was 4.5 lakhs.
- Indian coastline has a huge potential for the cruise tourism industry and 6 International cruise terminals are being planned on both the west coast (Mumbai,Goa,Kochi) and east coast (Visakhapattanam, Kolkata, Chennai) of India.
- One side voyage time of the cruise service is approximately 13 to 14 hours. Cruise has the capacity of 300 passengers and has 16 cabins. This cruise will sail two round trips in a week.
- The Cruise has Gaming Lounge, VIP Lounge, Entertainment on Deck and other modern amenities. One side journey will cost Rs.900+taxes(per head).
- In November,2020, Prime Minister inaugurated ‘Hazira-Ghogha’ RoPAX service(Gujarat). The success of the ferry service has opened the gates for many more routes of water transportation in Gujarat and all over India.
- Scientists have developed a new technique to track the huge bubbles of gas threaded with magnetic field lines that are ejected from the Sun.
- These disrupts space weather and causing geomagnetic storms, satellite failures, and power outages.
- As the ejections from the Sun, technically called Coronal Mass Ejections (CMEs), cause various disturbances of the space environment, forecasting their arrival time is very important.
- However, forecasting accuracy is hindered by limited CME observations in interplanetary space.
- Software named Computer Aided CME Tracking Software (CACTus) based on a computer vision algorithm was so far used to detect and characterise such eruptions automatically in the outer corona where these eruptions cease to show accelerations and propagate with a nearly constant speed.
- However, this algorithm could not be applied to the inner corona observations due to the vast acceleration experienced by these eruptions.
- This severely limited the capability to track the eruptions as CMEs accelerate in the lower corona. Moreover, with the advancement in space technology, there has been a tremendous increase in the amount of data obtained from spacecraft. To identify and track the solar eruptions in huge number of images can become tedious if done manually.
- The parameters determined by CIISCO are useful to characterise these eruption in the lower corona, a region where the properties of such eruptions are less known.
- An implementation of CIISCO on the large volume of data available from space observatories mentioned above will be helpful to improve our understanding of eruptions in the inner corona.
- As India’s first solar mission, Aditya-L1, will be observing this region of the solar corona, implementation of CIISCO on the Aditya-L1 data will provide new insight into the CME properties in this less explored region.
- In a major push towards deep technology and driving the country to become a digitally transformed nation, Atal Innovation Mission (AIM), NITI Aayog launched AIM-PRIME (Program for Researchers on Innovations, Market-Readiness & Entrepreneurship), an initiative to promote and support science-based deep-tech startups & ventures across India.
- In this regard, AIM has joined hands with Bill & Melinda Gates Foundation (BMGF) to launch this nationwide program which will be implemented by Venture Center – a non-profit technology business incubator.
- The first cohort of the program is open to technology developers (early-stage deep tech start-ups, and scientists/ engineers/ clinicians) with strong science-based deep tech business ideas.
- The program is also open to CEOs and Senior incubation managers of AIM Funded Atal Incubation Centers that are supporting deep tech entrepreneurs.
- Deep technology is an outcome of very intense research and development (R&D) with high knowledge content.
- Consequently, the entrepreneurial journey emphasizes different aspects and requires a different approach to navigating the de-risking process and bringing such ideas to market.
- The benefits of this program are aimed at addressing specific issues through training and guidance over a period of 12 months. Candidates selected for the program will get access to in-depth learning via a comprehensive lecture series, live team projects, exercises, and project-specific mentoring.