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Travel Bubble

Why in News Recently, the Baltic countries of Estonia, Latvia and Lithuania started a travel bubble to help put their economies back on track after...

19 May 2020 Economy
Helicopter Money

Why in News Recently, the Telangana Chief Minister suggested that the helicopter money can help states to come out of the economic chaos created by...

09 May 2020 Economy
1.6 Billion Risk Losing Jobs: ILO

Why in News Recently, the International Labour Organization (ILO) has warned that nearly half of the entire global workforce is in immediate danger...

30 Apr 2020 Economy
The Big Picture: Localising Globalisation

The dual supply and demand shocks from the COVID-19 pandemic are expected to cause a global recession. In the last several weeks, global supply...

29 Apr 2020 Economy
The Big Picture: Restoring Global Supply Chains

One of the lessons to be learnt from the novel coronavirus pandemic is that nations should build supply chains inside the country, even US...

27 Apr 2020 Economy
Commodity Markets Outlook: World Bank

Why in News According to the World Bank’s April 2020 Commodity Markets Outlook, Covid-19 is expected to bring most commodity prices down...

24 Apr 2020 Economy
Oil Prices Below Zero

Why in News Recently, the prices of West Texas Intermediate (WTI), the best quality of crude oil in the world, fell to minus $40.32 a barrel in...

22 Apr 2020 Economy
World Economic Outlook Report: IMF

Why in News Recently, the International Monetary Fund (IMF) has released its World Economic Outlook (WEO) report. Key Points The Covid-19...

15 Apr 2020 Economy
Crowdfunding

Why in News Recently, a 11 year old girl from Hyderabad has collected ₹6.2 lakh using crowdfunding to buy food for the less fortunate during...

15 Apr 2020 Economy
Neighboring Rights Law

Why in News The French competition regulator has asked Google to negotiate with publishers and news agencies the remuneration due to them under the...

13 Apr 2020 Economy
Impact of Covid-19 on Global Economy

Why in News Recently, the United Nations Conference on Trade and Development (UNCTAD) has observed that the economic uncertainty sparked by the...

03 Apr 2020 Economy
The Economic Impact of Coronavirus

Why in News The Coronavirus outbreak is having a negative impact on the various sectors of the economy. Impact on Indian Economy GDP Growth...

04 Mar 2020 Economy
Perils of Neo-Liberal Era

This article is based on “Towards a new world order” which was published in The Hindu on 14/02/2020. It talks about issues related to...

24 Feb 2020 Economy
Different Irrigation Systems

Irrigation Irrigation is the artificial application of water to the soil or agricultural field. It is the replacement or supplementation of...

17 Feb 2020 Economy
Operation Twist

Why in News The Reserve Bank of India has announced that it will carry out US-style 'Operation Twist' to bring down interest rates. Key...

20 Dec 2019 Economy
Insolvency and Bankruptcy Code

For...

12 Dec 2019 Economy
Insolvency and Bankruptcy Code

Why in News The Union Cabinet has approved the proposal to make amendments in the Insolvency and Bankruptcy Code (IBC), 2016, through the Insolvency...

12 Dec 2019 Economy
Industrial Corridors

Why in News Government has approved the development of the five industrial corridor projects which will be implemented through National Industrial...

09 Dec 2019 Economy
Industrial Corridors

For...

09 Dec 2019 Economy
Telecom Sector: Issues and Challenges

Introduction India is currently the world’s second-largest telecommunications market with a subscriber base of 1.20 billion and has...

05 Dec 2019 Economy

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		'title' => 'Travel Bubble',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <a href="/daily-updates/daily-news-analysis/baltic-nations" target="_blank" rel="noopener"><strong>Baltic countries</strong></a><strong> of Estonia, Latvia and Lithuania</strong> started a <strong>travel bubble</strong> to help put their economies back on track after <a href="/daily-updates/daily-news-analysis/coronavirus-disease-named-covid-19" target="_blank" rel="noopener"><strong>Covid-19</strong></a> <a href="/daily-updates/daily-news-analysis/21-days-lockdown" target="_blank" rel="noopener">lockdowns</a>.</p>
<ul style="list-style-type: square;">
<li>All three have been <strong>fairly successful at managing the Covid-19 outbreak</strong> and remaining comparatively safe.</li>
<li>In the Estonia-Latvia-Lithuania travel bubble, residents would be able to<strong> travel freely by rail, air and sea without quarantine measures.</strong></li>
</ul>
<div class="border-bg">
<p><strong>Baltic Countries</strong></p>
<p><strong><a href="http://www.drishtiias.com/images/uploads/1589877211_image3.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1589877211_image3.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="567" height="612" /></a></strong></p>
<ul style="list-style-type: square;">
<li>Baltic countries, the<strong> northeastern region of Europe,</strong> include the countries of <strong>Estonia, Latvia and Lithuania,</strong> on the<strong> eastern shores of the Baltic Sea.</strong></li>
<li>The Baltic states are bounded on the <strong>west and north</strong> by the <strong>Baltic Sea,</strong> which gives the region its name, on the <strong>east</strong> by<strong> Russia,</strong> on the <strong>southeast</strong> by <strong>Belarus</strong> and on the <strong>southwest</strong> by <strong>Poland</strong> and an <strong>exclave of Russia.</strong></li>
<li>In <strong>1991,</strong> their then popularly elected governments declared <strong>independence from the Union of Soviet Socialist Republics</strong> (USSR) with overwhelming support.</li>
<li>All three of them are <strong>members</strong> of the <a href="/important-institutions/drishti-specials-important-institutions-international-institution/european-union" target="_blank" rel="noopener"><strong>European Union</strong></a> (EU) and are sparsely populated (Lithuania-28 lakh, Latvia-19.2 lakh, Estonia-13.3 lakh people).</li>
<li><strong>India and Baltic countries</strong> have<strong> historical connect and common linguistic roots.</strong> The cutting edge <strong>technology and innovation ecosystems</strong> of the Baltic countries complement India&rsquo;s huge market and appetite for these technologies.</li>
</ul>
</div>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Travel Bubble:</strong><br />
<ul style="list-style-type: circle;">
<li>Creating a travel bubble involves <strong>reconnecting countries or states</strong> which have shown a<strong> good level of success in containing the Covid-19 <a href="/daily-updates/daily-news-analysis/covid-19-now-pandemic-who" target="_blank" rel="noopener">pandemic</a> domestically.</strong></li>
<li>Such a bubble would allow the members of the group to <strong>restart trade ties</strong> with each other and <strong>open travel and tourism.</strong></li>
<li>According to a report, potential travel bubbles among better-performing countries around the world would <strong>account for around 35% of the global <a href="/daily-updates/daily-news-analysis/gdp-growth" target="_blank" rel="noopener">Gross Domestic Product</a></strong> (GDP).</li>
<li>Travel bubbles are<strong> favoured by smaller countries</strong> because they are likely to benefit after being able to trade again with larger partners.</li>
</ul>
</li>
<li><strong>Criteria for Entering the Travel Bubble:</strong><br />
<ul style="list-style-type: circle;">
<li>People from the outside countries, willing to join the bubble corridor, will have to go into isolation for 14 days.</li>
<li>One should not have travelled outside the member countries of the travel bubble, in the past 14 days.</li>
<li>One should not be infected with coronavirus and should not have come in contact with anyone who has been coronavirus infected.</li>
</ul>
</li>
<li><strong>Other Countries to Start:</strong><br />
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-analysis/pitch-black" target="_blank" rel="noopener"><strong>Australia</strong></a> and <a href="/daily-updates/daily-news-analysis/india-new-zealand" target="_blank" rel="noopener"><strong>New Zealand</strong></a> reached an agreement to form a travel bubble, once it becomes safe to operate flights between them. Once it opens, the <strong>trans-Tasman zone</strong> (around <strong>Tasman Sea</strong>) will allow travel without a quarantine period.<br />
<ul style="list-style-type: disc;">
<li><strong>Trans-Tasman Zone:</strong> Trans-Tasman Travel Arrangement is an <strong>arrangement between Australia and New Zealand</strong> which allows for the<strong> free movement of citizens</strong> of one of these countries to the other. The arrangement <strong>came into effect in 1973</strong> and allows citizens of each country<strong> to reside and work</strong> in the other country, <strong>with some restrictions.</strong></li>
</ul>
</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1589877137_image2.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1589877137_image2.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="700" caption="false" /></a></p>
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-analysis/india-china-70-years-of-diplomatic-relations" target="_blank" rel="noopener"><strong>China</strong> </a>and <a href="/daily-updates/daily-news-analysis/prime-ministers-visit-to-south-korea" target="_blank" rel="noopener"><strong>South Korea</strong> </a>have launched a fast track channel for business travellers.</li>
<li>In the <a href="/daily-updates/daily-news-editorials/india-us-relations-1" target="_blank" rel="noopener"><strong>USA</strong></a>, travel bubbles are being suggested to group states who are doing well against the pandemic.</li>
</ul>
<p><a href="https://indianexpress.com/article/explained/explained-the-travel-bubble-idea-that-many-are-pinning-hopes-on-6416715/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 5277,
		'category_id' => (int) 21,
		'title' => 'Helicopter Money',
		'description' => '<h3>Why in News</h3>
<p>Recently, the Telangana Chief Minister suggested that the <strong>helicopter money</strong> can help states to come out of the economic chaos created by <a href="/daily-updates/daily-news-analysis/coronavirus-disease-named-covid-19" target="_blank" rel="noopener"><strong>Covid-19 pandemic</strong></a>.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Helicopter money:</strong><br />
<ul style="list-style-type: circle;">
<li>It is an unconventional <strong>monetary policy tool,</strong> which involves <strong>printing large sums of money and distributing it to the public,</strong> to stimulate the economy during a recession (decline in general economic activity) or when interest rates fall to zero.</li>
<li>Under such a policy, a central bank "directly increases the money supply and, via the government, distribute the new cash to the population <strong>with the aim of boosting demand and inflation.".</strong></li>
<li>The term was coined by <strong>American economist Milton Friedman.</strong> It basically denotes a helicopter dropping money from the sky.</li>
</ul>
</li>
<li><strong>Difference between helicopter money and quantitative easing:</strong><br />
<ul style="list-style-type: circle;">
<li>Helicopter money should <strong>not be confused with quantitative easing,</strong> because both aim to boost consumer spending and increase inflation.</li>
<li>In case of <strong>helicopter money,</strong> currency is distributed to the public and there is <strong>no</strong> <strong>repayment liability.</strong></li>
<li>Whereas in case of <strong>quantitative easing,</strong> it involves the use of printed money by central banks to buy government bonds. Here the <strong>government has to pay back for the assets that the central bank buys.</strong></li>
</ul>
</li>
<li><strong>Benefits of helicopter money:</strong><br />
<ul style="list-style-type: circle;">
<li>It does not rely on increased borrowing to fuel the economy, which means that it doesn&rsquo;t create more debt.</li>
<li>It boosts spending and economic growth more effectively than quantitative easing because it increases aggregate demand &ndash; the demand for goods and services &ndash; immediately.</li>
</ul>
</li>
<li><strong>Issues with helicopter money:</strong><br />
<ul style="list-style-type: circle;">
<li>It does not involve repayment liability, therefore many people argue that it&rsquo;s not a feasible solution to revive the economy.</li>
<li>It may lead to over-inflation.</li>
<li>It may devalue the currency in the foreign exchange market.</li>
</ul>
</li>
</ul>
<p><a href="https://www.thehindu.com/news/national/telangana/kcr-hopeful-of-pms-nod-for-helicopter-money/article31319785.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'article_id' => (int) 5180,
		'category_id' => (int) 21,
		'title' => '1.6 Billion Risk Losing Jobs: ILO',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <a href="/important-institutions/drishti-specials-important-institutions-international-institution/international-labour-organization" target="_blank" rel="noopener"><strong>International Labour Organization (ILO)</strong></a> has warned that nearly half of the entire global workforce is in immediate danger of having their livelihoods destroyed by the <a href="/daily-updates/daily-news-analysis/coronavirus-disease-named-covid-19" target="_blank" rel="noopener"><strong>coronavirus pandemic</strong></a>.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Informal workers at risk:</strong> Due to Covid-19 lockdown, three-quarters of workers (some 1.6 billion people) engaged in the informal economy have suffered massive damage to their capacity to earn a living.<br />
<ul style="list-style-type: circle;">
<li>Further, without alternative income, these workers and their families would have no means to survive.</li>
<li>The global workforce is 3.3 billion people, of which more than two billion people work in the informal economy.</li>
</ul>
</li>
<li><strong>Hard-hit Sectors:</strong> The worst-affected sectors would be <strong>accommodation and food services, manufacturing, wholesale and retail trade, and real estate and business activities.</strong></li>
<li><strong>Suggestions</strong><br />
<ul style="list-style-type: circle;">
<li>The ILO calls for <strong>urgent, targeted and flexible measures to support workers and businesses those in the informal economy</strong> and others who are vulnerable.</li>
<li>Measures for <strong>economic reactivation should follow a job-rich approach,</strong> backed by stronger employment policies and institutions, better-resourced and comprehensive social protection systems.</li>
<li>International coordination on<strong> stimulus packages and debt relief measures</strong> will also be critical to making recovery effective and sustainable. <br />
<ul style="list-style-type: disc;">
<li>International labour standards, which already enjoy tripartite consensus, can provide a framework.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h3>Informal Sector</h3>
<ul style="list-style-type: square;">
<li>The informal sector, also known as the unorganised sector, is the part of any economy that is <strong>neither taxed nor monitored by any form of government.</strong></li>
<li>The informal sector<strong> provides critical economic opportunities</strong> for the poor.</li>
<li>The informal sector is largely <strong>characterized by skills gained outside of a formal education, easy entry, a lack of stable employer-employee relationships, and a small scale of operations.</strong></li>
<li>Unlike the formal economy, the informal sector&rsquo;s components are not included in GDP computations.</li>
<li>The government of India has launched <a href="/loksabha-rajyasabha-discussions/the-big-picture-interim-budget-three-big-takeaways" target="_blank" rel="noopener"><strong>Pradhan Mantri Shram Yogi Maandhan Yojana</strong></a> as a social security for the unorganised workers.<br />
<ul style="list-style-type: circle;">
<li>It is a voluntary and contributory pension scheme.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>International Labour Organization (ILO)</strong></p>
<ul style="list-style-type: square;">
<li>Established in 1919 by the <strong>Treaty of Versailles</strong> as an affiliated agency of the<strong> League of Nations.</strong><br />
<ul style="list-style-type: circle;">
<li>League of Nations was disbanded in 1946 and powers and functions of ILO transferred to United Nations</li>
</ul>
</li>
<li>Became the first affiliated <strong>specialized agency </strong>of the<strong> United Nations in 1946.</strong></li>
<li><strong>Headquarters:</strong> Geneva, Switzerland</li>
<li>Received the <strong>Nobel Peace Prize</strong> in 1969.<br />
<ul style="list-style-type: circle;">
<li>For improving peace among classes.</li>
<li>Pursuing decent work and justice for workers.</li>
<li>Providing technical assistance to other developing nations.</li>
</ul>
</li>
<li>The organization has <strong>played a key role</strong> in<br />
<ul style="list-style-type: circle;">
<li>Ensuring labour rights during the Great Depression of 1929.</li>
<li>Decolonization process.</li>
<li>The creation of Solidarność (trade union) in Poland.</li>
<li>The victory over apartheid in South Africa.</li>
</ul>
</li>
<li>It is the only<strong> tripartite U.N. agency.</strong> It brings together<strong> governments, employers and workers</strong> of <strong>187 member States,</strong> to set labour standards, develop policies and devise programmes promoting decent work for all women and men.</li>
</ul>
</div>
<p><a href="https://www.thehindu.com/news/international/coronavirus-16-billion-at-the-risk-of-losing-jobs-warns-ilo/article31466782.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
		'posturl' => '1-6-billion-risk-losing-jobs-ilo',
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		'article_id' => (int) 5179,
		'category_id' => (int) 15,
		'title' => 'The Big Picture: Localising Globalisation',
		'description' => '<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/5NZYiEWnIjg" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>The dual supply and demand shocks from the COVID-19 pandemic <a href="/daily-updates/daily-news-editorials/covid-19-and-globalization" target="_blank" rel="noopener"><strong>are expected to cause a global recession</strong></a>. In the last several weeks, global supply chains have been disrupted as workers are locked down, factories shut and closed borders, and terminals block supplies and cargo. Aggregate demand has collapsed. The pandemic threatens to usher in a phase of economic insularity, through efforts at localisation of supply chains and stricter immigration controls.</p>
<h3>Trends in Globalisation in Recent Times</h3>
<ul style="list-style-type: square;">
<li><strong>Global financial crisis:</strong> The financial crisis that began in August 2007 and intensified in the fall of 2008 pushed the global economy into a severe downturn that came to be known as the <strong>Great Recession.</strong><br />
<ul style="list-style-type: circle;">
<li>World trade collapsed at a pace unseen since the Great Depression of the 1930s.</li>
<li>The protectionist instincts invariably come to the fore and concerns rose that it may lead to deglobalization&mdash;a reversal of globalization.</li>
<li>With few exceptions, the trend of slowing world trade and growing protectionism has since continued and the pandemic threatens to make it worse.</li>
</ul>
</li>
<li><strong>US-ChinaTariff war:</strong> US President&rsquo;s imposition of tariffs on China resulted in the US-China trade war. <br />
<ul style="list-style-type: circle;">
<li>This disrupted the global supply chains and gave birth to the possibility of these supply chains outside of China to more competitive markets.</li>
<li>The pandemic will now ensure further diversification of global supply chains.</li>
</ul>
</li>
<li><strong>COVID-19 induced disruption to global supply chains:</strong> The geopolitical watchdogs at The Spectator Index noted that Japan&rsquo;s government would spend upwards of $2 billion helping its multinationals leave China.<br />
<ul style="list-style-type: circle;">
<li>U.S. companies are leaving, too, even though there is no official push to do so.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Globalisation</strong></p>
<ul style="list-style-type: square;">
<li>It refers to the economic, social and political integration of nations. It entails the spread of products, technology, information and jobs across national borders and cultures.</li>
<li>In economic terms, it describes an interdependence of nations around the globe, fostered through free trade.</li>
<li>Globalisation can be further divided into subcategories based on its time frame and focus areas:<br />
<ul style="list-style-type: circle;">
<li><strong>Globalization 1.0</strong><br />
<ul style="list-style-type: disc;">
<li>It was pre-World War I globalization, which was launched by a historic drop in trade costs.</li>
<li>This globalization came with almost no government support and was without global governance.</li>
</ul>
</li>
<li><strong>Globalization 2.0</strong><br />
<ul style="list-style-type: disc;">
<li>It is the post-World War II phase where trade in goods was combined with complimentary domestic policies.</li>
<li>The market was in charge of efficiency while the government was in charge of justice.</li>
<li>It saw the establishment of institute-based, rule-based international governance, specifically the<a href="/important-institutions/drishti-specials-important-institutions-international-institution/united-nations-1" target="_blank" rel="noopener"><strong> United Nations</strong></a> (UN), <a href="/important-institutions/drishti-specials-important-institutions-international-institution/international-monetary-fund-imf" target="_blank" rel="noopener"><strong>International Monetary Fund</strong></a> (IMF), <a href="/important-institutions/drishti-specials-important-institutions-international-institution/world-bank-group" target="_blank" rel="noopener"><strong>World Bank</strong></a>, <a href="/important-institutions/drishti-specials-important-institutions-international-institution/world-trade-organisation-wto" target="_blank" rel="noopener"><strong>World Trade Organisation</strong></a> (WTO, earlier GATT), <a href="/important-institutions/drishti-specials-important-institutions-international-institution/international-labour-organization" target="_blank" rel="noopener"><strong>International Labor Organization</strong> </a>(ILO) etc.</li>
</ul>
</li>
<li><strong>Globalization 3.0</strong><br />
<ul style="list-style-type: disc;">
<li>It created a new world of manufacturing in which high-tech was combined with low wages.</li>
<li>This was achieved through establishment of global supply chains as factories crossed international borders.</li>
<li>It was variously called New globalization, Hyper globalization, Global value chain evolution.</li>
</ul>
</li>
<li><strong>Globalization 4.0</strong><br />
<ul style="list-style-type: disc;">
<li>It is the latest stage of globalization which involves cutting-edge new technologies like <a href="/loksabha-rajyasabha-discussions/in-depth-artificial-intelligence" target="_blank" rel="noopener"><strong>artificial intelligence</strong></a> (AI) that powers forward with the explosion of information technology.</li>
<li>These technologies shrink distances, open up borders and minds and bring people all across the globe closer together.</li>
</ul>
</li>
</ul>
</li>
</ul>
</div>
<h3>Self-Reliance: Possibilities and Challenges</h3>
<p>As the majority of the businesses worldwide face <a href="/daily-updates/daily-news-editorials/covid-19-and-india-1" target="_blank" rel="noopener"><strong>disruptions and economic fallout after the COVID-19 pandemic</strong></a>, India will have the opportunity to build an economy that is more resilient, diversified, and attractive to the global manufacturers and services. India with its large population has a big potential to become the manufacturing hub of the world.</p>
<ul style="list-style-type: square;">
<li><strong>Identify Core Sectors:</strong> Indian companies need to re-look at their supply chain and start building domestic capacity for essential products to reduce dependence on China.<br />
<ul style="list-style-type: circle;">
<li>There is a need to identify and enlist core sectors in which India can become self-reliant and design a strategy to replace too much reliance on China for the imports, particularly Pharma APIs.</li>
<li>Shifting the supply chains from China may also offer FDI opportunities.</li>
<li>Such industries where we have to become more independent and where there is too much monopoly for example- APIs, support needs to be provided in the form of limited, sector-specific, and focused protection.</li>
</ul>
</li>
<li><strong>Automation:</strong> With COVID-19 every industry will become less labour dependant and more automated.<br />
<ul style="list-style-type: circle;">
<li>Labor-intensive sectors will take a hit.</li>
<li>Therefore there&rsquo;ll be a need to produce more and more skilled labour force that could handle basic machines.</li>
</ul>
</li>
<li><strong>Liquidity crunch:</strong> Businesses have started facing massive working capital/cash flow issues due to lockdown and they will continue even post that because of reduced demand. MSME and startups are the worst hits. <br />
<ul style="list-style-type: circle;">
<li>The liquidity needs of companies need to be addressed to help them remain solvent. Though the government has started taking steps via SIDBI to help MSMEs, we still need to do more.</li>
</ul>
</li>
<li><strong>High taxes and competitiveness</strong>: The issue of higher taxes, credit risks, and liquidity crunch will be some of the glaring issues that need to be resolved in a time-bound manner. <br />
<ul style="list-style-type: circle;">
<li>The new policy to offer a reduced corporate tax rate of 15% to new manufacturing facilities set up after October 1, 2019, should attract people to set up manufacturing in India.</li>
<li>Cheaper credits and lesser taxation needs to be provided to ensure the level playing field for manufacturers in India.</li>
<li>India needs more open trade and investment policies to drive competitiveness</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>De-bureaucratisation:</strong> India needs to put in place such policies that improve its competitiveness, de-bureaucratise some sectors such as agriculture, and make labour laws less complicated. A holistic and easily accessible ecosystem, from the procuring of raw materials to the outlet of finished products, must be made available.</li>
<li><strong>People-centric policies:</strong> The only way to trigger employment is to step-up value addition in the local area. There is a need for such people-centric and sector-specific policies in order to accelerate growth.</li>
<li><strong>Alternative global alliance:</strong> India has till now lead by example in its handling of the pandemic. The sudden call for a video-conference by Indian Prime Minister, with SAARC leaders to chalk out a common strategy to fight COVID-19, sets an example to the world. <br />
<ul style="list-style-type: circle;">
<li>India needs to now move beyond regional alliances and look forward to a cooperative alliance between like-minded countries in terms of trade such as the USA, EU, and Japan, to figure out an alternative to break the hegemony of China in the global supply chain.</li>
<li>India needs to expand its cooperation programs into a global effort by engaging in the multilateral development of solutions to global policy challenges and share lessons and experiences to progressively strengthen public systems and state institutions worldwide.</li>
</ul>
</li>
<li><strong>Promote R&amp;D and capacity building:</strong> There&rsquo;s a need to prioritise building capacity and policy framework to become cost-competitive and quality competitive. <br />
<ul style="list-style-type: circle;">
<li>Enhance domestic consumption as well as put thrust to increase exports and promote research to become more independent. India needs to plan now for the next 20 years.</li>
</ul>
</li>
</ul>',
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		'article_id' => (int) 5153,
		'category_id' => (int) 15,
		'title' => 'The Big Picture: Restoring Global Supply Chains',
		'description' => '<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/QuU3x4DTNjw" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>One of the lessons to be learnt from the novel coronavirus pandemic is that nations should build supply chains inside the country, even US President Donald Trump stressed this aspect. Trump's remarks assume significance amid the disruption in the supply chain and the World's dependence on other countries on items of basic necessities and pharmaceuticals, including anti-malarial drug hydroxychloroquine that has been considered to be a viable therapeutic to the deadly COVID-19.</p>
<h3>Coronavirus: Impact on Global Supply Chains</h3>
<p>Even as the virus continues to take a toll on human life and livelihood and the governments around the world focus on food security and availability of essential commodities, the impact of the crisis on economies has come in sharp focus due to supply chain disruptions.</p>
<ul style="list-style-type: square;">
<li><strong>China- the production hub:</strong> The COVID-19 pandemic <strong>has caused closures of business, the stoppage of factory outputs, and the disruption to global manufacturing industries and their supply networks</strong> <br />
<ul style="list-style-type: circle;">
<li>This is a result of China becoming the production hub of the entire world in the last two decades. China represents about 16% of the world&rsquo;s GDP.</li>
<li>The closures of assembly and manufacturing facilities has caused major supply disruptions.</li>
</ul>
</li>
<li><strong>Global Trade slowdown:</strong> The World Trade Organization has said that the global trade &mdash; which was already slowing in 2019 due to the U.S.-China tariff fight &mdash; is projected to plummet by 13% to 32% in 2020.<br />
<ul style="list-style-type: circle;">
<li>According to the IMF, the global economy is projected to contract sharply by 3 percent in 2020</li>
</ul>
</li>
<li><strong>Increase in protectionism:</strong> Governments around the world will turn increasingly protectionist in the near term as they try to limit the economic damage from the coronavirus pandemic. <br />
<ul style="list-style-type: circle;">
<li>The international trade order will see a reversal globally and there can be a thrust towards self-sufficiency.</li>
<li>Every country will now try to build manufacturing units of at least essential commodities including medicines.</li>
</ul>
</li>
<li><strong>Crude-oil prices</strong>: The spillover effect of the present economic lockdown will be felt over the next few months as this one is both a supply and demand crisis <br />
<ul style="list-style-type: circle;">
<li>For the first time in history, the crude-oil prices have gone into negative territory.</li>
<li>Not only the supply chains but the plumbing of these chains have also been disrupted due to complete lockdown across the globe.</li>
</ul>
</li>
</ul>
<h3>Reviving Supply Chains Post Lockdown</h3>
<p>The present is an unprecedented crisis and it may bring upon a much worse economic recession than the one in 2008. The world today is too integrated in terms of manpower, resource allocation, and finances, however the future of international trade has now been put in uncertainty.</p>
<ul style="list-style-type: square;">
<li>Once the coronavirus pandemic gets over and countries go back to opening up their shut economies the primary focus will be on reinstalling the supply-chains within the country itself. As of now, only the essential commodities are being transported.</li>
<li>The pharmaceutical industry which has established its presence all across the world would need to fill in the gaps of Active Pharmaceutical Ingredients (API) towards achieving self-sufficiency.<br />
<ul style="list-style-type: circle;">
<li>According to Bloomberg, 70% of India's imports of APIs come from China.</li>
<li>India should work on a plan to supersize its own ingredient manufacturing to combat Chinese dominance in the market.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Active Pharmaceutical Ingredients (APIs)</strong></p>
<ul style="list-style-type: square;">
<li>APIs, also called bulk drugs, are significant ingredients in the manufacture of drugs. The Hubei province of China is the hub of the API manufacturing industry.</li>
<li>India is heavily import-dependent for APIs from China. India&rsquo;s API imports stand at around $3.5 billion per year, and around 70%, or $2.5 billion, come from China.</li>
</ul>
</div>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Role of Multilateral Institutions:</strong><br />
<ul style="list-style-type: circle;">
<li>WTO and IMF need to swing into action and produce a roadmap for the resurrection of global supply chains by initially pushing the production and create demand on both ends.</li>
<li>These two do not have the capability of restoring the global economy all by themselves and thus might need to join forces and work together and with other organisations as well.</li>
</ul>
</li>
<li><strong>Hopes for India:</strong> India is the most viable country in terms of geographical size and diversity and the available labour force to emerge as the epicenter of the restart of production.<br />
<ul style="list-style-type: circle;">
<li>India is known the world over for its generic drugs and the recent events related to anti-malaria drugs has made it more obvious.</li>
<li><strong>India should work to become self-sufficient in developing APIs and bulk drugs instead of depending overtly on China for its supply.</strong></li>
<li>The private and the public sector need to work together to generate self-sufficiency on that front.</li>
<li><strong>Policy measures:</strong> COVID-19 is the flash point which can tip us over the edge. India needs a reset towards resilience. We need better labour laws which are easy and flexible and fiscal incentives for the private sector, in order to create an enabling environment. It is important to identify and focus on certain sectors and then make sector-specific policies.</li>
<li><strong>Get ASEAN and SAARC in force:</strong> India took the initiative for the SAARC COVID Summit which culminated into a solution for the problem of funding. It is time for India to put greater trust in organisations like ASEAN and SAARC in order to build a regional action plan by the convergence of ideas from member nations.</li>
<li><strong>Fix the domestic market:</strong> India needs to get its domestic manufacturing sector in shape to actually take advantage of the global shift in production epicenter.</li>
<li>Building SEZs can play a better role in reviving Indian economy.</li>
</ul>
</li>
</ul>
<p>As is famously said, don&rsquo;t waste a crisis, the lockdown is a great time for the government to formulate trade friendly and production-friendly. The present crisis of the global supply chain can prove to be a game-changer for India's future as the global hub of production and manufacturing.</p>',
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		'article_id' => (int) 5125,
		'category_id' => (int) 21,
		'title' => 'Commodity Markets Outlook: World Bank',
		'description' => '<h3>Why in News</h3>
<p>According to the <strong>World Bank&rsquo;s April 2020 Commodity Markets Outlook,</strong> <a href="/daily-updates/daily-news-analysis/coronavirus-disease-named-covid-19" target="_blank" rel="noopener"><strong>Covid-19</strong></a> is expected <strong>to bring most commodity prices down</strong> substantially in 2020.</p>
<ul style="list-style-type: square;">
<li>However, it also says that the outlooks are<strong> &ldquo;exceptionally uncertain&rdquo;</strong> and depend on the severity and duration of the pandemic and when mitigation measures are taken.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Worst Hit</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Energy and metals commodities</strong> are the most affected by the sudden stop to economic activity and the serious global slowdown that is anticipated.</li>
<li>Commodities associated with <strong>transportation, including oil,</strong> have experienced the steepest declines.</li>
</ul>
</li>
<li><strong>Agricultural prices</strong> are likely to <strong>stay broadly stable in 2020</strong> because of relatively stable demand and all-time high levels of staple production and stock. <br />
<ul style="list-style-type: circle;">
<li>However, <strong>supply chain disruptions</strong> and government steps to restrict exports or stockpile commodities raise concerns that <strong>food security may be at risk</strong> in places.</li>
</ul>
</li>
<li><strong>Gold prices</strong> were up 6.9% in the last quarter (January- March,2020) &ndash; its sixth consecutive quarterly rise. <br />
<ul style="list-style-type: circle;">
<li>The <strong>strong investor demand</strong> propped gold up despite weak jewelry demand in India and China.</li>
</ul>
</li>
<li><strong>Oil Prices:</strong> These are expected to average at $35 per barrel in 2020.
<ul style="list-style-type: circle;">
<li>The decline in crude oil prices has been exacerbated by <strong>uncertainty around production agreements among the <a href="/daily-updates/daily-news-analysis/talks-on-oil-cut-deal-at-g-20" target="_blank" rel="noopener">Organization of the Petroleum Exporting Countries (OPEC)</a> and other oil producers.</strong></li>
</ul>
</li>
<li><strong>Impact on Importers and Exporters:</strong> They are likely to see some long-term shifts in their markets due to the pandemic. These include<br />
<ul style="list-style-type: circle;">
<li><strong>Increasing transport costs</strong> due to enhanced border checks and thus <strong>impact on supply chains.</strong></li>
<li><strong>Substituting for imports with domestic goods:</strong> Companies might prefer to source from closer by for instance.</li>
</ul>
</li>
<li><strong>Other Observations: Changing consumer behaviour,</strong> for instance, people may choose to work remotely, travel less, and this could impact permanent drops in demand for oil, <strong>favourably impacting the accounts for oil importers.</strong> <br />
<ul style="list-style-type: circle;">
<li>The reduction in emissions of the harmful gases caused by the restrictions <strong>may also increase public pressure for greener transport and lowered fossil fuel use.</strong></li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Commodity Markets Outlook</strong></p>
<ul style="list-style-type: square;">
<li>It provides <strong>market analysis for major commodity groups</strong> - energy, metals, agriculture, precious metals, and fertilizers.</li>
<li>The report forecasts <strong>prices for 46 key commodities,</strong> including oil.</li>
<li>It is <strong>published by the <a href="/important-institutions/drishti-specials-important-institutions-international-institution/world-bank-group" target="_blank" rel="noopener">World Bank</a> in April and October.</strong></li>
</ul>
</div>
<p><a href="https://www.thehindu.com/business/markets/most-commodity-prices-will-drop-substantially-in-2020-world-bank/article31418191.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'article_id' => (int) 5101,
		'category_id' => (int) 21,
		'title' => 'Oil Prices Below Zero',
		'description' => '<h3>Why in News</h3>
<p>Recently, the prices of<strong> West Texas Intermediate (WTI),</strong> the<strong> best quality of crude oil</strong> in the world, <strong>fell to minus $40.32 a barrel</strong> in interlay trade in <strong>New York (the USA).</strong></p>
<ul style="list-style-type: square;">
<li>It means that the seller of crude oil would be paying the buyer $40 for each barrel that is bought.</li>
<li>It is the <strong>lowest crude oil price ever recorded</strong> below the zero mark while the <strong>previous lowest</strong> was recorded <strong>immediately after World War II (WWII).</strong></li>
</ul>
<h3>Oil Pricing</h3>
<ul style="list-style-type: square;">
<li>Generally the <a href="/daily-updates/daily-news-analysis/talks-on-oil-cut-deal-at-g-20" target="_blank" rel="noopener"><strong>Organization of the Petroleum Exporting Countries</strong></a> <strong>(OPEC)</strong> used to <strong>work as a cartel and fix prices</strong> in a favourable band.<br />
<ul style="list-style-type: circle;">
<li>OPEC is <strong>led by Saudi Arabia,</strong> which is the <strong>largest exporter of crude oil in the world (single-handedly exporting 10% of the global demand).</strong></li>
<li>It could bring down prices by increasing oil production and raise prices by cutting production.</li>
</ul>
</li>
<li>The global oil pricing mainly <strong>depends upon the partnership between the global oil exporters</strong> instead of well-functioning competition.</li>
<li><strong>Cutting oil production</strong> or <strong>completely shutting down</strong> an oil well is a difficult decision, because <strong>restarting</strong> it is immensely<strong> costly and complicated.</strong><br />
<ul style="list-style-type: circle;">
<li>Moreover, if a country cuts production, it <strong>risks losing market share</strong> if other countries do not follow the suit.</li>
</ul>
</li>
<li>Recently, OPEC has been working with <strong>Russia, as</strong> <a href="/daily-updates/daily-news-analysis/opec" target="_blank" rel="noopener"><strong>OPEC+</strong></a> to fix the global prices and supply.</li>
</ul>
<h3>Reasons for Price Fall</h3>
<ul style="list-style-type: square;">
<li>Crude oil prices were <strong><a href="/daily-updates/daily-news-editorials/oil-prices-crash" target="_blank" rel="noopener">already falling</a> before the global <a href="/daily-updates/daily-news-analysis/21-days-lockdown" target="_blank" rel="noopener">lockdown</a></strong> due to the<strong> higher supply and lower demand.</strong><br />
<ul style="list-style-type: circle;">
<li>They were close to $60 a barrel at the start of 2020 and, by March-end, they were closer to $20 a barrel.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1587548054_image3.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1587548054_image3.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="600" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li>Problems arose when <strong>Saudi Arabia and Russia disagreed over the production cuts,</strong> required to keep prices stable.<br />
<ul style="list-style-type: circle;">
<li>Consequently, Saudi Arabia led oil-exporting countries started <strong>undercutting each other on price</strong> while <strong>producing the same quantities of oil.</strong></li>
<li>This strategy was<strong> unsustainable</strong> on its own and the global spread of <a href="/daily-updates/daily-news-analysis/coronavirus-disease-named-covid-19" target="_blank" rel="noopener"><strong>Covid-19</strong></a> <strong>made it even worse</strong> as it sharply <strong>reduced the economic activity</strong> and the <strong>oil-demand.</strong></li>
</ul>
</li>
<li>Oil-exporting countries decided to <strong>cut production by 10 million barrels a day</strong> (the <strong>highest production cuts)</strong> and yet the demand for oil was reducing even further.<br />
<ul style="list-style-type: circle;">
<li>This<strong> supply demand mismatch</strong> resulted in <strong>exhausted storage capacities.</strong></li>
</ul>
</li>
<li>It is important to highlight that the <strong>US</strong> became the <strong>largest producer of crude oil in 2018</strong> and the current US President has been pushing for <strong>higher oil prices</strong> instead of making efforts for lower prices like the previous US Presidents.</li>
<li>The oil prices started falling steeply because the <strong>May contracts for WTI were due to expire on 21<sup>st</sup> April, 2020</strong> which posed <strong>huge challenges</strong> for both the <strong>oil producers</strong> and the <strong>consumers (contractors/buyers).</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Producers:</strong> They started selling the oil at unbelievably low prices because<strong> shutting production would have been costlier to restart when compared to the marginal loss on May sales.</strong></li>
<li><strong>Consumers:</strong> They were facing the <strong>problem of storage.</strong> There is no space to store the oil even if they decided to buy and take the delivery.<br />
<ul style="list-style-type: disc;">
<li><strong>Accepting the oil delivery, paying for the transportation and storage would have been costlier than the hit on contract price.</strong></li>
</ul>
</li>
<li>In the short term, for both the holders of the delivery contract and the oil producers, it was less costly to pay $40 a barrel and get rid of the oil instead of storing it (consumers/buyers) or stopping production (producers). So this led to the <strong>negative WTI oil contract prices.</strong></li>
</ul>
</li>
</ul>
<h3>Future of Oil Prices</h3>
<ul style="list-style-type: square;">
<li>It was the <strong>WTI price for May in the US markets</strong> that went <strong>so low.</strong> Crude oil prices at <strong>other places fell but not too much.</strong></li>
<li>Prices for <strong>June and the coming months</strong> are pegged <strong>between $20 and $35 a barrel.</strong></li>
<li><strong>Investment budgets of exploration and production companies</strong> are <strong>expected to drop</strong> because of the <strong>low shale oil prices.</strong></li>
<li>Normally, this should force oil exporting countries to <strong>cut back production and negate the excess supply, restoring balance</strong> in the oil markets but the possibility of recent events from happening again cannot be ruled out.</li>
<li>Eventually, it would be the <strong>demand-supply mismatch</strong> (adjusted for how much can be stored away) that will<strong> decide the fate of oil prices.</strong></li>
</ul>
<h3>Impact on India</h3>
<ul style="list-style-type: square;">
<li>There is<strong> no direct impact</strong> on India because Indian crude oil basket does not comprise WTI and it <strong>only has Brent and oil from some of the Gulf countries.</strong><br />
<ul style="list-style-type: circle;">
<li>However, the <strong>weakness in WTI reflects on the falling prices</strong> of Indian basket as well because<strong> oil is traded globally</strong> and has<strong> indirect impacts.</strong></li>
</ul>
</li>
<li>The lower price can be <strong>beneficial for India in two ways:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>For Individuals:</strong> If the government passes on the <strong>lower prices to consumers,</strong> then<strong> individual consumption will be boosted</strong> whenever the<strong> economic recovery</strong> starts in India.</li>
<li><strong>For Governments:</strong> If both, central and the state, governments decide to<strong> levy higher taxes</strong> on oil, it can <strong>boost government revenues.</strong></li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1587548088_image2.jpg" target="_blank" rel="noopener"><strong><img class="content-img" src="http://www.drishtiias.com/images/uploads/1587548088_image2.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="600" caption="false" /></strong></a></p>
<div class="border-bg">
<p><strong>Difference between Brent and WTI</strong></p>
<ul style="list-style-type: square;">
<li><strong>Brent crude oil</strong> originates from oil fields in the <strong>North Sea</strong> between the Shetland Islands and Norway, while <strong>West Texas Intermediate</strong> (WTI) is sourced from <strong>US oil fields,</strong> primarily in Texas, Louisiana, and North Dakota.</li>
<li><strong>WTI with a lower sulphur content (0.24%)</strong> than <strong>Brent (0.37%),</strong> is considered <strong>"sweeter".</strong></li>
<li>Both oils are <strong>relatively light,</strong> but Brent has a slightly higher API gravity, making WTI the lighter of the two.<br />
<ul style="list-style-type: circle;">
<li><strong>American Petroleum Institute (API) gravity</strong> is an indicator of the density of crude oil or refined products.</li>
</ul>
</li>
<li><strong>Brent crude price</strong> is the international benchmark price used by the<strong> OPEC</strong> while <strong>WTI crude price</strong> is a benchmark for <strong>US oil prices.</strong><br />
<ul style="list-style-type: circle;">
<li>Since <strong>India imports primarily from OPEC</strong> countries, Brent is the benchmark for oil prices in India.</li>
</ul>
</li>
<li><strong>Cost of shipping for Brent</strong> crude is typically<strong> lower,</strong> since it is <strong>produced near the sea</strong> and it can be put on ships immediately. Shipping of WTI is priced higher since it is produced in landlocked areas like Cushing, Oklahoma where the storage facilities are limited.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1587548112_image4.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1587548112_image4.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="600" caption="false" /></a></p>
</div>
<p><a href="https://indianexpress.com/article/explained/why-crude-oil-prices-fell-below-zero-6373139/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 5034,
		'category_id' => (int) 21,
		'title' => 'World Economic Outlook Report: IMF',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <a href="/important-institutions/drishti-specials-important-institutions-international-institution/international-monetary-fund-imf" target="_blank" rel="noopener"><strong>International Monetary Fund (IMF)</strong></a> has released its <strong><a href="/daily-updates/daily-news-analysis/economic-growth-forecast" target="_blank" rel="noopener">World Economic Outlook (WEO) report</a>.</strong></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li>The <a href="/daily-updates/daily-news-analysis/covid-19-now-pandemic-who" target="_blank" rel="noopener"><strong>Covid-19 pandemic</strong></a> is having a severe effect on the world economy. As countries implement necessary <strong>quarantines and social distancing</strong> practices to contain Covid-19, the world has been put in a <strong>Great Lockdown.</strong><br />
<ul style="list-style-type: circle;">
<li>It is expected to cause a -<strong>3% change (i.e., a contraction) in global output in 2020,</strong> which is much <strong>worse than the 2008-09 financial crises.</strong></li>
<li><strong>Case of India:</strong> India&rsquo;s growth is <strong>expected to dip to 1.9% in 2020 and rebound to 7.4% in 2021.</strong><br />
<ul style="list-style-type: disc;">
<li>India&rsquo;s growth projection for 2020 is <strong>3.9% less than what was projected for the country</strong> in the January update to the WEO while its rebound in 2021 is 0.9 % higher than the January projection.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Growth Projections:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Emerging Asia:</strong><br />
<ul style="list-style-type: disc;">
<li>Emerging Asia is projected to be the only region that <strong>grows in 2020, at a rate of 1.0% -</strong> still more than 5 percentage points below the previous decade&rsquo;s average.</li>
<li>In China, where the coronavirus&rsquo;s impacts were first recorded this year, first quarter economic activity could have contracted by 8% year on year. <strong>China is projected to grow at 1.2% in 2020 and 9.2% in 2021.</strong></li>
<li>Apart from<strong> India&rsquo;s modest 1.9% in 2020, Indonesia is expected to grow at 0.5%,&nbsp;</strong>while <strong>others in the region experience contractions.</strong></li>
</ul>
</li>
<li><strong>Advanced economies:</strong><br />
<ul style="list-style-type: disc;">
<li>Advanced economies will have an <strong>output change of -6.1% (i.e., a contraction) in 2020</strong> followed by 4.5% in 2021.</li>
<li>The <strong>U.S. is projected to contract by 5.9%</strong> in 2020 and grow by 4.7% 2021.</li>
<li>The <strong>Euro area, will contract by 7.5%</strong> in 2020 and grow by 4.7% 2021.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Impact on Global GDP:</strong><br />
<ul style="list-style-type: circle;">
<li>The cumulative loss to global <a href="/daily-updates/daily-news-analysis/base-year-for-gdp-calculations" target="_blank" rel="noopener"><strong>Gross Domestic Product (GDP)</strong></a> over 2020 and 2021 from the pandemic crisis could be around <strong>9 trillion dollars,</strong> greater than the economies of Japan and Germany, combined.</li>
<li>Assuming that the pandemic fades in the second half of this year, with containment efforts gradually easing up, the <strong>world economy is projected to grow at 5.8% in 2020</strong> as economic activity normalizes, aided by policy.</li>
<li>If the pandemic does not recede in the second half of 2020, global GDP would<strong> fall an additional 3% in 2020.</strong></li>
</ul>
</li>
<li><strong>Measures to combat the impact:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Policymakers have to make targeted fiscal, monetary and financial sector interventions</strong> to support impacted households and businesses.</li>
<li>Fiscal measures <strong>should be two-fold:</strong><br />
<ul style="list-style-type: disc;">
<li>Cushioning the impact on the most-exposed households and businesses</li>
<li>Reducing firm closures , i.e., preserving economic relationships.</li>
</ul>
</li>
<li><strong>Monetary stimulus</strong> by large central banks and liquidity facilities to reduce systemic stress will help limit the shock, positioning the economy for a better recovery.</li>
<li><strong>Strong multilateral cooperation</strong> is essential to overcome the effects of the pandemic, including to help financially constrained countries facing twin health and funding shocks, and for channeling aid to countries with weak healthcare systems.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>International Monetary Fund</strong></p>
<ul style="list-style-type: square;">
<li>IMF is an organization working to <strong>foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty</strong> around the world.</li>
<li>Created in <strong>1945,</strong> the IMF is governed by and accountable to the <strong>189 countries</strong> that make up its near-global membership.India Joined on December 27, 1945.</li>
<li>The IMF's primary purpose is to ensure the stability of the international monetary system&mdash;the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. <br />
<ul style="list-style-type: circle;">
<li>The Fund's mandate was updated in 2012 to include<strong> all macroeconomic and financial sector issues</strong> that bear on global stability.</li>
</ul>
</li>
</ul>
<p><strong>World Economic Outlook</strong></p>
<ul style="list-style-type: square;">
<li>WEO is a survey by the IMF that is usually published <strong>twice a year in the months of April and October.</strong></li>
<li>It analyzes and predicts <strong>global economic developments</strong> during the near and medium term.</li>
<li>In response to the growing demand for more frequent forecast updates, the WEO Update is published in January and July between the two main WEO publications released usually in April and October.</li>
</ul>
</div>
<p><a href="https://www.thehindu.com/business/Economy/coronavirus-imf-projects-19-growth-for-india-in-2020/article31340201.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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	(int) 8 => object(Cake\ORM\Entity) {

		'article_id' => (int) 5022,
		'category_id' => (int) 21,
		'title' => 'Crowdfunding',
		'description' => '<h3>Why in News</h3>
<p>Recently, a 11&shy; year old girl from Hyderabad has collected ₹6.2 lakh using crowdfunding to buy food for the less fortunate during the <a href="/daily-updates/daily-news-analysis/21-days-lockdown" target="_blank" rel="noopener"><strong>lockdown</strong></a>.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Crowdfunding</strong> is a method of raising capital through the collective effort of a <strong>large number of individual investors.</strong></li>
<li>This approach taps into the collective efforts of a large pool of individuals, primarily <strong>online via social media</strong> and crowdfunding platforms and leverages their networks for greater reach and exposure.</li>
</ul>
<h3>Types of Crowdfunding</h3>
<ul style="list-style-type: square;">
<li>The 3 primary types of crowdfunding are <strong>donation-based, rewards-based, and equity-based.</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Donation-Based Crowdfunding:</strong> Donation-based crowdfunding is a way to source money for a project by asking a large number of contributors to individually donate a small amount to it. In return, the backers may receive token rewards that increase in prestige as the size of the donation increases. For the smallest sums, however, the funder may receive nothing at all.</li>
<li><strong>Rewards-Based Crowdfunding:</strong> Rewards-based crowdfunding involves individuals contributing to a business in exchange for a <strong>&ldquo;reward,&rdquo;</strong> typically a <strong>form of the product or service which company offers.</strong> Even though this method offers backers a reward, it&rsquo;s still generally considered a subset of donation-based crowdfunding since<strong> there is no financial or equity return.</strong></li>
<li><strong>Equity-Based Crowdfunding:</strong> Unlike the donation-based and rewards-based methods, equity-based crowdfunding allows contributors to become <strong>part-owners of the company by trading capital for equity shares.</strong> As equity owners, the contributors receive a financial return on their investment and ultimately receive a <strong>share of the profits in the form of a dividend or distribution.</strong></li>
</ul>
</li>
</ul>
<h3>Benefits of Crowdfunding</h3>
<ul style="list-style-type: square;">
<li>From tapping into a wider investor pool to enjoying more flexible fundraising options, there are a number of <strong>benefits to crowdfunding</strong> over traditional methods:<br />
<ul style="list-style-type: circle;">
<li><strong>Reach &ndash;</strong> By using a crowdfunding platform, one has access to thousands of accredited investors who can see, interact with, and share the fundraising campaign.</li>
<li><strong>Presentation &ndash;</strong> By creating a crowdfunding campaign, one goes through the invaluable process of looking at the business from the top level&mdash;its history, traction, offerings, addressable market, value proposition, with digestible packages.</li>
<li><strong>PR &amp; Marketing &ndash;</strong> From launch to close, one can share and promote the campaign through social media, email newsletters, and other online marketing tactics.</li>
<li><strong>Validation of Concept &ndash;</strong> Presenting the concept or business to the masses affords an excellent opportunity to <strong>validate and refine offering.</strong></li>
<li><strong>Efficiency &ndash;</strong> One of the best things about online crowdfunding is its ability to <strong>centralize and streamline fundraising efforts.</strong></li>
</ul>
</li>
</ul>',
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	(int) 9 => object(Cake\ORM\Entity) {

		'article_id' => (int) 4995,
		'category_id' => (int) 21,
		'title' => 'Neighboring Rights Law',
		'description' => '<h3>Why in News</h3>
<p>The <strong>French competition regulator has asked Google to negotiate with publishers and news agencies</strong> the remuneration due to them <strong>under the law relating to neighboring rights.</strong></p>
<ul style="list-style-type: square;">
<li>The French regulator has announced that Google must <strong>start paying media for sharing their content,</strong> as its practices had caused serious harm to the press sector.</li>
<li>The order is an<strong> interim decision.</strong> Though the order is only for the French press, it has global ramifications for Google and the press, as it can set a legal precedent and shape the discourse around the economics of news on the net.</li>
<li>The neighboring rights law that came into force on 24<sup>th</sup> July, 2019 in France aims to set the conditions for a balanced negotiation between publishers, news agencies and digital platforms, in order to redefine, in favour of press publishers and news agencies, the sharing of the value between these actors.</li>
</ul>
<h3>Neighboring Rights</h3>
<ul style="list-style-type: square;">
<li>According to the <a href="/daily-updates/daily-news-analysis/china-at-top-in-global-patent-race" target="_blank" rel="noopener"><strong>World Intellectual Property Organization (WIPO)</strong></a>, related rights, also referred to as neighboring rights, <strong>protect the legal interests of certain persons and legal entities that contribute to making works available to the public or that produce subject matter which, while not qualifying as works under the copyright systems of all countries,</strong> contains sufficient creativity or technical and organizational skill to justify recognition of a copyright-like property right.</li>
<li><strong>Traditionally,</strong> related rights have been granted to<strong> three categories of beneficiaries:</strong><br />
<ul style="list-style-type: circle;">
<li>Performers (actors/musicians);</li>
<li>Producers of sound recordings (also referred to as phonograms); and</li>
<li>Broadcasting organizations.</li>
</ul>
</li>
</ul>
<h3>Protection in India</h3>
<ul style="list-style-type: square;">
<li>The <strong>Copyright Act, 1957</strong> protects original literary, dramatic, musical and artistic works and cinematograph films and sound recordings from unauthorized uses. Unlike the case with patents, <strong>copyright protects the expressions and not the ideas.</strong> There is no copyright in an idea.<br />
<ul style="list-style-type: circle;">
<li>Copyright is a right given by the law to creators of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings. In fact, it is a bundle of rights including, inter alia, rights of reproduction, communication to the public, adaptation and translation of the work.</li>
<li>Copyright is an <a href="/to-the-points/paper3/intellectual-property-rights" target="_blank" rel="noopener"><strong>Intellectual Property Right (IPR).</strong> </a><br />
<ul style="list-style-type: disc;">
<li>Intellectual Property Rights (IPR) are the rights given to persons over the creations of their minds: inventions, literary and artistic works, and symbols, names and images used in commerce.</li>
<li>Other IPRs include trademarks, <a href="/daily-updates/daily-news-editorials/potential-of-gis-is-waiting-to-be-tapped" target="_blank" rel="noopener"><strong>geographical indications</strong></a>, industrial designs, patents, etc.</li>
</ul>
</li>
</ul>
</li>
<li>Copyright as provided by the Indian Copyright Act is valid only within the borders of the country. To secure protection to Indian works in foreign countries, <strong>India has become a member of the following international conventions on copyright and neighbouring (related) rights:</strong><br />
<ul style="list-style-type: circle;">
<li>Berne Convention for the Protection of Literary and Artistic works, 1886.</li>
<li>Universal Copyright Convention (Revised in 1971).</li>
<li>Convention for the Protection of Producers of Phonograms against Unauthorised Duplication of their Phonograms, 1971.</li>
<li>Multilateral Convention for the Avoidance of Double Taxation of Copyright Royalties, 1979.</li>
<li>Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement, 1995.</li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/business/companies/french-competition-watchdog-tells-google-to-pay-news-cos-for-sharing-their-content-6357009/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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	(int) 10 => object(Cake\ORM\Entity) {

		'article_id' => (int) 4904,
		'category_id' => (int) 21,
		'title' => 'Impact of Covid-19 on Global Economy',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <strong><a href="/daily-updates/daily-news-analysis/uncdat-world-investment-report-2019" target="_blank" rel="noopener">United Nations Conference on Trade and Development</a> (UNCTAD)</strong> has observed that the economic uncertainty sparked by the <a href="/daily-updates/daily-news-analysis/coronavirus-disease-named-covid-19" target="_blank" rel="noopener"><strong>Covid-19</strong></a> will likely cost the global economy $1 trillion in 2020.</p>
<ul style="list-style-type: square;">
<li>The observation is based on the <a href="/daily-updates/daily-news-analysis/world-economic-situation-and-prospects-2020" target="_blank" rel="noopener"><strong>World Economic Situation and Prospects 2020</strong></a> released by UNCTAD.</li>
</ul>
<h3>Key Observations</h3>
<ul style="list-style-type: square;">
<li>A <strong>slowdown in the global economy to under 2%</strong> for this year is envisaged which will probably cost in the order of $1 trillion.<br />
<ul style="list-style-type: circle;">
<li><strong>Worst possible scenario:</strong> If the world economy grew at only 0.5% which would involve a $2 trillion hit to <a href="/daily-updates/daily-news-analysis/base-year-for-gdp-calculations" target="_blank" rel="noopener"><strong>gross domestic product</strong></a> (GDP).</li>
<li><strong>Best case scenario:</strong> With moderate declines in private consumption, investment and exports and offsetting increases in government spending, global growth would fall to 1.2% in 2020.</li>
</ul>
</li>
<li><strong>Global financial market is fluctuating</strong> due to the<strong> supply-chain interruptions from China</strong> and<strong> oil price uncertainty</strong> among major producers.</li>
<li><strong>European economies</strong> had already been performing extremely badly towards the end of 2019.<br />
<ul style="list-style-type: circle;">
<li><strong>Europe</strong> is almost certain to go into <strong>recession</strong> over the coming months.</li>
<li><strong>German</strong> economy is in a<strong> fragile</strong> state.</li>
<li><strong>Italian</strong> economy and other parts of the <strong>European periphery</strong> are also facing very <strong>serious stresses</strong> right now.</li>
</ul>
</li>
<li>Many parts of the <strong>Latin American</strong> region are also vulnerable.<br />
<ul style="list-style-type: circle;">
<li><strong>Argentina</strong> in particular will be struggling as a consequence of the knock-on effects of this pandemic.</li>
</ul>
</li>
<li>The <strong>least developed countries</strong> whose economies are driven by the<strong> sale of raw materials</strong> will also face hard consequences.</li>
<li>Heavily-indebted <strong>developing countries,</strong> particularly <strong>commodity exporters,</strong> face a particular threat due to the <strong>weaker export returns linked to a stronger US dollar.</strong><br />
<ul style="list-style-type: circle;">
<li>The likelihood of a <strong>stronger dollar</strong> as investors seek safe-havens for their money and the almost certain<strong> rise in commodity prices</strong> as the global economy slows down, means that commodity exporters are particularly <strong>vulnerable.</strong></li>
</ul>
</li>
</ul>
<h3>Suggestions</h3>
<ul style="list-style-type: square;">
<li>A series of <strong>dedicated policy responses and institutional reforms</strong> are needed to prevent a localized health scare from turning into a global economic meltdown.</li>
<li>Governments need to <strong>spend now in order to prevent more damaging meltdown</strong> in the coming times.<br />
<ul style="list-style-type: circle;">
<li><strong>Chinese</strong> Government is likely to introduce <strong>significant expansionary measures &ndash;</strong> shorthand for increasing spending or tax cuts.</li>
<li>The<strong> US</strong> government is in an election year and it needs to do <strong>more than simply cutting taxes and reducing interest rates.</strong></li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>United Nations Conference on Trade and Development</strong></p>
<ul style="list-style-type: square;">
<li>It was established in <strong>1964</strong> to promote development-friendly integration of developing countries into the world economy.</li>
<li>UNCTAD is a <strong>permanent intergovernmental body</strong> headquartered at <strong>Geneva</strong> in Switzerland.</li>
<li>Some of the <strong>reports published by it are:</strong><br />
<ul style="list-style-type: circle;">
<li>Trade and Development Report</li>
<li>World Investment Report</li>
<li>The Least Developed Countries Report</li>
<li>Information and Economy Report</li>
<li>Technology and Innovation Report</li>
<li>Commodities and Development Report</li>
</ul>
</li>
</ul>
</div>
<p><a href="https://news.un.org/en/story/2020/03/1059011" target="_blank" rel="noopener"><strong>Source: UN</strong></a></p>',
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	(int) 11 => object(Cake\ORM\Entity) {

		'article_id' => (int) 4608,
		'category_id' => (int) 21,
		'title' => 'The Economic Impact of Coronavirus',
		'description' => '<h3>Why in News</h3>
<p>The <a href="/daily-updates/daily-news-editorials/novel-coronavirus-2019-ncov" target="_blank" rel="noopener"><strong>Coronavirus outbreak</strong></a> is having a negative impact on the various sectors of the economy.</p>
<h3>Impact on Indian Economy</h3>
<ul style="list-style-type: square;">
<li><strong>GDP Growth Rate</strong><br />
<ul style="list-style-type: circle;">
<li>The <a href="/daily-updates/daily-news-analysis/oecds-forecast-for-global-economy-in-2060" target="_blank" rel="noopener"><strong>Organisation for Economic Co-operation and Development (OECD)</strong></a> has slashed India&rsquo;s growth forecast for 2020-21 by 110 basis points (bps) to 5.1%, warning that the impact of the Covid-19 outbreak on business confidence, financial markets and the travel sector, including disruption to supply chains, could shave 50 bps off global growth in 2020.</li>
</ul>
</li>
<li><strong>Pharmaceuticals:</strong> Given the pharmaceutical industry&rsquo;s deep linkages to China, the supply chain of raw materials of drugs has taken a hit. <br />
<ul style="list-style-type: circle;">
<li>The production facilities in Himachal Pradesh &mdash; largest pharma hub of Asia &mdash; have warned of suspension.</li>
<li>Active Pharmaceutical Ingredients (APIs), also called bulk drugs, are significant ingredients in the manufacture of drugs. The Hubei province of China, the epicentre of the coronavirus, is the hub of the API manufacturing industry.</li>
<li>India is heavily import-dependent for APIs from China. India&rsquo;s API imports stand at around $3.5 billion per year, and around 70%, or $2.5 billion, come from China.</li>
</ul>
</li>
<li><strong>Automobile Industry</strong><br />
<ul style="list-style-type: circle;">
<li>China is one of the leading suppliers of auto components in India, accounting for 27% of the total imports.</li>
<li>The coronavirus is expected to have an impact on the Indian automotive industry and therefore also on the automobile component and forging industries, which had already reduced their production rate due to the market conditions and on account of the impending change over to BS-VI emission norms from BS-IV from April 2020.</li>
</ul>
</li>
<li><strong>Stock Market</strong><br />
<ul style="list-style-type: circle;">
<li>On 28<sup>th</sup> February, the Indian stock market registered one of its worst crashes in a single day. Indian indices fell over 3.5%, marking the second biggest fall in Sensex history.</li>
<li>The Sensex plunged 1,448.37 points to close at 38,297.29, while the Nifty tanked 3.711% or 431.55 points to settle a little above the 11,200 mark.</li>
<li>The Sensex's worst fall in history was on 24th August, 2015, when the indices fell 1,624 points on the back of a slump in the Chinese markets and rising crude oil prices.</li>
</ul>
</li>
<li><strong>Currency</strong><br />
<ul style="list-style-type: circle;">
<li>The month of March is typically good for the Indian currency as remittances, from both overseas citizens and companies, tend to boost the exchange rate.</li>
<li>In the past decade, the rupee has appreciated seven times against the dollar in March. But March 2020 could be hard on the exchange rate and the rupee&rsquo;s sharp drop to 73.25 per dollar on 3rd March, 2020 is evidence of this. One of the reasons is an increase in the number of reported cases of coronavirus in India.</li>
</ul>
</li>
</ul>
<h3>Global Scenario</h3>
<ul style="list-style-type: square;">
<li><strong>Global Growth:</strong> The world's economy could grow at its slowest rate since 2009 this year due to the coronavirus outbreak, according to the Organisation for Economic Cooperation and Development (OECD). The OECD has forecast growth of just 2.4% in 2020, down from 2.9% in November 2019</li>
<li><strong>Fall in Customer Demand:</strong> Some people are choosing to avoid activities that might expose them to the risk of infection, such as going out shopping. Restaurants, car dealerships and shops have all reported a fall in customer demand.</li>
<li><strong>Travel Industry:</strong> The number of cases diagnosed is increasing around the world every day. Thus, many countries have introduced travel restrictions to try to contain the virus's spread, impacting the travel industry massively.</li>
<li><strong>Beneficiaries</strong><br />
<ul style="list-style-type: circle;">
<li>Consumer goods giant Reckitt Benckiser, for example, has seen a boost in sales for its Dettol and Lysol products.The disinfectant is seen as providing protection against the spread of the disease, although its effectiveness has not yet been scientifically proven.</li>
<li>The price of gold - which is often considered a "safe haven" in times of uncertainty - has also increased. Its spot price hit a seven-year high of $1,682.35 per ounce in February 2020.</li>
</ul>
</li>
</ul>
<h3>Global Response</h3>
<ul style="list-style-type: square;">
<li>The COVID-19 outbreak was declared a Public Health Emergency of International Concern by the WHO on 30th January 2020.</li>
<li>According to recommendations by the World Health Organization, the diagnosis of COVID-19 must be confirmed by the Real Time- Polymerase Chain Reaction (PCRT-PCR) or gene sequencing for respiratory or blood specimens, as the key indicator for hospitalisation.</li>
<li>$15 million dollars has been released from the UN&rsquo;s Central Emergency Fund to help fund global efforts to contain the spread of the COVID-19 coronavirus, particularly vulnerable countries with weak health care systems.</li>
<li>Vaccines are being developed.</li>
</ul>
<h3>Indian Response</h3>
<ul style="list-style-type: square;">
<li>The Indian government arranged for the evacuation of 366 Indian citizens from Wuhan in a special Air India flight on 31<sup>st</sup> January 2020. The passengers were placed under quarantine for a period of 14 days.<br />
<ul style="list-style-type: circle;">
<li>A second batch of passengers, including seven Maldivan citizens evacuated by the government, arrived from Wuhan on 1st February 2020. The repatriated passengers were also monitored.</li>
</ul>
</li>
<li>The government has already introduced travel restrictions and suspended visas from affected countries.</li>
<li>A detailed containment plan has been shared with states. States have been asked to identify possible isolation areas in hospitals that can accommodate larger numbers.</li>
<li>The Indian health minister advised people to approach the government helpline numbers regarding the doubts related to symptoms of the deadly disease. The situation is being monitored at the highest level.</li>
<li>PCR Test: If PCR test is positive, the sample is sent to the National Institute of Virology in Pune, which is the only government laboratory currently doing genome sequencing, for final confirmation.</li>
</ul>
<div class="border-bg">
<p><strong>National Institute of Virology</strong></p>
<ul style="list-style-type: square;">
<li>The National Institute of Virology is one of the major Institutes of the Indian Council of Medical Research (ICMR).</li>
<li>It was established at Pune, Maharashtra State in 1952 as Virus Research Centre (VRC) under the auspices of the ICMR and the Rockefeller Foundation (RF), USA.</li>
</ul>
</div>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>It is critical to mount a coordinated and coherent response. This not only means involvement of both public and private sectors but also allopathic and non-allopathic medical systems, different departments such as police, fire, transportation, tourism, food supplies and other sectors.</li>
</ul>
<p><a href="https://www.thehindu.com/business/sensex-sheds-more-than-900-points-on-virus-alarm-in-india/article30965635.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'article_id' => (int) 4521,
		'category_id' => (int) 22,
		'title' => 'Perils of Neo-Liberal Era',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.thehindu.com/opinion/lead/towards-a-new-world-order/article30813398.ece" target="_blank" rel="noopener"><strong>&ldquo;Towards a new world order&rdquo;</strong> </a>which was published in The Hindu on 14/02/2020. It talks about issues related to the neo-liberal economic order and suggests a suitable alternative to it.</p>
</div>
<p>Capital can be defined as money, equipment, and other resources which are privately owned. Private ownership provides the owner with the opportunity to grow, develop and reap the benefits of using those resources for productive endeavours. Based on this capitalism, in its elementary stages fosters free enterprise and innovation.</p>
<p>Current world economic order can be termed as <strong>neo-capitalism or neo-liberalism</strong> order which focuses on <strong>Laissez-faire (market freedom), globalisation, intellectual property rights, free movement of goods, services, investment and ideas.</strong></p>
<p>However, over the course of the neoliberal era, economies around the world have become more and more unequal. Such conditions question neo-capitalism's long term viability as the key driving force of world economic order.</p>
<h3>Issues Related to Neo-liberal Era</h3>
<ul style="list-style-type: square;">
<li><strong>Increasing Inequalities:</strong> Social inequalities and the grim problems of stark and continuing poverty are at the epicentre of the current world order. This can be reflected by the <a href="/daily-updates/daily-news-analysis/global-inequality-crisis-report-oxfam-international" target="_blank" rel="noopener"><strong>Oxfam Report 2019:</strong></a><br />
<ul style="list-style-type: circle;">
<li>2,153 billionaires have more wealth than 4.6 billion people.</li>
<li>The world&rsquo;s richest 22 men have more money than all the women in Africa.</li>
<li>According to Oxfam, if governments were to increase taxation on the wealthiest 1% for the next 10 years, that would be the equivalent to creating 117 million jobs in education, health and elderly care and other sectors.</li>
</ul>
</li>
<li><strong>Creation of Monopolies:</strong> Despite its alleged commitment to market competition, the neoliberal economic agenda instead brought the decline of competition and the rise of close to monopoly power in vast swaths of the economy: pharmaceuticals, telecom, airlines, agriculture, banking, industrials, retail.</li>
<li><strong>Unsustainable Economic Growth:</strong> One of the chief characteristics of economic development is the intensification of energy use. There is an unprecedented concentration of high energy density in all economic development strategies.<br />
<ul style="list-style-type: circle;">
<li>The bulk of the energy continues to be generated from non-renewable sources.</li>
<li>The developed world&rsquo;s primary objective is to capture energy-generating resources from across continents and put them to use to push their GDP growth to greater heights.</li>
<li>This unsustainable economic growth model is against the concept of sustainability, as it sacrifices the need of future generations for the welfare of present generations.</li>
</ul>
</li>
<li><strong>Developing Countries at Disadvantage:</strong> High consumption of energy by the developed world has been accompanied by the disposal of residual products (&lsquo;e-waste&rsquo;) on the shores of many African and Asian countries.<br />
<ul style="list-style-type: circle;">
<li>As a result, the poor in the developing world are, unwittingly, drawn and exposed to toxic, hazardous materials like lead, cadmium and arsenic.</li>
</ul>
</li>
<li>Also, <strong>the &lsquo;globalisation&rsquo;</strong> phenomenon has led to the <strong>exploitation of the developing world,</strong> with most countries being treated as a source of cheap labour and critical raw material.</li>
<li>Further, <strong>high expenses on research and Intellectual Property Rights favour the developed countries,</strong> as it hinders the transfer of technology which may aid sustainable development.</li>
<li>Moreover, the sustainability of neo-liberal economic order got exposed during the 2007-2008 Global financial crisis due to which the global economy was on the verge of collapse.</li>
</ul>
<h3>Way Forward</h3>
<p>Improvement in &lsquo;Ease of Doing Business&rsquo; needs to be balanced with the improvement in Human Development Index.</p>
<ul style="list-style-type: square;">
<li>The current neo-liberal model can be replaced by<strong> &lsquo;Nordic Economic Model&rsquo;,</strong> which pertains to the remarkable achievements of the <strong>Scandinavian countries comprising Denmark, Finland, Iceland, Sweden, Norway, and allied territories.</strong></li>
</ul>
<div class="border-bg">
<p><strong>Nordic Economic Model</strong> is comprised of:</p>
<ul style="list-style-type: square;">
<li>Effective welfare safety nets for all.</li>
<li>Corruption-free governance.</li>
<li>A fundamental right to tuition-free education, including higher education.</li>
<li>A fundamental right to good medical care.</li>
<li>Nordic Countries also shut down the tax havens.</li>
<li>Also, in Nordic countries, personal and corporate income tax rates are very high, especially on the very rich.</li>
<li>They also have large public sector enterprises; extensive and generous universal welfare systems and considerable state involvement in promoting and upholding welfare states.</li>
<li>By following this economic model, These nations are among the richest in the world when measured in terms of GDP per capita.</li>
<li>UN reports also indicate that the Nordic countries are the happiest countries in the world.</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li><strong>New Model for the Corporate Sector:</strong> A new format has emerged under which a company&rsquo;s performance is measured through four &lsquo;Ps&rsquo;.<br />
<ul style="list-style-type: circle;">
<li><strong>The first is &lsquo;P&rsquo; for &lsquo;profit&rsquo;.</strong></li>
<li><strong>The second &lsquo;P&rsquo; is for &lsquo;people&rsquo;:</strong> How the companies actions impact not only employees but society as a whole.</li>
<li><strong>The third &lsquo;P&rsquo; is for &lsquo;planet&rsquo;:</strong> Companies actions and plans should be sensitive to the environment.</li>
<li><strong>The fourth &lsquo;P&rsquo; is for &lsquo;purpose&rsquo;</strong>: Companies and individuals must develop a larger purpose than &lsquo;business as usual&rsquo;.</li>
<li>Using big data and text analytics, a company&rsquo;s performance can be measured in terms of all the four &lsquo;P&rsquo;s and a corporate entity can be thus held accountable.</li>
</ul>
</li>
<li>Redistribution of wealth and resources is needed to end extreme poverty. This can be done by taxing wealth, high incomes, and cracking down on loopholes and inadequate global tax rules.</li>
<li>Apart from these, there is a requirement of global consensus and the will to make the planet more sustainable, so that all individuals can live with justice and equality.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #daf2f5;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Like the Nordic model, in India, the government needs to regulate the market forces in order to address social problems such as widespread poverty. Discuss.</p>
</td>
</tr>
</tbody>
</table>',
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		'article_id' => (int) 4457,
		'category_id' => (int) 28,
		'title' => 'Different Irrigation Systems',
		'description' => '<h3>Irrigation</h3>
<ul style="list-style-type: square;">
<li>Irrigation is the artificial application of water to the soil or agricultural field. It is the replacement or supplementation of rainwater with another source of water. It is used in dry areas and during periods of inadequate rainfall.</li>
<li>The main idea behind irrigation systems is to assist in the growth of agricultural crops and plants by maintaining with the minimum amount of water required, suppressing weed growth in grain fields, preventing soil consolidation etc.</li>
</ul>
<h3>Well and Tube Well Irrigation</h3>
<ul style="list-style-type: square;">
<li>Wells are mainly found in U.P., Bihar, Tamil Nadu, etc. There are various types of wells &ndash; shallow wells, deep wells, tube wells, artesian wells, etc. From the shallow wells water is not always available as the level of water goes down during the dry months. Deep wells are more suitable for the purpose of irrigation as water from them is available throughout the year.</li>
<li>At places where ground water is available, a tube-well can be installed near the agricultural area. A deep tube well worked by electricity, can irrigate a much larger area (about 400 hectares) than a surface well (half hectares). Tube wells are mostly used in U.P., Haryana, Punjab, Bihar and Gujarat.</li>
<li><strong>Merits:</strong> Well is simplest, cheapest and independent source of irrigation and can be used as and when the necessity arises. Several chemicals such as nitrate, chloride, sulphate, etc. found in well water add to the fertility of soil. More reliable during periods of drought when surface water dries up.</li>
<li><strong>Demerits:</strong> Only limited area can be irrigated. In the event of a drought, the ground water level falls and enough water is not available. Tubewells can draw a lot of groundwater from its neighbouring areas and make the ground dry and unfit for agriculture.</li>
</ul>
<h3>Canal Irrigation</h3>
<ul style="list-style-type: square;">
<li>Canals can be an effective source of irrigation in areas of low level relief, deep fertile soils, perennial source of water and extensive command area. Therefore, the main concentration of canal irrigation is in the northern plain of India, especially the areas comprising Uttar Pradesh, Haryana and Punjab.</li>
<li>The digging of canals in rocky and uneven areas is difficult and uneconomic. Thus, canals are practically absent from the Peninsular plateau area. However, the coastal and the delta regions in South India do have some canals for irrigation.<a href="http://www.drishtiias.com/images/uploads/1581943559_image4.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943559_image4.png" style="float: right;" width="250" caption="false" /></a></li>
<li><strong>Two types: <em>Inundation canals,</em></strong> which are taken out from the rivers without any regulating system like weirs etc. at their head. Such canals provide irrigation mainly in the rainy season when the river is in flood and there is excess water.<em><strong> Perennial Canals</strong></em> are those which are taken off from perennial rivers by constructing a barrage across the river. Most of the canals in India are perennial.</li>
<li><strong>Merits:</strong> Most of the canals provide perennial irrigation and supply water as and when needed. This saves the crops from drought conditions and helps in increasing the farm production.</li>
<li><strong>Demerits:</strong> Many canals overflow during the rainy season and flood the surrounding areas. Canal irrigation is suitable in plain areas only.</li>
</ul>
<h3>Tank Irrigation<a href="http://www.drishtiias.com/images/uploads/1581943596_image2.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943596_image2.png" style="float: right;" width="250" caption="false" /></a></h3>
<ul style="list-style-type: square;">
<li>A tank is developed by constructing a small bund of earth or stones built across a stream. The water impounded by the bund is used for irrigation and other purposes. Tank comprises an important source of irrigation in the Karnataka Plateau, MP, Maharashtra, Odisha, Kerala Bundelkhand area of UP, Rajasthan and Gujarat.</li>
<li><strong>Merits:</strong> Most of the tanks are natural and do not involve heavy cost for their construction and have longer life span. In many tanks, fishing is also carried on, which supplements both the food resources and income of the farmer.</li>
<li><strong>Demerits:</strong> Many tanks dry up during the dry season and fail to provide irrigation when it is required. Lifting of water from tanks and carrying it to the fields is a strenuous and costly exercise.</li>
</ul>
<h3>Drip Irrigation<a href="http://www.drishtiias.com/images/uploads/1581943627_image1.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943627_image1.png" style="float: right;" width="250" caption="false" /></a></h3>
<ul style="list-style-type: square;">
<li>In drip irrigation, water is applied near the plant root through emitters or drippers, on or below the soil surface, at a low rate varying from 2-20 liters per hour. The soil moisture is kept at an optimum level with frequent irrigations.</li>
<li>Among all irrigation methods, drip irrigation is the most efficient and can be practiced for a large variety of crops, especially in vegetables, orchard crops, flowers and plantation crops.</li>
<li><strong>Merits:</strong> Fertilizer and nutrient loss is minimized due to localized application and reduced leaching. Field leveling is not necessary. Recycled non-potable water can be used. Water application efficiency increases. Soil erosion and weed growth is lessened.</li>
<li><strong>Demerits:</strong> Initial cost can be more, can result in clogging, wastage of water, time and harvest, if not installed properly.</li>
</ul>
<h3>Sprinkler Irrigation<a href="http://www.drishtiias.com/images/uploads/1581943655_image3.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943655_image3.png" style="float: right;" width="250" caption="false" /></a></h3>
<ul style="list-style-type: square;">
<li>In this method, water is sprayed into the air and allowed to fall on the ground surface somewhat resembling rainfall. The spray is developed by the flow of water under pressure through small orifices or nozzles. The sprinkler irrigation system is a very suitable method for irrigation on uneven lands and on shallow soils.</li>
<li>Nearly all crops are suitable for sprinkler irrigation systems except crops like paddy, jute, etc. The dry crops, vegetables, flowering crops, orchards, plantation crops like tea, coffee are all suitable and can be irrigated through sprinklers.</li>
<li><strong>Merits:</strong> Suitable to all types of soil except heavy clay. Water saving. Increase in yield. Saves land as no bunds etc. are required.</li>
<li><strong>Demerits:</strong> Higher initial cost. Under high wind conditions and high temperature distribution and application efficiency is poor.</li>
</ul>
<h3>Other Types of Irrigation<a href="http://www.drishtiias.com/images/uploads/1581943695_image6.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943695_image6.png" style="float: right;" width="250" caption="false" /></a></h3>
<ul style="list-style-type: square;">
<li><strong>Furrow Irrigation:</strong> Furrow irrigation is a type of surface irrigation in which trenches or &ldquo;furrows&rdquo; are dug between crop rows in a field. Farmers flow water down the furrows and it seeps vertically and horizontally to refill the soil reservoir. Flow to each furrow is individually controlled.<br />
<ul style="list-style-type: circle;">
<li>One of the difficulties of furrow irrigation is ensuring uniform dispersion of water over a given field. Another difficulty with furrow irrigation is the increased potential for water loss due to runoff.</li>
</ul>
</li>
<li><strong>Surge Irrigation:</strong> Surge irrigation is a variant of furrow irrigation where the water supply is pulsed on and off in planned time periods. The wetting and drying cycles reduce infiltration rates resulting in faster advance rates and higher uniformities than continuous flow.</li>
<li><strong>Ditch Irrigation:</strong> It is a rather traditional method, where ditches are dug out and seedlings are planted in rows. The plantings are watered by placing canals or furrows in between the rows of plants. Siphon tubes are used to move the water from the main ditch to the canals.<a href="http://www.drishtiias.com/images/uploads/1581943728_image5.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943728_image5.png" style="float: right;" width="250" caption="false" /></a></li>
<li><strong>Sub Irrigation or Seepage Irrigation:</strong> It is a method of irrigation where water is delivered to the plant root zone from below the soil surface and absorbed upwards. The excess may be collected for reuse.<br />
<ul style="list-style-type: circle;">
<li>Advantages are water and nutrient conservation, and labor-saving.</li>
<li>The outfitting cost is relatively high. Potential problems, such as the possibility of increased presence of disease in recycle water.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<p>The farmers should be acquainted with the type of soil moisture, quality of irrigation water, frequency of irrigation for the proper implementation of irrigation systems.</p>',
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		'article_id' => (int) 3937,
		'category_id' => (int) 21,
		'title' => 'Operation Twist',
		'description' => '<h3>Why in News</h3>
<p>The <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener"><strong>Reserve Bank of India</strong></a> has announced that it will carry out <strong>US-style 'Operation Twist'</strong> to bring down interest rates.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li>RBI will conduct <strong>simultaneous purchase and sale of government</strong> securities under <strong>Open Market Operations (OMO)</strong> for ₹10,000 crore each.</li>
<li>It will purchase the longer-term maturities (i.e government bonds maturing in 2029), and simultaneously sell the shorter duration ones (i.e. short-term bonds maturing in 2020).</li>
<li>The eligible participants can bid or submit offers in electronic format on <a href="/daily-updates/daily-news-analysis/rbi-to-buy-g-secs" target="_blank" rel="noopener"><strong>RBI&rsquo;s Core Banking Solution (E-Kuber).</strong></a></li>
</ul>
<div class="border-bg">
<p><strong>&lsquo;Operation Twist&rsquo;</strong></p>
<ul style="list-style-type: square;">
<li>&lsquo;Operation Twist&rsquo; is when the<strong> central bank uses the proceeds from the sale of short-term securities to buy long-term government debt papers,</strong> leading to <strong>easing of interest rates on the long term papers.</strong></li>
<li>Operation Twist first appeared in 1961 as a way to strengthen the U.S. dollar and stimulate cash flow into the economy.</li>
<li>In June 2012, Operation Twist was so effective that the yield on the 10-year U.S. Treasury dropped to a 200-year low.</li>
</ul>
</div>
<h3>Open Market Operations</h3>
<ul style="list-style-type: square;">
<li>Open Market Operations (OMO) is one of the<a href="/daily-updates/daily-news-analysis/rbi-keeps-policy-rates-unchanged" target="_blank" rel="noopener"><strong> quantitative (to regulate or control the total volume of money) monetary policy tools</strong></a> which is employed by the central bank of a country to <strong>control the money supply in the economy.</strong></li>
<li>OMOs are conducted by the RBI by way of <strong>sale or purchase of government securities (g-secs)</strong> to adjust money supply conditions.</li>
<li>The central bank sells g-secs to remove liquidity from the system and buys back g-secs to infuse liquidity into the system.</li>
<li>These operations are often conducted on a <strong>day-to-day basis</strong> in a manner that balances inflation while helping banks continue to lend.</li>
<li>RBI carries out the OMO <strong>through commercial banks</strong> and <strong>does not directly deal</strong> with the public.</li>
<li>The RBI uses OMO along with other monetary policy tools such as repo rate, cash reserve ratio and statutory liquidity ratio to adjust the quantum and price of money in the system.</li>
</ul>
<h3>Benefits</h3>
<ul style="list-style-type: square;">
<li>This simultaneous purchase and sale will bring down interest on long term loans which can lead to<strong> increase in economic spending.</strong></li>
<li>OMOs are primarily done to maintain ample liquidity in the system, which reflects that the <a href="/daily-updates/daily-news-analysis/repo-rate-unchanged" target="_blank" rel="noopener"><strong>RBI is keen that banks should transmit lower rates to borrowers.</strong></a></li>
<li>The action of Operation Twist by the RBI is<strong> encouraging for the market.</strong> This step may become a <strong>driving factor for long-term economic activity</strong> and the addition of new investment stock.</li>
</ul>
<p><a href="https://www.thehindu.com/business/markets/rbi-to-conduct-operation-twist-to-manage-yields-on-dec-23/article30351441.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'title' => 'Insolvency and Bankruptcy Code',
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<p style="text-align: center;"><a href="/to-the-points/paper3/insolvency-and-bankruptcy-code-3" target="_blank" rel="noopener"><em>For TTP</em></a></p>',
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		'article_id' => (int) 3871,
		'category_id' => (int) 28,
		'title' => 'Insolvency and Bankruptcy Code',
		'description' => '<h3>Why in News</h3>
<p>The Union Cabinet has approved the proposal to make amendments in the <a href="/loksabha-rajyasabha-discussions/in-depth-insolvency-and-bankruptcy-code-act" target="_blank" rel="noopener"><strong>Insolvency and Bankruptcy Code (IBC), 2016,</strong></a> through the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019. The amendments aim to remove certain difficulties being faced during insolvency resolution process to realise the objects of the code and to further ease doing of business.</p>
<h3>Insolvency and Bankruptcy Code, 2016</h3>
<p><strong>Insolvency and Bankruptcy Code, 2016</strong> provides a time-bound process for resolving insolvency in companies and among individuals.</p>
<ul style="list-style-type: square;">
<li><strong>Insolvency</strong> is a situation where individuals or companies are unable to repay their outstanding debt.</li>
<li><strong>Bankruptcy,</strong> on the other hand, is a situation whereby a court of competent jurisdiction has declared a person or other entity insolvent, having passed appropriate orders to resolve it and protect the rights of the creditors. It is a legal declaration of one&rsquo;s inability to pay off debts.</li>
<li>The Government implemented the Insolvency and Bankruptcy Code (IBC) to consolidate all laws related to insolvency and bankruptcy and to tackle Non-Performing Assets (NPA), a problem that has been pulling the Indian economy down for years.</li>
<li>The Code is quite different from the earlier resolution systems as it shifts the responsibility to the creditor to initiate the insolvency resolution process against the corporate debtor.</li>
<li>The recently proposed amendments aim to remove bottlenecks, streamline the corporate insolvency resolution process, and protect the last mile funding in order to boost investment in financially distressed sectors.<br />
<ul style="list-style-type: circle;">
<li>Ring-fencing the companies resolved under the IBC from regulatory actions during past management can make the IBC process attractive for investors and acquirers.</li>
</ul>
</li>
</ul>
<p><strong>Objectives of IBC</strong></p>
<ul style="list-style-type: square;">
<li>To consolidate and amend all existing insolvency laws in India.</li>
<li>To simplify and expedite the Insolvency and Bankruptcy Proceedings in India.</li>
<li>To protect the interest of creditors including stakeholders in a company.</li>
<li>To revive the company in a time-bound manner.</li>
<li>To promote entrepreneurship.</li>
<li>To get the necessary relief to the creditors and consequently increase the credit supply in the economy.</li>
<li>To work out a new and timely recovery procedure to be adopted by the banks, financial institutions or individuals.</li>
<li>To set up an Insolvency and Bankruptcy Board of India.</li>
<li>Maximization of the value of assets of corporate persons.</li>
</ul>
<h3>Salient features of the Insolvency and Bankruptcy Code, 2016</h3>
<ul style="list-style-type: square;">
<li>Covers all individuals, companies, Limited Liability Partnerships (LLPs) and partnership firms.</li>
<li>Adjudicating authority:<br />
<ul style="list-style-type: circle;">
<li><strong>National Company Law Tribunal (NCLT)</strong> for companies and LLPs</li>
<li><strong>Debt Recovery Tribunal (DRT)</strong> for individuals and partnership firms</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Insolvency Resolution Process</strong></p>
<ul style="list-style-type: square;">
<li>Insolvency resolution process can be initiated by any of the stakeholders of the firm: firm/debtors/creditors/employees.</li>
<li>If the adjudicating authority accepts, an <strong>Insolvency resolution professional (IP)</strong> is appointed.</li>
<li>The power of the management and the board of the firm is transferred to the <strong>committee of creditors (CoC).</strong> They act through the IP.</li>
<li>The IP has to decide whether to revive the company (insolvency resolution) or liquidate it (liquidation).</li>
<li>If they decide to revive, they have to find someone willing to buy the firm.</li>
<li>The creditors also have to accept a significant reduction in debt. The reduction is known as a haircut.</li>
<li>They invite open bids from the interested parties to buy the firm.</li>
<li>They choose the party with the best resolution plan, that is acceptable to the majority of the creditors (75 % in CoC), to take over the management of the firm.</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li>Establishment of an <strong>Insolvency and Bankruptcy Board of India</strong> to exercise regulatory oversight over insolvency professionals, insolvency professional agencies and information utilities.</li>
<li><strong>Insolvency professionals</strong> handle the commercial aspects of insolvency resolution process.</li>
<li><strong>Insolvency professional agencies</strong> develop professional standards, code of ethics and be first level regulator for insolvency professionals members leading to development of a competitive industry for such professionals.</li>
<li><strong>Information utilities</strong> collect, collate, authenticate and disseminate financial information to be used in insolvency, liquidation and bankruptcy proceedings.</li>
<li>Enabling provisions to deal with <strong>cross border insolvency.</strong></li>
</ul>
<h3>Achievements of the IBC</h3>
<ul style="list-style-type: square;">
<li>IBC is a vast improvement on the two earlier laws legislated to recover bad loans &mdash;the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDB).</li>
<li><strong>Speedier Resolution:</strong> Before IBC, resolution processes took an average of 4-6 years, after the enactment of IBC, they came down to 317 days.</li>
<li><strong>Higher Recoveries:</strong> Recoveries are also higher: 43% after the IBC, against 22% before it.</li>
<li>Due to the institution of IBC, we have seen that many business entities are paying up front before being declared insolvent. The success of the Act lies in the fact that many cases have been resolved even before it was referred to NCLT.</li>
<li>A steady increase in the number of admitted corporate insolvency resolution process (CIRP) cases. <br />
<ul style="list-style-type: circle;">
<li>By the end of March 2019, a total of 1858 cases were admitted for resolution &ndash; of which 152 have been appealed/reviewed/settled, 91 have been withdrawn, 378 ended in liquidation and 94 have ended in approval of resolution plans.</li>
</ul>
</li>
</ul>
<h3>Challenges for IBC</h3>
<ul style="list-style-type: square;">
<li><strong>Lack of operational NCLT benches:</strong> Though the government had, in July 2019, announced setting up of 25 additional single and division benches of NCLT at various places including Delhi, Jaipur, Kochi, Chandigarh, and Amravati, most of these remain non-operational or partly operational on account of lack of proper infrastructure or adequate support staff.</li>
<li><strong>low approval rate of resolution plans:</strong> According to the data from the Insolvency and Bankruptcy Board of India (IBBI), of the 2,542 corporate insolvency cases filed between December 1, 2016 and September 30, 2019, about 156 have ended in approval of resolution plans &mdash; a mere 15%.</li>
<li>High number of liquidations is a cause for major worry as it violates IBC&rsquo;s principal objective of resolving bankruptcy.</li>
<li><a href="/daily-updates/daily-news-editorials/issues-in-ibc" target="_blank" rel="noopener"><strong>Slow judicial process</strong></a> in India allows the resolution processes to drag on, this was the same reason for slow recovery under SICA or RBBD.</li>
</ul>
<h3>Conclusion</h3>
<p>Operationalisation of IBC, till now, has been spoiled by myriad factors ranging from frivolous challenges posed by operational creditors and promoters to shortage of judges in tribunals. As a result, an important piece of legislation like IBC, which was expected to usher in a new era of ease of doing business, may fall into the trap of implementation failure. Timely amendments, which provide more teeth to the Code, can only rescue the process. New amendments of 2019 in IBC should be closely watched and observed in that light.</p>
<p><a href="/mind-map/gs-paper3/insolvency-and-bankruptcy-code-mindmap" target="_blank" rel="noopener"><em>For Mind Map</em></a></p>',
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		'article_id' => (int) 3844,
		'category_id' => (int) 28,
		'title' => 'Industrial Corridors',
		'description' => '<h3>Why in News</h3>
<p>Government has <a href="/daily-updates/daily-news-analysis/industrial-corridors" target="_blank" rel="noopener"><strong>approved the development of the five industrial corridor projects</strong></a> which will be implemented through National Industrial Corridor Development and Implementation Trust (NICDIT).</p>
<h3>Introduction</h3>
<ul style="list-style-type: square;">
<li>An industrial corridor is basically a <strong>corridor comprising of multi-modal transport services</strong> that would pass through the states as main artery. <br />
<ul style="list-style-type: circle;">
<li>Freight cargo from industrial and National Investment and Manufacturing Zones (NIMZs) located upto a distance of 100-150 km on both sides of this main artery are brought to the industrial corridor via rail and road feeder links that provides last mile connectivity.</li>
<li>This will lower costs of logistics and enable firms to focus on their areas of core competence.</li>
</ul>
</li>
<li>Industrial corridors offer <strong>effective integration between industry and infrastructure,</strong> leading to overall economic and social development.</li>
<li>Industrial corridors constitute world-class infrastructure, such as:<br />
<ul style="list-style-type: circle;">
<li>High-speed transportation network &ndash; rail and road</li>
<li>Ports with state-of-the-art cargo handling equipment</li>
<li>Modern airports</li>
<li>Special economic regions/industrial areas</li>
<li>Logistic parks/transhipment hubs</li>
<li>Knowledge parks focused on catering to industrial needs</li>
<li>Complementary infrastructure such as townships/real estate</li>
<li>Other urban infrastructure along with enabling policy framework</li>
</ul>
</li>
<li>Five industrial corridor projects have been identified, planned and launched by the Government of India. These corridors are spread across India, with strategic focus on inclusive development to provide a boost to industrialization and planned urbanization.</li>
<li>Manufacturing is a key economic driver in each of these projects. These projects are expected <strong>to play a critical role in raising the share of contribution of the manufacturing sector from approximately 16% to 25% by 2025.</strong></li>
<li>Smart cities are being developed along these corridors. These cities, with state-of-the-art infrastructure, will house the new workforce that is required to power manufacturing, in turn leading to planned urbanization.</li>
</ul>
<h3>Five Industrial Corridors</h3>
<ul style="list-style-type: square;">
<li><strong>Delhi-Mumbai Industrial Corridor (DMIC)</strong> covers Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Gujarat and Maharashtra.<br />
<ul style="list-style-type: circle;">
<li>The corridor covers an overall length of 1483 km between the political capital, Delhi, and the business capital, Mumbai, of India.</li>
<li>The US $100 bn project is being <strong>funded by the Government of India, Japanese loans, investments by Japanese firms</strong> and through Japan depository receipts issued by Indian companies.</li>
<li>DMIC Project aims to create futuristic Industrial Cities by leveraging the &ldquo;High Speed &ndash; High Capacity&rdquo; connectivity backbone provided by the Western Dedicated Freight Corridor (DFC)</li>
</ul>
</li>
<li><strong>Chennai-Bengaluru Industrial Corridor (CBIC)</strong> covers Tamil Nadu, Andhra Pradesh and Karnataka.<br />
<ul style="list-style-type: circle;">
<li>It is being<strong> funded by the Japan International Cooperation Agency</strong> (JICA).</li>
</ul>
</li>
<li><strong>Bengaluru-Mumbai Economic Corridor (BMEC)</strong> covers Maharashtra and Karnataka.<br />
<ul style="list-style-type: circle;">
<li>It is being developed<strong> with the help of Britain (UK).</strong></li>
<li>The Delhi Mumbai Industrial Corridor Development Corporation (DMICD) and the UK Trade and Investment (UKTI) have been determined as the nodal agencies on the Indian and UK sides respectively.</li>
</ul>
</li>
<li><strong>Amritsar-Kolkata Industrial Corridor (AKIC)</strong> covers Punjab, Haryana, Uttarakhand, Uttar Pradesh, Bihar, Jharkhand and West Bengal.<br />
<ul style="list-style-type: circle;">
<li>The Project extends from Amritsar (Punjab) to Dankuni (West Bengal) for a length of 1839 kms.</li>
<li>The Eastern Dedicated Freight Corridor is the backbone of this economic corridor.</li>
</ul>
</li>
<li><strong>East Coast Economic Corridor (ECEC)</strong> covers West Bengal, Odisha, Andhra Pradesh and Tamil Nadu. Vizag to Chennai segment of this Corridor has been taken as phase-1.<br />
<ul style="list-style-type: circle;">
<li><strong>Vizag-Chennai Industrial Corridor (VCIC)</strong> is the first coastal economic corridor in the country.</li>
<li>It covers more than 800 km of Andhra Pradesh&rsquo;s coastline and is aligned with the Golden Quadrilateral. It also plays a critical role in the &ldquo;Act East Policy&rdquo; of India.</li>
<li>In September 2016, the <strong>Asian Development Bank (ADB) approved loans</strong> and grants worth US$ 631 mn for the infrastructural development along the VCIC.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1575888931_image1.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1575888931_image1.png" width="488" height="508" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<h3>Significance of Industrial Corridors in India</h3>
<ul style="list-style-type: square;">
<li><strong>Economic Significance:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Avenues for Exports:</strong> The Industrial Corridors are likely to<strong> lower the cost of logistics</strong> thereby <strong>increasing the efficiency of industrial production structure.</strong> Such an efficiency <strong>lowers the cost of production</strong> which <strong>makes the Indian made products more competitive</strong> in international markets. The production of export surplus would <strong>generate employment opportunities</strong> and <strong>raise per capita incomes.</strong></li>
<li><strong>Job Opportunities:</strong> Development of Industrial Corridors would attract investments for the development of Industries which is likely to create more jobs in the market. Moreover, people would find job opportunities close to their homes and would not have to migrate to far-off places <strong>(would prevent distress migration)</strong>.</li>
<li>These corridors would provide necessary logistics infrastructure needed to reap<strong> economies of scale,</strong> thus enabling firms to focus on their areas of core competence.</li>
<li>Industrial corridor <strong>provides opportunities for private sector investment</strong> in the provision of various infrastructure projects associated with the exploitation industrial opportunity.</li>
<li>Apart from the development of infrastructure, long-term advantages to business and industry along the corridor include <strong>benefits arising from smooth access to the industrial production units, decreased transportation and communications costs, improved delivery time and reduction in inventory cost.</strong></li>
</ul>
</li>
<li><strong>Environmental Significance:</strong> The establishment of Industrial Units in a scattered manner along the industrial corridor across the length of the state will<strong> prevent concentration of industries in one particular location</strong> which exploited the environment beyond its carrying capacity and caused environmental degradation.</li>
<li><strong>Socio-Economic Significance:</strong> The cascading effect of industrial corridors in socio-economic terms are many such as <strong>setting up of industrial townships, educational institutions, hospitals.</strong> These will further raise the standards of human development.<br />
<ul style="list-style-type: circle;">
<li>Availability of jobs locally would help in preserving family as an institution. This will also increase <strong>social integration</strong> in the country</li>
</ul>
</li>
</ul>
<h3>Challenges Associated with Industrial Corridors</h3>
<ul style="list-style-type: square;">
<li><strong>Land Acquisition:</strong> Since the industrial corridor would cut across the length of the state, acquisition of land has been slow because of legal hurdles and the amount of compensation.</li>
<li><strong>Technological Knowhow:</strong> Since India lacks technological knowhow in certain sectors, it would be prudent to raise FDI caps to allow foreign players to bring in the required technological knowhow and encourage Indian investment in setting up ancillary and auxiliary industries in that sector.</li>
<li>India&rsquo;s <strong>taxation regime</strong> needs to clearly define the tax liabilities of foreign firms operating in India as permanent establishments and otherwise.</li>
<li><strong>Macroeconomic stability:</strong> It is necessary to have a stable exchange rate so that foreign players with investments in India can avoid currency risks.</li>
<li>India needs to clearly lay down <strong>ground rules for cancellation of licenses in Bilateral Investment Treaties</strong> which could later create confusion as in case of Antrix-Devas deal.</li>
<li>The <strong>economic and financial feasibility</strong> of industrial corridors should be ensured by attracting potential investors to set up manufacturing units at NMIZ.</li>
<li>Massive investment in industrial corridor will pave the way for<strong> large human displacement and destruction of fertile agricultural land.</strong></li>
<li>Fear of <strong>widening Rural-urban gap</strong> in terms of Human Development, economic well-being and standards of living.</li>
</ul>
<div class="border-bg">
<p><strong>National Investment &amp; Manufacturing Zones</strong></p>
<ul style="list-style-type: square;">
<li>National Investment &amp; Manufacturing Zones (NIMZs) are one of the important instruments of National Manufacturing Policy, 2011. NIMZs are envisaged as <strong>large areas of developed land</strong> with the requisite eco-system for<strong> promoting world class manufacturing activity.</strong></li>
<li><strong>The main objective of Special Economic Zones is promotion of exports,</strong> while<strong> NIMZs are based on the principle of industrial growth</strong> in partnership with States and focuses on manufacturing growth and employment generation. NIMZs are different from SEZs in terms of size, level of infrastructure planning, governance structures related to regulatory procedures, and exit policies.</li>
<li>So far the Government has granted &lsquo;in-principle&rsquo; approval to the fourteen NIMZs (outside the DMIC region). These are:<br />
<ul style="list-style-type: circle;">
<li>Nagpur in Maharashtra</li>
<li>Prakasam in Andhra Pradesh</li>
<li>Chittoor in Andhra Pradesh</li>
<li>Medak in Telangana</li>
<li>Hyderabad Pharma NIMZ at Rangareddy and Mahabubnagar Districts in Telangana.</li>
<li>Tumkur in Karnataka</li>
<li>Kolar in Karnataka</li>
<li>Bidar in Karnataka</li>
<li>Gulbarga in Karnataka</li>
<li>Kalinganagar, Jajpur District in Odisha</li>
<li>Ramanathapuram District of Tamil Nadu</li>
<li>Ponneri Taluk, Thiruvallur District, Tamil Nadu</li>
<li>Auraiya District in Uttar Pradesh</li>
<li>Jhansi District in Uttar Pradesh</li>
</ul>
</li>
</ul>
</div>
<h3>Conclusion</h3>
<ul style="list-style-type: square;">
<li>To make the corridors successful, India have to be part of the Industrial Revolution 4.0, which will be shaped by a fresh wave of innovation in areas such as smart robotics, materials that are lighter and tougher, and a manufacturing process built around 3D printing and analytics.</li>
<li>Industrial corridors will help India&rsquo;s efforts to lead the world in the fourth wave of industrial revolution. Effective execution of this plan could make India take a major leap in the race of development.</li>
</ul>
<p><a href="/mind-map/gs-paper3/industrial-corridors-mindmap" target="_blank" rel="noopener"><em>For MInd Map</em></a></p>',
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		'article_id' => (int) 3811,
		'category_id' => (int) 28,
		'title' => 'Telecom Sector: Issues and Challenges',
		'description' => '<h3>Introduction</h3>
<ul style="list-style-type: square;">
<li>India is currently the world&rsquo;s second-largest telecommunications market with a subscriber base of 1.20 billion and has registered strong growth in the past decade and a half.</li>
<li>Contribution of mobile phone industry as a part of gross domestic product (GDP) of the country in 2014 has been to the tune of US$ 400 billion.</li>
<li>According to a report prepared by the Groupe Speciale Mobile Association (GSMA), as of January 2019, India has witnessed a 165% growth in app downloads in the past two years.</li>
<li>Based on the data available from GSMA, this sector will create close to 4 million additional jobs by 2020.</li>
<li>Tele-density of Indian telecom industry (wireless plus wire line) has grown from a low of 3.60% in March 2001 to 84% in March 2016.</li>
<li><strong>Telecom is the second highest revenue earner for the government, after income tax:</strong> The sector is expected to contribute as much as 90% of the government&rsquo;s non-tax revenue. Digital India programme is also almost completely dependent on the telecom sector.</li>
<li>The liberal and reformist policies of the Government of India have been instrumental along with strong consumer demand in the rapid growth in the Indian telecom sector. The deregulation of Foreign Direct Investment (FDI) norms has made the sector one of the fastest growing and a top five employment opportunity generator in the country.</li>
</ul>
<h3>Evolution of the Telecom Sector in India</h3>
<ul style="list-style-type: square;">
<li>Indian telecom sector is <strong>more than 165 years old.</strong></li>
<li><strong>Telecommunications was first introduced in India in 1851</strong> when the first operational land lines were laid by the government near Kolkata (then Calcutta), although telephone services were formally introduced in India much later in 1881.</li>
<li>Further, in 1883, telephone services were merged with the postal system. <strong>In 1947, after India attained independence, all foreign telecommunication companies were nationalised to form the Posts, Telephone and Telegraph (PTT),</strong> a body that was governed by the Ministry of Communication.</li>
<li><strong>The Indian telecom sector was entirely under government ownership until 1984,</strong> when the private sector was allowed in telecommunication equipment manufacturing only.</li>
<li>The government concretised its earlier efforts towards developing R&amp;D in the sector by setting up an autonomous body &ndash; <strong>Centre for Development of Telematics (C-DOT) in 1984</strong> to develop state-of-the-art telecommunication technology to meet the growing needs of the Indian telecommunication network.</li>
<li>The actual evolution of the industry started after the <strong>Government separated the Department of Post and Telegraph in 1985 by setting up the Department of Posts and the Department of Telecommunications (DoT).</strong><strong></strong></li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1575544757_image1.jpg" target="_blank" rel="noopener"><strong><img class="content-img" src="http://www.drishtiias.com/images/uploads/1575544757_image1.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="601" height="451" caption="false" /></strong></a></p>
<h3>Issues and Challenges of Telecom Sector</h3>
<ul style="list-style-type: square;">
<li><strong>High Right-of-Way (ROW)</strong> cost: Sometimes, state governments charge a huge amount for permitting the laying of fiber, etc.</li>
<li><strong>Lack of fixed line penetration:</strong> India has very little penetration of fixed-line in its network whereas most of the developed countries have a very high penetration of fixed lines (telephone line that traveled through a metal wire or optical fiber as part of a nationwide telephone network).
<ul style="list-style-type: circle;">
<li>Only around 25% of Towers in India are connected with fibre networks, whereas in developed nations, it is in excess of 70%.</li>
<li>5G Network requires towers to be connected to with very high-speed systems. Those high speeds are not possible on the present radio systems.</li>
</ul>
</li>
<li><strong>Declining Average Revenue Per User (ARPU):</strong> ARPU decline now is sharp and steady, which, combined with falling profits and in some cases serious losses, is prompting the Indian telecom industry to look at consolidation as the only way to boost revenues.
<ul style="list-style-type: circle;">
<li>Recently, the Supreme Court allowed the government&rsquo;s plea to recover adjusted gross revenue of about Rs 92,000 crore from telcos, that further adds to their stress.</li>
</ul>
</li>
<li><strong>Limited Spectrum Availability:</strong> Available spectrum is less than 40% as compared to European nations and 50% as compared to China.</li>
<li><strong>Low Broadband Penetration:</strong> Low broadband penetration in the country is a matter of concern. As per white paper presented on broadband at the last International Telecommunication Union (ITU), <strong>broadband penetration in India is only 7%.</strong></li>
<li>Over the Top (OTT) applications such as WhatsApp, OLA and so on do not need permission or a pact with a telecommunications company. This hampers the revenue of telecommunication service providers.</li>
<li><strong>Huge fluctuations in the duties on Telecom Equipment</strong> which contribute to connecting the whole system from the central server to the consumer.</li>
<li><strong>Timeframe of policy execution:</strong> Government have withdrawn a lot of things to benefit telecom sector but by the time it gets executed to the market, it becomes too late.</li>
<li><strong>Lack of Telecom Infrastructure in Semi-rural and Rural areas:</strong> Service providers have to incur huge initial fixed cost to enter semi-rural and rural areas.</li>
<li><strong>Pressure on Margins Due to Stiff Competition:</strong> With competition heating up post entry of Reliance Jio, other telecom players are feeling the heat of substantial drop in tariff rates both for voice and data (more significant for data subscribers).</li>
</ul>
<h3>Steps Taken by the Government</h3>
<ul style="list-style-type: square;">
<li>A new <a href="/daily-updates/daily-news-analysis/the-national-digital-communications-policy-2018" target="_blank" rel="noopener"><strong>National Digital Communications Policy</strong></a> - <strong>2018 (NDCP-2018)</strong> was unveiled in Oct 2018, to replace National Telecom Policy-2012, to cater to the modern needs of the digital communications sector of India. The policy aims to attract USD 100 billion worth of investments and generate 4 million jobs in the sector by 2022.</li>
<li>Telecom Commission was re-designated as the <strong>"Digital Communications Commission&rdquo;.</strong></li>
<li>In 2017, Department of Telecom (DoT) came up with a gazette notification, advising the state governments to give quicker ROW permission and charge very little amount to service providers. Though, only some states responded.</li>
<li>The government has provided benefits to telecom sector by withdrawing some duties.</li>
<li>The government has fast-tracked reforms in the telecom sector and continues to be proactive in providing room for growth for telecom companies.</li>
<li>The Department of Information Technology intends to <strong>set up over 1 million internet-enabled common service centres across India</strong> as per the <a href="/to-the-points/Paper2/e-governance-1" target="_blank" rel="noopener"><strong>National e-Governance Plan.</strong></a></li>
<li>FDI cap in the telecom sector has been increased to 100% from 74%. Out of 100%, 49% will be done through automatic route and the rest will be done through the FIPB approval route.
<ul style="list-style-type: circle;">
<li>FDI of up to 100% is permitted for infrastructure providers offering dark fibre, electronic mail and voice mail.</li>
</ul>
</li>
<li>The Government of India has introduced Digital India programme under which all the sectors such as healthcare, retail, etc. will be connected through the internet.</li>
</ul>
<h3>Suggestions</h3>
<ul style="list-style-type: square;">
<li><strong>NDCP-2018 advocates:-</strong>
<ul style="list-style-type: circle;">
<li>Establishment of a <strong>National Digital Grid</strong> by creating a National Fibre Authority;</li>
<li>Establishing <strong>Common Service Ducts and utility corridors</strong> in all new city and highway road projects;</li>
<li>Creating a <strong>collaborative institutional mechanism</strong> between Centre, States and Local Bodies for Common Rights of Way, standardization of costs and timelines;</li>
<li><strong>Removal of barriers to approvals;</strong> and</li>
<li>Facilitating development of <strong>Open Access Next Generation Networks.</strong></li>
</ul>
</li>
<li><strong>Explore the option of revenue sharing agreement</strong> between Internet players and telecommunication companies.</li>
<li><strong>Outsourcing non-core functions</strong> such as network maintenance, IT operations and customer service.</li>
<li><strong>Divestment of tower assets</strong> into separate companies will enable curb costs and focus on core operations.</li>
<li><strong>Introduce new and efficient technologies</strong> such as M2M (technology that enables networked devices to exchange information and perform actions without the manual assistance of humans) and cloud computing.</li>
<li><strong>Benefits of industry status</strong> in line with other infrastructure sectors in the country to be implemented.</li>
<li><strong>Penetration of rural markets</strong> (72% of population staying in rural areas) will be the key growth driver.</li>
<li>The government should <strong>increase the network area through optical fibre</strong> instead of copper which is expensive. This is necessary to ensure last mile connectivity.</li>
<li>The government needs to prepare a ground for <strong>easy right-of-way permissions</strong> and lower cost of right-of-ways.</li>
<li>It is time to go for a <strong>generational shift</strong> to ensure that <strong>current tariff is financially viable</strong> for service providers.</li>
<li>Telecom Operators should leverage on the talent pool in the country which is bringing in a lot of<strong> new innovations in AI, blockchain technology</strong> etc.</li>
<li><strong>New Infrastructure on shareable basis</strong> just like the way telecom service providers share the cost of towers is need of the hour.</li>
<li>The government should spend more on R&amp;D and create an environment that makes India capable of manufacturing and exporting hardware components like mobile handsets, CCTV Cameras, touch screen monitors etc.</li>
</ul>
<h3>Conclusion</h3>
<ul style="list-style-type: square;">
<li>The telecom sector in India has to deal with various challenges like maintaining the sufficient spectrum, adoption of new technologies faster to be able to use the new features and techniques to serve the customers with better and feature rich service.</li>
<li>A proactive and facilitatory government role regarding telecom sector is the need of the hour given the huge opportunities provided by the sector.</li>
<li>Independent and statutory body, <strong>Telecom Regulatory Authority of India</strong> (TRAI) has an important role to play as a watchdog of the sector. A more proactive and timely Dispute Resolution by <strong>TDSAT</strong> (Telecom Disputes Settlement and Appellate Tribunal) is the need of the hour.</li>
</ul>
<p><a href="/mind-map/gs-paper3/telecom-sector-issues-and-challenges-mindmap" target="_blank" rel="noopener"><em>For Mind Map</em></a></p>',
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