DAILY MAINS NEWSLETTER FOR UPSC|24 MAY 2021|RaghululCS

Daily Mains Newsletter For UPSC
| RaghukulCS

24 May 2021

Index

Mains Value Addition

Mains Analysis

Topic No

Topic Name

Source

1

Recalibrate growth, reprioritise expenditures

The Hindu

2

Halting it in its rural tracks

Indian Express

Mains Value Addition

Documentary on Auroville’s afforestation project to be screened at Change Now summit

Syllabus–GS 3: Environment

Analysis: –

  • Aurovillian Christoph Pohl’s documentary Ever Slow Green, which tells the story of Auroville’s unique afforestation project that took root on an eroded desert plateau in Villupuram district, has been officially selected for screening at the prestigious ChangeNow summit in Paris.
  • It will be screened along with four specially selected films, including David Attenborough’s Breaking Boundaries: The Science of Our Planet at the ChangeNow film festival in the summit from May 27 to 29.
  • Pohl, whose documentary has already earned accolades and awards across the world, is happy with the development.
  • “I am excited and proud that my film will be screening alongside Sir David Attenborough’s new documentary, Breaking Boundaries. I came to Auroville in 2008 and was amazed to learn this landscape was completely barren and eroded in 1968 when Auroville started. I couldn’t believe that all the forests had been created from scratch and had grown in less than 40 years.
  • The documentary tells the story of Auroville’s 50-years-young forest through some of the diverse characters who have dedicated their lives to bringing it to fruition” he said.

INS Jalashwa reaches Vizag with 300 MT medical oxygen

Syllabus -GS 2: Health

Analysis: –

  • In the largest consignment of liquid medical oxygen, Navy’s INS Jalashwa arrived in Visakhapatnam with 300 metric tonne of oxygen and more than 3,600 oxygen cylinders from Singapore and Brunei under the ongoing Operation Samudra Setu II, the Navy said on Sunday.
  • “The consignment includes 300 metric tonne of liquid medical oxygen (LMO) and more than 3,600 oxygen cylinders from Singapore and Brunei.
  • The COVID-19 medical equipment also includes ventilators and empty cryogenic containers.”
  • The INS Trikand brought 40 MT LMO from Qatar, it said.
  • The INS Trikand with two LMO containers of 20 MT each and 100 oxygen cylinders arrived at Mumbai. In the first week of May, the Navy had diverted nine warships deployed on the high seas to various ports in the region extending from Kuwait in the west to Singapore in the east to pick up emergency medical oxygen and other supplies.

Mains Analysis

Recalibrate growth, reprioritise expenditures

Why in News?

The second wave of COVID-19 currently sweeping India is forcing States into successive lockdowns, in turn eroding economic activities.

Syllabus–GS 3: Economy

  • The Supreme Court on Friday upheld a government move to allow lenders initiate insolvency proceedings against personal guarantors, who are usually promoters of big business houses, along with the stressed corporate entities for whom they gave guarantee.
  • In a judgment, which will ring loud and clear across the business community, a Bench of Justices L. Nageswara Rao and S. Ravindra Bhat held that the November 15, 2019 government notification allowing creditors, usually financial institutions and banks, to move against personal guarantors under the Indian Bankruptcy and Insolvency Code (IBC) was “legal and valid”.
  • The November 15, 2019 notification was challenged before several High Courts initially. The Supreme Court had transferred the petitions from the High Courts to itself on a government request.

COVID-19-induced erosion

  • Various GDP forecasts has been given by different agencies showing a slack growth pattern amidst the second wave of COVID-19.
  • According to International Monetary Fund (IMF), the Reserve Bank of India (RBI), and the Ministry of Finance’s Economic Survey forecast real GDP growth for 2021-22 at 12.5%, 10.5%, and 11.0%, respectively.
  • Moody’s has recently projected India’s GDP growth in 2021-22 at 9.3%.
  • This level of growth may be achieved based on the assumption that the economy normalises in the second half of the fiscal year. If the lockdowns come to an end earlier, the growth rate may be higher.

 

  • The 2019-20 real GDP was ?145.7-lakh crore at 2011-12 prices. It fell to ?134.1-lakh crore in 2020-21, implying a contraction of minus 8.0%.
  • If India sees a fall in the real GDP in the current year as compared to 2019-20 level but the nominal GDP numbers assumed in the Budget will also be adversely affecting the fiscal predictions of Centre’s 2021-22 Budget.
  • This will lead to a lowering of tax and non-tax revenues and an increase in the fiscal deficit as compared to the budgeted magnitudes.

Budget magnitudes

  • The author gives the concept of tax buyoancy, budgeted gross and net tax revenues for 2021-22 were ?22.2-lakh crore and ?15.4-lakh crore, respectively.
  • The assumed buoyancy for the Centre’s gross tax revenues (GTR) was 1.2, if this buoyancy is achieved, the lower nominal GDP growth would imply a GTR growth of 15.7% as compared to the budgeted growth of 16.7%.
  • If the buoyancy of 1.2 proves optimistic and instead a buoyancy of 0.9, which is the average buoyancy of the five years preceding the COVID-19 year, is applied, the nominal growth of GTR would be 12.2%.
  • This would lead to the Centre’s GTR of about ?21.3-lakh crore. This might lead to corresponding shortfall in the Centre’s net tax revenues.
  • The budgeted magnitudes for non-tax revenues and non-debt capital receipts at ?2.4-lakh crore and ?1.9-lakh crore, respectively, may also prove to be optimistic. In these cases, the budgeted growth rates were 15.4% and 304.3%, respectively.
  • The excessively high growth for the non-debt capital receipts due to implementing an asset monetisation and disinvestment programme, but this might not be possible in COVID-19 situation.
  • The author further talks about budgeted growth in non-tax revenues is dependent on an assumed growth of 60% in revenues from communication services and of 44.1% in dividends and profits from non-departmental undertakings.
  • There is a possibility that there may be a shortfall of ?1.5-lakh crore in non-tax revenues and non-debt capital.
  • Two factors will affect the fiscal deficit estimate of 6.76% of GDP in 2021-22. First, there would be a change in the budgeted nominal GDP growth. Second, there would be a shortfall in the receipts from tax, non-tax and non-debt sources.
  • Together, these two factors may lead to a slippage in fiscal deficit which may be close to 7.7% of GDP in 2021-22 if total expenditures are kept at the budgeted levels.

Other Steps, Vaccination

  • By giving figures of previous and this budget estimates, author argues that there has been a reduction in capital expenditure and revenue expenditure in health sector from last year’s budget expenditure.
  • There is need to spend on construction activities within the health sector.
  • A higher expenditure on inducting a larger workforce of doctors, nurses and paramedics and other hospital-related administrative staff.
  • Strong support is needed for the vulnerable groups of the society including migrant labour and the rural and urban unemployed population.
  • Rather than individual State governments floating global tenders for vaccines, if central government itself does vaccine procurement it might lead to the economies of scale and the keeping the average vaccine price low.
  • The author suggest, central government may transfer the vaccines rather than the money to the states as some of the smaller States may find procuring vaccines through a global tender quite challenging.

Way forward

  • COVID-19 pandemic has brought the shortcomings of our health sector to the light, thus there is an urgent need to ramp up health and related infrastructure by enhancing the number of hospitals and hospital beds, sources of oxygen supplies, and the manufacture of COVID-19 vaccines and drugs.
  • Speedy and larger vaccination coverage of the vulnerable population is key to minimising economic damage.
  • The Centre’s Budget had allocated Rs. 35,000 crore for vaccination for the Department of Finance as an amount to be transferred to the States. But author says that this should be increased.

Question: –

The allocation for the health sector should be increased substantially by reprioritising expenditures. This would need revising the fiscal road map again, there is a need for reprioritising these expenditures. Explain.

Halting it in its rural tracks

Why in News?

The central govt has announced a 140% increase in the subsidy on Di-Ammonium Phosphate (DAP) which is estimated to cost the exchequer an additional Rs 14775 crore in the coming Kharif season alone.

Syllabus–GS2: Issues related to Public Policy

  • Photographs of dead bodies floating in the Ganga have been amongst the most painful and distressing images of the second wave of the pandemic. The wave took almost everyone by surprise.
  • The government had almost declared victory over Covid in late February/early March and people had lowered their guard. No one could guess that the virus was lurking round the corner, waiting to hit back hard.
  • The contagion started surging around late March in Mumbai; it spread like wildfire first in Maharashtra, and then in Delhi, Karnataka, and many other states in April. Our political leaders were busy with state assembly elections.
  • There was unprecedented panic, with people dying in hospitals and others gasping for breath due to oxygen shortage.
  • Black marketing of oxygen cylinders, concentrators and essential drugs made things worse. The government seemed to have lost control and many declared India a failed state.

What is the issue?

  • The 2nd wave surprised India, taking the death toll to more than 1 Lakh in the past two months.
  • The govt seemed to have lost control & many declared India as a failed state because
  • There was unprecedented panic with people dying in hospitals & others gasping for breath due to oxygen shortage.
  • Black marketing of oxygen cylinders, concentrators & essential drugs made the situation worse.
  • But due to the combined effort of all stakeholders, the situation from the past week seemed to be improving in the major cities.
  • But it is now time to think & take quick action to contain the spread of the virus in villages.

Why?

  • The farmers are the major constituents of rural India who are responsible for India’s food security.
  • Among all the Punjab agriculturists stand tall amongst the farming community.
  • But today it is the most affected by the COVID virus by registering the highest deaths among all states. The reason for it:
  • Farmers’ agitation that violated the COVID guidelines is the main cause behind the high caseload.
  • Also, ignorance & denial of COVID among agitating farmers is another reason.
  • Lack & weak health infrastructure in the rural areas.
  • The consequences if timely & necessary actions not taken would spell disaster & destroy the entire rural ecosystem.

The solution:

  • The main solution seems to be the vaccination of the entire India.
  • But according to NITI Aayog, it takes another 6 months to vaccinate 80% of the population.
  • Until then, people need to follow the COVID-related guidelines strictly.
  • Take timely medical care in the initial stages.

Way forward:

  • Timely & regularly addressing the nation & generating awareness about the govt’s preparedness.
  • NITI Aayog needs to work Actively with NGOs, corporates & coordinating international aid for smooth & timely medical supplies flow.
  • Convincing rural people about vaccination.
  • Upgrading the rural primary health care infrastructure.
  • Stocking vaccines in rural areas need to be provided with controlled temperatures & power supply using solar power.
  • This also generates new jobs while giving a fillip to health infrastructure with a green footprint.
  • Setting up vaccination camps at the panchayat level.
  • The vulnerable MGNREGA workers are needed to be incentivized for a vaccination with a free food/cash reward

Question: –

The need of the hour is a calibrated response that balances economic & health concerns based on a sound vaccine strategy. At the same time, a big push with regards to infrastructure & supporting MSME in rural areas can go a long way in saving lives & livelihoods. Discuss.

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