Current Affairs for UPSC IAS Exam – 20 October 2020

Contents

1. China GDP growth accelerates to 4.9%
2. Unemployment rate falls, scope for improvement
3. Australia to join Malabar naval exercise
4. More than half of farmers oppose farm laws: survey

CHINA GDP GROWTH ACCELERATES TO 4.9%

Focus: GS-III Indian Economy

Why in news?

• China’s economic growth continued to gain momentum in the third quarter, with the GDP expanding 4.9% from the July-September period of 2019.
• The pace of expansion was faster than the preceding quarter’s 3.2% and underlined the rebound in the world’s second-largest economy at a time when other major economies are struggling to recover from contractions triggered by the COVID-19 pandemic and the lockdowns to combat it.

Highlights

• The IMF has forecast China’s economy will expand by 1.9% in 2020, making it the only major economy to register growth in a pandemic-hit year.
• The economic rebound follows China’s broad return to normalcy this summer, following sweeping COVID-19 curbs including stringent lockdowns, extensive contact tracing, and restrictions on international travel through the first half of the year, which allowed the authorities to almost entirely stop transmission of the virus within China, with the exception of a few clusters that were contained locally.
• The recovery was driven by a 5.8% growth in industrial production and a revival of exports.
• A surge in investments in infrastructure projects, enabled by measures to boost liquidity, had been sanctioned by the government, which had to grapple with millions of job losses at the start of 2020.

Why it matters to India? India’s Dependence on Chinese Imports

• Most of the critical medical supplies which India has been importing for frontline healthcare workers in the COVID-19 battle come from China.
• Indian manufacturing is also dependent on supplies from China including a wide variety of machineries.

There are 2 reasons why China is so central to a very large number of global and regional supply chain:

1. China offers the capacity to businesses to develop the supply chains by considerable lengths within itself.
2. China has also become a major consumer for final products and remains a major source of the final demand market.

India’s imports from China, its largest trading partner in goods, had fallen to a record low in the months of April and May 2020, coinciding with the lockdown. However, now they have risen back in the past to month to the pre-lockdown levels.

• The primary reason for the rise according to experts is Chinese exports of medical supplies.
• Two-way trade continues to be heavily tilted in China’s favour, with India’s exports, which are up 6.7% year-on-year.
• The slump in China’s exports to India contrasts with its recovery overall.
• Much of the recent resilience of exports has been due to shipments of masks, medical products and work-from-home equipment.

China not the most competitive producer in 82% imports: Study

• In terms of the number of goods imported from across the border, the share of the 327 sensitive products was less than 10% of the items that were imported from China.
• The study estimated that in case of 82% products, China was not the most competitive producer.
• But there are also products where China is the sole exporter.
• It is possible to produce some of the products domestically if other sources are not immediately available.

-Source: The Hindu

UNEMPLOYMENT RATE FALLS, SCOPE FOR IMPROVEMENT

Focus: GS-III Indian Economy

Why in news?

The National Statistics Office released employment indicators for the quarter ending September 2019 which is the fourth such quarterly bulletin based on the new Periodic Labour Force Survey (PLFS) started in 2017-18 and gives estimates only for urban areas.

Details

• The unemployment rate in the quarter ended September 2019 improved by 1.3 percentage points compared to the corresponding period of 2018, according to data released by National Statistics Office (NSO).
• According to the bulletin, the unemployment rate in July-September 2019 in urban areas was 8.4%.
• The rate was 20.6% among those aged 15-29 years and 8.3% for those aged 15 years and above.
• The labour force participation rate (LFPR) was 36.8%; 56.6% for men and 16% for women which marked a marginal improvement over July-September 2018, when LFPR was 36.1%.
• In September 2018, the unemployment rate was 9.7%. This fell to 8.9% in the June quarter this year, although a sequential comparison of unemployment data isn’t advisable on account of seasonality.
• Among those working in the quarter ending September 2019 in urban areas and of age 15 years or older, 49.6% were salaried or regular wage employees, 38.3% were self-employed and 12.1% were casual workers.
• Compared to the June 2019 quarter, the share of the self-employed in the work-force increased by 1.6% and that of the regular wage and casual workers decreased by 0.8% and 1.6% respectively.
• Compared to the September 2018 quarter, the share self-employed and regular wage workers increased by 0.3% and 1% and that of casual workers decreased by 4.7%.
• 62% of the urban workers of age 15 years or older were employed in the tertiary sector, 32.8% in the secondary sector, and 5.2% in agriculture sector.
• The share of those employed in agriculture was 6.1% higher than that in the June 2019 quarter while the share of those employed in the secondary sector was 1.2% lower.
• The share of tertiary sector workers remained the same.
• Compared to September 2018, however, the share of those in tertiary sector rose by 2.6% while that of agriculture and secondary sector workers declined by 10.3% and 3% respectively.

Who is considered as employed?

• The estimates in the bulletin are based on the current weekly status (CWS) of those surveyed.
• In this approach, a person is considered part of the labour force if they worked or were available or looking for work for at least one hour during the survey week.

Labor Force Participation Rate (LFPR)

• The labor force participation rate is a measure of an economy’s active workforce.
• The formula for the number is the sum of all workers who are employed or actively seeking employment divided by the total noninstitutionalized, civilian working-age population.
• The labor force participation rate indicates the percentage of all people of working age who are employed or are actively seeking work.
• Global labor force participation has shown a steady decline since 1990.

Unemployment rate is still at double digits across 10 states

• Despite an overall fall in joblessness across India, at least 10 states including fairly industrialized ones like Haryana and Rajasthan are still reporting double-digit unemployment.
• Other than Haryana and Rajasthan which have reported 19.7% and 15.3% unemployment rate, joblessness is also high in Delhi (12.5%), Himachal Pradesh (12%), Uttarakhand (22.3%), Tripura (17.4%), Goa (15.4%) and Jammu & Kashmir (16.2%), according to the September monthly data of the Centre for Monitoring Indian Economy.
• Besides, two large states, West Bengal (9.3%) and Punjab (9.6%), have near double digit joblessness. By comparison the national rate was 6.67% in September—significantly lower than 23.52% in April and 21.73% in May.
• Employment in Himachal, Uttarakhand, Goa and J&K is largely driven by tourism and hospitality. But these sectors are the worst hit. And the dullness in allied sectors like transport, entertainment, retail and restaurant business is contributing to the high unemployment rate.

-Source: Hindustan Times

AUSTRALIA TO JOIN MALABAR NAVAL EXERCISE

Focus: GS-II International Relations

Why in news?

• Amid the ongoing stand-off with China in eastern Ladakh, the Ministry of Defence announced that Australia would join the Malabar 2020 naval exercise more than three years after Australia first requested to join.
• The Indian had invited Australia for the annual Malabar naval exercises in November 2020, with the United States and Japan already confirming their participation.
• The move is expected to further lay the foundations for the eventual formalisation of the QUAD grouping (India, U.S., Japan, Australia).

The shared objective of all four countries is free and open navigation in Indo-Pacific.

Details

• The Malabar 2020 exercises will take place in two parts; one would be in the Bay of Bengal, north of Andaman and Nicobar Islands and the other, in the Arabian Sea.
• The exercise comes after the QUAD Foreign Ministers meeting in Tokyo and will follow shortly after the India-US two plus two dialogue during which the geo-spatial agreement called BECA is expected to be signed by the two countries.
• The last time Australia was invited as a non-permanent partner by India for Malabar in 2007, Beijing issued a demarche to India, US, Japan and Australia (Singapore was the other partner) seeking details of the exercise in the context of QUAD initiative, which at that time existed only on paper. Both India and Australia were defensive back then.

China’s View

In the context of the emerging contours of QUAD, Chinese Foreign Minister termed the US Indo-Pacific strategy a “big underlying risk” designed to stir up confrontation among different groups, and stoke geo-political competition with the Cold War mentality.

About the Malabar Exercise

• It is an annual exercise between the navies of India, Japan, and the U.S. held alternately in the Indian and Pacific Oceans.
• It began in 1992 as a bilateral exercise between India and the U.S.
• Then it got permanently expanded into a trilateral format with the inclusion of Japan in 2015.

Click Here to read more about the QUAD

-Source: The Hindu, Hindustan Times

MORE THAN HALF OF FARMERS OPPOSE FARM LAWS: SURVEY

Focus: GS-III Agriculture

Why in news?

More than half of Indian farmers oppose the three farm reform laws passed by Parliament last month, while only 35% support them, according to a new survey in 16 States conducted by Gaon Connection Insights.

Highlights

• Almost 40% expressed fear that the new laws will end state-run markets and government procurement at minimum support prices, and almost 60% are in favour of a legal guarantee for MSPs.
• The Survey found that state-run mandis are the most popular medium of produce sale across the country (36%), followed by private traders (26%). Currently, only 2% sell to corporates.
• Geographically, the north-western States of Punjab, Haryana and Himachal Pradesh which have the highest proportion of sales in state-run markets (78%), also have the highest rates of opposition to the news reform laws (77%).
• In the eastern States of Assam, West Bengal, Odisha and Chhattisgarh, only 39% opposed the laws, but even fewer (36%) supported them.
• A quarter of respondents in the east responded “can’t say.” A similar lack of awareness or interest was also evident in the southern region, where 26% of respondents gave the same answer.
• Almost 60% of those opposed felt that the laws would force them to sell at lower prices in the open market, with 38% fearing increased dependence on private companies.

What are the three Bills?

The Bills aim to change the way agricultural produce is marketed, sold and stored across the country

1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, allows farmers to sell their harvest outside the notified Agricultural Produce Market Committee (APMC) mandis without paying any State taxes or fees.
2. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020, facilitates contract farming and direct marketing.
3. The Essential Commodities (Amendment) Bill, 2020, deregulates the production, storage, movement and sale of several major foodstuffs, including cereals, pulses, edible oils and onion, except in the case of extraordinary circumstances.

What is a ‘trade area’?

The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 defines “trade area” as any area or location, place of production, collection and aggregation including: (a) farm gates; (b) factory premises; (c) warehouses; (d) silos; (e) cold storages; or (f) any other structures or places, from where trade of farmers’ produce may be undertaken in the territory of India.

What is ‘trader’ and how is it linked to the protests?

The first ordinance defines a “trader” as “a person who buys farmers’ produce by way of inter-State trade or intra-State trade or a combination thereof, either for self or on behalf of one or more persons for the purpose of wholesale trade, retail, end-use, value addition, processing, manufacturing, export, consumption or for such other purpose”. Thus, it includes processor, exporter, wholesaler, miller, and retailer.

Why does the provision on ‘market fee’ worry protesters?

• The Act states that “no market fee or cess or levy, by whatever name called, under any State APMC Act or any other State law, shall be levied on any farmer or trader or electronic trading and transaction platform for trade and commerce in scheduled farmers’ produces in a trade area”.
• Government officials say this provision will reduce the cost of transaction and will benefit both the farmers and the traders.
• Under the existing system, such charges in states like Punjab come to around 8.5% — a market fee of 3%, a rural development charge of 3% and the arhatiya’s commission of about 2.5%.

What is the objection as far as dispute resolution is concerned?

• The protesters say that the provision on dispute resolution under the act does not sufficiently safeguard farmers’ interests.
• It provides that in case of a dispute arising out of a transaction between the farmer and a trader, the parties may seek a mutually acceptable solution through conciliation by filing an application to the Sub-Divisional Magistrate, who shall refer such dispute to a Conciliation Board to be appointed by him for facilitating the binding settlement of the dispute.
• Farmers fear the proposed system of conciliation can be misused against them.
• They say the ordinance does not allow farmers to approach a civil court.

Government’s take

• The laws will provide farmers with more choice
• More competition will lead to better prices
• They will usher in a surge of private investment in agricultural marketing, processing and infrastructure.
• While the Opposition has echoed farmers in alleging that the new legislation will benefit only big farmers and hoarders, the government said the provisions will be beneficial to all: farmers, consumers and traders.

-Source: The Hindu