Current Affairs for UPSC IAS Exam – 02 April 2021 | Legacy IAS Academy

Contents

1. UNESCAP report on India’s economic output in 2021
2. Ministerial meet of the BIMSTEC 2021
3. Payment arrears to Sugarcane farmers reaches 23k crore
4. Biden allows H1-B visa ban to expire

UNESCAP REPORT ON INDIA’S ECONOMIC OUTPUT IN 2021

Context:

‘Economic and Social Survey of Asia and the Pacific 2021’ was released by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) with the focus on the COVID-19 pandemic’s impact.

Relevance:

GS-III: Indian Economy (Economic Growth and Development in India), GS-II: International Relations (Important International organizations and their reports)

Dimensions of the Article:

1. About UNESCAP
2. About the Economic and Social Survey of Asia and the Pacific
3. Highlights of the ‘Economic and Social Survey of Asia and the Pacific 2021: Towards post-Covid-19 resilient economies’
4. What is a K-shaped recovery?
5. Way Forwards

About UNESCAP

• The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) is the regional development arm of the United Nations for the Asia-Pacific region.
• UNESCAP is headquartered in Bangkok, Thailand.
• It was established in 1947 has 53 Member States and 9 Associate Members from Asia-Pacific Region including India. In addition to countries in Asia and the Pacific, the commission’s members include France, the Netherlands, the United Kingdom and the United States.
• It was established in order to increase economic activity in Asia and the Far East, as well as to foster economic relations between the region and other areas of the world.
• The commission works to address some of the greatest challenges facing the region through results-oriented projects, technical assistance and capacity building to member states along with providing a forum for its member states to promote regional cooperation and collective action in pursuit of the 2030 Agenda for Sustainable Development.

About the Economic and Social Survey of Asia and the Pacific

• The Economic and Social Survey of Asia and the Pacific is published annually since 1947 and hence, it is the oldest United Nations report on the Asia and Pacific region’s progress.
• The Survey monitors regional progress, provides cutting-edge analyses and guides policy discussion on the current and emerging socio-economic issues and policy challenges to support inclusive and sustainable development in the region.

Highlights of the ‘Economic and Social Survey of Asia and the Pacific 2021: Towards post-Covid-19 resilient economies’

• India is estimated to record an economic growth of 7% in 2021-22, over a contraction of 7.7% witnessed in the previous fiscal on account of the pandemic’s impact on normal business activity.
• Unfortunately, India’s 2021 economic output is expected to remain below the 2019 level, as India entered the pandemic with already subdued GDP (Gross Domestic Product) growth and investment.
• Maintaining low borrowing costs and Keeping non-performing loans in check are the two major challenges for India on its path to faster economic recovery.
• China’s swift and effective response to Covid-19 enabled it to become the only major economy worldwide to achieve a positive annual economic growth rate in 2020.
• On an average, developing Asia-Pacific economies are expected to grow 5.9% in 2021 and 5% in 2022.
• The prospect of a K-shaped recovery, characterized by uneven post-pandemic recovery across countries and widened inequality gaps within countries, is highlighted as a primary policy challenge.

What is a K-shaped recovery?

• A K-shaped recovery happens when different sections of an economy recover at starkly different rates.
• A K-shaped recovery leads to changes in the structure of the economy or the broader society as economic outcomes and relations are fundamentally changed before and after the recession.
• This type of recovery is called K-shaped because the path of different parts of the economy when charted together may diverge, resembling the two arms of the Roman letter “K.”

Way Forwards

• For a more robust and inclusive recovery, the report calls for a more synchronised Covid-19 vaccination programme across countries. There is a need to leverage regional cooperation.
• It recommends that fiscal and monetary support should be sustained, as premature tightening could increase long-term scars.
• Continuity in policy support is a must and recovery policy packages should focus on building resilience and investing in the 2030 Agenda for Sustainable Development.
• To deal with various economic and non-economic shocks, a more integrated risk management approach to planning and policymaking is needed.

-Source: The Hindu

MINISTERIAL MEET OF THE BIMSTEC 2021

Context:

India’s External Affairs Minister expressed commitment about taking the Bay of Bengal community to “new heights” at the 17th ministerial meet of the BIMSTEC.

Relevance:

GS-II: International Relations (Important International Groupings, Foreign Policies and conferences affecting India’s Interests)

Dimensions of the Article:

1. About BIMSTEC
2. Highlights of India’s views at 17th ministerial meet of BIMSTEC
3. BIMSTEC Free Trade Area Framework Agreement

About BIMSTEC

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is an international organisation of seven nations of South Asia and Southeast Asia:

1. Bangladesh
2. Bhutan
3. India
4. Nepal
5. Sri Lanka
6. Myanmar (South-east Asia)
7. Thailand (South-east Asia)

• Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand are the member states dependent on the Bay of Bengal.
• Fourteen priority sectors of cooperation have been identified and several BIMSTEC centres have been established to focus on those sectors.
• The permanent secretariat of the BIMSTEC is in Dhaka, Bangladesh.

History of Formation

• In 1997, a new sub-regional grouping was formed in Bangkok under the name BIST-EC (Bangladesh, India, Sri Lanka, and Thailand Economic Cooperation).
• Following the inclusion of Myanmar on 22 December 1997 during a special Ministerial Meeting in Bangkok, the Group was renamed ‘BIMST-EC’ (Bangladesh, India, Myanmar, Sri Lanka and Thailand Economic Cooperation).
• In 2004, at the first Summit the grouping was renamed as BIMSTEC or the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation.

There are 14 main sectors of BIMSTEC along technological and economic cooperation among south Asian and southeast Asian countries along the coast of the Bay of Bengal.

1. Trade & Investment
2. Transport & Communication
3. Energy
4. Tourism
5. Technology
6. Fisheries
7. Agriculture
8. Public Health
9. Poverty Alleviation
10. Counter-Terrorism & Transnational Crime
11. Environment & Disaster Management
12. People-to-People Contact
13. Cultural Cooperation
14. Climate Change

The BIMSTEC uses the alphabetical order for the Chairmanship which has been taken in rotation commencing with Bangladesh (1997–1999).

Highlights of India’s views at 17th ministerial meet of BIMSTEC

• Cohesion among the members has been difficult to achieve mainly because of the Rohingya refugee crisis which created bitterness between Myanmar and Bangladesh. This affected the working of the organisation to some extent as it could not develop a common charter.
• The text of the BIMSTEC Charter, which will provide common set of rules and goals, has been finalized and is set for its adoption at the fifth BIMSTEC summit.
• The summit avoided any reference to Myanmar’s current crisis which has triggered an outflow of refugees to BIMSTEC members India and Thailand.
• After the 2017 exodus of the Rohingyas, the crisis is the second occasion where Myanmar’s domestic developments have triggered displacement of citizens.
• It is understood that despite the crackdown India has chosen to maintain communication with the military junta in Myanmar because of diplomatic requirements.
• The meeting also approved the BIMSTEC Master Plan for Transport Connectivity which will be taken up during the next summit of the organisation to be hosted by Sri Lanka.

BIMSTEC Free Trade Area Framework Agreement

• The BIMSTEC Free Trade Area Framework Agreement (BFTAFA) has been signed by all member nations to stimulate trade and investment in the parties, and attract outsiders to trade with and invest in the BIMSTEC countries at a higher level.
• The BIMSTEC Coastal Shipping Agreement draft was discussed on 1 December 2017 in New Delhi, to facilitate coastal shipping within 20 nautical miles of the coastline in the region to boost trade between the member countries.
• In 2019, the first ever BIMSTEC Conclave of Ports summit was held in Visakhapatnam, India, for providing a platform to strengthen maritime interaction, port-led connectivity initiatives and sharing best practices among member countries.

-Source: The Hindu

PAYMENT ARREARS TO SUGARCANE FARMERS REACHES 23K CRORE

Context:

Halfway through the marketing season, payment arrears from sugar mills to cane farmers have almost reached Rs. 23,000 crore, leading mills to lobby for the Centre to hike the minimum selling price of sugar.

Relevance:

GS-III: Agriculture (Agricultural Marketing and Pricing and related issues, Food Security)

Dimensions of the Article:

1. Sugar Industry in India
2. More about Sugarcane farmers plight of dues
3. Issues with the Sugarcane Industry
4. Government Initiative to manage the Sugarcane Industry

Sugar Industry in India

• India is the world’s largest consumer of sugar.
• India is the world’s largest producer of sugarcane and second largest producer of sugar after Cuba.
• Some 50 million farmers and millions of more workers, are involved in sugarcane farming.
• Sugar industry is broadly distributed over two major areas of production- Uttar Pradesh, Bihar, Haryana and Punjab in the north and Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh in the south.
• The major sugar producing states are Maharashtra, Uttar Pradesh and Karnataka in India.
• Uttar Pradesh is the highest sugarcane producing State in the sub-tropical zone.
• South India has tropical climate which is suitable for higher sucrose content giving higher yield per unit area as compared to north India.
• Khatauli’s Triveni Sugar Mill is the largest in Asia in terms of scale of production and storage capacity.

More about Sugarcane farmers plight of dues

• As of February 2021, dues of Rs. 22,900 crores were pending for the cane procured in the current season (October 2020 to February 2021).
• Data shows that more than half the dues are owed to farmers in Uttar Pradesh. Farmers from the sugarcane belt of western U.P. make up the bulk of protesters at the Ghazipur border site raising the issue of pending sugarcane dues, along with the wider issue of the repeal of the three farm reform laws.
• The prevailing low ex-mill sugar prices for the last several months, has adversely affected the liquidity of mills and their ability to pay the FRP [Fair and Remunerative Price] to cane farmers.
• Apart from price hikes, the other way to increase liquidity is reduce surplus stocks through exports.

Issues with the Sugarcane Industry

• Sugarcane has to compete with several other food and cash crops like cotton, oil seeds, rice, etc. This affects the supply of sugarcane to the mills and the production of sugar also varies from year to year causing fluctuations in prices leading to losses in times of excess production due to low prices.
• India’s yield per hectare is extremely low as compared to some of the major sugarcane producing countries of the world. For example, India’s yield is only 64.5 tonnes/hectare as compared to 90 tonnes in Java and 121 tonnes in Hawaii.
• Sugar production is a seasonal industry with a short crushing season varying normally from 4 to 7 months in a year. It causes financial loss and seasonal employment for workers and lack of full utilization of sugar mills.
• The average rate of recovery of sugar from sugarcane in India is less than ten per cent which is quite low as compared to other major sugar producing countries.
• High cost of sugarcane, inefficient technology, uneconomic process of production and heavy excise duty result in high cost of manufacturing.

Government Initiative to manage the Sugarcane Industry

Rangarajan committee (2012) was set up to give recommendations on regulation of sugar industry.

The Rangarajan committee recommended:

1. Abolition of the quantitative controls on export and import of sugar (to be replaced with appropriate tariffs)
2. No more outright bans on sugar exports and No restrictions on sale of by-products and prices should be market determined.
3. The central government has prescribed a minimum radial distance of 15 km between any two sugar mills, which needs to be reviewed as this criterion often causes virtual monopoly over a large area can give the mills power over farmers.
4. Remove the regulations on release of non-levy sugar.

-Source: The Hindu

BIDEN ALLOWS H1-B VISA BAN TO EXPIRE

Context:

The White House has allowed a 2020 ban on H1-B skilled worker and certain other temporary visas to expire on March 31.

Relevance:

GS-II: International Relations (Foreign Policies affecting India’s Interests, Indian diaspora)

Dimensions of the Article:

1. What is H-1B Visa?
2. What is a Green Card?
3. Why was the ban on certain H1-B visas imposed in 2020?
4. Impact of the 2020 U.S. Ban on Visas
5. The Current decision taken by the U.S. administration and its impact

What is H-1B Visa?

• The H-1B is a United States visa under the Immigration and Nationality Act, and it is one of the most popular visas for foreigners visiting the US for business or trade purpose.
• It is a non-immigrant visa that allows U.S. companies to employ foreign workers in speciality occupations that require theoretical or technical expertise.
• Speciality occupations include specialized fields like IT, finance, accounting, architecture, engineering, mathematics, science, medicine, etc. which usually require a bachelor’s degree or higher.
• US employers wishing to bring in staff for long-term assignment prefer H1B visa because its application is quicker than applying for a US Green Card.

What is a Green Card?

• A green card is a colloquial name for the identification card issued by U.S. Citizenship and Immigration Services to permanent residents, who are legally allowed to live and work in the U.S. indefinitely. Green cards got their nickname because they were green in color from 1946 to 1964.
• In 2010 they became green again, but the nickname persisted during the intervening decades of blue, pink and yellow “green cards.”
• The green card is a permanent resident ID issued to immigrants in the U.S.
• The green card lottery gives away up to 55,000 annual permanent visas to other countries.
• Permanent residents can be fined or jailed for not having their green card on their person.
• Green Cards must be renewed every 10 years.

Why was the ban on certain H1-B visas imposed in 2020?

• The ban was imposed by the Trump administration in June 2020 with the aim to prevent temporary workers across industries from entering the country and was later extended till March 31, 2021, citing the coronavirus pandemic.
• While the H1-B and other work visas have been criticised for allowing cheap labour in the US against the local workforce of the country, the visas have been useful to the country as a way of getting skilled and trained workers.
• Owing to this, tech industry leaders like Google CEO Sundar Pichai, Tesla CEO Elon Musk criticised Trump’s move.

Impact of the 2020 U.S. Ban on Visas

• Indian IT companies are amongst the biggest beneficiaries of the US H-1B visa regime, and have since 1990s cornered a lion’s share of the total number of visas issued each year.
• As of April 1, 2020, the US Citizenship and Immigration Services (USCIS) said Indians had applied for 67 per cent of the total H-1B work visas for the current financial year.
• This could result in a significant impact on margins and worker wages of Indian IT companies which send thousands of low-cost employees to work on client sites in the US.

The Current decision taken by the U.S. administration and its impact

• As US President Joe Biden promised during the run-up to the 2021 elections, the administration allowed the Trump-era proclamation to expire.
• The White House did not make an official statement on the suspension’s expiration.
• Visas for intra company transfers (L1), exchange visitors (J1), temporary non-agricultural workers (H-2B) and dependents of H1-B holders (H4) were also impacted by the expiring ban.
• The move is expected to help Indians as the major share of the H1-B visas are used by Indian professionals.
• The H1-B visas, which are approved for a period of three years, are a hiring pool for IT companies as it helps the companies keep their expenses in check.
• With the expiration of the order, those who were impacted by the travel ban will now be able to resume work in the US.
• The order will also allow US diplomatic missions, which are present in different countries, to issue fresh worker visas.
• It will thereby give permission to US-based IT companies to begin hiring foreign workers again.

-Source: The Hindu