Current Affairs for UPSC IAS Exam – 3 May 2021

Contents

1. India’s GDP to grow at 11% this fiscal, says ADB
2. Core sector output up 6.8% in March
3. Vande Bharat: One of the top civilian evacuations

India’s GDP to grow at 11% this fiscal, says ADB

Context:

The Indian economy is projected to grow at 11% in the current financial year amid the “strong” vaccine drive, said the Asian Development Bank (ADB) in its report – Asian Development Outlook (ADO) 2021.

Relevance:

GS-III: Indian Economy (Growth and Development of Indian Economy, Mobilization of Resources)

Dimensions of the Article:

1. Highlights of Asian Development Outlook (ADO) 2021
2. ADO 2021 on Impact of the Pandemic
3. About Asian Development Bank (ADB)

Highlights of Asian Development Outlook (ADO) 2021

• India’s Gross Domestic Product (GDP) will rebound strongly by 11% in Fiscal Year (FY) 2021-22 due to continued economic recovery boosted by increased public investment, vaccine rollout, and a surge in domestic demand.
• India’s economic growth will moderate to 7% in FY 2022-23.
• Indian economy is expected to have contracted by 8% in FY 2020-21 in line with the government’s second advance estimate.
• The ADB cited 2021’s ‘more targeted’ containment measures compared with 2020’s ‘large-scale’ national lockdown and said these would prove ‘less costly’ to the economy.
• A stimulus-fuelled surge in the U.S., India’s largest export market, will support the revival, but a severe second COVID-19 wave is threatening the recovery.
• ADB sees India’s average inflation rate slowing to 5.2% in 2021 from 6.2% in the last fiscal of 2020, and reverting to 4.8% (recorded in 2019-20), over the succeeding 12 months.

• Developing Asia’s economic growth is set to rebound to 7.3% in 2021-22. This follows a 0.2% contraction in 2020.
• Developing Asia comprises 46 members of ADB list on the basis of geographic group- including new industrialized economies, countries in Central Asia, East Asia, South Asia, Southeast Asia and the Pacific. [India is also a part of Developing Asia].

ADO 2021 on Impact of the Pandemic

• Pandemic remains the biggest risk for the region (Developing Asia) as potential delays in vaccine rollouts or significant new outbreaks could undermine growth.
• Increasing geopolitical tensions, production bottlenecks, financial turmoil from tightening financial conditions, and long-term scarring like learning losses due to school closures are among other risk factors.

School Closure factor

• Countries are using distance learning, but this is only partially effective as many students lack access to computers and the internet.
• These disruptions will affect the skills students acquire and, eventually, their productivity and earnings as future workers.
• Learning losses range from 8% of a year of learning in the Pacific, where schools have mostly stayed open, to 55% in South Asia, where school closures have been longest.
• The present value of students’ future earning reductions is estimated at USD 1.25 trillion for developing Asia, equivalent to 5.4% of the region’s GDP in 2020.

About Asian Development Bank (ADB)

• The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966 to promote social and economic development in Asia.
• It is headquartered in the city of Mandaluyong, Metro Manila, Philippines.
• The ADB was modeled closely on the World Bank and an official United Nations Observer.
• Japan holds the largest proportion of shares in ADB followed by the USA, and it has a weighted voting system where votes are distributed in proportion with members’ capital subscriptions (just like the World Bank).
• The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly the Economic Commission for Asia and the Far East or ECAFE) and non-regional developed countries.
• ADB defines itself as a social development organization that is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
• ADB aids in reducing poverty through investments in the form of loans, grants and information sharing (in infrastructure, health care services, financial and public administration systems), helping nations prepare for the impact of climate change or better manage their natural resources, as well as other areas.
• ADB is an official United Nations Observer.
• India was a founding member of the Asian Development Bank (ADB) in 1966 and is now the bank’s fourth largest shareholder and top borrower.

-Source: Down to Earth Magazine, The Hindu

Core sector output up 6.8% in March

Context:

Driven by base effect-led uptick in production of natural gas, steel, cement and electricity – the output of eight core sectors grew by 6.8% in March 2021.

Relevance:

GS-III: Indian Economy (Growth and Development of Indian Economy, Mobilization of Resources)

Dimensions of the Article:

1. What is Index of Industrial Production (IIP)?
2. What is Base-effect?

What is Index of Industrial Production (IIP)?

• The Index of Industrial Production (IIP) is an index that shows the growth rates in different industry groups of the economy in a fixed period of time.
• It is compiled and published MONTHLY by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.
• Base Year for IIP is 2011-2012.
• IIP is a composite indicator that measures the growth rate of industry groups classified under:
• Broad sectors, namely, Mining, Manufacturing, and Electricity.
• Use-based sectors, namely Basic Goods, Capital Goods, and Intermediate Goods

The Eight Core industries of IIP are:

1. Coal
2. Crude Oil
3. Natural Gas
4. Refinery Products
5. Fertilizers
6. Steel
7. Cement
8. Electricity.

Significance of IIP:

• IIP is the only measure on the physical volume of production.
• It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc., for policy-making purposes.
• IIP remains extremely relevant for the calculation of the quarterly and advance GDP estimates.

What is Base-effect?

• The base effect is the effect that choosing a different reference point for a comparison between two data points can have on the result of the comparison. This often involves the use of some kind of ratio or index value between two points in a time-series data set, but can also apply to cross-sectional or other types of data.
• Using a different reference or base for comparison can lead to a large variation in ratio or percentage comparisons between data points – hence, base effect can lead to distortion in comparisons and deceptive results, or, if well understood and accounted for, can be used to improve our understanding of data and the underlying processes that generate them.

In the current example of 8 core industries output data: Production of natural gas, steel, cement and electricity jumped 12.3%, 23%, 32.5% and 21.6% in March 2021, as against (-) 15.1%, (-) 21.9%, (-) 25.1% and (-) 8.2% in March 2020, respectively (low base effect).

-Source: The Hindu

Vande Bharat: One of the top civilian evacuations

Context:

The Vande Bharat Mission (VBM), which started repatriating Indians stranded abroad due to COVID-19 and the resultant lockdowns since May 7 2020 has turned out to be one of the largest evacuations of civilians by a country.

Relevance:

GS-II: Social Justice, Governance (Government Policies & Interventions)

Dimensions of the Article:

1. India’s Evacuations in the Past
2. Vande Bharat Mission (VBM) 2020-2021

India’s  Evacuations in the Past

Evacuation from the Gulf after Invasion of Kuwait(1990-91)

• The 1990 airlift of Indians from Kuwait was carried out from August 13, 1990 to October 20, 1990 after the Invasion of Kuwait. Air India helped evacuate 170,000 people by civil airliners.
• The operation was carried out before the Persian Gulf War in 1990 to evacuate Indian expatriates from Kuwait.
• Air India, the flag carrier Indian airline entered the Guinness Book of World Records for the most people evacuated by a civil airliner.

Operation Sukoon in 2006 during Lebanon War

Operation Sukoon was an operation carried out by the Indian Navy to evacuate Indian, Sri Lankan and Nepalese nationals, from the conflict zone during the 2006 Lebanon War.

It was one of the largest evacuations conducted by the Indian Navy in which a total of more than 2000 people were evacuated.

Operation Safe Homecoming in 2011 during Libyan Civil war

Operation Safe Homecoming was launched by the Indian government on 26th February, 2011 to evacuate its citizens, fleeing from the Libyan Civil War.

The air-sea operation was conducted by the Indian Navy and Air India. Around 15,000 civilians were rescued in the operation.

Operation Maitri in 2015 during Nepal earthquake

Operation Maitri was a rescue and relief operation, carried out by the government of India and Indian armed forces in the aftermath of the April 2015 Nepal earthquake.

The Indian Armed Forces evacuated more than 5000 persons, while nearly 800 foreign tourists were provided transit visas.

Operation Raahat in 2015 during Yemen Crisis

It was launched by the Indian Armed Forces, to evacuate 4,640 Indian citizens and 960 foreign nationals of 41 countries from Yemen during the 2015 Yemen Crisis.

The evacuation took place both by sea and the air.

Vande Bharat Mission (VBM) 2020-2021

The Vande Bharat Mission (VBM) is the biggest civilian evacuation exercise to bring back Indian citizens stranded abroad amidst the coronavirus-induced travel restrictions.

The mission is undergoing its 10th phase and has carried 32 lakh passengers approximately both inbound and outbound.

• Besides, helping distressed rural farmers and the NRIs, the aim of the mission is to keep the supply chain intact.
• While overseas Indians from as many as 93 countries have availed repatriation through the VBM, the government has entered into special travel arrangements called ‘air travel bubbles’ with 18 different countries so far.

-Source: The Hindu