GS2
CATEGORY: GOVERNANCE
- NRC Re-verification: Assam Firm
THE ISSUE IN NEWS
Assam government remains firm on its demand of 10-20% re-verification of the nationality claims made by some of the people included in the final National Register of Citizens (NRC), published in 2019.
- The state government’s plea for the re-verification is lying pending in Supreme Court (SC) for more than a year and the apex court is yet to stamp its approval on it.
- The NRC 2019 is yet to be approved by the Registrar General of India.
National Register of Citizens
- NRC is a register prepared in respect of each village, showing the houses or holdings in a serial order and indicating against each house or holding the number and names of persons staying therein.
- The register was first prepared after the 1951 Census of India and since then it has not been updated until recently.
- It has been updated in Assam only for now and the government plans to update it nationally as well.
- Purpose: To separate “illegal” immigrants from “legitimate” residents.
- Nodal Agency: Registrar General and Census Commissioner India.
Main Points
Background of the issue :
- the SC In 2018, mentioned the prospect of sample re-verification in an order, saying that it could consider re-verifying 10% of the names included in the NRC.
- In July 2019, the state government gave an affidavit in the SC seeking a reverification of 20% included names in the districts bordering Bangladesh and 10% in the rest of the districts.
- However, it was dismissed after the erstwhile coordinator of the NRC submitted that re-verification was already done.
Current Scenario:
- The state government of Assam has provided the latest data regarding ‘foreigner’ detection in the state.
- 1,36,149 people have been declared ‘foreigners’ by the state’s 100 functioning Foreigners’ Tribunals, whereas only 227 ‘foreigners’ have been deported from 13 March 2013 to 31 July 2020.
- There is a need for re-verification because people of Assam want a correct NRC.
- Also, there has been a delay in issuing the rejection slips to the over 19 lakh excluded people so that they can move court to claim nationality.
- Officials have cited the Covid-19 pandemic and the floods in the state as reasons for the delay.
- The rejection slips would carry the reason of rejection, which would differ from person to person and based on the reason they would be able to challenge their exclusion in the Foreigners’
- Every individual, whose name does not figure in the final NRC, can represent his/her case in front of the Foreigners Tribunals.
GS3
CATEGORY: ECONOMY
- Contraction of GDP by 23.9% in First Quarter
THE ISSUE IN NEWS
Recently National Statistical Office (NSO) released data regarding India’s Gross Domestic Product (GDP) growth contraction by 23.9% in the first (April-June) quarter of 2020 compared to the same period (April-June) in 2019.
- This is the sharpest contraction since India started reporting quarterly data in 1996.
- Gross Value Added (GVA) growth rate also declined by 22.8% in the first quarter of this financial year.
- GDP is a measure of economic activity in a country. It is the total value of a country’s annual output of goods and services. It gives the economic output from the consumers’ side. GVA is the sum of a country’s GDP and net of subsidies and taxes in the
Main Points
Data of various Sectors:
- Construction, manufacturing, trade, hotels and other services and mining were the worst-hit sectors, recording contractions of 50.3%, 39.3%, 47.0% and 23% respectively.
- This reflects the unprecedented suspension of economic activity in the first quarter of this fiscal due to the pandemic and the series of lockdowns.
- Only the agriculture sector showed a positive growth at 3.4%.
GDP Contraction Factors:
- The GDP growth In any economy is generated from one of the four engines of growth. i.e. private consumption, demand generated by private sector businesses, demand generated by government and exports.
- Private consumption has fallen by 27%. It is the biggest engine that drives the Indian economy.
- Investment by private sector businesses have fallen by 47%. It is the second biggest engine.
- The net export demand has turned positive in this first quarter because India’s imports have crashed more than its exports.
- While on paper, this provides a boost to overall GDP, it also points to an economy where economic activity has plummeted.
- The government’s expenditure went up by 16% but this was nowhere near enough to compensate for the loss of demand in other sectors (engines) of the economy.
Effect on various sectors:
- On Jobs: The sectors which have contracted (e.g. construction, manufacturing etc.) are the sectors that create the maximum new jobs in the country.
- Therefore, in a scenario where each of these sectors are contracting, would lead to more and more people either losing jobs (decline in employment) or failing to get one (rise in unemployment).
On Informal Sector:
- The real extent of the economic crisis is expected to be deeper given that the small-scale sector and informal sector is more affected than the organised sector, but is not reflected in the quarterly GDP
- In the informal sector, factory output figures are used to extrapolate the trends in the growth.
On Banks:
- The looming defaults in the banking sector after the moratorium ends will add to the banking sector woes, impacting bank’s lending. Also, there are worries regarding household debt, with incomes stagnating, salary cuts and job losses.
On Economy:
- With GDP contracting by more than what most observers expected, it is now believed that the full-year GDP could also worsen. A fairly conservative estimate would be a contraction of 7% for the full financial year.
Solution
- As the incomes of individuals fall sharply, they reduce consumption. When consumption falls sharply, businesses stop investing. Since both of these are voluntary decisions, there is no way to force people to spend more and/or coerce businesses to invest more.
- The same logic holds for exports and imports as well.
- Therefore under these circumstances, there is only one engine that can boost GDP, that is the government.
- Only when the government spends more — either by building roads and bridges and paying salaries or by directly handing out money — can the economy revive in the short to medium term. If the government does not spend adequately enough then the economy will take a long time to recover.
- Contraction of Core Sector by 9.6%
THE ISSUE IN NEWS
The output of eight core infrastructure sectors dropped by 9.6% in July 2020. It has been a continued contraction for the past five months.
Main Points
- Reasons: The contraction is due to decline mostly in production of steel, refinery products and cement.
- In general, the weak demand and over-supply along with global and domestic disruptions due to Covid-19 is hampering the mobilization of economic resources.
- In July, local demand growth has slowed because of high fuel prices, renewed lockdown in parts of the country and as monsoon rains hit transport, industrial and construction activity.
Scenario:
- The production of eight core sectors had expanded by 2.6% in July 2019. Barring Fertiliser (grew by 6.9%), all seven sectors — coal, crude oil, natural gas, refinery products, steel, cement and electricity — recorded negative growth in July.
- The output of steel saw the highest decline (16.5%). It was followed by refinery products (1.9%).
- The minimum contraction in the output is in the electricity sector with 2.3%.
Core Sector Industries
- The eight core sector industries include coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity.
- These comprise 27% of the weight of items included in the Index of Industrial Production (IIP).
- The eight core Industries in decreasing order of their weightage: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.
Industry Weight (In percentage)
- Petroleum & Refinery production 28.04
- Electricity generation 19.85
- Steel production 17.92
- Coal production 10.33
- Crude Oil production 8.98
- Natural Gas production 6.88
- Cement production 5.37
- Fertilizers production 2.63
Index of Industrial Production
- The Index of Industrial Production (IIP) is an indicator that measures the changes in the volume of production of industrial products during a given period.
- It is compiled and published monthly by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.
- 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.
- Base Year for IIP is 2011-2012.
Significance of IIP:
- 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.
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