Daily Current Affairs : 1st February 2022

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Daily Current Affairs for UPSC CSE

Topics covered

  1. Economic Survey
  2. Presidential Address
  3. Core Sector
  4. United Nations Commission on International Trade and Law Model Law
  5. Ethanol Blending
  6. Facts for Prelims

1 . Economic Survey

Context : India’s GDP is expected to grow by 9.2% this year and 8% to 8.5% in 2022-23, though hardening inflation and energy prices along with tightening of global liquidity pose a challenge, according to the Economic Survey for 2021-22 tabled by Union Finance Minister Nirmala Sitharaman in Parliament on Monday.

About Economic Survey

  • The Economic Survey is an annual report card of the economy, which is presented a day before the budget and examines the performance of each and every sector and then suggests future moves. 
  • The Economic Survey was de-linked from the Budget in 1964 and unveiled in advance in order to provide a context of the latter.
  • All the surveys have a theme. Last year, the theme was saving lives and livelihoods. In 2017-18, the Economic Survey was pink as the theme was women empowerment.
  • It consists of two parts – one includes the economic challenges the country is facing and the second is the analysis of the year gone by.

Significance

  • It reviews the economic development in India over the past financial year by analysing and providing detailed statistical data of all the sectors-industrial, agricultural, industrial production, employment, prices, exports, among others.
  • The survey also helps in giving a better understanding of the Union Budget by comprehending the country’s priority for the next financial year and what sectors would need more emphasis.

Who prepares the survey?

  • It is prepared by the Economics Division of the Department of Economic Affairs of the Finance Ministry under the overall guidance of the Chief Economic Adviser (CEA).
  • This year, the survey is being prepared by the Principal Economic Advisor and other officials in absence of the CEA. 
  • Just days before the presentation of the Economic Survey, the government has appointed economist V Anantha Nageswaran as the new CEA.
  • Even the first Economic Survey of the Modi government presented by the then Finance Minister Arun Jaitley in July 2014 was prepared by senior Economic Advisor Ila Patnaik.
  • At that time the post of CEA was vacant following the appointment of Raghuram Rajan as Governor of Reserve Bank of India. Later, Arvind Subramanian moved in as CEA in October 2014.

Note : Detailed Analysis of Economic Survey will be provided separately

2 . Presidential Address

Context : President Ram Nath Kovind on Monday lauded healthcare professionals, the government’s massive vaccination drive against COVID–19 aided by the indigenous production of vaccines and the citizens “who displayed profound faith in the democratic values, discipline and sense of responsibility” during the pandemic entering its third year, in his address to the joint Houses of Parliament at the start of the Budget session.

History & precedent

  • In the United Kingdom, the history of the monarch addressing the Parliament goes back to the 16th century.
  • In the United States, President Gorge Washington addressed Congress for the first time in 1790.
  • In India, the practice of the President addressing Parliament can be traced back to the Government of India Act of 1919. This law gave the Governor-General the right of addressing the Legislative Assembly and the Council of State. The law did not have a provision for a joint address but the Governor-General did address the Assembly and the Council together on multiple occasions.
  • There was no address by him to the Constituent Assembly (Legislative) from 1947 to 1950.
  • And after the Constitution came into force, President Rajendra Prasad addressed members of Lok Sabha and Rajya Sabha for the first time on January 31, 1950.

Constitutional Provision

  • The Constitution gives the President the power to address either House or a joint sitting of the two Houses of Parliament.
  • Article 87 provides two special occasions on which the President addresses a joint sitting.
  • The first is to address the opening session of a new legislature after a general election.
  • The second is to address the first sitting of Parliament each year.
  • A session of a new or continuing legislature cannot begin without fulfilling this requirement.
  • When the Constitution came into force, the President was required to address each session of Parliament. So during the provisional Parliament in 1950, President Prasad gave an address before every session.
  • The First Amendment to the Constitution in 1951 changed this position and made the President’s address once a year.
  • The Constitution states that the President shall “inform Parliament of the cause of the summons
  • The speech that the President reads is the viewpoint of the government and is written by it.
  • The government uses the President’s address to make policy and legislative announcements.

Procedure & tradition

  • In the days following the President’s address, a motion is moved in the two Houses thanking the President for his address.
  • The Prime Minister replies to the motion of thanks in both Houses, and responds to the issues raised by MPs.
  • The motion is then put to vote and MPs can express their disagreement by moving amendments to the motion.
  • Opposition MPs have been successful in getting amendments passed to the motion of thanks in Rajya Sabha on five occasions (1980, 1989, 2001, 2015, 2016). They have been less successful in Lok Sabha.
  • The President’s address is one of the most solemn occasions in the Parliamentary calendar. It is the only occasion in the year when the entire Parliament, i.e. the President, Lok Sabha, and Rajya Sabha come together.

3 . Core Sector

Context : Output from India’s eight core sectors grew 3.8% in December 2021, accelerating marginally from the 3.4% increase recorded in November, but still far from the healthy 8.4% year-on-year rise in October. Though output dipped year-on-year in just two sectors, crude oil (-1.8%) and steel (-1%), economists said signals from the data were mixed.

What is a core industry?

  • Core sectors or industry can be defined as the main industry of the economy. In most countries, these industries are backbone to other industries

Eight Core Industries (Mnemonic – EF, NRS, C3)

  1. Electricity
  2. Steel
  3. Refinery products
  4. Crude oil
  5. Coal
  6. Cement
  7. Natural gas
  8. Fertilizers

Index of Eight Core Industries

  • It is an index of the eight most fundamental industrial sectors of the Indian economy and it maps the volume of production in these industries.
  • The Index of Eight Core Industries is a monthly production index, which is also considered as a lead indicator of the monthly industrial performance. The index gives different weights to each of these sectors to arrive at a final figure.
  • Since these eight industries are the essential “basic” and/or “intermediate” ingredient in the functioning of the broader economy, mapping their health provides a fundamental understanding of the state of the economy. In other words, if these eight industries are not growing fast enough, the rest of the economy is unlikely to either.
  • Office of Economic Adviser within the Department for Promotion of Industry and Internal Trade releases the Index of Eight Core Industries (ICI) 

4 . United Nations Commission on International Trade and Law Model Law

Context : The Economic Survey 2021-22 has called for a standardised framework for cross-border insolvency as the Insolvency and Bankruptcy Code (IBC) at present does not have an instrument to restructure firms involving cross-border jurisdictions.

About UNCITRAL 

  • The United Nations Commission on International Trade and Law is the core legal body of the United Nations system in the field of international trade law.
  • UNCITRAL’s business is the modernization and harmonization of rules on international business.

About UNCITRAL Model Law of cross border insolvency

  • The UNCITRAL Model Law on Cross-Border Insolvency is a model law issued by the secretariat of UNCITRAL on 30 May 1997 to assist states in relation to the regulation of corporate insolvency and financial distress involving companies which have assets or creditors in more than one countries
  • The model law deals with four major  principles of cross-border insolvency, namely 
  1. Direct access to foreign insolvency professionals and foreign creditors to participate in or commence domestic insolvency proceedings against a defaulting debtor;
  2. Recognition of foreign proceedings & provision of remedies;
  3. Cooperation between domestic and foreign courts & domestic and foreign insolvency practioners; and
  4. Coordination between two or more concurrent insolvency proceedings in different countries.  

Need for adopting Model Law

  • The necessity of having Cross Border Insolvency Framework  under the Insolvency and Bankruptcy Code arises from the fact that many Indian companies have a global footprint and many foreign companies have presence in multiple  countries including India. 

Advantages

  • Precedence given to domestic proceedings and protection of public interest.
  • Greater confidence generation among foreign investors
  • Adequate flexibility for seamless integration with the domestic Insolvency Law and a robust mechanism for international cooperation.

Conclusion

  • Although the proposed Framework for Cross Border Insolvency will enable us to deal with Indian companies having foreign assets and vice versa, it still does not provide for  a framework for dealing with enterprise groups, which is still work in progress with UNCITRAL and other international bodies. 
  • The inclusion of the Cross Border Insolvency Chapter in the Insolvency and Bankruptcy Code of India, 2016, will be a major step forward and will bring Indian Insolvency Law  on a par with that of matured jurisdictions.

5 . Ethanol Blending

Context : The ethanol supply in the country to enable blending with petrol is likely to reach 302 crore litres, according to the Economic Survey 2021-2022.

About ethanol

  • Ethanol is a biofuel, that is, a fuel produced by processing organic matter.
  • Ethanol, an anhydrous ethyl alcohol having chemical formula of C2H5OH, can be produced from sugarcane, maize, wheat, etc  which are having high starch content.
  • In India, ethanol is mainly produced from sugarcane molasses by fermentation process.
  • Ethanol can be mixed with gasoline to form different blends.

Ethanol Blending Programme

  • The Ethanol Blending Programme (EBP) seeks to achieve blending of Ethanol with motor sprit with a view to reducing pollution, conserve foreign exchange and increase value addition in the sugar industry enabling them to clear cane price arrears of farmers.
  • Ethanol Blended Petrol (EBP) programme was launched in January, 2003.
  • The programme sought to promote the use of alternative and environment friendly fuels and to reduce import dependency for energy requirements.

How does blending ethanol reduce pollution?

  • As the ethanol molecule contains oxygen, it allows the engine to more completely combust the fuel, resulting in fewer emissions and thereby reducing the occurrence of environmental pollution.
  • Since ethanol is produced from plants that harness the power of the sun, ethanol is also considered as renewable fuel.
  • It can be mixed with fuel in different quantities and can help reduce vehicular emissions.
  • The auto fuels we commonly use are mainly derived from the slow geological process of fossilisation, which is why they are also known as fossil fuels.
  • Use of ethanol-blended petrol decreases emissions such as carbon monoxide (CO), hydrocarbons (HC) and nitrogen oxides (NOx), the expert committee noted.
  • Higher reductions in CO emissions were observed with E20 fuel — 50 per cent lower in two-wheelers and 30 per cent lower in four-wheelers. E20 fuel means blending of 20 per cent of ethanol with gasoline as an automotive fuel.

Roadmap of ethanol blending in India

  • The Centre had “launched pilot projects in 2001 wherein 5 percent ethanol blended petrol was supplied to retail outlets”.
  • Success of field trials eventually paved the way for the launching of the Ethanol Blended Petrol (EBP) Programme in January, 2003 for sale of 5 percent ethanol blended petrol in nine States and four UTs.
  • This programme has been extended to whole of India except Union Territories of Andaman Nicobar and Lakshadweep islands with effect from 01st April, 2019 wherein OMCs sell petrol blended with ethanol up to 10%.
  • India currently blends about 8.5 per cent ethanol in petrol. The government is targeting a 10 per cent ethanol blend by 2022 and a 20 per cent blend (E20) by 2025.

Pricing of Ethanol

  • Government has notified administered price of ethanol since 2014. For the first time during 2018, differential price of ethanol based on raw material utilized for ethanol production was announced by the Government.
  • These decisions have significantly improved the supply of ethanol thereby ethanol procurement by Public Sector OMCs has increased from 38 crore litre in ethanol supply year 2013-14 to estimated over 200 crore litre in 2018-19.

6 . Facts for Prelims

Minsk Agreement and Normandy Process

  • MINSK 1 – Ukraine and the Russian-backed separatists agreed a 12-point ceasefire deal in the capital of Belarus in September 2014. Its provisions included prisoner exchanges, deliveries of humanitarian aid and the withdrawal of heavy weapons, five months into a conflict that by that point had killed more than 2,600 people – a toll that has risen to more than 14,000 now, according to the Ukrainian government. The agreement quickly broke down, with violations by both sides.
  • MINSK II : Representatives of Russia, Ukraine, the Organisation for Security and Cooperation in Europe (OSCE) and the leaders of two pro-Russian separatist regions signed a 13-point agreement in February 2015 in Minsk. The leaders of France, Germany, Russia and Ukraine gathered there at the same time and issued a declaration of support for the deal.
  • The deal set out a series of military and political steps that remain unimplemented. A major blockage has been Russia’s insistence that it is not a party to the conflict and therefore is not bound by its terms. Point 10, for example, calls for the withdrawal of all foreign armed formations and military equipment from the two disputed regions, Donetsk and Luhansk: Ukraine says this refers to forces from Russia, but Moscow denies it has any there.
  • Normandy Process : The Normandy Format refers to discussions held between Russia, Ukraine, Germany and France, who have met since 2014, when Russia annexed Crimea. The four countries met in Paris on January 26 and are set to meet in Berlin in two weeks.

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