Daily CURRENT AFFAIRS

Daily Current Affair - UPSC/KAS Exams - 1st Jan 2022

NEWS

India’s Balance of Payments (BoP) position moved to a deficit of $9.6 billion in the quarter ended September (Q2), as widening trade deficit weighed.

BALANCE OF PAYMENTS

WHAT

• Record the transactions in goods, services, and assets
• Between residents of a country with the rest of the world for a specified time period typically a year.

COMPONENTS

• Current Account : Records exports and imports in goods, trade in services and transfer payments.
• Capital Account: Records all international purchases and sales of assets such as money, stocks, bonds, etc. It includes foreign investments and loans.

Note:

• The IMF accounting standards of the BOP statement divides international transactions into three accounts: the current account, the capital account, and the financial account, where the current account should be balanced by capital account and financial account transactions. In India, the financial account is included in the capital account itself.
• Grants might appear as component of capital account but are included in current account as they are unilateral, create no liability. Recipient does not have to give anything back in return.

BOP DISEQUILIBRIUM

Balance of payments equilibrium - When the demand for foreign exchange in exactly equivalent to the supply of it.BOP is regarded as being in disequilibrium when it shows either a surplus or a deficit.

Factors Causing disequilibrium –

Economic Factors:

• Large scale development expenditures generally increase the purchasing power, aggregate demand and prices, which results in substantially large imports.
• Cyclical fluctuations of general business activity such as boom and depression are one of the prominent reasons for balance of payments disequilibrium. Depression always brings about a drastic shrinkage in world trade, while prosperity stimulates it.
• Certain secular trends in the economy. For instance, in a developed country, the disposable income is generally very high and, therefore, so is the aggregate demand. At the same time, the production costs are also very high due to the higher wages. This naturally results in higher prices.
• Development of alternative source of supply, development of better substitutes, exhaustion of productive resources or change in transport routes and costs.

Political Factors: Political instability may experience large capital outflow and inadequacy of domestic investment and production. Factors like war of changes in the world trade routes could also produce similar difficulties.

Social Factors : Changes in the tastes, preferences and fashions, may affect imports and exports and thereby affect the balance of payments.

Monetary Measures

• Contraction of money supply is likely to reduce the purchasing power and thereby, the aggregate demand. It is also likely to reduce domestic prices.
• A country with fundamental disequilibrium in the balance of payments may devalue to currency in order to stimulate its exports and discourage imports to correct the disequilibrium. Devaluation makes export goods cheaper and imports dearer.
• The recipients of foreign exchange, like exporters, are required to surrender foreign exchange to the government/central bank in exchange for domestic currency
• Exports may be encouraged by reducing or abolishing export duties, providing export subsidy, encouraging export production and export marketing by giving monetary, fiscal, physical and institutional incentives and facilities.
• Imports may be controlled by improving or enhancing import duties, restricting imports through import quotas, licensing and even prohibiting altogether the import of certain inessential items.

NEWS

GST Council’s 46th meeting was held recently

WHAT HAPPEN AT THE MEET

• Recommended to defer the decision to change the rates in textiles recommended in the 45th GST Council meeting
• Existing GST rates in textile sector would continue beyond 1st January, 2022.

ABOUT GST COUNCIL

WHAT - Constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.

FORMATION

• Article 279-A
• President to constitute a GST Council by an order
• Secretariat of the Council is located in New Delhi
• Union Revenue Secretary acts as the ex-officio Secretary to the Council.

FUNCTIONS

• Will take all important decisions regarding the GST
• Dictates tax rate, tax exemption, the due date of forms, tax laws, and tax deadlines, keeping in mind special rates and provisions for some states.
• Predominant responsibility is to ensure to have one uniform tax rate for goods and services across the nation.

STRUCTURE

• Joint forum for the Centre and the States
• The Union Finance Minister will be the Chairperson
• As a member, the Union Minister of State will be in charge of Revenue of Finance
• The Minister in charge of finance or taxation or any other Minister nominated by each State government, as members.

• ndex of the eight most fundamental industrial sectors of the Indian economy
• Maps the volume of production in these industries.
• Weight of Core Industries in IIP

• 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.

NEWS

Defence Minister Rajnath Singh inaugurated 27 projects built by the Border Roads Organisation (BRO) recently

THE ROAD

• Is in south Ladakh
• Connecting Chisumle and Demchok
• Passes through a pass known as Umling La (height of over 19,000 feet)
• Height of the pass makes it the highest motorable road in the world
• Recently recognised as such by Guinness World Records.
• Built under extremely challenging conditions, as temperatures in the region can fall to below minus 40 degrees Celsius, and oxygen levels go down to 50 per cent below normal.
• 60-metre bridge has been built at the point called Km 99.3 on the road.

NEWS

POWERGRID celebrated anniversary of One Nation-One Grid-One Frequency on 31 December

About One Nation One Grid One Frequency

Grid management in the country, on a regional basis started in the sixties. At the beginning, state grids were interconnected to form a regional grid and India was demarcated into 5 regions namely Northern, Eastern, Western, North Eastern and Southern regions. With time each grid was connected to the other, to allow greater availability and transfer of power. It all came together when the Southern Region was connected to the Central Grid, with commissioning of 765 kV Raichur-Solapur Transmission Line, thereby achieving ‘ONE NATION-ONE GRID-ONE FREQUENCY’

ABOUT POWER GRID

• Originated in 1989 under the Companies Act of 1956,
• Incorporated as the National Power Transmission Corporation of India limited, Name was changed in 1992
• Incorporated as a public limited company, wholly owned by the Government of India.
• Now, it is a Maharatna company.
• Headquartered in Gurugram.
• Businesses include power transmission and distribution and energy trading.
• Subsidiary company POSOCO (Power System Operation Corporation Ltd.) engages in power management.
• Also has a telecom business named POWERTEL.
• Functions
  • Administration of Transmission of Power
  • Planning the projects
  • Executing the projects
  • Owning and operating the projects
  • Maintaining the projects

• India steamroll Sri Lanka by 9 wickets for eighth U-19 Asia Cup title
• Director General VS Pathania, took over as the 24th Chief of Indian Coast Guard
• Ministry of Housing and Urban Affairs (MoHUA)  announced the opening of  Urban Geospatial Data Stories Challenge to foster adoption of geospatial technologies & to promote innovation in India’s urban ecosystem. The challenge has been organized with select Smart Cities that will be publishing high quality GIS datasets.
• Officials of the Bharat Electronics Limited (BEL) have said that international clients are on its roster for the export of L-Band 3D Air Surveillance Radar RAWL-03 manufactured by the defence public sector undertaking. RAWL-03 antenna is compact and can be accommodated on wheeled vehicles and ships.