Daily Current Affairs for UPSC Civil Services Exam – 01 June 2021

Daily Current Affairs for UPSC Civil Services Exam – 01 June 2021

In Today’s News:

  1. April core sector output increases
  2. Fiscal deficit
  3. India’s GDP shrinks
  4. Chief Secretary

1. April core sector output increases

News Summary

Eight core sector output has jumped by 56.1% in April as per the official data.

Prelims GS – Economic Development

Index of Eight Core Industries:
  • Eight Core Industries comprises of the following industries:
    1. Coal
    2. Crude Oil
    3. Natural Gas
    4. Refinery Products (Petroleum)
    5. Fertilizers
    6. Steel
    7. Cement
    8. Electricity
  • The Index of Eight Core Industries is released by the Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry. (Note: UPSC Prelims Question expected)
  • In the index of eight core industries, Refinery products have the highest weight followed by Electricity and Steel.
  • The Eight Core Industries comprise 40.27 % of the weight of items included in the Index of Industrial Production (IIP).
Index of Industrial Production: (IIP)
  • Index of Industrial Production is an index that tracks manufacturing activity in various sectors of the economy.
  • The three broad sectors of IIP:
    • Mining,
    • Manufacturing,
    • Electricity
  • Besides these, the Index of eight core industries constitutes 40.27% of the weight of items in IIP.
  • IIP data is compiled and released monthly by the Central Statistical Organisation, Ministry of Statistics, and Programme Implementation.

2. Fiscal Deficit

News Summary

As per CGA data, the Fiscal Deficit has been recorded at 9.2% of GDP in 2020-2021 and is narrower than the forecasted Fiscal deficit of 9.5%.

Prelims GS – Economic Development

Fiscal deficit:
  • A fiscal deficit is a shortfall in a government’s income compared with its spending.
  • Fiscal Deficit is the difference between the total income of the government (total taxes and non-debt capital receipts) and its total expenditure.
  • A fiscal deficit occurs when the government’s expenditure exceeds the receipts.
  • Fiscal deficit= Total expenditure  – Total receipts except for borrowings.
  • The Finance Minister identified the fiscal deficit for FY 2019-20 at 3.8%(RE)  and pegged it at 3.5% (BE) for FY 2020-21 which is consistent with the government’s abiding commitment to macroeconomic stability as part of Medium Term Fiscal Policy cum Strategy Statement 2020-21.
  • Section 4(2) of the FRBM Act provides for a trigger mechanism for a deviation from the estimated fiscal deficit on account of structural reforms in the economy with unanticipated fiscal implications.
  • Therefore,  a deviation of 0.5%, consistent with Section 4(3) of the FRBM Act, both for RE 2019-20 and BE 2020-21 was taken by the Government.
FRBM Act 2003:
  • FRBM Act is an Act to provide for the responsibility of the Central Government to ensure inter-generational equity in fiscal management and long-term macro-economic stability by removing fiscal impediments in the effective conduct of monetary policy and prudential debt management consistent with fiscal sustainability through limits on the Central Government borrowings, debt and deficits, greater transparency in fiscal operations of the Central Government and conducting fiscal policy in a medium-term framework and for matters connected therewith or incidental thereto.
  • “Fiscal deficit” means the excess of total disbursements, from the Consolidated Fund of India, excluding repayment of the debt, over total receipts into the Fund (excluding the debt receipts), during a financial year.

Click here to view the FRBM act.

3. India’s GDP Shrinks

News Summary

As per the National Income estimates released by the National Statistical Office, GDP has shrunk by 7.3% in 2020-2021 and GVA shrunk 6.2% in 2020-2021.

Prelims GS – Economic Development

GDP:
  • Gross Domestic Product
  • GDP is the total value of all finished goods and services produced within a country during a specific period
GVA:
  • Gross Value Added
  • GVA= Value of output –value of intermediate consumption
  • GVA is a measure of contribution to GDP by a producer, industry, or sector
  • GVA= rupee value of goods and services – the cost of inputs and raw materials
The Relation between GVA and GDP:

GDP at market prices= ∑GVA at basic prices + product taxes –subsidies

Mini Insights

Mains GS3 – Economic Development

Applications of GVA :
  • GVA helps us understand how various sectors are performing.
  • It reflects the exact demand conditions in an economy and helps in making necessary policy interventions.
  • Since this is a global practice in national income accounting, a country that tends to attract foreign investment needs to follow GVA to adopt best practices.

4. Chief Secretary

News Summary

There is a piece of political news related to the Chief Secretary of West Bengal. The news as such is not important. But from the examination perspective, we may need to know some information about the Chief Secretary.

Prelims GS – Polity/Governance

Chief Secretary:
  • Chief Secretary acts as an advisor to the Chief Minister of a state and the government on administration.
  • Chief Secretary of a state has no specific tenure.(UPSC 2016 Prelims question)
  • Chief Secretary is the Head of state civil services.
  • The Chief Secretary of a particular state is chosen by the Chief Minister of the state.
  • The Chief Secretary acts as the official spokesperson of the State Government.

 

 

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