9 PM Daily Current Affairs Brief – February 9, 2021

Good evening dear reader

Here is our 9pm current affairs brief for you today

Read Previous 9 PM Brief

1. Impacts and importance of GDP revised estimates
2. Why RBI kept interest rates Unchanged?
3. India’s strategy for Myanmar
4. Fragility of Himalayan Mountain Ecosystem

Impacts and importance of GDP revised estimates

Source – The Indian Express

Syllabus – GS 3 – Indian Economy and issues relating to planning, mobilization, of resources, growth, development, and employment.

Synopsis – Revised estimates of GDP have been released. It would impact the growth prediction and levels of the future National Income.

Introduction

• Last week all major financial publications were released i.e. economic survey, budget, and 1st bi-monthly monetary policy review.
• However, the first revised estimate of GDP growth in 2019-20 was not highlighted.
• This revision has not only revised the 2019-20 GDP growth rate, but also the GDP growth rate for 2017-18 and 2018-19.
• Accordingly, GDP estimates for 2019-20 have been revised from 4.2% to 4 percent. For 2017-18 revision is from 7% to 6.8% and for 2018-19 it is from 6.1% to 6.5%.

What are the key takeaways from GDP revision?

• First, There have been many revisions of GDP estimates. The growth rate is still not certain. For example, for 2016-17 the GDP growth rate went up from 7.1%, as per the First Advance Estimates, to 8.3% in the final analysis.
• Second, Revision in 2019-20 figures is important for the base year effect. Due to COVID-19 disruptions in 2020-21, the GDP figures of 2019-20 becomes important for the comparison. Lower estimates in 2019-20, can result in higher figures of 2020-21 and 2021-22.
• Third, India’s GDP growth rate already going downwards from 2016 i.e. following an inverted-V shape. The COVID-19 pandemic brought that to a complete halt. Thus, a “V-shaped” recovery, which is being talked about by the expert is meaningless. For an actual recovery, the gains should first surpass the level of 2019-20.

Way forward-

The pandemic did not change the growth trajectory [it was already going down], it only made the decline even more precipitous.

Why RBI kept interest rates Unchanged?

Source- The Hindu

Syllabus- GS 2 – Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Synopsis- Monetary Policy Committee [MPC] has kept the benchmark interest rates unchanged. It is proceeding with an accommodative stance of monetary policy.

Introduction

• MPC is keeping the rates unchanged to sustain the present economic growth.
• There are many factors that are providing space to MPC for keeping an accommodative stance of monetary policy.

What are the factors behind not changing the policy rates?

• First, retail inflation has been reduced in December, below the RBI’s upper tolerance threshold of 6%.
• Second, while the economy is on the path of revival, it still needs support from every angle.
• Third, the COVID-19 vaccine and budget proposal for infrastructure are boosting confidence in the economy.

What are the concerns for growth and inflation dynamics?

• Farmer’s agitation- The agitation involves farmers from key crop-growing States including Punjab, Haryana, and U.P. is a cause for concern. Prolong agitation has the potential to disrupt farm output.
• The Centre alone borrows 12-lakh crore at the gross level in the coming financial year, the debt manager faces the difficult task.

Steps taken by the Central Bank as the government’s debt manager –

• The enhanced held-to-maturity (HTM) limit for banks was extended till March 31, 2023. The facility would be provided to the banks buying debt issued by the Centre and States.
• Allowing retail investors to buy G-Secs [government securities] directly through the Reserve Bank [Retail Direct].

Way forward-

• The vaccine campaign would boost the economic turnaround, the budget proposals and expenditure plans have raised hopes for a more robust recovery.
• The RBI needs to keep its focus over inflation as the interest rates are too low. It may boost the consumption in the near future.
  

  ---

India’s strategy for Myanmar

Source: The Hindu

Syllabus: GS 2- India and its Neighborhood- Relations.

Synopsis: India’s Policy towards Myanmar should be a balance of India’s interest and India’s norms.

Background

• The recent military coup in Myanmar has once again created uncertainty regarding the future of Myanmar’s democracy.
• The U. S and the west have reacted strongly. The US threatened Myanmar about sanctions.
• Myanmar lies between two powerful states (India and China) competing for power and influence. Thus, Myanmar will always have geopolitical importance.
• Given the high stakes in Myanmar, India needs to craft well-thought-out strategic choices regarding the situation.

What are the issues that countries are facing in supporting Aung San Suu Kyi?

• The image of Aung San Suu Kyi declined globally due to her support towards the ill-treatment of Rohingyas. Yet, there is no other alternative for international communities other than Aung San Suu Kyi in Myanmar.
• The increasing global support for Aung San Suu Kyi will diminish the possibilities for justice to the Rohingyas in the International Court of Justice (ICJ).

How the coup will impact China?

The coup in Myanmar was more in the interest of the armed forces of Myanmar. However, it might affect China both negatively and positively.

• In the short run, the Coup is against the Economic interests of other countries including India and China. Also, for China, the coup has destabilised its larger regional economic plans in Myanmar.
• However, in the long run, Myanmar will be forced to seek China’s support if, the US imposes economic sanctions on Myanmar.
• It is likely that China will be ready to offer them support in return for increasing the Chinese footprint in the country. This will make China the biggest beneficiary of the recent Military Coup in Myanmar.

What is the dilemma faced by India?

Till now, the existence of dual power centers in Myanmar suited India’s interest very well. However, the coup has put India in a dilemma on how to respond to the military coup in Myanmar.

1. Myanmar’s military has been instrumental in controlling the insurgent groups in India’s northeast. They provided India with coordinated action and intelligence sharing.
2. The issue of Rohingya Muslims is equally important. The military rule in Myanmar will offer support for increasing prosecution for Rohingyas. This could potentially lead to a rise of extremism within the community. This will be definitely against India’s interests in the longer run.
3. If India’s national interest is given priority then, India would cooperate with Myanmar’s military. However, open support for the Military by India will lead to strong criticism by the West and especially America.
4. On the other hand, India cannot actively oppose Myanmar’s military. Because Suu Kyi has also supported strong ties with China. It was Myanmar’s military that has been more supportive of India.

Recently, the Ministry of External Affairs has voiced its opinion for upholding the rule of law and the democratic process in Myanmar. However, considering the regional geopolitics India’s Myanmar policy will be based on interests rather than norms.

What is the way forward?

• India must strive to push for political reconciliation in the country while maintaining relations with the government in power in Myanmar.
• In the meantime, India needs to focus on improving trade, connectivity, and security links between the two sides.

Read more about India-Myanmar relations

Fragility of Himalayan Mountain Ecosystem

Source: Down to Earth ,  The Hindu

Syllabus: GS 3- Conservation, Environmental Pollution, and Degradation, Environmental Impact Assessment.

Synopsis: The recent Glacial outburst in Uttarakhand’s Chamoli district is a consequence of human’s impact on climate and lack of awareness towards local ecology.

Background

• Recently a glacier collapsed in Uttarakhand’s Nanda Devi. According to some satellite images, the glacier collapsed as a result of a landslide. It resulted in flash floods in the Rishiganga and Dhauliganga rivers.
• It claimed many lives (including workers of the two hydropower projects).
• Although the ITBP through immediate action, rescued nearly 15 people. Many people are still missing.

How Climate change is impacting the Mountain ecosystem and how it is impacting Human livelihood?

1. Anthropogenic activities are continuously affecting the earth’s climate. The change in the Mountain ecosystem is an indicator of that effect.
2. Mountain ecosystems are highly vulnerable to climate change owing to their altitude, slope, and orientation to the sun.
3. Due to increased global warming, mountains’ glaciers are melting at unprecedented rates. It is reducing the area for the survival of flora and fauna.
   • For example, satellite observations reveal that across India, China, Nepal, and Bhutan, the melting of glaciers has doubled since the start of the 21st century.
4. The melting of glaciers threatens water sustainability for hundreds of millions of people in counties, including India. These impacts become severe due to the increase in pressure on water resources for irrigation and food production, industrialization, and urbanization.

What are the reasons for climatic disaster in Uttarakhand?

The frequent disasters in Uttarakhand are not only caused by nature but also due to an indiscriminate increase in hydropower projects.

• Uttarakhand mountain ecosystem faces various threats such as seismicity, dam-induced micro seismicity, landslides. For example, the entire State of Uttarakhand falls under Zone-IV and V of the earthquake risk map of India.
• Besides being an earthquake-prone zone, it is also prone to Flood disasters. Bursting of glacial lakes can cause flash floods with catastrophic consequences. For instance, moderate earthquakes in the Tehri dam caused the 2013 floods in Kedarnath.
• Despite all these threats, the Uttarakhand government has indiscriminately pursued a greater number of hydropower projects. For example, the ongoing Tapovan power project.
• Also, India has heavily invested in dam development and the growth of hydropower in the Himalayas’ region to cut carbon emissions.
  • For example, if the national plan to construct dams in 28 river valleys in the hills is completed, the Indian Himalayas will have one dam for every 32 km. (The highest density in the world).
• Apart from this, the life of dams is often exaggerated without taking a proper account of the siltation level in the dams. For example, in the Bhakra dam in Himachal Pradesh, the siltation was higher by 140% than calculated.

These hydropower projects are incompatible with the local environment and ecology. They have increased the risk of disaster manifolds impacting the life and livelihood of millions of people.

What is the way forward?

• The government should realize the fragility of the Himalayan mountain’s ecosystems. Governments need to re-prioritize their projects based on the potential of the mountains, local and traditional knowledge as well as the aspirations of the place.
• Hydro projects should be confined to the areas with the least impact in the Himalayas. Also, the government needs to build more low-impact run-of-the-river power projects rather than building destructive large dams and reservoirs.
• Projects that are incompatible with the local environment and ecology should not be promoted just by giving due consideration to development or economic growth.

Factly :-News Articles For UPSC Prelims | Feb 9, 2021

Factly :-News Articles For UPSC Prelims | Feb 9, 2021