Syllabus subtopic: Modern Indian history from about the middle of the eighteenth century until the present- significant events, personalities, issues

Prelims and Mains focus: About the Bhima Koregaon conflict; its outcome and significane

News: Lakhs of devotees, neo-Buddhists, members of Ambedkarite outfits, politicians, students and other visitors are expected to congregate near the ransthamb or victory pillar in Bhima-Koregaon village for the 202nd anniversary of the Bhima-Koregaon battle of 1818 on New Year’s Day on Wednesday.

About Bhima-Koregaon conflict

• The battle was fought in Bhima Koregaon, a district in Pune with a strong historical Dalit connection, between the Peshwa forces and the British on January 1, 1818.

• The British army, which comprised mainly of Dalit soldiers, fought the upper caste-dominated Peshwa army. The British troops defeated the Peshwa army.

Outcomes of the battle:

• The victory was seen as a win against caste-based discrimination and oppression. Peshwas were notorious for their oppression and persecution of Mahar dalits. The victory in the battle over Peshwas gave dalits a moral victory, a victory against caste-based discrimination and oppression and sense of identity.

• However, the divide and rule policy of the British created multiple fissures in Indian society which is even visible today in the way of excessive caste and religious discrimination which needs to be checked keeping in mind the tenets of the Constitution.

Why Bhima Koregaon is seen as a Dalit symbol?

• The battle has come to be seen as a symbol of Dalit pride because a large number of soldiers in the Company force were the Mahar Dalits. Since the Peshwas, who were Brahmins, were seen as oppressors of Dalits, the victory of the Mahar soldiers over the the Peshwa force is seen as Dalit assertion.

• On 1 January 1927, B.R. Ambedkar visited the memorial obelisk erected on the spot which bears the names of the dead including nearly two dozen Mahar soldiers. The men who fought in the battle of Koregaon were the Mahars, and the Mahars are Untouchables.

FM unveils Rs.102 tn infra push to reignite growth

Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Prelims and Mains focus: on the government’s move to boost infrastructure investments and the role of NIP; Greenfield and brownfield projects

News: Finance minister Nirmala Sitharaman on Tuesday unveiled a plan to invest ? 102 trillion over five years to develop social and economic infrastructure to boost India’s sagging growth.

How the projects will get implemented and the role of NIP

• The projects will be implemented under the National Infrastructure Pipeline (NIP) mechanism.
• The task force for the purpose was set up after PM Modi, in his Independence Day speech, promised to roll out an ambitious infrastructure push worth Rs.100 trillion over the next five years to make India a $5 trillion economy.
• This exercise, the first of its kind, is expected to be followed up by a periodical review process. NIP will enable a forward outlook on infrastructure projects, which will create jobs, improve ease of living and provide equitable access to infrastructure for all, thereby making growth more inclusive.
• Greenfield and brownfield projects worth more than ?100 crore per project that may be at the conceptualization stage, under implementation and under development would be part of NIP.
• The projects will be spread across 21 ministries and 18 states and Union territories.
• While the Centre and states will contribute 39% each of the project cost, the private sector will contribute 22%. By 2025, it is expected that the private sector contribution will rise to 30%.

• Suggestions for reforms made by various working groups under the task force will be taken up. This will include reforming the contracts based on the public-private partnership model, enforcement of contracts and the dispute resolution process.
• A robust monitoring mechanism will also be established.
• Between FY20 and FY25, sectors such as energy (24%), roads (19%), urban (16%) and railways (13%) amount to around 70% of the projected capital expenditure in infrastructure in India.
• Out of the total expected capital expenditure of ?102 trillion, projects worth ?42.7 trillion (42%) are under implementation, which includes expressways and the national gas grid.
• Projects worth ?32.7 trillion (32%) are in the conceptualization stage and the rest are under development, which includes urban, roads and renewable energy.

Other measures taken by the govt. to boost economic growth

• The government has taken a raft of measures to address a slowdown in the broader economy, including a massive corporate tax cut and sector- specific steps. However, a renewed thrust on infrastructure projects is expected to increase economic activity, generate employment and boost demand.
• Encouraging more private sector investment in the infrastructure space can create additional fiscal space for the government.

Reforms suggested by the NIP report

• To boost investment in the infrastructure sector, the NIP report released by the finance minister also suggested general reforms and updating sector policies.
• The report said it is critical to have a robust project preparation framework consisting of a transparent policy and legislative framework, presence of guidelines, model bidding documents and standard procedures, design, multistage reviews and audits.
• “Inadequate attention to project planning may lead to avoidable delays in the implementation of the project or may even lead to the scrapping of projects prior to its implementation,” said the NIP report.
• The report also called for robust private sector participation in the infrastructure sector and optimal risk sharing between the public and private sector entities, such that the risks are allocated to entities best equipped to handle them.

What are Greenfield and Brownfield projects?

• The Greenfield project means that work which does not follow prior work. In infrastructure, the projects on unused lands where there is no need to remodel or demolish an existing structure are called Green Field Projects.
• The projects which are modified or upgraded are called brownfield projects.

Core sectors shrink for the fourth straight month

Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Prelims and Mains focus: about the eight core sectors of the Indian Economy and their performance; Index of Industrial Production

News: India’s eight infrastructure sectors shrank for the fourth straight month in November at 1.5%, though the magnitude of contraction slowed from 5.8% in the previous month. The eight core sectors contribute 40% to the Index of Industrial Production.

What does it signify?

• The slowing of the pace of contraction is being interpreted by some economists as a sign of green shoots, indicating that the economy is on a recovery path.

Background

• India’s economic growth decelerated to a six-and-a-half-year low of 4.5% in the September quarter on the back of slowing domestic and external demand.

• Data released by the Controller General of Accounts on Friday showed that the government exceeded its 2019-20 fiscal deficit target by 114.8% during the April-November period.

• After reducing policy rates five consecutive times by a cumulative 135 basis points, the Reserve Bank of India (RBI) opted for a pause in its December monetary policy review, given the sharp increase in retail inflation and weak monetary transmission from its earlier rate cuts. Retail inflation quickened to 4.6% in October, propelled by a surge in food prices.

• Earlier last month, RBI pared its growth forecast to 5% for 2019-20 from its October estimate of 6.1%, citing weak business and consumer sentiment. “While improved monetary transmission and a quick resolution of global trade tensions are possible upsides to growth projections, a delay in the revival of domestic demand, a further slowdown in global economic activity and geopolitical tensions are downside risks,” said RBI.

Sector-wise performance

• Five of the eight infra sectors reported a drop in output in November, according to data released by the industry department on Friday.
• Cement production bounced back to 4.1% growth, recovering from monsoon-related disruptions, while the output of refinery products accelerated to 3.1% in November. The output of coal and electricity sectors shrunk at a slower pace of 2.5% and 5.7%, respectively, in November from the previous month.
• However, crude oil, natural gas and steel saw their output shrink at a faster pace in November than in October.
• The core sector growth numbers for November, though disappointing, have a silver lining as sectors such as cement and fertilizers have registered growth.

About Index of Industrial Production (IIP)

• IIP is a composite indicator measuring changes in the volume of production of a basket of industrial products over a period of time, with respect to a chosen base period.
• It is compiled and published on a monthly basis by the Central Statistics Office (CSO) with a time lag of six weeks from the reference month.

The current account deficit narrows to 0.9% of GDP

Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Prelims and Mains focus: about the Current Account Deficit (CAD) and the reasons for it narrowing down this fiscal: about External Commercial Borrowings (ECBs)

News: India’s current account deficit (CAD) narrowed to 0.9% of GDP, or $6.3 billion, in the September 2019 quarter, on account of a lower trade deficit. It had stood at 2.9% of the gross domestic product (GDP), or $19 billion, in the corresponding quarter of 2018­-19.

On a sequential basis, CAD had printed 2% of GDP, or $14.2 billion, in the June 2019 quarter. “The contraction in the CAD was primarily on account of a lower trade deficit at $38.1 billion as compared with $50 billion a year ago,” the Reserve Bank of India (RBI) said in a release on Tuesday.

Yearly trend of various parameters in 2019 vis-à-vis 2018

• During the first half of the current financial year, CAD narrowed to 1.5% of the GDP from 2.6% in the corresponding period in 2018­19, on the back of a reduction in the trade deficit, which shrank to $84.3 billion as compared with $95.8 billion a year ago. The balance of payments stood at $5.12 billion in the second quarter and $19.1 billion during the first half of this fiscal.
• Net services receipts increased 0.9% in July­September on a year­on­year basis, on the back of a rise in net earnings from computer, travel and financial services, the RBI said.
• In the second quarter of 2019­20, private transfer receipts, mainly representing remittances by Indians employed overseas, rose to $21.9 billion, a rise of 5.2% compared to a year ago.
• The net inflow on account of external commercial borrowings (ECB) was $3.2 billion in the second quarter as compared with $2 billion a year earlier.

About Balance of Payments (BOP)

Balance of Payment is systematic record of overall international economic transactions during specific time period

• It takes into account the export and import of both Goods(Visible items) and Services (Invisible items)
• World’s net Balance of Payment is always zero.

• The BOP of a country gives information about its ability to pay for its imports. It gives information about the position of the country with respect to issues like currency crisis, capital flows and its impact on the economy etc. It also gives valuable insights into its economic output which is required for its economic growth.

Components of the Balance of payments (BOP)

The components of the balance of payment are:

Current account: It includes the financial transactions dealing with the export and import of goods, services, unilateral transfers, investment income etc.

Capital account: It includes the financial transactions dealing with assets such as foreign direct investment, foreign portfolio investment, foreign loans etc.

Official reserve transactions: It is conducted by the central bank in case of the BOP deficit or BOP surplus.

Errors and omissions: It is the element of BOP (other than the current account and the capital account) which refers to the balancing items reflecting the inability to record all the international financial transactions.