Factly :-News Articles For UPSC Prelims | Jan 08,2021

GDP likely to contract by 7.7% in 2020-21, says Govt.

News: National Statistical Office(NSO), Ministry of Statistics and Programme Implementation(MoSPI) has released the First Advance Estimates (FAE) for 2020-21.


  • What are the First Advance Estimates(FAE)? For any financial year, the MoSPI provides regular estimates of GDP. The first such instance is through the FAE. The FAE for any particular financial year is typically presented on January 7th.
  • Significance: FAE significance lies in the fact that they are the GDP estimates that the Union Finance Ministry uses to decide the next financial year’s Budget allocations.
  • Based on: The FAE are based on the benchmark-indicator method. The sector-wise estimates are obtained by extrapolation of indicators like:
    • Index of Industrial Production(IIP) of first seven months of the financial year
    • Financial performance of listed companies in the private corporate sector available up to quarter ending September,2020
    • First Advance Estimates of crop production
    • Accounts of Central and state governments
    • Information on indicators like deposits and credits, passenger and freight earnings of Railways, passengers and cargo handled by civil aviation, cargo handled at major sea ports, sales of commercial vehicles available for the first eight months of the financial year.

Key Takeaways:

  • GDP: India’s real GDP (Gross Domestic Product) is estimated to contract by 7.7% in 2020-21, compared to a growth rate of 4.2% in 2019-20.India will witness a negative GDP growth rate for the first time after 1979-80.
    • Reason: The reason for the contraction has been the disruption caused by Covid-induced lockdowns which saw the economy contract by almost 24% in the first quarter and by 15.7% during the first half of the year.
  • Gross Value Added(GVA): It provides a picture of the economy from the supply side. It maps the value-added by different sectors of the economy such as agriculture, industry and services. The real GVA will also shrink by 7.2%.
  • Positive Growth: Just two sectors are estimated to record positive growth in GVA this year with Agriculture continuing its strong run through the first half of year to the second half (3.4%) and Electricity, Gas, Water Supply & Other Utility services(2.7%).
    • However, the sharpest decline in the pandemic-dented year is expected to be in the Services Sector.
  • Private Final Consumption Expenditure (PFCE): The biggest demand for goods and services comes from private individuals trying to satisfy their consumption needs. This demand is called PFCE and it constitutes over 56% of the total GDP. It is expected to be almost what it was in 2017-18.
  • Gross Fixed Capital Formation (GFCF): The second biggest component of GDP is called GFCF and it measures all the expenditures on goods and services that businesses and firms make as they invest in their productive capacity. This type of demand accounts for close to 28% of India’s GDP. It has fallen below the 2016-17 level.
  • Government expenditure: It is expected to show a robust growth of 17% in the second half of the year, despite the challenges faced by the government on fiscal consolidation and the fact that government expenditure fell 3.9% in the first half of the year.

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Economic Impact of Internet shutdown in Indian and world economy

News: According to a report by the UK-based privacy and security research firm Top10VPN, India has suffered the longest internet shutdowns in 2020 globally.


Key Takeaways from the report:

  • Globally, internet shutdowns cost the world economy $4 billion. However, this represents a 50% decrease in impact compared to $8.05 billion in 2019.
  • India has suffered the biggest economic impact in the world in 2020 due to Internet shutdowns adding up to 8,927 hours and $2.8 billion losses.
  • Among 21 countries that curbed internet access last year, the economic impact seen in India was more than double the combined cost for the next 20 countries in the list.
  • India continued to restrict Internet access more than any other country — over 75 times in 2020.The majority of these short blackouts were highly targeted, affecting groups of villages or individual city districts.
  • The report made a separate mention of the extended curbs on Internet use in Jammu and Kashmir. It has called it as the longest Internet shutdown in a democracy.

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Government released Longitudinal Ageing Study in India(LASI)

News: Union Health Ministry has released the Longitudinal Ageing Study in India(LASI).


  • LASI: It is a full scale national survey of scientific investigation of the health, economic, and social determinants and consequences of population ageing in India.
  • Study conducted by: National Programme for Health Care of Elderly, Ministry of Health & Family Welfare has undertaken the study through International Institute for Population Sciences, (IIPS), Mumbai in collaboration with Harvard School of Public Health, University of Southern California, USA, United Nations Population Fund (UNFPA) and National Institute on Ageing
  • Objective: To provide a longitudinal database for designing policies and programmes for the older population in the broad domains of social, health and economic well-being.
  • Coverage: The study covered a panel sample of 72,250 individuals age 45 years and above, including 31, 464 people above 60 and 6,749 oldest-old persons aged 75 and above.

Key Takeaways from the study:

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Source: TOI

  • In the 2011 census, the 60+ population accounted for 8.6% of India’s population, accounting for 103 million elderly people. Growing at around 3% annually, the number of elderly people will rise to 319 million in 2050.
  • About 75 million elderly persons in India or one in two people above 60 years of age suffer from some chronic disease.
  • About 40% have some form of disability and as high as 20% are suffering from mental health issues. Also, 27% of this population group has multi-morbidities which translates to roughly 35 million people.
  • About a third(32%) of elderly age 60 and above have hypertension, 5.2% were diagnosed with chronic heart disease and 2.7% with stroke. The self-reported prevalence of diabetes mellitus among older adults age 45-59 is 9% and among the elderly age 60 and above is 1%.
  • The prevalence of asthma, bronchitis, and COPD is higher among elderly age 60 and above (5.9%, 1.6% and 2.8% respectively) than in older adults aged 45-59 (3.1%, 0.7%, and 1.6% respectively).

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PM inaugurates Rewari – Madar section on Western corridor

News: The Prime Minister of India has inaugurated the Rewari – Madar section on Western Corridor.


  • Rewari – Madar section: It is a part of Western Dedicated Freight Corridor(WDFC).It falls in Haryana (for approximately 79 Km in Mahendragarh & Rewari districts) and Rajasthan (approximately 227 Km in Jaipur, Ajmer, Sikar, Nagaur and Alwar districts) State.
  • Significance:
    • The section would be beneficial to farmers, industrialists and businessmen in the National Capital Region, Haryana and Rajasthan.
    • The ports of Gujarat like Kandla, Pipavav, Mundhra, Dahejetc will have an uninterrupted connectivity to the Northern parts of India.
    • With the dedication to the Nation of the 351-km Bhaupur-Khurja section, and construction of connecting link between Khurja – Boraki-Dadri- Rewari, seamless movement between WDFC & EDFC can ensue.

Additional Facts:

  • Dedicated freight corridor(DFC): It is meant to create a safe and efficient freight transportation system in the country.
  • Nodal Body: Dedicated Freight Corridor Corporation of India(DFCCIL) is constructing the Western DFC (1506 Route km) and Eastern DFC (1875 route km including Sonnagar-Dankuni PPP Section).
  • EDFC: The EDFC is starting from Sahnewal near Ludhiana (Punjab) and will pass through the states of Punjab, Haryana, Uttar Pradesh, Bihar and Jharkhand to terminate at Dankuni in West Bengal. It is being majorly funded by the World Bank.
  • WDFC: The Western Corridor is connecting Dadri in Uttar Pradesh to Jawaharlal Nehru Port (JNPT) in Mumbai and will traverse through the states of UP, Haryana, Rajasthan, Gujarat and Maharashtra of WDFC. Approx. 40% of WDFC is in Rajasthan. It is being majorly funded by Japan International Cooperation Agency(JICA).

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Pravasi Bharatiya Divas Convention 2021

News: Prime Minister will inaugurate the Pravasi Bharatiya Divas Convention to be held in virtual format on January 9 with Suriname President Chandrikapersad Santokhi as the chief guest.


  • Pravasi Bharatiya Divas(PBD) Convention: It is the flagship event of the Ministry of External Affairs and provides an important platform to engage and connect with the overseas Indian.
  • Purpose: To recognize the overseas Indians who have contributed to the development of India.
  • Significance: It is celebrated every year on January 9th because Mahatma Gandhi had returned to India from South Africa on January 09,1915.
  • Theme: “Contributing to Atma Nirbhar Bharat”
  • Pravasi Bharatiya Samman(PBSA): It is conferred every year on the occasion of Pravasi Bharatiya Divas to select Indian diaspora members to recognize their achievements and honour their contributions to various fields, both in India and abroad.
  • Youth Pravasi Bharatiya Divas(PBD): It will also be celebrated virtually on the theme “Bringing together Young Achievers from India and Indian Diaspora” and will be anchored by the Ministry of Youth Affairs and Sports.
    • The Special Guest for the event is Ms.Priyanca Radhakrishnan, Minister for Community & Voluntary Sector of New Zealand.

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Government approves new scheme for Industrial Development of Jammu & Kashmir

News: Cabinet Committee on Economic Affairs has approved the Central Sector Scheme for Industrial Development of Jammu & Kashmir.


  • Aim: To develop development of Manufacturing as well as Service Sector Units in J&K which will generate employment and leads to the socio economic development of the area.
  • Incentives: The following incentives would be available under the scheme:
    • Capital Investment Incentive at the rate of 30% in Zone A and 50% in Zone B on investment made in Plant & Machinery (in manufacturing) or construction of buildings and other durable physical assets(in service sector) is available.Units with an investment upto Rs. 50 crore will be eligible to avail this incentive. Maximum limit of incentive is Rs 5 crore and Rs 7.5 crore in Zone A & Zone B respectively
    • Capital Interest subvention: At the annual rate of 6% for maximum 7 years on loan amount up to Rs. 500 crore for investment in plant and machinery (in manufacturing) or construction of building and all other durable physical assets(in service sector).
    • GST Linked Incentive: 300% of the eligible value of actual investment made in plant and machinery (in manufacturing) or construction in building and all other durable physical assets(in service sector) for 10 years. The amount of incentive in a financial year will not exceed one-tenth of the total eligible amount of incentive.
    • Working Capital Interest Incentive: All existing units at the annual rate of 5% for maximum 5 years. Maximum limit of incentive is Rs 1 crore.
  • Other Key Features of the Scheme:
    • Scheme is made attractive for both smaller and larger units. Smaller units with an investment in plant & machinery upto Rs. 50 crore will get a capital incentive upto Rs. 7.5 crore and get capital interest subvention at the rate of 6% for maximum 7 years
    • The scheme aims to take industrial development to the block level in UT of J&K, which is first time in any Industrial Incentive Scheme of the Government of India and attempts for a more sustained and balanced industrial growth in the entire UT
    • Scheme has been simplified on the lines of ease of doing business by bringing one major incentive- GST Linked Incentive- that will ensure less compliance burden without compromising on transparency.
  • Expenditure involved: The financial outlay of the proposed scheme is Rs.28,400 crore for the scheme period 2020-21 to 2036-37.
  • Impact:
    • Scheme will bring radical transformation in the existing industrial ecosystem of J&K with emphasis on job creation, skill development and sustainable development.
    • The scheme is likely to attract unprecedented investment and give direct and indirect employment to about 4.5 lakh persons. Additionally, because of the working capital interest subvention the scheme is likely to give indirect support to about 35,000 persons.

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What are spectrum auctions?

News: Department of Telecommunications (DoT) said on Wednesday (January 6) that auctions for 4G spectrum in the 700, 800, 900, 1,800, 2,100, 2,300, and 2,500 MHz bands will begin from March 1. Licence holders have until February 5 to submit their applications.


What are Spectrum Auctions?

  • Devices such as cellphones and wireline telephones require signals to connect from one end to another. These signals are carried on airwaves, which must be sent at designated frequencies to avoid any kind of interference.
  • The Union government owns all the publicly available assets within the geographical boundaries of the country which also include airwaves. With the expansion in the number of cellphone, wireline telephone and internet users, the need to provide more space for the signals arises from time to time.
  • To sell these assets to companies willing to set up the required infrastructure to transport these waves from one end to another, the central government through the DoT auctions these airwaves from time to time.
  • These airwaves are called spectrum which is subdivided into bands which have varying frequencies. All these airwaves are sold for a certain period of time, after which their validity lapses, which is generally set at 20 years.

Why is spectrum being auctioned now?

  • The last spectrum auctions were held in 2016.During that time, the government managed to sell only 40% of the spectrum that was put up for sale.
  • However, the need for a new spectrum auction has arisen because the validity of the airwaves bought by companies is set to expire in 2021.

Who is likely to bid for the spectrum?

  • All three private telecom players, Reliance Jio Infocomm, Bharti Airtel, and Vi are eligible contenders to buy additional spectrum to support the number of users on their network.
  • Apart from these, new companies including foreign companies are also eligible to bid for the airwaves. Foreign companies, however, will have to either set up a branch in India and register as an Indian company or tie up with an Indian company to be able to retain the airwaves after winning them.

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