12th Oct, 2018-IAS Current Affairs
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Global Financial Stability Report (GS3: Indian Economy)
Issue: The recent report prepared by IMF says a stronger dollar, higher credit spreads, weaker equity prices and higher domestic interest rates have led to a tightening of financial conditions in recent months. The fall in inflows to emerging markets is just getting started.
Observations made in the report
- The fall in inflows from emerging markets on account of three factors—expectations about interest rate hikes from the US Federal Reserve, from the balance sheet contraction of the Fed and on account of risk aversion.
- The cumulative fall in inflows from emerging markets, estimated at $42 billion till the September quarter, is projected to go up by another $10 billion in the current quarter to a cumulative $52 billion.
- As the report says, this drop in inflows will pose challenges to countries that rely heavily on external financing. In other words, financing India’s rising current account deficit is going to be far from easy.
Climate change and India(GS3: Indian Economy)
Issue: India is among the top countries to face maximum economic loss from climate change, says a new research, estimating the total price that emissions would have to the country’s economy.
The findings which were published in the scientific journal, Nature Climate Change, highlighted that United States, India and Saudi Arabia are the top three counties with the most to lose from climate change, followed by Brazil and world’s largest CO2 emitter – China.
Observations made in the report
- According to the study, India’s country-level social cost of carbon was estimated to be the highest at $86 per tonne of CO2, which means that Indian economy stands to lose $86 from emitting each additional tonne of CO2.
- The research also highlights that several countries have not yet recognized the risk posed by climate change.
Diabetes (GS2: Issues related to Health)
Issue: The growing prevalence of obesity heightening the risk of type 2 diabetes in Indians, can be attributed to rapid economic transition, movement from rural to urban areas coupled with consequent changes in diet and physical activity patterns
Reasons for the increase in diabetes
- Major lifestyle changes associated with economic transition, industrialization, urbanization and globalization have been key determinants in the increasing burden of non-communicable diseases mainly diabetes.
- India is facing an unprecedented health challenge associated with rapid economic transition, a massive exodus from traditional rural to more urban settings, and consequent changes in diet and physical activity patterns. A heightened predisposition to non-communicable diseases is an unfortunate consequence of these changes, with increased prevalence of overweight and obesity leading to increased risk of type 2 diabetes
- Also, by 2045 an estimated 134 million Indians will have type 2 diabetes, up from a 2017 estimate of about 72 million, the study said.
- The paper also pointed out that examples of dietary change include the consumption of highly processed rice-based and wheat-based cereal diets in India, providing up to 60–70% of total energy, commonly with a high intake of sugar, with a high glycemic response (the effect that food or meal has on blood sugar levels after consumption).
The International Diabetes Federation 2017 estimates the prevalence of diabetes in adults in the region range from 4.0% in Nepal to 8.8% in India. India represents 49% of the world’s diabetes burden, with an estimated 72 million cases in 2017.
What is type-2 diabetes?
- Type 2 diabetes is a common condition that causes the level of sugar (glucose) in the blood to become too high.
- It can cause symptoms like excessive thirst, needing to pee a lot and tiredness. It can also increase your risk of getting serious problems with your eyes, heart and nerves.
- It’s a lifelong condition that can affect your everyday life. You may need to change your diet, take medicines and have regular check-ups.
- It’s caused by problems with a chemical in the body (hormone) called insulin. It’s often linked to being overweight or inactive, or having a family history of type 2 diabetes.
5 trillion dollar economy (GS3: Indian Economy)
Issue: The Working Group tasked to develop a roadmap towards achieving a 5 trillion dollar economy by 2025has prepared its report. The Working Group was constituted by the Department of Industrial Policy and Promotion in the Ministry of Commerce and Industry with participation from government and industry.
Current scenario of Indian Economy
India is one of the fastest growing major economies and is currently ranked as the world’s sixth largest economy. Projections of growth, over the medium term, remain encouraging and optimistic for India. The underlying strengths are indicative of the potential of India to achieve a USD 5 trillion economy by 2025
The current structure of the economy and the emerging dynamics provide us grounds to target achieving 1 trillion dollar from agriculture and allied activities, 1 trillion from manufacturing and 3 trillion from services.
Indian Footwear, Leather & Accessories Development Programme (IFLADP) (GS3: Indian Economy)
Issue: The Central Government has approved a special package for employment generation in leather and footwear sector. The package involves implementation of Central Sector Scheme – Indian Footwear, Leather & Accessories Development Programme (IFLADP) with an approved expenditure of Rs. 2600 Crore for 2017-20.
About the programme
The scheme aims at development of infrastructure for the leather sector, address environmental concerns specific to the leather sector, facilitate additional investments, generate employment and increase production. Enhanced Tax incentives will attract large scale investments in this sector and reforms in labour laws taking into account the seasonal nature of the sector will support economies of scale.
DIPP has also given in-principal approval for mega leather cluster at Bantala in West Bengal. This will generate employment for around 7000 people and lead to an investment of Rs. 400 to 500 crore.
The Leather Technology, Innovation and Environmental Issues sub-scheme under IFLADP provides financial support at 70% of the project cost to leather clusters to meet the prescribed pollution control discharge norms. This covers establishment, expansion, upgradation of CETPs, developing secure landfills, common recovery units, management of sludge and any other techniques for hazardous waste management.
Human Capital index (GS3: Indian Economy)
Issue: The World Bank released today a Human Capital Index (HCI) as part of the World Development Report 2019
About the report
Broader theme of the World Development Report (WDR) this year is “The Changing Nature of Work”. As part of this report, the World Bank has launched a Human Capital Project (HCP). The HCP programme is claimed to be a program of advocacy, measurement, and analytical work to raise awareness and increase demand for interventions to build human capital. There are three components of HCP- a cross-country human capital measurement metric called the Human Capital Index (HCI), a programme of measurement and research to inform policy action, and a programme of support for country strategies to accelerate investment in human capital.
The HCI has three components:
(i) Survival, as measured by under-5 mortality rates;
(ii) Expected years of Quality-Adjusted School which combines information on the quantity and quality of education (quality is measured by harmonizing test scores from major international student achievement testing programs and quantity from number of years of school that a child can expect to obtain by age 18 given the prevailing pattern of enrolment rates across grades in respective countries); and
(iii) Health environment using two proxies of (a) adult survival rates and (b) the rate of stunting for children under age 5.
Difference between ‘Human Capital Index’ and UNDP ‘Human development index’
UNDP constructs Human Development Index (HDI) for several years. The HCI uses survival rates and stunting rate instead of life expectancy as measure of health, and quality-adjusted learning instead of merely years of schooling as measure of education. HCI also excludes per capita income whereas the HDI uses it. Two significant changes from HDI are exclusion of income component and introduction of quality adjustment in learning. Exclusion of income element and introduction of quality adjustment makes HCI far less representative of Human Capital Development than the Index claims it to be.
The key observations regarding HCI for India in the Report are as under:
- Human Capital Index: A child born in India today will be only 44 per cent as productive when she grows up as she could be if she enjoyed complete education and full health.
- The HCI in India for females is marginally better than that for males.
- Further, there has been marked improvement in the HCI components in India over the last five years.
- Probability of Survival to Age 5: 96 out of 100 children born in India survive to age 5.
- Expected Years of School: In India, a child who starts school at age 4 can expect to complete 10.2 years of school by her 18thbirthday.
- Harmonized Test Scores: Students in India score 355 on a scale where 625 represents advanced attainment and 300 represents minimum attainment.
- Learning-adjusted Years of School: Factoring in what children actually learn, expected years of school is only 5.8 years.
- Adult Survival Rate: Across India, 83 per cent of 15-year olds will survive until age 60.
- Healthy Growth (Not Stunted Rate): 62 out of 100 children are not stunted. 38 out of 100 children are stunted, and so at risk of cognitive and physical limitations that can last a lifetime.
- Gender Differences: In India, HCI for girls is marginally higher than for boys.
Potential investments (GS3: Indian Economy)
Issue: For the third year in a row, Karnataka is set to top the list of States attracting potential investments. Till August, the State garnered a potential investment of ₹79,866 crore, which is nearly 60% more than Gujarat that received proposals for investment of ₹51,586 crore in the same period, according to investment intention data (Industrial Entrepreneurs Memorandum) from the Centre’s Department of Industrial Policy and Promotion.
Other observations made in the report
- While investment intentions continue to shoot up, data also shows that realization of investment is lagging. Though the State had more than ₹3 lakh crore investments in 2016 and 2017, the realization is just ₹11,617 crore, or less than 5%.
- The eco-system, particular when it comes to technology and innovation, remained strong in the State and this sees many tech-oriented investment being routed to Karnataka
Global Hunger index (GHI) (GS2: Issues related to Human resources)
Issue: At least one in five Indian children under the age of five are wasted, which means they have extremely low weight for their height, reflecting acute under-nutrition, according to the Global Hunger Index 2018.
The only country with a higher prevalence of child wasting is the war-torn nation of South Sudan, says the report, which was released on Thursday.
Observations made in the report
- Overall, India has been ranked at 103 out of 119 countries in the Index, with hunger levels in the country categorized as “serious”.
- Four main indicators are used to calculate hunger levels in the report.
- The first indicator is undernourishment, which is the share of the population which is undernourished and reflects insufficient caloric intake. The next three indicators use data for children under five: child wasting (low weight for height), reflecting acute under-nutrition; child stunting (low height for age), reflecting chronic under-nutrition; and child mortality.
- The percentage of undernourished people in the population has dropped from 18.2% in 2000 to 14.8% in 2018. The child mortality rate has halved from 9.2% to 4.3%, while child stunting has dropped from 54.2% to 38.4% over the same period.
- However, the prevalence of child wasting has actually worsened in comparison to previous reference years. It stood at 17.1% in 2000, and increased to 20% in 2005. In 2018, it stands at 21%. South Sudan’s child wasting prevalence is at 28%
- Child wasting in the region is associated with a low maternal body mass index, suggesting the need for a focus on the nutritional status of the mother during pregnancy.
- Maternal Body Mass Index (BMI) and access to improved water and sanitation are more closely associated with rates of child wasting than household wealth, suggesting that a reduction in poverty alone may not be sufficient to correct the problem
- Factors that could reduce child stunting in South Asia include increased consumption of non-staple foods, access to sanitation, women’s education, access to safe water, gender equality, and national food availability.
The Index projects that at the current rate of progress, 50 countries will fail to reach the “low” hunger category by 2030. This puts the UN’s Sustainable Development Goal 2, which aims to end hunger by 2030, in jeopardy
Superbug (GS2: Issues related to Health)
Issue: The world’s biggest animal drugs company has been accused of double standards and of exposing consumers in India to “higher levels of risk” by selling antibiotics for purposes now banned in Europe and the U.S.
Zoetis, the largest producer of veterinary medicines, is supplying Indian farmers with antibiotics to help their animals grow faster. The practice should be banned worldwide, according to the World Health Organisation (WHO), because it increases the prevalence of resistant bacteria that can infect humans and cause deadly and untreatable infections.
Impact of this antibiotic
The unnecessary use of antibiotics in human medicine and agriculture, such as their use to make animals grow faster rather than treat disease, are major contributors to growing levels of resistant bacteria. It is estimated 1,00,000 babies a year in the country die from infections from resistant bugs. Worldwide they’re believed to kill 7,00,000 people, according to a British government-commissioned review in 2016. WHO has called antibiotic resistance one of the greatest threats to public health
Amnesty scheme for prisoners (GS2: Governance)
Issue: More than 900 prisoners were released from prisons across India under an amnesty scheme announced as part of the year-long celebrations to mark the 150th birth anniversary of Mahatma Gandhi beginning October 2, the Home Ministry reported.
Women convicts aged 55 and above and male convicts of 60 years or more, who have served half of their sentence, and a few other categories of prisoners were eligible for the amnesty scheme announced by the Union Cabinet on July 18.