The HINDU Notes – 13th July 2019 - VISION

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Saturday, July 13, 2019

The HINDU Notes – 13th July 2019






📰 India, Russia discuss space cooperation

•India and Russia on Friday explored the “possibilities for production of space systems in India” during the discussions between National Security Adviser Ajit Doval and the visiting Director General of Russia’s space agency ROSCOSMOS and former Deputy Prime Minister Dmitry Rogozin.

•“Cooperation in futuristic technologies, including new space systems, rocket engines, propellants and propulsion systems, spacecraft and launch vehicle technology were also discussed,” the Ministry of External Affairs (MEA) said.

•The discussions covered all aspects of India-Russia space cooperation.

Strategic approach

•Both sides will take a strategic approach to “elevate bilateral cooperation to the next level keeping in mind the privileged partnership and India’s priorities such as Make in India programme,” the MEA said.

•There has been an increase in exchanges between the two space agencies as India rushes to finalise the details of the Gaganyaan Mission, which will carry Indian astronaut to space in 2022, to coincide with the country’s 75th anniversary of Independence.

•Russia has promised all assistance for India’s human space flight mission Gaganyaan, the statement said and added, “In addition, the Russian side stated that they would like to see India participate in the International Space Station, and offered its full support for this purpose.”

📰 India, Pakistan officials to meet at Wagah for talks on Kartarpur

Will discuss modalities to bridge the gaps in corridor project

•Indian and Pakistani officials will meet at the Attari-Wagah border on Sunday to discuss issues, including ways to bridge gaps related to the Kartarpur Corridor that is to be made operational by November, ahead of the commemoration of the 550th birth anniversary of Guru Nanak.

•The delegations will meet at Wagah in Pakistan to discuss issues of connectivity at the Zero Point, number of pilgrims and kind of travel documents to be allowed, government officials, speaking on condition of anonymity, said on Friday.

•India would also raise its concerns over the security aspect, the officials added.

•New Delhi had earlier conveyed to Pakistan its serious concern over the presence of a leading Khalistani separatist in a committee appointed by Islamabad for the project.

•“The meeting will discuss modalities of the Kartarpur Corridor and related technical issues,” a government official said.

•The project is aimed at easing access for Sikh pilgrims from India to visit Gurdwara Darbar Sahib in Kartarpur in Pakistan, the final resting place of Guru Nanak. Work on a four-lane highway on the Indian side was in full swing, the officials said. The four-lane highway connecting the Zero Point of the Kartarpur Corridor to National Highway 354 is being constructed by the National Highways Authority of India (NHAI).

•India is constructing a bridge at the Zero Point and has urged Pakistan to build a similar bridge on its side to ensure safe and secure movement of the pilgrims and address concerns regarding flooding, the officials said. The bridge is over a creek, of which the major part falls in Pakistan.

•Pakistan had said it would build a mud-filled embankment, a structure that would not only lead to flooding in areas on the Indian side but also pose a threat to the structure of the bridge, the officials asserted.

•The creek tends to flood during the monsoon when the Ravi river swells.

•Another proposal put forth by Pakistan was to build a causeway, the officials said, adding that it was unacceptable to India as it would not provide an all-weather road.

•They said the construction work at the site of a passenger terminal complex at Dera Baba Nanak in India was proceeding apace. More than 250 labourers and 30 engineers were working at the site in three shifts, they added.

•The terminal is being built on about 15 acres of land.

📰 India again abstains at U.N. vote on LGBTQ Independent Expert, draws criticism

India’s abstention drew widespread criticism especially since it came after the Supreme Court struck down Section 377 and decriminalised the LGBTQ community.

•India on July 12 abstained at the vote for extending the mandate of an important U.N. official who reports on violence and discrimination against sexual minorities.

•India’s abstention at the resolution for term-renewal of the Independent Expert on Sexual Orientation and Gender Identity in the U.N. Human Rights Council in Geneva drew widespread criticism from activists especially since it came after the Supreme Court struck down Section 377 and decriminalised the LGBTQ community.

•The resolution received support from most of the member countries at the Human Rights Council but India, Angola, Burkina Faso, Cameron, Congo, Hungary, Togo and Senegal abstained during the final voting. Pakistan, Saudi Arabia, China, Bangladesh, Bahrain, Qatar, Somalia opposed the resolution. India had also abstained during the 2016 vote on appointment of the Independent Expert. The current Independent Expert is Victor Madrigal Borlioz of Costa Rica.

•Activists pointed out that though India abstained but they were surprised to see that the Indian delegation supported some of the amendments that were brought by countries that opposed the work of the Independent Expert. They chose Nepal and Philippines for supporting the resolution which was about opposing violence against the LGBTQ persons, which is essentially a form of gender violence. An activist who worked on mobilising online opinion for the resolution said that the abstention of 2016 was before the landmark Supreme Court pronouncement on Section 377 and therefore India’s latest abstention which comes after the Supreme Court’s decision against 377 is disappointing.

•The Resolution numbered L10 Rev 1 granted an extension of three years to the Independent Expert to carry on reporting on incidents of violence against the LGBTQ community all over the world. The Resolution will help integrating the work of the crucial official into the larger body of global work by the United Nations. The text of the resolution specifically asked the U.N. for providing financial support to the official in implementing the mandate.

•It also urged member countries of the U.N. to support the Independent Expert in carrying out the mandate of protection of the vulnerable sexual minorities. Accordingly the Expert will submit an annual report to the U.N. General Assembly and the UNHRC.

•Earlier leaders like Shashi Tharoor, Priya Dutt and Supriya Sule had urged the government to support the renewal of the term of the Independent Expert and prevent discrimination and violence based on sexual orientation and gender identity.

📰 Trade talks held with team of U.S. officials

Enhanced engagement discussed

•Commerce Ministry officials on Friday met trade officials from the U.S. and discussed ways to improve trade relations been the two countries.

•“A delegation led by Assistant United States Trade Representative (AUSTR) Christopher Wilson visited India on July 11-12 to explore potential for enhanced bilateral trade and economic engagement with India under the new Government,” the Ministry said in a statement.

•The U.S. delegation held bilateral talks on July 12 with the Indian delegation led by Sanjay Chadha, Additional Secretary, Department of Commerce.

•“The meeting aimed at providing new impetus to bilateral trade and commercial ties, in line with the mandate given by Prime Minister Narendra Modi and the U.S. President Donald Trump during their meeting at Osaka, Japan on June 28, 2019,” the statement added.

•“Both sides discussed the broad contours of bilateral trade and commercial ties and agreed to continue their discussions for achieving mutually beneficial outcomes aimed at further growing the economic relationship and addressing mutual trade concerns,” it said.

•The U.S.-India Strategic Partnership Forum (USISPF) estimated that U.S.-India bilateral trade will grow from $143 billion to $238 billion by 2025. This growth will occur if trade grows by 7.5% each year, as has been the trend for the last seven years, it added.

•The AUSTR also called on the Commerce Secretary and Commerce & Industry Minister during the visit.

📰 U.S. will consider ‘301 probe’ on India, says trade official

Investigation is a precursor to trade measures

•The U.S. will consider a “301 investigation”, a probe employed as a precursor to tariffs and other trade measures against a country, against India if the trade issues between the two countries are not resolved quickly, Deputy U.S. Trade Representative (USTR) Jeffrey Gerrish said on Thursday.

•Mr. Gerrish also said India finalising data localisation policies could be deal-breaker across the board between the two countries.

•His comments were made at a U.S.-India Strategic Partnership Forum (USISPF) event in Washington during a discussion with Susan Esserman, a former Deputy USTR in the Clinton Administration.

•“We believe that we should utilise the full range of trade rules, including Section 301, where warranted. And we’re certainly looking at these policies and practices that India has engaged in light of that. We are doing it in a very deliberate, thoughtful way and trying to determine what the best approach is here,” Mr Gerrish said. “And we’ll see where that goes. At this point, we’re clearly in the very early stages of our engagement with the new Indian government and we want to see, of course, what the willingness is to address the trade issues that we have.”

•Mr. Gerrish declined to give a timeline for these actions but said issues would need to be resolved quickly.

•However, Mr. Gerrish added that if the market access issues related to GSP (Generalized System of Preferences) were resolved quickly, it would be a confidence building step and would help the process.

•Section 301 of the U.S. Trade Act (1974) was also to authorise a 2017 probe that resulted in tariffs on Chinese exports to the U.S. from July 2018. Earlier this week, the USTR announced a 301 probe against France on a digital services tax.

•“We certainly recognise the pivotal role that India plays as a vibrant democracy in the region to a free and open Indo-Pacific region and the important strategic relationship that our two countries have and in everything we do, we approach it with that in mind,” Mr. Gerrish said.

•Mr. Gerrish, a former lawyer and Trump appointee to the U.S.’s trade office, was confirmed by the Senate in March 2018.

•He said the two countries needed to move beyond the GSP review and take a more “comprehensive approach” to the issues between them. The US, in June, cancelled India’s benefits under the Generalized System of Preferences (GSP) programme for market access reasons.

•“But it goes well beyond that [GSP] and we have a number of other market access issues relating to agricultural and non-agricultural products, but also other critical issues and areas involving digital trade, services and intellectual property protection enforcement,” Mr. Gerrish said.

•A 301 probe, if launched, would be comprehensive.

•“Just on the IPR issue, this is something that India has been on our Priority Watch List that we issued as part of our Special 301 Process since 1989,” Mr. Gerrish said.

•A Special 301 Report is prepared annually by the USTR and is different from a 301 investigation.

•Mr. Gerrish said his trade colleagues were in New Delhi not to negotiate but to ascertain whether the new government had the “willingness and wherewithal” to address and resolve the trade issues between the two countries, adding the U.S. has had “good interactions so far” with Commerce Minister Piyush Goyal.

•A USTR delegation has been in New Delhi this week for talks, including with Commerce and Industry Minister Piyush Goyal.

•The issues, however, are not long-standing ones, Mr. Gerrish said, but included recent developments such as with regard to digital trade.

•“We’ve even had some... unfortunately... some additional troubling issues that have developed in the last year, particularly in the digital trade area,” Mr Gerrish said, adding India had taken a number of “troubling actions” in the data localisation arena. Mr. Gerrish cited the RBI electronic payments regulation, the draft e-commerce policy released earlier this year and the draft data privacy as examples of these actions.

•The RBI had, in 2018, said payment system operators operating in India would need to store payment systems data within the country.

•In the context of data localisation, Mr. Gerrish welcomed the fact that the Indian government had indicated that it would be consulting stakeholders on policies they are considering but indicated that data localisation policies, if finalised, would be deal breaker for U.S.-India trade.

•“It would be a really problematic step if those [data localisation policies] were to be put in place and could really, I think, hurt the new engagement that we have and potentially halt that altogether across the board on the trade issues.”

📰 A case of confused thinking: on draft National Education Policy

The draft National Education Policy lacks the very abilities it emphasises — critical thinking and deeper understanding

•The draft National Education Policy (NEP) 2019 recommends a restructuring of school years and the curriculum, in a wide-ranging manner. If properly implemented, many of the suggested changes may help education. These include flexibility and wider scope at the secondary level, space for moral reasoning, re-emphasis on the true spirit of the three language formula, a focus on the core concepts and key ideas in subjects, vocational courses, and also a focus of assessment on understanding. However, the draft NEP also recommends much that may have just the opposite effect. These are, for example, 15 subjects/courses at the upper primary level, three languages in early childhood education, and confusing statements on a number of curricular issues. The curriculum the draft NEP suggests at the upper primary level has started looking like a laundry list, perhaps because of a lack of a coherent vision and the curricular thinking it adopts.

India-centric aim?

•The policy envisions an “India centred education system that contributes directly to transforming our nation sustainably into an equitable and vibrant knowledge society”. The proclaimed “India centred-ness” of education is limited to recommendations on Indian languages and a mention of Indian knowledge systems. The operational vision is that of a “knowledge society”, almost entirely contained in UNESCO-preached ‘21st century skills’. The democratic ideal is neither mentioned nor used in articulating the aims of education or curricular recommendation, though democratic values are mentioned in the list of key “skills” that are to be integrated in subjects.

•The vision of a knowledge society directly leads to the objectives of curricular transformation “in order to minimise rote learning and instead encourage holistic development and 21st century skills such as critical thinking, creativity, scientific temper, communication, collaboration, multilingualism, problem solving, ethics, social responsibility, and digital literacy”. The most important and educationally worthwhile term is “skill” and everything has to fit in within that; even ethics and social responsibility.

Shaping an individual

•“The goal”, according to the draft policy, “will be to create holistic and complete individuals equipped with key 21st century skills”. This makes it quite clear what the definition of “holistic and complete individuals” means. After a host of curricular recommendations which includes new subjects/courses comes another statement which may sound like an articulation of curricular objectives or aims of education. Under the heading “Curricular integration of essential subjects and skills”, it says: “certain subjects and skills should be learned by all students in order to become good, successful, innovative, adaptable, and productive human beings in today’s rapidly-changing world. In addition to proficiency in languages, these skills include: scientific temper; sense of aesthetics and art; languages; communication; ethical reasoning; digital literacy; knowledge of India; and knowledge of critical issues facing local communities, States, the country, and the world”.




•The broad goals are to send out “good, successful, innovative, adaptable, and productive human beings”; not a critical, democratic citizen who may want to change the situation rather than adapting to it. The list of eight “skills” (sic) is supposed to “create” such individuals. And to enable such an aim, it is no wonder that everything is a “skill” which includes among others a “sense of aesthetics”, “ethical reasoning”, “compassion” and “curiosity”. The phrase “Evidence-based and scientific thinking” is used together everywhere implying that there can be “scientific thinking” which is not evidence based. The policy assumes that “evidence-based and scientific thinking... will lead naturally to rational, ethical, and compassionate individuals”. I wonder how “evidence based” this claim itself happens to be. How scientific thinking will develop “compassion” is beyond one’s understanding. Further, it is interesting that “evidence-based and scientific thinking” is supposed to help create an ethical, rational, and compassionate individual but not a “logical and problem solving” individual as they are listed separately as “skills”. I wonder what part of logical and problem-solving abilities remain outside evidence-based, scientific and rational thinking.

•The comments made above may be seen as a case of nit-picking by some. However, a policy document is read and interpreted at many levels and influences educational discourse. A document which places much emphasis on clarity of understanding and critical thinking cannot itself afford to fail in meeting the same standards. Shoddiness of thinking at the national level does not encourage hope of proper interpretation and implementation of the policy. This is already reflected in some policy recommendations. Here are a few such examples.

Language teaching

•The draft NEP rightly criticises private pre-schools for being a downward extension of primary school and of there being formal teaching in them. But it goes on to recommend preparing children for primary by prescribing learning the alphabets of and reading in three languages (for 3-6-year olds). All this in the name of “enhanced (sic) language learning abilities” of young children. Further the draft policy mistakes “language acquisition when children are immersed in more than one languages” with a “language teaching” situation where immersion is impossible in three languages. It then extends it unjustifiably to a learning of three scripts. It prescribes teaching script and reading in three languages to three-year-old children, but writing is supposed to be taught to six-year-old children. It also wants to introduce “some textbooks” only at age eight. One wonders why there is a three year gap between teaching reading and writing. If script and reading are already taught, then why withhold textbooks till age eight?

•Here is another example of similar and confused thinking. The draft policy stipulates that the “mandated contents in the curriculum will be reduced… to its core, focussing on key concepts and essential ideas”. This is to “yield more space for discussion and nuanced understanding, analysis, and application of key concepts”. But it goes on to block more than the space vacated by prescribing six new laundry-list subjects/courses in addition to the existing eight. Some of these new courses such as “critical issues” and “moral reasoning” can be taught in a much better way in a revised curriculum of social studies as the context for both is society. Social studies needs more space in the upper primary curriculum. The subject has to be taught in such a manner that it connects with society and can be a very good way of introducing critical issues and moral thinking. Abstract moral reasoning is likely to have the same fate as so-called “moral science” that is taught in many schools. Similarly, “Indian classical language” and “Indian languages” can constitute a single rich subject rather than being split into two courses.

Missing link

•Identifying key concepts and essential ideas are a matter of rational curricular decision making; not listing ideas as they come to one’s mind. The absence of discussion on socio-political life seems to be another casualty in the emphasis on a knowledge society and 21st century skills. Social studies seems to be missing entirely as it has been mentioned once and then left out of the entire discussion on curriculum. In the end, the vision of the draft NEP rests on UNESCO declarations and reports rather than the Indian Constitution and development of democracy in this country; this in spite of wanting to make education India-centred. Thus, in the suggested curriculum changes, socio-political life is almost invisible.

•All this goes to show that the draft NEP 2019 itself lacks the very abilities it emphasises, namely critical thinking and deeper understanding. It is a badly written document which hides behind a plethora of terms that are half-understood and clubbed under the overarching master concept of “skill”. In short, the policy lacks depth and loses focus of the richness of secular democratic ideals by aiming for 21st century skills.

📰 Game of chicken that can end in disaster: on U.S.-Iran relations

The confrontation between the U.S. and Iran in West Asia could snowball with damaging economic consequences

•On July 7, Iran announced that it would begin enriching uranium above a concentration of 3.67% permitted under the nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), reached by Iran and the P5+1 (China, France, Germany, Russia, the United Kingdom, and the United States) on July 14, 2015.

•This followed its July 1 announcement that it had breached the limit of the 300 kg of enriched uranium stockpile that was allowed by the JCPOA. It appears Iran’s patience is wearing out.

•These steps come in the wake of increasing tensions between the U.S. and Iran following the shooting down of an unmanned U.S. drone over the Strait of Hormuz in June. The circumstances surrounding this event and the locale of the downing are contested. However, it led to the U.S. President, Donald Trump, first ordering a retaliatory strike on Iran and then rescinding it at the last minute. It is possible that had this strike taken place it would have become the first act in a major military confrontation between the U.S. and Iran.

•The mayhem could have spread to the entire West Asian region with Iran attacking strategic American, Saudi and Emirati targets around the Gulf and attempting to block the Strait of Hormuz in an effort to choke off the supply of Gulf oil to the international market. Further, Iranian allies in Lebanon, Iraq and Syria might have launched attacks against American troop concentrations as well as against U.S. ally Israel, thus inviting further American and Israeli counter-retaliation and dragging the U.S. into its third major war in the region.

•The downward spiral in U.S.-Iran relations started with Mr. Trump’s decision (announced in May 2018) to withdraw from the JCPOA against the advice of the U.S.’s European allies France, Germany, and the U.K. that are parties to the deal. The Trump administration followed it up with the re-imposition of stringent economic sanctions against Iran that were being gradually dismantled following the 2015 nuclear deal. These included sanctions against foreign companies doing business with Iran and against countries buying Iranian oil.

List of demands

•Finally, the U.S. announced in April this year that it would not extend waivers granted earlier to eight countries (China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece) which had been the largest importers of Iranian oil. This decision was aimed at totally choking off the export of Iranian oil — the primary foreign exchange earner for Tehran — in order to bring Iran to its knees and force it to accept American demands spelt out by U.S. Secretary of State, Mike Pompeo. These included further curbs on Iran’s nuclear programme including total stoppage of uranium enrichment even at low levels permitted by the JCPOA and monitored by the International Atomic Energy Agency.

•Further, Mr. Pompeo demanded that Iran stop all support to Hezbollah and Hamas which the U.S. considers to be “terrorist” groups, permit the disarming of Shia militias in Iraq, and stop aiding Houthis in Yemen fighting Saudi and Emirati forces in that country. Above all, Mr. Pompeo demanded that Iran end building of ballistic missiles and halt further launching or development of nuclear-capable missile systems.

•All these demands went far beyond the limits placed on Iran by the JCPOA and most were unrelated to Iran’s nuclear programme. Iran’s government rejected these demands while still keeping the door open for negotiations, hoping against hope to draw the U.S. back into the nuclear deal. However, persisting and escalating moves by the U.S. during the past year now seem to have made it impossible for Tehran to simultaneously maintain the contradictory position of resisting American demands while continuing to comply with restrictions imposed on its nuclear programme by the JCPOA.

•The stance of Iran’s Hassan Rouhani government became increasingly untenable in the light of recent American actions. The latter provided the hardline opposition in Iran, composed of right-wing factions and the Islamic Revolutionary Guard Corps, the opportunity to attack the government for conforming to an agreement that had been rejected by the U.S. and that had provided no economic relief to the Iranian people, the primary selling point in favour of the JCPOA. Moreover, the Iranian Supreme Leader, Ayatollah Ali Khamenei, whose support for the JCPOA was crucial, has for all practical purposes withdrawn his endorsement of the agreement in turn leaving the duo of President Rouhani and Iran’s Foreign Minister Mohammad Javad Zarif without any protective political cover.

Tit-for-tat measures

•Therefore, the Iranian government, in order to maintain its standing with the populace, has been left with no option but to undertake tit-for-tat measures, further heightening the political temperature in the Persian Gulf. This has turned the U.S.-Iran standoff into a game of chicken in which either one of the parties to the game blinks and concedes victory to the other or a “crash” becomes inevitable. The American-Iranian confrontation seems to be inexorably heading towards the latter outcome. If taken to its logical conclusion this scenario can turn out to be catastrophic for the entire West Asian region as well as for the international economy. Oil supplies from the Persian Gulf are likely to be greatly reduced if not totally eliminated sending oil prices sky-rocketing, especially threatening the vulnerable economies of the global South.

📰 ISRO’s lunar touchdown has dry run on soil fetched from Tamil Nadu

ISRO’s lunar touchdown has dry run on soil fetched from Tamil Nadu
'Chandrayaan-2’s lander and rover were tested on a simulated surface

•Newly designed cars are tested for road-worthiness on terrain where they would be driven, while new aircraft are test-flown in the skies. But where on earth did the Chandrayaan-2 mission’s lander and rover, which will head for the moon on July 15, check out their legs and wheels?

•More than a decade ago, even as the Chandrayaan-1 orbiter mission of 2008 was being readied, the Indian Space Research Organisation (ISRO) created a proto-Lunar Terrain Test Facility (LTTF) at its advanced satellite testing unit, ISITE, in Bengaluru. This, it did, by modifying a balloon research lab, about 30-40 m high, long and wide.

•At the time, ISRO was grappling with the task of indigenously executing the cryogenic stage for its GSLV MkII rocket. Any thought of sending a moon lander was a distant dream of low priority. Equipping the LTTF and making it look and feel like being on the moon was the first challenge. It needed lunar ‘soil’ with almost all its features and texture, lunar temperatures, low gravity and the same amount of sunlight as on the moon.

•For recreating the terrain, an option was to import simulated lunar soil from the U.S. — at an exorbitant $150 a kg (the then prevailing price). The facility needed about 60-70 tonnes of soil.

•ISITE’s parent, the U.R. Rao Satellite Centre, or URSC (it was called the ISRO Satellite Centre or ISAC at the time) did buy a small amount of simulated lunar soil from the U.S., but soon decided to find its own solution at a lower cost.

•M. Annadurai, who as URSC Director oversaw activities related to the Chandrayaan-2 spacecraft until he retired in August 2018, recounts that geologists of various national agencies had found that a few sites near Salem in Tamil Nadu had the ‘anorthosite’ rock that somewhat matches lunar soil in composition and features. The URSC’s lunar soil simulation studies team zeroed in on Sithampoondi and Kunnamalai villages for the soil.

•It turned out to be a ₹25 crore project: experts from the National Institute of Technology in Tiruchi, Periyar University in Salem, and the Indian Institute of Science, Bengaluru, joined in, working without any fee.

•Professional crushers broke down the rocks and soil to the micro grain sizes sought by the ISRO-led team. Transporters moved the tonnes of this ‘lunar earth’ to ISITE, all free of charge, Dr. Annadurai recalls.

•These challenges were not there when he led the first lunar orbiting-only mission, Chandrayaan-1, as its project director.

•At the LTTF, the team spread the soil trucked in from Salem up to a height of about 2 metres. Studios were hired to illuminate the facility exactly as sunlight would play on the lunar terrain.

•On the Moon, the metre-long rover, weighing 27 kg, must move for about 500 metres during its expected life of 14 Earth days (one lunar day). Rover tests began as early as in 2015. The ISRO team had to reckon with the weak lunar gravity, about 16.5% of Earth’s. The rover’s weight was artificially reduced using helium balloons.

📰 South China Sea agreement should be binding: Vietnamese envoy

SCS agreement should be binding, says envoy

•The China-U.S. confrontation has made the situation in the South China Sea (SCS) more “complex and unpredictable,” said Vietnamese envoy in India Pham Sanh Chau on Friday, speaking at a discussion organised by the Society for Indian Ocean Studies. Calling the Code of Conduct for the SCS under negotiation between the Association of South East Asian Nations (ASEAN) and China as the most positive development, Mr. Chau said it should be binding.

📰 IIP dips to 3.1% in May on slowdown

•Growth in industrial activity slowed in May to 3.1% driven by an across-the-board deceleration, especially in the consumer durables sector, according to official data released on Friday.

•Retail inflation in June quickened marginally to 3.18% due to a rise in food price inflation, a separate release showed.

•Growth in the Index of Industrial Production slowed in May from 4.32% in April. Within the index, the mining sector slowed to 3.16% in May from 5.07% in April. The manufacturing sector saw growth slowing to 2.46% from 3.98% over the same period.

•Driven by increased demand during the summer months, the electricity sector saw growth accelerating in May., one of the only sectors to do so, to 7.41% from 5.99% in the previous month.

•“The fact that IIP has come down and that the effect is rather pronounced in the case of durable goods is indicative of the continuing slowdown in the first quarter of the fiscal year,” DK Srivastava, Chief Policy Advisor at EY India said. “High frequency data shows there is a continuing slowdown in demand, so IIP will be subdued for a few more months.”

•The consumer durables sector contracted 0.7% in May compared with a growth of 2.17% in April. The overall consumer goods sector, however, was buoyed by stronger growth in the consumer non-durables sector, which registered 7.72% growth in May compared with 5.87% in the previous month.

•The capital goods sector saw growth slowing to 0.75% in May from 1.23% in the previous month. The infrastructure and construction sector also saw growth slow significantly, to 5.54% from 7.21% over the same period.

•Retail inflation, as measured by the Consumer Price Index, accelerated somewhat in June to 3.18% from 3.05% in May.

•The CPI trend of marginally going up is because it follows the movement of food prices with a lag,” Mr Srivastava explained. “In the previous months, food prices had gone up and even though they are now falling, that rise is only now registering in CPI. The important thing is that core inflation is stable so there doesn’t seem to be any real inflationary pressures.”

•Inflation in the food and beverages category quickened to 2.37% in June from 2.03% in May. The pan, tobacco and other intoxicants category saw inflation accelerating to 4.11% from 3.93% over the same period.

•Inflation in the clothing and footwear segment eased to 1.52% in June from 1.82% in the previous month. The fuel and light segment saw inflation slowing to 2.32% in June from 2.48% in May.


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