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Saturday, June 25, 2022

THE HINDU NEWSPAPER IMPORTANT ARTICLES 25.06.2022

08:58
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Friday, June 24, 2022

Daily Current Affairs, 24th June 2022

18:59

 


1)  Jammu and Kashmir to host G-20 meetings in 2023

•Jammu and Kashmir will host the 2023 meetings of the G20, an influential group of the world’s major economies. J&K government has set up a five-member high-level committee for overall coordination of G20 meetings to be held in the Union Territory. Commerce and Industry Minister Piyush Goyal was appointed as India’s Sherpa for the G20 in September 2021. According to the Ministry of External Affairs, India will hold the G-20 presidency from December 1, 2022, and convene the first G20 leaders’ summit in 2023.


•India’s representation at G20 summits has been led by Prime Minister Modi since 2014. The G20 countries include Argentina, Australia, Brazil, Canada, China, Germany, France, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the United Kingdom.


2)  Gujarat CM Bhupendra Patel launches 17th ‘Shala Praveshotsav’

•In Gujarat, the Chief Minister Bhupendra Patel has launched the 17th ‘Shala Praveshotsav’, the drive to enrol students in primary schools in the state. The three-day enrollment drive begins from Memadpur primary school in Vadgam taluka of Banaskantha district. Chief Minister Patel said that the dropout rate of students’ reduced drastically following the mass enrolment drives of the children. He said that the drop out rate has been reduced to just 3.07 percent from 37.22 percent in 2002.


•According to official sources, the state officials including IAS and IPS officers and Members of Parliament and Members of Legislative Assembly will visit different schools of the state and enrol children in Class I.


3)  ‘Vivatech 2020’ Conference: India recognized as ‘country of the year’

•Europe’s biggest startup conference, “Vivatech 2020” has recognized India as the “country of the year.” It is a tremendous honour for India to be named “country of the year” in Vivatech 2020. This is due to the contribution of the Indian startups to the world. This is the recognition of Indian startups.


•Minister of Railways, Communications, Electronics and Information Technology, Ashwini Vaishnaw inaugurated the India pavilion at the technology exhibition Vivatech 2020, held in Paris, France. Around 65 start-ups from India are participating in Vivatech 2022 with government support.


•Indian start-up ecosystem has been growing very fast. It has been innovating at a rapid pace and now we have over 100 unicorns which reflects the scale and recognition of Indian ecosystems. The combination of billions of smartphones, billions of bank accounts with billions-plus digital identities help in enabling the creation of novel use cases for technology development in India.


4)  Ookla Speedtest Global Index: India ranked 115th

•The Speedtest Global Index released by network intelligence and connectivity insights provider Ookla showed that India recorded 14.28 Mbps median mobile download speeds in the month of May, slightly better than 14.19 Mbps in April 2022. With this, the country is now three notches up in its global ranking and is at 115th position.


•India also improved its global ranking for overall fixed median download speeds, from 76th in April to 75th in May, according to network intelligence and connectivity leader Ookla. In April, India had dropped four spots in rank globally for overall median fixed broadband speeds — from 72nd to 76th spot.


5)  14th BRICS Summit: Members of BRICS take a similar stance on world economy

•Prime Minister Narendra Modi said at a virtual summit of the five-nation grouping sponsored by China that the consequences of the Covid epidemic on the global economy are still apparent and that cooperation among the BRICS countries can be a beneficial part of its recovery. The BRICS member nations, according to the prime minister, share a similar approach to managing the world economy.


6)  First India-Nepal Bharat Gaurav tourist train flagged off

•First Bharat Gaurav tourist train connecting places associated with the Ramayana Circuit in India and Nepal was flagged off from the Safdarjung Railway Station in New Delhi. The Bharat Gaurav train carrying 500 tourists from India will arrive at the Janakpur Dham railway station in Nepal.


•The Indian Railway Catering and Tourism Corporation’s (IRCTC) 18-day Shri Ramayana Yatra special tourist train will take pilgrims to sacred places associated with the life of Lord Ram. Union Railway Minister Ashwini Vaishnaw along with Minister of Tourism and Culture G. Kishan Reddy flagged off the train.


7)  Union Minister Prahlad Singh Patel inaugurates the National Conference On Millets

•Union Minister of State for M/o Food Processing Industries, Prahlad Singh Patel has inaugurated the National Conference on Millets. The theme of the conference is ‘The Future Super Food for India’ in New Delhi, organised by industry body ASSOCHAM with the support of M/o Food Processing Industries. The conference has been organised to discuss opportunities and challenges in ensuring food and nutritional security.


•The Union Minister said that the production of coarse cereals in the country has increased to 17.96 million tonnes in 2020-21 from 14.52 million tonnes in 2015-16 and the production of bajra (pearl millet) has also increased to 10.86 million tonnes in the same period. The major millets producing states in India include Haryana, Uttar Pradesh, Chhattisgarh, Gujarat, Rajasthan, Madhya Pradesh, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Telangana.


8)  Government department will work with SBI, to establish an integrated pension platform

•In order to improve the quality of life for seniors, the State Bank of India (SBI) and the Department of Pension & Pensioners Welfare (DoPPW) of the Centre will work together to develop an integrated pension platform. SBI field employees were given sessions on pension policy reforms and digitization relating the disbursement of pensions to central government pensioners at a two-day banker’s awareness event in Udaipur, Rajasthan.


9)  Union Minister Piyush Goyal inaugurates Mango Festival in Belgium

•Piyush Goyal, Union Minister of Commerce and Industry, inaugurated a “Mango Festival” in Brussels, Belgium to raise awareness among Europeans and establish a market for Indian mangoes in Europe. India is a big supplier of mangoes to the rest of the globe, but most of the mangoes end up in the Middle East rather than Europe.


•During the event, mangoes like Banganapalli from Andhra Pradesh, Malihabad Dasheri from Uttar Pradesh, Amrapali from Odisha, Lakshman Bhog, Himsagar, Jardalu mango, Langra mangoes, as well as 12 GI-tagged items were on exhibit. The Indian Ambassador to Belgium, Luxembourg, and the European Union (EU), Santosh Jha, spoke about the occasion and the “immense potential” of the Indian mango in the European market.


10)  India likely to be affected by US recession, could impede growth in medium term

•According to economists, the medium-term economic trajectory of India is expected to be hampered by the imminent growth slowdown in the United States. According to the research firm, Nomura India Normalization Index (NINI), the Indian economy is currently returning to above-normal levels and is being driven by broad-based gains in consumption, investment, industry, and the external sector.

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The HINDU Notes – 24th June 2022

16:06

 


📰 The problems plaguing thermal power generators

With a coal-supply demand gap, and international coal prices rising, cash-strapped thermal power generators are left with critical stocks

•On June 10, India’s power demand touched a record high of 211 MW even as the coal shortage continued with coal stocks available only for eight days. In the last two months, as temperatures soared and the economy recovered, the power demand breached the 200 MW level on several occasions. But the coal stock position at power plants remained worrisome. Consequently, the Ministry of Power sprang into action. To bridge the gap between shortage in domestic supply and increasing demand, power-generating companies or ‘gencos’ were directed to use imported coal for 10% of their requirement, failing which their domestic supplies would be cut.

How did India get here?

•India is the second largest producer of coal, with reserves that could last up to 100 years. Despite that, year after year, the shortage of coal supplies continues to be an issue. Why does India have a recurring power crisis? As seen in chart 1, the domestic production of coal stagnated between FY18 and FY21, but revived in FY22. The power demand too surged owing to economic recovery and hotter weather conditions. In a press release published on May 27, the Ministry of Power noted that “despite efforts to increase the supply of domestic coal, there is still a gap between the requirement of coal and the supply of coal.”.

•Until FY20, domestic sources contributed to about 90% of the power sector’s coal receipts; the remaining was filled by imports. But by FY22, the reliance on imports dwindled to 3.8% which built pressure on domestic supplies. As chart 2 shows, the coal imported by power plants declined to 27 MT in FY22 from 66.06 MT in FY17. Coal imported for blending purposes by power plants that run on indigenous coal declined to 8 MT in the last financial year, from 19.7 MT in FY17. Past data show that importing coal for blending has always seen few takers. A bulk of imports was made by power plants designed for imported coal. Notably, their share of imports too saw a decline of 60% in FY22 since FY17. Out of 15 such import-based power plants in India, five had little or no coal stock as of June 15.

•This dip in imports can be attributed to the skyrocketing prices of coal in the international markets (chart 3). The price of imported coal is nearly 5-6 times higher than domestic supply. It is in this scenario that the Power Ministry asked the gencos to import coal. However, States are wary of using imported coal as it would raise the cost of power substantially. The shortfall in domestic supplies and the rising cost of imports have put power plants in a precarious situation (chart 4). About 79 of the 150 plants that depend on domestic coal had critical stocks (<25% of the required stock) as of June 15. Eight import-based coal plants were also at critical levels.

Perennial bottlenecks

•The use of imported coal will also push up the price of power supply to the power distribution companies or ‘Discoms,’ often dubbed as the weakest link in the power sector chain. Discoms owe long-standing dues to the tune of ₹1.16 lakh crore to the gencos. Delays in payments by discoms create a working capital crunch for generating companies which in turn inhibits them from procuring an adequate quantity of coal.

•According to the 2019-20 report by the Power Finance Corporation, discoms had accumulated losses up to ₹5.07 lakh crore and were therefore unable to pay generators on time. Discoms in Tamil Nadu, Rajasthan and Uttar Pradesh are the most financially stressed (see chart 5).

•Discoms are bleeding because the revenue they generate is much lower than their costs. This is evident from the gap between the average cost of supply and average revenue realised (see chart 6). Tamil Nadu, Jammu and Kashmir, and Rajasthan have the widest gap between revenues and expenses of discoms. Apart from providing power at cheaper rates, some State governments do not revise tariffs periodically. Further, the delay in getting compensation from the government also compounds the woes of cash-strapped discoms.

📰 Open network for digital commerce

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VISION IAS Mains 2022 Test 5 With Solution PDF

09:19

VISION IAS Mains 2022 Test 5 With Solution PDF

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GS SCORE Prelims 2023 Test 3 With Solution PDF

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GS SCORE Prelims 2023 Test 2 With Solution PDF

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THE HINDU NEWSPAPER IMPORTANT ARTICLES 24.06.2022

08:46
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VISION IAS Mains 2022 Test 4 With Solution in Hindi PDF

08:37

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VISION IAS Mains 2022 Test 4 With Solution PDF

08:32

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Thursday, June 23, 2022

The HINDU Notes – 23rd June 2022

21:31

 


📰 Crypto came tumbling after

As crypto assets are digital assets, the rate of return is sensitive to changes in the global liquidity conditions

•The precipitous downturn of the crypto market has brought cryptocurrencies back in the news. People wonder if this is the end of the crypto boom. The answer is ‘no’. Cryptocurrency is not really a currency. It is an asset that allows people to keep their money outside the formal financial system and make it accessible so that it can be used anywhere in the world. In today’s world, such an asset would be in great demand until some other asset innovation allows owners to achieve this objective in a more efficient way.

Price increases and decreases

•Crypto assets like Bitcoin have been subject to wide fluctuations in their prices since their inception. The current downturn is not the first of its kind. There have been similar fluctuations in the past. The phenomenal rise in the price of Bitcoin in recent years has dwarfed the fluctuations in its price in the past. The popularity of Bitcoin is obvious from the price differentials with Ethereum and Litecoin. Most of the fluctuations in the price of Bitcoin are brought about by changes in the demand side as the asset’s supply moves very slowly given the enormous cost of mining an additional Bitcoin at this stage.

•The rise in the price of crypto assets began at the onset of the pandemic as people with excess funds parked them in crypto assets. This made sense given the lack of investment opportunities on account of the uncertainty arising from lockdowns. As the COVID-19 spread slowed down, people may have wanted to move their funds out of crypto assets and into more lucrative real investment opportunities arising from a recovering economy. This led to the eventual decline in prices. The halt in withdrawal by Celsius especially led to panic among investors as this company is supposed to be one of the biggest crypto lenders.

•Notwithstanding the effects of these specific events, we must acknowledge that a crypto asset is only one of the assets in an individual’s portfolio. Therefore, changes in the general availability of profitable business opportunities and movement in the prices of other assets will definitely affect the price of crypto assets. Recently, there have been changes in the price of an important class of assets: government bonds issued by the governments of developed countries. Many central banks across the developed world have been raising their policy interest rates to combat rising inflation. For example, the Federal Funds Rate was hovering around zero for most of the pandemic. The Federal Reserve raised it recently leading to a sustained rise in the Federal Funds Rate as well as the three- month Treasury Bill Secondary Market Rate.

Safe assets

•Debt raised by developed country governments, especially the U.S. but also by U.K. and Germany, is an important class of assets because these are deemed as safe assets across the world. In an influential paper published in 2017, Ricardo Caballero and Emmanuel Farhi defined a safe asset as a simple debt instrument that is expected to preserve its value during adverse systemic events. As the central banks of these countries raise their policy interest rates, the rate of return is also expected to go up, motivating large institutional investors to buy more of these. Accordingly, these investors would get out of some current investments and use the newly realised liquidity to buy these safe assets.

•U.S. government bonds form a large fraction of safe asset portfolios, such as the portfolios of many central banks including that of India. The world over, demand for safe assets has increased as many developing countries have grown fast and accumulated enormous foreign exchange reserves. These countries then demanded USD-denominated assets to preserve the value of their portfolios. Events like the pandemic only increased the demand further for safe assets. Unfortunately, the supply of safe assets has not kept up with this demand as the developed countries that produce these assets have grown at a much slower rate. Given that there is generally a shortage of safe assets, it is likely that the demand and prices of crypto assets will change frequently as institutions look for alternatives with slight movements in the rate of return on safe assets. For example, Celsius reportedly could not raise additional liquidity because of tightening of interest rates leading to suspension of its operations.

•Overall, investors must understand the nature of crypto assets and their demand and not ignore the interconnectedness of financial markets at the global level. As crypto assets are digital assets that can be mined and transacted from anywhere in the world, the rate of return of crypto assets is more sensitive to changes in the global liquidity conditions than to local conditions.

📰 Towards a single low tax regime

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