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Note:  The following Current affairs has been selected from AIR, PIB, PRS, BBC, The Hindu, IDSA (Institute for Defence Studies and Analyses), Live mint, Indian Express, Quora.com, Hindustan Times, Telegraph, The Times , WTO, New Indian express , The Guardian and is highly recommended for UPSC Prelims and Mains Examination


News Analysis: 11-01-2019

National News

General Studies-III : Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.


Caution ahead

  • Election-season temptations for populist spending pose a challenge to the economy

  • The first advance estimate of gross domestic product (GDP) growth for 2018-19 released by the Central Statistics Office on Monday paints a mixed picture of the economy.

  • The GDP growth rate for the full year is projected to be at 7.2%, which is significantly higher than the growth rate of 6.7% achieved last year.

  • Many sectors of the economy are projected to do better than they did last year in the aftermath of the twin shocks of demonetisation and the rollout of the Goods and Services Tax.

  • Sectors such as manufacturing and construction, for instance, are projected to grow at a healthy pace of 8.3% and 8.9%, respectively, both of which are higher than the growth rate of below 6% that each sector witnessed last year

  • Interestingly, the CSO’s growth estimate for 2018-19 appears conservative and is lower than the estimates made by institutions such as the Reserve Bank of India and the World Bank.

  • A worrying trend in the economic data is the recent sequential deceleration in growth over consecutive quarters.

  • According to the CSO, growth is likely to slow down considerably from the average of 7.6% recorded during the first half of the current fiscal year to around 6.8% in the second half.

  • This sequential slowdown is expected to get reflected in the sectoral level data as well with sectors like manufacturing expected to slow down sharply in the second half of the year compared to the first half.

  • On the brighter side, investment spending, which has ailed the economy for long, is expected to pick up finally. Gross fixed capital formation as a percentage of GDP is expected to reach 33%, the highest in three years.

  • One of the significant near-term risks to the economy is the general election that is expected to be held in May.

  • Regime uncertainty associated with the election may put a halt to the nascent pick-up witnessed in investments as corporations might decide to hold back on big ticket investments until things clear up.

  • A major risk in the medium to long term is the absence of meaningful structural reforms that are necessary to increase economic productivity combined with populist policies that eventually damage the economy.

  • Another perennial risk is the over-dependence on imported oil, which makes growth heavily dependent on external events often beyond the control of the government.

  • The projected slowdown in the second half of the fiscal despite the fall in global oil prices is a worrying sign.

  • Ahead of the general election, the government may wish to help growth by boosting spending, but any such move would be ill-advised.

  • With the fiscal deficit exceeding the Budget estimate by 15% in just the first eight months of the fiscal year, the government cannot crank up spending without severely affecting its finances, along with investor confidence in the economy.

Source: The Hindu


General Studies-III : Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.


Tax, compliance burden eased for small businesses

  • The GST Council, in its meeting on Thursday, decided on a series of measures that will ease the tax and compliance burden for small businesses. Henceforth, companies with annual turnover up to ₹40 lakh will stay out of the GST net (₹20 lakh earlier).

  • In the case of companies in the northeastern and hill States, the limit has been doubled to ₹20 lakh.

  • The annual turnover limit for eligibility for the Composition Scheme has also been raised to ₹1.5 crore from April 1. From that date, companies eligible for the Composition Scheme can file annual returns and pay taxes quarterly.

  • The Confederation of All India Traders said in a statement that the increase in limit would allow about 10 lakh traders to be exempt from the GST compliance burden, and added that increasing the Composition Scheme limit would benefit about 20 lakh small businesses.

  • Mr. Jaitley announced that the limit for eligibility for the Composition Scheme would be raised to an annual turnover of ₹1.5 crore from April 1, 2019. He added that companies opting for the Composition Scheme would be allowed to file annual returns and pay taxes quarterly from April 1.

  • The Composition Scheme currently allows companies with an annual turnover of up to ₹1 crore to opt for it, and file returns on a quarterly basis at a nominal rate of 1%. So far, only manufacturers and traders were eligible for this scheme.

  • Mr. Jaitley said that the Council had decided to extend the Composition Scheme to small service providers with an annual turnover of up to ₹50 lakh, at a tax rate of 6%

  • The The GST Council also decided to allow Kerala to levy a cess of up to 1% for up to two years on intra-State supplies to help finance the disaster relief efforts following the recent floods in the state.

  • Confederation of All India Traders, in a statement, said that increasing the GST threshold limit would allow about 10 lakh traders to be exempt from the compliance burden of GST, and added that increasing the Composition Scheme limit would benefit about 20 lakh small businesses that fall between the annual turnover brackets of ₹1 crore and ₹1.5 crore.

  • As there were diverse and differing opinions on the issues of taxing real estate and lotteries, the GST Council decided to set up to separate Groups of Ministers to look into the issue and present their assessments to the Council

Source: The Hindu



General Studies-III : Conservation, environmental pollution and degradation, environmental impact assessment Disaster and disaster management.


Centre aims for 20% cut in air pollution by 2024

  • The Centre has launched a programme to reduce particulate matter (PM) pollution by 20-30% in at least 102 cities by 2024.

  • The National Clean Air Programme (NCAP), which was formally unveiled on Thursday, is envisaged as a scheme to provide the States and the Centre with a framework to combat air pollution.

  • Pointing out that curbing PM pollution would be a long-term process, officials said the ₹300-crore programme will bring pollution concerns to the heart of a State’s development plans.

  • In the past year, the 102 cities, identified as hotspots of pollution, were asked to submit a plan for addressing the problem.

  • Broadly, the plans include increasing the number of monitoring stations, providing technology support, conducting source apportionment studies, and strengthening enforcement.

  • For achieving the NCAP targets, the cities will have to calculate the reduction in pollution, keeping 2017’s average annual PM levels as the base year.

  • The World Health Organisation’s database on air pollution over the years has listed Tier I and Tier II Indian cities as some of the most polluted places in the world. In 2018, 14 of the world’s 15 most polluted cities were in India.

  • A study in the journal Lancet ranked India as No.1 on premature mortality and deaths from air pollution.

Source: The Hindu


General Studies-II : Bilateral, regional and global groupings and agreements involving India and/or affecting India's interests Effect of policies and politics of developed and developing countries on India's interests, Indian diaspora.


Pull-out puzzle

  • As Turkey rebuffs its plea to protect Syrian Kurds, the U.S. must evaluate its next move

  • President Donald Trump’s planned withdrawal of American troops from Syria ran into trouble this week as Turkish President Recep Tayyip Erdogan rebuffed National Security Adviser John Bolton’s suggestions for an orderly exit.

  • After Mr. Trump announced the pull-out of about 2,000 troops from northeast Syria, Mr. Bolton had said the troops would leave the war-torn country after the Islamic State is beaten.

  • He also said Kurds, U.S. allies in the fight against the IS, should be protected.

  • This has ostensibly angered Turkey, which considers the Syrian Democratic Forces, the official military wing of Syrian Kurdistan, an offshoot of the Kurdistan Workers’ Party, deemed a terrorist group by Ankara and Washington.

  • Mr. Erdogan, who initially welcomed Mr. Trump’s announcement of troops withdrawal, lashed out at Mr. Bolton for setting conditions for the pull-out.

  • Tensions were so high that Mr. Erdogan refused to meet Mr. Bolton, who was in Turkey.

  • The U.S. is now in a fix. Its President has announced the withdrawal. But it cannot just exit Syria without considering the existing geopolitical equations in the region.

  • Kurds were pivotal in the war against the IS, and it is highly likely that Turkey could attack them as soon as the U.S. troops leave.

  • Ankara sees an autonomous, militarily powerful Kurdistan on the Syrian side of the border as a threat to its territorial integrity.

  • Part of the problem is with the way Mr. Trump announced his decision to withdraw troops.

  • He should have held talks with the stakeholders, including Turkey, Russia and Kurds, before taking a decision. Or he could have used his intent to pull out from Syria as a bargaining chip to extract concessions from other countries involved in the civil war.

  • In the event, the abrupt announcement has become a concession to Turkey, which was hamstrung by U.S. presence in the Kurdish-populated region in pursuing its own military options. In practical terms, the U.S. has three options.

  • One, it could go ahead with the unilateral pull-out irrespective of what Turkey does. This would leave the Kurds at the mercy of Mr. Erdogan and the Turkish troops.

  • Two, Mr. Trump can walk back on his decision and continue to station troops in Syria, influencing, at least partially, the outcome of the civil war.

  • This is unlikely given his aversion to keeping troops indefinitely in Syria (and other West Asian conflict zones).

  • Three, the U.S. can stagger the withdrawal and pursue talks with Turkey, Russia and the Syrian government to reach an agreement to guarantee the protection of the Kurds and the defeat of the IS in Syria.

  • Mr. Bolton’s Ankara trip may have failed to extract any assurances from Mr. Erdogan, but Washington should continue to keep diplomatic channels open to ensure that the pull-out is done in an orderly fashion.


Source: The Hindu


Other Issues in News:

PM-led panel moves Alok Verma out of CBI, Rao back in charge

  • The high-power committee, headed by Prime Minister Narendra Modi, on Thursday removed Alok Verma as CBI Director, a day after he resumed office following the Supreme Court order that restored his position.

  • The decision to remove Mr. Verma was taken by a 2:1 majority in the three-member committee. Justice A.K. Sikri, a nominee of the Chief Justice of India, was the third member.

  • Government sources, however, said that in the light of the Central Vigilance Commission’s report against Mr. Verma, a detailed investigation, including a criminal probe, was “necessary” and therefore, his position was untenable.

  • The Cabinet Committee on Appointments posted Mr. Verma as Director-General, Fire Services, Civil Defence and Home Guards, for the remaining period of his term that ends on January 31.

Source: The Hindu


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