01 APRIL 2021
Daily Current Affairs based on ‘The Hindu’ newspaper as per the syllabus of UPSC Civil Services Examination (Prelims and Mains) compiled by Mrs. Bilquees Khatri.
|1.||GS III: ECONOMY – POLICY||Govt. sharply cuts rates on small savings instruments|
|2.||GS II: BILATERAL – INDIA – ASIA||Pakistan allows import of cotton and sugar from India|
|3.||GS III: DEFENCE||Military farms shut down after 132 years|
|4.||GS III: ECONOMY – POLICY||Govt. retains 4% inflation target for RBI’s rate panel for 2021-26|
|5.||GS III: ECONOMY – INDICATORS||Core sector output contracts 4.6% in Feb.|
GS III: ECONOMY – POLICY
Govt. sharply cuts rates on small savings instruments
- The government has sharply slashed the rates on all small savings instruments for the first quarter of 2021-22, bringing the rate of return on the Public Provident Fund down from 7.1% to 6.4% and effecting cuts ranging from 40 basis points (0.4%) to 110 basis points (1.1%) through a notification.
- The sharpest cut was seen in the quarterly interest rate paid on one-year term deposits, from 5.5% in the January to March quarter to 4.4% in this quarter.
- The rate of return on the Senior Citizen Savings’ Scheme was cut from 7.4% to 6.5%, while the Sukanya Samriddhi Account Scheme’s return was reduced from 7.6% to 6.9%.
- While the government resets the interest rate on small savings instruments every quarter, this round of rate cuts assumes significance as retail inflation has been breaching the 6% mark and the government is keen to lower interest rates to make it
GS II: BILATERAL – INDIA – ASIA
Pakistan allows import of cotton and sugar from India
- Partially reversing a two-year-old decision to suspend all trade with India, Pakistan announced that it would allow the import of cotton and sugar from across the border.
- The decision follows the Line of Control (LoC) ceasefire announced by India and Pakistan in February, and a number of moves seen as part of a larger dialogue process to de-freeze ties.
- Addressing the media at the end of a Cabinet meeting that cleared the two proposals from Pakistan’s Commerce Ministry, newly appointed Finance Minister Hammad Azhar said, however, that the decision was driven by rising prices and Pakistani industry’s need for the specific products.
- “We have allowed the import of sugar, but in the rest of the world too, sugar prices are high because of which imports are not possible. But in India, the prices of sugar are much less as compared to Pakistan, so we have decided to reopen sugar trade with India,” Mr. Azhar said.
GS III: DEFENCE
Military farms shut down after 132 years
- Military farms have been closed after 132 years of service, the Army said.
- “All the officers and workers have been redeployed within the Ministry to continue providing service to the organisation,” the Army said.
- There have been several recommendations in the past to shut down the farms.
- In 2012, the Quarter Master General branch had recommended their closure.
- In December 2016, the Lt. Gen. D.B. Shekatkar (retd.) committee, which was appointed to recommend measures to enhance combat capability and rebalance defence expenditure of the armed forces, said the same.
- The farms were set up with the sole requirement of supplying hygienic cow milk to troops in garrisons across British India.
- The first military farm was raised on February 1, 1889, at Allahabad.
- Post-Independence, they flourished with 30,000 heads of cattle in 130 farms all over India. They were even established in Leh and Kargil in the late 1990s.
- For more than a century, the farms supplied 3.5 crore litres of milk and 25,000 tonnes of hay yearly.
- It is credited with pioneering the technique of artificial insemination of cattle and introduction of organised dairying in India, providing yeoman service during the 1971 war, supplying milk at the Western and Eastern war fronts as well as during the Kargil.
GS III: ECONOMY – POLICY
Govt. retains 4% inflation target for RBI’s rate panel for 2021-26
- The Centre has decided to retain the inflation target of 4%, with a tolerance band of +/- 2 percentage points for the Monetary Policy Committee of the RBI for the coming five years, a top finance ministry official said.
- “The inflation target for the period April 1, 2021, to March 31, 2026… has been kept at the same level as it was for the previous five years,” Economic Affairs Secretary Tarun Bajaj told reporters on Wednesday.
- Economists welcomed the continuity in the framework, despite the recent spate of high inflation prints beyond the 6% upper threshold of the inflation target.
- “The range of 2%-6% as a flexible inflation target has worked reasonably well and continuing with the same target would not disturb the monetary policy framework as such going forward,” said M. Govinda Rao, member Fourteenth Finance Commission and former director of the National Institute of Public Finance and Policy.
- “Inflation may have breached the 6% mark a few times recently, but this has been during an exceptional situation in the economy.”
- The decision puts to rest speculation about the government considering a looser inflation target to enable a more growth-oriented focus in monetary policy.
GS III: ECONOMY – INDICATORS
Core sector output contracts 4.6% in Feb.
- The output of eight core sectors declined by 4.6% in February, the steepest contraction in the last six months, which economists said could drag the overall industrial production in the month into the negative territory.
- All the key segments, including coal, crude oil, natural gas, and refinery products, witnessed a decline in production.
- The growth rate of the eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — stood at 6.4% in February 2020.
- According to the data, coal production declined by 4.4%, crude oil by 3.2%, natural gas by 1%, refinery products by a steep 10.9%, fertilisers by 3.7%, steel by 1.8%, cement by 5.5% and electricity by 0.2% in February 2021.