DAILY CURRENT AFFAIRS

Air Transport Bubble

“Transport Bubbles” or “Air Travel Arrangements” are temporary arrangements between two countries aimed at restarting commercial passenger services when regular international flights are suspended as a result of the COVID-19 pandemic. They are reciprocal in nature, meaning airlines from both countries enjoy similar benefits.

Countries with which India Has Air Bubble agreements

Afghanistan

Bahrain

Bangladesh

Bhutan

Canada

Ethiopia

Finland

France

Germany

Iraq

Japan

Kenya

Kuwait

Maldives

Mauritius

Nepal

Netherlands

Nigeria

Oman

Qatar

Russia

Rwanda

Seychelles

Singapore

Sri Lanka

Tanzania

Ukraine

UAE

UK

USA

Uzbekistan

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About G20

·         G20 or Group of 20 is an intergovernmental forum.

·         Member Countries - Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union.

·         Permanent invitees are African Union, ASEAN, FAO, ILO, IMF, Spain, OECD, UN, World Bank, WHO and WTO.

·         Members comprises both industrialized and developing countries and accounts to two-third of world population, 75-80% world trade and 90% of Gross World Product (GWP – Gross National Income of all countries)

·         The G20 Summit is often formally known as the “Summit on Financial Markets and the World Economy”

·         G20 was founded in 1999 as a response to the severe Asian Economic Crisis of 1997-98, when it was acknowledged that the participation of major emerging market countries was necessary for a discussion on the international financial system. Thus from 1999, G20 Finance Ministers and Central Bank Governors meeting started on major economic and monetary policy issues amongst major countries in the global financial system targeting stable and sustainable global economic growth

·         Since 2008 it is upgraded to head of the state level and from 2011 are held annually.

·         They work on addressing major issues related to the global economy, such as international financial stability, climate change mitigation, trade, energy, counter-terrorism, migration, refugees and sustainable development.

Belt and Road Initiative (BRI)

• China’s global investment strategy to enhance regional connectivity and to build a brighter future through a large programme of investments in infrastructure development for ports, roads, railways and airports, as well as power plants and telecommunications networks.
• The official name for the initiative is the” Silk Road Economic Belt and 21st-Century Maritime Silk Road Development Strategy”
• Flagship project of President Xi Jinping, launched in 2013 at Kazakhstan. The BRI forms a central component of Xi Jinping's "Major Country Diplomacy" strategy, which calls for China to assume a greater leadership role for global affairs in accordance with its rising power and status
• Officially, it aims to develop land and sea infrastructure to better connect China to Asia, Europe and Africa via land and maritime networks with the aim of improving regional integration, increasing trade and stimulating economic growth.
• It is inspired from the concept of the Silk Road established during the Han Dynasty 2,000 years ago – an ancient network of trade routes that connected China to the Mediterranean via Eurasia for centuries. The BRI has also been referred to in the past as 'One Belt One Road'.
• The initiative defines five major priorities:
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  • policy coordination;
•  infrastructure connectivity;
•  unimpeded trade;
•  financial integration;
•  and connecting people.

The initiative was incorporated into the Constitution of China in 2017. 

About G7

G-7, or “group of seven,” is primarily a political forum of global leaders of top industrialized nations, formed in response to the oil shock of the 1970s. Members are Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. In addition, the presidents of the European Council and the European Commission represent the EU at G-7 summits

Goods and Services Tax (GST)

• The goods and services tax (GST) is a tax on goods and services sold domestically for consumption.

It is a comprehensive, multistage, destination-based tax: comprehensive because it has subsumed almost all the indirect taxes except a few state taxes. Multi-staged as it is, the GST is imposed at every step in the production process, but is meant to be refunded to all parties in the various stages of production other than the final consumer and as a destination-based tax.

• The GST is a common tax used by the majority of countries globally.
• The GST is usually taxed as a single rate across a nation.

Prime Minister Narendra Modi launched GST into operation on the midnight of 1 July 2017. But GST was almost two decades in the making since the concept was first proposed under the Atal Bihari Vajpayee government. 

Different Types of GST:

• Central GST (CGST): GST paid on each transaction is divided into two equal parts: the part for the Centre is termed as CGST.
• State GST (SGST): The part of a state’s share of GST, when a transaction takes place within the state, is called SGST.
• Union Territory GST (UGST): When a transaction takes place within a union territory (UT) without a legislature, the part of GST that the UT gets is called UGST.
• Integrated GST (IGST): When a transaction takes place between two states/UTs or between a state/UT and any foreign territory, IGST is levied without any bifurcation on the applicable GST rate.

Union Minister of Commerce and Industry – Shri Piyush Goyal

Balance of Trade and Trade Deficit

The balance of trade, commercial balance, or net exports, is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance of trade for goods versus one for services. The balance of trade measures a flow of exports and imports over a given period of time. The notion of the balance of trade does not mean that exports and imports are "in balance" with each other.

If a country exports a greater value than it imports, it has a trade surplus or positive trade balance, and conversely, if a country imports a greater value than it exports, it has a trade deficit or negative trade balance.

Production Linked Incentive (PLI) Scheme

PLI scheme is an initiative that provides incentives to domestic industries to boost local production. Through this, specifically tailored products emerge that satisfy a base target customers. Domestic businesses also help in cutting down import bills. As per the PLI scheme, the government encouraged domestic companies and establishments to set up or expand on manufacturing units to increase production, to which the government provides incentives on incremental sales.

Tariff and Non-Tariff Barrier

Tariff barriers are the tax or duty imposed on the goods which are traded to/from abroad. On the contrary, non-tariff barriers are the obstacles to international trade, other than tariffs like quotas. These are administrative measures implemented by the country’s government to discourage goods brought in from foreign countries and promote domestically produced items. Both of these are collectively known as trade barriers.

Debt to GDP Ratio

Debt to GDP= Total Debt of State or Country / Total GDP of State or Country

The debt-to-GDP ratio is the metric comparing public debt to its gross domestic product (GDP). It’s the comparison of what a state/country owes and what it produces or what is its output(measured in GDP). Thus the debt-to-GDP ratio reliably indicates that particular state’s/country’s ability to pay back its debts.

It is one of the most important factor to gauge that whether a country/state is moving towards economic turmoil or not

It's a useful tool for investors, leaders, and economists. A high ratio means a state/country isn't producing enough to pay off its debt. A low ratio means there is plenty of economic output to make the payments. Thus, a low debt-to-GDP ratio is a measure of a healthy economy that produces and sells goods and services without accumulating future debts. Whereas, extravagantly high debt-to-GDP ratios deter creditors from lending money creating financial panic in the market..

Although governments strive to lower their debt-to-GDP ratios, this can be difficult to achieve during periods of unrest, such as wartime, or economic recession or pandemic. In such challenging climates, governments tend to increase borrowing to stimulate growth and boost aggregate demand. 

GDP and Slowdown - 

An economic slowdown occurs when the rate of economic growth slows in an economy. Countries usually measure economic growth in terms of gross domestic product (GDP), which is the total value of goods and services produced in an economy during a specific period of time.For example if the Growth of GDP falls from 5% to 3%, we call it slowdown. It's not a fall in actual GDP but a slight fall in the growth rate of GDP.

How is recession different from slowdown?

An economic recession signifies a drop in the gross domestic product (GDP), while a slowdown is merely a decline in the growth rate of the GDP. It’s the difference between a salary cut and a smaller increment. While one reduces an individual’s actual income, the other is merely a drop in the growth of that income.

15th Finance Commission

Constituted by the President of India in November 2017, under the chairmanship of NK Singh. Its recommendations will cover a period of five years from the year 2021-22 to 2025-26.

Finance Commission is a constitutional body (constituted by President of India under Article 280), that determines the method and formula for distributing the tax proceeds between the Centre and states, and among the states as per the constitutional arrangement and present requirements. It is setup at an interval of five years

INTERNATIONAL MERCHANDISE TRADE

According to United Nations guidelines, international merchandise trade statistics record all goods which add to, or subtract from, the stock of material resources of a country by entering (as imports) or leaving (as exports) its economic territory. Goods being transported through a country or temporarily admitted or withdrawn (except for goods for inward or outward processing) are not included in merchandise trade statistics.

Merchandise Export related Scheme in India

Remission of Duties and Taxes on Exported Products (RoDTEP) scheme - It is for Exporters to make Indian products cost-competitive and create a level playing field for them in the Global Market.

It was kicked in from January 2021, replacing the earlier Merchandise and Services Export Incentive Schemes (MEIS) that were in violation of World Trade Organisation (WTO) norms. The new RoDTEP Scheme is a fully WTO compliant scheme.

It covers about 75% of traded items and 65% of India’s exports.

To enable zero-rating of exports by ensuring domestic taxes are not exported, all taxes, including those levied by States and even Gram Panchayats, will be refunded under the scheme.

Steel, pharma, and chemicals have not been included under the scheme because their exports have done well without incentives.

Balance of Trade and Trade Deficit

The balance of trade, commercial balance, or net exports, is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance of trade for goods versus one for services. The balance of trade measures a flow of exports and imports over a given period of time. The notion of the balance of trade does not mean that exports and imports are "in balance" with each other.

If a country exports a greater value than it imports, it has a trade surplus or positive trade balance, and conversely, if a country imports a greater value than it exports, it has a trade deficit or negative trade balance.

Asian Federation of Advertising Associations (AFAA)

AFAA is an international association for the development and support of the advertising industry of Asia. The federation aims to promote, protect and develop advertising within the context of conditions and varying cultures prevailing in the Asian region.

• AFAA is represented in India by the Advertising Council of India (ACI).
• India gave AFAA two distinguished Chairmen in the past – Gautam Rakshit and Pradeep Guha.

Bhopal Gas Tragedy, 1984

The Bhopal Disaster also known as Bhopal Gas Tragedy was an incident in which a poisonous chemical MIC (Methyl Isocyanate) and some other chemicals were released from a pesticide plant UCIL (Union Carbide India Limited) on 2nd December 1984. More than 500,000 people were exposed to MIC poisonous gas, from which 2259 died immediately and 25,000 died later.

History of World Computer Literacy Day:

World Computer Literacy Day was launched by Indian computer company NIIT to mark its 20th anniversary in 2001, in response to research that suggested that the majority of computer users around the world were men.  it aims to "create awareness and drive digital literacy in underserved communities worldwide"