📰 US President Donald Trump terminates preferential trade status for India under GSP
On March 4, Mr. Trump announced that the US intends to terminate India’s designations as a beneficiary developing country under the GSP programme. The 60-day notice period ended on May 3.
•President Donald Trump has terminated India’s designation as a beneficiary developing nation under the key GSP trade programme after determining that it has not assured the US that it will provide “equitable and reasonable access to its markets.” The Generalized System of Preference (GSP) is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
•“I have determined that India has not assured the US that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019,” Trump said in a proclamation on Friday, ignoring the plea made by several top American lawmakers as it will cost American businesses over $300 million in additional tariffs every year.
•On March 4, Mr. Trump announced that the US intends to terminate India’s designations as a beneficiary developing country under the GSP programme. The 60-day notice period ended on May 3.
•The Trump administration has prioritised working with the Government of India to ensure that US companies have a level-playing field, a senior State Department official told reporters on Thursday, hours after Narendra Modi was sworn in as Prime Minister for a second time following his spectacular electoral victory in the general elections.
•Under the GSP programme, nearly 2,000 products including auto components and textile materials can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress.
•India was the largest beneficiary of the programme in 2017 with $5.7 billion in imports to the US given duty-free status and Turkey the fifth largest with $1.7 billion in covered imports, according to a Congressional Research Service report issued in January.
Unemployment rate at 45-year high
•India’s GDP grew at 5.8% in the January-March 2019 quarter, dragging down the full year growth to a five-year low of 6.8%. The unemployment rate in the country rose to a 45-year high of 6.1% in 2017-18, as per official data released on the first day of the second term of the Modi government.
•Addressing a press conference on Friday, Economic Affairs Secretary Subhash Chandra Garg said the slowdown, caused by temporary factors such as liquidity crunch, is likely to continue in the April-June 2019 quarter, with the demand picking up from the second quarter onwards.
‘Temporary factors’
•“Slowdown in the fourth quarter GDP was due to temporary factors, like stress in the NBFC sector affecting consumption finance. The first quarter of the current fiscal will also see relatively slower growth. From the second quarter onwards, we expect the growth and consumption to pick up,” Mr. Garg said.
•Asked about India losing the fastest growing nation tag to China with a quarterly growth of 5.8%, Mr. Garg, who is also the Finance Secretary, said, “Quarterly numbers don’t matter…it is basically annual growth… At 6.8% annual growth, India is still the fastest growing nation… China is still lower.”
•During the year, the slowdown in the economy was led by sluggish growth in the agriculture, forestry and fishing sector (2.9% growth), the mining sector (1.3% growth) and in manufacturing (6.9%).
•The sectors which saw growth rate of over 7% were public administration, defence and other services, construction, financial, real estate and professional services, and electricity, gas, water supply and other utility services.
•The unemployment data, which was released a day after Prime Narendra Modi took oath for the second term, confirms an earlier leaked version of this survey that claimed that joblessness was at a 45-year high.
•“It is a new design and a new matrix. It would be unfair to compare it with the past. This 45-year high is your interpretation. I don’t want to claim that it is 45-year low or high,” Statistics Secretary Pravin Srivastava told the media.
📰 U.S. reiterates threat of sanctions over Triumf deal
‘Acquisition of missile sends the wrong message to Russia’
•India should not assume it will get a waiver from U.S. sanctions if it goes ahead with its purchase of the S-400 Triumf missile shield from Russia, Washington made it clear on Thursday. The purchase could also hamper the future of Indo-U.S. defence relationship, an official said.
•“The [U.S.] President has been very clear that the acquisition of advanced Russian technology sends the wrong message to Russia at a time when it continues its aggressions in Ukraine, has interfered in our internal elections...And so those concerns…we hold high,” a senior State Department official told a group of reporters on Thursday.
$5 billion deal
•India had committed last October to purchasing a Russian S-400 Triumf long-range missile defence shield for about $5 billion.
•The deal has run the risk of attracting sanctions from the U.S. under a 2017 law — the Countering America’s Adversaries Through Sanctions Act (CAATSA).
•While sanctions can kick in only when payments start being made for the S-400, the U.S. Congress’s annual defence budget authorisation, the National Defence Authorisation Act (NDAA) passed last year, allows the President to grant waivers from CAATSA sanctions under certain conditions.
•The State Department official emphasised, however, that a CAATSA waiver was not automatic and it was for the President to grant waivers on a case-by-case basis.
•This view that India should not bank on a waiver appears to be consistent across U.S. government departments.
Conditional waiver
•“We have serious concerns about the S-400, and we would not encourage any country to rely on waiver status for the purchase of any prohibited Russian items, especially the S-400,” a senior administration official had separately toldThe Hindu on May 24. “The irony of the U.S. pressing India on the S-400 is that several former U.S. defence officials have praised the military utility of Russian platforms like Brahmos cruise missiles and the S-400 system enabling India to face off against China. The U.S. can’t offer comparable anti-access/area denial capabilities,” said Sameer Lalwani, who heads the South Asia program at the Stimson Center, a non-partisan think-tank in Washington DC.
•Purchasing the S-400 would preclude a deep and broad defence relationship with the U.S, the official said.
•India is currently in discussions to buy various other U.S. defence equipment including combat aircraft and the Sea Guardian drones.
📰 ‘Jal Shakti’ Ministry to deal with integrated water issues
•A new ‘Jal Shakti’ Ministry, in which the erstwhile Ministries of Water Resources and Drinking Water and Sanitation will be merged, has been formed with Gajendra Singh Shekhawat at its helm.
•Mr. Shekhawat took charge of the Ministry on Friday, a day after he was sworn in as a Cabinet Minister. During the election campaign, Mr. Modi had promised to form an integrated Ministry dealing with water issues.
•The remit of the Ministry will encompass issues ranging from international and inter-State water disputes, the Namami Gange project, the flagship initiative to clean the Ganga, its tributaries and sub-tributaries and the provision of clean drinking water.
•In the first Modi government, the project to clean the Ganga was moved from the Ministry of Environment and Forests to the Ministry of Water Resources.
•With a greater push and larger monetary allocation, the Namami Gange project was launched.
•Mr. Shekhawat said that the priority would be to provide clean drinking water to everyone.
📰 Frame Uniform Civil Code: petition
•The Delhi High Court on Friday issued notice to the Centre on a petition seeking framing of a uniform civil code to promote “unity, fraternity and national integration.”
•A Bench of Chief Justice Rajendra Menon and Justice Brijesh Sethi passed the order on the petition filed by Bharatiya Janata Party leader Ashwini Kumar Upadhyay.
•Mr. Upadhyay has asked for direction to the Central government to constitute a Judicial Commission or a High Level Expert Committee to draft a Uniform Civil Code in the spirit of Article 44 of the Constitution within three months.
•This, Mr. Upadhyay said, should be done “while considering the best practices of all religions and sects, Civil Laws of developed countries and international conventions.”
📰 Guterres appoints Indian-origin Anita Bhatia as UN-Women’s dy executive director
Indian-origin official picked for UN Women
•Indian-origin official Anita Bhatia, a veteran in strategic partnerships and resource mobilisation, has been appointed by United Nations Secretary-General Antonio Guterres as the Deputy Executive Director in UN Women, the agency focussed on women empowerment and gender equality.
📰 Tight-fisted Centre meets deficit target
Fiscal deficit came in at 3.39% as against the 3.4% projected in the revised estimates of the Budget
•Fiscal deficit for 2018-19 came in at 3.39% of the GDP (gross domestic product), marginally lower than the 3.4% projected in the revised estimates of the Budget, mainly on account of lower expenditure and increase in non-tax revenue.
•In absolute terms, the fiscal deficit at the end of March 31, 2019, stood at Rs. 6.45 lakh crore as against Rs. 6.34 lakh crore in the revised estimates of the Budget.
•The fiscal deficit for 2018-19 works out to 3.39% of the GDP, as per data released by the Controller General of Accounts (CGA).
•Although in absolute terms the fiscal deficit has gone up, as a percentage of GDP, the deficit figure has come down marginally, mainly on account of gross domestic product expansion in 2018-19.
•GDP at current market prices in 2018-19 is estimated at Rs. 190.10 lakh crore, a 11.2% growth over Rs. 170.95 lakh crore in 2017-18.
•Non-tax revenues during the 2018-19 fiscal stood at Rs. 2.46 lakh crore, marginally higher than the Rs. 2.45 lakh crore in the revised estimates of Budget.
•However, tax revenue lagged at Rs. 13.16 lakh crore during the last fiscal, as against Rs. 14.84 lakh crore in the revised estimates.
•Total receipts stood at Rs. 16.66 lakh crore during the fiscal, compared to Rs. 18.22 lakh crore in the revised estimates.
•Total expenditure at the end of 2018-19 fiscal was lower at Rs. 23.11 lakh crore as both capital and revenue expenditure were less than what was projected in the revised estimates. In the revised estimates, the government had projected the total expenditure at Rs. 24.57 lakh crore.
•The CGA data also showed that fiscal deficit in April, the first month of 2019-20 fiscal, stood at 22.3% of the Budget estimates.
•In absolute terms, the deficit stood at Rs. 1.57 lakh crore in April, while the full 2019-20 budget estimate is about Rs. 7.04 lakh crore.
•Fiscal deficit, which is the difference between expenditure and revenue, was originally budgeted at 3.3% for 2018-19.
Upward revision
•However, the government later revised upward the deficit to 3.4% in the revised estimates of 2018-19 Budget to accommodate extra spending on account of schemes for farmers.
•For 2019-20, the fiscal deficit is budgeted at 3.4% of the gross domestic product.
📰 NITI for policy framework for infra projects
•A task force on project management, headed by NITI Aayog CEO Amitabh Kant, has suggested the development of a National Project Management Policy Framework for the effective execution of public sector and public-private partnership infrastructure projects.
•It has also recommended the setting up of a nodal body for the certification of chartered project management professionals to create world-class infrastructure. The report says, project management, with a view to deliver on time and within budget, is a learnable capability that can be institutionalised as demonstrated by the experiences of the U.S., the U.K., the UAE and China.
📰 E-cigarettes pose public health risk, says ICMR
Dismisses claims that devices can help cut tobacco use
•The Indian Council of Medical Research (ICMR) has warned of a potential public health disaster if action was not taken to completely prohibit and dissuade the use of Electronic Nicotine Delivery Systems (ENDS) or e-cigarettes given that the nicotine delivered by these devices adversely affect almost all systems in a human body.
•E-cigarette use adversely affects the cardiovascular system, impairs respiratory immune cell function and airways in a way similar to cigarette smoking and is responsible for severe respiratory disease. It also poses risk to foetus, infant, and child brain development, the council noted in a white paper released on Friday.
Harmful effects
•“Use of e-cigarettes has documented adverse effects on humans which include DNA damage; carcinogenesis; cellular, molecular and immunological toxicity; respiratory, cardiovascular and neurological disorders and adverse impact on foetal development and pregnancy,’’ said Prof. Balram Bhargava, director general ICMR.
•Given the harmful health effects e-cigarettes pose to users, as well as passive exposure, failure to make appropriate interventions at the right time — by bringing together all stakeholders under one umbrella to prevent this impending epidemic of e-cigarettes use — could lead to a public health disaster in India, Dr. Bhargava asserted.
Urges complete ban
•There are more than 460 different e-cigarette brands with varying configurations of nicotine delivery available in the market, according to the ICMR.
•Now, based on the currently available scientific data from multiple streams of research, the ICMR has recommended complete prohibition on ENDS or e-cigarettes in India in the greater interest of protecting public health.
•Observing that tobacco consumption, especially cigarette smoking, had shown a decline in India in recent years, Prof. K. Srinath Reddy, president, Public Health Foundation of India and cardiologist and public health expert who had chaired the ICMR expert group for this white paper, said that this had been achieved through several tobacco control measures that had already been initiated. “Thus, at this juncture, marketing of a product like e-cigarettes, with unproven benefit and high potential harm from addiction and health risks, is unwarranted as a tobacco control measure,” said Dr. Reddy. “The risk of youth addiction is high,’’ he warned.
•With any benefit that e-cigarettes may offer as a tobacco cessation aid yet to be established and evidence suggesting that there were risks of both dual use and the initiation to tobacco addiction among non-smokers, these products, on balance, had a net negative impact on public health, the ICMR noted.
•In its response, Association of Vapers India (AVI) in a statement said that the white paper does not present the true picture.
•“The findings of the ICMR paper run counter to empirical data from countries where e-cigarettes are regulated and research conducted by some of the most credible organisations in the world. This could be because they have cherry-picked studies to make a targeted case against e-cigarettes,” said Samrat Chowdhery, director of AVI.
📰 Japan unveils policy to curb plastic waste
It plans to press for an international agreement during G20 summit in Osaka
•Japan on Friday announced a policy to reduce marine plastic waste, part of efforts to raise the issue at the G20 summit it will host next month.
•Japan is hoping to cast itself as a leader on the issue, and will reportedly press for an international agreement to reduce the amount of plastic going into the ocean during the Osaka summit from June 28 to 30.
•“Ocean plastic waste is one of the issues topping the G20 summit agenda, and as the chair of the meeting, we will exercise leadership to solve the matter,” Prime Minister Shinzo Abe told a ministerial meeting that adopted the policy package.
•But so far the policies are largely theoretical, with no timeline specified for legislation needed to implement some of the programme.
•Japan is the second largest per capita producer of plastic waste in the world after the U.S., and while it has a comparatively high recycling rate, it lags behind on efforts to reduce single-use plastic.
•Included in the policy is a plan to require retailers to charge customers for plastic bags, though it remains unclear when that will come into effect and whether all retailers will be affected.
•Plastic bag charges are already common in many parts of the world, and the European Union in March passed legislation banning other single-use plastic including straws and cutlery from 2021.
•Japan’s policy aims to recycle 100% of newly produced plastics by 2035 and promotes the use of biodegradable alternatives to oil-based plastic.
•The package also includes a plan to support Southeast Asian countries with recycling technologies and other infrastructure, the government said in a statement.
•Globally, some eight million tonnes of plastic waste is estimated end up in the sea each year. From Japan, some 20,000 to 60,000 tonnes of plastic wastes are estimated to flow into oceans annually, the government said.
