EDITORIALS & ARTICLES
3rd April 2021
India's March trade deficit widens to $14.11 billion - govt
Preliminary data released by the government showed that India's trade deficit in goods widened to USD 14.11 billion in March 2021 from USD 9.98 billion during March 2020.
- Other Observations:
- Merchandise Exports: India’s merchandise exports in March 2021 were USD 34.0 billion as compared to USD 21.49 billion in March 2020, an increase of 58.23%.
- For the first time ever in a month, Indian exports crossed USD 34 billion in March 2021.
- Merchandise Imports: India’s merchandise imports were USD 48.12 billion as compared to USD 31.47 billion in March 2020, an increase of 52.89%.
- India is thus a net importer in March 2021, with a trade deficit of USD 14.11 billion.
- Reasons for Increased Imports:
- Relaxation in lockdown policy and start of economic activities are the main reasons for increase in demand for the goods and the import.
- Also the rise in global trade has made the global supply chain active and the commerce is taking place.
- Oil import has increased due to opening up of the transportation sector.
- Trade Deficit: A trade deficit is an amount by which the cost of a country's imports exceeds its exports.
- The trade deficit in goods shows a rise of demand in the economy.
- It is a part of the Current Account Deficit.
- Current Account Deficit:
- The current account records exports and imports in goods and services and transfer payments. It represents a country’s transactions with the rest of the world and, like the capital account, is a component of a country’s Balance of Payments (BOP).
- There is a deficit in Current Account if the value of the goods and services imported exceeds the value of those exported.
- Major components are:
- Goods,
- Services, and
- Net earnings on overseas investments (such as interests and dividend) and net transfer of payments over a period of time, such as remittances.
- It is measured as a percentage of Gross Domestic Product (GDP). The formulae for calculating Current Account Balance is:
- Current Account Balance = Trade gap + Net current transfers + Net income abroad.
- Trade gap = Exports – Imports
Balance of Payments
- Definition:
- Balance of Payment (BoP) of a country can be defined as a systematic statement of all economic transactions of a country with the rest of the world during a specific period usually one year.
- Components of BoP:
- For preparing BoP accounts, economic transactions between a country and rest of the world are grouped under - Current account, Capital account and Financial Account and Errors and Omissions.
- It also shows changes in Foreign Exchange Reserves.
- Current Account: It shows export and import of visibles (also called merchandise or goods - represent trade balance) and invisibles (also called non-merchandise).
- Invisibles include services, transfers and income.
- Capital Account and Financial Account: It shows a capital expenditure and income for a country.
- It gives a summary of the net flow of both private and public investment into an economy.
- External Commercial Borrowing (ECB), Foreign Direct Investment, Foreign Portfolio Investment, etc form a part of capital account.
- Errors and Omissions: Sometimes the balance of payment does not balance. This imbalance is shown in the BoP as errors and omissions. It reflects the country’s inability to record all international transactions accurately.
- Overall the BoP account can be a surplus or a deficit.
- If there is a deficit then it can be bridged by taking money from the Foreign Exchange (Forex) Account.
- If the reserves in the forex account are falling short then this scenario is referred to as BoP crisis.
Article 244 (A), its relevance for Assam hill tribes, and the politics
The demand for an autonomous state within Assam has been raised by some of the sections of the society in Assam under the provisions of Article 244A of the Constitution.
- Genesis:
- In the 1950s, a demand for a separate hill state arose around certain sections of the tribal population of undivided Assam.
- After prolonged agitations, Meghalaya gained statehood in 1972.
- The leaders of the Karbi Anglong and North Cachar Hills were also part of this movement. They were given the option to stay in Assam or join Meghalaya.
- They stayed back as the centre promised them more powers, including Article 244 (A).
- In the 1980s, the demand for more power/autonomy took the form of a movement with a number of Karbi groups resorting to violence.
- It soon became an armed separatist insurgency demanding full statehood.
- Article 244A:
- Article 244(A) allows for creation of an ‘autonomous state’ within Assam in certain tribal areas.
- It also envisages creation of a local legislature or Council of Ministers or both to carry out local administration.
- It was Inserted into the Constitution by the Twenty-second Constitution Amendment Act, 1969.
- Article 244(A) accounts for more autonomous powers to tribal areas than the Sixth Schedule. Among these the most important power is the control over law and order.
- In Autonomous Councils under the Sixth Schedule, they do not have jurisdiction of law and order.
6th Schedule
- The Sixth Schedule of the Constitution provides for the administration of tribal areas in Assam, Meghalaya, Tripura and Mizoram to safeguard the rights of the tribal population in these states.
- This special provision is provided under Article 244 (2) and Article 275 (1) of the Constitution.
- In Assam, the hill districts of Dima Hasao, Karbi Anglong and West Karbi and the Bodo Territorial Region are under this provision.
- The Governor is empowered to increase or decrease the areas or change the names of the autonomous districts. While executive powers of the Union extend in Scheduled areas with respect to their administration in fifth schedule, the sixth schedule areas remain within executive authority of the state.
- The Fifth Schedule of the Constitution deals with the administration and control of scheduled areas and scheduled tribes in any state except the four states of Assam, Meghalaya, Tripura and Mizoram.
- The whole of the normal administrative machinery operating in a state do not extend to the scheduled areas.
- At present, 10 States namely Andhra Pradesh, Chhattisgarh, Gujarat, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Rajasthan and Telangana have Fifth Schedule Area.
- Tribal habitations in the states of Kerala, Tamil Nadu, Karnataka, West Bengal, Uttar Pradesh and Jammu & Kashmir have not been brought under the Fifth or Sixth Schedule.
- The acts of Parliament or the state legislature do not apply to autonomous districts and autonomous regions or apply with specified modifications and exceptions.
- The Councils have also been endowed with wide civil and criminal judicial powers, for example establishing village courts etc. However, the jurisdiction of these councils is subject to the jurisdiction of the concerned High Court.
CM Kejriwal to attend World Cities Culture Forum
The Chief Minister of Delhi will represent Delhi and India at the World Cities Culture Forum (WCCF).
- The date for this year’s annual summit is yet to be announced on the forum’s website.
- Establishment: WCCF was established in London in 2012 with eight cities.
- Member Cities: It has 43 participating member cities.
- Participating member cities include London, Hong Kong, Amsterdam, Edinburgh, Lisbon, San Francisco, Shanghai, etc.
- Delhi is invited this year but it is not a part of member cities.
- Role: It enables the policy makers of member cities to share research and intelligence, and explores the vital role of culture in their future prosperity.
- Managed By: The activities of the World Cities Culture Forum are organised and delivered by BOP Consulting, a specialist consulting firm, on behalf of the Greater London Authority, London’s Municipal Government.
- BOP conducts comparative research to measure the impact and importance of culture and creativity, and shares it with the Forum so members can make evidence-based policy decisions.
- World Cities Culture Summit: Forum members collaborate via a programme of events including themed symposia, regional summits and workshops. These events feed into the annual World Cities Culture Summit.
- Hosted on a rotating basis by member cities, this unique gathering allows city leaders to share ideas and knowledge about the role of culture as an organising principle for the sustainable city of the future.
- It is attended by Deputy Mayors for Culture and Heads of Culture from the member cities.
- 2021 Theme: The Future of Culture.
- World Cities Culture Report: Delhi will also be part of the World Cities Culture Report - the most comprehensive global dataset on culture in cities.
- It is published by the forum every three years, with data and details on innovative projects from cities across the world. The last report was published in 2018.
Pollution Control Boards to Increase Capacity - NGT Orders
Recently, the National Green Tribunal (NGT) directed the Haryana State Pollution Control Board (HSPCB) to strengthen its capacity and the Central Pollution Control Board (CPCB) to form a uniform recruitment criteria.
- The order was to ensure better monitoring for improved compliance of environmental norms.
- Earlier in January 2021, the Supreme Court (SC) had taken suo motu cognizance of pollution of water bodies by untreated sewage in Haryana.
- The Plea:
- In 2018, a case was filed with NGT’s principal bench for revising existing monitoring mechanism by State Pollution Control Boards (SPCBs).
- This included an interval of mandatory inspections of highly polluting industries and policy for auto renewal of Consent to Operate (CTO) certificate under Water (Prevention and Control of Pollution) Act, 1974 as well as the Air (Prevention and Control of Pollution) Act, 1981.
- The plea pointed out that an earlier report of the Central Ground Water Board (CGWB) had established deterioration of the ground water quality in Haryana.
- The Comptroller and Auditor General (CAG) of India’s 2016 report also recorded operation of several projects without valid consent to establish or CTO certificates, showing ineffectiveness of monitoring mechanism.
- NGTs Action:
- The NGT passed an order for the Haryana government to revisit its inspection policy and make it adequate to ensure effective enforcement of law.
- Haryana's Proposal:
- The Haryana government, in compliance to the NGT order, proposed a revised policy with increased frequency of inspection, installation of online monitoring devices to capture real-time data and pre-verification of documents before issuing renewal.
- Current Order:
- Inspection at higher frequencies.
- Capacity enhancement of SPCBs/Pollution Control Committees (PCCs) with consent funds.
- Capacity enhancement of CPCB utilising environment compensation funds.
- Annual performance audit of state PCBs/PCCs.
- CPCB to prepare a format containing qualifications, minimum eligibility criteria and required experience for key positions.
- Significance:
- In the name of ‘ease of doing business’, powers and authorities of SPCB have been compromised. The latest judgement of NGT is a fresh start to the long-delayed initiative of strengthening CPCB/SPCBs/PCCs.
- The judgment of NGT could be termed as landmark. The NGT has tried to erase the bottlenecks, which were being used to halt the strengthening of environmental regulation.
- The important part of the judgement is asking CPCB to come out with standard recruitment rules which can be followed by all states. The existing SPCBs recruitment rules have not been updated for decades.
Note
- CPCB:
- CPCB is a statutory organisation which was constituted in September, 1974 under the Water (Prevention and Control of Pollution) Act, 1974.
- It was entrusted with the powers and functions under the Air (Prevention and Control of Pollution) Act, 1981.
- It serves as a field formation and also provides technical services to the Ministry of Environment and Forests and Climate Change of the provisions of the Environment (Protection) Act, 1986.
- SPCB:
- They supplement the CPCB as they are a statutory organization entrusted to implement Environmental Laws and rules within the jurisdiction of a state.
- Environment Compensation:
- Environmental compensation is a policy instrument for the protection of the environment which works on the‘Polluter Pays Principle’.
- Environment Compensation Fund:
- It is a specialised type of fund collected by charging the environmental violations.
- Example: Illegal discharge in water bodies.
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