- November 15, 2016
- Posted by: Vinoba
- Category: All Posts, November 2016
1.36th India International Trade Fair begins in New Delhi
The 36th edition of India International Trade Fair (IITF) has started at Pragati Maidan, New Delhi.
The theme of 2016 IITF is Digital India. 150 companies from 27 countries are taking part in the fair.
- The 2016 IITF has been organised by the India Trade Promotion Organisation (ITPO), under aegis of Union Ministry of Commerce and Industry.
- This year’s partner country is South Korea and focus country is Belarus. Besides, Madhya Pradesh and Jharkhand are partner states and Haryana is focus state.
- This year’s theme highlights country’s persistent efforts to alleviate poverty through meaningful convergence of digital technologies and e-governance.
- The fair will provide a glimpse with updated information on various missions, schemes and initiatives launched by the Central Government.
- It will also manifest a multi-pronged strategy of Indian economy driven by ‘Make in India’ initiative and reforms to transform trade and industry into an engine of socio-economic growth.
2.Termination clause in N-deal with Japan not binding on India: Government
Source: The Hindu
- The Union Government has said that the “termination” clause in the recently signed historic civil nuclear deal with Japan will be not binding on India.
- But the “termination” clause merely records the “views” of the Japanese side considering its “special sensitivities” as Japan is the only nation to have suffered a nuclear attack.
- Besides, the Union Government has also insisted that India has made “no additional commitments” over the similar agreements signed with the US and other countries.
- The historic India-Japan Nuclear Cooperation Agreement (or nuclear deal) was signed on 11 November 2016.
- The ‘Note on Views and Understanding’ signed after the agreement effectively allow Japan to invoke an “emergency” suspension of nuclear supplies if India goes for testing a nuclear weapon and to contest any compensation claims from India in court.
- This note has been included to help the Japanese Government to clear the nuclear deal in the Parliament or Diet in early 2017.
- In Japan, there is political opposition for making an exception for India as it is not signatory of the Non-Proliferation Treaty (NPT).
- India has given a voluntary moratorium on nuclear tests and has traditionally refused to link its nuclear trade with pre-conditions on testing, holding it is a matter of nuclear sovereignty.
- The nuclear agreement with Japan follows the same template as that of the India-US nuclear deal.
- However, in this case the circumstances triggering a possible termination are not sharply defined. Thus, note on views and understanding signed with Japan is simply a record by the negotiators (i.e. India and Japan) of respective views on certain issues and not binding.
3.Inaugurates Gwadar port; CPEC becomes a reality
Source: The Hindu
Symbol of Pakistan’s commitment to China’s ‘One Belt-One Road’ initiative, of which the CPEC is a key port.
Pakistan Prime Minister revamped Gwadar port, a strategic deep seaport in the $46 billion China-Pakistan Economic Corridor. Pakistan’s restive Balochistan after a Chinese commercial ship laden with around 250 containers set off for West Asia and Africa.
With the operationalisation of the revamped Gwadar port, the multi-billion dollar China-Pakistan Economic Corridor (CPEC), linking western China to the Arabian Sea, became a reality.
- The ship was carrying Chinese goods which were ferried by major trade convoy that started from Kashgar in western China on 30 October 2016 reached Gwadar on 12 November 2016.
- It was considered as watershed moment in the history of Pakistan and symbol of Pakistan’s commitment to China’s ‘One Belt-One Road’ (OBOR) initiative, of which CPEC is a key port.
- Benefits to Pakistan: China’s OBOR initiative integrates with Pakistan’s Vision 2025 which seeks to transform the country into a hub of trade and commerce.
- The CPEC would ultimately integrate South Asia, China and Central Asia.
- India’s concern: The CPEC is being laid through the Pakistan-occupied Kashmir (PoK).
4.Demonetisation: Black money clean-up may erase some growth gains as well
Source: Indian Express
The government’s move to withdraw higher denomination notes may also have some downsides which may ultimately impact the GDP numbers.
The government’s recent move to withdraw old series Rs 500 and Rs 1,000 notes aimed at ending the ‘ghost economy’ may actually hit the real economy in the coming months.
The move is expected to hamper India’s GDP growth in the short term as consumption demand, especially in rural areas, is likely to drop with reduction in cash holdings with people after the withdrawal of old series notes, which constituted about 86 per cent of the country’s total currency.
- The positive fallout of this could be a reduction in inflation rate in the short term due to lower consumption and lesser availability of cash with people.
- The withdrawal of the old series high-value currency notes as a deterrent for black money hoarders but it is being seen as a roadblock for a possible pick up in the economic growth which could have happened otherwise in the second half of the financial year with the onset of the rabi season.
- Apart from consumption, economists also expect production to be adversely impacted by the scrapping of old series notes especially in agricultural and SME sectors.
- The withdrawal of currency notes reduce the money supply due to incomplete replacement in the system, this is expected to reduce the GDP growth in the shock year, but also in the subsequent years.
- However, as some of the currency, which was not part of the financial system earlier, comes back to the banking system and there are policies to increase the cashless transaction in the economy, one should expect the improvement in the money multiplier.
- This should have positive impact on growth and expected to result in higher growth than in the base case.
GDP: India’s GDP growth in April-June, the first quarter of this financial year, had slowed down to 7.1 per cent from 7.5 per cent in the corresponding period a year ago. The government expects GDP growth at 8 per cent in 2016-17 on the back of improved agricultural output due to normal monsoon.
5.Economists see ‘short-term pain, long-term gain’
Source: The Hindu
The govt’s demonetisation drive will likely negatively impact the economy in the short term. But it could help over the longer term propel economic growth into double-digit levels
As more of the informal economy becomes formal and the GST comes into effect
- The NPAs of banks will go down as the cash coming in will lead to higher CASA (current account, savings account), in turn declogging the system
- Interest rates will come down because the money will go to the banks and to some extent some of it will go to the government as taxes
- The overall economic impact would include a likely appreciation of the rupee and a sharp slowing in inflation
- The banking system getting a boost and real estate prices falling about 20-25 per cent before stabilising.
- 6. Biggest and brightest Supermoon observed
Source: The Hindu
Supermoon or perigee full moon is a phenomenon that occurs when a full moon coincides with the moon being the closest to the Earth on its orbit.
During this time, the natural satellite appears roughly 30% larger in area and 30% brighter than the smallest full moons. In terms of diameter, the width of the moon is about 14% wider than the smallest full moons.
Causes of supermoon:
- The moon’s orbit around Earth is ellipse (a kind of squashed circle) and not in a circle.
- When an orbit is elliptical, Earth in the middle sits at one of two foci of ellipse.
- The moon is inevitably closer to the Earth when it passes one side of the ellipse and further away as it passes the other side.
- When it is at the closest side (called “perigee”) it is a full moon. If this distance is to closer to earth then it is called a supermoon.
why supermoons not all the same size?
The reason is that the shape of the ellipse that the moon draws around the Earth is changing all the time as it is pushed and pulled by other gravitational forces.
- World likely to cross 1.2°C global warming level this year
Source: The Hindu
World Meteorological Organisation shows record temperature rise in Status of the Global Climate in 2016 report
- The world is likely to cross 1.2° C of global warming above pre-industrial levels in 2016, coming dangerously close to breaching the 1.5° C warming levels advised as an ambitious target to stay safe from the worst impacts of climate change.
- In a preliminary assessment provided by the World Meteorological Organisation in its Status of the Global Climate in 2016 report, the global UN weather agency warned.
- Global temperatures for January to September 2016 were 1.2° C above pre-industrial levels and 0.88°C above the average for the 1961-1990 reference period (baseline).
- Ice and snow cover: Arctic sea ice remained at very low levels, especially during early 2016 and the October re-freezing period. In this region, temperatures were 6 to 7° C above the long-term average.
- Oceans: The temperatures had spiked in the early months of the year 2016 because of the powerful El Niño event of 2015-16.
- The excess ocean heat by the El Niño event had contributed to coral reef bleaching, and above-average sea-level rise. However, the extra heat from the powerful El Nino event has disappeared, the heat from global warming will continue.
- Because of climate change, the occurrence and impact of extreme events has risen. Heat waves and flooding are becoming more regular.
- Sea level rise has increased exposure to storm surges associated with tropical cyclones. Besides, wildfires and major droughts affected several parts of the world.
- The annual and long-term changes in the climate system will aggravate social, humanitarian and environmental pressure.
- Population migration is expected to increase as a result of more frequent and potentially more intense weather-related disasters.
- Rising sea levels will render coastal and low lying zones uninhabitable. Climate Change will also increase competition and conflict over shrinking resources.
Paris Agreement on Climate Change:
The Paris Agreement in 2015 had adopted 2° C as the absolute threshold for staying within safe global warming levels.
However, 1.5° C was set as an ambitious target, especially bearing in mind the fate of small island countries that are threatened with submergence due to sea-level rise and extreme weather events.