Welcome to the Endeavor Editors Weekly Current Affairs Blog series. Get a weekly roundup -on news from business, economy, markets, policy, and more. A quick capsule format news summary and update to keep you abreast with all the latest current affairs.
Current Affairs: February 2021 – Week 4
1. Global Economy
House of Representatives passes $1.9tn Covid stimulus package
The bill is on track to be the second-largest US stimulus ever and includes $1,400 direct payments, an extension of federal top-ups to unemployment insurance, and another $350bn for state and local governments. The stimulus package needs to pass both the House and the Senate — which Democrats control by the smallest of margins — if it is going to be sent to Biden’s desk to be signed into law. The package has been highly criticized by the Republicans. With no Republicans expressing support, every Democrat would have to vote in favor, with Vice President Kamala Harris likely needed to break a 50-50 tie. For details visit.
2. Indian Economy
Economy back in black!
A 0.4% expansion in GDP in the October-December quarter marks India’s emergence from a technical recession, validating the view that it is recovering well from covid-induced disruptions. Agriculture and construction showed buoyancy, with a 3.9% and 6.2% expansion, respectively. This is heartening, given the ongoing protests by farmers, and also suggests that a large group of workers displaced by the lockdown has returned to urban work. However, mining proved a drag, with a 5.9% contraction in output, while a 7.7% contraction in services such as trade, hotels, and transport reflects the poor state of travel and tourism. For details visit.
Fiscal deficit hits Rs 12.34 trillion at end of January
For this financial year, the government had initially pegged the fiscal deficit at Rs 7.96 trillion, or 3.5 percent of the GDP, in the Budget presented in February 2020. However, according to Revised Estimates in Budget 2021-22, the fiscal deficit in the year ending March is estimated to soar up to 9.5 percent of the GDP, or Rs 1,848,655 crore. This will be because of the rise in expenditure on account of the outbreak of Covid-19 and moderation in revenue.
The fiscal deficit had soared to a seven-year high of 4.6 percent of the GDP in 2019-20, mainly because of poor revenue realization. For details visit.
Hydrogen for a low-carbon future
Green Hydrogen is fast emerging as the fuel of the future. The government has promised the launch of a national Hydrogen Energy Mission in 2021-22.
Since October, oil major IOC has been using its patented compact reforming process to blend hydrogen with compressed natural gas (CNG). This fuel is already being used today on Delhi roads to reduce carbon emissions from buses run on CNG. In the foreseeable future, hydrogen fuel cells are an extremely promising automobile option. Electric vehicles, particularly heavy vehicles, can well run on fuel cells. Further, cost-effective green hydrogen would considerably reduce carbon emissions in energy-intensive industries like oil and steel.
(What is Green Hydrogen? Green hydrogen is produced using renewable energy and electrolysis to split water and is distinct from grey hydrogen, which is produced from methane and releases greenhouse gases into the atmosphere, and blue hydrogen, which captures those emissions and stores them underground to prevent them from causing climate change.) For details visit.
New climate pledges ‘far short’ of meeting Paris Agreement goals: UN
UN Framework Convention on Climate Change (UNFCCC) report analyzing the updated climate action plans submitted by 75 nations ahead of November’s COP26 climate summit which found that current policies won’t come close to meeting the goals of the Paris Agreement. Under the 2015 Paris climate accord, countries committed to reduce their carbon output and halt global warming below 2 degrees Celsius — and if possible, below 1.5 degrees Celsius — by the end of the century to avoid the worst impacts of climate change. For details visit.
Why copper prices are going through the roof
Prices have touched an almost 10-year high with demand expected to rise further owing to the optimism of a stronger global economic recovery.
Key Reasons for surge in prices: Increased Demand for Copper due to increased buying from China and demand for renewable energy where copper is a key metal. Supply constraints due to Covid related disruption in mining
Impact on India: India may need to pay 35% more on Copper imports. In 2017-18, India was among the top five exporters of copper cathodes but then ended up becoming a net importer around the beginning of 2018-19. For details visit.
BSE questions NSE conduct after glitches halted trading
After the unprecedented trading halt on 24 February, the National Stock Exchange (NSE) has been accused of a number of things, including inefficiency, poor communication, and general apathy towards the plight of market participants. The troubles at NSE Clearing Ltd. prevented the market from shifting to BSE’s trading platform. The framework of interoperability put in place by Sebi is supposed to facilitate market participants to continue transactions at other stock exchanges, thereby allowing them to seamlessly trade/square off existing positions. But in this particular incident, it wasn’t seamless for everyone. For details visit.
$1.4bn arbitration award: Cairn says hopeful of solution, will take steps to protect shareholder interest
In December, an arbitration body awarded the British firm Cairn damages of $1.2 billion-plus interest and costs, after ruling India had breached its obligations to Cairn under the U.K.-India Bilateral Investment Treaty. India however, is expected to appeal against the arbitration award.
The income tax department in 2014 seized Cairn’s assets after slapping a Rs 10,247 crore tax demand alleging capital gains Cairn made on reorganizing its India business prior to an IPO in 2006-07. For details visit.
Social Media Intermediary Guidelines
The rules for social media, also called Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021, were notified by the cabinet on February 25. The rules add a bunch of compliance for social media companies, such as Facebook, Twitter, Instagram, WhatsApp, and YouTube. ‘Significant social media intermediaries’ – decided on the basis of the user base – will abide by the new laws, and must comply within three months of the rules being published in the official gazette. Key highlights of the guidelines are – no safe harbor if due diligence not followed; platforms to remove or disable sexual content within 24 hours of complaint; Chief Compliance Officer post, monthly compliance report mandatory. For details visit.
Foreign countries want to implement India’s NEP: Pokhriyal
Union Education Minister Ramesh Pokhriyal, addressing the 97th annual convocation of Delhi University, said the new education policy that has been brought into place after “much deliberation” will see India “reform, perform and transform”. Cambridge, the UAE, Australia, Mauritius, Indonesia, and many others have said India’s NEP is the world’s biggest reform and that they want to implement it in their countries as well. For details visit.
Should companies make Covid-19 vaccination mandatory for employees?
Such a requirement would unfairly discriminate against people in developing countries where vaccines are in short supply or non-existent and it could even impede the travel industry’s pace of recovery. Surveys before the pandemic showed nearly 80 percent of people globally think vaccines are safe, one December poll showed only about 50 percent of US workers think Covid vaccines should be mandatory at work.
Companies are unsure how to handle staff who object to jabs on medical or religious grounds, or because they are pregnant; expectant UK mothers are advised to avoid Covid jabs because they have yet to be tested on pregnant women. For details visit.
Can private sector involvement in Covid-19 vaccination starting March 1 make a difference?
The challenge of administering the vaccine has been formidable for a country like India, given the large population, geographical spread, and skewed health infrastructure across urban and rural areas. In that context, getting into a public-private partnership and leveraging technology becomes very important. India needs close to 1 lakh inoculators to administer the vaccine. Out of this, the public sector can only provide close to 60,000-70,000. The capacity constraint, therefore, has to be filled by the private sector, particularly in the urban and semi-urban areas, where there is a limited government health care network. For details visit.
Bitcoin cannot replace the banks
One argument in favor of buying and holding bitcoin is that cryptocurrencies will eventually replace banks themselves, as their services for storing and transferring money will no longer be needed. This will make bitcoins valuable enough to replace dollars. But this argument is based on a flawed understanding of how dollars work, and who creates them now. Bitcoin is turning out to be a good way to reinforce the banking system we already have. But there isn’t much, so far, that Bitcoin seems to have done to fix these things, and it’s not at all clear how it will. For details visit.
8. Other Topics
What is a Special Purpose Acquisition Company (SPAC)
A special purpose acquisition company (SPAC) is a company with no commercial operations that are formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. Also known as “blank check companies,” SPACs have been around for decades. In recent years, they’ve become more popular, attracting big-name underwriters and investors and raising a record amount of IPO money in 2019. In 2020, as of the beginning of August, more than 50 SPACs have been formed in the U.S. which have raised some $21.5 billion. Get a better understanding of how SPAC works.
With that, we come to an end for our Weekly Current Affairs for week 4 of February 2021. Hope you have liked this initiative. Write in your feedback in the comments below and let us know if anything else you would like us to cover.
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