Current Affairs Daily Current Affairs 22

15thMarch,2022 ; Daily Current Affairs

Daily Current Affairs   Date :15thMarch,2022

 (30+ Questions hit in Prelims 2021 from this series)

Covers 4 Most relevant Sources

  • The Hindu
  • Indian Express
  • PIB
  • Mint

Index

  • Measures to Further Boost Coal Production and Supply (PIB)
  • Salient Features of New Education Policy (NEP), 2020 (PIB)
  • Wholesale Price Index (WPI) Vs Consumer Price Index (CPI) (TH, pg 15)
  • Startup India Yatra Initiative (PIB)
  • National Skill Qualification Framework (NSQF) (PIB)
  • Rejuvenation of thirteen Major Rivers through Forestry Interventions (PIB)
  • Women Capacity Development Programme (WING) (PIB)
  • SRIJAN (PIB)
  1. Measures to Further Boost Coal Production and Supply (PIB)

  • Context:This information was given by the Union Minister of Coal, Mines and Parliamentary Affairs Shri Pralhad Joshi in a written reply in Rajya Sabha.

Analysis

  • Demand of coal is higher than the current level of domestic supply of coal in the country.
  • The gap between demand and domestic supply of coal cannot be bridged completely as there is insufficient availability and reserve of prime coking coal in the country. 
  • Further, coal imported by power plants designed on imported coal and high-grade coal required for blending purposes is also imported in the country as this cannot be fully substituted by domestic coal which has limited reserve of high-grade coal.
  • Commercial mining, with a provision for 100% foreign direct investment, has been allowed by the Government.
  • As per the current import policy, coal is kept under Open General License (OGL) and consumers are free to import coal from the source of their choice
  • To take the task of coal import substitution to the next level, Coal India Limited has been asked to plan Zero Coal Import Mission by 2023-24 for substitutable coal.
  • Further, CIL introduced a new e-auction window Special Spot e-auction Scheme, 2020 for Import Substitution (where only coal importers can participate) with liberal coal lifting period to promote coal import substitution.
  • To encourage domestic coal production enhancement, captive mine lessees are allowed to sell coal or lignite up to 50 % of the total coal or lignite produced in a financial year after meeting requirement of end use plant linked with the mine.
  • This provision is not applicable to a power project awarded on the basis of competitive bid for tariff including Ultra Mega Power Projects.
  • In order to enhance coal production, Coal India Limited (CIL) has taken the following steps:
  • Manual loading method eliminated in all underground mines of CIL (except one mine of CCL) by introducing Side Discharge Loader (SDL)/ Load Haul Dump (LHD) loading in conjunction with belt conveyors.
  • Introduction of Surface Miners in opencast mines to improve operational efficiency and cater to environmental needs.
  • Introduction of Mass Production Technology in underground coal mines.

Mission Coking Coal

  • About 50 MT coking coal is imported by the country on an annual basis and the value of coking coal imported in FY 2020-21 was Rs.45435crore.
  • The Ministry of Coal has set up Mission Coking Coal to evolve a road map for increasing production and utilization of domestic coking coal.
  • Coking coal and steel sector have high correlation with each other. Coking coal is mainly used in manufacturing of steel through blast furnace route.
  • Domestic coking coal is high ash coal (mostly between 18% – 49%) and is not suitable for direct use in the blast furnace.
  • Therefore, coking coal is washed to reduce the ash percentage and is blended with imported coking coal (<9% ash) before utilisation in the blast furnace.
  1. Salient Features of New Education Policy (NEP), 2020 (PIB)

  • Context:The following information was given by the Minister of State for Educationin a written reply in the Lok Sabha recently.

Analysis

  • National Education Policy 2020 paves way for transformational reforms in school and higher education systems in the country.
  • The salient features of New Education Policy (NEP) 2020 are as follows:
  • New Policy promotes Multilingualism in both schools and HEIs; Indian Institute of Translation and Interpretation to be set up.
  • New Policy aims for 100 % Gross Enrolment Ratio (GER) in school education by 2030.
  • New 5+3+3+4 school curriculum with 12 years of schooling and 3 years of Anganwadi/ pre-schooling.
  • Emphasis on Foundational Literacy and Numeracy, no hard separation between academic streams, extracurricular, vocational streams in school; Vocational Education to start from Class 6 with Internships.
  • Assessment reforms with 360 degree Holistic Progress Card and tracking Student Progress for achieving Learning Outcomes.
  • A National Assessment Centre, PARAKH (Performance Assessment, Review, and Analysis of Knowledge for Holistic Development), to be set-up as a standard-setting body for transforming Assessment.
  • Setting-up of State School Standards Authority (SSSA) to establish a minimal set of standards based on basic parameters (namely, safety, security, basic infrastructure, number of teachers across subjects and grades, financial probity, and sound processes of governance), which shall be followed by all schools.
  • Teacher education to move into a multi-disciplinary environment and four year B.Ed. integrated to become a minimum degree qualification for school teachers by 2030.
  • Achieving 100% youth and Adult literacy.
  • GER in higher education to be raised to 50 % by 2035.
  • Higher Education curriculum to have Flexibility of Subjects.
  • Multiple Entry / Exit, and transfer of credit through an Academic Bank of Credits.
  • National Research Foundation to be established to foster a strong research culture.
  • Light but Tight Regulation of Higher education, single regulator with four separateverticals for different functions- the Higher Education Commission of India (HECI).
  • A stage-wise mechanism for granting graded autonomy to colleges, through a transparent system of graded accreditation, will be established.
  • NEP 2020 advocates increased use of technology with equity; National Educational Technology Forum to be created.
  • NEP 2020 emphasizes setting up of Gender Inclusion Fund, Special Education Zones for disadvantaged regions and groups.
  • NEP 2020, recommends that every State will be encouraged to strengthen existing or establish “Bal Bhavans” where children of all ages can visit once a week (e.g., on weekends) or more often, as a special daytime boarding school, to partake in art-related, career-related, and play-related activities.
  • It would be pertinent to mention here that Education is in the Concurrent list of the Constitution of India and setting up of the schools and related institutions are in the jurisdiction of the State and UTs. Therefore, it is for the respective State Government to take decision on setting up of Bal Bhavans within its jurisdictional area.
  1. Wholesale Price Index (WPI) Vs Consumer Price Index (CPI) (TH, pg 15)

  • Context:The Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade released index numbers of wholesale price in India (Base Year: 2011-12) for the month of February, 2022 (Provisional) and for the month of December, 2021 (Final) in this press release.
  • The annual rate of inflation is 13.11% (Provisional) for the month of February, 2022 (over February, 2021) as compared to 4.83% in February, 2021.
  • The high rate of inflation in February, 2022 is primarily due to rise in prices of mineral oils, basic metals, chemicals and chemical products, crude petroleum & natural gas, food articles and non-food articles etc. as compared to the corresponding month of the previous year.

Analysis

  • Inflation is the sustained increase in the prices of goods and services over time. There are the two primary measures of inflation: Wholesale Price Index and Consumer Price Index.

Wholesale Price Index (WPI)

  • WPI index reflects average price changes of goods that are bought and sold in the wholesale market.
  • WPI in India is published by the Office of Economic Adviser, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry.
  • Further, the data for WPI is monitored and updated on a monthly basis taking into account all the items that form the index.
  • The various commodities taken into consideration for computing the WPI can be categorized into primary article, fuel and power, and manufactured goods with corresponding weightages as 22.62%, 13.15% and 64.23% respectively.
  • Primary articles included for the computation of WPI include food articles, non-food articles and minerals.
  • WPI food index (Weight 24.38%) consists of ‘Food Articles’ from Primary Articles group and ‘Food Product’ from Manufactured Products group.
  • An important point to take note of is, the wholesale price index (WPI) does not include the cost of services (CPI includes certain services too); we cannot buy services on a wholesale basis.
  • Further, as WPI accounts for changes in general price level of goods at wholesale level, it fails to communicate actual burden borne by the end consumer.
  • The pricing norms of wholesale and retail are also different.
  • Certain items on WPI, such as fuel, are also closely linked to international prices, creating a gap between the figures on this index and the CPI.
  • The base year for the WPI index has been revised for the seventh time from the earlier 2004-2005 to 2011-12 to better capture changes in the economy.
  • The measure of wholesale price gains is the key deflator in computing the Index of Industrial Production and is also used to deflate Gross Domestic Product at current prices.
  • The index basket of the present 2011-12 series has a total of 697 items including 117 items for Primary Articles, 16 items for Fuel & Power and 564 items for Manufactured Products.
  • The prices tracked are ex- factory price for manufactured products, mandi price for agricultural commodities and ex-mines prices for minerals.
  • Weights given to each commodity covered in the WPI basket is based on the value of production adjusted for net imports.
  • WPI basket does not cover services.

The main uses of WPI are the following:

  • It provides estimates of inflation at the wholesale transaction level for the economy as a whole. This helps in timely intervention by the Government to check inflation in particular, in essential commodities, before the price increase spill over to retail prices.
  • WPI is used as deflator for many sectors of the economy including for estimating GDP by Central Statistical Organisation (CSO).
  • WPI is also used for indexation by users in business contracts.
  • Global investors also track WPI as one of the key macro indicators for their investment decisions.

Consumer Price Index (CPI)

  • Consumer Price Index is an index measuring retail inflation in the economy by collecting the change in prices of most common goods and services used by consumers.
  • Figures of CPI-based inflation are issued every month in India.
  • The index assigns different weights to various goods and services in the basket and tracks the movement of their prices.
  • It also tracks the price movement of the entire basket on a pan-India level to calculate the overall inflation figure or CPI inflation.
  • While CPI is the most relevant index for the consumer as it shows the increase in their actual outgo, it is not a completely accurate cost of living indicator since it focuses on certain goods and services more than others.
  • CPI is not the cost of living index, and is, therefore, not an accurate reflection of consumer spending.
  • The weightage of food in the CPI is close to 50%, but most households don’t spend nearly that much of their overall expenditure on food. What we spend more on are services such as education, health care and transportation, where inflation levels are much higher.

How does Consumer Price Index help?

  • The Reserve Bank of India and other statistical agencies study CPI so as to understand the price change of various commodities and keep a tab on inflation.
  • CPI is also a helpful pointer in understanding the real value of wages, salaries and pensions, the purchasing power of a country’s currency; and regulating prices.
  • Two Ministries – Ministry of Statistics and Programme Implementation (MOSPI) and Ministry of Labour and Employment (MOLE) are engaged in the construction of different CPIs for different groups/sectors.
  • CPI inflation is also called as ‘retail inflation’ as the prices are quoted from retailers.
  • Apart from measuring inflation in retail prices, the CPI-IW was used to regulate the DA of government employees and industrial workers, as well as fixing and revising minimum wages in scheduled employments.

Table: Different Price Indices in India

Index Agency Base Year
WPI Office of Economic Affairs, Ministry of Commerce and Industries 2011-12
CPI All India, CPI -Urban and Rural CSO, Ministry of Statistics and Programme Implementation 2012
CPI-AL  

Labour Bureau, Ministry of Labour and Employment

1986-87
CPI-RL 1986-87
CPI-IW 2016
  • CPI for Industrial Workers (IW),
  • CPI for Agricultural Labourers (AL),
  • CPI for Rural Labourers (RL) and
  • CPI for Urban Non-Manual Employees (UNME).
  • The CPI (IW), certainly, is the most popular one as the dearness allowance of Central government employees is calculated on the basis of movement in this index.
  • The CPI data mask the real extent of price pressures across major product categories.

Divergence between CPI and WPI inflation

Food inflation

  • Traditionally, the major reason for the CPI inflation being higher than WPI inflation has been that food articles had a higher weight (48.3 per cent) in CPI than in WPI (24.3 per cent).
  • This factor plays an important role, whenever the primary trigger of inflation is food inflation.

Non-food inflation

  • Non-food inflation according to WPI and CPI have very different composition.
  • Fuel and power category has a much bigger weight in WPI (14.9 per cent) than in CPI (6.8 per cent). What is included in this category also differs very much.
  • Similarly, manufactured goods are given more weightage in the wholesale basket. Therefore, any movement in the price of such items will move the WPI more than it does the CPI.
  • In fact, this divergence is inexplicable. There are certain items which figure in CPI but do not figure in WPI. These may be broadly treated as ‘services’.

Does RBI use WPI or CPI Inflation to manage monetary policy?

  • While earlier the Reserve Bank of India used WPI inflation to manage monetary policy expectations, it is now the CPI inflation which is largely taken into account.

Why CPI?

  • CPI data are available with the same lag as WPI.
  • CPI is also being updated with a new base frequently.
  • Since the control of inflation is aimed at minimising the impact of rising prices on the people.

Retail inflation

  • Inflation means the increase in prices of certain products or commodities compared to a base price.
  • In India, the index which shows the inflation rate at retail level is known as Consumer Price Index (CPI).
  • CPI is based on retail prices and this index is used to calculate the Dearness Allowance (DA) for government employees.

Inflation Targets

  • Inflation Target:                      Four per cent.
  • Upper tolerance level:            Six per cent.
  • Lower tolerance level:            Two per cent.
  • In case the inflation target is failed to achieve (2% higher or lower than the set target of 4% for continuous three quarters), the RBI has to give an explanation to the government about the reasons, the remedial actions and the estimated time for realizing the target.

Headline Inflation

  • Headline inflation is the raw inflation figure reported through the Consumer Price Index (CPI).
  • Monetary Policy Committee of the RBI uses ‘headline inflation’ to take its decision.

Core Inflation

  • Core inflation removes the CPI components that can exhibit large amounts of volatility from month to month, which can cause unwanted distortion to the headline figure.
  • The most commonly removed factors are those relating to the cost of food and energy.

Do you know?

  • Inflation deliberately undertaken to relieve a depression- Reflation
  • Rise in prices with little change in output- Stagflation is when economic growth is stagnant but there still is price inflation.
  • Price rise at full employment- Continuous inflation
  • The term ‘benign inflation’ implies a mild rate of inflation.

Disinflation Vs Deflation

  • When the inflation rate declines over time, but it remains positive (that is, say prices grow at 1% instead of 5%), it is called “When the inflation rate actually contracts (that is, say prices reduce by 1% instead of growing at 5%), it is called “deflation.”
  • Deflation is the drop in general price levels in an economy, while disinflation occurs when price inflation slows down temporarily.
  • Deflation, which is harmful to an economy, can be caused by a drop in the money supply, government spending, consumer spending, and corporate investment.
  • Central banks will fight disinflation by expanding its monetary policy and lowering interest rates.
  • Disinflation can be caused by a recession or when a central bank tightens its monetary policy.
  • Deflation, which is the opposite of inflation, is mainly caused by shifts in supply and demand. Disinflation, on the other hand, shows the rate of change of inflation over time.
  • A country is said to have entered a technical recession if its GDP growth rate stays in the negative territory for two consecutive quarters.

Office of the Economic Adviser (OEA)

  • It is an attached office of the Ministry of Commerce & Industry.

The main functions of the Office of Economic Adviser include, inter alia the following:

Policy Functions

  • Economic policy inputs on industrial development.
  • Rendering advice relating to formulation of Industrial Policy, Foreign Trade Policy with respect to industrial sector in general with thrust on manufacturing, issues relating to bilateral and multilateral trade, as well as taxes and duties related to industry, including but not restricted to safeguard and anti-dumping duties.
  • Analysis of trends of industrial production and growth.
  • Examination of multilateral and bilateral issues and processing Policy Notes with economic implications referred to the Office.

Statistical Functions

  • Compiling and releasing monthly Wholesale Price Indices
  • Compiling and releasing monthly Index of Core Industries Production
  • Developing other Indices on experimental basis, e.g. select business service price indices
  • Supervising as a ‘source agency’, compilation of monthly production statistics for identified industrial items, their validation, and onward transmission for computation of the monthly Index of Industrial Production (IIP) by Central Statistics Office.
  • Monthly Statistical compilation of macro indicators (secondary information).
  1. Startup India Yatra Initiative (PIB)

  • The Department for Promotion of Industry and Internal Trade (DPIIT),Ministry of Commerce and Industry, launched Startup India Yatra in 2017 to promote entrepreneurship in rural and non-metro regions(Tier 2 and Tier 3 cities) across States through grassroot startup aspirants by providing them incubation, mentorship, and funding support.
  • The Startup India Yatra is an initiative that travels to Tier 2 and Tier 3 cities of India to search for entrepreneurial talent and help develop Startup ecosystem.
  1. National Skill Qualification Framework (NSQF) (PIB)

  • National Education Policy (NEP) 2020 has advocated integration of vocational education with main stream education in a phased manner.
  • Accordingly, University Grants Commission (UGC), Ministry of Education, has facilitated Higher Education Institutions (HEIs) to offer skill-based programmes under National Skill Qualification Framework (NSQF).
  • The objective of NSQF is, inter alia, to integrate relevant skills into the higher education system in order to make higher education relevant to the learners and the community.
  1. Rejuvenation of thirteen Major Rivers through Forestry Interventions (PIB)

  • Ministry of Environment, Forest and Climate Change and Ministry of Jal Shakti jointly released the Detailed Project Reports (DPRs) on Rejuvenation of thirteen Major Rivers through Forestry Interventions.
  • The 13 rivers for which DPRs were released are Jhelum, Chenab, Ravi, Beas, Sutlej, Yamuna, Brahmaputra, Luni, Narmada, Godavari, Mahanadi, Krishna, and Cauvery.
  1. Women Capacity Development Programme (WING) (PIB)

  • WING is a unique Capacity Development Program for women-led startups, to identify and support both aspiring and established women entrepreneurs in their startup journeys
  • It aims to support 7,500 women entrepreneurs in the country per year.
  • It is being spearheaded by Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, through the Startup India programme.
  1. SRIJAN (PIB)

  • The SRIJAN portal, launched by the Department of Defence Production, MoD, is a ‘one stop shop online portal’ that provides access tothe vendors to take up items that can be taken up for indigenization.