Expansion of Indian Economy

Context:

Recently, the Indian growth story continues to expand as is demonstrated by the trends in FPI, FDI, and Corporate Bond Market flow that indicate and underline the beliefs of investors in the strength and resilience of the Indian economy.

Background:

• COVID-19 has drastically affected the investment climate in all economies of the world, causing a sharp decline in the demand and supply equilibrium everywhere.
• The investment sentiment in the Indian economy has been buoyed by the frequent and active intervention of the Government of India despite being hit by a worldwide pandemic.

Role of Foreign Portfolio Investment:

• October and November 2020 have witnessed a significant resurgence in FPI inflows driven primarily by equity inflows resulting in the highest ever FPI inflows for a month for India.
• The inflow in November 2020 is the highest amount of money invested ever since FPI data has been made available by the National Securities Depository Ltd.
• FPI flows are known to be less resilient and more sensitive to changing market conditions.
• The investments through the FPI route are therefore gauged through the metric of net inflow and outflow.

Role of Foreign Direct Investment

• The total Foreign Direct Investments (FDI) inflows into India during the second quarter of the financial year 2020-21 have been US$ 28,102 million, out of which FDI equity inflows were US$ 23,441 million or Rs. 174,793 crore.
• It takes the FDI equity inflows during the financial year 2020-21 up to September 2020 to US$30,004 million which is 15% more than the corresponding period of 2019-20.
• Both FDI equity inflows and total FDI inflows into India have shown a secular rise over the years, with 2019-20 the year with the highest FDI in the last six years.
• The measures taken by the government on the fronts of FDI policy reforms, investment facilitation, and ease of doing business have resulted in increased FDI inflows into the country.

Role of Bond Market:

• In the first half of 2020-21, the total corporate bond issuances amounted to Rs. 4.43 lakh crore, 25% higher than Rs. 3.54 lakh crore in the same period last year.
• The narrowing spread with G-Secs (Government Securities) stands testimony to the improved risk perception of corporate bonds.
• The cost of funds also moderated for both the Government and the corporate, on the back of RBI’s monetary easing and liquidity infusion.

Source: PIB

Roshni Act

Context:

The Jammu & Kashmir administration has recently released a series of lists of alleged beneficiaries of the Roshni Act of 2001 which gave ownership rights to the unauthorized occupants of state land against payment of a premium.

Roshni Act:

• The Roshni Act was targeted to earn  Rs 25,000 crores by transferring 20 lakh kanals of State land to existing occupants against payment at market rates.
• The Act also sought the conferment of proprietary rights of around 20.55 lakh kanals of land (1250 hectares) to the occupants.
• The law initially set 1990 as the cut-off year for encroachment on State land, based on which ownership would be granted.
• It was implemented with the aim of boosting the farming sector and "generating substantial revenue" for funding power projects.
• The land-related law, popularly known as the Roshni Act, was brought into force in 2001.
• The law aimed to grant ownership rights of public land to occupants.

Issues with the Roshni Act:

• The Roshni Act declared "unconstitutional" by the Jammu and Kashmir High Court which fell prey to corruption over the course of the last decade.
• The CAG report pointed to irregularities in the implementation of the Act as the cause of its failure to generate the expected revenue.
• The report listed irregularities such as "arbitrary" reduction in prices of the land and said that the reduction was aimed to benefit politicians and other affluent people.
• In the past, politicians, businessmen, and bureaucrats have been accused of misusing the Act by transferring public land under their name and that of their family members.
• In 2009, the Jammu and Kashmir vigilance organization registered an FIR against public officials for alleged criminal conspiracy to illegally possess and vest ownership of state land to occupants who didn't satisfy the criteria under the Roshni Act.
• The details of the applications received under the Act, the valuation of land, amounts paid by the beneficiary, the orders passed under the act, and the persons in whose favor the vesting was done.

Source: Indian Express

Peacock Soft Shell Turtle

Context:

Recently, a professor from Assam has rescued Peacock Soft Shell Turtle from being sold in a fish market.

Peacock Soft Shell Turtle:

• The species is confined to India, Bangladesh, and Pakistan because it is widespread in the northern and central parts of the Indian subcontinent.
• The Indian peacock softshell turtle has a large head, downturned snout with a low and oval carapace of dark olive green to nearly black.
• It is found in rivers, streams, lakes, and ponds with mud or sand bottoms.
• It is omnivorous because juveniles observed feeding on mosquito larvae and fish, while adults consume snails, earthworms, prawns, fish, frogs, carrion, and vegetation.

Protection:

• It is listed as ‘Vulnerable’ under the IUCN Red List of Threatened Species.
• It is protected under Schedule 1 of the Indian Wildlife Protection Act, 1972.
• It is also listed under Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

CITES:

• It is also known as the Washington Convention. 
• It is a multilateral treaty to protect endangered plants and animals.
•  It was drafted as a result of a resolution adopted in 1963 at a meeting of members of the International Union for Conservation of Nature (IUCN). 
• The convention was opened for signature in 1973 and CITES entered into force on 1 July 1975.
• Appendices I, II, and III to the Convention are lists of species afforded different levels or types of protection from over-exploitation.

Source: The Hindu

Emergency Use Authorisation (EUA)

Context:

The US drug-maker Moderna mentioned that it was applying for emergency use authorization for its Covid-19 vaccine. The decision was taken after Pfizer applied for emergency use authorization for the vaccine it has developed in collaboration with BioNTech.

Emergency Use Authorisation (EUA):

• Vaccines and medicines, and even diagnostic tests and medical devices, require the approval of a regulatory authority before they can be administered. 
• The approval for vaccines and medicines is granted after an assessment of their safety and effectiveness, based on data from trials.
• In emergency situations, regulatory authorities around the world have developed mechanisms to grant interim approvals if there is sufficient evidence to suggest a medical product is safe and effective. 
• The final approval is granted only after completion of the trials and analysis of full data and until then, emergency use authorization (EUA) allows the medicine or the vaccine to be used on the public.

Granting of Emergency Use Authorisation (EUA):

• In the US, the Food and Drug Administration (FDA) grants a EUA only after it has been determined that the “known and potential benefits outweigh the known and potential risks of the vaccine”.
• It implies that a EUA application can be considered only after sufficient efficacy data from phase 3 trials had been generated.
• The EUA cannot be granted solely on the basis of data from phase 1 or phase 2 trials, although these too need to show the product is safe.
• The FDA, for COVID vaccines, has specified that it would consider an application for EUA only if phase 3 data showed it was at least 50 % effective in preventing the disease.

Emergency Use Authorisation (EUA) in India:

• In India, the regulatory authority is the Central Drugs Standard Control Organisation (CDSCO).
• India’s drug regulations do not have provisions for a EUA, and the process for receiving one is not clearly defined or consistent.
• The CDSCO has been granting emergency or restricted emergency approvals to Covid-19 drugs such as remdesivir, favipiravir, and tocilizumab.

Source: Indian Express

Purchasing Managers’ Index (PMI)

Context:

According to the latest Purchasing Managers’ Index (PMI), India’s manufacturing sector lost momentum in November.

Key Highlights:

• India’s manufacturing sector activity lost momentum and fell to a three-month low in November amid slower increases in factory orders, exports, and buying levels.
• The seasonally adjusted Purchasing Managers’ Index (PMI) highlighted a strong improvement in business conditions.
• All three broad areas of the manufacturing industry recorded expansion, with growth led by consumer goods which was the only sector to see a stronger rate of increase.
• The activities in November could not keep pace with October, but that was still higher than pre-Covid activities.

Purchasing Managers’ Index (PMI):

• It is an economic indicator that is calculated from monthly surveys of purchasing managers and supply executives from specific companies.
• PMI data are compiled by IHS Markit for more than 40 economies worldwide.
• The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment, and inventories.
• The Purchasing Managers' Index is based on five major indicators naming new orders, inventory levels, production, supplier deliveries, and the employment environment.

Significance:

• PMI Manufacturing gives an indication of the economic health of the manufacturing sector.
• The investors use PMI surveys as leading indicators of economic health, given their insight into sales, employment, inventory, and pricing.
• The purchasing managers' index is an extremely important indicator for international investors looking to form an opinion on economic growth.

Source: The Hindu