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Daily Current Affairs – 2020

Topic: For Prelims and Mains

Fiscal Cliff & Fiscal Drag

19thJune, 2020

About the Fiscal Drag:

Fiscal drag happens when the government’s net fiscal position fails to cover the net savings desires of the private economy, also called the private economy’s spending gap.

  • The first point to remember about fiscal drag is that government will get more tax revenue (mainly income tax) at the time of fiscal drag.
  • Fiscal drag is the tendency of revenue from taxation to rise as a share of GDP in a growing economy. Fiscal drag may happen due to inflation or fiscal policies of the government.

Fiscal drag is normally associated with progressive tax rates. Because of progressive taxes, the government will get more taxes when the economy is booming. This also helps slow the rate of increase in demand, reducing the pace of growth, making it less likely to result in higher inflation.

Thus fiscal drag is an automatic stabilizer, as it acts naturally to keep demand stable.

Also note that fiscal drag means greater tax burden for people. And the greater tax burden can lead to less consumer spending.

About the Fiscal Cliff:

The fiscal cliff refers to a combination of expiring tax cuts and across-the-board government spending cuts that was scheduled to become effective December 31, 2012.

The story of Fiscal Cliff starts with the subprime crisis. Hence we covered that first.

  • US Congress (the legislative body, similar to Indian Parliament) had passed many laws during the recession period calling for tax cuts, in-order to boost economic activity.
  • But there was a time period specified for these exemptions. Many of these exemptions expired at midnight on December 31, 2012.

So period from Jan 1, 2013, was supposed to be a period of high taxes. A sudden condition of high taxes and reduced public expenditure after a long period of tax cuts and liberal public expenditure is known as Fiscal Cliff.

In the case of US, it was more a technical or policy issue, but to avoid this policy issue, the two houses of the US congress had to reach a consensus, which they didn’t reach initially.

Global Intellectual Property Index: 2020

Why in News? International Intellectual Property Index is released by Global Innovation Policy Center or GIPC of the US Chambers of Commerce.

India has been ranked 40th out of 53 countries on a global intellectual property index 2020.

  • India was placed at 36th position among 50 countries in 2019.
  • India’s score, however, increased from 36.04 per cent (16.22 out of 45) in 2019 to 38.46 per cent (19.23 out of 50) in 2020, a 2.42 per cent jump in absolute score.
  • However, India’s relative score increased by 6.71 per cent.
  • Since the release of the 2016 National IPR Policy, India has improved the speed of processing for patent and trademark applications, increased awareness of IP rights among Indian innovators and creators, and facilitated the registration and enforcement of those rights.
  • The Index specifically highlights a number of reforms over the last year that strengthen India’s overall IP ecosystem.
  • According to GIPC’s report India also continues to score well in the Systemic Efficiency indicator, scoring ahead of 28 other economies in these indicators.
  • To continue this upward trajectory, much work remains to be done to introduce transformative changes to India’s overall IP framework and take serious steps to consistently implement strong IP standards.

GIPC has identified several challenges for India, prominent among them being-

  1. Patentability requirements,
  2. Patent enforcement,
  3. Compulsory licensing,
  4. Patent opposition,
  5. Regulatory data protection,
  6. transparency in reporting seizures by customs,
  7. Singapore Treaty of Law of TMs
  8. Patent Law Treaty.

Kala Kumbh

Why in News?

It is a Handicrafts Exhibitions for promotion of Geographical Indication (GI) Crafts and heritage of India has recently organized by Ministry of Textiles.

  • It is a thematic Exhibition in various parts of the country through the Office of Development Commissioner (Handicrafts).
  • The exhibitions are planned in various major cities like Bengaluru, Mumbai, Kolkata and Chennai.
  • The exhibitions sponsored by Export Promotion Council for Handicrafts (EPCH).
  • The GI tag is used on handicrafts which correspond to a specific geographical location or origin (e.g., a town, region, or country).

As on August 2019, 178 GI handicraft products were registered from all over India.

Few of the exhibits are as follows

  1. Mysore rosewood inlay
  2. Channapatna lacquerware
  3. Dharwad kasuti embroidery
  4. Kolhapur chappal
  5. Bidriware
  6. Molakalmur handblock printing
  7. Ananthapur leather puppet
  8. Thrissur screwpine
  9. Vishakapatna lacquerware
  10. Sandur lambani embroidery
  11. Jodhpur terracota
  12. Jaipur handprinted textile
  13. Medinipur mat weaving
  14. Birbhum artistic leather

FACTS FOR PRELIMS

World Investment Report -2020:

The World Investment Report 2020 has been released by the UN Conference on Trade and Development(UNCTAD).

Facts:

  • The World Investment Report has been published annually since 1991.It covers the latest trends in foreign direct investment around the world.

Key Takeaways:

  • Indiawas the world’s 9th largest recipient of foreign direct investments (FDI) in 2019 with $51 billion in foreign investment.
    • In 2018, India was the world’s 12th largest recipient with $42 billion foreign investment.
  • GlobalFDI flows are forecast to decrease by up to 40% in 2020 from their 2019 value of $1.54 trillion.This would bring FDI below $1 trillion for the first time since 2005.

Additional Facts:

  • UNCTAD: It is a permanent intergovernmental body established by the United Nations General Assembly in 1964.It is headquartered in Geneva, Switzerland
  • Reports: a) The Trade and Development Report b) Technology and Innovation Report c) Digital Economy Report among others.

World Competitiveness Index 2020:

World Competitiveness Index 2020 has been released by the Institute for Management Development(IMD).

Facts:

  • World Competitiveness Index is an annual report published since 1989.
  • Parameters: It ranks 63 countries using 235 indicators grouped under four factors: economic performance, government efficiency, business efficiency and infrastructure.

Key Takeaways:

  • Top Rankers: Singapore has topped the index followed by Denmark and Switzerland.
  • India: It has been ranked at 43rd in the index.In 2019 also, it was ranked at 43rd.
  • BRICS Countries: India is ranked second after China(20th) followed by Russia (50th), Brazil (56th) and South Africa (59th)

Bose- Einsteine- condensate (BEC):

Bose-Einstein Condensate (BEC): It is the fifth state of matter whose existence was predicted by Albert Einstein and Indian mathematician Satyendra Nath Bose in the early 1920s.

  • Gases, liquids, solids and plasmas are the other four matters.

How are they formed: They are formed when atoms of certain elements are cooled to near absolute zero (0 Kelvin/-273.15 Celsius).

At this point, atoms become a single entity with quantum properties wherein each particle also functions as a wave of matter.

Features: They are extremely fragile and slightest interaction with the external world warms them past their condensation threshold.This makes their study nearly impossible on Earth where gravity interferes with magnetic fields required to hold them in place for observation.

Significance: Scientists believe BECs contain vital clues to mysterious phenomena such as dark energy — the unknown energy thought to be behind the Universe’s accelerating expansion.

 

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