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Daily Current Affairs – 2020
Topic: For Prelims and Mains
GDP growth down to 6-year low in Q1
Why in News? India’s gross domestic product (GDP) growth rate slowed to a six-year low of5% in the first quarter of the 2019-20 financial year, the government announced recently, led by a dramatic slowdown in the manufacturing sector.
Important Facts :
The last time the GDP grew slower was in the fourth quarter (January to March) of the financial year 2012-13,
It grew at 8% in the first quarter of last year. The growth of Gross Value Added (GVA) stood at 4.9% in the first quarter of the financial year 2019-20, also the slowest in six years.
The quarterly GDP estimates show that India’s GDP growth, while high, has shown some slowdown.
This is due to both endogenous and exogenous factors. The impact comes, especially, from global headwinds due to the deceleration in developed economies, the Sino-American trade conflict, etc.
The data show that the manufacturing sector grew at an anaemic two-year low of 0.6% in the first quarter of 2019-20, down from 12.1% in the same quarter of the previous year. The agriculture sector also saw a dramatic slowdown in growth to 2% from 5.1% over the same period.
The plight of the real estate sector was also highlighted by the slowdown in its growth rate to 7% in the first quarter of this financial year, compared with 9.6% in the same quarter of 2018-19.
The growth slowdown was led by private final consumption expenditure, which grew 3.1% only (18 quarter low).
Investment demand also remained lacklustre and fixed capital formation grew 4%. Only government expenditure provided support to growth and increased 8.8%.
GDP growth down to 6-year low in Q1 of 2019-20 financial year
Subramanian, however, highlighted the robust growth in the electricity and power generation sector, of 8.6% in the quarter under consideration compared with 6.7% in the same quarter of the previous year.
Electricity and power generation, which is a leading indicator across the world, grew by 8.6%, a good sign of green shoots towards higher growth.
While general elections in April-May 2019 had some impact on investment growth, the collapse of private consumption demand from 10.6% in the fourth quarter of financial year 2017-18 to 3.1% in the first quarter of financial year 2019-20 is a real cause of concern.
“As the Economic Survey 2019 shows, investment is a critical driver of the economy with consumption being a key force multiplier,” “Together with steps taken by the government for the banks and the financial sector, and structural reforms, investment should continue improving and drive economy to higher growth.”
Gross value added (GVA) :
· In economics, gross value added (GVA) is the measure of the value of goods and services produced in an area, industry or sector of an economy. In national accounts GVA is output minus intermediate consumption;
· It is a balancing item of the national accounts’ production account.
Facts for Prelims:
West Bengal passes Bill against lynching :
The West Bengal Assembly recently passed a Bill to prevent and punish mob assaults and lynching.
Main Provisions of the Bill–
The bill proposes a maximum punishment of life imprisonment and fines ranging from Rs 1 lakh to Rs 5 lakh for offences.
It defines lynching as any attempt or act of violence by a mob on the “grounds of religion, race, caste, sex, place of birth, language, dietary practices, sexual orientation, political affiliation, ethnicity, or any other ground”.
It also calls for witness protection and compensation for victims, adding that any allegation of threat, coercion or inducement of witnesses must be brought to the notice of a court within 24 hours.
Himachal passes Bill against ‘forced conversion’:
The Himachal Pradesh Assembly passed a Bill recently against conversion by force, inducement or through marriages solemnised for the “sole purpose” of adopting a new religion.
The Bill seeks to repeal the Himachal Pradesh Freedom of Religion Act, 2006, which is on similar lines. The new Bill proposes stringent punishments — up to seven years in jail compared to the three years under the existing law.
The Bill prohibits conversion by misrepresentation, force, undue influence, coercion, inducement, marriage or any fraudulent means. Any marriage for the sole purpose of conversion will also be declared null and void under Section 5 of the Bill.