Current Affairs 1st April

With 457 deaths, India reports highest COVID-19 toll this year #GS3 #SnT

India reported 457 deaths in the last 24 hours — the highest since December 17 when 355 COVID-19 fatalities were reported in a single day. This is also the highest single-day spike in casualties this year.

Maharashtra registered more than half the number of deaths with 227 fatalities, while Punjab registered the second highest toll with 55 deaths. The total registered death toll due to COVID-19 has now reached 1,62,959 in India, the fourth highest tally for any country in the world.

The daily case load remained high with 72,019 new infections registered on Wednesday. Maharashtra once again led the tally with 39,544 fresh cases being reported from the State. Chhattisgarh and Karnataka registered 4,563 and 4,225 infections respectively. In the first wave of infections in India, the daily cases peaked at nearly 98,000 in mid-September 2020.

The active case load has reached 5,80,327 with Maharashtra, Karnataka, Kerala, Punjab and Chhattisgarh cumulatively accounting for nearly 80% of the total active cases.

Govt. sharply cuts rates on small savings instruments #GS3 #Economy

The government has sharply slashed the rates on all small savings instruments for the first quarter of 2021-22, bringing the rate of return on the Public Provident Fund down from 7.1% to 6.4% and effecting cuts ranging from 40 basis points (0.4%) to 110 basis points (1.1%).

The sharpest cut was seen in the quarterly interest rate paid on one-year term deposits, from 5.5% in the January to March quarter to 4.4% in this quarter. The rate of return on the Senior Citizen Savings’ Scheme was cut from 7.4% to 6.5%, while the Sukanya Samriddhi Account Scheme’s return was reduced from 7.6% to 6.9%.

While the government resets the interest rate on small savings instruments every quarter, this round of rate cuts assumes significance as retail inflation has been breaching the 6% mark and the government is keen to lower interest rates to make it easier to execute its borrowing plans for the year and spur growth.

The government plans to borrow Rs. 12.05 lakh crore in 2021-22, on the back of a record gross borrowing of Rs. 13.71 lakh crore in 2020-21. High small savings rates have been cited by the central bank as a major impediment in ensuring policy rate cuts get transmitted into the banking system.

After keeping rates unchanged over the last few quarters, the government has effected a substantial lagged revision in small savings rates, mirroring the moderation in interest rates in the wider economy seen over the last year.

The interest rate paid on National Savings Certificate and Kisan Vikas Patra were also reduced significantly, from 6.8% to 5.9%, and from 6.9% to 6.2%, respectively. Consequently, the Kisan Vikas Patra, which used to mature in 124 months, will now mature in 138 months.

While savings deposits earned the lowest rate of 4% till now, that return has now been further slashed to 3.5%. Among time deposits, the return on five-year deposits has been reduced from 6.7% to 5.8%. Five-year recurring deposits, whose interest is compounded quarterly, will get a return of 5.3% instead of 5.8% in the previous quarter.

For savers, the option with the highest returns at this point is the Sukanya Samriddhi Account Scheme, followed by the Senior Citizens’ Savings Schemes and the Public Provident Fund.

In February, output of core sectors contracts by 4.6% #GS3 #Economy

The output of eight core sectors declined by 4.6% in February, the steepest contraction in the last six months which, experts said, could drag the overall industrial production in the month into negative territory.

All the key segments, including coal, crude oil, natural gas and refinery products, witnessed a decline in production. The growth rate of the eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity — stood at 6.4% in February 2020.

Last time in August 2020, the sectors had recorded a negative growth of 6.9%. In January this year, the segments had registered a positive growth of 0.9%.

The output of eight core sectors declined by 4.6% in February, the steepest contraction in the last six months, which economists said could drag the overall industrial production in the month into the negative territory.

All the key segments, including coal, crude oil, natural gas, and refinery products, witnessed a decline in production. The growth rate of the eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — stood at 6.4% in February 2020.

According to the data, coal production declined by 4.4%, crude oil by 3.2%, natural gas by 1%, refinery products by a steep 10.9%, fertilisers by 3.7%, steel by 1.8%, cement by 5.5% and electricity by 0.2% in February 2021.

Pakistan allows import of cotton and sugar from India #GS2 #IR

Partially reversing a two-year-old decision to suspend all trade with India, Pakistan announced on Monday that it would allow the import of cotton and sugar from across the border. The decision follows the Line of Control (LoC) ceasefire announced by India and Pakistan in February, and a number of moves seen as part of a larger dialogue process to de-freeze ties.

Addressing the media at the end of a Cabinet meeting that cleared the two proposals from Pakistan’s Commerce Ministry, newly appointed Finance Minister Hammad Azhar said, however, that the decision was driven by rising prices and Pakistani industry’s need for the specific products.

“We have allowed the import of sugar, but in the rest of the world too, sugar prices are high because of which imports are not possible. But in India, the prices of sugar are much less as compared to Pakistan, so we have decided to reopen sugar trade with India.

He added that there was also high demand for cotton and cotton yarn from India, especially from Pakistani Small and Medium Enterprises (SME) due to increased textile exports but a reduced crop in 2020.

The decision to cancel trade was taken by the Imran Khan government on August 9, 2019, days after the government amended Article 370 and reorganised Jammu and Kashmir.

India’s Ministry of External Affairs did not respond to the development, nor did it respond to questions on whether it was considering any complementary steps. While India had not banned trade with Pakistan, it suspended cross-LoC trade and withdrew Most Favoured Nation (MFN) status to Pakistan in the wake of the Pulwama attack in February 2019.

Experts said that the move by Pakistan, which follows the granting of sports related visas by India after a gap of three years, scheduling a much-delayed meeting of the Indus Water Commissioners in Delhi in March, peace at the LoC after more than 5,000 ceasefire violations last year, as well as the exchange of salutary messages between Prime Minister Narendra Modi and PM Khan, has raised hopes for further measures.

“The decision by Pakistan to allow trade in the selected items will gradually lead to restoration of normalcy in India-Pakistan trade. It will help Pakistan’s domestic manufacturers reduce cost of production, which increased because of the trade ban from India.

‘Keep vaccine wastage below 1%’ #GS3 #SnT

The Health Ministry on Wednesday told the States and the Union Territories that there was no value in conserving vaccines for the second dose and directed that prompt supply should be ensured to all government and private hospitals where there was a demand.

At a meeting ahead of the extension of COVID-19 vaccination to all those above the age of 45 from April 1, chaired by Health Secretary Rajesh Bhushan and R.S. Sharma, Chairperson, Empowered Group on COVID Vaccination, via videoconference, the Health Secretaries and senior officials of the States were asked to identify and take corrective action in low vaccine coverage pockets, particularly in districts showing a case surge.

In a statement, the Health Ministry said the States and the Union Territories had been instructed to maintain vaccine wastage at less than 1% (present national wastage percentage being 6%), regularly review wastage across all levels to minimise the same and ensure timely utilisation of available stocks to avoid expiry of vaccines without usage.

The States have also been told that only eligible beneficiaries should be registered and vaccinated under the category of healthcare and frontline workers and not allow any archiving of incorrect or duplicate entries on the CoWIN platform.

On vaccine stocks, while Dr. Sharma said there was no problem in the storage and logistics of vaccines, the States had been told that there should be no sedimentation of vaccine stocks.

The Health Ministry noted that vaccine was distributed based on consumption to avoid overstocking and understocking at cold chain points and that there was a regular review of vaccine stocks and consumption to identify gap areas.

States have to follow this protocol along with timely updating of data of vaccine consumption on CoWIN and eVIN portals. Regarding the involvement of private vaccination centres, the States were asked to conduct regular reviews of vaccinations at these facilities on capacity utilisation and other aspects.

Expert committee will rule on Sputnik V today #GS3 #SnT

A decision on India approving a third COVID-19 vaccine is likely soon, with a subject expert committee (SEC) set to take up Dr. Reddy’s Laboratories application seeking emergency use authorisation for Russia’s Sputnik V vaccine on April 1.

The meeting of the SEC is scheduled for Thursday, sources in the pharma major confirmed. It will be the second time the application will go before the committee that advises the Drugs Controller General of India (DCGI).

Last month, the committee had sought more data on Sputnik V vaccine trials from Dr. Reddy’s. The firm should submit immunogenicity and safety data of Phase II and III trial as per approved protocol for further consideration. “Further, the firm is requested to present its data with more clarity

Phase III trials

Dr. Reddy’s has since submitted additional data before the committee. The dosing of the volunteers under Phase III trials has also been completed. The trial data is being analysed and findings likely to be ready early April.

The Russian Direct Investment Fund (RDIF) has a partnership with Dr. Reddy’s for the clinical trials and distribution of the vaccine, developed by Gamaleya National Research Institute of Epidemiology and Microbiology, in India.

Covaxin supply to Brazil hits a roadblock #GS2 #IR

Supplies of Bharat Biotech’s Covaxin to Brazil have run into trouble with Brazil’s health regulatory agency, ANVISA, deciding not to clear Covaxin for use at present.

In a statement protesting the decision, Covaxin’s Brazilian import partner Precisa Medicamentos (PM) said it would appeal the ANVISA decision, which, diplomatic sources said, was more about “bureaucratic process” and not pertaining to the quality of the vaccine. In particular, ANVISA required a certification of “manufacturing good practices”, which needs to be submitted before the clearances can be given.

As part of its procedure, representatives from ANVISA visited Bharat Biotech’s factory in India from March 1 to 5 and “all notes raised by the agency” were recorded, said PM in the translated version of its press statement. During the inspection, the regulatory agency reportedly required more stringent “technical and documentation procedures”.

“The requirements pointed out during inspection will be fulfilled, the timelines for fulfilment is under discussion with the Brazil NRA [National Regulatory Agency] and will be resolved soon. The 20 million dose order from the Brazilian Govt is still active. The agreement with Precisa Medicamentos is based on a long term partnership and will continue.

Bharat Biotech said it had agreed to the conditions laid by ANVISA but found the deadlines for compliance too tight, offering to complete procedures by June, rather than April, which may have led to the denial of clearances, the sources said.

Import partner

“The fulfilment of ANVISA’s notes in the shortest time would only be possible by interrupting Covaxin’s production completely, consequently affecting the supply to countries that have already received the product and have already authorised its emergency use, which is extremely inconsistent and imprudent in this current world situation, pointing out that Brazilian laws allow the vaccine to be authorised nevertheless for emergency and exceptional use, even without the certification.

The development follows weeks after Serum Institute of India (SII) had informed Brazil’s state-owned vaccine importer Fiocruz that supplies of further Covishield (AstraZeneca) doses could not be guaranteed because a fire in an SII building had hampered manufacturing.

Food sector incentive gets Cabinet nod #GS2 #Governance

The Union Cabinet approved a production-linked incentive scheme for the food processing industry with an outlay of Rs. 10,900 crore. Scheme was a “fitting tribute to farmers” and that it would lead to employment for 2.5 lakh people. He added that it would lead to additional exports of Rs. 30,000 crore to Rs. 35,000 crore.

The objectives of the scheme were to “support creation of global food manufacturing champions”, “strengthen select Indian brand of food products for global visibility and wider acceptance in the international markets”, “increase employment opportunities of off-farm jobs” and “ensuring remunerative prices of farm produce and higher income to farmers”.

Mr. Goyal said the scheme would cover ready-to-cook, ready-to-eat, processed fruits and vegetables, marine products and mozzarella cheese. Organic products, free-range eggs, poultry meat and egg products were also covered.

“The implementation of the scheme would facilitate expansion of processing capacity to generate processed food output of Rs. 33,494 crore and create employment for nearly 2.5 lakh persons by the year 2026-27. The applicants selected for the scheme would be required to invest in plant and machinery in the first two years.

Govt. retains 4% inflation target for RBI’s rate panel for 2021-26 #GS3 #Economy

The Centre has decided to retain the inflation target of 4%, with a tolerance band of +/- 2 percentage points for the Monetary Policy Committee of the RBI for the coming five years, a top finance ministry official said.

“The inflation target for the period April 1, 2021, to March 31, 2026… has been kept at the same level as it was for the previous five years. He dismissed queries on whether the focus had shifted to core inflation or any other component of retail inflation and hinted that the framework would remain ‘the same’ as earlier.

Economists welcomed the continuity in the framework, despite the recent spate of high inflation prints beyond the 6% upper threshold of the inflation target.

“The range of 2%-6% as a flexible inflation target has worked reasonably well and continuing with the same target would not disturb the monetary policy framework as such going forward. “Inflation may have breached the 6% mark a few times recently, but this has been during an exceptional situation in the economy.”

The decision puts to rest speculation about the government considering a looser inflation target to enable a more growth-oriented focus in monetary policy. RBI officials had in a report in February stressed that “the current numerical framework for defining price stability” was appropriate for the next five years.

India GDP to grow 7.5%-12.5% in FY22, says World Bank #GS3 #Economy

India’s economy is expected to grow at 10.1% for the year starting April 1, 2021, as the vaccine roll-out drives activity in contact-intensive sectors, as per the World Bank’s South Asia Economic Focus South Asia Vaccinates report. However, given the significant uncertainty around epidemiological and policy factors, real GDP growth could range from 7.5% to 12.5%, stabilising at 6-7% in the medium term, it said.

“It is not normal to talk about these wide ranges in the forecast. “The reason is that we are really in unprecedented circumstances. Fiscal year 2021 is expected to register the worst economic damage due to the pandemic, the report said (the economy contracted 8.5% in FY20-21 as per the World Bank’s estimate).

The Bank expects public consumption to contribute positively, but pent-up private demand to fade by end 2021, as investment will pick up very gradually as a result of a large government capital expenditure push.

Negative spillovers from financial sector distress (particularly concessions to debtors) are a risk to the growth outlook, the report warned. However, the Reserve Bank of India is expected to maintain an accommodative monetary policy stance during FY22. “So a big bounce back in India, but not completely out of the woods yet,” Mr. Timmer said.

As to the second wave that is possibly under way now in India and its impact on the economic outlook, Mr. Timmer said that these new waves and new variants of the virus were part of the risk factors to the outlook.