What does our Current Account Deficit show?
(GS-III: Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment)
CAD in India decreased to 1.5% of gross domestic product (GDP) from 2.6% of GDP in Q3 FY 2021-22.
What is CAD?
The current account deficit is a measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the products it exports. The current account represents a country’s foreign transactions and, like the capital account, is a component of a country’s balance of payments (BOP)
What does CAD include?
CAD includes a nation’s net trade-in products and services, its net earnings on cross-border investments including interest and dividends, and its net transfer payments such as remittances and foreign aid. A current account deficit (CAD) means the value of goods and services imported exceeds the value of exports.
Reasons for lowering India’s CAD?
Robust performance by computer and business services, net service receipts rose.
Remittances by Indians abroad also rose.
Moderation of India’s trade deficit in the quarter mentioned.
Merchandise export overcame higher import bills: Geopolitical tensions and supply chain disruptions led to crude oil and commodity prices soaring. A rise in prices of coal, natural gas, fertilizers, and edible oils has added to the pressure on the trade deficit.
However, with global demand picking up, merchandise exports have also been rising.
How will a large CAD affect the economy?
Rising CAD: A large CAD will result in demand for foreign currency rising, thus leading to depreciation of the home currency. Nations balance CAD by attracting capital inflows and running a surplus in capital accounts through increased foreign direct investments.
A weaker Indian currency will drive inflation up, which is already a grave concern due to high commodity prices.
Rising CAD is not always bad: If an increase in the import bill is because of imports for technological upgradation it would help in long-term development.
If increasing imports is accompanied by an expansion in industrial production, it is a sign of economic development.
This decrease in CAD is temporary: India’s current account deficit is likely to widen to around 3-3.5% of gross domestic product (GDP) in 2022-23, due to FED interest rates hike and outflow of FII and FDI from the Indian market.
Juvenile Justice Act amendment may backfire
(GS-II: Laws, institutions and Bodies constituted for the protection of vulnerable sections)
Child rights panels of three states (Bengal, Rajasthan and Punjab) joined the Delhi Commission for the Protection of Child Rights (DCPCR), appealing to the Union government to roll back an amendment in the Juvenile Justice Act that makes certain offences against children non-cognisable.
In 2021, the Juvenile Justice (Care and Protection of Children) Act-2015 as amended through Presidential assent.
Previously, the National Commission for Protection of Child Rights (NCPCR) audit of Child Care Institutions (CCIs) in 2020, had highlighted glaring issues with the running of childcare institutions.
As per the amendments:
Supervision by District Magistrate: DMs and ADMs will monitor the functioning of various agencies under the JJ Act in every district- including the Child Welfare Committees, the Juvenile Justice Boards, and the District Child Protection Units and the Special Juvenile Protection Units.
The DM will also carry out background checks of CWC members, who are usually social welfare activists, including educational qualifications, as there is no such provision currently.
The DMs are also to check possible criminal backgrounds to ensure that no cases of child abuse or child sexual abuse are found against any member before they are appointed.
The CWCs are also to report regularly to the DMs on their activities in the districts.
Instead of the court, the District Magistrate (including Additional District Magistrate) will now issue adoption orders.
Serious offences will also include offences for which maximum punishment is imprisonment of more than seven years, and minimum punishment is not prescribed or is less than seven years.
Non-Cognisable offence: According to the amendment, the crimes under the special law, with punishment between three and seven years, have been reclassified as non-cognisable.
Pan India Problems with the law:
Discourages reporting: With this amendment, if anyone goes to the police station to register a complaint, the police will refer them to a magistrate for permission.
Need of Complainant: In some cases, NGOs or child rights activists decide to report such instances directly to the police given that they are a cognisable offence (until the amended JJ Act is notified). But the police will look for someone to be made a complainant even when they can verify the complaint and register an FIR if it is a cognisable offence.
Directions of Magistrate: According to the Code Of Criminal Procedure, once the crimes are rendered non-cognisable, the police will be able to register an FIR only on the directions of a magistrate and a complainant will first have to approach the magistrate concerned to start the process.
Loss of wages: Most children at CCIs whose parents are daily wage labourers do not want to engage with the legal process because that would force them to take time off from work, resulting in loss of wages.
Reporting instances of abuse and cruelty by staffers or persons in charge at child care institutions (CCI) is not easy.
The victims themselves are unable to directly report, most such crimes are reported to the police by either parents or child rights bodies and child welfare committees(CWC).
14th BRICS Summit
(GS-II: International Relations)
Recently, Prime Minister of India attended the 14th BRICS summit which was virtually hosted by China.
Theme of the 14th BRICS Summit: Foster High-quality BRICS Partnership, Usher in a New Era for Global Development.
BRICS Plus virtual conference was also held as part of the main meeting with ministers from countries, including the UAE, Saudi Arabia, Egypt, Kazakhstan, Indonesia, Argentina, Nigeria, Senegal, and Thailand.
What are the Key Highlights of the Summit?
Adopting the Beijing Declaration:
It states that BRICS supports talks between Russia and Ukraine.
The grouping is willing to support the United Nations’ and the International Committee of the Red Cross’s (ICRC) efforts to deliver humanitarian aid to Ukraine.
Countries also expressed concerns about the situation in Taliban-held Afghanistan.
Discussions on the Issues:
Humanitarian Situation in Ukraine:
Concerns over the humanitarian situation in and around Ukraine and expressed their support to efforts of the UN Secretary-General, UN Agencies and International Committee of the Red Cross (ICRC) to provide humanitarian assistance in accordance with the basic principles of humanity, neutrality and impartiality.
While discussing terrorism and terror cooperation, the BRICS countries said that only the UN Security council has the authority for imposing sanctions.
On Afghanistan, BRICS countries called for “Afghanistan authorities to achieve national reconciliation through dialogue and negotiation, and to establish a broad-based and inclusive and representative political structure”, adding that Afghan territory must not be used to shelter terrorists or attack any other country.
Initiative on Denial of Safe Haven to Corruption:
The BRICS Initiative on Denial of Safe Haven to Corruption aims to further strengthen anti-corruption capacity building through education and training programs and enhance anti-corruption exchanges and cooperation within multilateral frameworks.
Framework for Consumer Protection in E-commerce:
The declaration welcomed the establishment of the Digital Economy Working Group by upgrading the E-commerce Working Group.
And the BRICS nations have agreed to promote consumer protection in e-commerce by advancing the implementation of BRICS Framework for Consumer Protection in E-commerce.
More Focus on Combating Transnational Drug Trafficking:
The summit also expressed concern over the serious drug situation in the world. BRICS declaration appreciate BRICS Anti-Drug Working Group’s active role in combating transnational drug trafficking and promoting global drug governance and will further strengthen drug control cooperation.