 A very good evening aspirants. Welcome to the Hindu News Analysis by Shankar Aayez Academy for the day 14th of August 2021. So, these are the list of news articles that we have chosen for today's discussion. So, for today's discussion, we have two editorials and three articles which are discussed in the prelims perspective. And one editorial is about the LPG reforms. And then we also have an editorial on the UNSE debate that recently happened. And among the three articles discussed in the preliminary perspective, we have one article on genetically modified crops and another article on the fiscal deficit. And then we also have an article on a UJANA. So, without wasting much time, let's move into our discussion. Now look at this editorial article. See, this editorial is written by Mr. Rangar Rajan, who was a former chairman of the Economic Advisory Council to the Prime Minister. He was also a former governor of the Reserve Bank of India. And you may recollect him through the various committees that he has added and he even added her committee on poverty estimation. So, in this editorial, the author is giving us a brief overview on the economic state of our nation since the LPG reforms. So, in this context, we are going to refresh our learnings on LPG reforms. And then we will also see some important points that I mentioned by the author in this editorial article. The syllabus covered by this article is given below for your reference. First, let us begin by understanding what happened in 1991. See, in 1991, we that is India was under the balance of payment crisis. And for those who are not aware, see the balance of payments is nothing but a statement of all the transactions that were made between entities in one country and the rest of the world over a defined period of time, say some period like a quarter or a year. So, basically, country versus the rest of the world in terms of trade is the balance of payment. To understand this better, say, when you import something, you are supposed to pay for it either immediately or as a means of sale to the same entity. And that account is a part of the balance of payment. And this export import is a part of the current account of the balance of payment. And also remember, the capital account of balance of payment deals with investments. So, in a nutshell, the balance of payments includes both the current account as well as the capital account. And the current account includes a nation's net trade in goods and services, its net earnings on cross border investments, etc. And the capital account will consist of a nation's transactions in financial instruments and central bank reserves. Note that the sum of all transactions recorded in the balance of payments should be zero. I repeat, the sum of all transactions recorded in the balance of payments should be zero. See, basically, in any trade that is a case, right? So, if it is not zero, that is, if we owe the rest of the world more, then a crisis is likely to happen. So, this was the situation we were in the year 1991. And because of that, we had to reach out to the IMF and the World Bank for help. And on that line, the IMF or the International Monetary Fund, they mandated a series of reforms that India should undertake if it were to help India. And India also complied with it. And thanks to those reforms, because since then, India has come a long way in prosperity and the policy response is also paid off. See, the first and the major move is liberalization of trade policy. Note that earlier, we had one of the most restrictive import policies in the world. That is, anyone who is seeking to import something, they have to pay a heavy price as import duty. Earlier on the 11th of August, 2021, in the news analysis, we had a discussion about protectionism. Yes, our economy was protectionist at that time. And almost all intermediate and capital goods which earlier needed an import license were allowed to be freely imported against Exxon scripts. And this introduced a market mechanism for limiting imports to a sustainable level. See, import liberalization was essential for industrial liberalization to be meaningful. So, we achieved that. But then there is a risk. See, when we liberalize imports, the exports also need attention. Think of it as buying and buying from outside. And if it continues, then we will get into a habit of not making anything in India. And ultimately, at the end, when we buy more, we happen to spend more. So, therefore, the floating exchange rate was brought. See earlier, currency exchange rate was fixed. But liberalization changed this, wherein the value of currency was freely determined by market based on demand. Now, besides this, tax reforms covering both direct as well as indirect taxes that was laid out by the Chalaya Committee were also implemented over three years. And apart from this, foreign capital inflows in the form of portfolio flows were also liberalized in steps. Remember, deregulation of industrial sector is also an important vertical under this. That is, before 1991, for one to set up an industry, various licenses had to be obtained. And also inspections were made a norm back then. And this was actually creating a lot of hurdles in doing business. So, a lot of these were done away with. Now, apart from that, privatization also happened. And as we know, privatization generally refers to inducing private sector participation in the management and ownership of public sector enterprises. So, therefore, on that line, government, they sold shares from many PSUs. And the purpose of the sale, according to the government, was mainly to improve financial discipline and also to facilitate modernization. And it was also envisaged that private capital and managerial capabilities could be effectively utilized in order to improve the performance of the PSUs. And yes, this also worked. And lastly, India globalized as well by integrating the trade with the international trade at least partially. See, the subject that we have been discussing so far is what was called the LPG reforms. Now, in this LPG, L refers to liberalization, P to privatization and G to globalization. So, now we have got conceptual clarity on the LPG reforms. So, now, let us move into the article. See, on talking about the reforms, the author positively notes the developments that the LPG reforms have brought in. Firstly, he notes that the poverty has come down. See, the overall poverty ratio has come down from 45.3 percent in the year 1993 to 1994 to 37.2 percent in the year 2004 to 2005. And it further came down to 21.9 percent in the year 2011 to 2012. And when you look at the per year reduction in percentage points in poverty ratio between the year 2004 to 2005 and 2011 to 12, it was found to be 2.18, which is actually a very good thing. Next, he points out to the GDP. See, between 1992 to 93 and 2001 to 2, the GDP at factor cost, they grew annually by 6.2 percent. And between 2001 to 2 and 2010 to 11, it grew by 7.69 percent, which was higher than the previous 6.20 percent. And the growth rate between 2011 to 12 and 2019 to 20 was found to be 6.51 percent. And the best performance was between 2005 to 6 and 2010 to 11, wherein the GDP grew by 8.7 percent, which brought to light the potential growth, which brought to light the potential growth rate of. And this took place despite the fact that this period included the global crisis year of 2008 to 2009. Now, following that, the author also points out about the forex reserves. See, here he notes that the balance of payment situation had remained comfortable over the years and all these are credited to the reforms of 1991. See, when you have a closer look, you can find that all these achievements, they have one common factor, that is the objective has been to improve the productivity and the efficiency of the system by creating a more competitive environment. Now, this is because when competition prevails, everyone will want to be the best. So, new technologies will come and then faster ways of productions will come into work and the reduction in cost of production will also happen. See, in the current pandemic situation where our economy is wobbling, there is a need to focus on these parameters in order to keep the robust growth story going. And for that, the author here is suggesting two major things. Firstly, he says that the policy makers should identify the sectors which need reforms and to achieve this, the center and state must be joined partners in this effort. Now secondly, in terms of governance performance, the author suggests that there should be an increased focus on social sectors like health and education. See, when we provide the services, the emphasis must not be just on quantitative expansion but even the quality should be focused. So, finally, the author concludes the editorial by rightly pointing out the need for growth with equity because a growth without equity might not be sustainable as vast majority might be left out of the benefits of growth. So, with this, we have come to the end of this editorial discussion. Now, let us move on to the next part of our Hindu news analysis. Now, we are going to deal with this economy article. As you can see from the title, this article is regarding the recently presented Revised Tamil Nadu State Budget for the year 2021-22. Now, as per the news, the revised budget estimated a fiscal deficit of 4.33 percent of the gross state domestic product. Now, this has become an issue because the above mentioned fiscal deficit at 4.33 percent of the gross state domestic product is over and above the 4 percent ceiling that was permitted by the 15th finance commission for the states. So, based on this context, now in our discussion, we are going to brush up the deficit related economic terms from the prelims perspective. Now, first and foremost comes the concept of fiscal deficit. See, a fiscal deficit is a shortfall in a government's income compared with its spending. So, if a government has a fiscal deficit, then it means that the government is spending beyond its means. So, a fiscal deficit can be defined as the difference between the government's total expenditure and its total receipts excluding the borrowing. And the concept of this gross fiscal deficit is calculated by removing the revenue receipts and the non-debt creating capital receipts from the total expenditure. See, if you have carefully followed, I had mentioned the term non-debt creating capital receipts while talking about the calculation of gross fiscal deficit. See, this concept of non-debt creating capital receipts refer to those receipts which are not borrowings. And since they are not borrowings, they do not give rise to debt. And some examples for them are the recovery of loans and the proceeds from the sale of PSUs. And as we know, the fiscal deficit will have to be financed through borrowing. Thus, it indicates the total borrowing requirements of the government from all sources. So, from the financing side, gross fiscal deficit equals to net borrowing at home plus the borrowing from RBI plus the borrowing from abroad. Now, here the term net borrowing at home includes that which are directly borrowed from the public through debt instruments such as small savings schemes. And apart from that, it also includes the amount that are borrowed indirectly from commercial banks to statutory liquidity ratio or SLR. So, now, let us see about revenue deficit which is a part of fiscal deficit. See, fiscal deficit equals to revenue deficit plus the capital expenditure minus the non-debt creating capital receipts. And the concept of this revenue deficit refers to the excess of revenue expenditure over the revenue receipt. So, in simple words, a large share of revenue deficit in fiscal deficit indicates that a large part of the borrowing is being used to meet its consumption expenditure needs rather than investment. And there is also another deficit known as effective revenue deficit and this effective revenue deficit excludes those revenue expenditures or transfers in the form of grants for the creation of capital assets. See, there is also another deficit known as the effective revenue deficit and this effective revenue deficit excludes those revenue expenditures or transfers in the form of grants for the creation of capital assets. So, therefore, an effective revenue deficit indicates the difference between revenue deficits and the grants for the creation of capital assets. See, so far in our discussion, we saw about fiscal deficit, we also saw about revenue deficit and also about effective revenue deficit. So, now lastly, let us see about the primary deficit. Remember that the borrowing requirement of the government includes the interest obligations on accumulated debt and the goal of measuring this primary deficit is to focus on the present fiscal imbalances. So, therefore, primary deficit can be simply explained as a fiscal deficit minus the interest payments and as you can see below, the gross primary deficit equals to the gross fiscal deficit minus the net interest liabilities wherein the net interest liabilities will consist of interest payments minus interest receipts by the government on net domestic lending. So, by now, I hope that you have a picture in your mind related to the different concepts associated with fiscal deficit, revenue deficit, effective revenue deficit and also primary deficit. So, with this, now let us move on to the next part of our news discussion. Now, let us take up this news article for our discussion. Now, before discussing the article, let us understand the meaning of genetically modified organisms. See, according to WHO or the World Health Organization, according to the World Health Organization, genetically modified organisms can be defined as an organism in which the genetic material that is the DNA has been altered in a way that does not occur naturally by mating and or by natural recombination. That is, we humans, we alter the DNA and let it grow and these alterations can be in the form of deletion, addition or introduction of a genetic material from another organism as well. So, generally, such alterations are done to bring about some desired characteristics in the plant, say like, say like for example, pest control and all. And at the international level, the Food and Agricultural Organization or the WHO Codex guidelines, they exist for risk analysis of this genetically modified food. And at domestic level, generally for approving the genetically modified crops, it is first run through the Genetic Engineering Appraisal Committee and then they give their recommendation to the Ministry of Environment and the Ministry of Environment will take the final call in this regard. Now, note that India has not allowed any cultivation of edible genetically modified crops yet. And in the case of BT Brinjal, although it was allowed by the Genetic Engineering Appraisal Committee, still it was banned by the Ministry of Environment. And we are also apprehensive of importing genetically modified edible products in India. That is, we don't want the genetically modified crops to hinder the human food chain. But that still happens because the corn products imported from outside, they have genetically modified crop, though not whole, but still they have. Now, coming to the news in hand, see India is one of the leading producer and consumer of poultry. But then this poultry industry, they saw a crash in demand last year following the rumors that poultry eating spreads COVID. And besides this, the poultry feeds are also expensive. So the cost of poultry is being pushed up as we witness. So further, recently in 2018, following the WTO ruling, the India allowed import of chicken. So, so there is a glut in the market. And so on that line, the poultry producers are thus facing a stiff competition in the domestic market as well as in the international market with feeds getting more and more expensive. So there has been a long standing demand to allow the genetically modified poultry feeds. For instance, the genetically modified mace, which is a poultry feed is abundantly available. And it is in fact cheaper than the non genetically modified mace. Similar is the case with soy meal too. Apparently, poultry feed makes up to about 65% of the cost of production for the farmer. Note that soy meal is nothing but left over after oil is extracted from the bean. And in fact, it is the main protein ingredient in the feed, especially for broilers. And over the last three to four years, soy meal has been available at an average cost of about 34 to 36 rupees per kilogram. And and this month it shot up to 96 rupees per kilogram due to the shortage. Recently, respite was found when the Department of Animal Husbandry and Daring notified the customs department that soy meal and oil cake from the genetically modified soy would be permitted for import. But then this had some limitations. See the 1989 Rules of the Environment Protection Act governs the genetically modified products. Note that it is applied not just to genetically modified organisms, but also to products and substances thereof. So, this order by the Department of Animal Husbandry runs counter the rules and the concerns that the genetically modified products will enter the human chain are also widespread. So, this is all about the news article. Now, let us move on to the next news discussion. Now, let us take up this news article. This article talks about the expenses that were made towards the COVID-19 from the PMJ or the Pradhan Mandri Jan Arogya Yojana. Although the expenditure figures are less relevant, still we will be focusing on this news article because the PMJAY or the Pradhan Mandri Jan Arogya Yojana is an important topic from our preliminary exam perspective. So, come let us move into the article. See Ayushman Bharat is a flagship scheme of the Government of India and this scheme was launched as recommended by the National Health Policy of 2017. See the main objective of this scheme was to achieve the vision of universal health coverage and remember this Pradhan Mandri Jan Arogya Yojana is a centrally sponsored scheme having central sector component under Ayushman Bharat mission and also note this scheme is anchored in the Ministry of Health and Family Welfare. Note that this again is an umbrella of two major health initiatives and these two major health initiatives includes the Health and Wellness Centers and the National Health Protection Scheme. So, first let us look into the Health and Wellness Centers. See, under this around 1.5 lakh existing sub-centers will bring health care system closer to the homes of people in the form of health and wellness centers. Now what these centers do is that they will provide comprehensive health care and this health care will cover both non-communicable diseases as well as maternal and child health services and the list of services that are provided at these health and wellness centers is provided below for the benefit of aspirants. So, please have a look at it. So, having done with the Health and Wellness Centers now let us move on to the National Health Protection Scheme. See Ayushman Bharat Pradhan Mandri Jan Arogya Yojana it provides a defined benefit cover of around 5 lakh per family per year and this cover will take care of almost all secondary care and most of the tertiary care procedures and most importantly in order to ensure that nobody is left out especially women, children and elderly people there will be no cap on family size and also there will be no cap over the age in the scheme and know that the benefit cover will also include pre and post hospitalization expenses and all pre-existing conditions will be covered from day one of the policy and also know that a defined transport allowance per hospitalization will also be provided to the beneficiaries. Importantly remember that the benefits of the scheme are portable across the country and a beneficiary who is covered under the scheme will be allowed to take cashless benefits from any public or private impaneled hospitals across the country. See I have displayed the eligibility criteria and also the exclusion category related to the scheme so these are some raw information that requires you to merely memorize and roughly have provided them so go through that after the session. Now besides that as a recent development the government is also announced it will cover the COVID expenses of children as well and that is every family with a child is eligible to a cover of 5 lakh for the COVID treatment of the child. So these are some of the important details or facts that you need to have in mind whenever you learn about the Pradhan Mandri Jan Aroge Yojana. So with these details now let's move on to the next part of our news discussion. Now let us take up this reference editorial article for our discussion. If you remember recently our Indian Prime Minister chaired a high level UN Security Council open debate and this open debate was titled as announcing maritime security a case for international cooperation and this particular editorial article is written in that backdrop. The author in this editorial highlights the discussion that happened on the UN Security Council open debate. See we have already discussed this topic in 11 August 2021 Hindu News Analysis but still let me quickly run through the crux of this editorial. See the author has divided the discussion here into five segments and in each segment he puts forward the different prospects that was spoken in the recent UNSEE debate. See in the first segment the author has highlighted the glorious history of India's maritime tradition that was spoken by our Indian Prime Minister and as we know India has a very strong maritime tradition because of its natural seaward orientation and as we know India's maritime tradition began around 4500 years ago with Mesopotamia and then with the advent of Vasco da Gama it got a new shape and in the second segment the author is highlighting the importance of uninterrupted global maritime trade wherein he emphasizes the relevance of Sagar or the security and growth for all in the region that aims to promote the development in the Indian Ocean. Further in the third segment the author is talking about the peaceful settlement of maritime dispute on the basis of international law and following that comes the importance of preserving the maritime environment and its resources and the author also throws light on the importance of developing connectivity and infrastructure. So this is basically the crux for the important takeaways from this editorial article. Now having done with the article discussion now let us move on to the next segment of our Hindu news analysis that is the practice question discussion. Now look at this practice question consider the following statements about national health protection scheme statement one there is no cap on family size and age covered under the scheme statement two a defined transport allowance per hospitalization will be paid to the beneficiary and statement three the scheme does not include post hospitalization expenses. So we need to find the correct answer here so from our discussion we can say that statement one and two is correct but coming to statement three we can find that it is wrong because the scheme includes post hospitalization expenses as well so since we need to find only the correct answer the correct option here is option C that is one and two only. Now look at this question codex elementarius that is often seen in news refers to code for big data regulation under your opinion code for regulation of services trade under WTO code that governs the prisoner exchange and code for food standards. See the codex elementarius or food code is a collection of standards or guidelines and codes of practice that are adopted by the codex elementarius commission and this commission which is also called as the CAC is the central part of the joint FAO or WHO food standards program and it was established by the FAO and the WHO in order to protect the consumer health and also to promote fair practices in food trade and this also includes the genetically modified foods. So therefore the correct answer here is option D that is the code for food standards. Now let's take this question with reference to government deficit consider the following statements statement one says that primary deficit is the difference between the government's total expenditure and its total receipts excluding borrowing and statement two says that from the financing side gross fiscal deficit includes net borrowing at home and the borrowing from abroad. So we need to find the correct statement here. See statement one is incorrect because this statement is the definition of fiscal deficit and when you take primary deficit it is fiscal deficit minus the interest payments and we already said that fiscal deficit indicates the total borrowing requirements of the government from all sources. So from the financing side gross fiscal deficit is equal to net borrowing at home plus the borrowing from RBI plus the borrowing from abroad which means the statement two is correct. So since the correct answer only has to be marked the correct option here is option B that is two only. The list of main question is given below so you can write your answers and post them in the comment section. So with this we have come to the end of today's under news analysis and if you have liked the video then don't forget to like comment and share and do subscribe to Shankar Eye's Academy YouTube channel for more updates regarding QPSC civil services preparation.