09 June, 2020

  • LG overrules Delhi Govt. order to restrict COVID-19 treatment (Polity & Governance)
  • Who's afraid of monetisation of the deficit? - Lead Article (Economy)
  • The critical role of decentralised responses - Article (Polity & Governance)
  • The e-diplomacy experiment & Economy to contract 3.2% in FY21 - WB - (International Relations + Economy )
  • Question for the day

Prelims Quiz

    Solution.

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    Description

    L-G overrules Delhi govt. order to restrict COVID-19 treatment

    Delhi’s Lieutenant-Governor Anil Baijal in his capacity as Chairperson of the Delhi Disaster Management Authority has overruled two decisions of Delhi government related to COCID-19 treatment.

    • The decisions which have been overruled by LG
    • Right to health as part of Article 21
    • Understanding the relevant constitutional provisions
    • Relevant Judgments of the Supreme Court
    • Recommendation of Balakrishnan Committee

     

    Who’s afraid of monetization of the deficit?

    The Indian Economy was facing economic slowdown prior to COVID-19. The lockdown imposed due to COVID-19 has further accentuated the slowdown in the economy. The RBI expects that the Indian Economy would contract in 2020-21. The combined Fiscal deficit of the Centre and States is expected to be around 12% of India's GDP. The NPAs of the Indian Banks is expected to rise even further leading to contagion impact on other sectors. Against this backdrop, the Government has announced the Economic Stimulus package to revive the Indian Economy. However, the Stimulus package in India costs the Government only 2% of its GDP as compared to around 20% of GDP in other countries. Clearly, the reluctance of the Government to announce higher package is on account of the need to maintain Fiscal Deficit and Public Debt in control. Higher Government borrowings may have an adverse impact on the economy.   

    • Debate among Economists has started – to monetize the deficit or not?
    • Conventional Macro-economics
    • Modern Monetary Theory (MMT)
    • To answer this question, the MMT argues the following:
    • Monetization of Deficit in India
    • Arguments put forward by Author in context of monetizing the deficit.

     

    The critical role of decentralized responses

    This article makes some suggestions to improve local finance and argues that the extant fiscal illusion is a great deterrent to mobilization.

    • Local Finance
    • MPLADS Scheme
    • Disaster Management

     

    The E-Diplomacy experiment

    • The first India-Australia virtual leaders’ summit was recently conducted on June 4 where the two nations discussed issues ranging from military interoperability to jointly tackling COVID-19.
    • The two countries upgraded their relations to a ‘comprehensive strategic partnership’.
    • The summit was noteworthy because Prime Minister Narendra Modi and the Indian delegation were on a video conference call with Prime Minister Scott Morrison and the Australian delegation.

     

    Adapting to the COVID times

    Few notable examples:

    Issues with diplomacy - cyber security & absence of personal interactions

     

    GEP Report - World Bank

    The Indian economy is expected to contract by 3.2% in this fiscal year as a result of the COVID-19 pandemic and its associated restrictions, the World Bank said in its Global Economic Prospects (GEP) June 2020 Report. Growth is forecast at 3.1% next year.  

    • Important observation of Global Economic Prospects report
    Comments

    Sparsh 4 weeks ago

    Where to submit the answers of this particular video relating to mains?