What to read in The Hindu

15 June 2024, The Hindu

Exports bounced 9% but trade deficit hit 7-month peak in May

Page 1

GS 3: Indian Economy (international trade) 

• India’s goods exports grew 9.1% to $38.13 billion in May, while imports rose 7.7% to $61.91 billion, Commerce Secretary Sunil Barthwal said on Friday, stressing that things are looking “more optimistic for foreign trade this year”.
• Even the textiles sector recorded a healthy growth of nearly 10% in May “after several months of sluggishness”, he noted.
• However, despite exports growing faster than imports, the merchandise trade deficit surged to a seven-month high of $23.78 billion in May.
• This was 5.5% higher than the deficit recorded in May 2023, and 24.5% over April’s trade gap of $19.1 billion, which in turn was the highest in four months.
• Compared with April, May’s import bill was 14.4% higher, while the value of exports rose 8.9%.

 

Reimagining Indian federalism

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GS 2: issues and challenges pertaining to the federal structure

• On June 4, 2024, the Bharatiya Janata Party (BJP) tripped up short of the majority mark in the Lok Sabha, compelling it to hobble towards power by leaning heavily on its partners in the National Democratic Alliance, all of which are regional parties.
• Aside from placing fetters on the BJP’s overweening arrogance and decelerating our descent into majoritarian autocracy, the return to New Delhi of coalition governance offers another hope: that of revitalising India’s beleaguered federal structure, which has sustained countless death blows over the past decade.
• As I argued in the Lok Sabha last year — while opposing the Government of National Capital Territory of Delhi (Amendment) Act, 2023 — what we have repeatedly seen since 2014 is an insidious, inexorable effort to curtail the autonomy of our States.
• Despite Prime Minister Narendra Modi’s rhetoric of cooperative federalism, all we have seen is the rise of a coercive and combative brand of federalism that seeks to centralise power at the expense of the States.

 

India growth story has a ‘beneficial ownership’ hurdle

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GS 3: Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment.

• Foreign investments will play a crucial role in aiding the government’s goal of a $5 trillion economy by the end of the financial year 2025-26. But, in order to attract foreign investment, it is essential to remove all the bottlenecks for the Indian companies receiving this investment, and also foreign investors who are willing to bet on the India growth story.
• The amendment to the Indian Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (“FEMA NDI”) through the press note number 3 of 2020, has posed a significant challenge for Indian companies, especially start-ups and smaller enterprises seeking foreign investments.
• This amendment stipulates that any investments in Indian companies, whether direct or indirect, originating from entities located in countries that share land borders with India (“Neighbouring Countries”), or where the “beneficial owner” of the said Indian investment is situated in, or is a citizen of any of these Neighbouring Countries would necessitate prior government approval (“PN3 Requirement”).

 

Food factor

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GS 3: Indian Economy (Inflation)

• May’s provisional headline retail inflation may have marginally eased to a 12-month low of 4.75%, but food price gains remained unrelenting last month giving little reason to cheer.
• Yet again, vegetables and pulses were key contributors in keeping food inflation as measured by the Consumer Food Price Index little changed at 8.69%, with urban consumers feeling the heat more than their rural counterparts as the pace of year-on-year change in food prices in India’s cities and towns hit a three-month high of 8.83%.
• Vegetable inflation not only continued to hover above 27% for a sixth straight month, at 27.3%, but month-on-month gains too accelerated by almost 200 basis points to a six-month high of 3.22%.
• Tomato, onion and potato prices led the charge, with these heavyweights in the vegetables sub-group logging sequential gains of 1.5%, 0.5% and a bruising 15.1% in the case of potato.
• Nor is the outlook for vegetable inflation particularly reassuring with June’s retail price trends as well as the lag from escalating wholesale costs pointing to more pain ahead for consumers running their household budgets.

 

‘Laws curbing press freedom should be withdrawn’

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GS 2: Indian Constitution: features, amendments, significant provisions

• Several journalist associations and digital rights organisations have endorsed a resolution to intensify their demand for the withdrawal of laws that they said were “aimed at curbing the freedom of press”.
• As stated in the resolution, passed at a meeting held on May 28, 2024, the provisions under laws such as the proposed Broadcast Services (Regulation) Bill, 2023, Digital Personal Data Protection Act, 2023, Press and Registration of Periodicals Act, 2023, and the Information Technology Amendment Rules, grant authority to the government to remove any online content pertaining to its business that it deems to be false or misleading.

 

NSSO survey finds COVID-19’s second wave hit informal economy hard

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GS 3: Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment

• India’s large informal non-agricultural sector was badly hit by the second wave of the COVID-19 pandemic, but has recovered gradually since then, with the number of unincorporated firms and their employees rising almost 6% and 8%, respectively, by the latter half of 2022-23, according to findings of an official survey.
• Gross Value Added (GVA) by such enterprises grew by 9.83% at current prices during the period October 2022 and March 2023, in comparison with the financial year 2021-22, as per a fact sheet on the Annual Survey of Unincorporated Sector Enterprises (ASUSE) conducted by the National Sample Survey Office (NSSO) in 2021-22 and 2022-23.

 

In Burgenstock, leaders seek a peace framework for Ukraine, without Russia

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GS 2: International Relations- Bilateral, regional and global groupings and agreements involving India and/or affecting the Indian interests

• A 20 minutes drive from Lucerne, a key city in central Switzerland buzzing with tourists, is a heavenly resort nestled in the Alps and overlooking lake Luzern from high above.
• This largest integrated modern hotel resort in the country, rebuilt in 2014, has its roots dating back to the 18th century.
• It has played hosts to celebrities and world leaders. Jawaharlal Nehru and Jimmy Carter holidayed here; Audrey Hepburn tied the knot in a chapel here.
• The resort, at times, has played peacemaker, too.
• The annual Bilderberg Meetings under Chatham House rules to foster dialogue between Europe and North America in the 1950s took off from here.
• Turkish and Greek Cypriots negotiators sat across the table in the resort in 2004 to discuss the issue of accession to the EU.
• These past few days residents here have been subjected to the constant whirring of helicopters as the lake resort gears up to welcome world leaders for the Summit on Peace in Ukraine on June 15-16.