Current affairs November 2021

India joins G20 Troika

India has joined the G20 Troika, which consists of Indonesia, Italy, and India - the current, previous and incoming G20 Presidencies, respectively.

Italy hosted the G20 summit during October 30-31, 2021.

On 2nd December 2021, Indonesia assumed the G20 Presidency and will convene various G20 meetings throughout the year, culminating with the G20 Leaders’ summit on 30-31 October 2022 under the overall theme of "Recover Together Recover Stronger”.

India will assume the G20 Presidency on December 1, 2022 from Indonesia, and will convene the G20 Leaders’ Summit for the first time in India in 2023.

About G20

The G20 or Group of Twenty is an intergovernmental forum comprising 19 countries and the European Union (EU).

It works to address major issues related to the global economy, such as international financial stability, climate change mitigation, and sustainable development.

The G20 is composed of most of the world's largest economies, including both industrialized and developing nations, and accounts for around 90% of gross world product (GWP), 75–80% of international trade, two-thirds of the global population, and roughly half the world's land area.

Joko Widodo, the president of Indonesia is the current chairman of G20.

G20 and India

As a founding member of the G20, India has used the platform to raise issues of vital importance and those that impact on the most vulnerable around the world.

As a Troika-member, India will work closely with Indonesia and Italy to ensure consistency and continuity of the G20’s agenda.

First Multidimensional Poverty Index (MPI) of India

NITI Aayog has released the first-ever Multi-dimensional Poverty Index (MPI) of India.

This baseline report of the national MPI measure is based on the reference period of 2015-16

Objective

The MPI seeks to measure poverty across its multiple dimensions and in effect complements existing poverty statistics based on per capita consumption expenditure.

Dimensions & Indicators

The Index is based on three equally weighted dimensions – health, education, and standard of living – which in turn are represented by 12 indicators such as nutrition, school attendance, years of schooling, drinking water, sanitation, housing, bank accounts among others.

The MPI uses the globally accepted methodology developed by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP). The dimensions of the index have proven to help identify and achieve targeted policy interventions.

Key Findings

Overall, 25% of the population in India is Multi-dimensionally poor.

Highest Poverty

States: Bihar has the highest proportion of people, at 51.91 per cent of the state’s population, who are multi-dimensionally poor, followed by Jharkhand at 42.16 per cent and Uttar Pradesh at 37.79 per cent.

UTs: Among the Union Territories (UTs), Dadra and Nagar Haveli (27.36 per cent), Jammu & Kashmir, and Ladakh (12.58), Daman & Diu (6.82 per cent) and Chandigarh (5.97 per cent), have emerged as the poorest UTs in India.

Lowest Poverty

States: Kerala, Goa, and Sikkim have the lowest percentage of population being multi-dimensionally poor at 0.71 per cent, 3.76 per cent and 3.82 per cent, respectively.

UTs: The proportion of poor in Puducherry at 1.72 per cent is the lowest among the Union Territories, followed by Lakshadweep at 1.82 per cent, Andaman & Nicobar Islands at 4.30 per cent and Delhi at 4.79 per cent.

Global Multidimensional Poverty Index 2021

According to Global MPI 2021, released recently by the United Nations Development Programme (UNDP) and Oxford Poverty & Human Development Initiative (OPHI), India’s rank is 66 out of 109 countries.

The Index Uses Three Dimensions and Ten Indicators:

Education: Years of schooling and child enrollment

Health: Child mortality and nutrition

Standard of Living: Electricity, flooring, drinking water, sanitation, cooking fuel and assets

Major Findings on India

In India five out of six multi-dimensionally poor people are from lower tribes or castes (ST-9.4%; SC-33.3%; and OBC- 27.2%).

New Series of Wage Rate Index Released

The Labour ministry has released the new series of wage rate index (WRI) with the base year being 2016.

The new series of WRI with base 2016=100 will replace the old series with base 1963-65.

Government periodically revises the base year of WRI for key economic indicators in order to provide a clear picture of economic changes and record the wage pattern of workers.

Why this Change?

It was done after the recommendations of International Labour Organization and National Statistical Commission, to enhance the coverage and to make index more representative – which will play a critical role in determining the minimum wages and national floor wages along with other parameters.

What is New?

The new WRI series has expanded the scope and coverage in terms of number of industries, sample size, occupations under selected industries as well as weightage of industries among other indicators.

A total of 37 industries have been covered in the new WRI basket as against 21 industries in the 1963-65 series. The selected 37 industries in the new series are 30 from the manufacturing sector, four from the mining sector and three from the plantation sector.

Frequency of Compilation

The new WRI series would be compiled twice a year on point-to-point half-yearly basis, as on January 1 and July 1 of every year.

What is Wage Rate?

Wage rate may be defined as the price of working energy spent by a worker either for a specified period of time or for a specified measure of performance. This rate is settled in advance between the employer & employee.

Weightage of the Top Five Industries

Motor vehicles (11.49 per cent), coal mines (9.53 per cent), textile garments (9.32 per cent), iron & steel (9.30 per cent), and cotton textiles (6.55 per cent) — together account for 46 per cent of the total weight.

RBI opens Govt. Bond Market to Individual Investors

On 12th November 2021, Prime Minister Narendra Modi virtually launched two innovative customer centric initiatives of RBI: ‘Retail Direct Scheme’ and ‘Reserve Bank - Integrated Ombudsman Scheme, 2021’.

Retail Direct Scheme

RBI’s Retail Direct scheme will enable small investors to participate in the government’s bond market for their financial security.

Features

Easy Access for Small Investors: The Retail Direct Scheme will ensure easier and safer access for smaller investors in government securities. The provision of guaranteed settlement for government securities gives assurance of safety to citizens to invest their small savings.

Direct Access: Small investors will now have direct access to government securities and will no longer be reliant on indirect investment agencies like banks, insurance companies or mutual funds. Investors just need to open a Retail Direct Gilt Account by logging on to the RBI Retail Direct’s official website.

Relief from Fund Managers: One does not need any fund manager to handle the account and investors can operate it on their own from their smartphones.

Link to Investor Account: The account can also be linked to the investor’s savings bank account.

No Charges: It may be noted that there will be no charges for opening the Retail Direct Gilt Account.

About Reserve Bank - Integrated Ombudsman Scheme, 2021

To make the alternate dispute redress mechanism simpler and more responsive to the customers of entities regulated by it, it has integrated three Ombudsman schemes – (i) the Banking Ombudsman Scheme, 2006, as amended up to July 01, 2017; (ii) the Ombudsman Scheme for Non-Banking Financial Companies, 2018; and (iii) the Ombudsman Scheme for Digital Transactions, 2019 into the Reserve Bank - Integrated Ombudsman Scheme, 2021 (the Scheme).

Entities that will be regulated under this Scheme:

All Commercial Banks, Regional Rural Banks, Scheduled Primary (Urban) Co-operative Banks and Non-Scheduled Primary (Urban) Co-operative Banks with deposits size of Rupees 50 crore and above as on the date of the audited balance sheet of the previous financial year;

All Non-Banking Financial Companies (excluding Housing Finance Companies) which (a) are authorised to accept deposits; or (b) have customer interface, with an assets size of Rupees 100 crore and above as on the date of the audited balance sheet of the previous financial year;

All System Participants as defined under the Scheme.

Benefit

These schemes will expand the scope of investment in the country and make access to capital markets easier and more secure for investors.

Given low rates on bank fixed deposits and perception of low risk on government bonds, retail investors may be inclined to venture into direct investing in gilts.

What are government securities?

G-Secs are low-risk, sovereign-guaranteed bonds with assured interest paid every six months. Trading makes them liquid.

Compare with stocks, FDs I Stocks are high-risk, volatile assets, in which returns can fluctuate. FDs have assured returns, but don't have guarantee over Rs 5 lakh.

Global Practice

India is the first in Asia to allow retail investors in G-Secs. Other countries that allow include the US, the UK and Brazil.

42 Companies Selected Under PLI Scheme for White Goods

42 applicants with committed investment of Rs 4,614 crore have been provisionally selected as beneficiaries under the PLI scheme.

The selected applicants include 26 for Air Conditioner manufacturing with committed investments of Rs. 3,898 crore and 16 for LED Lights manufacturing with committed investments of Rs. 716 crore.

The approved investments of Rs. 4,614 crore are likely to generate net incremental production of around Rs. 81,254 crore and direct employment of about 44 thousand people.

PLI Scheme

Government of India has given approval to introduce the Production-Linked Incentive (PLI) Scheme for 13 key sectors with total outlay of Rs. 1,97,291crore.

Department for Promotion of Industry & Internal Trade (DPIIT) is coordinating the implementation of all PLI Schemes. DPIIT is also the nodal department for the PLI Scheme for White Goods - Air Conditioners and LED lights sector - with an outlay of Rs. 6,238 crore.