Environment
World Environment Day

Relevance IN - Prelims (about World Environment day) + Mains (GS III Environment conservation)
What's the NEWS

• World Environment Day is celebrated on June 5 every year. This year, the day is being hosted by our neighboring country Pakistan in partnership with the UN Environment Programme (UNEP) with the theme of 'ecosystem restoration.
• Since 1974, World Environment Day has been celebrated every year on 5 June, engaging governments, businesses and citizens in an effort to address pressing environmental issues.
• World Environment Day offers a global platform for inspiring positive change.
• It pushes for individuals to think about the way they consume; for businesses to develop greener models; for farmers and manufacturers to produce more sustainably; for governments to invest in repairing the environment; for educators to inspire students to take action; and for youth to build a greener future.
• Everybody living on this planet, in this moment in time can be a part of
• Every World Environment Day is hosted by a different country in which official celebrations take place.

Know! more about World Environment day and associated events

• Ecosystem restoration means preventing, halting and reversing this damage - to go from exploiting nature to healing it.
• This World Environment Day will kick off the UN Decade on Ecosystem Restoration, a global mission to revive billions of hectares, from forests to farmlands, from the top of mountains to the depth of the sea.
• Only with healthy ecosystems can we enhance people's livelihoods, counteract climate change and stop the collapse of biodiversity.
• For too long, we have been exploiting and destroying our planet's ecosystems. Every three seconds, the world loses enough forest to cover a football pitch and over the last century we have destroyed half of our wetlands.
• As much as 50 per cent of our coral reefs have already been lost and up to 90 per cent of coral reefs could be lost by 2050, even if global warming is limited to an increase of 1.5°C.
• The theme of 47th World Environment Day is 'Ecosystem Restoration.' This year, the focus is on resetting relations with nature.
• World Environment Day on June 5 will also mark the formal launch of the UN Decade on Ecosystem Restoration 2021-2030.
• The UN Decade is intended to massively scale up the restoration of degraded and destroyed ecosystems to fight the climate crisis, prevent the loss of a million species and enhance food security, water supply and livelihoods.
• Reviving natural carbon sinks, such as forests and peatlands, could help close the climate emissions gap by 25 percent by 2030.

Economy
Niti Aayog submits names of PSU banks to be privatised
Relevance IN - Prelims ( about Core Group of Secretaries on Disinvestment + about DIPAM) + Mains ( GS III Economic development)
What's the NEWS

• Government think tank Niti Aayog has submitted to the Core Group of Secretaries on Disinvestment the finalised names of PSU banks to be privatised in the current fiscal as part of the disinvestment process

Know! the process of privatization

• Niti Aayog has been entrusted with the task of selection of names of two public sector banks and one general insurance company for the privatisation as announced in the Budget 2021-22.
• The other members of the high-level panel are economic affairs secretary, revenue secretary, expenditure secretary, corporate affairs secretary, legal affairs secretary, Department of Public Enterprises secretary, Department of Investment and Public Asset Management (DIPAM) secretary and administrative department secretary.
• Following the clearance from the Core Group of Secretaries, headed by the Cabinet Secretary, the finalised names will go to Alternative Mechanism (AM) for its approval and eventually to the Cabinet headed by the Prime Minister for the final nod.
• Changes on the regulatory side to facilitate privatisation would start after the Cabinet approval.
• The government has budgeted Rs.1.75 lakh crore from stake sale in public sector companies and financial institutions, including two PSU banks and one insurance company, during the current financial year.
• The amount is lower than the record budgeted Rs.2.10 lakh crore to be raised from CPSE disinvestment in the last fiscal.

Core Group of Secretaries on Disinvestment

• The cabinet approved new process for strategic disinvestment making possible stakeholder consultation before inviting bids.
• So far, the strategic disinvestment process didn't allow for stakeholder consultation before the government issued EOI.
• With the change, the government will now get to know the investor demand and concerns better on specific stake sales, before formally inviting bids.
• The core group comprises all finance ministry secretaries and corporate affairs secretary and law secretary.

Department of Investment and Public Asset Management (DIPAM)

• It deals with all matters relating to management of Central Government investments in equity including disinvestment of equity in Central Public Sector Undertakings.
• The Four major areas of its work relates to Strategic Disinvestment, Minority Stake Sales, Asset Monetisation and Capital Restructuring. It also deals with all matters relating to sale of Central Government equity through offer for sale or private placement or any other mode in the erstwhile Central Public Sector Undertakings.
• DIPAM is working as one of the Departments under the Ministry of Finance.

Economy
India Services Business Activity Index
Relevance IN - Prelims ( about the services sector activities in pandemic + about PMI index and India Services Business Activity Index
What's the NEWS

• India's services sector activities slumped into contraction territory for the first time in eight months, amid renewed decline in new work intakes due to the escalation of the pandemic and the reintroduction of restrictions

Services sector activities (highlights)

• The seasonally adjusted India Services Business Activity Index fell to 46.4 in May, down from 54.0 in April, as the intensification of the COVID-19 crisis caused renewed declines in new business and output
• In PMI parlance, a print above 50 means expansion while a score below 50 denotes contraction.
• The intensification of the COVID-19 crisis and associated restrictions suppressed domestic and international demand for Indian services.
• International demand for Indian services also worsened, with new export business falling at the quickest rate in six months.
• The drop was attributed to international travel restrictions and business closures.
• On the job front, pandemic-related worries and falling sales led services companies to reduce workforce numbers again during May.
• On the inflation front, amid reports of higher prices for a wide range of inputs and fuel, operating expenses at services firms continued to increase in May.
• The Composite PMI Output Index, which measures combined services and manufacturing output, was down from 55.4 in April to 48.1 in May, pointing to a renewed decline in private sector activity across India.
• Aggregate new orders decreased for the first time in nine months and private sector jobs fell for the 15th month in succession.
• On the macroeconomic front, India's economy contracted by less-than-expected 7.3% in the fiscal year ended March 2021 after growth rate picked up in the fourth quarter, just before the world's worst outbreak of coronavirus infections hit the country.

The IHS Markit India Services Business Activity Index

• The Index is compiled by IHS Markit for more than 40 economies worldwide.
• IHS Markit is a global leader in information, analytics and solutions for the major industries and markets that drive economies worldwide.

Purchasing Managers' Index

• PMI is an index of the prevailing direction of economic trends in the manufacturing and service sectors.
• It consists of a diffusion index that summarizes whether market conditions, as viewed by purchasing managers, are expanding, staying the same, or contracting.
• The purpose of the PMI is to provide information about current and future business conditions to company decision makers, analysts, and investors.
• It is different from the Index of Industrial Production (IIP), which also gauges the level of activity in the economy.

Index of Industrial Production

• The Index of Industrial Production (IIP) is an index which details out the growth of various sectors in an economy such as mineral mining, electricity, manufacturing, etc.
• It is compiled and published monthly by the Central Statistical Organisation (CSO), Ministry of Statistics and Programme Implementation.
• The Base Year of the Index of Eight Core Industries has been revised from the year 2004-05 to 2011-12 from April, 2017.
• The eight core industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).
• The eight Core Industries in decreasing order of their weightage: Refinery Products> Electricity> Steel> Coal> Crude Oil> Natural Gas> Cement> Fertilizers.

Know! the difference between PMI and IIP

• IIP covers the broader industrial sector compared to PMI.
• Index of Industrial Production (IIP) measures growth in the industrial sector.
• IIP shows the change in production volume in major industrial sub sectors like manufacturing, mining and electricity.
• IIP also gives use based (capital goods, consumer goods etc) trends in industrial production.
• PMI is more dynamic compared to a standard industrial production index.
• The PMI senses dynamic trends because of the variable it uses for the construction of the index compared to volume based production indicators like the IIP.

Economy
On-tap Liquidity Window
Relevance IN - Prelims ( about On-tap Liquidity Window)
What's the NEWS

• The Reserve Bank of India (RBI) has opened a separate On-tap Liquidity Window to help mitigate the adverse impact of the second wave of the pandemic on certain contact-intensive sectors.
• The move would provide liquidity of Rs.15,000 crore till March 31, 2022 with tenors of up to three years.

Know! more about the scheme

• Under the scheme, banks can provide fresh lending support to hotels and restaurants; entities related to tourism - travel agents, tour operators and adventure/heritage facilities; aviation ancillary services
• By way incentive, banks will be permitted to park their surplus liquidity up to the size of the loan book created under this scheme with the Reserve Bank at a rate which is 25 basis points (bps) lower than the repo rate.
• This is the first significant sign indicating that the government has taken note of the severe effect that the pandemic has had on the hospitality industry and the huge economic impact it will have on the sector as well as the nation
• Infusing liquidity would provide much-needed support to cash-strapped hospitality businesses without which the industry couldn't have survived
• Indian Association of Tour Operators (IATO) welcome the announcement by the RBI offering loans to the tourism and hospitality sector on easy terms and lower rate of interest.

The Indian Association of Tour Operators (IATO)

• It is the National body of the tourism industry. It has over 1600 members covering all segments of Tourism Industry.
• Established in 1982, IATO today has international acceptance, and linkages. It has close connections and constant interaction with other Tourism Associations in US, Nepal and Indonesia, where USTOA , NATO and ASITA are its member bodies; and is increasing its international networking with professional bodies for better facilitation to the International traveler visiting not only India but the entire Region.
• IATO interacts closely with the Government on all critical Issues affecting the Tourism Industry in India with the highest priority to Tourism facilitation.
• It interacts closely with all Government Ministries / Departments, Chambers of Commerce and Industry, Diplomatic Missions etc.
• It acts as the common medium between the Decision Makers and the industry, and presents the complete perspective to both sides, synergising their common agenda of Tourism facilitation.

Monetary Policy Committee (MPC)
Relevance IN - Prelims ( about MPC meeting highlights and terms associated)
What's the NEWS

• The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) having taken stock of the evolving macroeconomic and financial conditions as well as the impact of the second wave of the pandemic voted unanimously to maintain status quo, keeping the policy repo rate unchanged at 4%.
• The MPC also decided unanimously to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.
• The marginal standing facility (MSF) rate and the bank rate remain unchanged at 4.25%. The reverse repo rate also remains unchanged at 3.35%.

Monetary Policy Committee (MPC) -highlights

• The GDP growth in FY21 contracted to 7.3%, the forecast of a normal south-west monsoon, the resilience of agriculture and the farm economy
• The adoption of COVID compatible operational models by businesses, and the gathering momentum of global recovery are forces that can provide tailwinds to revival of domestic economic activity when the second wave abates.
• The RBI has now projected real GDP growth at 9.5% in FY22 [from earlier projection of 10.5%] consisting of 18.5 per cent in Q1; 7.9 per cent in Q2; 7.2 per cent in Q3; and 6.6 per cent in Q4 of FY22 emphasizing that upside risks to inflation emanate from persistence of the second wave and consequent restrictions on activity on a virtually pan-India basis

Monetary Policy Committee

• It is responsible for fixing the benchmark interest rate in India.
• The meetings of the Monetary Policy Committee are held at least 4 times a year (specifically, at least once BIMONTHLY) and it publishes its decisions after each such meeting.
• The committee comprises six members - three officials of the Reserve Bank of India and three external members nominated by the Government of India.
• The Governor of Reserve Bank of India is the chairperson ex officio of the committee. Decisions are taken by majority with the Governor having the casting vote in case of a tie.
• The current mandate of the committee is to maintain 4% annual inflation until 31 March 2021 with an upper tolerance of 6% and a lower tolerance of 2%.
• The Reserve Bank of India Act, 1934 was amended by Finance Act (India), 2016 to constitute MPC which will bring more transparency and accountability in fixing India's Monetary Policy.
• The monetary policy are published after every meeting with each member explaining his opinions.
• The committee is answerable to the Government of India if the inflation exceeds the range prescribed for three consecutive quarters.

Know! the terms associated
Headwinds and Tailwinds

• The term "tailwinds" describes some condition or situation that will help move growth higher. For example, falling gas prices will help a delivery company be more profitable. Lower gas prices is said to be a tailwind for the freight services industry.
• "Headwinds" are just the opposite. Its a situation what will make growth more difficult. For example, if the price of bread goes much higher, McDonald's is facing headwinds.

Accommodative stance

• An accommodative stance means a central bank will cut rates to inject money into the financial system whenever needed.
• A change in this stance to ‘neutral' means RBI will alter rates in any direction to control the money supply in the system.
• Accommodative monetary policy, also known as loose credit or easy monetary policy, occurs when a central bank (such as the Federal Reserve) attempts to expand the overall money supply to boost the economy when growth is slowing (as measured by GDP).
• The policy is implemented to allow the money supply to rise in line with national income and the demand for money.

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