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Daily News Simplified - DNS

15 04 20Notes

SL. NO. TOPICS

THE HINDUPAGE NO.

1 Corona Bond 06

2 U.S. approves 2 missile deals with India 08

3 Economic Liberalization and its faults 07

4 India to grow 1.9%, global economy to shrink 3%: IMF 13

5 SoI maps add heft to Arogya Setu app 11

Dated: 15-April-2020 DNS Notes

Title 1. Corona Bond (The Hindu – Pg. 06)Syllabus Prelims: EconomyTheme International AgreementsHighlights

Context: EU finance ministers have agreed a €540bn Emergency Rescue Package for European countries hit hard by the coronavirus pandemic. It allows governments borrowing from the bailout fund to spend up to 2% of GDP on direct and indirect costs of the pandemic without conditionalities. However, there has been differences between rich and poor countries within EU over the usage of the fund to fight COVID-19 pandemic."Corona bonds" are joint debt issued to member states of the EU. The funds would be common and would come from the European Investment Bank.Emergency Credit Line

To raise the lending capacity of the European Investment Bank and Back the European Commission’s €100- billion unemployment insurance scheme.

The European Stability Mechanism

The European Stability Mechanism is a European Union agency that provides financial assistance, in the form of loans, to eurozone countries or as new capital to banks in difficulty.

It is a permanent agency, based in Luxembourg, and has replaced the temporary European Financial Stability Facility (EFSF).


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Title 2. U.S. approves 2 missile deals with India (The Hindu – Pg. 08)Syllabus Prelims: Science & technologyTheme Defense dealsHighlights

Context: The U.S. State Department has approved two potential missile deals with India, for an estimated $92 million and $63 million. As of now there in no offset clause in the deal but can be placed later by the contractors.

10 AGM-84L Harpoon Block II air-launched missiles and related equipment Harpoon Missiles will be fitted onto Boeing’s P-8I (Poseidon-Eight India) maritime

patrol aircraft, and are intended to enhance India’s capability in anti-surface warfare while defending its sea lanes.

This deal is worth 92 million dollars contracted by Boeing.

The next deal is worth $63 million contracted by Raytheon Integrated Defence System

16 MK 54 All Up Round Lightweight Torpedoes (LWT) Three MK 54 Exercise Torpedoes (MK 54 LWT Kit procurement required) and related

equipment. MK 54 spare parts, Torpedo containers, two Recoverable Exercise Torpedoes

(REXTORP) with containers and related equipment and support from the U.S. government and contractors.

The torpedoes are expected to enhance India’s anti-submarine warfare capability and can be used with the P-8I.


Personal Notes

Title 3. Economic Liberalization and its faults (Page number 07)Syllabus Mains: GS Paper III – Economy


Theme Economic PoliciesHighlights

Context:Governments across the world are grappling with the outbreak of COVID-19. Most of the countries have not able to provide essential medicines, Personal protection Equipment (PPE), diagnostic tools etc. to deal with the pandemic. In this regard, the article argues that this inability of the Government to provide essential health products is on account of LPG reforms. The LPG reforms has led to loss of manufacturing base in most of the countries. It has also increased their import dependence, even for essential health products.Accordingly, it highlights that the Industrial Policy of the countries need to be realigned in order to boost domestic production of health products and reduce their import dependence.

Impact of LPG reforms on the Global EconomyLoss of Manufacturing Base: The LPG Reforms have led to shift in production base of the MNCs from developed to developing countries. This has also led to development of Global value Chains. However, only some of the countries such as China have been able to get benefitted through integration with Global value chains due to higher value addition. China has also emerged as global manufacturing hub.Hence, the loss of manufacturing base in other economies, including India has made them dependent on china even for the essential goods. For instance, China is the considered as the biggest supplier of Active Pharmaceutical Ingredients (APIs), Personal Protection Equipment (PPE) and medical devices diagnostics.

Impact of LPG reforms on the Indian EconomyInability to make informed policy choices:Under the License Raj System, the Government used to regularly seek production related information from the private sector. Based upon such information, the Government used to take informed policy choices. For instance, if the production of any essential commodity is lower, then the Government would direct the private sector to ramp up the production.However, post LPG reforms, the Government does not seek production related information from the Private sector. This in turn has reduced the ability of the Government to make informed policy choices. For instance, after the outbreak of COVID-19, the Government took a number of weeks to gather information about stocks and the production capacity of pharmaceutical companies. Similarly, there were difficulties in finding out India’s production capacity of PPE, medical devices and diagnostics.

Higher Import Dependence on China for APIs:What are Active Pharmaceutical Ingredients (APIs)?

All drugs are made up of two core components – API (Central ingredient) and Excipient(Helps deliver the medication).

The Active Pharmaceutical Ingredient (API) is the part of any drug that produces the intended effects. Some drugs, such as combination therapies, have multiple active ingredients. The Excipients are chemically inactive substances, such as lactose or mineral oil in the pill.

For example, if the API is a solid and the drug is required to have a liquid dosage form, such as a cough syrup, then the excipients would be the liquids that are used to formulate the syrup.

Reasons for the higher import dependence of APIsOver-dependence on China for Imports: India is dependent on China for its APIs because importing raw material from China saves 15-20% of the overall costs for the Indian drug makers. This is on account of higher Government subsidies in China which leads to reduced production costs.Few Domestic Manufacturers in India: The reduced production costs of APIs in China has forced Indian drug companies such as Sun Pharma, Aurobindo Pharma to shift their focus from the manufacturing of APIs to developing formulations.

Lack of Manufacturing base in Medical Devices:In the past, India has allowed unconditional imports of PPE, medical devices and diagnostic kits leading to an adverse impact on domestic manufacturing of these goods. There are only a few domestic manufacturers who can produce PPE and medical devices like ventilators. This has in turn reduced our ability to respond to the outbreak of COVID-19.


Personal Notes


Title 4. India to grow 1.9%, global economy to shrink 3%: IMF (The Hindu Pg 13)Syllabus Mains; GS Paper III – EconomyTheme International RelationsHighlights

India to grow 1.9%, global economy to shrink 3%: IMF (The Hindu Pg 13)The News

The World Economic Outlook of IMF has released the global growth projections for periods during and after the COVID 19 pandemic.

Accordingly the global growth number is expected to contract by 3% and India is expected to grow by 1.9%

Growth projections As shown in the chart the world output will shrink by -3% in 2020 and expected to

increase by 5.8% in 2021. Emerging Asia is the only region that is projected to have positive growth rates in 2020. China is projected to grow at 1.2% in 2020 and 9.2% in 2021. India is projected to grow at 1.9% in 2020 and 7.4% in 2021 Advance economies will shrink by -6.1% in 2020 followed by 4.5% in 2021. The U.S. is projected to contract by 5.9% this year and grow by 4.7% in 2021 Euro area, will contract by 7.5% this year and grow by 4.7% next year.

Factors pulling down growth numbers during the pandemic Pandemic’s pathway Intensity and effectiveness of containment efforts, Supply chain disruptions Spending pattern changes Behavioural changes of consumers Tightening of global financial market conditions

Suggestions to policy makers Make targeted interventions to support impacted households and businesses Fiscal measures should be two-fold focusing on the vulnerable sections and businesses

on the brink of closures. Fiscal support should be scaled up even after the lockdowns if activity does not pick up

sufficiently. Monetary stimulus to reduce systemic stress to limit the shock and to enhance

recovery Multilateral cooperation to help financially constrained countries facing twin


challenges of weak healthcare systems and stalled economic activities


Personal Notes

Title 5. SoI maps add heft to Arogya Setu app (The Hindu – Pg. 11)


Syllabus Prelims: Science & technologyTheme HealthHighlights

Aarogya Setu App Launched by Ministry of Human Resource Development and is associated with

Digital India for the health and well-being of every Indian. Designed to help control the spread of coronavirus and make its information

accessible to the common people. Helps in finding out corona positive people present nearby. After downloading, this app asks if you have cough, fever or trouble breathing

etc. If you do not have any such problem, you will be in the Green Zone. To use the app the mobile phone's Bluetooth and location devices must be on.

Whenever the user visits a crowded place, this app keeps sending messages from nearby mobile phones through the Bluetooth. When the user stands near someone who is also a normal it shows green zone. But if that person becomes corona positive after 10 days, this app will alert you immediately.

This app also tells about hotspots, so that the user can change the route.

Sahyog app Developed by the Survey of India (SoI), the country’s apex map maker. [Note -

Department of Science and Technology, which oversees the SoI] Purpose is to “complement” the Arogya Setu App. It will help trace the contacts of those who may have been infected by COVID-

19. It could improve geospatial data as well as help develop maps that could be

customised to a variety of ‘COVID-related applications’ such as healthcare facilities, infection clusters and disaster management.

Privacy concerns with the appThere wasn’t clarity on how data would be shared between the two applications - Aarogya Setu App & SahyogApp’s privacy policy “does not specify which departments or ministry or officials will be the ones accessing that data”Aarogya Setu’s use of location data via GPS trails (in addition to Bluetooth) deviates from “privacy-focused global standards”, which are restricted to Bluetooth-based technology, which can match devices by not revealing the exact location. Such technologies have been in use, in the case of the TraceTogether app (Singapore), and the framework suggested by the Massachusetts Institute of TechnologyBluetooth is preferred from a privacy-respecting perspectiveArogya Setu’s terms of use is unclear - how long data would be stored, what would happen to it once the pandemic ceased, who else the data was being transferred to.While the government has repeatedly insisted that all the data collected by the app would reside within the device locally, it equally says that in certain conditions (exceptions) the information could be uploaded to a cloud server.


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