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Here are the topics covered for 22 August 2023: BRICS Summit, Onion Exports, Liberalised Remittance Scheme (LRS), Trade Deficit, Graphics Processing Units (GPUs), Summoning Government Officials, India-ASEAN Meet, Palm Cockatoo, Gene-edited Mustard.
Table of Contents:
GS Paper 2:
- BRICS Summit
GS Paper 3:
- Onion Exports
- Liberalised Remittance Scheme (LRS)
- Trade Deficit
- Graphics Processing Units (GPUs)
Facts for Prelims:
- Summoning Government Officials
- India-ASEAN Meet
- Palm Cockatoo
- Gene-edited Mustard
GS Paper 2
- Prime Minister Narendra Modi leaves to attend the 15th BRICS Summit. The Summit is set to take place in Sandton, Johannesburg from 22nd to 24th August 2023.
- Major thing about this upcoming summit is the possible meeting between Indian and Chinese leaders.
- It would be their first scheduled bilateral meeting since the border standoff began in May 2020.
- The BRICS summit is being held in person this time, after three years of virtual meetings.
- Expansion of BRICS is a major item on the agenda.
- Around 23 countries are learnt to have submitted their applications for membership of the grouping.
- PM Modi will first attend the BRICS Business Forum leaders’ dialogue, followed by a BRICS Leaders’ Retreat.
- A discussion on global developments and concerns arising out of those developments is expected during the leaders’ retreat.
- Modi will participate in the plenary sessions – there will be a closed plenary session which will focus on intra-BRICS issues, reform of the multilateral system and counter-terrorism.
- Modi will participate in a special event, “BRICS – Africa Outreach and BRICS Plus Dialogue”, being organised after the summit, which will include other countries invited by South Africa.
- During these sessions, the concerns and priorities of the Global South will be discussed, and the focus will be on partnership with Africa.
- Initially, only Brazil, Russia, India and China were included in BRIC, which was coined in 2001 by then Goldman Sachs chief economist Jim O’Neill.
- In 2009, the bloc was formed to provide its members with a platform for challenging a world order dominated by the West.
- The making of the bloc was initiated by Russia.
- There is no formal multilateral organisation like the United Nations, World Bank, or the Organisation of the Petroleum Exporting Countries (OPEC).
- A rotating chairmanship of the group is held every year by the heads of state and the governments of the member nations.
- The founding members are, evidently, Brazil, Russia, India, and China.
- In 2010, South Africa, the smallest member in terms of economic power and population, became the first beneficiary, and BRIC was rechristened BRICS.
- BRICS accounts for over 40 per cent of the world population and a quarter of its economic output. The group’s focus goes beyond geopolitics to include economic cooperation and multilateral trade. Consensus governs the bloc.
- The group of 20 major economies, or the G20, includes all of the BRICS nations as its members.
GS Paper 3
- The Commerce Ministry has imposed a 40% duty on the export of onions to improve domestic supplies and tame inflation during the upcoming festive season. The export duty will be in effect until December 2023.
Rise in onion price:
- The present price rise has two aspects to it:
- first is the shortage of stored produce;
- second has to do with lower-than-expected acreage of the bulb itself.
- Unlike, other vegetables such as okra or beans, onions are not grown around the year.
- Of the three crops Rabi is most amenable to storage given its lower moisture content and is stored in on-field storage structures called kanda chawls. Farmers offload the stored onions in tranches to ensure better realisation.
- The Crop and Weather Watch Group noted that as against the 3.76 lakh hectares target for onion, the country had seen sowing over 3.29 lakh hectares.
- The situation worsened due to the damage to the Rabi crop in March–April, when most onion-growing states, including Maharashtra, saw unseasonal rain and hailstorm.
About Export Ban
- There was a sharp rise in exports. Hence, the decision was taken in order to increase the availability of onions in the domestic market, especially in view of the upcoming festival season.
- Government has not restricted or prohibited the export of onion. The extant export policy of onions is ‘free’.
- Only the export of onion seed is ‘Restricted’ and that too is permitted under Authorisation from the Directorate General of Foreign Trade (DGFT).
Indian Onion Export:
- According to the Commerce Ministry, in the ongoing financial year, about 75 lakh tonnes of onions have been exported.
- In June, India exported 2.92 lakh metric tonnes of onions, which is 89.56% higher than 1.54 lakh metric tonnes in the same month last year.
- In the April-June 2023 period, India exported onions to 65 countries, of which a maximum quantity of 1.39 lakh metric tonnes was shipped to Bangladesh.
- Besides Bangladesh, Malaysia (1.07 lakh metric tonnes), United Arab Emirates (0.90 LMT), Sri Lanka (0.80 LMT), and Nepal (0.39 LMT) are among the top five destinations of Indian onions.
Liberalised Remittances Scheme (LRS)
Courtesy: The Indian Express
- Prior to the implementation deadline of the TCS (tax collected at source) set for July of this year, there was a notable surge in remittances by resident Indians to other countries. In June 2023, there was a 35% increase in remittances month-on-month and a significant 96% increase compared to June 2022.
Tax Collected at Source:
- The Budget 2023-24 had proposed hiking the TCS rate to 20 per cent from 5 per cent above Rs 7 lakh threshold for all purposes other than education and medical treatment.
- Also, for overseas tour packages, the government had proposed hiking the TCS rate to 20 per cent from 5 per cent, without any threshold, with effect from July 1.
- On May 16, the Centre amended rules under the Foreign Exchange Management Act (FEMA), bringing international credit card spending under the LRS.
- As a consequence, spending on international credit cards would have then attracted a higher rate of TCS at 20 per cent from July 1.
- However, on May 19, the government clarified that any payments by an individual using their international debit or credit cards up to Rs 7 lakh per financial year will be excluded from the LRS limits and hence, will not attract any TCS.
- The government then postponed the implementation to October 1, 2023.
- Days before the new tax was to come into effect, in a reversal of its earlier decision, the government decided to defer the decision to include international credit card spending outside India under the LRS.
- This, in effect, means there will be no levy of TCS on international credit card spending outside India as of now.
- Liberalized remittance scheme (LRS) was introduced in India in 2004 by the Reserve Bank of India (RBI).
- It is a scheme that enables Indian residents to remit funds abroad for certain specified purposes.
- The scheme has been one of the most important instruments for promoting international trade and investment, as well as for facilitating capital flows into and out of India.
- Prior to this, the Foreign Exchange Management Act (FEMA) 1999 had imposed several restrictions on the transfer of funds from India to other countries.
- Under the new scheme, individuals were allowed to remit up to USD 25,000 per financial year for eligible transactions.
- The amount was subsequently increased to USD 50,000 in 2007 and further increased to USD 250,000 in 2013.
- The primary objective of the liberalized remittance scheme is to liberalize the existing foreign exchange regulations and facilitate the smooth transfer of funds abroad by Indian residents.
- The scheme also aims to promote and encourage non-residents to invest in India and promote outward remittances from India.
- The RBI is nudging local banks to ask their clients to settle trade between the United Arab Emirates and India using the dirham (AED) or Indian rupee (INR) to reduce U.S.-dollar-based transactions.
More about the news:
- The move is part of the Reserve Bank of India’s broader aim of promoting settlement in local currencies with countries with which India has a trade deficit, with the knock-on effect of boosting the rupee’s global reach.
- India’s trade deficit with the UAE was $21.62 billion in 2022/23, or 8.2% of its total deficit, government data shows. In July, the two countries agreed to facilitate trade in rupees instead of dollars.
- Large corporates have, so far, been reluctant in engaging in non-dollar-denominated deals.
What is Trade Deficit?
- A trade deficit occurs when the value of a country’s imports exceeds the value of its exports—with imports and exports referring both to physical goods and services.
- In simple terms, a trade deficit means a country is buying more goods and services than it is selling.
Graphics Processing Units (GPUs)
- High-end chips called graphics processing units (GPUs) are currently facing a massive supply crunch amid skyrocketing demand, even as the shortages across most other chip categories are beginning to ease out.
- The graphics processing unit, or GPU, has become one of the most important types of computing technology, both for personal and business computing.
- Designed for parallel processing, the GPU is used in a wide range of applications, including graphics and video rendering.
- Although they’re best known for their capabilities in gaming, GPUs are becoming more popular for use in creative production and artificial intelligence (AI).
- GPUs were originally designed to accelerate the rendering of 3D graphics.
- Over time, they became more flexible and programmable, enhancing their capabilities.
- This allowed graphics programmers to create more interesting visual effects and realistic scenes with advanced lighting and shadowing techniques.
- Other developers also began to tap the power of GPUs to dramatically accelerate additional workloads in high-performance computing (HPC), deep learning, and more.
Reasons for the shortage:
- One, the generative AI boom has led to the demand for these specialised chips to skyrocket, given that GPUs have the computing power and operational efficiency to run the calculations that allow AI companies working on LLMs (or large language models), such as ChatGPT or Bard, to chomp down on massive volumes of data.
- Two, there is only one major company that produces H100-type chips — US-based Nvidia Corporation, which has seen valuations top $1 trillion since the LLM boom and is now swamped with orders that it is struggling to deliver.
Facts for Prelims
Summoning Government Officials
- The Supreme Court has agreed to lay down modalities on the summoning of government officials by courts, including on their dress, across the county while responding to the Centre’s request to frame a Standard Operating Procedure (SOP)
Need of SOP:
- A chief secretary is bound to be in attendance if called by a constitutional court or any court for that matter.
- But if a joint secretary dealing with the matter comes, he would be in a better position to assist.
- And the chief secretary remaining out for a day would affect several other works.
- The Chief Justice of India has highlighted that:
- Matters which are pending, there is no reason then to ask officers to be present before the court unnecessarily because the affidavit can do the task.
- Once adjudication has taken place and there is non-compliance, then, of course, you are governed by the contempt principles.
- And we would also lay down some other yardsticks on restraint which should be exercised when summoning officers.
- India and the ASEAN countries reached an agreement to review their free trade pact for goods and set a 2025 goalpost for concluding the review aimed at addressing the “asymmetry” in bilateral trade.
- A Joint Committee of the ASEAN India Trade in Goods Agreement (AITIGA), signed in 2009, deliberated on the roadmap for the review of the pact and finalised the terms of reference for the fresh negotiations, ahead of an ASEAN India Economic Ministers’ meeting held in Indonesia.
- The AITIGA review will now be taken up at the India ASEAN Leaders’ Summit scheduled in early September for further guidance.
- The review of the AITIGA was a longstanding demand of Indian businesses and the early commencement of the review would help in making trade facilitative and mutually beneficial.
- Also referred to as the goliath cockatoo or great black cockatoo, this parrot from the cockatoo family boasts a large smoky-grey or black hue.
- It features a prominent black beak complemented by striking red cheek patches.
- This bird hails from New Guinea, the Aru Islands, and the Cape York Peninsula.
- Their habitats range from rainforests and gallery forests to forest fringes, eucalypt and paperbark woodlands, monsoon woodlands, dense savannas, and areas with partial deforestation.
- For nesting and roosting, they prefer large trees.
- This species faces threats due to habitat destruction from logging activities and annual seasonal fires, which consistently decimate a substantial number of their nesting trees.
- IUCN: Least Concern.
- Rapeseed-mustard stands as India’s foremost domestically cultivated
- Mustard seeds are rich in glucosinolates, which are compounds containing sulfur and nitrogen that give the seeds’ oil and meal their distinctive sharp taste.
- Rapeseed meal isn’t favoured by poultry and pigs and usually needs to be combined with fodder grass and water for cattle and buffalo consumption.
- Elevated glucosinolate levels not only reduce feed consumption but are also associated with health issues in livestock, like goitre (neck swelling) and irregularities in internal organs.
- Conventional mustard seeds (Brassica juncea) grown in India have glucosinolate concentrations ranging between 120-130 parts per million (ppm or mg/kg). In contrast, canola seeds have levels below 30 ppm.