CURRENT AFFAIRS ROUND UP

-Hemang Panchmatia
Agenda
 3 Key Topics
 Get you make sensible points in GD/WAT/PI
 30 mins per topic
 Objective: Great content for a 10 mins speech on these 3 topics
Farm Loan Waivers
Keywords - 1
 Rahul Gandhi & State Elections
 Agriculture: Economically Unviable
 Moral Hazard
 Limited Impact
 Impact on Institutional Credit
2 trillion waived off since April 2017
Conclusion
 Band-Aid Solution
 Competitive Populism
 Good Politics may not be Good Economics
The Alternatives
 Minimum Support Price (Bhavantar Bhugtan Yojana., MP)
 Crop Insurance Scheme
 Farm Income Support
- KALIA scheme (Odisha)
- Rythu Bandhu scheme (Telangana)
Details - Rythu Bandhu scheme
 Annual Income Support of Rs. 8,000/- per acre to 6 million farmers
 Unconditional
 Requires digitalization of land records
 Praises: Brightest idea in Agriculture policy.
 Landslide victory for TRS in Telangana
 Criticism
 Leaves out landless farmers
 Benefits rich farmers disproportionately
Krushak Assistance for Livelihood and
Income Augmentation(KALIA)
Farmers – Big or Small
 Each family will get Rs. 5,000 separately in the kharif and rabi
seasons, for five cropping seasons between 2018-19 and 2021-22.
 Not linked to amount of land owned.
Work for landless
 10 lakh landless households
 Support with a unit cost of Rs. 12,500 for activities like goat
rearing, mushroom cultivation, beekeeping, poultry farming and
fishery.
Pradhan Mantri Kisan Samman Nidhi
Govt’s bid to harvest farmer votes?
 Direct transfer of 6000 rupees per farmers' bank accounts, for
farmers with less than 2 hectares land holding.
Likely to benefit 12 crore small and marginal farms.
 Estimated Cost of 75,000 Cr
World Trade War
World Trade War
 A trade war is when countries try to attack each other's trade
with tariffs and quotas on imports.
 One country will raise tariffs, a type of tax, causing the other to
respond, in a tit-for-tat escalation.
 This can hurt other nations' economies and lead to rising political
tensions between them.
 As it escalates, a trade war reduces international trade.
Reasons for Trade War
 Protect Domestic Industry

 To get a country mend its ways

US - China Trade War
The Hidden Agenda?
 Dollar as Reserve Currency
 Domination In High Tech
 Restore Trade Balance
 End subsidies to tech companies.
 Stop stealing U.S. intellectual
property.
 Open China to more U.S.
investment.
 Cut tariffs on U.S. goods by 2020.
 Reduce the trade deficit by $200
billion by 2020.
Implications
For US
 Raised the prices of consumer
goods.
 U.S. exporters may have to
cut costs and lay off workers.
For China
 Economists expect the trade
war will cut China’s export
growth by almost half to 5.1
percent in 2019, denting GDP
growth by 1.04 percentage
points.
US v/s EU
 April 21, 2018, EU upgrade of its trade agreement with Mexico.
Once signed, it will remove tariffs from almost all trade between
the two areas.
 On May 31, 2018, Trump announced the tariff would be imposed
on Canada, Mexico, and the EU.
 On June 21, Germany proposed an end to the EU's 10 percent tax
on U.S. auto imports. In return, Trump must forget about
imposing a 25 percent tax on European auto imports.
 On June 22, the EU imposed tariffs on $3.2 billion of American
products. It targeted imports that will impact Trump’s political
base.
Implications
Global Implications Implications for India
 Could cost the global  India’s trade surplus of $21 billion
economy $800 billion with the US has often attracted the
in reduced trade. ire of US President Trump.
 Could slow growth by  India and the US are now engaged
0.4 percent. in finalizing a trade package to ease
tensions.
 India has spotted an opportunity to
boost its exports in sectors such as
chemicals, pharmaceuticals and
electrical parts.
Implications
 On July 17, the EU signed a trade agreement with Japan. It
reduces or ends tariffs on almost all goods. It's the largest
bilateral trade agreement, covering $152 billion in goods. It will
come into force in 2019 after ratification.
 On July 25, 2018, the EU and the United States agreed to hold off
on any new tariffs, reassess the steel and aluminum tariffs, and
work toward zero tariffs on non-auto industrial goods.
Conclusion
 US has the upper hand in trade war with China.
 US-China probably will settle and China will begrudgingly give
ground.
 In the long term, trade wars slow global economic growth.
 Whatever form this conflict takes, and however long it lasts,
there will be no real winner.
Brexit
Brexit - Background
 Brexit = British Exit Country Remain Leave Verdict
 June 23, 2016 PM David Cameron called for England 46.6% 53.4% Leave
referendum to decide whether to ‘leave Wales 47.5% 52.5% Leave
the EU's single market and customs union.’
Scotland 62% 38% Remain
 Leave won by 51.9% to 48.1%. Total turnout
71.8% (30mil+ pax). Northern
55.8% 44.2% Remain
Ireland
 July – DC resigns. Replaced by Home
Secretary Theresa May as leader of Parameter Value Verdict
Conservative Party. Economic 1.8% Immediate
 Snap election on July 8, 2017, she remains Growth Doom avoided
Prime Minister. Inflation 3.1% Highest in 6 yrs
 Conservatives lost their outright majority Unemployment 4.3% 42 year low
in Parliament.
Possible Reasons for Brexit
 Financial: UK’s Annual commitment of $12 billion dollars
(£9 billion).
 Immigration: It is believed that almost 1 million people have
moved to the UK due to the free labour laws.
 Control & Autonomy: The European Parliament decides on many
rules and standards that EU countries have to follow and critics
felt that UK was losing control of our own affairs and laws.
Brexit
 Thersa May invoked Article 50 on 29 March, 2017. So, exit date is:
11 pm UK time on Friday 29 March, 2019.
 Article 50 was created as part of the Treaty of Lisbon and became
a law in 2009.
 3 "divorce" issues:
– how much the UK owes the EU
– what happens to the Northern Ireland border
– what happens to UK citizens living elsewhere in the EU and EU
citizens living in the UK
 plan for a two year "transition" period to smooth the way to
post-Brexit relations.
The Divorce Deal
 This deal is known as the withdrawal agreement which covers
some of these key points:
 How much money the UK will have to pay the EU in order to
break the partnership - that's about £39bn.
 What will happen to UK citizens living elsewhere in the EU, and
equally, what will happen to EU citizens living in the UK.
 How to avoid the return of a physical border between Northern
Ireland and the Republic of Ireland.
The Divorce Deal
 A length of time, called the transition period, has been agreed
to allow the UK and EU to make a trade deal and to give
businesses the time to adjust. That means that if the withdrawal
agreement gets the green light, there will be no huge changes
between 29 March 2019 and 31 December 2020.
 Another, much shorter, document has also been drawn up that
gives an overview of what the UK and EU's future relationship
will be in the longer term. This is the political declaration.
However, neither side has to stick exactly to what it says - it is a
set of ambitions for the future talks.
Events in Dec 2018
 MPs were due to vote on the deal on 11 December but Mrs May
was heading for a major defeat.
 She postponed the meaningful vote on the proposal until
January 2019.
 She survived a no-confidence vote, winning 200-117.
3 Possible Outcomes (Dec 2018)
 Keep the deal. The U.K. doesn't have the economic clout to
negotiate a better one.
 No deal Brexit.
 No Brexit: Have another referendum.
No Deal Brexit
 Trade: The UK would revert to World Trade Organisation rules
on trade. While Britain would no longer be bound by EU rules, it
would have to face the EU’s external tariffs. The price of goods
in shops for Britons could go up as businesses would have to
place tariffs on goods imported from the EU. But Britain would
be able to broker trade agreements with other countries.
 The fate of expats: There are 1.3 million Britons in EU countries
and 3.7 million Europeans in Britain – in terms of their rights to
live and work would be unclear.
No Deal Brexit
 Money: The Government would not have to pay the annual £13
billion contribution to the EU budget. However Britain would
lose out on some EU subsidies.
 The Irish border: The issue of the border between Northern
Ireland and the Republic would remain unresolved.
Events in Jan 2019
 MPs reject a no-deal Brexit in principle, by 318 votes to 310.
 MPs voted for an amendment by 317 votes to 301 to pass the
Brexit deal bill if Theresa May can negotiate changes to the Irish
backstop.
 Teresa May to renegotiate with EU but EU has signaled that
withdrawal agreement is not up for renegotiation.
 On Thursday the British foreign secretary, Jeremy Hunt, became
the first cabinet minister to admit that the two years of
negotiations allowed under article 50 may have to be prolonged,
describing the Brexit impasse as “a very challenging situation”.