THE GIST of Editorial for UPSC Exams : 03 June 2020 (Ominous signals: on slowdown of India's economy (The Hindu))

Ominous signals: on slowdown of India's economy (The Hindu)

Mains Paper 3:Economy
Prelims level: Gross value added
Mains level: Effects of the downgrading labour laws in industry sectors

Context:

India’s economy is in a severe slowdown that is only going to get worse in a pandemic-stricken world.
Three months after Finance Ministry mandarins that India’s growth slowdown had bottomed out, the latest economic data has belied that prediction.

Highlights the Slump in Growth:

The GDP growth estimates for the January-March quarter and the full fiscal year barely reflect the impact of the public health crisis and the stringent lockdowns.
The NSO’s estimates show ...............................................................................................

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What do you mean by Gross value added?

Gross value added (GVA) is the measure of the total value of goods and services produced in an economy(area, region or country). The amount of value-added to a product is taken into account.

Affected in other sectors:

Four of the eight industry sectors that together comprise the GVA are now revealed to be in far worse shape than was reported earlier.

This includes:

Manufacturing, which contracted for a third straight quarter and shrank by 1.4% in the fourth quarter;
Construction, a major job generating activity that continued to weaken and contracted 2.2%; and the two largest services categories.
The revisions in the trade, transport, hotels and communications, and, financial, real estate and professional services sectors have cut third-quarter growth figures by 1.6 and 4 percentage points, respectively.

Demand Drought:

The economy is visibly miredin a demand drought that is unlikely to abate(reduce) any time soon.
Private consumption spending, which accounts for 55-60% of GDP, extended a downtrend as growth slid to 2.7%.
Investment activity contracted .................................................................................................

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Conclusion:

But the imperativenow is to bite the bullet and opt for a massive fiscal stimulus that actually puts cash in the hands of consumers and the millions of jobless youth in order to help revive demand.

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Prelims Questions:

Q.1)With reference to the Section 230 of the Communications Decency Act (CDA) of 1996, United States, consider the following statements:
1. Section 230 of the Communications Decency Act (CDA) of 1996 is a piece of Internet legislation in the United States.
2. It provides immunity from liability for providers and users of an "interactive computer service" who publish information provided by third-party users.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2