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

Answer........................

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Mains Questions:
Q.1) What do you mean by Gross value added? How Gross value added can improve in the affected industry sectors?