- U.S. oil prices fall below zero, goes to minus $37.63 per barrel
- Open up e-com services: IAMAI
- Ensure workers download Aarogya app
- Additional trade barriers violate WTO’s principle
- SEBI surveillance till May 28
- Indian Envoy condemns hate-speech
U.S. OIL PRICES FALL BELOW ZERO, GOES TO MINUS $37.63 PER BARREL
Focus: GS-III Indian Economy
Why in news?
Traders fled from the expiring May U.S. oil futures contract in a frenzy, this led to sending the contract into negative territory for the first time in history.
May U.S. crude futures plunged to a depth never before seen, settling on the day at minus $37.63 a barrel.
Why did this happen?
- With demand down 30% worldwide due to the coronavirus pandemic, and storage hubs expected to fill up – there are barely any buyers are willing to take delivery of oil barrels because there is no place to put the crude.
- Major oil-producing nations have agreed to cut output and global oil companies are trimming production, but those cuts will not come quickly enough to avoid a massive clog.
- The world’s major oil producers agreed to cut production by 9.7 million bpd in an attempt to get world supply under control as demand slumps, but those cuts do not begin until May.
- Saudi Arabia is ramping up deliveries of oil, including big shipments to the United States.
- Worldwide oil consumption is roughly 100 million barrels a day, and supply generally stays in line with that. But consumption is down about 30% globally, and the cuts so far are far less.
- U.S. exchange-traded funds are also playing a role in the action
Will India benefit from this? Yes
- Import bill falls, thus Current Account Deficit (CAD) falls
- Fiscal Deficit of the govt falls if the govt decides not to pass on the price decline to consumers. It may consolidate its revenues by increasing the taxes by letting the prices be, as they stand today.
Read More About this in a COMPLETE COVERAGE EXCUSIVE POST here: https://www.legacyias.com/explained-why-oil-prices-dropped-to-negative-for-upsc-exam/
OPEN UP E-COM SERVICES: IAMAI
Focus: GS-III Indian Economy, Prelims
Why in news?
The Internet and Mobile Association of India (IAMAI) on 20th April 2020 said it had requested the government to open up e-commerce services, adding that the online vs offline debate is an ‘incorrect portrayal’ of the ground reality as lakhs of sellers from the physical markets also sold online.
This follows the ‘last-minute announcement’ by MHA on Sunday, limiting e-commerce to supply of essential goods even as companies prepared to scale up operations based on an earlier order.
Why is important to support e-commerce?
- In the current crisis, the only priority is to emphasize on ‘social distancing’ and e-commerce can support India’s fight against COVID-9.
- After nearly a month of lockdown, the debate is not necessarily between what is ‘essential’ and what is ‘non-essential’.
- The real debate is how not to choke demand completely when the country is going through a health crisis.
- The key to returning to normal was the fulfilment of consumer demand, which, under the present public health crisis, could be effectively done through e-commerce.
- Internet & Mobile Association of India (IAMAI) is a not-for-profit industry body registered under the Societies Act. Its mandate is to expand and enhance the online and mobile value-added services sectors.
- IAMAI is the only specialized industry body in India representing the interests of online and mobile value-added services industry.
- The main purpose of the IAMAI is to improve and expand the value-added services pertaining to mobiles and several online services.
- The Societies Registration Act, 1860 is a legislation in India which allows the registration of entities generally involved in the benefit of society – education, health, employment etc.
- The British Indian Empire, with a wish to encourage such activities and to promote the formal organization of groups of like-minded people, incorporated the Act 21 of 1860, in other words, The Societies Registration Act, 1860 (21 of 1860), which came into force on 21 May 1860.
- The Act continues until today and being an Act of Parliament, comes under the Right to Information Act, wherein the government is legally responsible to give any information requested by any citizen of India with respect to any society.
ENSURE WORKERS DOWNLOAD AAROGYA APP
Focus: GS-III Disaster Management, Science and Technology, Prelims
Why in news?
Central government organizations involved in construction, including various metro rail corporations, were instructed by the Central Public Works Department (CPWD) to ensure that “all labour personnel/staff” returning to work from 20th April 2020 have downloaded the government’s COVID-19 tracking app — Aarogya Setu.
Why was this needed?
- While the country remains in a lockdown till May 3, migrant workers, including construction workers, have been left with no work and no income during the period.
- The advisory comes as the Union Home Affairs Ministry has relaxed some restrictions starting 20th April, including for construction activity under certain conditions.
- On 19th April, the MHA issued an order allowing stranded migrant workers to return to their workplaces within the State they are located in provided they are asymptomatic.
Criticisms about how migrant workers are handled
- While the Labour Ministry has asked States to provide construction workers aid through their respective Building and Other Construction Workers Welfare Boards, the reality was that the majority of migrant workers were not registered with these Boards and/or did not they have bank accounts are required for transfer of funds.
- Trade unions also expressed concerns over the government’s decision to start movement of labourers within States/UTs.
- When it concerns use of Aarogya Setu App, the criticism is based on assumption of number of migrant labourers using smartphones.
Aarogya Setu App
- Aarogya Setu (lit. ’Health Bridge’) is a COVID-19 tracking mobile application developed by the National Informatics Centre that comes under the Ministry of Electronics and Information Technology, Government of India.
- The stated purpose of this app is to spread the awareness and to connect essential health services to the people of India.
- This app will augment the initiatives of the Department of Health to contain the risks of COVID-19, and sharing the best practices and advisories.
- This is a tracking app which uses smartphone’s GPS and Bluetooth features to track the coronavirus infection. Aarogya Setu app is available for Android and iOS mobile operating systems.
- Using Bluetooth technology, the Aarogya Setu app tries to determine the risk if one has been near a Covid-19 infected person (within six feet of distance) by scanning through a database of known cases across India, and using location information it determines the location one is in belongs to the infected areas based on the data available.
Central Public Works Department (CPWD)
- The Central Public Works Department of India is a premier Central Government authority in charge of public sector works.
- The CPWD, under the Ministry of Urban Development now MoHUA (Ministry of Housing and Urban Affairs), deals with buildings, roads, bridges, flyovers, complicated structures like stadiums, auditoriums, laboratories, bunkers, border fencing, border roads (hill roads), etc.
- CPWD came into existence in July 1854 when Lord Dalhousie established a central agency for execution of public works and set up Ajmer Provincial Division.
- It has now grown into a comprehensive construction management department, which provides services from project concept to completion, and maintenance management.
ADDITIONAL TRADE BARRIERS VIOLATE WTO’S PRINCIPLE
Focus: GS-II International Relations, GS-III Indian Economy
Why in news?
- India’s recently adopted policy to curb opportunistic takeovers of domestic companies goes against the principles of the World Trade Organisation (WTO), the spokesperson of the Chinese Embassy in India said on 20th April 2020.
- This is the first response from the Chinese side after the Ministry of Commerce and Industry in an April 17 decision that imposed restrictions saying companies from countries that share borders with India can invest “only under the government route”.
Details of the response
- The additional barriers set by Indian side for investors from specific countries violate WTO’s principle of non-discrimination, and go against the general trend of liberalisation and facilitation of trade and investment.
- More importantly, they do not conform to the consensus of the G20 leaders and Trade Ministers to realise a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open.
- The Indian policy revision is meant for sectors and enterprises other than defence, space, atomic energy and sectors and activities “prohibited for foreign investment”.
- It was understood that the Indian decision was a response to the news of an incremental purchase of shares in HDFC by the People’s Bank of China.
- The Chinese spokesperson invoked the principle of free market economy.
Criticisms of the move
- Analysts have pointed out that the amended policy brings every kind of Chinese investors to India within the ambit of government approval reducing the space for private business negotiations.
- The decision would face difficulties, especially if the government tried to attribute nationality to venture capital funds.
World Trade Organisation (WTO)
- The World Trade Organization (WTO) is an intergovernmental organization that is concerned with the regulation of international trade between nations.
- It is the largest international economic organization in the world.
- The headquarters of the World Trade Organization is in Geneva, Switzerland.
- The WTO deals with regulation of trade in goods, services and intellectual property between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants’ adherence to WTO agreements, which are signed by representatives of member governments.
- The WTO prohibits discrimination between trading partners, but provides exceptions for environmental protection, national security, and other important goals.
- Trade-related disputes are resolved by independent judges at the WTO through a dispute resolution process.
SEBI SURVEILLANCE TILL MAY 28
Focus: GS-III Indian Economy, Prelims
Why in news?
The tightened surveillance measures for stock markets, introduced on March 23 for a period of one month, have been extended until May 28.
In a statement on 21st April, the Securities and Exchange Board of India (SEBI) said the stock markets are expected to remain volatile in the near future on account of COVID-19 pandemic and hence, the measures had to be extended.
- As the stock markets (both domestic and global) are expected to be volatile in the near future owing to concerns relating to COVID-19 pandemic and the resultant fear of economic slowdown, keeping in view the objective of ensuring orderly trading and settlement, effective risk management, price discovery and maintenance of market integrity, it has been decided that the measures implemented since March 23, 2020 will continue to be in force till May 28, 2020
- On March 20, the capital markets regulator SEBI, announced an increase in margins in the cash segment while tightening the norms for position limits in the derivatives market as volatility continued to surge.
The Securities and Exchange Board of India (SEBI) is the regulator of the securities and commodity market in India owned by the Government of India.
SEBI was established in 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992.
The SEBI is managed by its members, which consists of the following:
- The chairman is nominated by the Union Government of India.
- Two members, i.e., Officers from the Union Finance Ministry.
- One member from the Reserve Bank of India.
- The remaining five members are nominated by the Union Government of India, out of them at least three shall be whole-time members.
SEBI has to be responsive to the needs of three groups, which constitute the market:
- issuers of securities
- market intermediaries
SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive.
- It drafts regulations in its legislative capacity.
- It conducts investigation and enforcement action in its executive function.
- It passes rulings and orders in its judicial capacity.
Though this makes it very powerful, there is an appeal process to create accountability.
There is a Securities Appellate Tribunal which is a three-member tribunal.
A second appeal lies directly to the Supreme Court.
Powers of SEBI
For the discharge of its functions efficiently, SEBI has been vested with the following powers:
- to approve by−laws of Securities exchanges.
- to require the Securities exchange to amend their by−laws.
- inspect the books of accounts and call for periodical returns from recognised Securities exchanges.
- inspect the books of accounts of financial intermediaries.
- compel certain companies to list their shares in one or more Securities exchanges.
- registration of Brokers and sub-brokers
INDIAN ENVOY CONDEMNS HATE-SPEECH
Focus: GS-II International relations
Why in news?
Cautioning Indians in the United Arab Emirates against a spate of religiously derogatory posts, India’s Ambassador to the UAE said any discrimination would not be tolerated.
- India and UAE share the value of non-discrimination on any grounds.
- Discrimination is against our moral fabric and the Rule of law. Indian nationals in the UAE should always remember this.
- In the past month of April, at least six Indians have lost jobs or face charges over social media posts linking the coronavirus pandemic to the Muslim community in India.
- The issue, according to at least two sources aware of the discussions, is creating a greater diplomatic strain for New Delhi, even as it negotiates with UAE officials who have been pushing for India to repatriate thousands of citizens who have lost jobs with companies in the Emirates due to COVID-19.
- An estimated 3.3 million Indians live and work in the UAE.
- Posts on social media by a number of Indian expatriates have been widely reported in UAE media, inviting censure from one member of the Royal family, Sharjah Princess Hend Faisal Al Qassemi, who publicly threatened Indians working in the UAE with deportation.
- Derogatory posts by some Indians feed into the propaganda that hostile countries like Pakistan try to amplify to mold public perception about India, and that adds to the diplomatic challenges the government faces.