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29th May Current Affairs


  1. India set for Deepest Recession Yet, Crucial Q4 Numbers
  2. India co-opts solar grid to fend off OBOR’s shadow
  3. LAC standoff Developments: Resolving, Infrastructure, U.S.
  4. SC: Migrants can’t be made to pay for travel
  5. U.S. bill on Uighur rights
  6. China passes controversial Hong Kong law


Focus: GS-III Indian Economy

Why in news?

Professional forecasters veered towards a consensus that India’s economy will face its worst recession in 40 years, contracting by at least 5% this fiscal.

On 29 May, the National Statistical Office (NSO) will release GDP data for the quarter ending March 2020.

Various Predictions

  • Swiss bank UBS said India’s economy could shrink 5.8%
  • S&P Global Ratings, Crisil, Fitch Ratings and Goldman Sachs projected India’s economy to contract 5% in FY21.
  • The March quarter growth number will be keenly watched as it includes one week of lockdown, which has the potential to skew the growth numbers.

Cause of the Drop

  • Although the government has eased restrictions and allowed businesses to restart operations, India’s more than two-month-long lockdown and flight of migrant workers from urban and industrial centres have crippled economic activity.
  • A big hit to growth will mean a large, permanent economic loss and deterioration in balance sheets throughout the economy.
  • Stay-at-home guidelines and the nationwide lockdown are likely to severely hit consumer demand, especially for non-essential items, which account for 47% of total consumption expenditure.

Risks in Path of Recovery

The risks around the path of recovery will depend on three key factors.

  1. The speed with which the covid-19 outbreak comes under control. Faster flattening of the curve—in other words, reducing the number of new cases—will potentially allow faster normalization of activity.
  2. A labour market recovery will be key to getting the economy running again.
  3. The ability of all sectors of the economy to restore their balance sheets following the adverse shock will be important. The longer the duration of the shock, the longer recover

Earlier Q4 Projections

  • NSO has already released the second advance estimates of GDP for 2019-20 in February, with the Real and nominal GDP growth in 2019-20 was projected to be 5% and 7.5% respectively.
  • A quick calculation using the 2019-20 GDP projection and quarterly GDP until December 2019 shows that the March quarter growth should have been 4.7%.
  • However, none of these projections hold anymore.

The Collapse

  • The collapse in GDP in the March quarter is likely to be followed by two quarters of contraction according to the Reserve Bank of India.
  • The economic deceleration phase India witnessed before Covid-19 hit the economy has been longer than that in the pre-2008 crisis period.
  • GDP growth has been going down, or almost stagnant, for seven consecutive quarters beginning June 2018.
  • A collapse in March 2020 GDP growth and contraction over the next two quarters will extend it to nine or ten quarters.
  • The end-May 2020 release of NSO on national income should provide greater clarity, enabling more specific projections of GDP growth in terms of both magnitude and direction.

What do these projections tell us? The Past and the impact

Focus on the trend

  • The first big takeaway is that India may not see a V-shaped recovery, like it did after the 2008 financial crisis.
  • In 2008, GDP growth had been going down since March 2008, and fell to almost zero in the quarter ending March 2009, but recovered sharply over the following year.
  • Fiscal deficit for 2008-09 reached 250% of Budget Estimates.
  • This stimulus was withdrawn in 2011-12 and the fiscal deficit has been declining since then.
  • While the withdrawal of the fiscal stimulus did not bring down growth immediately, things seem to have changed after crude oil prices reversed their declining trend.
  • Because India is a large importer of oil, a fall in oil prices always has a positive effect on the GDP.
  • This implies that the Indian economy has been suffering without a fiscal stimulus even without the pandemic’s disruption.

Why is this discussion of 2008 relevant? Lessons to learn:

  • By 29 May, the economy would have spent three months in contraction.
  • Any efforts to revive economic activity at a later stage will probably require a bigger fiscal push.
  • Growth calls for a straight-forward push to demand, but only a limited number of components in the 20.97 lakh crore economic stimulus provide direct support to the demand, and these add up to around ₹1.10 lakh crore, about 5% of the package.
  • Private investment holds the key to arrest the erosion of India’s economic growth, but a number of growth-supporting initiatives introduced even before Covid-19 could not check the steady fall in this.

-Source: Hindustan Times


Focus: GS-III Industry and Infrastructure, Indian Economy

Why in news?

India has invited bids from consultants to make an ambitious cross-border power grid plan that would seek to transfer solar power generated in one region to feed the electricity demands of others.

‘One Sun One World One Grid’ (OSOWOG)

  • A request for proposals (RFP) prepared by India’s ministry of new and renewable energy for inviting consultants to develop a long-term roadmap for the ‘One Sun One World One Grid’ (OSOWOG) comprises a technical and financial proposal.
  • This is one of the most ambitious schemes undertaken by any country with global significance in terms of sharing economic benefits.
  • India’s Prime Minister recently called for connecting solar energy supply across borders, with the mantra of ‘One Sun One World One Grid’ (OSOWOG).
  • The global grid may also leverage the International Solar Alliance (ISA) co-founded by India that has 67 countries as members.
  • It has become India’s calling card on climate change and is increasingly being viewed as a foreign policy tool.
  • The building of the global grid comes against the backdrop of China’s attempt to co-opt countries into its ambitious One Belt One Road (OBOR) initiative and the withdrawal of the US from the Paris climate deal.
  • It also comes at a time of the coronavirus pandemic giving India the opportunity to be seen as taking a lead in evolving global strategies.

Click Here to read more about One Belt One Road initiative. (2nd Article).

-Source: Livemint


Focus: GS-II International Relations

Why in news?

  • Indian and Chinese sides remain “engaged” through diplomatic and military channels in Delhi and Beijing and at the Line of Actual Control (LAC) in order to resolve the situation along the boundaries in Ladakh and Sikkim.
  • There will be no letup in the infrastructure development on the border with China despite the continuing standoff along the Line of Actual Control.
  • A day after US President Donald Trump made an unsolicited offer to mediate, India made it clear there was no room for any third party in bilateral issues with China.

Working with China to resolve border issue peacefully

  • Ministry of External Affairs (MEA) spokesperson said that India is fully engaged with the Chinese side to peacefully resolve the issue.
  • MEA said the contact between both sides on the issue included talks in “Delhi and Beijing”.
  • India is committed to the objective of maintenance of peace and tranquillity in the border areas with China and our armed forces scrupulously follow the consensus reached by our leaders and the guidance provided.
  • The two sides have established mechanisms both at military and diplomatic levels to resolve situations which may arise in border areas peacefully through dialogue and continue to remain engaged through these channels.
  • The MEA’s comments came a day after the Chinese Ministry of Foreign Affairs said the situation at the LAC was “stable and controllable”.

No room for 3rd party on China issue

  • Coming after Trump said the US had “informed” China that it was “ready, willing and able” to mediate to resolve tensions over the troop standoff in east Ladakh, the Indian statement was the closest to rejecting the US president without referring directly to him.
  • As the situation on the ground remains a stalemate, both New Delhi and Beijing have ramped up diplomatic exchanges to push a de-escalation through the mechanisms referred to in the MEA statement.

Infrastructure work in India-China border areas to continue

  • China has been objecting to Indian road construction at several points along the LAC.
  • The almost month-long standoff began when Chinese troops moved inside Indian areas with vehicles and equipment in some of the four standoff points at the LAC, including Pangong Tso, Demchok, Galwan Valley and Naku La in Sikkim, where PLA soldiers also blocked Indian patrols and pitched tents.
  • In major meetings with CDS and Service Chiefs it was conveyed to the Services that the ongoing infrastructure development activities have to continue uninterrupted.

-Source: The Hindu, Times of India, Hindustan Times


Focus: GS-II Social Justice

Why in news?

The Supreme Court intervened to protect the interests of stranded migrant workers on 28th May 2020, issuing a seven-point interim order.

The apex court’s intervention came two days after it took suo motu (on its own) cognisance of the travails of migrant workers.

Supreme Court’s Order

  • The Supreme Court’s Order said it was the job of the state to provide them food and transport and that they cannot be charged for their travel.
  • The court also remarked that no state can refuse to take back migrant workers.
  • The railway fare shall be shared by the States as per their arrangement.
  • SC also backed a uniform policy in order to do away with any kind of confusion in dealing with the migrant crisis.

-Source: Hindustan Times


Focus: GS-II International Relations

Why in news?

  • The U.S. House of Representatives overwhelmingly approved legislation on 27th May calling for sanctions on Chinese officials responsible for oppression of Uighur Muslims.
  • China denies mistreatment and says the camps provide vocational training.
  • The bill is now sent to the White House for the President to veto or sign into law.
  • The unanimous support in Congress and Senate puts pressure on Trump to impose human rights sanctions on China.

What does the Bill say?

  • The bill calls for sanctions against those responsible for repression of Uighurs and other Muslim groups in China’s Xinjiang province, where the United Nations estimates that more than a million Muslims have been detained in camps.
  • It singles out the region’s Communist Party secretary, Chen Quanguo, a member of China’s powerful Politburo, as responsible for “gross human rights violations” against them.
  • The bill also calls on U.S. companies or individuals operating in the Xinjiang region to take steps to ensure their products do not include parts using forced labor.

Who are Uyghurs?

  • Uyghurs are predominately Turkic-speaking Sunni Muslims who live primarily in the autonomous region of Xinjiang. Islam came to the region in the 10th century. Prior to Islam, the Uyghurs embraced Buddhism, Shamanism, and Manicheism.
  • Uyghurs embraced Islam in 934 during the Karahanid Kingdom. Kashgar, the capital of the Kingdom, quickly became one of the major learning centers of Islam.
  • Art, the sciences, music and literature flourished as Islamic religious institutions nurtured the pursuit of an advanced culture. In this period, hundreds of world-renowned Uyghur scholars emerged.
  • Thousands of valuable books were written. Among these works include the Uyghur scholar Yusuf Has Hajip’s book, The Knowledge for Happiness and Mahmud Kashgari’s dictionary of Turk languages.
  • Uyghurs played an important role in cultural exchanges between the East and West and developed a unique culture and civilization of their own based on Islam.

What are the accusations Levelled against China?

  • China is accused of encouraging internal migration into the Xinjiang province to increase the non-Uyghur population and power in the region.
  • In recent years, there have been many reports of students, teachers, and civil servants have been forbidden from fasting during Ramadan, forbidden from wearing their traditional dress and even keeping a beard.
  • Uyghurs continue to be the only population in China consistently subjected to executions for political crimes, and these executions are often both summary and public. With the rise of China as the expected superpower of the 21st century, such repressive policies against the Uyghur Muslims are likely to get worse.

-Source: The Hindu, Reuters


Focus: GS-II International Relations

Why in news?

The Chinese Parliament on 28th May passed new legislation for Hong Kong that will for the first time empower Beijing to draft national security laws for the Special Administrative Region (SAR).


  • The law essentially empowers the National People’s Congress (NPC) to draft new national security laws for Hong Kong.
  • The draft legislation said the scope of the laws could cover any activity that “seriously endangers national security”.
  • It said it was aimed at enabling “measures to counter, lawfully prevent, stop and punish foreign and overseas forces’ use of Hong Kong to carry out separatist, subversive, infiltrative, or destructive activities”.
  • The NPC decision has been criticised by pro-democracy parties and some in the legal community in Hong Kong as undermining the “one country, two systems” model.
  • Since 1997, Hong Kong has been governed by the Basic Law, which gives the SAR “executive, legislative and independent judicial power, including that of final adjudication”.
  • Only matters of defence and foreign affairs are handled by the central government.

Click Here to read more about the special status of Hong Kong and Impact of the Law

-Source: The Hindu

December 2023