03-02-2022
03-FEBRUARY-2022
The Hindu News Analysis – 03rd February 2022 – Shankar IAS Academy
S.
No.
Page Number*
News Articles
C
B
D
H
T
1
Bird watch (Picture)
1
-
1
-
-
2
Dip in population of waterbirds
-
-
-
-
2
3
Ink India-Britain free trade, unlock new opportunity (Editorial)
8
6
6
8
6
4
Budget moots tweaks to GST law to tighten input tax claims
14
12
12
14
12
5
Greater capital expenditure is the highlight of the Budget
14
12
12
14
12
6
Fitch Ratings flags high fiscal deficit target
1,10
8
1, 8 1,10
8
7
Aluminium sector says coal stocks critically low
14
12
12
12
8
Prelims Practice Questions
9
Mains Practice Question
14
@ end of the video
*C – Chennai; B – Bengaluru; D – Delhi; H – Hyderabad; T – Thiruvananthapuram
1
03-02-2022
Pg: 1 - C, D.
World Wetlands Day
• Celebrated each year on 2 nd February - to raise global awareness about the
vital role of wetlands for people and planet.
 Convention on Wetlands or Ramsar convention was on 2 February 1971.
• Theme for 2022 - Wetlands Action for People and Nature
 To ensure the conservation and sustainable use of wetlands for humans and
planetary health..
2
03-02-2022
RAMSAR CONVENTION
Wetland
• Areas where water is the primary factor controlling
the environment, associated plant and animal life.
• Occur where the water table is at or near the
surface of the land, or where the land is covered by
water.
• Wetlands (Conservation and Management) Rules, 2017
 Does
not
human-made
constructed
include
river
channels,
for
drinking
water
water
bodies/tanks
paddy
fields,
specifically
purposes
and
structures specifically constructed for aquaculture,
salt production, recreation and irrigation purposes.
• “Wetlands are areas of marsh, fen, peatland
or water, whether natural or artificial,
permanent or temporary, with water that is
static or flowing, fresh, brackish or salt,
including areas of marine water the depth of
which at low tide does not exceed six
metres”.
• Include a wide variety of inland habitats such
as marshes, peat-lands, floodplains, rivers
and lakes, and coastal areas such as
saltmarshes, mangroves, intertidal mudflats
and seagrass beds, and also coral reefs and
other marine areas no deeper than six metres
at low tide, as well as human-made wetlands
such as dams, reservoirs, rice paddies and
wastewater treatment ponds and lagoons.
Waterbird
• Bird that frequents water - habitually
wades or swims in fresh water.
• Spend life cycles in wetlands - habitat
and food source.
 Prefers
estuaries,
swamps,
freshwater
bays
and
lagoons,
and
open
mudflats,
saltwater
beaches,
lakes,
rivers, floodplain wetlands and dams.
• Indicators of wetland health.
• Population
trends
over
time
-
biodiversity trends and ecosystem health
in the wetlands.
Pg: 2 - Thiruvananthapuram Edition.
3
03-02-2022

Includes
waterfowls,
pelicans,
ibises
and
spoonbills, egrets and herons, waterhens, terns
and gulls, shorebirds (waders).
Asian Waterbird Census
• Part of the global International Waterbird
Census (IWC).
 Global waterbird monitoring programme -
supports the conservation and management
of wetlands and waterbirds worldwide.
• Initiated in 1987 in the Indian subcontinent.
• Now
covers
major
region
of
Asia
(Afghanistan to Japan), Southeast Asia and
Australasia.
• Covers
entire
East
Asian
-
Australasian
Flyway and a large part of the Central Asian
Flyway.
4
03-02-2022
News
• Drop in the number and species of waterbirds in
Kerala.
 30% reduction in wetlands of Trivandrum.
• Takes
place
science event.
every
January
-
citizen-
to
identify
wetlands
importance for waterbirds.
of
high
 Designation as Ramsar Sites and Flyway
Network
wetlands
species.
-
3,077
birds
belonging
to
56
 Reason for reduction - anthropogenic activities.
• Benefit:
 Used
 11
Sites,
or
priority
within national programmes.
wetlands
 Solid waste dumping.
 Shift
from
paddy
cultivation
to
vegetable
cultivation and application of chemicals.
 Noise from crackers.
 Disturbances
videographers.
from
photographers
&
Pg: 8 - C, H;
Pg: 6 - T, B, D.
5
03-02-2022
India-U.K. Relations
Economic relations
• Strong ties of history and culture since centuries.
• Merchandise trade - US$ 15.45 billion in 2019-20.
• Strategic Partnership in 2004.
• Trade balance was in favour of India.
Image source: https://www.hindustantimes.com/
Education, Research and Innovation
• India invested in 120 projects
 Created 5,429 new jobs in the UK.
• UK - favoured destinations for Indians.
 India
• India is a beneficiaries of UK’s new liberalised point-
become
source of FDI.
the
second-largest
• Nearly 600 U.K. companies in India
based immigration system.
Climate and Environment
 Employs more than 3,20,000 people.
• Ministerial Energy Dialogue and Joint Working Groups.
 Barclays
• Green Growth Equity Fund.
 UK
-
India.
& Hindustan Unilever.
6th
largest
investor
 UK - 6% of all FDI into India.
in
Multilateral
• UK
supports
India's
permanent
membership
of
UNSC,
NSG, MTCR, Australia Group and Wassenar Arrangement.
• UK - member of The International Solar Alliance (ISA).
6
03-02-2022
Indian Diaspora in UK
• One of the largest ethnic minority communities (2.5%).
• Contributes to 6% of the country’s GDP.
• Diversify supply chains.
• Easier
• 16 Indian origin MPs in the UK Parliament.
businesses
and
borders.
Free Trade Agreements (FTA)
• Arrangements - to reduce or eliminate customs tariff
and non tariff barriers on trade.
• Incentivize
to
do
new
small
in
more
business
the
affordability of products.
 Intellectual property rights (IPRs)
for
and
sized enterprises - export.
• Improvements
• Cover trade in goods or trade in services.
Cheaper
across
medium-
variety
and
 Investment
 Government procurement and
 Competition policy
• Benefits for UK and India:
 U.K. develops on free trade.
 India
-
opportunity
economy and society.
to
transform
its
 Offers valuable opportunities for India’s
booming companies.
 Stimulate growth and employment in both
countries.
Practice Question – Mains
GS – II
Q. The time has come for India and UK to
build a strong free trade agreement, that
will have a great significance for both the
countries. Comment.
(150 Words, 10 Marks)
 FTA would add around £14.8 billion to the
GDP of India and the U.K. by 2035.
7
03-02-2022
Pg: 14 - C, H;
Pg: 12 - T, B, D.
Input Tax Credit
• Feature of Goods and Services Tax (GST).
• Input credit - reduces the tax already paid
on buying some inputs.
News
• Finance bill proposed changes in the Central
• Can be availed by:
 Manufacturers, suppliers, agents, e-commerce
operators, aggregators etc. covered under
the GST Act.
GST Act - restricts input tax credits for
manufacturers
unless
their
remitted their share of taxes.
suppliers
have
 Exceptions
 For
personal
exempt.
use
or
goods
that
are
 Business under composition scheme.
8
03-02-2022
Practice Question – Prelims
Q. Consider the following statements with
reference to Input Tax Credit.
1. It is one of the key features of Goods
and Services Tax.
2. It is a mechanism
cascading of taxes.
to
enhance
3. A business under composition scheme
cannot avail of input tax credit.
Which of the statements given above
is/are correct?
a) 1 only
b) 1 and 2 only
c) 1 and 3 only
d) 2 and 3 only
Union Budget
Revenue Expenditure
 Incurred to meet day to
day and regular needs of
government
 Will not yield
revenue in future.
any
 Example – Subsidies,
Defence, Police, Pensions
and Salaries.
Capital Expenditure
 Expenditure
towards
building the country.
 Incurred on long period
development programs.
 Two way transaction.
 Leads to asset creation.
Pg: 14 C, H;
Pg: 12 T, B, D.
9
03-02-2022
Significance
Capital expenditure
• Disbursement of government funds in the form
of
investments
(or)
development
spending
towards the production of long-term assets.
• Ex:
money
spent
on
railways
or
the
construction of national highways and roads.
• Current fiscal year - capital expenditure of
₹5.54 lakh crore -
26% higher.
1. Fixed
assets
acquired,
existing
assets
upgraded or loans repaid - enhances labour
participation in the economy.
2. Generate demand in the economy - attracts
private investments over a longer term and
sustaining economic growth.
3. Impact
multiplier
effect
-
₹1 spent on
capital expenditure is 2.45 when compared
to ₹1 spent on revenue expenditure, where
the impact multiplier effect is 0.99.
Practice Question – Prelims
Q. Consider the following statements:
1. When capital assets are put into service,
depreciation occurs, and their value
decreases throughout their useful lives.
2. Returns on Capital Expenditure are
unpredictable because even loss can occur.
3. The accounting process of identifying,
measuring, and estimating the costs
relating to capital expenditures may be
quite complicated.
Which of the statements given above is/are
correct?
(a) 1 only
(b) 2 only
(c) 1 and 2 only
(d) 1, 2 and 3
10
03-02-2022
Part A—Preliminary Examination
Paper I - (200 marks)

Economic
and
Sustainable
Social
Development-
Development,
Poverty,
Inclusion, Demographics, Social Sector
Initiatives, etc.
Part B—Main Examination
PAPER-IV
General Studies‐III: Technology, Economic
Development, Bio diversity, Environment,
Security and Disaster Management.

Indian Economy and issues relating to
planning,
Pg: 1,10 - C, H;
Pg: 8
Pg: 1,8
Fiscal Deficit
• Excess of total disbursements, from the CFI over
total receipts, during a financial year.
 Excludes repayment of debt.
 Excludes debt receipts.
 Expressed as a percentage of GDP.
- T, B;
mobilization,
of
resources,
growth, development and employment.

Government Budgeting.
- D.
• Government
receipts
-
Corporation
Tax,
Income Tax, Interest Receipts, Dividends
and Profits, etc.
• Government
expenditures
-
Revenue
Expenditure, Capital Expenditure, Interest
Payments, etc.
• FD = Total Expenditure - (Total Receipts
except borrowings and liabilities)
 Total
expenditure
-
Total
except the debt capital receipts.
receipts
• Means country is in debt.
11
03-02-2022
• Affects country’s credit ratings.
Causes
 National governments’ credit standing - key benchmark
• Fall of Government revenue.
• Increase in Government spending.
in the world’s capital markets.
 Ex: Moody’s ratings - rate debt of over 120 sovereign
nations.
Impact of persistent increase
 Match sovereign credit risk with country’s Risk.
• Lead to runaway inflation - hurts
 Sovereign risk -
our quality of life.
 Runaway inflation - rapid rise
in
the
services.
prices
for
goods
and
treasury
or
sovereign debt.
chance of national government’s
central
bank
to
default
on
their
 Country’s credit rating - low due to high fiscal deficit.
 Leads to delays in investment decisions by businesses
- affects economic growth.
 Leads to macro-economic instability.
Previous Year Question – Prelims 2020
• Lead to printing of Money - to fund deficits
 Devalues paper money.
• Increases government debt.
Q. With reference to Fiscal Deficit, consider
the following statements:
1. Its is equal to total receipts minus
expenditure.
2. It may lead to printing of money.
 Large portion of the Government’s revenues
3. It results in high credit rating for the
Country.
 High level of debt associated with slower
Which of the statements given above
is/are incorrect?
a) 1 only
b) 1 and 2 only
c) 2 only
d) 1 and 3 only
spent towards interest payouts.
growth.
12
03-02-2022
Aluminum
• A metal.
• Third most abundant
element in earth’s crust.
• Properties:
 Light
 Corrosion resistance
 Heat conductivity
Pg: 14 - C,
H;
Pg: 12 - T,
 Malleability
 Ability to become strong when mixed with
other metals.
B, D.
• Uses:
Prime factors for the location of an
aluminium industry:
 Manufacturing aircraft, utensils and wires.
1. The location having regular supply
 Alternative to steel, copper, zinc, and lead.
• Occurs
in
materials.
various
proportions
in
different
 Component of many igneous minerals including
mica and clays.
• Extracted from Bauxite ore.
of electricity.
Bauxite Ore
2. Availability of an assured source
of raw material at minimum cost.
Issue:
• Some
industries
lack
regular
supply
of
electricity - rely on captive power plant
for continued power supply.
• Lack of coal stocks of only 3-4 days.
 Prescribed level - coal stocks of 15 days.
13
03-02-2022
Aluminium smelting plants in the country
• Odisha
• West Bengal
• Kerala
• Uttar Pradesh
• Chhattisgarh
• Maharashtra
• Tamil Nadu
14
03-02-2022
Previous Year Question – Prelims 2020
Q1. With reference to Fiscal Deficit,
consider the following statements:
1. Its is equal to total receipts minus
expenditure.
2. It may lead to printing of money.
3. It results in high credit rating for the
Country.
Which of the statements given above
is/are incorrect?
a) 1 only
b) 1 and 2 only
c) 2 only
d) 1 and 3 only
Practice Question – Prelims
Q2.Consider the following statements:
1. When capital assets are put into service,
depreciation occurs, and their value
decreases throughout their useful lives.
2. Returns on Capital Expenditure are
unpredictable because even loss can occur.
3. The accounting process of identifying,
measuring, and estimating the costs
relating to capital expenditures may be
quite complicated.
Which of the statements given above is/are
correct?
(a) 1 only
(b) 2 only
(c) 1 and 2 only
(d) 1, 2 and 3
15
03-02-2022
Practice Question – Prelims
Q3. Consider the following statements with
reference to Input Tax Credit.
1. It is one of the key features of Goods
and Services Tax.
2. It is a mechanism
cascading of taxes.
to
enhance
3. A business under composition scheme
cannot avail of input tax credit.
Which of the statements given above
is/are correct?
a) 1 only
b) 1 and 2 only
c) 1 and 3 only
d) 2 and 3 only
Practice Question – Prelims
Answers
Q1. Option (d) – 1 and 3 only
Q2. Option (d) – 1, 2 and 3
Q3. Option (c) – 1 and 3 only
16
03-02-2022
Practice Question – Mains
GS – II
Q. The time has come for India and UK to
build a strong free trade agreement, that
will have a great significance for both the
countries. Comment.
(150 Words, 10 Marks)
17