{"id":3459,"date":"2025-02-01T12:25:57","date_gmt":"2025-02-01T12:25:57","guid":{"rendered":"https:\/\/lawentranceindia.com\/blogs\/?p=3459"},"modified":"2025-02-01T12:25:57","modified_gmt":"2025-02-01T12:25:57","slug":"mlc-daily-current-affairs-01-february-2025","status":"publish","type":"post","link":"https:\/\/lawentranceindia.com\/blogs\/mlc-daily-current-affairs-01-february-2025\/","title":{"rendered":"MLC Daily Current Affairs – 01 February 2025"},"content":{"rendered":"

Today in History (February 01th<\/sup>,2017)<\/h1>\n

The Union Budget is presented on February 1st each year. Before 2017, the Budget was presented on the last working day of February. In 2017, then-Finance Minister Arun Jaitley shifted the date to February 1st to allow more time for policy implementation.<\/p>\n

Summary of Today’s News<\/strong><\/h2>\n

BUDGET IN PARLIAMENT<\/span><\/strong><\/h3>\n

The Budget goes through following stages:
\n1. Preparation of Budget:
\n\u2022 The Budget Division of the Department of Economic Affairs in the Finance Ministry is the nodal body responsible for preparing the Budget.
\n\u2022 Budget is prepared on Cash Basis (i.e. whatever is expected to be actually received or paid under proper sanction during a financial year).
\n2. Presentation:
\n\u2022 President in every financial year cause to be laid before both the Houses of Parliament the annual financial statement.
\n\u2022 In the Parliament, the budget is presented by the Union Finance Minister (usually on 1st February of every year since 2017)
\n3. General discussion
\n4. Scrutiny by Departmental Committees
\n5. Voting on Demands for Grants
\n6. Passing of Appropriation Bill
\n7. Passing of Finance Bill<\/p>\n

CHANGES INTRODUCED IN 2017<\/span><\/strong><\/h3>\n

\u2022 Advancement of Budget presentation to February 1 (earlier presented on the last working day of February),
\n\u2022 Merger of Railway Budget with the General Budget, and
\n\u2022 Doing away with plan and non-plan expenditure.
\nBALANCED, SURPLUS AND DEFICIT BUDGET <\/strong>
\n\u2022 Balanced Budget \u2013 A government Budget is assumed to be balanced if the expected expenditure is equal to the anticipated receipts for a fiscal year.
\n\u2022 Surplus Budget \u2013 A Budget is said to be surplus when the expected revenues surpass the estimated expenditure for a particular business year. Here, the Budget becomes surplus, when taxes imposed, are higher than the expenses.
\n\u2022 Deficit Budget- A Budget is in deficit if the expenditure surpasses the revenue for a designated year.<\/p>\n

Middle-Income Trap and India<\/span><\/strong><\/h3>\n

India, despite being the world\u2019s fifth-largest economy by nominal GDP, remains a middle-income country, which points to the challenge of the middle-income trap.
\nKey Points:
\n\u2022 According to the Finance Ministry, India is set to become the third-largest economy in the world, reaching a GDP of $5 trillion in the next three years and $7 trillion by 2030.
\n\u2022 India has a goal to become a $30 trillion economy by 2047.
\n\u2022 NITI Aayog\u2019s plan for “Viksit Bharat” (Developed India) aims to raise India to a high-income status by the centenary of its independence.
\nNITI Aayog\u2019s Vision for Viksit Bharat by 2047:<\/strong>
\n\u2022 India needs to grow its GDP nine times from the current $3.36 trillion.
\n\u2022 It must raise its per capita income by eight times, from $2,392 per year to levels seen in developed nations.
\n\u2022 The vision highlights key challenges such as:
\n\u2022 Expanding manufacturing and improving logistics.
\n\u2022 Reducing income gaps between rural and urban areas.
\n\u2022 Ensuring energy security, affordability, and sustainability.
\n\u2022 Boosting industrial competitiveness and moving people from agriculture to industry.
\nWorld Bank\u2019s Classification of Countries:<\/strong>
\n\u2022 The World Bank classifies countries by their Gross National Income (GNI) per capita:
\n\u2022 Low-Income Countries (LICs): GNI per capita less than $1,145.
\n\u2022 Lower-Middle-Income Countries (LMICs): GNI per capita between $1,146 and $4,515.
\n\u2022 Upper-Middle-Income Countries (UMICs): GNI per capita between $4,516 and $14,005.
\n\u2022 High-Income Countries (HICs): GNI per capita more than $14,005.
\n\u2022 The classification is updated annually by the World Bank.
\nMiddle-Income Countries (MICs):<\/strong>
\n\u2022 Middle-income countries are home to 75% of the world\u2019s population and 66% of the world\u2019s poor.
\n\u2022 These countries represent about one third of global GDP and produce 40% of the world\u2019s economic output.
\n\u2022 Over the past 34 years, only 34 middle-income countries have successfully moved to higher-income levels, mostly from the European Union, including countries like Saudi Arabia, Latvia, Bulgaria, and South Korea.
\nMiddle-Income Trap:<\/strong>
\n\u2022 The middle-income trap is when a country struggles to move from middle-income to high-income status, despite experiencing economic growth and reducing poverty.
\n\u2022 This term was coined by the World Bank in 2007 to describe countries in Latin America and the Middle East that failed to transition to high-income nations.
\n\u2022 Factors contributing to the middle-income trap include:
\n\u2022 Rising labor costs, causing industries that rely on cheap labor to move elsewhere.
\n\u2022 Declining competitiveness due to a lack of investment in high-value industries like technology or advanced manufacturing.
\n\u2022 Insufficient innovation and the failure to build strong innovation ecosystems.
\n\u2022 Currently, 108 countries, including major economies like China, Brazil, Turkey, and India, are stuck in the middle-income trap. A key reason is the lack of development in domestic innovation.
\nChallenges India Faces:<\/strong>
\n\u2022 Innovation & Technology: Low investment in research and development limits India\u2019s economic growth and diversification.
\n\u2022 Dependence on Agriculture: Many people still depend on low-productivity agriculture, with the pandemic causing an increase in agricultural employment in less productive areas.
\n\u2022 Slow Wage Growth: In 2023-24, wages for regular workers increased by just around 5%, while casual workers\u2019 wages grew by roughly 7%. With inflation at about 5%, real wage growth has been very slow.
\n\u2022 Global Competition: India faces tough competition from other emerging economies seeking growth.
\nThe Way Forward:<\/strong>
\n\u2022 Middle-income countries now face challenges such as ageing populations, trade issues, and the need to grow faster while protecting the environment.
\n\u2022 To escape the middle-income trap, countries need a focused strategy on innovation and active policies.
\n\u2022 Suggested solutions for India:
\n\u2022 Increase innovation and technological development.
\n\u2022 Invest in education and skills to build human capital.
\n\u2022 Focus on industrialization, especially in high-value manufacturing and services.
\n\u2022 Improve infrastructure, especially in underdeveloped areas.<\/p>\n