THE POLITY AND GOVERNANCE

1. BIHAR TO BECOME THE FIRST STATE TO IMPLEMENT DYNAMIC MAP TO TRACK LAND OWNERSHIPS

THE CONTEXT: New technological interventions are leading to better management and ease of living. Aligning with this, Bihar has become the first state in the country to introduce the concept of the dynamic map for villages. The dynamic map will automatically get updated, each time land ownership changes hands. The objective of the move is to reduce legal disputes.

THE EXPLANATION:

About the Initiative

As stated by the Bihar government, since February 2021, the state has seen almost 37,000 cases of land disputes and others. The move aimed to implement dynamic maps is taken as the state government’s initiative to resolve the issue of long-pending land reforms. It is pertinent to mention that the state Assembly has recently passed the Bihar Land Mutation Amendment Bill, 2021, that made the mutation of maps mandatory.

How will it work?

Every time a mutation takes place now, it will entail three changes, including

• A change in the text
• A change in the land parcel
• A modification of the survey map

What is Bihar Land Mutation Amendment Bill 2021?

• The Bill is aimed at reducing land-related disputes in the state. According to the Bihar government, in just about a year since February 2021, the state has seen almost 37,000 cases of some land dispute or the other. The move towards dynamic maps is part of a series of steps taken by the state government to implement long-pending land reforms.
• Therefore, dynamic maps of the village would ultimately reduce the cases related to land disputes considerably.

THE ENVIRONMENT AND ECOLOGY

2. RISE IN HUMAN-WILDLIFE CONFLICT IN KERALA

THE CONTEXT: The Wildlife Institute of India-Dehradun and Periyar Tiger Conservation Foundation in Kerala had jointly conducted a study to identify the reasons behind the increasing incidents of man-animal conflict in the state.

THE EXPLANATION:

• According to Kerala Forest Department data, the state has, since 2011, reported 34,875 cases of wildlife attacks, leaving 1,233 dead and 6,803 injured. A large number of deaths have been caused by snake bites. The incidents of attacks have been reported from across the state with a slight increase in central and northern forest circles.
• Wildlife attacks on humans have assumed alarming proportions in Kerala, where as many as 1,233 people have been killed in such attacks in the last one decade. One of the major factors behind the menace is the depletion in the quality of forest habitats in the state due to the growth of invasive alien plants.

• The Forest Department sources said the study has specifically pointed out that foreign invasive plants at forests have reduced the availability of fodder in forests, forcing animals to foray into settlements and farmlands.
• The quality of forest habitats has been lost due to the cultivation of alien plants mainly acacia, mangium and eucalyptus in forest tracts for commercial purpose. In Kerala, these alien trees have been cultivated at 30,000 hectares of forest land, impacting the quality of animal habitats.
• Other factors identified behind the increase in wildlife attacks are changing patterns of crops cultivated in farmlands near forests. Sugarcane, banana and similar crops are largely cultivated in such areas. Besides, the area of cultivation near forest tracts has increased leading to the conflict.
• The study also noted an increase in wildlife population due to effective conservation strategies. The movement of wildlife has been disrupted due to the fragmentation of habitats coupled with the increased movement of humans through such fragmented areas during odd hours.
• Recently, Kerala government had submitted a proposal to the Ministry of Environment, Forest and Climate Change to declare wild boar as vermin, which would make the culling of the animal legal. However, the Union Ministry turned down the proposal.

3. MOST OF GANGA CLEAN, CLAIMS JAL SHAKTI MINISTRY

THE CONTEXT: According to the Ministry of Jal Shakthi, the water quality of the river Ganga was clean enough for bathing and capable for supporting the river ecosystem for almost the entire stretch of the river.

THE EXPLANATION:

• According to the Ministry, the Dissolved Oxygen (DO), which is an indicator of river health was within “acceptable limits” of “bathing water quality criteria”.
• A report by the Central Pollution Control Board in 2018, pointed out four polluted stretches on the main stem of river Ganga. There are five categories ranked 1 to 5, with 1 the most polluted and 5 the least. An updated 2021 report noted that none of the stretches of the Ganga stretches were now in Priority Category I to IV and only two stretches are in Priority Category V with Biological Oxygen Demand (BOD), a parameter different from DO, ranging between 3-6 microgram/litre as per CPCB categorisation of polluted stretch.
• A comparison of median data of water quality parameters such as DO, Bio-chemical Oxygen Demand (BOD) and Faecal Coliform (FC) from 2014 and 2021; DO (Median) has improved at 31 locations; BOD at 46 and FC at 23 locations, respectively, the Ministry data noted.
• The 2018 report of the CPCB had identified 351 polluted stretches on 323 rivers based on monitoring results of 521 rivers in terms of Bio-chemical Oxygen Demand (BOD). “Based on the assessment of water quality, various measures are being taken both by the Centre and the States to prevent pollution of rivers and drains out–falling into them. River cleaning is a continuous process and the Central government assists the State governments and urban local bodies through schemes like ‘Namami Gange’ and National River Conservation Plan (NRCP).

Value Addition:

National Mission for Clean Ganga (NMCG)

• NMCG has been focusing on youth as part of its outreach and public communications efforts as they are the impellers of change.
• NMCG has tied-up with Diamond Toons to develop and distribute comics, e-comics and animated videos.
• The content will be designed with the objective of bringing about behavioral change amongst children towards Ganga and other rivers.

Namami Gange Programme

It is an Integrated Conservation Mission, approved as ‘Flagship Programme’ by the Union Government in June 2014 with budget outlay of 20,000 Crore to accomplish the twin objectives of effective abatement of pollution, conservation and rejuvenation of National River Ganga.

Main pillars of the Namami Gange Programme are:-

• Sewerage Treatment Infrastructure
• River-Front Development
• River-Surface Cleaning
• Bio-Diversity
• Afforestation
• Public Awareness
• Industrial Effluent Monitoring
• Ganga Gram

Its implementation has been divided into

• Entry-Level Activities (for immediate visible impact),
• Medium-Term Activities (to be implemented within 5 years of time frame) and
• Long-Term Activities (to be implemented within 10 years).

4. NEW DELHI REMAINS THE WORLD CAPITAL IN AIR POLLUTION, SWISS SURVEY FINDS

THE CONTEXT: New Delhi has topped the list of most polluted capitals in 2021, a dubious first position it has now held for four successive years, according to the World Air Quality Report prepared by Swiss organization IQ Air.

HIGHLIGHTS OF THE REPORT:

• According to the report, “Central and South Asia had some of the world’s worst air quality and was home to 46 of the world’s 50 most polluted cities” in 2021.
• “India was home to 11 of the 15 most polluted cities in Central and South Asia in 2021.Delhi saw a 14.6% increase in PM2.5 concentrations in 2021 with levels rising to 96.4 µg/m3 from 84 µg/m3 in 2020.
• Delhi is followed by the following capitals — Dhaka (Bangladesh), N’Djamena (Chad), Dushanbe (Tajikistan) and Muscat (Oman). The city is topping the list for the fourth consecutive year. Delhi topped a list of 92 capital cities in 2020, 85 such cities in 2019, and 62 such cities in 2018.
• Bhiwadi also topped the list of the ‘world’s most polluted cities’ in 2021 — 50 cities ranked in terms of PM 2.5 levels. This was followed by Ghaziabad and Hotan, China. Delhi was fourth on the list, while Noida was seventh with a PM 2.5 level of 91.4 µg/m3, and Gurgaon was eighteenth with 83.4 µg/m3. Faridabad, Baghpat, Bulandshahr, Meerut, and Sonipat are other NCR areas that were on the list.
• Sources of PM 2.5 “include internal combustion engines, power generation, industrial processes, agricultural processes, construction, and residential wood and coal burning. The most common natural sources for PM 2.5 are dust storms, sandstorms, and wildfires,” the report stated.
• In 2021, none of the cities in India met the prescribed World Health Organization air quality standards of 5 micrograms per cubic meter, the report stated.
• India also continues to feature prominently among the most polluted cities with 35 of the top 50 most polluted cities being in this country. India’s annual average PM 2.5 levels reached 58.1 μg/m3 in 2021, ending a three-year trend of improving air quality.”

WHO’S NEW AIR QUALITY GUIDELINES

Governments Measures taken:

• Notification of National Ambient Air Quality Standards and sector-specific emission and effluent standards for industries.
• Setting up of monitoring network for assessment of ambient air quality.
• Introduction of cleaner gaseous fuels like CNG, LPG etc and ethanol blending.
• Launching of National Air Quality Index (AQI);
• Leapfrogging from BS-IV to BS-VI standards for vehicles by 1st April 2020.
• Regulating the bursting of pollution-emitting crackers.
• Notification of graded response action plan for Delhi identifying source wise actions for various levels of air pollution, etc.
• National Clean Air Programme.

THE ECONOMIC DEVELOPMENT

5. GOVERNMENT INCREASES MINIMUM SUPPORT PRICE FOR JUTE

THE CONTEXT: The Cabinet Committee on Economic Affairs, chaired by Prime Minister approved a proposal to raise the minimum support price (MSP) for raw jute to ₹4,750 a quintal for the 2022-23 season, an increase of ₹250, or 5.5%, over the previous year.

THE EXPLANATION:

• According to the Government, the new MSP would ensure a return of 60.53% over the all-India weighted average cost of production.
• The hike is in line with the principle of fixing the MSP at a minimum of 1.5 times the all-India weighted average cost of production, as announced in the budget for 2018-19. This assures a minimum 50% profit margin.
• The Commission for Agricultural Costs and Prices had recommended the higher MSP.
• The Jute Corporation of India (JCI) will continue as the central government nodal agency to undertake the price support operation. In case of any losses in the operation, they would be fully reimbursed by the central government.

Value Addition:

About MSP:

• MSP is the rate at which the government purchases crops from farmers and is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers.
• The government of India sets the MSP twice a year for 23 crops (13 Kharif, 6 Rabi and 4 commercial crops).
• The Commission for Agricultural Costs and Prices (CACP)attached the Ministry of Agriculture office, which decides the minimum support price and recommends it to the government. It is an advisory body whose recommendations are not binding to the government.

FRP for Sugarcane:

• The central government and State Government determine them.
• The Central Government announces Fair and Remunerative Prices, which are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP) and are announced by the Cabinet Committee on Economic Affairs, which Prime Minister chairs.
• The State Advised Prices (SAP) are announced by key sugarcane producing states generally higher than FRP.

 Additional information about crops:

6. EXPLAINED: NATIONAL LAND MONETIZATION CORPORATION

THE CONTEXT: The Union Cabinet, chaired by Prime Minister has approved the setting up National Land Monetization Corporation (NLMC),it will be wholly owned Government of India company with an initial authorized share capital of Rs 5000 crore and paid-up share capital of Rs 150 crore.

THE EXPLANATION:

• NLMC will undertake monetization of surplus land and building assets of Central Public Sector Enterprises (CPSEs) and other Government agencies. The proposal is in pursuance of the Budget Announcement for 2021-22.

WHAT IS THE SIGNIFICANCE?

• At present, CPSEs hold considerable surplus, unused and under used non-core assets in the nature of land and buildings. For CPSEs undergoing strategic disinvestment or closure, monetization of these surplus land and non-core assets is important to unlock their value.
• NLMC will support and undertake monetization of these assets. This will also enable productive utilization of these under-utilized assets to trigger private sector investments, new economic activities, boost local economy and generate financial resources for economic and social infrastructure.
• NLMC is also expected to own, hold, manage and monetize surplus land and building assets of CPSEs under closure and the surplus non-core land assets of Government owned CPSEs under strategic disinvestment.
• Efficiency:NLMC will undertake surplus land asset monetization as an agency function. It is expected that NLMC will act as a repository of best practices in land monetization, assist and provide technical advice to Government in implementation of asset monetization programme.
• Technical Experts: NLMC will have necessary technical expertise to professionally manage and monetize land assets on behalf of CPSEs and other Government agencies. The Board of Directors of NLMC will comprise senior Central Government officers and eminent experts to enable professional operations and management of the company.  The Chairman, non-Government Directors of the NLMC will be appointed through a merit-based selection process.

NLMC will be a lean organization with minimal full time staff, hired directly from the market on contract basis.  Flexibility will be provided to the Board of NLMC to hire, pay and retain experienced professionals from the private sector.

• Nodal Agency: Department of Public Enterprise, Ministry of Finance, will set up the company and act as its administrative ministry.

What does monetisation mean?

• When the government monetises its assets, it essentially means that it is transferring the revenue rights of the asset (could be idle land, infrastructure, PSU) to a private player for a specified period of time.
• In such a transaction, the government gets in return an upfront payment from the private entity, regular share of the revenue generated from the asset, a promise of steady investment into the asset, and the title rights to the monetised asset.
• There are multiple ways to monetise government assets; in the case of land monetisation of certain spaces like offices, it can be done through a Real Estate Investment Trust (REIT) — a company that owns and operates a land asset and sometimes, funds income-producing real estate. Assets of the government can also be monetised through the Public Private Partnerships (PPP) model.

What is the Need?

• There are different reasons why the government monetises its assets. One of them is to create new sources of revenue.
• Second is to unlock the potential of unused or underused assets by involving institutional investors or private players.
• Thirdly, it is also done to generate resources or capital for future asset creation.

THE PRELIMS PRACTICE QUESTIONS

QUESTIONS OF THE DAY 23^rd MARCH 2022

Q1. Consider the following statements about National Ayush Mission (NAM):

1. It was launched during 11 th Five Year Plan
2. It is centrally sponsored scheme.
3. Government of India has recently announced its continuation of its implementation up to2026.

Which of the above given statements is/are correct?

a) 1 and 2 only

b) 2 and 3 only

c) 3 only

d) 1, 2 and 3

ANSWER FOR 22^ND MARCH 2022

Answer: A

Explanation:

• Stagflation is a situation in an economy when inflation and unemployment both are at higher levels.
• Conventional thinking that a trade-off existed between inflation and unemployment (i.e., Phillips Curve) was falsified when a situation first arose in the 1970s in the US economy (average unemployment rate above 6 per cent and the average rate of inflation above 7 per cent) and in many Euro-American economies. This took place as a result of oil price increases of 1973 and 1979 and anticipation of higher inflation.

When the economy is passing through the cycle of stagnation and the government shuffle with the economic policy, a sudden and temporary price rise is seen in some of the goods—such inflation is also known as stagflation. Stagflation is basically a combination of high inflation and low growth.

1. Indic climate ethics can address energy poverty READ MORE
2. Dynamic Response READ MORE

1. Rise in human-wildlife conflict in Kerala due to depletion of forest habitat, changing crop patterns READ MORE  
2. World Water Day: Water management, dead rivers seminal issues in India’s groundwater debate READ MORE
3. Record Heat Waves Sweeping Both Poles of Earth, Climate Scientists Warn of Danger READ MORE
4. World Water Day: Unsustainability of the System Cannot Beget Sustainable Solutions READ MORE

1. Hijab Ban Verdict Ignores Constitutional Values, Favours ‘Right of Society’ Over the Individual READ MORE
2. TB and mental health concerns have to be addressed together – urgently READ MORE

1. Needed, an Indian Legislative Service: A common service can help strengthen the many legislative bodies in India, from the panchayat level to Parliament READ MORE
2. The weaknesses of corporate governance systems in India READ MORE
3. Digital India dream and arbitrary internet shutdowns can’t go together. Just see the loss READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. SOIL HEALTH CARD SCHEME READ MORE
2. KISAN CREDIT CARD SCHEME READ MORE
3. 59,350 farmers get subsidy for cultivation of medicinal plants READ MORE
4. Mandaviya to inaugurate Step-Up to End TB – World TB Day Summit on March 24 READ MORE
5. Every country exceeds new PM2.5 annual limit set by WHO: Report READ MORE
6. New Delhi remains the world capital in air pollution, Swiss survey finds READ MORE
7. Double Membership of Houses READ MORE

Main Exam   

GS Paper- 1

1. Hijab Ban Verdict Ignores Constitutional Values, Favours ‘Right of Society’ Over the Individual READ MORE
2. Why Bhagat Singh still inspires many Indians READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Needed, an Indian Legislative Service: A common service can help strengthen the many legislative bodies in India, from the panchayat level to Parliament READ MORE
2. The weaknesses of corporate governance systems in India READ MORE
3. Digital India dream and arbitrary internet shutdowns can’t go together. Just see the loss READ MORE

SOCIAL ISSUES

1. TB and mental health concerns have to be addressed together – urgently READ MORE

INTERNATIONAL ISSUES

1. A blow to equitable access to essential medicines: The ‘compromise outcome’ at the WTO could see India and South Africa losing their lead theme in the COVID-19 fight READ MORE
2. ICJ has ordered an end to invasion of Ukraine. This matters READ MORE
3. India, US Have Different Priorities READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. A digital-first ecosystem: The Govt’s initiative, India Stack, has revolutionised fintech sector READ MORE
2. Handle with care: Address risks before introducing CBDC READ MORE
3. E-Commerce Rules Need to Stay True to Scores of Small Retailers and Shopkeepers READ MORE

ENVIRONMENT AND ECOLOGY  

1. Rise in human-wildlife conflict in Kerala due to depletion of forest habitat, changing crop patterns READ MORE  
2. World Water Day: Water management, dead rivers seminal issues in India’s groundwater debate READ MORE
3. Record Heat Waves Sweeping Both Poles of Earth, Climate Scientists Warn of Danger READ MORE
4. World Water Day: Unsustainability of the System Cannot Beget Sustainable Solutions READ MORE

SCIENCE

1. Understanding hypersonic weapons READ MORE

DISASTER MANAGEMENT

1. How climate change is making India’s big dams dangerous READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

1. Indic climate ethics can address energy poverty READ MORE
2. Dynamic Response READ MORE

Questions for the MAIN exam

1. Discuss the issues involved in the appointment of the Secretary-General to the Houses of the Parliament.
2. ‘Frequent shutdowns adversely impact both Indian economy and society’. In the light of the statement, discuss how government can avoid frequent internet shutdowns and maintain law and order?
3. ‘Effective governance is intertwined with the full realisation of people’s fundamental rights’. Analyse the statement with the appropriate examples.

QUOTATIONS AND CAPTIONS

• Power in defence of freedom is greater than power on behalf of tyranny and oppression.
• When the Indian judiciary bases its verdicts on theological grounds, it risks diluting the Constitution’s written word, which deems fundamental rights as unconditional.
• Protecting and conserving water sources must be a major task to follow. It is important that the least city moves out from its boundaries and rejuvenates its own resources and groundwater for a secured life.
• While the world is concerned about climate change and almost irreversible global warming, the polar region is specifically important owing to their sensitive climatic conditions.
• Secularism is increasingly becoming anathema in India. A few people have taken it upon themselves to deride all religions, apart from their own, on the slightest pretext.
• India could end up without friends in the free world exactly when it needs them most if it does not stand on the right side of history today and now.
• India has to brace for the worst because it is now far more globalised in trade, investment and finance.
• India could be vulnerable in both energy and food, given its political economy compulsions and commitment to supply free food to large populations post-Covid.
• The right to internet access should be treated as a fundamental right. Frequent shutdowns adversely impact both Indian economy and society.
• Effective governance is intertwined with the full realisation of people’s fundamental rights.
• A common legal service can help strengthen the many legislative bodies in India, from the panchayat level to Parliament.

50-WORD TALK

• A common entrance test for central universities seems like the obvious solution to the outrage of 100% cut-offs at colleges. However, it raises questions about equal opportunities to students from across states and the role of board exams. Government should ensure this doesn’t become a repeat of the NEET mess.
• President Biden has complained India alone, among Quad countries, is “somewhat shaky” on sanctioning Russia. He’s right, but India has reasons. High oil prices and economic disruption hurt India disproportionately. But Delhi should be careful not to isolate partners needed to push back against China. It’s not an easy balance.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and also exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

[WpProQuiz 184]

THE CONTEXT: External trade recovered strongly in 2021-22 after the pandemic-induced slump of the previous year, with strong capital flows into India, leading to a rapid accumulation of foreign exchange reserves. The resilience of India’s external sector during the current year augurs well for growth revival in the economy. However, the downside risks of global liquidity tightening and continued volatility of global commodity prices, high freight costs, coupled with the fresh resurgence of COVID-19 with new variants may pose a challenge for India during 2022-23.

EXTERNAL TRADE PERFORMANCE

• The survey states that owing to the recovery of global demand coupled with a revival in domestic activity, India’s merchandise exports, and imports rebounded strongly and surpassed pre-COVID levels during the current financial year.
• The revival in exports was also helped by timely initiatives taken by the Government. The USA followed by the UAE and China remained the top export destinations in April-November 2021, while China, the UAE, and the USA were the largest import sources for India.

• Despite weak tourism revenues, there was a significant pickup in net services receipts during April-December 2021 on account of robust software and business earnings, with both receipts and payments crossing the pre-pandemic levels.

• The Economic Survey notes that the first half of the calendar 2021 witnessed an acceleration in the global economic activity that lifted the merchandise trade above its pre-pandemic peaks. It says that India’s merchandise exports have followed the global trend and during April – December 2021 the merchandise exports grew by 49.7%, compared to the corresponding period of last year and 26.5% over 2019-20 (April-December).
• The Survey mentions that India has already attained more than 75% of its ambitious export target of US$ 400 billion set for 2021-22 and is well on the track to achieve the target. It says that sharp recovery in key markets, increased consumer spending, pent-up savings, and disposable income due to the announcement of fiscal stimulus by major economies, and an aggressive export push by the Government have bolstered exports in 2021-22.
• The rise in exports has been broad-based. India’s agriculture exports continue to do well, with the export of agriculture and allied products growing by 23.2% during April- November 2021 over the corresponding period of last year. The Survey recommends that a push in the direction of Free Trade Agreements would help provide the institutional arrangements for India’s exports diversification.
• On the issue of merchandise imports, the Economic Survey states that India witnessed a revival in domestic demand resulting in strong import growth.
• Merchandise imports grew at the rate of 68.9% in April-December 2021 over the corresponding period of last year and 21.9% over April-December 2019, crossing the pre-pandemic level.
• The Survey indicates that there has been increased diversification of India’s import sources as reflected in the reduction of China’s share to 15.5% from 17.7% in the April–November period. The Survey indicates that the merchandise trade deficit has increased to US$ 142.4 billion in April-December 2021.

TRADE-IN SERVICES

• India has maintained its impressive performance in world services trade in the post-COVID-19 period, with services exports growing by 18.4% to US$ 177.7 billion during April-December 2021 for the corresponding period of last year. The Survey says that the strong growth witnessed in services exports may also be attributed to key reforms undertaken by the Government. Services imports rose by 21.5% to US$ 103.3 billion in April-December 2021.

CURRENT ACCOUNT BALANCE:

• The Economic Survey says that India’s current account balance turned into a deficit of 0.2 percent of GDP in the first half of 2021-22, largely led by a deficit in the trading account. Net capital flows were higher at US$ 65.6 billion in H1: 2021-22, on account of continued inflow of foreign investment, revival in net external commercial borrowings (ECBs), higher banking capital, and additional special drawing rights (SDR) allocation. India’s external debt rose to US$ 593.1 billion at the end of September 2021, from US$ 556.8 billion a year earlier, reflecting additional SDR allocation by IMF, coupled with higher commercial borrowings.

CAPITAL ACCOUNT

• The Survey states that the net foreign investment inflows moderated to US$ 25.4 billion in the first half of the current financial year, compared to the corresponding year of FY 2021. As per data available till November 2021, the net FDI and gross FDI inflows have moderated largely due to lower equity investment. The Survey states that Foreign Portfolio investment remains volatile due to global uncertainties.

BOP BALANCE AND FOREIGN EXCHANGE RESERVES

• The Economic Survey mentions that the robust capital flows were sufficient to finance the modest current account deficit, resulting in an overall balance of payments (BoP) surplus of US$ 63.1 billion in H1 of 2021-22, which led to an augmented foreign exchange reserves crossing the milestone of US$ 600 billion and touched US$ 633.6 billion as of December 31, 2021. As of the end of November 2021, India was the fourth-largest forex reserves holder in the world after China, Japan, and Switzerland.

On the issue of movement in the exchange rate, the Economic Survey states that the rupee exhibited movements in both directions against the US$ during April-December 2021, yet it depreciated by 3.4% in December 2021 over March 2021.  However the depreciation of the rupee was modest as compared to its emerging market peers and it also appreciated against Euro, Japanese Yen, and Pounds Sterling.

EXTERNAL DEBT

• India’s external debt stood at US$ 593.1 billion, as of end-September 2021 which was 3.9% more than end-June 2021 levels. The Survey states that India’s external debt which crossed the pre-crisis level as at end-March 2021, consolidated further as at end-September 2021, aided by a revival in NRI deposits and one-off additional SDR allocation by the IMF. The share of short-term debt in total external debt fell marginally to 17% at the end-September 2021 from 17.7% at end-March 2021. The Survey says that from a medium-term perspective, India’s external debt continues to be below what is estimated to be optimal for an emerging market economy.

INDIA’S RESILIENCE

• The Economic Survey mentions that a sizeable accretion in reserves led to an improvement in external vulnerability indicators such as foreign reserves to total external debt, short-term debt to foreign exchange reserves, etc. India’s external sector is resilient to face any unwinding of the global liquidity arising out of the likelihood of faster normalization of monetary policy by systematically important central banks, including the Fed, in response to elevated inflationary pressures.

JUST ADD TO YOUR KNOWLEDGE

1. Top 10 Agricultural Export Products

2. Top Investing Countries FDI Equity Inflows

HIGHLIGHTS

• India’s merchandise exports and imports rebounded strongly and surpassed pre-COVID levels during the current financial year.
• There was significant pickup in net services with both receipts and payments crossing the pre-pandemic levels, despite weak tourism revenues.
• Net capital flows were higher at US$ 65.6 billion in the first half of 2021-22, on account of continued inflow of foreign investment, revival in net external commercial borrowings, higher banking capital and additional special drawing rights (SDR) allocation.
• India’s external debt rose to US $ 593.1 billion at end-September 2021, from US $ 556.8 billion a year earlier, reflecting additional SDR allocation by IMF, coupled with higher commercial borrowings.
• Foreign Exchange Reserves crossed US$ 600 billion in the first half of 2021-22 and touched US $ 633.6 billion as of December 31, 2021.