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.

THE INTERNATIONAL RELATIONS

1.‘RUSSIA USED PHOSPHORUS SHELLS IN DONBAS ATTACKS’

THE CONTEXT: Ukrainian officials accused Russia of using phosphorus chemical bombs in the eastern Donbas region, while a separate air strike on a monastery sheltering civilians wounded 30.

THE EXPLANATION:

International law prohibits the use of white phosphorus shells in heavily populated civilian areas but allows them in open spaces to be used as cover for troops.

What is White Phosphorus?

• White phosphorous is a colour less, white or yellow, waxy solid.
• It does not occur naturally.
• It is manufactured using phosphate rocks. It smells like garlic.
• It is a highly combustible substance that reacts with oxygen in the air.
• It can catch fire at temperatures as low as 10 to 15 degrees above room temperature.

Applications:

• Militaries across the globe use white phosphorous (WP) in mortar shells, grenades and artillery shells.
• When burnt, WP produces a large amount of smoke that can be used to provide a screen to friendly troops’ movement.
• The smoke can also be used to mark the targets so that aircraft can drop bombs at the location.
• It can also be used by troops to give the signal for attack or evacuation.
• Other applications may include as a component in fertilisers, food additives and cleaning compounds.

Chemical Weapons Convention (CWC):

• CWC is a multilateral treaty that bans chemical weapons and requires their destruction within a specified period of time.
• CWC negotiations started in 1980 in the UN Conference on Disarmament.
• The convention entered into force on April 29, 1997.
• CWC is implemented by: Organization for the Prohibition of Chemical Weapons (OPCW),
• The OPCW receives states-parties’ declarations detailing chemical weapons-related activities and relevant industrial activities.
• CWC is open to all nations and currently has 193 states-parties.
• India is a signatory and party to the CWC.
• Three states have neither signed nor ratified the convention: Egypt, North Korea and South Sudan.

Prohibitions:

The CWC prohibits:

• Developing, producing, stockpiling, or retaining chemical weapons.
• The direct or indirect transfer of chemical weapons.
• Chemical weapons use or military preparation for use.
• Assisting, encouraging, or inducing other states to engage in CWC-prohibited activity.
• The use of riot control agents as a method of warfare.

2. JAPAN TO INVEST $42 BILLION IN INDIA OVER FIVE YEARS

THE CONTEXT: India and Japan set an investment target of “five trillion yen” ($42 billion) in the next five years, the leaders announced after a meeting in New Delhi for the 14th annual summit, where several agreements were signed.

THE EXPLANATION:

• The two sides discussed various regional issues where Indian Prime Minister briefed Japan PM Fumio Kishida on the situation at the Line of Actual Control (LAC) with China, and the PLA’s attempts at “multiple transgression” on the LAC.
• The two sides also exchanged six agreements on cybersecurity, economic partnerships, waste–water management, urban development, a clean energy partnership and an agreement on promoting bamboo–based products from the northeast region.

List of Agreements/MoUs signed during the 14th India-Japan Annual Summit

1. Memorandum of Cooperation (MoC) in the field of Cybersecurity: For information sharing, capacity building programs and cooperation in the area of cybersecurity.
2. 7 JICA Loans (INR 20400 crores) for projects in connectivity, water supply and sewerage, horticulture, healthcare, and biodiversity conservation in various States.

• Dedicated Freight Corridor Project (Phase 2) (III)
• North East Road Network Connectivity Improvement Project (NH208 (Khowai – Sabroom)) Phase 6

• Bengaluru Water Supply and Sewerage Project (Phase 3) (II)
• Uttarakhand Integrated Horticulture Development Project
• Strengthening Health Systems and Excellence of Medical Education in Assam
• Tamil Nadu Biodiversity Conservation and Greening Project Phase –II
• Chennai Metro (Phase 2) (II)

3. Amendment of Article 7 (Exchange of Information) of Implementing Agreement (IA) signed between India and Japan as per Article 13 of India-Japan Comprehensive Economic Partnership Agreement (CEPA). Amend Annex 2 (Product Specific rules) of CEPA to allow the fish surimi product of India with the non-originating additive to be considered as an originating good of India.

4. Memorandum of Cooperation (MoC) on Decentralized Domestic Wastewater Management: To introduce Johkasoutechnology in India by Japanese companies for decentralized waste water treatment. It is used in areas where sewage infrastructure has not yet been developed.
5. India-Japan Industrial Competitiveness Partnership Roadmap: To implement the Memorandum of Cooperation (MoC) on India-Japan Industrial Competitiveness Partnershipthat was signed in November 2021. It seeks to seeks to address issues that Japanese companies currently face in India through a fast-track mechanism. Working Groups on logistics and textiles have been established and in other sectors as needed. It includes cooperation in Micro, Small and Medium Enterprises (MSME) sector and supply chain matters.
   6. Memorandum of Cooperation on Sustainable Urban Development: Builds on the 2007 Memorandum of Understanding (MoU) on Urban Development to include smart cities development, affordable housing, urban flood management, wastewater management, Intelligent Transport Management System etc.

For other Announcement during Summit

• Clean Energy Partnership (CEP): For cooperation in areas such as electric vehicles, storage systems including batteries, electric vehicle charging infrastructure, development of solar energy; hydrogen; ammonia; etc. The objective is to encourage manufacturing in India, creation of resilient and trustworthy supply chains in these areas as well as fostering collaboration in R&D. It will be implemented through the existing mechanism of Energy Dialogue.
• 5 trillion yen investment target (TBC): This follows from the Investment Promotion Partnership of 2014 when both sides had agreed for JPY 3.5 trillion investment during 2014-19. That target has been met, taking into account both ODA and Investments from Japan. The new ambitious target would provide a scope for greater involvement of Japanese companies in our economy.
• Sustainable Development Initiative for the Northeastern Region of India: Includes both ongoing projects and possible future cooperation in various States in the NER in areas such as connectivity, healthcare, new and renewable energy, as well as ‘Initiative for Strengthening Bamboo Value Chain in the North East’.

THE ENVIRONMENT AND ECOLOGY

3. THE VULTURE HOLOCAUST IN ASSAM

THE CONTEXT: According to forest officials, as many as 100 endangered vultures and an eagle have died in Assam’s Chaygaon region. The cause of death is being conjectured to be insecticide poisoning.

 THE EXPLANATION:

• As per reports, the area where they were found is located close to a village where at least 10 endangered vultures died after feeding on a pesticide-laced cattle carcass in February 2020. The vultures belonged to the Himalayan Griffon species while the eagle was a Stepee Eagle. Both birds are listed in Schedule 1 of the Wildlife Protection Act, 1972.
• There have been several instances of vultures dying after consuming carcass of poisoned animals in Assam in the past few years. In January and February 2021 , 56 vultures died in Tinsukia district in two separate incidents after consuming poisoned carcasses of cows.
• In April 2020, 19 vultures had died on a single day in Sivasagar district after consuming meat of a dead cow. In March 2019, 39 vultures had died in the same district after consuming poisoned meat.

VALUE ADDITION:

About Vultures:

• It is one of the 22 species of large carrion-eating birds that live predominantly in the tropics and subtropics.
• They act an important function as nature’s garbage collectors and help to keep the environment clean of waste.
• Vultures also play a valuable role in keeping wildlife diseases in check.

Why is the vulture population so significant?

• Vultures clear the carcasses of dead animals (nature’s cleanup crew) playing a crucial role in maintaining the health of the ecosystem
• Vultures have a highly acidic stomach that helps them kill disease-causing bacteria
• Reduces the health hazards associated with feral dogs that consume carcasses

What efforts have been taken for their conservation?

National Efforts

• India banned diclofenac for veterinary use in 2006.
• Action Plan for Vulture Conservation 2020-25  was released by MoEFCC.
• Vulture Conservation Breeding Programme (VCBP) was established by Central Zoo Authority and Bombay Natural History Society (BNHS)  for captive breeding.
• Vulture Safe Zones are declared when no toxic drugs are found in undercover pharmacies and cattle carcass surveys for two consecutive years.
• Vulture restaurant has been established at Phansad wildlife sanctuarynear Murud in Maharashtra.

International Efforts

• Saving Asia’s Vultures from Extinction (SAVE) – A consortium of like-minded, regional and international organizations for conservation of south Asia’s vultures.

THE GOVERNMENT SCHEMES/NEWS IN NEWS

4. NIPUN BHARAT SCHEME

THE CONTEXT: The Department of School Education and Literacy, Ministry of Education, Government of India has launched the National Mission on Foundational Literacy and Numeracy called National Initiative for Proficiency in Reading with Understanding and Numeracy (NIPUN Bharat) on 5^thJuly 2021 under the aegis of Centrally Sponsored Scheme of SamagraShiksha.

ABOUT THE SCHEME:

• The National Mission which has been launched under the aegis of the centrally sponsored scheme of Samagra Shiksha, will focus on providing access and retaining children in foundational years of schooling; teacher capacity building; development of high quality and diversified Student and Teacher Resources/Learning Materials; and tracking the progress of each child in achieving learning outcomes.
• The Department of School Educationand Literacy, Ministry of Education (MoE) will be the implementing agency at the national level and will be headed by a Mission Director.

Students covered

• The mission will focus on children of age group of 3 to 9 years including pre-school to Grade 3. The children who are in Class 4 and 5 and have not attained the foundational skills will be provided individual teacher guidance and support, peer support and age appropriate and supplementary graded learning materials to acquire the necessary competencies.
• The goals and objectives of the mission are required to be achieved by all Govt., Govt. Aided and Private Schools so that universal acquisition of FLN skills can be achieved by 2026-27.

THE PRELIMS PERSPECTIVE

5. INTERNATIONAL DAY OF FORESTS- MARCH 21

THE CONTEXT: International Day of Forests is observed every year on March 21 The day aims to raise awareness regarding the importance of all types of forests.

THE EXPLANATION:

• According to the UN, around 1.6 billion people depend directly on forests for food, shelter, energy, medicines and income. Forests are home to about 80 per cent of the world’s terrestrial biodiversity.
• World Forest Day theme 2022: The International Day of Forests 2022 theme is ‘Forests and Sustainable production and consumption.’
• The International Day of Forests was observed for the first time on March 21, 2013.

Why this day?

In 2012, the Food and Agriculture Organisation (FAO) and United Nations (UN) established the day to combat climate change. Every year on this day, leading government networks and private organisations come together to enlighten people about the importance of forests and the role they play in our lives.

 THE DATA SHEET

THE PRELIMS PRACTICE QUESTIONS

QUESTIONS OF THE DAY 22^ND MARCH 2022

Q. Which of the following best explains stagflation?

a) A situation in an economy when inflation and unemployment both are at higher levels.

b) A situation in an economy when inflation and employment both are at higher levels.

c) A situation in an economy when there is high inflation and low unemployment.

d) A situation in an economy when there is low inflation and high unemployment.

ANSWER FOR 21^ST MARCH 2022

Answer: C

Explanation:

• Asiatic lion’s habitat included tropical dry forests, grasslands, thickets and deserts. Today’s,its population is limited in Gir National Park in Gujarat.

1. Dharma is not rigid, it’s everchanging by nature READ MORE
2. Man’s Search For Meaning READ MORE
3. Truth about tolerance~I READ MORE

1. Groundwater depletion must be arrested READ MORE
2. Climate and Us | India needs an emergency plan for heat extremes READ MORE
3. Climate variability may explain annual spike in ozone-destroying gas: Study READ MORE

1. Shrinking the Muslim woman’s choice READ MORE
2. Driving change and inclusive growth: The aim is to adopt a multi-disciplinary approach to higher education READ MORE

1. Need for sensitivity: Instead of Pocso Act provisions, employ a sensible approach in minor girls’ cases READ MORE
2. Is Disclosure of Identity of Vctim under POCSO Act a Cognizable Offence? A three-judge SC Bench May Decide READ MORE
3. Examining the Legality of Extraneous and Irrelevant Conditions for Bail READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. Nipun Bharat Scheme READ MORE
2. IPCC Report on Climate Change READ MORE
3. Indian, U.S. officials discuss 2+2 ministerial, Ukraine READ MORE
4. India says oil import from Russia less than 1% of total, sees rise from US READ MORE
5. Rawat, Ghulam Nabi Azad, N. Chandrasekharan conferred Padma awards READ MORE
6. International Day of Forests: Significance of March 21 and theme for 2022 READ MORE
7. Tamil Nadu: GI tag for handmade Narasingapettai nagaswaram READ MORE

Main Exam    

GS Paper- 1

1. Shrinking the Muslim woman’s choice READ MORE

GS Paper- 1

POLITY AND GOVERNANCE

1. Need for sensitivity: Instead of Pocso Act provisions, employ a sensible approach in minor girls’ cases READ MORE
2. Is Disclosure of Identity of Vctim under POCSO Act a Cognizable Offence? A three-judge SC Bench May Decide READ MORE
3. Examining the Legality of Extraneous and Irrelevant Conditions for Bail READ MORE

SOCIAL ISSUES

1. Driving change and inclusive growth: The aim is to adopt a multi-disciplinary approach to higher education READ MORE

INTERNATIONAL ISSUES

1. A Ukraine peace plan that needs a U Thant: The elements of viable peace exist, and all that is required is for someone to step forward and pursue it with urgency READ MORE   
2. Realising the potential of ‘maitri’ and ‘mateship’: Deepening investments in Australia-India strategic, economic, and community ties highlight their stronger relationship READ MORE
3. On South Asia, US must reorient itself READ MORE
4. UNSC is not fulfilling its primary mandate READ MORE
5. The future of India-Japan ties READ MORE

GS Paper- 1

ECONOMIC DEVELOPMENT

1. The pandemic’s income inequality surprise READ MORE
2. PLI plus: India’s supply side policies for EV and battery manufacturing are too inward looking READ MORE
3. RBI, banks up against new challenges READ MORE
4. Edible oils, incredible prices: Incentivise Punjab farmers to reduce imports READ MORE

ENVIRONMENT AND ECOLOGY  

1. Groundwater depletion must be arrested READ MORE
2. Climate and Us | India needs an emergency plan for heat extremes READ MORE
3. Climate variability may explain annual spike in ozone-destroying gas: Study READ MORE

SCIENCE

1. Tech companies have a road out of China. It lies with the EV industry READ MORE

GS Paper- 1

ETHICS EXAMPLES AND CASE STUDY

1. Dharma is not rigid, it’s everchanging by nature READ MORE
2. Man’s Search For Meaning READ MORE
3. Truth about tolerance~I READ MORE

Questions for the MAIN exam

1. Discuss the possible geo-political solutions to the Ukraine-Russia military conflict.
2. ‘Self-sufficiency in edible oil production is a distant dream, but there is ample scope for drastically lowering the dependence on imports and minimising the damage caused by global shocks’. Analyse the statement.

QUOTATIONS AND CAPTIONS

• Establishing lasting peace is the work of education; all politics can do is keep us out of war.
• Australia knows that in India we have a natural partner who will help build a region where every nation can prosper.
• Washington could seize the current opportunity, amid Ukraine crisis, to elevate US’s salience, limit the traditional economic and military weight of China and Russia in the Subcontinent.
• There is no clear pattern between growth or poverty on the one hand, and inequality on the other. The policies should focus on growth and poverty. While inequality is problematic, it is a more elusive target.
• The hijab ban in the classroom is not only a ban on identity but also on female expression, choice, development and the ability to break away from the shackles of chauvinists, whether judges or religious fundamentalists.
• Institutional reform in the form of creating water user groups, besides pricing water realistically, should be seriously pursued to address the issue of groundwater depletion.
• The Security Council’s objective was to stop a conflict by addressing its cause. But, for years now, it has taken on the subsidiary pursuit of being a humanitarian council. India needs to consider if this is the change it wants
• Self-sufficiency in edible oil production is a distant dream, but there is ample scope for drastically lowering the dependence on imports and minimising the damage caused by global shocks.
• The sovereignty, independence and territorial integrity of any country should be respected and safeguarded because this is a basic norm of international relations. It is consistent with the purposes and principles of the UN Charter and is the consistent position of the Chinese Government. Ukraine is no exception.
• As far as education at the tertiary level is concerned, NEP’s approach appears to set out a very clear way forward by getting the mentors fully involved in new techniques and developing challenging strategies to meet the need of all categories of students.
• Bail conditions in the nature of planting trees, community service, and distribution of free food, while certainly contributing towards social good, are entirely disconnected with the purpose of administration of ‘justice’ or effectiveness of the trial.

50-WORD TALK

• The value of praise depends on who gives it. So Pakistani Prime Minister Imran Khan’s shabaash for India’s foreign policy is a cause for anxiety, not satisfaction. Khan simultaneously undermined his country’s relationship with the West, China and Saudi Arabia. Pats on the back like this, India can do without.
• Supreme Court panel’s year-old report on now-repealed farm laws, made public by a member, is a year too late. Modi government’s fear of political damage was misplaced and exaggerated. A silent majority supported them. It’s unfortunate that SC sat over the report. Timely judicial response may have saved these laws.

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 183]

THE CONTEXT: Over the last two years, fiscal policy has remained a significant tool for addressing the economic fallout of the pandemic. The government of India has adopted a calibrated fiscal policy approach to the pandemic, which had the flexibility of adapting to an evolving situation to support the vulnerable sections of society/firms and enable a resilient recovery. India’s unique agile policy response differed from the waterfall strategy of introducing front-loaded stimulus packages, adopted by most other countries in 2020. Such an adaptive approach has now been widely accepted in policy circles (IMF Fiscal Monitor October 2021). This chapter reviews the fiscal developments in India in the aftermath of the pandemic outbreak. It begins with fiscal policy strategy and performance of the fiscal parameters in the current year 2021-22, followed by a detailed analysis of the medium to long-term trends in Central, State, and General Government finances. The chapter concludes with a discussion on policy measures to enhance the efficiency of Government spending.

FISCAL POLICY STRATEGY IN THE AFTERMATH OF THE PANDEMIC OUTBREAK

• The agile fiscal policy response adopted by the Government of India encompassed a change in the mix of the stimulus measures amidst an uncertain evolution of the pandemic situation.
• In the initial phase of the pandemic, the fiscal policy focused on building safety-nets for the poor and vulnerable sections of society to hedge against the worst-case outcomes.
• Stimulus measures such as direct benefit transfers to the vulnerable sections, emergency credit to the small businesses, and the world’s largest food subsidy program targeting 80.96 crore beneficiaries enabled the creation of safety-nets, by ensuring that the essentials are taken care of.
• This was followed by a series of stimulus packages spread throughout the year 2020-21, driven by a Bayesian updating of information as the situation evolved.
• With the restoration of economic activities, the fiscal response focused on stimulating demand in the economy.
• During this phase of economic recovery, the stimulus mix included investment boosting measures like Production Linked Incentives (PLI), steps to encourage investment in the infrastructure sector, and enhancing capital expenditure by the Central and State Governments.
• This enhanced focus on capital expenditure in the second half of the year 2020-21 is reflective of the responsive fiscal policy which the Government of India has adopted against COVID-19.
• Due to movement restrictions in containment zones, and unwillingness or inability of contractors and workers to carry out works, the quarterly capital expenditure was restrained during the first two quarters of 2020-21.
• With the easing of movement and health-related restrictions in Q3 of 2020-21, capital spending was pushed for encouraging expenditure in sectors with the most positive effect on the economy.
• The focus on capital spending has been sustained during the current fiscal, as the capital expenditure shows an increasing trend during the first three quarters of 2021-22.
• Building on the same approach, the Union Budget 2021-22 had enhanced the budget outlays for the more productive capital expenditure.
• The Government budgeted for a 34.5 percent growth in capital expenditure over 2020-21 with emphasis on railways, roads, urban transport, power, telecom, textiles, and affordable housing amid continued focus on the National Infrastructure Pipeline.
• The National Infrastructure Pipeline covering 6835 projects was expanded to 7400 projects in Budget 2021-22.
• To unlock the domestic manufacturing potential across sectors, such as renewable energy, heavy industry, agriculture, automotive, and textiles, Budget 2021-22 launched PLI schemes for 13 sectors, with an outlay of `1.97 lakh crore, for 5 years starting from 2021-22.
• All these initiatives are expected to collectively generate employment and boost output in the medium to long term through multiplier effects.
• The stimulus measures announced during the year 2021-22 have continued the emphasis on liquidity enhancing and investment boosting measures such as the PLI Scheme, credit guarantee schemes, and export boosting initiatives to support the reviving economy, apart from providing free food grains to the poor.

PERFORMANCE OF FISCAL INDICATORS DURING 2021-22

• This section analyses the performance of financial indicators and their components for the period April to November 2021.
• The data on Government accounts for April to November 2021, released by the Controller General of Accounts, show that the fiscal deficit of the Central Government at the end of November 2021 stood at 46.2 percent compared to 135.1 percent during the same period in 2020-21 and 114.8 percent during the same period in 2019-20.
• During this period both fiscal deficit and primary deficit stood at levels much below the corresponding levels in the previous two years.
• The primary deficit during the period April to November 2021 turned up at nearly half of the level it had reached during April to November 2019.

REVENUE COLLECTION

• Revenue receipts have grown at a much higher pace during the current financial year (April to November 2021) compared to the corresponding periods during the last two years. This performance is attributable to considerable growth in both tax and non-tax revenue. Net tax revenue to the Centre, which was envisaged to grow at 8.5 percent in 2021-22 BE relative to 2020-21 PA, grew at 64.9 percent from April to November 2021 over April to November 2020 and at 51.2 percent over April to November 2019.

EXPENDITURE

• The expenditure policy of the government during 2021-22 has been characterized by restructuring and prioritization of spending in sectors that have a long-term impact on output. The total expenditure of the Government increased by 8.8 percent from April to November 2021 and stood at 59.6 percent of the Budget Estimate. While the revenue expenditure has grown by 8.2 percent during the first eight months of 2021-22 over the same period in 2020-21, the non-interest revenue expenditure grew by 4.6 percent over April to November 2020.

LONG-TERM TRENDS IN GOVERNMENT FINANCES: CENTRE, STATES, AND GENERAL GOVERNMENT

• During the year 2020-21, the shortfall in revenue collection owing to the interruption in economic activity and the additional expenditure requirements to mitigate the fallout of the pandemic on vulnerable people, small businesses, and the economy in general, created immense pressure on the available limited fiscal resources.
• As a result, the budgeted fiscal deficit for 2020-21 was revised from 3.5 percent in BE to 9.5 percent in RE. The fiscal deficit for 2020-21 Provisional Actuals stood at 9.2 percent of GDP i.e. lower than RE.
• The MediumTerm Fiscal Policy (MTFP) Statement presented with Budget 2021-22 envisaged a fiscal deficit target of 6.8 percent of GDP for 2021-22.
• This reduction in deficit during the current year was budgeted on account of reduction in expenditure from 17.7 percent of GDP in 2020-21 RE to 15.6 percent in 2021-22 BE; and a budgeted marginal increase in gross tax revenues to the tune of 0.1 percent of GDP.
• The data on Government accounts for April to November 2021, released by the Controller General of Accounts, shows that the Government is well on track for achieving the budget estimate for fiscal deficit in 2021-22.

TAX REVENUE

• The Provisional Actual figures released by the Controller General of Accounts for 2020-21 show that the gross tax revenue grew by 0.7 percent (YoY) during 2020-21.

DIRECT TAXES

• Within direct taxes, personal income tax has grown at 47.2 percent over April-November 2020 and at 29.2 percent over April-November 2019. The corporate income tax registered a growth of 90.4 percent over April-November 2020 and 22.5 percent over April-November 2019.

INDIRECT TAXES

• The indirect tax receipts have registered a YoY growth of 38.6 percent in the first eight months of this fiscal year. The revenue collection from customs from April to November 2021 has registered a growth of almost 100 percent over April to November 2020 and over 65 percent compared to April to November 2019.
• The revenue from excise duties has registered a YoY growth of 23.2 percent during April- November 2021. The GST collections for the Centre were 61.4 percent of BE from April to November 2021.
• Gross GST collections, Centre and States took together, were `10.74 lakh crore during April to December 2021, which is an increase of 61.5 percent over April to December 2020 and 33.7 percent over April to December 2019.

NON-TAX REVENUE

• The non-tax revenue collections up to November 2021 registered a YoY increase of 79.5 percent. This increase was driven by dividends and profits, which stood at `1.28 lakh crore against BE of `1.04 lakh crore. The key component of dividends and profits during this period was ` 0.99 lakh crore surplus transfer from RBI to the Central Government.

EXPENDITURE

• The total expenditure of the Government increased by 8.8 percent from April to November 2021 and stood at 59.6 percent of the Budget Estimate. While the revenue expenditure has grown by 8.2 percent during the first eight months of 2021-22 over the same period in 2020-21, the non-interest revenue expenditure grew by 4.6 percent over April to November 2020.

TRANSFER TO STATES

• The Union Government has accepted the recommendations made by the Fifteenth Finance Commission (XV-FC) in its Report for the award period 2021-22 to 2025-26 relating to the grants-in-aid amounting to ` 2,33,233 crore to the States during 2021-22 for Post Devolution Revenue Deficit grant, grants to Local Bodies, Health sector grant and Disaster Management grants.

CENTRAL GOVERNMENT DEBT

• During the year, a major challenge in the aftermath of the COVID-19 pandemic was the management of debt, both for the Central and State Governments. In this milieu, conventional and unconventional measures were taken to maintain the orderly market conditions to ensure that the increased financial needs of the Governments are met smoothly while keeping in mind the major objectives of cost minimization, risk mitigation, and market development. Supported by these measures, the weighted average cost of the Government on dated securities during 2020-21 was at a 17-year low of 5.79 percent, despite a 141.2 percent jump in net market borrowings.
• The increase in total liability of central government is on account of higher borrowing resorted to due to COVID-19 pandemic as well as a sharp contraction in the GDP. The Debt-GDP is however expected to follow a downward trajectory in the upcoming years.

STATE FINANCES:

• The Gross Fiscal Deficit of States is estimated to cross the Fiscal Responsibility Legislation (FRL) threshold of 3 percent of GDP during 2020-21 RE and 2021-22 BE. The Revenue Deficit of the States also increased from 0.1 percent of GDP in 2018-19 to 2 percent of GDP in 2020-21.
• This relaxation in borrowing limits was allowed on account of the additional expenditure needs and constrained revenues of the States due to COVID-19. The net borrowing ceilings of the States were enhanced to 5 percent of GSDP of the States for the year 2020-21 and 4 percent of GSDP of the States for 2021-22.
• Both Gross Fiscal Deficit and Revenue Deficit for the States are budgeted to decline in 2021-22 from the high levels they reached in 2020-21.

POLICY MEASURES TO ENHANCE THE EFFICIENCY OF GOVERNMENT SPENDING

GOVERNMENT E-MARKETPLACE (GEM):

• The Government in 2016 had set up a dedicated e-market known as Government e-Marketplace (GeM) for the purchase of certain standard day-to-day use goods. This is a simple, transparent, and completely digital process for procurement. The General Financial Rules 2017 mandates all Ministries and Departments to procure Goods and Services available on GeM from GeM.

NEW GUIDELINES FOR REFORMS IN PUBLIC PROCUREMENT AND PROJECT MANAGEMENT:

• Apart from the purchases of common goods from GeM, the government also procures non-routine Goods, Services, and Works like construction of highways, buildings, hiring of consultants, etc.
• Keeping in mind the limitations of the earlier procurement strategy, the Government issued new guidelines for procurement and project management in October 2021, which have expanded the ambit of selecting bidders for executing government projects and procuring goods and services. The key changes in the procurement process are as follows:
• Quality and Cost Based Selection for Works and Non-consultancy Services.
• Fixing of Evaluation/ Qualification and Scoring Criteria under QCBS for Works and Non-consultancy Services.
• Stringent deadlines for making payments.
• Single bid rejection.
• Fixed Budget-based Selection for Consultancy Services.

HIGHLIGHTS

• The revenue receipts from the Central Government (April to November 2021) have gone up by 67.2 percent (YoY) as against expected growth of 9.6 percent in the 2021-22 Budget Estimates (over 2020-21 Provisional Actuals).
• Gross Tax Revenue registers a growth of over 50 percent during April to November 2021 in YoY terms.  This performance is strong compared to pre-pandemic levels of 2019-2020 also.
• During April-November 2021, Capex has grown by 13.5 percent (YoY) with a focus on infrastructure-intensive sectors.
• Sustained revenue collection and a targeted expenditure policy have contained the fiscal deficit for April to November 2021 at 46.2 percent of BE.
• With the enhanced borrowings on account of COVID-19, the Central Government debt has gone up from 49.1 percent of GDP in 2019-20 to 59.3 percent of GDP in 2020-21 but is expected to follow a declining trajectory with the recovery of the economy.

THE ENVIRONMENT AND ECOLOGY

1. PROJECT NILGIRI TAHR

THE CONTEXT: The Tamil Nadu Budget for FY 2022-23 allocated an amount of Rs.10 crore for protecting the state animal, Nilgiri Tahr.

THE EXPLANATION:

• The first-of-its-kind project aims to protect the endemic to the Nilgiris and the southern portion of the Western Ghats in Tamil Nadu and Kerala and raise awareness about it.
• The Nilgiri tahr population restricted to the fragmented patches of grasslands in the Mukurthi National Park.
• The Wildlife (Protection) Act of 1972 under Schedule 1 protects this ungulate species, which is also listed as endangered by the International Union for Conservation of Nature. The Nilgiri tahr (nilgiritragushylocrius) lives in montane grasslands with rocky cliffs between 300 and 2,600 metres above mean sea level. Mukurthi, Glenmorgan of the Nilgiris, Anamalai, Grass Hills, Coimbatore’s Siruvani hills, Dindigul’s Palani hills, Megamalai of Theni, Agasthyamalai ranges, and Eravikulam in Kerala are all good places to see the elusive species.

Value Addition:

About Mukurthi National Park:

• The park was previously known as Nilgiri Tahr National Park.

• It was declared as a National Park in the year of 1990. Total area of the park is about 78.46 Km2. The park is characterized by montane grasslands and shrublands interspersed with sholas in a high-altitude area of high rainfall, near-freezing temperatures and high winds.
• The park is a part of Nilgiri Biosphere Reserve, India’s first International Biosphere Reserve. As part of the Western Ghats, it is a UNESCO World Heritage Site since 1 July 2012. The Park is sandwiched between the Mudumalai National Park and the Silent Valley National Park.

2. THE GREAT BARRIER REEF SUFFERS WIDESPREAD CORAL BLEACHING

THE CONTEXT: According to the Australian government agency the Great Barrier Reef is suffering widespread and severe coral bleaching due to high ocean temperatures two years after a mass bleaching event.

THE EXPLANATION:

• The report by the Great Barrier Reef Marine Authority, which manages the world’s largest coral reef ecosystem, comes before a United Nations delegation is due to assess whether the reef’s World Heritage listing should be downgraded due to the ravages of climate change.
• The reef has suffered significantly from coral bleaching caused by unusually warm ocean temperatures in 2016, 2017 and 2020. The previous bleaching damaged two-thirds of the coral.
• In July 2021, Australia garnered enough international support to defer an attempt by UNESCO, the United Nations’ cultural organization, to downgrade the reef’s World Heritage status to “in danger“because of damage caused by climate change.

Value Addition:

What is coral spawning?

• Coral spawning is an annual event where corals simultaneously reproduce. During this synchronised breeding, coral polyps release millions of tiny egg and sperm bundles into the water. Each bundle must find another bundle from the same species to fertilise.
• Coral spawning is an annual event where corals simultaneously reproduce.
• During this synchronised breeding, coral polyps release millions of tiny egg and sperm bundles into the water.
• Each bundle must find another bundle from the same species to fertilise. By spawning on mass, corals increase the likelihood of finding and fertilising a matching bundle.

 When does coral spawn?

• This depends on a number of factors including their location, the water temperature and tides.
• On the Great Barrier Reef, inshore reefs typically spawn in October, while outer reefs spawn during November or December.
• Spawning follows a full moon and water temperatures must have risen enough to stimulate the maturation of the egg and sperm bundles. The timing of spawning is also impacted by the length of the day, the tide and salinity levels in the water.
• Spawning only happens at night and lasts from a few days up to a week. Different species of coral spawn on different days to prevent crossbreeding.

About Great Barrier Reef:

• The Great Barrier Reef is the world’s largest coral reef system composed of over 2,900 individual reefs and 900 islands.
• The reef is located in the Coral Sea (North-East Coast), off the coast of Queensland, Australia.
• The Great Barrier Reef can be seen from outer space and is the world’s biggest single structure made by living organisms.
• The reef structure is composed of and built by billions of tiny organisms, known as coral polyps. It was selected as a World Heritage Site in 1981.

Coral Bleaching:

• The stunning colours in corals come from marine algae called zooxanthellae, which live inside their tissues.
• This algae provides the corals with an easy food supply thanks to photosynthesis, which gives the corals energy, allowing them to grow and reproduce.
• When corals get stressed, from things such as heat or pollution, they react by expelling these algae, leaving a ghostly, transparent skeleton behind.
• This is known as ‘coral bleaching’. Some corals can feed themselves, but without the zooxanthellae most corals starve.
• Causes for Coral Bleaching include Change in Ocean Temperature, Runoff and Pollution, Overexposure to sunlight and Extreme low tides.

3. AFRICAN TECHNIQUE USED TO TRANSLOCATE DEER FROM KEOLADEO

THE CONTEXT: An uncommon experiment with Africa’s Boma technique undertaken at Keoladeo National Park in Rajasthan’s Bharatpur district for capturing and translocating spotted deer is set to improve the prey base in Mukundara Hills Tiger Reserve.

THE EXPLANATION:

What is Boma Technique?

• The Boma capturing technique, which is popular in Africa, involves luring of animals into an enclosure by chasing them through a funnel-like fencing. The funnel tapers into an animal selection-cum-loading chute, supported with grass mats and green net to make it opaque for animals, which are herded into a large vehicle for their transport to another location.
• This old technique was earlier utilised to capture wild elephants for training and service. Following its adoption in Madhya Pradesh in recent years, Boma has been put to practice for the first time in Rajasthan for sending the ungulates to the prey-deficient Mukundara reserve as the kills for tigers and leopards.
• The National Tiger Conservation Authority’s (NTCA) technical committee has approved a proposal to shift two tigers from Ranthambhore National Park to Mukundara, which lost two tigers and two cubs in 2020 and is now left with an eight-year-old tigress. The reserve, spread across 759 sq. km area, was created with the portions of Darrah, Chambal and Jawahar Sagar wildlife sanctuaries in south-eastern Rajasthan.

Boma technique:

THE SECURITY AFFAIRS

4. IAF TO EMPLOY ‘DIRECT TACTICAL PLANNING’ FOR S-400

THE CONTEXT: According to IAF official has told a parliamentary standing committee that countering the potent weapon of the adversary will be based on India’s “direct tactical planning”.

THE EXPLANATION:

• India is in the process of acquiring a batch of S-400 Triumf missile systems from Russia.
• The S-400 is considered the most advanced air-defence system worldwide. The missile is capable of protecting its air defence bubble against missiles, rockets, cruise missiles and aircraft.
• The system is already available with China, which has deployed it along the Line of Actual Control (LAC) in eastern Ladakh amid the 18-month military standoff.

About S-400 Triumf

• S-400 Triumf is a mobile, surface-to-air missile (SAM) system. It was developed by Russia’s Almaz Central Design Bureau for Marine Engineering in the 1990s, as an upgrade to the S-300 family.
• The first battalion of the newest surface-to-air missile systems assumed duty on August 6, 2007. China was the first foreign buyer of the missile, in 2014.
• Since then, countries like Saudi Arabia, Turkey, Belarus and India have all acquired or expressed interest in the system. S-400 missile systems are organized across the 30K6E administration system. It is having a range of 400kms.

Connect the dots:

• US Congressional report had warned that “India’s multi-billion-dollar deal to purchase the Russian-made S-400 air defence system may trigger US sanctions on India under the Countering America’s Adversaries Through Sanctions Act” (CAATSA).

THE PRELIMS PERSPECTIVE

5. NARASINGHAPETTAI NAGASWARAM BAGS GI TAG

THE CONTEXT: The ‘Narasinghapettai nagaswaram’, an ancient musical instrument hand-crafted by artisans from Narasinghapettai, a nondescript village in Tiruvidaimarudur taluk in Thanjavur, has been granted the Geographical Indication (GI) tag.

THE EXPLANATION:

This highly complex musical instrument, dating back to the 13th century, involves intricate craftsmanship and only a few artisans in Narasinghapettai have inherited the skill of chiselling the wooden instruments.

The unique feature of the ‘Narasinghapettainagaswaram’ is its production process as they are handmade unlike other machine-made nagaswarams. Also, ‘Aacha’ wood, which is naturally water-resistant, is procured specifically from the Cauvery river basin for making the instrument. But fresh wood cannot be used and the instrument is crafted with old wood which is at least 100 years old. The reeds themselves are made from the leaves of a locally grown plant called ‘naanal’, a bamboo variety.

The nagaswarams produced in Narasinghapettai are marketed and sold in different states and in countries including Singapore, Malaysia and Sri Lanka. According to the officials, there are 46 products have been granted GI in Tamil Nadu so far.

Value addition:

Some Interesting facts about GI Tag:

• GI tag is the abbreviation of Geographical Indications tags in India. It came into force with effect from 15th September 2003.
• A geographical indication (GI) is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
• The products which are given the Geographical Indication tag in India are regarded as the invaluable treasures of incredible India.
• This tag is valid for a period of 10 years following which it can be renewed.
• Union Minister of Commerce and Industry had launched the logo and tagline for the Geographical Indications (GI) of India.
• The first product to get a GI tag in India was the Darjeeling tea in 2004.
• The Geographical Indications of Goods (Registration and Protection) Act, 1999 (GI Act) is a sui generis Act for the protection of GI in India.
• India, as a member of the WTO, enacted the Act to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights.
• Geographical Indications protection is granted through the TRIPS Agreement.
• This tag is issued by the Geographical Indication Registry under the Department of Industry Promotion and Internal Trade, Ministry of Commerce and Industry.
• Geographical indications are typically used for agricultural products, foodstuffs, wine and spirit drinks, handicrafts, and industrial products.
• The Gucchi mushroom, one of the most expensive mushrooms in the world, from the state of Jammu and Kashmir was recently given the GI tag in India.

Benefits of GI Tags

• A geographical indication right enables those who have the right to use the indication to prevent its use by a third party whose product does not conform to the applicable standards.
• Geographical indication tags are given to the products for
• Legally protecting the goods.
• Preventing unauthorised or illegal use of geographical indication tags by others.
• Helping customers in getting the original items that contain all the specific traits.
• Promoting the economic prosperity of manufacturers/ producers of items under GI tags. Items with GI tags get enhanced demand in national as well as international markets.

6. WORLD HAPPINESS REPORT 2022

THE CONTEXT: Finland has been named the world’s happiest country for a fifth year running, in an annual UN-sponsored index. The report ranked Denmark in the second place, with Switzerland, Iceland, and the Netherlands rounding up the top five happiest places in the world.

THE EXPLANATION:

• Published ever since 2012 by United Nations Sustainable Development Solutions Network, the World Happiness Report is based on people’s own assessment of their happiness, as well as economic and social data. For the World Happiness Report 2022, people across 149 countries were asked to rate their happiness.
• The World Happiness Report ranks 146 countries based on a variety of factors, such as per capita GDP, social support, healthy life expectancy, freedom of choice, generosity and perceptions of corruption.
• India ranks 136 on the 2022 World Happiness Report. It is among the 11 least happy countries. (2021 positioned India at rank 139 out of 149).
• According to the Happiness Report 2022 list, Afghanistan is the saddest country in the world (146th). Afghanistan is followed by Lebanon and Zimbabwe. China ranks 72nd on the list, while Russia, which is attacking Ukraine, ranks 80th. Ukraine ranks 98th in the Russian attack.

THE PRELIMS PRACTICE QUESTIONS

QUESTIONS OF THE DAY 21^ST MARCH  2022

Q. For translocation of Asiatic lions, which of the following forest ecosystem is more suitable?

a) Tropical evergreen forest

b) Moist deciduous forest

c) Dry deciduous forest

d) Montane forest

ANSWER FOR 16^TH MARCH 2022

ANSWER: A

EXPLANATION:

• The primary objective of the alliance is to work for efficient consumption of solar energy the reduce dependence on fossil fuels.
• Countries that do not fall within the Tropics can join the alliance and enjoy all benefits as other members, with the exception of voting rights

The ISA is headquartered in Gurugram, Not in France.

1. Performing effortless action is true yog READ MORE
2. Violence, war and solutions READ MORE

1. Clean energy should use the battery of a circular economy READ MORE
2. Explained | What is the upcoming global treaty on plastic pollution? READ MORE
3. Study reveals significant decline in Golden Langur habitat READ MORE

1. Secularism and its constraints READ MORE
2. Towards inclusive education: The accessibility guidelines for higher education institutions and universities require some modifications READ MORE  

1. Treating values of individual freedom as trifles: The hijab judgment has struck a blow against each of these principles — liberty, equality, and fraternity READ MORE
2. Supreme Court tears into practice of ‘sealed cover jurisprudence’ READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. Great Barrier Reef suffers widespread coral bleaching READ MORE  
2. Japan to invest $42 billion in India over five years READ MORE
3. Explained | What is the National Pharmaceutical Pricing Authority’s role in fixing drug prices? READ MORE
4. IAF to employ ‘direct tactical planning’ for S-400 READ MORE
5. Recombination of two virus variants seen since 2020 READ MORE
6. Govt restores valid e-visa to 156 countries; regular visas to all; 10 year visa to US, Japan nationals READ MORE
7. India extends $1 billion credit facility to Sri Lanka for short-term concessional loans READ MORE
8. Andaman & Nicobar Islands brace for Cyclone Asani, preparations on for evacuation READ MORE
9. 100 endangered vultures killed by suspected insecticide poisoning in Assam READ MORE
10. Finland ranked world’s happiest country for fifth year running READ MORE
11. The complexities of introducing African cheetahs to India READ MORE
12. UN international court of justice orders Russia to halt invasion of Ukraine READ MORE
13. 16 Chinese got Indian citizenship since 2007 READ MORE
14. Deep ocean gliders, manned vehicles for ocean mission READ MORE

Main Exam    

GS Paper- 1

1. Secularism and its constraints READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Treating values of individual freedom as trifles: The hijab judgment has struck a blow against each of these principles — liberty, equality, and fraternity READ MORE
2. Supreme Court tears into practice of ‘sealed cover jurisprudence’ READ MORE

SOCIAL ISSUES

1. Towards inclusive education: The accessibility guidelines for higher education institutions and universities require some modifications READ MORE  

INTERNATIONAL ISSUES

1. United Nations votes are not black and white: Delegations do not vote for or against other countries; they vote for themselves READ MORE  
2. India’s stand on the Ukraine war is tragic: New Delhi cannot crawl for the goodwill of Russia but must at least condemn Moscow’s aggression and illegal invasion READ MORE
3. A churn in the global order READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. The spring blues: On India’s recovery two years into the pandemic READ MORE
2. Land resource management measures will impact larger economy READ MORE

ENVIRONMENT AND ECOLOGY  

1. Clean energy should use the battery of a circular economy READ MORE
2. Explained | What is the upcoming global treaty on plastic pollution? READ MORE
3. Study reveals significant decline in Golden Langur habitat READ MORE

SCIENCE

1. Innovations in vaccine science can make our lives safer READ MORE

SECURITY

1. A blueprint for cost-effective defence management READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

1. Performing effortless action is true yog READ MORE
2. Violence, war and solutions READ MORE

Questions for the MAIN exam

1. Discuss how Legalized gambling would help curtail an important source of black money and bring revenue to the government?
2. Highlight the changes made in the Plastic Waste Amendment Rules 2022 vis-à-vis 2016 and why it may still remain just a paper tiger?

QUOTATIONS AND CAPTIONS

• War is what happens when language fails.
• One thing to be understood is that just as violence is part of the human mind, peace and happiness are also very much part of it. And, if people really want, they can find peace both within and without.
• There should be not only the neutrality of political authority but also the freedom of conscience and belief as well as equality before law.
• India hasin the past decade started to warm up to the US-led global alliance of strategic partners but misgivings in New Delhi and Washington policy circuits remain.
• The main difference is immunity, and vaccines have played a critical role towards higher population immunity and minimizing the number of vulnerable people.
• Vaccines have played an important role in limiting the impact of the Covid-19 pandemic and are our best way forward. Relying on natural immunity alone to stop pandemics is analogous to taking comfort in an old surgical adage – all bleeding stops.
• Land resource management and governance, like the keel of a ship, will provide the right balance and float to the national economy despite one of the worst economic downturns induced by the pandemic.
• Without naming or blaming anyone, India has expressed its fundamental position that war is not a solution and diplomacy should be the only option to prevent war.
• The hijab judgment has struck a blow against each of these principles — liberty, equality, and fraternity.
• An efficient waste management ecosystem is crucial to manage the huge waste generated in India’s new energy push.

50-WORD TALK

• India’s fresh $1 billion credit to help Sri Lanka’s struggling economy is good diplomacy. India may not have the wallet to match China’s but its intentions aren’t usurious or extortionist and that should comfort strategic partners in the neighbourhood. It’s good that the drift in New Delhi-Colombo ties is ending.

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.

THE ECONOMY RECOVERS PAST PRE-PANDEMIC LEVELS

The Indian economy, as seen in quarterly estimates of GDP, has been staging a sustained recovery since the second half of 2020-21(see Figure: 1). Advance estimates suggest that GDP will record an expansion of 9.2 percent in 2021-22. This implies that the level of real economic output will surpass the pre-COVID level of 2019-20.

DIFFERENCE BETWEEN GDP AND GVA

In 2015, in the wake of a comprehensive review of its approach to GDP measurement, India opted to make major changes to its compilation of national accounts and bring the whole process into conformity with the United Nations System of National Accounts (SNA) of 2008. As per the SNA, gross value added, is defined as the value of output minus the value of intermediate consumption and is a measure of the contribution to GDP made by an individual producer, industry, or sector. At its simplest, it gives the rupee value of goods and services produced in the economy after deducting the cost of inputs and raw materials used. GVA can be described as the main entry on the income side of the nation’s accounting balance sheet, and from economics, perspective represents the supply side. While India had been measuring GVA earlier, it had done so using ‘factor cost’ and GDP at ‘factor cost’ was the main parameter for measuring the country’s overall economic output till the new methodology was adopted. In the new series, in which the base year was shifted to 2011-12 from the earlier 2004-05, GVA at basic prices became the primary measure of output across the economy’s various sectors and when added to net taxes on products amounts to the GDP.

SECTORAL TRENDS IN THE ECONOMY

AGRICULTURE  

AGRI GROWTH: The agricultural sector was the least impacted by the pandemic-related disruptions. It is estimated to grow 3.9 percent in 2021-22. This sector now accounts for 18.8 percent of GVA(Figure 2)

FOOD PRODUCTION: The area is sown under Kharif and Rabi crops, and the production of wheat and rice has been steadily increasing over the years(Figures 5 and 6). In the current year, food grains production for the Kharif season is estimated to post a record level of 150.5 million tonnes.

FIGURE 2- REAL GVA: AGRICULTURE AND ALLIED SECTOR

INDUSTRIAL SECTOR

GROWTH DATA:

• The industrial sector went through a big swing by first contracting by 7 percent in 2020-21 and then expanding by 11.8 percent in this financial year.
• The share of industry in GVA is now estimated at 28.2 percent (Table 2)

INDICES TRAJECTORY:

• Since January 2021, the Purchasing Managers’ Index-Manufacturing has remained in the expansionary zone (i.e. over 50) except for one month when the second wave had slowed down economic activity.
• The Index of Industrial Production (IIP) and Core Industry indices have both followed a similar pattern and, in November 2021, went past their pre-pandemic level for the corresponding month in 2019(See Figure 7 and 8).

SERVICES

GROWTH DATA: 

• Services account for more than half of the Indian economy and were the most impacted by the COVID-19 related restrictions, especially for activities that need human contact.
• Although the overall sector first contracted by 8.4 percent in 2020-21 and then is estimated to grow by 8.2 percent in 2021-22, it should be noted that there is a wide dispersion of performance by different sub-sectors.

SUBSECTOR VARIATIONS:

• Both the Finance/Real Estate and the Public Administration segments are now well above pre-COVID levels.
• However, segments like Travel, Trade, and Hotels are yet to fully recover. It should be added that the stop-start nature of repeated pandemic waves makes it especially difficult for these sub-sectors to gather momentum.

INDICES PROJECTIONS:

• Despite contact-sensitive services still being impacted by COVID, there has been a strong recovery of the Purchasing Managers’ Index-Services since August 2021.
• Similarly, the Google Mobility Index has also recorded recovery to pre-pandemic levels. Both these indices, capture data before the Omicron struck the country.

NON-CONTACT SERVICES:

• In contrast to contact-based services, distance-enabled services have increased their share with the growing preference for remote interfaces for office work, education, and even medical services.
• Indeed, there has been a boom in software and IT-enabled services exports even as earnings from tourism have declined sharply (see Figures 15 and 16).

DEMAND TRENDS: COMPONENTS OF GDP

CONSUMPTION (PRIVATE AND GOVERNMENT):

• Total consumption is estimated to have grown by 7.0 percent in 2021-22 with government consumption remaining the biggest contributor as in the previous year.
• private consumption is yet to see the pre-pandemic level. Private consumption is poised to see stronger recovery with rapid coverage in vaccination and faster normalization of economic activity. This assessment is also seconded by RBI’s Consumer Confidence Survey.
• However, Government consumption is estimated to grow by a strong 7.6 percent surpassing pre-pandemic levels. (See Table 3).

INVESTMENT:

• Investment, as measured by Gross Fixed Capital Formation (GFCF) is expected to see strong growth of 15 percent in 2021-22 and achieve full recovery of pre-pandemic level.
• Government’s policy thrust on quickening virtuous cycle of growth via CAPEX and infrastructure spending has increased capital formation in the economy lifting the investment to GDP ratio to about 29.6 percent in 2021-22, the highest in seven years (Figure 19).

EXPORTS AND IMPORTS:

• India’s exports of both goods and services have been exceptionally strong so far in 2021-22.
• India’s total exports are expected to grow by 16.5 percent in 2021-22 surpassing pre-pandemic levels.
• Imports also recovered strongly with the revival of domestic demand and a continuous rise in the price of imported crude and metals. Imports are expected to grow by 29.4 percent in 2021-22 surpassing corresponding pre-pandemic levels.
• Merchandise exports have been above US$ 30 billion for eight consecutive months in 2021-22, and net services exports have also risen sharply.
• India’s net exports have turned negative in the first half of 2021-22, compared to a surplus in the corresponding period of 2020-21 with the current account recording a modest deficit of 0.2 percent of GDP in the first half (Figure 24).

GREEN SHOOTS IN INVESTMENT

While private investment recovery is still at a nascent stage, there are many signals which indicate that India is poised for stronger investment. The number of private investment projects under implementation in the manufacturing sector has been rising over the years. Companies hitting record profits in recent quarters and mobilization of risk capital bode well for an acceleration in private investment. A sturdy and cleaned-up banking sector stands ready to support private investment adequately. The expected increase in private consumption levels will propel capacity utilization, thereby fuelling private investment activity. RBI’s latest Industrial Outlook Survey results indicate rising optimism of investors and expansion in production in the upcoming quarters.

A GLIMPSE INTO THE STRATEGY OF POLICY MAKING OF THE GOVERNMENT OF INDIA

BARBELL STRATEGY:  AGILE RESPONSE& SAFTEY NETS

The last two years have been particularly challenging for policy-making around the world with repeated waves from a mutating virus, travel restrictions, supply-chain disruptions, and, more recently, global inflation. Faced with all this uncertainty, the Government of India opted for a “Barbell Strategy” that combined a bouquet of safety nets to cushion the impact on vulnerable sections of society/business, with a flexible policy response based on a Bayesian updating of information. This is a common strategy used in financial markets to deal with extreme uncertainty by combining two seemingly disparate legs: agile approach and safety nets.

The Agile approach is a well-established intellectual framework that is increasingly used in fields like project management and technology development. In an uncertain environment, the Agile framework responds by assessing outcomes in short iterations and constantly adjusting incrementally. It is important here to distinguish Agile from the “Waterfall” framework which has been the conventional method for framing policy in India and most of the world. Notice that the flexibility of Agile improves responsiveness and aids evolution, but it does not attempt to predict future outcomes. This is why the other leg of the Barbell strategy is also needed. It cushions for unpredictable negative outcomes by providing safety nets.

THE WATERFALL APPROACH:

• The Waterfall approach entails a detailed, initial assessment of the problem followed by a rigid upfront plan for implementation.
• This methodology works on the premise that all requirements can be understood at the beginning and therefore pre-commits to a certain path of action.
• This is the thinking reflected in five-year economic plans, and rigid urban master plans.
• While some form of feedback-loop-based policy-making was always possible, it is particularly effective at a time when we have wealth of real-time data.

AGILE APPROACH:

• Over the last two years, Government leveraged a host of High-Frequency Indicators (HFIs) both from government departments/agencies as well as private institutions that enabled constant monitoring and iterative adaptations.
• Such information includes GST collections, power consumption, mobility indicators, digital payments, satellite photographs, cargo movements, highway toll collections, and so on.
• These HFIs helped policymakers tailor their responses to an evolving situation rather than rely on pre-defined responses of a Waterfall framework.

A BRIEF OVERVIEW OF THE TWO LEGS OF BARBELL STRATEGY ADOPTED BY GOVT

AGILE APPROACH:

• The Government made its way forward by regularly announcing packages targeted at specific challenges.
• This agile approach was preceded by Safety Net.
• The fiscal mix changed over time towards supporting demand through capital expenditure and the supply-side through measures like production-linked incentives.
•  In line with the Agile approach, this mix can be changed again as per the requirements of an evolving situation.

SAFETY NET:

• Government’s initial measures in 2020-21 were mostly about making food available to the poor, providing emergency liquidity support for MSMEs, and holding the Insolvency and Bankruptcy Code in abeyance. (Read ahead. See Table:5)

THE BARBELL STRATEGY

The barbell strategy is an investment concept that suggests that the best way to strike a balance between reward and risk is to invest in the two extremes of high-risk and no-risk assets while avoiding middle-of-the-road choices. All investing strategies involve seeking the best return on investment that is possible given the degree of risk that the investor can tolerate. Investors who follow the barbell strategy insist that the way to achieve that is to go to extremes.

HIGH-FREQUENCY INDICATORS: LEVERAGING DATA FOR GOVERNANCE

In the last two years, Government leveraged an array of eighty HFIs representing industry, services, global trends, macro-stability indicators, and several other activities, from both public and private sources to gauge the underlying state of the economy on real-time basis. These include electricity generation, scheduled domestic flights, volume/value of financial transactions, capital flows, mobility indices, and so on. It also covers employment demanded under MGNREGA to gauge rural employment conditions, especially in the context of migrant workers. These indicators are regularly published in the Monthly Economic Report of the Ministry of Finance. While HFIs have the advantage of being real-time and frequent, they need to be used with care. Each indicator provides, at best, a partial view of developments. In a rapidly evolving situation, policy-makers can pick up useful signals that allow for faster response and better targeting. Thus, using HFIs for gauging trends in the economy is as much an art as a science.

A BRIEF OVERVIEW OF THE MACROECONOMIC PARAMETERS OF THE INDIAN ECONOMY

EXTERNAL SECTOR:

• Despite all the disruptions caused by the global pandemic, India’s balance of payments remained in surplus throughout the last two years.
• The foreign exchange reserve as of Dec 2021 is equivalent to 13.2 months of imports and higher than the country’s external debt.
• As of end-November 2021, India was the fourth-largest foreign exchange reserves holder in the world after China, Japan, and Switzerland.

FISCAL BALANCE:

• The fiscal support given to the economy as well as the health response caused the fiscal deficit and government debt to rise in 2020-21.
• However, there has been a strong rebound in government revenues in 2021-22 so far.
• The gross monthly GST collections have crossed ` 1 lakh crore consistently since July 2021(See figures: 29 and 30)

FINANCIAL SECTOR:

• The financial system is always a possible area of stress during turbulent times. However, India’s capital markets, have done exceptionally well and have allowed record mobilization of risk capital for Indian companies.
• The Sensex and Nifty scaled up to touch their peak at 61,766 and 18,477 on October 18, 2021. Among major emerging market economies, Indian markets outperformed their peers in April-December 2021.
• Gross NPA ratio of SCBs decreased from 7.5 percent at end-September 2020 to 6.9 percent at end-September 2021.
• The Capital to risk-weighted asset ratio (CRAR) of SCBs increased from 15.84 percent at the end of September 2020 to 16.54 percent at the end-September 2021 on account of improvement for both public and private sector banks.

INFLATION:

• Inflation has reappeared as a global issue in both advanced and emerging economies (Figure 33).
• The surge in energy prices, non-food commodities, input prices, disruption of global supply chains, and rising freight costs stoked global inflation during the year. (See Figure 33 and 34).

THE GLOBAL SUPPLY-SIDE DISRUPTION DUE TO THE PANDEMIC

As the world economy recovered in 2021, it is faced with serious supply-side constraints ranging from delivery delays, container shortages, and semiconductor chip shortages.

CONTAINER INDUSTRY:

• The stress in the container shortages can be captured in the Drewry’s3 Composite World Container Index, which data reflects the problems in the sector.
• The shortage of containers has also impacted the Indian sea trade.
•  According to the Federation of Indian Export Organisation set up under the Ministry of Commerce and Industry, the lack of containers has resulted in rising sea freight rates in the range of 300 percent to 350 percent.
• Further, the production of the new containers has slowed since 2019.
• Simultaneously, a rise in the disposal of containers has also been observed for the same period.
• Thus, the overall growth in the containers has fallen from 11 percent in 2019 to 5 percent in 2021.

SEMICONDUCTOR CHIPS:

• A report by investment bank Goldman Sachs 2021 states that the supply chain disruptions in the semiconductor industry have spillovers in over 169 industries.
• The manufacturing of semiconductors requires a large amount of capital and has an average gestation period of 6-9 months.
• Moreover, it has a fairly long production cycle of about 18-20 weeks.
• Hence, any recovery from the supply chain disruptions will be a slow and costly affair.
• The report further stated that microchips and semiconductors account for about 4.7 percent of the value added by the automotive industry.
• With the delay in supply, the average lead time in the automobile industry for 2021 has been around 14 weeks globally.

REFORMS AND THE COVID-19: TWO-PRONGED STRATEGY

One distinguishing feature of India’s economic response has been an emphasis on supply-side reforms rather than a total reliance on demand management. The emphasis given to the supply-side in India’s COVID-19 response is driven by two important considerations. First, Indian policy-makers saw the disruptions caused by travel restrictions, lockdowns, and supply-chain breakdowns as an interruption of the economy’s supply side. Second, the post-Covid world will be impacted by a wide variety of factors – changes in technology, consumer behavior, geopolitics, supply-chains, climate change, and so on. In a nutshell, the supply-side reforms are built upon two broad strategies which are explained below:

FLEXIBILITY AND INNOVATION:

• Reforms that improve flexibility and innovation to deal with the long-term unpredictability of the post-Covid world.
• This includes factor market reforms; deregulation of sectors like space, drones, geospatial mapping, trade finance factoring;
• Also, process reforms like those in government procurement and in the telecommunications sector; removal of legacy issues like retrospective tax; privatization and monetization, creation of physical infrastructure, and so on.

RESILIENCE ORIENTATION:

• Reforms aimed at improving the resilience of the Indian economy range from climate/environment-related policies; social infrastructure such as the public provision of tap water, toilets, basic housing, insurance for the poor, and so on;
• Support for key industries under Atmanirbhar Bharat; a strong emphasis on reciprocity in foreign trade agreements, and so on.
• Some commentators have likened the Atmanirbhar Bharat approach to a return to old-school protectionism. Far from it, the focus on economic resilience is a pragmatic recognition of the vagaries of the international supply chain.

SOME CONCRETE EXAMPLES OF REFORMS UNDERTAKEN BY THE GoI

INDUSTRY:

• Production Linked Incentive Scheme approved for 13 sectors including Automobiles and auto components, Pharmaceuticals drugs, Specialty steel, Telecom & Networking Products, etc.
• Retrospective tax repealed to promote tax certainty and foreign investment.

TELECOM: Structural reforms:

• Rationalization of Adjusted Gross Revenue: Non-telecom revenue will be excluded from the definition of Adjusted Gross Revenue.
• Interest rates rationalized and penalties from delayed payments of License Fee or Spectrum Usage Charge (SUC) removed.
• 100 percent FDI under automatic route permitted in the telecom sector.
• No Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions.
• Spectrum sharing encouraged.
• The additional SUC of 0.5 percent for spectrum sharing was removed.

Process Reforms:

• Requirement of customs clearance for import of wireless equipment removed and replaced with self-declaration to improve the ease of doing business.

DRONE RULES (ANNOUNCED IN AUGUST 2021):

• Extended applicability of rules: Drones up to 500 kg are now subject to regulations, compared to the earlier limit of 300 kg.
• Several approvals were abolished with the total forms to be filled reduced from 25 to 5. Types of fees reduced from 72 to 4.
• Quantum of fees to be paid considerably reduced and delinked with the size of the drone. Removal of the requirement of prior security clearance.
• Earlier restrictions on all foreign entities owning, manufacturing, or dealing with drones in India have been done away with.
• Expanded area of drone operations: An interactive map on the Digital Sky platform specifies color-coded zones on the map i.e., green, yellow, and red, indicating free zones, those which require prior permission, and no-fly zones, respectively.
• The perimeters of these zones have also been liberalized to increase freely accessible airspace under the green category.

FINANCIAL SECTOR: Banking: Reforms in Deposit Insurance:

• Increase in deposit insurance from ` 1 lakh to ` 5 lakh per depositor per bank. Introduced interim payments:
• Interim payment will be made by Deposit Insurance and Credit Guarantee Corporation (DICGC) to depositors of those banks for whom any restrictions/ moratorium have been imposed by RBI under the Banking Regulation Act resulting in restrictions on depositors from accessing their own savings.
• Timeline of a maximum of 90 days has been fixed for providing interim payment to depositors.

Expansion in the factoring ecosystem:

• The earlier condition of NBFCs whose principal business was factoring has been removed and now all NBFCs are permitted to undertake factoring business.

DEFENCE:

• Corporatisation of Ordnance Factory Board (OFB) approved and 7 new Defence Public Sector Undertakings created.
• FDI enhanced in Defence sector up to 74 percent through the automatic route and up to 100 percent by government route.

DISINVESTMENT:

• New Public Sector Enterprise Policy and Asset Monetisation Strategy: New policy is for strategic disinvestment of public sector enterprises Public sector commercial enterprises are classified as Strategic and Non-Strategic sectors, with the policy of privatization in non-strategic sectors and bare minimum presence even in strategic sectors.
• The identified strategic sectors are (i) Atomic Energy, Space & Defense; (ii) Transport & Telecommunication; (iii) Power, Petroleum, Coal & other minerals; and (iv) Banking, Insurance & Financial Services Privatization of Air India.
• National Monetisation Pipeline: Aggregate monetization potential of ` 6 lakh crore through core assets of the Central Government over four years from 2021-22 to 2024-25. The top 5 sectors including roads, railways, power, oil & gas pipelines, and telecom account for around 83 percent of the aggregate value. So far, CPSEs have referred 3400 acres of land and other non-core assets for monetization.

GROWTH OUTLOOK

The Indian economy is estimated to grow by 9.2 percent in real terms in 2021-22 (as per the First Advance Estimates), after a contraction of 7.3 percent in 2020-21. Growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. This projection is based on the assumption that there will be no further debilitating pandemic related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be broadly orderly, oil prices will be in the range of US$70-$75/bbl., and global supply chain disruptions will steadily ease over the year. As per the IMF’s latest World Economic Outlook (WEO) growth projections released on 25th January 2022, India’s real GDP is projected to grow at 9 percent in both 2021-22 and 2022-23 and at 7.1 percent in 2023-24. This projects India as the fastest-growing major economy in the world in all these three years.

HIGHLIGHTS

• Indian economy is estimated to grow by 9.2 percent in real terms in 2021-22 (as per first advanced estimates) after a contraction of 7.3 percent in 2020-21.
• GDP projected to grow by 8- 8.5 percent in real terms in 2022-23.
• The year ahead is poised for a pickup in private sector investment with the financial system in a good position to provide support for the economy’s revival.
• Projection comparable with World Bank and Asian Development Bank’s latest forecasts of real GDP growth of 8.7 percent and 7.5 percent respectively for 2022-23.
• As per IMF’s latest World Economic Outlook projections, India’s real GDP is projected to grow at 9 percent in 2021-22 and 2022-23 and at 7.1 percent in 2023-2024, which would make India the fastest-growing major economy in the world for all 3years.
• Agriculture and allied sectors are expected to grow by 3.9 percent; industry by 11.8 percent and services sector by 8.2 percent in 2021-22.
• On the demand side, consumption is estimated to grow by 7.0 percent, Gross Fixed Capital Formation (GFCF) by 15 percent, exports by 16.5 percent, and imports by 29.4 percent in 2021-22.
• Macroeconomic stability indicators suggest that the Indian Economy is well placed to take on the challenges of 2022-23.
• Combination of high foreign exchange reserves sustained foreign direct investment, and rising export earnings will provide an adequate buffer against possible global liquidity tapering in 2022-23.
• Economic impact of the “second wave” was much smaller than that during the full lockdown phase in 2020-21, though health impact was more severe.
• Government of India’s unique response comprised of safety-nets to cushion the impact on vulnerable sections of society and the business sector, significant increase in capital expenditure to spur growth, and supply-side reforms for a sustained long-term expansion.
• Government’s flexible and multi-layered response is partly based on an “Agile” framework that uses feedback-loops, and the use of eighty High-Frequency Indicators (HFIs) in an environment of extreme uncertainty.

[WpProQuiz 182]

CONTEXT: On 18 February 2022 India and the United Arab Emirates (UAE) signed the Comprehensive Economic Partnership Agreement (CEPA) to boost the bilateral trade between the two countries. This write-up examines the issue in detail.

THE SALIENT FEATURES OF INDIA-UAE CEPA

1. CEPA is a balanced, fair, comprehensive & equitable partnership agreement, which will give enhanced market access for India in both goods and services.
2. India and UAE aim to increase bilateral goods trade over the next five years to $100 billion.
3. Under the agreement, the UAE is set to eliminate duties on 80 percent of its tariff lines which account for 90 percent of India’s exports to the UAE by value. This is particularly important for exports in highly competitive areas such as textiles and garments.
4. The partnership agreement will open doors, especially to labor-intensive Indian products which are exported to UAE – such as textiles, gem & jewelry, medicines, agricultural products, footwear, leather, sports goods, engineering goods, auto components, and plastics.

1. The agreement which is expected to come into effect in the first week of May is expected to generate “an additional 10 lakh jobs” in India.
2. It will help India in realizing the ambitious target of U.S $1 trillion of merchandise exports and the U.S $1 trillion of services exports by the year 2030.

THE ROADMAP ENVISAGED FOR THE ACHIEVING THE OBJECTIVES OF THE AGREEMENT

The roadmap will ensure that the two countries work together even more closely to address the shared global challenges, achieve shared objectives, and build a future-ready robust and resilient relationship. The roadmap will promote the development of new trade, investment, and innovation dynamics, and intensify bilateral engagement in diverse areas including:

ECONOMIC PARTNERSHIP: 

• This will create investment opportunities for Indian investors in establishing specialized industrial advanced technology zones. Integrating local value chains of the existing and future specialized economic zones in areas of logistics & services, pharmaceuticals, medical devices, agriculture, agri-tech, steel, and aluminum.

CULTURAL COOPERATION ENERGY PARTNERSHIP, CLIMATE ACTION, AND RENEWABLE:

• Recognizing shared cultural heritage and strong ties rooted in history, the Leaders agreed to set up an India – UAE Cultural Council to facilitate and promote cross-cultural exchanges, cultural projects, exhibitions, and dialogue between thought leaders of the two countries.
• This will identify new collaboration opportunities to support India’s energy requirements, including new energies, and ensure the provision of affordable and secure energy supplies to India’s growing economy.
• As the UAE and India collectively navigate the global energy transition, both countries remain committed to working together to create a just and equitable transition to a low-carbon future
• To bring significant opportunities, for societies, economic growth, and businesses, the Leaders agreed to support each other’s clean energy missions.

FOOD SECURITY AND HEALTH COOPERATION:

• India and UAE will contribute to promoting and strengthening the infrastructure and dedicated logistic services connecting farms to ports to final destinations in the UAE.
• The countries will collaborate in the research, production, and development of reliable supply chains for vaccines and to enhance investments by UAE entities in the rapidly growing health infrastructure in India.
• The leaders also agreed to collaborate in providing health care in underprivileged countries.

EDUCATION COOPERATION AND SKILL COOPERATION:

• India and UAE agreed to establish an Indian Institute of Technology in the United Arab Emirates to establish world-class institutions that encourage and support innovation and technological progress.
• India-UAE agreed to enhance their cooperation to develop a mutually agreed professional standards and skills framework.

EMERGING TECHNOLOGIES:

• Recognizing the rapidly digitizing world, the two countries agreed to expand cooperation and collaborate on critical technologies and mutually promote e-businesses and e-payment solutions.
• They agreed to collaborate to promote start-ups from both countries to expand into the two regions and utilize such platforms as a basis for growth.

COOPERATION IN THE INTERNATIONAL ARENA:

• Reflecting shared values and principles, and growing strategic convergence, both countries have resolved to reinforce mutual support in multilateral areas to promote collaboration in economic and infrastructure spheres. They can also intensify cooperation in UNSC etc.

DEFENCE AND SECURITY:

• The countries agreed to enhance maritime cooperation contributing to the maintenance of peace and security in the region.
• Maintaining and strengthening peace in the Middle East through dialogue and cooperation must be the cornerstone of a more integrated, stable, and prosperous region.
• Joint commitment to the fight against extremism and terrorism, including cross-border terrorism, in all forms, at both regional and international levels.

MANY FIRSTS OF THE AGREEMENT

• Finalized and signed in a record time of just 88 days.
• The CEPA provides for automatic registration and marketing authorization of Indian generic medicines in 90 days, once they are approved in any of the developed countries. This will give big market access to Indian medicines.
• Indian jewelry exporters will get duty-free access to the UAE, which currently imposes a 5% customs duty on such products. This will substantially raise its jewelry exports.

SIGNIFICANCE OF THE AGREEMENT FOR INDIA

STRATEGIC LOCATION OF UAE: The UAE, due to its strategic location, has emerged as an important economic hub not just within the context of the Middle East/ West Asia, but also globally. A trade agreement with the UAE could well be a springboard to realize our ambitious export targets.

INCREASE IN REMITTANCES: The CEPA will also help in increasing remittances as Indian investments in UAE will bring Indian employees into the Gulf country. The remittances are expected to rise with the full economic recovery of the UAE’s post-pandemic economy. According to a study, (82% of India’s total remittances originated from seven countries that included Gulf countries like the UAE, Saudi Arabia, Oman, and Kuwait.) *Total Remittances to India is estimated to be US $ 83.3 Billion in FY20.

MARKET FOR INDIAN GOODS: Will allow increased visibility of Indian products in the UAE. Due to the reduction in tariff for Indian jewelry and gems, food items such as cereals, sugar, fruits and vegetables, tea, meat and seafood, textiles, engineering and machinery products, chemicals.

MAKING INDIAN MANUFACTURING EXPORT-ORIENTED: 

• The CEPA which covers almost 90% of exports will make it more attractive for Indian companies to invest in export-oriented businesses because of the zero-tariff facility that the UAE is expected to provide to Indian products.
• The agreement will provide significant benefits to Indian and UAE businesses, including enhanced market access and reduced tariffs. The CEPA will boost bilateral trade from the current $60 billion to $100 billion in the next 5 years.
•  CEPA is expected to create new jobs, raise living standards, and provide wider social and economic opportunities in both nations.

ENTRY TO AFRICAN MARKET:

• This FTA with the UAE will pave the way for India to enter the UAE’s strategic location and have relatively easy access to the Africa market and its various trade partners which can help India to become a part of that supply chain, especially in handlooms, handicrafts, textiles, and pharma.
• This can be achieved by offering attractive investment opportunities in India with a globally competitive infrastructure and an investor-friendly regulatory framework.
• The UAE is a major global redistribution center and much of exports to Africa are routed through Dubai. The CEPA will encourage Indian Businesses for setting up warehousing or distribution centers in the UAE for exports to Africa.

ACCESS TO GULF COOPERATION COUNCIL (GCC) COUNTRIES’ COOPERATION ON MULTILATERAL PLATFORMS:

• The UAE is a party to several regional and bilateral FTAs and has strong economic ties with GCC Countries which may open the gates for India to have strong economic ties with these GCC countries.
• UAE has become a non-permanent member of UNSC for 2022-23 and India will assume the Presidency of G-20 in Dec-2022; both countries may complement each other on multilateral platforms on various issues.

• India’s major exports to the UAE: include petroleum products, precious metals, stones, gems and jewelry, minerals, food items such as cereals, sugar, fruits and vegetables, tea, meat, seafood, textiles, engineering, and machinery products, and chemicals.
• India’s top imports from the UAE: include petroleum and petroleum products, precious metals, stones, gems and jewelry, minerals, chemicals, wood, and wood products.

POTENTIAL CHALLENGES IN THE IMPLEMENTATION

UAE IS A LOW TARIFF ECONOMY: The scope of tariff reduction is limited and hence the gains to Indian exporters. In most of the labor-intensive sectors like textiles, clothing, leather, footwear, etc., while the maximum tariff rate is 5 percent, the average tariff rate is either 5 percent or less. In other manufacturing sectors such as non-electrical machinery, electrical machinery, transport equipment, which constitute a significant proportion of the Indian export basket to the UAE, the maximum tariff rate is again 5 percent and the average tariff rate is less than 5 percent.

SURGE IN IMPORTS: The issue for India is the possibility of a surge in imports from the UAE. This is mainly because it is an entrepot economy and re-exports form a large proportion of its gross exports.

RISK OF TREATY ABUSE: While the agreement will be mutually beneficial for both countries, India needs to ensure that goods originating from outside the UAE are not allowed duty-free into India under this treaty. The risk of treaty abuse arises because the UAE is a global transshipment hub and hence, India should guard against duty-free imports of transshipped products.

THE WAY FORWARD

• It is imperative for India to not only have strong rules of origin provision under the CEPA but also it must enforce them.
• To get duty-free access to the Indian market under the CEPA, the required value addition in the UAE has been kept at 40 percent, which is significantly higher than other FTAs where value addition requirement is generally 30-35 percent.
• The CEPA would also have an effective enforcement mechanism in place. This will reduce the excessive surge in imports.
• To enhance the utilization of CEPA it is also important to ensure that the cost of compliance remains at the minimum level.

Exploring Other Trade OpportunitiesIn Future: The success of India-UAE CEPA will also provide much-needed insight and confidence to India to have other similar FTAs with other countries having a potential market for the Indian Goods and Services. The Government of India has prioritized at least six countries to engage with under the new FTA policy, with the UAE at the top of the list for an early harvest deal. The United Kingdom, the European Union, Australia, Canada, Israel, and a group of Gulf Cooperation Council countries are the others (GCC). In due future, the early harvest agreement will be expanded into a comprehensive FTA.

THE CONCLUSION: The CEPA brings the two nations closer, will open many new opportunities for Indians to work in UAE, including in fintech, tech, green tech, automation, and Artificial Intelligence. Technology, digital trade, and sustainability have a big focus in the partnership. The CEPA will not only improve the competitiveness of Indian products but also provide strategic advantages to India. Both countries will identify clear areas of focus and establish ways of working together to resolve trade remedy cases as envisaged in the MoU signed in January 2017.

BACK TO BASICS

INDIA-UAE RELATIONS IN THE RECENT PAST

• The UAE is the eighth-largest investor in India: The UAE has invested $11 billion between April 2000 and March 2021.
• Investment by Indian companies in the UAE is estimated to be over $85 billion
• The UAE is India’s second-largest export destination after the US, with exports valued at approximately $29 billion in FY20.
• India was the UAE’s second-largest trading partner in 2019, with bilateral non-oil trade valued at $41 billion
• The UAE is currently India’s third-largest trading partner with bilateral trade in FY20 valued at $59 billion.
• Indian Diaspora in UAE: Indian expatriate community of approx. 3.5 million (as per International Migrant Stock 2020 released by the Population Division of the UN Department of Economic and Social Affairs (DESA) is reportedly the largest ethnic community in UAE constituting roughly about 30 percent of the country’s population.
• Military exercises between India and UAE: Both countries have come together in the past to have bilateral as well as multilateral military exercises:

VARIOUS TYPES OF TRADE AGREEMENTS

Free Trade Agreement (FTA): To establish a fair set of rules of trade between the agreeing countries. They provide favorable treatment to each other by reducing trade barriers such as cutting the import duties to/from the other country. They also work on easing out non-tariff barriers to exports like easing quantitative import restrictions, easing customs procedures, improving market access for service exports, and better investment rules.

FTAs help in trade, job creation, and economic growth and also serve as a diplomatic tool for improving international relations Eg: ASEAN countries impose a 20% duty on the import of leather goods however for India this is 0%.

There are various types of trade agreements such as

• Preferential Trade Agreements (PTA): In a PTA, two or more partners agree to reduce tariffs on the agreed number of tariff lines. The list of products on which the partners agree to reduce duty is called a positive list. India MERCOSUR PTA (Argentina, Brazil, Paraguay, Uruguay, and Venezuela) is such an example. However, in general, PTAs do not cover substantially all trade.
• Comprehensive Economic Cooperation Agreement (CECA) and Comprehensive Economic Partnership Agreement (CEPA): These terms describe agreements that consist of an integrated package on goods, services, and investment along with other areas including IPR, competition, etc. The India UAE CECA is one such example and it covers a broad range of other areas like trade facilitation and customs cooperation, investment, competition, IPR, etc.
• Broad-Based Trade and Investment Agreement (BTIA):  India and the European Union (EU) are set to resume negotiations for a (BTIA). The BTIA talks have been suspended since 2013

DIFFERENCE BETWEEN CECA/CEPA AND FTA

CECA/CEPA: More comprehensive and ambitious than FTA in terms of coverage of areas and the type of commitments i.e. a holistic coverage of many areas like services, investment, competition, government procurement, disputes, etc. CECA/CEPA looks deeper at the regulatory aspects of trade than an FTA.

FTA: FTA focuses mainly on goods. A free trade agreement is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

FTAS  OF INDIA WITH OTHER COUNTRIES AND THEIR ANALYSIS

• Presently, India shares preferential market access and economic cooperation through trade agreements with over 50 countries.
• India actively engages in regional and bilateral trade negotiations to diversify and expand its export markets while ensuring access to the raw materials, intermediates, and capital goods needed to stimulate value-added domestic manufacturing.

Table 1 https://www.trade.gov/country-commercial-guides/india-trade-agreements

It’s true that most of the trade agreements have not delivered the expected results in terms of FTA utilization rate, market penetration, integration with regional or global production networks, etc. Given the complementarities in economic structures of the two countries, the India-UAE CEPA could be a win-win for both economies as India is highly dependent on oil imports and is an agriculture surplus economy, whereas UAE is an oil rich and agriculture deficit economy.

Mains Ques

1. The India-UAE CEPA will not only improve the competitiveness of Indian products but also provide strategic advantages to India. Explain
2. UAE being an entrepot economy, how the CEPA can enhance India’s export prospects not only to the UAE but also to West Asia and even Africa regions.
3. India –UAE CEPA may provide the much-needed boost to labour intensive sectors in India. Elaborate