TOP 5 TAKKAR NEWS OF THE DAY (20th JUNE 2023)

1. THE REMARKABLE ENDURANCE OF THE Y CHROMOSOME, ‘MASTER OF MALENESS’

TAG: GS 3: SCIENCE AND TECHNOLOGY

THE CONTEXT: Researchers have discovered that the Y chromosome possesses genes linked to ageing and lifespan regulation.

EXPLANATION:

  • In humans, in addition to the 22 pairs of chromosomes in each, there is a pair of sex chromosomes called X and Y.
  • Sex as a specification is determined by these sex chromosomes. They carry sex-determining genes.
  • All biological males have X and Y chromosomes and all biological females have two X chromosomes. The ‘sex-determining region Y’ on the Y chromosome determines the biological male sex.

How is the Y chromosome characterised?

  • Scientists published the complete genetic sequence of the Y chromosome in 2003. This sequence provided an outline of 23 million bases of the 60 million or so bases that together make up the Y chromosome. In total, the chromosome encoded for only 55 genes and accounted for around 2% of the genetic material inside a cell.
  • Many researchers refer to the Y chromosome as the “juvenile delinquent” among chromosomes due to its abundance of repetitive sequences, poor functional utility with a small number of genes, reluctance to recombine with other chromosomes, and a high proclivity to degenerate over the course of evolution.
  • It has little potential to recombine, the diminutive Y chromosome has been passed from father to son, carrying the legacy of generations.
  • Scientists have extensively studied it to understand human migration and evolution. It has also fuelled countless debates, unravelled the mysteries of paternity, revealed genetic diversity, and illuminated the intricate tapestry of our shared past.

Why does the Y chromosome matter?

  • In a landmark genetic study, published in March 2003 in the American Journal of Human Genetics, researchers reported that around 0.5% of all the men in the world have inherited a Y chromosome from the Mongol emperor Genghis Khan or one of his descendants.
  • Researchers have discovered of late that the Y chromosome possesses genes that are vital to biological functions, including those linked to ageing and lifespan regulation
  • In the animal kingdom (including mammals), scientists have noticed substantial differences in lifespan between the sexes: the females tend to live longer than the males. This phenomenon has been attributed largely to the absence of a second Y chromosome in males, exposing the deleterious mutations in the X chromosome.
  • It is also well known that men lose the Y chromosome (LoY) with age and that this is associated with a higher frequency of cancers, Alzheimer’s disease, and a shorter lifespan.
  • However, a recent study in fruit flies from France’s National Centre for Scientific Research, published in the journal Nature Ecology and Evolution attributed the longevity to the phenotypic sex of the animal rather than the presence of a Y chromosome. Phenotypic sex refers to an individual’s sex as deduced from their genitalia.

2. INITIATIVE ON CRITICAL AND EMERGING TECHNOLOGY (iCET)

TAG: PRELIMS PERSPECTIVE

THE CONTEXT: Recently, India and the United States unveiled a roadmap for enhanced collaboration in high-technology areas, with a focus on addressing regulatory barriers and aligning export controls for smoother trade and “deeper cooperation” in critical areas. This was part of the Initiative on Critical and Emerging Technology (iCET) announced by US President and Indian Prime Minister in 2022.

EXPLANATION:

What is iCET?

  • The Initiative on Critical and Emerging Technologies is a framework agreed upon by India and the U.S. for cooperation on critical and emerging technologies in areas including artificial intelligence, quantum computing, semiconductors and wireless telecommunication.
  • It was launched in January 2023 to strengthen their strategic partnership and drive technology and defence cooperation.
  • It was first announced the framework on the sidelines of the Quad meeting in Tokyo in May 2022.
  • The United States and India affirm that the ways in which technology is designed, developed, governed, and used should be shaped by our shared democratic values and respect for universal human rights.
  • It aims to fostering an open, accessible, and secure technology ecosystem, based on mutual trust and confidence, that will reinforce our democratic values and democratic institutions.

What are the focus areas of the initiative?

  • Primarily, the iCET seeks to position India and USA as “trusted technology partners” to build supply chains and support the co-production and co-development of items.
  • A White House fact sheet released after the inaugural dialogue gives a broad outline of areas the two countries intend to explore to expand the depth of tech partnership and cooperation between their governments, businesses, and academic institutions.
  • Key takeaways include setting up a research agency partnership to drive collaboration in areas like AI; developing a new defence industrial cooperation roadmap to accelerate technological cooperation for joint development and production; developing common standards in AI; developing a roadmap to accelerate defence technological cooperation and ‘innovation bridge’ to connect defence startups; supporting the development of a semiconductor ecosystem; strengthening cooperation on human spaceflight; advancing cooperation on development in 5G and 6G; and adopting OpenRAN network technology in India.

What has been the progress so far?

  • The two countries have already put in place the Quantum Coordination Mechanism, launched a public-private dialogue (PDD) on telecommunication to drive collaboration in OpenRAN, 5G and 6G, and held “important exchanges” on AI and space.
  • India and the U.S. signed an MoU on establishing a semiconductor supply chain that paved the way for creating a semiconductor sub-committee to review recommendations from an industry-led task force launched in connection with the iCET.
  • On the defence front, the two countries are close to concluding a mega jet engine deal.
  • In addition, a new initiative to advance cutting-edge technology cooperation, known as the India-U.S. Defence Acceleration Ecosystem (INDUS-X), is set to be launched during the visit.
  • India and the U.S. have also concluded a roadmap for ‘Defence Industrial Cooperation’ to guide the policy direction for the next few years.
  • The two countries have also established a Strategic Trade Dialogue to remove regulatory “barriers” and review existing export control norms to take forward strategic technology and trade collaborations envisaged under iCET.
  • Both the NSAs express optimism that the initiative will achieve more specific and tangible results in the near future
  • India and the United States unveiled a roadmap for enhanced collaboration in high-technology areas, with a focus on addressing regulatory barriers and aligning export controls for smoother trade and “deeper cooperation” in critical areas.
  • India and the U.S. signed an MoU on establishing a semiconductor supply chain that paved the way for creating a semiconductor sub-committee to review recommendations from an industry-led task force launched in connection with the iCET.

3. FUNCTIONING OF TELEGRAM BOTS

TAG: GS 3: SCIENCE AND TECHNOLOGY

THE CONTEXT: Bots on Telegram are small applications that run entirely within the platform and can be designed to support any kind of task or service. However, not all of them are secure and safe. They may collect user data, including personal information and chat history.

EXPLANATION:

  • Recently, reports came out which alleged that a Telegram bot had access to and was presenting the identification numbers of the documents submitted for vaccination purposes which includes Aadhaar, PAN card, and even passport numbers of individuals.
  • In a similar incident, in 2021, a bot on the platform was found selling phone numbers pulled from Facebook. Security researchers reportedly found a network of deep fake bots on the platform that were generating non-consensual images of people submitted by users, some of which involved children.

What is Telegram?

  • Telegram is an open-source API messaging platform service launched in 2013. The platform allows developers to create their own apps and use the free-to-use API to develop specialised tools, like bots, to integrate services.
  • The platform currently has over 700 million monthly active users and is one of the 10 most downloaded apps in the world, and is known for supporting file shares of up to 2GB, stored on the cloud that can be accessed from different devices.
  • Telegram makes money through its sponsored messages and premium subscriptions. The platform protects private conversations from snooping third parties including officials, marketers, and advertisers, the platform’s website says.
  • The platform does not process any requests related to group chats and private conversations among participants. They only entertain requests related to sticker sets, channels, and bots as they are publicly available.

What are Telegram bots?

  • Bots are computer programs that act as agents of a user or another computer program. Bots on Telegram are small applications that run entirely within the platform and can be designed to support any kind of task or service.
  • Bots on Telegram can host full Web Apps and can be designed to support everything from online stores to arcade games. Additionally, they can also be designed to make it easier for users to access information held within large databases they are connected to.
  • Users can enter commands, or simply enter the name or description of files they are looking for and the bot can search the connected database to present the information.
  • Bots are listed on the platform as special accounts that do not require a phone number to set up and are connected to the owner’s server which processes input and requests from users. They can be found using the search feature on the Telegram app.

Who can create bots on Telegram?

  • Any developer with some skills in computer programming or a third-party service provider can create a Telegram bot using the platform’s bot API. The API gives the tools and framework required to integrate code for the bot within the platform. The platform assists the creation of bots through “Botfather” a virtual user designed to be the central development tool for Telegram bots.
  • Telegram requires bots created using its Bot API to be registered using an authentication token generated by the platform. Bots on the platform can be created using a wide range of programming languages which include Java and Python.

What is the use of bots on Telegram?

  • Bots are usually used in professional areas for smart communication and pulling information from defined databases.
  • Users can send commands to bots that they respond to with relevant information or perform tasks they are designed to do. For example, if a user does not wish to open their email app to check their messages, they can use a bot to check their email within the Telegram app.
  • Users can also authorise bots to respond to emails from the Telegram app.

Are bots on Telegram safe?

  • While Telegram encourages developers to create bots that comply with its terms of service, not all bots may be secure and some can pose security risks.
  • Bots may collect user data, including personal information and chat history and users should read the terms of service and privacy policy to understand how individual bots handle user data.
  • Bots can also be created by threat actors to contain malicious content, such as links to phishing websites or malware. Threat actors can also distribute bots to scam users, promising rewards or discounts on purchases to lure users into sharing their personal data.
  • Some bots could have security vulnerabilities that can be used by threat actors to compromise the security of users.

4. DIRECT SEEDING VERSUS TRANSPLANTING

TAG: PRELIMS PERSPECTIVE

THE CONTEXT: As weak monoon can impact paddy production, here direct seeding of rice, instead of transplanting and flooding of fields, can cut down the massive water consumption of paddy.

EXPLANATION:

  • The southwest monsoon season (June-September) has registered 37.2% deficient rain so far. With most global weather agencies predicting El Niño which typically suppresses rainfall in India to fully set in by this month-end, the outlook for the rest of the season doesn’t look great.
  • A weak monsoon can particularly impact paddy (rice with husk). A highly water-intensive crop, its cultivation entails preparing nurseries, where the seeds are first raised into young plants that are uprooted and re-planted around 30 days later in the main field. During the nursery stage, water equivalent to one round of irrigation is given.
  • But the real water consumption starts after that: The field in which the seedlings are transplanted is usually irrigated once, before being “puddled” or tilled in standing water. Puddling churns the soil, making it softer for transplanting, and breaks its capillary pores through which water percolates down. This operation alone consumes water equivalent to three irrigations.
  • For the first two weeks or more after transplanting, farmers have to irrigate every 1-2 days to maintain a water depth of 4-5 cm, necessary to prevent weed growth during the crop’s early stage. In the remaining 110-odd days out of the total 155-160 days duration (seed to grain) the irrigation requirement reduces to once a week.
  • In all, the conventional transplanting route requires some 28 irrigations. It can go up if high temperatures force more frequent watering, and go down if there is enough rain. Each irrigation consumes roughly 5 hectare-cm or 500,000 litres of water (one hectare-cm is one cm of standing water in one hectare area, equal to 100,000 litres).

Direct seeding versus transplanting

  • In Direct seeding of rice (DSR) paddy here is sown directly in the field without any nursery preparation, puddling or flooding. In transplanting, the flooded fields basically deny oxygen to the weed seeds in the soil, preventing their germination. Water, thus, acts as a natural herbicide. In DSR, water is replaced with chemical herbicides.
  • First ploughing of the land is done  and used a laser leveler machine for smoothening and leveling of the soil surface. This was followed by a pre-sowing irrigation and 2-3 rounds of planking to compact the soil for it to retain moisture.
  • Sowing was done by a DSR machine after 4-5 days, when the field had sufficient workable soil moisture. Pendimethalin herbicide was then sprayed (at 1.5 litres/acre) within 24 hours of sowing. The weeds whose small seeds in the soil germinate fast once irrigation is given are killed on coming into contact with this “pre-emergent” herbicide.
  • DSR is effective against weeds and saves water compared to transplanting. The second irrigation is required only 18-20 days after sowing. Also, a second “post-emergent” herbicide, bispyribac sodium, is applied (at 100-125 gm/acre) 20-25 days after sowing, when the crop’s main stem has produced 2-3 leaves.
  • The water saving in DSR comes from no puddling and flooding of fields during the initial 2-3 weeks.

Why DSR hasn’t picked up?

  • A key reason is subsidised or even free electricity for irrigation, providing farmers little incentive to deploy water-saving technology. A second reason highlighted is the lack of good machines.
  • The recommended spacing for paddy is 20 cm row-to-row and 15 cm plant-to-plant, allowing for a plant population of 33 per square meter. The DSR seed drill machines mostly sow row-to-row and don’t get the plant-to-plant distance right.

5. IS THIS ‘AGE OF THE DELTA’ COMING TO AN END?

TAG: GS 1: GEOGRAPHY

THE CONTEXT: The soils are sinking, for varied and complex reasons. Worse, as the climate warms, the seas are rising leading to disappearance of delta, often quite rapidly.

EXPLANATION:

  • Deltas are inherently impermanent as climate changes through the epochs, as the seas rise and fall, deltas are formed and then buried underwater. Still, these past few thousand years can be thought of as an “age of the delta,”. Not coincidentally, it has also been an age of human flourishing. Human civilisation started when modern river deltas started to appear.
  • Similar landforms flat and wet and rich with wildlife have built up wherever rivers dump their mud and sand into shallow oceans. There are thousands of such deltas across the world, ranging in size from just a few acres to, in the case of the Mississippi River’s, thousands of square miles. Many of these places, including the marshes in Louisiana, are

What are river deltas, and why are they important?

  • River deltas are places where river sediments settle. Rivers slow down when they reach the sea, and then all the sediments that rivers carry are dropped out. That builds land over time.
  • A typical delta is a place that’s flooded, sometimes by tides every couple of hours, while some deltas flood only once a year, during a monsoon or a big hurricane. The ecology and biology have to be very well adapted to this periodic inundation.
  • These are great places for fish. The river-carried sediment is rich with organic material, which is good for agriculture.

How do deltas form?

  • Deltas exist on a balance. Some forces are constructive like river to supply a lot of sediment. That can happen naturally, through mountain-building and then erosion that’s why we have a lot of big deltas downstream of the Himalayas.
  • Then there are destructive forces. Sea level is a first-order control on the evolution of deltas. When the seas are rising, it’s hard for rivers to supply enough sediment to keep up.
  • Humans can actually be a constructive force for deltas. What we’ve seen over the past few hundred years is that deforestation upstream in a river’s watershed can cause an increase in the amount of sediment that is brought down by a river. So in that sense, humans have greatly accelerated delta growth over the past centuries.
  • But humans can be a destructive force, too. There is subsidence, for example: land lowering, which happens a lot in deltas because they are built from young, soft soils. Here in the Netherlands, we started to drain the delta because we wanted to use it for agriculture. And then subsidence accelerates and the land sinks beneath your feet, since the water in the soil dries out. So now you build levees to protect yourself from all the extra flooding.

Is it really end of delta?

  • Really, though, given how big a control sea-level rise is on delta construction, the biggest problem now is climate change. As ice sheets begin to melt again, that’s causing seas to rise much more quickly than they have in thousands of years.
  • It sounds like we’ve been in an “age of the delta,” but that’s now coming to an end.
  • So it could go very, very fast. Since sea level is so important here, a lot of that depends on what we do in terms of CO2 emissions and climate change.
  • But for many deltas, we’ve built levees, so they’re fixed – they’re not moving anywhere. And big deltas are hard to sustain. They need a lot of sediment. Those deltas are much more uncertain.
  • Eventually, sea-level rise will slow again, and then we’ll reenter an age of the delta, when rivers can build again. Ironically, if we continue emissions at a high rate that might happen sooner, because we will speed up the tipping point where the world’s ice sheets collapse. If we continue emissions at a high rate, then sea-level rise might slow again around the year 2400, and deltas may be able to grow again by the end of this millennium, once much of Greenland and Antarctica have melted.

Is there anything we can do to save today’s deltas?

  • There are adaptation methods that can work for individual deltas. One key idea is trying to use the sediments coming down from the river in a smarter way. That typically means breaking down levees and restoring the natural flow of the river into the delta’s wetlands. These projects are sometimes called “river diversions.”
  • River diversions lead to high sedimentation rates, but these rates decline over time. The sedimentation rate is dependent on the elevation difference, so as you build your land, it gets harder and harder to keep up. And diversions work on very small parts of a delta.



Ethics Through Current Development (20-06-2023)

  1. Three types of desires READ MORE
  2. Understand other person’s perspective READ MORE
  3. The power of good READ MORE



Today’s Important Articles for Geography (20-06-2023)

  1. What made Cyclone Biparjoy unique, why its path was difficult to predict READ MORE
  2. Extreme weather events led to 12 million displacements of children in 2022, estimates UNICEF READ MORE



Today’s Important Articles for Sociology (20-06-2023)

  1. Caste census needed, but with a plan READ MORE
  2. A wandering monk who was a social reformer READ MORE



Today’s Important Articles for Pub Ad (20-06-2023)

  1. Grassroots peace: Free and fair elections to local bodies are not possible without peace READ MORE
  2. Safety first: on Indian pharma products and drug safety READ MORE
  3. Curb frivolous PILs in national interest READ MORE
  4. Democracy’s balance between certainty and uncertainty READ MORE
  5. The perils of plea bargaining READ MORE



WSDP Bulletin (20-06-2023)

(Newspapers, PIB and other important sources)

Prelim and Main

  1. Punjab steps in to help Karnataka with its free rice scheme READ MORE  
  2. Explained | If Betelgeuse goes supernova, what would it look like? READ MORE
  3. Goundwater extraction has affected the earth’s tilt: new study READ MORE
  4. Withdrawal of duty benefit scheme by U.K. may impact labour-reliant export sectors READ MORE
  5. UN slams ‘gender apartheid’ in Kabul READ MORE
  6. Ladakh leaders meet Union Minister, demand statehood READ MORE
  7. Punjab govt. decision to allow free-to-air telecast of the READ MORE
  8. Gandhi Prize is a great honour, says Gita Press, declines cash award READ MORE
  9. UN rights chief seeks to establish presence in China and India READ MORE
  10. Archaeologist finds Mesolithic-era rock painting in Andhra’s Guntur READ MORE

Main Exam

GS Paper- 1

  1. What made Cyclone Biparjoy unique, why its path was difficult to predict READ MORE
  2. Extreme weather events led to 12 million displacements of children in 2022, estimates UNICEF READ MORE
  3. Caste census needed, but with a plan READ MORE
  4. A wandering monk who was a social reformer READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

  1. Grassroots peace: Free and fair elections to local bodies are not possible without peace READ MORE
  2. Safety first: on Indian pharma products and drug safety READ MORE
  3. Curb frivolous PILs in national interest READ MORE
  4. Democracy’s balance between certainty and uncertainty READ MORE
  5. The perils of plea bargaining READ MORE

SOCIAL ISSUES AND SOCIAL JUSTICE

  1. Rural healthcare: Village family adoption included in MBBS course READ MORE

INTERNATIONAL ISSUES

  1. A rising India, in waltz dance steps with the U.S. READ MORE
  2. PM’s US visit: Politics and strategy behind Narendra Modi’s diaspora outreach READ MORE
  3. The golden opportunity and a dark cloud in Indo-US ties READ MORE
  4. Will US visit signal the end of non-alignment? READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

  1. On defaulters, RBI prioritises public interest READ MORE
  2. Millets need a procurement push READ MORE
  3. Is opposition to GM crops emotional? READ MORE

ENVIRONMENT AND ECOLOGY

  1. Heatwave needs a swift response READ MORE
  2. Decoding decarbonization READ MORE

SCIENCE AND TECHNOLOGY

  1. Phonons on the chopping block: Are ‘sound particles’ quantum too? READ MORE

SECURITY

  1. Tri-service integration: Common ACR for top brass a step forward READ MORE

DISASTER MANAGEMENT

  1. Preparedness pays off: On Cyclone Biparjoy READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

  1. Three types of desires READ MORE
  2. Understand other person’s perspective READ MORE
  3. The power of good READ MORE

Questions for the MAIN exam

  1. While a caste-based census would aid a better understanding of the present dynamics and policy-making of caste, there are challenges that must be addressed before executing an exercise as elaborate as census. Comment.
  2. It is human nature to seek certainty and shun uncertainty. Comment and justify how humans generally feel apprehensive about uncertainty.
  3. India may claim strategic autonomy and remain in global forums alongside Russia and China, however, it is moving deeper into the US camp. In the light of the statement, examine how the US has succeeded in wooing India and drawing it strategically away from Russia?
  4. The misuse of public interest litigations adversely affects the democratic process and undermines the credibility of the judicial system. Critically comment.

QUOTATIONS AND CAPTIONS

  • Science and technology revolutionise our lives, but memory, tradition and myth frame our response.
  • Today space technologies are essential for power and prestige in the international system.
  • The high dependence on fossil fuels for revenue and GDP growth is impeding the transition to a low-carbon economy.
  • While a caste-based census would aid better understanding of the present dynamics and policy-making of caste, there are challenges that must be addressed before executing an exercise as elaborate as census​.
  • A caste-based census literally means the collection of primary data about people’s castes, the employment and educational level, etc., everything associated with one’s caste.
  • The core ideals of the criminal justice system in a welfare democracy such as India is laid on the bedrock that the State shall have the primary duty of justice dispensation.
  • The founding principle of criminal justice is deeply rooted in the idea of providing a fair opportunity to the accused prior to passing a verdict.
  • The criminal justice system is flawed with several drawbacks, and increased judicial efficiency requires transparent and accountable systems.
  • India may claim strategic autonomy and remain in global forums alongside Russia and China, however it is moving deeper into the US camp. It may not become a military ally but will be a strategic partner. The US has succeeded in wooing India and drawing it strategically away from Russia.
  • The misuse of public interest litigations adversely affects the democratic process and undermines the credibility of the judicial system.
  • The Republicans and Democrats see India as a valued civilisational ally and a strategic partner as there are powerful mutual interests with the U.S.

Essay topic

  • An optimist is one who finds an opportunity in every difficulty whereas the pessimist sees a difficulty in every opportunity.

50-WORD TALK

  • If countries can forget their differences, their people will prosper, which is the objective of any governance. Imagine what could happen when a common government can attract ideas from billions of citizens, channel their creativity for innovation and direct their energies for development it could usher in a world beyond the wildest of our imagination. If nations can forge alliances to promote regional integration, scaling it up to be continental integration and finally to a world government, where every country retains their uniqueness yet is guided by a common agenda driven by such a government, we can become what scientists have called a Type-I civilisation

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 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.



CHAPTER 1: STATE OF THE ECONOMY 2022-23- RECOVERY COMPLETE

THE CONTEXT: Recovering from pandemic-induced contraction, Russian-Ukraine conflict and inflation, Indian economy is staging a broad-based recovery across sectors, positioning to ascend to the pre-pandemic growth path in FY23.

GDP GROWTH

  • India’s GDP growth is expected to remain robust in FY24. GDP forecast for FY24 to be in the range of 6-6.8 %.
  • Monetary tightening by the RBI, the widening of the CAD, and the plateauing growth of exports have essentially been the outcome of geopolitical strife in Europe. As these developments posed downside risks to the growth of the Indian economy in FY23, many agencies worldwide have been revising their growth forecast of the Indian economy downwards.
  • Despite strong global headwinds and tighter domestic monetary policy, if India is still expected to grow between 6.5 and 7.0 per cent, and that too without the advantage of a base effect, it is a reflection of India’s underlying economic resilience; of its ability to recoup, renew and re-energize the growth drivers of the economy.

  • Rising inflation and monetary tightening led to a slowdown in global output beginning in the second half of 2022. The global PMI composite index has been in the contractionary zone since August 2022, while the yearly growth rates of global trade, retail sales, and industrial production have significantly declined in the second half of 2022.
  • The consequent dampening of the global economic outlook, also compounded by expectations of a further increase in borrowing costs, was reflected in the lowering of growth forecasts by the IMF in its October 2022 update of the World Economic Outlook (WEO).

MACROECONOMIC AND GROWTH CHALLENGES IN THE INDIAN ECONOMY

The impact of the pandemic on India was seen in a significant GDP contraction in FY21 but the third wave did not affect economic activity in India as much as the previous waves of the pandemic did since its outbreak in January 2020 and India gets hope to achieve the pace of growth similar to pre-pandemic level. But still some challenges remain for India economy-

  • Inflation: The country’s retail inflation crept above the RBI’s tolerance range (i.e., 6%) in January 2022. It remained above the target range for ten months before returning to below the upper end of the target range in November 2022.
  • Depreciation of the Rupee: With monetary tightening, the US dollar has appreciated against several currencies, including the rupee. However, the rupee has been one of the better-performing currencies worldwide.
  • Current Account Deficit: The modest depreciation of the Rupee may have added to the domestic inflationary pressures besides widening the CAD. Global commodity prices may have eased but are still higher compared to pre-conflict levels. They have further widened the CAD, already enlarged by India’s growth momentum. However, for FY23, India has sufficient forex reserves to finance the CAD and intervene in the forex market to manage volatility in the Indian rupee.
  • Export Growth: Export growth was strong enough to increase India’s share in the world market of merchandise exports. However, due to aggressive and synchronized monetary tightening, global economic growth has started to slow, and so has world trade.

CONSUMPTION

Private consumption in Half-1 is the highest since FY15 and this has led to a boost to production activity resulting in enhanced capacity utilization across the sectors.

  • The rebound in consumption has also been supported by the release of “pent-up” demand, a phenomenon not again unique to India but nonetheless exhibiting a local phenomenon influenced by a rise in the share of consumption in disposable income.
  • Accelerating growth in personal loans in India testifies to an enduring release of “pent-up” demand for consumption.
  • The “release of pent-up demand” was reflected in the housing market too. Demand for housing loans picked up.

Note: Pent-up demand refers to consumer demand for products and services that builds over time due to a recession. People delay purchasing goods and services during a recession, which leads to a large amount of buying once the recession is over.

CAPITAL EXPENDITURE

The Capital Expenditure of Central Government and crowding in the private Capex (Capital expenditure) led by strengthening of the balance sheets of the Corporates is one of the growth drivers of the Indian economy in the current year.

  • Construction activity, in general, has significantly risen in FY23 as the much-enlarged capital budget (Capex) of the central government and its public sector enterprises is rapidly being deployed.
  • Going by the Capex multiplier estimated for the country, the economic output of the country is set to increase by at least four times the amount of Capex.
  • Evidence shows an increasing trend in announced projects and capex spending by the private players.

CREDIT SUPPLY

  • The credit growth to the MSME sector was over 30.6 per cent on average during Jan-Nov 2022.
  • The banking sector in India has responded in equal measure to the demand for credit. The Year-on-Year growth in credit since the January-March quarter of 2022 has moved into double-digits and is rising across most sectors.
  • The finances of the public sector banks have seen a significant turnaround, with profits being booked at regular intervals and their Non-Performing Assets (NPAs) being fast-tracked for quicker resolution/liquidation by the Insolvency and Bankruptcy Board of India (IBBI).

INFLATION

  • RBI has projected headline inflation at 6.8 per cent in FY23, which is outside its target range.
  • At the same time, it is not high enough to deter private consumption and not so low as to weaken the inducement to invest.
  • Moderately high inflation has further ensured the anchoring of inflationary expectations preventing prices from weakening demand and growth in India.
  • Additionally, with inflation on the declining path, the interest cost of domestic credit will likely decline, inducing a further increase in demand for credit by corporates and retail borrowers.

INDIA’S INCLUSIVE GROWTH

  • Growth is inclusive when it creates jobs. Both official and unofficial sources confirm that employment levels have risen in the current financial year. The Periodic Labour Force Survey (PLFS) shows that the urban unemployment rate for people aged 15 years and above declined from 9.8 per cent in the quarter ending September 2021 to 7.2 per cent one year later (quarter ending September 2022).

  • In FY21, the Government announced the Emergency Credit Line Guarantee Scheme. The scheme has succeeded in shielding micro, small and medium enterprises from financial distress. A recent CIBIL report (ECLGS Insights, August 2022) showed that the scheme has supported MSMEs in facing the covid shock.
  • The Mahatma Gandhi National Rural Employment Guarantee (MGNREGS) scheme has been rapidly creating more assets in respect of “Works on individual’s land” than in any other category. The share of this category rose to about 60 per cent in FY22, indicating that MGNREGA, besides generating daily wage employment, has also been creating assets for individual households to diversify their sources of income and lift their supplementary incomes.
  • The National Family Health Survey (NFHS) in India shows improved rural welfare indicators from FY16 to FY20, covering aspects like gender, fertility rate, household amenities, and women empowerment.

  • Strong consumption rebound, robust revenue collections, sustained capex in both the public and the private sector, growing employment levels in the urban as well as the rural areas, and targeted social security measures further underpin the prospects for economic and social stability and sustained growth.
  • India is the third-largest economy in the world in PPP terms and the fifth-largest in market exchange rates. As expected of a nation of this size, the Indian economy in FY23 has nearly “recouped” what was lost, “renewed” what had paused, and “re-energized” what had slowed during the pandemic and since the conflict in Europe.

OUTLOOK: 2023-24

  • India’s recovery from the pandemic was relatively quick, and growth in the upcoming year will be supported by solid domestic demand and a pickup in capital investment. Reforms such as the introduction of the Goods and Services Tax and the Insolvency and Bankruptcy Code enhanced the efficiency and transparency of the economy and ensured financial discipline and better compliance.
  • Even as India’s outlook remains bright, global economic prospects for the next year have been weighed down by the combination of a unique set of challenges expected to impart a few downside risks.
  • Global growth is forecasted to slow from 3.2 per cent in 2022 to 2.7 per cent in 2023 as per IMF’s World Economic Outlook, October 2022. A slower growth in economic output coupled with increased uncertainty will dampen trade growth. This is seen in the lower forecast for growth in global trade by the World Trade Organisation, from 3.5 per cent in 2022 to 1.0 per cent in 2023.
  • On the external front, risks to the current account balance stem from multiple sources. Strong domestic demand amidst high commodity prices will raise India’s total import bill and contribute to unfavourable developments in the current account balance.
  • Another risk to the outlook originates from the ongoing monetary tightening Entrenched inflation may prolong the tightening cycle, and therefore, borrowing costs may stay ‘higher for longer’.
  • In such a scenario, the global economy may be characterized by low growth in FY24. However, the scenario of subdued global growth presents two silver linings – oil prices will stay low, and India’s CAD will be better than currently projected. The overall external situation will remain manageable.

The upside to India’s growth outlook arises from –

  1. Limited health and economic fallout for the rest of the world from the current surge in Covid-19 infections in China and, therefore, continued normalization of supply chains.
  2. Inflationary impulses from the reopening of China’s economy turning out to be neither significant nor persistent.
  • Recessionary tendencies in major advances economies triggering a cessation of monetary tightening and a return of capital flows to India amidst a stable domestic inflation rate below 6 per cent.
  1. This leads to an improvement in animal spirits and provides further impetus to private sector investment.
  • Against this backdrop, the survey projects a baseline GDP growth of 6.5 per cent in real terms in FY24.
  • The projection is broadly comparable to the estimates provided by multilateral agencies such as the World Bank, the IMF, and the ADB and by RBI, domestically. The actual outcome for real GDP growth will probably lie in the range of 6.0 per cent to 6.8 per cent, depending on the trajectory of economic and political developments globally.

THE CONCLUSION: The year FY23 so far for India has reinforced the country’s belief in its economic resilience. The economy has withstood the challenge of mitigating external imbalances caused by the Russian-Ukraine conflict without losing growth momentum in the process.




Day-444 | Daily MCQs | UPSC Prelims | ENVIRONMENT AND ECOLOGY

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