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Distribution: yearly

  • Row over Mekedatu Project

    mekedatu

    Central Idea

    • Announcement of dam and reservoir: The Deputy CM of Karnataka announced plans for the construction of a dam and reservoir called Mekedatu near the state’s border with Tamil Nadu.
    • Objections raised by Tamil Nadu: Tamil Nadu expressed strong objections to the project, arguing that it goes against the rulings of both the Cauvery Water Disputes Tribunal and the Supreme Court.
    • Warning of protests: Political parties in Tamil Nadu have warned of potential protests and opposition if the construction of the Mekedatu dam proceeds.

    What is Mekedatu Project?

    • Location and purpose: The Mekedatu dam project is planned to be constructed in Ramanagaram district, approximately 100 km south of Bengaluru. Its primary purpose is to address the drinking water needs of Bengaluru and replenish the regional groundwater table.
    • Proposed capacity and estimated cost of the dam: The dam is proposed to have a capacity of 48 TMC (thousand million cubic) feet and is estimated to cost Rs 6,000 crore.
    • Background and previous developments of the project: The idea of the Mekedatu dam has been under consideration for several years. In 2014, the Karnataka government invited expressions of interest for the project and allocated funds for a detailed project report in the following year.

    Opposition to the Project

    • Widespread protests and state-wide bandh in TN: When the project was initially proposed, Tamil Nadu witnessed widespread protests against it. These protests culminated in a statewide bandh, supported by various stakeholders.
    • Resolutions passed by TN Assembly against the project: The Tamil Nadu Assembly, representing the voice of the people, passed unanimous resolutions expressing strong opposition to the Mekedatu project in December 2018 and January 2022.
    • Political actions and legal involvement in the dispute: Various political leaders and parties in Tamil Nadu have taken actions, including raising the issue with the central government and approaching the Supreme Court to challenge the project’s legality.

    Arguments against the Project

    • Concerns over modification of river flow: Critics of the Mekedatu project argue that constructing reservoirs on the Cauvery River would modify its natural flow, potentially leading to adverse effects downstream.
    • Violation of the final award of the water disputes tribunal: Tamil Nadu contends that the proposed dam violates the final award of the Cauvery Water Disputes Tribunal, which determined the water-sharing arrangements between the two states.
    • Impact on water flow in catchment areas: Tamil Nadu raises concerns that the project’s implementation would impound the flow in catchment areas, affecting the availability of water downstream and potentially leading to water scarcity in the state.

    Justifications and proposals

    • Ensuring adequate flow to TN: Karnataka argues that the construction of the Mekedatu dam will not hinder the stipulated quantum of water release to Tamil Nadu nor be utilized for irrigation purposes.
    • Allocation of funds and willingness to negotiate: The Karnataka government has earmarked Rs 1,000 crore for the project, indicating its commitment. It also expresses willingness to engage in discussions and negotiations with Tamil Nadu to address concerns and find a resolution.
    • Clearance of feasibility study: The Central Water Commission cleared a feasibility study for the Mekedatu project in 2018, providing additional support for Karnataka’s justifications and indicating the project’s viability.

    Historical context of the dispute

    • Past opposition and protests against the dam: The Mekedatu dam has been a subject of contention and opposition for several years. Tamil Nadu has witnessed widespread protests, reflecting public sentiment against the project.
    • Political actions and involvement of state delegations: Political leaders from Tamil Nadu and Karnataka have been actively involved in addressing the issue. Delegations from both states have approached the central government seeking support or intervention.
    • Legal challenges and the role of the Supreme Court: Tamil Nadu’s approach to the Supreme Court against the Mekedatu project highlights the legal dimension of the dispute. The involvement of the court plays a crucial role in considering the arguments and reaching a resolution.

    Environmental and Economic considerations

    • Potential benefits of the dam for water supply: Proponents of the Mekedatu project argue that it will address the pressing drinking water needs of Bengaluru, ensuring a stable water supply for the growing city.
    • Concerns about environmental impact and ecosystem disruption: Critics raise concerns about the potential environmental impact of constructing the dam and reservoir. They highlight potential disruptions to local ecosystems and the natural flow of the river.
    • Evaluating the economic viability of the project: Given the significant estimated cost of the Mekedatu project, there is a need to evaluate its cost-effectiveness and long-term economic viability, considering factors such as funding sources, returns on investment, and sustainable utilization of resources.

    Way forward

    • Importance of negotiation and finding common ground: The conflict surrounding the Mekedatu project emphasizes the importance of dialogue, negotiations, and finding mutually acceptable solutions that address the concerns of both Karnataka and Tamil Nadu.
    • Role of the Supreme Court and other mediators in resolving conflicts: The involvement of the Supreme Court and other mediators can play a crucial role in facilitating discussions, mediating conflicts, and reaching a resolution that adheres to legal frameworks and considers the interests of both states.
    • Promoting inter-state cooperation for sustainable water management: The dispute underscores the need for robust inter-state cooperation and collaboration on water management issues. It is crucial to ensure sustainable and equitable utilization of shared water resources, respect legal frameworks, and address the concerns of all stakeholders involved.

     

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  • India’s GDP expanded 6.1% in 2022-23’s last quarter

    gdp

    Central Idea

    • The National Statistical Office (NSO) has released provisional national income data revealing that India’s GDP growth in the January to March 2023 quarter reached 6.1%.
    • This growth in the fourth quarter is the fastest among major economies, indicating better prospects for the current year compared to previous expectations.

    Key Highlights

    (1) Manufacturing Sector Growth Slows, Despite Q4 Rebound

    • Gross Value Added (GVA) in the economy rose by 7% in 2022-23, compared to 8.8% in the previous fiscal year.
    • Manufacturing GVA growth declined significantly, reaching only 1.3% compared to 11.1% a year ago.
    • The sector experienced a rebound of 4.5% in the final quarter after six months of contraction, but overall growth remained subdued.

    (2) Agri and Services Sectors Propel Economic Growth

    • The agricultural GVA grew by 4% in 2022-23, an increase from 3.5% in the previous year.
    • Financial, real estate, and professional services sectors experienced a 7.1% growth in GVA, compared to 4.7% in 2021-22.
    • Trade, hotels, transport, and communication sectors, along with services related to broadcasting, witnessed a marginal increase of 14% in GVA.

    (3) Revised GDP and GVA Figures Reflect Changes in Economic Performance

    • The NSO revised GDP and GVA numbers for the first half of 2022-23, with slight decreases, but the third-quarter figures were slightly increased.
    • The first quarter’s GDP growth in 2022-23 is now pegged at 13.1%, followed by 6.2% in the second quarter and 4.5% growth in the third quarter.
    • GVA growth estimates for the first and second quarters were revised to 11.9% and 5.4% respectively, while the third quarter GVA growth increased to 4.7% from the earlier estimate of 4.6%.

    (4) Consumer Sentiment and Consumption Growth

    • Despite a slight uptick in private final consumption expenditure to 2.8% in Q4 from 2.2% in Q3, consumption growth remained muted.
    • This contradicted the uptick in consumer sentiments as per the RBI’s consumer confidence survey, highlighting the disparity between sentiment and actual spending.

    (5) Outlook and Challenges for Future Growth

    • Maintaining growth above 6% will be challenging amid a global economic slowdown, according to economists.
    • Higher-than-expected GDP growth in the previous year may temper growth expectations for the current year, with the government and central bank projecting around 6.5% growth.
    • Pent-up demand that supported growth previously may not be as strong, and private sector investment needs to pick up since exports are not expected to contribute significantly to growth.

    What can we as an Aspirant infer?

    • The resilience of the Indian economy and its promising trajectory despite global challenges is often highlighted in news.
    • This article justifies this perception about better performance of Indian Economy.

    Conclusion

    • To sustain and enhance economic growth, focus on stimulating private sector investment to complement the performance of agriculture and services sectors.
    • Addressing the challenges in the manufacturing sector and boosting consumer confidence can lead to increased consumption and overall economic expansion.
    • Efforts to diversify and promote exports should be prioritized to contribute to future growth and reduce dependence on domestic consumption.

    Tap to read more about:

    [Static Revision] National Income Determination, GDP, GNP, NDP, NNP, Personal Income

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  • UAE withdraws from Combined Maritime Forces (CMF)

    Central Idea

    The United Arab Emirates (UAE) has announced its withdrawal from the U.S.-led Combined Maritime Forces (CMF), a maritime coalition responsible for securing Gulf waterways crucial to global oil trade.

    What is Combined Maritime Forces (CMF)?

    Establishment 2002
    Location Bahrain
    Objective Promoting security, stability, and prosperity across maritime regions
    Member Nations Over 30 member nations
    Primary Task Forces Combined Task Force 150 (CTF 150), Combined Task Force 151 (CTF 151), Combined Task Force 152 (CTF 152)
    Operations Counter-terrorism, counter-piracy, maritime security, and cooperation
    Collaborations United Nations, European Union, NATO, and regional partners
    Contributions Naval assets including warships, aircraft, and maritime patrol vessels
    Focus Areas Arabian Sea, Gulf of Oman, Gulf of Aden, Red Sea, Indian Ocean, Arabian Gulf, and surrounding areas

     

    Reasons for UAE’s withdrawal

    • UAE has not provided specific reasons for its withdrawal from the Combined Maritime Forces (CMF) in the official statement.
    • One potential factor could be a desire to distance themselves from perceived dependencies or entanglements with the US.
    • This could be part of a broader strategy by the UAE to assert its own regional influence, pursue independent foreign policies, or rebalance its relationships with China and Iran.

    Recent incidents and tensions in Gulf Waters

    • In late April and early May, Iran seized two tankers, one of which was empty and travelling between the UAE ports of Dubai and Fujairah.
    • Iran was also accused of launching a drone attack on an Israeli-owned tanker in November 2022, escalating tensions with the United States.
    • As a response to increasing harassment by Iran, the US announced the deployment of reinforcements to the Gulf, a vital route for a significant portion of the world’s sea-borne oil.

     

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  • Mandatory Anti-Tobacco Warnings on OTT Platforms

    tobacco

    Central Idea

    • Over-the-top (OTT) streaming platforms must display anti-tobacco warnings similar to those seen in movies screened in theatres and on TV.
    • The requirement is based on a Union Health Ministry notification that amends the rules under the Cigarettes and Other Tobacco Products Act (COTPA), 2004.

    What is COTPA, 2004?

    Description
    Purpose Regulate production, sale, distribution, and consumption of tobacco products
    Prohibition of Smoking in Public Places Smoking prohibited in public areas like offices, restaurants, parks, public transport, etc.
    Health Warnings on Tobacco Products Mandatory display of health warnings on cigarette packages and other tobacco products
    Ban on Advertisement and Promotion Prohibition on direct and indirect advertising of tobacco products
    Prohibition on Sale to Minors Selling tobacco products to individuals below 18 years of age is strictly prohibited
    Packaging and Labelling Requirements Health warnings and pictorial representations of harmful effects on cigarette packages
    Powers of Enforcement Authorities empowered to enforce the act, conduct inspections, and seize contraband products

    New requirements for Anti-Tobacco Warnings

    • Publishers of online curated content displaying tobacco products or their use must show anti-tobacco health spots at the beginning and middle of the program.
    • When tobacco products or their use are displayed during the program, an anti-tobacco health warning must be prominently displayed as a static message at the bottom of the screen.
    • The warning message should be legible and readable, with black font on a white background.
    • The specified warnings are ‘Tobacco causes cancer’ or ‘Tobacco kills.’
    • Health spots, warnings, and audio-visual disclaimers should be in the same language as used in the show.

    Negative health impacts of tobacco

    • Cancer: Tobacco use is the leading cause of preventable cancer. It can cause cancer of the lungs, mouth, throat, larynx, pancreas, bladder, kidney, and cervix.
    • Respiratory diseases: It may cause chronic obstructive pulmonary disease (COPD), which includes chronic bronchitis and emphysema. It can also worsen asthma symptoms.
    • Cardiovascular diseases: Consumption increases the risk of heart attack, stroke, and other cardiovascular diseases. It damages blood vessels and increases the risk of blood clots.
    • Reproductive health: Tobacco use can lead to infertility, premature birth, and low birth weight in babies.

    Socio-economic impact

    (1) On an individual level:

    • Decreased productivity: Smoking-related illnesses can result in absenteeism from work, decreased work performance, and increased medical expenses.
    • Decreased life expectancy: Tobacco consumption can lead to decreased life expectancy, which reduces the overall productive years of an individual.

    (2) On a societal level:

    • Healthcare cost: Tobacco consumption can lead to decreased economic development due to the increased burden of healthcare costs and decreased productivity.
    • Increased social expenditure: According to a study conducted by the World Health Organization (WHO), tobacco-related illnesses cost India about $22.4 billion in healthcare costs and lost productivity annually

    Why tobacco isn’t completely banned?

    • Revenue loss: The industry contributes a significant amount of tax revenue to the government. Banning tobacco would result in the loss of these tax revenues, which are used for various public welfare programs and initiatives.
    • Economic Impact: The tobacco industry provides employment to a large number of people, especially in the agricultural sector, where tobacco farming is prevalent.
    • Not a psychotropic substance: While the harmful effects of tobacco are well-documented, banning a legal product entirely requires careful consideration and legal processes.
    • Regulatory approach: Instead of a complete ban, the Indian government has adopted a regulatory approach to control tobacco use.

    Way forward

    • Strengthen tobacco control laws: Review and enhance existing laws to effectively reduce tobacco consumption.
    • Conduct public awareness campaigns: Educate the public about the health risks of tobacco use and the benefits of quitting.
    • Expand access to tobacco cessation programs: Increase availability of affordable and effective programs to support individuals who want to quit tobacco.
    • Implement sin taxes on tobacco products: Increase taxes to discourage consumption, especially among price-sensitive populations.
    • Enforce smoke-free environments: Strictly implement smoke-free laws in public places, workplaces, and public transport.
    • Support tobacco farmers: Provide alternative livelihood options and assistance for farmers transitioning away from tobacco farming.
    • Conduct research and surveillance: Invest in data collection and analysis to inform evidence-based policies and interventions.
    • Collaborate with international organizations: Partner with global entities like WHO to leverage expertise and resources in tobacco control.

     

     

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  • City Investments to Innovate, Integrate and Sustain (CITIIS) Project

    cities city

    Central Idea

    • The Union government has approved the second phase of the City Investments to Innovate, Integrate, and Sustain (CITIIS) project.

    What is CITIIS 2.0?

    • It is a part of the Smart Cities Mission and aims to promote integrated waste management and climate-oriented reform actions.
    • The project will be implemented in 18 cities selected through a competition process.
    • The project will span over a period of four years, from 2023 to 2027.

    Objectives of the project

    • CITIIS 2.0 supports competitively selected projects focusing on circular economy and integrated waste management at the city level.
    • It also emphasizes climate-oriented reform actions at the State level and aims to strengthen institutions and disseminate knowledge at the national level.

    Implementation Partners

    • The project is implemented in partnership with the French Development Agency (AFD), Kreditanstalt fur Wiederaufbau (KfW), the European Union (EU), and the National Institute of Urban Affairs (NIUA).

    Components

    The project consists of three major components:

    1. Financial and technical support for developing climate-resilient projects in up to 18 smart cities.
    2. Interventions at the center, state, and city levels to enhance climate governance.
    3. Promotion of climate adaptation and mitigation measures.

    Back2Basics: Smart Cities Mission

    • The Smart Cities Mission is an initiative of the Union Housing and Urban Affairs Ministry that was launched in 2015.
    • Cities across the country were asked to submit proposals for projects to improve municipal services and to make their jurisdictions more liveable.
    • Between January 2016 and June 2018 (when the last city, Shillong, was chosen), the Ministry selected 100 cities for the Mission over five rounds.
    • The projects were supposed to be completed within five years of the selection of the city, but in 2021 the Ministry changed the deadline for all cities to June 2023, which was earlier the deadline for Shillong alone.
    • With an increase on urban population and rapid expansion of areas, government is looking at smarter ways to manage complexities, increase efficiencies and improve quality of life.
    • The mission will cover 100 cities that have been distributed among the States /Union Territories (UT) on the basis of an equitable criteria.
    • The formula gives equal weightage (50:50) to urban population of the State/UT and the number of statutory towns in the State/UT.

     

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  • India joins Centralised Laboratory Network (CLN)

    Central Idea

    • India has recently become a member of the Centralized Laboratory Network (CLN), which is a part of the Coalition for Epidemic Preparedness Innovations (CEPI).

    Centralised Laboratory Network (CLN)

    • CLN consists of 15 partner facilities in 13 countries and aims to test vaccines for use during pandemics and epidemic disease outbreaks.
    • It focuses on testing vaccines for pandemic and epidemic disease outbreaks.
    • It is part of the Coalition for Epidemic Preparedness Innovations (CEPI).
    • The network aims to standardize testing methods and materials.

    New members of the CLN

    • Indian Council of Medical Research-National Institute of Virology (ICMR-NIV) joins CLN.
    • Institute Pasteur de Dakar (IPD) from Senegal is a new member.
    • KAVI Institute of Clinical Research (KAVI ICR) and University of Nairobi Institute of Tropical and Infectious Diseases (UNITID) from Kenya join CLN.
    • Synexa Life Sciences from South Africa becomes a member.
    • Uganda Virus Research Institute (UVRI) from Uganda is also a new member.

    Objectives of the CEPI-funded network

    • The CEPI-funded network aims to identify promising vaccine candidates rapidly and accurately.
    • The network focuses on emerging infectious diseases.
    • The goal is to support sustainable regional outbreak preparedness infrastructure.

    CEPI-Funded Network Objectives

    • The CEPI-funded network, which includes CLN, has the primary objective of identifying the most promising vaccine candidates rapidly and accurately against emerging infectious diseases.
    • In addition to vaccine testing, the expanded network also aims to support the development of sustainable regional outbreak preparedness infrastructure.
    • By working collaboratively and sharing standardized methods and materials, the network enhances global preparedness for potential disease outbreaks.

     

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  • Maharashtra’s Ahmednagar to be renamed Ahilyanagar

    ahmad ahilya

    Central Idea

    • Government decision: Ahmednagar district was renamed after Punyashlok Ahilya Devi Holkar.
    • Support from officials: Government officials express gratitude and believe it enhances district honour.
    • Previous discussions: Maharashtra Education Minister planned to rename the city as ‘Punyashlok Ahilyadevi Nagar’.

    Origin and History of Ahmednagar

    • Ancient references: Ahmednagar was mentioned in reference to Mauryan Emperor Ashok (240 BC).
    • Rule of prominent kingdoms: Rashtrakuta Dynasty, Western Chalukyas, and Delhi Sultanate.
    • Emergence of Ahmednagar: Revolt led to the establishment of Bahmani kingdom, with Ahmednagar as one of the five independent kingdoms.

    Malik Ahmad Nizam Shah and Ahmednagar

    • PM of Bahmani Sultanate: Malik Ahmad Nizam Shah assumed the position in 1486.
    • Victory and city foundation: Defeated the king of Bahmani kingdom and founded Ahmednagar in 1494.
    • Unifying communities: Gained loyalty of Muslims, Maratha peasants, and warriors.

    Ahilyabai Holkar: Early Life and Marriage

    • Remarkable upbringing: Ahilyabai born in Chondi village, received rare education.
    • Marriage to Khande Rao: Malhar Rao Holkar arranged the marriage after being impressed by Ahilyabai’s devotion.

    Administration and Temple-building

    • Assumption of power: Ahilyabai took control of Malwa after her husband’s death in 1754.
    • Effective governance: Excelling in administration and military strategies under her father-in-law’s guidance.
    • Temple restoration: Notable efforts in restoring Hindu temples, earning respect as a capable ruler.

    Legacy of Ahilyabai Holkar

    • Recognizing achievements: Prime Minister Narendra Modi’s inauguration of Samudra Darshan Path and Somnath Exhibition Gallery.
    • Symbol of inspiration: Somnath temple built by Ahilyabai Holkar in 1783, representing triumph of truth and faith.

     

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  • Cambodian King’s state visit to India

    cambodia

    Central Idea

    • Cambodian King Norodom Sihamoni is on his maiden state visit to India to mark the culmination of 70th anniversary of diplomatic relations with India.

    Marking 70th Anniversary of Diplomatic Ties

    • This visit holds special significance as it is the first state visit by a Cambodian King in nearly six decades, with the last visit being made by King Norodom Sihamoni’s father in 1963.
    • India and Cambodia share warm and friendly relations, characterized by deep-rooted people-to-people ties, cultural connections, and a commitment to mutual economic growth.

    India-Cambodia Diplomatic Ties: A Backgrounder

    cambodia

    [A] Historical Background

    Additional Information
    Indianization of Southeast Asia Spread of Indian religions, cultural practices, art, architecture, and literature across Southeast Asia
    Funan Kingdom (1st to 6th century CE) Indian traders establishing commercial links with Funan, leading to the exchange of goods, ideas, and cultural practices
    Chenla Kingdom (6th to 9th century CE) Emergence of Chenla as an Indianized kingdom with continued Indian cultural and religious influence
    Khmer Empire (9th to 15th century CE) Peak of Indian influence, adoption of Hinduism and later Buddhism, construction of monumental temples and structures like Angkor Wat
    Sanskrit Inscriptions and Literature Adoption of Sanskrit as court language, creation of inscriptions and literary works in Sanskrit
    Cultural Exchange and Artistic Influence Indian art, architecture, and performing arts influencing Cambodian temples, sculptures, and dance forms
    Royal Ties and Religious Connections Close connections between ruling elites of the Khmer Empire and Indian kingdoms, the transmission of Buddhist teachings and scriptures from India

     

    [B] Diplomatic Relations

    • Establishment of Diplomatic Ties: India and Cambodia established diplomatic relations in 1952 after Cambodia’s independence from French colonial rule.
    • High-Level Visits: Frequent visits by Indian Prime Ministers and Presidents to Cambodia and vice versa to strengthen bilateral relations and political dialogue.
    • Bilateral Agreements: Signing of agreements covering areas such as economic cooperation, cultural exchanges, defense, and tourism.
    • Resident Diplomatic Missions: Indian Embassy in Phnom Penh and Cambodian Embassy in New Delhi facilitating regular communication and coordination.
    • Regional and Multilateral Engagement: Collaboration within organizations like ASEAN and East Asia Summit, providing platforms for regional cooperation and addressing challenges.

    Various facets of India-Cambodia Relations

    (1) Economic Cooperation

    • Growing Bilateral Trade: Focus on sectors like textiles, pharmaceuticals, automobiles, agriculture, and information technology.
    • Development Assistance: India’s support in sectors like agriculture, irrigation, human resource development, and capacity building.
    • Investment and Joint Ventures: Exploring opportunities for investment and collaborative projects.

    (2) Defense and Security Cooperation

    • Training and Capacity Building: Defense cooperation through training programs for Cambodian armed forces personnel.
    • Defense Dialogues and Exchanges: Regular engagement in discussions on maritime security, counter-terrorism, and defense industry collaboration.

    (3) Cultural and Educational Exchanges

    • Art, Music, Dance, and Literature: Fostering cultural ties through exchanges and appreciation of each other’s cultural heritage.
    • Scholarships and Education: ICCR scholarships facilitate Cambodian students’ higher education in India.
    • People-to-People Connections: Cultural festivals, events, and tourism enhance mutual understanding and interactions.

    Strategic significance of Cambodia for India

    • Geostrategic Location: Cambodia’s position in Southeast Asia provides India with access to crucial sea routes and enhances its engagement in the Indo-Pacific region.
    • Regional Connectivity: Cambodia’s connectivity with other ASEAN countries allows India to strengthen regional partnerships and facilitate trade, investment, and people-to-people exchanges as part of its Act East Policy.
    • Balancing China’s Influence: Strengthening relations with Cambodia enables India to maintain a balanced approach and counterbalance China’s growing influence in the region.
    • Maritime Security: Cambodia’s coastal geography and access to the Gulf of Thailand are strategically important for India’s maritime security concerns. Cooperation with Cambodia supports regional stability and ensures the safety of vital sea routes.
    • Economic Engagement: Cambodia’s growing economy and investment potential offer opportunities for India to enhance economic cooperation, boosting trade, investments, and joint ventures for mutual benefit.
    • Cultural Diplomacy: Cambodia’s historical and cultural linkages with India provide a foundation for strong cultural and people-to-people ties, enhancing India’s soft power in the region.
    • Defense and Security Cooperation: Collaborating with Cambodia in defence and security areas contributes to regional security, including capacity building, joint exercises, and information sharing.

    Way Forward

    • Strengthen Economic Ties: Expand bilateral trade and investment, explore new sectors, and foster business partnerships.
    • Enhance Defense Cooperation: Continue training and capacity-building programs, and deepen discussions on shared security challenges.
    • Cultural Exchanges and Tourism: Promote greater cultural understanding, organize more cultural events, and facilitate tourism exchanges.
    • People-to-People Contacts: Encourage more interactions between citizens, foster academic collaborations, and promote tourism.
    • Regional Cooperation: Engage actively within ASEAN and other regional forums to address common challenges and pursue shared interests.

     

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  • Light weight and Portable Payment System (LPSS) for emergencies

    payment

    Central Idea

    The Reserve Bank of India (RBI) has proposed the development of a Light weight and Portable Payment System (LPSS).

    Light weight and Portable Payment System (LPSS)

    • LPSS is referred to as a “bunker” equivalent, to ensure uninterrupted digital payments during exigencies such as natural calamities or war.
    • This system will operate independently of existing payment technologies like UPI, NEFT, and RTGS.
    • It can be operated from anywhere by a minimal staff during exigencies.
    • It will process critical transactions, such as bulk payments and interbank payments, during extreme and volatile situations.
    • The system operates on minimalistic hardware and software and is activated only when needed.

    Why such move?

    • As part of the Utkarsh 2.0 initiative, the RBI is working on strengthening the oversight framework for Centralised Payment Systems, including NEFT and RTGS.
    • The initiative aims to enhance the existing payment systems and introduce new functionalities to improve efficiency and reliability.

    Importance of an LPSS

    • Near-zero downtime: The RBI aims to create a payment system that can operate on minimalistic hardware and software, ensuring near-zero downtime of the payment and settlement system in the country.
    • Continuous liquidity pipeline: The lightweight system will facilitate uninterrupted functioning of essential payment services like bulk payments, interbank payments, and provision of cash to participant institutions, thereby keeping the liquidity pipeline of the economy alive and intact.
    • Stability of the economy: It is expected to process critical transactions, including government and market-related transactions that are crucial for maintaining the stability of the economy.
    • Enhancing public confidence: The resilient nature of the system will act as a bunker equivalent in payment systems, enhancing public confidence in digital payments and financial market infrastructure, even during extreme conditions.

    Differences between LPSS and UPI

    • Existing payment systems: The RBI acknowledges the availability of various payment systems in India for individuals and institutions, each with its distinct character and application.
    • Handling large transaction volumes: Conventional systems like RTGS, NEFT, and UPI are designed to handle large volumes of transactions while ensuring sustained availability, relying on complex wired networks and advanced IT infrastructure.
    • Vulnerability to catastrophic events: However, catastrophic events such as natural calamities and war can temporarily render these payment systems unavailable by disrupting the underlying information and communication infrastructure.
    • Preparedness for extreme situations: To address this vulnerability, the RBI believes it is prudent to be prepared with a lightweight payment system capable of functioning in extreme and volatile situations.

    Conclusion

    • The RBI has not provided a specific timeline for the launch of the lightweight payment and settlements system.
    • However, the concept serves as a crucial step towards ensuring the resilience of the payment ecosystem during emergencies.
    • Further research and development efforts are necessary to bring this system to fruition and enhance the overall stability and confidence in digital payments in India.

     

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  • Shifting US Policy: From Decoupling to De-risking in China Relations

    china

    Central Idea

    • The US is transitioning its policy on China from decoupling to de-risking, signalling a new approach.
    • The EU has already adopted a de-risking approach in its China policy, and the G-7 summit also expressed consensus on de-risking.

    Understanding the De-risking

    • After establishing diplomatic ties in 1979, the US and China developed a deep economic interdependence, benefiting China’s global engagement.
    • China’s rise challenged US global clout and impacted its domestic industries.
    • The Trump administration initiated a “decoupling” strategy to address the techno-economic challenge from China.
    • The Biden administration continues with a modified approach, shifting from decoupling to de-risking.
    • De-risking focuses on resilient supply chains to ensure the US is not subjected to coercion from other countries.

    Rationale behind De-risking

    • Geopolitical Competition: China’s rise as a strategic competitor challenges US global influence, prompting de-risking to reduce vulnerabilities and maintain an advantage.
    • National Security: Concerns about risks like intellectual property theft and cyber threats lead to de-risking to safeguard sensitive technologies and protect national security interests.
    • Resilient Supply Chains: The COVID-19 pandemic exposed vulnerabilities in supply chains, driving the need for de-risking to ensure diversified and resilient networks.
    • Fair Trade Practices: De-risking addresses concerns over China’s trade practices, such as intellectual property infringement and forced technology transfers, aiming for fairer trade by diversifying partners.
    • Alliance Building: De-risking aligns with allies’ interests, promoting collaboration and a united front against China’s rise.

    Geopolitical Ramifications

    • De-risking for Stronger Alliances: The US adopts de-risking to strengthen alliances in its rivalry with China, as seen in the G-7 summit declaration.
    • China’s Skepticism: China views de-risking as disguised decoupling, shifting blame for risks to China.
    • Aligning with Decoupling and United Front: De-risking aligns with decoupling by diversifying supply chains, while fostering a united front among allies.
    • Uncertain Effectiveness: The effectiveness of de-risking is uncertain, influenced by China’s response and challenges in diversifying supply chains.
    • Short-Term Indo-Pacific Impact: De-risking may temporarily divert focus from the Indo-Pacific, necessitating a balance with maintaining a robust strategy in the region.

    Way forward

    • The de-risking approach should be further developed and coordinated with allies to effectively counter China’s rise.
    • Balancing the benefits of de-risking with the need to maintain a robust Indo-Pacific strategy is crucial.
    • Engaging in strategic dialogues and strengthening alliances can help shape a cohesive approach in addressing China’s influence while minimizing risks.

     

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