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GS Paper: GS3

  • Indian Economic Growth Prospects: A Comprehensive Analysis

    Growth

    Central Idea

    • India has had an established track record of high growth, with an average annual GDP growth of 6.6% in the decade leading up to the Covid-19 pandemic. In fiscal 2023, India is seen growing at 7%, making it the fastest-growing large economy. But with an imminent global slowdown and the full manifestation of the lagged impact of interest rate hikes since May 2022, the economy is expected to decelerate and grow at 6% in fiscal 2024.

    Indian economic growth prospects

    • Growth accounting: Growth accounting provides a useful framework to analyse medium-term prospects by decomposing their drivers into the contribution of capital, labour and efficiency.
    • Economic growth next five years: Indian economy expected to grow at 6.8 per cent per year for the next five years with 52 per cent of it from capital, 38 per cent from efficiency and 10 per cent from labour.
    • Changing growth model: The growth model is changing to an infrastructure and manufacturing-driven one.
    • Capital spending: The Union Budget has raised capital spending by almost a third in high-multiplier infrastructure segments. But such support to capex will moderate in the years to come, given fiscal consolidation pressures.
    • Investment ratio: Investment as a percentage of GDP has already touched a decadal high of 34 per cent in fiscal 2023. So far, the onus to lift the investment ratio has been shouldered by the government. The contribution of the private sector to investments is set to improve, primed as it is with healthier balance sheets, cash reserves and low leverage.
    • Contribution of productivity to growth: The creation of physical and digital infrastructure in conjunction with efficiency-enhancing reforms will raise the contribution of productivity to growth. The economy is expected to continue seeing efficiency gains from reforms such as GST and Insolvency and Bankruptcy Code (IBC).

    What is holding back a swift and broad-based lift in private investments?

    • Economic uncertainty, primarily, and geopolitical events to a lesser extent.
    • Sustainability challenge looms for the manufacturing sector as manufacturing and infrastructure growth are carbon-intensive.
    • Low-quality skilling of the workforce is holding back its contribution to growth.
    • Quality and the skilling of the workforce
    • Falling labour force participation of women

    What is holding back in Labour’s contribution to growth?

    • Labour’s contribution to growth is likely to be low not because India does not have sufficient people in the working-age group, this cohort is 67 per cent of the population and is set to expand by 100 million over the next decade. It is the quality and skilling of the workforce that is holding it back.

    Why private investment is essential for Indian economic growth?

    • Capital formation: Private investment helps in creating capital formation, which is essential for economic growth. It helps in building infrastructure, creating jobs, and generating income, which in turn drives consumer spending and boosts economic growth.
    • Innovation: Private investment is often associated with innovation and technological advancements. Companies that invest in research and development (R&D) can develop new products and processes that can boost productivity and create new markets. This, in turn, can lead to increased profits and more investment in R&D, creating a virtuous cycle of innovation and growth.
    • Employment: Private investment creates jobs, which is critical for economic growth and development. When companies invest in new projects or expand their operations, they often need to hire additional workers, which reduces unemployment and boosts consumer spending.
    • Foreign investment: Private investment is also an important driver of foreign investment. When companies invest in India, they often bring new technology, skills, and expertise that can help boost local industries and drive economic growth.
    • Tax revenue: Private investment can also help increase tax revenues, which can be used by the government to fund public goods and services such as education, healthcare, and infrastructure.

    Steps taken by the government to encourage private investment

    • Investment-Friendly Policies: The Indian government has launched several investment-friendly policies, such as Make in India, Start-up India, and Digital India, to encourage private investment in the country.
    • Infrastructure Development: The government is investing heavily in infrastructure development, including roads, railways, airports, and ports, to create a conducive environment for private investment.
    • Tax Reforms: The Indian government has implemented several tax reforms, such as the Goods and Services Tax (GST), to simplify the tax structure and make it more investor-friendly.
    • FDI Liberalization: The government has liberalized foreign direct investment (FDI) norms in several sectors, including defense, insurance, and retail, to attract more foreign investment.
    • Insolvency and Bankruptcy Code (IBC): The government has implemented the Insolvency and Bankruptcy Code (IBC), which has made it easier for businesses to exit, and has increased investor confidence in the Indian economy.
    • Production Linked Incentives (PLI): The government has launched the Production Linked Incentives (PLI) scheme to encourage manufacturing in India and make it more competitive globally.
    • Easing of Business Regulations: The Indian government has eased several business regulations to improve the ease of doing business in the country and attract more private investment.
    • Skill Development: The government has launched several initiatives, such as Skill India and Pradhan Mantri Kaushal Vikas Yojana, to develop the skills of the Indian workforce and make it more attractive to investors.

    Facts for prelims: Steps taken by the government to encourage labour force participation of women

    Initiatives

    Description
    Maternity Benefit Programme A scheme to provide financial assistance to pregnant women and lactating mothers for their health and nutrition needs.
    Pradhan Mantri Ujjwala Yojana A scheme to provide LPG connections to women from Below Poverty Line households.
    National Urban Livelihood Mission A programme to provide self-employment opportunities and skill development training to urban poor women.
    National Rural Livelihood Mission A scheme to provide self-employment opportunities and skill development training to rural women.
    Mahila E-Haat A digital platform to provide a market for women entrepreneurs to sell their products online.
    Beti Bachao Beti Padhao A campaign to address the declining child sex ratio and to promote education among girls.
    Sukanya Samriddhi Yojana A savings scheme for the girl child to ensure their education and marriage expenses are taken care of.

     Way ahead

    • Focus on green transition: As the manufacturing and infrastructure growth are carbon-intensive, so it’s important to have a significant and simultaneous focus on green transition. Having a high sustainability quotient can only embellish India’s credentials as a production destination.
    • For instance: Research suggests that between fiscals 2023 and 2027, over 15 per cent of India’s capex could be towards green initiatives involving renewable energy, transportation, altering the fuel mix, and green hydrogen. In the fragmented geopolitical milieu, which is shifting towards supply-chain diversification and friend shoring, India can attract foreign investments.
    • Enhancing labour force participation of women: The labour force participation of women is falling. This will have to be reversed through employment policies and investing in the health and education of women.
    • For instance: According to a World Bank report in 2018, India could add 1.5 percentage points to its GDP growth by improving the participation of women in its workforce.

    Growth

    Conclusion

    • India is going to become a $5 trillion economy by fiscal 2029, given the current growth dynamics. However, the impact of climate risk mitigation will be felt across revenue, commodity prices, export markets, and capital spending. To win the growth marathon, India’s focus must be sharp on the drivers of pace.

    Mains Question

    Q. Highlight India’s growth prospects in the next five years? Discuss the significance of private investment for economic growth and enlist factors that holding back the private investment.

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  • Centre gives nod for National Quantum Mission (NQM)

    quantum

    Central idea: The Union Cabinet has approved the National Quantum Mission (NQM) with a budget of ₹6,003 crore. The mission aims to fund research and development in quantum computing technology and associated applications.

    What is Quantum Computing?

    Explanation
    What is it? A type of computing that uses quantum-mechanical phenomena to perform operations on data.
    Qubits Quantum bits, which can be 0, 1, or both simultaneously (a superposition of 0 and 1).
    Computational speed It can perform certain calculations much faster than traditional computing, especially for complex algorithms and large amounts of data.
    Entanglement The use of entanglement allows quantum computing to process multiple pieces of data simultaneously, further increasing computational power.
    Research Governments, universities, and private companies around the world are researching quantum computing.
    Challenges Building practical quantum computers is a major challenge due to the fragility of qubits and the difficulty of controlling and measuring them accurately.
    Development stage Quantum computing is still in its early stages of development.

     

    National Quantum Mission (NQM)

    Mission duration 2023-2031
    Total cost Rs. 6,003.65 crore
    Leading Department Department of Science and Technology (DST)
    Supporting departments Other government departments
    Focus Development of physical qubit-based quantum computers
    Applications Healthcare and diagnostics, defense, energy, and data security
    India’s positioning Among the top six nations involved in quantum research and development

     

    Key focus areas

    (1) Thematic Hubs

    • The mission will be structured around four broad themes:
    1. Quantum Computing,
    2. Quantum Communication,
    3. Quantum Sensing and Metrology, and
    4. Quantum Material and Devices.
    • Thematic hubs will be established at research institutes and R&D centres already working in the field.
    • The effort is to create an ecosystem that favours quantum technology development in the country.

    (2) Satellite-based Communication

    • One of the key areas of focus for the NQM will be the development of satellite-based secure communication between ground stations and receivers located within a 3,000 km range over the first three years.
    • NQM will lay communication lines using Quantum Key Distribution over 2,000 km for satellite-based communication within Indian cities.
    • Tests will be conducted in the coming years for long-distance quantum communication, especially with other countries.

    (3) Quantum Computing

    • The mission will focus on developing quantum computers (qubit) with physical qubit capacities ranging between 50 – 1000 qubits, developed over the next eight years.
    • The development of computers up to 50 physical qubits will take three years.
    • 50 – 100 physical qubits will be developed in five years, and computers up to 1000 physical qubits will be developed in eight years.

    Applications

    • The mission would have a wide range of applications, including in healthcare and diagnostics, defense, energy, and data security.
    • Quantum technologies are expected to be far more powerful than traditional computing systems and capable of performing the most complex problems in a highly secure manner.

    Various challenges

    • Sub-zero temperatures: Current prototype systems require extremely cold (close to -273 C) conditions to work, along with developing the materials capable of such computations.
    • Still evolving: Quantum computers are still a work in progress globally, and no one has built a practical computer that can actually work and solve meaningful problems.
    • No global breakthrough: IBM, D-Wave of Canada or China’s Zuchongzhi 2.1, all of whom have prototype systems, have not built a quantum computer that can solve a problem that anybody cares about.

    Conclusion

    • The NQM represents a significant step forward for India’s research and development efforts in the quantum technology sector.
    • By focusing on the development of quantum computers and related technologies, the country is positioning itself as a key player in this field, with wide-ranging applications across multiple sectors.

     

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  • Windfall Tax back on local crude oil

    windfall

    The government has revised a windfall tax on domestically-produced crude oil. According to an official notification, the windfall tax rate of Rs 6,400 per tonne.

    What is a Windfall Tax?

    • Windfall taxes are designed to tax the profits a company derives from an external, sometimes unprecedented event — for instance, the energy price-rise as a result of the Russia-Ukraine conflict.
    • These are profits that cannot be attributed to something the firm actively did, like an investment strategy or an expansion of business.
    • The US Congressional Research Service (CRS) defines a windfall as an “unearned, unanticipated gain in income through no additional effort or expense”.
    • One area where such taxes have routinely been discussed is oil markets, where price fluctuation leads to volatile or erratic profits for the industry.

    Features of Windfall Tax

    • Imposed on unanticipated and unearned gains: Windfall tax is imposed on the profits or gains that a company earns from external events or factors beyond their control, which they did not actively seek or pursue.
    • One-time tax: It is typically imposed as a one-time tax retrospectively, over and above the normal rates of tax, and is not a regular or ongoing tax.
    • Imposed on specific sectors or industries: Windfall taxes are usually imposed on specific sectors or industries where there is a significant increase in profits due to external factors such as price fluctuations, supply disruptions, or changes in regulations.
    • Rationale for imposition: The imposition of windfall taxes is based on the rationale of redistributing unexpected gains, funding social welfare schemes, and creating a supplementary revenue stream for the government.
    • Design problems: Introducing windfall taxes may suffer from design problems, given their expedient and political nature.
    • Potential impact on investment: Windfall taxes may lead to uncertainty in the market and negatively impact future investment, as companies may feel uncertain about investing in a sector with an unstable tax regime.

    When did India introduce this?

    • In July 2022, India announced a windfall tax on domestic crude oil producers who it believed were reaping the benefits of the high oil prices.
    • It also imposed an additional excise levy on diesel, petrol and air turbine fuel (ATF) exports.
    • Also, India’s case was different from other countries, as it was still importing discounted Russian oil.

    How is it levied?

    • Governments typically levy this as a one-off tax retrospectively over and above the normal rates of tax.
    • The Central government has introduced a windfall profit tax of ₹23,250 per tonne on domestic crude oil production, which was subsequently revised fortnightly four times so far.
    • The latest revision was on August 31, when it was hiked to ₹13,300 per tonne from ₹13,000.

    Reasons for re-introduction

    • There have been varying rationales for governments worldwide to introduce windfall taxes like:
    1. Redistribution of unexpected gains when high prices benefit producers at the expense of consumers,
    2. Funding social welfare schemes, and
    3. Supplementary revenue stream for the government

    Issues with imposing such taxes

    • Design problems: Windfall taxes may suffer from design problems, given their expedient and political nature. There is also the issue of determining what constitutes true windfall profits and who should be taxed, which raises questions about the threshold for exemption of smaller companies.
    • Potential impact on investment: Windfall taxes may lead to uncertainty in the market and negatively impact future investment, as companies may feel uncertain about investing in a sector with an unstable tax regime.
    • Internalization of potential taxes: Introducing a temporary windfall profit tax may reduce future investment since prospective investors may internalize the likelihood of potential taxes when making investment decisions.
    • Threshold for exemption of smaller companies: Determining the threshold for exemption of smaller companies raises questions about which companies should be taxed and what level of profit is normal or excessive.
    • Difficulty in determining true windfall profits: There is also the issue of determining what constitutes true windfall profits, as it may be challenging to differentiate between profits attributable to external events versus those attributable to a company’s active investment strategy or business expansion.

     

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  • How Web3 differs from Web2?

    web

    Central idea: The article discusses the key features of Web3, including its decentralized nature, peer-to-peer transactions, and greater control over data and digital assets for users.

    What is Web3?

    • Web3, also known as Web 3.0, is the next generation of the World Wide Web that emphasizes decentralization, security, and user privacy.
    • It is essentially a vision of the internet where users have more control over their data, identities, and online interactions.
    • It is built on blockchain technology, which enables peer-to-peer transactions without the need for intermediaries such as banks, governments, or other third parties.
    • This decentralized approach to the web allows for greater transparency and trust, as well as more secure and private transactions.
    • Web3 technologies include blockchain platforms like Ethereum, IPFS (InterPlanetary File System) for distributed file storage, decentralized identity systems like uPort, and decentralized marketplaces like OpenBazaar.

    Features of Web 3

    Feature

    Web3

    Web2

    Centralisation

    		 Decentralised Centralised

    Intermediaries

    		 Peer-to-peer Rely on intermediaries

    Data ownership and control

    		 Users have control Large corporations have control

     

    Challenges for Web3:

    Challenge

    Scalability

    		 Current blockchain infrastructure can only handle a limited number of transactions per second.

    User Adoption

    		 Despite being around for over a decade, blockchain technology is still relatively unknown to the general public.

    Interoperability

    		 Web3 is being developed by different organisations, each with their own unique vision for the technology, leading to challenges in integration.

    Complexity

    		 Technical expertise is required to use and understand Web3, which may be a barrier for some users.

     

    Examples of Web3 use:

    Use

    Cryptocurrencies

    		 Built on blockchain technology, cryptocurrencies enable secure, decentralised transactions without the need for intermediaries.

    Decentralised Finance

    		 Aims to build a new financial system on top of blockchain technology. DeFi applications enable users to borrow, lend, and trade crypto.

    Decentralised storage

    		 Used to create decentralised social networks and develop decentralised identity verification systems.

     

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  • Repeating radio signal detected from nearby Exoplanet YZ Ceti b

    ceti

    Central idea: Astronomers have detected a repeating radio signal from the YZ Ceti exoplanet that suggests the presence of a magnetic field around it.

    What is YZ Ceti b?

    • YZ Ceti b is an earth-sized exoplanet (a planet that orbits a star other than our sun).
    • It is located barely 12 light-years from Earth, and it rotates around a small red dwarf star called YZ Ceti.

    How was the discovery made?

    • The researchers had to make multiple rounds of observations before they could detect the radio signals from the star YZ Ceti, which seemed to match the orbital period of the planet YZ Ceti b.
    • From this, they deduced that the signals were a result of the interaction between the planet’s magnetic field and the star.

    Why does the magnetic field matter?

    • Intense bursts of energy from the YZ Ceti star-exoplanet exchange produce spectacular auroral lights, similar to the energy surges from the sun that disrupt telecommunications on earth.
    • The radio waves confirmed the existence of an exoplanetary magnetic field.
    • This can only be produced if the exoplanet orbits very close to its parent star and has its own magnetic field to influence the stellar wind and generate the signals.

    What’s the implication for YZ Ceti b?

    • The small orbit of YZ Ceti b indicates that the planet takes just a couple of earth days to circle its star.
    • Nearly half of all the stars visible in the sky could potentially harbor rocky, earth-sized planets in habitable orbits around them.
    • Astronomers indicated that the possibility of the existence of a magnetic field on the Earth-like exoplanet, called YZ Ceti b, probably hints at the habitability of life on that planet.

    How common are such magnetic fields?

    • Planetary scientists have never been able to identify magnetic fields on smaller, rocky exoplanets until now.
    • The survival of a planet’s atmosphere may depend on its having, or not having, a strong magnetic field, since the field protects its atmosphere from being eroded by the charged particles blowing in from its star.

     

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  • What are Stablecoins?

    stablecoins

    The US Congress (Parliament) has made another attempt to create a legislative framework for the increasingly popular stablecoins, a sort of cryptocurrency that is pegged to a particular commodity or currency.

    What are Stablecoins?

    • Stablecoins are cryptocurrencies designed to maintain a stable value, typically by being pegged to a stable asset such as the US dollar.
    • Investing in stablecoins can help mitigate market volatility because they are less susceptible to price fluctuations than other cryptocurrencies such as Bitcoin or Ethereum or any other.

    Types of stablecoins

    Fiat-backed stablecoins Backed by reserves of fiat currency held in a bank account or other secure location. Example: Tether (USDT)
    Commodity-backed stablecoins Backed by reserves of a physical commodity, such as gold or silver. Example: PAX Gold (PAXG)
    Algorithmic stablecoins Use algorithms or smart contracts to maintain a stable value. Example: Dai stablecoin (DAI)

     

    How can Stablecoin mitigate market volatility?

    Explanation
    Hedging against volatility
    • Help investors hedge against volatility and reduce their risk exposure.
    • Pegged to a stable asset, which can provide a haven during market turbulence.
    • If the value of Bitcoin or Ethereum drops suddenly, investors can move their funds into stablecoins to protect their portfolio from further losses.
    Greater flexibility in transferring funds
    • Greater flexibility and convenience compared to traditional fiat currencies.
    • Quickly and easily transferred between wallets and exchanges, making them ideal for cross-border transactions.
    • Investors take advantage of investment opportunities in other markets and avoid currency exchange fees and delays.
    Arbitrage trading
    • Used for arbitrage trading, which involves buying an asset in one market and selling it in another market for a higher price.
    • As stablecoins are pegged to a stable asset, investors can quickly move funds between exchanges without worrying about price fluctuations, making arbitrage trading easier and potentially more profitable.

     

    What are the risks?

    Explanation
    Stability of the asset
    • Stablecoins are reliant on the stability of the asset they are pegged to.
    • If the value of that asset drops, it can lead to a drop in the stablecoin’s value as well.
    • This could result in losses for investors who hold the stablecoin.
    Transparency and regulation
    • There are concerns over the transparency and regulation of stablecoin issuers.
    • This could result in a loss of trust in the stablecoin and a subsequent drop in its value.
    • There is no proper regulation and oversight.
    • There is a risk that stablecoin issuers may engage in fraudulent or unethical behaviour, which could lead to losses for investors.
    • It is important for investors to carefully assess the reputation and credibility of the stablecoin issuer before investing in a stablecoin.

     

     

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  • Indian scientists identify and probe EMIC waves

    emic

    Central idea

    • Scientists working at the Indian Antarctic Station, Maitri, have identified and probed Electromagnetic Ion Cyclotron (EMIC) waves to study their characteristics.
    • The study aims to understand the impact of energetic particles in the radiation belts on low orbiting satellites.

    About Indian Antarctic Station, Maitri

    Description
    Name Maitri Antarctic Station (Friendship Research Centre)
    Establishment 1984
    Location Schirmacher Oasis, East Antarctica
    Distance from other stations 5 km away from Novolazarevskaya Station
    Purpose Conducting scientific research as part of the Indian Antarctic Programme
    Features Second permanent research station of India in Antarctica
    Named by Then-PM Indira Gandhi
    First camp commander Squadron Leader D.P. Joshi
    First huts Completed in 1989 by the IV Antarctica Expedition

     

    What are EMIC Waves?

    • Electromagnetic Ion Cyclotron (EMIC) waves are a type of plasma wave that occurs in the Earth’s magnetosphere.
    • They are caused by the interaction of energetic particles in the radiation belts with the Earth’s magnetic field.
    • These waves have frequencies in the range of a few hundred hertz to a few kilohertz and are known to play an important role in the acceleration and loss of energetic particles in the Earth’s magnetosphere.
    • The study of EMIC waves is important for understanding the effects of space weather on satellite communication and navigation systems.

    Identification and study of EMIC waves

    • A team of scientists from the Indian Institute of Geomagnetism (IIG) analysed data collected between 2011 and 2017 by the Induction Coil Magnetometer.
    • The device was installed at the Indian Antarctic station Maitri to bring out several aspects of the ground observation of the EMIC waves.

    Significance of the study

    • This study is important to improve our understanding of EMIC wave modulation and how they interact with energetic particles that impact satellites and their communication.
    • It could help understand the impact of energetic particles in the radiation belts on low orbiting satellites and lead to improved satellite communication systems.

    Back2Basics:  Indian Antarctic Programme

    • It is a scientific program run by the National Centre for Antarctic and Ocean Research under the Ministry of Earth Sciences.
    • It was launched in 1981 and since then India has been operating research stations in Antarctica.
    • It gained global acceptance with India’s signing of the Antarctic Treaty and subsequent construction of the Dakshin Gangotri Antarctic research base in 1983, superseded by the Maitri base from 1989.
    • The program conducts research in areas such as geology, oceanography, atmospheric sciences, and earth sciences.
    • India currently operates two permanent research stations in Antarctica – Maitri and Bharati.
    • The program also has plans to set up a third research station called ‘Siddhanta’ in the coming years.
    • Apart from conducting research, the program also engages in logistics support, environmental monitoring, and outreach activities.

     

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  • ISRO to launch TeLEOS-2 Satellite

    teleos

    The Indian Space Research Organisation (ISRO) will launch Singapore’s TeLEOS-2 satellite this week, from the Satish Dhawan Space Centre in Sriharikota.

    What is TeLEOS-2?

    • TeLEOS-2 is a Singaporean Earth Observation satellite built by ST Electronics (Satellite Systems).
    • It carries a made-in-Singapore Synthetic Aperture Radar (SAR) capable of providing 1 m resolution data.
    • It will be equipped with a 500 GB onboard recorder for recording the data captured and a high speed 800 Mbps downlink.
    • In 2015, ISRO launched TeLEOS-1, the first Singapore commercial Earth Observation Satellite, which was launched into a low Earth orbit for remote sensing applications.
    • ISRO has so far launched nine satellites belonging to Singapore.

    About the launch vehicle: PSLV-CA

    • The PSLV-CA was manufactured by ISRO with the first launch on 2007-04-23.
    • CA means “Core Alone”, model premiered on 23 April 2007.
    • PSLV-CA has 15 successful launches and 0 failed launches with a total of 15 launches.
    • The CA model does not include the six strap-on boosters used by the PSLV standard variant.
    • The fourth stage of the CA variant has 400 kg less propellant when compared to its standard version.
    • It currently has the capability to launch 1,100 kg to a 622 km Sun-synchronous orbit.

     

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  • Plant ‘cries’: Recalling Jagadish Chandra Bose

    bose

    Central idea

    • A recent discovery by researchers from Tel Aviv University in Israel, that plants make distinct sounds in the ultrasonic range when faced with stress, made headlines around the world.
    • However, Indians who had grown up hearing about Jagadish Chandra Bose’s work, more than a century ago, on plant physiology and their ability to feel pleasure and pain, were not surprised.

     

    Details
    Who was JC Bose? – Born in 1858 in Mymensingh, Bengal.

    – A polymath who made significant contributions to physics, biophysics, and plant physiology

    – Graduated from Calcutta University with honors in physics and studied in London and Cambridge.
    Notable works – Developed sensitive instruments for wireless telegraphy and demonstrated the first-ever wireless transmission of microwaves in 1895.

    – Showed that plants produce electrical signals in response to stimuli and made significant contributions to biophysics.
    Recognition & Controversy – Despite his contributions, he was not awarded a Nobel Prize, which many believe he deserved.

    – Refused to obtain patents for his work and rejected the idea of making money from science.

    – Claimed that even inanimate inorganic matter could respond to stimulus and regarded plants as intermediates in a continuum between animals and non-living materials, which was not easily accepted by his contemporaries.
    Legacy and Significance – Founded the Bose Institute, a premier research institute in India.

    – The crater Bose on the Moon is named after him.

    – Regarded as one of India’s greatest scientists, and his legacy continues to inspire future generations of scientists.
    Significance – Bose’s work on plant physiology and biophysics was ahead of his time and not fully understood by his contemporaries.

    – However, over the years, much of his work has been confirmed.

     

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  • What is the Consumer Confidence Index (CCI)?

    confidence

    Central idea

    • The Consumer Confidence Survey was conducted in the first half of March 2023 across 19 cities.
    • This article analyses the survey results, released this month, and breaks down the findings under different sections.

    What is Consumer Confidence Survey?

    • The Reserve Bank of India (RBI) conducts a Consumer Confidence Survey to measure consumers’ perceptions of the prevailing economic situation.
    • The survey is conducted across various cities and measures consumer confidence on parameters such as the economy, employment, price, income, and spending.
    • The survey consists of questions regarding consumers’ sentiments over various factors in the current situation and future.

    Here are a few parameters that help aggregate overall confidence:

    1. Spending: The consumer is asked about the willingness to spend on major consumer durables, purchasing vehicles, or real estate. This measures the overall spending scenario on necessities as well as luxuries for the next quarter.
    2. Employment: The consumer is asked about current and future ideas on employment situations, joblessness, job security, which reflects the sentiments of the current or expected employment in the country.
    3. Inflation: The consumer is asked about interest rates and levels of prices of all goods, tracking the price expected by consumers and their spending on basic necessities.

    About the Consumer Confidence Index (CCI)

    • CCI is a survey that is conducted every two months to measure how optimistic or pessimistic the consumers are regarding their financial situation.
    • The index measures the change in consumer perception on the financial situation in the last year and the future expectations index measures what the consumer thinks about his financial situation in the coming one year.
    • The main variables of the survey are: Economic situation, Employment, Price Level, Income and Spending.

    Current perceptions of the survey

    • The survey estimates current perceptions and a year-ahead expectations on the economy, employment, price, income, and spending.
    • The results show that consumer confidence continues to recover from its historic low of mid-2021, but still remains pessimistic at 87.0, a 2.2 point increase from previous results.
    • The assessment of inflation conditions improved for the current period reflecting a higher confidence in prevailing economic conditions.
    • With regards to spending, sentiments were positive with signs of improvement compared to the last round conducted in January 2023.

    What does this imply?

    • The survey shows that while consumer confidence is slowly recovering, it still remains pessimistic.
    • The survey results indicate positive sentiments on employment and spending, but a marginal dip in the country’s future economic situation.
    • Credit growth numbers indicate a rise in consumer spending.
    • The upcoming state and general elections could have an impact on the economy, and it remains to be seen how it will play out.

     

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