GS Paper: GS3

SDGs: India’s Progress Analysis
Central Idea
- A recent analysis published in The Lancet has concluded that India is not on-target to achieve 19 of the 33 Sustainable Development Goals (SDGs) indicators. The critical off-target indicators include access to basic services, wasting and overweight children, anaemia, child marriage, partner violence, tobacco use, and modern contraceptive use.
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Analysis
- On-Target: Districts that have not met the SDG target by 2021 and have observed a magnitude of improvement between 2016 and 2021 sufficient to meet the target by 2030.
- Off-Target: Districts that have not met the SDG target by 2021 and either observed worsening between 2016 and 2021 or observed an insufficient magnitude of improvement between 2016 and 2021. If these districts continue with either of these trends, they will not meet their targets by 2030.
- Progress in: Indicators shows the progress in reducing adolescent pregnancy, tobacco use in women, multidimensional poverty, teenage sexual violence, and improving electricity access.
- Areas where more efforts are needed: More efforts are needed for reducing anaemia in women, improving access to basic services, providing health insurance for women, and reducing anaemia in pregnant women.
Sustainable Development Goals (SDGs)
- The SDGs, otherwise known as the Global Goals, are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.
- The SDGs were adopted by the United Nations in 2015 with a vision to achieve a better and more sustainable future for all. The 17 SDGs came into force with effect from 1st January 2016 as a part of 2030 Agenda for Sustainable Development.
- India is one of the signatory countries that has committed to achieving these goals by 2030.
- Though not legally binding, the SDGs have become de facto international obligations and have the potential to reorient domestic spending priorities of the countries during the next fifteen years.
- Countries are expected to take ownership and establish a national framework for achieving these goals.
Targets set for each of the SDGs
- No Poverty: By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 a day.
- Zero Hunger: By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious and sufficient food all year round.
- Quality Education: By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and effective learning outcomes.
- Gender Equality: End all forms of discrimination, violence, harmful practices against all women and girls everywhere. Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic, and public life.
India’s progress towards achieving SDGs so far
- SDG 1 (No Poverty): India has made significant progress in reducing poverty, with the poverty rate declining from 21.9% in 2011-12 to 4.4% in 2020. The government’s efforts to provide financial inclusion and social protection schemes have contributed to this progress.
- SDG 2 (Zero Hunger): India has made progress in reducing hunger, with the prevalence of undernourishment declining from 17.3% in 2004-06 to 14% in 2017-19. The government’s initiatives such as the National Food Security Act and the Pradhan Mantri Garib Kalyan Anna Yojana have contributed to this progress.
- SDG 3 (Good Health and Well-being): India has made progress in improving maternal and child health, with maternal mortality ratio declining from 167 per 100,000 live births in 2011-13 to 113 in 2016-18. The government’s efforts to strengthen health systems and increase access to healthcare services have contributed to this progress.
- SDG 4 (Quality Education): India has made progress in improving access to education, with the gross enrolment ratio for primary education increasing from 93.4% in 2014-15 to 94.3% in 2019-20. The government’s initiatives such as the Sarva Shiksha Abhiyan and the Right to Education Act have contributed to this progress.
- SDG 5 (Gender Equality): India has made progress in improving gender equality, with the sex ratio at birth increasing from 918 in 2011 to 934 in 2020. The government’s initiatives such as the Beti Bachao Beti Padhao and the Maternity Benefit Programme have contributed to this progress.
Recent findings by National Family Health Survey
- Multidimensional poverty declined: At a compounded annual average rate of 4.8 per cent per year in 2005-2011 and more than double that pace at 10.3 per cent a year during 2011-2021.
- Declining child mortality: There are some issues with the 2011 child-mortality data, but for each of the 10 components of the MPI index, the rate of decline in 2011-2021 is considerably faster than in 2005-2011.
- Average decline in overall indicators: The average equally weighted decline for nine indicators was 1.9 per cent per annum in 2005-2011 and a rate of 16.6 per cent per annum, more than eight times higher in 2011-2021.
- Consumption inequality decline: Every single household survey or analysis has shown that consumption inequality declined during 2011-2021. This is consistent with the above finding of highly inclusive growth during 2011-2021.
Conclusion
- The analysis provides a valuable tool for policymakers to address the gaps and focus on the indicators that require more attention, thereby improving the well-being of its citizens and creating a sustainable future for all.
Mains question

Q. What are Sustainable Development Goals (SDGs)? Discuss India’s progress made so far in achieving these targets

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March 2, 2023
Policy: Making India Earthquake Prepared
Central Idea
- The destruction caused by earthquakes in Turkey should be alarming for India. Over the last three weeks, tremors have been felt in Himalayan states. Moreover, geologists have warned of a probable massive earthquake in the Himalayan state. In this context the Delhi High Court asked the state government to file a status report and action plan on the structural safety of buildings in Delhi. Nearly 58 per cent of the Indian landmass is vulnerable to earthquakes and the concerns that have been raised by the court need a policy response instead.
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How do earthquakes happen?
- According to the theory of plate tectonics, the Earth’s crust and upper mantle are made of large rigid plates that can move relative to one another.
- Slip on faults near the plate boundaries can result in earthquakes.
- The point inside the Earth where the earthquake rupture starts is called the focus or hypocentre.
- The point directly above it on the surface of the Earth is the epicentre.
What is missing in India’s policy on earthquake preparedness?
- Current policy operates primarily at the scale of structural details: Guided by the National Building Codes, this includes specifying dimensions of the structural members columns, beams, etc. and details of the reinforcements that join these elements together.
- While scientifically sound, this view on earthquake preparedness is myopic:
1. It ignores the buildings that were constructed before such codes were published in 1962. Such buildings form a large part of our cities.
2. It assumes infallibility in the processes of enforcement, relying only on penalisation and illegalities.
3. It treats earthquakes as a problem of individual buildings, as if they exist and behave in complete isolation from their urban context.
What needs to be done?
- Preparedness at Building and City Scale through policy: Earthquake preparedness, therefore, needs to act at the scale of building details as well as that of cities. Moreover, we must think about it in the realm of policy and not just legal enforcement.
- Need for Comprehensive Policy: At the scale of building details, we need to create a system of retrofitting existing structures and enforcing seismic codes with more efficiency. While there has been political talk and piecemeal efforts towards retrofitting, we still lack a comprehensive policy.
A policy should include two measures
1. Retrofitting Buildings to Seismic Codes:
- To create a system of tax-based or development rights-based incentives for retrofitting one’s building up to seismic codes.
- Such a system of incentives will enable the growth of an industry around retrofitting and will generate a body of well-trained professionals and competent organisations.
1. Improving Seismic Code Enforcement:
- By ensuring better enforcement of seismic codes through a similar model. A step forward in this direction was the National Retrofitting Programme launched in 2014.
- Under the programme, the Reserve Bank of India directed banks to deny loans for any building activity that does not meet the standards of earthquake-resistant design.
Case study: Japan
- Japan has invested heavily in technological measures to mitigate the damage from the frequent earthquakes that it experiences.
- Skyscrapers are built with counterweights and other high-tech provisions to minimise the impact of tremors.
- Small houses are built on flexible foundations and public infrastructure is integrated with automated triggers that cut power, gas, and water lines during earthquakes.
- All of this has been a result of cultivating an industry around earthquake mitigation and fostering expertise.
Criteria for an urban-level policy to generate earthquake vulnerability maps
1. The percentage of vulnerable structures in the area;
2. The availability of evacuation routes and distances from the nearest open ground;
3. Density of the urban fabric;
4. Location of nearest relief services and the efficiency with which these services can reach affected sites.
- For example: Flood zone mapping is a good example of such an exercise that has proven to be successful in terms of timely evacuation and efficient implementation.
Conclusion
- Governments and policymakers ought to know better than act in a piecemeal manner. Programmes like the ongoing Urban 20 meetings are an excellent opportunity for international knowledge exchange on earthquake preparedness. The Delhi High Court’s directions must act as a reminder for the inclusion of an earthquake preparedness policy in urban renewal programmes such as the Smart Cities Mission. A policy on earthquake preparedness requires a visionary, radical and transformative approach.
March 2, 2023
Case for open and verifiable Forest Cover Data
Central idea: From 19.53% in the early 1980s, today India’s total green cover stands at 24.62% ‘on-paper’.

Defining Forest and Tree Cover
- The Forest Survey of India (FSI) publishes its biennial State of Forest reports in 1987.
- A/c to FSI, India counts all plots of 1 hectare or above, with at least 10% tree canopy density, irrespective of land use or ownership, within forest cover.
- This disregards the United Nation’s benchmark that does not include areas predominantly under agricultural and urban land use in forests.
How are forests categorized?

The Forest Survey of India has listed four categories of forests. They are:
1. Very Dense Forest (with tree canopy density of 70 per cent or above) (added since 2003)
2. Moderately Dense Forest (tree canopy density of 40 per cent or above but less than 70 per cent)
3. Open Forest (tree canopy density of 10 per cent or above but less than 40 per cent)
4. Scrub (tree canopy density less than 10 per cent)
New category: NOT a forest (isolated or small patches of trees — less than 1 hectare)

Satellite imagery used for precision
- Until the mid-1980s (SFR 1987), the forest cover was estimated through satellite images at a 1:1 million scale.
- The resolution then improved to 1:250,000, reducing the minimum mappable unit size from 400 to 25 hectares.
- Since 19.53% in the early 1980s, India’s forest cover has increased to 21.71% in 2021.
- By 2001, the scale improved to 1:50,000, bringing down the unit size to 1 hectare, and interpretation went fully digital.
Accounting losses in forest cover
- Satellite imagery shows decline: The National Remote Sensing Agency (NRSA) estimated declines in India’s forest cover using satellite imagery.
- Official account on deforestation: While reliable data on encroachment is unavailable, government records show that 42,380 sq. km — nearly the size of Haryana— of forest land was diverted for non-forest use between 1951 and 1980.
- Reconciled data: The NRSA and the newly established FSI “reconciled” India’s forest cover at 19.53% in 1987. The FSI did not contest the NRSA finding that the dense forest cover had fallen from 14.12% in the mid-1970s to 10.96% in 1981, and reconciled it to 10.88% in 1987.
What about Total Recorded Forests?

Ans. Lost some areas due to encroachment, diversion, forest fire etc.
- In India, land recorded as forest in revenue records or proclaimed as forest under a forest law is described as Recorded Forest Area.
- These areas were recorded as forests at some point due to the presence of forests on the land.
- Divided into Reserved, Protected and Unclassed forests, Recorded Forest Areas account for 23.58% of India.
One-third forest lost!
- Almost one-third of India’s old natural forests — over 2.44 lakh sq. km (larger than Uttar Pradesh) or 7.43% of India are lost.
- Even after extensive plantation by the forest department since the 1990s, dense forests within Recorded Forest Areas added up to cover only 9.96% of India in 2021.
- That is a one-tenth slide since the FSI recorded 10.88% dense forest in 1987.
Then why is there a net increase in India’s forest cover?
- Plantations disguise as forest: The loss remains invisible due to the inclusion of commercial plantations, orchards, village homesteads, urban housings etc. as dense forests outside Recorded Forest Areas. Natural forests do not grow so fast.
- Plantation data unavailable: The FSI provides no specific information on the share of plantations in the remaining dense forests inside Recorded Forest Areas.
Why are plantations not an alternative to forests?

Plantations can grow a lot more and faster than old natural forests. This also means that plantations can achieve additional carbon targets faster. However they are cannot be accounted as forests because-
- Lack of biodiversity: Natural forests have evolved naturally to be diverse and, therefore, support a lot more biodiversity. Simply put, it has many different plants to sustain numerous species.
- Non-sustainable: Plantation forests have trees of the same age, are more susceptible to fire, pests and epidemics, and often act as a barrier to natural forest regeneration.
- Low carbon capacity: Natural forests are old and therefore stock a lot more carbon in their body and in the soil.
How accurate are these estimations?
- The FSI compares some interpreted data with the corresponding reference data collected from the ground under the National Forest Inventory (NFI) programme.
- In 2021, it claimed to have established an overall accuracy of 95.79% in identifying forests from non-forests.
- However, given the limited resources, the exercise was limited to less than 6,000 sample points.
What led to such decline in forest cover?
- Agricultural expansion
- Infrastructure development
- Mining and industrial activities
- Illegal logging (for timber)
- Climate change and natural disasters
Way forward
- Aggressive conservation policies and programs: The government needs to strengthen forest conservation policies and programs to promote the sustainable use and management of forests and trees.
- Community participation and empowerment: Engaging local communities in forest conservation and management can promote sustainable practices and enhance their livelihoods.
- Sustainable forest management practices: Promoting sustainable forest management practices like agroforestry, silvopasture, and mixed-use landscapes can enhance the productivity and resilience of forests.
- Use of technology for monitoring and enforcement: Leveraging technology like remote sensing, geographic information systems (GIS), and blockchain can improve the monitoring and enforcement of forest conservation policies and programs.
- Involving individuals and communities: They play a crucial role in protecting forests and trees by adopting sustainable practices, supporting forest conservation initiatives, and raising awareness about the importance of forests for the environment and people.
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March 2, 2023
Extradition of Fugitive Economic Offenders (FEOs)
Central idea: India has called upon G20 countries to adopt multilateral action for faster extradition of fugitive economic offenders (FEOs) and recovery of assets both on the domestic front as well as from abroad.

Who are Fugitive Economic Offenders (FEOs)?
- FEOs are individuals who have fled their home country to avoid facing prosecution for financial crimes such as money laundering, fraud, and embezzlement.
- These individuals typically engage in illegal activities that involve large sums of money and often cause significant damage to the economy of the country they have fled.
FEOs and India
- India has put in place specialized legislation in this regard, in the form of the Fugitive Economic Offenders Act, 2018.
- It defines the term- as an individual against whom a warrant of arrest in relation to a scheduled offense has been issued by any court in India and who has left the country so as to avoid criminal prosecution; or the FEO abroad, refuses to return to face criminal prosecution”.
Why do offenders go fugitive?
- Finding safe heavens: FEOs seek refuge in countries that do not have an extradition treaty with their home country or that have weak extradition laws.
- Evading justice: FEOs often exploit legal loopholes and the differences in laws and regulations across countries to evade justice.
- Asset offshoring: They may move their assets to offshore accounts or invest in assets such as real estate and art that are difficult to seize.
How FEOs impact the economy?

FEOs can have a significant impact on the economy of the country they have fled from.
- Loan defaults: They may default on loans, engage in fraudulent activities, and siphon off large amounts of money from banks and financial institutions.
- NPA crisis: This can lead to a rise in non-performing assets (NPAs), a slowdown in economic growth, and a loss of investor confidence.
International mechanisms for FEOs

Some of the key international mechanisms for FEOs are:
- Extradition treaties: Many countries have extradition treaties in place with other countries that enable them to request the extradition of individuals who have fled to other countries to avoid prosecution.
- Mutual Legal Assistance Treaties (MLATs): MLATs are agreements between countries that facilitate the exchange of information and evidence in criminal investigations and proceedings.
- International Conventions and Agreements: There are several international conventions and agreements that address financial crimes and provide a framework for international cooperation. Ex. UN Convention against Corruption, FATF etc.
- INTERPOL: Interpol facilitates cross-border police cooperation and coordination. It maintains a database of wanted individuals, including FEOs, and works with member countries to locate and apprehend them.
- Asset recovery: Such mechanisms are designed to enable countries to recover assets by means of seizure and repatriation of assets, as well as the freezing of assets to prevent FEOs from accessing them.
Way forward
- Strengthening domestic laws: India can strengthen its domestic laws and regulations to make it easier to prosecute FEOs and recover their assets.
- Developing extradition treaties: India can work to develop and strengthen extradition treaties with other countries to ensure that FEOs are not able to evade justice by fleeing to other countries.
- Enhancing international cooperation: India can enhance its cooperation with other countries and international organizations to facilitate the sharing of information and intelligence about FEOs.
- Seizing and repatriating assets: India can work to seize and repatriate assets that have been acquired through illegal means by FEOs.
- Improving transparency and accountability: India can improve transparency and accountability in its financial system to prevent FEOs from exploiting loopholes and engaging in illegal activities.
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March 2, 2023

RBI’s new pilot project on Coin Vending Machines

coin

The RBI in collaboration with banks is set to launch a pilot project to assess the functioning of a QR-code-based coin vending machine.

Coin Vending Machines

The vending machines would dispense coins with the requisite amount being debited from the customer’s account using United Payments Interface (UPI) instead of physical tendering of banknotes.
Customers would be endowed the option of withdrawing coins in required quantities and denominations.
The central idea here is to ease the accessibility to coins.
With particular focus on ease and accessibility, the machines are intended to be installed at public places such as railway stations, shopping malls and marketplaces.

Why such a move?

Prevent hoarding of coins: The situation with respect to coins is peculiar with the supply being very high. It is taking up a lot of storage space and is not getting properly distributed despite high demands.
Eliminate the physical tendering of banknotes: It was observed that the currency being fed into the machines (for coin exchange) were often found to be fake and could not be checked right at that point of time.

Do you know?

For perspective, coins in India are issued in denominations of 50 paise, one rupee, two rupees, five rupees, ten rupees and twenty rupees (not considering special edition coins of various denomination).

Coins of up to 50 paise are called ‘small coins’ while those of one rupee and above are called ‘rupee coins’.

How coins are significant in our economy?

As per the latest RBI bulletin, the total value of circulation of rupee coins stood at ₹28,857 crore as of December 30 last year. The figure is an increase of 7.2% from the year-ago period.
Circulation of small coins remained unchanged at ₹743 crore.
The figures above could be compared to the volume of digital payments until December 2022 which stood at approximately ₹9,557.4 crore, as per the Digidhan Dashboard.
The number is inclusive of mobile banking, internet banking, IMPS, BHIM-UPI and NEFT, among others.
Hence the reliance on UPI for dispensing coins is particularly noteworthy.

Is it going against the digital push?

RBI is in the midst of a pilot for the Central Bank Digital Currency (CBDC).
But this proposal should not be viewed as a “zero-sum game of digital versus cash.”
The two can easily supplement each other by re-circulating existing coins in the economy.

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March 1, 2023

Proton Beam Therapy out of reach for many
There is currently a demand-supply gap of proton beam therapy machines in India, leaving many cancer patients in a difficult situation.

What is Proton Beam Therapy?
- Proton beam therapy is a type of radiation therapy — a treatment that uses high-energy beams to treat tumors.
- Radiation therapy using X-rays has long been used to treat cancers and noncancerous (benign) tumors.
- It uses protons rather than x-rays to treat cancer. At high energy, protons can destroy cancer cells.
- It can also be combined with x-ray radiation therapy, surgery, chemotherapy, and/or immunotherapy.
- Like x-ray radiation, proton therapy is a type of external-beam radiation therapy.
How it works?
- Fundamentally, all tissue cells are made up of molecules with atoms as their building blocks.
- In the center of every atom is the nucleus. Orbiting the nucleus of the atom are negatively charged electrons.
- When energized protons pass near orbiting electrons, the positive charge of the protons attracts the negatively charged electrons, pulling them out of their orbits. This is called ionization.
- It changes the characteristics of the atom and consequentially the character of the molecule within which the atom resides.
- Because of ionization, the radiation damages molecules within the cells, especially the DNA.
- Damaging the DNA destroys specific cell functions, particularly the ability to divide or proliferate.
- While both normal and cancerous cells go through this repair process, a cancer cell’s ability to repair molecular injury is frequently inferior.
- As a result, cancer cells sustain more permanent damage and subsequent cell death than occurs in the normal cell population.
Why in news?
- There is currently a significant demand-supply gap of proton beam therapy machines in India, with only a few machines available in the country.
- This has resulted in long wait times for patients who need the treatment, and many patients are forced to travel abroad to access the treatment, which can be prohibitively expensive.
Various challenges
- Huge demand: The demand for PBT machines is also increasing, as more and more patients are being diagnosed with cancer and are seeking the latest and most effective treatments available.
- High cost: One of the major challenges in setting up PBT machines is the high cost involved, as the machines are complex and require a significant investment.
- Shortage of personnel: In addition, there is a shortage of trained personnel who can operate and maintain the machines, which further limits their availability.
Way Forward
- The government and private sector need to invest more in setting up and maintaining the machines. This could include-
1. Offering tax incentives and subsidies to private healthcare providers who invest in PBT machines
2. Providing training and education to personnel who can operate and maintain the machines
3. Setting up more public hospitals that offer proton beam therapy, which would help to make the treatment more accessible and affordable to patients who need it
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March 1, 2023
ISRO successful in key test for Chandrayaan-3 Mission
The Indian Space Research Organisation (ISRO) has successfully conducted a crucial test for its upcoming Chandrayaan-3 mission.

What was the test?
- The test involved the high-thrust cryogenic engine, which will be used to power the rocket that carries the Chandrayaan-3 spacecraft.
- The engine was tested for its endurance and performance under various conditions.
About Chandrayaan-3 Mission
- The Chandrayaan-3 mission is the third lunar exploration mission by the Indian Space Research Organisation.
- The mission follows the successful Chandrayaan-1 and Chandrayaan-2 missions, which were launched in 2008 and 2019 respectively.
- The Chandrayaan-3 mission is designed to further explore the Moon’s South Pole region and conduct various scientific experiments, including studying the lunar surface, mineralogy, and the presence of water.
Significance of the recent test
- With the successful test of the high-thrust cryogenic engine, ISRO is now one step closer to launching the Chandrayaan-3 mission.
- The mission is expected to be a significant step forward in India’s space exploration efforts and will further our understanding of the Moon and its potential for future exploration and exploitation.
Chandrayaan-2: A quick recap
- Chandrayaan-2 consisted of an Orbiter, Lander and Rover, all equipped with scientific instruments to study the moon.
- The Orbiter would watch the moon from a 100-km orbit, while the Lander and Rover modules were to be separated to make a soft landing on the moon’s surface.
- ISRO had named the Lander module as Vikram, after Vikram Sarabhai, the pioneer of India’s space programme, and the Rover module as Pragyaan, which crash-landed.
Inception of Chandrayaan 3
- The subsequent failure of the Vikram lander led to the pursuit of another mission to demonstrate the landing capabilities needed for the Lunar Polar Exploration Mission proposed in partnership with Japan for 2024.
Its design
- The lander for Chandrayaan-3 will have only four throttle-able engines.
- Unlike Vikram on Chandrayaan-2 which had five 800N engines with a fifth one being centrally mounted with a fixed thrust.
- Additionally, the Chandrayaan-3 lander will be equipped with a Laser Doppler Velocimeter (LDV).
Back2Basics: Chandrayaan-1 Mission
- The Chandrayaan-1 mission was launched in October 2008 was ISRO’s first exploratory mission to the moon, in fact to any heavenly body in space.
- The mission was designed to just orbit around the moon and make observations with the help of the instruments onboard.
- The closest that the Chandrayaan-1 spacecraft came to the moon was in an orbit 100 km from its surface.
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March 1, 2023
[pib] Exercise Cobra Warrior
IAF contingent comprising to participate in Exercise Cobra Warrior at the Waddington Air Force Base of the Royal Air Force in the United Kingdom.

Exercise Cobra Warrior
- Cobra Warrior is a multinational military exercise that takes place annually in the United Kingdom.
- It is designed to improve the readiness and interoperability of the Royal Air Force and allied air forces for joint combat operations.
- The exercise brings together military units from different countries, including NATO allies and partner nations, to practice and enhance their air combat capabilities.
- During the exercise, the participating air forces conduct a series of realistic training scenarios that simulate air-to-air combat, air-to-ground attacks, and other mission types.
- The aim is to provide pilots and ground crews with realistic training experiences to help prepare them for real-world combat situations.
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March 1, 2023
Current Account Deficit (CAD): Desirable and Undesirable Components
Central Idea
- As per the RBI’s quarterly statistics, the current account deficit (CAD) widened to 4.4 per cent of GDP in the second quarter of 2022-23, down from 2.2 per cent in the preceding quarter. This marks a reversal from an unusual surplus of 0.9 per cent of GDP in 2020-21. In the third quarter of this financial year, while the merchandise trade deficit has widened, the CAD may witness a fall.
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What is Current Account Deficit (CAD)?
- Current Account Deficit (CAD) = Trade Deficit + Net Income + Net Transfers
- A current account is a key component of balance of payments, which is the account of transactions or exchanges made between entities in a country and the rest of the world.
- This includes a nation’s net trade in products and services, its net earnings on cross border investments including interest and dividends, and its net transfer payments such as remittances and foreign aid.
- A CAD arises when the value of goods and services imported exceeds the value of exports, while the trade balance refers to the net balance of export and import of goods or merchandise trade.
Components of Current Account
1. Trade Deficit
- Trade Deficit = Imports – Exports
- A Country is said to have a trade deficit when it imports more goods and services than it exports.
- Trade deficit is an economic measure of a negative balance of trade in which a country’s imports exceeds its exports.
- A trade deficit represents an outflow of domestic currency to foreign markets.
1. Net Income
- Net Income = Income Earned by MNCs from their investments in India.
- When foreign investment income exceeds the savings of the country’s residents, then the country has net income deficit.
- Net income is measured by Payments made to foreigners in the form of dividends of domestic stocks, Interest payments on bonds and Wages paid to foreigners working in the country.
1. Net Transfers
- In Net Transfers, foreign residents send back money to their home countries. It also includes government grants to foreigners. It also Includes Remittances, Gifts, Donation etc.
India’s CADs have both desirable and undesirable components
- Desirable:
- A desirable deficit is a natural reflection of rising investment, portfolio choices and the demographics of the country.
- If CADs can be financed by stable capital inflows, such as FDI inflows, they are desirable as they are less prone to capital flight.
- Stable capital flows are desirable as they allow debtor countries, such as India, to utilize and allocate them into sectors that may yield long-term productive gains and foster higher economic growth.
- Undesirable:
- Large and persistent CADs can be undesirable if they reflect bigger problems such as poor export competitiveness and are financed by unstable financing.
- If deficits are financed by volatile capital flows such as portfolio flows, there may be a cause of concern. Portfolio flows are capricious and more susceptible to reversals in case of any global financial shock.
The countercyclical nature of India’s CAD: A matter of concern
- Dominance of external shocks: Research suggests that the country’s CAD rises when output falls rather than when demand rises, indicating the dominance of external shocks.
- For instance: If oil prices rise, and as oil is an input in the production process, it raises the cost of production and leads to a fall in economic growth. In this case, CADs rise with falling growth due to both the inelasticity of oil import demand as well as its major share in India’s total imports.
Remarks to be Noted
- Remittances and services exports have provided a counter-balance to rising merchandise trade deficits.
- India’s services exports grew at 23.5 per cent in 2021-22.
- While capital flows are pro-cyclical and react negatively to contractionary monetary policy by the Fed, remittances have exhibited remarkable stability.
Challenges and a Way ahead
- The composition of financing is crucial. While FDI inflows were enough to finance the deficit in 2021-22, these inflows have been weak in the current fiscal year.
- Over the medium term, policymakers need to arrest the negative spillovers from the slowdown in global trade on merchandise exports.
- Further rate hikes by the US Fed may lead to capital outflows leading to additional exchange rate market pressures. This could be challenging in the current situation as a weaker currency, coupled with a sticky import basket will lead to imported inflation.
- Policy measures thus must facilitate exports by focusing on structural reforms to improve trade competitiveness, alongside which the government must sign free trade agreements.
Conclusion
- India is currently facing the twin-deficit problem of high fiscal and CADs. While aggressive fiscal consolidation may be undesirable in the face of rising fears about a global slowdown, a comfortable external environment can be maintained by ensuring stable financing, along with using exchange rates as a shock absorber to weather the adverse global economic situation.
Mains Question

Q. Explain the concept of Current account deficit? India’s CAD have both desirable and undesirable components. Discuss.

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e-Waste Rules 2022
Central Idea
- The burgeoning problem of managing e-waste is a cross cutting and persisting challenge in an era of rapid urbanisation, digitalisation and population growth. In November 2022, the Ministry of Environment and Forests notified a new set of e-waste rules, which will come into force from April 1, 2023. These rules address some of the critical issues but are silent on others.
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What is e-Waste?
- e-waste refers to electronic waste, which includes any discarded electronic or electrical device, such as computers, mobile phones, televisions, and refrigerators.
- These devices contain hazardous substances such as lead, mercury, cadmium, and polyvinyl chloride (PVC) that can pose significant environmental and health risks if not disposed of properly.
Key components of e-waste Rules in India
- Extended Producer Responsibility (EPR): The first set of e-waste Rules was notified in 2011 and came into effect in 2012. An important component of the Rules (2011) was the introduction of EPR. Under EPR compliance, producers are responsible for the safe disposal of electronic and electric products once the consumer discards them.
- Authorization and product stewardship: E-waste rules 2016, which were amended in 2018, were comprehensive and included provisions to promote authorisation and product stewardship. Other categories of stakeholders such Producer Responsibility Organisations (PRO) were also introduced in these rules.
- A digitalized systems approach, introduced in the new rules (2022): Standardizing the e-waste value chain through a common digital portal may ensure transparency and is crucial to reduce the frequency of paper trading or false trail i.e., a practice of falsely revealing 100% collection on paper while collecting and/or weighing scrap to meet targets
e-waste recycling: Analysis
- Two important stages of efficient e-waste recycling:
- 1. Component recovery (adequate and efficient recoveries of rare earth metals in order to reduce dependence on virgin resources) and
- 2. Residual disposal (safe disposal of the leftover residual during e-waste recycling).
- Concern: The rules briefly touch upon the two aspects, but do not clearly state the requirement for ensuring the recovery tangent.
- The new notification does away with PRO and dismantlers: All the responsibility of recycling vests on authorised recyclers; they will have to collect a quantity of waste, recycle them and generate digital certificates through the portal.
- Concern: Fresh challenges might emerge as companies are no longer required to engage with PROs and dismantlers, who partially ensured double verification in terms of quantity and quality of recycling.
- Lack of recognition to informal sector: The new rules for e-waste management in India do not recognize the crucial role played by the informal sector, which handles 95% of e-waste in the country. This lack of recognition may be due to the sector’s “illegality
- Concern: This move could further push e-waste handling into the shadows and make it more difficult to monitor and regulate. This could lead to environmental pollution, health hazards for workers, and inefficient e-waste management.
Impact on Health
- Incineration and leaching: Open incineration and acid leeching often used by informal workers are directly impacting the environment and posing serious health risks, especially to child and maternal health, fertility, lungs, kidney and overall well-being.
- Occupational health hazards: In India, many of these unskilled workers who come from vulnerable and marginalised are oblivious to the fact that that what they know as ‘black plastics’ have far reached occupational health hazards especially when incinerated to extract copper and other precious metals for their market value.
- Exposures to children: This ‘tsunami of e-waste rolling out of the world’, as described in an international forum on chemical treaties, poses several health hazards for women in this sector as they are left exposed to residual toxics elements mostly in their own households and often the presence of children.
- Constant contact with organic pollutants: According to a recent WHO report, a staggering 18 million children, some as young as five, often work alongside their families at e-waste dumpsites every year in low- and middle-income countries. Heavy metals such as lead, as well as persistent organic pollutants (POPs), like dioxins, and flame retardants (PBDEs) released into the environment, have also added to air, soil, and water pollution
Way ahead
- In order to ensure maximum efficiency, the activities of the recyclers must be recorded in the system.
- The authorities should periodically trace the quantity of e-waste that went for recycling vis-à-vis the recovery towards the end.
- Recognising the potential of informal sector in e- waste handling.
- For instance, ‘Karo Sambhav’, a Delhi-based PRO, has integrated informal aggregators in its collection mechanism. Through this initiative, e-waste is entered in a safe and structured system and the informal sector also has an advantage in terms of financial and legal security.
- In order to ensure the efficient implementation of the law, stakeholders must have the right information and intent to safely dispose of e-waste.
- There is need of strengthening reverse logistics, building capacity of stakeholders, improving existing infrastructure, enhancing product designing, rationalising input control and adopting green procurement practices.
- Provide doorstep collection to consumers.
Conclusion
- e-waste recycling and management have become a major environmental challenge in the modern world, as the volume of e-waste generated continues to grow rapidly. Simultaneous efforts needed to increase awareness and improve infrastructure for effective e-waste management. Moreover, robust collection and recycling system and required to meet legislative requirements.
Mains Question

Q. What is e- waste? Discuss the set of e-waste rules in India and suggest what needs to be done for effective e- waste management?

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February 28, 2023