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January 2022

Food Processing Industry: Issues and Developments

Unlock India’s food processing potential


From UPSC perspective, the following things are important :

Prelims level : PLIS

Mains level : Paper 3- Food processing industry in India


One of the largest producers of fruits and vegetables in the world to boost processed food in large quantities, India has formulated a unique Production-Linked Incentive Scheme (PLIS) which aims to incentivise incremental sales.

Progress made so far

  • A sum of ₹10,900 crore has been earmarked for the scheme.
  • Beneficiaries have been obliged to commit a minimum investment while applying for the scheme.
  • Under Category 1, firms are incentivised for incremental sales and branding/marketing initiatives taken abroad.
  • Assuming the committed investment as a fixed ratio of their sales and undertaking execution of at least 75% of the projects, the sector is likely to witness at least ₹6,500 crore worth of investment over the next two years.
  • New alternatives are being explored which have immense potential in replacing the staples of rice and wheat in the form of Nutri-cereals, plant-based proteins, fermented foods, health bars and even fresh fortified foods for pets.
  • By welcoming the new brands in the category, PLIS aims to create an enabling ecosystem for innovation in both food products and processes.

Way forward

1] Improve infrastructure

  • A study in the United States concluded that a 1% increase in public infrastructure increased the food manufacturing output by 0.06% in the longer run (
  • This correlation holds good for India too as a higher investment is being concentrated in States such as Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu and Uttar Pradesh.
  • These States as reported by the Good Governance Index 2020-21, ranked among the highest in the ‘Public Infrastructure and Utilities’ parameter with ‘Connectivity to Rural Habitations’ showing the highest improvement.

2] Improve profitability in export

  • For the exports market, it is now established that sales promotion is positively related to increased sales volume, but inversely related to profitability.
  • To bridge this gap, of the 13 key sectors announced under the PLIS, the ‘Food Processing PLIS’ earmarks a dedicated Category 3 for supporting branding and marketing activities in foreign markets. 
  •  This ensures that India’s share of value-added products in the exports basket is improved, and it may leverage on its unique geographical proximity to the untapped markets of Europe, the Middle East/West Asia, Africa, Oceania and Japan.

3] Access to credit

  •  The access of micro, small, and medium enterprises (MSMEs) to finance is a perennial problem in the country, predominating due to a lack of proper credit history mechanism for MSMEs.
  • Smart financing alternatives such as peer-to-peer (P2P) lending hold potential for micro-food processors.
  • Access to working capital has in theory been addressed by the Trade Receivables Discounting System (TReDS), a platform for facilitating the financing/discounting of trade receivables of MSMEs through multiple financiers.


With growing populations, changing food habits and unrestricted use of natural resources, nations must come together and lay out a road map for a common efficient food value chain.

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Renewable Energy – Wind, Tidal, Geothermal, etc.

The consequences of an ill-considered green strategy


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 3- Issues with rapid transition to green energy


Europe’s push for renewable energy at the cost of conventional fuel may end up causing a global food crisis.

Consequences of fuel shortage in Western Europe

  • Since August 2021, Western Europe has faced a problem with renewable energy – the wind doesn’t always blow when needed and the sun doesn’t always shine.
  • Commodity markets across the world operate on a balance of demand and supply — even seemingly “small” changes in either side of a few percentage points can push the prices up or down sharply.
  • High energy bills: Higher gas prices have pushed up energy bills for households and are expected to impact household spending and consumption as well.
  • High urea prices: Natural gas is used to produce urea – if gas prices go up, fertiliser also becomes expensive.
  •  Some poor and middle-income countries are already starting to face problems of fertiliser availability — there are reports from several Indian states as well. 
  • High food prices: The impact of expensive fertiliser will be felt some months down the line as expensive fertiliser and reduced harvests push up food prices.
  • India is relatively less affected as the share of natural gas in the country’s energy mix is low but will still face problems due to high food prices.
  • In 2007-08, when oil prices were high, there was a push to use “biofuels” led by the US and Europe.
  •  The effects of the 2008 food price crisis were felt around the world, especially by the poor.

Lessons for India

  • Cheap and reliable energy sources should not be abandoned until the alternatives have been stringently stress tested.
  • India will be especially hard hit if oil prices spike as it imports close to 1.4 billion barrels of oil annually.

Consider the question “What are the inherent dangers in rapid transition to the green energy? Suggest the way forward for India.”


A blind push to shut down traditional sources of energy and move to less reliable “clean” energy can have second and third order effects.

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Parliament – Sessions, Procedures, Motions, Committees etc

Govt tweaks spending norms for Contingency Fund of India


From UPSC perspective, the following things are important :

Prelims level : Contingency Fund of India

Mains level : Not Much

The government has tweaked spending norms for Contingency Fund of India, allowing 40% of the total corpus to be placed at disposal of the Expenditure Secretary.

What are the proposed changes?

  • Budget 2021-22 proposed to enhance the Contingency Fund of India from ₹500 crore to ₹30,000 crore through Finance Bill.
  • An amount equivalent to 40 per cent of the Fund corpus shall be placed at the disposal of the Secretary, Ministry of Finance, Department of Expenditure.
  • This would serve the purpose of meeting unforeseen expenditure.

What is Contingency Fund of India?

  • Contingency is a negative event which may occur in future, like recession or pandemic.
  • The Constitution has a provision for a contingency fund. Its corpus is always kept intact.
  • Article 267 of the Constitution mandates formation of a corpus under Contingency Fund of India to deal with any emergency situation.
  • It is placed at the disposal of the President of India.
  • Government cannot withdraw funds from it without authorization of the Parliament.
  • And the corpus has to be replenished with the same amount later.

Management of the fund

  • The fund is held by the Department of Economic Affairs on behalf of the President of India and it can be operated by executive action.
  • The fund can be increased through a Finance Bill when Parliament is in the session.
  • Or through Ordinance if the House is not in session and situation warrants.
  • Withdrawal from the fund takes place with the approval of the Secretary of Department of Economic Affairs, in terms of the Contingency Fund of India Act, 1950.
  • An amount equivalent to 40% of the corpus has now been placed at the disposal of the Expenditure Secretary.
  • All further Contingency Fund releases beyond this limit will require the approval of the Expenditure Secretary in addition to the Economic Affairs Secretary’s approval.


Consolidated Funds of India

  • The provision for this fund is given in Article 266(1) of the Constitution of India.
  • The government meets all its expenditure from this CFI.
  • It receives money from:
  1. Direct and indirect taxes Loans taken by the Indian government
  2. Returning of loans/interests of loans to the government by anyone/agency that has taken it
  • The government needs parliamentary approval to withdraw money from this fund.
  • Each state has its own Consolidated Fund of the state with similar provisions.
  • The Comptroller and Auditor General of India audits these funds and reports to the relevant legislatures on their management.

Public Account of India

  • All other public money (other than those covered under the Consolidated Fund of India) received by or on behalf of the Indian Government are credited to this account/fund.
  • It is constituted under Article 266(2) of the Constitution.
  • This is made up of:
    1. Bank savings account of the various ministries/departments
    2. National small savings fund, defense fund
    3. National Investment Fund (money earned from disinvestment)
    4. National Calamity & Contingency Fund (NCCF) (for Disaster Management)
    5. Provident fund, Postal insurance, etc.
    6. Similar funds
  • The government does not need permission to take advances from this account.
  • Each state can have its own similar accounts.
  • CAG makes audit of all the expenditure from the Public Account of India.


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Prime Minister’s Office : Important Updates

What are Padma Awards?


From UPSC perspective, the following things are important :

Prelims level : Padma Awards

Mains level : National Honours

The central government has announced the names of Padma awardees for this year.

What are Padma awards?

  • The Padma awards are the highest civilian honor of India after the Bharat Ratna.
  • They are announced every year on the eve of Republic Day.
  • The awards are given in three categories:
  1. Padma Vibhushan (for exceptional and distinguished service)
  2. Padma Bhushan (distinguished service of higher order) and
  3. Padma Shri (distinguished service)
  • The award seeks to recognize achievements in all fields of activities or disciplines where an element of public service is involved.

Note: During the years 1978 and 1979 and 1993 to 1997, Padma awards were not announced.

Who are the awardees?

  • The awards are given in certain select categories which include Art, Social Work, Public Affairs, Science & Engineering, Trade & Industry, Medicine, Literature & Education, Civil Service and Sports.
  • Awards are also given for propagation of Indian culture, protection of human rights, wild life protection among others.

Its constitution

  • The PADMA Awards were instituted in 1954 along with Bharat Ratna.
  • At that time only Padma Vibhushan existed with three sub-categories – Pahela Varg, Dusra Varg and Tisra Varg.
  • These were subsequently renamed as Padma Vibhushan, Padma Bhushan and Padma Shri vide Presidential Notification issued on January 8, 1955.

Particulars of the awards

  • The awardees do not get any cash reward but a certificate signed by the President apart from a medallion which they can wear at public and government functions.
  • The awards are, however, not a conferment of title and the awardees are expected to not use them as prefix or suffix to their names.
  • A Padma awardee can be given a higher award only after five years of the conferment of the earlier award.

Terms of awarding

  • Not more than 120 awards can be given in a year but this does not include posthumous awards or awards given to NRIs and foreigners.
  • The award is normally not conferred posthumously.
  • However, in highly deserving cases, the Government could consider giving an award posthumously.

Who is eligible for Padma awards?

  • All persons without distinction of race, occupation, position or sex are eligible for these awards.
  • However, government servants including those working with PSUs, except doctors and scientists, are not eligible for these awards.
  • The award seeks to recognize works of distinction and is given for distinguished and exceptional achievements or service in all fields of activities and disciplines.
  • According to Padma awards selection criteria, the award is given for “special services” and not just for “long service”.
  • It should not be merely excellence in a particular field, but the criteria has to be ‘excellence plus’.

Who nominates the awardees?

  • Any citizen of India can nominate a potential recipient.
  • One can even nominate one’s own self. All nominations are to be done online where a form is to be filled along with details of the person or the organisation being nominated.
  • An 800-word essay detailing the work done by the potential awardee is also to be submitted for the nomination to be considered.
  • The government also writes to various state governments, governors, Union territories, central ministries and various departments to send nominations.

Who selects the awardees?

  • All nominations received for Padma awards are placed before the Padma Awards Committee, which is constituted by the Prime Minister every year.
  • The Padma Awards Committee is headed by the Cabinet Secretary and includes Home Secretary, Secretary to the President and four to six eminent persons as members.
  • The recommendations of the committee are submitted to the Prime Minister and the President of India for approval.
  • The antecedents of the selected awardees are verified using the services of central agencies to ensure nothing untoward has been reported or come on record about them.
  • A final list is then prepared and announced.

Is the recipient’s consent sought?

  • There is no provision for seeking a written or formal consent of the recipient before the announcement of the award.
  • However, before the announcement, every recipient receives a call from the Ministry of Home Affairs informing him or her about the selection.
  • In case the recipient expresses a desire to be excluded from the award list, the name is removed.


Try this question from CSP 2021

Q.Consider the following statements in respect of Bharat Ratna and Padma Awards

  1. Bharat Ratna and Padma Awards are titles under the Article 18(1) of the Constitution of India.
  2. Padma wards, which were instituted in the year 1954, were suspended only once.
  3. The number of Bharat Ratna Awards is restricted to a maximum of five in a particular year.

Which of the above statements are not correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3


Post your answers here.


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Corruption Challenges – Lokpal, POCA, etc

Corruption Perceptions Index (CPI), 2021


From UPSC perspective, the following things are important :

Prelims level : Corruption Perceptions Index (CPI), 2021

Mains level : Corruption and money laundering


The 2021 Corruption Perception Index by Transparency International places India 85th on a list of 180 countries, one position above last year.

Corruption Perceptions Index (CPI)

  • The CPI is an index which ranks countries “by their perceived levels of public sector corruption, as determined by expert assessments and opinion surveys.”
  • The CPI generally defines corruption as an “abuse of entrusted power for private gain”.
  • The index is published annually by the non-governmental organisation Transparency International since 1995.
  • The index ranks 180 countries and territories by their perceived levels of public sector corruption according to experts and business people.
  • It uses a scale of 0 to 100 to rank CPI, where 0 is highly corrupt and 100 is very clean.

What kind of corruption does the CPI measure?

The data sources used to compile the CPI specifically cover the following manifestations of public sector corruption:

  • Bribery
  • Diversion of public funds
  • Officials using their public office for private gain without facing consequences
  • Ability of governments to contain corruption in the public sector
  • Excessive red tape in the public sector which may increase opportunities for corruption
  • Nepotistic appointments in the civil service
  • Laws ensuring that public officials must disclose their finances and potential conflicts of interest
  • Legal protection for people who report cases of bribery and corruption
  • State capture by narrow vested interests
  • Access to information on public affairs/government activities

The CPI does NOT cover:

  • Citizens’ direct perceptions or experience of corruption
  • Tax fraud
  • Illicit financial flows
  • Enablers of corruption (lawyers, accountants, financial advisors etc)
  • Money-laundering
  • Private sector corruption
  • Informal economies and markets

Highlights of the 2021 Report

  • The top-performing countries were Denmark, Finland and New Zealand — all having a corruption perceptions score of 88 — followed by Norway, Singapore and Sweden, all of them scoring 85.
  • In contrast, the worst-performing countries were South Sudan with a corruption perceptions score of 11, followed by Syria (13), Somalia (13, Venezuela (14) and Afghanistan (16).

India’s performance

  • In 2021, India ranked 86th with the same CPI score of 40.
  • The report highlighted concerns over the risk to journalists and activists who have been victims of attacks by the police, political militants, criminal gangs and corrupt local officials.
  • Civil society organizations that speak up against the government have been targeted with security, defamation, sedition, hate speech and contempt-of-court charges, and with regulations on foreign funding.


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Tribes in News

Who are the Chakmas and Hajongs?


From UPSC perspective, the following things are important :

Prelims level : Chakmas and Hajongs

Mains level : Not Much

In Arunachal Pradesh, the Chakma and Hajong people are feeling heat since the State government decided to conduct a special census in December 2021.

What is the news?

  • The North-Eastern States have had a history of being paranoid about outsiders outnumbering the indigenous communities and taking their land, resources and jobs.
  • The threat from “non-locals” in a specific area has also been perceived to be from communities indigenous elsewhere in the region.
  • This has often led to conflicts such as the recent attacks on non-tribal people in Meghalaya’s capital Shillong or an Assam-based group’s warning to a fuel station owner in Guwahati against employing Bihari workers.

Who are the Chakmas and Hajongs?

  • The Chakmas and Hajongs of Arunachal Pradesh are migrants from the Chittagong Hill Tracts of erstwhile East Pakistan, now Bangladesh.
  • Displaced by the Kaptai dam on the Karnaphuli River in the 1960s, they sought asylum in India.
  • They settled in relief camps in the southern and south-eastern parts of Arunachal Pradesh from 1964 to 1969.
  • A majority of them live in the Changlang district of the State today.
  • Mizoram and Tripura have a sizeable population of the Buddhist Chakmas while the Hindu Hajongs mostly inhabit the Garo Hills of Meghalaya and adjoining areas of Assam.

Why was a special census of the two communities planned?

  • The Arunachal Government has cited to resolve the protracted issue of racial antagonism.
  • It seeks to rehabilitate the Chakma-Hajongs in other States.
  • The census plan was however dropped after the Chakma Development Foundation of India petitioned the PMO.

Issues with the census

  • Chakma organizations said the census was nothing but racial profiling of the two communities because of their ethnic origin and violated Article 14 of the Indian Constitution.
  • It is against Article 1 of the International Convention on the Elimination of All Forms of Racial Discrimination, ratified by India.

What is their citizenship status?

  • Members of the two communities had been settled in Arunachal Pradesh six decades ago with a rehabilitation plan, allotted land and provided with financial aid depending on the size of their families.
  • Although local tribes claim the population of the migrants has increased alarmingly, the 2011 census says there are 47,471 Chakmas and Hajongs in the State.
  • They are granted citizenship by birth under Section 3 of the Citizenship Act, 1955, after having been born before July 1, 1987, or as descendants of those who were born before this date.


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Wildlife Conservation Efforts

Specie in news: Spot-billed Pelicans


From UPSC perspective, the following things are important :

Prelims level : Spot-billed Pelicans

Mains level : NA

A nematode infestation has led to mass mortality of spot-billed pelicans (Pelicanus philippensis) at Telineelapuram Important Bird Area (IBA) in Andhra Pradesh.

Spot-billed Pelicans

  • The spot-billed pelican (Pelecanus philippensis) or grey pelican is a member of the pelican family.
  • It breeds in southern Asia from southern Iran across India east to Indonesia.
  • It is a bird of large inland and coastal waters, especially large lakes.
  • The breeding population of these pelican species is limited to India, Sri Lanka and Cambodia.
  • In the non-breeding season they are recorded in Nepal, Myanmar, Thailand, Laos and Vietnam.

Conservation status

  • IUCN status: Near Threatened
  • Wildlife (Protection) Act, 1972: Schedule IV (Hunting prohibited but the penalty for any violation is less compared to the first two schedules)


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Parliament – Sessions, Procedures, Motions, Committees etc

The strength of our republic


From UPSC perspective, the following things are important :

Prelims level : GST Council

Mains level : Paper 2- Working of Constitution


A republic is made robust and kept alive by its people. In its current form, the Indian republic marks 73 years of maintaining a dynamic balance.

Directly elected representation

  •  It is to the credit of our people that today we have a pyramidal three-layered elected representative system that governs us.
  • This system today has over 3 million elected representatives (a million of them women), over 4,000 elected to the state legislatures and over 500 in the Parliament.
  • This scale of directly elected representation, perhaps, can be seen nowhere else in the world.

Moral and spiritual basis of the Constitution

  • In Pilgrimage to Freedom, K M Munshi writes, “our Constitution has a moral background — to secure justice for every section of our society; as also a spiritual basis — to preserve and protect all religions in the exercise of their functions”.
  • The challenges continue in securing justice for every section of our society.
  • The Backward Classes, the Scheduled Castes and the Scheduled Tribes and the poor across all categories clamour for better opportunities and affordable justice.
  • What Munshi calls the spiritual basis of our Constitution in having to preserve and protect all religions is also seen under stress.
  • When the right to practise one’s religion is denied or threatened, the silence of the thinking public or the media weakens that constitutionally embedded protection.

Challenges posed by social media

  • Through the power of technology and its capacity to broadcast at mass scale, an otherwise useful tool, social media, has become a challenge and sometimes a threat to one or several of the rights enshrined in our Constitution.
  • Curtailing them to protect the rights of citizens is seen as trampling upon the right to free speech.
  • Without any action, the damage caused to social harmony by such rampant false news can result in people losing faith in the Constitution itself.

Constitution as a living, dynamic process

  • Our Constitution is the most amended of all constitutions in the world.
  • If there are more than 100 amendments made to the Constitution, there are more than 1,500 laws that have been repealed because they have outlived their times.
  • These deadwood laws, by remaining on paper, occasionally became a weapon in the hands of rent-seekers.
  • Their removal, as a part of administrative reform, has kept the role of the executive transparent and accountable.
  • That the Constitution is always evolving is best exemplified by the 101st amendment which rolled out the Goods and Services Tax.
  • his amendment brought in a unified indirect tax regime by subsuming most of the indirect taxes of the Centre and the states.
  • Yet to complete five full years, the GST Council has stood the test of challenging times even in its initial years.
  • It augurs well for cooperative federalism.


Our Constitution has served us well in these seven decades. Several republics in the post-imperial era have rejected their earlier constitutions and tested new ones. It is the people who can keep the republic robust and alive.

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Parliament – Sessions, Procedures, Motions, Committees etc

A festival to salute India’s vibrant democracy


From UPSC perspective, the following things are important :

Prelims level : Constituent Assembly working

Mains level : Paper 2- Working of India's Constitution


This year we are celebrating our 73rd Republic Day. The Constitution has been our guiding force in the journey of the nation as a mature democracy among comity of nations.

Historical background

  • The Constituent Assembly undertook intensive deliberations over a period of two years, 11 months and 18 days spread over 11 sessions, during which the Constitution of India took shape.
  • Our Constituent Assembly played a dual role after Independence, given the insurmountable task of nation-building.
  • Our Constituent Assembly had performed the functions of the provisional Parliament of India in the interval between the time our Constitution was enforced and the day when the new Parliament was formed following the first General Elections (October 25, 1951-February 21, 1952).
  • The Constituent Assembly of India acted as the first Parliament of independent India.

Role of the Parliament

  • Representative institutions and democratic traditions have always been an integral part of our rich heritage
  • Our Parliament has been playing a pivotal role in the all-round development of the nation by adopting many parliamentary devices for ensuring free and fair discussions and dialogue.
  • We have to ensure that our institutions and governance ensure inclusivity and the participation of our population in our developmental journey, particularly our women, Scheduled Castes, Scheduled Tribes and all other marginalised sections become equal partners in our growth story.

Ensuring the best legislative practices

  • Repository of the proceedings: To ensure that best legislative practices are shared, a national portal is being planned to serve as a repository of the proceedings of Parliament and all State/Union Territory legislatures in the country.
  • Research support is being provided to Members to help them participate better and meaningfully in matters brought before Parliament.
  • Review of the laws to make them relevant: It is also time in the journey of our nation to take stock and review laws that were enacted during the pre-Independence era so as to make them more relevant to our current requirements and future challenges.


Republic Day is an occasion for people’s representatives and all citizens of this proud nation to reaffirm faith in the ideals enshrined in our Constitution.

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Climate Change Impact on India and World – International Reports, Key Observations, etc.

Towards low emissions growth


From UPSC perspective, the following things are important :

Prelims level : COP26

Mains level : Paper 3- Transition to net zero-emission future


While many developing countries made net-zero pledges at COP26 in Glasgow, they face enormous developmental challenges in their attempts to grow in a climate-constrained world.

Developmental challenges for India

  • For India, the national context is shaped by high youth unemployment, millions more entering the workforce each year, and a country hungry for substantial investments in hard infrastructure to industrialise and urbanise.
  • Growth with low emission footprint: India’s economic growth in the last three decades, led by growth in the services sector, has come at a significantly lower emissions footprint.
  • But in the coming decades, India will have to move to an investment-led and manufacturing-intensive growth model to create job opportunities and create entirely new cities and infrastructure to accommodate and connect an increasingly urban population.
  •  All of this requires a lot of energy. Can India do all of this with a low emissions footprint?

What could India do to pursue an industrialization pathway that is climate-compatible?

  • A coherent national transition strategy is important in a global context where industrialised countries are discussing the imposition of carbon border taxes while failing to provide developing countries the necessary carbon space to grow or the finance and technological assistance necessary to decarbonise.
  • What India needs is an overarching green industrialisation strategy that combines laws, policy instruments, and new or reformed implementing institutions to steer its decentralised economic activities to become climate-friendly and resilient.

Issues with India’s domestic manufacturing of renewable technology components

  • India’s industrial policy efforts to increase the domestic manufacturing of renewable energy technology components have been affected by policy incoherence, poor management of economic rents, and contradictory policy objectives.
  • India managed to create just a third of jobs per megawatt that China has managed to in its efforts to promote solar PV and wind technologies.
  • China has created more jobs in manufacturing solar and wind components for exports than domestic deployment.
  • India could have retained some of those jobs if it were strategic in promoting these technologies.

Opportunities in decarbonising transport and industry sector

  • Technologies needed to decarbonise the transport and industry sectors provide a significant opportunity for India.
  • However, India’s R&D investments in these emerging green technologies are non-existent.
  • PLI is a step in right direction: The production-linked incentives (PLIs) under ‘Aatmanirbhar Bharat’ are a step in the right direction for localising clean energy manufacturing activities.
  • Focus on R&D: Aligning existing RD&D investments with the technologies needed for green industrialisation is crucial for realising quantum jumps in economic activities.
  • Encourage private entrepreneurship: India also needs to nurture private entrepreneurship and experimentation in clean energy technologies.
  • Besides China, Korea’s green growth strategy provide examples of how India could gain economic and employment rents from green industrialisation without implementing restrictive policies.

Way forward

  • India should set its pace based on its ability to capitalise on the opportunities to create wealth through green industrialisation.
  • India should follow a path where it can negotiate carbon space to grow, buying time for the hard-to-abate sectors; push against counterproductive WTO trade litigations on decarbonisation technologies; all while making R&D investments in those technologies to ensure that it can gain economic value in the transition.

Consider the question “What are the challenges India faces as it strives to reach the goal of net-zero emission by 2070. Suggest the strategy India should follow to maximise the developmental gains.”


The government should neither succumb to international pressure to decarbonise soon nor should it postpone its investment in decarbonisation technologies and lose its long-term competitiveness in a global low-carbon economy.

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Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

Dealing with the macroeconomic uncertainties


From UPSC perspective, the following things are important :

Prelims level : Tax buoyancy

Mains level : Paper 3- Macroeconomic uncertainty and way ahead


Macroeconomic uncertainties are mounting.

Impact of US Fed’s decision

  • Against the backdrop of possible interest rate hikes by the U.S. Federal Reserve and the taper tantrum, there is pressure on the Reserve Bank of India (RBI) to increase its interest rates to prevent capital outflows.
  • The monetary policy corridor is still “accommodative” to support the growth recovery.
  • Globally, central banks have started increasing the interest rates.

Macroeconomic uncertainties

1] Inflationary pressure

  •  In India, the wholesale price index (WPI) inflation rose to a record high of 14.32% in November 2021 as per the data released by the Ministry of Commerce and Industry.
  • The consumer price index (CPI) inflation now is 5.03%, though that is still within the comfort zone of the inflation targeting framework envisaged in India’s new monetary framework.
  • The official nominal inflation anchor in India is 4%, with a band of variations of +/- 2. 

2] Absorbing excess liquidity

  • The RBI Financial Stability Report, published on December 29, 2021, revealed a possible worsening of the gross non-performing asset (GNPA) ratio of scheduled commercial banks — from 6.9% in September 2021 to 9.5% by September 2022.
  • Absorbing the excess liquidity that was injected to stimulate growth as part of the pandemic response is crucial to reversing trends in non performing assets (NPAs).
  • Absorption of excess liquidity was attempted by increasing the cut-off yield rate of variable rate reverse repo (VRRR) to 3.99%, and curtailing the government securities acquisition programme.

3] Interest rate structure and implications for government borrowing

  •  The call money market rates are below the repo rate.
  • The bond yields are increasing ahead of the Union Budget 2022-23.
  • The rise in bond yields will result in higher borrowing costs for the Government.

Way forward for fiscal policy

  • Maintain accommodative policy stance: Given these macroeconomic uncertainties, maintaining an accommodative fiscal policy stance in the upcoming Union Budget for FY23 is crucial for a sustainable recovery.
  • Don’t focus on fiscal consolidation: Any attempt at fiscal consolidation at this juncture employing capital expenditure compression rather than a tax buoyancy path can adversely affect economic growth. 
  •  Public investment — infrastructure investment in particular — is a major growth driver through “crowding-in” of private corporate investment.
  • Strengthening investments in the health-care sector is crucial at this juncture as a prolonged lockdown can accentuate the current humanitarian crisis and deepen economic disruptions.
  • When credit-linked economic stimulus has an uneven impact on growth recovery, the significance of fiscal dominance cannot be undermined.
  • Address unemployment: Rising unemployment needs to be addressed through an urgent policy response that strengthens job guarantee programmes.


The upcoming Union Budget for 2022-23 should maintain an accommodative fiscal stance in order to support the sustainability of the economic growth process and also for financing human development.

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Foreign Policy Watch: India-Myanmar

Why India must engage with Myanmar


From UPSC perspective, the following things are important :

Prelims level : Sittwe port

Mains level : Paper 2- Why India should engage with Myanmar


Notwithstanding the unfortunate developments since the Tatmadaw took over, a recalibration exercise for developing a robust relationship with Naypyidaw is the need of the hour.

Need for proactive neighbourhood policy with Myanmar

  • Security and economic interests: India should implement an unbiased and proactive “Neighbourhood First” strategy that facilitates the Act East policy crucial for India’s long-term security and economic interests.
  • Myanmar — regardless of who governs its polity — is not only the decisive lynchpin for India’s Act East policy but critical for the economic development and security of India’s Northeast.
  • China factor: Such a policy should take into account the measures that China has taken to arm the Tatmadaw.

How to support Myanmar?

  • Critical requirements: India should find ways to support Naypyidaw for its critical requirements of systems and platforms like UAVs, surveillance systems and communication equipment.
  • Economic engagement: There is a need for dynamic economic engagement with Myanmar, to expedite the completion of the earlier agreement on the operationalisation of the Sittwe port, the establishment of an oil refinery and joint vaccine production facilities at a cost of $6 billion.
  • People-to-people goodwill: India also needs to proactively employ the existing “people-to-people” goodwill and proximate ties between the two armies.
  • Engage with military leadership to stop highhandedness: India has the singular advantage of acceptability from both factions in Myanmar and it is, therefore, imperative that it takes the lead in engaging with the ruling military leadership, to stop the highhandedness.
  • The visit by India’s Foreign Secretary to Myanmar in the last week of December 2021 was significant.
  • It conveyed the message that India, notwithstanding its commitment to democracy, is amenable to conduct business with the country, regardless of who is in the seat of power.


It is of the utmost importance for India to positively engage Naypyidaw and stave off attempts to exploit Myanmar by countries inimical to India’s growth. Any ambiguity or delay in India’s constructive engagement with Myanmar would only serve the interests of anti-India forces.

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Foreign Policy Watch: India – EU

India’s challenge in European geopolitics


From UPSC perspective, the following things are important :

Prelims level : NATO

Mains level : Paper 2- India-Europe relations


For India, an important strategic priority today is to rebalance the Indo-Pacific. Delhi, however, recognises that this expansive challenge can’t be met by any one power, including the US. A larger European role in securing Asia therefore becomes critical.

Importance of Russia in balancing China

  • Peace with Russia in Europe might be necessary for America to focus on Asia has been the key motivation behind President Joe Biden’s decision to intensify engagement with Vladimir Putin in the last few months.
  • On the question of Ukraine’s membership of NATO, the US and its European allies have suggested that membership is certainly not imminent; but they are unwilling to say Ukraine will “never” be admitted.

Contradiction in Europe

  • 1] Europe remains geopolitically unstable: None of the three European settlements of the 20th century — in 1919 after the First World War, in 1945 after the Second World War, and in 1991 after the Cold War — has endured.
  • 2] The difficulty of integrating Russia into a European order: Russia was part of the great power system in Europe through the 18th and 19th centuries.
  • If the 1917 Bolshevik Revolution put Russia and the West at odds with each other, the collapse of the Soviet Union has not resolved the contradiction.
  • 3] Growing tension between the US and Europe: Since the Second World War, Europe has relied on the US for its security.
  • However, Europe has never stopped resenting the American dominance over its geopolitics.
  • The EU’s foreign policy chief, Josep Borrell, has repeatedly objected to the US and Russia deciding the future of Ukraine over European heads.
  • But Russia does not take the EU seriously and is betting on negotiations with the US.
  • 4] Europe still remains a weak security actor:  While the EU has become a powerful economic entity (with its $17 trillion GDP), it remains a weak security actor.
  • Whatever might be the outcome from the gathering conflict over Ukraine, these European contradictions are not going to disappear any time soon.

Why Europe remains a weak security actor?

  • Dominance of the US and Russia: The ambition to construct a strong geopolitical personality for the EU is hobbled by divisions over the role of Russia and the US in the region.
  • Mutual suspicions: The historically rooted mutual suspicions among European states also plays role.
  • Reluctance to spend on defence: This is compounded by the reluctance to spend more on defence and the inability to develop collective defence arrangements outside of NATO led by the US.

Suggestions for India

  • The contradictions in Europe demand that Delhi discard its tendency to view the region through the “East versus West” binary.
  • Delhi today could profitably take a leaf out of the book of the Indian national movement.
  • In the late 18th century, as European powers competed for influence in the subcontinent, many Indian princes sought to take advantage of the contradictions between Britain and France.
  • Imperial Germany supported the formation of a nationalist government of India in Kabul in 1915 headed by Raja Mahendra Pratap Singh.
  • Eager to accelerate Indian independence during the Second World War, Netaji turned to Germany and Japan, the world’s newest great power.
  • The sharpening struggle for Indian independence, and more broadly the liberation of Asia between the two World Wars, inevitably involved exploiting the contradictions between different imperial powers.
  •  This was complicated, however, by rapid realignment among the major powers —friends became adversaries and enemies became allies.
  • The Indian and Asian national movements were deeply divided in coping with the shifting great power dynamic.
  • The world enters a similar moment today that could rearrange relations between the US, UK, Europe, Russia, China and Japan.

Consider the question “What are the contradictions in Europe today? How these contradiction can play role in India’s international relations with the European countries?”


Greater engagement with Europe and dealing with its multiple contradictions must necessarily be important elements of India’s international relations today.

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Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

What is a K-shaped Economic Recovery?


From UPSC perspective, the following things are important :

Prelims level : Various shapes of economic recovery

Mains level : Impact of COVID on employment and economic growth

Former RBI Governor Raghuram Rajan has said that the government needed to do more to prevent a K-shaped recovery of the economy hit by the coronavirus pandemic.

K-Shaped Recovery

  • A K-shaped recovery occurs when, following a recession, different parts of the economy recover at different rates, times, or magnitudes.
  • This is in contrast to an even, uniform recovery across sectors, industries, or groups of people.
  • A K-shaped recovery leads to changes in the structure of the economy or the broader society as economic outcomes and relations are fundamentally changed before and after the recession.
  • This type of recovery is called K-shaped because the path of different parts of the economy when charted together may diverge, resembling the two arms of the Roman letter “K.”

Try these PYQ:


Q.Economic growth in country X will necessarily have to occur if-


(a) There is technical progress in the world economy

(b) There is population growth in X

(c) There is capital formation in X

(d) The volume of trade grows in the world economy

Implications of a K-Shaped Recovery

  • Households at the bottom have experienced a permanent loss of income in the forms of jobs and wage cuts; this will be a recurring drag on demand, if the labour market does not heal faster.
  • To the extent that Covid has triggered an effective income transfer from the poor to the rich, this will be demand-impeding because the poor tend to spend-instead of saving.
  • If Covid-19 reduces competition or increases the inequality of incomes and opportunities, it could impinge on trend growth in developing economies by hurting productivity and tightening political economy constraints.

Also read:

Shapes of Economic Recovery


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Festivals, Dances, Theatre, Literature, Art in News

What is Beating Retreat Ceremony?


From UPSC perspective, the following things are important :

Prelims level : Beating Retreat Ceremony

Mains level : Important national festivals and their significance

There are 26 tunes that will be played at Beating Retreat this year on January 29 skipping the “Abide with Me” tune.

What is the Beating Retreat function?

  • ‘Beating Retreat’ marks a centuries old military tradition, when the troops ceased fighting, sheathed their arms and withdrew from the battlefield and returned to the camps at sunset at the sounding of the Retreat.
  • The military tradition began in 17th century England, when King James II ordered his troops to beat drums, lower flags and organise a parade to announce the end of a day of combat.
  • The ceremony was then called ‘watch setting’ and took place at sunset after firing a single round from the evening gun.
  • The ceremony is currently held by Armed Forces in the UK, US, Canada, New Zealand, Australia, and India, among others.

How did it begin in India?

  • Beating the Retreat’ has emerged as an event of national pride when the Colours and Standards are paraded.
  • The ceremony traces its origins to the early 1950s when Major Roberts of the Indian Army indigenously developed the unique ceremony of display by the massed bands.
  • Section D (Ceremonials) at the Ministry of Defence conducts the event.
  • The ceremony consists of musical performances by the bands, who each year play Indian and western tunes.


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Blockchain Technology: Prospects and Challenges

What are Non-Fungible Tokens (NFTs)?


From UPSC perspective, the following things are important :

Prelims level : Non-Fungible Tokens

Mains level : Challenges associated to Cryptocurrency

A French luxury fashion brand is suing American digital artist who created a series of NFTs (Non-Fungible Tokens), a rapidly growing part of the cryptoworld.

Non-Fungible Tokens

  • An NFT is a unique, irreplaceable token that can be used to prove ownership of digital assets such as music, artwork, even tweets and memes.
  • The term ‘non-fungible’ simply means that each token is different as opposed to a fungible currency such as money (a ten-rupee note can be exchanged for another and so on).
  • Cryptocurrencies such as Bitcoin and Ethereum are also fungible, which means that one Bitcoin can be exchanged for another.
  • But an NFT cannot be exchanged for another NFT because the two are different and therefore unique.
  • Each token has a different value, depending on which asset it represents.

How does NFT transaction take place?

  • NFT transactions are recorded on blockchains, which is a digital public ledger, with most NFTs being a part of the Ethereum blockchain.
  • NFTs became popular in 2021, when they were beginning to be seen by artists as a convenient way to monetize their work.

Why are they in high demand?

  • One of the other attractions is that NFTs are a part of a new kind of financial system called decentralized finance (DeFi), which does away with the involvement of institutions such as banks.
  • For this reason, decentralized finance is seen as a more democratic financial system because it makes access to capital easier for lay people by essentially eliminating the role of banks and other associated institutions.
  • Even so, because NFTs operate in a decentralized system, any person can sell a digital asset as one.
  • This can sometimes create problems. For instance, if you were to sell someone else’s artwork as an NFT, you could essentially be infringing on a copyright.


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Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

[pib] One District One Product (ODOP) Initiative


From UPSC perspective, the following things are important :

Prelims level : One District One Product (ODOP)

Mains level : Not Much

As a major boost to Centre and State collaboration in promoting products under the ODOP Initiative – a State Conference was recently held by the Department for Promotion of Industry and Internal Trade (DPIIT).

One District One Product (ODOP)

  • ODOP spearheaded by the Uttar Pradesh government in 2018, is an important initiative that is being adopted all over India to realize the true potential of each district.
  • ODOP is an initiative which is seen as a transformational step forward towards realizing the true potential of a district, fuel economic growth and generates employment and rural entrepreneurship.
  • It is operationally merged with ‘Districts as Export Hub’ initiative being implemented by DPIIT as a major stakeholder.
  • The main philosophy is to select, brand and promote one product from each district of India that has a specific characteristic feature to enable profitable trade in that product and generate employment.

Why need this scheme?

  • India is home to several agricultural and non-agricultural (including manufacturing) products that are region-specific.
  • Every district has products that are unique and provide livelihoods and generate income.
  • This scheme is in tune with the PM’s call to transform every district into an export hub and realize the goal of Atmanirbhar Bharat.

What needs to be done for its success?

The important aspect that the policy initiatives in India should thus be mindful of are:

  • Ownership of the initiative should lie at the center of implementation.
  • The stakeholders irrespective of the sector along the value chain need to be identified and provided information and awareness.
  • It is important to streamline other initiatives such as registration of Geographical Indications (GI), formation and development of farmer producer organizations etc.


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Indian Army Updates

[pib] Sela Pass Tunnel Project


From UPSC perspective, the following things are important :

Prelims level : Sela Pass

Mains level : Critical border infrastructures

The final blast for the 980-metre long Sela Tunnel was recently conducted by the Border Roads Organisation (BRO) amidst inclement weather and heavy snowfall.

Sela Pass Tunnel Project

  • The tunnel covers a total distance of 12.04 kms which consist of two tunnels of 1790 metres and 475 meters.
  • It is being built at an estimated cost of ₹687 crores by the Border Roads Organisation.
  • It aims to provide all weather connectivity to Tawang in Arunachal Pradesh — an area claimed entirely by China — and other forward areas.
  • Once built it will cut travel time to Tawang by at least an hour for Indian troops stationed in adjoining Assam’s Tezpur town — the headquarters of the Indian army’s IV Corps.

Strategic Importance

  • The lack of motorable roads and rail connections in India’s northeast and Arunachal Pradesh in particular were seen as distinct disadvantages for India vis a vis China in the region.
  • Analysts had been warning of China building infrastructure including access roads right up to the Indian border that would give it a strategic advantage in any conflict with India.
  • Once completed this would result in all weather connectivity to Tawang and forward areas and reduction in more than one hour of travelling time from Tezpur to Tawang.


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Higher Education – RUSA, NIRF, HEFA, etc.

Budgeting for the education emergency


From UPSC perspective, the following things are important :

Prelims level : Expenditure on education in India

Mains level : Paper 2- Increasing the expenditure on education


Faced with an unprecedented education emergency, this is the time to substantially ramp up public spending on education and make it more effective.

Low allocation for education

  • UNESCO’s 2030 framework for action suggests public education spending levels of between 4% and 6% of GDP and 15%-20% of public expenditure.
  • A recent World Bank study notes that India spent 14.1 % of its budget on education, compared to 18.5% in Vietnam and 20.6% in Indonesia, countries with similar levels of GDP.
  • But since India has a higher share of population under the age of 19 years than these countries, it should actually be allocating a greater share of the budget than these countries.
  • Public spending on education in most States in India was below that of other middle-income countries even before the pandemic.
  • Most major States spent in the range of 2.5% to 3.1% of State income on education, according to the Ministry of Education’s Analysis of Budgeted Expenditure on Education.
  • This compares with the 4.3% of GDP that lower-middle-income countries spent, as a group, between 2010-11 and 2018-19.
  •  In the 2021-22 Budget, the Central government’s allocation for the Education Department was slashed compared to the previous year, even though the size of the overall budget increased.
  • Of the major States and Delhi, eight either reduced or just about maintained their budget allocation for education departments in 2021-22 compared to 2020-21.

Way forward

  • The vast majority of the 260 million children enrolled in preschool and school, especially in government schools, did not have meaningful structured learning opportunities during the 20 months of school closures.
  • Infusion of resources: The education system now needs not only an infusion of resources for multiple years, but also a strengthened focus on the needs of the poor and disadvantaged children.
  • What it is spent on and how effectively resources are used are important.
  • It is clear what additional resources are required for.
  • The needs include: back-to-school campaigns and re-enrolment drives; expanded nutrition programmes; reorganisation of the curriculum to help children learn language and mathematics in particular, and support their socio-emotional development, especially in early grades; additional learning materials; teacher training and ongoing support; additional education programmes and collection and analysis of data.
  • Focus on teacher training:  How does expenditure on technology compare with the amounts spent on teacher training, which represents just 0.15% of total estimated expenditure on elementary education?
  • Teachers are central to the quality of education, so why does India spend so little on teacher training?

The opacity of education finance data in India

  • The opacity of education finance data makes it difficult to comprehend this.
  • For instance, the combined Central and State government spending on education was estimated to be 2.8% of GDP in 2018-19, according to the Economic Survey of 2020-21.
  • This figure had remained at the same level since 2014-15.
  • On the other hand, data from the Ministry of Education indicates that public spending on education had reached 4.3% of GDP in the same year, rising from 3.8% of GDP in 2011-12.
  • The difference in the figures is due to the inclusion of expenditure on education by departments other than the Education Department.
  •  Including expenditure on education by, for example, the Ministry of Tribal Affairs, the Ministry of Social Justice and Empowerment (on Anganwadis, scholarships, etc.), the Ministry of Science and Technology (for higher education) is of course legitimate.
  • However, the composition of these expenditures is not readily available.


The questions for this Budget should be clear. How much additional funds are being allocated for different levels of education by the principal departments in 2021-22? Are the funds being spent on the specific measures required to address the education emergency facing the children?

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Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

A chance to support growth, fiscal consolidation


From UPSC perspective, the following things are important :

Prelims level : Marginal propensity to consume

Mains level : Paper 3- Growth prospects for Indian economy


The adverse effect of the third wave of COVID-19, which is mainly affecting the last quarter of 2021-22, may call for a further downward adjustment in the growth rate to about 9%.

Growth in FY 2021-22

  •  As per the NSO’s advance estimates, at the end of 2021-22, the magnitude of GDP in real terms is estimated at INR₹147.5-lakh crore that is only a shade higher than INR₹145.7-lakh crore in 2019-20.
  • Thus, due to the three waves of COVID-19 that India has experienced, two years of real growth in economic activities have been wiped out. 
  • As per the advance estimates, the gross fixed capital formation (GFCF) relative to GDP at current prices stands at 29.6% in 2021-22.
  • Capacity utilisation in India continues to have considerable slack.
  • Private final consumption expenditure (PFCE) also shows a low growth of 6.9% in 2021-22.
  • Any pick-up in demand would continue to be constrained by low-income growth in sectors characterised by a high marginal propensity to consume (MPC) such as the trade, transport, et al. sector and the Micro, Small and Medium Enterprise (MSME) sector more broadly.
  • It may thus be prudent to expect a real GDP growth in the range of 6%-7%.
  • Growth in 2022-23 would also continue to be constrained by supply-side bottlenecks and high prices of global crude and primary products.
  • Growth in 2022-23 would depend on the basic determinants such as the saving and investment rates in the economy.


  • Extend GST compensation period: The GST compensation provision would also come to an end in June 2022.
  • This would cause a major revenue shock at least for some States such as Tamil Nadu, Kerala and Andhra Pradesh.
  • While this matter may be considered by the GST Council, the compensation arrangement should be extended by two years in some modified form.
  • With respect to non-tax receipts, the scope of the National Monetization Pipeline (NMP) may be extended to cover monetisation of government-owned land assets.
  • Disinvestment initiatives may have to be accelerated.
  • Expenditure prioritisation in 2022-23 should focus on reviving both consumption and investment demand.
  • Urban counterpart to MGNREGA: Since consumption demand remains weak, some fiscal support in the form of an urban counterpart to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) may be considered.

Focusing on fiscal consolidation

  • It would be appropriate now to consider a graduated return to fiscal consolidation while using fiscal policy to lay the base for faster growth in the years to come.
  • The Fifteenth Finance Commission had suggested a fiscal consolidation path where the Centre’s fiscal deficit was benchmarked at 5.5% of GDP for 2022-23.
  • In their pessimistic scenario, it was kept at 6% of GDP. 
  • It may be prudent to limit the reduction in fiscal deficit-GDP ratio to about 1% point of GDP in 2022-23.
  • This would imply a fiscal deficit in the range of 5.5%-6% of GDP.
  • From here on, a stepwise reduction of 0.5% points per year would enable a level of about 4% of GDP by 2025-26.
  • By this time, as suggested by the Fifteenth Finance Commission, a high-powered inter-governmental group should be constituted to re-examine the sustainability parameters of debt and fiscal deficit of the central and state governments.


Expenditure prioritisation in 2022-23 should focus on reviving both consumption and investment demand while aiming for the gradual return to the fiscal consolidation.

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