Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Lessons from Bangladesh's success
The article examines the key driving factors of Bangladesh’s stellar economic progress and draws lessons for India.
Overview of Bangladesh’s economic achievements
- Bangladesh’s GDP growth in 2019 was an enviable 8.4 per cent — twice that of India’s during that year.
- It is one of the few countries to have maintained a positive growth rate during the COVID-19 pandemic.
- Its GDP per capita is just under $2,000 — almost the same as India’s.
- In five years, by 2026, Bangladesh will drop its least developed country tag, and move into the league of developing countries — on a par with India.
Parallels between Vietnam and Bangladesh’s progress
- Vietnam instituted market and economic reforms in 1986, which enabled it to achieve rapid economic growth and industrialisation.
- It began with the manufacturing of textiles and garments and moved into making mobiles and electronics.
- As supply chains diversify from China, Vietnam is a beneficiary.
- It is now the “+1” in the “China +1” strategy of multinationals.
- Vietnam has signed trade agreements and inserting itself into global supply chains.
- Bangladesh has followed a similar strategy.
- Its rise is directly connected with the textiles and garments industry, which accounts for 80 per cent of the country’s exports.
- Bangladesh also enjoys preferential trade treatments with the European Union, Canada, Australia, and Japan with negligible or zero tax.
- With India too, Dhaka has a zero-export duty on key products like readymade garments.
- Like Vietnam, its foreign investment regime is investor-friendly.
- For instance, Bangladesh’s liberal FDI policy allows 100 per cent equity in local companies and no limits on repatriation of profits in most sectors.
- Indian companies are increasingly present in Bangladesh, and Indian products are popular — an outcome of a strong cultural affinity.
Women in workforce and microfinance
- The world’s most successful and pioneering microfinance organisations like Grameen and BRAC have aided small businesses in the country, and regionally.
- Many of these schemes, over the years, were directed at women.
- This has paid dividends not just in financial independence, but also in encouraging them to work outside the home.
- Consequently, Bangladesh’s workforce in its textiles sector is almost all women — 95 per cent women in an industry which is 80 per cent of Bangladesh’s exports.
Role of government schemes
- This, along with government schemes like Pushti Apas (Nutrition Sisters) and community health clinics has helped Bangladesh in the development indices.
- Bangladesh fares better on infant mortality, sanitation, hunger and gender equality than many countries including India.
Key lessons for India
- Increasing women in the workforce, liberalising internal and external trade, and making micro lending accessible, are some of the lessons.
- But so is the goal of being a global hub for the sub region, building special economic zones which requires infrastructure, connectivity and a welcoming environment for investors both domestic and foreign.
- both countries have suffered since 1947, without connectivity, at huge cost.
- It is time to integrate our power systems, think about free trade, liberalise the visa regime.
Conclusion
India need not always carry the burden of South Asia’s development alone. It now has a partner with whom to collaborate effectively towards achieving that goal.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Uneven economic recovery at the global level and policy challenges it poses
The article highlights how the faster recovery of the U.S. economy aided by the faster vaccination and stimulus packages may pose a policy challenge to the emerging economies.
About the fiscal stimulus in the U.S.
- With the recent passage of Biden’s $1.9 trillion coronavirus relief package, the cumulative fiscal stimulus amounts to 25 per cent of GDP.
- This reliance on fiscal stimulus is in sharp contrast to the policy response in the aftermath of the 2008 global financial crisis (GFC) when monetary policy was the main tool.
- The over reliance on fiscal measures is because of the “liquidity trap” — interest rates are already treading close to zero.
So, what does this mean for the US and emerging economies?
- From the US perspective, this is good news.
- The U.S. economy is expected to converge to the pre-pandemic GDP projection after the third quarter of 2021, exceeding it by 1 per cent in the fourth quarter.
- The impact on emerging economies is less certain.
- A booming US economy generally bodes well for global growth as higher demand “spills over” to the rest of the world.
- However, the sectoral contribution to US growth presents a different picture this time.
- Private consumption of goods (tradable) is already back to pre-pandemic levels, while consumption of services remains significantly below pre-pandemic levels.
- As the vaccination drive gathers pace in the US and the economy slowly opens up, it should be fair to assume that the non-tradable sector would be driving growth.
- But given the expected nature of the underlying growth, the positive impact on emerging economies will perhaps be softer.
- With smaller fiscal stimulus in emerging economies and the slower vaccine roll, the US recovery largely being led by the non-tradable sector will result in a divergence in growth between the US and emerging countries.
Policy challenge for emerging economies which is different from GFC
- Post-GFC, a combination of zero interest rates and quantitative easing in advanced economies led to a significant surge in capital inflows to emerging countries in search of higher yield leading to an appreciation of their currencies.
- Now, the situation is exactly the opposite.
- The differential rate of recoveries has already led to capital outflow from emerging economies.
- The rise in yield in the U.S. may further fuel capital outflows in coming days leading to tighter monetary conditions in emerging markets.
What should be India’s policy response
- As far as India is concerned, the macro-economic fundamentals are much stronger than during the taper-tantrum days.
- The foreign exchange reserves remain at historically high levels, the current account situation is comfortable and the inflation rate remains within the target band of the RBI.
- In the event of capital outflows, the RBI should let the currency depreciate as the first line of defence to preserve India’s external competitiveness and intervene only to smoothen out extreme volatility.
- It should avoid the temptation to increase interest rates at the risk of hurting the pace of economic recovery.
Consider the question “Uneven economic recovery on the global level poses a policy challenge to India. In this context, discuss the possible impact of uneven recovery and suggest the policy measures to deal with it.”
Conclusion
Uneven recovery at the global level demands an unconventional policy approach. The policy approach of India should be based on this premise.
Back2Basics: Taper Tantrum
- The phrase, taper tantrum, describes the 2013 surge in U.S. Treasury yields, resulting from the Federal Reserve’s (Fed) announcement of future tapering of its policy of quantitative easing.
- The Fed announced that it would be reducing the pace of its purchases of Treasury bonds, to reduce the amount of money it was feeding into the economy.
- The ensuing rise in bond yields in reaction to the announcement was referred to as a taper tantrum in financial media.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- How fiscal deficit financed government spending leads to wealth inequality
The article highlights the issues with government expenditure driven by the selling of public sector assets.
How public asset selling could affects private investment decisions
- Public sector assets are not bought by reducing consumption or investment.
- Current investment expenditure depends on decisions taken in the past and is more or less pre-determined.
- Investment decisions that are taken today for fructification tomorrow that may be scaled down by such a purchase.
- However, if investment decisions taken today are scaled-down, then it results in crowding out and such a strategy should be avoided anyway.
- This implies that selling public sector assets therefore does not release any resources from private use for government spending.
How selling public asset has same macroeconomic effect as fiscal deficit
- In case of fiscal deficit, the government puts its bonds in private hands; in sale of a public asset, the government puts its equity held in public sector assets in private hands.
- The macroeconomic consequences of a fiscal deficit on the economy are no different from those of selling public assets.
- However, finance capital, and institutions like the IMF treat the sale of public assets on a different footing from a fiscal deficit, for ideological — not economic — reasons, because they ideologically favour a dismantling of the public sector.
How fiscal deficit leads to wealth inequality
- In a situation of demand-constraints, where unutilised capacity and unemployed workers exist aplenty, if an appropriate monetary policy is pursued, it can have no adverse effects whatsoever, except one: It increases wealth inequality.
- The government expenditure financed by the fiscal deficit creates additional aggregate demand that increases output and incomes until the additional savings generated out of such incomes exactly match the fiscal deficit.
- These additional savings accrue to the savers without their having to reduce their consumption, compared to the initial situation (that is, prior to government expenditure increase).
- Since savings represent additions to wealth, this amounts to putting extra wealth into the hands of the rich.
- Selling public assets puts into private hands public assets, and that too at prices well below the capitalised value of earnings.
- This increases wealth inequality for two reasons:
- First, it does so exactly as a fiscal deficit does.
- Second, the public asset it puts in private hands is under-priced.
Why tax financed government spending should be preferred
- If the same government expenditure is financed by taxation, no matter who was taxed, then there would be no addition to private wealth and hence no increase in wealth inequality.
- Which is why tax-financed government expenditure should always be preferred to fiscal-deficit-financed government expenditure.
What alternative government have
- The obvious one is wealth taxation.
- Taxing away the private wealth created by a fiscal deficit leaves private wealth inequality unchanged at its initial level; it does not exacerbate it.
- If the government is unwilling to impose higher wealth or profit taxes, it can raise GST rates on several luxury goods.
Consider the question “How fiscal deficit financed government spending differs in its impact on weath inequality from the tax-financed government spending?”
Conclusion
Thus, selling public assets to finance government spending is both undesirable and unnecessary.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Appointment of CJI
Mains level: Judicial appointments and transparency issues
The Chief Justice of India Sharad Bobde has recommended Justice N.V. Ramana, the senior-most judge of the Supreme Court, as the next top judge from April 24.
Chief Justice of India
- The CJI is the chief judge of the Supreme Court of India as well as the highest-ranking officer of the Indian federal judiciary.
Appointment
- The Constitution of India grants power to the President to nominate, and with the advice and consent of the Parliament, appoint a chief justice, who serves until they reach the age of 65 or until removed by impeachment.
- Earlier, it was a convention to appoint seniormost judges.
- However, this has been broken twice. In 1973, Justice A. N. Ray was appointed superseding 3 senior judges.
- Also, in 1977 Justice Mirza Hameedullah Beg was appointed as the chief justice superseding Justice Hans Raj Khanna.
Qualifications to be a SC Judge
The Indian Constitution says in Article 124 (3) that in order to be appointed as a judge in the Supreme Court of India, the person has to fit in the following criteria:
- He/She is a citizen of India and
- has been for at least five years a Judge of a High Court or of two or more such Courts in succession; or
- has been for at least ten years an advocate of a High Court or of two or more such Courts in succession; or
- is, in the opinion of the President, a distinguished jurist
Also read:
Explained: Collegium of Judges
Functions
- As head of the Supreme Court, the CJI is responsible for the allocation of cases and appointment of constitutional benches which deal with important matters of law.
- In accordance with Article 145 of the Constitution and the Supreme Court Rules of Procedure of 1966, the chief justice allocates all work to the other judges.
On the administrative side, the CJI carries out the following functions:
- maintenance of the roster; appointment of court officials and general and miscellaneous matters relating to the supervision and functioning of the Supreme Court
Try this PYQ:
Q. Who/Which of the following is the custodian of the Constitution of India?
(a) The President of India
(b) The Prime Minister of India
(c) The Lok Sabha Secretariat
(d) The Supreme Court of India
Removal
- Article 124(4) of the Constitution lays down the procedure for removal of a judge of the Supreme Court which is applicable to chief justices as well.
- Once appointed, the chief justice remains in the office until the age of 65 years. He can be removed only through a process of removal by Parliament as follows:
- He/She can be removed by an order of the President passed after an address by each House of Parliament supported by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present.
- The voting has been presented to the President in the same session for such removal on the ground of proved misbehaviour or incapacity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sixth Schedule
Mains level: Read the attached story
The Ministry of Home Affairs (MHA) has informed the Lok Sabha that presently, there is no proposal to implement the Panchayat system in the Sixth Schedule areas of Assam.
Try this question from CSP 2015:
Q.The provisions in Fifth Schedule and Sixth Schedule in the Constitution of India are made in order to-
(a) protect the interests of Scheduled Tribes
(b) determine the boundaries between States
(c) determine the powers, authority and responsibilities of Panchayats
(d) protect the interests of all the border States
What is the Sixth Schedule?
- The Sixth Schedule consists of provisions for the administration of tribal areas in Assam, Meghalaya, Tripura and Mizoram, according to Article 244 of the Indian Constitution.
- Passed by the Constituent Assembly in 1949, it seeks to safeguard the rights of the tribal population through the formation of Autonomous District Councils (ADC).
- ADCs are bodies representing a district to which the Constitution has given varying degrees of autonomy within the state legislature.
- The governors of these states are empowered to reorganize the boundaries of the tribal areas.
- In simpler terms, she or he can choose to include or exclude any area, increase or decrease the boundaries and unite two or more autonomous districts into one.
- They can also alter or change the names of autonomous regions without separate legislation.
Autonomous districts and regional councils
- The ADCs are empowered with civil and judicial powers can constitute village courts within their jurisdiction to hear the trial of cases involving the tribes.
- Governors of states that fall under the Sixth Schedule specify the jurisdiction of high courts for each of these cases.
- Along with ADCs, the Sixth Schedule also provides for separate Regional Councils for each area constituted as an autonomous region.
- In all, there are 10 areas in the Northeast that are registered as autonomous districts – three in Assam, Meghalaya and Mizoram and one in Tripura.
The specified tribal areas are the North Cachar Hills, Karbi Anglong and the Bodoland Territorial Area in Assam, Khasi Hills, Jaintiya Hills and Garo Hills in Meghalaya, Tribal Areas in Tripura, Chakma, Mara and Lai districts in Mizoram.
- These regions are named as district council of (name of district) and regional council of (name of region).
- Each autonomous district and regional council consists of not more than 30 members, of which four are nominated by the governor and the rest via elections. All of them remain in power for a term of five years.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NPs mentioned in the news
Mains level: Tiger relocation issues
Sundari — a tigress shifted as part of India’s first inter-state translocation project in 2018 from Madhya Pradesh to Odisha has returned home.
What is the news?
- The five-year-old tigress Sundari spent 28 months in captivity in Satkosia Tiger Reserve, Odisha.
- The two states lingered on the process for her relocation despite the National Tiger Conservation Authority (NTCA) shelving off the much-vaunted inter-state tiger translocation drive.
What was the Tiger Relocation Project?
- The tiger relocation project was initiated in 2018 wherein two big cats, a male (Mahavir) from Kanha Tiger Reserve and a female (Sundari) from Bandhavgarh from MP were relocated to Satkosia Tiger Reserve in Odisha.
- The relocation was meant to serve two purposes
- to reduce the tiger population in areas with excess tigers to majorly reduce territorial disputes and
- to reintroduce tigers in areas where the population has considerably reduced due to various reasons
How were Mahavir and Sundari chosen for the project?
- Both the big cats were selected for the translocation project as per the NTCA guidelines and in collaboration with the Wildlife Institute of India and the GoI.
- Two key factors were considered for choosing the animal — first, a dispersing young animal which is to find a new and second, an adult transient which was yet to establish any territory.
What is the Satkosia Tiger Reserve and why was it chosen?
- Encompassing an area of 963.87 sq km, the Satkosia Tiger Reserve spreads across four districts and has as its core area 523 sq km.
- According to NTCA, Satkosia falls under reserves where “there is a potential for increasing tiger populations”.
- Declared as a Tiger Reserve in 2007, Satkosia had a population of 12 tigers then. The numbers reduced to two in 2018.
- The purpose of the relocation was to repopulate tigers in the reserve areas.
Try this PYQ from CSP 2020:
Q.With reference to India’s Desert National Park, which of the following statements is correct?
- It is spread over two districts.
- There is no human habitation inside the Park.
- It is one of the natural habitats of Great Indian Bustard.
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1,2 and 3
Unexpected outcomes of the project
The project ran into trouble within weeks of initiation.
- The arrival of the tigers was followed by severe protests by villagers living on the fringes of the reserve and the matter eventually snowballing into a poll issue.
- Forest department officials were attacked and their offices burnt down by irate villagers most of whom were tribals.
- The villagers feared the big cats would endanger their livelihoods, lives and livestocks. They also alleged that they were not consulted or informed prior to the translocation.
- The major reason which contributed to the failure of the project was the lack of confidence and trust-building between the forest department and the villagers.
- Within months of the translocation, Mahavir was found dead and was killed in poaching.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Suez Canal
Mains level: Not Much
A massive cargo ship has turned sideways in Egypt’s Suez Canal, blocking traffic in a crucial East-West waterway for global shipping.
Try this PYQ:
Q.Between India and East Asia, the navigation time and distance can be greatly reduced by which of the following?
- Deepening the Malacca straits between Malaysia and Indonesia.
- Opening a new canal across the Kra isthmus between the Gulf of Siam and Andaman sea.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Suez Canal
- The Suez Canal is an artificial sea-level waterway in Egypt, connecting the Mediterranean Sea to the Red Sea through the Isthmus of Suez; and dividing Africa and Asia.
- Constructed by the Suez Canal Company between 1859 and 1869, it officially opened on 17 November 1869.
- The canal was earlier controlled by British and French interests in its initial years but was nationalized in 1956 by Egypt’s then leader Gamal Abdel Nasser.
- It extends from the northern terminus of Port Said to the southern terminus of Port Tewfik at the city of Suez.
- Its length is 193.30 km including its northern and southern access channels.
Its significance
- The Suez Canal provides a crucial link for oil, natural gas and cargo being shipping from East to West.
- It provides a major shortcut for ships moving between Europe and Asia, who before its construction had to sail around Africa to complete the same journey.
- Around 10 % of the world’s trade flows through the waterway and it remains one of Egypt’s top foreign currency earners.
- As per a report, the canal is a major source of income for Egypt’s economy, with the African country earning $5.61 billion in revenues from it last year.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Zabarwan Mountains
Mains level: NA
Prime Minister has asked tourists to visit the tulip garden, located at the foothills of the Zabarwan range in Jammu and Kashmir.
Try this PYQ from CSP 2020:
Q.Siachen Glacier is situated to the
(a) East of Aksai Chin
(b) East of Leh
(c)North of Gilgit
(d) North of Nubra Valley
Zabarwan Mountains
- The Zabarwan Range is a short sub-mountain range between Pir Panjal and the Great Himalayan Range in the central part of the Kashmir Valley.
- Specifically, the range is known to be what overlooks the Dal Lake and holds the Mughal gardens of Srinagar.
- The Shankaracharya Temple is built on the edge of the central part of the Zabarwan Range.
- The highest peak of this range is Mahadev Peak at 13,013 feet (3,966 m), which forms the distant background of the eastern mountain wall.
- On the northern slopes of the central part of the range, there are three Mughal gardens built by Emperor Shah Jahan.
- These include Chashma Shahi, Nishat Bagh and Shalimar Garden alongside the Pari Mahal (the fairy palace).
- The Dachigam National Park is the main feature of the range which holds the last viable population of Kashmir stag (Hangul) and the largest population of black bear in Asia.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Shigmo Festival
Mains level: NA
The Shigmo or the Goan Carnival celebrations may be terminated this year due to rising covid cases.
Try this PYQ from CSP 2017:
Q.Consider the following pairs:
Traditions Communities
- Chaliha Sahib Festival — Sindhis
- Nanda Raj Jaat Yatra — Gonds
- Wari-Warkari — Santhals
Which of the pairs given above is/are correctly matched?
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) None of the above
What is Shigmo or Shigmotsav?
- Shigmo is the celebration of a ‘rich, golden harvest of paddy’ by the tribal communities of Goa.
- Agricultural communities including the Kunbis, Gawdas and Velips celebrate the festival that also marks the onset of spring.
- Shigmo celebrations last over a fortnight in the months of Phalgun-Chaitra months of the Hindu calendar that correspond with March-April every year.
Various activities in celebrations
- The festival begins with ‘Naman’ that is the invocation of the local folk deities on the village ‘maand’ or the village stage.
- It is held to the beats of percussion instruments like the Ghumat, Dhol, Mhadle and Tashe by the male folk.
- This is called the ‘romta mell’ that moves from one village to another.
- The celebration is replete with traditional, colourful costumes, mythological installations, painted faces and costumes of various hues.
- Folk dances like Ghodemodini (a dance of equestrian warriors), Gopha and Phugadi are among the many dances performed by the participating communities.
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