Note4Students
From UPSC perspective, the following things are important :
Prelims level: Maoism, Leninism and Marxism
Mains level: Not Much
While his views on Buddhism being superior to other religions are well-known, Ambedkar also believed the Buddha’s path to be superior to the popular religion-rejecting philosophy, Marxism.
Marxist view of religion
- Marx saw religion as a conservative force that prevented social change by creating false consciousness.
- Marx once said- “Religion is the opium of the people. It is the sigh of the oppressed creature, the heart of a heartless world, and the soul of our soulless conditions.”
- The end goal of Marxism is to achieve a classless society throughout the world.
How Dr. Ambedkar compared Buddhism to Marxism?
- Ambedkar has compared Buddhism with Marxism, saying that while both strive for the same end of a just and happy society.
- The means propounded by Buddha are superior to those of Marx.
- It is just simple that Marx was modern and Buddha ancient.
- If the Marxists keep back their prejudices and study the Buddha and understand what he stood for I feel sure that they will change their attitude, Ambedkar writes.
Similarities between the two
- In showing the similarities between Buddhism and Marxism, Ambedkar first condenses the basic philosophy of both into neat bullet points.
- For Buddhism, Dr. Ambedkar lists key points:
- The function of Religion is to reconstruct the world and to make it happy and not to explain its origin or its end;
- That private ownership of property brings power to one class and sorrow to another;
- That it is necessary for the good of Society that this sorrow be removed by removing its cause; and
- All human beings are equal.
- Of Marx, he says all that is left “is a residue of fire”:
- The function of philosophy is to reconstruct the world and not to waste its time in explaining the origin of the world;
- That private ownership of property brings power to one class and sorrow to another through exploitation;
- That it is necessary for the good of society that the sorrow be removed by the abolition of private property.”
How abolition of private property works under Buddhism?
- Dr Ambedkar says Buddhism’s commitment to abolishment of private property is apparent in how its ‘Bhikshus’ give up all worldly goods.
- He says the rules for Bhikhshus owning property or possessions are “far more rigorous than are to be found in communism in Russia.”
- To establish a happy and fair society, the Buddha had laid down a path for believers.
- The means adopted by the Buddha were to convert a man by changing his moral disposition to follow the path voluntarily.
Key difference: Violent means
- The means adopted by the Communists are equally clear, short and swift. They are (1) Violence and (2) Dictatorship of the Proletariat.
- It is now clear what are the similarities and differences between Buddha and Karl Marx.
- The differences are about the means. The end is common to both.
- The driving force of India’s Constitution also says Buddha was a democrat.
- As to Dictatorship, the Buddha would have none of it. He was born a democrat and he died a democrat, Ambedkar writes.
Try this PYQ:
Q. Karl Marx explained the process of class struggle with the help of which one of the following theories?
(a) Empirical liberalism.
(b) Existentialism.
(c) Darwin’s theory of evolution.
(d) Dialectical materialism.
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FLDG
Mains level: NA
Two months after the RBI issued guidelines on digital lending, banks, NBFCs and fintech players are still awaiting clarity on many aspects, including the First Loss Default Guarantee (FLDG) system.
What is FLDG System?
- FLDG is an arrangement between a fintech company and regulated entity (RE), including banks and non-banking finance companies, wherein the fintech compensates the RE to a certain extent if the borrower defaults.
- Under this, the fintech originates a loan and promises to compensate the partners up to a pre-decided percentage in case customers fail to repay.
- The bank/NBFC partners lend through the fintech but from their own books.
- FLDG helps expand the customer base of traditional lenders but relies on the fintechs underwriting capabilities.
- FLDG is also seen as a validation of the fintechs underwriting capabilities for loans disbursed.
Issues with FLDGs
- A report by an RBI-constituted working group on digital lending has laid down risks of FLDG agreements with unregulated entities.
- The other concern is that FLDG costs are often passed on to customers.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Healthy tax collection, advantages and challenges
Context
- Notwithstanding the likely slowdown in economic momentum in the second half of the year, the Union government’s tax collections are on track to surpass its budgeted target by a significant amount this year.
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The current status Union government’s tax collection
- Gross tax collections have already touched the target: Data released by the Controller General of Accounts last week shows that gross tax collections have already touched 58 per cent of the full year’s target, growing by 18 per cent in the first seven months (April-October) of the current financial year.
- Healthy growth in corporate tax collection: Under the broad rubric of taxes, direct tax collections have grown by a robust 26 per cent in the first seven months of the financial year, with healthy growth being seen across both corporate and income tax collections.
- Higher than the nominal GDP growth: While the pace of direct collections has eased during July-October when compared to the first quarter, it continues to be higher than nominal GDP growth in the second quarter.
- Healthy indirect tax collection: On the indirect tax side, GST collections continued to witness healthy growth, recording an increase of 11 per cent in November.
Memory shot in short: Types of Direct Taxes
- Income Tax: Depending on an individual’s age and earnings, income tax must be paid. Various tax slabs are determined by the Government of India which determines the amount of Income Tax that must be paid. The taxpayer must file Income Tax Returns (ITR) on a yearly basis. Individuals may receive a refund or might have to pay a tax depending on their ITR. Penalties are levied in case individuals do not file ITR.
- Wealth Tax: The tax must be paid on a yearly basis and depends on the ownership of properties and the market value of the property.
- Estate Tax: It is also called Inheritance Tax and is paid based on the value of the estate or the money that an individual has left after his/her death.
- Corporate Tax: Domestic companies, apart from shareholders, will have to pay corporate tax. Foreign corporations who make an income in India will also have to pay corporate tax.
- Capital Gains Tax: It is a form of direct tax that is paid due to the income that is earned from the sale of assets or investments
- Higher devolution to states: Higher tax collections at the level of the central government imply that devolution to states will be higher than the budgeted amount of Rs 8.16 lakh crore. The months of August and November have in fact witnessed double instalments as the Centre has stepped up devolution.
- States can increase fiscal expenditure: Along with the interest free loan scheme extended by the Centre, higher devolution implies that states have considerable fiscal room to increase capital expenditure. However, this has not been the case so far. Capex by states has been rather muted.
- Provides comfort to governments fiscal arithmetic: As per recent statements by revenue secretary Tarun Bajaj, the government is now hopeful of exceeding the budgeted target by nearly Rs 4 lakh crore. With its spending also likely to surpass earlier expectations by a considerable margin, higher tax collections will provide some comfort to the government’s fiscal arithmetic.
Challenges on the expenditure side
- Increased subsidy bills: On the expenditure side, the Union government is facing a massive increase in its subsidy bill.
- Spending is more than actual budget: Actual spending on the food and fertilizer subsidy and also on LPG will be significantly higher than what has been budgeted for. This is likely to make the fiscal situation challenging.
- Effective utilization is necessary: Considering that the central government has maintained the momentum on its capital spending, growing by around 60 per cent in the first seven months of the year, the overall general government fiscal impulse will depend on how effectively states are able to utilise the extra space available to them.
Conclusion
- Calls for increasing spending to support the economy during this uncertain period will only gain traction as the budget approaches. The government must however resist the temptation. It should stick to the glide path of fiscal consolidation.
Mains Question
Q. In a time of possible economic slowdown, India’s tax collection is on a healthy path. Discuss what good tax collection means for economy?
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Criminalization of Politics
Context
- The increasing trend of criminalization of politics is dangerous and has steadily been eating into the vitals of our democratic polity along with growing corruption of a humongous nature.
What is criminalization of politics?
- Criminals becomes legislators: The criminals entering the politics and contesting elections and even getting elected to the Parliament and state legislature. Criminalization of politics is the focus of public debate when discussion on electoral reforms takes place.
- Criminal nexus: It is result of nexus between politicians and criminals.
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What are the reasons for criminalization of politics
- Political control of state machinery: Increasing trend of criminalization of politics is linked to political control of state machinery, corruption, vote-bank politics and above all, loopholes in the legal system.
- Inaction from bureaucrats: We cannot expect probity and integrity from the bureaucracy if it is controlled in large measure, by criminals. Good governance gets seriously undermined when, for instance, criminals, gangsters or mafia dons, become the political bosses of bureaucrats and subvert the system to serve their interests.
- Embracing the corruption: In such a scenario, the bureaucratic system ceases to resist corruption and often embraces it to carry out the diktats of criminal political bosses and also to suit its own ends.
- Hampering free and fair election: limited choice of voters to elect a candidate to parliament or state. It is against the spirit of free and fair election which is the bedrock of a democracy.
- Unhealthy democratic practice: The major problem is that the law-breakers become law-makers, this affects the efficacy of the democratic process in delivering good governance. These unhealthy tendencies in the democratic system reflect a poor image of the nature of India’s state institutions and the quality of its elected representatives.
- Circulation of black money: It also leads to increased circulation of black money during and after elections, which in turn increases corruption in society and affects the working of public servants.
- Culture of violence: It introduces a culture of violence in society and sets a bad precedent for the youth to follow and reduces people’s faith in democracy as a system of governance.
- Weakening the institutions: This is a pervasive malaise in our body politic, which is assuming cancerous proportions. As a result, the three main pillars of our democracy, namely, Parliament, judiciary and executive, get progressively weakened, and the fundamental concept of a democratic system gets subverted.
What should be done?
- Fast judicial process: Fast-tracking the judicial process will weed out the corrupt as well as criminal elements in the political system.
- Political consensus is necessary: It is high time all political parties came together and developed a consensus on keeping criminals some of them with serious charges including kidnapping, rape, murder, grave corruption and crimes against women out of the system.
- Warning by Vohra committee: The Vohra Committee set up by the Centre in 1993 sounded a note of warning saying that “some political leaders become the leaders of these gangs/armed senas and, over the years, get themselves elected to local bodies, state assemblies and the national Parliament.” This was nearly three decades ago.
Efforts by Supreme court and Executive
- Disclosure of criminal records: In 2002, the Court ruled that every candidate contesting election has to declare his criminal and financial records along with educational qualifications. It must be said that mandatory declaration of assets and existing criminal charges in self-sworn affidavits to the EC, prior to elections, has brought in some degree of transparency.
- Formation of special courts: As a follow-up to these directives, in 2017, the Union government started a scheme to establish 12 special courts for a year to fast track the trial of criminal cases against MPs and MLAs. The apex court has since then issued many directions, including asking the Centre to set up a monitoring committee to examine reasons for delay of investigation in these cases.
- Tackling the pendency of cases: The number of pending cases continues to be a matter of grave concern, so much so that the Supreme Court had been informed, as per media reports of February 2022, that the number of pending criminal cases against sitting and former MLAs and MPs had risen to close to 5,000 towards the end of December 2021.
Conclusion
- There cannot be any leniency to criminals and the corrupt in public life, especially when it comes to a range of crimes which are serious and heinous in nature. Fast tracking trials and expediting the judicial process through a time-bound justice delivery system alone can cleanse our public life and rid it of this widespread disease.
Mains Question
Q. What is the criminalization of Politics? Enlist the reasons for criminalization of politics and solution to tackle the same.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Basics of Soils, Theme of the WSD, 2022
Mains level: Soil pollution, nutrient loss, consequences and India’s Soil conservation strategy
Context
- As soil is the basis of food systems, it is no surprise that soil health is critical for healthy food production. World Soil Day (WSD) 2022, annually observed on December 5, aligns with this.
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Theme of the World soil day
- WSD 2022, with its guiding theme, ‘Soils: Where food begins’, is a means to raise awareness on the importance of maintaining healthy soils, ecosystems and human well-being by addressing the growing challenges in soil management, encouraging societies to improve soil health, and advocating the sustainable management of soil.
What is soil?
- Soil is the loose material of the earth’s surface in which the terrestrial plants grow. It is usually formed from weathered rock or regolith changed by chemical, physical and biological process.
Back to basics: Composition of soils
- Mineral matter: It includes all minerals inherited from the parent material as well as those formed by recombination from substances in the soil solution.
- Organic matter: It is derived mostly from decaying plant material broken down and decomposed by the actions of animals and microorganisms living in the soil. It is this organic portion that differentiates soil from geological material occurring below the earth’s surface which otherwise may have many of the properties of a soil. (Note: The end product of breakdown of dead organic material is called humus.)
- Air and water: Normally, both air and water fill the voids in soil. Air and water in the soil have a reciprocal relationship since both compete for the same pore spaces. For example, after a rain or if the soil is poorly drained, the pores are filled with water and air is excluded. Conversely, as water moves out of a moist soil, the pore space is filled with air. Thus the relationship between air and water in soils is continually changing.
Why is soil so important?
- Healthy soils are essential for our survival: They support healthy plant growth, habitat for many insects and other organisms, It enhance both our nutrition and water percolation to maintain groundwater levels, act as a filtration system for surface water.
- Second largest carbon sink after ocean: Soils help to regulate the planet’s climate by storing carbon and are the second largest carbon sink after the oceans. They help maintain a landscape that is more resilient to the impacts of droughts and floods.
- Contribute to the economies: They also support buildings and highways and contribute to the economies of our cities. For instance, the rich, deep fertile soils of the Ganga plain especially its delta and the coastal plains of Kerala support a high density of population through agricultural prosperity.
- Main drivers of soil degradation: The main drivers contributing to soil degradation are industrial activities, mining, waste treatment, agriculture, fossil fuel extraction and processing and transport emissions. Further, excessive use of fertilizers and pesticides, and irrigation with contaminated wastewater are also polluting soils.
- Reasons behind the nutrient loss: The reasons behind soil nutrient loss range from soil erosion, runoff, leaching and the burning of crop residues.
- Increasing soil pollution undermines food security: Today, nutrient loss and pollution significantly threaten soils, and thereby undermine nutrition and food security globally.
- Soil degradation affects around 29% of India’s total land area: Soil degradation in some form or another affects around 29% of India’s total land area. This in turn threatens agricultural productivity, in-situ biodiversity conservation, water quality and the socio-economic well-being of land dependent communities. Nearly 3.7 million hectares suffer from nutrient loss in soil (depletion of soil organic matter, or SOM).
- Irreparable consequences: Impacts of soil degradation are far reaching and can have irreparable consequences on human and ecosystem health.
India’s Soil conservation strategy
- Five- pronged strategy: The Government of India is implementing a five-pronged strategy for soil conservation. This includes making soil chemical-free, saving soil biodiversity, enhancing SOM, maintaining soil moisture, mitigating soil degradation and preventing soil erosion.
- Soil Health Card (SHC) scheme: Earlier, farmers lacked information relating to soil type, soil deficiency and soil moisture content. To address these issues, the Government of India launched the Soil Health Card (SHC) scheme in 2015. The SHC is used to assess the current status of soil health, and when used over time, to determine changes in soil health. The SHC displays soil health indicators and associated descriptive terms, which guide farmers to make necessary soil amendments.
- Pradhan Mantri Krishi Sinchayee Yojana: Other pertinent initiatives include the Pradhan Mantri Krishi Sinchayee Yojana, to prevent soil erosion, regeneration of natural vegetation, rainwater harvesting and recharging of the groundwater table.
- Promoting organic farming practices under National Mission for Sustainable Agriculture (NMSA): In addition, NMSA has schemes promoting traditional indigenous practices such as organic farming and natural farming, thereby reducing dependency on chemicals and other agri-inputs, and decreasing the monetary burden on smallholder farmers.
- FAO’s various initiatives to support government efforts in soil conservation: The Food and Agriculture Organization of the United Nations (FAO) undertakes multiple activities to support the Government of India’s efforts in soil conservation towards fostering sustainable agrifood systems.
- FAO’s collaboration on developing data analytics and forecasting tools: The FAO is collaborating with the National Rainfed Area Authority and the Ministry of Agriculture and Farmers’ Welfare (MoA&FW) to develop forecasting tools using data analytics that will aid vulnerable farmers in making informed decisions on crop choices, particularly in rainfed areas.
FAO working with target States
- To increase capacities of farmers to farm livelihood: The FAO, in association with the Ministry of Rural Development, supports the Deen Dayal Antyodaya Yojana-National Rural Livelihoods Mission’s (DAY-NRLM) Community Resource Persons to increase their capacities towards supporting on-farm livelihoods for the adoption of sustainable and resilient practices, organic certification and agri-nutri-gardens.
- Target states: The FAO works in eight target States, namely, Madhya Pradesh, Mizoram, Odisha, Rajasthan, Uttarakhand, Chhattisgarh, Haryana and Punjab, for boosting crop diversification and landscape-level planning. In Andhra Pradesh, the FAO is partnering with the State government and the Indian Council of Agricultural Research (ICAR) to support farmers in sustainable transitions to agro-ecological approaches and organic farming.
Way ahead
- There is a need to strengthen communication channels between academia, policymakers and society for the identification, management and restoration of degraded soils, as well as in the adoption of anticipatory measures.
- These will facilitate the dissemination of timely and evidence-based information to all relevant stakeholders.
- Greater cooperation and partnerships are central to ensure the availability of knowledge, sharing of successful practices, and universal access to clean and sustainable technologies, leaving no one behind.
Conclusion
- A key component of sustainable food production is healthy soil as nearly 95 percent of global food production depends on soil. The current state of soil health is alarming and unprecedented soil degradation is a major challenge for sustainable food production. India is on track to restore 26 million hectares of degraded land by 2030.
Mains Question
Q. Soil is the basis of the food system, its degradation and nutrient depletion in recent years is alarming. Discuss the soil conservation strategy of India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Economic indicators
Mains level: India's economic growth story, current challenges and the future roadmap
Context
- By 2047, India will complete 100 years after Independence. By that time, India strives to achieve the status of a developed economy, which means achieving a minimum per capita income equivalent to $13,000.
Economic growth during the British period
- Poor state of economy: It is not realized often that India’s economic progress in the first half of the 20th century under British rule was dismal. According to one estimate, during the five decades, India’s annual growth rate was just 0.89%.
- Negligible growth in per capita: With the population growing at 0.83%, per capita income grew at 0.06%. It is not surprising that immediately after Independence, growth became the most urgent concern for policymakers.
- In the early period, India’s strategy of development comprised four elements:
- Raising the savings and investment rate;
- Dominance of state intervention;
- Import substitution, and
- Domestic manufacture of capital goods.
- Modest growth till 1970: India’s average growth till the end of the 1970s remained modest, with the average growth rate being 3.6%. With a population growth of 2.2%, the per capita income growth rate was extremely modest at 1.4%.
- Improvement in social indicators: On certain health and social parameters, such as the literacy rate and life expectancy, there were noticeable improvements.
- The success of green revolution: While India had to rely on the heavy imports of food grains on a concessional basis, initially, there was a breakthrough in agriculture after the Green Revolution.
- Industrial base widened: The industrial base expanded with time. India became capable of producing a wide variety of goods including steel and machinery.
- Unsustainable fiscal policy: Plan after plan, actual growth was less than what was projected. The Indian economy did grow at 5.6% in the 1980s. But it was accompanied by a sharp deterioration in the fiscal and current account deficits, and the economy faced its worst crisis in 1991-92.
Statistics of economic growth after 1991
- Rapid economic growth: Between 1992-93 and 2000-01, GDP at factor cost grew annually by 6.20%. Between 2001-02 and 2012-13, it grew by 7.4% and the growth rate between 2013-14 and 2019-20 was 6.7%.
- Sustained period of high growth rate: The best performance was between 2005-06 and 2010-11 when GDP grew by 8.8%, showing clearly what the potential growth rate of India was. This is the highest growth experienced by India over a sustained period of five to six years. This was despite the fact that this period included the global crisis year of 2008-09.
- Rising investment rate: There was a corresponding increase in the savings rate. The current account deficit in the Balance of Payments (BOP) remained low at an average of 1.9%.
- Setback to growth after 2011-12: However, the growth story suffered a setback after 2011-12. The growth rate fell to 4.5% in 2012-13 according to the 2004-05 series. The growth rate since then has seen ups and downs. The growth rate touched the 3.7% level in 2019-20.
Roadmap for Future Growth
- Keeping the sustained growth rate: The first and foremost task is to raise the growth rate. Calculations show that if India achieves a 7% rate of growth continuously over the next two decades and more, it will make a substantial change to the level of the economy. India may almost touch the status of a developed economy.
- Maintaining the incremental capital output ratio: If India maintains the incremental capital output ratio at 4, which is a reflection of the efficiency with which we use capital, India can comfortably achieve a 7% rate of growth.
- Investment must be increased: Raising the investment rate depends on a number of factors. A proper investment climate must be created and sustained.
- Private investment is crucial: While public investment should also rise, the major component of investment is private investment, both corporate and non-corporate. It is this which depends on a stable financial and fiscal system. The importance of price stability in this context cannot be ignored.
- New technologies must be embraced: India needs to absorb the new technologies that have emerged, and that will emerge. Its development strategy must be multidimensional.
- Strong Export and manufacturing: India need a strong export sector. It is a test of efficiency. At the same time, India needs a strong manufacturing sector. The organized segment of this sector must also increase.
- Strengthened the social safety nets: As output and income increase, India must also strengthen the system of social safety nets. Growth without equity is not sustainable.
Challenges for India’s growth
- Low per capita income: India today is the fifth largest economy. This is an impressive achievement. However, in relation to per capita income, it is a different story. In 2020, India’s rank was 142 out of 197 countries. This only shows the distance we have to travel.
- Declining growth in developing countries: The external environment is not going to be conducive. The Organization for Economic Co-operation and Development reports a secular decline in growth in developed countries.
- Climate change may affect the growth: Environmental considerations may also act as a damper on growth. Some adjustment on the composition of growth may become necessary.
Conclusion
- Considering the India’s population, India has no option but to grow continuously. Government has undertaken major structural reform and policy initiatives like GATI-SHAKTI to give fillip to growth of economy. These are the steps in the right directions and more such liberalizing initiatives need to be encouraged.
Mains Question
Q. Briefly describe the history of economic growth of India after independence. What could be the roadmap for future growth of India till 2047?
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: China Indian Ocean Region Forum, USAID
Mains level: Read the attached story
China’s top development aid agency convened the first “China-Indian Ocean Region Forum” in the southwestern Chinese city of Kunming.
What is the China Indian Ocean Region Forum?
- It is organised by the China International Development Cooperation Agency (CIDCA).
- It is the latest Chinese initiative focusing on the Indian Ocean Region (IOR).
- It underlines Beijing’s growing strategic interests in a region where its economic footprint has been deepening.
What is it about?
- The CIDCA is China’s new development aid agency similar to the United States Agency for International Development (USAID).
- It aims to-
- Strengthen policy coordination,
- Deepen development cooperation,
- Increase resilience to shocks and disasters, and
- Enhance relevant countries’ capacity to obtain economic benefits through use of marine resources such as fisheries, renewable energy, tourism, and shipping in a sustainable way
Which countries have backed the forum?
- The organisers have said the forum was attended by high-level representatives and senior officials from 19 countries.
- But at least two of those countries, Australia and Maldives, subsequently released statements rebutting the claim, emphasising that they did not participate officially.
Why such a move by China?
China’s ambitions in the Indian Ocean have been motivated by three factors-
- Gaining significance of Indo-Pacific: As the new world order unveils around the Indo-Pacific, Beijing aims to challenge other major powers, such as India, and establish its hegemony.
- Domestic energy security: Beijing needs the Indian Ocean to ensure its energy security and continue fuelling its growth, which defines its foreign policy and international leverage.
- Hegemony establishment: Establishing new and alternative institutions with IOR countries helps China display its presence and influence from the China Sea to the Indian Ocean, reflecting its status as a significant power.
How is China perceiving its interests?
- Political corruption: Beijing has cultivated close and personal relationships with political elites and parties of IOR countries, usually through corruption, party funding, and by turning a blind eye to their human rights abuses and democratic infirmities.
- Fractionalization: Friendship with different political parties in Pakistan; bonhomie with the Rajapaksa clan in Sri Lanka, and close relations with Maldives’ Abdulla Yameen are some examples of this widespread phenomenon.
- Elite capture: In addition, China has often used the elite capture tactic to ensure a pro-China policy and bag geo-economically and strategically significant projects. This includes concessions on Pakistan’s Gwadar Port and Sri Lanka’s Colombo Port City project.
Where does India stand?
- India was the lone absentee in the forum ignoring the invitation.
- China has exposed its intention with the Indian Ocean Region (IOR) countries.
- New Delhi has viewed China’s recent moves in the region warily, including the recent visit of a Chinese military tracking vessel, the Yuan Wang 5, to Sri Lanka.
- Moreover, India sees the Indian-Ocean Rim Association (IORA) as an already established platform for the region.
China’s plans for the IOR
- The forum has underlined China’s stepped-up interest in the IOR, where it is already a major trading partner for most countries and where sea routes lie vital to China’s economic interests.
- The CIDCA forum is the latest initiative to reflect Beijing’s view that it has a clear stake in the region, and that more such initiatives are likely.
Has China out-powered India in the IOR with this move?
- The Chinese initiative looks like a kind of delayed response.
- It can be seen only as a comparison and competitor to India’s SAGAR (Security and Growth for All in the Region), as outlined by PM Modi in Mauritius in 2015.
- The Indian idea is implemented through the nation’s ‘Neighbourhood First’ policy and such other initiatives as ‘‘Project Mausam’ and ‘Integrated Coastal Surveillance System’ (now shared with Maldives).
- All of them are confined to the Indian Ocean, where India too belongs legitimately, unlike China.
Conclusion
- In a way, the new initiative reflects China’s unending greed.
- It also reflects China’s desire and ambition to measure up to the US in reach and outreach, and through them, geo-economics, geopolitical, and geostrategic comparability.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Electoral Bond Scheme
Mains level: Read the attached story
The government has opened yet another week-long window for electoral bond sales starting December 5.
What are Electoral Bonds?
- Electoral bonds are banking instruments that can be purchased by any citizen or company to make donations to political parties, without the donor’s identity being disclosed.
- It is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India.
- The citizen or corporate can then donate the same to any eligible political party of his/her choice.
- An individual or party will be allowed to purchase these bonds digitally or through cheque.
About the scheme
- A citizen of India or a body incorporated in India will be eligible to purchase the bond
- Such bonds can be purchased for any value in multiples of ₹1,000, ₹10,000, ₹10 lakh, and ₹1 crore from any of the specified branches of the State Bank of India
- The purchaser will be allowed to buy electoral bonds only on due fulfillment of all the extant KYC norms and by making payment from a bank account
- The bonds will have a life of 15 days (15 days time has been prescribed for the bonds to ensure that they do not become a parallel currency).
- Donors who contribute less than ₹20,000 to political parties through purchase of electoral bonds need not provide their identity details, such as Permanent Account Number (PAN).
Objective of the scheme
- Transparency in political funding: To ensure that the funds being collected by the political parties is accounted money or clean money.
Who can redeem such bonds?
- The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.
- Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent of the votes polled in the last General Election to the Lok Sabha or the State Legislative Assembly, shall be eligible to receive the Electoral Bonds.
Restrictions that are done away
- Earlier, no foreign company could donate to any political party under the Companies Act
- A firm could donate a maximum of 7.5 per cent of its average three year net profit as political donations according to Section 182 of the Companies Act.
- As per the same section of the Act, companies had to disclose details of their political donations in their annual statement of accounts.
- The government moved an amendment in the Finance Bill to ensure that this proviso would not be applicable to companies in case of electoral bonds.
- Thus, Indian, foreign and even shell companies can now donate to political parties without having to inform anyone of the contribution.
Issues with the Scheme
- Opaque funding: While the identity of the donor is captured, it is not revealed to the party or public. So transparency is not enhanced for the voter.
- No IT break: Also income tax breaks may not be available for donations through electoral bonds. This pushes the donor to choose between remaining anonymous and saving on taxes.
- No anonymity for donors: The privacy of the donor is compromised as the bank will know their identity.
- Differential benefits: These bonds will help any party that is in power because the government can know who donated what money and to whom.
- Unlimited donations: The electoral bonds scheme and amendments in the Finance Act of 2017 allows for “unlimited donations from individuals and foreign companies to political parties without any record of the sources of funding”.
Way ahead
- The worries over the electoral bond scheme, however, go beyond its patent unconstitutionality.
- The concern about the possibility of misuse of funds is very pertinent.
- The EC has been demanding that a law be passed to make political parties liable to get their accounts audited by an auditor from a panel suggested by the CAG or EC. This should get prominence.
- Another feasible option is to establish a National Election Fund to which all donations could be directed.
- This would take care of the imaginary fear of political reprisal of the donors.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: UPI
Mains level: UPI transactions
The National Payments Corporation of India (NPCI) has extended by two years the deadline to comply with its 30 percent cap on the market share of platforms operating on the Unified Payments Interface (UPI).
What is UPI?
- Unified Payments Interface (UPI) is an instant real-time payment system developed by National Payments Corporation of India (NPCI) facilitating inter-bank transactions.
- The interface is regulated by the Reserve Bank of India (RBI) and works by instantly transferring funds between two bank accounts on a mobile platform.
What is the NPCI plan for UPI?
- NPCI had initially planned to enforce the market cap rules in January 2021.
- It aimed to limit any single payments app from processing more than 30 per cent of UPI transactions in a month.
Why extension?
- The extension is being seen as a major relief for Walmart and Flipkart-backed PhonePe and Google Pay, which currently command a majority of the UPI market share.
How could it impact UPI platforms?
- Industry analysts believe the move comes as a shot in the arm for PhonePe and Google Pay, which collectively control more than 80 per cent of UPI’s market share.
- For platforms like Paytm and WhatsApp Pay, however, the extension could be seen as a natural loss.
- As of October, Paytm had a market share of 15 per cent on UPI.
- In comparison, PhonePe had a 47 per cent market share, while GooglePay accounted for around 35 per cent.
How is UPI performing?
- According to the Reserve Bank of India’s Payment Vision 2025, UPI is expected to register an average annualized growth of 50 percent.
- After touching a new high of Rs 12.11 lakh crore in October, the UPI transaction value for the month of November came in at Rs 11.90 lakh crore.
- However, the transaction count at 7.3 billion in October remained the same in November.
Try this PYQ:
With reference to digital payments, consider the following statements:
- BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
- While a chip-pin debit card has four factors of authentication, BHIM app has only two factors of authentication.
Which of the statements given above is/ are correct? (CSP 2018)
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SHI Report
Mains level: Religious intoleranc issue
In 2020, India has been ranked first in the Social Hostilities Index (SHI) released by US think-tank Pew Research Center.
What is Social Hostilities Index (SHI)?
- SHI measures acts of religious hostility by private individuals, organisations or groups in society.
- The SHI measures acts of religious hostility by private individuals, organizations or groups.
- The index comprises 13 metrics, including religion-related armed conflict or terrorism and mob or sectarian violence.
- Questions used to compute the SHI included whether the country saw violence motivated by religious hatred or bias, whether individuals faced harassment or intimidation motivated by religious hatred or bias and whether there was mob violence against those of particular religious groups.
How bad has India fared?
- At 9.4 out of a maximum possible score of 10, India’s SHI in 2020 was worse than neighbouring Pakistan and Afghanistan, and a further increase in its own index value for 2019, the Pew data showed.
- India has faced severe backlash due to its crackdown on a ‘religious’ congregation held in New Delhi defying the COVID pandemic.
Other components: Government Restrictions Index (GRI)
- India much better on a second index: the Government Restrictions Index (GRI).
- This index looks at laws, policies and state actions restricting religious beliefs and practices.
- China ranked the worst, with a score of 9.3.
- India’s 34th rank was enough to categorize it among countries with “high” levels of such government restrictions.
- The GRI comprises 20 measures, including efforts by governments to ban particular faiths, prohibit conversion, limit preaching or give preferential treatment to one or more religious groups
Official data for substantiation
- By India’s own official crime statistics, the picture is more mixed.
- According to police data, religious riots for which cases were filed rose substantially in 2020, and declined again in 2021.
- But there have been significant variations over time, and the numbers are too low as a share of overall rioting incidents to indicate a definitive trend.
- Moreover, the home ministry no longer provides data on “communal incidents”, and the National Crime Records Bureau (NCRB) now only publishes data on religious “riots”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ICAO Ranking
Mains level: Aviation safety in India
In the rankings by the International Civil Aviation Organisation (ICAO), India is now at the 48th position, a “quantum leap” from the 102nd rank it had in 2018.
ICAO Assessment
- Under the ICAO standards, the Effective Implementation (EI) of six areas were assessed. They are LEG, ORG, PEL, OPS, AIR and AGA.
- LEG is Primary Aviation Legislation and Specific Operating Regulations;
- ORG is Civil Aviation Organisation;
- PEL is Personnel Licensing and Training;
- OPS is Aircraft Operations;
- AIR is Airworthiness of Aircraft; and
- AGA is Aerodrome and Ground Aid.
How has India fared in ICAO ranking?
- With a score of 85.49 per cent each, India and Georgia are at the 48th position.
- Neighbouring Pakistan is at the 100th spot with a score of 70.39 per cent.
Global scenario
- The rankings are topped by Singapore with a score of 99.69 per cent.
- It is followed by the UAE at the second position with a score of 98.8 per cent and the Republic of Korea is at the third place (98.24 per cent).
- Others in the top ten are France (4th; 96.42 per cent), Iceland (5th; 95.73 per cent), Australia (6th; 95.04 per cent), Canada (7th; 94.95 per cent), Brazil (8th; 94.72 per cent), Ireland (9th; 94.6 per cent) and Chile (10th; 93.9 per cent).
What is ICAO?
- The ICAO is a specialized agency of the UN that coordinates the principles and techniques of international air navigation.
- It fosters the planning and development of international air transport to ensure safe and orderly growth.
- ICAO headquarters are located in the Quartier International of Montreal, Quebec, Canada.
Functions of ICAO
- Standardization: The ICAO Council adopts standards and recommended practices concerning air navigation, its infrastructure, flight inspection, prevention of unlawful interference, and facilitation of border-crossing procedures etc.
- Investigation standards: ICAO defines the protocols for air accident investigation that are followed by transport safety authorities in countries signatory to the Chicago Convention on International Civil Aviation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National heroes
Mains level: Medieval history, Maratha kingdom and the important persons
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Context
- Recently, Maharashtra Tourism Minister Mangal Lodha triggered a controversy by equating Chhatrapati Shivaji Maharaj’s legendary Agra escape to Chief Minister Eknath Shinde’s defection from the Uddhav Thackeray-led camp in Maharashtra. His comments drew sharp criticism from political parties and other organisations that venerate Shivaji as a Maratha icon, with no parallel in the past or present.
Brief Political background of the issue
- Eknath Shinde’s “revolt” against party leadership and CM Uddhav Thackeray in June this year led to the fall of the coalition government of the Shiv Sena, NCP, and the Congress. He has since taken the reins of Maharashtra as its CM.
Who was Chhattrapati Shivaji Maharaj?
- Chhatrapati Shivaji Maharaj (1630-1680): He was born on 19th February, 1630 at Shivneri Fort in District Pune in the present-day state of Maharashtra. He was born to a general Shahaji raje who served different Deccan Sultans over the course of his life and Jijabai, as known to be an influential and determined woman who was an embodiment of self-respect and virtue.
- Founder of an Independent Maratha kingdom: Shivaji Maharaj was keen on expanding his father’s fiefdom of modern-day Pune into an independent Maratha state. He carved out an independent Maratha kingdom from various Deccan states in the 17th century. At the time of his death, he held around 300 forts over an area that stretched across the Konkan coast, from Surat to near Goa, and was overlooked by the strategic Western Ghats.
- Contemporary kingdoms and power struggle: At this point of time, several Sultanates (mainly Bijapur, Golkonda and Ahmadnagar) and the Mughals were vying for the control of the Deccan. As Mughal power grew, these Sultanates would become tributaries to the Mughal Empire (while often continuing to bicker among themselves) with the rulers and ruling clans being given positions in the Mughal court.
- Lifetime conflicts and fights for Swaraj: His conflict with the Adil Shahi Sultanate of Bijapur began when he was only 16. He would spend the rest of his life fighting various opponents, and in the process, laying the foundation for the Maratha Empire which would stretch across large parts of the Indian subcontinent and rule till the 19th Century.
- Importance of forts in his times: Early in his life, he realised that the key to holding power in the Deccan (or for that matter, many places in India in that era) was to capture and hold important forts. Thus, his strategies would be centred around taking control of forts in strategic locations, often on hilltops. He also repaired and built new forts as his sphere of control increased.
- An inspiration to fight against the colonial rule: Shivaji remained a Maratha folk legend until two centuries after his death. It was the British Raj and the subsequent anti-colonial movement that marked his increasing stature in history and as a pan Indian hero.
- From a folk hero to a Pan India hero: Nationalist historians saw him as an example of an local Indian ruler who was able to successfully resist and defeat the powerful and oppressive “outsiders” (Muslim rulers, including both Mughals and the Deccan Sultans). Thus, Shivaji rose from being a folk hero to a nationalist icon, seen as a proto-nationalist himself.
- Tales of his bravery and just rule used to infuse motivation: Tales of his bravery were told to galvanise a population that was enduring emasculation and injustices under its British overlords. Over the 19th and 20th centuries, the narrative around Shivaji Maharaj emphasised on both his military heroism and his just rule.
Shivaji Maharaj and the Mughals
- Meteoric rise: Shivaji Maharaj’s meteoric rise posed challenges to the suzerainty of the Mughals. His first direct encounter with the Mughals was during Aurangzeb’s Deccan campaigns of the 1650s. As Aurangzeb went North to fight for the Mughal throne, Shivaji Maharaj was able to seize further territory.
- Swift and smart warfare tactics beyond understanding of the Mughals: His tactics against the Mughals were adapted to the specific nature of his force and the flabby Mughal armies. Using swift cavalry attacks, he would raid and pillage Mughal strongholds. While on the rare occasion he would engage in battle to actually capture and hold Mughal positions, most often, he would simply cause much menace, raid the treasury, and leave with the Mughals in terror and disarray.
- Well know Seize of Surat: Famously, in 1664, he attacked the port of Surat (now in Gujarat) and plundered one of the richest and busiest commercial towns of Mughal India while the local governor hid in a nearby fort.
- Posed a greatest challenge to Aurangzeb and subsequent treaty of Purandar: As the legend of Shivaji and the physical sphere of his influence grew, Aurangzeb sent a 100,000-strong, well-equipped army under Raja Jai Singh I to subdue him in 1665. After putting up a valiant fight, Shivaji was besieged in the Purandar hill fort.
The chronology of the great escape
- Taken to Agra after purandar treaty: He was taken to Aurangzeb’s court in Agra in 1666. He presented Aurangzeb with various gifts, but he felt slighted at the treatment he received in return, and made his displeasure clear in open court.
- Kept under strict House arrest: Aurangzeb put him under house arrest in Agra. Far away from home and help, Shivaji realised he needed to escape to save himself and his territories. He began to plot a plan to return home and keep up his fight against the Mughals.
- The perfect plan of escape: The story of Shivaji’s subsequent escape is now part of common lore. The popularly told story involves an elaborate plan, under which he began daily distribution of alms to brahmans. The alms would be sent from his home in Agra in large, covered baskets.
- The final escape right under the nose of Mughals: After some time, the Mughal guards became lax about checking the contents of the baskets that daily left his house. One day, Shivaji slipped into one of the baskets, and put his young son, Sambhaji, in another basket. It was in these covered baskets that Shivaji and his son left Agra, right under the noses of the Mughals.
- Smart and swift movement in disguise from the Mughal territory: From there, he would traverse across Mughal territory, living incognito until he reached the safer lands closer to home. Some versions of this story say that he took the disguise of a wandering ascetic while others say he had a number of different disguises. His exact path is not known, though folktales and songs memorialising Shivaji often mention different towns and places he crossed.
- Embarrassed Aurangzeb regarded him as a king: Aurangzeb was livid and embarrassed. But he chose not to start an immediate conflict with Shivaji again. Instead, he offered Shivaji the title of Raja and guaranteed his authority in the Maratha lands as long as he acknowledged the supremacy of the Mughals and maintained truce.
Coronation of Shivaji Maharaj to Chhatrapati and the ideal rule
- By 1669, Shivaji had regrouped and raised an effective army. Using his old guerilla tactics, he would swiftly descend into static Mughal and Bijapuri strongholds, looting and pillaging the shocked Mughals.
- During this time, Aurangzeb was occupied with Pathan revolts in the North-West corner of his Empire. Shivaji deftly regained his lost positions in the Konkan coast. In 1674, he crowned himself Chhatrapati, officially creating an independent Maratha kingdom.
- The next six years were spent expanding his rule and forging new political norms, replacing the prevailing Indo-Persian court culture. He promoted the use of Marathi and Sanskrit in his courts and created an elaborate administrative system with a council of ministers known as “Ashta Pradhan.”
Conclusion
- Chhatrapati Shivaji Maharaj is not just a name or a person but to many he is an idea, a life and inspiration for today and tomorrow, which has no parallel in the past or the present.
- Protection of the Swarajya and welfare of his subjects were the motives that pushed Shivaji Maharaj to escape from Agra. Comparing his love for his subjects with the political exigencies and manoeuvers of present-day politicians will be an injustice to the astuteness of Chhatrapati Shivaji Maharaj.
Mains question
Q. Chhatrapati Shivaji Maharaj is considered as the king of the people; Discuss how he is remembered today and what qualities make him stand tall and different from those of the past and present?
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Indo-Pacific and importance of North east
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Context
- India’s ‘Look East’ and ‘Act East’ policies have moved into the phase of Indo-Pacific policy and strategy. But what we in the national capital interpret as the ‘Indo-Pacific’ is different from the perceptions of this policy in North-eastern and eastern India.
What is Indo-pacific?
- The Indo-Pacific is geographic region interpreted differently by different countries.
- For India, the geography of the Indo-Pacific stretches from the eastern coast of Africa to Oceania whereas, for US, it extends up to the west coast of India which is also the geographic boundary of the US Indo-Pacific command.
Importance of North-East
- Security of India: The Northeast which comprises seven ‘sisters’ or States and one ‘brother’, Sikkim, has been witnessing transformation as it heads towards better security conditions and development
- Geography and Biodiversity: North-eastern Indian States are blessed with a wide range of physiographic and ecoclimatic conditions and the geographical ‘gateway’ for much of India’s endemic flora and fauna.
- Siliguri corridor only connecting link: North-East is home to 3.8% of the national population and occupies about 8% of India’s total geographical area. Siliguri corridor, a narrow strip of land in West Bengal, popularly known as “chicken’s neck” connects this region to the rest of mainland India.
Present condition of north east
- Improved security: Security conditions have improved significantly since 2017. However, the core issues behind the insurgency have remained unresolved.
- Serious non-traditional threats: A notable contrast in security assessments of the authorities and others came to the fore. The official perspective was that the pernicious phenomena of smuggling, drug trafficking, transnational border crime, insurgent activity, and the influx of refugees (from Myanmar) represented serious non-traditional threats.
- Chinese hand in nefarious activities: China was viewed as a ‘constant player’ behind these nefarious activities. This has necessitated vigilance and strict action by the Assam Rifles and other security agencies.
- Sensitive border management: The insensitive handling of those engaged in lawful exchanges with the neighbouring countries. A balanced view indicates that considerable scope exists for more effective and people-sensitive border management in the future.
Development as priority in North East
- Rising road infrastructure: The Northeast is on the right path to concentrate on economic development. More is awaited through improvement in roads linking north-eastern towns and job creation for thousands of graduates produced by local universities.
- Hub of medical tourism: Manipur needs to be promoted as the hub of medical tourism for other Indian States and neighbours such as Myanmar.
- Investment needs to increase: The State’s research and development facilities to leverage the region’s biodiversity should be expanded. Accelerated development requires increased investment by Indian corporates and foreign investors as well as better management.
- Blueprint for economic development: Strategic and business community to contribute to crafting a concrete blueprint for leveraging opportunities relating to commerce, connectivity, and human capital development.
Cultural diplomacy from North east
- Showcasing the culture of north east: An ambitious endeavour by 75 artists from nine countries highlighted the region’s ‘unity in diversity’ through music, dance, drama, and cuisine.
- Education, tourism and trade: Clearly, expanding the reach of cultural diplomacy and people-to-people cooperation through greater educational exchanges, tourism, and trade is desirable.
- Regional cooperation through cultural exchange: Harsh Vardhan Shringla, former Foreign Secretary, aptly stressed that the “shared culture, history and mutual social threads that tie the region with India also an important component towards fostering regional cooperation”.
- Geo-cultural dimension: At Kolkata, intellectuals and performers in the cultural domain from India, the U.S., Japan, Thailand, Sri Lanka, and Bangladesh reflected on the Indo-Pacific construct’s cultural dimensions. Moving beyond geopolitics and geo-economics, neighbors should focus on “the geo-cultural dimension” of the Indo-Pacific.
- Expanding people to people cooperation: Diplomats from the region agree on the importance of expanded people-related cooperation which would lead to wider acceptance of the Indo-Pacific and consolidation of the Quad.
Conclusion
- While implementing India’s Indo-Pacific strategy, voices from Northeast and eastern India must be heard. Thus, beyond ‘Look East’ and ‘Act East’ lies ‘Think and Relate East’, especially within our own country.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CBDC and applications
Mains level: Read the attached article in detail
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Context
- The Reserve Bank of India (RBI) has launched the first pilot of the retail digital rupee, also known as e₹-R, on December 1, 2022. The digital token that represents legal tender will be issued in the same denominations as paper currency and coins. The RBI’s pilot on the digital rupee will test the robustness of the new system. Let’s understand it in detail.
The first pilot project of retail digital rupee
- Allowed banks: Initially, only four banks- State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities have been allowed to offer e₹-R. The scope of the pilot will be increased gradually to include more banks, users and locations.
- Transaction: People will get e₹-R from banks and will be able to make transactions via their digital wallets. The digital rupee can be stored on mobile phones or devices.
- Like fiat currency in digital form: CBDC is a legal tender issued by the central bank in digital form. Like rupee notes or coins, which are in physical form. Like fiat currency, it can also be exchanged between people. Simply, put it’s just like rupee (₹) notes but in digital form (e₹). You can also exchange e₹ for physical currency notes.
- Unlike fiat currency no need to have account: However, unlike fiat currency that’s usually stored in banks and hence their liability, CBDC is a liability on the RBI’s balance sheet. That’s why you don’t necessarily need to have a bank account to own a digital rupee.
Why do we need CBDC?
- Cost efficient management: CBDC will cut the cost related to physical cash management. India spent ₹4,984.80 crore on printing money in FY22 and ₹4,012.10 crore a year before that. These expenses are borne by people, businesses, banks and the RBI. e₹ cuts all kinds of printing, storage, transportation and replacement and settlement costs. Though the RBI will invest a significant amount in building CBDC infrastructure, subsequent marginal operating costs will be very low.
- Boost to digital economy and financial inclusion: It’ll fulfil the higher cash requirement of the country. The government will be able to make money available in areas where it’s a challenge to provide physical cash. Also, it’ll boost India’s digital economy, enhance financial inclusion, and make the financial system efficient.
- People will have money in uncertain times: Since e₹ is the central bank money, in any uncertain situation like COVID-19, it’ll save people’s savings. Banks only insure deposits up to Rs 5 lakh. In case of defaults, people could lose their savings.
- Multiple saving and transaction options: e₹ will provide you with other options like e-wallets, mobile banking, and UPI to make payments.
- Much safer payment option: e₹ is a safe central bank instrument, with direct access to the RBI money for payment and settlement. It is an electronic version of cash, whose main use case is retail
Will CBDC replace UPI?
- Not expected to substitute but supplement payment option: The CBDC-based payment system is not expected to substitute other modes of existing payment options. It will supplement by providing another payment avenue to people.
- India already has a sound payment system: UPI uses your money deposited with banks but with CBDC, the money becomes the liability of RBI India already has a sound payment system, with payment products like RTGS, NEFT and UPI, etc., coupled with an exponential increase in digital transactions.
No interest on e₹? but why?
- No interest on digital money: According to the RBI, if it starts paying interest on digital money, it could lead to a massive disintermediation in the financial system, in which banks will lose deposits, and thus hurt their credit creation capacity in the economy.
- Rationale behind No interest on digital rupee: Banks may be compelled to increase deposit rates, which will increase their costs of funding and decrease net interest income. Ultimately, the cost will be passed on to borrowers.
- CBDC will be attractive payment option without interest: If there is no interest, CBDC can still be attractive as a medium of payment, even while its attractiveness as a savings instrument diminishes. Also, banks would restrain themselves from distributing CBDCs if they find it as a threat to bank deposits, which can hamper credit flows and the adoption of CBDCs.
How will CBDC be different from crypto?
- CBDC is Algorithm based unlike crypto mining: The central bank will be issuing CBDCs based on algorithm-driven processes, rather than mining through competitive reward methods. These algorithms will have energy efficiency and environmental friendliness as their core principles, unlike private crypto mining.
- Less energy consumption unlike crypto: Therefore, issuance and management of CBDCs are expected to have much lesser energy consumption vis-à-vis more energy-intensive processes normally associated with the mining and distribution of private cryptocurrencies.
- Legal consumer protection: Unlike private cryptos wherein any individual can compete to mine and create the cryptocurrency, only the central bank can issue the CBDC and can simply opt for conversion of the bank’s existing balances to CBDC balances. So, CBDCs will provide the public with the benefits of virtual currencies, while ensuring consumer protection by avoiding the damaging social and economic consequences of private virtual currencies.
Why India needs a digital rupee?
- Online transactions: India is a leader in digital payments, but cash remains dominant for small-value transactions.
- High currency in circulation: India has a fairly high currency-to-GDP ratio.
- Cost of currency management: An official digital currency would reduce the cost of currency management while enabling real-time payments without any inter-bank settlement.
Conclusion
- e₹-R is a digital token that has real value like rupee notes or coins. CBDC will make transactions and currency exchange smoother, and it’ll boost financial inclusion. The RBI’s pilot on the digital rupee will test the robustness of the new system.
Mains question
Q. What is central bank digital currency? Why do we need CBDC? It is said that digital rupee is different from crypto currency. Discuss.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Collegium system
Mains level: Issues with collegium system
The Supreme Court has said that it had become a “fashion” for its former judges to comment on earlier decisions of the Collegium when they were part of it while adding that the apex court was the “most transparent institution”.
What is Collegium System?
- The Collegium of judges is the Indian Supreme Court’s invention.
- It does not figure in the Constitution, which says judges of the Supreme Court and High Courts are appointed by the President and speaks of a process of consultation.
- In effect, it is a system under which judges are appointed by an institution comprising judges.
- After some judges were superseded in the appointment of the CJI in the 1970s, and attempts made subsequently to effect a mass transfer of High Court judges across the country.
- Hence there was a perception that the independence of the judiciary was under threat. This resulted in a series of cases over the years.
Evolution: The Judges Cases
- First Judges Case (1981) ruled that the “consultation” with the CJI in the matter of appointments must be full and effective.
- However, it rejected the idea that the CJI’s opinion, albeit carrying great weight, should have primacy.
- Second Judges Case (1993) introduced the Collegium system, holding that “consultation” really meant “concurrence”.
- It added that it was not the CJI’s individual opinion, but an institutional opinion formed in consultation with the two senior-most judges in the Supreme Court.
- Third Judges Case (1998): On a Presidential Reference for its opinion, the Supreme Court, in the Third Judges Case (1998) expanded the Collegium to a five-member body, comprising the CJI and four of his senior-most colleagues.
The procedure followed by the Collegium
Appointment of CJI
- The President of India appoints the CJI and the other SC judges.
- As far as the CJI is concerned, the outgoing CJI recommends his successor.
- In practice, it has been strictly by seniority ever since the supersession controversy of the 1970s.
- The Union Law Minister forwards the recommendation to the PM who, in turn, advises the President.
Other SC Judges
- For other judges of the top court, the proposal is initiated by the CJI.
- The CJI consults the rest of the Collegium members, as well as the senior-most judge of the court hailing from the High Court to which the recommended person belongs.
- The consultees must record their opinions in writing and it should form part of the file.
- The Collegium sends the recommendation to the Law Minister, who forwards it to the Prime Minister to advise the President.
For High Courts
- The CJs of High Courts are appointed as per the policy of having Chief Justices from outside the respective States. The Collegium takes the call on the elevation.
- High Court judges are recommended by a Collegium comprising the CJI and two senior-most judges.
- The proposal, however, is initiated by the Chief Justice of the High Court concerned in consultation with two senior-most colleagues.
- The recommendation is sent to the Chief Minister, who advises the Governor to send the proposal to the Union Law Minister.
Does the Collegium recommend transfers too?
- Yes, the Collegium also recommends the transfer of Chief Justices and other judges.
- Article 222 of the Constitution provides for the transfer of a judge from one High Court to another.
- When a CJ is transferred, a replacement must also be simultaneously found for the High Court concerned. There can be an acting CJ in a High Court for not more than a month.
- In matters of transfers, the opinion of the CJI “is determinative”, and the consent of the judge concerned is not required.
- However, the CJI should take into account the views of the CJ of the High Court concerned and the views of one or more SC judges who are in a position to do so.
- All transfers must be made in the public interest, that is, “for the betterment of the administration of justice”.
Loopholes in the Collegium system
- Lack of Transparency: Opaqueness and a lack of transparency, and the scope for nepotism are cited often.
- Judges appointing Judge: The attempt made to replace it with a ‘National Judicial Appointments Commission’ was struck down by the court in 2015 on the ground that it posed a threat to the independence of the judiciary.
- Criteria: Some do not believe in full disclosure of reasons for transfers, as it may make lawyers in the destination court chary of the transferred judge.
Way ahead
- In respect of appointments, there has been an acknowledgment that the “zone of consideration” must be expanded to avoid criticism that many appointees hail from families of retired judges.
- The status of a proposed new memorandum of procedure, to infuse greater accountability, is also unclear.
- Even the majority opinions admitted the need for transparency, now Collegiums’ resolutions are now posted online, but reasons are not given.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Remittances
Mains level: Remittances inflows and their significance
India is expected to receive a record $100 billion in remittance in 2022, the top recipient this year, the World Bank has said.
What are Remittances?
- A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland.
- The World Bank defines it as “the sum of worker’s remittances, compensation of employees, and migrants’ transfers as recorded in the IMF Balance of Payments.
- Workers remittances are current transfers by migrant who are considered residents in the source.
- Remittances are a vital source of household income for low- and middle-income countries.
India’s total remittances to grow
- Remittances to India are money transfers from non-resident Indians (NRIs) employed outside the country to family, friends or relatives residing in India.
- In its Migration and Development Brief, the World Bank has said India’s remittance will grow 12 per cent from 7.5 per cent last year, resulting in $100 billion flow as compared to $89.4 billion in 2021.
- It attributed the feat to the large share of Indian migrants earning relatively high salaries in the US, UK and East Asia.
Key points from the report by World Bank
- Highly-skilled Indian migrants living in wealthy nations such as the US, UK, and Singapore were sending more money home.
- Remittances to low and middle-income countries have grown by 5% in 2022 to around $626 billion – around half the rate of growth seen in 2021.
- The amount of money sent back home by migrants around the world has grown by 5% in 2022.
- Other top recipient countries for remittances include Mexico, China, Egypt and the Philippines.
- Domestic and International shocks have affected countries like Pakistan, Bangladesh, and Sri Lanka for whom remittances earned by migrants are expected to drop this year
- Barring India and Nepal, other south Asian countries saw a decline of more than 10% in their remittances from 2021, due to the end of government incentives introduced during the pandemic
Why is remittance to India so high this year?
- Upskilling: There has been a gradual shift in destinations for Indian migrants aided by a structural shift in qualifications.
- Work from home: Indian migrants in high-income countries benefited from work-from-home and large fiscal stimulus packages.
- Easing of pandemic: As the pandemic eased, the wage hikes and “record-high employment conditions” helped migrants send money home despite high global inflation.
- Inflation control in India: The price support policies kept inflation at bay in India.
- Crude oil dynamics: Demand for labour increased with higher oil prices, which in turn increased remittances for Indian labourers.
Significance of remittances
- Stable source of funds: Remittance flows tend to remain relatively stable through the business cycle, thereby having the potential to support households in the face of economic adversity.
- Economic lifeline: In countries affected by political conflict, they are often an economic lifeline to the poor.
- Labour contribution: While migrant remittances contribute to the development of their home country, and also to the host country by filling the gap between labour demand and supply and making a positive net fiscal contribution.
- Globalization: In this way, remittances represent globalization with a human face, contributing to the spread of global interdependence at all levels – social, economic and political.
Issues with Remittances
- Fear of currency depreciation: It causes the rupee to weaken against the dollar, which in return impacts the businesses exposed to foreign exchange, and the economy overall.
- Accuracy of data: A key challenge for policymakers, researchers and investors interested in remittance flows concerns the accuracy and consistency of available data.
- Accounting inconsistencies: The varied nature of remittance transactions makes the compilation process complex, resulting in a systemic problem of under-reporting of flows and data asymmetries between host and recipient countries.
- No formal registration in India: The main source of data on remittances is the World Bank, which combines national balance of payments data compiled by the IMF with country information.
- Ignoring informal flows: A large share of remittances is believed to flow through informal channels, which are often more convenient and cheaper than formal ones.
- Hawala transactions: In addition, Hawala (an international network of money brokers) and Hundi (a form of credit instrument) systems operate in parallel to formal remittance channels.
Way forward
- Promoting labour mobility: India should aim to increase remittances to say 10% of GDP. The Philippines’ model of promoting labour mobility should be replicated in India.
- Reducing the costs involved: Both the cost of recruitment of such workers and the cost of sending remittances back to India should come down.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: UNESCO ICH, Baguette
Mains level: NA
Baguette the staple French bread has been inscribed into the UN’s list of intangible cultural heritage (ICH).
What is a Baguette?
- The baguette is a long and thin loaf made of flour, water, salt and yeast, and is consumed as a staple in France.
- Some believe that it was invented by August Zang, a baker and an entrepreneur from Vienna in 1839, who introduced the world to the taste of crusty bread with softer insides, using a steam oven.
- It gained its official name in 1920.
- The history of the bread is uncertain, some also believe that Napoleon Bonaparte ordered thin sticks of bread for consumption by his soldiers as they could be carried from one place to another more conveniently.
Why did France nominate it for the UN list?
- About 10 billion baguettes are consumed every year in France by a population of 67 million.
- It drew attention to the steady decline in the number of bakeries in the country as around 20,000 of them have closed down since 1970.
- In March 2021, France nominated the baguette as its candidate for consideration within the UNESCO ICH list.
- In 1970, there were 55,000 artisanal bakeries (one for every 790 residents) compared with 35,000 today (one for every 2,000), often in favour of baguettes produced industrially.
Back2Basics: UNESCO Intangible Cultural Heritage (ICH)
- ICH means the practices, representations, expressions, knowledge, skills – as well as the instruments, objects, artefacts and cultural spaces associated with them that communities, groups and, in some cases, individuals recognize as a part of their cultural heritage.
- Furthermore, its importance is not in the cultural manifestation itself, but in the wealth of knowledge, know-how and skills that are transmitted from one generation to the next.
- The adoption of the Convention for the Safeguarding of the ICH by the General Conference of UNESCO in 2003 was a crucial step towards preserving intangible heritage.
- UNESCO’s list of Intangible Cultural Heritage of Humanity was established in the year 2008.
Criteria for the selection
- There are three criteria for an intangible cultural heritage to be inscribed in the United Nations list.
- The entity must-
- be recognized by communities, groups and, in some cases, individuals as part of their cultural heritage,
- be transmitted from generation to generation and be constantly recreated by communities and groups in response to their environment, their interaction with nature and their history and
- provide them with a sense of identity and continuity, thus promoting respect for cultural diversity and human creativity
India’s ICH on the UNESCO list
- Sangeet Natak Akademi is the nodal organisation which looks after this function, and files nominations of intangible cultural entities from India, for evaluation by the international body.
- ICG from India include Kolkata’s Durga Puja (2021), Kumbh Mela (2017), Navroz (2016), Yoga (2016), traditional brass and copper craft of utensil-making among coppersmiths of Punjab (2014), Sankirtana, a ritual musical performance of Manipur (2013), and the Buddhist chanting of Ladakh (2012).
- Before 2011, the list included Chhau dance, Kalbelia folk songs and dance of Rajasthan, and Mudiyettu, a dance drama from Kerala (2010), Ramman, a religious festival and theatre performance of Garhwal in the Himalayas (2009), and Kutiyattam or Sanskrit theatre, and Vedic chanting (2008).
- Ramlila, a traditional performance of Ramayana, was also included in 2008.
- This year, India nominated Garba, a traditional dance form that originated in the state of Gujarat, for inscription on UNESCO’s ICH list.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: DigiYatra
Mains level: Not Much
The centre has introduced paperless entry at select airports to make air travel hassle-free under the DigiYatra initiative.
What is DigiYatra?
- DigiYatra envisages that travellers pass through various checkpoints at the airport through paperless and contactless processing.
- This means, passengers won’t need to carry their ID card and boarding pass.
- This would rather use facial features to establish their identity, which would be linked to the boarding pass.
- With this technology, the entry of passengers would be automatically processed based on the facial recognition system at all checkpoints – including entry into the airport, security check areas, aircraft boarding, etc.
Implementation strategy
- In the first phase, the initiative will be launched at seven airports, starting with three — Delhi, Bengaluru, and Varanasi.
- It will then be followed by four airports namely Hyderabad, Kolkata, Pune, and Vijayawada by March 2023.
- Subsequently, the technology will be implemented across the country.
How is it being implemented?
- The project is being implemented by the DigiYatra Foundation — a joint-venture company whose shareholders are the Airports Authority of India (26% stake) and Bengaluru Airport, Delhi Airport, Hyderabad Airport, Mumbai Airport and Cochin International Airport.
- These five shareholders equally hold the remaining 74% of the shares.
How can people avail the DigiYatra facility?
- For availing the service, a passenger has to register their details on the DigiYatra app using Aadhaar-based validation and a self-image capture.
- In the next step, the boarding pass has to be scanned, and the credentials are shared with airport authorities.
- At the airport e-gate, the passenger has to first scan the bar coded boarding pass and the facial recognition system installed at the e-gate will validate the passenger’s identity and travel document.
- Once this process is done, the passenger can enter the airport through the e-gate.
- The passenger will have to follow the normal procedure to clear security and board the aircraft.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: Network security collaboration in QUAD countries
Context
- The advent of 5G provides the Quad or the Quadrilateral Security Dialogue of the United States (US), Japan, Australia and India, a unique opportunity to demonstrate how democracies can engage in effective technology collaboration.
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Background: The Huawei and QUAD response
- Huawei’s connection with Chinese Communist Party: Recognising the risks that companies like Huawei, which is connected to the Chinese Communist Party, pose to telecommunications networks, each member country of the Quad has taken steps to ensure secure and resilient access to 5G.
- Australia’s measure: Australia, for one, banned Huawei from its 5G rollout in 2018 and did the same with ZTE, citing national security concerns.
- US concerns: For its part, the US has been raising concerns about Huawei since 2012, and doubled-down on its efforts in 2019 by adding Huawei to the Entity List.
- Japan creating Open RAN: Japan, meanwhile, a long-time leader in the telecommunications space has accelerated its efforts to create ‘Open Radio Access Networks (Open RAN)’, which promote vendor diversification and competition for better solutions.
- India 5G and conflict with China on border: India took what it called a “step towards the new era” by deploying its first 5G services in select cities in October 2022; it is aiming to extend the network across the country over the next few years. India is unlikely to include Huawei in its networks, given the clash with Chinese forces in Galwan Valley in June 2020 and concerns about vendor trustworthiness.
- Agreement in first meeting: During the first in-person leaders’ meeting in September 2021, Quad countries agreed to “build trust, integrity, and resilience” into technology ecosystems by having suppliers, vendors, and distributors ensure strong safety and security-by-design processes, and committed to a “fair and open marketplace”.
- Memorandum of cooperation on 5g suppliers: Later, at the fourth meeting in May 2022, partners signed a New Memorandum of Cooperation on 5G Supplier Diversification and Open RAN, and reaffirmed their desire to “collaborate on the deployment of open and secure telecommunications technologies in the region.”
Why QUAD must cooperate on Network Security?
- Fast emerging telecom technologies: For one, virtualised (software-based) networks will be the norm in the next 10 years, by which time 6G networks will begin to rollout. Early attention to security issues for emerging telecommunications technologies will help ensure that there is sufficient focus on security in the runup to 5G rollouts.
- Interoperable software’s need to check: The Quad’s advocacy of Open RAN networks or network architectures that consist of interoperable software run on vendor-neutral hardware is another reason why there is a need to focus on software supply chain and software-based infrastructure security.
- To ensure the comprehensive network strategy: Critics of Open RAN solutions often point to security concerns to argue against deploying these technologies. A comprehensive 5G security strategy is necessary to ensure trust in these networks.5G networks are critical infrastructure and it is imperative for states to ensure their security.
- For instance: In 2018, Australian officials were the first to warn the public of the risks posed by untrustworthy vendors on 5G networks. Officials from the other Quad countries have followed suit and, along with key partners such as the European Union and United Kingdom, there is a clear consensus on the fundamental importance of secure and resilient communications networks.
How QUAD will be a key player in Talent Development?
- Bridging the gap of talent pool: Nations across the globe are suffering from a talent shortage in the technology domain. With heightened demand for high-skilled workers, like-minded nations must cultivate and share their expertise with one another to bridge critical gaps.
- Quad Fellowship: this, the Quad created the Quad Fellowship, which will support 100 students per year to pursue STEM-related graduate degrees in the United States. This could be an effective way to grow the talent pipeline in a way that fills current and emerging needs.
- Restructuring programs that can fulfil the current and future demand: Many nations have started to consider changes to immigration policies for high-skilled talent. Australia, for example, has raised its permanent immigration cap by 35,000 for the current fiscal year, and Japan is planning to expand its programs soon.
- Creative ways of QUAD countries to recruit talent: Shortage of talent pool that all Quad countries are experiencing as they seek creative ways to grow their technology talent pool. Indian companies, for example, are beginning to recruit in rural areas to address significant tech worker shortages that may stymie a growing start-up ecosystem.
What QUAD need to do?
- Ensure close coordination: While these commitments are significant, maintaining momentum requires close coordination of resources and policies. No one country can build resilient, open, and secure telecommunications networks on its own, particularly as countries deploy 5G and think ahead to 6G.
- Adhering to the goals and principles: To ensure that operationalisation moves forward in line with the Quad’s stated principles and goals, the member countries must work together in four key areas: standard-setting; security; talent development; and vendor diversity.
- Develop a recruitment framework for telecommunications: Quad countries have an opportunity to set a precedent for other democracies by rethinking what it means to be “qualified” for a position. Companies can look beyond degrees during the hiring process and focus on relevant skills by jointly developing assessment criteria for worker readiness and performance.
- Incentivise 5G deployment in underserved areas: To ensure that talent is not left out of the candidates’ pool for tech jobs, Quad members can agree to prioritise secure 5G deployment in rural regions. Lack of access to reliable information and communications can be a significant barrier to entering the workforce, and expanding 5G deployment is a critical aspect of broadening the talent pool.
- Enhance public-private partnerships: As Quad countries build their infrastructure and talent pools at home, they must also think about other countries that only consider cost when choosing Huawei and other untrusted telecom providers. As such, the Quad could leverage public-private partnerships to bolster the presence of trusted companies in new locations. By using coordinated, strategic financial incentives, they will also have an opportunity to train and educate third country governments on the threats posed by untrusted 5G vendors. Consequently, they will contribute to broader network security and resiliency as 5G is more widely deployed.
- Provide R&D incentives: The governments of the Quad countries should offer incentives to promote ongoing work in hardware, software, and security improvements, specific technologies such as high-band technology and end-to-end network slicing, and research areas including telehealth, energy research, and agriculture. A broad base of enabling technologies and applications would encourage new entrants into the market.
Conclusion
- Quad countries are well-positioned to accomplish plenty together. Of the many areas where they can progress, securing 5G is particularly promising due to the clearly stated objectives that Quad countries share. The Quad countries have the potential to provide a secure, flexible and open 5G network model to the Indo-Pacific and nations seeking democratic alternatives for their telecommunications infrastructure.
Mains question
Q. It is said that QUAD countries are well-positioned to secure the telecommunication network in the world. Discuss.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NA
Mains level: India's economic growth amidst the global slowdown
Context
- India’s economic growth slowed to 6.5 percent during the July-September quarter because of a fading low-base effect. For the full year, the economy is expected to grow at 7 percent, with risks tilted to the downside. This implies that the second half of the year (October–March) will see growth slow down to 4.6 percent, again largely due to the base effect and slowing global growth.
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Background: The COVID Pandemic, geopolitical tensions and the Prospects
- This was the second consecutive quarter with no functional disruption of economic activity caused by the COVID-19 pandemic.
- Since October, Google, too, has stopped reporting mobility indicators, which had become one of the most tracked data points for analysts and policymakers since the pandemic struck.
- This suggests that COVID-19 is unlikely to come in the way of growth for most parts of the world, with China, which is following a zero-COVID policy, being the key exception.
- Spill over effect in India: In an interconnected world, Geopolitical tensions, high and broad-based inflation in many parts of the world and sharp increases in policy rates in developed countries amid a looming recession will continue to confront the global economy. These effects will spill over to India as well, despite its structural strengths.
- Slow growth of contact- intensive service sector: Growing at 14.7 per cent, contact-intensive services such as trade, hotels and transport continued to be key drivers of the growth momentum in the second quarter. This segment had borne the brunt of the pandemic because of recurrent lockdowns, and is showing a strong rebound because of pent-up demand, a trend that is likely to continue this year.
- Strong private consumption: Private consumption was quite strong in the second quarter, growing by 9.7 per cent, and now 11.2 per cent above the pre-pandemic level.
- Rising domestic demand, good for the economy: The resilience of domestic demand will shape the contours of GDP growth in coming quarters as the global growth momentum is anticipated to lose steam. Advanced economies, whose growth is expected to slow sharply next year, account for almost 45 per cent of India’s merchandise exports.
- Strong and firm Agriculture sector: Despite climate-related disturbances, agriculture surprisingly held its ground in the second quarter.
- Healthy tax revenue: So far, healthy tax revenue collections have allowed the government to finance its bloated subsidy bill and investments without much pressure on the fiscal deficit. Led by government capex, investments grew 10.4 per cent in the second quarter.
- Good corporate balance sheets: strong corporate balance sheets not only cushion them against global headwinds but also provide an opportunity to kick-start the investment cycle once uncertainty subsides.
The current status of India’s manufacturing growth
- Slowed growth: Manufacturing GDP growth slowed rather sharply due to the base effect and margin pressure on manufacturing companies. This is somewhat contradictory to the relatively strong signals from the Purchasing Managers’ Index (PMI) which, at 55.9, was in the expansion zone during the July-September quarter, while also being slower than the IIP growth of 1.4 per cent in the same quarter.
- Support from the government: Currently, manufacturing is finding some support from government spending on infrastructure, particularly in sectors such as steel and cement. The production-linked incentive scheme has incentivised private investment and fast-forwarded manufacturing investments in electronics and pharmaceuticals.
- Overall demand is low except few high value segments: The festive season-related production and the continued strong demand in the automobile sector (especially in high-value segments), was not enough to prevent an overall slide in manufacturing.
The current status of Agriculture sector
- Strong and firm Agriculture sector: Despite climate-related disturbances, agriculture surprisingly held its ground in the second quarter. Although rains were 6 per cent above normal this year, they were quite lopsided and led to a drop in rice acreage in some of the rice-growing regions on account of rainfall deficiency and some damage to crops from excess unseasonal rains in October.
- Inconsistency in rainfall may affect kharif: In fact, October rains were 47 per cent above the long-period average. Rain shortfall in some regions, excess in others, and unseasonal excess rains point towards some hit to kharif production.
- Rabi crops look in good swing: That said, the prospects for the winter crop (rabi crop), which is largely irrigated, look good owing to favourable soil moisture conditions and healthy reservoir levels. While rabi sowing was initially delayed on account of unseasonal October rains, it is now progressing well, with sown area until November 18 about 7 per cent higher than during the same period last year.
- Overall agriculture growth prospects: This trend, if sustained, should offset the hit to kharif production to some extent. Overall, we expect agriculture to grow at 3 per cent this year, lower than the decadal average of 3.8 per cent.
- Food inflation: Abnormal weather has also triggered food inflation, particularly in cereals, which will cool off only when the prospects for rabi crop become clear. While fall in inflation in October was largely due to a high base effect, core inflation continues to be sticky and food inflation risks persists.
Conclusion
- India’s growth cycle has become well-synchronized with those of advanced economies. So, a sharp slowdown in these countries will spill over to India and the maximum impact of domestic interest rate hikes on growth will play out next fiscal given that monetary policy impacts growth with a lag. The key policy challenge for India will be to manage a soft landing amid the possibility of a hard landing in advanced countries.
Mains question
Q. COVID pandemic disrupted the global economy, moreover the geopolitical tensions are adding to the existing slow growth. In this context, discuss the current status of Indian economy.
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