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Archives: News

  • Internal Security Trends and Incidents

    Defence funds decline, BRO gets backing 

    Why in the News?

    Union Finance Minister Nirmala Sitharaman has allocated ₹6.22 lakh crore for the Defence Ministry for 2024-25, matching the amount presented in the interim Budget in February.

    Budgetary allocation for different sectors 

    • Border Roads Organisation (BRO): The BRO received a significant increase in funding, with an allocation of ₹6,500 crore, aimed at improving border infrastructure and promoting socio-economic development in border areas.
    • Indian Coast Guard: The allocation for the Indian Coast Guard is ₹7,651.8 crore, which is 6% lower than the revised estimates for FY24. Of this, ₹3,500 crore is designated for capital expenditure to enhance maritime capabilities.
    • Innovation in Defence: An additional ₹400 crore has been allocated for innovation in defence through the Acing Development of Innovative Technologies with iDEX (ADITI) scheme, aimed at engaging startups and MSMEs in developing indigenous defence technologies.
    • Overall Allocation Breakdown: The allocation for the Defence Ministry includes 27.66% for capital expenditure, 14.82% for revenue expenditure, 30.66% for pay and allowances, 22.7% for defence pensions, and 4.17% for civil organizations under the Defence Ministry.

    Marginal Capex Push

    • Slight increase in capital expenditure: The budget reflects a marginal increase in capital expenditure, focusing on strengthening the capabilities of the armed forces and enhancing domestic procurement.
    • Strategic infrastructure development: The increased allocation to the BRO and the Coast Guard indicates a strategic push towards improving infrastructure in border areas and maritime security, though the overall capital push remains modest.
    • Focus on Indigenous solutions: The emphasis on domestic capital procurement and innovation through the iDEX scheme aims to bolster self-reliance in defence technology, fostering a more robust Indigenous defence industry.
    • Long-term strategic goals: The allocations are aligned with long-term strategic goals, including enhancing operational preparedness and infrastructure development in sensitive regions, although the overall growth in capital expenditure may be viewed as conservative.
    • Balancing defence needs with budget constraints: While the budget seeks to address critical defence needs, the slight reduction in the overall percentage of the budget allocated to defence suggests a balancing act between defence priorities and other pressing social and economic needs.

    Way forward: 

    • Enhance Focus on Indigenous Production: The government should further promote indigenous production capabilities by increasing investments in research and development, and by providing incentives for domestic manufacturers to produce advanced defence technologies.
    • Strengthen Infrastructure Development: The need for continued emphasis on infrastructure projects, particularly in border areas, should be prioritized to enhance national security and socio-economic development, ensuring that allocations are effectively utilized for maximum impact.
  • Modern Indian History-Events and Personalities

    [pib] Birth Anniversary of Chandrashekhar Azad and Lokmanya Tilak  

    Why in the News?

    Prime Minister paid his tributes to legendary freedom fighters Bal Gangadhar Tilak and Chandra Shekhar Azad on their birth anniversaries.

    About Chandrashekhar Azad and Lokmanya Tilak  

    [1] Chandrashekhar Azad:

    Details:
    • Born Chandra Shekhar Tiwari on 23 July 1906;
    • Indian revolutionary leader of HSRA;
    • Died 27 February 1931.
    Early Life
    • From Bardarka, Uttar Pradesh;
    • Joined Non-Cooperation Movement at 15;
    • Famously declared his name as “Azad” when arrested.
    Revolutionary Life
    • Joined Hindustan Republican Association (HRA), participated in Kakori Train Robbery, avenged Lala Lajpat Rai’s death;
    • Reorganized HRA into Hindustan Socialist Republican Association (HSRA);
    • Influenced by socialist literature.
    Support from Congress Financially supported by Motilal Nehru.
    Activities in Jhansi Used Jhansi as a base, practiced shooting, lived as Pandit Harishankar Bramhachari, taught children, connected with local revolutionaries.
    Collaboration with Bhagat Singh Reorganized HRA into HSRA, planned to assassinate James A. Scott, mistakenly killed John P. Saunders.
    Death Surrounded by police in Alfred Park, Allahabad;

    Ensured companion’s escape; shot himself to avoid capture on 27 February 1931.

     

    [2] Lokmanya Tilak:   

    Details:
    • Born Bal Gangadhar Tilak on 23rd July 1856 in Ratnagiri, Maharashtra;
    • Died on 1st August 1920.
    Education Founded Deccan Education Society (1884) and Fergusson College (1885) in Pune.
    Ideology
    • Devout Hindu using scriptures to inspire resistance;
    • Advocated for self-rule (Swarajya); famous slogan: “Swaraj is my birthright and I shall have it!”;
    • Emphasized cultural and religious revival.
    • Popularized Ganesh Chaturthi and Shiv Jayanti festivals.
    Political Life
    • Early advocate for complete independence;
    • Part of the Lal-Bal-Pal trio; joined Indian National Congress (INC) in 1890.
    Surat Split (1907) Split INC into Extremists (led by Tilak) and Moderates (led by Gopal Krishna Gokhale) due to leadership disputes and differing approaches.
    Contribution to Freedom Movement
    • Promoted swadeshi movements and boycott of foreign goods; co-led Indian Home Rule Movement (1916);
    • Founded All India Home Rule League;
    • Involved in Lucknow Pact (1916) for Hindu-Muslim unity.
    Imprisonment Imprisoned from 1908 to 1914 in Mandalay Prison for defending revolutionaries Khudiram Bose and Prafulla Chaki.
    Publications
    • Edited weekly Kesari (Marathi) and Mahratta (English);
    • Authored books “Gita Rahasya” and “Arctic Home of the Vedas.”

     

    PYQ:

    [2022] Who among the following is associated with ‘Songs from Prison’, a translation of ancient Indian religious lyrics in English?

    (a) Bal Gangadhar Tilak

    (b) Jawaharlal Nehru

    (c) Mohandas Karamchand Gandhi

    (d) Sarojini Naidu

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

    What is a Climate Finance Taxonomy, announced by FM Sitharaman?

    Why in the News?

    • The 2024 Union Budget, presented by Finance Minister, includes developing a taxonomy for climate finance.
      • The aim is to enhance the availability of capital for climate adaptation and mitigation.

    What is a Climate Finance Taxonomy?

    • A climate finance taxonomy is a classification system that identifies which economic activities can be marketed as sustainable investments.
    • It serves as a guide for investors and financial institutions to direct capital towards projects that contribute to climate adaptation and mitigation, aligning with broader environmental goals.

    Significance of a Climate Finance Taxonomy

    • Net-Zero Economy: With global temperatures rising and the adverse effects of climate change worsening, countries need to transition to a net-zero economy.
    • Alignment with Transition Pathways: Taxonomies help ascertain if economic activities are aligned with credible, science-based transition pathways.
    • Deployment of Climate Capital: They provide an impetus for the deployment of climate capital by directing investments towards sustainable projects.
    • Reduction of Greenwashing Risks: Taxonomies help reduce the risks of greenwashing by providing clear criteria for what constitutes a sustainable investment.

    Why does India need a Green Taxonomy?

    • According to the IFC, India needs an estimated $10.1 trillion to achieve net-zero by 2070.
    • Public investments alone can’t match this goal, calling for standardization in investments.

    Benefits for India

    • For India, a taxonomy could attract more climate funds from international sources.
    • Currently, green finance flows in India are falling short of the country’s needs, accounting for only around 3% of total FDI inflows, according to the Landscape of Green Finance in India 2022 report by the Climate Policy Initiative.
    • A lack of clarity on what constitutes sustainable activity is a significant reason for the low green finance flows. A taxonomy would address this issue.

    India’s Climate Commitments:

    • India aims to achieve a net-zero economy by 2070.
    • The country has pledged to reduce the emissions intensity of its GDP by 45% by 2030, compared to the 2005 level.
    • India has also committed to achieving about 50% of its cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.

    Steps taken by India:

    • In January 2021, India established a task force on sustainable finance under the Department of Economic Affairs, Ministry of Finance.
      • The task force’s objectives include creating a framework for sustainable finance, establishing pillars for a sustainable finance roadmap, suggesting a draft taxonomy of sustainable activities, and creating a framework of risk assessment by the financial sector.
    • In April 2021, the RBI joined the Central Banks and Supervisors Network for Greening the Financial System (NGFS) as a member.
    • RBI is also a member of a task force on climate-related financial risks set up by the Basel Committee on Banking Supervision and the International Platform on Sustainable Finance.

    Potential for Green Investments in India

      • According to a report by the International Finance Corporation (IFC), India has a climate-smart investment potential of $3.1 trillion from 2018 to 2030.
      • The largest investment opportunity lies in the electric vehicle segment, with a potential of $667 billion as India aims to electrify all new vehicles by 2030.
    • The renewable energy sector also presents a substantial investment opportunity, estimated at $403.7 billion.

    International Adoption of Taxonomies

    • Many countries have either started developing or have finalized their taxonomies.
    • Countries with developed taxonomies include South Africa, Colombia, South Korea, Thailand, Singapore, Canada, and Mexico.
    • The European Union has also developed its own taxonomy.

    PYQ:

    [2016] With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct?

    1. The Agreement was signed by all the member countries of the UN, and it will go into effect in 2017.
    2. The Agreement aims to limit the greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2ºC or even 1.5ºC above pre-industrial levels.
    3. Developed countries acknowledged their historical responsibility in global warming and committed to donate $ 1000 billion a year from 2020 to help developing countries to cope with climate change.

    Select the correct answer using the code given below:

    (a) 1 and 3 only
    (b) 2 only
    (c) 2 and 3 only
    (d) 1, 2 and 3

  • Tax Reforms

    What is Angel Tax that was scrapped in Budget 2024?

    Why in the News?

    Finance Minister announced the abolition of the angel tax, aiming to strengthen the startup ecosystem and support innovation in India.

    What is Angel Investment?

    • An angel investor is an individual who provides financial backing to early-stage startups or entrepreneurs, typically in exchange for equity in the company.
    • Angel investors are typically high-net-worth individuals who invest their own personal funds, rather than investing on behalf of a firm or institution.
    • Features of Angel Investing: Early-stage funding, equity investment, high-risk, high-reward, active involvement,personal investment,f lexible terms and shorter investment horizon.

    What is Angel Tax? 

    • Referred to as Angel Tax, this rule is described in Section 56(2)(vii)(b) of the Income Tax Act, 1961.
    • Essentially it’s a tax on capital receipts, unique to India in the global context.
    • This clause was inserted by the Finance Act in 2012 to prevent laundering of black money, round-tripping via investments with a large premium into unlisted companies.
    • The tax covers investment in any private business entity, but only in 2016 was it applied to startups.

    Why was angel tax introduced?

    • The complicated nature of VC fundraising with offshore entities, multiple limited partners and blind pools is contentious.
    • There has been some element of money laundering or round-tripping under guise.

    Details of its levy

    • The Angel Tax is being levied on startups at 9% on net investments in excess of the fair market value.
    • For angel investors, the amount of investment that exceeds the fair market value can be claimed for a 100% tax exemption.
    • However, the investor must have a net worth of ₹2 crores or an income of more than ₹25 Lakh in the past 3 fiscal years.

    Key Issues with Angel Tax

    • Share Valuation: The tax impacted the valuation of shares, causing complications for startups in raising funds.
    • Discounted Cash Flow (DCF) Method: Issues arose with the treatment of estimated figures in the DCF method, leading to disputes.
    • Scrutiny of Funding Sources: The scrutiny of funding sources and investor credibility added another layer of complexity for startups.
    • Retrospective Application: The retrospective application of the tax and its effect on the conversion of convertible instruments into equity were also significant points of dispute.

    Significance for the Startup Community

    • Startups has long advocated for a more supportive and less restrictive environment for fundraising.
    • With this change, the government aims to create a more favourable atmosphere for innovation and investment in India.
    PYQ:

    [2014] What does venture capital mean?

    (a) A short-term capital provided to industries.

    (b) A long-term start-up capital provided to new entrepreneurs.

    (c) Funds provided to industries at times of incurring losses.

    (d) Funds provided for replacement and renovation of industries.

  • Tourism Sector

    Bihar’s Vishnupad and Mahabodhi Temples

    Why in the News?

    • Finance Minister announced during her Union Budget speech that corridor projects will be built for the Vishnupad Temple at Gaya and the Mahabodhi Temple at Bodh Gaya in Bihar.

    About the Vishnupad Temple at Gaya

    Details
    Dedicated to Lord Vishnu
    Significance Contains a 40 cm long footprint of Lord Vishnu; considered sacred in Hinduism; attracts pilgrims for “Pind Daan” rituals.
    Historical Importance Believed to be over 1000 years old; associated with various legends and historical references in Hindu texts.
    Architecture
    • Built in Shikhara style;
    • Features intricate carvings and silver-plated flagposts;
    • Constructed of grey granite blocks.
    Built by Queen Ahilyabai Holkar of Indore in 1787.
    Festivals and Rituals
    • Major site for “Pind Daan” rituals during Pitru Paksha;
    • Attracts thousands of pilgrims during this period.
    Mythology The footprint is believed to be where Lord Vishnu placed his foot to subdue the demon Gayasur.
    Associated River Located on the banks of the Phalgu River, considered sacred for ritual offerings.
    Access and Visitation Accessible year-round; major pilgrimage site with facilities for devotees.
    Recent Developments Ongoing efforts for preservation and restoration; improved infrastructure for pilgrims.

     

    About the Mahabodhi Temple Complex:

    Details
    Location Bodh Gaya, Bihar;
    Significance Marks the location where Buddha attained enlightenment
    UNESCO Status World Heritage Site since 2002
    Historical Importance
    • One of the four holy sites related to Buddha’s life (Enlightenment).
    • Other holy sites: Lumbini (Birth) in Nepal, Sarnath (First Sermon) in Uttar Pradesh, Kushinagar (Death) in Uttar Pradesh
    Original Construction Built by Mauryan Emperor Ashoka around 260 BCE
    Reconstruction Reconstructed in brick during the late Gupta period (5th or 6th centuries)
    Archaeological Finds
    • Indicates site of veneration since the Mauryan period.
    • Vajrasana (Diamond Throne): Located within the temple, dated to the third century BCE
    Main Temple Structure Dates from the 6th century CE, incorporates parts from 2nd or 3rd century CE
    Architectural Features
    • Two large shikhara towers, the largest over 55 meters high
    • Influenced Jain, Hindu, and Buddhist architecture globally
    Materials Made mostly of brick covered with stucco
    Bodhi Tree Direct descendant of the original tree under which Buddha attained enlightenment
    Traditional Accounts Describes 7 weeks Buddha spent meditating after enlightenment at various spots within the complex
    Decline and Revival
    • Declined after Huna invasions and early Islamic invasions.
    • Revived under the Pala Empire (8th-12th century).
    • Declined again after 12th century CE invasions by Turk armies.
  • Mother and Child Health – Immunization Program, BPBB, PMJSY, PMMSY, etc.

    How children win with U-WIN, govt’s new online vaccine portal?

    Why in the News?

    • The government plans to roll out U-WIN, an online vaccine management portal for childhood vaccination, across the country.
      • Similar to CoWIN used during the Covid-19 pandemic, U-WIN aims to digitize and individualize immunization records from birth.

    What is U-WIN? 

    • Children up to 6 years old and pregnant mothers are registered on U-WIN using government IDs like Aadhaar and their mobile phone numbers.
    • Records of all 25 shots given to a child and the two given to pregnant mothers are added to the platform.
    • It’s Working:
    • The platform generates a color-coded vaccination certificate.
      • The digital vaccine certificate can be downloaded by parents using their registered mobile numbers, eliminating the need for a physical vaccination booklet.
    • After each shot is administered and recorded, the date is added to the card, which also shows the due date for the next set of vaccines.
      • U-WIN sends SMS reminders to parents before their children are due for the next dose.
      • U-WIN helps locate the nearest vaccination center and book available slots.

    Significance:

    1) For providing Immunization:
    • U-WIN’s reminders to parents are likely to improve compliance with vaccination schedules.
    • The platform ensures portability, allowing children to receive their doses anywhere in the country, particularly benefiting children of migrant workers.
    • Registration at birth may help reduce the number of “zero dose” children, those who have not received any vaccinations.
    2) For Health Workers:
    • The platform can automatically generate a due list of children in specific areas for health workers.
    • These data points can be utilized by other government programs and eventually connected through the ABHA (Ayushman Bharat Health Account) ID.

    Integration with Existing Systems

    • U-WIN will link to the government’s existing eVIN platform for inventory management.
    • eVIN tracks all vaccine vials, from central stores to each vaccination site, monitoring doses used, wasted, and returned, and tracks real-time temperature and humidity using sensors.
    • U-WIN runs on the same principles and digital infrastructure as CoWIN, making adoption straightforward.
    • Most vaccinators are familiar with similar platforms, ensuring a smooth transition.

    Zero Dose Children

    • In India, the coverage of the first dose of diphtheria, pertussis, and tetanus (DPT)-containing vaccine is taken as the proxy for zero dose children.
    • Data from WHO and UNICEF showed that while 93% of children received their first vaccine dose, there were still 1.6 million zero dose children in India in 2023.
    • The data also showed that 1.6 million children missed their first measles-containing vaccine in 2023, up from 1.1 million the previous year.
    • This is concerning as in 2022, five states — Bihar, Gujarat, Haryana, Jharkhand, and Maharashtra — reported a rise in the incidence of measles.

     

    PYQ:

    [2016] ‘Mission Indradhanush’ launched by the Government of India pertains to:

    (a) Immunization of children and pregnant women

    (b) Construction of smart cities across the country

    (c) India’s own search for the Earth-like planets in outer space

    (d) New Educational Policy

  • Global Geological And Climatic Events

    What are Rogue Waves and how can AI help predict them?

    Why in the News?

    • Rogue waves, unusually large waves compared to those before and after them, pose significant threats to ships, coastal and offshore infrastructure, and human lives.
      • Until now, there has been no method to forecast rogue waves.

    What Are Rogue Waves?

    • Rogue waves are unusually large and unpredictable waves that are much larger than the surrounding waves.
    • They are often defined as waves that are at least twice the height of the surrounding waves.
    • Formation:
      • Rogue waves can form when swells from distant weather systems converge to create a single, amplified wave.
      • They may also form when ocean currents compress swells, creating strong, high waves.
    • Features:
      • Traditionally, rogue waves have been difficult to predict due to their sudden appearance and rare occurrence.
      • The lack of real-time forecasting methods has made it challenging to mitigate their impact effectively.

    What is Sea State?

    • In oceanography, sea state refers to the condition of the surface of a large body of water at a specific location and time.
    • The World Meteorological Organization (WMO) sea state code characterizes sea state based on wave height on a scale of 0 (no waves) to 9 (waves over 14 meters).

    Characteristics:

    • Unlike typical waves, rogue waves can appear suddenly and without warning.
    • They defy the average sea state, making them exceptionally dangerous.

    Threats Posed by Rogue Waves:

    (1) Shipping

    • For Ships and Vessels: Rogue waves pose a significant threat to ships and other vessels at sea. Their unexpected and massive size can lead to capsizing or severe damage.
    • For Offshore Infrastructure: Oil rigs, wind turbines, and other offshore structures can be heavily damaged or destroyed by rogue waves.

    (2) Coastal Threats

    • Coastal Erosion: The sheer force of rogue waves can lead to accelerated coastal erosion, affecting beaches and shorelines.
    • Flooding: Rogue waves can cause sudden and severe coastal flooding, posing risks to coastal communities and ecosystems.

    (3) Human Safety

    • Loss of Life: Rogue waves have been responsible for numerous fatalities. Between 2011 and 2018, rogue waves killed at least 386 people.
    • Property Damage: The impact of rogue waves on ships, coastal areas, and offshore structures can result in significant financial losses.

    Advancements in Forecasting

    • University of Maryland mathematicians Thomas Breunung and Balakumar Balachandran have developed an artificial intelligence program capable of forecasting rogue waves.
    • The AI program was trained using billions of data points collected by a network of 172 ocean buoys.
    • The researchers analyzed 20-minute long samples recorded by ocean buoys.

     

    PYQ:

    [2017] At one of the places in India, if you stand on the seashore and watch the sea, you will find that the sea water recedes from the shore line a few kilometres and comes back to the shore, twice a day, and you can actually walk on the sea floor when the water recedes. This unique phenomenon is seen at:

    (a) Bhavnagar

    (b) Bheemunipatnam

    (c) Chandipur

    (d) Nagapattinam

  • Parliament – Sessions, Procedures, Motions, Committees etc

    What is Governor’s immunity under Article 361, set to be reviewed by Supreme Court?

    Why in the News?

    • The Supreme Court has agreed to hear a plea seeking to redefine the constitutional immunity of state Governors.
      • Article 361 of the Constitution shields the President and Governors from criminal prosecution and judicial scrutiny.
      • The Supreme Court will interpret whether the immunity includes the registration of an FIR, initiation of a preliminary inquiry, or a magistrate taking cognisance of an offence.

    Origins of Governor’s Immunity

    • The concept of immunity is based on the Latin maximrex non potest peccare” (the king can do no wrong), rooted in English legal traditions.
    • During the Constituent Assembly debates in 1949, member H. V. Kamath questioned whether immunity meant no proceedings could be instituted against the President or Governor during their term or only while they were in office.
      • The article was adopted without further debate on criminal immunity.

    What are immunities under Article 361?

    • According to Article 361(1), the President or a Governor is not answerable to any court for the exercise of their powers and duties.
    • Article 361(2) ensures that NO criminal proceedings can be initiated or continued against the President or Governor during their term.
    • Article 361(3) prohibits the arrest or imprisonment of the President or Governor while they are in office.
    • Article 361(4) states that civil lawsuits for personal acts against the President or Governor cannot be initiated during their term and can only proceed two months after a written notice is given post-term.

    Judicial Interpretations of Article 361:

    • Dr SC Barat and Anr vs. Hari Vinayak Pataskar Case (1961): Distinguished between the Governor’s official and personal actions. While official actions have complete immunity, civil proceedings for personal acts can proceed with prior notice.
    • Rameshwar Prasad vs. Union of India Case (2006): The Supreme Court recognized “complete immunity” for constitutional actions under Article 361(1), but allowed judicial review for actions taken with malicious intent.
    • Vyapam Scam Case (2015): The Madhya Pradesh High Court ruled that Governor Ram Naresh Yadav had absolute protection under Article 361(2), preventing his name from being included in the investigation to avoid undue legal harassment.
    • State of UP vs. Kalyan Singh Case (2017): The Supreme Court upheld that Kalyan Singh, while serving as Governor of Rajasthan, was immune under Article 361. Legal proceedings related to the Babri Masjid demolition were to resume after his term.
    • Telangana High Court Judgment (2024): Observed that the Constitution does not explicitly or implicitly bar judicial review of actions taken by a Governor, and stated that Article 361 immunity is personal and does not exclude judicial review.

    Case for Revisiting Immunity

    The debate on executive immunity is ongoing in other countries as well.

    • The US Supreme Court recently decided that former President Donald Trump is entitled to “absolute immunity” from criminal prosecution for official acts but not for unofficial or personal acts.
    • In India, the discussion is viewed within the larger context of the tension between Governors and opposition-ruled state governments.
    • The Supreme Court has noted instances where Governors acted with political motives.

    PYQ:

    [2018] Consider the following statements:

    1. No criminal proceedings shall be instituted against the Governor of a State in any court during his term of office.
    2. The emoluments and allowances of the Governor of a State shall not be diminished during his term of office.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

    [2019] Which one of the following suggested that the Governor should be an eminent person from outside the State and should be a detached figure without intense political links or should not have taken part in politics in the recent past?

    (a) First Administrative Reforms Commission (1966)

    (b) Rajamannar Committee (1969)

    (c) Sarkaria Commission (1983)

    (d) National Commission to Review the Working of the Constitution (2000)

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

    India’s economy projected to grow at 6.5% to 7% in FY ending March 2025.

    Why in the News?

    • India’s economy is projected to grow at 6.5% to 7% in the fiscal year ending March 2025.
      • The Economic Survey for 2023-24 highlights the need to address inequality and unemployment as policy priorities.

    Policy Recommendations by Chief Economic Adviser (CEA)

    • Regulatory Burdens: CEA V. Anantha Nageswaran advocates for Central and State governments to reduce regulatory burdens on businesses.
    • Corporate Responsibility: He urges the corporate sector to create productive jobs, emphasizing their responsibility in generating employment.

    Various Challenges discussed

    (1) Challenges in the IT Sector:

    • Slowdown in Hiring: The CEA notes a significant slowdown in IT sector hiring over the last two years.
    • AI and Labor: He encourages the industry to use AI to augment labor rather than replace workers.

    (2) Skilling Initiatives

    • Addressing Inequality: The Economic Survey suggests steps to tackle inequality, improve health, and bridge the education-employment gap.
    • Skilling Reboot: A reboot of India’s skilling initiatives is proposed to provide the industry with people having the right attitude and skills.

    (3) Corporate Sector and Economic Growth

    • Demand and Employment: The Survey emphasizes the benefits for corporates from higher demand generated by employment and income growth.
    • Warning against Short-Termism: It warns against “short-termism” which can weaken economic linkages.

    (4) State Capacity and Consensus Building:

    • Enhancing State Capacity: Enhancing state capacity is critical for the strategy to work.
    • Need for Consensus: The CEA stresses the need for consensus between governments, businesses, and the social sectors for effective transformation.

    (5) Land Acquisition and Investment Concerns:

    • Land Use Norms: While the Survey does not mention land acquisition reform, it highlights the need to deregulate land use norms and consolidate farmland holdings.
    • Investment Cautions: The Survey cautions about private capital formation being cautious due to fears of cheaper imports, indirectly referencing China.

    (6) Foreign Direct Investment (FDI) Challenges:

    • Attracting FDI: Attracting FDI will be challenging due to higher interest rates and developed countries encouraging domestic investments through subsidies.
    • Addressing Uncertainties: Despite progress, uncertainties related to transfer pricing, taxes, and import duties need to be addressed.

    Structural Reforms

    • Existing Reforms: Structural reforms such as GST and the Insolvency and Bankruptcy Code are delivering expected results.
    • Next-Gen Reforms: The Survey calls for “next-gen reforms” that are bottom-up in nature to achieve sustainable, balanced, and inclusive growth.

    Strategic Directions for Growth

    • Six-Pronged Strategy: The Survey outlines a six-pronged strategy for growth, emphasizing private sector investments and a fair share of income for workers.
    • Focus Areas: Other focus areas include financing the green transition, removing barriers for MSMEs, and implementing intelligent farmer-friendly policies.

    Conclusion

    • Sustained Growth Potential: The economy can grow at over 7% on a sustained basis in the medium term by building on past reforms.
    • Tripartite Compact: Achieving this growth requires a tripartite compact between the Centre, States, and the private sector.

    PYQ:

    [2013] Economic growth in country X will necessarily have to occur if:

    (a) There is technical progress in the world economy.

    (b) There is population growth in X.

    (c) There is capital formation in X.

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

  • Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

    Will local job quotas pass the legal test?    

    Why in the News? 

    The Karnataka State Employment Bill, 2024, proposing private sector reservations for Kannadigas, is on hold after backlash from business and industry leaders.

    What Does the Constitution Say?

    • Equality of Opportunity (Article 16):
      • Article 16(1): Guarantees equality of opportunity in public employment and prohibits discrimination based on race, religion, caste, sex, descent, place of birth, or residence.
      • Article 16(3): Allows Parliament to prescribe residence requirements for public office in a specific state or Union Territory, but this power does not extend to state legislatures.
    • Freedom of Movement and Residence (Article 19):
      • Article 19(1)(d): Ensures the freedom of movement throughout India.
      • Article 19(1)(e): Grants the right to reside and settle in any part of India.
      • Article 19(1)(g): Protects the right to practice any profession or carry on any occupation, trade, or business.
    • Legislative Powers (Article 35):
      • Article 35(a): Designates Parliament as the sole authority to make laws concerning residence requirements for employment or appointments to public offices, thereby restricting state legislatures from enacting such laws.

    Why Is the constitutionality of the Karnataka State Employment of local candidates in the Industries, factories and Other Establishments Bill, 2024, being doubted?

    • Absence of Provision for Private Sector Reservation: The Constitution does not provide for reservation in the private sector, leading to concerns about the legality of such mandates at the state level.
    • Legislative limits on residential criteria: State Assemblies lack the power to prescribe residential criteria for private sector employment, as such powers are reserved for Parliament under Article 35(a).
    • Impact on Fundamental Rights:
      • The Bill may infringe on citizens’ rights under Article 19(1)(d) and (e), restricting their freedom of movement and right to reside or settle in different states.
      • The quota system might violate Article 19(1)(g), impinging on individuals’ freedom to pursue occupations of their choice.

    What Is the Status of Similar Laws in Other States Such as Haryana?

    • Haryana State Employment of Local Candidates Act, 2020: Mandated 75% reservation in the private sector for jobs with salaries up to ₹30,000. This Act was struck down by the Punjab and Haryana High Court, and the matter is pending before the Supreme Court.
    • Andhra Pradesh Employment of Local Candidates in Industries/Factories Act, 2019: Proposed 75% reservation for local candidates and allowed a three-year period for training and engagement. This Act has faced legal challenges and has not been zealously implemented by the government.
    • Jharkhand Definition of Local Persons Bill: Initially faced resistance from the Governor over its constitutionality, especially regarding 100% reservation for locals in certain job categories. The bill was re-enacted in December 2023 despite concerns about its constitutionality.

    Way forward: 

    • Inclusive Dialogue: The Karnataka government should engage in comprehensive consultations with all stakeholders, including industry representatives, legal experts, and civil society, to understand their concerns and suggestions.
    • Impact Analysis: Need to conduct a detailed socio-economic impact assessment of the proposed reservation policy can provide insights into its potential benefits and drawbacks.

    Mains PYQ: 

    Q The reservation of seats for women in the institutions of local self-government has had a limited impact on the patriarchal character of the Indian Political Process.” Comment. (2019)

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