Note4Students
From UPSC perspective, the following things are important :
Prelims level: OST, INF Treaty, New START policy
Mains level: US-Russia power tussle
Russian President Mr Putin has proposed a one-year extension without conditions of the last major nuclear arms reduction accord, the New START Treaty between Russia and the U.S.
The New START, INF and the Open Skies …. Be clear about the differences of these treaties. For example- to check if their inception was during cold war era etc.
New START Treaty
- The New Strategic Arms Reduction Treaty (New START) pact limits the number of deployed nuclear warheads, missiles and bombers and is due to expire in 2021 unless renewed.
- The treaty limits the US and Russia to a maximum of 1,550 deployed nuclear warheads and 700 deployed missiles and bombers, well below Cold War caps.
- It was signed in 2010 by former US President Barack Obama and then-Russian President Dmitry Medvedev.
- It is one of the key controls on superpower deployment of nuclear weapons.
- If it falls, it will be the second nuclear weapons treaty to collapse under the leadership of US President Donald Trump.
- In February, US withdrew from the 1987 Intermediate-Range Nuclear Forces Treaty (INF), accusing Moscow of violating the agreement.
Also read:
https://www.civilsdaily.com/news/us-confirms-pull-out-from-inf-treaty/
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Collective Security Treaty Organisation (CSTO)
Mains level: Not Much
Russian Navy along with CSTO members has begun military exercises in the central waters of the Caspian Sea north of the Azerbaijani capital Baku.
Try this MCQ:
Q.The Collective Security Treaty Organisation (CSTO) sometimes seen in news is an alliance led by:
(a) Russia (b) USA (c) India (d) European Union
Collective Security Treaty Organization
- CSTO is an intergovernmental military alliance that was signed on 15 May 1992.
- In 1992, six post-Soviet states belonging to the Commonwealth of Independent States—Russia, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan—signed the Collective Security Treaty
- This is also referred to as the “Tashkent Pact” or “Tashkent Treaty”.
- Three other post-Soviet states—Azerbaijan, Belarus, and Georgia—signed the next year and the treaty took effect in 1994.
- Five years later, six of the nine—all but Azerbaijan, Georgia, and Uzbekistan—agreed to renew the treaty for five more years, and in 2002 those six agreed to create the CSTO as a military alliance.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ‘Five Eyes’ group of nations, End-to-end encryptions
Mains level: Not Much
India joins the UK in drive known as ‘Five Eyes’ group of nations, as a seventh member against encrypted social media messages.
Map the countries in ‘Five Eyes’ group of nations.
‘Five Eyes’ group of nations
- The Five Eyes (FVEY) is an intelligence alliance comprising Australia, Canada, New Zealand, the United Kingdom and the United States.
- The origins of the Five Eyes alliance can be traced back to the Atlantic Charter, which was issued in August 1941 to lay out the Allied goals for the post-war world.
- These countries are parties to the multilateral UK-USA Agreement, a treaty for joint cooperation in signals intelligence.
- India is among seven countries to back a UK-led campaign against end-to-end encryption of messages by social media giants such as Facebook, which they say hinder law enforcement by blocking all access to them.
A formal expansion
- The UK and India joined this group to ensure they do not blind themselves to illegal activity on their platforms, including child abuse images.
- This marks an expansion of the so-called “Five Eyes” group of nations, a global alliance on intelligence issues, to include India and Japan.
For a common cause
- All members claim that end-to-end encryption policies such as those employed by the social media giant erode the public’s safety online.
- They have made it clear that when end-to-end encryption is applied with no access to content, it severely undermines the ability of companies to take action against illegal activity on their own platforms.
- It also prevents law enforcement investigating and prosecuting the most serious crimes being committed on these services such as online child sexual abuse, grooming and terrorist content.
Back2Basics: End-to-end encryption
- End-to-end encryption (E2EE) is a system of communication where only communicating users can read the messages.
- It is regarded as the most secure way to communicate privately and securely online.
- By encrypting messages at both ends of a conversation, end-to-end encryption prevents anyone in the middle from reading private communications.
- In principle, it prevents potential eavesdroppers – including telecom providers, Internet providers, and even the provider of the communication service – from being able to access the cryptographic keys needed to decrypt the conversation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Chapter Proceedings
Mains level: Law and order maintenance
The Mumbai police last week began “chapter proceedings” against the Editor-in-Chief of a news channel.
Can you relate the philosophy behind chapter proceedings and preventive detention?
What exactly are “chapter proceedings”?
- Chapter proceedings are preventive actions taken by the police if they fear that a particular person is likely to create trouble and disrupt the peace in society.
- These proceedings are unlike punitive action taken in case of an FIR with an intention to punish.
- Here, the police can issue notices under sections of the Code of Criminal Procedure to ensure that the person is aware that creating nuisance could result in action against him.
What are the sections using which these notices are served?
- Generally, a notice is issued to a person under section 111 of the CrPC whereby he is asked to present himself before the Executive Magistrate – an ACP-rank officer in a Commissionerate of a Dy. the collector in rural areas – who has issued the notice.
- The person has to explain why he should not be made to sign a bond of good behaviour.
- If the Executive Magistrate is not satisfied with the answer, the person is asked to sign a bond of good behaviour and produce sureties vouching for his/her good behaviour.
- A fine amount is also decided – in accordance with the crime and the person’s financial capability – which the person would have to pay if he violates the conditions set in the bond.
Legal immunities against such proceedings
- On receiving the notice under section 111, a person can appeal the notice before the courts.
- In fact, in the past, courts have come down strongly against chapter proceedings in some cases.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Authority of Ship Recycling (NASR)
Mains level: Not Much
The Central government has notified the Director-General of Shipping as the national authority for recycling of ships under the Recycling of Ships Act, 2019.
The ‘Hong Kong Convention’ is the odd man out here. Read more about the convention at:
[pib] Hong Kong International Convention for Safe Recycling of Ships 2009
About NASR
- The national authority of ship recycling will be set up in Gandhinagar, Gujarat.
- The location of the office will benefit the ship recycling yard owners situated in Alang, Gujarat which is home to the largest ship recycling industry in the world.
- DG Shipping is authorized to administer, supervise and monitor all activities relating to ship recycling in the country.
- DG Shipping will oversee the sustainable development of the ship recycling industry, monitoring the compliance to environment-friendly norms and safety and health measures for the stakeholders.
- DG Shipping will be the final authority for the various approvals required by the ship-recycling yard owners and state governments.
Recycling of Ships Act, 2019
- Under the Ship Recycling Act, 2019, India has acceded to the ‘Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships’.
- This was adopted by the International Maritime Organization (IMO).
- DG Shipping is a representative of India in the IMO and all the conventions of IMO are being enforced by DG Shipping.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Criteria for MSMEs
Mains level: Paper 3- Formalisation of MSMEs
The lack of formalisation has several implications for MSMEs. Registering them could help them in various ways. The article deals with the issue of formalisation.
Please read the link shared below for issues related to MSME
The missing large in MSMEs
Steps taken by Government to Formalize MSME
- UAM: In 2015, the government notified the Udyog Aadhaar Memorandum (UAM), an online filing system for MSMEs.
- As of January, 86 lakh MSMEs had registered on the UAM portal.
- In 2016, the government notified rules under which MSMEs had to furnish information relating to their enterprises, online, in an MSME databank.
- As of January, only 1.6 lakh units registered on it.
- A new process of classification and registration for small businesses took off on July 1 called as “Udyam”.
- As of October 1, the MSME ministry has confirmed that only 7 lakh registrations have taken place using the new system.Nudge by the government
- In an attempt to nudge more enterprises to become lifetime Udyam, the government has integrated the system with the Trade Receivables Electronic Discounting System (TReDS) and the Government e-Marketplace (GeM).
- In its updated Priority Sector Lending (PSL) guidelines, the RBI has established that for the purposes of PSL, MSMEs will be identified as per the gazette notification laying down the new process of classification and registration.
Addressing the concerns
- While the Udyam initiative holds more promise, it is important to assess if this will be detrimental to accessing formal finance.
- To this end, the government and RBI should consider whether the registration requirement can be exempted for units with investment and turnover that falls in the lower end of the criteria.
- In 2018, the International Finance Corporation estimated that the overall supply of finance from formal sources met only one-third of the credit demand of the MSME sector.
- Enabling strategies such as PSL could provide a fillip to priority sectors including MSMEs which require increased formal financing.
Conclusion
The costs of formalisation and compliance are high and onerous in many states in India. In such an ecosystem, there are perverse incentives to remaining small and informal. Governments’ efforts towards formalisation should be directed towards addressing these issues.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Need for multilateralism
Multilateralism faces several challenges at the time when it is needed the most. The article highlights the need for more of it in the face of global challenges.
Lack of international collaboration to deal with Covid
- As COVID-19 recognises no boundaries, one would have expected that countries with technological and financial capabilities, would agree to pool their resources together to work on an effective and affordable anti-virus vaccine.
- Instead, there are several parallel national efforts underway even as the World Health Organization (WHO) has put together a Covax alliance for the same purpose.
- Active collaboration would have enhanced our collective ability to overcome what has become a public health-cum-economic crisis.
- But we live in an era when nationalist urges, fuelled by a political opportunism, diminish the appeal of international cooperation.
- The post-pandemic world will have the awful dilemma of global integration without solidarity.
Trends in the global order that suggests the need for multilateralims
1) Global food crisis
- The World Food Program has been awarded this year’s Noble Peace Prize.
- The award is sending a message to the world — that we need multilateralism as an expression of international solidarity.
- According to the WFP, 132 million more people could become malnourished as a consequence of the pandemic.
- To the 690 million people who go to bed each night on an empty stomach, perhaps another 100 million or more will be added.
- The Nobel Prize to the WFP will hopefully nudge our collective conscience to come together and relieve this looming humanitarian crisis.
2) Despite issues, U.N. is still important
- The United Nations is at the centre of multilateral institutions and processes and kept alive the notion of international solidarity and cooperation.
- But it suffers from several disabilities due to the fault of its most powerful member countries.
- They have deprived the UN of resources.
- They have resisted efforts to institute long-overdue reforms.
- Its structure no longer reflects the changes in power equations that have taken place and country such as India continues to be denied permanent membership of the Security Council.
- And yet, the UN is now an essential part of the fabric of international relations for two reasons:
- 1) The salience of global issues has expanded.
- 2) The need for multilateral approaches in finding solutions has greatly increased.
3) Multilateral institutions have become platform for contestation
- In the network of multilateral institutions, several belong to the UN system, others are inter-governmental, still others may be non-governmental of a hybrid character.
- This network performs two important tasks:
- 1) Enable governance in areas which require coordination among nation-states.
- 2) Set norms to regulate the behaviour of states so as to avoid conflict and to ensure both equitable burden-sharing and, equally, a fair distribution of benefits.
- While there are multilateral institutions they have become platforms for contestations among their member states.
- There is recognition of the need to cooperate but this is seen as a compulsion rather than desirable.
4) Globalisation driven by technology will remain here
- Globalisation may have stalled, but as we become increasingly digitised, there will be more, not less, globalisation.
- The pandemic has triggered galloping globalisation in the digital economy.
- Globalisation is driven by technology and as long as the technology remains the key driver of economic growth, there is no escape from globalisation.
- In the contemporary world, the line separating the domestic from the external has become increasingly blurred.
- In tackling domestic challenges deeper external engagement is often indispensable. This is certainly true of climate change.
- The pandemic originated in a third country but soon raged across national borders.
- If there had been a robust and truly global early warning system, perhaps it could have been contained.
5) Interconnectedness of challenges
- We must also take into account the inter-connectedness among various challenges, for example, food, energy and water security are inter-linked with strong feedback loops.
- Enhancing food security may lead to diminished water and energy security.
- It may also have collateral impact on health security.
- It is in recognition of these inter-connections that the international community agreed on a set of Sustainable Development Goals (SDGs).
- The SDGs are cross-domain but also cross-national in character, and hence demand greater multilateral cooperation in order to succeed.
6) Need for more democratic world
- The lack of cooperation from even a single state may frustrate success in tackling a global challenge.
- A fresh pandemic may erupt in any remote corner of the world and spread throughout the globe.
- Prevention cannot be achieved through coercion, only through cooperation. It is only multilateralism that makes this possible.
Conclusion
It is a paradox that precisely at a time when the salience of cross-national and global challenges has significantly increased, nation-states are less willing to cooperate and collaborate in tackling them. So, there is a need for more of multilateralism to deal with the issues of global level.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GDP, GNP, GVA etc.
Mains level: India's GDP related issues
In IMF’s latest Economic Outlook, Bangladesh has overtaken India in GDP per capita. This has caught everyone’s attention.
Do you know?
- In the 2019 edition of Transparency International’s rankings, Bangladesh ranks a low 146 out of 198 countries (India is at 80th rank; a lower rank is worse off).
- In the latest gender parity rankings, out of 154 countries mapped for it, Bangladesh is in the top 50 while India languishes at 112.
Bangladesh surpasses India
- Typically, countries are compared on the basis of GDP growth rate, or on absolute GDP.
- For the most part since Independence, on both these counts, India’s economy has been better than Bangladesh’s.
- This can be seen from Charts 1 and 2 that map GDP growth rates and absolute GDP — India’s economy has mostly been over 10 times the size of Bangladesh, and grown faster every year.
- However, per capita income also involves another variable — the overall population — and is arrived at by dividing the total GDP by the total population.
What made India lag behind?
There are three reasons why India’s per capita income has fallen below Bangladesh this year:
- The first thing to note is that Bangladesh’s economy has been clocking rapid GDP growth rates since 2004.
- Secondly, over the same 15-year period, India’s population grew faster (around 21%) than Bangladesh’s population (just under 18%).
- Lastly, the most immediate factor was the relative impact of Covid-19 on the two economies in 2020. While India’s GDP is set to reduce by 10%, Bangladesh’s is expected to grow by almost 4%.
How has Bangladesh managed to grow so fast and so robustly?
- Freshly start: In the initial years of its independence with Pakistan, Bangladesh struggled to grow fast. However, moving away from Pakistan also gave the country a chance to start afresh on its economic and political identity.
- Diverse labour participation: As such, its labour laws were not as stringent and its economy increasingly involved women in its labour force. This can be seen in higher female participation in the labour force.
- Textile boom: A key driver of growth was the garment industry where women workers gave Bangladesh the edge to corner the global export markets from which China retreated.
- Less dependence on Agriculture: It also helps that the structure of Bangladesh’s economy is such that its GDP is led by the industrial sector, followed by the services sector. Both of these sectors create a lot of jobs and are more remunerative than agriculture.
- Better social capital: Bangladesh improved a lot on several social and political metrics such as health, sanitation, financial inclusion, and women’s political representation.
Retaining the lead
- The IMF’s projections show that India is likely to grow faster next year and in all likelihood again surge ahead.
- But, given Bangladesh’s lower population growth and faster economic growth, India and Bangladesh are likely to be neck and neck for the foreseeable future in terms of per capita income.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: Climate change induced disasters
The UN Office for Disaster Risk Reduction (UNDRR) recently published its report titled “The Human Cost of Disasters”.
The report holds much significance for prelims as well as mains. Just for the sake of information, we must be aware of the report.
Highlights of the report
- 7,348 major disaster events had occurred between 2000 and 2019, claiming 1.23 lives, affecting 4.2 billion people and costing the global economy some $2.97 trillion.
- Of this, China (577 events) and the US (467 events) reported the highest number of disaster events followed by India (321 events).
- Climate change is to be blamed for the doubling of natural disasters in the past 20 years says the report.
- There had also been an increase in geophysical events like earthquakes and tsunamis that are not related to climate but are particularly deadly.
Back2Basics: UN Office for Disaster Risk Reduction
- The UNDRR was established in 1999 as a dedicated secretariat to facilitate the implementation of the International Strategy for Disaster Reduction (ISDR).
- It is headquartered in Geneva, Switzerland.
- It is mandated to serve as the focal point in the UN system for the coordination of disaster reduction and to ensure synergies among the disaster reduction activities.
- It has a vision to substantially reduce disaster risk and losses for a sustainable future with the mandate to act as the custodian of the Sendai Framework to which India is a signatory.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NGTA, Forex Reserve
Mains level: Not Much
In a bid to improve its functioning, the RBI has decided to move to the Next Generation Treasury Application (NGTA) for managing the country’s foreign exchange and gold reserves.
Aspirants must make a note here:
1.Authority managing FOREX in India
2.Components of FOREX
3.IMF’s SDRs
4.Emergency use of FOREX
What is NGTA?
- The NGTA, according to the RBI, would be a web-based application providing scalability, manoeuvrability and flexibility to introduce new products and securities, besides supporting multi-currency transactions and settlements.
- It would be supporting various transactions in asset classes like Fixed Income (FI), Forex (FX), Money Market (MM) and Gold.
- It would be used for managing the foreign exchange reserves in a more efficient way, mitigate risk, achieve operational efficiencies, dealing in various asset classes and reporting.
Objectives of NGTA
The objectives of the proposed system include:
- dealing in various asset classes (like Fixed Income Securities, Forex, Money Market, Gold);
- portfolio management; workflow management; reserve management;
- integration with various third-party and in-house systems; and dashboards, reports, widgets.
Features of NGTA
- The NGTA shall automatically fetch all the relevant details of a security/contract from a trading platform.
- It shall support all internationally accepted conventions pertaining today count, interest computation, holiday logic, shut period-dividend, ex-dividend, cash flows, and odd coupon.
- With respect to transactions in gold, the NGTA shall support purchase, sale, deposit (including rollover and premature withdrawal).
- On maturity of a gold deposit, there can be exact, under or over delivery.
Back2Basics: Forex Reserves
- Reserve Bank of India Act and the Foreign Exchange Management Act, 1999 set the legal provisions for governing the foreign exchange reserves.
- RBI accumulates foreign currency reserves by purchasing from authorized dealers in open market operations.
- The Forex reserves of India consist of below four categories:
- Foreign Currency Assets
- Gold
- Special Drawing Rights (SDRs)
- Reserve Tranche Position
- The IMF says official Forex reserves are held in support of a range of objectives like supporting and maintaining confidence in the policies for monetary and exchange rate management including the capacity to intervene in support of the national or union currency.
- It will also limit external vulnerability by maintaining foreign currency liquidity to absorb shocks during times of crisis or when access to borrowing is curtailed.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Taiwan strait
Mains level: Not Much
A U.S. warship sailed through the Taiwan Strait in what the American military described as a “routine” passage on but enraging China, which claims sovereignty over the island and surrounding seas.
Try this PYQ:
Q.Which one of the following can one come across if one travels through the Strait of Malacca?
(a) Bali
(b) Brunei
(c) Java
(d) Singapore
Taiwan Strait
- The Taiwan Strait, also known as the Formosa Strait, is a 180 km wide strait separating Taiwan and mainland China.
- The strait is currently part of the South China Sea and connects to the East China Sea to the north. The narrowest part is 130 km wide.
- The entire strait is on Asia’s continental shelf.
- Historically both the People’s Republic of China (PRC) and Taiwan espoused a One-China Policy that considered the strait part of the exclusive economic zone of a single “China”.
Tap to read more about One China Policy at:
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: KAPILA program
Mains level: IPR protection measures
Union Education Ministry has launched ‘KAPILA’ Kalam Program for IP Literacy and Awareness Education campaign to bring awareness towards the patenting of inventions.
Remember one thing, ‘KAPILA’ Program is related to IP awareness. It sounds much like an animal husbandry related initiative.
‘KAPILA’ Program
- KAPILA is an acronym for Kalam Program for IP (Intellectual Property) Literacy and Awareness.
- Under this campaign, students pursuing education in higher educational institutions will get information about the correct system of the application process for patenting their invention and they will be aware of their rights.
- The program will facilitate the colleges and institutions to encourage more and more students to file patents.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: PMP and PLI Scheme
Mains level: Paper 3- Issues with Phased Manufacturing Policy
The Production Linked Incentive Scheme, though ambitious in its goal suffers from several fundamental issues. The article discuses such issues.
Background of the Phased Manufacturing Policy
- The Phased Manufacturing Programme (PMP) incentivised the manufacture of low value accessories initially, and then moved on to the manufacture of higher value components.
- This was done by increasing the basic customs duty on the imports of these accessories or components.
- The PMP was implemented with an aim to improve value addition in the country.
- Recently, 16 firms in the mobile manufacturing sector were approved for the Production Linked Incentive (PLI) scheme to transform India into a major mobile manufacturing hub.
- The PLI comes on the back of a phased manufacturing programme (PMP) that began in 2016-17.
Issues to consider
1) More imports and less value addition in India
- Firms such as Apple, Xiaomi, Oppo, and OnePlus have invested in India, but mostly through their contract manufacturers.
- As a result, production increased from $13.4 billion in 2016-17 to $31.7 billion in 2019-20.
- But factory-level production data from the Annual Survey of Industries (ASI) shows that more than 85% of the inputs were imported.
- UN data for India, China, Vietnam, Korea and Singapore (2017-2019), show that except for India, all countries exported more mobile phone parts than imports.
- More export than import by these countries indicate the presence of facilities that add value to these parts before exporting them.
- India, on the other hand, imported more than it exported.
- Therefore, while the PMP policy increased the value of domestic production, improvement in local value addition remains low.
- The new PLI policy offers an incentive subject to thresholds of incremental investment and sales of manufactured goods.
- Thus, focus remains on increasing value of domestic production, and not local value addition.
2) Shift from China unlikely
- India produced around 29 crore units of mobile phones for the year 2018-19; 94% of these were sold in the domestic market.
- This implies that much of the incremental production and sales under the PLI policy will have to be for the export market.
- Recently, a study by Ernst & Young showed that if the cost of production of a mobile phone is say 100 (without subsidies), then the effective cost (with subsidies and other benefits) of manufacturing mobile phone in China is 79.55, Vietnam, 89.05, and India (including PLI), 92.51.
- So, it may be premature to expect a major chunk of mobile manufacturing to shift from China to India.
3) PLI doesn’t strengthen the current export competitiveness
- India’s mobile phone exports grew from $1.6 billion in 2018-19 to $3.8 billion in 2019-20, but per unit value declined from $91.1 to $87, respectively.
- This shows that our export competitiveness seems to be in mobiles with lower selling price.
- However, for foreign firms chosen under the PLI policy, the incentive will be at and above ₹15,000 ($204.65).
- So, it is clear that the PLI policy does not strengthen our current export competitiveness in mobile phones.
4) Absence of domestic firms
- Domestic firms have been nearly wiped out from the Indian market.
- So, their ability to take advantage of the PLI policy and grab a sizeable domestic market share seems difficult.
- Domestic firms may have the route of exporting cheaper mobile phones to other low-income countries.
- However, their performance in the last couple of years has not been promising.
5) Importance of supply chain colocation
- The six component firms that have been given approval under the ‘specified electronic components segment’do not complete the mobile manufacturing ecosystem.
- For example, when Samsung set up shop in Vietnam, it relied heavily on its Korean suppliers which co-located with it to produce intermediate inputs, so much so that 63 among Samsung’s 67 suppliers then were foreign.
- Though Samsung is invested hugely in India, it has not colocated its supply chain in the country.
- So, the foreign firms chosen under the PLI policy should be encouraged to colocate their supply ecosystems in the country.
6) Complaint at WTO against PMP
- In September 2019, Chinese Taipei contested the raise in tariffs under the PMP.
- If the PMP is found to be World Trade Organization (WTO) non-compliant, then we may be flooded with imports of mobile phones.
- This might make the local assembly of mobile phones unattractive.
- This will affect the operations of the mobile investments done under the PMP.
Conclusion
The PMP policy, since 2016-17 has barely been helpful in raising domestic value addition in the industry even though value of production expanded considerably.
B2BASICS
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Debt-GDP ratio
Mains level: Not Much
India’s public debt ratio, which remarkably remained stable at about 70% of the GDP since 1991, is projected to jump by 17 percentage points to almost 90% a/c to IMF.
Try this PYQ:
Q.Consider the following statements:
- Most of India’s external debt is owed by governmental entities.
- All of India’s external debt is denominated in US dollars.
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
Why such a spike?
- The increase in public spending, in response to COVID-19, and the fall in tax revenue and economic activity, will make public debt jump by 17 percentage points to almost 90% of GDP.
What is Debt-to-GDP Ratio?
- The Debt-to-GDP ratio is the ratio between a country’s government debt and its gross domestic product (GDP).
- It measures the financial leverage of an economy.
- A country able to continue paying interest on its debt-without refinancing, and without hampering economic growth, is generally considered to be stable.
- A country with a high debt-to-GDP ratio typically has trouble paying off external debts (also called “public debts”), which are any balances owed to outside lenders.
- In such scenarios, creditors are apt to seek higher interest rates when lending. Extravagantly high debt-to-GDP ratios may deter creditors from lending money altogether.
- A low debt-to-GDP ratio indicates an economy that produces and sells goods and services sufficient to pay back debts without incurring further debt.
- Geopolitical and economic considerations – including interest rates, war, recessions, and other variables – influence the borrowing practices of a nation and the choice to incur further debt.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FAO
Mains level: India and FAO
On the occasion of 75th Anniversary of Food and Agriculture Organization (FAO) on 16th October 2020, PM has released a commemorative coin of Rs 75.
Try this MCQ:
Q.The FAO accords the status of ‘Globally Important Agricultural Heritage Systems (GIAHS)’ to traditional agricultural systems. What is the overall goal of this initiative?
- To provide modern technology, training in modern farming methods and financial support to local communities of identified GIAHS so as to greatly enhance their agricultural productivity.
- To identify and safeguard eco-friendly traditional farm practices and their associated landscapes, agricultural biodiversity and knowledge systems of the local communities.
- To provide Geographical Indication status to all the varieties of agricultural produce in such identified GIAHS 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
About FAO
- It is a specialized agency of the United Nations that leads international efforts to defeat hunger and improve nutrition and food security.
- It was founded in October 1945 and is headquartered in Rome.
- It maintains regional and field offices around the world, operating in over 130 countries.
- It also conducts research, provides technical assistance to projects, operates educational and training programs, and collects data on agricultural output, production, and development.
- Composed of 197 member states, the FAO is governed by a biennial conference representing each member country and the European Union, which elects a 49-member executive council.
- The Director-General serves as the chief administrative officer.
India and FAO
- India has had a historic association with FAO.
- Indian Civil Service Officer Dr Binay Ranjan Sen was the Director-General of FAO during 1956-1967.
- The World Food Programme, which has won the Nobel Peace Prize 2020, was established during his time.
- India’s proposals for the International Year of Pulses in 2016 and the International Year of Millets 2023 have also been endorsed by FAO.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: STARS Project
Mains level: Not Much
The Union Cabinet has approved the sum of Rs. 5718 crore for the World Bank aided project STARS.
Try this MCQ:
Q. The STARS Project recently seen in news is an initiative of:
World Bank/ Bill and Melinda Gates Foundation / UNECOSOC/ UNICEF
STARS Project
- ‘STARS’ is an acronym for Strengthening Teaching-Learning and Results for States (STARS).
- The STARS project will be implemented through the Samagra Shiksha Abhiyan, the flagship central scheme.
- The six states include- Himachal Pradesh, Kerala, Madhya Pradesh, Maharashtra, Odisha and Rajasthan.
- It will help improve learning assessment systems, strengthen classroom instruction and remediation, facilitate school-to-work transition, and strengthen governance and decentralized management,
- Some 250 million students (between the age of 6 and 17) in 1.5 million schools and over 10 million teachers will benefit from the STARS program.
- STARS will support India’s renewed focus on addressing the ‘learning outcome’ challenge and help students better prepare for the jobs of the future – through a series of reform initiatives.
Major components of the STARS
1) At the national level, the project envisages the following interventions which will benefit all states and UTs:
- To strengthen MOE’s national data systems to capture robust and authentic data on retention, transition and completion rates of students.
- To support MOE in improving states PGI scores by incentivizing states governance reform agenda through SIG (State Incentive Grants).
- To support the strengthening of learning assessment systems.
- To support MOE’s efforts to establish a National Assessment Center (PARAKH).
2) At the State level, the project envisages:
- Strengthening Early Childhood Education and Foundational Learning
- Improving Learning Assessment Systems
- Strengthening classroom instruction and remediation through teacher development and school leadership
- Governance and Decentralized Management for Improved Service Delivery.
- Strengthening Vocational education in schools through mainstreaming, career guidance and counselling, internships and coverage of out of school children
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Thalassemia
Mains level: Not Much
Union Health Ministry has launched the second phase of “Thalassemia Bal Sewa Yojna” for underprivileged Thalassemic patients.
Thalassemia Bal Sewa Yojna
- This scheme was launched in 2017 under the Coal India CSR funded Hematopoietic Stem Cell Transplantation (HSCT) program.
- It aims to provide a one-time cure opportunity for Haemoglobinopathies like Thalassaemia and Sickle Cell Disease for patients who have a matched family donor.
- The initiative was targeted to provide financial assistance to a total of 200 patients by providing a package cost not exceeding Rs. 10 lakhs per HSCT.
What is Thalassemia?
- Thalassemia is an inherited blood disorder characterized by less oxygen-carrying protein (haemoglobin) and fewer red blood cells in the body than normal.
- When there isn’t enough haemoglobin, the body’s red blood cells don’t function properly and they last shorter periods of time, so there are fewer healthy red blood cells travelling in the bloodstream.
- Symptoms include fatigue, weakness, paleness and slow growth.
- Mild forms may not need treatment. Severe forms may require blood transfusions or a donor stem-cell transplant.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Inflation targeting mechanism
Mains level: Paper 3- Issues with the inflation targeting mechanism of the RBI
The article analyses the recent changes signalled by the RBI in its policymaking.
Changes in the economic policymaking
- Recently the U.S. Fed declared that the Fed will not let inflation stand in the way of maximising employment.
- The reason for this was that the Phillips Curve, the relationship between inflation and unemployment, may no longer hold in the U.S. economy.
- This is significant, given that the Anglo-American economics has been dominated by Phillips Curve.
Why there was need for change in inflation targeting
- Data show that the model that currently guides India’s inflation control strategy may be quite irrelevant.
- This is seen in the recent behaviour of inflation.
- We know that output contracted by more than 23% in the first quarter of this year.
- Despite this staggering decline the inflation rate did not change,
- This was contrary to experience that inflation reflects an ‘over heating’ economy, one growing too fast in relation to its potential.
- This view represents the RBI’s official understanding of inflation, and presumably forms the basis of its policy of inflation targeting.
- It was endorsed by the Government of India when it legislated the modern monetary policy framework to enable the RBI to pursue inflation targeting.
- If the Phillips Curve, which the RBI’s approach internalises, exists, inflation should have decreased as India’s economy contracted during the lockdown.
- The current inflation targeting mechanism had been imagined with developing economies in mind.
- Inflation targeting mechanism is based on the idea that food prices are an important determinant of inflation along with imported inflation.
- Accordingly, a macroeconomic contraction need not lower inflation.
Role of food prices in India
- A recent working paper of the RBI’s research department suggested that a more eclectic model than the one that underlies inflation targeting does a better job of forecasting inflation in India.
- This model accepts a role for food prices, a possibility that is missed when embracing economic models developed in the western hemisphere, where food prices have stopped trending upwards over half a century ago.
Conclusion
The RBI shifting away from its rigid inflation targeting policy is in tune with the time and signals that the central bank is finally alive to India’s economy.
Back2Basics: What is Philips Curve?
- The Phillips curve is an economic concept, stating that inflation and unemployment have a stable and inverse relationship.
- The theory claims that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment.
- However, the original concept has been somewhat disproven empirically due to the occurrence of stagflation in the 1970s, when there were high levels of both inflation and unemployment.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Karman Line, New Sphephard
Mains level: Micro-gravity experimentation
New Shephard, a rocket system meant to take tourists to space successfully completed its seventh test launch.
Note the features of the Karman Line. It is a new terminolgy in our recent space vocab.
What is New Shephard?
- New Shephard has been named after astronaut Alan Shephard, the first American to go to space, and offers flights to space over 100 km above the Earth and accommodation for payloads.
- Essentially, it is a rocket system that has been designed to take astronauts and research payloads past the Karman line – the internationally recognised boundary of space.
- The idea is to provide easier and more cost-effective access to space meant for purposes such as academic research, corporate technology development and entrepreneurial ventures among others.
- It is built by Amazon founder Jeff Bezos’s Space Company called Blue Origin.
- In 2018, Blue Origin was one of the ten companies selected by NASA to conduct studies and advance technologies to collect process and use space-based resources for missions to the Moon and Mars.
How does it work?
- The rocket system consists of two parts, the cabin or capsule and the rocket or the booster.
- The cabin can accommodate experiments from small mini payloads up to 100 kg.
- The cabin is designed for six people and sits atop a 60-feet tall rocket and separates from it before crossing the Karman line, after which both vehicles fall back to the Earth.
- The system is a fully reusable, vertical takeoff and vertical landing space vehicle that accelerates for about 2.5 minutes before the engine cuts off.
- After separating from the booster, the capsule free falls in space, while the booster performs an autonomously controlled vertical landing back to Earth.
- The capsule, on the other hand, lands back with the help of parachutes.
Back2Basics: Karman line
- The Karman line is an attempt to define a boundary between Earth’s atmosphere and outer space.
- The line is named after Theodore von Kármán (1881–1963), a Hungarian American engineer and physicist, who was active primarily in aeronautics and astronautics.
- He was the first person to calculate the altitude at which the atmosphere becomes too thin to support aeronautical flight and arrived at 83.6 km (51.9 miles) himself.
Locating the line
- The Fédération Aéronautique Internationale (FAI) defines Karman Line as the altitude of 100 kilometres (62 miles; 330,000 feet) above Earth’s mean sea level.
- However, other organizations do not use this definition. There is no international law defining the edge of space, and therefore the limit of national airspace.
- For instance, the US Air Force and NASA define the limit to be 50 miles (80 km) above sea level.
- The line is approximately at the turbopause, above which atmospheric gases are not well-mixed.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Zojila Pass
Mains level: Road infrastructure in Himalayas
Union Transport Ministry has launched the first blasting for construction-related work at the Zojila tunnel that will provide all-year connectivity between Srinagar valley and Leh.
These days various Himalayan passes and tunnels are overwhelmingly seen in news. Open your Atlas and try to spot all of them for now and once before the exam.
Zojila Tunnel
- The Zojila is set to be Asia’s longest bi-directional tunnel.
- It will connect Srinagar, Dras, Kargil and Leh via a tunnel through the famous Zojila Pass.
- Located at more than 11,500 feet above sea level, the all-weather Zojila tunnel will be 14.15 km long and ensure road connectivity even during winters.
- It will make the travel on the 434-km Srinagar-Kargil-Leh Section of NH-1 free from avalanches, enhance safety and reduce the travel time from more than 3 hours to just 15 minutes.
- The speed limit inside the tunnel is likely to be the same as in the Atal tunnel – 80 kmph.
Its significance
- The project holds strategic significance as Zojila Pass is situated at an altitude of 11,578 feet on the Srinagar-Kargil-Leh National Highway and remains closed during winters due to heavy snowfall.
- At present, it is one of the most dangerous stretches in the world to drive a vehicle and this project is also geo-strategically sensitive.
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