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  • NSO’s New Data: India’s GDP Growth

    GDP

    Central Idea

    • The National Statistical Office (NSO) has released a new set of data on India’s annual and quarterly national income, providing a final assessment of the COVID-19 pandemic’s impact on the country’s GDP growth. The latest numbers and sector-wise performance, highlighting areas of growth and contraction.

    Recovery since pre-COVID year

    • Advance estimates: NSO’s second advance estimate (SAE) shows a contraction of (-) 5.7% in 2020-21, lower than its first advance estimate (FAE) at (-) 7.7%.
    • Benefited sectors: Manufacturing, construction, and financial sectors benefited the most in the revised estimate.
    • GDP growth: Real GDP in the COVID-19 year amounted to ₹136.9 lakh crore, higher than the earlier assessment of ₹134.4 lakh crore. GDP grew by 9.1% in 2021-22 and 7% in 2022-23.
    • Negative growth in 2020: The compound annual average growth rate between 2019-20 and 2022-23 was 3.2%. Comparison with other countries, including China, Bangladesh, and Vietnam, shows India’s negative growth rate in 2020.

    Back to basics: Advanced estimates

    • Advance estimates refer to the preliminary projections made by the government regarding the likely economic growth, inflation, or other macroeconomic indicators of a country for a given period. These estimates are usually released a few months before the actual data for the period becomes available.
    • Advance estimates are based on various economic indicators such as industrial production, agricultural output, exports, and consumption expenditure, among others. These indicators are used to extrapolate the economic activity for the full period, based on which the government makes its initial projections.

    GDP

    Sector-wise Performance

    • Overall GVA in 2022-23 is higher by 11.3% compared to 2019-20.
    • Mining and quarrying sector still shows a contraction at (-) 0.3%.
    • Trade, hotels, transport, etc., show weak growth of 4.3%.
    • Construction sector shows higher-than-average growth at 18.6%.
    • Manufacturing sector also shows robust growth at 14.8%.
    • Financial, real estate, etc., grew at 14.3%.
    • Agriculture sector grew at 12%.
    • Government final consumption expenditure (GFCE) grew at 7.4%.
    • Gross fixed capital formation and private final consumption expenditure (PFCE) increased by 17.7% and 13.1%, respectively.

    Investment and Capacity Utilization

    • Gross fixed capital formation to GDP ratio in nominal terms increased to 29.2% in 2022-23 from 28.6% in 2019-20.
    • Real investment rates increased to 34% in 2022-23 from 31.8% in 2019-20.
    • Estimated incremental capital output ratio (ICOR) decreased to 4.9 in 2022-23 from 8.5 in 2019-20.
    • Capacity utilization ratio in the manufacturing sector was only 70.3% in 2019-20, but it increased to 73.5% in the first half of 2022-23.
    • Subdued growth implies lower capacity utilization and higher ICOR.

    Quarterly Growth and Projections

    • Q3 2022-23 saw a decline in real GDP growth to 4.4% from 6.3% in Q2 and 13.2% in Q1.
    • Growth rate in Q3 and expected growth rate in Q4 are quite low.
    • High frequency indicators point towards improved economic activity.
    • PMI manufacturing in January and February 2023 remained above its long-term average.
    • PMI services increased to a near 12-year

    GDP

    Conclusion

    • the NSO’s latest data on India’s GDP growth provides a final assessment of the COVID-19 pandemic’s impact on the country’s economy. The NSO’s data shows that India’s economy is recovering, albeit at a slower pace, from the COVID-19 pandemic.
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  • Antiquities abroad: What Indian, international laws say

    antiq

    Central idea: Indian authorities are pushing for restitution of stolen antiquities and ancient religious artefacts.

    What is an antiquity?

    • An antiquity is defined by the Antiquities and Art Treasures Act, 1972 as-
    1. Any coin, sculpture, painting, epigraph or other work of art or craftsmanship;
    2. Any article, object or thing detached from a building or cave;
    3. Any article, object or thing illustrative of science, art, crafts, literature, religion, customs, morals or politics in bygone ages;
    4. Any article, object or thing of historical interest that has been in existence for not less than one hundred years.
    • For manuscripts, records or other documents of scientific, historical, literary or aesthetic value, this duration is not less than seventy-five years.

    What do international conventions say?

    • The UNESCO 1970 Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property defined “cultural property” as the property designated by countries having “importance for archaeology, prehistory, history, literature, art or science.”
    • The Convention further stated that “the illicit import, export and transfer of ownership of cultural property is one of the main causes of the impoverishment of the cultural heritage of the countries of origin of such property and that international co-operation constitutes one of the most efficient means of protecting each country’s cultural property.”
    • The General Assembly of the UN and the UN Security Council in 2015 and 2016 also raised concerns about the illicit international traffic of cultural items and related offenses.
    • An INTERPOL report in 2019 indicated that almost 50 years after the UNESCO convention, the illicit international traffic of cultural items and related offenses is increasingly prolific.

    What do Indian laws say?

    • In India, Item-67 of the Union List, Item-12 of the State List, and Item-40 of the Concurrent List of the Constitution deal with the country’s heritage.
    • The Antiquities (Export Control) Act was passed in April 1947 to ensure that no antiquity could be exported without a license.
    • The Ancient Monuments and Archaeological Sites and Remains Act was enacted in 1958.
    • The Antiquities and Art Treasures Act, 1972 (AATA) was implemented on April 1, 1976, after an uproar in Parliament over the theft of a bronze idol from Chamba and some important sandstone idols from other places.
    • Under the AATA, it is not lawful for any person other than the Central Government or any authorized agency to export any antiquity or art treasure, and no person shall carry on the business of selling or offering to sell any antiquity except under and in accordance with the terms and conditions of a license granted by the Archaeological Survey of India (ASI).

    What is the provenance of an antiquity?

    • Provenance includes the list of all owners from the time the object left its maker’s possession to the time it was acquired by the current owner.

    How is ownership proved?

    • The requesting party needs to furnish, at its expense, the documentation and other evidence necessary to establish its claim for recovery and return, according to the UNESCO 1970 declaration.
    • In India, the first thing in order to prove ownership is the complaint (FIR) filed with the police. In many cases, there is no FIR for missing antiquities.
    • However, other proof such as details mentioned by reputed scholars in research papers can also be helpful.

    How to check for fake antiquities?

    • Every person who owns, controls or is in possession of any antiquity shall register such antiquity before the registering officer and obtain a certificate in token of such registration under section 14(3) of the AATA.
    • The National Mission on Monuments and Antiquities, launched in March 2007, has registered
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  • What is the Moscow-dominated security pact ‘CSTO’?

    Central idea: Armenia’s PM accused the Moscow-dominated security alliance Collective Security Treaty Organisation (CSTO) of leaving Armenia in the cold amid renewed hostilities with Azerbaijan.

    What did Armenia say?

    • Armenia has repeatedly criticized the CSTO for its failure to protect itself.
    • Russia has maintained a delicate diplomatic balancing act between Armenia and Azerbaijan, avoiding any forceful action.

    What is CSTO?

    • The CSTO is a Russia-led military alliance of seven former Soviet states that was created in 2002.
    • Current CSTO members are Armenia, Belarus, Kazakhstan, Kyrgyzstan, the Russian Federation and Tajikistan. Afghanistan and Serbia hold observer status in the CSTO.
    • Its purpose is to ensure the collective defense of any member that faces external aggression.
    • It has been described by political scientists as the Eurasian counterpart of NATO, which has 29 member states, while the CSTO has just six.

    Outlined functions of CSTO

    • CSTO supports arms sales, manufacturing, and military training and exercises, making the CSTO the most important multilateral defense organization in the former Soviet Union.
    • Beyond mutual defense, the CSTO also coordinates efforts in fighting the illegal circulation of weapons among member states and has developed law enforcement training for its members in pursuit of these aims.

    What does CSTO membership provide?

    • While CSTO membership means that member states are barred from joining other military alliances, limiting, for example, their relationship with NATO.
    • Its members receive discounts, subsidies, and other incentives to buy Russian arms, facilitating military cooperation.
    • Most importantly, membership presumes certain key security assurances – the most significant of which is deterring military aggression by third countries.
    • In the CSTO, aggression against one signatory is perceived as aggression against all.
    • It however remains unclear whether this feature works in practice.

    Armenia’s Concerns and Threats

    • The PM emphasizes the threat of escalation along Armenia’s border and in Nagorno-Karabakh, citing increasingly aggressive rhetoric from Azerbaijan.
    • Tensions between Armenia and Azerbaijan increased in December when Azerbaijani protesters blocked the Lachin corridor, leaving Nagorno-Karabakh residents short of food and basic supplies.

    Nagorno-Karabakh Conflict

    csto

    • Nagorno-Karabakh lies within Azerbaijan but has been under the control of ethnic Armenian forces since a separatist war in 1994.
    • In 2020, Azerbaijani troops routed Armenian forces in six weeks of fighting.
    • They claimed a significant part of Nagorno-Karabakh and nearby areas which had been in Armenian hands for nearly two decades.

    Back2Basics: NATO (North Atlantic Treaty Organization)

    • NATO was established in the aftermath of the Second World War.
    • Its purpose was to secure peace in Europe, to promote cooperation among its members and to guard their freedom – all of this in the context of countering the threat posed at the time by the Soviet Union.
    • It is a military alliance established by the North Atlantic Treaty (also called the Washington Treaty) of April 4, 1949.
    • It sought to create a counterweight to Soviet armies stationed in Central and Eastern Europe after World War II.
    • Its original members were Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the United Kingdom, and the United States.
    • NATO has spread a web of partners, namely Egypt, Israel, Sweden, Austria, Switzerland and Finland.
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  • Who were Alluri Sitharama Raju and Komaram Bheem?

    raju

    A Telugu movie with its story and characters rooted in the lives of Indian freedom fighters Alluri Sitharama Raju and Komaram Bheem is garnering attention on the global stage.

    Who was Alluri Sitharama Raju?

    • Raju is believed to have been born in Andhra Pradesh in 1897 or 1898.
    • He is said to have become a sanyasi at the age of 18 and gained a mystical aura among the hill and tribal peoples with his austerity, knowledge of astrology and medicine, and his ability to tame wild animals.
    • At a very young age, Raju channelled the discontent of the hill people in Ganjam, Visakhapatnam, and Godavari into an effective guerrilla resistance against the British.

    Advent into revolutionary activities

    • Colonial rule threatened the tribals’ traditional podu (shifting) cultivation, as the government sought to secure forest lands.
    • The Forest Act of 1882 banned the collection of minor forest produce such as roots and leaves, and tribal people were forced into labour by the colonial government.
    • While the tribals were subjected to exploitation by muttadars, village headmen commissioned by the colonial government to extract rent, the new laws and systems threatened their way of life itself.
    • Strong anti-government sentiment, shared by the muttadars who were aggrieved by the curtailment of their powers by the British, exploded into armed resistance in August 1922.

    Contribution to freedom struggle

    • The Rampa or Manyam Rebellion continued in the form of a guerrilla war until May 1924, when Raju, the charismatic ‘Manyam Veerudu’ or Hero of Jungle, was finally captured and executed.
    • The Rampa Rebellion coincided with Mahatma Gandhi’s Non-Cooperation Movement.
    • Raju often talked of the greatness of Mahatma Gandhi, said he was inspired by the Non-Cooperation Movement, and persuaded people to wear khadi and give up drinking.
    • But at the same time, he asserted that India could be liberated only by the use of force, not non-violence.

    Who was Alluri Sitharama Raju?

    • Raju is believed to have been born in Andhra Pradesh in 1897 or 1898.
    • He is said to have become a sanyasi at the age of 18 and gained a mystical aura among the hill and tribal peoples with his austerity, knowledge of astrology and medicine, and his ability to tame wild animals.
    • At a very young age, Raju channelled the discontent of the hill people in Ganjam, Visakhapatnam, and Godavari into an effective guerrilla resistance against the British.

    Advent into revolutionary activities

    • Colonial rule threatened the tribals’ traditional podu (shifting) cultivation, as the government sought to secure forest lands.
    • The Forest Act of 1882 banned the collection of minor forest produce such as roots and leaves, and tribal people were forced into labour by the colonial government.
    • While the tribals were subjected to exploitation by muttadars, village headmen commissioned by the colonial government to extract rent, the new laws and systems threatened their way of life itself.
    • Strong anti-government sentiment, shared by the muttadars who were aggrieved by the curtailment of their powers by the British, exploded into armed resistance in August 1922.

    Contribution to freedom struggle

    • The Rampa or Manyam Rebellion continued in the form of a guerrilla war until May 1924, when Raju, the charismatic ‘Manyam Veerudu’ or Hero of Jungle, was finally captured and executed.
    • The Rampa Rebellion coincided with Mahatma Gandhi’s Non-Cooperation Movement.
    • Raju often talked of the greatness of Mahatma Gandhi, said he was inspired by the Non-Cooperation Movement, and persuaded people to wear khadi and give up drinking.
    • But at the same time, he asserted that India could be liberated only by the use of force, not non-violence.

    And who was Komaram Bheem?

    • Komram Bheem was born in the Gond tribal community at Sankepally village in Komarambheem District, which was renamed after him in 2016.
    • Bheem’s family’s land was occupied by a jagirdar who was an informer of the Nizam, which led to him killing the jagirdar in a fit of rage.
    • To avoid authorities, he went to Assam and worked as a labourer in coffee and tea plantations for five years.
    • Despite being illiterate, Bheem learned to read and write and became aware of movements like Birsa Munda’s.

    Resistance against the Nizam government

    • The Nizam government collected taxes in the name of “Bambram” and “Dupapetti” from people grazing cattle and collecting firewood for cooking.
    • Bheem spread the message of “Jal, Jangal, Zameen” among tribal people in opposition to this tax collection.
    • He trained tribal people to fight with weapons, and villages in Adilabad were ready with the help of a guerrilla army composed of Gond and Koya communities’ men.

    Death and legacy

    • Despite their efforts, Nizam’s army overwhelmed the tribal resistance.
    • Bheem died at their hands in the Jodeghat forest.
    • Bheem’s message of “Jal, Jangal, Zameen” has become a clarion call for indigenous people’s rights to natural resources, used in many parts of India to date.
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  • 14th Mar 23 | Nikaalo Prelims- Mini Test 9 (Financial Markets)

    14th Mar 23 | Nikaalo Prelims- Mini Test 9 (Financial Markets)

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  • Explained: Understanding the Saudi-Iran Reconciliation

    iran

    Central idea: Saudi Arabia and Iran, two of West Asia’s major powers that have been at odds with each other for decades, agreed to restore diplomatic relations last week in an agreement brokered by China.

    Saudi-Iran Ties: A timeline

    • Pre-1979: Saudi Arabia and Iran compete for regional dominance.
    • 1979: Iranian Revolution brings down the monarchy and turns Iran into a Shia theocratic republic.
    • 1980-1988: Iran-Iraq war sees Saudi Arabia support Iraq.
    • 1990-1991: Saudi Arabia supports Iraq against Iran in the Gulf War.
    • 1996: Iranian-backed Hezbollah bombs Saudi military housing complex in Khobar, killing 19 US soldiers.
    • 2011-2015: Saudi Arabia and Iran support opposing sides in the Syrian civil war.
    • 2015: Saudi Arabia launches military intervention in Yemen against Iranian-backed Houthi rebels.
    • January 2016: Saudi Arabia executes prominent Shia cleric Sheikh Nimr al-Nimr, leading to protests in Iran and the burning of the Saudi embassy in Tehran.
    • 2016: Saudi and several Arab allies cut diplomatic ties with Iran.
    • 2019: Saudi oil facilities are attacked, leading to increased tensions between Saudi Arabia and Iran.
    • 2021: Both begin direct talks, brokered by China.
    • March 2023: Both nations announce an agreement to restore diplomatic ties, brokered by China.

    Reasons for hostile relations

    The hostility between Saudi Arabia and Iran has its roots in a complex mix of historical, geopolitical, religious, and ideological factors.

    • Religious contradictions: Historically, the rivalry between the two countries dates back to the seventh century when the Prophet Muhammad died without a clear successor, leading to a dispute over the leadership of the Muslim community. This dispute ultimately resulted in the split between Sunni Islam (which dominates in Saudi Arabia) and Shia Islam (which dominates in Iran).
    • Geopolitical tensions: The two countries are located in a strategically important region, with both seeking to exert influence and maintain dominance in the Middle East. Iran’s Islamic revolution in 1979 posed a challenge to Saudi Arabia’s status as the leading Islamic power in the region, and the two countries have been competing for regional influence ever since.
    • Sectarian tensions: Saudi Arabia and Iran have long had competing visions for the role of Islam in society. Saudi Arabia promotes a strict interpretation of Sunni Islam known as Wahhabism, while Iran supports Shia Islam and the principle of the “Guardianship of the Jurist,” which asserts that a senior Shia cleric should have political power and authority over all Muslims.
    • Ties with west: The two countries have fundamentally different views on a range of issues, including democracy, human rights, and regional security. Saudi Arabia is a conservative monarchy with close ties to the United States, while Iran is an Islamic republic that has been at odds with the West since the 1979 revolution.

    All these factors have contributed to the ongoing hostility between Saudi Arabia and Iran, and the tensions between the two countries continue to have a destabilizing effect on the region.Top of Form

    What are the terms of the agreement?

    • The details of the agreement are yet to be unveiled.
    • Iran has reportedly agreed to prevent further attacks against Saudi Arabia from Houthi-controlled parts of Yemen while Saudi Arabia has agreed to rein in Iran International, a Farsi news channel critical of the Iranian regime.
    • Foreign Ministers of both countries will meet soon to thrash out the terms of the reconciliation before reopening embassies in each other’s capitals in two months.
    • China is planning to host a cross-Gulf conference of Iran and the six Gulf monarchies to further strengthen peace in the region.

    Why did Saudi Arabia reach out to Iran (defying the US)?

    Ans. Iran’s Rise, and Changing Alliances

    • Internal Security: When Saudi oil facilities were attacked in 2019, the US looked away, prompting the Saudis to look for alternative solutions for the Iran problem, such as reaching out to the Iranians.
    • Differences over Palestine: The US was trying to broker a normalization agreement between Saudi Arabia and Israel to bring the two pillars of its West Asia policy together against Iran.
    • US negligence of West Asia: The US deprioritized West Asia due to bigger foreign policy challenges, such as the Russian war in Ukraine and China’s rise in the Indo-Pacific.
    • Obsolesce of ties with US: Relations between Saudi Arabia and the US have been rocky in recent years, as the US is not as dependent on Gulf Arabs as it used to be during the Cold War.
    • Shared opinions over Israel: Saudi Arabia has been hesitant to reconcile with Israel, and its relations with the US have been rocky in recent years.

    What led Iran to accept the deal?

    • Isolation and Domestic pressure: Tehran is aware that getting relief from Western sanctions is not a near-term possibility. Despite crackdown, protests in Iran refuse to die down.
    • Crumbling economy: Iran’s economy is deteriorating and its currency, the rial, is struggling. A deal with Saudi Arabia, under China’s mediation, could open economic lifelines for Iran
    • China factor: Iran wanted Chinese investments and support for the rial. China allowed Iran to withdraw parts of the $20 billion funds frozen with Chinese banks due to US sanctions.
    • Fouling American efforts: Iran knows that such a deal could complicate American efforts to rally Arab countries and Israel against it. A reconciliation with Saudi is beneficial for Iran, at least in a tactical sense.

    Why is China brokering the deal?

    • Securing its oil supplies: China has an interest in promoting stability in the Middle East region, which is a major source of oil and natural gas for China.
    • Side-lining the US: By brokering a deal between Saudi Arabia and Iran, China can position itself as a mediator and gain goodwill from both sides.
    • Create alternative axis: China has longstanding relationships with both countries. The US since Trumps departure is distancing itself from the US, whereas China is also getting closer to Russia amid the war.
    • Image building as a leader: While the US is busy rallying the Western world to arm Ukraine to push back Russia and weaken Moscow through sanctions, China is quietly brokering peace in the Global South.

    US reception of this deal

    • Welcomed the move: The public narrative is that the peace deal would help stabilize the region and benefit the global energy market.

    Key implications for the US

    • Hegemony decline: The US would not like to lose its influence in West Asia even when it is deprioritizing the region.
    • Saudi drifts away: US sees an ally (Saudi Arabia) drifting further away, a rival it wanted to contain (Iran) making new friends, and China spreading and deepening its influence in a region the US has dominated historically.
    • Iran Sanctions going loose: The Iran nuclear deal is practically dead and the US wants Saudi Arabia to normalize ties with Israel and put up a joint front against Iran.

    What inferences can be drawn from all these?

    • Strategic realignments in West Asia: It can be inferred that West Asia is currently undergoing significant strategic realignments, with the UAE normalizing relations with Israel and other Arab countries deepening their partnerships.
    • Shifted US focus on Ukraine and Indo-Pacific: The US, which traditionally held significant power in the region, has deprioritized West Asia due to bigger foreign policy challenges such as Russia’s war in Ukraine and China’s rise in the Indo-Pacific.
    • China occupying power vacuum: This deprioritization has created a power vacuum that has allowed Iran to rise as a challenge, prompting the US to try to bring Israel and the Arab world together against Iran.

     

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  • Iran- Saudi rivalry: China’s role and India’s Concerns

    Saudi

    Central Idea

    • In an unexpected turn of events on March 10, the National Security Advisors of Iran and Saudi Arabia declared, in the presence of Chinese State Councillor Wang Yi in Beijing, that they have come to a mutual understanding to address their issues, and will reopen their embassies within a span of two months.

    Background: Iran- Saudi rivalry

    • Since January 2016, when the Saudi kingdom severed diplomatic ties with Iran after the attack on the former’s embassy in Tehran, the two countries have been engaged in a rivalry for regional geopolitical influence, prolonging conflicts in Yemen and Syria.
    • Only a few months ago, Iran’s top military officials were threatening Saudi Arabia with consequences unless it controlled its Persian-language media outlets zealously covering anti-government protests in Iran. Riyadh had raised alert levels citing a credible threat of attack from Iran.

    Iran’s Strategic Partnership with China

    • Iran considers China its most important strategic partner, and was alarmed when the joint statement issued at the first China-GCC Summit in Riyadh in December 2022 called on Iran to maintain the non-proliferation regime and respect the principles of non-interference in the internal affairs of states.
    • The China-brokered agreement coming a month after Raisi’s visit to Beijing shows how Beijing has successfully leveraged its ties with an Iran struggling with domestic pressure, sanctions, and deteriorating ties with Europe over its military support to Russia.

    The Dialogue Process

    • The Iran-Saudi Security Dialogue: This refers to the ongoing talks between Iran and Saudi Arabia aimed at improving security in the region, particularly in Yemen. These talks were facilitated by then-Iraqi Prime Minister Mustafa Al-Kadhimi in 2021, and have continued in fits and starts since then.
    • Biden Administration’s Conflict Management Measures: The Biden administration has taken steps to end American support for offensive operations in the war in Yemen, including relevant arm sales, as a conflict management measure. This move helped to make Riyadh see the logic of dialogue with Iran.
    • Chinese Role in Brokering the Final Agreement: China has played a key role in brokering the final agreement between Iran and Saudi Arabia. Beijing has adopted a balanced approach of strengthening ties with all players based on common interests and mutual respect rather than geopolitical alignments with specific countries.
    • China’s Growing Regional Engagement: China’s growing regional engagement in the Middle East is driven by its desire to distinguish itself from the US-led interventions in the region. Beijing has supported Gulf countries in setting up multilateral dialogue platforms and taking the initiative in regional issues, including those involving Iran.

    What are India’s concerns?

    • Impact on India’s Energy Security: Any improvement in relations between Iran and Saudi Arabia could impact India’s energy security. India is heavily dependent on oil imports from both countries, and any conflict or tension between them could lead to disruptions in oil supplies and increased prices.
    • Potential for regional destabilization: The rivalry between Iran and Saudi Arabia has fueled conflicts in the Middle East, including the ongoing war in Yemen. Any escalation of tensions between the two countries could lead to further destabilization in the region, which could have implications for India’s security interests.
    • China’s growing influence in the Middle East: China’s role in brokering the agreement between Iran and Saudi Arabia highlights its growing political capital in the region, which could have implications for India’s strategic interests. India has traditionally maintained good relations with both Iran and Saudi Arabia, and any shift in the regional balance of power could impact India’s interests.
    • Impact on India’s Chabahar port project: India has invested heavily in the development of the Chabahar port in Iran as a gateway to Afghanistan and Central Asia. Any improvement in relations between Iran and Saudi Arabia could impact India’s plans for the port, which could have implications for India’s strategic interests in the region.

    Conclusion

    • India will now have to deal with the new reality where China has been able to translate its economic influence in West Asia into diplomatic heft. The agreement between Iran and Saudi Arabia could have positive implications for the region’s stability, but India will need to carefully monitor the evolving dynamics and assess how it can leverage its own relations with Iran, Saudi Arabia, and other regional players to secure its strategic interest.

    Mains Question

    Q. Evaluate China’s growing influence in the Middle East and its impact on India’s traditional ties with Iran and Saudi Arabia.

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  • 14th Mar 23 | Prelims Daily with Previous Year Questions

    14th Mar 23 | Prelims Daily with Previous Year Questions

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  • Nikaalo Prelims Spotlight || Financial Markets

    Dear Aspirants,

    This Spotlight is a part of our Mission Nikaalo Prelims-2023.

    You can check the broad timetable of Nikaalo Prelims here

    Session Details

    YouTube LIVE with Parth sir – 1 PM  – Prelims Spotlight Session

    Evening 04 PM  – Daily Mini Tests

    Telegram LIVE with Sukanya ma’am – 06 PM  – Current Affairs Session

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    14th Mar 2023

    Financial Markets

    FINANCIAL MARKETS

    • Financial Markets refers to the system consisting of financial institutions, financial instruments, regulatory bodies and organisations
    •  It facilitates flow of debt and equity capital.
    • Financial Institutions (Banks), Development financial Institutions (NABARD, SIDBI, IDBI etc.) and Non-Banking Financial Institutions form Financial Institutions. Ø Financial Instruments are shares, bonds, debentures etc.

    Financial markets consist of two major segments:

    (l) Money Market: the market for short term funds;

    (2) Capital Market: the market for long and medium term funds.

    MONEY MARKET

    According to the RBI, “The money market is the centre for dealing mainly of short character, in monetary assets; it meets the short term requirements of borrowers and provides liquidity or cash to the lenders.

    It is a place where short term surplus investible funds at the disposal of financial and other institutions and individuals are bid by borrowers, again comprising institutions and individuals and also by the government.

    Functions of Money Market

    • To maintain monetary equilibrium: It means to keep a balance between the demand for and supply of money for short term monetary transactions.
    • To promote economic growth: Money market can do this by making funds available to various units in the economy such as agriculture, small scale industries, etc.
    • To provide help to Trade and Industry: Money market provides adequate finance to trade and industry. Similarly it also provides facility of discounting bills of exchange for trade and industry.
    • To help in implementing Monetary Policy: It provides a mechanism for an effective implementation of the monetary policy.
    • To help in Capital Formation: Money market makes available investment avenues for short term period. It helps in generating savings and investments in the economy.
    • Money market provides non-inflationary sources of finance to government.

    Instruments of money market

    Treasury Bills: They are promissory notes issued by the RBI on behalf of the government as a short term liability and sold to banks and to the public. The maturity period ranges from 14 to 364 days. They are the negotiable instruments, i.e. they are freely transferable. No interest is paid on such bills but they are issued at a discount on their face value.

    Commercial Bills: They are also called Trade Bills or Bills of Exchange. Commercial bills are drawn by one business firm to another in lieu of credit transaction. It is a written acknowledgement of debt by the maker directing to pay a specified sum of money to a particular person. They are short-term instruments generally issued for a period of 90 days. These are freely marketable. Banks provide working capital finance to firms by purchasing the commercial bills at a discount; this is called ‘discounting of bills’.

    Commercial Paper (CP): The CP was introduced in 1990 on the recommendation of the Vaghul Committee. A commercial paper is an unsecured promissory note issued by corporate with net worth of atleast Rs 5 crore to the banks for short term loans. These are issued at discount on face value for a period of 14 days to 12 months. These are issued in multiples of Rs 1 lakh subject to a minimum of Rs 25 lakh.

    Certificate of Deposit (CD): The CD was introduced in 1989 on the recommendation of the Vaghul Committee. These are issued by banks against deposits kept by individuals and institutions for a period of 15 days to 3 years. These are similar to Fixed Deposits but are negotiable and tradable. These are issued in multiples of Rs. 1 lakh subject to a minimum of Rs25 lakh.

    CAPITAL MARKET

    The capital market is the market, for medium and long term funds. It consists of all the financial institutions, organizations and instruments which deal in lending and borrowing transaction of over one year maturity.

    It is of following two types:

    Primary Market

    Secondary Market

    It issues security for the first time. Example- Initial public offer and follow on public offer.

    Existing securities are bought and sold.

    Firms issue shares to public.

    One investor sells it to another investor.

    Price is fixed by the firms.

    Price is fixed on the basis of demand and supply.

    Firms raise money for long-term investment.

    Companies benefit from the secondary markets.

    There is no specific geographical location.

    There is no specific geographical location.

    SEBI is the regulator for this market.

    SEBI is the regulator for this market as well.

    GILT-EDGED MARKET

     The Gilt-edged market refers to the market for government and semi government securities, backed by the RBI.

    It is known so because the government securities do not suffer from the risk of default and are highly liquid.

    The RBI is the sole supplier of such securities. These are demanded by commercial banks, insurance companies, provident funds and mutual funds.

    The gilt-edged market may be divided into two parts- the Treasury bill market and the government bond market. Treasury bills are issued to meet short-term needs for funds of the government, while government bonds are issued to finance long-term developmental expenditure. 

     

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  • India remains biggest Arms Importer during 2018-22: SIPRI

    arm

    Central idea

    • India is the world’s largest arms importer for the five-year period during 2018-22, according to Stockholm International Peace Research Institute (SIPRI).
    • However, India’s arms imports have dropped by 11% between 2013–17 and 2018–22.

    Top Arms Suppliers to India

    arm

    • Russia was the largest supplier of arms to India in both 2013–17 and 2018–22.
    • France emerged as the second largest supplier from 2018-22, and its share of total Indian arms imports increased significantly.
    • Among the top 10 arms exporters for the period 2018-22, India was the biggest arms export market to three countries — Russia, France and Israel and the second-largest export market to South Korea.
    • India was also the third largest market for South Africa, which was ranked 21 in the list of arms exporters.

    Arms import by Country

    • For the same period, India remained the largest arms importer followed by Saudi Arabia.
    • Russia accounted for 45% of India’s imports followed by France (29%) and the US (11%).
    • India was the third largest arms supplier to Myanmar after Russia and China, accounting for 14% of its imports.

    Reasons for India’s Arms Imports

    • Complexities with neighborhood: “India’s tensions with Pakistan and China largely drive its demand for arms imports. With an 11% share of total global arms imports, India was the world’s biggest importer of major arms in 2018–22,” says SIPRI.
    • Procurement bottlenecks: India’s slow and complex arms procurement process, efforts to diversify its arms suppliers, and attempts to replace imports with major arms that are designed and produced domestically have contributed to the decrease in arms imports.

    Russia’s position as India’s Main Arms Supplier

    • India diversifying its imports: Russia’s position as India’s main arms supplier is under pressure due to strong competition from other supplier states.
    • Self-arming for ongoing war: This is due to increased Indian arms production, and constraints on Russia’s arms exports related to its invasion of Ukraine.

    Global Arms Transfers

    • Arms imports by Pakistan increased by 14% between 2013–17 and 2018–22 and accounted for 3.7% of the global total with China supplying 77% of Pakistan’s arms imports in 2018–22.
    • While the global level of international arms transfers decreased by 5.1%, imports of major arms by European states increased by 47% between 2013–17 and 2018–22 in the backdrop of the war in Ukraine.
    • The U.S. share of global arms exports increased from 33% to 40% while Russia’s fell from 22% to 16%.

    What we can conclude from this?

    • Security concerns: India has long-standing tensions with neighboring countries such as Pakistan and China, which have led to security concerns and a perceived need for a strong military.
    • Slow and complex procurement process: India’s procurement process for arms is often slow and complex, leading to delays in acquiring weapons and equipment. This has resulted in India relying on imports to meet its defense needs.
    • Lack of domestic production: India’s domestic arms production capabilities are still limited, which makes it difficult for the country to produce high-tech weapons and equipment. This has forced India to rely on imports to meet its defense requirements.
    • Diversification of suppliers: While Russia has been the traditional supplier of arms to India, in recent years India has been diversifying its sources of weapons and equipment to countries such as France, Israel, and the United States.
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  • Rise of the Environmental, Social and Governance (ESG) Regulations

    esg

    Central idea: Regulators and corporations worldwide now measure businesses on ESG criteria. ESG criteria is crucial for investors to assess a company’s risk profile accurately. India is still in the nascent stage of ESG laws and regulations.

    What is ESG?

    • ESG Regulations are a set of standards used by investors to evaluate a company’s environmental and social impact, as well as its corporate governance practices.
    • They require companies to be transparent about their environmental and social performance, as well as their governance structure.
    • ESG factors are increasingly being used by investors to make investment decisions, and ESG ratings are becoming an important metric for companies seeking to attract investment.
    • The ESG regulations differ by country, but many require companies to disclose information on environmental and social issues, as well as on their governance practices.
    • ESG regulations are becoming increasingly important as investors and consumers demand greater transparency and accountability from companies.Top of FormBottom of Form

    Features of ESG Mechanism

    • Environmental factors: These include a company’s impact on climate change, greenhouse gas emissions, pollution, waste management, and natural resource conservation.
    • Social factors: These include a company’s impact on society, such as labor practices, human rights, community relations, customer satisfaction, and product safety.
    • Governance factors: These include a company’s management structure, board diversity, executive compensation, shareholder rights, and business ethics.
    • ESG ratings and metrics: Companies are evaluated based on ESG ratings and metrics, which can help investors assess a company’s overall sustainability and ethical impact.
    • ESG investing: ESG investing refers to investing in companies that meet certain ESG criteria, with the aim of generating financial returns while also having a positive impact on society and the environment.
    • ESG reporting: Many companies are now required to disclose their ESG performance and report on their sustainability practices, in order to meet regulatory requirements and respond to growing investor demand for transparency and accountability.Top of FormBottom of Form

    Corporate Social Responsibility: ESG-like mechanism in India

    • India has a robust corporate social responsibility (CSR) policy that mandates that corporations engage in initiatives that contribute to the welfare of society.
    • This mandate was codified into law with the passage of the 2014 and 2021 amendments to the Companies Act of 2013.

    How ESG differs from CSR?

    • ESG regulations differ from CSR regulations in their process and impact
    • For example, the U.K. Modern Slavery Act requires companies with business in the U.K. and with annual sales of more than £36 million to publish their efforts in identifying and analysing the risks of human trafficking, child labour and debt bondage in their supply chain.
    • It seeks to establish internal accountability procedures, evaluate supplier compliance, and train supply chain managers regarding these issues
    • The EU’s Sustainable Finance Disclosure Regulation requires financial market participants to disclose how they have integrated sustainability risks into their investment decision-making processes
    • There are scores of such regulations at the state, national and transnational level.

    Why is ESG relevant in India?

    Ans. Existing mechanisms serve ESG purpose

    • India has long had a number of laws and bodies regarding environmental, social and governance issues, including the Environment Protection Act of 1986.
    • It has quasi-judicial organisations such as the National Green Tribunal, a range of labour codes and laws governing employee engagement and corporate governance practices.
    • These initiatives established guidelines that emphasise monitoring, quantification and disclosure, akin to ESG requirements found in other parts of the world.

    ESG for Indian companies

    Here are some key considerations for Indian companies in relation to ESG:

    • Compliance with global ESG regulations: Compliance in the US, UK, EU and elsewhere is critical for Indian companies to take full advantage of the growing decoupling from China and play a more prominent role in global supply chains and the global marketplace overall.
    • Due diligence: This will play a key role in ESG risk management, which means going beyond questionnaires and conducting deeper assessments that may include looking at company records, interviewing former employees, and making discreet visits to observe operations to ensure that measures to comply with international ESG standards are in effect.
    • Revamp organizations: ESG due diligence should be supported within the company with detailed procedures for assessing risks and controls for assuring that no corners are cut. Companies that wish to maximise their opportunities in the global economy need to embrace these new requirements and adjust their organisations accordingly.

    Way forward

    • Encouraging and incentivizing companies: To adopt ESG practices voluntarily through education, training and awareness-raising programs.
    • Developing national guidelines and standards for ESG: To promote consistency and comparability of ESG performance data among Indian companies.
    • Tailor-made Policy catering to domestic needs: Implementing ESG regulations that are tailored to the specific needs and challenges of Indian companies, with a focus on promoting transparency, accountability and stakeholder engagement.
    • Facilitating access to capital for companies that demonstrate strong ESG performance: By establishing ESG-focused investment funds and credit facilities.
    • Promoting international collaboration and harmonization of ESG standards: To facilitate global trade and investment while ensuring that ESG risks are appropriately addressed.

    Conclusion

    • Overall, a comprehensive and collaborative approach is needed to ensure that Indian companies can effectively manage ESG risks and opportunities and contribute to sustainable development.

     

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  • India bats for Sovereign Credit Rating upgrade

    credit

    Central idea: India is seeking an upgrade to its sovereign credit rating, currently at the lowest-possible investment grade, as it believes its economic metrics have improved considerably since the pandemic.

    What are Sovereign Credit Ratings?

    • A sovereign credit rating is a measure of a country’s creditworthiness, or its ability to meet its financial obligations.
    • It is an assessment of the credit risk associated with a country’s bonds or other debt securities.
    • The rating is assigned by credit rating agencies such as Standard & Poor’s, Moody’s, and Fitch Ratings.

    India’s current ratings

    • S&P and Fitch rate India ‘BBB-‘ and Moody’s ‘Baa3’, all indicative of the lowest-possible investment grade, but with a stable outlook.

    What does BBB mean?

    • A ‘BBB’ rating indicates that expectations of default risk are currently low.
    • The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity.

    What is a Rating Agency?

    • Rating agencies assess the creditworthiness or potential of an equity, debt or country.
    • Their reports are read by investors to make an informed decision on whether or not to invest in a particular country or companies in that geography.
    • They assess if a country, equity or debt is financially stable and whether it at a low/high default risk.
    • In simpler terms, these reports help investors gauge if they would get a return on their investment.

    What do they do?

    • The agencies periodically re-evaluate previously assigned ratings after new developments geopolitical events or a significant economic announcement by the concerned entity.
    • Their reports are sold and published in financial and daily newspapers.

    What grading pattern do they follow?

    • The three prominent ratings agencies, viz., Standard & Poor’s, Moody’s and Fitch subscribe to largely similar grading patterns.
    • Standard & Poor’s accord their highest grade, that is, AAA, to countries, equity or debt with the exceedingly high capacity to meet their financial commitments.
    • Its grading slab includes letters A, B and C with an addition a single or double letter denoting a higher grade.
    • Moody’s separates ratings into short and long-term definitions. Its longer-term grading ranges from Aaa to C, with Aaa being the highest.
    • Fitch, too, rates from AAA to D, with D being the lowest. It follows the same succession scheme as Moody’s and Fitch.

    Significance of such ratings

    • Access to Capital: Higher credit ratings mean that a country can access capital at a lower cost, while lower ratings indicate that borrowing costs will be higher.
    • Investment Decisions: Investors use credit ratings as a tool to evaluate a country’s creditworthiness and assess the level of risk associated with investing in that country.
    • Economic Growth: Higher credit ratings typically lead to increased foreign investment, which can create jobs, boost productivity, and stimulate economic growth.
    • International Trade: Countries with higher credit ratings are viewed as more stable and trustworthy, making them more attractive trading partners for other countries.
    • Reputation: Countries with lower credit ratings may be seen as less reliable or stable, which can negatively impact diplomatic relationships and political influence.

    Criticism of the rating agencies

    • Credibility: Popular ratings agencies publicly reveal their methodology, which is based on macroeconomic data publicly made available by a country, to lend credibility to their inferences.
    • Bias: These agencies were subjected to severe criticism for allegedly spurring the financial crisis in the United States, which began in 2017.
    • Fouled metrics: The agencies underestimated the credit risk associated with structured credit products and failed to adjust their ratings quickly enough to deteriorating market conditions.
    • Erroneous: They were charged for methodological errors and conflict of interest on multiple counts.

    Why is India seeking upgrade in its credit ratings?

    • Improved creditworthiness: These ratings are used to judge a country’s creditworthiness, often impacting its borrowing costs.
    • Stable indicators: India has series of stable parameters such as economic growth rate, inflation, general government debt and short-term external debt as a percentage of GDP, and political stability, among others.

    Measures taken to improve ratings

    • India aims to cut its fiscal deficit to 5.9% of GDP next fiscal year, from the 6.4% target for the current year that ends March 31, and to further reduce that to 4.5% in the next three years.
    • India’s Economic Survey has forecast growth of 6% to 6.8% for 2023-24, which would make it one of the world’s fastest-growing major economies.
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  • In news: One Rank One Pension (OROP) scheme

    The government told the Supreme Court that paying all dues to 1.6 million army pensioners under the OROP scheme in one go may not be in the nation’s larger interest as it could disrupt allocations for other public purposes.

    What is OROP Policy?

    • OROP means the same pension, for the same rank, for the same length of service, irrespective of the date of retirement.
    • The concept was provoked by the then decision by Indira Gandhi-led government, in 1973, two years after the historic victory in the 1971 Bangladesh war.

    Origin of the debate

    • The Rank pay was a scheme implemented by the Rajiv Gandhi-led govt in 1986, in the wake of the 4th Central Pay Commission.
    • It reduced the basic pay of seven armed officers’ ranks of 2nd Lieutenant, Lieutenant, Captain, Majors, Lt. Colonel, Colonels, Brigadiers, and their equivalent by fixed amounts designated as rank pay.

    Implementation

    • In 2008, Manmohan Singh led Government in the wake of the Sixth Central Pay Commission (6CPC), which discarded the concept of rank-pay.
    • Instead, it introduced Grade pay, and Pay bands, which instead of addressing the rank, pay, and pension asymmetries caused by ‘rank pay’ dispensation, reinforced existing asymmetries.
    • The present government has accepted the OROP and disbursed some funds for its implementation.

    Issues with this pension policy

    • The issues, veterans emphasize, are of justice, equity, honor, and national security.
    • The failure to address the issue of pay-pension equity, and the underlying issue of honor, is not only an important cause for the OROP protest movement but its escalation.

    Present status

    • The govt has already released Rs. 5500 crores to serve the purpose, but still, there are some grievances from the veterans’ side.
    • It refined Pensions for all pensioners retiring in the same rank as the average of the minimum and maximum pensions in 2013.
    • The veterans noted governments’ proposal as one rank many pensions since the review of 5 years would lead to differences in pension between senior and a junior.

     

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  • What are Oscar Awards?

    oscar

    A notable Indian song and a documentary has won the Oscar Award this year.

    What are Oscar Awards?

    • The Oscar Awards, also known as the Academy Awards, are an annual awards ceremony honouring excellence in the film industry.
    • The awards are presented by the Academy of Motion Picture Arts and Sciences (AMPAS), a professional honorary organization of over 9,000 members.
    • The first Oscars ceremony was held in 1929, and the awards are now widely considered to be the most prestigious awards in the film industry.
    • The ceremony typically takes place in late February or early March, and is broadcast live on television in over 225 countries and territories worldwide.

    How are the winners decided?

    • Awards are given out in various categories, including Best Picture, Best Director, Best Actor, Best Actress, Best Supporting Actor, Best Supporting Actress, and many more.
    • Nominees and winners are chosen by AMPAS members who work in various branches of the film industry, including actors, directors, writers, and producers.
    • Winning an Oscar can have a significant impact on a filmmaker’s career, as it is widely seen as a mark of prestige and can lead to increased funding and opportunities for future projects.

     

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  • 13th Mar 23 | Nikaalo Prelims- Mini Test 8 (Important keywords in Budget, Fiscal Policy and Taxation)

    13th Mar 23 | Nikaalo Prelims- Mini Test 8 (Important keywords in Budget, Fiscal Policy and Taxation)

    [WpProQuiz 1272]

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  • Explained: Silicon Valley Bank (SVB) Crisis

    silicon valley

    Central idea: The shutdown and takeover of Silicon Valley Bank (SVB) by US regulators has raised questions on how it impacts India’s startup industry. It was an important partner for the global startup economy.

    Silicon Valley Bank (SVB)

    • It is a financial institution that provides banking services to the technology industry and venture capital firms.
    • Founded in 1983, it has since become the go-to bank for startups and entrepreneurs in Silicon Valley and beyond.
    • It is unique in that it understands the specific needs and challenges of the tech industry, and provides a range of services that cater to startups, including loans, deposits, and investment management.
    • It has become a critical player in the startup ecosystem, providing funding and financial services to many of the world’s most successful startups, including Tesla, Uber, and LinkedIn.

    What is SVB crisis?

    • SVB Financial Group runs one of the largest American commercial banks – Silicon Valley Bank.
    • Last week, it had announced a $1.75 billion share sale programme to further strengthen its balance sheet.
    • This programme triggered a massive sell-off in the group’s shares.
    • Thereafter, market went severely bearish and bear rampage wiped out over $80 billion of its market value.
    • Alongside, the bond prices of the group collapsed and created a panic in the market.

    Reasons for SVB’s downfall

    • Downturn of tech stocks: The bank was hit hard by the downturn in technology stocks over the past year as well as the Federal Reserve’s aggressive plan to increase interest rates to combat inflation.
    • Lower bond yield due to lower interest rates: SVB bought billions of dollars’ worth of bonds over the past couple of years, using customers’ deposits as a typical bank would normally operate.
    • Mostly startups account holders: SVB’s customers were largely startups and other tech-centric companies that started becoming needier for cash over the past year.
    • Drying VC funding: Venture capital funding was drying up, companies were not able to get additional rounds of funding for unprofitable businesses.
    • Fear over deposit insurance: Since its customers were largely businesses and the wealthy, they likely were more fearful of a bank failure since their deposits were over $250,000, which is the government-imposed limit on deposit insurance.

    Immediate effects of SVB’s failure

    • Startups scramble: Many startups and other companies that relied on the bank’s services were suddenly left without access to their funds, which caused financial strain and uncertainty for these businesses.
    • Ripple effect: They now fear that they might have to pause projects or lay off or furlough employees until they could access their funds.

    Major implications for SVB

    There are two large problems remaining with Silicon Valley Bank-

    • Huge uninsured deposits: The vast majority of these were uninsured due to it’s largely startup and wealthy customer base.
    • No scope for asset reconstruction: There is no potential buyer of Silicon Valley Bank.

    Could this lead to a repeat of what happened in 2008?

    • No probability: At the moment, experts do not expect any issues to spread to the broader banking sector.
    • Diversified customer bases: Other banks are far more diversified across multiple industries, customer bases and geographies.

    Impact on Indian startups

    • Uncertainty over deposits: The failure of SVB is likely to have a ripple effect on Indian startups, many of which have significant amounts of funds deposited with the bank.
    • Hamper the funding: SVB has been a major player in the Indian startup ecosystem, providing banking services and funding to many of the country’s most successful startups, including Flipkart, Ola, and Zomato.
    • Ripple effect: This could lead to a cash crunch for many companies, which may be forced to cut costs, delay projects, or lay off employees.
    • Reduce global footprints: SVB has also been instrumental in helping Indian startups expand into the US market, by providing them with the necessary infrastructure and support to set up operations in Silicon Valley.

    How can Indian startups mitigate the impact of SVB’s failure?

    • Diversify banking relations: Indian startups that have funds deposited with SVB may want to consider diversifying their banking relationships to reduce their exposure to any one bank.
    • Alternative financing: This may involve opening accounts with multiple banks, or exploring alternative banking services such as digital banks or fintech startups.

    Back2Basics: 2008 Financial Crisis

    • The bankruptcy of Lehman Brothers was a key event in the 2008 financial crisis.
    • Lehman Brothers was one of the largest investment banks in the world, with assets of around $600 billion.
    • However, the firm had invested heavily in the US housing market, and when the housing market began to decline in 2007, Lehman’s investments began to lose value.
    • In addition, the firm had taken on a large amount of debt to finance its investments and operations.
    • As the value of Lehman’s assets declined and its debt levels increased, the firm became insolvent and was unable to meet its obligations to creditors.
    • In September 2008, Lehman Brothers filed for bankruptcy, triggering a financial panic and market turmoil.

    Its impact

    • The Lehman crisis had far-reaching consequences, including the collapse of other financial institutions, a global recession, and widespread economic and social hardship.
    • The crisis highlighted the risks of excessive leverage and the interconnectedness of financial institutions, and led to significant reforms in financial regulation and risk management practices.

     

     

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  • Same-Sex Marriages can rock societal values: Centre

    marriage

    Central idea: The Centre in the Supreme Court expressed its disagreement towards same-sex marriage, citing traditional beliefs and values.

    Here are the main points of the affidavit:

    • Heterosexual marriage has been the norm throughout history and is “foundational to both the existence and continuance of the state.”
    • Marriage in India is regarded as a “holy union,” a “sacrament,” and a “sanskar,” and is dependent on customs, rituals, practices, cultural ethos, and societal values.
    • Any “deviation” from the “statutorily, religiously and socially” accepted norm in “human relationship” can only happen through the legislature and not the Supreme Court.

    Basis of Centre’s opposition

    • The 2018 Navtej Singh Johar judgment decriminalised homosexuality, but it did not mention/legitimise same-sex marriage.
    • Same-sex marriage cannot be compared to a man and woman living as a family with children born out of the union.
    • Registration of same-sex marriage would result in a violation of existing personal as well as codified law provisions.
    • There is a “compelling interest” for the society and the state to limit recognition to heterosexual marriages only.

    Reasons behind centre’s opposition

    • Legal revamp required: The registration of marriage of same-sex persons also results in a violation of existing personal as well as codified law provisions — such as ‘degrees of prohibited relationship’; ‘conditions of marriage’; ‘ceremonial and ritual requirements’ under the personal laws governing the individuals”.
    • Definition of spouse: In a same-sex marriage, it is neither possible nor feasible to term one as ‘husband’ and the other as ‘wife’ in the context of the legislative scheme of various personal laws.
    • Against cultural norms:  The social order in our Country is religion based which views procreation as an obligation for the execution of various religious ceremonies.
    • Property and other civil rights: Property rights post marriage is a much-contested issues in India. Same sex marriage will not create any immunity for the law but increase complex interpretations.

    Issues with such marriages

    The issue of homosexual conduct to this fore in recent legal and political debate for main reasons, which are as follows:

    • Morality: This has brought with it a change in social attitudes, so that the stigma attached to homosexuality has to a greater extent disappeared.
    • Rising activism: Campaigns for lesbian and gay rights taken on an increasingly radical character, arguing for an end to all forms of discrimination against homosexuality.
    • Religious sanctions: Same sex acts are punishable by death in Arab countries. No religion openly embraces same sex marriage. More or less, they are considered un-natural everywhere.
    • Social stigma:  Apart from the harsh legal scenario, homosexuals face social stigma as well. Same sex marriages are still unimaginable as any instance of sexual relations between a couple of the same sex draws hatred and disgust.
    • Patriarchy: It must not be forgotten that the Indian society is patriarchal in nature and the fact that certain women and men have different choices, which is not sanctioned by the ‘order’, frightens them in a way.
    • Burden of collectivity: Our society is very community oriented and individualism is not encouraged in the least, any expression of homosexuality is seen as an attempt to renounce tradition and promote individualism.

    Arguments in favor

    • Pursuit of happiness: Homosexuality is not an offence, it is just a way of pursuit of happiness, a way to achieve sexual happiness or desire.
    • Right to privacy: The fundamental right to liberty (under Article-21) prohibits the state from interfering with the private personal activities of the individual.
    • Arbitrariness: Infringement of, the right to equal protection before law requires the determination of whether there is a rational and objective basis to the classification introduced.
    • Issues with definition: Section-377 assumes that natural sexual act is that which is performed for procreation. Hence, it thereby labels all forms of non-procreative sexual act as unnatural.
    • Discrimination: Section-377 discriminates on the basis of sexual orientation which is forbidden under Article-15 of the Constitution. Article-15 prohibits discrimination on several grounds, which includes Sex.
    • Human rights: The universal law of Human Rights states that social norms, tradition, custom or culture cannot be used to curb a person from asserting his fundamental and constitutional rights.
    • Many countries recognizing: According to global think tank Council of Foreign Relations, same sex marriages are legal in at least 30 countries, including the United States, Australia, Canada and France.

    Way forward

    • Dissociating from religion: Such marriages are forbidden in almost every religion. Hence no single religion should be considered a hindrance in creating a legal sanction.
    • Doing away with discrimination: The same-sex community needs an anti-discrimination law that empowers them to build productive lives and relationships irrespective of gender identity.
    • Letting the society evolve: The society has to imbibe the doctrine of progressive realization of rights and it cannot be forcibly convinced by law.
    • Creating awareness: Certainly this is not an overnight phenomenon. We are society where practice of Sati and Nikah halala was considered a religious order.

     

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  • Rural-Urban Dichotomy And The Continuum

    Rural-Urban

    Central Idea

    • The traditional dichotomy of rural and urban, and the accordingly mandated governance structure, seems inadequate to understand and act upon poverty, undernourishment, education, health, environmental management or even development. There is a need to adopt the notion of urban catchment areas delineated along an urban-rural continuum to understand urban-rural interconnections and address issues related to environment and natural resources management.

    What is Rural-Urban Dichotomy?

    • Distinct Division: It is the perception of a clear and distinct division between rural and urban areas, which are seen as two distinct and separate entities.
    • Significant Differences: This dichotomy is based on the assumption that there are significant differences between rural and urban areas in terms of social, economic, and cultural characteristics.
    • Traditional vs modern values: It suggests that rural areas are primarily agricultural, less developed, and have traditional social and cultural values, while urban areas are more developed, industrialized, and have modern values.

    Rural-Urban

    The Rural-Urban Continuum

    • The Rural-Urban Continuum is an alternative perspective that acknowledges the existence of intermediate areas that blur the distinction between rural and urban.
    • An intermediate settlement formation exists between the two extremes where rural and urban functions coexist without distinguishable boundaries.
    • Such formations evolve due to interactions of a complex set of geographical, cultural, economic, and historical processes.
    • The transition from rural to urban follows a graded curve of development, and opportunities for social and economic development depend on one’s location along this curve.

    Importance of the Rural-Urban Continuum

    • Identification of urban catchment areas delineated along an urban-rural continuum would help understand urban-rural interconnections, which is important for making policy decisions across development sectors and for addressing issues related to environment and natural resources management.

    Studies and examples of Rural-Urban Continuum

    • The Desakota Study report:
    • A 2008 report of the Desakota Study Team, Re-imagining the Rural Urban Continuum, was based on studies in eight countries around the world including India.
    • Team’s report in 2008 emphasized understanding the changing relationship between ecosystems and livelihoods under diversified economic systems across the rural-urban continuum as it has important policy implications at all levels.
    • In India, Kerala for instance:
    • Kerala is well known for the rural-urban continuum in the coastal plain. This was noted even by Moroccan traveller Ibn Batuta in the 14th century. The trend further spread over the lowlands and adjoining midlands and highlands.
    • Geographical factors supported by affirmative public policy promoting distributive justice and decentralisation have increased rural-urban linkages and reduced rural-urban differences in major parts of Kerala.
    • The urban industrial interaction in India is spreading rapidly: The urban industrial interaction fields in India are spreading by linking rural areas and also small towns around the mega cities and urban corridors penetrating rural hinterlands.

    Rural-Urban

    Dissolving the boundaries and barriers

    • Technology and globalization led connectivity: Technology and economic globalization have increased mobility of resources and people and enhanced inter- and intra-country connectivity, promoting the rural-urban continuum.
    • Physical distance barriers are melting: The barriers due to physical distance are melting as increasing rural-urban linkages have given rise to diffused network regions.
    • Movement of goods, people and information is rising: Rural hinterlands are connected to multiple urban centers, and the movement of goods, people, information, and finance between sites of production and consumption has strengthened linkages between production and labour markets.

    Changing Ecosystems of the Rural-Urban Continuum

    • Land Use Changes: Agriculturally productive lands are being given for other uses, food security zones are being reconfigured, and areas for pollutant filtering are declining.
    • Impacts on Ecosystem Services and Local Livelihoods: There is an increase in waste dump, enhanced disaster risk, and elevated vulnerability, reducing the access of local people to water, food, fuel, fodder, and fiber from ecosystems.
    • Emergence of Intermediary Market Institutions: At the same time, intermediary market institutions are emerging to provide these goods, which has significant implications for the local people.
    • Escalating Market Value of Land and Marginalization: There is also escalation of market value of land, which further marginalizes them.

    Way ahead

    • Acknowledge the rural-urban continuum in discussions on social and economic development and environmental issues.
    • Identify challenges and opportunities for improving both urban and rural governance and enhancing access to employment, services, institutional resources, and environmental management.
    • Build rural-urban partnership by taking a systems approach, where the city and surroundings form a city region for which a perspective plan is prepared integrating rural and urban plans within a common frame.
    • Move towards a post-urban world where the rural-urban dichotomy will no longer exist.
    • Better map rural-urban linkages by using satellite-based settlement data and integrating it with Census data.

    Conclusion

    • Recognizing and addressing the interconnections between rural and urban areas along a continuum is crucial for effective policy-making and environmental management in India.

    Mains Question

    Q. The rural-urban continuum has drawn wide attention in recent years. In this light discuss the importance of Recognizing and addressing the interconnections between rural and urban areas.

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  • Ukraine Conflict: Implications And The Danger Of Provoking A World War

    Ukraine

    Central Idea

    • The Ukraine conflict has significant implications for Europe and the world. It has demonstrated that the US is the true defender of Europe and highlighted the fragile state of Europe’s defence industry. The conflict has also given the US confidence to take on all challengers, leading to new ambitions in Western minds. While the conflict has taught several important lessons, the wrong lessons could also be derived, which could prove to be dangerous in the long run.

    What is the Present Situation?

    • While acknowledging the bravery of the Ukrainian people, significant efforts are underway in Europe, including France, Germany, and the United Kingdom, to end the ongoing war.
    • Given that neither side is poised for a decisive victory, it is highly unlikely that Russia will withdraw from the territories it initially occupied.
    • The initial enthusiasm has given way to a sense of exhaustion, and the conflict in Ukraine is increasingly being viewed as a US-backed NATO proxy war against Russia.
    • As a result, European leaders are currently focused on negotiating a ceasefire and ending the conflict rather than prolonging it.

    Implications of the war on Europe

    • Europe’s struggling economy: Despite receiving state-of-the-art weapons from the US, Europe remains at the mercy of NATO and the US due to its fragile defence industry. The prospect of a prolonged war without end is daunting for Europe’s struggling economy.
    • US as the True Defender of Europe: The Ukraine conflict has demonstrated that the US is the true defender of Europe, with the people believing that without the US, Europe would not have come together to support Ukraine.
    • US Confidence and New Ambitions: The US’s success in Europe has fuelled new ambitions and the belief that momentum now lies with them. This could potentially lead to dangerous experimentation, with Ukraine and the war in Europe not being a laboratory for similar experiments elsewhere.
    • The Danger of Overconfidence and Misadventures: US triumphalism could lead to misadventures, as Ukraine and Europe cannot be a bellwether for what might happen in a conflict with China in the Indo-Pacific. China is not Ukraine or Russia, and Asia is not Europe.

    China’s strong Posture

    • China’s Direct and Harsh Language Against the US and Western Countries: China is accusing the US and other Western countries of engaging in the containment, encirclement, and suppression of China. China have openly accused the US of attempting to encircle China through its Indo-Pacific strategy, which they say is an Asia-Pacific version of NATO. China’s language is unusually direct and harsh, leading to concerns that China may be preparing for a direct confrontation with the US.
    • China’s Preparation for All Eventualities: China is preparing for all possible scenarios in response to the current situation. It has warned that no amount of guardrails can prevent derailment if the US continues to speed down the wrong path. China’s efforts are aimed at thwarting US attempts to restore its dominant position in world affairs.
    • Taiwan as the Flashpoint
    • Taiwan remains a flashpoint in the Indo-Pacific region, with tensions further aggravated by the recent visits of top US military leaders to Taiwan. However, newer tensions are also adding to the possibilities of a conflict in other regions in the Indo-Pacific.

    The danger of provoking a world war

    • Starting with a misreading or misunderstanding of the other side’s intentions, all wars can begin.
    • The success of the US in assisting Ukraine to withstand the Russian offensive and undercutting Russia’s image of being a superpower in Europe.
    • The success in Europe and the goal of returning to the post-1945 era may be the impetus for targeting China. This could lead to a direct confrontation with China and have disastrous consequences, possibly leading to a world war.

    Conclusion

    • The US is basking in the glow of its successful intervention in Europe and this could provoke retaliation, leading to the escalation of hostilities in other regions and potentially paving the way for another global conflict. Such an outcome would be a catastrophe of monumental proportions.
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  • 13th Mar 23 | Prelims Daily with Previous Year Questions

    13th Mar 23 | Prelims Daily with Previous Year Questions

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