💥UPSC 2026, 2027, 2028 UAP Mentorship (March Batch) + Access XFactor Notes & Microthemes PDF
Talk to mentor

Civilsdaily

Login

Type: op-ed snap

  • Disasters and Disaster Management – Sendai Framework, Floods, Cyclones, etc.

    Policy: Making India Earthquake Prepared

    op-ed snap | Enviro & Biodiversity | Mains Paper 3: Disaster Management

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Earthquakes, India's earthquake prone regions

    Mains level: India's policy on Earthquake preparedness

    Policy

    Central Idea

    • The destruction caused by earthquakes in Turkey should be alarming for India. Over the last three weeks, tremors have been felt in Himalayan states. Moreover, geologists have warned of a probable massive earthquake in the Himalayan state. In this context the Delhi High Court asked the state government to file a status report and action plan on the structural safety of buildings in Delhi. Nearly 58 per cent of the Indian landmass is vulnerable to earthquakes and the concerns that have been raised by the court need a policy response instead.

    Get your Rs 10,000 worth of UPSC Strategic Package for FREE | PDFs, Zoom session, Tests, & Mentorship

    How do earthquakes happen?

    • According to the theory of plate tectonics, the Earth’s crust and upper mantle are made of large rigid plates that can move relative to one another.
    • Slip on faults near the plate boundaries can result in earthquakes.
    • The point inside the Earth where the earthquake rupture starts is called the focus or hypocentre.
    • The point directly above it on the surface of the Earth is the epicentre.

    What is missing in India’s policy on earthquake preparedness?

    • Current policy operates primarily at the scale of structural details: Guided by the National Building Codes, this includes specifying dimensions of the structural members columns, beams, etc. and details of the reinforcements that join these elements together.
    • While scientifically sound, this view on earthquake preparedness is myopic:
    1. It ignores the buildings that were constructed before such codes were published in 1962. Such buildings form a large part of our cities.
    2. It assumes infallibility in the processes of enforcement, relying only on penalisation and illegalities.
    3. It treats earthquakes as a problem of individual buildings, as if they exist and behave in complete isolation from their urban context.

    What needs to be done?

    • Preparedness at Building and City Scale through policy: Earthquake preparedness, therefore, needs to act at the scale of building details as well as that of cities. Moreover, we must think about it in the realm of policy and not just legal enforcement.
    • Need for Comprehensive Policy: At the scale of building details, we need to create a system of retrofitting existing structures and enforcing seismic codes with more efficiency. While there has been political talk and piecemeal efforts towards retrofitting, we still lack a comprehensive policy.

    A policy should include two measures

    1. Retrofitting Buildings to Seismic Codes:
    • To create a system of tax-based or development rights-based incentives for retrofitting one’s building up to seismic codes.
    • Such a system of incentives will enable the growth of an industry around retrofitting and will generate a body of well-trained professionals and competent organisations.
    1. Improving Seismic Code Enforcement:
    • By ensuring better enforcement of seismic codes through a similar model. A step forward in this direction was the National Retrofitting Programme launched in 2014.
    • Under the programme, the Reserve Bank of India directed banks to deny loans for any building activity that does not meet the standards of earthquake-resistant design.

    Case study: Japan

    • Japan has invested heavily in technological measures to mitigate the damage from the frequent earthquakes that it experiences.
    • Skyscrapers are built with counterweights and other high-tech provisions to minimise the impact of tremors.
    • Small houses are built on flexible foundations and public infrastructure is integrated with automated triggers that cut power, gas, and water lines during earthquakes.
    • All of this has been a result of cultivating an industry around earthquake mitigation and fostering expertise.

    Criteria for an urban-level policy to generate earthquake vulnerability maps

    1. The percentage of vulnerable structures in the area;
    2. The availability of evacuation routes and distances from the nearest open ground;
    3. Density of the urban fabric;
    4. Location of nearest relief services and the efficiency with which these services can reach affected sites.
    • For example: Flood zone mapping is a good example of such an exercise that has proven to be successful in terms of timely evacuation and efficient implementation.

    Conclusion

    • Governments and policymakers ought to know better than act in a piecemeal manner. Programmes like the ongoing Urban 20 meetings are an excellent opportunity for international knowledge exchange on earthquake preparedness. The Delhi High Court’s directions must act as a reminder for the inclusion of an earthquake preparedness policy in urban renewal programmes such as the Smart Cities Mission. A policy on earthquake preparedness requires a visionary, radical and transformative approach.

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • G20 : Economic Cooperation ahead

    G20: Multilateralism and India’s Diplomacy

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: G20

    Mains level: India's Multilateralism amidst the global power struggle

    G20

    Central Idea

    • The inability of the G20 finance ministers to agree on a joint statement last week points to an important reality about multilateralism. When great powers are at peace with each other, multilateralism has reasonable chances of success; but when they are at each other’s throats, the room for global cooperation shrinks.

    Get your Rs 10,000 worth of UPSC Strategic Package for FREE | PDFs, Zoom session, Tests, & Mentorship

    What is multilateralism?

    • Multilateralism is an approach in which multiple countries or parties come together to address and solve common problems, through negotiations and cooperation, while respecting each other’s sovereignty and interests.
    • In international relations, multilateralism can take different forms, such as multilateral agreements, treaties, and organizations.
    • The United Nations (UN) is an example of a multilateral organization, which brings together almost all countries in the world to promote peace, development, and cooperation.

    Multilateralism and Major Powers: From Cooperation to Conflict

    1. The Cold War and Multilateralism:
    • Lack of cooperation during the Cold War, except in a few areas such as nuclear arms control
    • The formation of the UN after the Second World War with the expectation of great power cooperation.
    • Allies turning into adversaries and sharp division of the world into competing economic and military blocs.
    1. Post-Cold War Multilateralism:
    • Collapse of the Soviet Union in 1991 led to an expansive phase of multilateralism
    • Great power cooperation at the UN and creation of the WTO
    • The financial crisis of 2008 and the rallying of the top 20 economies to stabilise the global economy.
    1. Current State of Multilateralism
    • World of shared interests among top nations no longer exists
    • Simmering political conflict between Russia and the West, possibility of military conflict between the US and China.
    • Consensus on key issues eludes the G20 today
    • Rising geopolitical conflict mirrored in the economic domain
    • Efforts by the US and China to reduce their massive economic exposure to each other
    • Economic conflict enveloping emerging technologies, especially in the digital domain.

    India’s Multilateral Diplomacy amidst the Great Power Conflict

    • Multilateralism and G20: As the current chair of the G20 in 2023, India has to steer the group amidst the renewed rivalry between the major powers. Reducing the impact of the political conflicts on the G20 would be a diplomatic achievement for India.
    • Delhi’s Troubled Relationship with Beijing: India is part of the great power rivalry with China. The conflict is not just about military assertiveness but also deep differences on multilateral issues
    • Need to Balance China: India cannot stand apart from the great power conflict while representing the Global South at the G20. India has to balance its cooperation and contestation with China in various multilateral forums.
    • India’s Participation in Multiple Multilateral Institutions: India’s approach to multilateralism has evolved from a focus on the UN and NAM to participation in multiple institutions including the Quad and the G7. It is also working to strengthen its coalition with the Global South.

    Conclusion

    • The diversity of India’s multilateralism reflects the structural imperatives of global politics. Delhi must cooperate with adversaries for regional and global problem-solving while wrestling with rivals and collaborating with like-minded countries. Cooperation and contestation balance depend on the issue and context.

    Mains Question

    Q. What do you understand by Multilateralism? India is continuously expanding its multilateral approach. Discuss.

    Attempt UPSC 2024 Smash Scholarship Test | FLAT* 100% OFF on UPSC Foundation & Mentorship programs

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Tobacco: The Silent Killer

    Tobacco consumption: Higher Prices Could Be The Effective way

    op-ed snap | Governance | Mains Paper 2: Health & Education

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: NA

    Mains level: Tobacco consumption, Health and socio economic impact

    Tobacco

    Central Idea

    • The share of smokers is declining in India, but smokeless tobacco consumption continues unabated. Smokeless tobacco use is widespread and is a significant public health challenge. The use of smokeless tobacco in India is deeply ingrained in cultural and traditional practices, making it difficult to address through public health interventions.

    Get your Rs 10,000 worth of UPSC Strategic Package for FREE | PDFs, Zoom session, Tests, & Mentorship

    DATA: Tobacco consumption in India

    • High Consumption in north eastern states: In the north-eastern States of India, consumption of tobacco among men in both smokable and chewable forms was higher than the rest of India in 2019-21.
    • Consumption in southern states is relatively low: In the southern States, the share was relatively low with regard to both forms of tobacco consumption. However, among those who smoked, the share of those who consumed more than five sticks a day was much higher in many southern States. So, while smokers were fewer in the south, those who smoked did so heavily.
    • Smokable forms: If only the smokable forms were considered, the share was higher in the northern States of Himachal Pradesh, Uttarakhand, Haryana, J&K U.T. and the eastern State of West Bengal.
    • Chewable forms: If only the chewable forms were considered, the share was higher in the east Jharkhand, Bihar and Odisha and in Uttar Pradesh, Madhya Pradesh and Gujarat.
    • Share of cigarette/bidi smokers is coming down: Overall, in India, the share of cigarette/bidi smokers is coming down. Compared to 2005-06, the share of smokers came down by over 10% points in 2019-21.

    Why is this trend?

    • Increase in prices of smokable forms: According to health economists the reduction in cigarette smoking may be attributed to the increase in the prices of the commodity over time.
    • Price of chewable form have not increased: On the other hand, the prices of bidis and other chewable forms have not increased much, and so consumption too has not reduced much.

    tobacco

    Why price and taxation of tobacco matters?

    • Effective way to reduce consumption: Research from many countries around the world including India shows that a price increase induces people to quit or reduce tobacco use as well as discourages non-users from getting into the habit of tobacco use.
    • For example: a study conducted in India found that a 10% increase in the price of tobacco products led to a 6.4% reduction in tobacco consumption among adults.
    • Higher prices can also discourage young people from taking up smoking: According to the World Health Organization, increasing tobacco prices by 10% can reduce tobacco use among young people by about 4%. This is particularly important as most tobacco users start smoking during adolescence.

    Tobacco consumption: Negative health effects

    • Cancer: Tobacco use is the leading cause of preventable cancer. It can cause cancer of the lungs, mouth, throat, larynx, pancreas, bladder, kidney, and cervix.
    • Respiratory diseases: It may cause chronic obstructive pulmonary disease (COPD), which includes chronic bronchitis and emphysema. It can also worsen asthma symptoms.
    • Cardiovascular diseases: Consumption increases the risk of heart attack, stroke, and other cardiovascular diseases. It damages blood vessels and increases the risk of blood clots.
    • Reproductive health: Tobacco use can lead to infertility, premature birth, and low birth weight in babies.

    Tobacco consumption: Social-Economic Impact

    1. On an individual level:
    • Tobacco consumption can lead to decreased productivity and increased healthcare costs.
    • Smoking-related illnesses can result in absenteeism from work, decreased work performance, and increased medical expenses.
    • In addition, tobacco consumption can lead to decreased life expectancy, which reduces the overall productive years of an individual.
    1. On a societal level:
    • Tobacco consumption can lead to decreased economic development due to the increased burden of healthcare costs and decreased productivity.
    • According to a study conducted by the World Health Organization (WHO), tobacco-related illnesses cost India about $22.4 billion in healthcare costs and lost productivity annually

    tobacco

    Conclusion

    • Tobacco consumption in India has significant socioeconomic and health impacts, particularly on the poor and marginalized sections of the population. Worryingly, after GST implementation, cigarette prices have not increased much. Increasing the price of tobacco products through taxation is a key strategy for reducing tobacco consumption and its associated health and economic costs.

    Mains Question

    Q. Tobacco consumption in India has significant socioeconomic and health impacts? Discuss. Do you think increase in price of tobacco commodities reduces its consumption?

    Attempt UPSC 2024 Smash Scholarship Test | FLAT* 100% OFF on UPSC Foundation & Mentorship programs

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

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

    Current Account Deficit (CAD): Desirable and Undesirable Components

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Current Account Deficit

    Mains level: CAD and deficit financing

    CAD

    Central Idea

    • As per the RBI’s quarterly statistics, the current account deficit (CAD) widened to 4.4 per cent of GDP in the second quarter of 2022-23, down from 2.2 per cent in the preceding quarter. This marks a reversal from an unusual surplus of 0.9 per cent of GDP in 2020-21. In the third quarter of this financial year, while the merchandise trade deficit has widened, the CAD may witness a fall.

    Get your Rs 10,000 worth of UPSC Strategic Package for FREE | PDFs, Zoom session, Tests, & Mentorship

    What is Current Account Deficit (CAD)?

    • Current Account Deficit (CAD) = Trade Deficit + Net Income + Net Transfers
    • A current account is a key component of balance of payments, which is the account of transactions or exchanges made between entities in a country and the rest of the world.
    • This includes a nation’s net trade in products and services, its net earnings on cross border investments including interest and dividends, and its net transfer payments such as remittances and foreign aid.
    • A CAD arises when the value of goods and services imported exceeds the value of exports, while the trade balance refers to the net balance of export and import of goods or merchandise trade.

    Components of Current Account

    1. Trade Deficit
    • Trade Deficit = Imports – Exports
    • A Country is said to have a trade deficit when it imports more goods and services than it exports.
    • Trade deficit is an economic measure of a negative balance of trade in which a country’s imports exceeds its exports.
    • A trade deficit represents an outflow of domestic currency to foreign markets.
    1. Net Income
    • Net Income = Income Earned by MNCs from their investments in India.
    • When foreign investment income exceeds the savings of the country’s residents, then the country has net income deficit.
    • Net income is measured by Payments made to foreigners in the form of dividends of domestic stocks, Interest payments on bonds and Wages paid to foreigners working in the country.
    1. Net Transfers
    • In Net Transfers, foreign residents send back money to their home countries. It also includes government grants to foreigners. It also Includes Remittances, Gifts, Donation etc.

    CAD

    India’s CADs have both desirable and undesirable components

    • Desirable:
    • A desirable deficit is a natural reflection of rising investment, portfolio choices and the demographics of the country.
    • If CADs can be financed by stable capital inflows, such as FDI inflows, they are desirable as they are less prone to capital flight.
    • Stable capital flows are desirable as they allow debtor countries, such as India, to utilize and allocate them into sectors that may yield long-term productive gains and foster higher economic growth.
    • Undesirable:
    • Large and persistent CADs can be undesirable if they reflect bigger problems such as poor export competitiveness and are financed by unstable financing.
    • If deficits are financed by volatile capital flows such as portfolio flows, there may be a cause of concern. Portfolio flows are capricious and more susceptible to reversals in case of any global financial shock.

    The countercyclical nature of India’s CAD: A matter of concern

    • Dominance of external shocks: Research suggests that the country’s CAD rises when output falls rather than when demand rises, indicating the dominance of external shocks.
    • For instance: If oil prices rise, and as oil is an input in the production process, it raises the cost of production and leads to a fall in economic growth. In this case, CADs rise with falling growth due to both the inelasticity of oil import demand as well as its major share in India’s total imports.

    Remarks to be Noted

    • Remittances and services exports have provided a counter-balance to rising merchandise trade deficits.
    • India’s services exports grew at 23.5 per cent in 2021-22.
    • While capital flows are pro-cyclical and react negatively to contractionary monetary policy by the Fed, remittances have exhibited remarkable stability.

    Challenges and a Way ahead

    • The composition of financing is crucial. While FDI inflows were enough to finance the deficit in 2021-22, these inflows have been weak in the current fiscal year.
    • Over the medium term, policymakers need to arrest the negative spillovers from the slowdown in global trade on merchandise exports.
    • Further rate hikes by the US Fed may lead to capital outflows leading to additional exchange rate market pressures. This could be challenging in the current situation as a weaker currency, coupled with a sticky import basket will lead to imported inflation.
    • Policy measures thus must facilitate exports by focusing on structural reforms to improve trade competitiveness, alongside which the government must sign free trade agreements.

    CAD

    Conclusion

    • India is currently facing the twin-deficit problem of high fiscal and CADs. While aggressive fiscal consolidation may be undesirable in the face of rising fears about a global slowdown, a comfortable external environment can be maintained by ensuring stable financing, along with using exchange rates as a shock absorber to weather the adverse global economic situation.

    Mains Question

    Q. Explain the concept of Current account deficit? India’s CAD have both desirable and undesirable components. Discuss.

    Attempt UPSC 2024 Smash Scholarship Test | FLAT* 100% OFF on UPSC Foundation & Mentorship programs

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • e-Waste Management

    e-Waste Rules 2022

    op-ed snap | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: e-waste

    Mains level: e-waste, impact, recycling challenges and management

    e-waste

    Central Idea

    • The burgeoning problem of managing e-waste is a cross cutting and persisting challenge in an era of rapid urbanisation, digitalisation and population growth. In November 2022, the Ministry of Environment and Forests notified a new set of e-waste rules, which will come into force from April 1, 2023. These rules address some of the critical issues but are silent on others.

    Get your Rs 10,000 worth of UPSC Strategic Package for FREE | PDFs, Zoom session, Tests, & Mentorship

    What is e-Waste?

    • e-waste refers to electronic waste, which includes any discarded electronic or electrical device, such as computers, mobile phones, televisions, and refrigerators.
    • These devices contain hazardous substances such as lead, mercury, cadmium, and polyvinyl chloride (PVC) that can pose significant environmental and health risks if not disposed of properly.

    e-Waste

    Key components of e-waste Rules in India

    • Extended Producer Responsibility (EPR): The first set of e-waste Rules was notified in 2011 and came into effect in 2012. An important component of the Rules (2011) was the introduction of EPR. Under EPR compliance, producers are responsible for the safe disposal of electronic and electric products once the consumer discards them.
    • Authorization and product stewardship: E-waste rules 2016, which were amended in 2018, were comprehensive and included provisions to promote authorisation and product stewardship. Other categories of stakeholders such Producer Responsibility Organisations (PRO) were also introduced in these rules.
    • A digitalized systems approach, introduced in the new rules (2022): Standardizing the e-waste value chain through a common digital portal may ensure transparency and is crucial to reduce the frequency of paper trading or false trail i.e., a practice of falsely revealing 100% collection on paper while collecting and/or weighing scrap to meet targets

    e-Waste

    e-waste recycling: Analysis

    • Two important stages of efficient e-waste recycling:
    • 1. Component recovery (adequate and efficient recoveries of rare earth metals in order to reduce dependence on virgin resources) and
    • 2. Residual disposal (safe disposal of the leftover residual during e-waste recycling).
    • Concern: The rules briefly touch upon the two aspects, but do not clearly state the requirement for ensuring the recovery tangent.
    • The new notification does away with PRO and dismantlers: All the responsibility of recycling vests on authorised recyclers; they will have to collect a quantity of waste, recycle them and generate digital certificates through the portal.
    • Concern: Fresh challenges might emerge as companies are no longer required to engage with PROs and dismantlers, who partially ensured double verification in terms of quantity and quality of recycling.
    • Lack of recognition to informal sector: The new rules for e-waste management in India do not recognize the crucial role played by the informal sector, which handles 95% of e-waste in the country. This lack of recognition may be due to the sector’s “illegality
    • Concern: This move could further push e-waste handling into the shadows and make it more difficult to monitor and regulate. This could lead to environmental pollution, health hazards for workers, and inefficient e-waste management.

    Impact on Health

    • Incineration and leaching: Open incineration and acid leeching often used by informal workers are directly impacting the environment and posing serious health risks, especially to child and maternal health, fertility, lungs, kidney and overall well-being.
    • Occupational health hazards: In India, many of these unskilled workers who come from vulnerable and marginalised are oblivious to the fact that that what they know as ‘black plastics’ have far reached occupational health hazards especially when incinerated to extract copper and other precious metals for their market value.
    • Exposures to children: This ‘tsunami of e-waste rolling out of the world’, as described in an international forum on chemical treaties, poses several health hazards for women in this sector as they are left exposed to residual toxics elements mostly in their own households and often the presence of children.
    • Constant contact with organic pollutants: According to a recent WHO report, a staggering 18 million children, some as young as five, often work alongside their families at e-waste dumpsites every year in low- and middle-income countries. Heavy metals such as lead, as well as persistent organic pollutants (POPs), like dioxins, and flame retardants (PBDEs) released into the environment, have also added to air, soil, and water pollution

    e-Waste

    Way ahead

    • In order to ensure maximum efficiency, the activities of the recyclers must be recorded in the system.
    • The authorities should periodically trace the quantity of e-waste that went for recycling vis-à-vis the recovery towards the end.
    • Recognising the potential of informal sector in e- waste handling.
    • For instance, ‘Karo Sambhav’, a Delhi-based PRO, has integrated informal aggregators in its collection mechanism. Through this initiative, e-waste is entered in a safe and structured system and the informal sector also has an advantage in terms of financial and legal security.
    • In order to ensure the efficient implementation of the law, stakeholders must have the right information and intent to safely dispose of e-waste.
    • There is need of strengthening reverse logistics, building capacity of stakeholders, improving existing infrastructure, enhancing product designing, rationalising input control and adopting green procurement practices.
    • Provide doorstep collection to consumers.

    Conclusion

    • e-waste recycling and management have become a major environmental challenge in the modern world, as the volume of e-waste generated continues to grow rapidly. Simultaneous efforts needed to increase awareness and improve infrastructure for effective e-waste management. Moreover, robust collection and recycling system and required to meet legislative requirements.

    Mains Question

    Q. What is e- waste? Discuss the set of e-waste rules in India and suggest what needs to be done for effective e- waste management?

    Attempt UPSC 2024 Smash Scholarship Test | FLAT* 100% OFF on UPSC Foundation & Mentorship programs

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Government Budgets

    Invest In People For The Brighter Future

    op-ed snap | Economics | Mains Paper 3: Government Budgeting,Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Budget

    Mains level: Government capex, debt, investments and social welfare

    Invest

    Central Idea

    • The world is indeed looking up to the Indian economy as a bright star, as the finance minister noted in the Budget speech on February 1. In 2020, India accounted for 20.6% of the worldwide population of 15- to 29-year-olds. Which means that in the years ahead, one out of every five workers deployed globally could be an Indian. No doubt, the rest of the world foresees a fortune in India’s young population. But are our policymakers doing enough to realise the possibilities that are unfolding?

    Get your Rs 10,000 worth of UPSC Strategic Package for FREE | PDFs, Zoom session, Tests, & Mentorship

    The key proposals in this year’s Union budget are the following

    • Increase in capital expenditures for infrastructure: There will be a considerable increase in capital expenditures, for the building of physical infrastructure, mainly in transport, energy and defence. The figures under this head are expected to be higher in 2023-24 compared to the corresponding level in 2022-23 (revised estimates).
    • Modest tax revenue: The growth of the tax revenues is going to be modest, the government is nevertheless committed to reducing the fiscal deficit to 5.9% of GDP. That could have been achieved only by reducing the spending on some other sectors
    • The axe has fallen on subsidies and social sector expenditures: Compared to its previous year, in 2023-24, the Union government’s expenditure on food subsidy will fall by ₹0.9 trillion (or 90,000 crore), on fertilizer subsidy by ₹0.5 trillion, and on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) by ₹0.3 trillion.
    • Marginal increase unlikely to make impact: The marginal increases in the allocations on health, education, agriculture and the Angwandi scheme are unlikely to make an impact, after taking into account the effect of inflation.

    Public-private complementarities

    • Capital spending indicates country’s productive capability: A jump in capital spending by the government, as proposed in the Budget, is a much-needed step to reinvigorate the Indian economy. Investment as a proportion of income or GDP indicates the rate at which a country’s productive capabilities are growing.
    • High rates of investment; Fast rates of economic progress: In India, this proportion rose steadily during the mid-2000s and peaked at 42% in 2007, which was even better than China’s record at that point in time. High rates of investment translated into extremely fast rates of economic progress in the country, which lasted until the early 2010s.
    • Crowd in Private investments: If the proposed investments by the government come through, and they indeed crowd in private investments as the finance minister has predicted, that can set the stage for a revival of the Indian economy.

    Global financial crisis in 2007-08 was a turning point

    • China responded with high domestic investment: China responded to the crisis by increasing domestic investment, a large part of which coming from its public sector.
    • India restrained its expenditures: In India, the government restrained its expenditures, worrying about the rising fiscal deficits. As public expenditures nosedived, private investors lost confidence as well. Investment as a proportion of GDP was on a steady downward slide

    Invest

    Investing in people is an investment in the future

    • Expenditure on social sector: Public expenditures on the social sectors constitute an investment for the future more so for a country with a predominantly young population.
    • For instance: The income a destitute mother receives for work through MGNREGA may ensure that her children do not have to go to school with empty stomachs.
    • Underinvestment in education: Underinvestment in education and health will undercut India’s chances in a global economy that is increasingly dominated by knowledge. Millions of young people are denied access to affordable education and decent jobs, leading to frustration.
    • For instance: In 2022, only 2.6% of the nearly 1.9 million candidates who wrote the NEET managed to secure a seat for MBBS in a government college.
    • Government expenditure to boost to supply and demand: Government expenditure on health and education can provide a boost to both the supply and the demand fronts in a knowledge-driven economy, more new jobs as teachers and doctors, especially for women, and a greater supply of younger professionals and skilled workers.

    Importance of social sector spending for long-term growth and social welfare

    • Contrasting Capital Expenditures with Social Sector Spending: Unlike capital expenditures, which are generally considered productive, subsidies and social sector spending are often labeled as wasteful. It is commonly believed that cutting social sector spending will not harm economic growth; however, this perception is incorrect.
    • The Negative Impact of Reducing Social Sector Spending: Cutting social sector spending not only exacerbates existing social inequalities but also dampens the prospects for long-term growth.
    • For instance: In India, for example, only 9.8% of workers have access to regular jobs that provide some form of social security. Therefore, measures such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the free provision of food have been a lifeline for millions of poor Indians who have been affected by the COVID-19 pandemic and joblessness.

    Unwarranted fears about fiscal deficit

    • The Counterproductive Nature of Inflated Fears: Inflated fears about the fiscal deficit and government debt will only be counterproductive in a country possessing vast reserves of untapped human and other resources as India does.
    • India’s government debt is held largely by domestic financial institutions does not pose threat: Only a small portion of India’s public debt is owed to external agencies (amounting to 4.2% of GDP in 2022), which does not pose a threat. India’s public debt is held largely by domestic financial institutions, including public sector banks, insurance companies. This is a debt the government owes to the people of this country, whose savings the financial institutions have mobilised.
    • For example: Greece and the most recent example of Sri Lanka’s economic crisis was a result of external debt.
    • A Virtuous Cycle of Debt: Higher levels of development and incomes will lead to the creation of fresh savings, which can help pay off the debts. Borrowing to feed and educate all of its young citizens will provide asset-poor and socially disadvantaged households the opportunity to pick up qualifications required to enter the new job market.

    Invest

    Conclusion

    • For a generation of young Indians, this is, without a doubt, a ‘make or break moment’. without increased public spending on human capabilities, there is little hope for them to escape poverty, lack of skills, and discontent. However, if the government invests in food security, health, and education, India’s young people can thrive and become bright stars that illuminate the world.

    Mains question

    Q. Without increased public spending on human capabilities, there is little hope for young Indians to escape poverty and discontent. Discuss.

    Attempt UPSC 2024 Smash Scholarship Test | FLAT* 100% OFF on UPSC Foundation & Mentorship programs

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Solar Energy – JNNSM, Solar Cities, Solar Pumps, etc.

    Surya Nutan: A Stove of Green Energy Transition

    op-ed snap | Economics | Mains Paper 3: S&T – Applications In Everyday Life

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Surya Nutan solar cook-stove

    Mains level: India Energy week 2023

    Stove

    Central Idea

    • The formal launch of the Indian Oil Corporation’s patented solar cook-stove at the India Energy Week 2023 (February 6-8, 2023 in Bengaluru as part of the G-20 calendar of events) by the Prime Minister Narendra Modi must be looked at closely from the point of view of India’s national energy story. While Mr. Modi claimed the stove would soon reach three crore households within the next few years, Union Minister for Petroleum and Natural Gas Hardeep Singh Puri called it a catalyst in accelerating adoption of low-carbon options along with biofuels, electric vehicles, and green hydrogen.

    Get your Rs 10,000 worth of UPSC Strategic Package for FREE | PDFs, Zoom session, Tests, & Mentorship

    Salient features of Surya Nutan solar cook-stove

    • Indoor solar cooking: Surya Nutan is a Stationary, rechargeable, and always kitchen-connected indoor solar cooking.
    • Patented by Indian Oil: This is a patented product designed and developed by Indian Oil R&D Centre, Faridabad.
    • Maximum utilization of solar energy: It offers online cooking mode while charging through the Sun which maximizes the system efficiency and ensures high utilization of energy from Sun.
    • How it will work?: It collects energy from the sun, converts it into heat through a specially designed heating element, stores thermal energy in a scientifically proven thermal battery and reconverts the energy for use in indoor cooking. The energy captured not just covers day time cooking needs of a family of four but also the night meal.
    • Hybrid mode: It works on a Hybrid Mode (i.e. can work on both solar & auxiliary energy source simultaneously) which makes the Surya Nutan a reliable cooking solution for all weather conditions.
    • Minimises heat loss: Insulation design of Surya Nutan minimizes radiative and conductive heat losses.
    • Surya Nutan is available in three different models: The premium model (Breakfast +Lunch+Dinner) of Surya Nutan can cook all the meals for family of four.
    • What will be the cost: Initially, cost of the product is around Rs 12,000 for base model, and Rs. 23,000 for Top Model. However, the cost is expected to reduce substantially with economies of scale. At a price of Rs. 12,000-14,000/- for Top Model, assuming annual consumption of 6-8 LPG cylinders, this product can pay back the buyer in first 1-2 years itself.
    • Inbuilt Safety aspects: All the safety aspects required in any indoor appliances are inbuilt in Surya Nutan.
    • substitute for fossil fuels: The stove, which entails a one-time procurement cost and has zero maintenance, is being touted as a substitute for fossil fuels. It does not have a traditional battery that needs replacement. Also, the solar panel has a 25-year life.
    • Modular system: Surya Nutan is a modular system and can be designed in different sizes as per the requirement.

    India’s national energy story

    • In 1950s, the National Physical Laboratory (NPL) fabricated a solar cooker and state-led hydroelectric power but failed to address rural energy consumption.
    • Parallel efforts to improve the traditional stove proved unsuccessful, such as the Hyderabad Engineering Research Laboratories smokeless chulha.
    • 1980s government launched improved chulhas program to reduce fuelwood consumption and benefit women’s health/finances with 50% subsidy incentive. But the program failed due to construction, maintenance, and corruption issues. Women still rely on chulha despite hazards.
    • Cooking is 80% of rural Indian household’s energy use. 668m people in India use biomass for cooking/lighting, despite LPG scheme success. Fuel price inflation and subsidy withdrawal force women to use chulha with hazards.

    India Energy Week 2023

    • India’s G20 Presidency: India Energy Week 2023 is being organised during India’s G20 Presidency, under the tagline “Growth, Collaboration, Transition”, from 6-8 February 2023 in Bengaluru.
    • Opportunity for India: It provided a unique opportunity to showcase India as both an engine of global economic growth and a driver for global consumption, supported by a conducive and investment-friendly environment, and a skilled workforce.
    • Opportunity for strategic policy making and knowledge sharing: IEW 2023 was an unprecedented opportunity for regional, international leaders and CEOs to come together for strategic policy making and technical knowledge sharing.

    Why In India?

    • India is projected to witness the largest increase in energy demand of any country over the next two decades, as its economy continues to grow and create opportunities for its people to fulfil their potential.
    • India’s share in global energy consumption will rise from 7% to 14% by 2050
    • IEA predicts India will account for 25% of energy demand growth from 2020 to 2040
    • India’s oil and gas demand will triple by 2050
    • Gas consumption to grow threefold by 2030
    • Share of gas in energy mix to rise from 6.3% today to 15% by 2030

    Do you know “THE PANCHAMRIT” (The five-nectar-element commitments)?

    1. Indian Will take its non-fossil energy capacity to 500 GW by 2030.
    2. Indian will meet 50 % of its energy requirements from renewable energy by 2030.
    3. India will reduce the total projected carbon emissions by one billion tonnes from now till 2030.
    4. By 2030, India will reduce the carbon intensity of its economy by less than 45 percent.
    5. By the year 2070, India will achieve the target of net zero

    Conclusion

    • Surya Nutan has the potential to transform our energy security situation, as India currently imports 50% of its LPG requirements. It also reduces India’s CO2 emissions drastically and keeps our citizens insulated from the vagaries of the high international fossil fuel prices. India’s energy transition will play a pivotal role in global energy markets. India Energy Week comes at a critical time, with the challenges of energy security and environmental sustainability impacting long-term energy transition and paths towards decarbonisation.

    Mains Question

    Q. Indian Oil Corporation recently launched the Surya Nutan a solar cook-stove at the India Energy Week 2023. Discuss its salient features and potential benefits for energy security for rural households.

    Attempt UPSC 2024 Smash Scholarship Test | FLAT* 100% OFF on UPSC Foundation & Mentorship programs

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Social Media: Prospect and Challenges

    OTT Governance: Measures To Enhance Transparency

    op-ed snap | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Digital Media Ethics Code

    Mains level: OTT governance In India, concerns and measures

    Central Idea

    • It has been two years since the government issued the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules through which the Ministry of Information and Broadcasting (I&B) was given the task of regulating content on OTT and online platforms. India’s approach can be termed as a light-touch co-regulation model where there is self-regulation at the industry level and final oversight mechanism at the Ministry level.

    Get your Rs 10,000 worth of UPSC Strategic Package for FREE | PDFs, Zoom session, Tests, & Mentorship

    What are OTT Media?

    • An over-the-top (OTT) media service is a streaming media service offered directly to viewers via the Internet.
    • OTT bypasses cable, broadcast, and satellite television platforms, the companies that traditionally act as a controller or distributor of such content.
    • The term is most synonymous with subscription-based video-on-demand (SVoD) services that offer access to film and television content.
    • They are typically accessed via websites on personal computers, as well as via apps on mobile devices (such as smartphones and tablets), digital media players, or televisions with integrated Smart TV platforms.

    Digital Media Ethics Code Relating to Digital Media and OTT Platforms

    • This Code of Ethics prescribes the guidelines to be followed by OTT platforms and online news and digital media entities.
    1. Self-Classification of Content: Platforms must self-classify content into five age-based categories and implement parental locks and age verification mechanisms.
    2. Norms for news: Publishers of news on digital media would be required to observe Norms of Journalistic Conduct of the Press Council of India and the Programme Code under the Cable Television Networks Regulation Act.
    3. Self-regulation by the Publisher: Publisher shall appoint a Grievance Redressal Officer based in India who shall be responsible for the redressal of grievances received by it. The officer shall take a decision on every grievance received it within 15 days.
    4. Self-Regulatory Body: Publishers can have a self-regulatory body headed by a retired judge or eminent person with up to six members. The body must register with the Ministry of Information and Broadcasting, monitor publisher compliance with the Code of Ethics, and address grievances not resolved by publishers within 15 days.
    5. Oversight Mechanism: The Ministry of Information and Broadcasting must establish an oversight mechanism and establish an Inter-Departmental Committee to hear grievances.

    Guidelines Related to social media

    • Due Diligence to Be Followed By Intermediaries: The Rules prescribe due diligence that must be followed by intermediaries, including social media intermediaries. In case, due diligence is not followed by the intermediary, safe harbour provisions will not apply to them.
    • Grievance Redressal Mechanism: The Rules seek to empower the users by mandating the intermediaries, including social media intermediaries, to establish a grievance redressal mechanism for receiving resolving complaints from the users or victims.
    • Ensuring Online Safety and Dignity of Users, Especially Women Users: Intermediaries shall remove or disable access within 24 hours of receipt of complaints of contents that erodes individual privacy and dignity.

    What are the concerns?

    • Low compliance and limited public awareness: OTT Rules require display of contact details for grievance redressal mechanisms and officers, but compliance is low and awareness among public is limited. Though the OTT Rules were notified in 2021, there is little awareness about them among the general public.
    • Lack of Transparency in Complaint Redressal Information: In many cases, either the complaint redressal information is not published or published in a manner that makes it difficult for a user to notice easily. In some cases, the details are not included as part of the OTT app interface.

    The Singapore Model

    • In Singapore, the Infocomm Media Development Authority is the common regulator for different media.
    • Aside from instituting a statutory framework and promoting industry self-regulation, its approach to media regulation emphasises on promoting media literacy through public education.

    What needs to be done?

    • Uniformity: There is a need for uniformity in displaying key information on obligations, timelines, and contact details for grievance redressal.
    • Specified rules: Rules should specify manner, text, language, and frequency for display of vital information and mandate industry associations to run campaigns in print and electronic media
    • Description in respective languages: Age ratings and content descriptors should be displayed in respective languages of the video, and shown prominently in full-screen mode for a mandatory minimum duration
    • Guidelines should be prominent in advertisements: Guidelines should ensure film classification/rating is legible and prominent in advertisements and promos of OTT content in print and electronic media.

    Measures to Enhance Transparency and Accountability in OTT Platform Governance

    • Periodic Audits by Independent Body: Periodic audits should be undertaken by an independent body to check the existence and effectiveness of access controls, age verification mechanisms, and display of grievance redressal details by each OTT platform.
    • Dedicated Umbrella Website: The Ministry could facilitate a dedicated umbrella website for the publication of applicable Rules, content codes, advisories, contact details for complaints/appeals, etc.
    • Publish Complaint Details in public domain: Publish detailed complaint descriptions and decisions by OTT providers and self-regulatory bodies in the public domain; providers should upload this information on a dedicated website for transparency.
    • IDC Membership to be Broad-Based and Representative: The Inter-Departmental Committee (IDC) comprising officer-nominees from various ministries of the Central government and domain experts should be made more broad-based and representative with security of tenure.
    • Provision for Disclosure: Provision for the disclosure or publication of an apology/warning/censure on the platform or website should be incorporated in the Rules.
    • Financial Penalties: Financial penalties may be imposed on erring entities.
    • Common Guidelines for Content Governance: A common set of guidelines for content, classification, age ratings, violations, etc. should be evolved to govern content uniformly across platforms in the era of media convergence.

    Conclusion

    • India’s OTT regulatory model aims to strike a balance between self-regulation and legal backing, aligning with global trends. The government’s efforts to enhance media literacy and transparency will not only promote effective self-regulation but also empower millions of OTT consumers. These initiatives are crucial for achieving the objective of raising India’s stature at an international level and serving as a model for other nations to emulate.

    Mains Question

    Q. Despite the launch of Intermediary Guidelines and Digital Media Ethics Code there are still concerns over the OTT governance. In this backdrop Discuss what can be done to improve the transparency and safeguarding the its users?

    Attempt UPSC 2024 Smash Scholarship Test | FLAT* 100% OFF on UPSC Foundation & Mentorship programs

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Foreign Policy Watch: India-United States

    I2U2: Significance Of The Minilateral Grouping

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: I2U2

    Mains level: I2U2 development its significance for India and potential challenges

    Central Idea

    • In July 2022, India, Israel, the United States (US), and the United Arab Emirates (UAE) in a hybrid summit announced the establishment of a new minilateral grouping called the I2U2. The four countries envision their alliance as an ad-hoc, informal, issue-specific and geoeconomic initiative.

    Background: I2U2 forum

    • Following the Abraham Accords between Israel and the UAE, I2U2 was founded in October 2021 to address marine security, infrastructure, and transportation challenges in the region.
    • It was known as the ‘International Forum for Economic Cooperation’at the time. At that time, UAE had referred to the new grouping as the ‘West Asian Quad’.
    • As the Accords opened room for increased interactions between Israel and its Gulf neighbours, it has become less difficult for other partners like the US and India to engage with the region through plurilateral forums.
    • I2U2 prioritizes economic strengths over political differences, leveraging India’s growing economy, Israel’s technical expertise, UAE’s capital, and USA’s international clout for mutual cooperation.
    • I2U2 meetings explore B2B relations and establish I2U2 Business Forum; proposal to form ‘I2U2 Hub’ in UAE as ideation center for forging economic partnerships and sharing profits of intellectual property

    Significance of I2U2: Own motivations for joining the grouping

    1. For India:
    • I2U2 bolsters India’s strategic engagement with West Asia and strengthens its robust bilateral relationships with the UAE, Israel, and the US.
    • India’s total trade with UAE amounted to US$ 73 billion in 2022, making UAE India’s third largest trading partner. UAE is also India’s second largest export destination and accounts for 40 percent of India’s total trade with the Arab world.
    • Israel, is one of India’s top suppliers of defence equipment and a key technology partner in different domains including defence, space, agriculture, and cybersecurity.
    • The US is India’s largest trading partner and second-largest foreign investor, with bilateral trade reaching US$ 119 billion in 2022 and investments accounting for 18 percent of total Foreign Direct Investment.
    1. For Israel:
    • From Israel’s perspective, I2U2 is a continuation of the Abraham Accords and presents a new opportunity to build a platform where it can combine its old partners (the US and India) with the new (UAE) through a wider economic and strategic partnership.
    1. For UAE:
    • The Emiratis is of the view that such a grouping, with a focus on complementarities, will help solve global challenges such as those related to security in food, energy, and water.
    • The UAE knows these challenges only too well, given its own food and water shortages, with an annual rainfall of only 100mm and importing 85 percent of its food supplies.
    • UAE also sees I2U2 as a platform that can serve its interests in strengthening bilateral ties with the other three nations, while placing itself as the bridge between West Asia and South Asia.
    1. For the United States:
    • The grouping is a low-hanging fruit, following the Abraham Accords, through which it can nurture relationships with its allies and partners bilaterally as well as multilaterally, especially in the West Asian region.
    • This also helps the US in checking the expanding Chinese footprint in the region, particularly in the fields of investment, innovation, and technology.
    • US participation also indicates that it has shed its traditional strategic and security lens and now views the world order in a trans-regional and multilateral way.

    What makes this forum different?

    • Economic cooperation: The I2U2 is a regional forum focused on economic cooperation, distinguishing it from other forums like the Quad, Negev Forum, and AUKUS.
    • Six core sectors for intervention: The I2U2 has identified six core sectors for intervention are water, energy, transportation, space, health, and food security.
    • Active role for joint investments: The grouping envisions an active role for private capital and technology, aiming to collaborate on joint investments, resource mobilization, and new initiatives.
    • Key global concerns are prioritized: Two key global concerns are being prioritised by the grouping food security and clean energy which have local, trans-regional and long-term dimensions.

    Food corridor project

    • I2U2’s Food Security Project Addresses Global Hunger Crisis: I2U2 aims to combat global hunger crisis by utilizing member countries’ strengths in finance, technology, agriculture, and knowledge.
    • For instance: The project will use Israeli and American technology to establish integrated food parks in the states of Gujarat and Madhya Pradesh, with future expansion planned for other states, including Telangana, Andhra Pradesh, and Maharashtra .
    • Broader objective is to create alternate supply chains: The broader objective of the initiative is to create alternate supply chains among countries with similar goals, to guarantee food security that is environmentally sustainable

    Hybrid renewable energy project

    • Renewable Energy Project in Gujarat: I2U2’s second project aims to establish a 300 MW hybrid renewable energy facility in Gujarat with advanced battery storage technology developed through Israeli expertise and Emirati and American investments.
    • Strong Interest in UAE-India Partnership for Renewable Energy: UAE-based companies like Masdar are interested in partnering with India to explore renewable energy opportunities, especially with India’s goal of achieving 500 GW of non-fossil fuel capacity by 2030.

    What are the Potential Challenges?

    • Security Interests Could Pose Challenges for I2U2: Individual countries may prioritize their own security interests, which could conflict with those of others.
    • For instance: US and Israeli outlook on West Asia is affected by Iranian rivalry, while India and UAE might have a different perspective. While these security considerations have not yet affected the project, the unpredictable situation with Iran could pose a challenge.
    • China’s Presence in the Region Raises Concerns: The US and India are wary of China’s expanding presence in the region through trade deals, infrastructure investments, and security cooperation whereas Israel and UAE, have a more positive view of China,
    • For instance: UAE upgrading its ties to a Comprehensive Strategic Partnership and Israel engaging in defence and technical cooperation with China
    • Institutional Bottlenecks Could Hinder I2U2: Institutional bottlenecks could be a potential roadblock for the I2U2 project, as there may be a lack of synergy in the working cultures of business people from the four countries, and accountability mechanisms may be vague.

    Way ahead: India’s Stakes

    • India’s participation in I2U2 is crucial due to its position as a connector between West Asia and South Asia.
    • The initiative can bring investments, innovation and technology to India, boosting its journey to become the world’s third largest economy.
    • I2U2 can also support ‘Make in India’ by attracting manufacturing facilities in fields such as AI, fintech, transportation, and space.
    • To facilitate cooperation, India can designate nodal officers in its embassies and form a Coordinating Committee with the sherpa.
    • I2U2 could also inspire India to establish similar minilateral groupings with its partners in South Asia and Africa.

    Conclusion

    • As an alternative to the dismal performance of most multilateral institutions, minilaterals like I2U2 provide hope for more effective and mutually beneficial international cooperation. Such platforms can provide a sound framework to explore opportunities, support collective resolution of global challenges, and unlock avenues for greater convergence of interests and actions between countries.

    Mains Question

    Q. What is I2U2 minilateral forum? Discuss the Significance of I2U2 as the member counties driven by own motivations for joining the grouping. Also note down the potential challenges.

    Attempt UPSC 2024 Smash Scholarship Test | FLAT* 100% OFF on UPSC Foundation & Mentorship programs

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now

  • Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

    Free Trade Agreements (FTAs) and its Geoeconomic Implications

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: NA

    Mains level: Free trade agreements and its advantages

    Trade

    Central Idea

    • With a projected 7 per cent growth for the ongoing year, the Indian economy is set to register the highest growth rate across all the major economies of the world. Moreover, Indian growth story for the years to come will be shaped by the unfolding geoeconomic and geopolitical forces that will sustain its consumption-driven-growth phenomenon, further driving investment and production.

    Get your Rs 10,000 worth of UPSC Strategic Package for FREE | PDFs, Zoom session, Tests, & Mentorship

    What is Regional Trade Agreement (RTA)?

    • RTA is a treaty between two or more countries in a particular region that aims to reduce or eliminate trade barriers, such as tariffs and quotas, to facilitate increased trade between the member countries.
    • RTAs can take various forms, such as Free Trade Agreements, Customs Unions, Common Markets, and Economic Unions.

    Trade

    What is Free Trade Agreement (FTA)?

    • FTA is a specific type of RTA that eliminates tariffs and other trade barriers on goods traded between the member countries.
    • FTAs may also include provisions on trade in services and investment, but they are primarily focused on reducing tariffs on goods.

    India’s tryst with RTAs/ FTAs

    • From 2021, there has been a sudden spurt in signing bilateral trade agreements by India.
    • The India-Mauritius CECPA in 2021, India-UAE CEPA and Australia-India ECTA in 2022, are some examples.
    • Talks on these grounds with the UK and Canada are in advanced stages,
    • Serious intentions on inking FTAs with the EU and Israel have also been expressed.

    Geoeconomic Implications

    1. India-UAE Comprehensive Economic Partnership Agreement (CEPA):
    • Western QUAD: The India-UAE CEPA strengthens Indian commitment with I2U2 (i.e. Israel, India, UAE and the United States), also referred to as the western QUAD, a regional force convened in October 2021.
    • Access to the western neighbours: This agreement provides India an access to the western neighbours that can facilitate the process of negotiating trade agreements in the absence of China.
    • Advantage for India-GCC FTA: It puts India a step ahead towards having an India-GCC (Gulf Cooperation Council) FTA, thereby ameliorating its relations with the gulf nations.
    • Boost to economy: On the economic front, the trade pact is envisioned to almost double bilateral commodity trade by 2027, increase service trade and generate 10 lakh jobs in labour-intensive sectors.
    1. The Australia-India Economic Cooperation and Trade Agreement (ECTA)
    • The Australia-India ECTA boosts Australia-India ties on various fronts, including geopolitical one.
    • Once a more comprehensive FTA, i.e. the CECA (Comprehensive Economic Cooperation Agreement) gets inked between the two nations, various other areas such as services, investments, government procurement and intellectual property will be covered.
    • Even within the QUAD, the strong relationship between Australia and India will help in creating an Australia-India niche.
    1. Indo-Pacific Economic Framework for Prosperity (IPEF)
    • The IPEF, an economic initiative driven by the Biden administration with a total of fifteen participating member nations, presents the massive potential to ink a regional trade agreement and create a trade bloc without China.
    • If that happens, India, being a member, will definitely be a beneficiary.

    Trade

    How FTA’s will lead to Consumption-driven growth?

    • FTAs boosting consumption demand, this can happen through two avenues.
    • Increase consumption choice: The FTAs will enable cheaper imports of commodities and will increase the consumption choice.
    • Multiplier effect on domestic incomes: The second is that the direct multiplier effect of enhanced trade and increased employment will have its multiplier effect on domestic incomes.
    • Increase purchasing power: Both the forces combined together will increase the purchasing power of the consumers, and increase consumption demand.

    Trade

    Factors that put India at Competitive Advantage

    • India’s demographic dividend: India’s competitive advantage lies with its comparative demographic dividend over China. The under-30 population in India, being about 52 percent, compares favorably with around 40 percent for China, which is going to shrink faster over the next decade. The young population is expected to boost consumption, savings and investments, and will drive consumption-led-growth.
    • Low wage and thereby Cost-competitiveness: Second, as per 2019 estimates, the average Indian wage is 10% of that of China, thereby rendering relative cost-competitiveness to the products manufactured in India as compared to China. This is already enticing foreign investment.
    • National Infrastructure Pipeline: India’s massive emphasis on physical infrastructure through projects like the National Infrastructure Pipeline (NIP) for FY 2019-25 and transport sector growth will reduce the transaction costs of doing business.
    • Reforms in business environment: India has been working extensively to reform its business environment through effective policy practices be it through measures like Production Linked Incentive (PLI) scheme, or bringing about substantial changes in its tax regimes, liberalization of the Foreign Direct Investment (FDI) policies in manufacturing, etc.
    • Digital literacy: It entails digital literacy and English language skills. On both counts, the Indian youth is way ahead of China.
    • Strong Indian Diplomacy: Indian diplomacy is also playing an important role with trade agreements being used as important instruments of diplomacy. This is true for the UAE, Australia, and the partnerships like QUAD (or even IPEF), and I2U2.

    Conclusion

    • No doubt, FTAs are emerging as important tools for economic diplomacy for India for deeper levels of engagement with friendly nations. At the same time, the FTAs are two-level games for India. At the international level, it has to negotiate with the concerned nation/s, while at the domestic level it has to negotiate with various contending constituencies. Yet, FTAs’ role as a growth driver through trade and investment cannot be ignored. In addition, with India becoming the most populous nation in the world, surpassing China in January 2023, it presents itself as the largest product and factor market to the global community.

    Mains Question

    Q. What are FTAs and RTAs? India is enhancing its FTAs and RTAs in recent times. Discuss how it will contribute to the growth of the economy.

    Attempt UPSC 2024 Smash Scholarship Test | FLAT* 100% OFF on UPSC Foundation & Mentorship programs

    Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

    Attend Now