India’s Slowing Exports

GS PAPER-III

Context: The article discusses the primary causes for decreased exports as well as areas where the Indian economy is performing well. According to the Ministry of Commerce, India’s exports fell by around 16.7 (sixteen point seven) percent in October compared to the previous year.

Background:

• This is the first monthly slide reported since February 2021.
• Imports climbed at a significantly slower rate in October than in previous months, owing to global commodity price weakness, resulting in a 50% increase in the trade imbalance.

Main reason for this performance of the export sector:

• Engineering products (formerly the backbone of India’s commerce exports) decreased by 21%. The Engineering Export Promotion Council of India blamed the slowdown on high inflation in developed nations, falling demand in China, the EU and US slowdowns, and the Russia-Ukraine war.
• Steel and related product exports fell by $2 billion in October.
• Because of the export tariff imposed on certain items to aid in increasing local availability.
• This responsibility has subsequently been abolished by the government.
• Workers took time off over the Diwali holiday season, reducing production.

How have the other exporting nations performed?

• Due to strong lockdowns impacting its industrial production, China is an outlier this year (registering a drop in export growth).

Signs of improvement for the Indian economy:

• Local demand is resilient: In the next days, the investment cycle will drive growth and employment creation.
• Capital spending in the private sector is expected to reach six lakh crores this year, the most in the past six years.
• Private Capex is generally based on credit or loans obtained from the financial system.
• Local forces, such as increasing food costs, have fueled inflation rather than foreign factors. Retail inflation, which has been persistently above 7% in recent months, was 6.8% in October.
• International commodity prices are falling, and the Kharif crop has arrived.

Conclusion:

Whether the foregoing signs (both good and negative) indicate a transitory or permanent trend will be determined in the following months.

The silent revolution of “Nari Shakti”

GS PAPER-II

Context: On the 75th year of India’s independence, the Prime Minister articulated a bold vision that in the coming 25 years, “Nari Shakti” would play a vital role in India’s socio-economic developmental journey.

Background:

• Women have always had a higher rank in India, both culturally and mythologically. The goddess Uma, for example, is recounted in the Kena Upanishad as having enlightened the three mighty but ignorant gods, Indra, Vayu, and Agni, on the profound secret of Brahman.
• Women have endured prejudice in the home and at work, and they have long been victims of governmental apathy and neglect.
• “Nari Shakti” has been reasserted in recent decades through micro and quiet revolutions. There are some silent women-led shifts that are politically and economically altering our society. However, there is a need to stress the barriers that women face in reaching their full potential as contemporary nation-builders in India.

Role of Women in Indian democracy

• According to research on women voters based on historical data, the gender gap in voter turnout has narrowed dramatically since 2010, and current trends suggest that women voter turnout regularly exceeds male voter turnout. This tremendous growth is a statewidephenomena that is also being noticed in less developed sections of the country where women’s standing has historically been much lower.
• Since 2010, significantly more women have run for office. To put this in context, women fought state assembly elections in around 7% of the seats in the 1950s, but by the 2010s, women were contesting in 54% of the constituencies. This is especially notable at the panchayat level, where 50% of seats have been designated for women for over a decade.

Results of this positive change

• One important corollary is that women voters can no longer be ignored or marginalised; they demand respect and command attention.
• This silent revolution has driven political entrepreneurs and grounded leaders to create policies that address concerns important to women. It is unsurprising that some of the most dramatic policy advances in poverty reduction since 2015-16 have taken the shape of home networking across the country via amenities such as cooking fuel, sanitation, water, and electricity. These are also important long-term economic forces.
• The silent revolution of growing women voters has driven political parties to make law and order a crucial electoral issue in less developed regions, where women and children have been the most vulnerable victims of lawlessness.
• Rather than focusing on caste and communalism rhetoric, political parties and leaders are now responding to this by increasing availability and affordability to fundamental requirements of common people such as facilities and infrastructure. This is in stark contrast to the “democratic recession” that the rest of the world is experiencing.

Challenges-

• According to World Bank data, female labour force participation has decreased from 32% in 2005 to 19% in 2022. Unpaid domestic services, such as caring for children and the elderly, are not considered when calculating labour force participation.
• Our research, based on data from time usage surveys conducted in India in 2018-19, finds that women aged 25 to 59 spend nearly seven hours per day performing unpaid domestic tasks.
• One of the main causes for the reduction in women’s labour force participation is the double burden of working women. Working or non-working males in the same age range, on the other hand, spend less than 45 minutes on unpaid domestic or caregiving services.
• Fertility rates have fallen considerably below the replacement rate, the share of the senior population has grown, and the percentage of kinless elderly has climbed alarmingly.

Way forward-

• It is critical to consider the experience of industrialised nations, where growing labor-force involvement of women has come at the price of family structure.
• If we want more women to enter the labour field while also preserving the family structure, males must share the cost of unpaid domestic services. This would necessitate a break with tradition and the development of new modern tales and myths.

Conclusion

• As India assumes the presidency of the G20, it is an opportunity to celebrate “Nari Shakti” and political empowerment. A massive rise in female voter turnout over the last decade has strengthened and advanced our democracy. Women’s political emancipation in India has been a bottom-up movement with lessons for other nations.

Economic Indicators

GS PAPER-III

Context:The Union budget year 2023-24 will be released on February 1, followed by state budgets. These budgets will set the policy tone for the remainder of the year and are thus highly scrutinised.

Situation of Capex and budgetary restructuring following pandemic

• The government’s total budget deficit has skyrocketed, and we believe the next several years will be all about bringing it back on track.
• This is significant since interest payments on previous debt account for a stunning 50% of the central government’s net tax receipts, leaving very little opportunity for further spending.
• Given the needs of the economy on various fronts like health, education and capex, it is important to lower the interest burden over time. That can only be achieved by fiscal consolidation.

Analysing the tax revenue and expenditure of central and state government

• Given the economy’s demands in areas such as health, education, and capital expenditure, it is critical to reduce the interest burden over time. This can only be accomplished through budgetary consolidation. Both benefited as tiny and informal businesses battled with the lockdowns and lost market share to larger corporations that pay more taxes.
• During the early stages of the epidemic, a substantial portion of the tax income came from the “special” duty and surcharge on oil, which went mostly to the central government. To be fair, the federal government later reduced the oil duty (in both 2021-22 and 2022-23), and the tax portion that went to the states increased little.
• The federal government has committed to higher current spending than the states. While overall spending grew throughout the epidemic, central government spending climbed more.
• Larger social welfare expenditure (for example, on the free food distribution plan) and, more recently, higher subsidies (for example, fertilisers) in response to rising commodity prices drove this trend.
• The general assumption is that governments have gone beyond on unsustainable current spending. However, records suggest that just a few states have spent much (for example, Telangana, Assam, West Bengal and Punjab).

Analyzing the capex and fiscal deficit of central and state government

• Making a praiseworthy choice, the central government increased capital investment by 1.2 percent of GDP between 2019-20 and 2021-22, leveraging both its tax windfall and its capacity to borrow more at a time when banking sector liquidity was low.
• On the other hand, states reduced capital expenditure, which has decreased as a proportion of GDP in recent years and remains poor in the present year. In reality, comparing central government capex to state and public sector investment reveals that the total public sector drive is no greater than it was in 2018-19.
• The federal government’s budget deficit has exceeded expectations, but the state deficit has remained reasonably stable. The federal government’s fiscal deficit has increased over the pre-pandemic level of 3.4 percent of GDP in 2018-19, and is already far above the 3 percent medium-term objective.
• Even if the state fiscal deficit climbed in the first year of the epidemic (from 2.5 per cent of GDP in 2018-19 to 3.8 per cent in 2020-21), it has reduced considerably after (to 2.7 per cent in 2021-22).
• In reality, state government borrowing has been rather modest this year. If this trend continues, the budget deficit might be much smaller in 2022-23 (approximately 2.5 percent of GDP), well below the 3% medium-term objective and well on par with pre-pandemic levels.

Challenges-

• The states have less fiscal challenges than the federal government.
• Both face the same dilemma of committing to additional capex, which is regarded as high-quality expenditure since it “crowds in” private investment when done carefully. And we think that investment is the only long-term method to boost the economy’s potential to grow and generate employment.
• The federal government’s problem is to maintain its capex drive at a period of budgetary austerity. The issue for the states is to begin doing more.

Way forward-

• The federal government intends to reduce the budget deficit by around 2% of GDP during the next three years. Approximately half of this consolidation may be achieved by returning current expenditure to pre-pandemic levels.
• Continued economic formalisation, which boosts tax collections (albeit “organic” formalisation is likely to be more durable than “forced” formalisation).
• A stronger drive for disinvestment through selling holdings in public-owned firms, as well as further tax measures (in terms of direct taxes and the GST).
• If they do not work, the default choice will be to reduce capex, which is a problem because it would have an impact on medium-term growth.

Conclusion

Fiscal consolidation and capital spending should be complementary. More government expenditure equals greater infrastructure construction and more opportunities for development and jobs. This spending should be done with caution.

Historical and Archaeological Findings

GS PAPER-I

Context:According to Dylan Sullivan and Jason Hickel’s recent assessment of India’s experience under colonial rule, figures from the Census of India show that between 1880 and 1920, nearly 100 million Indians perished as a result of British policies in India. Their strategy is to compute excess mortality, which is the difference between actual deaths and predicted deaths.

What assumptions does their research make?

• Prior to colonial domination, India’s mortality rate was most likely comparable to that of modern England.
• The resultant estimates for extra fatalities between 1880 and 1920 are 50 million in the first scenario and 160 million in the second. The authors conclude on a midpoint number of about 100 million fatalities in India as a result of colonial policies.
• For context, they point out that this amount is more than the death from hunger in “the Soviet Union, Maoist China, North Korea, Pol Pot’s Cambodia, and Mengistu’s Ethiopia”. According to them, this gives a direct appraisal of the Raj’s repercussions for India.

Study quantifying the impact of colonial rule in India

• Attempts to measure the impact of colonial rule in India have focused mostly on changes in national revenue. However, accurate income figures for the eighteenth century are few. Population numbers, on the other hand, are accessible from the first Census of India in 1871.
• After 1881, the mortality rate in British India began to grow rapidly, reaching over 20% by 1921. Because it is rare for a country’s death rate to climb continually due to natural causes, this shows that living conditions deteriorated throughout this time period.
• The death rate fell in 1931, the final census performed in British India, although the country’s last famine was still to come. It occurred in Bengal in 1943, during the final five years of nearly two centuries of British colonial rule.

How repeated famines are recorded?

• Arguments include “English systems of land tenure, the English language, banking, the common law, Protestantism, team sports, the limited state, representative assemblies, and the notion of liberty” have been presented by the Harvard historian Niall Ferguson.
• There is no mention of the famines that began almost immediately after the East India Company’s rule in Bengal, the nineteenth-century de-industrialisation of India, the drain of wealth, or the worsening food security as India’s peasants were forced to grow commercial crops for export so that Britain could balance its trade.
• The fact that there has not been a single famine since 1947 lends credence to the argument that British policies in India caused numerous famines. This is despite a population increase following a substantial decline in mortality rates. The decrease in death rate undoubtedly indicates better living circumstances. According to the Census, Indians’ life expectancy at birth grew more in the 1950s than it had in the preceding seventy years.

Census as a double-edged sword

• It indicates that gender disparity in India is worsening. A basic indicator of this would be the population’s female-to-male ratio. This ratio is thought to be one in the absence of conditions that reduce women’s life chances, such as foeticide. According to the Census of India, we have never hit that level in our documented history, save in isolated enclaves inside the country.
• While this is concerning in and of itself, it is much more concerning that this ratio has gradually fallen since 1947. After falling for four decades beginning in 1951, it began to rise again in 1991. However, it was still lower in 2011 than it was in 1951.
• So, while life expectancy climbed quickly after independence, it increased quicker for males than for women in the early years.

Conclusion

The Census of India not only clarifies the dangers of British authority in India, but also points out potential impediments. As India shouts VasudhaivaKutumbakam at the G-20, meaning that the countries of the globe are a family, it is our responsibility to guarantee that all members of our own family have the same liberties.

Need to reform India’s Pensions System

GS PAPER-II

Context: The Global Pension Index recently placed India’s pension system 41st out of 44 countries.There is an index that ranks pension systems across the world. The index is known as the Mercer CFA Institute Global Pension Index.

What does this index look at?

• The index research concedes that comparing pension schemes throughout the world is neither easy nor straightforward.
• There are variances in demographic profile and needs, economic growth, government income, regulatory maturity, and private market development.

The index rates nations based on three factors:

• Adequacy: What benefits may future retirees expect?
• Can the present mechanisms continue to function in the face of demographic and budgetary challenges?
• Integrity: Are private pension systems regulated in a way that fosters long-term community trust.

India’s position:

• This ranking ranks India’s pension system 41st out of 44 nations considered in the 2022 edition.
• Constantly low: That’s a low rank but it is also crucial to remember that India has consistently rated low on this index even when only 16 nations were studied in 2011.

More about the pension:

A pension is a monthly stipend provided to those who are no longer working.

Pension Required:

• In old age, one is not as prolific as in youth.
• The emergence of the nuclear family –
• Younger earning members migrate.
• Cost of living increases
• Prolonged life expectancy
• A monthly income guarantee provides a decent life in old age.

Global Data suggestions:

• “For the first time in human history, individuals aged 65 and above outnumber youngsters aged five and under,” according to the World Economic Forum.
• And while this stress may be less for a nation such as India, which has a comparatively youthful demographic profile, there is such a thing as longevity risk.
• Longevity risk refers to the possibility that increased life expectancy would necessitate more funds for pension and insurance businesses as individuals live longer than expected.

Highlights about the gross inadequacy of India’s pension architecture:

• At least 85% of current workers are not members of any pension scheme and are thus likely to remain uninsured or to receive merely a social income in their retirement.
• 57% of the elderly receive no financial support from government spending, while 26% receive social pensions as part of poverty alleviation.
• As government ex-workers (or their survivors), 11.4 percent of the elderly get defined benefits, accounting for 62 percent of system expenses.
• The system of old-age income assistance accounted for 11.5% of total government spending, with sub-national governments bearing more than 60% of the burden.
• Contributory programme funds invested in government paper absorb 40% of all subnational government interest payments.
• Pensions for federal and state government employees were set at 50% of the most recently received basic wage.
• Only government personnel are entitled for a pension once they retire.
• Income from the previous pension programme is not taxed.

Issues:

• The fundamental issue was that the pension liability remained unfunded: there was no pension corpus that would increase continually and could be dipped into for payments.

Furthermore, the OPS was unsustainable:

• Pension liabilities would keep growing since pensioners’ benefits grew every year; like salaries of existing employees, pensioners profited from indexation, or what is called ‘dearness relief’
• Improved health-care facilities would enhance life expectancy, and increasing longevity would result in longer rewards.

Warming of Arctic Region

GS PAPER-III

Context: Researchers recently completed an annual evaluation of the region, which concluded that temperatures in the Arctic Circle have been rising significantly faster than those elsewhere on the world.

Nearly 150 specialists from 11 countries created this year’s Arctic Report Card, which The National Oceanic and Atmospheric Administration has released since 2006.

About Arctic Region:

• It is usually believed to refer to the region north of latitude 66° 34′ N above the Arctic Circle, which encompasses the Arctic Ocean and the North Pole.
• The Arctic Council is made up of eight Arctic countries: Canada, the Kingdom of Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States.
• The Arctic is home to about four million people, approximately one-tenth of whom are indigenous people.
• The Arctic Ocean and its surrounding continent have piqued the curiosity of worldwide scientists and policymakers alike, as well as being a high-priority field of research.
• The Arctic has an impact on the earth’s atmospheric, oceanic, and biogeochemical cycles.

Major Challenges

• Climate Change: They reported how increasing air temperatures, melting sea ice, shorter times of snow cover, greater wildfire and rising amounts of precipitation had forced animals and Indigenous people in the region to adapt.
• Greenland had the most catastrophic melting of its ice sheet for that time of year in over four decades of continuous satellite observation.
• For the first time in 2021, an August heat wave prompted rain to fall at the ice sheet’s peak.
• Rising temperatures are changing the environment of the region, making it less characterised by sea ice, snow, and permafrost and more defined by open water, rain, and green landscapes.
• Warming in the poles raises sea levels across the planet, alters how heat and water move in the seas, and may even impact extreme weather events like heat waves and rainstorms.

Pace of change:

• The region has warmed at four times the world average rate over the last four decades. Some Arctic regions are warming at up to seven times the world average.
• Rising temperatures have aided the growth of plants, shrubs, and grasses in portions of the Arctic tundra.
• Green vegetation levels in 2022 were the fourth highest since 2000, especially in the Canadian Arctic Archipelago, northern Quebec, and central Siberia.

Reduced snow cover:

• North American Arctic snow cover was the second-lowest on record. It was the third lowest in the Eurasian Arctic.
• For the past 25 years, the Greenland ice sheet has been melting.

Maritime ship traffic:

• Scientists have cautioned that as sea ice melts, maritime ship traffic is increasing in the Arctic, with the most noticeable increases occurring among ships travelling from the Pacific Ocean through the Bering Strait and Beaufort Sea.

Implications

• Threat to humanity: Rapid melting ice, thawing permafrost, rising temperatures, wildfires, and other changes endanger our homes, livelihoods, and physical safety.
• Monsoons: Because of the country’s dependency on rainfall for water and food security, the relationship between the impact of changing Arctic and monsoons is becoming increasingly important.
• Mineral Resources: The Arctic area is rich in coal, gypsum, and diamond resources, as well as significant amounts of zinc, lead, placer gold, and quartz. Greenland alone holds almost one-quarter of the world’s rare earth deposits.
• Hydrocarbons: The Arctic is also rich in hydrocarbon resources. India is the world’s third-largest consumer of energy. As a result, the Arctic may be able to meet India’s energy security demands.

Way Forward

• The difficulty is that we do not totally understand the mechanisms that influence how swiftly the ice moves and so joins the ocean.
• One method to handle the problem of not knowing the process is to investigate how sea level changed in the past.
• The Earth is presently nearly as warm as it was during the previous interglacial era, which lasted around 125,000 years.
• We must act quickly to prevent and mitigate the impact of climate change on glaciers.

FACTS FOR PRELIMS

Base Editing

• Scientists in the United Kingdom studying a novel kind of cancer therapy found success in Alyssia, a teenager girl with T-cell acute lymphoblastic leukaemia.

• Alyssia was the first person to receive experimental gene therapy using a novel technology known as ‘base editing.’

Base Editing

• The genetic code of a person is made up of numerous permutations of four bases: adenine (A), guanine (G), cytosine (C), and thymine (T).
• Sequences of these bases, like letters in the alphabet, spell out genes, which are instructions for producing the vast range of proteins required for the body’s activities.
• Scientists have been able to zoom into a specific area of the genetic code to change the chemical structure of only one base, essentially modifying its genetic instructions, thanks to breakthroughs in genetic technology.

Developments

A team at Great Ormond Street Hospital used base-editing to generate a novel form of T-cell from a healthy donor that would not target other cells in Alyssa’s body, would not kill each other, would survive chemotherapy, and would eventually hunt down all other T-cells in Alyssa’s body (healthy and cancerous).

Orcas

• Two communities in the US state of Washington have publicly declared their support for the legal rights of a group of endangered orcas.
• Orcas are toothed whales that may be found in temperate and tropical environments (from the Arctic to the Antarctic)
• They have extended life spans and are very gregarious
• Orcas, commonly known as “killer whales,” may be found all over the world.
• The term is derived from the scientific Latin name of the whale, Orcinus orca.
• Killer whales are technically the biggest member of the dolphin family. So they are, in fact, killer dolphins. However, because to their size, the term “whale” is employed in their name.
• They kill other creatures for a living as the top ocean predator.
• IUCN: Data deficient

National Energy Conservation Award

• ·        In 1991, the Ministry of Power’s Bureau of Energy Efficiency (BEE) launched NECA.
• The President also unveiled the ‘EV-Yatra Portal’ (created by BEE) to help drivers get to the nearest public Electric Vehicle charger.

BEE Facts:

• BEE is a statutory agency formed in 2002 by the Energy Conservation Act 2001 to promote energy efficiency and conservation.