29-April-2024-Daily-Current-Affairs

INDIA’S CHINESE IMPORT BILL UP 2.3 TIMES IN 15 YEARS 

TOPIC: (GS2) INTERNATIONAL RELATIONS– SOURCE: THE HINDU 

India’s imports from China surged to over $101 billion in 2023-24 from around $70 billion in 2018-19. China’s share of India’s industrial goods imports increased from 21% to 30% over 15 years. 

• Report by the Global Trade Research Initiative (GTRI) anticipates further growth in Chinese imports. 

Sectoral Dominance: 

• China emerges as the top supplier in eight major industrial sectors, including machinery, chemicals, pharmaceuticals, and textiles. 
• Chinese imports extend beyond electronics to various industries.major industrial product imports into India reached 30%, with over 70% in some categories. 
• Significant reliance on Chinese imports observed across various sectors, including textiles, machinery, electronics, and chemicals. 

Trade Deficit Concerns: 

• India faces a growing trade deficit with China, with stagnant exports and surging imports. 
• Cumulative trade deficit exceeds $387 billion over six years, raising economic concerns. 

Export Scenario: 

• While exports to China increased in 90 principal commodities, India’s overall trade balance remains skewed. 
• Exports to China include items like iron ore, telecom instruments, and electronic components. 

TRADE DEFICIT 

A trade deficit occurs when a country import more in value of goods and services than it exports. In simpler terms, a country is buying more from other countries than it is selling to them. This results in a negative balance of trade. 

• India has the largest trade deficit with China. 
• Electronics and fossil fuels are greatest contributing sectors of trade deficit 

 

How Atmanirbhar Bharat can make India self-reliant 

The Atmanirbhar Bharat Abhiyan (Self-reliant India Mission) aims to boost domestic manufacturing and reduce import dependence. Here are some data points to consider, along with the ongoing debate about its effectiveness: 

Possible Positive Impacts: 

• Production Growth: There has been a rise in production of some goods like mobile phones. India became the world’s second-largest mobile phone producer in 2021. 
• Foreign Direct Investment (FDI): FDI inflows into certain sectors like manufacturing have increased since the initiative’s launch. This indicates growing investor confidence in domestic production. 

Challenges and Debates: 

• Overall Import Reduction: While there might be a shift in sources (diversifying away from China), overall import dependency hasn’t significantly decreased yet according to some  
• Impact on Consumers: Increased focus on domestic production can lead to higher prices for consumers initially, especially if domestic alternatives haven’t yet reached economies of scale. 
• Technological Upgradation: Can India’s industries become globally competitive in quality and innovation? 
• Ease of Doing Business: Does India provide a conducive environment for manufacturers to operate efficiently? 

Government tackles import concerns through initiatives: 

• PLI Scheme: Offers incentives for domestic manufacturing in key sectors, reducing reliance on imports. 
• Boosting Bulk Drug Production: Programs promote domestic API production, reducing dependence on foreign medicines. 
• Focus on Specific Sectors: Support for sectors like textiles and electronics to become import substitutes and global exporters. 
• Technical Regulations: Stricter standards for products like electronics to ensure quality and competitiveness of domestic manufacturing. 
•  E-20 Ethanol blending program aims to blend ethanol with petrol , to decrease bimport burden on fossil fuels  
• Biofuels Mission: Promoting biofuel production like ethanol from sugarcane can partially substitute for imported gasoline, reducing dependence on crude oil. 

Dependency on Chinese imports has profound economic and national security implications. Calls for reassessment of India’s import strategies to mitigate economic risks, bolster domestic industries, and reduce dependency on single-country imports. 

Multiple choice question: 

1. Which of the following factors contributes significantly to a country’s trade deficit? 

1. Decrease in domestic consumption 

1. Increase in foreign investment 

1. Appreciation of the domestic currency 

1. Decrease in imports of essential goods 

ANSWER – C 

Explanation: 

When a country’s currency appreciates (increases in value) relative to other currencies, its exports become more expensive for foreign buyers while imports become cheaper for domestic consumers. This leads to an increase in imports and a decrease in exports, ultimately contributing to a trade deficit. Therefore, the appreciation of the domestic currency is a significant factor contributing to a country’s trade deficit. 

INEQUALITY CAN NO LONGER BE IGNORED 

TOPIC: (GS3) ECONOMY– SOURCE: THE HINDU 

Evidence from the World Inequality database reveals a significant rise in income and wealth inequality in India, with the top 1% experiencing their highest income share since 1922. 

Need for Action: 

• Inequality cannot be justified as a byproduct of growth. 
• Cost of unequal growth must be examined. 

Election Issue: 

• Inequality becomes a significant election issue, welcomed regardless of outcome. 
• Public discussion, especially on social media, focuses on direct redistribution measures. 

Taxation and Spending: 

• India’s low tax-GDP ratio and regressive taxation structure underscore need for reform. 
• Welfare spending remains inadequate compared to other countries, especially in health and social sectors. 

Job Creation and Equitable Growth: 

• Emphasis on generating decent jobs and equitable growth. 
• Governments urged to invest in public services, cash transfer schemes, and direct job creation efforts. 
• Focus on improving quality of jobs, especially for women, and reducing inequality in opportunities. 

Factors Contributing to Income Inequality: 

• Wage Disparities: Differences in wages across occupations and industries create income gaps. 
• Educational Disparities: Higher education levels often lead to better-paying jobs, widening income discrepancies. 
• Technological Changes: Advancements in technology affect demand for skills, impacting income distribution. 
• Globalization: Global economic integration can lead to job outsourcing and wage pressure, exacerbating inequality. 
• Labor Market Trends: Shifts towards gig economy jobs and part-time work influence income distribution. 
• Tax Policies: Tax structures can either reduce or worsen income inequality, with progressive taxes helping to narrow the gap. 

Measuring Income Inequality: 

Gini Coefficient: 

• Calculates income inequality by comparing the distribution of income among individuals or households. 
• Ranges from 0 (perfect equality) to 1 (perfect inequality). 
• A higher coefficient indicates greater income inequality. 

Lorenz Curve: 

• Graphically represents income distribution by plotting cumulative income shares against the population. 
• Shows the gap between actual income distribution and perfect equality. 
• Greater deviation from the line of perfect equality signifies higher income inequality. 

Atkinson Index: 

• Measures inequality by assigning different weights to income differences across the distribution. 
• Reflects societal preferences regarding inequality aversion. 
• Sensitive to changes in income distribution among different income groups. 

Multiple choice question: 

1. The Gini coefficient of a country is 0.4. This implies that 

1. Income distribution is perfectly equal. 

1. Income distribution is moderately unequal. 

1. Income distribution is highly unequal. 

1. Data is insufficient to determine income inequality. 

Answer: B 

EXPLANATION: 

The Gini coefficient is a numerical measure of income inequality, ranging from 0 to 1. A value of 0 indicates perfect equality (everyone has the same income), while 1 signifies maximum inequality (all income goes to one person). A value of 0.4 suggests moderate inequality, where some income disparity exists but it’s not extreme. 

TOWARDS GREEN GROWTH 

TOPIC: (GS3) ENVIRONMENT – SOURCE: THE HINDU 

The Reserve Bank of India (RBI) acknowledges the threat of climate change to India’s economic stability. Extreme weather events and climate shocks can disrupt food production and impact inflation. 

• This can affect the “natural rate of interest,” a key tool for the RBI to manage inflation and economic growth. 

The Cost of Inaction 

• RBI studies suggest long-term economic output could be 9% lower by 2050 without climate action. 
• Higher inflation could force the RBI to raise interest rates, further slowing economic growth. 

Towards a Greener Economy 

• The RBI has begun addressing the transition to a sustainable economy. 
• India needs significant investment (over $17 trillion) to achieve net-zero emissions by 2070. 
• A green taxonomy, like those in Europe and ASEAN, can help assess the sustainability of economic activities. 

Recommendations for the RBI 

• Conduct a thorough assessment of climate change’s impact on economic and financial stability. 
• Collaborate with the government to develop a layered green taxonomy for India. 
• This will help mitigate risks to the financial system during the transition to a sustainable future. 

Climate change and environmental degradation pose a significant threat to India’s economic growth and financial stability.  

• The Reserve Bank of India (RBI) rightly recognizes this in its Monetary Policy Report. 

Interconnected Challenges: 

• Extreme weather events: Droughts, floods, and heatwaves disrupt agricultural production, leading to food price inflation. This disrupts economic activity and strains household budgets. 
• Natural rate of interest: The RBI uses this rate to manage inflation and economic output. Climate shocks can alter this rate, making it difficult to achieve both price stability and growth. 
• Long-term impact: Studies suggest India’s economic output could be 9% lower by 2050 without climate action. This translates to lower living standards and tax revenues, hindering growth potential. 

The Vicious Cycle of Inaction: 

• Entrenched inflation: Persistent inflation can lead to “inflation hysteresis,” where people expect future inflation to be high. This can become self-fulfilling, forcing the RBI to raise interest rates. 
• Higher interest rates: While they curb inflation, higher interest rates also slow down economic growth by making borrowing more expensive for businesses and individuals. 

Towards a Sustainable Future: 

• Green taxonomy: A framework classifying economic activities based on their environmental impact can guide investments towards sustainable practices. This promotes long-term growth without compromising the environment. 
• Green finance: The RBI’s issuance of Sovereign Green Bonds and allowing foreign investment in green government securities are positive steps. Expanding green finance is crucial for a smooth transition to a sustainable economy. 

Multiple choice question: 

1. Climate change is expected to have a significant impact on agricultural productivity in India.In the context of the above statement, consider the following reasons: 

1. Increased frequency and intensity of droughts and floods will disrupt crop cycles and yields. 

1. Rising temperatures will stress crops, leading to reduced growth and higher susceptibility to pests and diseases. 

1. Changes in rainfall patterns will alter water availability for irrigation, affecting crop water requirements. 

Which of the reasons given above are likely to impact agricultural productivity in India due to climate change? 

1. 1 and 2 only 

1. 2 and 3 only 

1. 1 and 3 only 

1. 1, 2 and 3 

ANSWER: D 

EXPLANATION: 

• Climate change poses a serious threat to India’s agricultural sector, which is highly dependent on weather patterns.  
• Increased droughts and floods: These extreme weather events disrupt planting and harvesting seasons, damage crops, and reduce overall yields. 
• Rising temperatures: Higher temperatures can stress crops, affecting their growth and development. This can lead to stunted plants, lower yields, and a decrease in the quality of produce. Additionally, warmer temperatures create a more favorable environment for pests and diseases, causing further damage. 
• Changes in rainfall patterns: Erratic rainfall patterns can disrupt irrigation schedules and water availability. Droughts can lead to water scarcity, while excessive precipitation can cause flooding and soil erosion. Both scenarios can significantly impact crop production. 

NHRC ACCREDITATION STATUS FACES REVIEW IN GENEVA THIS WEEK 

TOPIC: (GS2) POLITY AND GOVERNANCE – SOURCE: THE HINDU 

The NHRC is under scrutiny in Geneva for its accreditation status, with a decision on its “A status” due this week. Issues raised in 2023 include concerns about its composition process, police involvement, and insufficient diversity. 

Importance of Accreditation: 

• Affects NHRC’s ability to vote at UN Human Rights Council and UNGA bodies. 

• May impact international perception of India’s human rights record. 
• MEA reaching out to countries for support. 

Previous Rankings and Concerns: 

• India accredited in 1999; retained A ranking in 2006 and 2011. 
• Status deferred in 2016 and restored after a year. 
• SCA cited concerns over government interference, police involvement, and lack of diversity. 

International Pressure and Response: 

• Human rights groups including Amnesty International and Human Rights Watch urge NHRC’s downgrade. 
• Reference made to increasing restrictions on civil society and discrimination against minorities. 
• UN Human Rights Council reports rejected by the government. 

NATIONAL HUMAN RIGHTS COMMISSION (NHRC) OF INDIA 

Evolution 

•  
• Established in 1993 as per the provisions of the Protection of Human Rights Act (PHRA) of 1993, it became operational on March 31, 1994. 

Body  

• Quasi-judicial body with powers to investigate human rights violations. 
• Functions under the Paris Principles, a set of international standards for NHRCs. 

Composition 

• Chairperson: Retired Chief Justice of India or a Supreme Court judge. 
• Four full-time Members: Judicial and non-judicial members with expertise in human rights. 

Key Functions 

• Investigate complaints of human rights violations. 
• Recommend remedial measures to victims. 
• Monitor government’s human rights policies. 
• Review factors that inhibit the enjoyment of human rights. 

Selection Process and appointment 

• President appoints the Chairperson and Members of the NHRC. 
• This selection is based on recommendations from a high-level committee. 

Committee Composition: 

• Prime Minister (Head) 
• Speaker of the Lower House (Lok Sabha) 
• Home Affairs Minister 
• Leaders of the Opposition in both houses of Parliament (Lok Sabha and Rajya Sabha) 
• Deputy Chairman of the Upper House (Rajya Sabha) 

Term of Office: 

• Both the Chairperson and Members serve a fixed term of three years. 
• They may also be required to step down upon reaching the age of seventy. 

Removal from Office: 

• The President holds the authority to remove the Chairperson or any Member from office. 
• However, this removal can only occur under specific circumstances and requires a formal process. 

Grounds for Removal: 

• Proven Misconduct or Incapacity: This necessitates an inquiry conducted by the Supreme Court of India. 
• Financial Insolvency 
• Engaging in paid external work during the tenure 
• Mental or physical unfitness to perform duties 

• Legal declaration of unsound mind by a competent court 
• Conviction and imprisonment for an offense deemed morally reprehensible by the President 

Limitations of the Protection of Human Rights Act, 1993: 

• Limited Enforcement Power: NHRC can’t penalize authorities for non-compliance with its orders. 
• Time-Bound Complaints: Investigations are limited to one year after an incident. 
• NHRC Composition Ambiguity: The Act doesn’t specify human rights expertise for NHRC judges. 
• Limited Power over Armed Forces: NHRC can only request reports and issue recommendations for military rights violations. 
• Ineffectiveness Against Caste Violence: Despite high rates of Dalit atrocities, conviction rates remain low (e.g., 25.52%). 
• Case Failures: The Kairana Migration case highlights NHRC’s struggles to gather evidence in critical situations. Recent Manipur violence is also another example of incompetence of NHRC 

Strengthening the NHRC: 

• Enhanced Training: Equip NHRC members and staff with regular training to effectively handle human rights cases. 
• Streamlined Processes: Simplify complaint procedures, improve case management, and adopt best ractices. 
• Expanded Authority: Consider granting the NHRC power to enforce recommendations and investigate non-state actors. 
• Structural Reforms: Advocate for changes in laws and policies that perpetuate discrimination and address systemic issues. 

CHAKISAURUS NEKUL 

TOPIC: (GS1) ANCIENT HISTORY– SOURCE: REUTERS  

Chakisaurus nekul’s name comes from the indigenous languages of the region. “Chaki” means “old guanaco” in the Aonikenk language of the Tehuelche people, while “nekul” means “fast” or “agile” in the Mapudungún language of the Mapuche people. 

Habitat and Time: This dinosaur lived approximately 90 million years ago during the Late Cretaceous period in what is now Patagonia, Argentina. 

Discovery Location: It was found in the Pueblo Blanco Natural Reserve in the southern province of Río Negro, Patagonia. This area is known for its abundant fossil discoveries, including mammals, turtles, fish, and other dinosaur species. 

Characteristics: 

• Medium-sized herbivore. 
• Known for its speed; it was a fast runner. 
• Its tail curved downward, unlike most other dinosaurs whose tails were horizontal. 
• It walked on two legs, making it bipedal. 

Significance of Findings: Studies of Chakisaurus provided new insights into its behavior, highlighting its speed and the unusual curvature of its tail. 

MEPHEDRONE 

TOPIC: (GS3) SCIENCE AND TECHNOLOGY– SOURCE: INDIAN EXPRESS 

The Narcotics Control Bureau (NCB) and Gujarat’s Anti-Terrorism Squad (ATS) worked together to uncover hidden labs producing mephedrone in Gujarat and Rajasthan. 

About Mephedrone: 

• Names: Also known as 4-methylmethcathinone, 4-MMC, and 4-methylephedrone. Street names include ‘drone,’ ‘M-CAT,’ ‘white magic,’ ‘meow meow,’ and ‘bubble.’ 
• Classification: It’s a synthetic stimulant, belonging to the amphetamine and cathinone classes. 
• Health Effects: Users experience increased alertness, euphoria, and sociability, but it’s associated with negative effects like anxiety, paranoia, nausea, and insomnia. Long-term use can lead to severe issues such as cardiovascular problems, hallucinations, and aggressive behavior. 
• Legal Status: Banned in India under the Narcotic Drugs and Psychotropic Substances Act, 1985. 

Consequences and Concerns: Mephedrone’s impact on mental and physical health raises concerns about addiction and long-term psychological harm. Its production and distribution are illegal due to its harmful effects. 

ALAGAR TEMPLE IN MADURAI 

TOPIC: (GS1) ANCIENT HISTORY– SOURCE: MINT 

The procession of Lord Kallalagar from Alagar hills to Vaigai river is a significant part of the Chithirai festival in Madurai, Tamil Nadu. 

About Alagar Temple (Azhagar Kovil): 

• Location: Situated at the foothills of Alagar hills, it’s dedicated to Lord Vishnu and is renowned for its intricate sculptures and mandapams. 
• Historical Significance: Mentioned in ancient epics like Silappathikaram, and revered by Alvars (saints) including Thirumangai Alvar, Nammalvar, and Andal. 
• Inscriptions and Residences: Inscriptions dating back to King Ashoka’s rule are found here. The temple is said to have been visited by the Jain monk Ajjanandi and his disciples. 
• Pandyan Reign: Held prominence during the Pandyan reign, with contributions such as beautification of the sanctum sanctorum’s vimana with gold plates and construction of the massive entrance tower. 
• Nayaka Dynasty: King Thirumalai Naickar added artistic features, notably the Nayaka art showcased in the kalyan mandapam. 

ASSET RECONSTRUCTION COMPANIES  

TOPIC: (GS3) ECONOMY– SOURCE: TIMES OF INDIA 

Recently RBI has released guidelines for asset reconstruction companies. 

Asset Reconstruction Companies (ARCs): 

• ARCs are specialized financial institutions that buy bad debts from banks at agreed-upon values and work to recover them. 
• They are registered under the RBI and regulated by the SARFAESI Act, 2002. 
• ARCs operate under RBI’s supervision and control. 
• Functions include acquiring financial assets, changing management, rescheduling debts, enforcing security interest, and settling dues. 
• They take over NPAs from banks, engaging in asset reconstruction or securitization. 
• All rights regarding the debt transfer from the bank to the ARC. 

Funding: Funds for purchasing debts come from Qualified Buyers, including financial institutions, insurance companies, banks, and others. 

• Only Qualified Buyers can provide funds to ARCs. 
• ARCs play a crucial role in managing distressed assets and aiding banks in resolving their NPAs.