20-December-2024-Daily-Current-Affairs

INDIA AS THE ‘HIGHEST TARIFF MAJOR ECONOMY’

TOPIC: (GS3) ECONOMY: THE HINDU

India is known for imposing high tariffs on imports, making it the “highest tariff” major economy. This issue has sparked discussions about the need to reduce tariffs to promote equitable trade. The U.S. has emphasized fair and balanced trade practices to further enhance bilateral trade relations.

India’s High Tariff Economy

• Tariff Concerns: The U.S. advocates for lowering tariffs on both sides to make trade more fair and mutually beneficial.
• Impact on Trade: High tariffs have created challenges in trade between the two nations, but bilateral trade has still grown significantly.

• Despite these difficulties, the U.S. has become India’s largest trading partner.

Growth in Bilateral Trade

• 10-Fold Increase: India-U.S. trade has expanded ten times since 2001, showcasing the potential of their economic partnership.
• Collaborative Efforts: Both countries need to engage in open and honest dialogue to address trade barriers. Emphasis on training and talent exchange to meet business needs across the Indo-Pacific region.

U.S. Perspective on Tariffs

• ‘Tariff King’ Label: Former U.S. President Donald Trump frequently criticized India’s tariff policies, referring to the country as a “tariff king.” He called for reciprocal measures against India’s high duties on certain American products.
• Fair Trade Advocacy: The U.S. seeks a balanced approach to trade that ensures equal opportunities for businesses in both nations.

Way Forward

• Lowering Tariffs: Both countries should aim to reduce trade barriers to foster stronger economic ties. Collaborative efforts to create a fair-trading environment will benefit businesses and consumers on both sides.
• Deepening Partnerships: By addressing tariff issues, India and the U.S. can unlock further potential in their bilateral trade relationship.

RECENT DEVELOPMENTS IN INDIA’S TRADE POLICY

Interest Equalisation Scheme

• Provides cheaper rupee credit for pre-shipment and post-shipment activities.
• Aims to help MSME manufacturing exporters improve competitiveness in global markets.

Remission of Duties and Taxes on Exported Products (RoDTEP)

• Neutralises taxes and duties on exported goods.
• Enhances cost-effectiveness for exporters.

Export Promotion Capital Goods (EPCG)

• Allows duty-free import of capital goods.
• Focuses on building domestic manufacturing capacity for exports.

Trade Facilitation Improvements

• India scored 93.55% in the 2023 UNESCAP Global Survey on Digital and Sustainable Trade Facilitation.
• The score improved from 90.32% in 2021 and surpassed several developed nations like France, UK, and Germany.

Trade Connect e-Platform

• A single-window platform for MSME exporters to access trade-related information.
• Provides real-time updates and resources to connect with government and global markets.

Conclusion

India and the U.S. share a robust trade partnership, but high tariffs remain a point of contention. Reducing tariffs and fostering equitable trade practices will strengthen economic ties and benefit both nations.

INDIA SETS DEADLINE FOR SOLAR FIRMS TO USE DOMESTIC SOLAR CELLS

TOPIC: (GS3) ENVIRONMENT: THE HINDU

To boost domestic manufacturing and reduce dependence on imports, the Ministry of New and Renewable Energy (MNRE) has mandated that solar firms must use India-made solar cells by June 2026 for participating in government-backed programs.

Key Details of the Policy

• Deadline for Adoption: From June 1, 2026, only solar panels made with India-manufactured photovoltaic (PV) cells will qualify for government procurement.
• Approved Manufacturers: The MNRE will issue a “List-II” of approved solar cell manufacturers to ensure compliance.

• This initiative is part of the government’s strategy to strengthen local production.

Current Dependence and Challenges

• Import Dependency: Indian solar firms heavily rely on cheaper imports from China and Southeast Asia for solar cells.

• Domestic manufacturing of essential components like wafers and ingots is still lacking.

• Cost Implications: Indian-made solar cells are 1.5 to 2 times costlier than imports, even after applying Basic Customs Duty.

• Increased costs could raise project expenses by ₹5-10 million per megawatt and tariffs by 40-50 paise per unit.

Solar Energy Progress in India

• Installed Capacity: India has installed 92 GW of solar capacity, with a solar module manufacturing capacity of 63 GW and solar cell capacity of 5.8 GW.

• By FY 2027, cell manufacturing capacity is expected to grow to 60 GW, backed by ₹30,000 crore in investments.

• Prominent Schemes: Programs like PM Kusum and rooftop solar schemes mandate sourcing modules from MNRE-approved manufacturers.

Conclusion

The June 2026 deadline is a significant step towards promoting self-reliance in solar energy manufacturing. However, addressing cost and component production challenges remains critical to achieving sustainable growth in this sector.

CRIMES AGAINST HUMANITY (CAH) AND INDIA’S STANCE

TOPIC: (GS2) POLITY: THE HINDU

The UN General Assembly (UNGA) recently adopted a resolution to negotiate a treaty for the prevention and punishment of crimes against humanity (CAH). This marks a crucial step in addressing accountability gaps for such crimes globally.

The Need for a CAH Treaty

• Limited Jurisdiction of ICC: The International Criminal Court (ICC) governs CAH but covers only member states, leaving non-member states beyond its reach.
• State Responsibility: The ICC focuses on individual accountability, whereas a dedicated treaty would ensure state accountability for failing to prevent CAH.

• Example: The Gambia filed a case at the International Court of Justice (ICJ) against Myanmar for violating the Genocide Convention in 2019.
• Expanding the Definition: The treaty could broaden CAH’s scope to include acts like starvation, gender apartheid, forced pregnancy, terrorism, exploitation of natural resources, and crimes against indigenous populations.

India’s Position on CAH

• Scepticism of the ICC: India is not a party to the Rome Statute and opposes certain provisions, including the ICC prosecutor’s powers and the UN Security Council’s role. India criticizes the omission of “nuclear weapons use” as a war crime.
• Definition of CAH: India advocates restricting CAH to crimes committed during armed conflicts, excluding peacetime acts. Opposes the inclusion of “enforced disappearances” but supports adding “terrorism” under CAH.
• Preference for Domestic Jurisdiction: India emphasizes using national laws and courts to address international crimes, questioning the need for a new treaty.

Challenges in India’s Legal Framework

• Absence of CAH Legislation: India lacks domestic laws addressing CAH and genocide, as noted by Justice S. Muralidhar in 2018. Recent criminal law reforms did not address this gap.
• Missed Opportunities: Despite advocating for national jurisdiction, India has not enacted laws to deal with CAH.

Way Forward

• Incorporating CAH in Domestic Law: India should enact laws to address CAH and other international crimes. This aligns with its insistence on the primacy of domestic jurisdiction.
• Global Leadership Role: By addressing these gaps, India can lead efforts to end impunity for human rights violations and strengthen its position as a global leader (Vishwa guru).

SHOULD LEGISLATURES IN INDIA HAVE FIXED TENURES?

TOPIC: (GS2) POLITY: THE HINDU

The Constitution (One Hundred and Twenty-Ninth Amendment) Bill, 2024, proposes a fixed five-year term for the Lok Sabha, with State Legislature elections aligned to the same cycle. This raises important questions about governance, federalism, and political stability.

Key Arguments for Fixed Tenures

• Governance Stability: Advocates argue that synchronized elections could minimize disruptions caused by frequent polls. The reduced electoral expenditure claim, however, is debatable as most costs arise from political parties, not official budgets.
• Political Accountability: Frequent elections currently ensure that politicians stay connected with voters. A fixed tenure may dilute this accountability, as representatives could prioritize their party over public interests during their term.

Key Reasons for the Shift

• Political Instability: Premature dissolution of State Assemblies and the Lok Sabha caused the synchronization to break. For instance, the dissolution of the Fourth Lok Sabha in 1971 and various State Assemblies disrupted the simultaneous election cycle.
• Coalition Governments: The rise of coalition politics in the late 20th century increased instability. Many governments, particularly at the State level, could not complete their tenure, necessitating mid-term elections.
• Emergency Period (1975-1977): The declaration of Emergency led to the deferment of elections, further derailing the alignment of Lok Sabha and State elections.
• Judicial Interventions: Judicial rulings, such as the one invalidating the election of Prime Minister Indira Gandhi in 1975, triggered political crises, contributing to unscheduled elections.

Impact on Federalism

• Potential Challenges: Aligning State Assemblies with Lok Sabha elections could undermine federal principles.

• States currently enjoy independent legislative terms; the Bill might curtail this autonomy by forcing premature dissolution.

• Voter Choices: Historical evidence shows voters are capable of making distinct choices for Centre and State elections.

• For instance, the 2014 Delhi elections demonstrated voters’ ability to differentiate between central and state-level preferences.

Concerns About Governance

• Curbing Destabilization: The Bill may not fully address issues like defections and horse-trading, as seen in states like Madhya Pradesh and Karnataka.

• Shorter tenures following mid-term elections might hinder legislative stability and policymaking.

• Political Deadlocks: Provisions for mid-term elections address scenarios like hung assemblies, but truncated tenures may reduce their effectiveness in governance.

Challenges of Restoring Synchronization

• Legislative Reforms: Introducing fixed terms for legislatures and aligning State and Lok Sabha elections would require constitutional amendments.
• Political Will: Achieving consensus among political parties is difficult due to varying interests and priorities.
• Federal Concerns: Aligning State elections with the Lok Sabha may undermine the autonomy of State governments, raising federalism concerns.

Lessons from Global Models

• German Model: A constructive no-confidence vote could provide stability but may not suit India’s diverse political environment.
• UK’s Experience: The repealed Fixed-term Parliaments Act (2011-2022) highlighted risks like policy paralysis and constitutional crises, suggesting caution in adopting similar systems.

Conclusion

While fixed tenures promise uniformity and stability, they risk undermining federalism and voter accountability. The current system, with its flexibility, aligns better with India’s complex political and social landscape. Legislative reforms should prioritize addressing pressing governance issues over structural changes.

RUPEE RECOVERS SLIGHTLY BUT REMAINS WEAK AGAINST THE U.S. DOLLAR

TOPIC: (GS3) ECONOMY: THE HINDU

The Indian rupee showed a minor recovery against the U.S. dollar on December 20, 2024, after hitting an all-time low in the previous session. Despite gaining some ground, it is expected to remain under pressure due to global and domestic factors, including dollar demand and cautious monetary policies by the Federal Reserve.

Rupee’s Performance

• The rupee opened at ₹85.07, a gain of 6 paise from the previous close.
• It later traded at ₹85.10, slightly above its record low of ₹85.13 on December 19, 2024.
• On December 19, the rupee weakened by 19 paise, breaching the crucial ₹85 mark for the first time.

Factors Impacting the Rupee

Global Factors:

• The U.S. Federal Reserve reduced its interest rate by 25 basis points on December 18 but scaled down its forecast for 2025 rate cuts from four to two.
• The Dollar Index (DXY), measuring the dollar’s strength against six major currencies, remained strong at 43, creating pressure on the rupee.

• Demand for U.S. Dollar: The U.S. dollar is the world’s primary reserve currency, driving higher global demand compared to the rupee. Dollar strength impacts rupee depreciation when demand for dollars rises.
• Global Interest Rates: When the U.S. Federal Reserve raises interest rates, it attracts investments, increasing demand for dollars and depreciating the rupee.
• Crude Oil Prices: India is a major oil importer, and rising global oil prices lead to higher dollar demand for payments, weakening the rupee.
• Geopolitical Tensions: Global events, like conflicts or trade wars, create uncertainty, leading investors to favour the dollar as a safe haven.

Domestic Factors:

• The Reserve Bank of India (RBI) faces challenges in intervening effectively in the forex market due to tightening liquidity in the banking system.
• Indian equities witnessed corrections of over 1%, adding to the rupee’s downward trajectory.

• Trade Deficit: A high trade deficit (imports exceeding exports) increases dollar outflows, pressuring the rupee.
• Foreign Investment: Withdrawal of Foreign Institutional Investors (FIIs) from Indian markets reduces dollar inflows, weakening the rupee.
• Inflation and Economic Stability: High inflation reduces the purchasing power of the rupee, leading to depreciation. Political or economic instability can deter investments, reducing rupee demand.
• RBI Intervention: The Reserve Bank of India (RBI) occasionally buys or sells foreign exchange reserves to stabilize the rupee.

Why the Rupee Is Lower Than the Dollar

• Historical and Economic Differences: The U.S. dollar has been a global reserve currency since World War II, maintaining strong demand. The U.S. economy is larger, more stable, and has higher purchasing power compared to India.
• Supply and Demand Dynamics: India’s dependency on imports (e.g., oil, electronics) requires consistent dollar payments, increasing demand for USD.
• Per Capita Income and Productivity: The U.S. has a higher per capita income and productivity, supporting a stronger currency compared to developing nations like India.
• Monetary Policies: The Federal Reserve has more global influence in shaping monetary policies, making the dollar more valuable.

FEDERAL RESERVE RATES

This is the interest rate at which banks lend to each other overnight to meet reserve requirements. The Fed targets a range for this rate to manage monetary policy.

• Discount Rate: The interest rate the Fed charges commercial banks and other financial institutions for borrowing directly from the Federal Reserve.

Purpose of Federal Reserve Rates

• Control Inflation: By adjusting rates, the Fed aims to maintain price stability. Higher rates reduce borrowing and spending, controlling inflation.
• Boost Economic Growth: Lowering rates encourages borrowing and investment, stimulating the economy during slowdowns.
• Regulate Employment Levels: The Fed balances interest rates to ensure maximum employment without overheating the economy.
• Stabilize Financial Markets: It ensures liquidity and prevents excessive volatility in the financial system.

Global Implications of Federal Reserve Rates

• Impact on Currency Exchange Rates: Higher Fed rates attract foreign investments, strengthening the U.S. dollar and influencing global currencies.
• Effect on Emerging Markets: Developing economies like India often experience capital outflows when Fed rates rise, leading to currency depreciation.
• Cost of Borrowing Worldwide: Global interest rates are often influenced by the Fed, affecting loans, mortgages, and investments globally.

Conclusion

The rupee’s slight recovery is overshadowed by ongoing global economic uncertainties and domestic challenges. Analysts anticipate continued volatility in the short term, with limited scope for significant improvement unless macroeconomic factors stabilize.

SACRED GROVES

TOPIC: (GS3) ENVIRONMENT: PIB

The Supreme Court of India has instructed the Union government to develop a detailed policy for the management and preservation of sacred groves throughout the nation.

What are sacred groves?

• Sacred groves are small patches of forest or natural vegetation that are preserved by local communities due to their cultural and religious importance.
• These areas, often dedicated to local deities, act as sanctuaries for both wildlife and spiritual practices.

Significance of Sacred Groves

• Ecological Role: Sacred groves serve as biodiversity hotspots, protecting various rare plant and animal species. They help in preserving local flora and fauna.
• Cultural Importance: These groves are integral to the cultural identity of local communities, being associated with religious beliefs and rituals. They are often dedicated to deities or spirits.
• Conservation Practices: Hunting and deforestation are typically prohibited, ensuring the protection of these areas. However, sustainable activities like collecting honey or gathering fallen wood are generally allowed.

Sacred Groves in India

Sacred groves are found throughout India, particularly in regions with rich cultural heritage and natural vegetation. Notable regions include:

• Western Ghats
• Himalayas
• Northeastern hill tracts
• Central India

Regional Names for Sacred Groves

Sacred groves are known by different names depending on the region. Some of these include:

• Sarna (Bihar)
• Dev Van (Himachal Pradesh)
• Devarakadu (Karnataka)
• Kavu or Sarpa Kavu (Kerala)
• Devrai or Deorai (Maharashtra)
• Law Kyntang or Asong Khosi (Meghalaya)
• Oran (Rajasthan)

Success Story: Piplantri Village

A well-known example of community-driven conservation is Piplantri Village in Rajasthan. The village has a unique tradition of planting 111 trees for every girl child born. This initiative has contributed to:

• Increased local income through forest resources.
• Reduced instances of female foeticide.
• Empowerment of women through self-help groups.

Sacred groves play a crucial role in preserving both the environment and the cultural heritage of India. Their management, as directed by the Supreme Court, will ensure the sustainability of these valuable ecosystems.

CLIMATE CHANGE AND THE SHIFTING LANDSCAPE OF HIMALAYAN TREES

TOPIC: (GS3) ENVIRONMENT: PIB

Recent research highlights the impact of climate change on the Himalayan tree landscape, where drought-resistant fir trees are increasingly replacing the Himalayan birch trees. This shift poses significant ecological and environmental challenges for the region.

Himalayan Birch Tree:

• The Himalayan birch is a deciduous, broad-leaved tree native to the Western Himalayas.

• Distribution: It is found in the altitudinal range of 3,100 to 3,800 meters in the Northwestern Himalayas and can grow at elevations up to 4,500 meters.
• Longevity and Resilience: Birch trees are long-lived, with some surviving up to 400 years. They are the only angiosperms in the region that dominate sub-alpine areas.
• Ecological Role: Birch trees help prevent soil erosion and create bio-shields that protect the forests and meadows beneath the treeline.

Impact of Climate Change on Himalayan Birch

• Environmental Stress: Increasing temperatures and reduced moisture levels are limiting the growth of birch trees, which require higher moisture levels.
• Competition with Fir Trees: Fir trees, which are more drought-resistant, are outcompeting birch trees for resources such as sunlight, water, and nutrients.
• Disturbances from Climate Change: Factors such as early snowmelt, snow fungi, avalanches, landslides, insect outbreaks, and more frequent droughts and fires are further stressing the birch population.

Environmental Consequences of the Shift

Changes in Ecosystem Dynamics: The replacement of birch with fir trees, an evergreen species, can alter various ecological processes, including:

• Rate of litter decomposition
• Carbon and nitrogen cycling
• Water-use efficiency
• Interactions with animals and fungi
• Energy fluxes

Impact on Alpine Plant Communities: The shift in plant species composition may lead to further disruptions in the structure and functioning of alpine ecosystems.

The ongoing changes in the Himalayan tree landscape underscore the need for comprehensive strategies to address climate change impacts on biodiversity and ecosystem stability.

MILKWEED FIBER

TOPIC: (GS3) ENVIRONMENT: PIB

The Union Ministry of Textiles is expanding its research and development initiatives into new natural fibers, including milkweed fiber, which has gained attention for its potential applications in various industries.

About Milkweed Fiber

• Source: Milkweed fiber is derived from the seed of the milkweed plant, scientifically known as Asclepias syriaca.
• Plant Description: This plant belongs to the Asclepiadaceae family and is commonly referred to as “stubborn weed.”
• Geographical Distribution: In India, milkweed is found growing as a wild plant in states like Rajasthan, Karnataka, and Tamil Nadu.
• Characteristics: The milkweed plant contains a significant amount of milky sap in its leaves, stems, and pods.

Properties of Milkweed Fiber

• Composition: The fiber contains oily materials and lignin, which give it a woody structure, making it brittle and difficult to spin.
• Surface Traits: The fiber has a hydrophobic (water-repellent) and oleophobic (oil-repellent) surface due to natural waxes present on the fiber’s surface, contributing to its unique properties.

Applications of Milkweed Fiber

• Paper Industry: Milkweed fiber is used in the production of paper due to its fibrous texture.
• Insulative Material: The fiber serves as an effective insulative filling material in various products.
• Water Safety Equipment: Milkweed is utilized in manufacturing life jackets and belts for water safety due to its buoyant properties.
• Oil Spill Cleanup: Researchers have discovered that milkweed fiber can absorb oil while repelling water, making it highly effective in cleaning up oil spills in aquatic environments.

Milkweed fiber’s diverse uses in industries such as paper production, safety equipment, and environmental cleanup highlight its potential as a sustainable natural resource.

GREY JUNGLEFOWL

TOPIC: (GS3) ENVIRONMENT: THE HINDU

The recent controversy regarding the alleged consumption of ‘Jungli Murga’ (Grey Junglefowl) by the Himachal Pradesh Chief Minister has raised concerns about legal, environmental, and cultural issues. The Grey Junglefowl is a protected species under Indian wildlife laws.

Key Legal and Environmental Implications

Wildlife Protection:

• The Grey Junglefowl is listed under Schedule I of the Wildlife (Protection) Act, 1972, offering it the highest level of protection.
• Hunting or consuming this species is a criminal offence, punishable by law.

Legal Framework:

• Sections 353(2) and 356 of the Bharatiya Nyaya Sanhita (BNS) address spreading false information and defamation, which are relevant to the controversy.

About the Red Junglefowl

Significance:

• Wild ancestor of domestic chickens, essential for studying avian domestication.
• Found in India, Southeast Asia, and Malaysia.

Conservation:

• Though listed as “Least Concern” by the IUCN, it faces threats from habitat loss and hybridization with domestic chickens.

Conclusion

The controversy underscores the need to balance cultural traditions with adherence to wildlife protection laws to safeguard India’s biodiversity.