GS Analyst
Daily Current Affairs

The International Monetary Fund (IMF) has highlighted the escalating public debt scenarios in the United States and China, which are poised to significantly impact global economic stability in the coming years.

Key Highlights of the Report

• Report Title: Fiscal Monitor
• The IMF predicts a near doubling of public debt in both the US and China by 2053 under current policies.
• The fiscal policies of these two economic powerhouses hold profound implications for the global economy, posing significant risks for fiscal projections worldwide.
• Increased interest rates in the US could exacerbate economic challenges for other nations by elevating the value of the dollar, consequently amplifying debt burdens for countries with USD-denominated loans.
• China's economic slowdown, potentially intensified by fiscal imbalances at local government levels, poses risks to global trade, external financing, and investments.

1: Dimension - Impact on Global Financial Stability

• Escalating Debt Burdens: The projected surge in public debt in the US and China threatens to destabilize global financial markets, with repercussions for economic growth and stability worldwide.
• Interest Rate Dynamics: Higher interest rates in the US could trigger ripple effects across the globe, amplifying borrowing costs and impeding economic recovery in other countries.

2: Dimension - Implications for International Trade and Investments

• Currency Valuation Effects: Strengthening of the US dollar relative to other currencies could render dollar-priced commodities more expensive, affecting trade balances and competitiveness globally.
• China's Economic Slowdown: A potential downturn in China's economy could disrupt international trade flows and dampen investor confidence, exerting downward pressure on global growth.

3: Dimension - Challenges for Fiscal Policy Governance

• Election Year Dynamics: With a significant number of countries holding elections this year, fiscal policy faces heightened pressures, potentially leading to looser fiscal stances and increased expenditure.
• Risks of Fiscal Slippages: Political preferences for expanded government spending could strain fiscal discipline, exacerbating deficits and debt levels, particularly in election years.

Mains Practice Question

Q: How do escalating public debts in the US and China pose significant risks to global economic stability?

The Union Environment Ministry has introduced amendments to the Green Credit Programme (GCP) to emphasize the restoration of ecosystems over mere tree planting, addressing concerns of potential misalignment with conservation objectives.

Key Highlights of the Programme

• Focus on Ecosystem Restoration: The revised norms prioritize the restoration of degraded forest lands rather than solely emphasizing tree planting for financial incentives, aligning with broader ecological conservation goals.
• State Participation: Thirteen states have already identified 387 parcels of degraded forest land spanning approximately 10,983 hectares for restoration efforts, indicating active state involvement in the programme.
• Role of Individuals and Organizations: Individuals and companies can contribute to ecosystem restoration by financing the restoration process through the Indian Council of Forestry Research and Education (ICFRE).
• Credit Mechanism: The programme introduces the concept of 'green credits,' wherein each planted tree evaluated by the ICFRE after two years can translate into one green credit. These credits can be utilized for compliance with forest laws or corporate social responsibility obligations.

1: Dimension - Emphasis on Ecosystem Restoration

• Clarification on Objectives: The amendments underscore the importance of restoring degraded ecosystems, acknowledging the complexity and significance of ecosystem health beyond mere afforestation.
• State-led Initiatives: State forest departments are entrusted with the task of actual afforestation activities, ensuring localized management and expertise in ecosystem restoration.

2: Dimension - Integration with Corporate Responsibility

• Utilization of Green Credits: The programme offers a dual benefit by allowing organizations to fulfill legal obligations, such as compensatory afforestation, while also integrating environmental stewardship into corporate governance practices.
• Alignment with CSR Mandates: Green credits provide organizations with a mechanism to meet corporate social responsibility requirements, fostering sustainable development practices.

3: Dimension - Adaptive Guidelines for Restoration

• Flexible Criteria: The Ministry's decision to remove the fixed requirement of 1,100 trees per hectare for reforestation reflects an adaptive approach, allowing states to tailor restoration efforts according to local ecological conditions.
• Ecosystem Diversity Considerations: Recognizing the diverse nature of degraded forests, the guidelines permit the restoration of ecosystems using a variety of vegetation types, including shrubs, herbs, and grasses, based on ecological suitability.

Mains Practice Question

Q. Discuss the significance of prioritizing ecosystem restoration over mere afforestation.

With rising temperatures across India and the onset of heat alerts as early as February, the effectiveness of Heat Action Plans (HAPs) in mitigating the impacts of heatwaves warrants examination.

1: Dimension - Implementation of Heat Action Plans

• State-Level Preparedness: Governments at various levels have devised HAPs to enhance readiness and minimize adverse effects of heatwaves. Collaborative efforts between the National Disaster Management Authority, IMD, and 23 states aim to develop comprehensive HAPs tailored to local conditions.
• Community Engagement: Effective implementation of HAPs requires active involvement and awareness among communities. Public participation through awareness campaigns, community meetings, and capacity-building workshops enhances the effectiveness of heat resilience measures.
• Inter-Agency Coordination: Seamless coordination among various agencies and departments is vital for the successful execution of HAPs. Integration of efforts between health departments, disaster management authorities, and urban planning bodies ensures a holistic approach to heatwave management.

2: Dimension - Recommendations and Strategies

• Mitigation Measures: HAPs advocate a range of strategies including early warning systems, public education campaigns, establishment of cooling centers, and provision of clean water to combat dehydration.
• Healthcare Preparedness: Hospitals are advised to equip themselves with necessary supplies and trained personnel to manage heat-related illnesses, while long-term measures emphasize urban planning for heat resilience.

3: Dimension - Challenges and Limitations

• Local Contextualization: HAPs face challenges in accurately defining heatwaves at local scales and incorporating factors like urban heat islands and humidity levels. A broader understanding of heatwave impacts beyond temperature is crucial for effective planning.
• Methodological Consistency: Variability in vulnerability assessments across HAPs underscores the need for standardized climate risk assessments and hotspot mapping to prioritize interventions effectively.
• Addressing Vulnerable Populations: While HAPs prioritize vulnerable groups, targeted interventions accounting for socio-economic disparities and infrastructure limitations are essential for equitable heat resilience.
• Resource Allocation and Integration: Dedicated funding and integration of HAPs with broader urban resilience plans can enhance implementation and ensure effective utilization of resources.
• Nature-Based Solutions: HAPs should emphasize nature-based solutions alongside infrastructural developments, incorporating green and blue spaces to combat extreme heat in hotspots effectively.

Mains Practice Question

Q: Assess the effectiveness of Heat Action Plans in mitigating the impacts of heatwaves in India.

Agroforestry, the practice of integrating trees with crops and livestock, holds significant promise for small-scale farmers in India. Despite its potential to enhance livelihoods and promote sustainable land use, the adoption of agroforestry among smallholder farmers faces various challenges, including limited access to finance, technical knowledge, and market linkages. Overcoming these barriers is crucial to harnessing the full benefits of agroforestry and promoting resilient farming systems.

1: Dimension - Enhancing Agroforestry for Small-Scale Farmers

• Unlocking Livelihood Opportunities: Agroforestry presents a promising avenue for small-scale farmers to diversify their income streams and improve resilience against environmental shocks. By integrating trees with crops and livestock, farmers can harness multiple benefits such as increased productivity, soil fertility enhancement, and additional income sources.
• Challenges in Adoption: Despite the potential benefits, smallholder farmers face barriers in adopting agroforestry practices. Challenges include limited access to finance for initial investments, lack of technical knowledge, and inadequate market linkages for tree-based products. Addressing these challenges is crucial to promoting widespread adoption of agroforestry among small-scale farmers.
• Policy Support Needed: Government policies play a vital role in facilitating the adoption of agroforestry practices. There is a need for tailored policies that cater to the specific needs of small-scale farmers, including access to credit, extension services, and marketing support. Policy frameworks should incentivize agroforestry while ensuring sustainable land use practices and equitable distribution of benefits.

2: Dimension - Overcoming Barriers to Agroforestry Adoption

• Water Availability Concerns: Water scarcity poses a significant challenge for smallholder farmers engaging in agroforestry. Addressing water availability issues, especially during the initial stages of tree plantation, requires innovative solutions such as selecting tree species that are less water-intensive and leveraging tools for water accounting to optimize resource allocation.
• Promoting Native Species: The choice of tree species plays a crucial role in the success of agroforestry systems. While fast-growing non-native species may offer short-term benefits, they can have detrimental effects on soil health and biodiversity. Promoting the cultivation of native species that are well-adapted to local conditions can enhance ecosystem resilience and contribute to sustainable livelihoods.
• Financial Support Mechanisms: Smallholder farmers often lack access to financing for agroforestry investments. Introducing payment for ecosystem services (PES) and other incentive mechanisms can incentivize farmers to adopt tree-based farming practices by providing financial rewards for ecosystem services such as carbon sequestration, biodiversity conservation, and water regulation.

3: Dimension - Enabling Policy Environment for Agroforestry

• Tailored Policy Interventions: Government policies should be tailored to address the specific needs and challenges faced by small-scale farmers in adopting agroforestry. This includes providing financial incentives, technical assistance, and market linkages to promote agroforestry as a sustainable land use practice.
• Certification Schemes: Certification schemes such as the Indian Forest and Wood Certification Scheme can play a role in promoting sustainable agroforestry practices. However, policymakers need to ensure that certification criteria are accessible to smallholder farmers and do not create barriers to participation.
• Ecosystem-Based Approaches: Adopting ecosystem-based approaches such as payment for ecosystem services can provide economic incentives for smallholder farmers to engage in agroforestry. These approaches recognize the value of ecosystem services provided by trees on farms and incentivize farmers to adopt sustainable land management practices.

Mains Practice Question:

Q. Discuss the potential of agroforestry in enhancing livelihoods for small-scale farmers in India.

India’s 2011 free trade deal (FTA) with Japan is likely to be reviewed in the coming months, with New Delhi keen to minimize the trade deficit with Tokyo, according to sources familiar with the matter.

1: Dimension - Need for Review

• Trade Imbalance: Despite the 2011 Comprehensive Economic Partnership Agreement (Cepa) between India and Japan, the trade balance has been largely in favor of Japan, resulting in a significant trade deficit for India. Initiating a review of the deal is aimed at addressing this imbalance and ensuring more equitable trade relations between the two countries.
• Demand for Equitable Terms: India has long pursued the demand for a review of the FTA with Japan, emphasizing the need for more balanced and fair terms that benefit both nations. This includes revisiting non-tariff measures that have posed challenges for Indian companies and Micro, Small, and Medium Enterprises (MSMEs) in accessing the Japanese market.
• Impact of Economic Changes: Since the signing of the FTA in 2011, there have been significant economic changes in both India and Japan. A review of the deal is essential to align it with the current economic realities and address any disparities that may have emerged over time.

2: Dimension - Issues to be Addressed

• Non-Tariff Measures: One of the key areas of discussion in the review will be non-tariff measures, such as rules of origin (ROO) and product-specific rules (PSRs). These measures have impacted Indian businesses, particularly in terms of eligibility for preferential tariffs and determining the national source of products.
• Concerns Over Trade Deficit: India’s imports from Japan have consistently outweighed its exports, leading to a widening trade deficit. Addressing this concern requires revisiting the terms of the FTA to ensure a more balanced flow of trade between the two countries.
• Market Access: The review will also focus on enhancing market access for Indian products in Japan. This includes addressing barriers and restrictions that hinder the entry of Indian goods into the Japanese market and exploring opportunities for expanding the range of products traded between the two countries.

3: Dimension - Prospects and Challenges

• Potential Impact on Indian Exports: While renegotiating the FTA with Japan may help address some of India’s concerns regarding trade imbalances, there are doubts about its potential to significantly boost Indian exports. Low import duties in partner countries could limit the effectiveness of the renegotiation in increasing India’s exports post-FTA.
• Navigating Complexities: The review process will involve navigating complex issues related to trade regulations and market access. Addressing concerns such as rules of origin and product-specific rules will require careful negotiation and collaboration between Indian and Japanese authorities.
• Geostrategic Considerations: Beyond economic factors, the review of the FTA with Japan also has geostrategic implications. Strengthening trade ties with Japan can contribute to India’s broader strategic interests in the Indo-Pacific region, providing opportunities for enhanced cooperation and alignment on regional security and economic issues.

Mains Practice Question:

Q. There is a persistent trade deficit of India with its FTA partners. Critically analyze

Record-breaking rainfall in the UAE and Oman raised concerns about cloud seeding's role.

• Condensation: Water vapour condenses around small particles to form the droplets that make up a cloud. These droplets collide and grow; as they get heavy and the cloud gets saturated, it rains.
• Cloud Seeding Salts: With cloud seeding, clouds are usually injected with salts like silver iodide, potassium iodide, or sodium chloride, which is the ‘seed’. These salts are expected to provide additional nuclei around which more cloud droplets can form. They are dispersed into the cloud either using aircraft or through generators on the ground.
• Microphysical process: Seeding accelerates cloud microphysical processes, a sufficiently large droplets must be formed that can reach the surface of the earth and not evaporate on the way.
• Cloud condensation nuclei and ice nuclei: The substance that is dispersed into the cloud needs to have cloud condensation nuclei and ice nuclei and these two come from two different salts.
• Cloud droplets: The cloud condensation nuclei help form cloud droplets, and ice nuclei help to form ice crystals. Ice crystals grow faster than drops, and they become large and fall.

Cloud Seeding Methods

• There are three cloud seeding methods: static, dynamic and hygroscopic
• Static cloud seeding involves spreading a chemical like silver iodide into clouds. The silver iodide provides a crystal around which moisture can condense. The moisture is already present in the clouds, but silver iodide essentially makes rain clouds more effective at dispensing their water.
• Dynamic cloud seeding aims to boost vertical air currents, which encourages more water to pass through the clouds, translating into more rain. Up to 100 times more ice crystals are used in dynamic cloud seeding than in the static method. The process is considered more complex than static clouding seeding because it depends on a sequence of events working properly.
• Hygroscopic cloud seeding disperses salts through flares or explosives in the lower portions of clouds. The salts grow in size as water joins with them.

The study by scientists at Germany's Potsdam Institute for Climate Impact Research said climate impacts could cost the global economy around $38 trillion a year by 2049.

• Its estimation of damage is based on projected temperature and rainfall trends, but does not take into account extreme weather or other climate-related disasters such as forest fires or rising sea levels.
• It is also only based on emissions already released, even though global emissions continue to rise at record levels.
• If emissions continue at today's rate - and the average global temperature climbs beyond 4C - the estimated economic toll after 2050 amounts to a 60% income loss by 2100, the findings suggest.
• Limiting the rise in temperatures to 2C would contain those losses at an average of 20%.

The Forest Department in Karnataka has launched an operation to capture trouble-causing wild elephants and fix radio collars on them.

• The Asian elephant (Elephas maximus) weighs about 5,500 kg and has a shoulder height of up to 3.5 metres.
• The Asian elephant includes three subspecies: the Indian, or mainland (E. maximus indicus), the Sumatran (E. maximus sumatranus), and the Sri Lankan (E. maximus maximus).
• African elephants have much larger ears, which are used to dissipate body heat.
• Elephants are keystone species as well as the Natural Heritage Animal of India.
• India has the largest number of wild Asian Elephants. The elephant population in the country is estimated to be over 30,000.
• Karnataka has the highest elephant population in India.
• Conservation Status:
  • Convention of the Migratory Species (CMS): Appendix I
  • Wildlife (Protection) Act, 1972: Schedule I
  • International Union for Conservation of Nature (IUCN) Red List of threatened species:
  • Asian Elephant: Endangered
  • African Forest Elephant: Critically Endangered
  • African Savanna Elephant: Endangered

India’s Digital Competition Act is in the works amid growing concern among policymakers about the dominance of tech giants in the digital economy, and the need to ensure a level playing field for all players, including startups in the market.

• As per the order, the committee will “review whether existing provisions in the Competition Act, 2000 and rules and regulations, framed thereunder are sufficient to deal with the challenges that have emerged from the digital economy”.
• It will also examine the need for an ex-ante regulatory mechanism for digital markets through a separate legislation and study the practices of “systemically important digital intermediaries” which “limit or have the potential to cause harm in digital markets”.
• Some of the provisions impose certain “behavioural norms” on digital economy firms.
• The proposed law aims to prevent what is seen as anticompetitive behaviour. These include lack of neutrality of online retailing platforms that also sell their own products, limiting of consumer choice by bundling products and services, predatory pricing, preventing users of digital platforms from accessing third part applications and exclusive tie-ups that limit market access for business users of digital platforms.

EC halts Bengal Governor’s Cooch Behar trip on poll eve

• Cooch Behar, also known as Koch Bihar, is a city and municipality in West Bengal, India, located along the Torsa River and in the foothills of the Eastern Himalayas.
• It's the only planned town in the North Bengal region.
• Being one of the main tourist destinations of West Bengal, housing the Cooch Behar Palace and Madan Mohan Temple, it has been declared a heritage city.