GS Analyst
Daily Current Affairs

The decline in private investment, particularly evident since 2011-12, remains a significant challenge for the Indian economy. Despite various measures undertaken by the government, private investment has failed to regain momentum. Understanding the factors contributing to this decline is crucial for devising effective policy interventions.

1: Dimension- Understanding GFCF and its Significance

• Definition and Importance: GFCF, or Gross Fixed Capital Formation, denotes the growth in the size of fixed capital within an economy. Fixed capital, encompassing assets like buildings and machinery, requires investment for creation. This metric serves as an indicator of the private sector's willingness to invest, crucial for economic growth and improved living standards.
• Influence on Economic Growth: Fixed capital plays a pivotal role in boosting economic growth by enhancing the productivity of workers, ultimately leading to increased output and improved standards of living. The level of fixed capital within an economy significantly influences its overall production capacity and, consequently, the purchasing power of consumers.

2: Dimension-Trends in Private Investment in India

• Historical Perspective: Private investment in India witnessed a notable surge post the economic reforms of the late-1980s and early-1990s, signifying enhanced confidence within the private sector. However, since 2011-12, there has been a consistent decline in private investment as a percentage of GDP, marking a departure from the earlier growth trajectory.
• Recent Developments: The trajectory of private investment reached its zenith around 2007-08 but has since experienced a downward trend. Despite governmental efforts, private investment dwindled to 19.6% of GDP in 2020-21, reflecting a concerning decline.

3: Dimension- Factors behind the Drop in Private Investment

• Impact of Consumption Expenditure: Many economists attribute the subdued private investment to low private consumption expenditure, especially in the aftermath of the pandemic. They argue that robust consumer spending is essential to instil confidence among businesses regarding future demand, thereby encouraging investment.
• Policy Environment and Uncertainty: Conversely, structural issues and policy uncertainty are also deemed significant contributors to the decline in private investment. Unfavourable government policies and regulatory uncertainties have deterred private investors from committing to long-term projects, exacerbating the investment slowdown.
• Historical Correlations: Interestingly, historical data challenges the notion that an increase in private consumption directly spurs private investment in India. Moreover, the inverse relationship between consumption and investment suggests a more complex interplay of economic factors influencing investment decisions.

4: Dimension- Implications of Low Private Investment

• Economic Growth Concerns: The stagnation in private investment raises concerns about its adverse impact on economic growth. A robust fixed capital base is indispensable for driving economic output, and the current trend threatens to impede the nation's growth trajectory.
• Role of Government Investment: While government-led investments may mitigate the shortfall in private investment, concerns regarding crowding out private sector involvement and inefficiencies in resource allocation persist. Private investors are often perceived as more adept at capital allocation, thereby fostering economic efficiency.

Mains Practice Question

Q: "Private investment is the cornerstone of economic growth in India." Discuss

The National Framework of Early Childhood Stimulation, 2024, underscores the critical role of early learning in shaping a child's development. With a focus on children from birth to the age of three, this framework emphasizes the importance of age-appropriate activities conducted by parents, anganwadi staff, and ASHA workers to lay a strong foundation for future learning.

1: Dimension- Fostering Continuous Learning

• 'Navchetana' Curriculum: Aligned with the National Education Policy, 2020, 'Navchetana' introduces an activity-based curriculum aimed at fostering continuous learning from infancy to toddlerhood.
• Staff Training Initiatives: Training programs for staff in 14 lakh anganwadis facilitate effective implementation of the curriculum, equipping frontline workers with the necessary skills and knowledge.
• Multifaceted Engagement: The curriculum emphasizes diverse activities encompassing talking, playing, and sensory stimulation, promoting holistic development across various domains.

2: Dimension- Key Components of the Curriculum

• Stimulation of Senses: Recognizing the importance of sensory experiences in early learning, the curriculum prioritizes activities that engage children in sight, touch, sound, and movement.
• Brain Development Focus: With 75% of brain development occurring in the first three years, the curriculum provides detailed instructions to optimize cognitive growth through targeted stimulation activities.
• Language and Literacy Promotion: Through age-appropriate activities, the curriculum aims to foster early language acquisition, emergent literacy, and numeracy skills critical for future academic success.

3: Dimension- Progressive Activities

• Developmental Milestones: The curriculum delineates 36 sets of activities aligned with developmental milestones, enabling caregivers to track and support children's progress.
• Personalized Interventions: In cases of developmental delays, the framework empowers caregivers to adapt activities and interventions tailored to individual children's needs, ensuring inclusive learning environments.
• Empowering Caregivers: By providing step-by-step guidance and leveraging household objects, the curriculum empowers caregivers to facilitate meaningful interactions and learning experiences conducive to children's holistic development.

Mains Practice Question

Q: "Early childhood stimulation programs play a pivotal role in shaping a child's future. Discuss

Nestlé, a global giant in food and beverage, has come under scrutiny due to variations in sugar content in its baby food products sold across different regions, particularly in India, Africa, and Latin America compared to European markets.

Key Findings of the Report

• A report by the Swiss NGO Public Eye and International Baby Food Action Network (IBFAN) revealed significant variations in sugar content in Nestlé's baby food products across different regions.
• Products such as Cerelac for six-month-old babies, which contain no added sugars in the UK and Germany, were found to have substantial added sugar content in India, Ethiopia, and Thailand.
• The disparity in sugar content raises concerns about adherence to nutritional standards and regulatory oversight in different markets.

1: Dimension - Regulatory Standards and Compliance

• Global Recommendations vs. Local Regulations: The World Health Organization (WHO) recommends no added sugars in foods for children under three, setting a global standard for infant nutrition. However, Indian regulations permit limited amounts of sucrose and fructose in baby food, creating discrepancies in nutritional guidelines across regions.
• Challenges in Uniform Compliance: Inconsistencies in regulatory standards highlight challenges in ensuring uniform compliance and oversight in the infant nutrition industry. This raises questions about the adequacy of regulatory frameworks to safeguard infant health across different markets.

2: Dimension - Impact on Child Health

• Risk of Long-Term Health Issues: Introduction of added sugars in infant diets can lead to the development of addictive eating habits, contributing to long-term health risks such as obesity and diabetes. Early exposure to high sugar content in baby foods may predispose children to a preference for sweet tastes, potentially influencing dietary preferences and habits later in life.
• Importance of Early Nutrition: WHO's warning about the adverse effects of added sugar emphasizes the critical importance of ensuring optimal nutrition during early childhood for long-term health outcomes. The disparity in sugar content raises concerns about the nutritional adequacy of infant diets and its impact on public health.

3: Dimension - Corporate Responsibility

• Commitment to Nutritional Improvement: Nestlé India's commitment to reducing added sugars in their products reflects corporate awareness of the need for nutritional improvements and compliance with global standards.
• Adherence to Standards: Emphasizing adherence to CODEX standards and local specifications demonstrates Nestlé's recognition of the importance of regulatory compliance in maintaining consumer trust.
• Evolution of Corporate Responsibility: The company's assertion of prioritizing nutritional quality and compliance highlights the evolving landscape of corporate responsibility towards public health and consumer well-being. However, questions remain regarding the efficacy of corporate self-regulation in ensuring the nutritional adequacy of infant products.

Mains Practice Question

Q. Discuss the challenges in ensuring uniform regulatory oversight and corporate responsibility in maintaining consistent nutritional quality.

Over recent years, India has witnessed a notable increase in exports to China, albeit with persistent trade deficits. The surge in imports from China, primarily driven by demand for critical materials and components, has raised apprehensions about India's economic dependency and its implications on domestic manufacturing and trade sustainability.

1: Trade Statistics and Trends

• India-China Trade Dynamics: India's exports to China saw a modest increase of 8.74% from $15.33 billion in FY23 to $16.67 billion in FY24. Conversely, imports from China rose by 3.29% to $101.75 billion in FY24 from $98.51 billion in FY23, contributing to a significant trade deficit. Despite a marginal narrowing, this trade imbalance remains a cause for concern.

2: Dimension- Export Profile

• Commodity Composition: India's exports to China primarily consist of raw materials and minerals. These include items such as iron ore, cotton yarn, cotton, quartz, unwrought aluminium, and sanitary items.
• Stagnant Growth: Ajay Srivastava, founder of Global Trade Research Initiative (GTRI), highlights that India's exports to China have not seen substantial growth, remaining lower than FY19 levels.
• Impact of Import Substitution: Despite efforts to enhance export competitiveness, India's exports to China continue to be overshadowed by imports, indicating a need for strategic measures to promote domestic production.

3: Dimension- Import Profile:

• Surging Demand: Imports from China have steadily increased, reaching $101.75 billion in FY24 from $70.3 billion in FY19. This surge is attributed to the growing demand for materials essential for sectors such as solar energy, electronics, and electric vehicles.
• Concerns over Dependency: India's reliance on Chinese imports is expected to rise further, posing challenges to domestic manufacturing and economic resilience.
• Sectoral Analysis: Critical sectors such as electronics, pharmaceuticals, and white goods heavily depend on imports, necessitating targeted policies to reduce dependency and enhance self-sufficiency.

4: Dimension- Impact on Trade Deficit

• Magnitude of Deficit: Over the past five years, India's trade deficit with China has exceeded $387 billion, indicating a significant reliance on Chinese imports and a persistent trade imbalance.
• Economic Implications: The widening trade deficit with China poses risks to India's economic stability, affecting factors such as currency valuation, current account balance, and overall growth prospects.
• Strategic Concerns: The disproportionate trade relationship with China raises strategic concerns regarding India's vulnerability to disruptions in the global supply chain and geopolitical tensions.

5: Dimension- Policy Response and Initiatives

• Diversification Efforts: India has been actively seeking to diversify its trade relationships and reduce dependence on China. Negotiations for free-trade agreements with major economies like the US, UK, Australia, and others are underway, with the aim of signing agreements with all major economies by the end of 2024.
• Promoting Domestic Manufacturing: In line with the 'Make in India' initiative, the government has implemented production-linked incentive (PLI) schemes across critical sectors to boost domestic manufacturing and reduce reliance on imports. These initiatives have shown some success, as evidenced by the decrease in mobile handset imports.
• Enhancing Export Competitiveness: Efforts to enhance export competitiveness through infrastructure development, technology adoption, and skill enhancement are underway to capitalize on emerging opportunities in global markets and mitigate the impact of trade imbalances.

Mains practice question

Q. Critically evaluate the role of free-trade agreements and production-linked incentives in reshaping India's trade landscape and enhancing its global competitiveness.

Pathogens that transmit through the air will be described by the term ’infectious respiratory particles’ or IRPs, according to the World Health Organization (WHO).

• Need: There was a lack of a common terminology to describe the transmission of these pathogens, which was particularly challenging during the global COVID-19 pandemic.
• Varying terminologies highlighted gaps in common understanding and contributed to challenges in public communication and efforts to curb the transmission of the pathogen.
• Individuals infected with a respiratory pathogen can generate and expel infectious particles containing the pathogen through their mouth or nose by breathing, talking, singing, spitting, coughing, or sneezing, and these particles should be described with the term IRPs.
• IRPs exist on a continuous spectrum of sizes, and no single cut-off points should be applied to distinguish smaller from larger particles.
• Under the umbrella of ‘through the air transmission’, two descriptors can be used:
  • Airborne transmission or inhalation, for cases when IRPs are expelled into the air and inhaled by another person.
  • Direct deposition, for cases when IRPs are expelled into the air from an infectious person, and are then directly deposited on the exposed mouth, nose or eyes of another person nearby, then entering the human respiratory system and potentially causing infection.

The World Crafts Council International (WCCI), a Kuwait-based organisation working on recognition and preservation of traditional crafts across the globe, has picked Srinagar for mapping its craft clusters before its final nomination as the World Craft City (WCC) from India this year. 

• The WCC-World Craft City Programme, a groundbreaking initiative launched in 2014 by the World Crafts Council AISBL (WCC-International) in recognition of the pivotal role local authorities, craftspeople, and communities play in cultural, economic, and social development worldwide.
• It Showcase the reputation and assets of creative cities/regions specializing in specific craft disciplines, raw materials, articles, or a variety of crafts on a global platform.
• Promote the exchange of know-how, experiences, and best practices in various craft fields at the national, regional, and international levels.
• Srinagar has several clusters where artisans were working on local crafts like Pashmina shawls, carpets, papier mâché etc.
• Srinagar, spread over 416 square kilometres, has a registered artisan base of 20,822 craftsmen, who are involved in multiple disciples of papier mâché, walnut wood carving, hand-knotted carpet, Kani shawl, Khatamband, pashmina, Sozni craft etc.
• The total craft related workforce in Srinagar stands at 1.76% approximately.
• The contribution of the handicraft to the overall economy of J&K stood at 2.64% by 2016-17.

DRDO successfully test fires indigenous long range subsonic cruise missile

• Nirbhay (lit. 'Fearless') is a long range, all-weather, subsonic Cruise Missile.
• The missile can be Launched from Multiple Platforms and is capable of carrying conventional and nuclear warheads.
• Nirbhay is powered by a solid rocket booster.
• The missile, also known as Indigenous Technology Cruise Missile (ITCM), is equipped with an indigenous propulsion system and the Manik turbofan engine.
• The missile is claimed to have sea-skimming and loitering capability.

Newfound ‘obelisks’ join viruses, viroids as third unusual life form

• They are circular bits of genetic material that contain one or two genes and self-organise into a rod-like shape.
• Like viroids, obelisks have a circular single-stranded RNA genome and no protein coat but, like viruses, their genomes contain genes that are predicted to code for proteins.
• All obelisks so far described encode a single major protein known as obulin, and many encode a second, smaller obulin.
• Obelisks probably rely on microbial host cells to replicate, including those that live inside humans to replicate.
• Bacteria or fungi are likely hosts, but it is not known which exact species harbour these elements.