GS Analyst: Daily Current Affairs

Prime Minister Narendra Modi said there is a need to identify and remove obstacles in the research ecosystem of the country, Prime Minister Narendra Modi said while chairing the first meeting of the governing board of Anusandhan National Research Foundation (ANRF). He further emphasised that research should be focussed on finding new solutions to existing problems and although these concerns could be global in nature, their solutions must be localised in accordance with Indian needs.

Need of strong research ecosystem

The significance of research and innovation cannot be overstated in fuelling:  Economic growth; Technological advancement and Global competitiveness. However, the ecosystem is suffering from various challenges/issues:

• Low Funding: R&D funding in India is less than 1% of the Gross Domestic Product (GDP), which is relatively low compared to global standards.
• As per data from the National Science Foundation USA,
  • India’s spending on research and development is among the lowest in the world. In 2022, India spent 0.65% of GDP on R&D, which is lower than the BRICS nations and much lower than the world average of 1.8%. 
  • India ranks 3rd in the world for both scientific publications as well as for the number of PhD students.
  • India ranks 9th in citations, 6th in patent filings and 40th for innovation, which is a matter of concern.
  • India has one of the lowest Gross Expenditure on R&D (GERD) in the world, with only USD 43 per capita, according to the NITI Aayog’s India Innovation Index Report 2021.
• Gap: India has over 4.3 crore students spread across 1,168 universities and 45,473 colleges. Centrally funded institutions like IITs and IIMs, though prestigious, enroll less than 1 per cent of the total student population.
• Lack of Provisions: There are insufficient additional provisions for R&D in emerging sectors, hindering innovation in sunrise industries.
• High Dependence on Grants: Many universities rely heavily on extramural support from agencies like the Department of Science and Technology (DST), Department of Biotechnology (DBT), Indian Council of Medical Research (ICMR), and Council of Scientific and Industrial Research (CSIR). This dependency often compromises the quality of doctoral research due to fluctuating funding levels and reduced autonomy.
• Brain Drain: A significant outflow of top talent to foreign countries results in a shortage of skilled professionals within India’s R&D sector, affecting the country's innovative capacity.
• IPR Violation: Poor enforcement of Intellectual Property Rights (IPR) discourages foreign investment in R&D, as investors are concerned about the safety and return on their innovations.
• Outdated Curriculum and Pedagogy: Many universities continue to use outdated curricula centered around rote learning and job-oriented skills, which limits the effective utilization of research grants and the development of innovative capabilities.
• Poor Private Sector Participation: Private sector contributions to R&D account for only 37% of total R&D expenditure in India, significantly below the 68% average in developed countries, resulting in underfunded and less dynamic research efforts.

In India, the Reserve Bank of India (RBI) plays a crucial role in managing inflation and setting interest rates, which directly affect consumers, borrowers, and the broader economy. The recent query from borrowers about when the RBI will reduce interest rates stems from the complexities of controlling inflation in the current economic climate.

What is the importance of Price Stability?

• Inflation refers to the rate at which the general price level of goods and services rises, reducing purchasing power.
• An unstable inflation rate causes uncertainty around costs, prices, and profits, discouraging businesses from producing and investing. As a result, price stability—meaning a low and stable inflation rate—is considered essential for sustaining a high and stable investment rate, which in turn leads to healthy and stable growth of gross domestic product.

Why is the RBI Holding Off on Lowering Interest Rates?

• Inflation Management: The RBI’s main goal is to manage inflation, which affects the overall cost of living. A stable inflation rate helps in maintaining economic stability and encourages investment.
• Current Inflation Situation:
• GDP Growth Projection: The RBI projects the GDP growth rate for 2024-2025 to be between 6.5% and 7%.
• Retail Inflation: As of July 2024, retail inflation (CPI inflation) has fallen to a near five-year low of 3.64%, which is below the RBI's target of 4%.
• Repo Rate: The repo rate, at which banks borrow short-term funds from the RBI, has been held steady at 6.5% since February 2023, following an increase from 4% in May 2022, to curb inflation.

Key Factors Affecting RBI’s Decision

• Food Inflation Impact: Food prices make up a large portion of the Consumer Price Index (CPI). Persistent high food inflation (which stood at 36% in June 2024) can offset gains from lower overall inflation, complicating the RBI's decision to lower rates.
• Global and Supply-Side Factors: Food and fuel prices are influenced by external factors like weather conditions and global oil prices, which the RBI cannot control. High food prices can lead to broader inflation if workers demand higher wages to cover rising costs.
• Fiscal Policy: The government’s fiscal deficit (the gap between its spending and revenue) impacts overall demand in the economy. A high fiscal deficit can increase demand, making it harder for the RBI to control inflation. The Indian government has been working to reduce the fiscal deficit, easing the RBI’s task.
• Economic Growth and Employment: Lowering interest rates too quickly can slow down economic growth and increase unemployment. The RBI must balance its policies to avoid negative impacts on the economy.
• Global Interest Rates: The RBI’s interest rate decisions are also influenced by rates in other major economies. If interest rates in the US and EU are high, international investors might seek better returns elsewhere, affecting domestic monetary policy.
• Impact on Savers vs. Borrowers: Lower interest rates benefit borrowers but can harm savers, especially those relying on fixed deposits for income. The RBI needs to balance the interests of both groups.
• Delayed Effects: Changes in interest rates take time to affect the economy. Even after lowering rates, it can take time for lending rates and investment spending to adjust. The RBI must wait to see the full impact before making further changes.

The RBI’s current stance is to maintain its monetary policy until it is certain that inflation, particularly food inflation, is under control. This cautious approach ensures that inflationary pressures do not resurface, and economic stability is preserved.

The Centre permitted Madhya Pradesh, Maharashtra and Karnataka to procure soybeans at the fixed MSP of Rs 4,892 per quintal.

About Soyabean Crop

• Soyabean (Glycin max) is a kharif oilseed crop. The crop belongs to legume family. It is native of East Asia. 
• It is a rich source of Protein also excellent source of fibre. Oil extracted from soybean contain small amount of saturated fat.
• Major soyabean growing states: Madhya Pradesh, Maharashtra, Rajasthan, Karnataka, and Telangana. 
• Soil requirement: Well-drained, fertile loamy soils with a pH range of 6.0 to 7.5 
• Nationally, soybeans have been sown in around 12.51 million hectares of land this kharif season, which is nearly two per cent higher than the normal acreage under the crop. Normal acreage is the average acreage of the last five years.
• In July 2024, India imported around 1.84 million tonnes of edible oils, which is marginally less than the 1.85 million tonnes imported in June 2024.
• Most notably, India imported a record 1.08 million tonnes of palm oil which is the highest level reached since November 2022.

Ovarian cancer is one of the most deadly forms of gynecological cancer, often termed a “silent killer” due to its vague symptoms and late diagnosis

About

• Ovarian cancer occurs when abnormal cells in ovaries or fallopian tubes grow and multiply out of control.
  • Ovariesare part of the female reproductive system. These two round, walnut-sized organs make eggs during reproductive years.
• Cancer Subtypes:
  • Type I Tumors: Less common, typically diagnosed early, and have a better prognosis.
  • Type II Tumors: More aggressive, commonly diagnosed at advanced stages, and responsible for most deaths.
• Common Symptoms: Include bloating, pelvic or abdominal pain, loss of appetite, feeling full quickly, frequent urination, indigestion, constipation, back pain, fatigue, weight loss, and postmenopausal bleeding.
• Diagnostic Challenges: These symptoms often mimic less serious conditions, leading to delayed diagnosis. A 2004 study noted that women with malignant ovarian cancer experience these symptoms 20-30 times a month, more severely compared to those without the disease.
• Screening Challenges: There are no effective routine screening tests for ovarian cancer. The CA125 blood test is not recommended for general screening due to its low specificity and potential for false positives.
• Risk Factors
• • Genetics: BRCA1 and BRCA2 Mutations significantly increase the risk of ovarian cancer (up to 50% for BRCA1 and around 15% for BRCA2).
  • Endometriosis: Women with endometriosis have a higher risk of developing certain types of ovarian cancer, though the risk is relatively low.
  • Hormone Replacement Therapy (HRT), used for menopausal symptoms, has been associated with a higher risk of ovarian cancer, even with short-term use.
  • Unhealthy lifestyle
• The Gravity of Ovarian Cancer
• • Prevalence in India: Ovarian cancer ranks among the top three cancers in Indian women, contributing to 6.6% of all female cancer cases.
  • Incidence and Mortality: In 2022, India reported 47,333 new cases and 32,978 deaths due to ovarian cancer.

Ahead of the upcoming UN General Assembly High-Level Meeting on antimicrobial resistance, the World Health Organization (WHO) issued it’s first-ever guidance on antibiotic pollution from manufacturing. The WHO highlighted that antibiotic pollution and the resultant antimicrobial resistance (AMR) could threaten global antibiotic effectiveness, including those produced at manufacturing sites.

About AMR

• Antimicrobial resistance (AMR) occurs when pathogens evolve to survive despite the presence of antimicrobial drugs, such as
• This evolution typically results from the misuse or overuse of these drugs, leading to the development of "superbugs" that are resistant to common treatments.
• Impact of AMR: AMR complicates the treatment of infections, making previously manageable diseases difficult to treat. This often results in prolonged hospital stays, higher medical costs, and an increased risk of severe complications. The situation is exacerbated in patients with multiple health conditions.
• Common Resistant Pathogens:
  • coli: This bacterium, which can cause gut infections, showed a decrease in susceptibility to many antibiotics. For example, susceptibility to carbapenems dropped from 81.4% in 2017 to 62.7% in 2023.
  • Klebsiella pneumoniae: Known for causing pneumonia and urinary tract infections, this pathogen also displayed reduced susceptibility. Susceptibility to two carbapenem medicines decreased from 58.5% to 35.6% and 48% to 37.6% between 2017 and 2023.
  • Acinetobacter baumannii: Typically associated with hospital-acquired infections, this pathogen’s resistance to carbapenems was 88% in 2023, indicating its high resistance to even strong antibiotics.

SpaceX's Polaris Dawn mission launched successfully, carrying four private citizens on a five-day journey that includes the first spacewalk by an all-civilian crew.

About

• The mission aims to reach an orbital altitude of 870 miles above Earth, which is more than three times higher than the International Space Station (ISS) and the highest humans have reached since the final Apollo moon mission in 1972.
• Spacecraft: The crew is traveling aboard a Crew Dragon capsule launched by a Falcon 9 rocket.
• Mission Goals: The mission will test new spacesuits and technologies that could facilitate future long-duration missions to the Moon and Mars, potentially revolutionizing space exploration.
  • The Crew Dragon capsule's orbit will pass through the inner regions of the Van Allen radiation belts, allowing scientists to study the effects of space radiation on both the astronauts and the spacecraft.
  • Findings from this mission could help SpaceX plan future missions to the Moon and Mars, where astronauts will encounter similar radiation challenges as they navigate through the Van Allen belts.
• The mission marks a historic event as it represents the first spacewalk by a crew of entirely non-government astronauts.

The recent Ninth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) held in Beijing highlights China's strategic engagement with Africa. Over 24 years, FOCAC has become a critical platform for China to foster relations with African nations. The summit underscores China's ongoing commitment to its African strategy, reflecting its economic, political, and strategic interests.

Key Outcomes of the Beijing Summit

• Document Structure: The Beijing Declaration features six sections, including the "China Africa Community with a Shared Future" and the integration of the Belt and Road Initiative (BRI) with AU's Agenda 2063 and the UN's 2030 Agenda. It focuses on governance, modernization, and mutual economic benefits.
• Economic and Political Commitments: China pledged USD 50 billion in financing over the next three years, emphasizing trade connectivity, green development, and support for African exports with zero tariff treatment for 100% tariff lines.
• Future Developments: The next FOCAC summit will be hosted in Congo in 2027, with the Republic of the Congo taking over as co-chair from Senegal.

Analysis of China-Africa Relations

• Chinese Perspective: China views its relationship with Africa as a natural partnership between two major developing regions. It promotes its own development model as an alternative to Western approaches, emphasizing mutual benefits.
• African Perspective: African nations recognize both advantages and challenges in their relationship with China, which often operates with a donor-recipient dynamic, limiting African initiative in the partnership.
• Western Perspective: Some analysts argue that China's engagement with Africa is partly driven by Xi Jinping’s anti-American stance, aiming to build a coalition in the Global South to counterbalance U.S. influence.

Implications for India

• Need for Consistency: India must renew its focus on Africa with consistent high-level engagement. The last India-Africa Forum Summit was held in 2015, and there has been a noticeable pause in India's Africa-centered diplomacy.
• Financial Commitment: India should enhance its financial contributions to Africa. While historical ties and rhetoric are valuable, substantial investments are necessary to match China’s financial generosity and impact.
• Revised Diplomatic Priorities: India needs to reassess and elevate Africa's role in its foreign policy agenda to ensure that diplomatic and business initiatives are effectively supported.

Practice Question:

Q. Discuss the strategic importance of the Forum on China-Africa Cooperation (FOCAC) in shaping China-Africa relations. How should India adjust its diplomatic strategy to effectively engage with Africa in light of China’s increasing influence on the continent?

India’s G20 presidency has prominently highlighted Digital Public Infrastructure (DPI) as a key tool for inclusive and sustainable development. DPIs, with their openness, interoperability, and scalability, play a crucial role in public and private service delivery. The recent emphasis on DPI’s impact and challenges underscores the need for a balanced regulatory approach to harness their benefits while addressing potential issues.

Characteristics and Impact of DPIs

• Foundational vs. Sectoral DPIs: Foundational DPIs, such as Aadhaar and UPI, provide essential digital infrastructure across domains like identity and payments, while sectoral DPIs, like the Ayushman Bharat Digital Mission, cater to specific needs such as health coverage.
• Successful Examples: The CoWIN platform is a notable success story, utilizing Aadhaar for efficient vaccine distribution. India’s extensive use of Aadhaar and UPI reflects DPI’s transformative impact, evidenced by over 1.3 billion Aadhaar enrollments and 10 billion UPI transactions monthly.
• Future Developments: The Finance Minister's budget speech proposed expanding DPI applications into areas like credit, e-commerce, and urban governance, highlighting ongoing efforts to extend DPI benefits.

Risks and Challenges of DPI Implementation

• Platform Dynamics and Market Concentration: DPIs operate as multi-sided platforms that can lead to monopolistic outcomes. For instance, UPI has created a virtual duopoly, raising concerns about market concentration and data control by private entities.
• Regulatory Needs: The G20 Task Force on Digital Public Infrastructure emphasizes the need for regulatory frameworks to prevent monopolistic practices and ensure a level playing field. Adaptable regulations are necessary to address data privacy, security, and competition issues.
• Data and Innovation Concerns: The operation of private entities within DPIs raises issues regarding data privacy and security. There is a risk that government-supported DPIs may inadvertently entrench private firms, necessitating clear governance frameworks to balance public and private interests.

Governance and Regulatory Approaches

• Role of Government: The state must play a critical role in overseeing DPIs, akin to infrastructure like roads and airports. An effective techno-legal governance framework is essential to balance innovation with public protection.
• Soft Law vs. Statutory Frameworks: A combination of soft law and statutory regulations may be optimal. Soft law can promote industry best practices and flexibility, while statutory frameworks can address critical aspects of data usage and privacy.
• Strategic Frameworks: Segregating DPIs into components governed by statutory frameworks and those suited to soft law can help maximize their benefits while minimizing risks. Clear governance structures are needed to ensure private actors contribute positively without undermining public interests.

Practice Question:

What is the role of Digital Public Infrastructure (DPI) in promoting inclusive and sustainable development? Evaluate the potential risks associated with DPI implementation and suggest a balanced regulatory approach to address these challenges while fostering innovation.

The Goods and Services Tax (GST) Council has convened to address growing criticism regarding the 18% GST on insurance premiums. This meeting follows mounting pressure to reconsider the tax levy on life and health insurance policies.

Recent Developments and Reactions

• Formation of New Group of Ministers: The GST Council has decided to form a new Group of Ministers to review the GST rates on life and health insurance. This group is tasked with recommending potential tax changes, with the Council expected to reconvene in November to discuss the report.
• Political Pressure and Criticism: There have been opposition to the GST on insurance premiums. The tax has been equated to taxing life’s uncertainties, reflecting broader discontent within the government and its allies.
• Revenue Impact: GST revenues from health insurance premiums increased by over 54% from 2021-22 to 2023-24, reaching Rs 8,262 crore last year. This significant revenue boost has fueled calls for reconsideration of the levy amidst concerns about the financial burden on consumers.

Considerations for Future Policy

• Need for Comprehensive Review: There is a call for a nuanced approach in reducing GST on insurance. Any reduction should be comprehensive and not selective, ensuring real cuts in premiums, especially given the rising costs of health insurance and the strain on public health systems.
• Focus on Pure Term Insurance: For life insurance, it is suggested that relief should primarily benefit pure term policies, which provide essential coverage without the investment component found in many market-linked products. This approach aims to support families during financial shocks.
• Comparative Taxation Rationale: The argument is made that if shared-seat helicopter services attract only 5% GST, insurance policies, which are crucial for financial security, should also receive more favorable tax treatment to alleviate consumer costs.

Practice Question:

Q. Evaluate the implications of the GST levy on insurance premiums for consumers and the insurance sector. Discuss the potential benefits and drawbacks of revising the GST rates on life and health insurance policies, considering the current economic and public health context.