GS Analyst: Daily Current Affairs

India and the US have recently signed two important defence agreements: the Security of Supplies Arrangement (SOSA) and a Memorandum of Understanding (MoU) on the Assignment of Liaison Officers. These agreements aim to strengthen defence cooperation between the two nations. India & US now aim for Reciprocal Defense Procurement (RDP).

What is SOSA?

• SOSA facilitates closer industry cooperation between India and the US, focusing on reciprocal priority support for defence-related goods and services.
• Mechanism: Under SOSA, both countries can request priority delivery for contracts and orders from each other's companies, helping to manage supply-chain disruptions in the defence sector.
• US Assurance: The US will provide India with assurances under the US Defense Priorities and Allocations System (DPAS), including support from the Department of Defense (DoD) and the Department of Commerce (DOC).
• Indian Commitment: India will establish a government-industry code of conduct, encouraging Indian firms to prioritize US defence needs.
• Global Participation: India becomes the 18th country to sign SOSA with the US, joining nations like Australia, Israel, Japan, and the UK.
• Implications for Indian Companies:
• Code of Conduct: Indian firms will voluntarily agree to provide priority support for US defence contracts, reflecting their reliability and commitment.
• Priority Requests: US DoD and contractors can request priority delivery for materials and services from participating Indian companies when needed for US defence requirements.

What is Reciprocal Defense Procurement (RDP)?

• The Reciprocal Defense Procurement (RDP) agreement will be legally binding, promoting joint production and sourcing between India and the US on a larger scale.
• Significance: RDP is already in place with 28 countries and aims to standardize and enhance interoperability of defence equipment.
• Benefits for US Companies: RDP allows American companies to bypass certain domestic procurement restrictions, facilitating easier collaboration and investment in signatory countries.
• The agreement also allows American companies to bypass the “Buy American statute”–similar to “Make in India”–entitling firms to set up manufacturing bases and collaboration with signatory countries

The SOSA and potential RDP agreements represent key steps in enhancing defence ties between India and the US, focusing on improving supply chain efficiency and fostering closer military cooperation.

PYQ

Q: What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region. (2020)

In a notable development in international relations, Indian Prime Minister Narendra Modi has concluded a landmark visit to Ukraine, marking the first state visit by an Indian Prime Minister since the two countries established diplomatic relations over three decades ago. This visit underscores India’s evolving foreign policy and strategic interests in Europe.

Background

• Since the onset of Russia’s military operation in Ukraine in February 2022, India has faced criticism from the West for not condemning Russia’s actions.
• Despite Western sanctions on Moscow, India has balanced its relationship with Russia, which has been a significant supplier of military hardware.
• Prime Minister Modi’s visit is part of India's broader strategy to navigate this complex geopolitical landscape and signal a more active role in global peace efforts.
• India’s Larger Europe Push: Modi’s visit to Ukraine represents a significant departure from India’s traditional foreign policy.
  • Historically aligned with Russia during the Cold War, India’s engagement with Ukraine and other European countries has been limited. India’s foreign policy focused primarily on its relations with Russia, Germany, France, and Britain.
  • Modi articulated a move from India’s historic policy of non-alignment towards a more proactive engagement with all nations.
  • The visit reflects a strategic shift to enhance ties with central and eastern Europe, recognizing the importance of diversifying India's foreign relations beyond its historical focus on Russia.

Key Highlights of Modi’s Visit

• Diplomatic Engagement: During his visit, Prime Minister Modi met with Ukrainian President Volodymyr Zelenskyy at the Mariinskyi Palace, engaging in extensive discussions on bilateral and global issues. Modi also paid homage at Mahatma Gandhi’s statue in Kyiv and honored the memory of children affected by the conflict at the National Museum of History of Ukraine.
• Humanitarian Assistance: India continued its humanitarian efforts by delivering 22 tonnes of medical support equipment to Ukraine. This aid includes the BHISHM Cube, a state-of-the-art mobile hospital designed for rapid deployment in disaster zones, capable of handling a wide range of medical emergencies.

Implications for India-Russia Relations

• Maintaining Balance: Despite the enhanced engagement with Ukraine, there is no indication that India’s relationship with Russia will suffer. India continues to rely on Russia for a significant portion of its military hardware and energy needs. The relationship with Ukraine is seen as a separate track, aimed at fostering peace and stability in the region without impacting India’s longstanding ties with Russia.
• Global Diplomacy: Modi’s visit underscores India’s commitment to supporting dialogue and diplomacy for resolving international conflicts. By engaging with Ukraine, India is positioning itself as a global player capable of balancing its traditional alliances while pursuing new opportunities for international cooperation.

Significance of Ukraine for the World

• Strategic Location: Ukraine’s position at the crossroads of Eastern Europe, bordering Russia, the EU, and NATO member states, makes it a crucial player in regional stability and security. The ongoing conflict in Ukraine has broader implications for global geopolitics and international relations.
• Agricultural Hub: Ukraine is a major global supplier of agricultural products, particularly grains such as wheat and corn. This positions Ukraine as a key player in global food security, impacting agricultural markets and food availability worldwide.

The government announced the inclusion of three new Ramsar sites in India, bringing the country's total to 85. The newly designated sites are the Nanjarayan Bird Sanctuary and Kazhuveli Bird Sanctuary in Tamil Nadu, and the Tawa Reservoir in Madhya Pradesh.

The New Ramsar Sites

• Nanjarayan Bird Sanctuary (Tamil Nadu):
  • Location: Situated on the banks of the Noyyal River.
  • Significance: Originally a water reservoir, it has evolved into an important ecosystem supporting diverse bird species like the Eurasian coot, spot-billed duck, and various herons. It is also a key stopover for migratory birds along the Central Asian Highway and supports local livelihoods through fishing.
• Kazhuveli Bird Sanctuary (Tamil Nadu):
  • Location: On the Coromandel Coast, this is one of the largest brackish water wetlands in South India.
  • Significance: The sanctuary features a mix of salt marshes, mudflats, and shallow waters, providing habitat for globally endangered species such as the black-headed ibis and greater flamingo. It serves as a crucial stopover for migratory birds along the East Asian-Australasian Flyway and contributes to flood control and groundwater recharge.
• Tawa Reservoir (Madhya Pradesh):
  • Location: Created by damming the Tawa River.
  • Significance: The reservoir is a major wintering ground for migratory birds and supports regional water management by providing irrigation water, drinking water to local communities, and sustaining nearby fisheries.

Why Wetlands are vital?

• Wetlands are defined by the Ramsar Convention as “areas of marsh, fen, peatland, or water, whether natural or artificial, permanent or temporary, with water that is static or flowing, fresh, brackish, or salt, including areas of marine water the depth of which at low tide does not exceed six meters.”
• This broad definition encompasses lakes, rivers, aquifers, swamps, marshes, and other water bodies.
• Wetlands are vital for several reasons:
  • Climate Regulation: They play a crucial role in regulating climate conditions through carbon sequestration, which is the storage of atmospheric carbon.
  • Water Purification: Wetlands help in purifying water by filtering out pollutants from shallow waters.
  • Buffer: Wetlands are essential for mitigating floods and storms by absorbing excess rainfall and acting as buffers against extreme weather events.

The Ramsar Convention

• The Ramsar Convention, signed in 1971 in Ramsar, Iran, is an intergovernmental treaty aimed at the conservation and protection of wetlands worldwide.
• It encourages the designation of Ramsar sites based on criteria such as the support they provide to plant and animal species at critical life stages or during adverse conditions, as well as their ability to support fish and waterbirds.
• With 172 signatory countries, including India, the convention mandates the creation of wetland reserves and the promotion of sustainable use of these habitats.
  • India joined the convention in 1982, initially designating Chilika Lake in Orissa and Keoladeo National Park in Rajasthan as Ramsar sites.Today, India boasts one of the highest numbers of Ramsar sites in Asia.

Threats to Wetlands

• Encroachment: Human expansion and development.
• Pollution: Agricultural and industrial runoff deteriorating water quality.
• Urbanization: Rapid growth leading to the degradation and shrinking of wetland areas.
• The Ramsar Convention’s Global Wetland Outlook (2018) reported a 35% loss of global wetlands between 1970 and 2015, driven largely by human activities.
• In India, the Ministry of Environment, Forest and Climate Change (MoEFCC) has launched initiatives to address these challenges, such as the
  • National Wetland Conservation Programme (1986)
  • 2015 National Plan for Conservation of Aquatic Wetlands

The second-largest diamond ever discovered, a 2,492-carat rough stone, was found in Botswana.

Key-facts

• Location: The diamond was unearthed at the Karowe mine, located about 500 km north of Botswana's capital, Gaborone.
• Previous Largest: The largest diamond ever found was the 3,106-carat Cullinan diamond discovered in South Africa in 1905. It was cut into nine stones, many of which are now part of the British Crown Jewels.
• Botswana is the world’s leading diamond producer by value, contributing about 20% of global diamond production.
• Previous Record in Botswana: The largest diamond found in Botswana before this was a 1,758-carat stone discovered at the same Karowe mine in 2019.
• Other major discoveries at the Karowe mine include the 1,109-carat Lesedi La Rona diamond in 2015 and the 1,758-carat Sewelô diamond in 2019.

The Supreme Court recently held that simply insulting a member of a Scheduled Caste (SC) or Scheduled Tribe (ST) does not automatically constitute an offence under the 1989 SC and ST (Prevention of Atrocities) Act, underlining that the offence requires a specific intent to humiliate the individual based on their caste identity.

What is SC/ST Act?

• The Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act of 1989 (SC/ST Act) is a law that aims to prevent crimes against members of Scheduled Castes and Scheduled Tribes (SCs and STs). 
• The Act came into effect in1990. 
• Popularly known as POA, the SC/ST Act, lists 22 offences relating to various patterns or behaviours inflicting criminal offences and breaking the self-respect and esteem of the scheduled castes and tribes community.
  • This includes denial of economic, democratic and social rights, discrimination, exploitation and abuse of the legal process.
• 'Police' and 'Public Order' are State subjects under the Seventh Schedule (List-II) to the Constitution of India. The primary responsibility for implementation of the Act rests with the State Governments/UT Administrations.

The - has directed companies to cease using labels such as A1 and A2 on dairy products. This action is based on the assertion that such labels are "misleading" and do not comply with the provisions of the FSS Act, 2006.

What is A1 and A2?

• A1 and A2 refer to specific types of beta-casein proteins found in cow's milk. The difference between A1 and A2 milk is related to the structure of a protein called beta-casein. Beta-casein is a major protein in milk, and there are at least 13 different forms.
  • A1 beta-casein: Milk from breeds of cows that originated in northern Europe is generally high in A1 beta-casein. These breeds include Holstein, Friesian, Ayrshire, and British Shorthorn.
  • A2 beta-casein: Milk that is high in A2 beta-casein is mainly found in breeds that originated in the Channel Islands and southern France. These include Guernsey, Jersey, Charolais, and Limousin cows.
• A2 Milk: Contains only A2 beta-casein, whereas regular milk has both A1 and A2.
• Health Considerations:
  • Research: Some studies suggest that A2 milk may be healthier and cause fewer digestive issues than milk with A1 beta-casein. For instance, a study indicated that individuals with milk intolerance experienced fewer symptoms with A2 milk.
  • BCM-7 Peptide: A peptide produced during the digestion of A1 beta-casein, BCM-7, is sometimes linked to health issues such as type 1 diabetes and heart disease, though research is limited and ongoing.
  • Scientific Debate: A study published in 2005 found no strong evidence linking A1 beta-casein to health problems like type 1 diabetes or heart disease.

India has successfully launched its first reusable hybrid rocket, RHUMI-1, developed by the Tamil Nadu-based start-up Space Zone India in collaboration with the Martin Group.

Key Details:

• RHUMI-1 incorporates a reusable mechanism, promising a cost-effective and environmentally sustainable solution to satellite launches.
  • Rocket Technology: RHUMI-1 is equipped with a generic-fuel-based hybrid motor and electrically triggered parachute deployer. The spacecraft is 100% pyrotechnic-free and 0% TNT.
    • The hybrid propulsion system, combining solid fuel and liquid oxidizer technologies, is engineered to slash the costs associated with hybrid rocket operations while ensuring utmost safety.
  • The RHUMI-1 rocket combines the advantages of both liquid and solid fuel propellant systems to improve efficiency and reduce operational costs.
  • The RHUMI series includes three models—RHUMI-1, RHUMI-2, and RHUMI-3—capable of reaching altitudes ranging from 1 km to 500 km.
• Application: Beyond its space exploration objectives, RHUMI 1’s applications extend to agriculture, environmental monitoring, and disaster management.
• Key-features
  • Flexibility and reusability
  • Adjustable launch angle, which can be modified between 0 and 120 degrees
  • A CO2-triggered parachute system
• Rocket and Satellites: RHUMI-1 carried 3 Cube Satellites and 50 PICO Satellites into a suborbital trajectory. These satellites will gather data on global warming and climate change.
• Space Zone India: Based in Chennai, Space Zone India focuses on providing affordable, long-term space solutions. The company offers training in Aerodynamics, Satellite Technology, Drone Technology, and Rocket Technology. They also promote awareness about careers in the space industry.
  • Educational Initiatives: In 2023, Space Zone India ran the "Dr. APJ Abdul Kalam Students Satellite Launch" mission, involving over 2,500 students from various schools in designing and building a student satellite launch vehicle. This vehicle was capable of carrying 150 Pico satellites for research experiments.

More than 350 cases of cholera have been recorded in a new outbreak in Sudan in just a few weeks.

What is Cholera?

• Cholera is a bacterial disease usually spread through contaminated water. It is spread when people drink infected water, when people with open wounds have direct contact with the contaminated water, and, in some cases, when they eat raw shellfish.
• The disease causes severe diarrhoea and dehydration. If the disease is left untreated, cholera can kill within hours – even people who were previously healthy.
• Transmission: It cannot be transmitted from person to person, so casual contact with a person who has the disease is not a risk.
• While the disease might not cause illness to everyone exposed to it, infected people can still pass the bacteria in their stool, contaminating food and water supplies. This is a particular problem where there are no working sanitation facilities.
• Vulnerability: Children under the age of five have the highest rates of infection, but all age groups are at risk, especially those suffering from malnutrition, those who are immunocompromised or who lack prior vaccination.

Treatment:

• Rehydration to replace the lost fluids.
• Other treatments include intravenous fluids, antibiotics and zinc supplements.

India's centennial year of independence in 2047 is a key milestone for the country, with a focus on becoming a developed nation. Achieving this ambitious goal requires a substantial increase in per capita Gross National Income (GNI) and a comprehensive development strategy, particularly in the agriculture sector.

Agricultural Transformation

• Sustainable Practices: The adoption of precision farming, genetically modified crops, and advanced irrigation techniques is crucial for transforming Indian agriculture. Programs like the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) are vital for improving water-use efficiency.
• Government Initiatives: Schemes such as the Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Electronic National Agriculture Market (eNAM) are addressing challenges in crop insurance and market access, enhancing the resilience of farmers.
• Infrastructure and Support: The Agriculture Infrastructure Fund and Soil Health Card (SHC) scheme are instrumental in improving post-harvest management and optimizing soil nutrients, respectively. These initiatives are crucial for sustainable agricultural growth and increased farmer incomes.

Current Challenges

• Economic Imbalance: Despite employing nearly 46% of the workforce, agriculture's contribution to GDP is only about 18%. The growth rate of agricultural GDP lags behind the overall GDP growth, highlighting the sector's economic imbalance.
• Population Growth and Food Demand: With India's population expected to reach 1.5 billion by 2030, there is an urgent need to meet growing food demands. The expenditure elasticity of food indicates a significant increase in food demand, requiring efficient agricultural strategies.
• Sectoral Disparities: The anticipated shrinking of agriculture’s share in GDP by 2047, coupled with rising food demand, underscores the necessity for structural changes and investments in agricultural research and development.

Strategic Planning for 2047

• Future Demand Projections: Projections suggest that India will need to produce between 402 to 437 million tonnes of food grains by 2047-48. Ensuring production exceeds demand will be key to food security.
• Government Budget and Investments: The 2024-25 Budget's allocation of ?20 lakh crore for agricultural credit and the launch of the Agriculture Accelerator Fund highlight the government’s commitment to fostering innovation and growth in the sector.
• Sustainable Development Goals: Embracing sustainable agricultural practices, leveraging technological advancements, and implementing strategic initiatives will be critical for meeting the food needs of a growing population and achieving inclusive development by 2047.

Mains Question:

Q. What are the key challenges facing Indian agriculture in the context of achieving the goal of becoming a developed nation by 2047? How do current government schemes and initiatives address these challenges? Analyze their effectiveness and suggest additional measures that could be taken to ensure sustainable agricultural growth.

The global discourse on international tax reform has gained momentum, particularly after the global financial crisis revealed the low tax rates paid by multinational corporations. Efforts led by the OECD and the G20 have aimed at addressing profit-shifting and tax avoidance. In 2023, a significant development occurred when 125 countries, including India, supported a UN global tax convention, challenging the dominance of the OECD framework.

OECD and Global Tax Reforms

• OECD’s Efforts: The OECD developed fifteen action points to enhance transparency and address cross-border tax avoidance. This included inviting low-income countries to participate in the Inclusive Framework (IF) to level the playing field.
• Complexities and Criticism: The OECD’s attempts to address redistribution of taxing rights, particularly for large tech companies, led to complex solutions. The process faced criticism from developing countries and led to calls for a new approach.
• UN Tax Convention Proposal: In response to dissatisfaction with the OECD framework, 125 countries voted for a UN global tax convention in 2023. This move indicates a shift towards a more inclusive and equitable tax governance structure.

Challenges and Institutional Overlap

• Institutional Frameworks: The OECD has established robust mechanisms for information exchange and anti-abuse measures. The UN’s proposal needs to address potential duplication and ensure that new frameworks build on existing strengths.
• Economic Interests and Sovereignty: Diverging economic interests and concerns about national sovereignty pose challenges for the UN convention. Ensuring fair allocation of taxing rights while respecting sovereignty remains a complex issue.
• Revised Focus and Transparency: The UN convention introduces formal processes and greater transparency compared to the OECD framework. This includes equitable election processes and public information on country votes.

Future Prospects and Implementation

• Implementation Challenges: The UN convention faces obstacles in gaining acceptance from key countries like the US and UK. These countries’ reluctance may impact the adoption of the new protocols.
• Focus Areas: The convention’s emphasis on tax avoidance by high-net-worth individuals and fair allocation of taxing rights represents a shift in international tax policy. However, the concept of fairness remains undefined.
• Pragmatic Approach: A successful implementation would require addressing cross-border services, digital economy concerns, and illicit financial flows. Engaging with resistant countries and ensuring effective protocols will be crucial.

Mains Question:

Q. Evaluate the implications of the UN global tax convention for international tax governance. How does it address the shortcomings of the OECD framework, and what challenges are likely to arise in its implementation? Discuss the potential impact on global tax fairness and sovereignty.

The debate over the Goods and Services Tax (GST) rate slabs has intensified, with many states opposing changes despite growing GST revenues. The discussion centers on whether simplifying the rate structure would enhance economic efficiency and compliance, or whether it could lead to revenue losses for states.

Arguments for Rate Rationalisation

• Revenue Growth and Stability: GST revenues have shown a significant increase from Rs 94,734 crore in 2020-21 to Rs 1,84,724 crore in April-July 2024-25. This revenue growth suggests that it might be an opportune time to streamline the GST rate structure.
• Current Rate Structure Issues: The existing GST slabs (0%, 5%, 12%, 18%, and 28%) create inconsistencies and inefficiencies. Examples include the high 28% GST on cement and the 18% rate on medical insurance premiums, which seem disproportionately high given their essential nature.
• Potential Benefits of Simplification: Reducing the number of GST slabs from five to three could decrease complexity and promote economic activity. Simplified rates could also lead to better compliance and potentially higher revenues through increased consumption.

Challenges and Concerns

• State Revenue Concerns: Many states fear that rate rationalisation might lead to a loss in revenue. They are cautious about changes that could impact their fiscal health, especially if the restructuring reduces the tax base.
• Economic and Fiscal Impact: Simplification of GST rates could act as a fiscal stimulus by lowering indirect taxes. This could potentially spur economic activity and consumption, benefiting the overall economy more than incremental government spending.
• Alternative Revenue Sources: States are encouraged to explore alternative revenue sources, such as revising user charges on utilities and adjusting property-related fees. This could offset any potential revenue losses from GST rate changes and support better compliance.

Mains Question:

Q. Discuss the potential advantages and disadvantages of rationalising the Goods and Services Tax (GST) rate slabs in India. How might simplifying the GST structure impact state revenues, economic activity, and overall fiscal health? Propose alternative measures states could adopt to manage any revenue shortfall resulting from GST rate rationalisation.