GS Analyst: Daily Current Affairs

The birth anniversary of the legendary Chola emperor Raja Raja Chola I (985 to 1014 CE) is being celebrated with great fervour and devotion during the annual Sadhaya Vizha in Thanjavur, Tamil Nadu.

About Raja Raja Chola I:

• Born as Arulmozhi Varman in 947 CE, Raja Raja Chola I ascended the throne in 985 CE and became one of the most revered and powerful emperors in Indian history.
• He was born to Parantaka Chola II and Vanavan Mahadevi. 
• His leadership transformed the Chola Empire into a dominant force in South and Southeast Asia. He conquered the kingdoms of southern India, his empire expanding as far as Sri Lanka in the south and Kalinga (Orissa) in the northeast.
• He is often called "Raja Raja the Great" for his military and administrative achievements.
• Militaristic and Administrative Vision: His reign is remembered for extensive military campaigns that expanded the Chola empire to Sri Lanka and the Maldives. His administration is also known for its organizational reforms, including the efficient management of the empire’s revenue and military systems, and the consolidation of his territorial gains.
• Cultural Contributions and Temple Building: Raja Raja Chola was responsible for constructing the largest Hindu temple of its age: the Bhrihadishvara temple (commonly known as the Tanjore temple) in Thanjavur, completed in 1013. 
  • It is one of the largest temples in India and is an example of Dravidian architecture during the Chola period. The temple turned 1014 years old in 2014.
  • The temple is part of the UNESCO World Heritage Site known as the "Great Living Chola Temples", with the other two being the Gangaikonda Cholapuram and Airavatesvara temple.

Important Achievements of Raja Raja Chola I

1. Military Conquests:
   • Kandalur War (994 CE): Raja Raja Chola defeated the Chera king Bhaskara Ravi Varman Thiruvadi and destroyed the Chera fleet, establishing Chola dominance over the southern seas.
   • Defeat of Pandya King Amarabhujanga: Raja Raja captured the port of Virinam and defeated the Pandya king, further expanding his empire’s influence in southern India.
   • Expansion of the Chola Empire: Raja Raja assumed the title Mummudi Chola after conquering territories of the Cholas, Pandyas, and Cheras, symbolizing his rule over these three kingdoms.
2. Conquest of Sri Lanka (993 CE):
   • Invasion of Anuradhapura: Raja Raja invaded Sri Lanka, destroyed the ancient capital Anuradhapura, and established Chola control over the northern part of the island, renaming the capital as Jananathamangalam (Polonnaruwa).
   • Construction of Siva Temple in Polonnaruwa: Raja Raja commemorated his victory by constructing a Siva temple in Polonnaruwa, cementing the Chola presence in Sri Lanka.
3. Chalukyan and Southern Conquests:
   • Defeat of the Nolambas and Western Chalukyas (998 CE): Raja Raja annexed Gangapadi, Nolambapadi, and Tadigaipadi, regions previously under the Nolamba feudatories of the Rashtrakutas. His victory over the Western Chalukyas laid the foundation for Chola expansion in the Deccan.
   • Conflict with Eastern Chalukyas (Vengi): After defeating Jata Choda Bhima, Raja Raja Chola placed Saktivarman I on the throne of Vengi, reasserting Chola control over the Vengi kingdom.
   • Confrontations with Hoysalas: Raja Raja’s general Aprameya defeated the Hoysala forces in battles near Narasipur and Channapatna, reinforcing Chola authority.
4. Naval Power and Maritime Expansion:
   • Naval Campaigns: Raja Raja recognized the importance of a strong navy and conducted successful campaigns, including a naval conquest of the Maldives, strengthening Chola influence in the Bay of Bengal and beyond.
   • Invasion of Srivijaya: Raja Raja’s naval supremacy allowed his son, Rajendra Chola, to carry out raids in Southeast Asia, particularly in Srivijaya, marking the height of Chola naval power.

India has emphasized the importance of freedom of navigation and peaceful commerce in the Indo-Pacific, particularly in the South China Sea, a vital waterway for global trade. India's Defence Minister, Rajnath Singh, stressed at the ASEAN Defence Ministers' Meeting that a proposed Code of Conduct (COC) for the South China Sea must follow international law, particularly the UN Convention on the Law of the Sea (UNCLOS). This aligns with India’s stance that the code should respect the rights of all nations, even those not directly involved in the dispute.

What is the South China Sea?

• The South China Sea is a crucial waterway between the Indian Ocean and Northeast Asia. It connects ports of countries like China, Japan, Korea, and Russia.
• Nearly USD 5.3 trillion worth of goods pass through it every year, making it one of the world’s most important trade routes.
• It is also rich in fishing resources, and over half of the world’s fishing vessels operate here.
• The Territorial Dispute: Several countries, including China, Vietnam, the Philippines, Malaysia, and Brunei, have competing territorial claims over parts of the South China Sea.
  • They argue over the Paracel and Spratly islands and the waters surrounding them.
  • These islands are mostly uninhabited but may contain natural resources like oil and gas.

China's Claims and Others' Disagreement

• China's Nine-Dash Line: China claims nearly the entire South China Sea, demarcated by the "nine-dash line" which dates back to a 1947 map. China argues that these islands and waters have been part of its territory for centuries. Taiwan, which also claims the area, mirrors China’s position.
• Disputes from Other Countries:
  • Vietnam contests China’s claims, saying it has ruled the Paracels and Spratlys since the 17th century and has documents to prove it.
  • The Philippines also claims the Spratlys, emphasizing its proximity to the islands and also claims the Scarborough Shoal, which China disputes.
  • Malaysia and Brunei claim parts of the sea within their Exclusive Economic Zones (EEZ), defined by international law (UNCLOS).
• International Legal Developments: The 2016 UN Arbitration Ruling: In 2013, the Philippines took China to court over its claims. The Permanent Court of Arbitration in The Hague ruled in favor of the Philippines in 2016, declaring that China’s claims based on the nine-dash line were illegal. This ruling was grounded in the United Nations Convention on the Law of the Sea (UNCLOS), an international treaty governing maritime laws, which China, despite being a signatory, rejected.

Code of Conduct (COC) Negotiations

• The Code of Conduct is an agreement that aims to regulate the behavior of countries in the South China Sea, particularly regarding military and maritime activities. It is being discussed by countries involved in the territorial dispute, such as China, the Philippines, Vietnam, Malaysia, Brunei, and Taiwan.
• ASEAN's Role: The Association of Southeast Asian Nations (ASEAN), which includes countries like Indonesia, Thailand, Singapore, and others, is also involved in the negotiations, even though they are not direct claimants to the area. ASEAN wants to ensure peaceful use of the sea and prevent conflict.
• India’s Stance: India, along with other countries like the US, Japan, and Australia, has an interest in the COC outcome because the South China Sea is vital for international trade and security. India supports the idea that any COC must be consistent with international law and not infringe upon the rights of countries not involved in the dispute.

Global Stakes in the Dispute

• Global Importance of the Sea: The South China Sea is crucial for global trade and the movement of naval forces. The Sea Lines of Communication (SLOCs) passing through this region are vital for the peace and prosperity of countries in the Indo-Pacific.
• Global Powers' Reactions:
  • United States: The US has conducted freedom of navigation operations (FONOPS) to challenge China’s territorial claims. The US has also supported Southeast Asian countries in countering China's expansion in the region.
  • Japan and Australia: These countries have been strengthening their maritime security ties with the Philippines and Vietnam to help counter China’s assertive territorial claims.

Increasing pollution is causing damage to people’s lungs. Even teenagers’ lungs are now resembling those of lifelong smokers, a stark sign of the widespread harm from urban pollution.

Pollution as a National Health Crisis

• According to the United Nations Environment Programme (UNEP), pollution levels are rising quickly in India, with emissions increasing by more than 6% from the previous year.
• Air pollution is now the leading environmental cause of premature death in India. In 2021, nearly 2 million deaths were attributed to pollution-related health issues.
• Vulnerable groups like pregnant women, children, the elderly, and those with pre-existing health conditions are most affected by air pollution, which increases the risk of respiratory infections, heart diseases, and other health complications.
• Impact on Children’s Health: Air pollution is severely affecting children's lung development, leading to chronic conditions like asthma. These aren't just temporary issues; they can result in lifelong health problems.

Impact of Air Pollution on Specific Organs

Air pollution affects several key bodily systems and organs, contributing to a wide range of health problems:

• Respiratory System
• • Asthma & Allergic Rhinitis: Pollutants aggravate respiratory conditions like asthma and allergic rhinitis (hay fever), leading to more frequent attacks and worsening symptoms.
  • Chronic Obstructive Pulmonary Disease (COPD): Long-term exposure to air pollution can damage the lungs, leading to COPD, a group of diseases that obstruct airflow and make breathing difficult.
  • Lung Cancer: Pollutants, especially carcinogens in the air, increase the risk of lung cancer.
  • Pneumonia & Lung Infections: Air pollution can also increase susceptibility to acute respiratory infections like pneumonia, particularly in vulnerable groups such as the elderly and children.
• Cardiovascular System
• • Heart Disease: Fine particulate matter (PM2.5) in the air is linked to heart disease, including an increased risk of heart attacks, strokes, and heart failure.
  • Hypertension: Long-term exposure to air pollution can cause high blood pressure (hypertension), a leading risk factor for cardiovascular diseases.

• • Cognitive Decline & Dementia: Air pollution is also associated with cognitive impairments, including early cognitive decline, dementia, and Alzheimer’s disease. Pollutants can negatively affect brain function, accelerating the onset of neurological diseases.
• Skin
• • Dermatitis & Eczema: Pollution can lead to skin conditions such as dermatitis and eczema, causing redness, irritation, and inflammation.
  • Premature Skin Aging: Exposure to pollutants accelerates the aging process of the skin, leading to wrinkles, loss of elasticity, and pigmentation changes.
• Internal Organs
• • Kidney & Liver Damage: Air pollution can also affect internal organs like the kidneys and liver, potentially leading to chronic kidney disease and liver dysfunction. The toxins in polluted air may cause inflammation and damage to these vital organs.

The PS5 Pro console was recently released globally, but India was not included in the initial list of markets. Sony announced that the PS5 Pro won’t be available in countries like India due to a specific issue with Wi-Fi 7 technology, which uses a 6GHz frequency band. This band is currently not allowed for Wi-Fi use in India.

Wi-Fi Bands and Their Evolution:

• Wi-Fi bands are frequency ranges used for wireless internet. These bands were available for public use in India starting in 2002.
  • 4GHz and 5GHz are the most common Wi-Fi bands used globally, including in India.
  • 4GHz offers a larger coverage area but slower speeds.
  • 5GHz provides faster speeds but covers a smaller area.

Introduction of Wi-Fi 6 and Wi-Fi 6E:

• In 2020, Wi-Fi 6 was introduced, which can use both 2.4GHz and 5GHz bands more efficiently, improving speeds.
• Wi-Fi 6E was launched in 2021, introducing a third band—the 6GHz band—to provide even faster internet speeds (up to 9.6Gbps).
  • This 6GHz band is important because it can carry much higher speeds compared to the older bands.

What is 6GHz Band?

• 6GHz spectrum is the frequency range between 5,925 MHz and 7,125 MHz. It allows for faster internet speeds and less congestion since it's a new, unoccupied band.
• Many countries, including the US, UK, South Korea, and UAE, have allowed this band for Wi-Fi, but India has not yet opened it up for use.
• The International Telecommunications Union (ITU) usually tries to create global agreements about how wireless spectrum should be used, but countries like India and China are still deciding what to do with this band.
• The 6GHz Band in India: In India, the 6GHz band is currently used by the Indian Space Research Organisation (ISRO) for satellite communication. However, satellite use is unlikely to interfere with Wi-Fi use.

• Telecom companies in India are pushing for the 6GHz band to be used for 5G and 6G networks, while tech companies (such as Google, Meta, and Amazon) want it to be allocated for Wi-Fi instead, like in the US.
• There is a debate in India about whether the entire 6GHz band should go to telecoms or be shared for Wi-Fi as well. Australia has already made half of the 6GHz spectrum available for Wi-Fi, and India might follow this example.

Impact on PS5 Pro and Wi-Fi 7 in India:

• Wi-Fi 7, which is the next generation of Wi-Fi technology, requires the 6GHz band for full performance.
• In India, since this band isn’t available for Wi-Fi use yet, the PS5 Pro, which supports Wi-Fi 7, cannot fully utilize the 6GHz band here.
• However, Apple and Samsung phones also support Wi-Fi 6GHz but are programmed to avoid using it in India, as the band is not allowed here. Sony could do something similar with the PS5 Pro.

Education loans have been growing at a notable pace in recent years and a further boost is expected with the newly launched ‘Pradhan Mantri Vidyalaxmi scheme’.

What is the PM Vidyalaxmi Scheme?

• The PM Vidyalaxmi Scheme is a new initiative launched by the government to provide financial support to students for higher education.
• It aims to ensure that financial barriers do not prevent deserving students from pursuing their dreams of studying at top institutions.
• Under this scheme, eligible students can get collateral-free, guarantor-free loans to cover tuition fees and other expenses for their courses.
• Eligibility: The scheme is available to students who have been admitted to Quality Higher Educational Institutions (QHEIs), which are ranked highly according to the National Institutional Ranking Framework (NIRF).
• • Top 100 Institutions (Overall, Category, Domain-specific NIRF rankings): These are the leading government and private institutions.
  • State Government Institutions (Ranked 101-200): These institutions also qualify.
  • All Institutions under the Central Government: These are automatically eligible.
  • Each year, the list of eligible institutions will be updated based on the latest NIRF rankings. The scheme will initially include 860 institutions, covering over 2 million students.

Key Benefits of the Scheme

• Collateral-Free Loans: Students can get loans to cover the full cost of their education, including tuition fees, without needing any security or a guarantor.
• Loan Guarantee: For loans up to Rs 7.5 lakh, there will be a 75% credit guarantee for the banks, reducing their risk of defaults.
• Interest Subsidy:
  • Students with a family income of up to Rs 8 lakh (who are not eligible for other government scholarships) can get a 3% interest subsidy on loans up to Rs 10 lakh.
  • The subsidy will apply during the moratorium period (the period before the loan repayments begin).
  • This subsidy will benefit 100,000 students per year, with priority given to those from government institutions and those pursuing technical/professional courses.
  • The government has allocated a budget of Rs 3,600 crore for the period from 2024-25 to 2030-31.

A combination of factors, including rising interest rates, regulatory action and funding scarcity, could moderate growth in the non-banking financial company (NBFC) sector from 18 per cent in 2024 to 13-15 per cent in the coming year, according to rating agency ICRA.

What is an NBFC?

• An NBFC (Non-Banking Financial Company) is a financial institution that provides financial services similar to banks but does not hold a banking license.
• NBFCs play an important role in the economy by providing credit and other financial services to parties usually not served by traditional banks.
• In India, NBFCs are regulated by the Reserve Bank of India (RBI) and must comply with specific regulatory norms.
• They primarily raise funds through public deposits, borrowings from banks, and capital markets.
• No Deposit Insurance: Unlike banks, deposits made in NBFCs are not insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
• They play a crucial role in the financial system, offering services such as: Loans and Credit, Investment Services, Financial Leasing, Microfinance, Insurance and Asset Management
• Different types of NBFCs in India
• Asset Finance Companies (AFCs) primarily finance the purchase of physical assets like automobiles or industrial machinery.
• Investment Companies (ICs) focus on acquiring securities and stocks to build investment portfolios.
• Loan Companies (LCs) engage primarily in providing loans and advances.
• Infrastructure Finance Companies (IFCs) lend to infrastructure projects.
• Microfinance Institutions (MFIs) provide small loans to low-income individuals and groups.

Challenges faced by NBFCs

• The Reserve Bank of India (RBI) is nudging NBFCs to grow prudently and focus on long-term sustainability to avert stress in any segment. 
  • In November 2023, it increased the risk weights for loans to NBFCs by 25 basis points, making bank borrowing more expensive for them.
• Other challenges:
  • tightening liquidity conditions intensify margin pressures
  • restrict access to credit, especially for smaller and mid-sized players
  • rising cost of credit
  • limited bargaining power, especially for smaller NBFCs

Countries at the COP29 summit in Baku adopted a USD 300 billion a year global finance target to help poorer nations cope with impacts of climate change, a deal its intended recipients criticised as woefully insufficient.

What is the finance deal struck at COP29?

• Delegates at COP29 agreed to provide additional funding to developing countries to fight and adapt to climate change.
• The wealthy nations, who are historic emitters, offered USD 300 billion a year by 2035, much less than what the developing world was hoping to receive.
  • Under a framework established by the UN in 1992, 23 developed countries -- and the European Union -- historically responsible for most planet-heating emissions are obliged to contribute to climate finance.
• Source: The deal states that the money will come directly from a "wide variety of sources" including government budgets, private sector investment, and other financing. It also cites "alternative sources" -- a reference to potential global taxes under discussion on the aviation and maritime industries, and the rich.
• It’s part of the plan to keep cutting pollution with new targets every five years, which the world agreed to at the UN talks in Paris in 2015.
  • The Paris Agreementset the system to keep warming under 5 degrees Celsius above pre-industrial levels. The world is already at 1.3 degrees Celsius and carbon emissions continue to rise.

India’s Stand

• India has rejected the new USD 300 billion climate deal for the Global South, saying it was too little and too late.
• India does not accept the goal proposal in its present form. The amount that is proposed to be mobilised is abysmally poor. It is a paltry sum. It is not something that will enable conducive climate action that is necessary for the survival of our country.
• USD 300 billion does not address the needs and priorities of developing countries. It is incompatible with the principle of CBDR (Common but Differentiated Responsibilities) and equity, regardless of the battle with the impact of climate change.
• The negotiations were also the scene of disagreements within other developing world.
• The Least Developed Countries (LDCs) bloc had asked that it receive $220bn per year, while the Alliance of Small Island States (AOSIS) wanted $39bn – demands that were opposed by other developing nations.
• The figures did not appear in the final deal. Instead, it calls for tripling other public funds they receive by 2030.
• The next COP, in Brazil in 2025, is expected to issue a report on how to boost climate finance for these countries.

India's urban population is expected to grow from 400 million in the last decade to 800 million over the next three decades, presenting both an opportunity and a challenge for urban infrastructure. The World Bank report estimates India will require Rs 70 lakh crore by 2036 to meet its urban infrastructure needs. However, the current government investment is far from sufficient, creating a significant funding gap. The financial and administrative challenges faced by municipal bodies in managing urban infrastructure are highlighted in recent reports, emphasizing the need for reforms.

Financial Challenges for Urban Infrastructure

• Investment Shortfall: The World Bank estimates India will need Rs 4.6 lakh crore annually to meet urban infrastructure requirements, while current government investment stands at only Rs 1.3 lakh crore, less than one-fourth of the required amount.
• Municipal Finance Issues: Municipal finance has stagnated at 1% of GDP since 2002, with tax revenue growth of only 8% between 2010-2018. The share of municipalities' own revenue sources has also declined from 51% to 43%.
• Collection Inefficiencies: Urban Local Bodies (ULBs) like Bengaluru and Jaipur collect only 5%-20% of their potential tax revenue, and nationwide property tax collection stands at just Rs 25,000 crore, 0.15% of GDP.

Challenges in Utilization and Public-Private Partnerships (PPP)

• Low Absorptive Capacity: Major cities like Hyderabad and Chennai only managed to utilize 50% of their capital expenditure budgets in 2018-19, indicating inefficiencies in utilizing allocated funds for urban development.
• Central Scheme Utilization: Schemes like the Smart Cities Mission and AMRUT show suboptimal fund utilization, with AMRUT achieving 80% and Smart Cities Mission reaching only 70%.
• Decline in PPPs: Investment through Public-Private Partnerships (PPPs) plummeted from Rs 8,353 crore in 2012 to just Rs 467 crore in 2018, reflecting reduced attractiveness due to lack of project-specific revenues and viability funding.

Measures for Sustainable Urban Infrastructure Development

• Structural Reforms: Strengthening state finance commissions and empowering municipal governments with greater autonomy are key to ensuring better financial management and resource allocation for urban development.
• Robust Project Pipeline: A clear pipeline of 600-800 urban projects is necessary to meet the Rs 70 lakh crore investment goal, with 15% of the funding coming from PPPs.
• Leveraging Digital Public Infrastructure: Implementing Digital Public Infrastructure (DPI) for better urban service delivery, particularly in public transport, can improve operational efficiency and management.

Practice Question:

Q. India faces significant financial challenges in meeting the urban infrastructure needs of its growing population. Discuss the key issues related to municipal finances, the role of Public-Private Partnerships, and suggest measures for sustainable urban infrastructure development.

A Supreme Court-appointed committee headed by Justice (retired) Nawab Singh has raised concerns over India's agrarian crisis, highlighting the need for legal sanctity to Minimum Support Prices (MSP) for farmers. While the committee’s observations are not binding, they are likely to influence ongoing Supreme Court hearings related to farmers' protests.

Agrarian Crisis and MSP

• Viability Crisis in Agriculture: The Indian agrarian economy is in a crisis, as evidenced by issues like farmer suicides, which reflect deep-rooted economic challenges in the sector.
• Limitations of MSP: The committee suggests that while MSP has been essential for ensuring food security, it cannot address deeper systemic issues like water scarcity, soil degradation, and the environmental impact of practices such as stubble burning.
• Localized Negative Impact: In states like Punjab, MSP has exacerbated problems such as water wastage and soil degradation, raising questions about its sustainability in the long term.

Broader Challenges in Indian Agriculture

• Labor Cost Reduction: To cope with rising labor costs, farmers are increasingly resorting to harmful practices like stubble burning, which have far-reaching environmental consequences.
• Need for Job Diversification: Generating employment opportunities outside agriculture is essential to alleviate the strain on the farming sector, although achieving this in a labor-abundant economy remains a complex challenge.
• Environmental Impact: Practices such as stubble burning, driven by cost-saving measures, contribute significantly to air pollution and are a direct fallout of the financial pressures on farmers.

Reforms for Sustainable Farming

• Political Dialogue for Change: A sustainable solution to the agrarian crisis requires a comprehensive political dialogue that includes all stakeholders to drive reforms and policy changes in the sector.
• Fiscal Space for Agricultural Transformation: There is a need to carve out fiscal resources to support long-term transformations in Indian farming, addressing issues such as sustainability, viability, and environmental conservation.
• Role of Courts: Courts should recognize that there are no simple solutions to the agrarian crisis and focus on facilitating constructive political and policy debates for a lasting resolution.

Practice Question:

Q. India’s agricultural sector is grappling with a viability crisis that is deeply intertwined with environmental degradation and socio-economic challenges. Discuss the limitations of the Minimum Support Price (MSP) scheme in addressing these issues and suggest a comprehensive approach to reforming the agrarian economy.

The Adani Group is facing serious allegations in a bribery scandal, which involves accusations of doling out USD 265 million in bribes to government officials in five Indian states. This comes after a prior investigation by Hindenburg Research and now involves a legal suit by the US Department of Justice, raising concerns about corporate governance and its impact on India’s growth narrative.

Bribery Allegations and Legal Proceedings

• USD 265 Million Bribe: The Adani Group is accused of paying bribes to government officials across five Indian states to secure expensive solar power contracts.
• Foreign Corrupt Practices Act Violation: The case involves alleged violations of the US Foreign Corrupt Practices Act, which could result in severe penalties if proven.
• Evidence Against the Group: The allegations are backed by a collection of documents and electronic messages, possibly obtained with the help of whistle-blowers, which have sparked investigations in the United States.

Impact on Adani Group and Market Reactions 

• Market Reaction: Following the news of the bribery case, shares of Adani Green Energy, a key company in the Group's renewable energy sector, dropped nearly 40%.
• Investor Concerns: Investors are seeking clarity from the Adani Group regarding the charges, with expectations for a detailed public statement.
• Group's Defense: The Adani Group has attempted to downplay the severity of the charges, citing the legal principle that all defendants are presumed innocent until proven guilty.

Broader Implications for Governance and India’s Economic Image

• Corporate Governance Questions: The scandal raises concerns about the corporate governance standards within the Adani Group, a major player in India’s economy.
• Impact on India’s Growth Narrative: The allegations threaten to tarnish India's growth story, which the Modi government has used to attract foreign investment.
• US-India Relations: There are concerns that the case could become a political tool, especially with the influence of Donald Trump’s administration and its possible leverage over the Indian government and its business ties.

Practice Question:

Q. Discuss the impact of the Adani Group bribery scandal on corporate governance in India, its implications for India’s economic image, and the potential challenges it poses to foreign investment.