GS Analyst
Daily Current Affairs

Sweden is set to join NATO after Hungary's parliament ratified its bid.

Brief Background

• Hungary's decision comes two years after both Sweden and Finland applied to join NATO in May 2022 following Russia's full-scale invasion of Ukraine.
• Why Hungary’s approval was required? All members of NATO must give their approval before another country is able to join.

Why is Sweden joining a big deal? (A larger perspective)

• Break from neutrality: Sweden has not been involved in a war since 1814and has “pursued a policy of non-alignment in peacetime and neutrality in wartime, basing its security on a strong national defense. Sweden’s entry into NATO move signals a break from a history of neutrality for both countries. 
• Reducing the vulnerability: Sweden's NATO membership strengthens alliance in Baltic Sea region.
• Sense of security: At the time that Russia’s invasion threatened Europe’s security order and made Sweden’s need for guaranteed securitygranted through NATO membership apparent.
• Reinforcing the Baltic states: Three countries breathing a particular sigh of relief over the entry of Sweden - and Finland - are NATO's Baltic states, Estonia, Latvia and Lithuania, long seen as an Achilles heel for the alliance.
• Kaliningrad threat: Beyond its long Baltic coastline, Sweden brings with it the island of Gotland which would play a central role in helping NATO impose its will. But just across the water, Russia has its vital outpost -- the exclave of Kaliningrad.
  • Wedged between Poland and Lithuania, Moscow has in recent years turned the region into one of the most militarised in Europe, with nuclear-capable missiles stationed there. 

Sweden's entry makes it easier for NATO to exert control and reinforce its vulnerable Baltic states, Russia can still menace the region from heavily-armed exclave Kaliningrad and threaten undersea infrastructure.

The Centre’s move to progressively hike customs duties, especially the more recent offensive targeted at imports of Chinese components and inputs, needs to be reviewed, as it can threaten the domestic economy. 

Brief Background

• The blockade targeting Chinese imports gained traction across Central ministries and departments in the aftermath of the Galwan border clash since 2020.
• China accounts for 14 per cent of India’s imports with not just inputs for the domestic industry in sectors ranging from electronics to pharmaceuticals and textiles to leather, but also capital goods, being sourced from China.

What is Protectionism?

• Protectionism refers to government policies that limit international commerce in order to benefit home companies and stimulate domestic investment in a particular industry.
• Protectionist policies are typically intended to boost domestic economic activity, but they can also be enacted to address safety or quality problems.
• Tools of Protectionism: Tariffs, Quotas, Subsidies, Anti-dumping duties

What are the impacts of such blockade?

• Impact on important sectors: The blockade targeting Chinese imports is now seen to be impacting sectors such as electronics and pharmaceuticals.
• Loss in domestic output: The roadblocks to imports in these sectors is leading to a loss of domestic output.
• Restriction on necessary input material: To check cheap quality imports from China, India imposed Quality Control Orders (QCOs) that restrict MSMEs from getting necessary input material.
• Loss of competitive advantage: It is leading to a loss of competitive advantage for Indian manufacturing.
  • Uncompetitive atmosphere: The average tariffs in India have jumped to 18.1 per cent in 2022 from 13 per cent eight years ago in 2014, has made India uncompetitive vis-a-vis countries such as Vietnam, Thailand and Mexico.
• Threatened supply chain: India’s high tariffs pose a disincentive to de-risking supply chains beyond China. As a result, countries such as Vietnam, Thailand and Mexico are offering lower tariffs on components to grab the space vacated by China.

Why India’s trade with China is important?

• Top source of imports:India’s trade with China is important because, for the last 15 years, China has been India’s top source of imports.
• Double share:To put these numbers in perspective, in these two years, the second biggest source of imports for India was the UAE, with an import share of 6.7 per cent in 2020-21 and 7.31 per cent in 2021-22. These numbers indicate that China is not only India’s biggest source of imports, but its share in total Indian imports is also more than double that of the UAE.
• Dominance in non-oil merchandise imports:In total non-oil merchandise imports, China’s dominance is even more pronounced. As oil imports account for 25-30 per cent of India’s total imports, India’s dependence on China for non-oil imports can be as high as 25 per cent or more.
• Export Market: China is a big market for Indian exports, as well. China has been among the top four export markets for India in the last few years. After Covid, India’s exports to China have gone up.

The government of India has finally conducted and released the Household Consumption Expenditure Survey of 2022-23 after more than a decade.

What is Household Consumption Expenditure Survey (HCES)?

• The Household Consumption Expenditure Survey (HCES) is a survey conducted every five years to collect information about the consumption of goods and services by the households.
• Conducted by National Survey Organisation (NSO), it also collects additional information on the age and profile of the members of a household.

What are the findings regarding rural and urban consumption in the survey?

• Rural vs urban MPCE: The monthly per capita consumption expenditure (MPCE) was Rs. 3,773 for rural areas and Rs.6,459 for urban areas in 2022-23.
  • Compared to the last survey in 2011-12, rural MPCE has increased at a CAGR of 9.2 per cent from Rs.1,430 while the urban MPCE has increased at an annual rate of 8.5 per cent from Rs.2,630.
• MPCE on food vs non-food items: The households are spending less on food than expected. MPCE on food by rural households is just 46 per cent, whereas expenses on non-food items is 54 per cent. For urban households, the food, non-food mix is 39 and 61 per cent.

What can be the reason behind this changing trend?

• The faster growth in rural consumption is a little strange given sluggish growth in rural areas in the recent past.
• But the social welfare schemes could have freed up some money allocated for food, thus increasing overall spends.
• Rural inflation has also been higher than urban inflation during this period, which would also be reflected in higher expenditure growth for rural households.

What are the findings of the survey regarding ‘inequality’?

• Narrowing gap: The consumption gap between urban and rural areas is narrowing but income inequality continues to make spends higher among high-income earners.
  • The difference between rural and urban consumption as a percentage of rural MPCE has fallen from 90.8 per cent in 2004-05 to 71.2 per cent in 2022-23.
• Improving income: This shows that those living in rural areas have seen their incomes improve.

What are the findings regarding eating habits in rural and urban India?

• Shift towards processed foods: The largest share of food and drink consumption is going towards beverages, refreshments and processed foods indicating shifting eating patterns across India.
  • The share in MPCE for this component was 9.62 per cent in rural India while it was 10.64 per cent in urban India. Milk and milk products had the next largest share at 8.3 and 7.2 per cent in rural and urban areas followed by vegetables, egg, fish and meat and cereal and cereal substitutes.
• In rural India, the share of cereal in total monthly per capita consumption expenditure (MPCE) has fallen to 4.89 per cent in 2022-23 as compared to 10.69 per cent in 2011-2012.
• Cereal: The share of cereal substitutes has gone down to 0.02 per cent from 0.06 per cent during the same period.
• Vegetables: At the same time, the spending on vegetables has reduced to 5.38 per cent from 6.62 per cent.
• The share of this category has gone up to 9.62 per cent from 7.90 per cent in 2011-12. This is despite the total food spending as a percentage of total spending in rural India falling from 52.9 per cent in 2011-12 to 46.38 per cent in 2022-23.
• Some other categories, which saw higher spending percentages in rural India were dry fruits (1.17 per cent), egg, fish & meat (4.91 per cent), fruits (2.54 per cent) and milk & milk products (8.33 per cent).

‘Bitcoin Halving’ is predicted to happen in April this year.

What is the Bitcoin Halving?

• The Bitcoin Halving refers to the 50% reductionin the reward paid to Bitcoin miners who successfully process other people’s cryptocurrency transactions so that they can be added to the public digital ledger known as the
• Proof of work: Bitcoin miners rely on advanced computer equipment to solve a complex mathematical puzzle through a process known as ‘Proof of work’ to grow Bitcoin’s blockchain and keep the ecosystem running.
  • Carbon footprints: This intense activity is the reason Bitcoin transactions result in huge carbon footprints and require vast amount of electricity. No real mining is carried out.

Why does the Bitcoin Halving matter to crypto investors?

• Bitcoin mining increases the supply of BTC in circulation while the Bitcoin Halving reduces the rate at which these coins are released, making the asset more scarce.
  • Scarcity is seen as pushing up prices, as is the case with gold.

Germany plans to enable underground carbon storage at offshore sites, pushing ahead with a much-discussed technology in an acknowledgment that time is running out to combat climate change.

What’s the plan?

• Germany’s target: Germany (home to many energy-intensive industries) aims to cut its emissions to "net zero" by 2045.
  • The International Energy Agency estimates that 100 billion tonnes of CO2 must be stored by 2060 to limit temperature rise to 2 degrees Celsius.
• The proposed “carbon management strategy” foresees enabling the transport of carbon dioxide and its storage under the sea in Germany’s exclusive economic zone, except in marine conservation areas.
• It doesn’t foresee allowing storage sites on land.

About the Technology

• Capturing: Carbon capture and storage (CCS) is the separation and capture of carbon dioxide (CO2) from the emissions of industrial processes prior to release into the atmosphere and storage of the CO2 in deep underground geologic formations.
  • Approaches: The most well-developed approach to storing CO2 is injecting it underground into naturally occurring, porous rock formations such as former natural gas or oil reservoirs, coal beds that can’t be mined, or saline aquifers.

• Geological sequestration: Once CO2 has been captured using CCUS technology, it’s pressurised and turned into a liquid-like form known as ‘supercritical CO2’. From there it’s transported via pipeline and injected into the rocks found in the formations deep below the earth’s surface. This is a process called geological sequestration.

Can Sequestered Carbon Escape?

• Carbon stored underground could find multiple ways to escape and seep back into the atmosphere due to chemical reactions that take place between the carbon dioxide, rocks, water in the pores and even the cement from abandoned wells.
• If these emissions escape, this would add to existing greenhouse gas emissions which exacerbate global warming.

What about India?

• Carbon capture and storage (CCS) is vital for India to be self-reliant, achieve net-zero GHG emissions by 2070, and ensure a just transition.
• Despite India promoting renewable and alternative energy sources, long-term projections show that to meet the growing energy demand of power systems and industries, fossil fuels will need to remain an integral part of India’s energy economy.
• Cumulatively, India will have to inject 5.3–10 gigatonnes (Gt) of CO2 by 2050 to mitigate fossil fuel use–based emissions under 1.5°C temperature increase scenarios.

Polity & Governance (GS-II)

Grant PC to women coast guard officers: SC

Supreme Court directed the Centre to set up a fresh selection board to consider the issue of granting permanent commission to women coast guard officers.

The current induction method

• The SSC (short service commission) officers are inducted under the 10+4 scheme, in which the officer serves for 10 years and can exercise the option of extending his service by four years.
• The Permanent Commission is granted to SSC officers subject to service requirement and availability of vacancies.

Polity & Governance (GS-II)

Election of MP to Rajya Sabha

Members of the Legislative Assembly (MLAs) begin casting their votes to elect Members of Parliament (MPs) for 15 Rajya Sabha seats.

Election of MPs in Rajya Sabha

• As per the Constitution of India, the number of MPs in the Rajya Sabha cannot exceed 250.
• Currently, the Upper House of the Indian Parliament has 245 members comprising 233 members who are elected from states and Union Territories (UT), while the President of India nominates the other 12 members from the disciplines of art, literature, science, and social services.
• The voting process in Rajya Sabha follows a single transferable vote (STV) system through an open ballot, wherein each MLA is allowed to vote once, and the same is counted.
  • Every vote cast by the MLAs is counted only once.
• While a party having a majority in Lok Sabha might send more MPs to Rajya Sabha, this need not be the case always.