GS Analyst: Daily Current Affairs

Context:

 During President DroupadiMurmu's visit to Mauritius, India reinforced its commitment to strengthening ties with African nations, highlighting the significance of the Indian Ocean Region and Africa in its foreign policy agenda.

India's Engagement with Africa:

• Economic Partnerships: India's engagement with Africa extends beyond rhetoric, with substantial investments and trade partnerships. Indian investments in Africa reached $98 billion in 2023, showcasing the depth of economic cooperation. Additionally, Indian social enterprises and NGOs are actively contributing to Africa's development through innovative solutions in various sectors.
• Global Governance: Africa's growing influence in global forums presents opportunities for India's vision of inclusive global governance. As India advocates for the African Union's representation in platforms like the G20, it aligns with the goal of reforming existing structures to reflect the realities of a multipolar world.
• Sustainable Development Cooperation: India's focus on sustainable development cooperation with Africa encompasses critical minerals and technical capacity building. Collaboration in the critical minerals sector, given Africa's abundance of resources, is crucial for India's energy transition and national security. Moreover, enhancing technical capacity building among Africa's workforce aligns with India's commitment to education and skill development in the region.

Enhancing India-Africa Relations:

• Leveraging Historical Partnerships: As India positions itself as a leading voice of the Global South, strengthening historical partnerships with African nations becomes imperative. India's multifaceted relationship with Africa offers significant opportunities for both regions, ranging from economic cooperation to global governance reforms.
• Opportunities for Cooperation: India's engagement with Africa presents avenues for cooperation in various sectors, including critical minerals, technical capacity building, and sustainable development. By leveraging Africa's potential and historical ties, India can contribute to the continent's growth and development while advancing its own strategic interests.
• Future Prospects: As geopolitical dynamics evolve, India's engagement with African nations is poised for transformation. Recognizing Africa's importance in the Global South, India must prioritize deepening partnerships and fostering mutual cooperation to achieve shared developmental goals.

Context:

The Supreme Court of India's recent ruling declared the electoral bonds scheme unconstitutional, raising concerns about its effectiveness in addressing the issue of black money in politics.

Gap between the professed and the actual:

• Failed attempt:The electoral bonds scheme failed to bridge the divide between the stated objective of curbing illegal financing in elections and the actual practices prevalent in Indian politics.
• Promoting financing backers:Despite its implementation, political leaders continue to prioritize the interests of financial backers over the welfare of their constituents.

Money and the election:

• Persistent challenges:The introduction of electoral bonds did not deter the flow of illegal funds into election campaigns, highlighting the persistent challenges in campaign financing and political influence.
• Misuse and manipulation: The scheme's opacity facilitated potential misuse and manipulation, undermining efforts to promote transparency and accountability in electoral processes.

Cronyism uncovered:

• Cronyism and corruption:Recent revelations regarding the use of electoral bonds have exposed the extent of cronyism and corruption in Indian politics, with funds exchanged for favors from policymakers and to evade legal scrutiny.
• Need of reforms: The scheme's failure underscores the urgent need for comprehensive reforms to address systemic issues and uphold the integrity of democratic institutions.

Context:

The Centre's fiscal deficit has seen a significant increase, reaching Rs15 lakh crore by the end of February, indicating a notable deviation from the earlier trajectory and posing challenges for fiscal management.

Factors contributing to deficit surge:

Two key factors have contributed to the surge in the fiscal deficit for February.

• Firstly, higher transfers to States, amounting to around Rs2.15 lakh crore, compared to ?1.4 lakh crore last year, have widened the deficit.
• Secondly, capital expenditure witnessed a substantial increase from ?47,600 crore in January to Rs84,400 crore in February, driven by efforts to boost infrastructure development and stimulate economic growth.

Challenges and targets for fiscal consolidation:

• The government aims to narrow the fiscal deficit to 4.5% of GDP by 2025-26, with a target of 5.1% for 2024-25.
• However, achieving this requires recalibration of the fiscal path, considering factors such as economic conditions, government priorities, and expenditure patterns.
• Despite room for spending available in critical sectors like Agriculture, Rural Development, and Consumer Affairs, persistent deviations from spending targets raise concerns about the effectiveness of fiscal planning and the need for better expenditure management.