GS Analyst: Daily Current Affairs

India has reiterated its concerns over the increasing detention of Indian fishermen by Sri Lankan authorities at the recent India-Sri Lanka Joint Working Group (JWG) on Fisheries meeting.

What are the issues between India and Sri Lanka?

• The ongoing issue revolves around the detention of Indian fishermen, predominantly from Tamil Nadu, accused of crossing the International Maritime Boundary Line (IMBL) into Sri Lankan waters.
• Majorly, the problem has three interrelated facets:
  • disagreements over Kachchatheevu (islet)
  • poaching by Indian fishers in Sri Lankan waters
  • practices like bottom trawling (which deplete marine resources)
• The disagreement between both parties arose after signing two agreements in 1974 and 1976 on the maritime boundaries.
• According to the 1974 Indo-Lanka Maritime Agreement, the Indian Government ceded Kachchatheevu Island to Sri Lanka.
• However, Indian fishermen have been crossing the International Maritime Boundary Line (IMBL) unintentionally and have sometimes been apprehended or faced unfortunate consequences from the Sri Lankan authorities.
• UNCLOS: India and Sri Lanka have both signed the United Nations Convention Law of the Sea (UNCLOS), and it is crucial to consider Sri Lanka’s claim that Indian fishermen engage in illegal fishing activities after crossing the IMBL.
  • According to Article 19 of UNCLOS, vessels that engage in such activities in foreign territorial seas are considered a threat to the “peace, good order, or security of the coastal state.”

A recent research study highlights the paradox of higher child stunting rates in India compared to sub-Saharan Africa, revealing that this discrepancy largely disappears when chronic malnutrition is analyzed along caste lines. This study challenges previous assumptions about India's nutrition status and underscores the significant disparities within the country.

Key Findings of the Report

• Stunting Rates: The study found that children from historically marginalized communities, such as Scheduled Castes (SCs) and Scheduled Tribes (STs), are 50% more likely to experience stunting than those from forward castes. The overall stunting rate in India is 36%, compared to an average of 34% in 19 sub-Saharan African countries.
• Comparative Analysis: Children from forward castes have a stunting rate of 27%, which is lower than both the average in sub-Saharan Africa and the overall rate in India. This suggests that when analyzing stunting, the intra-country disparities are more pronounced than the international comparison.
• Hidden Divide: The research indicates a "hidden divide" in nutrition outcomes within India, which is often overlooked in broader comparisons. The gaps in child malnutrition are primarily borne by stigmatised caste groups, revealing the need for a more nuanced understanding of malnutrition in the country.

India's economy is facing a significant shift as it appears to have entered a cyclical growth slowdown. Recent analyses by economists from Nomura have indicated that India's GDP growth may dip below 6.7% amid emerging economic challenges. This slowdown has implications for urban demand, wage growth, and overall economic health.

Key Findings

• Current Growth Projections: Nomura has projected India’s GDP growth at 6.7% for the current year and 6.8% for the next, citing rising risks that could further dampen these forecasts.
  • The Reserve Bank of India (RBI) anticipates a more optimistic growth rate of 7.2% for 2024-25, which Nomura considers overly optimistic.
• Weak Urban Demand: Urban consumption is showing signs of weakening due to high interest rates and diminishing wage growth. The economists note that urban demand may remain sluggish in the foreseeable future.
  • Factors contributing to this trend include lower real salary hikes and the fading impact of pent-up demand following the pandemic.
• Salary Trends: Real salary growth for listed non-financial corporations has decreased significantly, with a decline from 10.8% in FY23 to just 0.8% in Q2 FY25 when adjusted for inflation.
• Tight Credit Conditions: The RBI's tightening of monetary policy has led to reduced lending growth, particularly among non-banking finance companies, further stifling personal consumption.

What is Cyclical Growth Slowdown?

• A cyclical growth slowdown occurs when an economy experiences a decline in growth due to various external and internal factors.
• This term refers to a period when economic growth decelerates due to various factors, often related to the business cycle.
• This can happen during different phases of the economic cycle, often characterized by reduced consumer spending, lower business investment, and tightening financial conditions.

Factors Responsible for the Slowdown

• High Interest Rates: Increased borrowing costs have deterred consumer spending and investment.
• Moderating Wage Growth: Slower growth in real wages has limited purchasing power, impacting overall consumption.
• Decreased Pent-Up Demand: The surge in consumer spending observed post-pandemic is waning, leading to a reduction in economic activity.
• Tight Credit Conditions: Stricter lending norms and reduced availability of credit have constrained personal and corporate borrowing.

Impact of the Cyclical Slowdown

• Economic Growth: A slowdown can lead to lower GDP growth, impacting the overall economic stability of the country.
• Employment: Companies may scale back on hiring or reduce wages, leading to higher unemployment and less disposable income for households.
• Consumer Confidence: Persistent weak demand can diminish consumer confidence, further impacting spending and investment decisions.
• Investment Landscape: A declining growth outlook may make investors more cautious, impacting both domestic and foreign investments in India.

The recent inauguration of the TATA Aircraft Complex in Vadodara, Gujarat, marks a significant milestone in India's pursuit of self-reliance, or Atmanirbharta, in the defence sector. This facility will manufacture C-295 military transport aircraft, representing the first private sector Final Assembly Line (FAL) for military aircraft in India. The initiative highlights the government's commitment to enhancing indigenous production capabilities and reducing dependency on foreign imports.

Key Achievements in Defence Production

• Record Production Growth: India’s defence production reached an all-time high of Rs 1.27 lakh crore in FY 2023-24, a remarkable increase of approximately 174% from Rs 46,429 crore in 2014-15.
  • This shift from being a major arms importer to a burgeoning centre for indigenous production demonstrates the effectiveness of strategic government policies.
• Transition to Indigenous Manufacturing: Historically, India relied heavily on imports for its defence needs, with about 65-70% of equipment sourced from abroad. Currently, around 65% of defence equipment is manufactured domestically, underscoring a robust defence industrial base comprising 16 Defence Public Sector Units (DPSUs), over 430 licensed companies, and approximately 16,000 Micro, Small, and Medium Enterprises (MSMEs). Notably, the private sector contributes 21% of this production.
• Major Defence Platforms Developed: Under the Make in India initiative, key defence platforms such as the Dhanush Artillery Gun System, Advanced Towed Artillery Gun System (ATAGS), Main Battle Tank (MBT) Arjun, and Light Combat Aircraft (LCA) Tejas have been developed, showcasing India's growing capabilities in defence manufacturing.
• Defence Exports Surge: India's defence exports have surged from Rs 686 crore in FY 2013-14 to Rs 1,083 crore in FY 2023-24, reflecting a growth of over 30 times in a decade.
  • This growth is supported by effective policy reforms and a commitment to self-reliance in defence. Defence exports experienced a 32.5% increase over the previous fiscal year, demonstrating India's expanding international footprint.
• Export Highlights: India’s export portfolio includes a diverse range of advanced defence equipment such as bulletproof jackets, Dornier aircraft, and lightweight torpedoes. The inclusion of ‘Made in Bihar’ boots in the Russian Army’s equipment highlights India's high manufacturing standards and commitment to quality.
• Future Export Goals: India aims to increase defence exports to Rs 50,000 crore by 2029, with major markets including the USA, France, and Armenia. This ambition reflects India's intention to establish itself as a reliable global defence partner.

Key Government Initiatives

The Indian government has undertaken several initiatives to bolster defence production and achieve self-reliance:

• Liberalized FDI Policy: Increased foreign direct investment limits to 74% through the Automatic Route, and up to 100% for access to modern technology.
• Budget Allocation: A budget of Rs 6,21,940.85 crore for the Ministry of Defence in FY 2024-25 supports domestic manufacturing.
• Priority for Domestic Procurement: Emphasis on procuring capital items from domestic sources under the Defence Acquisition Procedure (DAP)-2020.
• Positive Indigenization Lists: Identification of 509 items for indigenization, with an embargo on imports beyond specified timelines.
• Streamlined Licensing Process: Simplified industrial licensing with a longer validity period.
• iDEX Scheme: The scheme was launched to engage startups and MSMEs in defence innovation.
• Defence Industrial Corridors: Establishment of corridors in Uttar Pradesh and Tamil Nadu to promote manufacturing.
• Public Procurement Preference: Implementation of the Public Procurement (Preference to Make in India) Order 2017 to support domestic manufacturers.

Brazil has recently opted not to join China’s Belt and Road Initiative (BRI), becoming the second country, after India, within the BRICS bloc to take this stance.

What is the Belt and Road Initiative?

• The Belt and Road Initiative, launched in 2013, is a global development strategy aimed at enhancing regional connectivity and economic cooperation through infrastructure development.
• It involves investments in roads, railways, ports, and other infrastructure projects across Asia, Europe, and Africa, with the goal of expanding China's influence and facilitating trade.
• Routes of BRI:
  • Silk Road Economic Belt:This segment of the BRI is dedicated to improving connectivity, infrastructure, and trade links across Eurasia through a network of overland transportation routes.
  • Maritime Silk Road:This component emphasizes maritime connections and cooperation in the form of ports, shipping routes, and maritime infrastructure projects.
    • It begins via the South China Sea going towards Indo-China, South-East Asia and then around the Indian Ocean thus reaching Africa and Europe.
  • Comparison with India: India has been a vocal opponent of the BRI, primarily due to concerns about sovereignty, particularly regarding the China-Pakistan Economic Corridor (CPEC) passing through Pakistan-occupied Kashmir.
    • India insists that BRI projects should adhere to international norms, governance standards, and transparency.

Israel's parliament has banned the United Nations Relief and Works Agency for Palestine Refugees (UNRWA) from operating in the country, effective in 90 days.

What is UNRWA?

• Established in: 1949
• The UNRWA was established in 1949 by UN General Assembly to provide aid to about 700,000 Palestinians who were forced to leave their homes during the 1948 Arab-Israeli war.
• UNRWA has been active for decades in the Gaza Strip and for the past year has sought to aid civilians caught up in Israel's war against Hamas militants in the enclave, where many of the 2.3 million people are suffering from a lack of shelter, food and medical care.
• It operates in Gaza and the Israeli-occupied West Bank, as well as in Lebanon, Syria, and Jordan — where Palestinian refugees took shelter after their expulsion.
• The UN agency is funded mostly by voluntary contributions from donor states such as the United States, Germany, the European Union, etc.
• It also gets a limited subsidy from the UN, which is used only for administrative costs.
• The UN views Gaza as Israeli-occupied territory, and international law requires an occupying power to agree to relief programs for people in need and to facilitate them "by all the means at its disposal."

Prime Minister Narendra Modi launched health insurance coverage for all senior citizens aged 70 years and above, regardless of income, under his government’s flagship initiative Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY).

About Ayushman Bharat Scheme

• Ayushman Bharat is a flagship health initiative of the Government of India, launched to achieve Universal Health Coverage (UHC) as per the recommendations of the National Health Policy 2017.
• This program aims to provide accessible, affordable, and quality healthcare to all, particularly targeting vulnerable populations and aligning with the Sustainable Development Goals (SDGs).
• Components of Ayushman Bharat
  • Health and Wellness Centres (HWCs): HWCs aim to deliver Comprehensive Primary Health Care (CPHC) by transforming existing health facilities, bringing services closer to communities.
  • Pradhan Mantri Jan Arogya Yojana (PM-JAY): PM-JAY was inaugurated on September 23, 2018, and is the world’s largest health assurance scheme.
• Key Features of PM-JAY
  • Comprehensive Coverage: Covers up to ?5 lakhs annually per family for secondary and tertiary care.
  • No Cap on Family Size: There are no restrictions based on age, gender, or family size.
  • Portability: Benefits can be availed at any empanelled hospital across India.
  • Inclusive Treatment: Encompasses a wide range of services, including diagnostics, medicines, and post-hospitalization care.
• Government Initiatives Addressing Related Issues
  • National Health Mission (NHM): Aims to strengthen healthcare delivery in rural areas and improve health indicators across the country.
  • Ayushman Bharat Digital Mission (ABDM): Focuses on digitizing health records to improve accessibility and efficiency in healthcare delivery.
  • Mission Indradhanush: Aims to improve immunization coverage among children and pregnant women, reducing preventable diseases.
  • Nutrition Schemes: Various initiatives such as the Integrated Child Development Services (ICDS) and the Mid-Day Meal Scheme focus on improving nutrition among vulnerable populations, which complements the health goals of Ayushman Bharat.

The 44th ASEAN Summit, held in Vientiane, Laos, addressed urgent regional issues, particularly the escalating crisis in Myanmar following the military coup in 2021. Despite ASEAN's attempts to mediate through the Five-Point Consensus, the situation remains dire, threatening the bloc's credibility and regional stability.

Current Situation in Myanmar

• Ongoing Civil War: Myanmar is embroiled in a civil war between the military junta and resistance groups, including Ethnic Armed Organisations (EAOs) and the People's Defence Forces (PDFs). The junta, which overthrew Aung San Suu Kyi's government, faces significant territorial control by resistance groups.
• Humanitarian Crisis: The conflict has displaced hundreds of thousands, with over 18.6 million people requiring assistance, including 6 million children, according to the United Nations. The military's aggressive tactics have exacerbated the humanitarian situation.
• Failure of International Efforts: The junta's refusal to engage in meaningful negotiations and its designation of opposition groups as terrorists have stalled international peace efforts, undermining ASEAN's attempts to implement its Five-Point Consensus aimed at fostering dialogue and humanitarian aid.

ASEAN's Response to the Crisis

• Shifts in Engagement: Despite prior exclusions of Myanmar’s military leaders from high-level summits, the recent attendance of a Myanmar official at the ASEAN Summit indicates a pragmatic shift in ASEAN's approach. This reflects the necessity of keeping dialogue open with the junta.
• Divergent ASEAN Positions: ASEAN's consensus-based decision-making complicates responses, with member states like Indonesia, Malaysia, and the Philippines advocating for stronger action, while Thailand, Cambodia, and Laos maintain closer ties with the military government.
• Efforts to Break the Impasse: Thailand's proposal to host informal talks involving ASEAN Troika members demonstrates attempts to overcome diplomatic stalemates. However, without inclusive participation from all Myanmar stakeholders, such initiatives may fall short.

India's Strategic Interests in Myanmar

• Importance of Myanmar to India: India’s Myanmar policy is closely linked to its Act East Policy, emphasizing Myanmar’s role as a critical land bridge. Stability in Myanmar is essential for India's regional interests, especially given its 1,643 km border with the country.
• Regional Connectivity Initiatives: India is involved in projects like the Kaladan Multi-Modal Transit Transport Project and the India-Myanmar-Thailand Trilateral Highway, aimed at enhancing trade and connectivity. However, ongoing political instability poses challenges to the success of these initiatives.
• Balanced Engagement Strategy: India is considering broader engagement with various Myanmar stakeholders to safeguard its strategic interests while contributing to peace. This approach requires meaningful dialogue with all parties involved to ensure stability and development in Myanmar.

Practice Question

Q. Critically examine the role of ASEAN in addressing the crisis in Myanmar and discuss India’s strategy for engagement in the context of regional stability. How can both entities foster a more inclusive approach towards Myanmar?

The Union government has announced that India’s census will resume in 2025, with results anticipated in 2026. Originally scheduled for 2021, the census was postponed due to the COVID-19 pandemic, raising questions about the government's reluctance to disclose updated demographic and socio-economic data.

Importance of the Census

• Foundation for Policy Planning: The census is crucial for informed policy-making in India, providing essential data on demographics, literacy, poverty, and access to basic amenities. This information is vital for identifying infrastructure gaps and shaping targeted development initiatives.
• Focus on Marginalised Communities: Accurate census data helps monitor the socio-economic conditions of Scheduled Castes and Scheduled Tribes, facilitating the effectiveness of affirmative action policies. A comprehensive caste census is necessary to assess the equitable distribution of benefits among Other Backward Classes (OBCs).
• Potential Risks of Caste Census: While a caste census could enhance transparency and address social disparities, there are concerns that it may exacerbate existing divisions. Nonetheless, recognizing caste dynamics is essential for effective governance and policy formulation.

Political Implications

• Impact on Political Representation: Updated census data could significantly influence political representation, particularly in states with varying birth rates. Southern states, having implemented family planning, fear losing parliamentary seats, while states like Bihar and Uttar Pradesh may gain representation.
• Need for Constitutional Safeguards: Article 82 of the Constitution, which protects states' interests in constituency delimitation, may need reinforcement to balance representation for regions prioritizing population control. This is critical in maintaining equitable political power distribution.
• Census as a Measure of Progress: The census serves as a key indicator of social and economic progress in India. Its findings, particularly regarding caste, are essential for formulating inclusive policies that meet the diverse needs of the population.

Future Directions

• Planning for Inclusive Policies: The resumption of the census will enable the government to align its policies more effectively with the actual demographic realities of its citizens. Comprehensive data will support targeted interventions in education, healthcare, and welfare.
• Engaging Stakeholders: Involving various stakeholders, including civil society and marginalized communities, in the census process can enhance the accuracy and relevance of the data collected. This engagement is critical for fostering trust and ensuring that all voices are represented.
• Strategic Use of Census Data: Post-census, it will be imperative for the government to strategically utilize the data to address inequalities and implement social justice initiatives. The insights gained will be fundamental to achieving sustainable development goals.

Practice Question

Q. Discuss the significance of the upcoming census in India for socio-economic planning and political representation. How can the government ensure that the data collected addresses existing inequalities, particularly regarding caste dynamics?

In September 2023, the Economic Advisory Council to the Prime Minister (EAC-PM) released a paper titled "Relative Economic Performance of Indian States: 1960-61 to 2023-24," highlighting significant income disparities among Indian states. The report underscores the growing economic divide, raising concerns about federalism and the equitable distribution of resources.

Income Disparities

• Economic Contributions and Per Capita Income: Maharashtra, as the highest contributor to India’s economy, has a per capita income of about 150% of the national average. However, this average conceals stark inequalities, such as the contrast between Mumbai's wealth and Vidharba's poverty, reflected in high rates of farmers' suicides.
• Regional Performance: The report identifies consistently better performance in western and southern states, while eastern states lag behind, leading to a widening economic divide. Northern states show poor performance, with Haryana and Delhi as notable exceptions.
• Impact on Federalism: The growing economic divide raises questions about the viability of federalism, with representatives from wealthier states claiming they receive less from the Centre relative to their contributions. This mirrors past sentiments seen during the 2000 'Conclave of the Successful.'

Investment Dynamics

• Investment as a Growth Determinant: Investment levels significantly influence economic output, with better-performing states attracting higher rates of public and private investment. This trend perpetuates disparities as richer states continue to thrive.
• Private Sector Preferences: Private investment tends to flow into developed areas with established markets, while poorer states struggle to attract such investments due to perceived risks and lower profitability. Urban centers like Mumbai and Delhi remain preferred destinations for investment.
• Infrastructure and Governance: Infrastructure quality and governance are crucial for attracting investments, with richer states generally performing better in these aspects. This relationship emphasizes the need for targeted public policies to enhance conditions in lagging states.

Policy Recommendations

• Need for Governance Improvement: To address these disparities, states must enhance governance and reduce corruption, alongside increased public expenditure in social sectors. Effective governance can create a conducive environment for investment in poorer states.
• Shift in Focus to Unorganised Sector: Policy should prioritize the unorganised sector, as enhancing its productivity can lead to increased incomes and demand, thereby attracting private investment back to lagging regions.
• Balanced Growth for Federal Unity: Strategic policy shifts aimed at reducing disparities can ensure that while richer states continue to develop, the overall economic growth becomes more equitable, strengthening the fabric of federalism and national unity.

Practice Question

Q: What are the implications of regional economic disparities on federalism in India? What policy measures can be implemented to ensure balanced economic growth across states?