What's New :
31st December 2024 (10 Topics)

31st December 2024

Mains Issues

Context

Rohingya refugees in India face severe legal, humanitarian, and political challenges. While international law, including the UN Refugee Convention, offers protection against forced return (non-refoulement), India’s position on refugees remains complex. The lack of a refugee policy, discriminatory laws like the Citizenship Amendment Act (CAA), and poor detention conditions continue to put Rohingya refugees in vulnerable situations, raising concerns over their human rights and legal protection in India.

The Issue: Rohingya Refugees in India

  • The Rohingya people are a stateless minority from Myanmar, facing persecution by Myanmar's military. Around 8 million Rohingya exist globally, with nearly 22,500 refugees currently residing in India.
  • Persecution: The Rohingya have been subjected to genocidal violence and human rights violations in Myanmar, which forced many to flee their country and seek refuge in neighboring nations, including India.

International Legal Protections

  • Non-Refoulement: According to international law, especially the 1951 Refugee Convention and the 1967 Protocol, countries are forbidden from sending refugees back to places where they could face persecution, torture, or inhuman treatment. This principle is part of customary international law, meaning it's binding even for countries that haven't signed these treaties.
  • India’s Position: Although India has signed international human rights treaties like the International Covenant on Civil and Political Rights (ICCPR), it is not a signatory to the 1951 Refugee Convention. India claims that since it is not legally bound to the Refugee Convention, it doesn't have an obligation to follow the principle of non-refoulement.

Legal Situation in India

  • Domestic Law: India does not have a refugee law but uses laws like the Foreigners Act, 1946 and the Passport Act, 1967 to treat Rohingya refugees as illegal migrants.
  • Supreme Court Rulings:
    • In 2021, the Supreme Court of India ruled that while Rohingya refugees have the right to life under Article 21 of the Constitution, they do not have the right to reside or settle in India.
    • The Court also dismissed a plea to prevent the deportation of 170 Rohingya refugees detained in Srinagar, citing national security
  • In October 2024, the Delhi High Court dismissed a plea seeking the admission of Rohingya children in schools, as the issue required a policy decision from the Union government.
India’s International Obligations
  • While India is not legally bound by the Refugee Convention, it is still bound by international human rights The International Covenant on Civil and Political Rights (ICCPR) and Convention Against Torture require India to refrain from refouling individuals to places where they may face torture or cruel, inhuman treatment.
  • Supreme Court Rulings on Non-Refoulement:
    • The Indian Supreme Court has ruled that international law must be applied by Indian courts in the absence of specific domestic laws. The Court has upheld the principle of non-refoulement in some cases, including for refugees from different countries.
    • This includes rulings from Gujarat High Court (1998) and Delhi High Court (2015), which affirmed that refugees must be protected from deportation to places where they could face harm.
Concerns Regarding Rohingya Refugees in India
  • Lack of Legal Protection: India has no standardized refugee policy, leading to inconsistent treatment of various refugee groups. For instance, Tibetan, Sri Lankan, and Afghan refugees often receive special treatment, such as refugee certificates or long-term visas, but Rohingya refugees, despite being registered with the UNHCR, face detention and imprisonment.
  • Citizenship Amendment Act (CAA): The CAA, passed in 2019, allows non-Muslim minorities from neighboring countries to apply for Indian citizenship, but it excludes the Rohingya, who are Muslim. This has worsened their status in India.
  • Detention Conditions: Rohingya refugees in detention centers, including pregnant women and children, are often subjected to dehumanizing conditions. For example, the Matia Transit Camp in Assam has been criticized for its poor conditions.
  • Lack of Legal Aid: Civil society organizations that work with Rohingya refugees face funding issues due to the revocation of Foreign Contribution (Regulation) Act (FCRA) This has made it difficult for lawyers to take on cases involving Rohingya refugees, as they fear government retaliation.
  • Human Rights Violations: A recent report by The Azadi Project and Refugees International reveals gross violations of Rohingya refugees' constitutional and human rights in India. Many refugees are being held in detention even after completing their sentences, and their basic rights are not being upheld.
Fact Box:

Refugee, Asylum – Seeker and Migrant

  • Refugee: Refugees are persons who are outside their country of origin for reasons of feared persecution, conflict, generalized violence, or other circumstances that have seriously disturbed public order and, as a result, require international protection. 
    • The refugee definition can be found in the 1951 Convention and regional refugee instruments, as well as UNHCR’s Statute. 
  • Migrant: While there is no formal legal definition of an international migrant, most experts agree that an international migrant is someone who changes his or her country of usual residence, irrespective of the reason for migration or legal status.
    • Generally, a distinction is made between short-term or temporary migration, covering movements with duration between three and 12 months, and long-term or permanent migration, referring to a change of country of residence for duration of one year or more.
  • Asylum-seeker: An asylum-seeker is a person who has left their country and is seeking protection from persecution and serious human rights violations in another country, but who hasn’t yet been legally recognized as a refugee and is waiting to receive a decision on their asylum claim.
    • Seeking asylum is a human right.
    • This means everyone should be allowed to enter another country to seek asylum.

Mains Issues

Context

The Central government officially recognised the catastrophic landslides in Wayanad as a disaster of "severe nature," five months after the devastation hit the Kerala district. This declaration acknowledges the immense scale and impact of the disaster that struck the region, resulting in significant loss of life and widespread destruction.

What Does 'Severe Nature' Disaster Status Mean for Wayanad?

  • The designation of "severe nature" carries significant implications for Wayanad’s recovery.
  • The official recognition of the disaster’s severity paves the way for more substantial financial support from both the State and National Disaster Response Funds.
    • The SDRF will provide initial relief, and the NDRF will follow, depending on assessments by the IMCT, ensuring that the region receives the financial resources required for reconstruction and rehabilitation efforts.
  • This classification will also expedite the release of funds for relief work and help in the restoration of essential services like healthcare, education, and infrastructure.
  • Additionally, it signals a commitment to address the long-term rehabilitation needs of the displaced population, ensuring that the affected communities can rebuild their lives and livelihoods.

Fact Box:

What is Disaster?

  • The DM Act defines "disaster" to mean ‘a catastrophe, mishap, calamity or grave occurrence in any area, arising from natural or man-made causes, or by accident or negligence which results in substantial loss of life or human suffering or damage to, and destruction of, property, or damage to, or degradation of, environment, and is of such a nature or magnitude as to be beyond the coping capacity of the community of the affected area.'
  • NDRF is meant to “meet the expenses for emergency response, relief and rehabilitation” for any threatening disaster situation.
  • Although Section 46 includes a clause regarding grants made by any person or institution, provisions for such donations had not been made.

National Disaster Response Fund (NDRF)

  • The National Disaster Response Fund (NDRF), constituted under Section 46 of the Disaster Management Act, 2005.
  • It acts as a fund managed by the Central Government for meeting the expenses for emergency response, relief and rehabilitation due to any threatening disaster situation or disaster.
  • NDRF is located in the "Public Accounts" of Government of India under "Reserve Funds not bearing interest".
  • Comptroller and Auditor General of India(CAG) audits the accounts of NDRF.

Prelims Articles

Context

A statue of Chhatrapati Shivaji Maharaj was unveiled on the banks of the serene Pangong Tso in Ladakh, situated at an impressive altitude of 14,300 feet.

About the location of Statue

  • Chhatrapati Shivaji’s statue on the shore of the picturesque Pangong Tsoin eastern Ladakh holds significance amid India’s recent border disengagement process with China.
  • The 135-kilometre-long strategic lake straddles the LAC, the de facto border between the two neighbours.
    • In October, India and China completed the disengagement of troops in the two friction points of Demchok and Depsang at the LAC in eastern Ladakh.
    • This marked the end of the roughly four-and-half-year-long border standoff, which broke out in 2020 on several points along the LAC after a violent clash between the Indian and Chinese troops in the Pangong Lake area.

Fact Box:

Pangong Lake

  • Pangong Lake, situated at a height of almost 4,350m in the disputed region of Aksai Chin, is the world’s highest saltwater lake. 
  • Pangong Lake, one of the most famous lakes in Leh Ladakh, derives its name from the Tibetan word, “Pangong Tso”, which means “high grassland lake”.
  • One-third of the nearly 160 kilometres-long lake lies in India, other two-thirds in China.
  • It was one of the prominent flashpoints when border tensions between the two countries flared up in June 2020. 

Chhatrapati Shivaji Maharaj (1630-1680)

  • He was born on 19th February 1630 at Shivneri Fort in District Pune in the present-day state of Maharashtra.
  • He was born to Shahaji Bhonsle, a Maratha general who held the jagirs of Pune and Supe under the Bijapur Sultanate, and Jijabai, a pious woman whose religious qualities had a profound influence on him.
  • Shivaji was not named after Lord Shiva. His name was derived from the name of a regional deity – ‘Goddess Shivai.’
  • Contributions:
    • He revived ancient Hindu political traditions and court conventions and promoted the usage of Marathi and Sanskrit, rather than Persian, in court and administration.
    • India's first-ever navy in the modern era was built by Shivaji to protect the coast of Maharashtra.
    • He established a competent and progressive civil rule with the help of disciplined military and well-structured administrative organizations.
  • The Ashta Pradhan (Marathi: Council of Eight) set up by the Chhatrapati Shivaji Maharaj
    1. Peshwa (Prime Minister )
    2. Amatya (Finance Minister )
    3. Shurunavis (  Secretary )
    4. Waqia-Navis (Interior Minister )
    5. Sar-i-Naubat (Commander-in-Chief )
    6. Sumant (Foreign Minister)
    7. Nyayadhish (Chief Justice )
    8. Panditrao (  High Priest)
    • He innovated military tactics, pioneering non-conventional methods (guerrilla warfare) and leveraged strategic factors like geography, speed, and surprise.
  • He focused on pinpoint attacks to defeat his larger and more powerful enemies.
  • A brave and genuinely secular ruler, he respected women and cared for the downtrodden and farmers.
    • He died on 3rd April 1680.

Important Battle:

Battle of Pratapgad, 1659

Fought at the fort of Pratapgad near the town of Satara, Maharashtra, between the forces of the Maratha king Chhatrapati Shivaji Maharaj and the Adilshahi general Afzal Khan.

Battle of PavanKhind, 1660

Fought at a mountain pass in the vicinity of fort Vishalgad, near the city of Kolhapur, Maharashtra, between the Maratha Sardar Baji Prabhu Deshpande and Siddi Masud of Adilshahi.

Sacking of Surat, 1664

Fought near the city of Surat, Gujarat, between Chhatrapati Shivaji Maharaj and Inayat Khan, a Mughal captain.

Battle of Purandar, 1665

Fought between the Mughal Empire and Maratha Empire.

Battle of Sinhagad, 1670

Fought on the fort of Sinhagad near the city of Pune, Maharashtra between Tanaji Malusare, a commander of Maratha ruler Shivaji Maharaj and Udaybhan Rathod, fort keeper under Jai Singh I who was a Mughal Army Chief.

Battle of Kalyan, 1682-83

Bahadur Khan of the Mughal Empire defeated the Maratha army and took over Kalyan.

Battle of Sangamner, 1679

Fought between the Mughal Empire and Maratha Empire. This was the last battle in which the Maratha King Shivaji fought.

Prelims Articles

Context

Jimmy Carter, the 39th president of the United States, died Sunday at the age of 100. He became the oldest living US president in history after George H.W. Bush died in 2018 at the age of 94.

Key Achievements:

  • Key Achievements:
    • Camp David Accords (1978): He brokered a peace agreement between Egypt and Israel.
    • Human Rights: He emphasized global human rights in U.S. foreign policy.
    • SALT II Treaty (1979): He signed with the Soviet Union to limit nuclear arms (later abandoned after the Soviet invasion of Afghanistan).
    • Relations with China: He played a role in normalizing U.S.-China relations.
    • Panama Canal Treaty (1977): He negotiated the return of the Panama Canal to Panama.
    • Criticism of U.S. Foreign Policy: He publicly opposed the 2003 Iraq War and critiqued Israeli-Palestinian issues in his book "Palestine: Peace Not Apartheid."
  • Challenges:
    • Iranian Hostage Crisis (1979): 52 Americans held hostage for 444 days in Tehran.
    • Economic Struggles: US faced high inflation and an energy crisis.
  • Key Post-Presidency Contributions:
    • Guinea Worm Disease Eradication: Led efforts to reduce cases from millions to a handful.
    • Election Monitoring: The Carter Center observed over 113 elections worldwide, ensuring their fairness and transparency.
    • Peace and Conflict Resolution: Worked in places like North Korea, Sudan, and Bosnia to help broker ceasefires and peace agreements.
    • Promotion of Democracy: Focused on global democracy, conflict resolution, and combatting corruption.

Relationship with India

  • Nuclear Concerns: India's 1974 nuclear test, known as Smiling Buddha, caused considerable anger in the United States, leading Carter to press India on the Non-Proliferation Treaty (NPT), which the U.S. strongly supported. He strongly opposed India’s nuclear ambitions after their 1974 nuclear test.
  • Diplomatic Balance: While tensions existed due to nuclear issues, Carter laid the groundwork for improving U.S.-India relations, particularly after his presidency.  
    • In 1978, Carter and then First Lady Rosalynn Carter travelled to the village of Daulatpur Nasirabad, an hour southwest of New Delhi.
    • The visit was so successful that shortly after, village residents renamed the area ‘Carterpuri’ and remained in contact with the White House for the rest of President Carter’s tenure. The trip made a lasting impression: Festivities abounded in the village when President Carter won the Nobel Peace Prize in 2002, and January 3 remains a holiday in Carterpuri.
  • Since the Carter administration, the US and India have worked closely on energy, humanitarian aid, technology, space cooperation, maritime security, disaster relief, counterterrorism, and more.
  • Indo-U.S. Civilian Nuclear Deal: It took over three decades for the U.S. and India to resolve their nuclear issues through the Indo-U.S. civilian nuclear deal in 2006, which was negotiated under Prime Minister Manmohan Singh and U.S. President George W. Bush.
  • Carter’s Return to India (2006): Coincidentally, as the nuclear deal was being finalized, Carter returned to India and met with Singh.

Prelims Articles

Context

The Ministry of Home Affairs (MHA) plans to map demographic data along the India-Myanmar border, and the suspension of the Free Movement Regime (FMR) particularly in Nagaland, Mizoram, and Manipur, to help in the fencing of the border and prevent illegal infiltration.

What is FMR?

  • The 1,643-km-long India-Myanmar border, spanning Mizoram, Manipur, Nagaland, and Arunachal Pradesh, operated under the FMR, which permits individuals living near the India-Myanmar border to travel 16 km into each other’s territories without a visa.
    • Initiated in 2018, the FMR policy was a component of India’s Act East policy.
  • Suspension of the FMR: However, the MHA recently decided to scrap the Free Movement Regime (FMR) to enhance internal security.
    • A new protocol was finalized, which allows movement of people within 10 km (down from the earlier 16 km).

India’s Northeast

  • The northeast (eight northeastern States: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim) is blessed with vast natural resources.
  • Its strategic location, sharing borders with Nepal, Bhutan, China, Bangladesh and Myanmar, is an asset.
  • The region is connected to the rest of the country by a narrow land corridor- Siliguri Corridor, also known as the "Chicken's Neck”.
  • The region contributes 2.8 percent of India’s GDP. 
  • It is also resource-rich, with supplies of limestone, coal, natural oil and gas, uranium, copper, rare herbs.
  • Challenges: The region has faced long-standing separatist insurgencies, leading to both internal security problems and cross-border tensions. These insurgencies have made the region volatile and have led to a sense of insecurity among locals.
  • Myanmar Border: India shares a long border with Myanmar, which is porous and prone to cross-border terrorism and refugee flows.
    • o    Four northeastern states - Arunachal Pradesh (520 km), Manipur (398 km), Nagaland (215 km) and Mizoram (510 km) - share 1,643-km unfenced border with Myanmar.

Prelims Articles

Context

In 2024, India set a new global record by receiving an estimated $129.1 billion in remittances, the highest amount ever for any country in a single year. This accounts for 14.3% of global remittances, marking the highest share India has had in global remittances since the year 2000. This data was highlighted in a blog article by the World Bank published recently.

What Are Remittances?

  • Remittances refer to the money sent by individuals working abroad to support their families back home.
  • For many developing countries, remittances are a critical source of income for households and have a major impact on the economy.
  • Key Insights from 2024 Remittance Data
  • Top Recipients of Remittances in 2024:
    • India received the highest remittances, followed by Mexico and China.
    • Other countries in the top 10 list include the Philippines, France, Pakistan, Bangladesh, Egypt, Guatemala, and Germany.
  • China's Decline:
    • China’s share of global remittances has declined sharply from over 10% in the 2010s to 5.3% in 2024. This decrease is attributed to China's growing economic prosperity and an ageing population, which have slowed the migration of less-skilled workers.
  • India's Growing Share:
    • India's share in global remittances has remained above 10% for most years since 2000, with a significant increase in the post-pandemic period.
    • In 2024, India's remittance inflows were twice as high as Mexico’s, which was second at 7.5% of global remittances.
  • Remittances as a Share of GDP:
    • In some countries, remittances are a larger proportion of GDP compared to India. For example, Nepal saw over 25% of its GDP from remittances in 2024.
    • India’s remittances accounted for 3.3% of its GDP in 2024.
  • Remittances vs Other Financial Flows:
    • In low- and middle-income countries, remittances have been the largest source of external financial flow, surpassing both Foreign Direct Investment (FDI) and Official Development Assistance (ODA) in recent years.
    • From 2000 to 2024, remittances to these countries increased by 57%, while FDI declined by 41%.

Prelims Articles

Context

India's Ministry of Defence signed two significant defence contracts totaling Rs 2,867 crore to enhance its Scorpene-class submarines. These contracts are part of India's push for greater self-reliance in defence under the 'Atmanirbhar Bharat' initiative.

Key Contracts:

  • Deal with Mazagon Dock Shipbuilders (Rs 1,990 crore): This deal focuses on the construction and integration of an Air Independent Propulsion (AIP) system for the Scorpene-class submarines.
    • AIP technology allows submarines to stay submerged for longer durations without needing to surface for air, significantly increasing their endurance.
    • This system is indigenously developed by the Defence Research and Development Organisation (DRDO) and will be integrated into the submarines at Mazagon Dock Shipbuilders in Mumbai.
    • The project will also contribute to employment generation, with an estimated 3 lakh man-days.
    • This contract aligns with India's goal of boosting indigenous defence capabilities and reducing reliance on foreign technology.
  • Deal with France’s Naval Group (Rs 877 crore): This contract pertains to the integration of Electronic Heavy Weight Torpedoes (EHWT), also known as F21 Torpedoes, into the Kalvari-class submarines.
    • The EHWT features advanced technology, including aluminum silver oxide technology, which enhances its range and speed, making it a much more lethal weapon.
    • The torpedo is designed to be safe, ensuring that it will never explode onboard a submarine, even in case of a fire or accidental drop.
    • This collaboration involves the Indian Navy, DRDO, and the Naval Group, France, and will significantly enhance the firepower capabilities of the Kalvari-class submarines.
Fact Box:

AIP (Air Independent Propulsion)

  • AIP is a technology used in conventional (non-nuclear) submarines to enable them to stay submerged for longer periods without needing to surface or use their snorkels for air.
  • Traditionally, conventional submarines use diesel engines that require access to atmospheric oxygen, which means they have to periodically come to the surface or use a snorkel (a pipe that reaches the surface while the submarine is submerged) to draw in air for the engines.
  • With AIP technology, the submarine can generate power and remain submerged for much longer durations—sometimes even for weeks—without needing to surface.
  • This is because AIP systems allow submarines to operate without the need for atmospheric oxygen, using alternative energy sources like fuel cells, stirling engines, or liquid oxygen systems.
  • In simpler terms, AIP acts as a force multiplier for conventional submarines, giving them increased endurance and stealth by reducing the need to surface, making them harder to detect by enemy forces. This makes them more effective for surveillance, patrolling, and defense missions.

Electronic Heavy Weight Torpedoes (EHWT)

  • EHWT refers to a type of advanced torpedo that is designed to be used by heavyweight submarines like the Scorpene-class.
  • These torpedoes are a critical part of the submarine’s offensive weaponry and are used to target other naval vessels or submarines.
  • The specific torpedo mentioned in the contract, the F21 Heavy Weight Torpedo, is developed by Naval Group (France) and is described as highly advanced in terms of technology and performance. Some key features of the EHWT (F21) include:
    • Increased Range and Speed: The torpedo uses aluminum silver oxide technology, which helps it travel faster and farther, making it a more lethal weapon compared to older torpedo designs.
    • Safety Features: A key safety feature of the EHWT is that it is designed to never explode onboard the submarine, even if there is a fire or if it is dropped or fired accidentally. This is an important safety feature, as torpedoes are explosive weapons.
    • Enhanced Accuracy and Lethality: The torpedo is designed to be more accurate and lethal, giving submarines a significant edge in naval combat.

Editorials

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Context

The crash of an Azerbaijani airliner near Aktau, Kazakhstan, has brought global attention to the dangers of flying over the Russia-Ukraine conflict zone. The crash, which killed 38 people, appears to have been caused by a Russian anti-drone missile attack, highlighting the risks of collateral damage in the region amidst the ongoing war.

Geopolitical and Security Implications

  • Drone Warfare and the Changing Nature of Conflict: The crash underscores the changing nature of warfare, where drones and microdrones, as low-cost weapons, have emerged as significant tools for both surveillance and strikes. The damage occurred nearly 500 miles from the Ukrainian border, illustrating the broad reach of these modern weapon systems and their potential to cause harm in unintended locations.
  • Call for De-escalation: The incident highlights the urgent need for de-escalation in the region. The growing risks of collateral damage, especially to civilian aviation, make it crucial to address the ongoing Russia-Ukraine conflict. An effective resolution would require Moscow's commitment to ending its invasion of Ukraine and halting further military escalation, as well as a consensus on limiting NATO's expansion.
  • Potential for Regional Escalation: Failure to de-escalate the conflict may lead to more regional actors being drawn into the war, further destabilizing the area. The incident serves as a reminder that geopolitical conflicts can have wide-ranging consequences, including the loss of innocent lives and the expansion of violence beyond the immediate warzone.

Policy Recommendations

  • Strengthening international regulations on airspace safety, especially in conflict zones.
  • Expedited de-escalation and diplomatic negotiations between Russia, Ukraine, and NATO to reduce military confrontations that endanger civilian infrastructure.
  • Enhanced cooperation among international stakeholders, including military and civilian aviation authorities, to prevent such incidents in the future.

Practice Question

Q. Examine the geopolitical and security risks posed by ongoing military conflicts to civilian aviation. How can international cooperation and diplomatic measures help in mitigating such risks?

Editorials

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Context

Vivek Ramaswamy, a prominent American politician, recently commented on American culture's veneration of mediocrity over excellence, particularly criticizing the emphasis placed on social events and sports over academic achievements. This comment has sparked a debate on the relationship between culture and merit, especially in the context of American immigration policy, including the H-1B visa.

Cultural and Meritocracy Clash in Society

  • Culture vs. Merit: Ramaswamy's statement challenges the American cultural celebration of social events like prom and sports over academic excellence, asserting that such a culture doesn't produce top engineers and innovators.
  • The Immigrant Perspective: A hypothetical parallel is drawn with a comment from an immigrant politician in India, which criticizes the prioritization of entertainment over development. This comparison underlines the discomfort of immigrants facing criticism over cultural practices that may not align with dominant narratives in their new countries.
  • Cultural Shifts in Merit Definition: Historically, merit in American colleges shifted to include non-academic criteria such as "character" and extracurricular activities, partly as a response to increasing Jewish enrollments and rising anti-Semitism.

Cultural Values Across Civilizations

  • Multiple Intelligence Theory: Howard Gardner’s theory of multiple intelligences suggests that different cultures value different types of intelligence, like physical agility in ancient Greece or artistic skills in Confucian China. These diverse historical values show that intelligence, as understood today, is a relatively modern Western concept.
  • Cultural Relevance of Merit: Merit, in different cultures, has been aligned with specific virtues such as courage, wisdom, or creativity. This perspective questions whether merit, as we understand it in the modern sense, is truly universal or shaped by historical and cultural forces unique to each society.
  • The Current American Dilemma: The clash between culture and merit in America is most visible in debates surrounding H-1B visas and the treatment of highly skilled immigrant professionals. The growing rift between cultural values and merit in the American public sphere mirrors the challenges faced by immigrant communities, including those from India, in finding acceptance within an evolving societal structure.

Political and Economic Implications

  • Immigrant Policies and Populism: The US immigration debate reflects the growing divide between elite immigrant professionals and populist resentment towards immigration. Highly skilled immigrants, particularly in tech fields have been aligned with their political and economic goals.
  • The Intersection of Elites and Populism: The Trump-Musk alliance showcases the blending of populist support from disenfranchised poor Whites with the backing of Silicon Valley elites. This nexus represents a powerful political force that could shape future immigration policies to prioritize high-skilled immigrants while maintaining a populist agenda.
  • Shift in Public Perception of Merit: The growing emphasis on high-skilled immigrant professionals in sectors like technology contrasts with the populist view that questions the value of expertise.
Practice Question:

Q. Examine the interplay between cultural values and merit in shaping societal structures. How do immigration policies reflect this relationship, particularly in the context of the US and its treatment of highly skilled immigrants?

Editorials

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Context

The Indian rupee has recently faced significant pressure, hitting a record low against the U.S. dollar. The Reserve Bank of India (RBI) has intervened to stabilize the currency, while various internal and external factors contribute to the rupee's volatility. Key issues include foreign portfolio outflows, trade imbalances, and geopolitical uncertainties surrounding U.S. policies.

Factors Affecting the Indian Rupee

  • Foreign Portfolio Outflows: After the peak of key stock indices in late September, foreign portfolio investments in India have been on the decline, contributing to downward pressure on the rupee. Investors have been pulling funds, citing overstretched stock valuations and weak corporate performance during the July-September quarter.
  • Global Economic and Political Factors: A strengthening U.S. dollar, particularly following the U.S. presidential election, has added to the rupee's troubles. Additionally, external shocks, such as concerns over the BRICS currency proposal and potential trade tariffs, have further rattled emerging market currencies, including the rupee.
  • Trade Imbalances and Current Account Deficit: India is facing a record trade deficit, primarily driven by high import bills for inelastic items like crude oil and edible oils. While services trade continues to generate a surplus, the goods trade imbalance is expected to significantly impact the current account deficit in the coming quarter.

Implications of a Weakening Rupee

  • Impact on Inflation and Import Bills: A weaker rupee leads to higher import costs, particularly for essential commodities like crude oil and edible oil. This exacerbates inflation, affecting both consumers and businesses. India needs to balance the benefits of a cheaper rupee for exporters with the risks of rising input costs for imports.
  • Foreign Investment Uncertainty: The uncertain outlook for foreign investment, combined with the U.S. Federal Reserve’s monetary policy, adds to the pressure on the rupee. A more hawkish U.S. monetary policy could further destabilize emerging market currencies and dampen investment inflows into India.
  • Central Bank’s Limited Intervention: While the RBI has been intervening in the forex market, there is a limit to how much it can deploy forex reserves to manage the rupee's trajectory. The Finance Ministry has acknowledged that the recent depreciation of the rupee is restricting the flexibility of monetary policymakers in India.

Economic Challenges for India

  • Domestic Drivers of Economic Stress: In addition to external challenges, India’s domestic economic factors, such as faltering consumption and slow investment growth, are contributing to the rupee’s woes. These issues could test the resilience of India’s economy in the coming year, especially with external pressures like currency depreciation and trade imbalances.
  • Role of the Government and Diplomacy: The Indian government needs to clarify its stance on international economic issues such as the BRICS currency proposal and de-dollarization. Clear diplomatic communication is essential to alleviate market concerns about India’s broader economic strategy and its commitment to global financial stability.
  • Policy Adjustments Needed: In light of these challenges, India must carefully navigate its monetary and fiscal policies to manage the risks posed by currency volatility and external economic shocks. Policymakers should focus on strengthening economic fundamentals, increasing foreign investment, and ensuring a sustainable balance in trade and currency management.
Practice Question:

Q. Examine the factors contributing to the recent depreciation of the Indian rupee. How do domestic economic conditions and global political developments affect the rupee’s stability? Discuss the policy options available to India to manage these challenges.

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