GS Analyst: Daily Current Affairs

South Korean President Yoon Suk Yeol declared martial law for the first time in the country since 1980, citing the need to protect the nation from North Korea’s communist forces and to address what he described as “anti-state elements.”

What Is Martial Law?

• Martial law refers to the temporary imposition of military control over civilian authorities during times of crisis when regular civil governance is deemed insufficient.
• It often involves suspending normal civil rights and enforcing military law.
• While intended as a temporary measure, martial law can sometimes persist for extended periods.
• Article 77 of the Republic of Korea’s constitution contains provisions pertaining to the declaration of martial law in the country.
• Historical Context of Martial Law in South Korea: Martial law in South Korea has been historically tied to national crises and authoritarian rule.
  • During the Korean War (1950-1953), martial law was imposed to maintain order.
  • It was also used during the April Revolution (1960) and the May 16 Coup (1961), which led to significant political changes, including the authoritarian rule of Park Chung-hee.
• Notable Instances of Martial Law
  • Gwangju Uprising (1980): Martial law was declared by General Chun Doo-hwan after Park Chung-hee’s assassination. The Gwangju Uprising, where citizens protested against Chun’s rule, was brutally suppressed, leading to hundreds of deaths. This event remains a dark chapter in South Korea’s history.
  • Transition to Democracy (1987): Martial law played a role in the country’s eventual democratic transition, particularly during the June Democratic Uprising. South Korea moved towards direct presidential elections, reducing the reliance on martial law.

Concerns and Impact

• The imposition of martial law has raised concerns about its effect on South Korea’s democracy and civil liberties.
• While Yoon emphasized the need to address security threats, he provided limited details on how long the martial law would last or what specific measures would be taken.
• This situation has led to public and political scrutiny.

The World Bank has advised India to reconsider its decision not to join the Regional Comprehensive Economic Partnership (RCEP), a major trade agreement in Asia. The World Bank believes that by joining RCEP, India could tap into regional value chains and meet its target of USD 1 trillion in exports.

Background

• India had previously pulled out of RCEP in 2019, citing unresolved issues, especially concerns over trade deficits (India imports more than it exports) and the effect of cheaper imports on domestic industries.
• This decision followed a 2018 report that highlighted India’s growing trade deficit with countries having free trade agreements (FTAs) with India.
• Why did India opt out? India was a member of the RCEP drafting committee from its inception in 2011, but in November 2019, it decided to opt out.
  • Concerns regarding China:India did not join RCEP raising a concern that this deal would open it up to Chinese goods.
  • Safeguarding domestic interest: Its decision was to safeguard the interests of industries like agriculture and dairy and to give an advantage to the country’s services sector. 

India’s Self-Reliance and Manufacturing Push:

• In response to these challenges, India has focused on becoming more self-reliant through policies like the Production Linked Incentive (PLI) scheme, launched in 2020. The PLI aims to boost domestic manufacturing by offering incentives to companies that produce goods locally, in sectors such as smartphones, automobiles, medical devices, and solar products.
• India’s manufacturing output under this scheme has increased significantly. For example, smartphone production grew to $51 billion in FY24, a 21-fold increase over a decade. Exports from this sector grew 81-fold to $16 billion.
• However, these industries still rely heavily on imports from China. For instance, 60% of India’s solar equipment imports come from China, and 30% of India’s industrial imports are from China. The government is working to reduce this dependence by developing domestic production of components and inputs.

Concerns About China’s Influence in RCEP:

• One of the main reasons India pulled out of RCEP was the fear that joining this trade bloc would expose India’s markets to cheap, subsidized imports from China. This could harm India’s developing industries, especially since China has a dominant position in many industries, such as electronics, solar panels, and electric vehicle batteries.
• The RCEP trade agreement could increase India’s reliance on China, worsening the trade deficit (India imports much more from China than it exports). For example, India’s trade deficit with China grew from $63 billion in FY19 to $85 billion in FY24.
• India’s concern is that RCEP’s value chains are dominated by China, which could disrupt the progress made by domestic industries under the PLI scheme.

Global Trade and Geopolitical Challenges:

• Global trade policies have become more protectionist due to rising geopolitical tensions. For example, the US and EU have implemented measures to protect their domestic industries, like the Inflation Reduction Act and Carbon Border Adjustment Mechanism.
• China’s subsidies to its industries (including solar, batteries, and EVs) have distorted global trade, making it difficult for countries like India to compete with China’s cheap exports.
• Countries in RCEP, such as ASEAN nations, Japan, and South Korea, have seen their trade deficits with China grow since the agreement. For example, ASEAN’s trade deficit with China increased from $82 billion in 2020 to $135.6 billion in 2023.

India has made significant strides in global trade, becoming a major player in various export sectors. This progress reflects India's growing manufacturing capacity, technological advancements, and government initiatives designed to boost exports.

Key Export Achievements:

• Petroleum Products: India is now the second-largest global exporter of petroleum oils, with exports rising from $60.84 billion in 2014 to $84.96 billion in 2023, capturing 12.59% of the global market. This growth is due to India’s advanced refining infrastructure and increased production capacity.
• Agrochemicals: India is now the third-largest global exporter of agrochemicals, including insecticides and fungicides. Exports in 2023 reached $4.32 billion, up from $2.04 billion in 2014. This success is driven by investments in research and development and adherence to international standards.
• Sugar: India is the second-largest global exporter of sugar, with exports growing from $1.17 billion in 2014 to $3.72 billion in 2023. India’s share in the global sugar market rose from 4.31% in 2014 to 12.21% in 2023, fueled by strong agricultural policies.
• Electronics and Electrical Components: Exports of electrical transformers and components grew from $1.08 billion in 2014 to $2.85 billion in 2023, making India the 10th largest global exporter in this category. The growth is due to initiatives like "Make in India" and the Production-Linked Incentive (PLI) scheme.
• Rubber Tyres: India’s exports of rubber pneumatic tyres grew from $1.49 billion in 2014 to $2.66 billion in 2023, securing the 8th position in the global market. The focus on quality and cost competitiveness has made India a key player in this sector.
• Semiconductors: India’s semiconductor exports have increased from $0.23 billion in 2014 to $1.91 billion in 2023, rising from 20th to 9th globally. India is expanding its role in the global semiconductor supply chain through domestic manufacturing and innovation.
• Precious Stones: India has become the world leader in the export of precious and semi-precious stones, with exports reaching $1.52 billion in 2023. India’s market share surged from 2.64% in 2014 to 36.53% in 2023, owing to its centuries-old craftsmanship and modern technology in gemstone processing.

Government Initiatives to Boost Exports:

• New Foreign Trade Policy (FTP): Launched in 2023, the FTP focuses on four main areas: providing incentives for remission, promoting export collaboration, enhancing business ease, and focusing on emerging sectors like e-commerce. The policy also includes initiatives like the "Towns of Export Excellence Scheme" to recognize new export hubs.
• Production-Linked Incentive (PLI) Scheme: With an investment of ?1.97 lakh crore, the PLI scheme aims to enhance manufacturing in 14 key sectors, such as electronics, automobiles, and textiles. This scheme has already contributed to job creation and increased production and exports.
• RoDTEP and RoSCTL Schemes: These schemes aim to rebate taxes and levies on export products, making exports more competitive. The RoDTEP scheme, expanded in 2022, now covers more sectors, including pharmaceuticals and chemicals.
• Districts as Export Hubs: This initiative supports local exporters and manufacturers by identifying export-potential products in each district and addressing bottlenecks. It encourages employment generation and regional economic growth.
• Digital Platforms and Ease of Doing Business: The government has launched various digital platforms like the Trade Connect e-Platform to link exporters with resources and improve export processes. Additionally, measures like reducing compliance burdens and streamlining business procedures through the National Single Window System (NSWS) have helped improve India's business environment.
• Attracting Investments: Reforms in Goods and Services Tax (GST), corporate tax reduction, and the introduction of quality control orders (QCOs) have made India more attractive for both domestic and foreign investments. This has strengthened India’s manufacturing base and its ability to export more competitively.
• E-Commerce Export Hub (ECEH): India is developing cross-border e-commerce to boost exports, particularly from SMEs and artisans. The goal is to reach USD 100 billion in e-commerce exports by 2030, improving market access for small producers.
• Logistics and Infrastructure Development: The PM GatiShakti National Master Plan and the National Logistics Policy aim to improve connectivity and reduce logistics costs. These policies are designed to enhance India’s integration into global supply chains.

Extrachromosomal DNA (ecDNA), a small fragment of genetic material found outside the main chromosomes in cells, has gained significant attention in cancer biology. Discovered about 50 years ago but initially overlooked due to its rarity, recent research has highlighted its crucial role in cancer development and drug resistance.

What is ecDNA?

• Normally, human cells contain 23 pairs of chromosomes that store our genetic information.
• However, during certain types of cancer, damage to these chromosomes can result in pieces of DNA breaking off and forming small circular structures.
• These fragments are called ecDNA and float freely within the nucleus of the cell.
• Recent Findings: Researchers investigated how ecDNA contributes to cancer growth and resistance to treatment. They discovered that:
  • ecDNA in Cancer: EcDNA is present in 17% of tumor samples, with higher prevalence in cancers like liposarcoma, brain tumors, and breast cancer. Interestingly, the presence of ecDNA increases after chemotherapy and is linked to cancer spread (metastasis) and poorer patient outcomes.
  • ecDNA and Tumor Growth: EcDNA often carries multiple copies of oncogenes, genes that drive cancer growth. Unlike normal chromosomal DNA, ecDNA is free to move and interact with other ecDNA, forming hubs that significantly increase the activity of oncogenes. This boosts cancer cell growth and accelerates tumor evolution.
  • Mendel’s Law Challenged: Normally, when cells divide, genetic material is passed on randomly, as per Mendel’s third law of independent assortment. However, ecDNA doesn’t follow this rule. During cell division, ecDNA is clustered together and passed to daughter cells as a unit. This process, called the “jackpot effect,” allows cancer cells to retain advantageous genetic combinations, making them more resilient and capable of growing more aggressively.
  • Vulnerability in Cancer Cells with ecDNA: While ecDNA presents new challenges, it also creates potential weaknesses. The unusual structure and high activity of ecDNA lead to conflicts in the cell's machinery responsible for making RNA, resulting in DNA damage. The cancer cells rely heavily on a protein called CHK1 to repair this damage. When researchers used a drug that blocks CHK1 (BBI-2779), they observed a reduction in tumor growth in mice, particularly in stomach cancer cells containing ecDNA. This suggests that targeting CHK1 could be a new way to treat cancers driven by ecDNA.

Vizhinjam Port is set to begin its commercial operations, following the completion of a four-month trial-run phase

Details of the Completion:

• The Vizhinjam Port is developed by Adani Ports and SEZ under a public-private partnership.
• It is India's latest international deep-water transshipment facility.
• Vizhinjam’s strategic location, deep-water capacity, and proximity to major shipping lanes position it as a competitive alternative to Colombo, the region's primary transshipment hub.
  • Vizhinjam has been an important port since ancient times, serving as a key maritime trade centre for the Kingdom of Travancore. It played a significant role in the spice trade, connecting Kerala to global trade routes.
  • The location of the port facilitated cultural and economic exchanges between Kerala and various civilizations, including the Greeks, Romans, Arabs and Chinese, which influenced the region's culture, cuisine and architecture.
• The new port aims to bolster India’s trade capabilities while attracting global shipping traffic.
• Vizhinjam is envisaged to be an all-weather, multipurpose, deepwater, mechanised, greenfield port that seeks to garner the lion's share of the Indian transhipment cargo now being handled by the nearby foreign ports and emerge as the future transhipment hub of the country.
• During its five-month trial run, 70 cargo ships, including ultra-large motherships, successfully docked at the port. In this period, a total of 47 lakh containers were handled, demonstrating the port's operational capabilities.
• The port, developed by Adani Ports and Special Economic Zone Ltd (APSEZ), part of the Adani Group, was built under a public-private partnership model with an investment of approximately ?8,867 crore.
• Vizhinjam International Seaport Limited, Adani Vizhinjam Port Private Limited, and the Indian Institute of Technology, Madras played key roles in completing all necessary steps to meet the project’s agreement conditions.
• The port is set to become a key player in regional trade, potentially serving as a gateway for trade between Southeast Asia, the Middle East and Africa.

The International Day of Persons with Disabilities (IDPD), observed annually on December 3, celebrates the resilience, contributions, and leadership of persons with disabilities (PwDs) worldwide. 

What is IDPD?

• The International Day of Persons with Disabilities (IDPD), observed annually on December 3, celebrates the resilience, contributions, and leadership of persons with disabilities (PwDs)
• This day is a reminder of the global commitment to foster inclusivity, advocate for the rights of PwDs, and create equitable opportunities for all.
• The theme for this year is: “Amplifying the leadership of persons with disabilities for an inclusive and sustainable future.”
• History of IDPD:
• The day was proclaimed by the United Nations General Assembly in 1992 under resolution 47/3.
• The aim was to promote the rights and well-being of persons with disabilities and increase awareness of their challenges in various aspects of life (political, social, economic, and cultural).
• The Convention on the Rights of Persons with Disabilities (CRPD), adopted in 2006, further advanced the rights of PwDs in line with the 2030 Agenda for Sustainable Development.

Initiatives by the Indian Government:

India has implemented several policies and initiatives to empower and include PwDs:

• Department of Empowerment of Persons with Disabilities (DEPwD): Created in 2012 under the Ministry of Social Justice and Empowerment, this department focuses on the welfare of PwDs. Renamed in 2014, it coordinates efforts between various ministries, state governments, NGOs, and other stakeholders.
• Accessible India Campaign (Sugamya Bharat Abhiyan) - 2015: It was launched to achieve universal accessibility across India, focusing on:
  • Built Environment Accessibility (e.g., public spaces).
  • Transportation Accessibility for independent mobility.
  • Information and Communication
  • Sign Language Access through interpreter training.
• Deendayal Divyangjan Rehabilitation Scheme (DDRS) provides grants to NGOs for projects supporting PwDs’ rehabilitation and empowerment, helping them reach their optimal physical, sensory, and intellectual levels.
• District Disability Rehabilitation Centres (DDRC) provide early identification of disabilities, raise awareness, supply assistive devices, and offer self-employment loans. They also promote a barrier-free environment.
• Assistance to Persons with Disabilities for Purchase/Fitting of Aids/Appliances (ADIP) Scheme: It grants agencies the funds needed to help PwDs buy modern aids and appliances to aid their rehabilitation and enhance economic potential.
• Schemes for Implementation of Rights of Persons with Disabilities Act 2016 (SIPDA): It is a comprehensive scheme supporting:
  • Creation of Barrier-Free Environments.
  • Accessible India Campaign.
  • Skill Development for PwDs.
  • Issuing Unique Disability Identification (UDID)
  • Awareness Generation and training for stakeholders.
  • Research and Development for suitable aids.
• Divya Kala Mela is a national-level fair celebrating Divyangjan artisans. It focuses on showcasing the artistic contributions of PwDs, highlighting their skills and creating a platform for them to showcase their work.
• PM-DAKSH Yojana: It is a skill development platform for PwDs, connecting them to training organizations and employers. The scheme consists of two modules:
  • Divyangjan Kaushal Vikas: Skill training for PwDs.
  • Divyangjan Rozgar Setu: Connecting PwDs with employment opportunities.

The Union government told the Lok Sabha that “growing awareness, wider publicity, and capacity building of police personnel” were among the reasons for the increasing number of cases being registered across the country under the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act.

Key-highlights

• Data from the National Crime Records Bureau (NCRB) show that over 67,000 cases had been registered in 2022 under the SC/ST Act for crimes of atrocities against people belonging to Scheduled Castes (SC) and Scheduled Tribes (ST).
• This is the highest number of cases registered under this Act since 2013.  
• Among these cases, 57,582 cases were registered with regard to atrocities against people belonging to SC communities, and 10,064 cases were registered with regard to atrocities against people from ST communities.

U.S. President Joe Biden has granted an unconditional pardon to his son, Hunter Biden, who was facing sentencing for federal tax and gun convictions. This means that Hunter Biden is forgiven for these crimes and will not have to serve any punishment. The pardon also covers any possible federal crimes he may have committed between 2014 and 2024.

Can the President Grant Pardons?

• Yes, under the S. Constitution, the President has the absolute power to grant pardons for federal criminal offenses.
• This includes forgiving someone for a crime before or after a conviction, and it applies to all crimes except those related to impeachment. A pardon relieves a person from punishment but does not remove the criminal record.
• What’s the Controversy? The use of presidential pardons has been controversial throughout history. Some notable examples include:
• • George Washington pardoning leaders of the Whiskey Rebellion in 1795.
  • Bill Clinton pardoning his half-brother Roger Clinton in 2001.
  • Donald Trump pardoning his father-in-law's father in 2020.
• In Hunter Biden’s case, President Joe Biden granted the pardon, which is controversial because he had earlier promised not to do so. Biden justified his action by saying that his son was "unfairly prosecuted" and was targeted only because he is his son. Hunter Biden had been convicted by a jury for illegally purchasing and possessing a gun while being a drug user. He also pleaded guilty to tax evasion.

What’s the Situation in India?

• In India, the President and Governor have the power to grant pardons (forgive someone for a crime).
• This is mentioned in Article 72 (for the President) and Article 161 (for the Governor) of the Constitution. These powers are exercised on the advice of the Council of Ministers. A pardon in India removes the person’s conviction and punishment.
• Like in the U.S., the use of this power has led to political controversies in India. For instance, there have been cases where the government’s decision to accept or reject mercy petitions has been criticized as politically motivated.
• The Supreme Court of India, in the Epuru Sudhakar case (2006), stated that pardon decisions could be judicially reviewed if they are found to be arbitrary or influenced by personal or external factors.

The Banking Laws (Amendment) Bill, 2024 was passed in the Lok Sabha on December 3, 2024, marking the first bill to be approved after the end of the week-long parliamentary logjam. The bill, which was introduced by Finance Minister Nirmala Sitharaman, aims to strengthen governance in the banking sector and improve customer convenience.

Key Provisions of the Bill:

• The Banking Laws (Amendment) Bill 2024 aims to improve banking governance and enhance investors' protection.
• The amended law would strengthen governance in the banking sector and enhance customer convenience.
• Amendments are proposed in the:
  • Reserve Bank of India Act, 1934
  • Banking Regulation Act, 1949
  • State Bank of India Act, 1955
  • Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970
  • Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980
• Nomination Facility: The bill allows bank account holders to have up to four nominees for their accounts, providing more flexibility in case of the account holder’s demise. Locker holders will have successive nominations, meaning that only one nominee can be appointed at a time, but it can be updated as needed.
• Redefining ‘Substantial Interest’ for Directorships: The bill proposes increasing the cap for ‘substantial interest’ for directorships from Rs 5 lakh to Rs 2 crore, a threshold that had remained unchanged for nearly six decades.
• Tenure of Directors in Cooperative Banks: The tenure for directors (excluding the chairman and whole-time directors) in cooperative banks will be extended from 8 years to 10 years, bringing it in line with the Constitution (Ninety-Seventh Amendment) Act, 2011.
  • Additionally, directors of Central Cooperative Banks will now be allowed to serve on the board of State Cooperative Banks, which could improve the coordination and management of cooperative banks.
• Freedom in Remuneration of Statutory Auditors: The amendment seeks to give greater flexibility to banks regarding the remuneration of statutory auditors, allowing them to set the pay structure as per their needs.
• Changes to Reporting Dates: The bill proposes to change the reporting dates for banks for regulatory compliance to the 15th and last day of each month, instead of the previous system of the second and fourth Fridays.
• Enhancing Investor and Customer Protection: The amendments would strengthen banking governance and enhance investor protection, particularly through improved nomination processes for depositors and safer banking practices.

The Government of India will revise the base year for calculating Gross Domestic Product (GDP) from 2011-12 to 2022-23, marking the first update in over a decade.

What is base year?

• The base year is a benchmark for calculating GDP by eliminating the effects of inflation, allowing for a comparison of economic growth over time.
• Updating the base year is crucial because it ensures that GDP data reflects the latest economic activities, consumption patterns, and industry contributions.
• The shift from 2011-12 to 2022-23 is particularly relevant because the Indian economy has undergone substantial transformations over the past decade.
  • New sectors have emerged
  • Digitalisation has accelerated
  • Economy has adapted to post-pandemic realities
• This change aims to better reflect the structural shifts in India’s economy and provide a more accurate foundation for economic policymaking.
• A 26-member Advisory Committee on National Accounts Statistics (ACNAS), chaired by economist Biswanath Goldar, will oversee the transition.
• The GDP base year of 2011-12 was fixed in January 2015 when the Central Statistics Office (CSO), now part of the Ministry of Statistics and Programme Implementation (MoSPI), revised the base year for calculating national accounts.
• This extends beyond GDP to include updates for the Consumer Price Index (CPI), Index of Industrial Production (IIP), Wholesale Price Index (WPI), and Producer Price Index (PPI).
• The new GDP series is scheduled for rollout in February FY26 and will encompass key estimates, including the FY26 Q3 estimate, FY26 second advance estimate, FY25 first revised estimate, and FY24 second revised estimate.
• Similarly, a revised CPI series for inflation will be introduced in February FY26, followed by an updated IIP series in March FY26. These revisions aim to provide a more accurate reflection of the economy’s structural and sectoral shifts.

World Wildlife Conservation Day, observed on December 4, serves as a reminder to reflect on India’s biodiversity and the urgent need for better protection and conservation efforts. India’s role as a megadiverse country places it at the center of global conservation efforts.

India’s Biodiversity and Challenges in Conservation

• India is a megadiverse country, hosting a remarkable array of species despite covering only 4% of the world’s land area.
• With 7-8% of all recorded species, India is home to over 45,000 species of plants and 91,000 species of animals.
• The country has 10 biogeographic zones and is particularly rich in mammals, birds, reptiles, amphibians, fish, and plants, with India accounting for a significant proportion of the world’s species:
  • Mammals: 8.58%
  • Avian Species: 13.66%
  • Reptiles: 7.91%
  • Amphibians: 4.66%
  • Fish: 11.72%
  • Plants: 11.80%
• India is home to four of the world’s 34 biodiversity hotspots: the Himalaya, Indo-Burma, the Western Ghats-Sri Lanka, and Sundaland, which makes it a key area for global biodiversity.

Critically Endangered Species in India

• As of 2022, India is home to 73 critically endangered species according to the IUCN, a significant rise from the 47 species identified in 2011. This increase is partly due to improved monitoring and data collection rather than a significant rise in extinctions.
• Mammals: Of the nine critically endangered mammal species in India, eight are endemic, meaning they are found only in India and nowhere else in the world. These species include:

• Kashmir Stag (Hangul)
• Malabar Large-spotted Civet
• Andaman Shrew
• Nicobar Shrew
• Jenkin’s Shrew
• Namdapha Flying Squirrel
• Large Rock Rat
• Leafletted Leaf-nosed Bat

• Birds: The Great Indian Bustard, a critically endangered bird species, is under threat from human-made structures such as powerlines, especially in regions like Rajasthan. Despite being an important species, it often does not receive the attention it deserves for its conservation.
• Carnivores: While iconic carnivores such as lions, tigers, and cheetahs attract significant attention, they are only a few among the many endangered species that need protection.

The Bhopal disaster is one of the worst industrial accidents in history. The Union Carbide India Limited (UCIL) plant in Bhopal was producing carbaryl, an insecticide, by reacting methyl isocyanate (MIC) with 1-naphthol. A massive leak of MIC occurred after a large amount of water entered a storage tank containing the highly toxic chemical. This led to a violent reaction. While MIC was likely a major component of the toxic fumes, other substances, such as hydrogen cyanide, are also suspected to have been present, as indicated by the red coloration of the victims' viscera.

Key Toxic Compounds Associated with the Disaster

The disaster site and surrounding areas still show significant levels of toxic contamination, with several harmful chemicals present in the environment:

• Mercury: A highly toxic heavy metal known to accumulate in soft tissue, mercury can damage multiple organs and interfere with cellular functions. It is dangerous even at low concentrations and poses long-term environmental and health risks.
• Heavy Metals: Other heavy metals like chromium, copper, nickel, and lead were also found in the area. These metals are carcinogenic and can cause immune system damage and various cancers, particularly of the lungs, kidneys, and brain.
• Hexachlorobutadiene: This compound is a potential carcinogen and can cause severe damage to the liver, kidneys, and brain. Exposure also leads to fat accumulation in the liver, cellular destruction, and nervous system impairment.
• Chloroform: Known for affecting the central nervous system, chloroform can lead to fainting at lower concentrations and death at higher concentrations. It is also classified as possibly carcinogenic to humans.
• Carbon Tetrachloride: This chemical is a health hazard and can damage the liver, causing cancer. Exposure can also affect vision and heart function.
• Trichlorobenzene: These volatile compounds spread easily in the air and accumulate in the body’s fatty tissues. They can damage the liver and kidneys.
• Persistent Organic Pollutants (POPs): These are chemicals that persist in the environment and bioaccumulate. They are linked to cancers, nervous system damage, reproductive disorders, and developmental issues. POPs also disrupt the immune system and are associated with serious health outcomes, including cancer of the liver, breast, pancreas, and prostate.

The United States has approved a potential sale of MH-60R helicopters and related equipment to India, estimated at a cost of USD 1.17 billion.

What is the MH-60R Helicopter?

• The MH-60R is a versatile helicopter that can perform several types of missions, including anti-submarine warfare, surface warfare, and logistics support.
• Design and Features: The helicopter has a crew of 3-4 people and can carry around 5 passengers. It can fly at speeds up to 330 km/h and has a range of 830 km.
• Weaponry: It can be armed with torpedoes, air-to-surface missiles, and machine guns for defense.
• Global Use: The MH-60R is used by several countries, including the US, Australia, and Japan, for similar roles.
• India already inducted MH-60R helicopters into its navy in 2024. These helicopters are used for anti-submarine warfare, anti-surface warfare, search and rescue, and other operations.
• Strategic Importance:
• The helicopters will help India enhance its "blue-water" capabilities, meaning it will be able to conduct operations across vast ocean areas, far from its shores, particularly in the Indo-Pacific region.
• The US sees India as an important partner in maintaining peace and stability in this region, so the sale aligns with both countries’ security interests.

Population issues in India are back in focus, with discussions about the Census and delimitation of Parliamentary seats. The Chief Ministers of Andhra Pradesh and Tamil Nadu have expressed concerns about potential reductions in parliamentary representation due to their states’ declining fertility rates. This issue has sparked a broader debate on the implications of differential population growth rates among states and the political, economic, and social consequences.

Political Implications and Delimitation Freeze

• Delimitation of Parliamentary Seats: The political response to population growth in India has been to freeze the delimitation of parliamentary seats based on population for 25 years, starting in 1976 and extended in 2001. This freeze has ensured that states with slower population growth are not penalized in terms of parliamentary representation.
• Concerns of Southern States: States like Andhra Pradesh and Tamil Nadu, with relatively lower fertility rates, are concerned about losing parliamentary seats due to the freeze. These states are considering policy measures, including incentivizing higher fertility rates, to maintain their political representation at the national level.
• Alternative Electoral Systems: Alternative proposals, such as allocating seats based on parties’ vote shares, have been discussed, but these solutions are considered impractical and may not be suitable for India's federal structure. Extending the delimitation freeze for another 25 years appears to be a more feasible political solution.

Economic and Fiscal Consequences

• Impact on Resource Allocation: Population plays a significant role in determining the flow of resources from the Centre to states, with population being a key criterion in the Finance Commission’s allocations. States with higher populations tend to receive a larger share of resources, which can lead to inequities for states that have successfully reduced their fertility rates.
• Finance Commission's Adjustments: The 14th and 15th Finance Commissions adjusted for the reduced fertility rate by introducing the "demographic change" variable, giving more weight to states that have lowered their fertility rates. This approach helps offset the disadvantages faced by states that have worked to control population growth.
• Need for Accelerated Economic Growth: In response to the disparity in population growth rates, accelerating economic growth in lagging states through initiatives like the aspirational district program is vital. This requires innovative strategies from both the Centre and states to address the economic disparities exacerbated by population growth rates.

Addressing Population Growth Directly

• High Fertility States' Demographic Challenges: India’s population growth is uneven, with some states, mainly in the northern and central parts, having a fertility rate higher than the replacement level (2.1). Efforts to reduce fertility rates in these states should focus on enhancing women's empowerment and improving reproductive health services.
• State-Specific Approaches: Rather than attempting to increase fertility in states with low TFR, which would be counterproductive, the focus should be on states with higher fertility rates. These states need targeted interventions that improve access to family planning, healthcare, and education to empower couples to make informed reproductive choices.
• Challenges of Redistribution and Population Mobility: While migration could help redistribute population, large-scale permanent migration poses significant social challenges. Therefore, the solution lies in tackling the root causes of high fertility through local interventions that respect regional contexts.

Practice Question

Q. Discuss the implications of differential population growth rates in India for political representation, economic resource allocation, and social harmony. What measures can be adopted to address these challenges?

India’s second-quarter GDP numbers have surprised many, showing a slowdown consistent with earlier economic signals. The manufacturing sector, in particular, has been facing a slowdown for some time, influenced by high real policy rates. This GDP performance raises concerns and presents several key policy lessons that need attention to avoid further economic downturn.

Economic Slowdown and Interest Rates

• Interest Elasticity of Durable Goods Demand: Indian consumption demand for durable goods is highly sensitive to interest rates, especially for first-time homebuyers. Persistently high real policy rates lead to a slowdown in sectors like manufacturing and construction, which are most interest-sensitive, as evidenced by negative import growth and reduced stock building by firms.
• The Role of Macroeconomic Policy: Post-pandemic, counter-cyclical macroeconomic policies helped smooth external shocks, but domestic policies failed to counteract falling export growth. Without boosting domestic demand, the slowdown in the first half of the year became more pronounced, highlighting the need for a more balanced approach in policy interventions.
• Tightening Policies and Their Impact: The simultaneous tightening of government spending, macro-prudential policies, and monetary policy during a slowdown has exacerbated the problem. A more flexible approach, including a relaxing of monetary policy, could have countered this trend and stimulated domestic demand to offset weakening exports.

Consumption and Economic Growth Factors

• Consumption Growth and Structural Challenges: Despite concerns about structural issues, private consumption has shown a healthy 6% growth, while government consumption has shifted from negative to positive growth. The economy’s slowdown is cyclical, not structural, as consumption in services continues to perform well, disproving the view that reforms are needed to revive growth immediately.
• Role of Monetary Policy in Sustaining Growth: Monetary policy must respond quickly to high-frequency data and signals. The current inflation spike, primarily driven by seasonal effects like vegetable prices, is expected to reverse. Given this, a rate cut is long overdue to ensure that high real rates do not stifle growth, especially with inflation showing signs of easing.
• Monetary and Fiscal Coordination: The coordination between fiscal and monetary policies has been critical for high growth post-pandemic. However, this coordination has weakened, particularly with the government’s focus on high food prices and the central bank’s cautious approach to inflation. This misalignment suggests the need for better long-term reforms in agriculture and fiscal strategies to reduce food price pressure.

Policy Reforms and Economic Strategies

• Agricultural Policy Reforms: India's agricultural policies need restructuring to shift consumer demand towards non-grain food items, which would reduce the government's dependency on food price control measures. Encouraging private participation in vegetable supply chains and reducing intermediaries can help farmers earn more while lowering consumer prices.
• Opportunities in Domestic Fuel Prices: Reducing domestic fuel prices could provide further space for economic growth. By cutting rates, monetary policy could be more supportive, helping to balance inflationary pressures while stimulating domestic demand.
• Banking Sector and Interest Rates: Indian banks need to lower their interest margins, which are among the highest globally. Although banks resist rate cuts due to fears of reduced deposit returns, the large profits made during high-interest periods can be used for restructuring, and regulators must ensure these special interest groups do not derail national economic objectives.

Practice Question

Q. Critically analyze the causes behind India’s economic slowdown in the second quarter and suggest policy measures that could be implemented to sustain long-term growth.

COP29, held in Baku, Azerbaijan in November 2024, was branded as the “Finance COP” with hopes to secure a substantial commitment for global climate action. The New Collective Quantified Goal (NCQG) was expected to drive stronger financial commitments, especially from developed countries, to aid developing nations in their transition to cleaner energy technologies. However, the outcome of COP29 left many disappointed, particularly regarding the scale of financial assistance promised and the approach to climate justice.

Financing Needs of Developing Countries

• Upfront Costs of Green Technologies: Transitioning to clean energy solutions in developing countries requires substantial upfront investment, especially for renewable energy technologies. While some of these technologies have long-term cost benefits, the initial costs remain prohibitive without government financial support to ensure affordability for consumers.
• Additional Finance for Transformation: The urgency for scaling up finance within this decade is critical to achieving transformational changes in climate action. Developing countries need financial support to improve access to modern energy and infrastructure while ensuring that cleaner energy solutions are adopted widely and equitably.
• The Challenge of High Debt Burden: Developing nations face high debt levels, making it difficult to access affordable capital for climate action. The reliance on loans rather than grants exacerbates the financial challenges, as high-interest rates further limit the capacity of these countries to invest in green technologies and sustainable development.

Role of the NCQG and Financial Commitments

• The NCQG Framework: The NCQG was created to establish clear and quantifiable climate goals for countries, aiming for greater transparency and accountability in meeting global climate targets. This was expected to provide a structured approach to climate financing, ensuring that the financial pledges made are both sufficient and actionable.
• Developed Countries’ Financial Commitment: Despite the pressing financial needs outlined by developing countries, COP29 saw the developed world commit to providing $300 billion annually by 2035, far below the $1.3 trillion per year requested by developing nations. This amount is considered insufficient to address the urgent climate change challenges and does not represent a transformative change in global financial flows.
• Disappointment with the NCQG Outcome: The NCQG outcome was seen as disappointing, with the pledged amount of $300 billion considered too small to meet the scale of the climate crisis. This outcome raises concerns over the principles of climate justice, as it fails to address the financial needs of the Global South and does not reflect the urgency required for climate action.

The Road Ahead and the Need for Continued Dialogue

• Equitable Climate Action: The road ahead requires continued negotiations and dialogue, with a focus on climate justice and ensuring that the principles of Common but Differentiated Responsibilities and Respective Capabilities (CBDR and RC) are respected. It is essential to ensure that the Global South’s financial needs are addressed in a fair and equitable manner.
• The Importance of Global Cooperation: Climate change transcends national boundaries, making it imperative for the international community to collaborate towards collective climate action. The COP negotiations must continue to prioritize global solutions to the climate crisis, ensuring that all countries, regardless of their economic status, contribute fairly to mitigating its impacts.
• Pushing for Just Transitions: Developing countries must work together to ensure that any transition to cleaner energy is just, recognizing the unique challenges they face. This includes advocating for financial mechanisms that support sustainable development while addressing the disproportionate effects of climate change on vulnerable populations.

Practice Question

Q. Discuss the role of the New Collective Quantified Goal (NCQG) established at COP29 in addressing the financial needs of developing countries in their climate transition. Critically analyze the adequacy of the financial commitments made by developed countries.