GS Analyst: Daily Current Affairs

India emerged as the global leader in remittances, receiving over USD 111 billion in 2022, surpassing the USD 100 billion milestone. The International Organisation for Migration's (IOM) World Migration Report 2024 highlighted India's prominence as both a remittance recipient and origin of international migrants.

Key Points: 

• Remittance Receipts: India topped the list of remittance recipient countries, with significant inflows from countries like the United Arab Emirates, the United States, and Saudi Arabia. The country's remittance inflows exceeded USD 111 billion in 2022.
• Migration Statistics: India was noted as the origin of the largest number of international migrants globally, with approximately 18 million migrants, accounting for 1.3% of the total population.
  • Additionally, India ranked 13th as a destination country for immigrants, with 4.48 million immigrants.
• Migration Corridors: Major migration corridors included India - United Arab Emirates, India - US, India - Saudi Arabia, and Bangladesh - India, driven primarily by labor migration from the subregion.
• Risks Faced by Migrant Workers: Financial exploitation, indebtedness, migration costs, xenophobia, and workplace abuses.
• High Migrant Labor Sectors: Construction, hospitality, security, domestic work, and retail, reflecting the diverse nature of migrant employment.
• Factors accelerating growth in remittances: Educated Indian diaspora, proficiency in English, skills, increased demand for labour due to higher oil prices, and others.

Significance of Remittances for India's Economy 

Remittances play a crucial role in India's economic landscape, accounting for a significant portion of the GDP and serving as a vital buffer for the external sector. Additionally, remittances bolster India's forex reserves, stabilize the rupee, and fuel consumption-driven economic growth.

• Macro-Economic Cushion: Remittances contribute approximately 3% of India's GDP, serving as a substantial source of external financing. During periods of trade deficit widening, remittances provide a vital cushion, stabilizing India's external sector amidst global economic challenges.
• Stability for Current Account: As the second-largest source of external financing after service exports, remittances play a pivotal role in maintaining stability in India's current account. By bolstering forex reserves, they help the Reserve Bank of India (RBI) safeguard the rupee against excessive volatility.
• Boosting Purchasing Power: Remittances enhance people's purchasing power, driving consumption in the domestic market. This increased demand stimulates economic activity, contributing to overall growth in the economy.

Furthermore, India's adoption of modern fintech tools like UPI linkages facilitates faster and cheaper remittance transactions for Non-Resident Indians (NRIs). This technological advancement attracts more NRI investments, further strengthening India's economic resilience.

The demand for Sarna religion has gained attention, particularly in the context of Lok Sabha elections.

About Sarna Religion:  

• Sarna religious code to formally acknowledge the tribe's unique religious identity as a people who adore the natural world.
• It is often believed that having a distinct religious identity will stop the process of conversion while also effectively preserving the tribes' language, culture, and history.
• The Sarna faith believes that "Jal (water), Jungle (forest), Zameen (land)" is the holy grail. Its adherents worship to hills and trees and believe that the forest regions should be protected.
• Individuals who follow the Sarna faith do not believe in heaven, hell, the Varna system, or idol worship.
• States that make up the tribal belt: Odisha, Jharkhand, Bihar, West Bengal, and Assam.
• Although it was not a code, reports indicate that more than 5 million persons identified as "Sarna" in the 2011 Census.

This detention of Delhi’s Chief Minister has garnered attention due to its potential impact on the electoral process, especially in the context of the upcoming Lok Sabha election.

Legal Immunity 

• According to Article 361 of the Indian Constitution, the President of India and Governors of states and Union Territories are granted immunity from civil and criminal proceedings throughout their terms.
• This means they cannot be sued or prosecuted for actions taken in the course of their official duties.
• Limitations of Immunity: Unlike Presidents and Governors, Prime Ministers and Chief Ministers do not enjoy legal immunity.
  • They are subject to the principle of equality before the law, meaning they can be sued or prosecuted like any other citizen. However, arrest alone does not lead to disqualification from office.
  • The Indian Constitution does not explicitly address whether a person can remain Chief Minister while in remand. However, Section 8(3) of the Representation of People Act, 1951, stipulates that a Member of the Legislative Assembly (MLA) or Member of Parliament (MP) can face disqualification if convicted and sentenced to at least two years in prison.
  • In short, disqualification only occurs if they are convicted of a crime.

Grounds for Removal of a Chief Minister: 

• Mere arrest is not enough for removal.
• A Chief Minister (CM) is primarily a Member of the Legislative Assembly (MLA), thus subject to MLA disqualification criteria, such as holding an office of profit, unsound mind declaration, charge-sheeting, bankruptcy, loss of citizenship, or Anti-defection Law violation.
• Removal can also occur if the CM loses majority support or faces a no-confidence motion in the legislative assembly.
• For Delhi, specific provisions apply:
• Article 239AA: President appoints CM and they hold office at the President's pleasure.
• Article 239AB: President, upon LG's report of constitutional machinery failure, can suspend the legislative assembly and remove the CM.

West Nile fever cases have been recently reported in Kerala.

About 

• Caused by: West Nile virus (WNV) is the cause of West Nile fever.
• In humans, the West Nile virus can induce a fatal neurological condition. All infected individuals, though, might not exhibit any symptoms.
• West Nile virus (WNV) is classified by the World Health Organization as a member of the flavivirus genus and a member of the family Flaviviridae's Japanese encephalitis antigenic
• WNV is classified by the World Health Organization as a member of the flavivirus genus. It belongs to the Japanese encephalitis antigenic complex of the family 
  • Flavivirus is a group of positive, single-strand RNA viruses and mostly have arthropod vectors.
  • It cause a number of serious human diseases such as yellow fever, dengue, encephalitis, hepatitis C, and West Nile Fever.
• Symptoms: fever, headache, exhaustion, aches and pains in the body, nausea, vomiting, sporadic skin rash, and enlarged lymph nodes.
• Treatment: At present, there is no vaccine available.
• Uganda saw its discovery in 1937. In 2011, Kerala recorded the first West Nile fever case.

The Department of Consumer Affairs issued a warning about 'drip pricing,' where only part of the price is shown upfront, and additional charges are added later.

About Drip Pricing

• Drip pricing means showing only a fraction of an item's cost at first, and revealing the full amount during purchase.
• These added charges might include taxes or booking fees, or omitting necessary extras like internet access, which may be needed for the product or service.
• In December 2023, the Central Consumer Protection Authority (CCPA) released 'Guidelines for Prevention and Regulation of Dark Patterns, 2023' to tackle practices like drip pricing, bait and switch, disguised advertising, and false urgency.
• Such practices are considered 'unfair trade practices' under the Consumer Protection Act, 2019.

The Mumbai bench of the Income-tax Appellate Tribunal (ITAT) ruled that the difference between the proceeds from redeeming unlisted non-convertible debentures (NCDs) and their purchase cost will be considered as 'Interest income' and not 'capital gain tax'. It will be taxed under the head 'Income from other sources' for the investor.

About 

Capital Gain Tax 

• Any profit or gain that arises from the sale of a ‘capital asset’ is known as ‘income from capital gains’. Such capital gains are taxable in the year in which the transfer of the capital asset takes place. This is called capital gains tax.
• The following items do not fall under the category of capital assets:
  • Stocks, consumables, or raw materials held for business or professional purposes
  • Personal belongings like clothes and furniture used for personal use
  • Agricultural land in rural India
  • 6½% gold bonds (1977), 7% gold bonds (1980), or National Defence gold bonds (1980) issued by the central government
  • Special bearer bonds (1991)
  • Gold deposit bonds issued under the gold deposit scheme (1999) or deposit certificates issued under the Gold Monetisation Scheme, 2015, and Gold Monetisation Scheme, 2019 notified by the Central Government.

Interest Income 

• Interest income refers to the money earned by an entity for lending its funds or allowing another entity to use its money.
• It is typically considered taxable income and is reported in the income statement because it represents revenue earned by the entity.

India's remarkable economic journey in 2023 and 2024 reflects its status as a global economic powerhouse, driven by its rich cultural heritage and a population exceeding 1.4 billion.

Key Highlights: 

• GDP Growth: India's GDP surged by 8.4% in the third quarter of FY24, marking a significant increase compared to the previous year.
• Sectoral Growth: The construction sector experienced robust growth, fueled by demand for residential properties. Manufacturing and service sectors also witnessed growth, although concerns lingered over private consumption growth.
• Export Contribution: While exports contributed 22.2% to GDP, there was a marginal decline compared to the previous quarter.

Understanding GDP Growth Rate: 

• GDP growth rate reflects the pace of a country's economic expansion over a specific period, measured annually or quarterly. It signifies economic health, with positive rates indicating growth and negative rates indicating contraction or recession.

Historical GDP and growth rate of India 

*As per government of India

• GDP per Capita: GDP per capita is a metric for assessing a country's economic prosperity, calculated by dividing GDP by population. India's strong economic fundamentals, including thriving domestic demand and favorable demographic trends, contribute to its status as the fifth-largest economy globally.

India’s rank in GDP* 

Data and rankings as per International Monetary Fund (IMF)

The recent projection of inheritance tax as a tool for wealth redistribution has sparked widespread debates, prompting discussions on the rationale behind addressing high inequality through progressive taxation.

Socioeconomic and Political Implications of Inequality: 

• Disproportionate Power Dynamics: High inequality allows a few wealthy individuals to control resources, influencing socioeconomic and political decisions to their advantage.
• Impact on Growth and Rights: Unequal wealth distribution hampers growth, reduces labour income, and diverts resources away from essential rights (education), leading to increased conflict.
• Economic Consequences: Diminished earnings for the poor due to high inequality result in reduced consumption, savings, and increased indebtedness, ultimately limiting production, investments, and future growth rates.

Need for Wealth Redistribution Mechanisms:      

• Reducing Wealth Concentration: Implementing inheritance and wealth taxes reduces wealth concentration, encourages productive investments, and ensures that accumulated wealth is not merely inherited without contributing to society.
• Upholding Constitutional Mandate: Progressive taxation helps address disparities arising from accidents of birth and upholds the constitutional mandate of equality of status and opportunity, fostering a more inclusive society.
• Maximizing Revenue: Despite concerns about tax evasion among the wealthy, recent research suggests that investment in improving tax compliance can yield significant returns, making progressive taxes practical and effective.

Mains question:  

Examine the rationale behind advocating for progressive taxes as a mechanism to address high inequality.

Recent rhetoric surrounding Pakistan's purportedly lower unemployment rate than India's, coupled with discussions on India's labor market transformation and critiques of economic analyses, has sparked significant debate and scrutiny.

Challenges in Interpreting Unemployment Data:      

• Reliability: The debate on India's unemployment stems from data provided by the CMIE Consumer Pyramids Household survey, which has faced scrutiny for methodological inconsistencies and fundamental issues.
• Complexity of Labor Market Dynamics: Assertions regarding the withdrawal of millions from India's labor force overlook nuances in high-wage employment sectors where vacancies remain unfilled despite relaxed hiring standards, challenging the narrative of widespread frustration-driven exits.
• Misconceptions and Comparisons: Comparisons between India and Pakistan's labor markets often overlook nuanced factors and regional variations, neglecting the multifaceted nature of employment dynamics and the inherent complexities in drawing meaningful comparisons.

Assessment of India's Labor Market Transformation: 

• Shift in Employment Landscape: India's labor market transformation is ongoing, characterized by a transition from agrarian-based livelihoods to industrial and formal employment, albeit at varying paces across different sectors and regions.
• Diagnosis of Core Issues: While India maintains relatively low unemployment rates, the focus should shift towards addressing wage disparities, informal employment, and enhancing the quality of jobs to ensure sustainable economic growth and equitable opportunities.
• Balancing Economic Policies: Effective policy responses should prioritize addressing structural challenges such as formalization, skill development, and regulatory reforms while maintaining fiscal and monetary stability to foster inclusive growth and mitigate labor market disparities.

Mains question: 

Discuss the factors contributing to wage disparities within India's segmented labor market.

Negotiations for the Global Plastics Treaty, aimed at eliminating plastic use, face hurdles due to economic concerns and differing opinions on binding targets and consensus.

Challenges in Global Plastics Treaty Negotiations:   
       

• Economic Hurdles: Oil-producing nations like Saudi Arabia, the United States, and Russia, alongside India and Iran, resist hard deadlines to eliminate plastic production due to economic implications, hindering consensus on binding targets.
• Disagreement on Timeline and Decision-Making: African countries, backed by European nations, advocate for a timeline around 2040 for reducing plastic use, while disagreements persist on whether contentious elements should be decided by vote or consensus.
• India's Perspective and Call for Equity: India, uncomfortable with binding targets, emphasizes the importance of addressing availability, accessibility, and affordability of alternatives, echoing the principle of 'common but differentiated responsibility' seen in climate talks.

Challenges in Implementing Plastic Regulations: 

• Incomplete Enforcement of Regulations: Despite India's Plastic Waste Management Amendment Rules (2021) banning 19 categories of single-use plastics, enforcement remains inconsistent, with some outlets continuing to sell these items.
• Exclusions in Regulations: The ban does not cover plastic bottles under 200 ml and multi-layered packaging, highlighting gaps in regulatory coverage.
• Global Distribution of Plastic Pollution: Brazil, China, India, and the U.S. account for 60% of plastic waste globally, underscoring the unequal distribution of plastic pollution and the need for comprehensive measures beyond treaties.

Mains question: 

What are the challenges faced by India in negotiating the Global Plastics Treaty? Also analyse India's stance on binding targets and equitable responsibilities in addressing plastic pollution.