GS Analyst
Daily Current Affairs

Crisil’s monthly food cost assessment shows a surge in onion, tomato prices pushed up vegetarian plate costs from a year earlier, but a 2% sequential drop pushed the plate’s price to a 7-month low; non-vegetarian plate costs slid 9% year-on-year.

1: Dimension: Inflation Trends

• Price Spikes in Vegetarian Food Items: In February, vegetarian food prices experienced a notable surge, with a 7% increase. This rise was primarily driven by significant spikes in onion and tomato prices.
• Rise in Essential Commodities: Notably, onion prices soared by 29%, while tomato prices saw an even sharper increase of 38%. Additionally, staple items such as rice and pulses, which collectively constitute 21% of the cost of a typical vegetarian meal, also witnessed significant upticks of 14% and 20%, respectively.

2: Dimension: Factors Influencing Price Changes

• Market Dynamics: The decrease in the cost of non-vegetarian meals, in contrast, can be attributed to a decline of approximately 20% in broiler prices compared to the previous fiscal year. Broiler prices play a significant role, constituting about half of the cost of a non-vegetarian meal.
• Seasonal and Regional Influences: The sequential fluctuations in food plate costs highlight the impact of seasonal and regional factors. While vegetarian plate costs decreased by 2% from January levels, non-vegetarian plate costs saw a 4% increase. This disparity can be linked to factors such as lower broiler supply and the spread of bird flu in Andhra Pradesh, alongside rising demand ahead of Ramadan.

3: Dimension: Analysis and Outlook

• Cost Mitigation Efforts: Despite the overall increase in food prices, there are instances of relief. For instance, the cost of the vegetarian meal eased from January levels due to declines in onion and potato prices. However, the prices of tomatoes and pulses remained relatively stable during this period.
  • Implications for Household Budgets: The Crisil report's insights into the average cost of preparing a meal at home offer valuable insights for households across different regions of India. Understanding these trends can aid consumers in managing their budgets effectively amidst fluctuating food prices.

India and the four-nation European Free Trade Association (EFTA), which includes Switzerland, Norway and Liechtesnstein, is likely to sigh a long-negotiated free trade agreement, aimed at increasing trade and investment flows, job creation and economic growth.

1: Dimension: Economic Impact

• Scope of the Agreement: India and the European Free Trade Association (EFTA) countries, comprising Switzerland, Finland, Norway, and Liechtenstein, are poised to sign a significant bilateral free trade agreement on March 10. The pact, known as the India-EFTA Trade and Economic Partnership Agreement (TEPA), aims to enhance trade and investment flows, spur job creation, and foster economic growth.
• Projected Investments: The TEPA is anticipated to facilitate investments amounting to $100 billion from the EFTA bloc into India over the next 15 years. This infusion of capital is expected to generate approximately one million jobs, contributing significantly to India's economic landscape.

2: Dimension: Trade Dynamics and Deficit Mitigation

• Addressing Trade Imbalances: The trade pact holds promise in addressing the substantial trade deficit that India currently experiences with the EFTA bloc. In 2023, India's exports to EFTA amounted to $1.87 billion, primarily comprising chemicals, pharmaceuticals, and apparel. In contrast, imports from EFTA totalled $20.45 billion, dominated by pearls, precious metals, and coins.
• Boosting Export Opportunities: By fostering greater market access and facilitating trade in goods and services, the TEPA is expected to bolster India's export potential to EFTA countries, thereby narrowing the trade deficit over time.

3: Dimension: Strategic Implications

• Signal for Future Engagements: The successful conclusion of negotiations and the imminent signing of the India-EFTA TEPA signal India's commitment to fostering mutually beneficial trade relationships. Furthermore, it serves as a positive precedent for ongoing FTA negotiations with other key partners, including the European Union and the United Kingdom.
• Sectoral Focus and Investment Prospects: The TEPA lays the groundwork for collaborative ventures across various sectors, including pharmaceuticals, chemicals, food processing, and engineering products. Notably, this agreement marks India's first FTA wherein commitments on investment and employment have been secured from partner nations, promising significant opportunities for economic collaboration and growth.

Defence Ministry has planned a slew of facilities at INS Jatayu, the Indian Navy’s newest base being established on Minicoy Island in Lakshadweep. In addition to INS Jatayu, new infrastructure and facilities were inaugurated at the Karwar naval base in Karnataka by Defence Minister

1: Dimension: Strategic Significance of INS Jatayu

• Strategic Upgrade: INS Jatayu, the Indian Navy's latest base on Minicoy Island in Lakshadweep, is poised to undergo significant enhancements to bolster India's security posture in the Indian Ocean region. Equipped with radars, jetties, an airfield, and BrahMos supersonic cruise missiles, INS Jatayu will serve as a crucial surveillance outpost overlooking the Arabian Sea.
• Geopolitical Context: The establishment of INS Jatayu assumes paramount importance amidst expanding Chinese naval activities in the Indian Ocean. Positioned strategically close to critical Sea Lanes of Communication (SLOC) and the Maldives, Minicoy Island emerges as a pivotal node in India's maritime security framework.

2: Dimension: Operational Capabilities and Surveillance

• Technological Arsenal: The integration of advanced radar systems and BrahMos supersonic cruise missiles at INS Jatayu will significantly augment India's surveillance capabilities, enhancing maritime domain awareness and responsiveness to potential threats. Additionally, the deployment of extended-range BrahMos missiles offers flexibility in deterring adversarial actions.
• Strategic Vision: Navy Chief Admiral R. Hari Kumar underscores the imperative of heightened surveillance amidst evolving geopolitical dynamics, emphasizing the pivotal role of INS Jatayu in safeguarding India's maritime interests. Positioned strategically at the tip of India's Exclusive Economic Zone (EEZ), INS Jatayu serves as a formidable deterrent against adversarial incursions.

3: Dimension: Infrastructure Development and Economic Implications

• Strategic Infrastructure: The expansion of Karwar naval base under Project Seabird represents a monumental leap in India's naval infrastructure development. Phase IIA of the project aims to accommodate a substantial fleet of ships and submarines, accompanied by comprehensive logistical support and residential facilities.
• Economic Stimulus: The ambitious expansion of Karwar naval base is poised to inject vitality into the local economy, with an estimated 50,000 individuals expected to reside in the naval facilities upon full operationalization. Additionally, the development of ancillary facilities such as greenfield naval air stations and civil enclaves augurs well for regional economic growth.

4: Dimension: Geopolitical Implications and Global Trade Dynamics

• Strategic Imperatives: The evolving security landscape in the Red Sea and Gulf of Aden underscores the strategic significance of naval bases such as INS Jatayu and Karwar. With over 90% of India's trade flowing through the sea, securing critical maritime routes assumes paramount importance in safeguarding national interests.
• Global Trade Dynamics: The proliferation of drone and missile attacks on commercial shipping underscores the vulnerability of global trade routes. India's concerted efforts to fortify its naval capabilities serve not only to protect its own trade interests but also contribute to the stability and security of global maritime commerce.

The Indian government's initiative to promote rooftop solar installations under the PM-Surya Ghar Muft Bijli Yojna (Prime Minister’s Rooftop Solar: Free Electricity Scheme) comes against the backdrop of escalating concerns over climate change and the urgent need to transition towards cleaner energy sources.

1: Dimension: Scheme Modifications

• Revised Subsidy Model: The ?75,000-crore PM-Surya Ghar Muft Bijli Yojna, initially intended to fully subsidize the installation of 1-3 KW solar systems in one crore households, has undergone significant alterations. The scheme now offers a subsidy covering up to 60% of the installation costs, requiring participating households to contribute the remaining amount.
• Financial Implications: Households availing the scheme's benefits will be required to make a minimum contribution, with the balance amount covered by low-interest, collateral-free loans. This strategic shift aims to foster greater consumer involvement and financial responsibility while ensuring the sustainability of the scheme.

2: Dimension: Operational Framework

• Net-Metering Mechanism: Through a system of net-metering, surplus solar power generated by households can be fed back into the grid, offsetting their electricity bills. This innovative approach not only encourages renewable energy adoption but also offers the potential for households to earn income through excess energy production.
• Enhanced Service Delivery: The revamped scheme emphasizes streamlined service delivery, leveraging digital platforms for seamless application processes and installation procedures. By minimizing bureaucratic hurdles, the scheme aims to expedite the deployment of rooftop solar systems across eligible households.

3: Dimension: Financing Mechanism and Subsidy Structure

• Collateral-Free Loans: Twelve public sector banks are set to offer collateral-free loans to eligible households seeking to install rooftop solar systems. With an interest rate marginally above the prevailing RBI repo rate, this financing mechanism aims to make solar adoption financially accessible to a wider demographic.
• Doubling of Subsidy: The scheme witnesses a substantial increase in rooftop solar subsidy rates, doubling the previous subsidy amount per kilowatt. This enhanced financial support is poised to incentivize greater uptake of rooftop solar installations, thereby accelerating India's transition towards renewable energy.

4: Dimension: Projected Impact and Future Prospects

• Scale-Up Strategy: The revised scheme targets the installation of rooftop solar systems in one crore households over the next three years, representing a significant scaling up of India's rooftop solar capacity. By expanding the reach of renewable energy infrastructure, the scheme holds the potential to substantially reduce carbon emissions and mitigate environmental impact.
• Boosting Domestic Manufacturing: By stipulating that only solar panels manufactured by the Indian industry are eligible for subsidies, the scheme aims to bolster domestic manufacturing capacity. This strategic emphasis on indigenous production aligns with broader objectives of promoting self-reliance and sustainability in the renewable energy sector.