Indo-Pacific Economic Framework Q What is the context ? A The official launch of the Biden Administration’s Indo-Pacific Economic Framework (IPEF), the US’s de facto foreign economic policy for Asia, has been lauded and welcomed. Q What is Indo-Pacific Economic Framework ? A Seen as a means to counter China in the region, it is a U.S.-led framework for participating countries to solidifyRead more
Category Archives: Economics
What is the context ? South Asia became a major player in the global textiles and clothing market with the onset of the third wave of global production. What is status of textile industry in Bangladesh ? Bangladesh overtook India in exports in the past decade as Indian labour costs resulted in products becoming 20% more expensive. Bangladesh joined the league inRead more
South Asia, which accounts for over a quarter of the world’s population, is bolstering its transmission and distribution infrastructure to meet growing energy demand, not only by expanding power grids but also by improving renewable energy sources such as solar and hydropower. The electricity policies of South Asian countries aim at providing electricity to every household. Objective: The objective is toRead more
Global sanctions Q Why is it in News ? A A shift is taking place in the business of global dominance and hegemony, from the model of expressing force through troop presence to financial sanctions. It is led by the US and has become recently visible in the US and EU sanctions on Russia. Q How sanctions works ? Sanctions areRead more
Index of Industrial Production Q. Why is this in News? Recently, as per official estimates for the Index of Industrial Production (IIP), India’s industrial recovery slowed sharply in December 2021, with output growing just 0.4% year-on-year, and manufacturing activity contracting 0.1%. Contrary to expected growth of 2.5%, growth has come in at 0.4% which is disappointing. Q. What is the Index ofRead more
Ratings Agency Q What is the context ? Finance Secretary has accused rating agencies of “double standards” when assessing emerging markets and developing economies. Fitch, a rating agency, has termed India as the most indebted emerging market. It claimed that the latest budget did not provide clarity on fiscal consolidation plans. Q What is a Rating Agency? Rating agencies assessRead more
LIC Disinvestment Q Why is it in News ? The Union government has filed a draft document with the stock market regulator for selling 5% of its shares in the Life Insurance Corporation (LIC) of India. Q What are details of the IPO ? The IPO is a 100% OFS [offer for sale] by the Government of India and entailsRead more
Highlighting the role played by agriculture in India, sketch the scenario of investment in the Indian agricultural sector in the recent years.
Model Answer Answer: Agriculture plays a vital role in the Indian economy. Over 70 per cent of the rural households depend on agriculture. Agriculture is an important sector of Indian economy as it contributes about 17% to the total GDP and provides employment to over 60% of the population. Role of agriculture in Indian economy: Share in National Income Largest EmploymentRead more
What are the reforms brought in through GST and what can be the future reforms in indirect taxation in India.
Model Answer GST is a comprehensive indirect tax levied on manufacture, sale and consumption of goods as well as services at the national level. It has replaced all indirect taxes levied on goods and services by the Central and State Governments. It has been a milestone in the economic landscape of India. Reforms bought in by GST: It brought in more transparencyRead more
About: Maharatna Scheme Maharatna scheme was introduced by the Government of India for Central Public Sector Enterprises (CPSEs) in May, 2010. Objective: To empower mega CPSEs to expand their operations and emerge as global giants. Under the scheme, a CPSE is accorded the status of “Maharatna” company when it meets certain eligibility criteria. Concerned Department: Department of Public Enterprises, MinistryRead more
About: Credit Rating Agencies A credit rating agency is a company that assesses the financial strength of sovereign companies and government entities, especially their ability to meet principal and interest payments on their debts. The rating assigned to a given debt shows an agency’s level of confidence that the borrower will honour its debt obligations as agreed. Each agency usesRead more
In Focus: Periodic Labour Force Survey In every economy, estimation of reliable employment and unemployment data is important. The National Sample Survey Office (NSSO) was historically conducting quinquennial (once in every five years) employment and unemployment surveys as part of its National Sample Surveys. From April 2017, the NSSO has adopted a new employment and unemployment survey called Periodic Labour Force Survey (PLFS).Read more
Co-operatives: Cooperatives are organizations formed at the grassroots level by people to harness the power of collective bargaining towards a common goal. The main aim of Cooperative societies is to provide tangible benefit to all people who face similar problems. Co-operatives are owned by members—producers or consumers—and have in many ways resulted in benefits to the stakeholders. By some estimates,Read more
Digital India initiatives The initiatives under Digital India fall under three umbrellas: A.DI initiatives – Infrastructure Aadhaar Aadhaar identity platform is one of the key pillars of ‘Digital India’, under which every resident of the country is provided with a unique identity or Aadhaar number. It is a strategic policy tool for social and financial inclusion, public sector delivery reforms, managing fiscalRead more
About: Purchasing Manager Index (PMI) The Nikkei India Manufacturing PMI, compiled by IHS Markit, is based on data compiled from monthly survey responses by purchasing managers in more than 400 manufacturing companies, on various factors that represent demand conditions.Note: It is also sometime referred to as IHS Markit India Manufacturing PMI. PMI measures activity at the purchasing or input stage. It is very different from industrial production which isRead more
About Digital India The Digital India programme was launched in 2015, with a vision to transform India into a digitally empowered society and knowledge economy. It is an umbrella programme that covers multiple government Ministries and Departments. The overall coordination is done by the Department of Electronics and Information Technology (DeitY). It brings together a large number of ideas into aRead more
In Focus: Cryptocurrencies About: A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to governmentinterference or manipulation. Types of Cryptocurrency: Bitcoin: Launched in 2009, the first blockchain-basedRead more
What is Corporate Social Responsibility? It is a corporation’s initiative to assess and take responsibility for the company’s effects on environmental and social well being. It helps a company be socially accountable — to itself, its stakeholders, and the public. By practicing corporate social responsibility, companies can be conscious of the kind of impact they are having on all aspects ofRead more
About: Pradhan Mantri Kaushal Vikas Yojana (PMKVY) It is the flagship scheme for skill training of youth being implemented by the Ministry of Skill Development and Entrepreneurship (MSDE) through the National Skill Development Corporation (NSDC). The objective of the scheme is to enable a large number of Indian youth to take up industry relevant skill training that will help themRead more
Model Answer The Green Revolution in India began in the mid-1960s marking a transition from traditional agriculture in India and the introduction of high-yielding varieties of seeds and the associated agricultural techniques. The Main achievements of the Green Revolution are: Increase in Agricultural Production and productivity: The production and productivity of wheat, rice, maize and bajra has substantially increased. Less DependenceRead more
Q. Forest Fires pose a threat not only to the forest wealth but also to the entire regime. In view of this statement discuss the various adverse impacts of Forest Fires.
Model Answer Fires are a major cause of forest degradation and have wide ranging adverse ecological, economic and social impacts including: Effects of forest fire: Loss of valuable timber resources: Forest fires cause indispensable loss to timber and deteriorate its quality. Valuable timber species like teak, sal, chir, deodar, sheesam, rosewood etc. are adversely affected by fire. However, the adhesive impactRead more
Q. What is Budget Transparency? Scratching its genesis, discuss the benefits associated with budget transparency as well as the ways through which it can be promoted in functioning of a government?
Model Answer Budgets are key documents since they lay out a government’s priorities in terms of policies and programs. Opening up budgets and democratizing the budget process gives citizens a say in policy formulation and resource allocation. Budget transparency refers to the extent and ease with which citizens can access information about and provide feedback on government revenues, allocations, andRead more
Q. Insolvency and Bankruptcy Code (IBC) has become a major savior for the banking sector. In this light discuss the impact of new Code on loan recovery and also suggest remedial measures for better implementation of the Code.
Structure of the answer: Background Introduction (about IBC) Positive impact of IBC Lacunas Suggestion and way forward Model Answer Before the passing of IBC it took an average of 4.3 years to resolve insolvency and recovery rate was 25.9% as compared to developed countries where recovery rate was 72%. The salient features are: Consolidation of various laws on insolvency. The resolution process has to beRead more
Q. Foreign direct investment (FDI) is a like double edged sword. In this light discuss the positive and negative impact of FDI in India. Also suggest suitable measures to improve FDI in India.
Structure of the answer: Introduction (using data) Positive impact of FDI Negative impact of FDI Measures to increase FDI in India Model Answer FDI is an investment made by a firm or an individual into business interest located in other countries. Unlike, portfolio investment the investor in FDI acquire foreign business asset, ownership or controlling interest in foreign company. FDI equity inflowRead more
Q. Oceans are the major sources for multiple living and non-living resources that are useful for the growth of blue economy. In this light discuss the concept of Blue economy and its importance for India.
Structure of the answer: Introduction (Blue economy) Ocean as the source for various resources Importance of blue economy Final analysis Model Answer The concept of blue economy was given by Gunter Pauli. It is the sustainable use of ocean resources for economic growth, improved livelihoods and jobs and ocean ecosystem health. Thus, it advocates the greening of ocean development for purposes of higherRead more
Q. In recent years there has been number of farmer protest around India demanding increase in Minimum support price (MSP). In this light discuss the effectiveness of MSP and need for replacing it with Price deficiency payment system.
Structure of the answer: Introduction Deficiencies in the MSP system Importance of price deficiency payment system Final analysis Model Answer MSP is the base price set by the Government and whenever the market prices fall below the announced MSPs, procurement agencies step in to procure the crop at the support price. In India, the MSP are recommended by the Commission for Agricultural Cost andRead more
Q. Recent international trend has been averse to the use of nuclear energy. In this light, discuss the reason inhibiting use of nuclear use energy. Also bring out the positive externalities arising from use of nuclear energy.
Structure of the answer: Introduction Reason for averseness to the use of nuclear energy Positive things in relation to use of nuclear energy Conclusion Model Answer Dr. APJ Abdul Kalam described nuclear power as a gateway to a prosperous future. However, World Nuclear Association has reported that nuclear electricity generation in 2017 was at its lowest level since 1999. Even, Germany has decided to closeRead more
Q. Government has promised to double farmer’s income by 2022, in this light discuss the measures taken by government to implement the same. Also suggest suitable strategies to timely and sustainable achievement of this target.
Structure of the answer: Introduction Measures taken by government Suggestion Way forward Model Answer The government has set a target of doubling farmers’ income by 2022 to overcome the distressed situation of agriculture. The situation was evident after large scale farmer’s protest in various parts of India. The reorientation of strategy was needed due to following reasons: Earlier strategy focused primarilyRead more
Q. To resolve the issue of unemployment, there is a need for multi-prong approach. In this light discuss the steps needed to resolve this long-standing issue and also mention the measures taken by the government in this regard.
Structure of the answer: Introduction Steps needed for unemployment Steps taken by the government Way forward Model Answer Unemployment is a situation where person is capable of working both physically and mentally at the existing wage rate, but does not get a job to work. As per the recent statistics unemployment rate in India rose to 7.2% in 2019. Unemployment represent itselfRead more
Q. The suburbanisation occurring at a relatively early stage of India’s urban development is creating new challenges for Indian cities. Enumerate the reasons and suggest remedies.
Approach: Brief introduction about suburbanisation phenomenon in most urbanising countries. Enumerating the reasons why it is occurring at a relatively early stage of India’s urban development. Highlight the challenges it is creating for Indian cities and suggest ways forward. Model Answer A 2013 World Bank report, “Urbanization beyond Municipal Boundaries”, found that suburban areas (or Suburbs) are generating higher economicRead more
About: Krishna Godavari basin The delta plain formed by Krishna and Godavari rivers in the state of Andhra Pradesh and the adjoining areas of Bay of Bengal is known as Krishna Godavari Basin. It is a proven hydrocarbon reserve, with an inland part that covers an area of 28,000 sq. km and an offshore (located in the sea or near the coast) part thatRead more
About: Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was enacted in 2005 providing a legal right to employment for adult members of rural households. It aims at addressing causes of chronic poverty through the ‘works’ (projects) that are undertaken, and thus ensuring sustainable development. Core objectives: Providing not less than 100 days of guaranteed wage employmentRead more
About: Foreign Exchange Reserves Foreign exchange reserves are the foreign currencies held by a country’s central bank.The reserves in India are managed by the Reserve Bank of India for the Indian government and the main component is foreign currency assets. Reserve Bank of India accumulates foreign currency reserves by purchasing from authorized dealers in open market operations. Reserve Bank of India Act andRead more
The International Energy Agency (IEA) has released a report, Global Energy Review 2020, detailing the impact of Covid-19 on global energy demands and CO2 Report Summary: Covid-19 impact on global energy demands: Decline in overall Energy demand: The IEA is forecasting a 6% decline in energy demand for the year. In absolute terms this is the largest on record. Percentage wise,Read more
Headline : The WTO’s dispute settlements mechanism is all but dead Details : In News: The World Trade Organization’s (WTO’s) dispute settlement mechanism is on the brink of collapsing. About: World Trade Organisation (WTO) In 1948, the General Agreement on Tariffs and Trade (GATT) came in as an ad hoc and provisional mechanism to enable international trade and to establishRead more
Headline : Manufacturing PMI improves Details : In News: The Nikkei India Manufacturing Purchasing Managers’ Index rose in November from October, indicating an increase in manufacturing activity November. About: Purchasing Manager Index (PMI) The Nikkei India Manufacturing PMI is based on data compiled from monthly survey responses by purchasing managers in more than 400 manufacturing companies, on various factors that represent demand conditions. PMI measures activity at the purchasingRead more
About: Core Industries, Index of Industrial Production (IIP), Core sectors and their weights in their 40.27% contribution to the calculation of IIP
Headline : Core sector output falls 1st time in 4 yrs Details : The News: The eight core sectors reported their worst decline in at least eight years, shrinking 5.8% in October. The fall is the sharpest since the start of the new data series using 2011-12 as the base year. About: Index of Industrial Production (IIP) Index of Industrial ProductionRead more
Headline : India can learn agri-policy lessons from China Editorial 25th Oct’19 FinancialExpress Details : India and China have similar challenges in agriculture: India and China are the most populous countries in the world, having a population size of 1.35 billion and 1.39 billion, respectively, in 2018. With limited arable land [about 120 million hectare (m ha) in China, and 156 mRead more
Headline : IMF members delay quota changes, agree to maintain funding Details : In News Members of the International Monetary Fund (IMF) have agreed to maintain its funding at $1 trillion but postponed changes to its voting structure. Highlights of the deal The deal will allow an extension of non-permanent, supplementary sources of funds, such as the New Arrangement to Borrow (NAB) andRead more
Headline : Explained: Why interest rates aren’t falling Details : Context for the article: This article explores why, despite significant repo rate cuts by the RBI, the interest rates in the banking system are not falling much. Rate cuts by the RBI: Since February, the Reserve Bank of India (RBI) has aggressively cut the repo rate. Repo rate is the interestRead more
Headline : What impact will the thundershowers, hailstorm have on rabi crop? Details : The topic Recently, there was heavy rainfall and hailstorms in the many areas of northern India. This articles assesses the impact of heavy rainfall and hailstorms on rabi crops. Background In early February, the National Capital Region, Punjab, Haryana, parts of Uttar Pradesh and northern Madhya Pradesh witnessedRead more
Headline : Explained: What ails the existing microcredit model Details : In News Studies suggest that the existing systems of microcredit have a limited impact on the long-term wellbeing of the recipients. Telegram: https://t.me/MrunalsEconomy www.UpscExpress.com About: Microcredit Microcredit refers to the granting of very small loans to impoverished borrowers. Rationale Loans given as microcredit are often givenRead more
Headline : Fintech committee recommends new legal framework for consumer protection Details : In News: A panel on issues related to financial technology (fintech) has recently submitted its recommendations to the Finance Ministry. The committee has suggested putting in place a comprehensive legal framework to protect consumers of digital services. What Is Financial Technology (Fintech)? Financial technology (Fintech) is used to describe newRead more
Headline : Deceleration in economy: Cyclical downswing, not a deep structural slowdown, says RBI Details : In News The Reserve Bank of India has released its annual report for the year 2018-19. The report confirms that several sectors are undergoing a deceleration in the economy. However, it states that the deceleration could turn into cyclical downturn rather than a deep structuralRead more
Headline : India’s water crisis: All stakeholders must come together Editorial 29th Aug’19 HindustanTimes Details : Water stress in India: India is home to 17% of world’s population, but has only 4% of the world’s fresh water resources. At present, 75% of Indian households do not have access to drinking water, and close to 90% of rural households have no access toRead more
Headline : Supreme Court upholds homebuyers’ rights as financial creditors under IBC Details : Why in News: The Supreme Court has upheld the validity of an amendment to the Insolvency and Bankruptcy Code (IBC) that treats homebuyers as financial creditors, thus giving homebuyers the right to take legal recourse against developers under three key laws. Background: The IBC amendment in relationRead more
Headline : RBI has done its bit, now over to the government Editorial 9th Aug’19 HindustanTimes Details : Rate cut by RBI: Inflation is within control. The economy is slowing down. RBI has lowered its growth projections for the first half of the year sharply. The RBI’s projections indicate that it expects growth to improve in the second half of the year,Read more
Headline : Market participants seek rollback of surcharge on FPIs, lower LTCG tax Details : The News: In a meeting with Finance Minister, foreign portfolio investors (FPIs) and finance industry players presented a series of proposals to revive investment sentiment. Important Terminologies: About: Dividend Tax Distribution A dividend is a return given by a company to its shareholders out of theRead more
Headline : India connects Bangladesh to Bhutan, through waterway Details : The News: In a first-ever development, Indian waterways is being used to transport cargo between 2 countries i.e. Bhutan and Bangladesh. The inland waterways vessel containing cargo from Bhutan to Bangladesh will move via River Brahmaputra ( NW 2) and the Indo Bangla Protocol Route Telegram: https://t.me/UpscExpress News Summary TheRead more
Headline : Urbanisation key to driving growth engines Editorial 3rd Aug’19 FinancialExpress Details : Development and urbanisation: Development and urbanisation are two sides of the same coin. No society in recent history remained agrarian while adequately providing for its population. Urbanisation aggregates human activity—aggregation leads to specialisation, specialisation to increased productivity. This enables greater availability of goods, delivery of services, increased wages,Read more
Headline : Explained: The new debate on defence funding Details : In News The Union Cabinet has amended the terms of reference (ToR) of the 15th Finance Commission (FC) to widen their scope. Through the change, the government has requested the FC to look into the possibility of a separate mechanism for the funding of defence and internal security. FinanceRead more
About: Purchasing Manager Index (PMI) The Nikkei India Manufacturing PMI, compiled by IHS Markit, is based on data compiled from monthly survey responses by purchasing managers in more than 400 manufacturing companies, on various factors that represent demand conditions. Note: It is also sometime referred to as IHS Markit India Manufacturing PMI. PMI measures activity at the purchasing or input stage. It is very different from industrial production whichRead more
The key features of Mumbai’s undersea tunnel, the first in India Q. What is the news? By 2023, Mumbai will be home to India’s first undersea tunnel, which will be part of the city’s Coastal Road project. Q. Where are Mumbai’s undersea tunnels being built? The twin tunnels, which have a length of 2.07 km of which a kilometre willRead more
Effects of Globalization on Indian Culture Globalisation has affected what we eat and the way we prepare food (Mcdonaldization), what we wear , purchase etc( Walmartization). There is trend toward homogenization of culture with similar food habits, dressing pattern, music, news , TV programs, movies etc. However, there is also increasing tendency toward Glocalization of Culture. Glocalization refers to mixingRead more
National Agriculture Market PM Modi recently launched an electronic mandi to help farmers sell their produce online and do away with the problems many farmers face in agricultural markets. National Agriculture Market (NAM) has been incorporated by the Department of Agriculture & Cooperation. This e-platform aims to provide more options to farmers to sell their produce and is part of implementation of theRead more
Organic Farming : – Paramparagat Krishi Vikas Yojana (PVKY): It is one of the schemes under NMSA (National Mission for Sustainable Agriculture) to promote organic farming. Under PKVY, Organic farming is promoted through cluster approach and local quality assurance systems. It is proposed to develop 10,000 clusters with a size of 20 hectare so as to increase the area 2 lakh hectare in 3 years. The assistanceRead more
Black Revolution – Petroleum Production Blue Revolution – Fish Production Brown Revolution – Leather/non-conventional(India)/Cocoa production Golden Fibre Revolution – Jute Production Golden Revolution – Fruits/Overall Horticulture development/Honey Production Green Revolution – Food grains Grey Revolution – Fertilizer Pink Revolution – Meat Production – some also refer it to prawns/onion/pharmaceuticals production Round Revolution – Potato Silver Fiber Revolution – Cotton Silver Revolution – Egg/Poultry Production White Revolution (In India: Operation Flood) – Milk/Dairy production Yellow Revolution – Oil Seeds productionRead more