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Types of ATM – White, Brown, Pink, Green | UPSC – IAS

Types of ATM - White, Brown, Pink, Green UPSC - IAS gk today banking

Detailed Overview of Various Types of ATMs and their working in India

Types of ATM - White, Brown, Pink, Green UPSC - IAS gk today banking

In the evolving landscape of banking in India, ATMs play a crucial role in providing convenience and accessibility to customers. Various types of ATMs have emerged to meet specific financial needs and regulatory requirements. Here’s a comprehensive look at the different types of ATMs in India:

White Label ATMs (WLAs)

White Label ATMs are operated by non-bank entities and do not display the branding of any particular bank. Instead, they are operated under the label of a non-banking financial company (NBFC) or a third-party service provider.

Key Features:

  • Ownership and Operation: Owned and managed by private entities, such as NBFCs or independent operators, with no direct association with a specific bank.
  • Regulatory Framework: Authorized under the Payment and Settlement Systems Act, 2007, by the Reserve Bank of India (RBI). These operators must obtain separate licenses from the RBI.
  • Functionality: While the ATM machines do not carry the branding of a particular bank, they allow customers of various banks to access their accounts. Cash is provided by a sponsoring bank, and transactions are facilitated through established networks.
  • Purpose: To increase ATM access in underserved areas, thereby promoting financial inclusion and offering banking services to a broader population.

Advantages:

  • Enhanced Financial Inclusion: Helps in extending banking services to remote and underserved areas.
  • Cost Efficiency for Banks: Banks can access more ATMs without investing in infrastructure, as the WLA operators handle the setup and maintenance.

Example: Tata Communications Payment Solutions Limited (Indicash) is a notable player in this segment.

Brown Label ATMs (BLAs)

Brown Label ATMs are operated where the ATM hardware and lease are owned by a third-party service provider, but cash management and connectivity to banking networks are provided by a sponsor bank.

Key Features:

  • Ownership and Operation: The service provider owns the ATM machine, arranges for its placement, and manages the infrastructure. The sponsor bank provides the cash and network connectivity.
  • Branding: These ATMs carry the branding of the sponsor bank, although they are not owned by the bank itself.
  • Regulatory Framework: The RBI is not directly involved in the operations but ensures that the banks and service providers adhere to the necessary regulations through contractual obligations.

Advantages:

  • Cost Savings: Banks can avoid the high capital expenditure associated with ATM ownership and maintenance.
  • Operational Efficiency: Allows banks to focus on their core activities while outsourcing ATM management to specialized providers.

Example: Several banks in India utilize Brown Label ATMs to expand their ATM network cost-effectively.

Green Label ATMs

Green Label ATMs are specifically designed to cater to agricultural transactions, facilitating banking services for farmers and agricultural workers.

Key Features:

  • Purpose: Focused on providing financial services related to agriculture, such as subsidies, loans, and direct benefits transfers.
  • Design and Location: Often located in rural areas and regions with high agricultural activity to ensure accessibility for farmers.
  • Special Services: May offer specialized features tailored to the needs of agricultural transactions.

Advantages:

  • Targeted Financial Inclusion: Helps in reaching the agricultural community with tailored financial products and services.
  • Improved Access: Enhances the accessibility of banking services in rural and agricultural zones.

Example: Some banks and financial institutions set up Green Label ATMs in agricultural regions to support the farming community.

Orange Label ATMs

Orange Label ATMs are dedicated to facilitating share transactions, catering to the needs of investors and traders.

Key Features:

  • Purpose: Specially designed to handle transactions related to the stock market, such as buying and selling shares.
  • Integration: Often integrated with stock exchange platforms to provide real-time transaction capabilities.
  • Location: Typically located in financial hubs and areas with high investor activity.

Advantages:

  • Enhanced Trading Facilities: Provides a convenient and direct means for investors to conduct share transactions.
  • Specialized Services: Offers features tailored to the needs of traders and investors, improving efficiency.

Example: These ATMs are less common but may be found in major financial districts and investment centers.

Yellow Label ATMs

Yellow Label ATMs are set up for e-commerce transactions, supporting online shopping and payment services.

Key Features:

  • Purpose: Facilitates transactions related to online shopping, bill payments, and other e-commerce activities.
  • Integration: Often linked with e-commerce platforms and payment gateways to support a wide range of online transactions.
  • Location: Generally placed in areas with high consumer traffic and commercial activity.

Advantages:

  • Convenience: Provides a convenient means for customers to perform e-commerce transactions without needing to use traditional online payment methods.
  • Broadened Access: Enhances the accessibility of e-commerce services to a larger audience.

Example: Some modern ATMs in urban areas are equipped with features for e-commerce transactions.

Pink Label ATMs

Pink Label ATMs are designed specifically for women, offering a safe and secure environment for female customers.

Key Features:

  • Purpose: Address safety concerns by providing ATMs monitored by security personnel to ensure women can access banking services without fear.
  • Location: Typically placed in areas where women are likely to use them, such as near women’s hostels, shopping areas, and residential neighborhoods.
  • Security: Monitored by guards and may have additional safety features to ensure a secure transaction environment.

Advantages:

  • Safety and Security: Provides a safer banking environment for women, reducing the risk of harassment and ensuring their security.
  • Improved Accessibility: Enhances convenience and safety for female customers in accessing banking services.

Example: Pink Label ATMs are part of initiatives to promote gender safety and improve access to financial services for women.

Biometric ATMs

Biometric ATMs use advanced security features, such as fingerprint or iris scanners, to authenticate users and provide access to banking services.

Key Features:

  • Security: Utilizes biometric data for user authentication, enhancing security and reducing the risk of fraud.
  • Technology: Equipped with fingerprint scanners, iris recognition, or other biometric technologies to verify the identity of the user.
  • Location: Often found in high-security areas or institutions that require enhanced security measures.

Advantages:

  • Enhanced Security: Provides a higher level of security compared to traditional PIN-based systems, reducing the risk of unauthorized access.
  • Convenience: Offers a more convenient and faster method of authentication for users.

Example: Some banks have implemented Biometric ATMs in high-security locations to offer enhanced security features.

The Evolution and Impact of ATMs in India

In recent years, the ATM landscape in India has experienced significant growth, particularly in urban areas. This expansion reflects a broader trend of digital banking adoption and financial inclusion across the country.

As more people lead busy lives, there has been a noticeable shift in banking behavior, with customers increasingly relying on ATMs for routine transactions rather than visiting bank branches. This trend is driven by the convenience and accessibility that ATMs offer, making them an essential part of India’s financial ecosystem.

Different Types of ATMs in India

India’s diverse banking needs have led to the development of various types of ATMs, each designed to serve specific purposes:

  1. White Label ATMs (WLAs): These ATMs are owned and operated by non-bank entities and are authorized by the Reserve Bank of India (RBI) under the Payment and Settlement Systems Act, 2007. WLAs do not carry the branding of any particular bank and are designed to enhance financial inclusion by offering banking services in areas where traditional bank ATMs may not be present. The cash in these ATMs is provided by a sponsor bank, and the operators earn fees from banks for ATM usage by their customers.
  2. On-Site ATMs: Located within or near bank branches, these machines are often the most secure and are directly managed by the bank.
  3. Brown Label ATMs (BLAs): In the Brown Label ATM model, the ATM hardware and lease are owned by a service provider, while the bank (sponsor bank) manages cash and network connectivity. These ATMs display the branding of the bank but are not directly owned by them. This model allows banks to expand their ATM network without incurring the full costs associated with ATM ownership, making it a cost-effective solution.
  4. Green Label ATMs: These ATMs are specifically designed for agricultural transactions, providing farmers with easy access to banking services tailored to their needs.
  5. Orange Label ATMs: Primarily used for share transactions, these ATMs cater to investors and traders, offering specialized financial services.
  6. Off-Site ATMs: Placed in convenient locations like shopping malls, airports, or gas stations, these ATMs provide accessibility outside of bank premises.
  7. Yellow Label ATMs: Set up for e-commerce purposes, Yellow Label ATMs support online shopping and payment services, reflecting the growing importance of digital commerce in India.
  8. Pink Label ATMs: These ATMs are designed exclusively for women and are monitored by security personnel to ensure safety. The primary goal of Pink Label ATMs is to reduce the time women spend waiting in line and provide a secure environment for banking transactions.
  9. Cash Dispenser ATMs: Simpler machines that only allow cash withdrawals and balance inquiries.
  10. Biometric ATMs: Equipped with advanced security features like fingerprint and eye scanners, Biometric ATMs offer enhanced security for customers, ensuring that only the account holder can access their banking information.

Key Factors Driving the Growth of Brown Label ATMs in India

The growth of Brown Label ATMs (BLAs) in India is driven by several key factors:

  1. Cost Efficiency: Traditional ATMs require significant capital investment for purchasing and maintaining equipment. Brown Label ATMs, on the other hand, allow banks to outsource these responsibilities to specialized service providers, reducing their operational costs.
  2. Regulatory Influence: Compliance with RBI regulations can be challenging and costly for individual banks. By outsourcing ATM management to third-party providers, banks can more easily meet these regulatory requirements.
  3. Operational Streamlining: Outsourcing ATM operations allows banks to focus on their core activities, such as customer service and financial services, while the service provider handles the technical and logistical aspects of ATM management.
  4. Changing Perceptions: As the banking industry evolves, there is a growing recognition of the benefits of outsourcing ATM operations. Banks are increasingly viewing Brown Label ATMs as a modern, cost-effective way to expand their ATM networks.

Why Have Banks in India Shifted to Using Brown Label ATMs?

The shift towards Brown Label ATMs in India is driven by several factors:

  1. Cost Reduction: By leasing ATM infrastructure from third-party vendors, banks can avoid the high upfront costs associated with ATM ownership, including installation and maintenance expenses.
  2. Regulatory Compliance: Outsourcing ATM management to specialized service providers ensures that banks can efficiently meet RBI’s stringent regulations.
  3. Operational Streamlining: By delegating ATM management to third-party vendors, banks can focus on their core services, ensuring uninterrupted and up-to-date ATM operations.
  4. Technological Advancements: Service providers often bring cutting-edge technology to the table, allowing banks to offer advanced and secure ATM services without investing heavily in technology development.

Advantages of Brown Label ATMs Over Other Types of ATMs

Brown Label ATMs offer several advantages over other types of ATMs:

  1. Cost Savings: Banks save on capital and operational expenses by outsourcing ATM management to service providers.
  2. Efficient Resource Management: Banks can focus on their core operations and customer service, leaving ATM infrastructure management to experts.
  3. Scalability: Brown Label ATMs allow banks to expand their ATM networks quickly and cost-effectively.
  4. Enhanced Customer Reach: With reduced capital expenditure, banks can afford to place more ATMs in various locations, improving customer accessibility.
  5. Operational Efficiency: Specialized service providers ensure that ATMs are well-maintained and up-to-date, resulting in fewer downtimes and better customer experiences.
  6. Compliance and Security: Service providers ensure that ATMs meet the latest compliance and security standards, providing peace of mind for both banks and customers.

The Current Status and Future Outlook of Brown Label ATMs in India

Current Status: Brown Label ATMs have become a preferred solution for many banks in India. By outsourcing ATM infrastructure and management to third-party providers, banks can focus on their core banking activities while reducing operational costs.

Future Outlook: The growth of Brown Label ATMs in India is expected to accelerate in the coming years, driven by cost efficiency, regulatory factors, and the need for operational streamlining. As more banks adopt this model, the landscape of the ATM industry in India is set to change dramatically.

How Are Costs Shared in the Brown Label ATM Model?

In the Brown Label ATM model, costs are shared between the service provider and the bank:

  1. Initial Investment: The service provider handles the initial capital expenditure for setting up the ATM, including installation and hardware costs.
  2. Operational Costs: Banks compensate the service provider through a pay-per-transaction model or a fixed monthly fee. This ensures that banks only pay for the services they use.
  3. Cash Management: The service provider is responsible for stocking the ATM with cash, reducing the logistical burden on banks.
  4. Network Monitoring and Security: The service provider handles network monitoring, security, and maintenance, ensuring that the ATM operates smoothly and securely.

Key Points About the National Payments Corporation of India (NPCI)

Establishment:

    • NPCI was established in December 2008 as an initiative by the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA).

    Purpose:

      • It serves as the umbrella organization for all retail payments and settlement systems in India.
      • Aims to create a robust and efficient payment infrastructure to support and expand electronic payments in the country.

      Regulatory Framework:

        • Operates under the Payment and Settlement Systems Act, 2007.
        • Acts as a central body for facilitating secure and efficient payment systems.

        Major Initiatives of NPCI

          • Unified Payments Interface (UPI): A real-time payment system that allows users to link multiple bank accounts and perform transactions seamlessly.
          • Bharat Interface for Money (BHIM): A mobile app that simplifies digital payments and promotes financial inclusion.
          • RuPay: A domestic card payment network that supports debit, credit, and prepaid card transactions.
          • BharatQR: A QR code-based payment solution designed to enable easy and secure transactions.
          • Aadhaar Enabled Payment System (AePS): Allows users to perform transactions using their Aadhaar number, including cash withdrawals and balance inquiries.
          • National Automated Clearing House (NACH): Facilitates bulk transactions such as salaries, pensions, and utility bill payments.

          Role in ATM Management:

            • Oversees and links all ATMs in India, ensuring interoperability among various banks and financial institutions.
            • Manages the shared ATM network, allowing seamless access to ATMs across different banks.

            Operational Goals:

              • Promote financial inclusion by expanding access to banking services in rural and underserved areas.
              • Enhance the security and efficiency of payment systems through technological innovation and standardization.

              Partnerships:

                • Collaborates with banks, financial institutions, and technology providers to implement and maintain payment systems.
                • Works with government agencies to integrate payment solutions with various public services.

                Innovation and Development:

                  • Continuously works on developing new payment technologies and improving existing systems.
                  • Focuses on expanding digital payment adoption and ensuring a seamless payment experience for users.

                  Consumer Protection:

                  • Ensures compliance with security and privacy standards to protect users’ financial data and transactions.
                  • Provides mechanisms for dispute resolution and consumer support related to electronic payments.

                  Impact on the Economy:

                  • Plays a crucial role in driving the digital economy by facilitating efficient and secure financial transactions.
                  • Supports the government’s vision of a cashless economy and financial inclusion.

                    Conclusion

                    The rise of Brown Label ATMs in India reflects the banking industry’s ongoing evolution towards more cost-effective, efficient, and customer-centric solutions. By leveraging the expertise of third-party service providers, banks can expand their ATM networks, improve customer service, and maintain compliance with regulatory requirements—all while keeping operational costs in check. As the financial landscape in India continues to evolve, Brown Label ATMs are poised to play an increasingly important role in shaping the future of banking in the country.

                    Government Imposes Stock Limits on Tur and Chana Dals

                    Centre imposes stock limits on tur, chana dal to curb hoardings

                    Government Imposes Stock Limits on Tur and Chana Dals to Control Prices

                    Introduction:
                    The government recently imposed stock limits on tur and chana dals in order to prevent hoarding, speculation, and to improve affordability for consumers. This move comes as part of a series of measures taken to regulate the prices of essential commodities.

                    Imposition of Stock Limits:
                    The Centre has issued an order imposing stock limits on wholesalers, retailers, chain retailers, millers, and importers for tur and chana dals. These stock limits will be in effect until September 30, 2024. The aim is to prevent hoarding and ensure fair pricing for consumers.

                    Specific Limits:
                    Under the new order, specific stock limits have been prescribed for each category of entities. Wholesalers are allowed to stock up to 200 tonnes of tur and chana, while retailers can hold up to 5 tonnes at each outlet. Big chain retailers can stock up to 200 tonnes at their depot. Millers are allowed to hold the last 3 months of production or 25% of their annual installed capacity, whichever is higher.

                    Importers are also subject to restrictions, as they are not allowed to hold imported stock beyond 45 days from the date of customs clearance. Legal entities are required to declare their stock positions on the Department of Consumer Affairs portal. If stocks exceed the prescribed limits, they must bring them down by July 12, 2024.

                    Government’s Efforts:
                    The government has been taking proactive steps to monitor the stock positions of pulses through the stock disclosure portal. In addition to enforcing mandatory stock disclosures, officials have conducted visits to major pulses-producing states and trading hubs to ensure compliance.

                    Furthermore, the reduction of import duty on desi chana is expected to boost domestic production. This, along with increased sowing of Kharif pulses like tur and urad due to favorable monsoon predictions, is likely to bring down prices in the coming months.

                    Future Outlook:
                    The government anticipates that imports of tur from East African countries and the arrival of new chana crops from Australia will help maintain availability and affordability for consumers. These factors, combined with higher production estimates, are expected to contribute to price stability in the market.

                    Conclusion:
                    The imposition of stock limits on tur and chana dals is a strategic move by the government to curb hoarding, speculation, and ensure fair pricing for consumers. By taking proactive measures and closely monitoring the stock positions of essential commodities, the government aims to create a more equitable and affordable market environment.

                    Finance Minister Sitharaman Chairs Pre-Budget Meeting 2024

                    Union Finance Minister Nirmala Sitharaman chairs pre-budget meeting with State Finance Ministers





                    Pre-Budget Meeting Held by Union Finance Minister Nirmala Sitharaman

                    Union Finance Minister Nirmala Sitharaman chairs the pre-Budget meeting with Finance Ministers of all States and Union Territories in New Delhi on June 22, 2024.
                    | Photo Credit: PTI

                    Significance of the Pre-Budget Meeting

                    Union Finance Minister Nirmala Sitharaman chaired a pre-budget meeting with Finance Ministers of all States and Union Territories on June 22 to take suggestions for the upcoming Union Budget 2024-25.

                    Features of the Pre-Budget Meeting

                    The Union Finance Ministry began consultations on the Budget with different stakeholders a few days ago.

                    Objectives of the Pre-Budget Meeting

                    On June 19, Ms. Sitharaman chaired the first pre-Budget consultation meeting, which was attended by various stakeholders to gather input for the upcoming budget.

                    Effects of the Pre-Budget Meeting

                    Decisions and recommendations arising from the pre-budget meeting will impact the content and direction of the Union Budget 2024-25.

                    Pros and Cons

                    While the pre-budget meeting allows for valuable input from different entities, varying opinions and priorities may present challenges in finalizing the budget.

                    Fun Fact

                    Ms. Sitharaman will also chair the 53rd Goods and Services Tax (GST) Council Meeting, showcasing her active involvement in key financial matters.


                    Multiple Choice Questions

                    1. Who chaired the pre-budget meeting with Finance Ministers of all States and Union Territories on June 22, 2024?
                      A) Pankaj Chaudhary
                      B) Nirmala Sitharaman
                      C) Chief Economic Adviser
                      D) Finance Secretary

                    Correct Answer: B) Nirmala Sitharaman
                    Explanation: The passage states that Union Finance Minister Nirmala Sitharaman chaired the pre-budget meeting on June 22, 2024.

                    1. What does the Goods and Services Tax (GST) Council discuss in its meetings?
                      A) Budget allocation for different states
                      B) Administrative challenges faced by the Finance Ministry
                      C) Tax rates, policy modifications, and administrative challenges related to the GST regime
                      D) Economic development measures for Union Territories

                    Correct Answer: C) Tax rates, policy modifications, and administrative challenges related to the GST regime
                    Explanation: The passage mentions that the GST Council discusses issues related to tax rates, policy modifications, and administrative challenges of the GST regime in its meetings.

                    1. When was the Goods and Services Tax (GST) introduced in India?
                      A) July 1, 2016
                      B) July 1, 2017
                      C) July 1, 2018
                      D) July 1, 2019

                    Correct Answer: B) July 1, 2017
                    Explanation: The passage states that the Goods and Services Tax was introduced in India with effect from July 1, 2017.

                    Brief Summary | UPSC – IAS

                    Union Finance Minister Nirmala Sitharaman chaired a pre-budget meeting with Finance Ministers of all States and Union Territories to gather suggestions for the upcoming Union Budget 2024-25. She has been holding consultations with various stakeholders, including economists, finance experts, and industry bodies. In addition to the pre-budget meeting, Sitharaman also chaired the 53rd Goods and Services Tax (GST) Council Meeting with State Finance Ministers in attendance. The GST Council plays a crucial role in shaping India’s indirect tax system, discussing issues regarding tax rates, policy modifications, and administrative challenges. The decisions and recommendations from this meeting are closely watched by stakeholders as they have the potential to impact taxation, trade, and the economy overall. The GST was implemented in India in July 2017, and states were assured compensation for revenue losses for five years under the GST (Compensation to States) Act, 2017.

                    Improvement Suggestions for ₹1.3 Lakh Crore Interest-Free Loan Scheme

                    States seek improvements in 50-year interest-free loan scheme







                    States Urge Centre for Improvements in Interest-Free Loan Scheme

                    States Urge Centre for Improvements in Interest-Free Loan Scheme

                    Significance

                    The 50-year interest-free loan scheme for pursuing capital investment projects is a significant initiative by the Union government to support States in their development endeavors.

                    Features

                    The scheme provides States with a substantial amount of ₹1.3 lakh crore annually for capital investment projects.

                    Objectives

                    The primary objective of the scheme is to boost infrastructure development in States and promote economic growth.

                    Effects

                    The scheme has positively impacted various sectors by enhancing the overall infrastructure and creating job opportunities in the States.

                    Pros and Cons

                    One of the pros of the scheme is that it provides States with financial assistance without any interest burden. However, some may argue that the scheme could lead to dependency on central funding in the long run.

                    Fun Fact

                    Did you know that the Scheme for Special Assistance to States for Capital Investment was first launched in 2020-21?

                    States have urged the Centre to make some improvements in the 50-year interest-free loan scheme for pursuing capital investment projects, under which the Union government has proposed to give them ₹1.3 lakh crore this year, the same amount as 2023-24.

                    Ministers from States made suggestions related to the ‘Scheme for Special Assistance to States for Capital Investment’, during pre-Budget consultations chaired by Union Finance Minister Nirmala Sitharaman on June 22.

                    Ms. Sitharaman also heard out several suggestions from State Ministers regarding the Union Budget 2024-25 likely to be presented next month, along with requests specific to their regions, and assured them that their ideas and inputs will get “due consideration by the Union Government during the preparation of Union Budget 2024-25”.

                    Apart from Finance Ministers from several States, the meeting was attended by the Chief Ministers of Goa, Meghalaya, Mizoram, Nagaland, and Sikkim, along with the Deputy Chief Ministers of Bihar, Madhya Pradesh, Odisha, Rajasthan and Telangana.

                    “In her remarks, the Union Finance Minister underlined Union Government’s support to States through timely tax devolution, Finance Commission grants, and arrears of GST Compensation being provided for providing stimulus to growth,” the Finance Ministry said in a statement.

                    On the ‘Scheme for Special Assistance to States for Capital Investment’, Ms. Sitharaman iterated that while most of the loans under it are untied, a part of the allocation is conditional and linked to citizen-centric reforms by States and sector-specific capital projects. She requested the States to avail these loans by fulfilling those requisite criteria.


                    Multiple Choice Questions

                    1. What is the purpose of the ‘Scheme for Special Assistance to States for Capital Investment’ mentioned in the article?
                      A) To provide interest-free loans to States for pursuing capital investment projects
                      B) To provide grants to States for social welfare programs
                      C) To provide subsidies to States for agricultural development
                      D) To provide tax breaks to States for attracting foreign investment

                    Correct Answer: A) To provide interest-free loans to States for pursuing capital investment projects
                    Explanation: The scheme aims to provide interest-free loans to States for capital investment projects.

                    1. What improvements have States urged the Centre to make in the 50-year interest-free loan scheme?
                      A) Increase the loan amount
                      B) Decrease the loan duration
                      C) Provide conditional loans
                      D) Provide subsidies instead of loans

                    Correct Answer: A) Increase the loan amount
                    Explanation: States have urged the Centre to make improvements in the 50-year interest-free loan scheme by increasing the loan amount.

                    1. Who chaired the pre-Budget consultations where States made suggestions regarding the ‘Scheme for Special Assistance to States for Capital Investment’?
                      A) Chief Ministers of Goa, Meghalaya, Mizoram, Nagaland, and Sikkim
                      B) Union Finance Minister Nirmala Sitharaman
                      C) Finance Ministers from several States
                      D) Deputy Chief Ministers of Bihar, Madhya Pradesh, Odisha, Rajasthan and Telangana

                    Correct Answer: B) Union Finance Minister Nirmala Sitharaman
                    Explanation: Union Finance Minister Nirmala Sitharaman chaired the pre-Budget consultations where States made suggestions regarding the ‘Scheme for Special Assistance to States for Capital Investment’.

                    1. What is the main role of the Union Finance Minister in relation to the Union Budget 2024-25?
                      A) To allocate funds to States for capital investment projects
                      B) To hear suggestions from State Ministers and ensure they are considered in the budget preparation
                      C) To implement citizen-centric reforms in States
                      D) To provide tax devolution and Finance Commission grants

                    Correct Answer: B) To hear suggestions from State Ministers and ensure they are considered in the budget preparation
                    Explanation: The Union Finance Minister hears suggestions from State Ministers regarding the Union Budget and ensures they are considered during the preparation process.

                    1. What criteria are States required to fulfill in order to avail loans under the ‘Scheme for Special Assistance to States for Capital Investment’?
                      A) Implement social welfare programs
                      B) Link loans to citizen-centric reforms and sector-specific capital projects
                      C) Receive tax breaks from the Union Government
                      D) Submit yearly reports on capital investment projects

                    Correct Answer: B) Link loans to citizen-centric reforms and sector-specific capital projects
                    Explanation: States are required to fulfill criteria such as citizen-centric reforms and sector-specific capital projects to avail loans under the scheme mentioned.

                    Brief Summary | UPSC – IAS

                    During a pre-Budget consultation, State Ministers suggested improvements to the 50-year interest-free loan scheme for capital investment projects proposed by the Union government. Finance Minister Nirmala Sitharaman assured States that their suggestions and inputs for the upcoming Union Budget 2024-25 will be considered. The meeting included Finance Ministers from several States, as well as Chief Ministers and Deputy Chief Ministers from various regions. Sitharaman emphasized the Union Government’s support through tax devolution, Finance Commission grants, and arrears of GST Compensation to stimulate growth. The ‘Scheme for Special Assistance to States for Capital Investment’ offers untied loans with conditions tied to citizen-centric reforms and sector-specific projects. States were urged to fulfill these criteria to access the allocated loans.

                    GST Council Meeting: Relief for Taxpayers & Future Agenda

                    Railway services, hostel stay exempted from GST

                    Goods and Services Tax (GST) Council Meeting Highlights

                    Union Finance Minister Nirmala Sitharaman chairs the 53rd GST Council meeting in New Delhi on June 22, 2024.
                    | Photo Credit: PTI

                    Significance

                    The Goods and Services Tax (GST) Council meeting held after nine months addressed various compliance issues, exemptions, and future plans regarding the GST regime in India. This meeting signified the government’s continuous efforts to ease processes and simplify tax structures for businesses and consumers.

                    Features

                    The key features of the GST Council meeting included approval for compliance easing measures for small businesses, exemption for hostel accommodation up to ₹20,000 a month, and discussions on revising GST rates in the future. The implementation of biometric-based Aadhaar authentication for GST registrations was also highlighted as a major feature.

                    Objectives

                    The main objectives of the meeting were to provide relief to taxpayers, reduce litigation, and streamline GST processes. The Council aimed to clarify GST rates on various items, simplify registration procedures, and pave the way for future reforms in the GST structure.

                    Effects

                    The decisions taken at the GST Council meeting are expected to have a positive impact on small businesses, students requiring hostel accommodation, and overall GST compliance. The implementation of Aadhaar authentication and clarification of GST rates will also lead to a more transparent and efficient tax system.

                    Pros and Cons

                    While the meeting focused on benefits such as relief for taxpayers and clarity on GST rates, there may be challenges in implementing the proposed changes and transitioning to a revised GST structure. It is essential for all stakeholders to adapt to the new regulations smoothly to ensure successful implementation.

                    Future Agenda

                    At the next meeting, the GST Council plans to address pending procedural issues, discuss the rationalization of GST rates, and explore the future of the GST Compensation Cess. These discussions will further shape the direction of GST reforms and ensure a more efficient tax system in India.

                    Fun Fact

                    Did you know that the GST Council meeting marked the inclusion of 11 new members from various states, bringing fresh perspectives and diverse inputs to the discussions on GST reforms?

                    Multiple Choice Questions

                    1. What was the main focus of the 53rd GST Council meeting chaired by Finance Minister Nirmala Sitharaman on June 22, 2024?
                      A. Reducing income tax rates
                      B. Easing compliance for small businesses
                      C. Increasing tariffs on imports
                      D. Implementing a new sales tax system
                      Explanation: The correct answer is B. The meeting focused on approving measures to ease compliance for small businesses.
                    2. What was one of the key decisions made by the GST Council regarding hostel accommodation?
                      A. Exempting hostel accommodation worth up to ₹20,000 a month
                      B. Taxing hostel accommodation at a flat rate of 18%
                      C. Limiting hostel accommodation deductions to ₹10,000 annually
                      D. Banning hostel accommodation deductions altogether
                      Explanation: The correct answer is A. The GST Council decided to exempt hostel accommodation worth up to ₹20,000 a month.
                    3. What is the purpose of rolling out biometric-based Aadhaar authentication for all GST registrations?
                      A. To increase paperwork for businesses
                      B. To control input tax credit fraud through fake invoices
                      C. To slow down the registration process
                      D. To discourage small businesses from registering for GST
                      Explanation: The correct answer is B. The purpose of the biometric-based Aadhaar authentication is to control input tax credit fraud through fake invoices.
                    4. What items will now attract a 12% GST rate, regardless of use, material, or energy source?
                      A. Electronic gadgets
                      B. Milk cans, sprinklers, carton boxes, and solar cookers
                      C. Clothing items
                      D. Automotive parts
                      Explanation: The correct answer is B. Milk cans, sprinklers, carton boxes, and solar cookers will now attract a 12% GST rate.
                    5. What is one of the future agenda items for the GST Council after its next meeting?
                      A. Increasing GST rates for luxury goods
                      B. Addressing pending procedural issues
                      C. Eliminating GST altogether
                      D. Extending the GST Compensation Cess indefinitely
                      Explanation: The correct answer is B. One of the future agenda items for the GST Council is to address pending procedural issues.

                    Brief Summary | UPSC – IAS

                    The 53rd GST Council meeting chaired by Union Finance Minister Nirmala Sitharaman approved measures to ease compliance for small businesses, exempted hostel accommodation and Railway services, and agreed to reconvene in August to discuss the multiple tax rates under GST. The meeting, after nine months, included new members from various states. The Council also waived interest and penalties on some past tax demands and clarified GST rates on several items. It was agreed to roll out biometric-based Aadhaar authentication for all GST registrations to quicken the registration process and prevent fraudulent use of input tax credits. Future agenda items include rationalizing GST rates and addressing pending procedural issues. The Council will reconvene after the Budget session of Parliament to address these challenges.

                    Bihar Deputy CM seeks additional aid & packages from Finance Minister

                    Bihar demands additional assistance, airs grievances of pending dues in pre-Budget meeting






                    Bihar Deputy Chief Minister Samrat Choudhary’s Demands at Pre-Budget Meeting with Union Finance Minister Nirmala Sitharaman

                    Significance

                    Bihar Deputy Chief Minister Samrat Choudhary’s demands at the pre-Budget meeting with Union Finance Minister Nirmala Sitharaman hold significant importance as they highlight the financial needs and developmental requirements of the state of Bihar. By presenting these demands, Mr. Choudhary aims to address crucial areas such as infrastructure, education, healthcare, agriculture, and more, which are essential for the overall progress and prosperity of Bihar.

                    Features

                    During the meeting, Mr. Choudhary emphasized the growth performance of Bihar and highlighted the need for additional financial assistance for the state to sustain its growth momentum. He proposed various measures such as enhancing the borrowing limit, implementing ‘one nation, one tariff’ in the energy sector, expanding air connectivity, constructing metro rail in major cities, establishing government medical colleges, and increasing funds for various schemes and programs.

                    Objectives

                    The main objectives of Mr. Choudhary’s demands are to ensure adequate financial support for the development of Bihar, improve infrastructure and services in key sectors, boost economic growth, create employment opportunities, enhance educational and healthcare facilities, and overall, uplift the standard of living for the people of Bihar.

                    Effects

                    If implemented, these demands have the potential to significantly impact Bihar’s overall development and progress. Enhanced financial assistance, improved infrastructure, better healthcare and education facilities, increased agricultural support, and other proposed measures can contribute to the socio-economic advancement of the state and benefit its residents in various ways.

                    Pros and Cons

                    While the demands put forth by Mr. Choudhary are aimed at addressing the developmental needs of Bihar, there may be challenges in terms of allocation of funds, implementation of proposed projects, and ensuring the efficient utilization of resources. However, the potential benefits of these measures outweigh any possible drawbacks, as they have the capacity to bring about positive change and growth in Bihar.

                    Fun Fact

                    Despite facing challenges, Bihar has shown remarkable growth and progress in comparison to other states, as highlighted by Mr. Choudhary during the meeting. This underscores the resilience and potential of Bihar to further prosper with the right support and investments.


                    Multiple Choice Questions

                    1. What additional financial assistance did Bihar Deputy Chief Minister Samrat Choudhary demand during the pre-Budget meeting with Union Finance Minister Nirmala Sitharaman?
                      A. An increase in the borrowing limit by 2%
                      B. An additional package for Bihar
                      C. Implementation of GST across the country
                      D. Allocation of funds for new railway projects

                    Explanation: Mr. Choudhary demanded an additional package for Bihar to sustain the growth momentum and meet the State’s developmental needs.

                    1. Which States did Mr. Choudhary compare Bihar’s growth performance to in his meeting with Nirmala Sitharaman?
                      A. Maharashtra, Rajasthan, and West Bengal
                      B. Tamil Nadu, Karnataka, and Gujarat
                      C. Uttar Pradesh, Kerala, and Punjab
                      D. Andhra Pradesh, Telangana, and Odisha

                    Explanation: Mr. Choudhary compared Bihar’s growth performance to developed States like Tamil Nadu, Karnataka, and Gujarat, where Bihar recorded higher growth.

                    1. What was Mr. Choudhary’s proposal regarding the construction of metro rail in Bihar?
                      A. To build metro rail in all districts of Bihar
                      B. To focus on building metro rail in the four big cities
                      C. To prioritize building metro rail in rural areas
                      D. To establish metro rail for inter-state connectivity

                    Explanation: Mr. Choudhary proposed the construction of metro rail in the four big cities of Bihar – Gaya, Muzaffarpur, Darbhanga, and Bhagalpur to meet the increasing population and traffic demand.

                    1. What additional funds did Mr. Choudhary request for the salary of teachers under Samagra Shiksha Abhiyan (SSA)?
                      A. ₹12,500 crore
                      B. ₹17,686.25 crore
                      C. ₹5,000 crore
                      D. ₹20,000 crore

                    Explanation: Mr. Choudhary requested additional funds of ₹17,686.25 crore for the salary of teachers under Samagra Shiksha Abhiyan (SSA).

                    1. Which sector did Mr. Choudhary express concern about and demand the implementation of ‘one nation, one tariff’?
                      A. Education
                      B. Energy
                      C. Agriculture
                      D. Healthcare

                    Explanation: Mr. Choudhary expressed concern about the energy sector and demanded the implementation of ‘one nation, one tariff’ across the country.

                    Brief Summary | UPSC – IAS

                    Bihar Deputy Chief Minister Samrat Choudhary called for additional assistance and a special package for Bihar during a pre-Budget meeting with Union Finance Minister Nirmala Sitharaman in New Delhi. Choudhary highlighted Bihar’s impressive growth compared to other States and requested further financial aid to sustain this momentum. He urged for an increase in the borrowing limit, the implementation of ‘one nation, one tariff’ for energy, the construction of new airports, and the expansion of metro rail and medical colleges in the State. Additionally, Choudhary emphasized the need for increased funds for programs such as PMGSY, Samagra Shiksha Abhiyan, and NFSM. He also sought support for resolving pending dues related to MGNREGA. Overall, Choudhary advocated for increased financial support from the Central government to facilitate Bihar’s development initiatives.

                    RBI warns of inflation risks from extreme weather and oil price volatility

                    Extreme weather may pose risk to inflation, says RBI Bulletin




                    Understanding the Impact of Extreme Weather on Inflation: A Teacher’s Perspective

                    The Impact of Extreme Weather on Inflation

                    Extreme Weather

                    Extreme weather conditions may pose a risk to inflation, according to the Reserve Bank’s April Bulletin. This, along with prolonged geopolitical tensions that could keep crude oil prices volatile, is a growing concern for our economy.

                    Significance

                    The retail inflation, based on the Consumer Price Index (CPI), has eased to 4.9% in March after averaging 5.1% in the preceding two months. This can have a significant impact on monetary policy decisions and overall economic stability.

                    Features

                    • Extreme weather conditions
                    • Geopolitical tensions
                    • Volatility in crude oil prices

                    Objectives

                    The Reserve Bank mainly factors in CPI while arriving at its bi-monthly monetary policy decisions. The key interest rate has been kept unchanged at 6.5% since February 2023, citing concerns on the inflation front.

                    Effects

                    Global growth momentum has been sustained in the first quarter of 2024, and the outlook for world trade is turning positive. Treasury yields and mortgage rates are ticking up in major economies as expectations of interest rate cuts are being pared. In India, conditions are shaping up for an extension of a trend upshift in real GDP growth.

                    Pros and Cons

                    Pros: Strong investment demand, upbeat business and consumer sentiments, positive global growth momentum.

                    Cons: Potential risks of inflation due to extreme weather conditions, geopolitical tensions, and volatile crude oil prices.

                    Fun Fact

                    The views expressed in the Bulletin article are of the authors and do not represent the official views of the Reserve Bank of India.


                    Mutiple Choice Questions

                    1. What factor may pose a risk to inflation, according to the Reserve Bank’s April Bulletin?
                    a) Geopolitical tensions
                    b) Global growth momentum
                    c) Interest rate cuts
                    d) Consumer sentiment

                    Answer: a) Geopolitical tensions

                    Explanation: The Reserve Bank’s April Bulletin stated that extreme weather conditions and prolonged geopolitical tensions could pose a risk to inflation.

                    2. What was the retail inflation based on the Consumer Price Index (CPI) in March?
                    a) 4.9%
                    b) 5.1%
                    c) 6.5%
                    d) 4.5%

                    Answer: a) 4.9%

                    Explanation: The retail inflation based on the Consumer Price Index (CPI) was reported to be 4.9% in March.

                    3. What key interest rate has the Reserve Bank kept unchanged since February 2023?
                    a) 7.0%
                    b) 6.5%
                    c) 6.0%
                    d) 5.5%

                    Answer: b) 6.5%

                    Explanation: The Reserve Bank has kept the key interest rate unchanged at 6.5% since February 2023.

                    4. According to the article on ‘State of the Economy’ published in the Bulletin, what is turning positive?
                    a) Inflation
                    b) World trade
                    c) Interest rates
                    d) GDP growth

                    Answer: b) World trade

                    Explanation: The article on ‘State of the Economy’ mentioned that the outlook for world trade is turning positive.

                    5. What is the RBI’s stance on the views expressed in the Bulletin article?
                    a) They agree with all the views
                    b) They disagree with all the views
                    c) The views are of the authors and do not represent the RBI’s views
                    d) The views are endorsed by the RBI

                    Answer: c) The views are of the authors and do not represent the RBI’s views

                    Explanation: The RBI stated that the views expressed in the Bulletin article are of the authors and do not represent the views of the Reserve Bank of India.

                    Brief Summary | UPSC – IAS

                    The Reserve Bank of India’s April Bulletin highlighted that extreme weather conditions and geopolitical tensions could impact inflation. The retail based on the Consumer Price Index (CPI) eased to 4.9% in March. The RBI has kept the key interest rate unchanged at 6.5% since February. Global growth momentum has been sustained in the first quarter of 2024, and outlook for world trade is positive. India is expected to experience an increase in real GDP growth due to strong investment demand and positive business and consumer sentiments. The views in the article are of the authors and not the official position of the RBI.

                    The Significance of India’s Debt and the IMF’s Recommendations

                    India has high debt like China, but risks are moderated: IMF

                    India’s debt level has been a topic of concern, with its current debt standing at 81.9% of GDP, similar to that of China. However, a senior official from the International Monetary Fund (IMF) has stated that the risks associated with India’s debt are not as great as those of its northern neighbor. Ruud de Mooij, Deputy Director of the Fiscal Affairs Department at the IMF, has advised India to implement an ambitious fiscal consolidation plan in the medium term to bring down deficits. Let’s delve into the features, objectives, effects, and possible pros and cons of this recommendation.

                    Features

                    India’s debt, although high, is not projected to rise like China’s. In fact, it is expected to decrease slightly by 1.5% to 80.4% of GDP by 2028. One contributing factor to the moderated risks is the long maturities of the debt in India. Additionally, a significant portion of India’s debt is held domestically and denominated in domestic currency, which helps mitigate the risks associated with external debt.

                    Objectives

                    The main objective of the IMF’s recommendation is to achieve fiscal consolidation in India. By bringing down the deficits, especially the primary deficits, India can work towards stabilizing its debt level over time. This would be crucial in managing the interest expenditures that currently account for 5.4% of GDP.

                    Effects

                    Implementing a fiscal consolidation plan would have several effects on India’s economy. Firstly, it would contribute to stabilizing the debt level, which is projected to be around 80%. This would help reduce the vulnerability of the economy to debt-related risks. Secondly, it would create a more sustainable fiscal framework, ensuring that the government can continue to invest in public infrastructure, education, and healthcare. Lastly, it would enhance spending efficiency, reducing waste and enabling resources to be directed towards areas that truly need them.

                    Pros and Cons

                    While the IMF’s recommendation has its advantages, there may also be some challenges and drawbacks. Pros of implementing a fiscal consolidation plan include increased stability, improved fiscal transparency, and strengthened spending efficiency. By following this path, India can create a more sustainable and resilient economy. However, some cons could arise, such as the potential impacts of reduced government spending on certain sectors. It would be essential to carefully prioritize public investments and ensure that support is effectively targeted to those in need.

                    Fun Fact

                    India is known for its high growth rate, which is one of the factors that positively contributes to its debt-to-GDP ratio. This growth potential can help offset some risks associated with the debt and provide opportunities for managing it effectively.

                    To summarize, the IMF’s recommendation for India to adopt an ambitious fiscal consolidation plan aims to address the country’s high debt. By reducing deficits and focusing on spending efficiency, India can stabilize its debt level, enhance its fiscal framework, and allocate resources more efficiently. While challenges may arise, careful implementation of these measures can contribute to a sustainable and resilient economy for India in the long run.

                    Mutiple Choice Questions

                    1. What is the current debt-to-GDP ratio in India?
                    a) 81.9%
                    b) 83%
                    c) 75%
                    d) 5.4%

                    Explanation: According to the information provided, the current debt-to-GDP ratio in India is 81.9% (option a).

                    2. Compared to China, how does India’s current debt level compare?
                    a) India’s debt level is higher than China’s.
                    b) India’s debt level is lower than China’s.
                    c) India’s debt level is the same as China’s.
                    d) The information does not provide a comparison between India and China’s debt levels.

                    Explanation: According to the information provided, India’s debt level is very similar to China’s, with India at 81.9% of GDP and China at 83% of GDP (option c).

                    3. Which factor contributes to moderating the risks associated with India’s debt?
                    a) Long maturities of the debt.
                    b) High growth rate in India.
                    c) Domestic holdings of the debt.
                    d) All of the above.

                    Explanation: According to the information provided, all of the factors mentioned contribute to moderating the risks associated with India’s debt (option d).

                    4. What is the projected debt level in India for 2028?
                    a) 80.4%
                    b) 81.9%
                    c) 83%
                    d) The information does not provide a projected debt level for 2028.

                    Explanation: According to the information provided, the projected debt level in India for 2028 is 80.4% (option a).

                    5. What is the recommended policy advice for India in the medium term?
                    a) Increase deficits through a range of measures.
                    b) Decrease primary deficits through a range of measures.
                    c) Increase interest expenditures to 5.4% of GDP.
                    d) None of the above.

                    Explanation: According to the information provided, the recommended policy advice for India in the medium term is to have an ambitious fiscal consolidation plan that brings down the deficits, especially the primary deficits, through a range of measures (option b).

                    6. How can India usefully support fiscal consolidation?
                    a) By strengthening the tech system.
                    b) By reversing fuel tax cuts.
                    c) By prioritizing public investments.
                    d) All of the above.

                    Explanation: According to the information provided, all of the options mentioned can be useful in supporting fiscal consolidation in India (option d).

                    7. What is one area where spending efficiency can be improved in India?
                    a) Education and healthcare.
                    b) Public infrastructure.
                    c) Household subsidies.
                    d) All of the above.

                    Explanation: According to the information provided, spending efficiency can be improved in areas such as education, healthcare, and subsidies provided to households (option d).

                    8. How can the management of fiscal policies be improved in India?
                    a) By making public financial management more transparent.
                    b) By implementing a strong fiscal framework with clear fiscal rules.
                    c) By working with an independent institution that advises on fiscal policy.
                    d) All of the above.

                    Explanation: According to the information provided, all of the options mentioned can contribute to improving the management of fiscal policies in India (option d).

                    Brief Summary | UPSC – IAS

                    India’s debt levels are high, standing at 81.9% of GDP compared to China’s 83%. The country is advised to implement an ambitious fiscal consolidation plan to reduce deficits. India’s deficit is projected to be 8.8% in 2023, with a significant portion attributed to interest expenditures. However, India’s debt is not projected to rise like China’s and is expected to decrease slightly to 80.4% by 2028. Factors moderating the risks associated with India’s debt include long maturities, domestically held and denominated debts. The risk factor comes from high debts at the state level. The International Monetary Fund recommends a range of measures for fiscal consolidation, including revenue and spending reforms, and strengthening the tax system. Improving spending efficiency and fiscal policy management are also advised.

                    Opening Bank Accounts in IFSC Gift City: PAN Exemption for Non-residents and Foreign Companies

                    Did EFLU release backdated circulars during protests?

                    The Significance of Non-residents and Foreign Companies Opening Bank Accounts in IFSC Gift City

                    Introduction

                    The International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT) is a tax-neutral enclave for the financial sector. In a recent development, the Finance Ministry has amended Income Tax Rules exempting non-residents and foreign companies opening bank accounts in IFSC Gift City from the requirement of submitting PAN and instead allowing them to file a declaration. This move aims to facilitate ease of doing business and attract more foreign investment to the Indian financial market.

                    Features and Objectives

                    The exemption from furnishing PAN to open bank accounts in IFSC Gift City comes with certain conditions. Non-residents and foreign companies should file a declaration in Form 60 and ensure they have no tax liabilities in India. This initiative aims to make it easier for overseas companies, NRIs, and other non-residents to open bank accounts in IFSC banks.

                    The main objective of this relaxation is to boost the liability/deposits side as well as the retail business segment of IFSC banks. It encourages foreign companies to establish a presence in IFSC Gift City by alleviating the administrative burden of obtaining PAN, thereby promoting financial activities and transactions within the center.

                    Effects and Benefits

                    The amendment in the Income Tax Rules has several positive effects. Firstly, it enhances the ease of doing business for non-residents and foreign companies, giving them a hassle-free experience in opening bank accounts. This will attract more investments and foster a conducive environment for financial transactions.

                    Secondly, the boost in the liability/deposits side and the retail business segment of IFSC banks will contribute to the overall growth of the financial sector in IFSC Gift City. With easier access to banking services, more foreign companies and NRIs can actively participate and contribute to the Indian financial market.

                    Furthermore, this initiative aligns with the government’s vision of promoting IFSC Gift City as a global financial hub. By exempting PAN requirements, it creates a level playing field for foreign entities while adhering to international financial standards.

                    Pros:

                    • Eases the process of opening bank accounts for non-residents and foreign companies in IFSC Gift City.
                    • Attracts more foreign investment to the Indian financial market.
                    • Boosts the liability/deposits side and the retail business segment of IFSC banks.
                    • Promotes the vision of IFSC Gift City as a global financial hub.

                    Cons:

                    • May raise concerns about potential misuse of the exemption by entities with undisclosed tax liabilities.
                    • Could require additional scrutiny and monitoring to ensure compliance with tax regulations.

                    Fun Fact:

                    IFSC Gift City is the first International Financial Services Centre in India, established in 2015. It aims to function as a global financial hub on par with other major financial centers around the world.

                    Mutiple Choice Questions

                    1. What is the latest amendment made by the Finance Ministry regarding non-residents opening bank accounts in IFSC Gift City?
                    a) Non-residents and foreign companies will not have to furnish PAN while opening a bank account in IFSC Gift City.
                    b) Non-residents and foreign companies will have to submit PAN while opening a bank account in IFSC Gift City.
                    c) Non-residents and foreign companies can open a bank account in IFSC Gift City without submitting any declaration.
                    d) Non-residents and foreign companies can open a bank account in IFSC Gift City without any tax liabilities in India.

                    Explanation: The correct answer is option a) Non-residents and foreign companies will not have to furnish PAN while opening a bank account in IFSC Gift City. The Finance Ministry has amended Income Tax Rules exempting non-residents opening a bank account from the requirement of submitting PAN. Instead, they can file a declaration in Form 60 and should not have any tax liabilities in India.

                    2. What is the purpose of Gujarat International Finance Tec-City (GIFT)-IFSC?
                    a) To promote tax-neutral enclaves for the financial sector.
                    b) To facilitate tax evasion for foreign companies.
                    c) To encourage non-residents to open bank accounts in India.
                    d) To promote retail business segments in IFSC banks.

                    Explanation: The correct answer is option a) To promote tax-neutral enclaves for the financial sector. GIFT-IFSC is being promoted as a tax-neutral enclave for the financial sector, aiming to attract non-residents, foreign companies, and NRIs to open bank accounts in IFSC banks.

                    3. How will the latest relaxation in PAN requirements benefit IFSC banks?
                    a) It will boost the liability/deposits side of IFSC banks.
                    b) It will boost the retail business segment of IFSC banks.
                    c) It will encourage non-residents to open bank accounts in IFSC banks.
                    d) All of the above.

                    Explanation: The correct answer is option d) All of the above. The relaxation in PAN requirements for non-residents and foreign companies opening bank accounts in IFSC Gift City will benefit IFSC banks by boosting their liability/deposits side as well as the retail business segment. It will also encourage non-residents, NRIs, and other foreign companies to open bank accounts with IFSC banks.

                    4. Which form should a non-resident or foreign company file while opening a bank account in IFSC Gift City?
                    a) Form 60
                    b) Form 61
                    c) Form 62
                    d) Form 63

                    Explanation: The correct answer is option a) Form 60. Non-residents and foreign companies opening a bank account in IFSC Gift City should file a declaration in Form 60 according to the latest amendment made by the Finance Ministry.

                    Brief Summary | UPSC – IAS

                    Non-residents and foreign companies opening bank accounts in the IFSC Gift City will no longer be required to furnish a PAN, but instead can file a declaration. The Finance Ministry has amended Income Tax Rules to exempt non-residents from submitting a PAN and instead they can file a declaration in Form 60. This change aims to make it easier for foreign companies, NRIs, and other non-residents to open bank accounts in the IFSC. This is expected to boost the liability/deposits side as well as the retail business segment of IFSC banks.

                    Understanding India’s Retail Inflation: Significance, Features, Objectives, and Effects

                    Wholesale prices almost flat in September

                    Inflation in vegetables crashed from 26.1% in August to just 3.4% in September but inflation in cereals remained sticky at 11% and the pace of price rise in pulses accelerated from 13% in August to 16.4% last month. File | Photo Credit: Sushil Kumar Verma

                    India’s retail inflation eased from 6.83% in August to 5.02% in September, breaking a two-month streak over the tolerance threshold of the Reserve Bank of India (RBI), with the rise in food prices easing to 6.6% from almost 10%.

                    Rural inflation stood at 5.33% in September, compared to 7% in August, while the price rise faced by urban consumers moderated more sharply to 4.65% last month from 6.6% in August.

                    Amid a mixed trend in food items, inflation in vegetables crashed from 26.1% in August to just 3.4% in September. But inflation in cereals remained sticky at 11% and the pace of price rise in pulses accelerated from 13% in August to 16.4% last month.

                    Significance of Retail Inflation

                    Retail inflation is a crucial economic indicator that measures the rate at which the general level of prices for goods and services is rising and, consequently, purchasing power is falling. It impacts individuals, businesses, and the overall economy. Understanding retail inflation helps policymakers make informed decisions on monetary policy, interest rates, and fiscal measures.

                    Features of India’s Retail Inflation

                    • Inflation in vegetables significantly decreased from 26.1% in August to just 3.4% in September.
                    • Inflation in cereals remained high at 11%.
                    • Pulses experienced an increased pace of price rise, reaching 16.4% in September from 13% in August.
                    • Rural inflation lowered to 5.33% in September, while urban inflation dropped to 4.65%.

                    Objectives of Controlling Inflation

                    The primary objectives of controlling inflation are:

                    • Stabilizing prices and ensuring price stability
                    • Maintaining the purchasing power of a currency
                    • Controlling inflationary expectations
                    • Promoting a favorable business and investment environment

                    Effects of Retail Inflation

                    The effects of retail inflation can vary and impact different stakeholders:

                    • Decreased purchasing power for consumers as prices rise
                    • Increased production costs for businesses, leading to reduced profitability
                    • Potential wage pressure as employees seek higher pay to compensate for rising prices
                    • Impacts borrowing costs, interest rates, and lending policies
                    • Affects investment decisions and economic growth

                    Pros and Cons of Retail Inflation

                    While retail inflation can have both positive and negative consequences, some pros and cons include:

                    • Pros: Encourages saving, discourages excessive borrowing, and stimulates government policies to control inflation
                    • Cons: Decreases purchasing power, erodes savings, and poses challenges for businesses in planning and decision-making

                    Fun Fact about Retail Inflation

                    Did you know that countries with high inflation rates often experience economic instability and challenges in attracting foreign investments? Controlling inflation is essential for maintaining a stable economy.

                    Mutiple Choice Questions

                    1. What was the retail inflation rate in India in September?
                    a) 6.83%
                    b) 5.02%
                    c) 7.4%
                    d) 4.3%
                    Explanation: The retail inflation rate in India decreased from 6.83% in August to 5.02% in September, according to the information provided. (source: The Hindu)

                    2. What was the inflation rate in vegetables in September?
                    a) 26.1%
                    b) 3.4%
                    c) 11%
                    d) 16.4%
                    Explanation: The inflation rate in vegetables dropped from 26.1% in August to 3.4% in September, as mentioned in the passage.

                    3. What was the inflation rate in cereals in September?
                    a) 26.1%
                    b) 3.4%
                    c) 11%
                    d) 16.4%
                    Explanation: The inflation rate in cereals remained at 11% in September, as stated in the information.

                    4. What was the inflation rate in pulses in September?
                    a) 26.1%
                    b) 3.4%
                    c) 11%
                    d) 16.4%
                    Explanation: The inflation rate in pulses increased from 13% in August to 16.4% in September, according to the passage.

                    5. What was the inflation rate in fuel and light prices for households in September?
                    a) 4.3%
                    b) -0.1%
                    c) 6.6%
                    d) 7.4%
                    Explanation: The inflation rate in fuel and light prices for households decreased from 4.3% in August to -0.1% in September due to LPG rate cuts, as mentioned in the passage.

                    6. What is the average inflation projection for the current quarter by the MPC?
                    a) 5.6%
                    b) 6.2%
                    c) 6.4%
                    d) 5.4%
                    Explanation: The MPC expects inflation to average 5.6% in the current quarter, as stated in the information.

                    7. Which protein source experienced higher inflation in September?
                    a) Milk
                    b) Eggs
                    c) Meat and fish
                    d) Spices
                    Explanation: Eggs had higher inflation of 6.4% in September, while milk inflation eased slightly to 6.9%, as mentioned in the passage.

                    8. Which state had the highest inflation rate?
                    a) Rajasthan
                    b) Haryana
                    c) Chhatisgarh
                    d) Tamil Nadu
                    Explanation: Rajasthan and Haryana recorded the highest inflation rate at 6.5%, according to the information provided.

                    9. Which sector still experienced rising costs in September?
                    a) Food
                    b) Health
                    c) Personal care
                    d) Airlines and hospitality
                    Explanation: Costs of services like health and personal care were still rising in September, as mentioned in the passage.

                    10. What factors might impact inflation in the future?
                    a) Kharif harvest and El-Niño effect
                    b) Israel-Palestine crisis
                    c) Rising airline and hospitality costs
                    d) All of the above
                    Explanation: According to Madan Sabnavis, the chief economist at Bank of Baroda, factors such as the Kharif harvest, El-Niño effect, and the Israel-Palestine crisis could impact inflation going forward, as stated in the passage.

                    Brief Summary | UPSC – IAS

                    India’s retail inflation dropped from 6.83% in August to 5.02% in September, falling below the Reserve Bank of India’s tolerance threshold. Food prices rose at a slower rate, with inflation in vegetables decreasing from 26.1% in August to 3.4% in September. However, inflation in cereals remained high at 11%, while the price of pulses increased from 13% to 16.4%. The drop in inflation was attributed to the reduction in LPG cylinder prices and base effects from the previous year. Moving forward, factors such as the Kharif harvest, the El-Niño effect, and the Israel-Palestine crisis may impact inflation rates.

                    “India’s Forex Reserves Drop by $2.166 Billion, Reaching $584.742 Billion”

                    Forex reserves drop by $2.17 billion to $584.74 billion

                    The country’s forex reserves dropped by a further $2.166 billion. The country’s foreign exchange reserves declined by $2.166 billion to $584.742 billion for the week ended October 6, according to a statement by the Reserve Bank of India (RBI) on Friday.

                    Significance of Forex Reserves

                    Forex reserves play a crucial role in stabilizing a country’s economy. They serve as a buffer in times of economic crises, external shocks, or trade imbalances. By maintaining an adequate level of forex reserves, a country can ensure stability in its currency, bolster confidence among investors, and meet its external obligations.

                    Features of India’s Forex Reserves

                    India’s forex reserves comprise various components:

                    • Foreign Currency Assets (FCA): The FCA is the largest component and consists of major currencies like the US dollar, euro, pound, and yen, among others.
                    • Gold Reserves: India holds a considerable amount of gold as part of its reserves.
                    • Special Drawing Rights (SDRs): SDRs are international reserve assets created by the International Monetary Fund (IMF) and allocated to its member countries.
                    • Reserve Position with the IMF: This represents India’s holdings in the IMF.

                    Objectives of Maintaining Forex Reserves

                    The primary objectives of maintaining forex reserves are:

                    1. To ensure stability in the exchange rate of the domestic currency.
                    2. To maintain confidence in the financial system and the economy.
                    3. To meet external obligations, such as imports, debt repayments, and other international transactions.
                    4. To have a safeguard against economic uncertainties and external shocks.

                    Effects of Decreasing Forex Reserves

                    India’s declining forex reserves can have several effects:

                    • Exchange Rate Volatility: A decrease in forex reserves can lead to heightened exchange rate volatility, as the central bank has limited resources to stabilize the currency.
                    • Import Constraints: Lower reserves may limit the ability to finance imports, potentially leading to trade imbalances and supply chain disruptions.
                    • Reduced Investor Confidence: Insufficient forex reserves may undermine investor confidence in the economy, leading to capital outflows and increased borrowing costs.
                    • Inflationary Pressures: If the declining reserves result in a weaker currency, it can fuel inflationary pressures by increasing the cost of imported goods and raw materials.

                    Pros and Cons of Decreasing Forex Reserves

                    While a decline in forex reserves can pose challenges, there can be potential benefits:

                    • Export Competitiveness: A weaker currency resulting from low reserves can make exports more competitive, boosting domestic industries.
                    • Current Account Correction: Lower forex reserves may prompt a correction in the current account by encouraging import substitution and export promotion.

                    Fun Fact

                    India’s forex reserves reached an all-time high of $645 billion in October 2021. This significant reserve accumulation reflects confidence in the Indian economy and its ability to weather global economic conditions.

                    By presenting this information in a comprehensive article, you can educate your students about the importance of forex reserves, the impact of declining reserves, and the potential implications for the economy. The article also highlights the objectives, features, and effects of forex reserves, as well as the pros and cons of decreasing reserves. Additionally, the inclusion of a fun fact adds an engaging element to keep your students intrigued.

                    Mutiple Choice Questions

                    1. What was the drop in India’s forex reserves for the week ending October 6?
                    a) $3.794 billion
                    b) $2.166 billion
                    c) $584.742 billion
                    d) $586.908 billion
                    Explanation: The country’s forex reserves dropped by a further $2.166 billion to $584.742 billion for the week ended October 6.

                    2. When did India’s forex kitty reach an all-time high?
                    a) October 6, 2021
                    b) October 22, 2023
                    c) September 22, 2023
                    d) October 1, 2021
                    Explanation: India’s forex kitty reached an all-time high of $645 billion in October 2021.

                    3. What is the major component of India’s forex reserves?
                    a) Gold reserves
                    b) Foreign currency assets
                    c) Special Drawing Rights (SDRs)
                    d) Reserve position with the IMF
                    Explanation: The foreign currency assets are a major component of India’s forex reserves.

                    4. How much did the foreign currency assets decrease by for the week ending October 6?
                    a) $707 million
                    b) $519.529 billion
                    c) $42.306 billion
                    d) $15 million
                    Explanation: The foreign currency assets decreased by $707 million to $519.529 billion for the week ended October 6.

                    5. What caused the drop in India’s forex reserves?
                    a) Global developments
                    b) Rupee appreciation
                    c) Increase in gold reserves
                    d) Reserve Bank of India’s intervention
                    Explanation: The reserves took a hit as the central bank deployed the kitty to defend the rupee amid pressures caused majorly by global developments since last year.

                    Brief Summary | UPSC – IAS

                    India’s forex reserves have dropped by $2.166 billion to $584.742 billion for the week ended October 6, after reaching an all-time high of $645 billion in October 2021. The decrease is attributed to the central bank using the reserves to defend the rupee against global pressures. The country’s foreign currency assets decreased by $707 million to $519.529 billion, while gold reserves were down by $1.425 billion to $42.306 billion. The Special Drawing Rights (SDRs) decreased by $15 million to $17.923 billion, and India’s reserve position with the IMF dropped by $19 million to $4.983 billion.

                    Rising Risk of Indian Banks Unsecured Loans Amid Regulatory Tightening: UBS

                    Risk of Indian banks' unsecured retail loans turning sour is rising, UBS says

                    UBS has warned that there is an increasing risk of Indian banks’ unsecured retail loans going bad, as lending to borrowers with overdue debt has risen. Lenders in India have been expanding their unsecured lending portfolios as the pandemic-induced financial stress on households has eased. UBS has shifted to a “neutral” stance on the banking sector and predicts a greater possibility of regulatory tightening on unsecured loans. The bank has also raised its credit cost forecasts for Indian banks and downgraded its ratings on State Bank of India and Axis Bank. UBS favors HDFC Bank and IndusInd Bank.

                    Significance of the Rising Risk of Unsecured Retail Loans

                    The rising risk of unsecured retail loans in Indian banks is a cause for concern in the country’s financial sector. With lenders increasing their unsecured lending portfolios, there is a higher probability of these loans turning sour. This poses a potential threat to the stability of the banking sector, as default rates could increase and impact the overall economy. Monitoring and addressing this risk is crucial to maintain the health of the financial system.

                    Features of the Rising Risk of Unsecured Retail Loans

                    • Increased lending to borrowers with overdue debt
                    • Rise in the share of loans to borrowers with weaker risk profiles
                    • Increase in retail borrowers’ leverage
                    • Growth in outstanding receipts from credit cards and personal loans
                    • Rise in the share of lending to borrowers with overdue loans
                    • Increase in the number of borrowers with multiple retail loans
                    • Higher credit cost forecasts for Indian banks
                    • Lowered rating and price target for affected banks, such as State Bank of India and Axis Bank
                    • Preferential preference for HDFC Bank and IndusInd Bank

                    Objectives of Addressing the Rising Risk of Unsecured Retail Loans

                    The objectives of addressing the rising risk of unsecured retail loans are:

                    1. Mitigate potential financial instability caused by loan defaults
                    2. Safeguard the interests of depositors and investors
                    3. Maintain the overall health and stability of the banking sector
                    4. Promote responsible lending practices among banks
                    5. Prevent the creation of a debt burden for individuals and households

                    Effects of the Rising Risk of Unsecured Retail Loans

                    The effects of the rising risk of unsecured retail loans can include:

                    • Increased loan defaults and non-performing assets for banks
                    • Financial stress on borrowers with weaker risk profiles
                    • Potential impact on economic growth and development
                    • Decreased investor confidence in the banking sector
                    • Tighter regulatory measures and oversight on unsecured loans

                    Pros and Cons of Addressing the Rising Risk of Unsecured Retail Loans

                    Pros:

                    • Protects the stability of the banking sector
                    • Minimizes the financial impact of loan defaults
                    • Encourages responsible lending practices
                    • Prevents individuals and households from falling into excessive debt

                    Cons:

                    • Might lead to reduced access to credit for individuals with weaker credit profiles
                    • Could slow down credit growth and economic activity
                    • Increased regulatory burden on banks

                    Fun Fact

                    Did you know that India’s unsecured loans have seen a significant increase in recent years? In fiscal year 2022-23, the share of lending to borrowers with overdue loans rose to 23%, and the number of borrowers with multiple retail loans increased to 9.3%. This indicates a growing reliance on unsecured credit among Indian borrowers, which raises the importance of effectively managing the associated risks.

                    Mutiple Choice Questions

                    1. What is the main concern raised by UBS regarding Indian banks’ unsecured retail loans?
                    a) The decrease in lending portfolios
                    b) The increase in lending portfolios
                    c) The decrease in household finances
                    d) The increase in household finances

                    Explanation: UBS is concerned about the rising risk of Indian banks’ unsecured retail loans turning sour due to the increase in lending to borrowers with overdue debt.

                    2. Why have lenders in India been boosting their unsecured lending portfolios?
                    a) To decrease household finances
                    b) To increase household finances
                    c) To ease pandemic-induced stress on household finances
                    d) To monitor nascent stress in the banking sector

                    Explanation: Lenders in India have been boosting their unsecured lending portfolios to ease the pandemic-induced stress on household finances.

                    3. What did the country’s central bank announce regarding the monitoring of unsecured loans?
                    a) It is actively promoting unsecured loans
                    b) It is closely monitoring the segment for signs of nascent stress
                    c) It is decreasing regulations on unsecured loans
                    d) It is increasing regulations on unsecured loans

                    Explanation: The country’s central bank announced that it is closely monitoring the segment of unsecured loans for signs of nascent stress.

                    4. What does UBS expect in terms of regulatory tightening on unsecured loans?
                    a) It expects a decrease in regulatory tightening
                    b) It expects an increase in regulatory tightening
                    c) It expects no changes in regulatory tightening
                    d) It expects the elimination of regulatory tightening

                    Explanation: UBS sees a higher probability of regulatory tightening on unsecured loans in the banking sector.

                    5. According to UBS, what has been happening to the share of loans to borrowers with weaker risk profiles?
                    a) It has been decreasing
                    b) It has been increasing
                    c) It has been stable
                    d) It has been fluctuating

                    Explanation: According to UBS, the share of loans to borrowers with weaker risk profiles has risen along with an increase in retail borrowers’ leverage.

                    6. What is the current outstanding amount from credit cards held by the Indian banks?
                    a) ₹1.68 trillion
                    b) ₹2.18 trillion
                    c) ₹26.19 billion
                    d) ₹25.19 billion

                    Explanation: The current outstanding amount from credit cards held by the Indian banks is ₹2.18 trillion ($26.19 billion).

                    7. How much did outstanding personal loans rise in the same period?
                    a) 12%
                    b) 23%
                    c) 26%
                    d) 9.3%

                    Explanation: Outstanding personal loans rose 26% in the same period, according to central bank data.

                    8. What was the percentage of lending to borrowers with overdue loans in fiscal year 2022-23?
                    a) 12%
                    b) 23%
                    c) 9.3%
                    d) 3.9%

                    Explanation: The percentage of lending to borrowers with overdue loans rose to 23% in fiscal year 2022-23, compared to 12% in fiscal 2018-19.

                    9. What was the percentage of borrowers with multiple retail loans in fiscal year 2022-23?
                    a) 12%
                    b) 23%
                    c) 9.3%
                    d) 3.9%

                    Explanation: The percentage of borrowers with multiple retail loans rose to 9.3% in fiscal year 2022-23, compared to 3.9% in fiscal 2017-18.

                    10. Which banks are preferred by UBS?
                    a) State Bank of India and Axis Bank
                    b) HDFC Bank and IndusInd Bank
                    c) State Bank of India and HDFC Bank
                    d) Axis Bank and IndusInd Bank

                    Explanation: UBS prefers HDFC Bank and IndusInd Bank.

                    “India’s Goods Exports Decline, Imports Plummet in September”

                    Goods exports dipped, but August tally lifts outlook

                    India’s Goods Exports Decline, but Trade Performance Shows Promise

                    Goods exports dipped 2.6% from last September to hit a three-month low of $34.47 billion. File image for representation.| Photo Credit: The Hindu

                    Even though goods exports declined for the seventh time in eight months in September, India’s weak foreign trade performance so far this year appeared to be turning around as per data released by the Commerce Ministry on Friday, which included revisions worth over $5 billion to August’s trade tally.

                    While goods exports dipped 2.6% from last September to hit a three-month low of $34.47 billion, imports dropped by a sharper 15% to $53.84 billion, and were 10.4% below August’s updated import bill of $60.1 billion, which marked an 11-month high.





                    August’s goods exports were ramped up by a record $4 billion to $38.45 billion, the highest in five months and reflecting a 3.88% growth over last August. This was the first uptick after six months of contraction and Commerce Secretary Sunil Barthwal expressed hope that the second half of 2023-24 will bring sustained growth in goods exports.

                    Revised figures

                    The revised goods trade deficit in August stood at $21.65 billion, instead of the 10-month high of $24.2 billion reported earlier, and eased further to $19.37 billion in September. The overall goods deficit in the second quarter of 2023-24 is now $59.4 billion, just 5.6% over the first-quarter tally, belying economists’ fears that weaker trade balances originally reported for July and August may exacerbate the country’s current account deficit.

                    On a year-on-year basis, September’s goods trade deficit was 31% lower and narrowed the tally for the first half of the year to $115.9 billion, 17.7% lower than a year ago. This is because of a steeper 12.2% decline in imports between April and September 2023, in comparison to exports which are now down 8.8%.

                    Estimates for exports of services in September also indicated a mild 0.5% uptick, compared to a 0.4% decline in August. The final services exports numbers for these two months will be released by the Reserve Bank of India later.

                    Import bill down

                    “So far this year, oil exports have declined 17.5%, but non-oil exports have held up better and dropped only 6.3%,” said Bank of Baroda economist Aditi Gupta. However, non-oil and non-gold imports, a proxy for domestic demand, have remained weak and declined by 10% over the last year, she pointed out.

                    Top Ministry officials, however, stressed that the volumes of inbound shipments remained stable even as the year-on-year decline in prices of commodities, especially petroleum and edible oils, caused the import bill to dip in September. Lower prices also pared the value of petroleum exports, though shipment volumes were 22.1% higher between April and August.

                    Among major sectors, the exports of gems and jewelry, down 24.3% so far in 2023-24, were the worst hit, followed by chemicals (-15.8%) and textiles (-8.6%). Imports of gold, whose prices have risen 8% this year, are up 9.8%, and may rise further due to festive spending in this quarter.

                    Significance

                    The data released by the Commerce Ministry indicates a potential turnaround in India’s weak foreign trade performance. While goods exports have declined, the drop in imports was greater, resulting in a narrowing trade deficit. This indicates a possible improvement in India’s trade balance, which is crucial for the country’s economic growth and stability.

                    Features

                    The key features of the trade data include a record increase in goods exports in August, a significant decline in the goods trade deficit in September, and a steeper decline in imports compared to exports. These features suggest a positive shift in India’s trade performance.

                    Objectives

                    The objectives of analyzing and releasing trade data are to assess the health of India’s foreign trade, identify trends and patterns, and make informed policy decisions. The data helps policymakers and economists understand the impact of global and domestic factors on India’s trade performance and implement strategies to promote exports and control imports.

                    Effects

                    The decline in goods exports reflects the challenging global economic environment and the impact of the ongoing COVID-19 pandemic. However, the drop in imports suggests a slowdown in domestic demand, which can have implications for various sectors of the economy. The narrowing trade deficit is a positive development as it eases the pressure on India’s current account deficit and reduces the dependence on external financing.

                    Pros and Cons

                    Pros:
                    – The increase in goods exports in August indicates a potential recovery in India’s export-oriented industries.
                    – The decline in the goods trade deficit improves India’s trade balance and reduces the vulnerability to external shocks.
                    – The steeper decline in imports compared to exports suggests a possible moderation in domestic consumption, which can help control inflationary pressures.

                    Cons:
                    – The decline in goods exports signals a slowdown in global demand and highlights the challenges faced by Indian exporters.
                    – The weakness in non-oil and non-gold imports indicates a sluggish domestic economy and a potential slowdown in investment and consumption.
                    – The decline in exports of sectors such as gems and jewelry, chemicals, and textiles raises concerns about the competitiveness and resilience of these industries.

                    Fun Fact

                    India’s exports of petroleum products increased by 22.1% between April and August, despite lower prices. This suggests a higher volume of shipments, indicating a potential increase in global demand for Indian petroleum products.

                    Mutiple Choice Questions

                    1. What was the percentage decline in goods exports in September compared to the previous year?
                    a) 2.6%
                    b) 15%
                    c) 10.4%
                    d) 3.88%
                    Explanation: Goods exports declined by 2.6% from last September to hit a three-month low of $34.47 billion.

                    2. What was the percentage decline in imports in September compared to the previous month?
                    a) 2.6%
                    b) 15%
                    c) 10.4%
                    d) 3.88%
                    Explanation: Imports dropped by a sharper 15% to $53.84 billion in September.

                    3. What was the value of August’s goods exports after revisions?
                    a) $34.47 billion
                    b) $38.45 billion
                    c) $60.1 billion
                    d) $19.37 billion
                    Explanation: August’s goods exports were revised up by a record $4 billion to $38.45 billion, the highest in five months.

                    4. What was the revised goods trade deficit in August?
                    a) $24.2 billion
                    b) $21.65 billion
                    c) $59.4 billion
                    d) $115.9 billion
                    Explanation: The revised goods trade deficit in August stood at $21.65 billion, instead of the 10-month high of $24.2 billion reported earlier.

                    5. What was the percentage decline in imports between April and September 2023?
                    a) 12.2%
                    b) 8.8%
                    c) 6.3%
                    d) 10%
                    Explanation: Imports declined by 12.2% between April and September 2023.

                    6. What was the percentage decline in exports of gems and jewellery in 2023-24?
                    a) 24.3%
                    b) 15.8%
                    c) 8.6%
                    d) 9.8%
                    Explanation: Exports of gems and jewellery were down 24.3% so far in 2023-24.

                    7. What was the sector with the worst hit exports in 2023-24?
                    a) Gems and jewellery
                    b) Chemicals
                    c) Textiles
                    d) Gold
                    Explanation: The exports of gems and jewellery, down 24.3% so far in 2023-24, were the worst hit.

                    Note: The detailed explanations are given in the text provided.

                    Brief Summary | UPSC – IAS

                    India’s goods exports decreased by 2.6% in September, reaching a three-month low of $34.47 billion. However, the country’s weak foreign trade performance this year showed signs of improvement as imports dropped by a sharper 15% to $53.84 billion. August’s goods exports were revised up by a record $4 billion to $38.45 billion, the highest in five months, which reflected a 3.88% growth compared to the previous year. Despite this, sectors such as gems and jewellery, chemicals, and textiles continue to struggle. Oil exports declined by 17.5%, while non-oil exports only dropped by 6.3%.

                    The India-Middle East-Europe Economic Corridor (IMEC): Significance, Features, Objectives, Effects, and Pros and Cons

                    Violence in West Asia will not affect the India-Middle East-Europe-Economic Corridor, says Sitharaman

                    Union Finance Minister Nirmala Sitharaman poses for a picture with European Central Bank President Christine Lagarde and Reserve Bank of India Governor Shaktikanta Das prior to the commencement of the 2nd session of the G20 Finance Ministers and Central Bank Governors meeting in Marrakech on Friday, Oct. 13, 2023.

                    The conflict in Israel and Palestine will not dampen plans for the India-Middle East-Europe Economic Corridor (IMEC), Finance Minister Nirmala Sitharaman signalled on Friday, noting that the strife didn’t figure significantly in parleys held with G20 Finance ministers in Marrakech, Morocco.

                    However, the West Asian crisis has brought concerns about fuel, food security, and supply chains to the forefront again, Ms. Sitharaman said in a briefing after the last meeting under India’s presidency of the G20 Finance Ministers and Central Bank Governors (FMCBG) held in Marrakech on October 12 and 13.

                    Significance of the India-Middle East-Europe Economic Corridor (IMEC)

                    The India-Middle East-Europe Economic Corridor (IMEC) holds immense significance as a strategic economic project. It aims to promote trade, investment, and connectivity between India, the Middle East, and Europe. IMEC is seen as a counter to China’s ambitious Belt and Road Initiative and seeks to enhance India’s engagement with these regions to boost economic growth and cooperation.

                    Features of the India-Middle East-Europe Economic Corridor (IMEC)

                    The key features of IMEC include:

                    • Enhancing trade and investment ties between India, the Middle East, and Europe.
                    • Promoting infrastructure development and connectivity through road, rail, sea, and air routes.
                    • Facilitating the movement of goods, services, and people between the participating countries.
                    • Encouraging collaboration in sectors such as energy, agriculture, tourism, technology, and finance.

                    Objectives of the India-Middle East-Europe Economic Corridor (IMEC)

                    The main objectives of IMEC are:

                    • To strengthen economic cooperation and partnerships between India, the Middle East, and Europe.
                    • To create new opportunities for trade and investment in the region.
                    • To enhance connectivity and infrastructure development to facilitate smoother movement of goods and services.
                    • To promote cultural exchange and people-to-people ties.

                    Effects of the West Asian Crisis on IMEC

                    The West Asian crisis, particularly the conflict in Israel and Palestine, has brought concerns about fuel, food security, and supply chains to the forefront. While the crisis has not significantly affected the discussions regarding IMEC, it highlights the need for addressing these concerns to ensure the smooth functioning of the economic corridor. Instability in the region can impact the flow of goods, increase inflationary pressures, and disrupt supply chains.

                    Pros and Cons of the India-Middle East-Europe Economic Corridor (IMEC)

                    Pros:

                    • Enhanced trade and investment opportunities for participating countries.
                    • Increased connectivity and infrastructure development.
                    • Strengthened economic cooperation and partnerships.
                    • Promotion of cultural exchange and people-to-people ties.

                    Cons:

                    • Potential geopolitical challenges and conflicts affecting the smooth functioning of IMEC.
                    • Risk of overdependence on certain countries or regions.
                    • Environmental concerns related to increased economic activities and infrastructure development.

                    Fun Fact

                    The India-Middle East-Europe Economic Corridor (IMEC) is part of India’s broader approach towards engaging with regional and global partners to foster economic growth and connectivity. It reflects India’s aspiration to play a significant role in shaping the global economic landscape and promoting inclusive development.

                    Mutiple Choice Questions

                    1. According to the information provided, where did the G20 Finance Ministers and Central Bank Governors meeting take place?
                    a) India
                    b) Marrakech, Morocco
                    c) Palestine
                    d) Middle East-Europe Economic Corridor

                    Explanation: The G20 Finance Ministers and Central Bank Governors meeting took place in Marrakech, Morocco. This is mentioned in the article as the location where the last meeting was held under India’s presidency of the G20 Finance Ministers and Central Bank Governors.

                    2. What concerns were brought to the forefront by the West Asian crisis?
                    a) Investment flows in emerging markets
                    b) Food security and supply chains
                    c) High interest rates
                    d) All of the above

                    Explanation: The West Asian crisis brought concerns about fuel, food security, and supply chains to the forefront again, as mentioned in the article. Therefore, the correct answer is d) All of the above.

                    3. When will data exchanges between countries under the Crypto Asset Reporting Framework (CARF) begin?
                    a) 2023
                    b) 2025
                    c) 2027
                    d) 2030

                    Explanation: According to the information provided, data exchanges between countries under the Crypto Asset Reporting Framework (CARF) will begin by 2027.

                    4. What is the purpose of the India-Middle East-Europe Economic Corridor (IMEC)?
                    a) To solve the conflict in Israel and Palestine
                    b) To address concerns about fuel, food security, and supply chains
                    c) To counter China’s Belt and Road Initiative
                    d) To promote international tax transparency

                    Explanation: The purpose of the India-Middle East-Europe Economic Corridor (IMEC) is to counter China’s Belt and Road Initiative, as mentioned in the article. Therefore, the correct answer is c) To counter China’s Belt and Road Initiative.

                    Brief Summary | UPSC – IAS

                    Finance Minister Nirmala Sitharaman has stated that the conflict in Israel and Palestine will not hinder plans for the India-Middle East-Europe Economic Corridor (IMEC). The issue was not a significant topic of discussion during the G20 Finance Ministers meeting in Marrakech, Morocco. However, the crisis has raised concerns about fuel, food security, and supply chains. Sitharaman also mentioned that emerging markets, despite potential impact from “higher for longer” interest rates, should not be deterred from receiving investment flows. On the topic of crypto assets, the G20 members adopted a roadmap for implementation, including data exchanges between countries under the Crypto Asset Reporting Framework by 2027.

                    The Implications of India’s Import Restrictions on IT Hardware

                    U.S., Korea raise concerns on India's decision to impose import restrictions on laptops, computers

                    On August 3, India imposed import restrictions on a host of IT hardware products such as laptops, personal computers (including tablet computers), microcomputers, large or mainframe computers, and certain data processing machines with a view to boost domestic manufacturing and cut imports from countries like China. | Photo Credit: Elise Amendola

                    Significance

                    India’s decision to impose import restrictions on IT hardware products has raised concerns among major economies, including the United States, China, Korea, and Chinese Taipei. The implications of these restrictions were discussed in a meeting of the World Trade Organization (WTO), highlighting the potential impact on global trade.

                    Features

                    The import restrictions apply to a wide range of IT hardware products, including laptops, personal computers, microcomputers, large or mainframe computers, and certain data processing machines. The measures aim to promote domestic manufacturing and reduce reliance on imports, particularly from countries like China.

                    Objectives

                    The primary objective of India’s import restrictions on IT hardware is to boost domestic manufacturing in the sector. By reducing imports, India aims to create a conducive environment for the growth of Indian IT hardware manufacturers and promote self-reliance in the industry.

                    Effects

                    The implementation of these import restrictions could have significant effects on global trade dynamics. The United States expressed concerns about the impact on its exports to India, while other nations raised questions about the consistency of the measures with WTO rules. The restrictions also create uncertainty for exporters and downstream users, potentially disrupting established supply chains.

                    Pros and Cons

                    Proponents argue that import restrictions on IT hardware can stimulate domestic production, create job opportunities, and enhance national security by reducing reliance on foreign technology. However, critics raise concerns about potential trade barriers, increased costs for consumers, and the need for detailed clarifications to ensure compliance with WTO rules.

                    Fun Fact

                    Did you know that India imported personal computers, including laptops, worth $5.33 billion in 2022-23, compared to $7.37 billion in 2021-22? The import restrictions aim to narrow this import gap and promote indigenous production in the IT hardware sector.

                    Note: The HTML heading tags (h1, h2) have been added based on the provided instructions to structure the article.

                    Mutiple Choice Questions

                    1. What is the purpose of India imposing import restrictions on IT hardware products?

                    A) To increase exports to countries like China.
                    B) To boost domestic manufacturing and reduce imports from countries like China.
                    C) To decrease the availability of laptops and computers in the Indian market.
                    D) To impose licensing requirements on imports.

                    Explanation: According to the information provided, India imposed import restrictions on IT hardware products to boost domestic manufacturing and cut imports from countries like China. This means option B is correct.

                    2. Who raised concerns about India’s decision to impose import restrictions on laptops and computers?

                    A) India’s Commerce Secretary, Sunil Barthwal.
                    B) The U.S., China, Korea, and Chinese Taipei.
                    C) The World Trade Organization (WTO).
                    D) Paraguay’s Committee on Market Access.

                    Explanation: According to the information provided, the U.S., China, Korea, and Chinese Taipei raised concerns about India’s decision to impose import restrictions on laptops and computers. This means option B is correct.

                    3. What impact did the U.S. claim India’s decision would have on trade?

                    A) It would increase U.S. exports to India.
                    B) It would create uncertainty for exporters and downstream users.
                    C) It would improve bilateral trade between the U.S. and India.
                    D) It would create unnecessary trade barriers.

                    Explanation: According to the information provided, the U.S. stated that India’s decision would create uncertainty for exporters and downstream users. This means option B is correct.

                    4. When will the import restrictions imposed by India take effect?

                    A) August 3rd.
                    B) November 1st.
                    C) December 25th.
                    D) There is no specific date mentioned.

                    Explanation: According to the information provided, the import restrictions imposed by India will take effect on November 1st. This means option B is correct.

                    5. What was Korea’s concern regarding India’s proposed measures?

                    A) They were inconsistent with WTO rules and could create unnecessary trade barriers.
                    B) They would decrease imports from India.
                    C) They would only benefit countries like China.
                    D) They would impose licensing requirements on imports.

                    Explanation: According to the information provided, Korea expressed concern that India’s proposed measures seemed inconsistent with WTO rules and could create unnecessary trade barriers. This means option A is correct.

                    Brief Summary | UPSC – IAS

                    India’s decision to impose import restrictions on IT hardware products such as laptops and computers has raised concerns among the US, China, Korea, and Chinese Taipei, according to a meeting of the World Trade Organization (WTO). The US believes that the decision will impact trade, including US exports to India, and create uncertainty for exporters and downstream users. Korea stated that the measures are inconsistent with WTO rules and could create unnecessary trade barriers. India’s import restrictions, aimed at boosting domestic manufacturing and reducing reliance on countries like China, will come into effect on November 1.

                    The Impending Economic Crisis: India’s Ageing Population

                    Why India should worry about its ageing population

                    Why India Should Worry About Its Ageing Population

                    India’s policymakers have long flaunted the massive economic benefits that the country will reap from its huge youth population.

                    But while the country, with a median age of a little below 30 years, is still relatively young today, it looks all set to age quite rapidly in the coming decades, thanks primarily to a rapid decline in fertility levels.

                    An ageing population, many economists believe, could turn out to mean serious economic trouble unless India manages to grow its economy at a rapid pace in the coming decades.

                    Significance of India’s Ageing Population

                    India’s ageing population holds significant implications for the country’s economy and social fabric. It is crucial for policymakers and citizens to understand the potential challenges and opportunities that come with this demographic shift.

                    Key Features and Objectives

                    The main feature of India’s ageing population is the rapid decline in fertility rates and an increase in life expectancy. This shift poses several objectives for the government:

                    • Providing adequate social security and healthcare for the elderly population.
                    • Creating employment opportunities for older workers and harnessing their experience and skills.
                    • Implementing policies to address the changing needs and aspirations of an ageing population.

                    Effects of Ageing Population on India’s Economy

                    The effects of an ageing population on India’s economy can be both positive and negative:

                    • Positive: The older population can contribute to the economy by engaging in productive work and entrepreneurship.
                    • Negative: The increasing demand for healthcare, pensions, and social security can strain the government’s finances and put pressure on the working-age population to support the elderly.

                    Pros and Cons

                    Like any demographic shift, India’s ageing population has its pros and cons:

                    • Pros: Increased life expectancy indicates improved healthcare facilities and better living conditions.
                    • Cons: The burden on the working-age population to support the growing elderly population may lead to economic challenges.

                    Fun Fact

                    India’s elderly population is projected to grow at a rapid 41% between 2021 and 2031, and by 2050, approximately one in every five Indians will be over 60 years old. This demographic transformation highlights the need for proactive measures to address the needs and expectations of the ageing population.

                    Mutiple Choice Questions

                    1. What is the main reason for India’s ageing population?
                    a) Rapid decline in fertility levels
                    b) High mortality rate among the youth
                    c) Lack of access to healthcare for the elderly
                    d) Immigration of elderly individuals

                    Correct answer: a) Rapid decline in fertility levels

                    Explanation: The passage states that India’s ageing population is primarily due to a rapid decline in fertility levels.

                    2. What percentage is the elderly population expected to grow between 2021 and 2031?
                    a) 20%
                    b) 31%
                    c) 41%
                    d) 51%

                    Correct answer: c) 41%

                    Explanation: According to the United Nations report mentioned in the passage, India’s elderly population is estimated to grow at a rapid 41% between 2021 and 2031.

                    3. When will the number of elderly people surpass the number of children in India?
                    a) 2021
                    b) 2031
                    c) 2046
                    d) 2050

                    Correct answer: c) 2046

                    Explanation: The passage states that the number of elderly people in India will be larger than the number of children by 2046.

                    4. How many elderly persons were there for every 100 working-age persons in 2021?
                    a) 16
                    b) 25
                    c) 39
                    d) 50

                    Correct answer: a) 16

                    Explanation: According to the United Nations data mentioned in the passage, in 2021, there were 16 elderly persons for every 100 working-age persons in India.

                    5. What percentage of India’s population is expected to be over 60 years old by 2050?
                    a) 10%
                    b) 20%
                    c) 30%
                    d) 40%

                    Correct answer: b) 20%

                    Explanation: According to the United Nations, elderly people will constitute about 20% (or one in five members) of India’s population by 2050.

                    (Note: The detailed explanation provides the relevant information from the passage to support each correct answer choice)

                    Brief Summary | UPSC – IAS

                    India’s ageing population is a growing concern as fertility levels rapidly decline. The United Nations predicts that India’s elderly population will increase by 41% between 2021 and 2031, surpassing the number of children by 2046. Currently, there are 39 elderly persons for every 100 children in India. It is estimated that by 2050, 20% of India’s population will be elderly, and by the end of the century, over one-third will be above 60. Economists warn that if India does not accelerate its economic growth, an ageing population could pose serious economic challenges in the future.

                    The Significance of India’s Unified Payments Interface (UPI)

                    India's UPI system leading in cross-border payment: U.S. treasury official

                    The Advancement of UPI in Bilateral Links

                    India’s Unified Payments Interface (UPI) system has garnered attention for its role in advancing bilateral links with other countries, including Singapore and the United Arab Emirates, according to Jay Shambaugh, Under Secretary of US Treasury for International Affairs. Speaking at Harvard Law School, Shambaugh highlighted the ambition of interlinking fast payment systems multilaterally and the ongoing efforts to upgrade legacy payment systems.

                    Features and Objectives

                    The UPI system, created by the National Payments Corporation of India (NPCI), aims to provide a secure, seamless, and instant payment system to facilitate easy transactions for individuals and businesses. Its key features include:

                    • Interoperability: UPI enables customers to link multiple bank accounts to a single mobile application.
                    • Instant Transfers: Users can make real-time transfers directly from their bank accounts.
                    • Secure Authentication: UPI incorporates two-factor authentication to ensure secure transactions.
                    • Easy Integration: The UPI interface can be integrated into various payment apps, facilitating widespread adoption.

                    The objectives of UPI include:

                    • Financial Inclusion: UPI seeks to provide access to digital payment services to all sections of society.
                    • Promoting Cashless Transactions: UPI aims to reduce the dependency on cash and promote digital transactions across the country.
                    • Convenience: The system provides a simplified and user-friendly platform for making payments.

                    Effects and Benefits

                    The introduction of UPI has had several positive effects on the Indian economy and its citizens:

                    • Convenience: UPI offers a hassle-free and efficient method of transferring funds, eliminating the need for physical cash or traditional payment methods.
                    • Financial Inclusion: The system has played a crucial role in bridging the gap between the banked and unbanked population, providing easy access to digital payment services.
                    • Promoting Digital Economy: UPI has played a crucial role in driving the adoption of digital transactions, encouraging a cashless economy.
                    • Reduced Costs: The use of UPI can help individuals and businesses save on transaction costs compared to traditional banking methods.

                    Current Landscape and Future Innovations

                    The UPI system is continuously evolving to meet the changing needs of the society and adapt to technological advancements. Shambaugh mentioned that jurisdictions are exploring future states of money and payments, such as cross-border Central Bank Digital Currencies (CBDCs) and Distributed Ledger Technology (DLT)-based payments. These innovations present opportunities for designing more efficient and transparent cross-border payment systems.

                    Fun Fact

                    Did you know that as of March 2021, UPI in India recorded over 2.7 billion transactions, amounting to a total value of ₹5.04 trillion (approximately $68 billion)? This highlights the widespread adoption and popularity of UPI in the country.

                    Mutiple Choice Questions

                    1. What is the purpose of India’s Unified Payments Interface system (UPI)?
                    a) To advance bilateral links with other countries
                    b) To upgrade legacy payment systems
                    c) To facilitate cross-border payments
                    d) All of the above

                    Explanation: The purpose of India’s Unified Payments Interface system (UPI) is to advance bilateral links with other countries, upgrade legacy payment systems, and facilitate cross-border payments. This was stated by a U.S. treasury official in a speech at Harvard Law School.

                    2. Which countries are mentioned as having bilateral links with India’s UPI system?
                    a) Singapore and the United Arab Emirates
                    b) ASEAN countries
                    c) United States and China
                    d) European Union and Australia

                    Explanation: India’s Unified Payments Interface system (UPI) stands out in advancing bilateral links with Singapore and the United Arab Emirates, as mentioned by a U.S. treasury official in the given information.

                    3. What is one advantage of implementing the ISO 20022 messaging standard for payment processing?
                    a) Faster messaging
                    b) Lower payment failure rates
                    c) More data-rich transactions
                    d) All of the above

                    Explanation: Implementing the ISO 20022 messaging standard for payment processing offers advantages such as faster messaging, lower payment failure rates, and more data-rich transactions, as stated by the U.S. treasury official in the information provided.

                    4. What is the focus of the G20 Payments Roadmap?
                    a) Upgrading legacy payment systems
                    b) Cross-border CBDCs and DLT-based payments
                    c) Payment system interoperability and extension
                    d) Increasing efficiency while reducing risk

                    Explanation: The G20 Payments Roadmap focuses on payment system interoperability and extension, which ensures facilitation of better payment system connectivity and operational alignment along key corridors, according to the U.S. treasury official in the given information.

                    5. What additional features could be included in future cross-border payment systems?
                    a) Transparency of costs and institutions in the payment chain
                    b) Atomic, instantaneous settlement
                    c) Programmable payments
                    d) All of the above

                    Explanation: Additional features that could be included in future cross-border payment systems include transparency of costs and institutions in the payment chain, atomic, instantaneous settlement, and programmable payments. These features aim to increase efficiency and reduce risk, as mentioned by the U.S. treasury official in the provided information.

                    Brief Summary | UPSC – IAS

                    India’s Unified Payments Interface (UPI) system is leading the way in advancing bilateral links with other countries such as Singapore and the United Arab Emirates, according to Jay Shambaugh, Under Secretary of US Treasury for International Affairs. Shambaugh highlighted that the G20 Payments Roadmap is focusing on enhancing payment system connectivity and operational alignment along key corridors, which enables the instant transfer and settlement of payments across systems. He also noted that jurisdictions are exploring future states of money and payments, including experiments with cross-border central bank digital currencies (CBDCs) and distributed ledger technology (DLT)-based payments. Overall, the goal is to increase efficiency while reducing risk in payment systems.

                    The Ageing Crisis: Strain on Population as Elderly Women Outnumber Men – Impact and Challenges

                    No country for old women | Data

                    As life expectancy rises and birth rates decline, a nation begins to see a larger proportion of its population ageing. India will soon approach a critical juncture where the proportion of elderly will peak, placing an overwhelming strain on the working populace. Women, who generally outlive men, are at the centre of this crisis. As a high share of them are out of the labour force, they lack savings. They are more prone to health issues compared to men and often find basic tasks more challenging during their sunset years. They are also less aware of government schemes than men.

                    Significance of the Aging Crisis

                    • The share of elderly population is estimated to double to 20.8% by 2050. Also, elderly women will outnumber senior men.
                    • Close to 30% of women above 60 years have one morbidity and nearly 25% suffer from two morbidities.
                    • 30% of elderly women have difficulty getting out of bed, while 25% find it tough to take a bath and eat without assistance.
                    • Less than 25% of elderly women are aware of concession schemes given by the government for senior citizens.

                    Objectives

                    The objective is to understand the challenges faced by the aging population in India, particularly elderly women, and identify potential solutions to alleviate their hardships and improve their quality of life. By addressing these issues, the aim is to ensure that the elderly population can age with dignity and have access to the necessary support and resources.

                    Effects of the Aging Crisis

                    The effects of the aging crisis in India are manifold:

                    • An increased strain on the working population as the proportion of elderly individuals rises.
                    • Higher healthcare costs due to the prevalence of health issues among the elderly population.
                    • Greater demand for caregiving, as a significant number of elderly individuals require assistance with basic activities.
                    • Inadequate awareness of government schemes, leading to a lack of utilization of available benefits.
                    • Potential social isolation and mental health issues among the elderly population.

                    Pros and Cons of Addressing the Crisis

                    Addressing the aging crisis in India has several potential advantages:

                    • Improved quality of life for the elderly population, particularly women.
                    • Reduced burden on the working population through the implementation of appropriate support systems and policies.
                    • Enhanced social cohesion and intergenerational relationships through caregiving and support networks.

                    However, there may also be challenges in addressing the crisis:

                    • Financial implications associated with the provision of healthcare and support for the aging population.
                    • Complexity in implementing and ensuring efficient distribution of resources to those in need.
                    • The need for societal and cultural changes to foster a supportive environment for the elderly.

                    Fun Fact

                    Did you know that by the year 2100, seniors in India are projected to constitute 36% of the total population? This signifies a significant shift in demographics and highlights the urgency in addressing the challenges faced by the aging population.

                    Mutiple Choice Questions

                    1. What is the estimated proportion of elderly population by 2050?
                    a) 10.4%
                    b) 15.2%
                    c) 20.8%
                    d) 25.6%
                    Explanation: The share of elderly population is estimated to double to 20.8% by 2050 (as stated in the information).

                    2. Which gender generally outlives the other?
                    a) Men generally outlive women
                    b) Women generally outlive men
                    c) There is no significant difference in life expectancy between men and women
                    d) Both genders have an equal chance of outliving the other
                    Explanation: Women generally outlive men (as stated in the information).

                    3. What percentage of women above 60 years have at least one morbidity?
                    a) 15%
                    b) 20%
                    c) 25%
                    d) 30%
                    Explanation: Close to 30% of women above 60 years have one morbidity (as stated in the information).

                    4. What percentage of elderly women have difficulty getting out of bed?
                    a) 15%
                    b) 20%
                    c) 25%
                    d) 30%
                    Explanation: 30% of elderly women have difficulty getting out of bed (as stated in the information).

                    5. How many elderly women are aware of concession schemes given by the government for senior citizens?
                    a) Less than 10%
                    b) Less than 25%
                    c) Approximately 50%
                    d) More than 75%
                    Explanation: Less than 25% of elderly women are aware of concession schemes given by the government for senior citizens (as stated in the information).

                    Brief Summary | UPSC – IAS

                    India is facing an impending crisis as its population ages and birth rates decline. The number of elderly people is expected to double to 20.8% by 2050, with elderly women outnumbering senior men. Many elderly women are out of the labor force and lack savings, making them more vulnerable to health issues and difficulties with basic tasks. They are also less aware of government schemes for senior citizens. The prevalence of chronic health conditions is higher among elderly women, and they face challenges in performing basic activities. Additionally, there is a lack of awareness and utilization of social security schemes among elderly women in low-income households.

                    The Status of Earnings in the Indian Labour Market: A Comprehensive Analysis

                    Have earnings grown post-pandemic? - The Hindu

                    Recent data from the Periodic Labour Force Survey (PLFS) of 2022-23 has revealed positive trends in the Indian labour market, with unemployment rates falling and labour force participation rates (LFPRs) rising. However, while these numbers indicate a strengthening economy, it is essential to closely examine the condition of earnings in order to get a comprehensive understanding of the overall situation. This article delves into the data provided by the PLFS, highlighting the significance, features, objectives, effects, and potential pros and cons of the findings.

                    Significance

                    The PLFS data sheds light on the changing dynamics of the Indian labour market, particularly in terms of rural women’s participation and earnings. The significant increase in LFPRs for rural women is seen as a positive outcome, reflecting a shift towards greater inclusivity in the workforce. Analyzing the data is important to assess the impact of various factors and policies on the earning potential of different cohorts.

                    Features

                    According to the PLFS data, there has been a notable rise in self-employment for women, especially in rural areas. Unfortunately, this increase in employment seems to come at the cost of suitable working conditions, particularly for women. Additionally, while there has been an increase in wages and earnings, high inflation rates have eroded the real earnings, impacting the purchasing power of workers.

                    Objectives

                    The primary objective of this analysis is to understand the changing trends in earnings for different segments of the workforce over the period of April-June 2019 to April-June 2023. By examining the data for regular wage workers, casual workers, and the self-employed, we can assess the impact of inflation on earnings and identify any disparities between urban and rural sectors.

                    Effects

                    The findings demonstrate that only casual workers witnessed a net increase in their average real monthly earnings between 2019 and 2023. While women casual workers experienced a 13% increase in earnings, inflation led to a reduction in real earnings for most other cohorts. The impact of inflation was especially prevalent among rural women in self-employment, whose average monthly real gross earnings decreased by 7.72%.

                    Pros and Cons

                    Pros:
                    – The data indicates a significant increase in LFPRs for rural women, suggesting improved opportunities for economic empowerment.
                    – Women in regular wage work in rural areas experienced a substantial increase in earnings, reflecting progress in bridging the gender pay gap.
                    – Urban and rural self-employed men enjoyed gains in real earnings, indicating potential entrepreneurial opportunities.

                    Cons:
                    – The rise in self-employment for women has resulted in lower earnings and increased vulnerability to poor working conditions.
                    – Wage workers, both casual and regular, witnessed limited gains in real earnings, indicating a potential decline in the share of wages compared to output.

                    Fun Fact

                    Did you know that rural women in regular wage employment experienced a remarkable 27.5% increase in monthly real earnings in the quarter of April-June 2023 compared to April-June 2019? While they make up only 8% of the rural female workforce, this growth highlights the potential for progress in narrowing income disparities.

                    Rahul Menon is Associate Professor, Jindal School of Government and Public Policy, O.P. Jindal Global University

                    Mutiple Choice Questions

                    1. What is the main focus of the provided information?
                    a) The rise in unemployment rates in the Indian economy
                    b) The increase in labour force participation rates for rural women in India
                    c) The decrease in suitable working conditions for women in India
                    d) The impact of inflation on earnings in India

                    Explanation: The main focus of the provided information is the impact of inflation on earnings in India. It discusses the changes in real earnings for different cohorts of workers and highlights the effects of inflation on purchasing power.

                    2. According to the data, which cohort experienced the highest growth in real earnings between 2019 and 2023?
                    a) Rural women in self-employment
                    b) Urban men in regular wage employment
                    c) Rural women in regular wage employment
                    d) Urban women in casual work

                    Explanation: The cohort that experienced the highest growth in real earnings between 2019 and 2023 is rural women in regular wage employment. Their monthly real earnings were 27.5% higher in the quarter of April-June 2023 compared to April-June 2019.

                    3. Which cohort saw a decrease in real earnings between 2019 and 2023?
                    a) Urban men in self-employment
                    b) Rural men in casual work
                    c) Urban women in regular wage employment
                    d) Rural women in self-employment

                    Explanation: The cohort that saw a decrease in real earnings between 2019 and 2023 is rural women in self-employment. Their average monthly real gross earnings reduced by 7.72%, the largest reduction for any cohort.

                    4. What is the main concern associated with the increase in employment for women?
                    a) Lack of suitable working conditions
                    b) Decrease in labour force participation rates
                    c) Rise in unemployment rates
                    d) Inflation outpacing earnings growth

                    Explanation: The main concern associated with the increase in employment for women is the lack of suitable working conditions. The information mentions that much of the new employment generated for women has been in self-employment, which may not provide suitable working conditions.

                    5. In the year 2023, which cohort saw the highest growth in real earnings compared to 2019?
                    a) Urban women in casual work
                    b) Rural men in self-employment
                    c) Urban men in regular wage employment
                    d) Rural women in regular wage employment

                    Explanation: The cohort that saw the highest growth in real earnings in the year 2023 compared to 2019 is rural women in regular wage employment. Their monthly real earnings were 35.5% higher in the quarter of April-June 2023 compared to April-June 2019.

                    6. Which cohort experienced a decrease in real earnings in urban areas?
                    a) Urban men in self-employment
                    b) Urban women in casual work
                    c) Urban men in regular wage employment
                    d) Urban women in regular wage employment

                    Explanation: The cohort that experienced a decrease in real earnings in urban areas is urban women in regular wage employment. Their real incomes in 2023 were 2.34% lesser than in 2019.

                    7. What is the overall trend in real earnings between 2022 and 2023?
                    a) A widespread decrease in real earnings for all cohorts
                    b) Significant increase in real earnings for all cohorts
                    c) Mixed trends with some cohorts experiencing growth and others experiencing a decrease
                    d) No significant change in real earnings for any cohort

                    Explanation: The overall trend in real earnings between 2022 and 2023 is mixed, with some cohorts experiencing growth and others experiencing a decrease. Self-employed men enjoyed significant gains, while wage workers (both casual and regular) did not see extensive gains. Urban women casual workers were the only cohort that saw a decrease in real earnings.

                    8. What does the information suggest about India’s recovery from the pandemic?
                    a) India is experiencing a robust recovery with widespread income growth.
                    b) India is experiencing a K-shaped recovery with uneven income growth among different cohorts.
                    c) India is experiencing a slow recovery with declining income rates.
                    d) India’s recovery is yet to be determined based on the data provided.

                    Explanation: The information suggests that India is experiencing a K-shaped recovery with uneven income growth among different cohorts. While some cohorts saw an increase in real earnings, wage workers as a whole did not see extensive gains, indicating a reduction in the share of wages.

                    Note: The explanations provided are based on the given information and may vary depending on the context.

                    Brief Summary | UPSC – IAS

                    Recent data from the Periodic Labour Force Survey (PLFS) of 2022-23 shows positive trends in India’s labor market, with falling unemployment rates and rising labor force participation rates for rural women. However, there are concerns about the quality of employment, as much of the new jobs for women are in self-employment and unpaid family help. In terms of earnings, only casual workers saw a net increase in their average real monthly earnings. Women casual workers experienced a 13% increase, while male casual workers enjoyed a 10.33% increase. Most workers experienced lesser real earnings due to high inflation. Overall, the data suggests a K-shaped recovery with slower wage growth compared to output.

                    Geopolitic Tensions and the World Economy

                    World Bank's Banga says geopolitics pose 'serious' risk to world economy

                    During the annual Future Investment Initiative (FII) in Riyadh, World Bank President Ajay Banga expressed concerns about the impact of geopolitical tensions on the world economy. He highlighted various risks, including rising U.S. 10-year Treasury yields and the threat of future pandemics. This article examines the significance of Banga’s remarks and their implications for economic development.

                    Features and Objectives

                    Ajay Banga’s remarks shed light on the rapidly evolving nature of risks in the global economy. Geopolitical tensions, such as conflicts and wars, pose significant challenges to economic stability and development. By addressing these concerns, Banga aims to draw attention to the potential impact on economic growth and encourage global leaders to take necessary measures to mitigate risks.

                    Effects

                    Geopolitical tensions can have far-reaching effects on the world economy. They can disrupt international trade, lead to capital flight, and create uncertainty in financial markets. This can hinder investment, slow down economic growth, and increase the risk of recessions. By highlighting these effects, Banga emphasizes the need for greater attention to geopolitical factors in economic policymaking.

                    Pros and Cons

                    While the importance of addressing geopolitical tensions is universally recognized, there can be pros and cons to different approaches. On the positive side, acknowledging these risks allows policymakers to develop contingency plans and take preventive measures. However, excessive focus on geopolitics can divert attention and resources from other pressing economic issues. Therefore, a balanced approach is necessary to effectively manage risks while ensuring sustained economic development.

                    Fun Fact

                    Did you know that Ajay Banga is not only the President of the World Bank but also the CEO of Mastercard? He has been a strong advocate for financial inclusion and digital payment solutions to promote economic development in emerging markets.

                    Mutiple Choice Questions

                    1. According to World Bank President Ajay Banga, what is the biggest threat to the world economy?
                    a) Geopolitic tensions
                    b) The U.S. 10-year Treasury yield
                    c) The next pandemic
                    d) Geopolitics in the wars

                    Explanation: World Bank President Ajay Banga stated that geopolitic tensions pose the biggest threat to the world economy.

                    2. What did the U.S. 10-year Treasury yield do recently?
                    a) It crossed 5%
                    b) It reached an all-time low
                    c) It remained stable
                    d) It increased steadily

                    Explanation: The U.S. 10-year Treasury yield briefly crossed 5% recently, which is an unusual occurrence.

                    3. According to Ajay Banga, what other risk should not be ignored?
                    a) Cybersecurity threats
                    b) Climate change
                    c) Financial market volatility
                    d) The impact of wars

                    Explanation: While geopolitics pose the biggest threat, Ajay Banga mentioned that risks “tend to move around” fast, so others should not be ignored.

                    4. What recent event involving Israel and Gaza did Ajay Banga refer to?
                    a) Protest demonstrations
                    b) Natural disaster
                    c) Conflict and war
                    d) Economic cooperation

                    Explanation: Ajay Banga mentioned the recent conflict in Israel and Gaza as an example of the geopolitical tensions and wars that impact economic development.

                    5. According to Ajay Banga, what is the current state of economic development?
                    a) Better than expected in the developed world
                    b) Stagnant in most countries
                    c) Declining globally
                    d) Unpredictable and uncertain

                    Explanation: Ajay Banga stated that while economic development looks better than expected in the developed world, the current juncture is still considered very dangerous.

                    Brief Summary | UPSC – IAS

                    World Bank President Ajay Banga highlighted that geopolitic tensions are the biggest threat to the global economy, but also emphasized the need to be mindful of other risks. He mentioned the recent increase in the US 10-year Treasury yield and the potential impact of future pandemics. Banga pointed out ongoing geopolitical conflicts, such as those in Israel and Gaza, and their potential to negatively impact economic development. Despite positive economic indicators in the developed world, he believes that the world is currently in a precarious situation.

                    “Global Minimum Tax Deal Weakened, Raises Fraction of Envisaged Revenue: EU Tax Observatory’s Warning”

                    Deal to force multinational companies to pay 15% minimum tax is marred by loopholes: EU Tax Observatory

                    The Weakening of the Global Minimum Corporate Tax Agreement: A Comprehensive Analysis

                    The implementation of a global minimum corporate tax has long been discussed as a means to combat tax evasion and ensure multinational corporations pay their fair share. In 2021, an agreement was reached by more than 140 countries and territories to set a minimum global corporate tax rate of 15%. This landmark agreement, brokered by the Organization for Economic Cooperation and Development (OECD), aimed to address the practice of shifting earnings to low-tax or no-tax havens. However, a tax watchdog supported by the European Union (EU) has warned that the agreement has been weakened by loopholes, resulting in significantly reduced revenue generation. Let’s delve deeper into the significance, features, objectives, effects, pros and cons, and an interesting fact of this agreement.

                    Significance

                    The agreement on a global minimum corporate tax is significant due to several reasons. Firstly, it aims to curb the practice of multinational corporations exploiting tax havens by artificially relocating profits to jurisdictions with low or no taxation. This practice has led to substantial revenue losses for countries, estimated at $100 billion to $240 billion annually. By setting a minimum tax rate, countries seek to prevent tax base erosion and profit shifting, ensuring a fair distribution of tax burdens.

                    Features and Objectives

                    The key feature of the agreement is the establishment of a minimum global corporate tax rate of 15%. This rate serves as a threshold for multinational corporations, preventing them from taking advantage of jurisdictions with extremely low tax rates. The main objective is to create a level playing field for businesses and eliminate the race-to-the-bottom phenomenon, where countries compete by offering lower tax rates to attract corporations.

                    Effects

                    According to the EU Tax Observatory report, the weakened agreement is expected to generate only half the anticipated revenue, amounting to less than 5% of global corporate tax revenue. Loopholes have been identified, which have diminished the effectiveness of the minimum tax. For example, the agreement allows companies with tangible operations in a country to pay a tax rate lower than 15%. This provision could incentivize companies to shift production to countries with lower tax rates, exacerbating the race-to-the-bottom issue.

                    Another concern is the allowance of tax credits for green technologies, which may reduce companies’ tax rates below the minimum threshold while still complying with the agreement. This poses a risk of depleting government revenues and increasing income inequality by benefiting shareholders disproportionately.

                    Pros and Cons

                    The implementation of a global minimum corporate tax has its advantages and disadvantages. The pros include:

                    • Prevention of tax base erosion and profit shifting.
                    • Creating a fairer tax system that promotes corporate responsibility.
                    • Reducing global tax competition and ensuring a level playing field for businesses.

                    On the other hand, the cons of the agreement are:

                    • The presence of loopholes that weaken the effectiveness of the minimum tax.
                    • The potential for companies to relocate operations to countries with lower tax rates.
                    • The risk of reducing government revenues through tax credits for green technologies.

                    Fun Fact

                    The EU Tax Observatory’s report revealed that multinational corporations shifted a staggering $1 trillion, which accounted for 35% of their profits earned outside their home countries, to tax havens. Furthermore, American companies were responsible for approximately 40% of global profit shifting.

                    In conclusion, the weakening of the global minimum corporate tax agreement highlights the challenges in establishing a comprehensive solution to tax evasion. While the agreement’s objectives are commendable, the presence of loopholes raises concerns regarding its effectiveness. As the global tax landscape continues to evolve, it is crucial for countries to address these challenges and work towards a fair and sustainable global tax regime.

                    Mutiple Choice Questions

                    1. What was the purpose of the 2021 agreement reached by more than 140 countries and territories?
                    a) To implement a global minimum corporate tax of 15%
                    b) To stop multinational corporations from evading taxes through legal maneuvers
                    c) To raise revenue equal to nearly 10% of global corporate tax revenue
                    d) To ban tax havens such as Bermuda and the Cayman Islands

                    Explanation: The purpose of the 2021 agreement was to stop multinational corporations from using accounting and legal maneuvers to shift earnings to low- or no-tax havens, thereby evading taxes.

                    2. Which organization brokered the landmark agreement for a global minimum corporate tax?
                    a) European Union (EU)
                    b) Organization for Economic Cooperation and Development (OECD)
                    c) The Tax Observatory
                    d) The Paris School of Economics

                    Explanation: The Organization for Economic Cooperation and Development (OECD) brokered the landmark agreement for a global minimum corporate tax.

                    3. How much revenue was the agreement expected to raise according to the EU Tax Observatory?
                    a) Nearly 10% of global corporate tax revenue
                    b) Half of global corporate tax revenue
                    c) $100 billion to $240 billion a year
                    d) Roughly $270 billion in 2023

                    Explanation: According to the EU Tax Observatory, the agreement was expected to raise an amount equal to nearly 10% of global corporate tax revenue.

                    4. Why has the expected revenue of the minimum tax been reduced?
                    a) Due to the introduction of loopholes during the refinement of the agreement
                    b) Due to the delayed provision for imposing additional taxes on U.S. multinational companies
                    c) Due to the ability of companies with tangible businesses to pay less than 15% tax
                    d) All of the above

                    Explanation: The expected revenue of the minimum tax has been reduced due to the introduction of loopholes during the refinement of the agreement, the delayed provision for imposing additional taxes on U.S. multinational companies, and the ability of companies with tangible businesses to pay less than 15% tax.

                    5. What is a concern raised by the EU Tax Observatory regarding tax breaks for green technologies?
                    a) It depletes government revenues
                    b) It increases inequality by boosting after-tax profits of shareholders
                    c) It raises the same issues as standard tax competition
                    d) All of the above

                    Explanation: The EU Tax Observatory is concerned that tax breaks for green technologies deplete government revenues, increase inequality by boosting after-tax profits of shareholders, and raise the same issues as standard tax competition.

                    6. How much of the profits earned outside their home countries do multinational corporations shift to tax havens?
                    a) 25%
                    b) 35%
                    c) 40%
                    d) 50%

                    Explanation: Multinational corporations shift 35% of the profits they earned outside their home countries to tax havens.

                    7. What is the proposed global tax on billionaires’ wealth by the EU Tax Observatory?
                    a) 1%
                    b) 2%
                    c) 5%
                    d) 10%

                    Explanation: The EU Tax Observatory is proposing a 2% global tax on billionaires’ wealth, which it estimates would raise $250 billion annually from fewer than 3,000 people.

                    Brief Summary | UPSC – IAS

                    A tax watchdog backed by the EU has warned that an agreement involving more than 140 countries and territories to tackle tax havens and ensure that multinational corporations pay a minimum tax has been weakened by loopholes and will generate only a fraction of the intended revenue. The landmark agreement implemented a minimum global corporate tax rate of 15% to prevent companies from shifting profits to low-tax jurisdictions. However, the EU Tax Observatory report states that the weakened plan will generate less than 5% of corporate tax revenue, instead of the anticipated nearly 10%. The report estimates that the weakened agreement will raise around $136bn in 2023 instead of $270bn. Loopholes include provisions that permit companies to pay a tax rate below 15% if they have tangible businesses operating in a particular country. The agreement will now be delayed until 2026 pending the resolution of several outstanding matters.

                    “GST Authorities Serve ₹1 Lakh Crore Show Cause Notices to Online Gaming Companies”

                    Online gaming companies get ₹1 lakh crore GST show cause notices so far

                    Online Gaming Companies Issued ₹1 Lakh Crore GST Notices for Tax Evasion

                    A host of online gaming, like Dream11, and casino operator, like Delta Corp, have received GST show cause notices last month for alleged short payment of taxes. File.
                    | Photo Credit: Reuters

                    GST authorities have issued show cause notices worth ₹1 lakh crore to online gaming companies for tax evasion so far, a senior official said on October 25.

                    The official, however, said that there is no data yet of foreign gaming companies registering in India since October 1.

                    The government has amended the GST law, making it mandatory for overseas online gaming companies to register in India from October 1.

                    Significance of the GST Notices

                    The issuance of ₹1 lakh crore worth of GST notices to online gaming companies highlights the government’s efforts to crack down on tax evasion in this sector. By making it mandatory for foreign gaming companies to register in India, the authorities aim to ensure that these companies contribute their fair share of taxes to the country’s revenue.

                    Features of the GST Notices

                    The GST notices serve as a show cause for alleged short payment of taxes by online gaming companies such as Dream11 and Delta Corp. These notices require the companies to provide a valid justification or explanation for the alleged tax evasion.

                    Objectives of the GST Notices

                    The main objective of the GST notices is to address the tax evasion issue and ensure compliance with the amended GST law. By holding online gaming companies accountable for their tax obligations, the government aims to strengthen tax revenue and create a level playing field in the gaming industry.

                    Effects of the GST Notices

                    The issuance of these notices sends a strong message to online gaming companies about the seriousness of tax evasion. It serves as a deterrent for future evasion attempts and encourages companies to fulfill their tax obligations. Additionally, the government’s actions may lead to increased transparency and accountability in the online gaming sector.

                    Pros and Cons

                    Pros:

                    • Enhanced tax revenue for the government
                    • Level playing field for all gaming companies
                    • Encourages compliance with tax laws

                    Cons:

                    • Potential negative impact on the growth of online gaming industry
                    • Possible resistance and legal battles from affected companies

                    Fun Fact

                    The highest amount of GST notice, worth ₹21,000 crore, was sent to GamesKraft in September last year for alleged GST evasion. While the Karnataka High Court ruled in favor of the company, the central government filed a Special Leave Petition (SLP) in the Supreme Court in July, indicating the complexity and significance of these tax evasion cases.

                    Source: The Hindu

                    Mutiple Choice Questions

                    1. According to the information provided, how much worth of show cause notices have GST authorities issued to online gaming companies?
                    a) ₹10,000
                    b) ₹1,000
                    c) ₹1,00,000
                    d) ₹1,00,00,000
                    Explanation: The senior official mentioned that GST authorities have issued show cause notices worth ₹1 lakh crore to online gaming companies for tax evasion.

                    2. What is the recent amendment in the GST law regarding overseas online gaming companies?
                    a) They are exempt from registering in India.
                    b) They are required to register in India from October 1.
                    c) They must pay a higher GST rate than Indian gaming companies.
                    d) They must submit annual reports to the GST authorities.
                    Explanation: The recent amendment in the GST law makes it mandatory for overseas online gaming companies to register in India from October 1.

                    3. Which online gaming companies have received GST show cause notices for alleged tax evasion?
                    a) Dream11
                    b) Delta Corp
                    c) Both Dream11 and Delta Corp
                    d) GamesKraft
                    Explanation: Both Dream11 (an online gaming company) and Delta Corp (a casino operator) have received GST show cause notices for alleged short payment of taxes.

                    4. What is the GST rate levied on the full value of bets placed on online gaming platforms?
                    a) 15%
                    b) 18%
                    c) 28%
                    d) 30%
                    Explanation: The GST Council has clarified that 28% Goods and Services Tax (GST) would be levied on the full value of bets placed on online gaming platforms.

                    5. Which company received a show cause notice for alleged GST evasion of ₹21,000 crore?
                    a) Dream11
                    b) Delta Corp
                    c) GamesKraft
                    d) None of the above
                    Explanation: GamesKraft received a show cause notice in September last year for alleged GST evasion of ₹21,000 crore. The case is currently being heard in the Supreme Court.

                    Brief Summary | UPSC – IAS

                    The Indian government has issued show cause notices totaling ₹1 lakh crore to online gaming companies for alleged tax evasion under the Goods and Services Tax (GST). These companies, including Dream11 and Delta Corp, have been accused of short payment of taxes. Additionally, the amended GST law now requires foreign gaming companies to register in India as of October 1, although there is currently no data on the registration of foreign gaming companies. A separate show cause notice was sent to GamesKraft in September 2019 for alleged GST evasion of ₹21,000 crore, with the central government filing a Special Leave Petition in July.

                    Tech Mahindra Q2 profit plunges 61%, cites telecom slowdown

                    Did EFLU release backdated circulars during protests?

                    Tech Mahindra Reports a 61% Decline in Net Profit for Q2 FY24: Analysis and Outlook

                    Tech Mahindra, one of India’s leading technology companies, recently announced a significant decline in its net profit for the second quarter of fiscal year 2024. The company’s net profit dropped by 61%, amounting to ₹505.3 crore, compared to ₹1,299.2 crore in the same period last year. This significant decline can be attributed to various factors and has implications for both Tech Mahindra and the broader industry.

                    Significance

                    The decline in Tech Mahindra’s net profit is a significant development that sheds light on the ongoing challenges faced by the company and the technology sector as a whole. It highlights the impact of slowing demand in the telecom and communications segments as well as delays in deal cycles. Tech Mahindra’s performance in this quarter reflects the volatile nature of the industry and reminds us of the need for adaptability and strategic planning.

                    Features

                    This decline in net profit reinforces the current trends seen in the technology sector, particularly in the telecom and communications segments. The company’s CEO and Managing Director, C.P Gurnani, emphasized the challenging demand environment and macro uncertainties that Tech Mahindra is navigating. In response, Tech Mahindra is focusing on working closely with clients, assisting them in streamlining and modernizing operations as they reprioritize resources.

                    The strategy of reducing exposure to non-core areas of business, as mentioned by Rohit Anand, Chief Financial Officer of Tech Mahindra, is viewed as a key feature in improving the company’s financial performance and enabling long-term sustainable growth.

                    Objectives

                    The objectives of Tech Mahindra are twofold. Firstly, the company aims to address the current challenges facing the technology sector by adapting its strategies and working closely with clients to effectively navigate uncertainties. Secondly, it seeks to enhance its financial performance and achieve sustainable growth in the long run by focusing on core areas of business and reducing exposure to non-core areas.

                    Effects

                    The decline in net profit may have wide-ranging effects on various stakeholders. Shareholders and investors may show concern and may closely monitor the company’s performance and future plans. Employees may be affected by the lower net profit, particularly in terms of remuneration and job security. Clients might perceive the situation as an opportunity to negotiate better terms, and Tech Mahindra will need to ensure it continues providing value to maintain existing contracts and attract new business.

                    Pros and Cons

                    While a decline in net profit is typically viewed as a negative outcome, it can also present opportunities for Tech Mahindra. By addressing the challenges and streamlining their operations, the company can build resilience and adapt to a changing competitive landscape. The focus on core areas of business and reduction of exposure to non-core areas can result in improved financial performance and increased profitability in the long term. However, there is also a risk that these measures may limit diversification and potentially hinder future growth prospects.

                    Fun Fact

                    Despite the challenges faced by Tech Mahindra, the company’s attrition rate decreased from 13% in the previous quarter to 11% in Q2 FY24. This suggests that employees are showing loyalty and a commitment to the organization, indicating a positive work culture and a strong talent pool within the company.

                    In conclusion, Tech Mahindra’s decline in net profit for Q2 FY24 highlights the challenges faced by the company amidst a difficult demand environment and macro uncertainties. By implementing strategic measures and focusing on core operations, Tech Mahindra aims to improve its financial performance and achieve sustainable growth. While there are both pros and cons associated with these measures, it is essential for the company to adapt and innovate to remain competitive in the ever-evolving technology sector.

                    Mutiple Choice Questions

                    1. What was the net profit of Tech Mahindra in the second-quarter of FY24?
                    a. ₹505.3 crore
                    b. ₹1,299.2 crore
                    c. ₹806.1 crore
                    d. ₹874.5 crore
                    Answer: a. ₹505.3 crore
                    Explanation: Tech Mahindra’s net profit in the second-quarter of FY24 was ₹505.3 crore, which is a 61% decline compared to the net profit of ₹1,299.2 crore in the corresponding period last year.

                    2. What were the main factors that contributed to the difficult quarters for Tech Mahindra?
                    a. Slowing demand in telecom and communications segments
                    b. Delays in deal cycles
                    c. Both a and b
                    d. None of the above
                    Answer: c. Both a and b
                    Explanation: According to Tech Mahindra, the last two quarters were challenging due to slowing demand in telecom and communications segments and delays in deal cycles.

                    3. What did Tech Mahindra’s CEO mention about the demand environment and macro uncertainties?
                    a. The demand environment is favorable and there are no macro uncertainties
                    b. The demand environment is challenging and there are prolonged macro uncertainties
                    c. The demand environment is stable and there are short-term macro uncertainties
                    d. None of the above
                    Answer: b. The demand environment is challenging and there are prolonged macro uncertainties
                    Explanation: The company’s CEO, C.P Gurnani, stated that the year is being characterized by a challenging demand environment and prolonged macro uncertainties.

                    4. What actions did Tech Mahindra take to improve its financial performance?
                    a. Reduced exposure to non-core areas of business
                    b. Increased capital expenditures
                    c. Invested in new business areas
                    d. None of the above
                    Answer: a. Reduced exposure to non-core areas of business
                    Explanation: Tech Mahindra’s CFO, Rohit Anand, mentioned that the company has taken actions to reduce the exposure to non-core areas of business, which will help improve financial performance over time.

                    5. What was Tech Mahindra’s attrition rate in Q2 FY24?
                    a. 11%
                    b. 13%
                    c. 9%
                    d. 15%
                    Answer: a. 11%
                    Explanation: Tech Mahindra’s attrition rate in Q2 FY24 decreased to 11% from 13% in the previous quarter.

                    6. What was the interim dividend declared by Tech Mahindra?
                    a. ₹6 per equity share
                    b. ₹8 per equity share
                    c. ₹10 per equity share
                    d. ₹12 per equity share
                    Answer: d. ₹12 per equity share
                    Explanation: Tech Mahindra declared an interim dividend of ₹12 per equity share of ₹5 each.

                    Note: This is a sample set of multiple-choice questions and their explanations. The actual number and content of questions may vary depending on the requirements of the exam.

                    Brief Summary | UPSC – IAS

                    Indian IT company Tech Mahindra saw a 61% decline in net profit in the second quarter of FY24, due to slowing demand in telecom and communications sectors and delays in deal cycles. The company’s CEO, C.P Gurnani, described the current year as being characterised by a challenging demand environment and prolonged macro uncertainties. In response to these challenges, Tech Mahindra is focusing on working closely with clients to help streamline and modernise operations. The company is also taking actions to reduce exposure to non-core business areas and improve its financial performance. Tech Mahindra’s attrition rate decreased to 11% in Q2 FY24.

                    “The Gender Earnings Gap: Exploring Workforce Disparities and Hours Worked”

                    How big is the gender gap in earnings?

                    The Gender Earnings Gap: Exploring the Comprehensive Data from Periodic Labour Force Surveys

                    The Periodic Labour Force Surveys (PLFS) have been instrumental in monitoring the gender earnings gap in various forms of employment from April-June 2019 to 2023. The latest round of surveys has brought attention to the significance of weekly hours worked in understanding the complete picture of inequality. While men, on average, earn more than women, this disparity is not solely attributed to gender, but also shaped by societal norms and individual choices that influence women to work fewer hours. As a teacher, understanding these dynamics is essential to address gender disparities in the workforce.

                    How Does the Gender Earnings Gap Differ?

                    The pioneering work of Claudia Goldin, a Nobel laureate, in analyzing the various factors influencing gender inequalities in America, resonates with the situation in India. Indian scholars have extensively examined the disparities affecting working women in terms of work participation and wages. To gauge the gender earnings gap, all types of workers’ earnings are converted into weekly figures. Table 1 showcases the ratio of weekly earnings for men and women at the all-India level, integrating the rural and urban sectors, from April-June 2019 to April-June 2023. A ratio above 1 indicates higher men’s earnings relative to women, such as a figure of 1.24, signifying that men’s earnings are 24% greater than women’s.

                    Interestingly, men consistently earn more than women across all forms of work, with the wage gap being most significant for self-employed individuals. In 2023, male self-employed workers earned 2.8 times more than their female counterparts. On the other hand, male regular wage workers earned 24% more, and male casual workers earned 48% more. The persistence of the gender gap in earnings is undeniable. However, there are discernible trends – the gender earnings gap has increased for self-employed workers while declining for regular wage workers. From 2019 to 2022, male regular wage workers earned 34% more than women, with the gap reducing to 24% in 2023.

                    Are There Any Notable Differences in Average Weekly Work Hours?

                    While the gender earnings gap provides insights, it does not fully capture the inequalities in earnings per work effort. Women generally work fewer hours than men across all forms of work, as depicted in Table 2. In 2023, the largest gap in work hours was observed among self-employed workers, with men working 50% more hours than women. In comparison, the gap was lowest for regular wage workers (19%). Interestingly, despite having the smallest gap, men and women in regular wage work had the longest work hours, with men averaging 51 hours per week and women averaging 43 hours. While the ratio of work hours remained relatively stable for regular wage workers, it witnessed a significant increase for self-employed workers.

                    This rise in the gender gap in hours worked, coupled with the growing number of women in self-employment, necessitates explanation. Rural women’s labor force participation rates (LFPRs) have risen, accompanied by a significant increase in the proportion of self-employed women. However, the average weekly hours worked by rural self-employed women declined from 37.1 in 2019 to 30.1 in 2023. This suggests that the increased employment for rural self-employed women has primarily been part-time in nature, in contrast to men’s full-time work. In contrast, the ratio of hours worked for regular wage workers remained relatively constant.

                    By utilizing data on weekly earnings and hours worked, researchers have calculated earnings per hour for each category of workers. Table 3 demonstrates the ratio between men and women’s hourly earnings.

                    What Is the Percentage Decrease in the Gap in Hourly Earnings?

                    Considering hourly earnings provides valuable insights into the forces influencing changes in inequality over this period. The gender gap in hourly earnings reduces significantly for regular wage workers. In 2023, men in regular wage employment earned 24% more than women over the week, but also worked 19% longer. Thus, the gap in hourly earnings narrows down to approximately 4%, declining from 11% in 2019.

                    Remarkably, women in regular wage work earn less per week, but nearly the same when considering earnings per hour. However, it is crucial to acknowledge that averages conceal significant disparities, necessitating further research to determine if the gap in hourly earnings holds true across all workers, occupations, and industries. Inequality in hourly earnings remains higher in other forms of work, albeit not as high as when considering total earnings. In 2023, male casual workers earned 23% more per hour than women, representing a reduction from 33% in 2019. The gender gap has slightly increased for self-employed individuals, rising from 84% in 2019 to 87% in 2023.

                    What Influences Hours of Work?

                    Lower inequality in hourly earnings for regular wage workers does not imply that the inequality arises solely from women choosing to work fewer hours. Often, the available options for working hours are restricted due to social norms that assign domestic and child-rearing duties predominantly to women. Working hours are not purely driven by unconstrained choices. Therefore, it is critical to not only understand the factors influencing differences in remuneration but also those shaping disparities in total hours of work.

                    Policies aimed at addressing this issue should focus on removing barriers that limit the hours of work available to women. Interventions within the workspace, such as mandating creches and providing more generous maternity leaves, can facilitate this process. Additionally, comprehensive transformations in social norms are necessary to distribute the burden of childcare and domestic work more equitably across both genders.

                    As we delve deeper into the comprehensive data provided by the Periodic Labour Force Surveys, we gain a better understanding of the gender earnings gap and the underlying factors shaping it. By recognizing the significance of weekly hours worked, addressing disparities in earnings per work effort, and addressing socio-cultural constraints, we can strive towards a more equitable and inclusive workforce.

                    Fun Fact: Did you know that as of 2021, only 36% of women were employed worldwide, compared to 75% of men? The gender earnings gap and inequalities in work participation are significant global challenges that need to be tackled.

                    (Rahul Menon is Associate Professor, Jindal School of Government and Public Policy, O.P. Jindal Global University)

                    Mutiple Choice Questions

                    1. What do the Periodic Labour Force Surveys (PLFS) monitor?
                    a) Gender disparities in the workforce
                    b) Gender earnings gap across various forms of employment
                    c) Women’s work participation and wages
                    d) All of the above

                    Explanation: The Periodic Labour Force Surveys (PLFS) monitor the gender earnings gap across various forms of employment, including work participation and wages affecting working women.

                    2. What does a figure above 1 indicate in Table 1?
                    a) Greater men’s earnings relative to women
                    b) Equal earnings between men and women
                    c) Greater women’s earnings relative to men
                    d) None of the above

                    Explanation: A figure above 1 in Table 1 indicates greater men’s earnings relative to women.

                    3. In what form of work do men earn the most compared to women in 2023?
                    a) Regular wage workers
                    b) Self-employed workers
                    c) Casual workers
                    d) None of the above

                    Explanation: In 2023, male self-employed workers earned 2.8 times that of women, indicating that men earn the most compared to women in self-employment.

                    4. How has the gender gap in earnings changed for regular wage workers from 2019 to 2023?
                    a) It has increased
                    b) It has decreased
                    c) It has remained constant
                    d) It is not mentioned in the information

                    Explanation: The gender gap in earnings for regular wage workers has decreased from 34% in 2019 to 24% in 2023.

                    5. What is the gap in work hours between men and women in regular wage workers in 2023?
                    a) Men work 50% more hours than women
                    b) Men work 19% more hours than women
                    c) Men work 84% more hours than women
                    d) None of the above

                    Explanation: In 2023, the gap in work hours between men and women in regular wage workers is 19%, indicating that men work 19% more hours than women.

                    6. What has been the trend in average hours worked per week for rural self-employed women from 2019 to 2023?
                    a) It has increased
                    b) It has remained constant
                    c) It has decreased
                    d) It is not mentioned in the information

                    Explanation: The average hours worked per week for rural self-employed women has decreased from 37.1 in 2019 to 30.1 in 2023.

                    7. How has the gap in hourly earnings for regular wage workers changed from 2019 to 2023?
                    a) It has increased
                    b) It has decreased
                    c) It has remained constant
                    d) It is not mentioned in the information

                    Explanation: The gap in hourly earnings for regular wage workers has decreased from 11% in 2019 to around 4% in 2023.

                    8. What is the gap in hourly earnings between male casual workers and women in 2023?
                    a) Men earn 23% per hour more than women
                    b) Men earn 33% per hour more than women
                    c) Men earn 84% per hour more than women
                    d) None of the above

                    Explanation: In 2023, male casual workers earn 23% per hour more than women.

                    9. What is the main driving factor behind rising inequality amongst self-employed workers?
                    a) Changes in hours worked
                    b) Changes in hourly earnings
                    c) Changes in the gender gap
                    d) None of the above

                    Explanation: The main driving factor behind rising inequality amongst self-employed workers is changes in hours worked. The influx of women into part-time work reduced their average hours of work, leading to increased inequality in total earnings.

                    10. What must policies focus on to address differences in total hours of work for women?
                    a) Removing barriers that limit the hours of work available to women
                    b) Interventions within the workspace, such as mandating creches and more generous maternity leaves
                    c) Transformations in social norms that do not place the entire burden of child care and domestic work on women
                    d) All of the above

                    Explanation: Policies must focus on removing barriers that limit the hours of work available to women, including interventions within the workspace and transformations in social norms. This can help address differences in total hours of work.

                    Brief Summary | UPSC – IAS

                    The Periodic Labour Force Surveys (PLFS) in India have been tracking the gender earnings gap from 2019 to 2023. The latest round of surveys has highlighted the importance of considering weekly hours worked when measuring inequality. Women tend to work fewer hours than men due to societal pressures and personal choices, highlighting the complex factors that contribute to gender disparities in the workforce. Men consistently earn more than women in all forms of work, with the largest gap seen among self-employed workers. However, the gender gap has decreased among regular wage workers while increasing for self-employed workers. The analysis also demonstrates that women work fewer hours than men across all types of work. When examining hourly earnings, the gap decreases significantly for regular wage workers, suggesting that the difference in total earnings is largely influenced by the difference in hours worked. It is important to understand and address the factors that influence both remuneration and total hours of work in order to reduce gender inequality in the workforce.

                    “Inflation Risks and Longer Interest Rates Steer Global Economy in 2024”

                    Did EFLU release backdated circulars during protests?

                    The Impending High Inflation and its Impact on the World Economy

                    Significance

                    The world economy is predicted to face a significant challenge in the form of high inflation next year. A Reuters poll conducted among over 200 economists suggests that there is a growing concern that inflation may turn out to be even higher than forecasted. This poses a risk to the global economy and implies that interest rates are likely to remain higher for longer. The survey results indicate a shift in expectations, as several central banks were initially anticipated to start cutting interest rates by mid-2024, but economists now believe that the more likely timeframe is in the second half of next year. This change reflects the evolving economic landscape and the difficulties central banks face in stabilizing inflation.

                    Features

                    At the beginning of this year, investment banks predicted that the U.S. Federal Reserve, serving as a benchmark for many other central banks, would be cutting rates around now. However, despite the success in reducing inflation from its peak, prices continue to rise at a pace that most central banks find challenging to manage. The recent Reuters poll reveals downgrades in economic growth forecasts for 2024 and upgrades in inflation forecasts across 48 economies worldwide. Furthermore, 75% of economists surveyed expressed concerns that these upwardly revised inflation forecasts might be even higher than anticipated.

                    Objectives

                    The primary objective for central banks is to achieve price stability and moderation in inflation rates. However, high inflation poses hurdles to reaching these targets. Central banks strive to strike a balance between stimulating economic growth and preventing runaway inflation. Amidst changing economic conditions, central banks must reassess their strategies to ensure that they adopt appropriate monetary policies. The objective is to stabilize inflation rates while fostering sustainable economic growth.

                    Effects

                    High inflation can have a wide range of effects on the world economy. Rising prices erode the purchasing power of individuals, reducing their overall standard of living. Businesses also face challenges as higher input costs potentially lead to reduced profitability and job cuts. Additionally, high inflation often necessitates tighter monetary policy, such as higher interest rates, which can dampen borrowing and investment. This may result in slower economic growth, hampering job creation and exacerbating income inequality. Furthermore, a prolonged period of high inflation may erode confidence in fiat currencies and adversely impact international trade.

                    Pros and Cons

                    Pros:
                    – Higher interest rates, if implemented effectively, can help rein in inflation and maintain price stability.
                    – Strict monetary policy measures can encourage individuals and businesses to save and invest instead of relying on borrowed money.
                    – A controlled inflation rate can positively impact creditors, as the real value of their loans increases.

                    Cons:
                    – Higher interest rates can hinder borrowing, causing a slowdown in economic growth.
                    – Inflation can lead to increased costs for businesses, reducing their competitiveness and profitability.
                    – Individuals may experience decreased purchasing power, affecting their overall quality of life.

                    Fun Fact

                    Did you know that hyperinflation, a severe form of inflation, has historically led to instability and economic turmoil? An extreme example is the hyperinflation experienced in the Weimar Republic in Germany during the early 1920s, when prices rose at an astronomical rate, rendering the German mark virtually worthless.

                    Mutiple Choice Questions

                    1. What is the main risk associated with high inflation next year, according to economists?
                    a) Interest rates will remain higher for longer
                    b) Central banks will start cutting interest rates sooner than expected
                    c) Prices will continue to rise faster than preferred by central banks
                    d) Inflation will turn out lower than forecasted

                    Explanation: According to the information given, the main risk associated with high inflation next year is that interest rates will remain higher for longer. This is supported by the statement that three-quarters of over 200 economists polled by Reuters believe that the main risk is that inflation turns out higher than they forecast, suggesting that interest rates will also remain higher for longer.

                    2. When are several central banks expected to begin cutting interest rates?
                    a) By the middle of 2023
                    b) By the middle of 2024
                    c) In the first half of next year
                    d) In the second half of next year

                    Explanation: The information provided states that several central banks are still expected to begin cutting interest rates, but a growing number of economists surveyed are adjusting their views and pushing the more likely date into the second half of next year.

                    3. How do economists’ expectations regarding interest rate cuts this year compare to the start of the year?
                    a) Investment banks were predicting rate cuts at the start of the year
                    b) Expectations for rate cuts have remained unchanged
                    c) Expectations for rate cuts have shifted to later in the year
                    d) Economists were not predicting rate cuts at the start of the year

                    Explanation: The information states that at the start of this year, some investment banks were predicting the U.S. Federal Reserve, which sets the tone for many others, would be cutting rates right around now. This indicates that economists’ expectations for rate cuts have shifted to later in the year.

                    4. What is the current trend in inflation rates?
                    a) Inflation rates are significantly declining
                    b) Inflation rates are rising faster than preferred by central banks
                    c) Inflation rates are stable and on target
                    d) Inflation rates are expected to increase next year

                    Explanation: According to the information given, despite success in bringing inflation down from its highs, prices are still rising faster than most central banks would prefer. This indicates that inflation rates are rising faster than preferred by central banks.

                    5. What were the results of the Reuters poll regarding inflation forecasts?
                    a) Majority of the 48 surveyed economies had inflation downgrades
                    b) Majority of the 48 surveyed economies had inflation upgrades
                    c) Inflation forecasts for all surveyed economies remained unchanged
                    d) The poll did not cover inflation forecasts

                    Explanation: The information states that the Reuters poll of over 500 economists produced inflation upgrades for a majority of the 48 economies surveyed. This implies that a majority of the surveyed economies had inflation upgrades.

                    6. How do economists view the risk to upgraded inflation forecasts?
                    a) Majority of economists believe the risk is higher than forecasted
                    b) Majority of economists believe the risk is lower than forecasted
                    c) There is equal belief among economists that the risk is higher or lower than forecasted
                    d) The risk was not addressed in the information provided

                    Explanation: The information states that a 75% majority of economists surveyed believe that the risk to the broadly-upgraded inflation forecasts is skewed higher. This indicates that the majority of economists believe the risk is higher than forecasted.

                    7. What was the unexpected growth rate of the U.S. economy in the third quarter?
                    a) 5%
                    b) 2.6%
                    c) 2.9%
                    d) 4.5%

                    Explanation: The information states that the U.S. economy unexpectedly grew nearly 5%, annualised, in the third quarter. Therefore, the correct answer is 5%.

                    8. What did European Central Bank President Christine Lagarde say regarding interest rate cuts?
                    a) It is premature to discuss interest rate cuts
                    b) Interest rate cuts are necessary to stimulate the economy
                    c) Interest rate cuts will be implemented in the second half of next year
                    d) Interest rate cuts are more likely to happen in the first half of next year

                    Explanation: The information states that Christine Lagarde said after the ECB snapped a 10-meeting tightening streak that “even having a discussion on a cut is totally, totally premature.” This indicates that Lagarde believes it is premature to discuss interest rate cuts.

                    9. Which central bank is still expected to maintain ultra-loose policy through next year?
                    a) Reserve Bank of Australia
                    b) Bank of Japan
                    c) Federal Reserve
                    d) European Central Bank

                    Explanation: The information states that even the Bank of Japan, which has been the outlier sticking to ultra-loose policy through this entire round of inflation, is now expected to abandon negative interest rates next year. Therefore, the correct answer is the Bank of Japan.

                    10. What would prompt the first cut by the central bank, according to a majority of economists?
                    a) To make real interest rates less restrictive as inflation falls
                    b) To stimulate the economy due to a significant hit to demand and inflation
                    c) In response to pressure from financial market traders
                    d) To address the negative effects of high inflation on the global economy

                    Explanation: The information states that over a two-thirds majority of economists surveyed said the first cut by the central bank they cover would be simply to make real interest rates less restrictive as inflation falls. Therefore, the correct answer is to make real interest rates less restrictive as inflation falls.

                    Note: The questions and answers have been generated based on the provided information, but may require additional context or clarification for a complete understanding.

                    Brief Summary | UPSC – IAS

                    A majority of over 200 economists surveyed by Reuters believe that high inflation will be a persistent issue in the world economy next year, with the main risk being that it turns out higher than anticipated. As a result, interest rates are likely to remain higher for a longer period of time. While some central banks had anticipated cutting interest rates by mid-2024, growing number of economists are pushing back their expectations to the second half of next year. Economists also downgraded growth forecasts for 2024 while upgrading inflation forecasts for a majority of the 48 economies surveyed.

                    “Infosys Founder Sparks Debate: 70-Hour Work Week for Young Indians”

                    Putting Infosys founder Narayana Murthy’s ‘70-hour work week’ idea into perspective | Data

                    Working Hours: Exploring Narayana Murthy’s Suggestion

                    Infosys founder N.R. Narayana Murthy recently made headlines by suggesting that young Indians must work for 70 hours a week. This statement has sparked a debate among the masses, with some expressing support and others criticizing the idea. Murthy made these comments in the first episode of a video series called ‘The Record’, published by 3one4 Capital.

                    Significance

                    The significance of Murthy’s suggestion lies in the aim to increase work productivity in India. According to him, the country’s work productivity is among the lowest globally. By advocating for longer working hours, Murthy aims to help India compete with countries that have made significant progress.

                    Features

                    Murthy’s suggestion implies that if people work for six days a week, they would need to work for 11.5 hours each day. However, a Time Use Survey conducted in India in 2019 reveals that the average young Indian already spends around 7.2 hours (in rural areas) to 8.5 hours (in urban areas) per day in employment and related activities. Therefore, the current work hours are notably lower than what Murthy envisions.

                    Objectives

                    The primary objective of Murthy’s suggestion is to improve India’s work productivity. By increasing the number of working hours, he believes that Indians can catch up with countries like Germany and Japan, which witnessed enhanced productivity through longer work hours in the past.

                    Effects

                    The effects of implementing Murthy’s recommendation are twofold. On one hand, longer work hours may lead to increased productivity initially, as seen in the German and Japanese examples. However, it is essential to consider the long-term effects on individuals’ physical and mental well-being. Longer work hours can reduce the time available for leisure activities and have a negative impact on work-life balance.

                    Pros and Cons

                    Pros of implementing longer working hours include the potential for increased productivity and greater competition on an international scale. This may lead to economic growth and improved living standards. However, cons include the negative impact on individuals’ quality of life, decreased leisure time, and potential burnout. Balancing work productivity with employee well-being becomes crucial.

                    Fun Fact

                    Germany and Japan, two countries known for their strong work ethic, witnessed a reduction in average annual working hours as their labor productivity increased. This suggests that productivity can be improved through technology and efficient work practices rather than solely relying on longer working hours.

                    Mutiple Choice Questions

                    1. According to the information, who recently suggested that young Indians should work for 70 hours a week?
                    a) N.R. Narayana Murthy
                    b) Rebecca Rose Varghese
                    c) The employees of Infosys
                    d) The government of India

                    Answer: a) N.R. Narayana Murthy

                    Explanation: The information states that Infosys founder N.R. Narayana Murthy recently suggested that young Indians should work for 70 hours a week.

                    2. What is the average number of hours an urban Indian aged 15-29 spends in a day on employment and related activities?
                    a) 7.2 hours
                    b) 8.5 hours
                    c) 9.6 hours
                    d) 11.5 hours

                    Answer: c) 9.6 hours

                    Explanation: According to the information, the average number of hours an urban Indian aged 15-29 spends in a day on employment and related activities is 9.6 hours.

                    3. In which countries did the average annual working hours per worker peak after the Second World War?
                    a) Germany and Japan
                    b) India and Japan
                    c) India and Germany
                    d) Japan and India

                    Answer: a) Germany and Japan

                    Explanation: The information states that the average annual working hours per worker peaked after the Second World War in Germany and Japan.

                    4. What is the relation between labour productivity and working hours in Germany and Japan?
                    a) As labour productivity increased, working hours increased
                    b) As labour productivity increased, working hours decreased
                    c) Labour productivity and working hours are unrelated
                    d) Labour productivity and working hours have a negative correlation

                    Answer: b) As labour productivity increased, working hours decreased

                    Explanation: According to the information, as labour productivity increased in Germany and Japan, the average working hours reduced drastically.

                    5. What is the percentage share of informal employment in the total workforce in Germany compared to India and Japan?
                    a) 4.2%
                    b) 8%
                    c) 89%
                    d) 100%

                    Answer: a) 4.2%

                    Explanation: The information states that the percentage share of informal employment in the total workforce is 4.2% in Germany, while it is 89% in India and around 8% in Japan.

                    Brief Summary | UPSC – IAS

                    Infosys founder N.R. Narayana Murthy suggested that young Indians should work 70 hours a week, sparking both support and criticism. Currently, young Indians spend around 7.2 to 8.5 hours a day on employment and related activities. Murthy argues that increasing work productivity is crucial for India’s competitiveness, citing Germany and Japan as examples where increased productivity led to reduced working hours. However, critics question whether longer work hours are the answer or if productivity should be enhanced through technology. It is also important to consider the difference in the nature of the labor force and the viability of comparing India to Germany and Japan.

                    “Indian Railways’ Challenges and Potential for General Cargo Movement”

                    How cargo transport can be improved 

                    The Indian Railways and the Carriage of General Cargo: Significance, Features, and Objectives

                    The Indian Railways and the Carriage of General Cargo: Significance, Features, and Objectives


                    A cargo train near the Tuticorin Port.

                    A cargo train near the Tuticorin Port. | Photo Credit: File Photo

                    Introduction

                    This article analyzes the carriage of non-bulk and general cargo by the Indian Railways (IR), focusing on its significance, features, and objectives. It also discusses the current challenges and potential solutions for improving the transportation of general cargo.

                    Significance of General Cargo

                    General cargo refers to a diverse range of goods that are transported in smaller quantities and do not require bulk transportation. It includes general goods, domestic containers, parcels, and other miscellaneous items. The efficient carriage of general cargo is crucial for facilitating trade, commerce, and economic development.

                    Features of Indian Railways’ General Cargo Carriage

                    The Indian Railways carries general cargo through a combination of passenger trains and special heavy parcel van (VPH) trains. However, there are various challenges affecting the effectiveness of these approaches, including high tariffs, inadequate infrastructure, unreliable transit times, and complex booking processes.

                    Objectives of Improving General Cargo Carriage

                    The primary objectives of enhancing the carriage of general cargo by the Indian Railways are:

                    • To increase the loading capacity and revenue generated from general cargo transportation
                    • To provide cost-effective and efficient transportation solutions for shippers
                    • To attract more shippers and buyers of general cargo to choose railways as their preferred mode of transportation
                    • To optimize pay load and speed through the development of new rolling stock and infrastructure

                    Effects of Current Challenges

                    The current challenges in the carriage of general cargo by the Indian Railways have led to a decline in parcel trains and underutilization of containerization. These challenges result in higher costs for shippers, limited market development, and missed opportunities for revenue generation by the railways.

                    Potential Solutions and Pros

                    There are several potential solutions to improve the transportation of general cargo:

                    • Discontinuing the use of VPH parcel trains in favor of more efficient covered wagon types
                    • Offering lower tariffs and simplified booking mechanisms to attract more shippers
                    • Allowing individual wagon bookings and running trains even with partial loads
                    • Modifying freight tariff rules to accommodate different types and quantities of cargo
                    • Encouraging the development of cargo aggregators and optimizing payload and speed

                    These solutions have the potential to increase revenue, improve efficiency, and meet the diverse needs of shippers and buyers of general cargo.

                    Cons and Limitations

                    While the proposed solutions have various benefits, some potential cons and limitations include:

                    • Possible financial losses during the initial phase of market development
                    • Risk of predatory pricing by other container train operators
                    • The need for policy changes and modifications in freight tariff rules
                    • Challenges in developing and maintaining a developed market for general cargo

                    Fun Fact: Indian Railways and General Cargo

                    The Indian Railways is one of the largest railway networks in the world, covering vast distances and connecting thousands of destinations. Despite its extensive infrastructure, the carriage of general cargo has not yet reached its projected potential. With the implementation of innovative strategies and improved services, the Indian Railways has the potential to significantly increase the transportation of general cargo in the coming years.

                    Sudhanshu Mani is the leader of the Vande Bharat project and an independent rail consultant. M. Ravibabu is a founding member of Anekdhara, a public policy portal.

                    Mutiple Choice Questions

                    1. What was the total earnings of Indian Railways from the carriage of general cargo in 2018-19?
                    a) ₹8,247 crore
                    b) ₹5,339 crore
                    c) ₹12,584 crore
                    d) ₹3,384 crore

                    Explanation: In 2018-19, the Indian Railways earned a total of ₹8,247 crore from the carriage of general cargo.

                    2. According to a RITES study in 2008, what was the projected general cargo loading for the Indian Railways for the next ten years?
                    a) Between 194 to 292 MT
                    b) Between 100 to 150 MT
                    c) Between 500 to 600 MT
                    d) Between 50 to 100 MT

                    Explanation: According to a RITES study in 2008, the projected general cargo loading for the Indian Railways for the next ten years was between 194 to 292 MT.

                    3. What are the two approaches currently used by the Indian Railways to move general cargo?
                    a) Passenger trains and parcel vans
                    b) Freight trains and container trains
                    c) Heavy parcel vans and truck transport
                    d) Special heavy parcel van (VPH) trains and premium scale rates

                    Explanation: The two approaches currently used by the Indian Railways to move general cargo are passenger trains and special heavy parcel van (VPH) trains.

                    4. Why has there been a decline in the parcel segment of general cargo?
                    a) High tariff rates
                    b) Improper terminals
                    c) Inconsistent weighbridges
                    d) All of the above

                    Explanation: The decline in the parcel segment of general cargo can be attributed to reasons such as high tariff rates, improper terminals, inconsistent weighbridges, and other factors mentioned in the passage.

                    5. What is the suggested alternative to VPH parcel trains for carrying general cargo?
                    a) Covered Bogie Wagon Type with Air Brake and Heavy Load (BCNHL)
                    b) Freight trains
                    c) Truck transport
                    d) Premium scale rates

                    Explanation: The suggested alternative to VPH parcel trains for carrying general cargo is a Covered Bogie Wagon Type with Air Brake and Heavy Load (BCNHL), which can carry 700% more cargo with 45% more volume.

                    6. How much domestic cargo moved by containers as a percentage of the Indian Railways’ loading?
                    a) 0.3%
                    b) 1%
                    c) 5%
                    d) 10%

                    Explanation: Only 0.3% of the Indian Railways’ loading is domestic cargo moved by containers.

                    7. What is the main issue faced by shippers for the carriage of general cargo by the Indian Railways?
                    a) Lack of service to meet their needs
                    b) High haulage rates
                    c) Risk of losses involved
                    d) Predatory pricing by other container train operators

                    Explanation: The main issue faced by shippers for the carriage of general cargo by the Indian Railways is that it lacks a service to meet their needs.

                    8. What are the three categories into which general cargo is segmented?
                    a) Highly time sensitive (HTSG), medium time sensitive (MTSG), and low time sensitive (LTSG)
                    b) Domestic cargo, international cargo, and perishable cargo
                    c) Bulk cargo, containerized cargo, and non-bulk cargo
                    d) Premium scale rates, Rajdhani rates, and truck rates

                    Explanation: General cargo is segmented into three categories — highly time sensitive (HTSG), medium time sensitive (MTSG), and low time sensitive (LTSG).

                    9. How can the Indian Railways attract shippers to use their freight rates for moving price-sensitive cargo?
                    a) By permitting shippers to book individual wagons
                    b) By reducing the freight rates
                    c) By adding freight of any kind (FAK) to the tariff table
                    d) All of the above

                    Explanation: The Indian Railways can attract shippers to use their freight rates for moving price-sensitive cargo by permitting shippers to book individual wagons, reducing the freight rates, and adding freight of any kind (FAK) to the tariff table.

                    10. What does the IR need to encourage in order to optimize payload and speed for the carriage of general cargo?
                    a) Cargo aggregators
                    b) More freight forwarders
                    c) Rajdhani express trains
                    d) Sleeper coaches

                    Explanation: The IR needs to encourage cargo aggregators in order to optimize payload and speed for the carriage of general cargo.

                    Brief Summary | UPSC – IAS

                    The Indian Railways (IR) has been facing challenges in the carriage of non-bulk and general cargo. In 2018-19, the IR loaded 62 million tonnes of general cargo, which fell short of a projected target of 194 to 292 million tonnes. The decline in the parcel segment can be attributed to high tariffs, improper terminals, and unreliable transit times. The use of heavy parcel vans (VPH) trains has been counterproductive, and a better alternative would be matching covered wagons. Private container train operators have also failed to boost general cargo movement due to high haulage rates and market risks. To improve the situation, the IR should focus on segmenting general cargo, permitting the booking of individual wagons, and incentivizing volumetric loading.

                    “Slowdown in Indian Manufacturing Sector Growth: October’s PMI Report”

                    Manufacturing PMI signals eight-month low growth in October

                    The Slowdown in India’s Manufacturing Sector

                    Image for respresentational purposes only

                    Image for representational purposes only | Photo Credit: B. Velankanni Raj

                    Significance

                    The slowdown in India’s manufacturing sector, as indicated by the S&P Global India Manufacturing Purchasing Managers’ Index (PMI), holds critical importance for the country’s economy. The manufacturing sector not only contributes significantly to India’s GDP but also plays a vital role in employment generation and export earnings.

                    Features

                    The S&P Global India Manufacturing PMI for October recorded a decline to 55.5 from 57.6 in September, indicating the slowest pace of growth since February. The new orders index hit a one-year low, reflecting lower demand for certain types of products, particularly consumer goods. Additionally, job creation was at its weakest level since April, with only a small percentage of surveyed firms hiring new staff.

                    Objectives

                    The objective of measuring manufacturing sector growth through the PMI is to provide policymakers, businesses, and investors with timely and reliable data on the performance of the sector. This data helps in analyzing market trends, making informed decisions, and implementing appropriate strategies to support and boost the manufacturing industry.

                    Effects

                    The slowdown in the manufacturing sector can have various effects on the economy. Firstly, it can lead to a decline in industrial production, resulting in reduced export earnings and lower GDP growth. Secondly, the weak job creation in the sector can contribute to higher unemployment rates. Lastly, the decrease in business confidence levels may discourage new investments, hindering overall economic growth.

                    Pros and Cons

                    The slowdown in the manufacturing sector can have both positive and negative implications. On a positive note, it can help in curbing inflationary pressures by reducing demand for goods and services. It can also provide an opportunity for policymakers to reassess existing strategies and implement measures to enhance the competitiveness of the sector. However, a prolonged slowdown can result in reduced income for businesses and workers, leading to economic hardship and social unrest.

                    Fun Fact

                    Despite the overall slowdown, the survey-based PMI pointed out that some firms reported an increase in demand from Asia, Europe, the Middle East, and the U.S. This highlights the interconnectedness of the global manufacturing sector and the potential for recovery through international trade opportunities.

                    Note: HTML heading tags (h1, h2) have been used to organize the content.

                    Mutiple Choice Questions

                    1. According to the S&P Global India Manufacturing Purchasing Managers’ Index (PMI), the manufacturing sector growth in October was:
                    a) The highest it has been since February
                    b) The lowest it has been since February
                    c) The same as it was in September
                    d) Not mentioned in the given information

                    Explanation: The given information states that the manufacturing sector growth in October eased to the slowest pace since February, implying that the correct answer is b) The lowest it has been since February.

                    2. What was the reason for the slow growth in the manufacturing sector in October?
                    a) Lack of demand for certain types of products
                    b) Increase in job creation
                    c) Rise in business confidence levels
                    d) Decrease in input cost pressures

                    Explanation: The given information mentions that growth subsided on several fronts as demand for certain types of products faded, implying that the correct answer is a) Lack of demand for certain types of products.

                    3. Which sector was the worst hit in terms of sales and production growth?
                    a) Consumer goods
                    b) Capital goods
                    c) Export goods
                    d) Job creation

                    Explanation: The given information states that consumer goods were behind most of the slowdown, recording considerably softer increases in sales and production, implying that the correct answer is a) Consumer goods.

                    4. What was the rate at which output prices were raised by firms?
                    a) It remained the same as previous months
                    b) It increased compared to previous months
                    c) It decreased compared to previous months
                    d) Not mentioned in the given information

                    Explanation: The given information mentions that the rate at which output prices were raised by firms receded, implying that the correct answer is c) It decreased compared to previous months.

                    5. What factor was expected to dent future demand and production growth according to firms surveyed?
                    a) Rising inflation expectations
                    b) Decreasing input cost pressures
                    c) Increase in job creation
                    d) Rise in business confidence levels

                    Explanation: The given information highlights that firms signalled that rising inflation expectations were expected to dent demand and subsequently production growth over the coming 12 months, implying that the correct answer is a) Rising inflation expectations.

                    Brief Summary | UPSC – IAS

                    The growth of India’s manufacturing sector in October slowed to the lowest level since February, according to the S&P Global India Manufacturing Purchasing Managers’ Index (PMI). The index fell to 55.5 in October from 57.6 in September, with new orders hitting a one-year low. Demand for consumer goods was particularly weak, while job creation was at its lowest level since April. Business confidence also dropped to a five-month low. International orders slowed to a four-month low, although some firms reported increased demand from Asia, Europe, the Middle East, and the US. Input costs rose for producers, but the rate at which output prices increased decreased.

                    “Price Hike: Commercial LPG Gas Cylinder Prices Soar, Concerns for Businesses and Consumers”

                    Oil marketing companies raise prices of commercial LPG gas cylinders

                    The Impact of Price Increase in Commercial LPG Gas Cylinders


                    Representational file image.

                    Representational file image. | Photo Credit: E. LAKSHMI NARAYANAN

                    In a move that is set to impact businesses and consumers, oil marketing companies (OMCs) have announced an increase in the prices of commercial LPG gas cylinders. Effective from November 1, the retail price of the 19 kg commercial LPG gas cylinder in Delhi will see a hike of ₹101, bringing the new rate to ₹1,833 per cylinder, according to official sources.

                    This price revision follows a previous increase that occurred on October 1, when public sector OMCs raised the price of 19 kg commercial LPG gas cylinders by ₹209. As a result of this adjustment, the updated price in Delhi stands at ₹1,731.50, compared to the previous month’s rate of ₹1,522.50.

                    Similar increases were observed in other major cities, with Kolkata witnessing a hike to ₹1,839.50, Mumbai to ₹1,684.00, and Chennai to ₹1,898.00 for a 19 kg commercial LPG cylinder. The rise in prices has left business owners, particularly shopkeepers and restaurateurs deeply concerned. Shopkeepers are now urging the government to take measures to control inflation and ease the financial burden on small businesses.

                    Monthly revisions for both commercial and domestic LPG (liquefied petroleum gas) cylinders occur on the first day of each month, in line with government regulations and market dynamics. In August, OMCs had taken the opposite approach, slashing the prices of commercial LPG cylinders by ₹99.75, offering some relief to businesses and consumers. The increase in commercial LPG gas cylinder prices comes as a challenge for businesses already grappling with inflation, and it emphasizes the need for policy actions to stabilize prices and support small enterprises during these trying times.

                    ATF price cut 5.8%

                    Jet fuel or ATF price was cut by almost 6% after four rounds of monthly increases since July.

                    Aviation turbine fuel (ATF) price was cut by ₹6,854.25, or 5.79%, in the national capital to ₹1,11,344.92 per kl from ₹1,18,199.17, according to a price notification of state-owned fuel retailers.

                    The price cut comes on the back of four rounds of increases, the last on October 1, when rates were hiked by ₹5,779.84 per kl or 5.1%. Prior to that ATF prices had gone up by the steepest-ever 14.1% (₹13,911.07 per kl) on September 1, and 8.5% or ₹7,728.38 per kl on August 1.

                    On July 1, the ATF price had gone up by 1.65% or ₹1,476.79 per kl. In four increases, ATF prices have gone up by a record ₹29,391.08 per kl.

                    Wednesday’s cut in prices of jet fuel, which makes up for 40% of an airline’s operating cost, will ease the burden on already financially strained airlines.

                    Significance

                    The increase in prices of commercial LPG gas cylinders has significant implications for businesses and consumers. It directly impacts the operational costs of businesses, particularly small enterprises such as shops and restaurants. Consumers also bear the brunt of these price hikes, as they result in higher prices for various goods and services. Understanding the significance of these price changes helps to evaluate the overall economic impact on different stakeholders.

                    Features

                    • Retail price increase of ₹101 for 19 kg commercial LPG gas cylinders in Delhi.
                    • Similar price hikes observed in other major cities like Kolkata, Mumbai, and Chennai.
                    • Monthly revisions in LPG cylinder prices as per government regulations and market dynamics.
                    • Previous price decrease in August provided temporary relief to businesses and consumers.

                    Objectives

                    The objectives behind the price increase in commercial LPG gas cylinders can include:

                    • Improvement of revenue for oil marketing companies.
                    • Balancing supply and demand dynamics in the LPG market.
                    • Addressing fluctuating manufacturing and distribution costs.

                    Effects

                    The effects of the price increase in commercial LPG gas cylinders are:

                    • Higher operational costs for businesses, potentially leading to price hikes for consumers.
                    • Inflationary pressure on small businesses, affecting their profitability and sustainability.
                    • Financial burden on consumers who rely on LPG for cooking and heating purposes.

                    Pros and Cons

                    Pros of the price increase:

                    • Improved revenue for oil marketing companies, supporting their operations.
                    • Potential stabilization of the LPG market and supply chain.

                    Cons of the price increase:

                    • Negative impact on the profitability of small businesses.
                    • Increased financial burden on consumers already facing inflationary pressures.

                    Fun Fact

                    Jet fuel or aviation turbine fuel (ATF) prices have experienced both significant increases and decreases in recent months. While the price cut mentioned in the article provides relief to financially strained airlines, previous rounds of increases have put additional pressure on their operating costs. The fluctuating prices of ATF reflect the volatility in the aviation industry and its direct correlation with global oil prices.

                    By analyzing the significance, features, objectives, effects, pros and cons, and including a fun fact, this comprehensive article provides a detailed understanding of the impact of the price increase in commercial LPG gas cylinders.

                    Mutiple Choice Questions

                    1. What is the new retail price of a 19 kg commercial LPG gas cylinder in Delhi after the price hike on November 1?

                    a) ₹1,522.50
                    b) ₹1,731.50
                    c) ₹1,839.50
                    d) ₹1,898.00

                    Explanation: The retail price of a 19 kg commercial LPG gas cylinder in Delhi after the November 1 price hike is ₹1,833 per cylinder. This is a hike of ₹101 from the previous price of ₹1,731.50.

                    2. When was the previous increase in the price of 19 kg commercial LPG gas cylinders?

                    a) November 1
                    b) October 1
                    c) September 1
                    d) August 1

                    Explanation: The previous increase in the price of 19 kg commercial LPG gas cylinders occurred on October 1. The price was raised by ₹209, bringing the price in Delhi to ₹1,731.50.

                    3. Which city witnessed a hike in the price of a 19 kg commercial LPG gas cylinder to ₹1,684.00?

                    a) Delhi
                    b) Kolkata
                    c) Mumbai
                    d) Chennai

                    Explanation: Mumbai witnessed a hike in the price of a 19 kg commercial LPG gas cylinder to ₹1,684.00. Other cities like Kolkata and Chennai also saw increases in prices.

                    4. According to the article, why are shopkeepers urging the government to take action?

                    a) To increase the prices of commercial LPG gas cylinders
                    b) To control inflation and ease the financial burden on small businesses
                    c) To decrease the prices of commercial LPG gas cylinders
                    d) To support large enterprises during trying times

                    Explanation: Shopkeepers are urging the government to take measures to control inflation and ease the financial burden on small businesses. The rise in prices of commercial LPG gas cylinders has left business owners concerned.

                    5. What is the purpose of monthly price revisions for both commercial and domestic LPG cylinders?

                    a) To stabilize prices and support small enterprises
                    b) To maximize profits for oil marketing companies
                    c) To create fluctuations in the market
                    d) To meet government regulations and market dynamics

                    Explanation: The purpose of monthly price revisions for both commercial and domestic LPG cylinders is to meet government regulations and market dynamics. It allows adjustments based on factors affecting the market.

                    6. What percentage was the cut in the price of aviation turbine fuel (ATF)?

                    a) 5.8%
                    b) 6%
                    c) 14.1%
                    d) 8.5%

                    Explanation: The price of aviation turbine fuel (ATF) was cut by almost 5.8%. This cut comes after four rounds of monthly price increases since July.

                    7. What percentage of an airline’s operating cost does jet fuel (ATF) make up for?

                    a) 10%
                    b) 20%
                    c) 30%
                    d) 40%

                    Explanation: Jet fuel (ATF) makes up for approximately 40% of an airline’s operating cost. The price cut in jet fuel will ease the financial burden on already financially strained airlines.

                    Brief Summary | UPSC – IAS

                    Oil marketing companies (OMCs) have announced an increase in the prices of commercial LPG gas cylinders, affecting businesses and consumers. The retail price of a 19 kg commercial LPG gas cylinder in Delhi will see a hike of ₹101, bringing the new rate to ₹1,833 per cylinder. Similar increases were observed in other major cities as well. This rise in prices has left business owners, particularly shopkeepers and restaurateurs, concerned and they are urging the government to take measures to control inflation and ease the financial burden on small businesses. In addition, the price of aviation turbine fuel (ATF) has been cut by almost 6%, providing some relief to financially strained airlines.

                    “Growth in India’s GST Revenues Surges to ₹1.72 Lakh Crore in October”

                    GST collections rise 13% to ₹1.72 lakh crore in October

                    Growth in India’s GST Revenues Reaches 10-Month High in October

                    An Indian consumer goods trader shows letters GST representing “Goods and Services Tax” (GST)at his shop in Hyderabad on August 3, 2016. Growth in India’s gross Goods and Services Tax (GST) revenues bounced back in October with tax collections rising 13.4% to the second-highest monthly tally of ₹1.72 lakh crore.An Indian consumer goods trader shows letters GST representing “Goods and Services Tax” (GST)at his shop in Hyderabad on August 3, 2016. Growth in India’s gross Goods and Services Tax (GST) revenues bounced back in October with tax collections rising 13.4% to the second-highest monthly tally of ₹1.72 lakh crore.

                    Growth in India’s gross Goods and Services Tax (GST) revenues bounced back in October with tax collections rising at a 10-month high pace of 13.4% to hit the second highest monthly tally of ₹1.72 lakh crore.

                    October’s GST receipts were 5.7% over the kitty in September, when growth in the indirect tax had slowed to a 27-month low of 10.2%. The 13.4% revenue growth marks the sharpest year-on-year uptick since December 2022 and breaks a three-month streak of deceleration.

                    Domestic transactions and services imports yielded a 13% uptick in October’s revenues. The Finance Ministry did not disclose the revenue growth from goods imports. Back of the envelope calculations by The Hindu indicate that GST levies on imports of goods rose 13.9% in October, which is faster than the growth from domestic transactions and the highest uptick in at least 9 months. Revenues from goods imports have contracted in four of the last seven months, including September.

                    GST Compensation Cess collections, which include ₹1,294 crore levied on goods imports, hit a record high of ₹12,456 crore in October. The previous highest collection of the cess levy that will persist till at least March 2026 was ₹12,025 crore received in April.

                    The Ministry did not share the revenue growth trends among States and union territories that is usually part of its monthly GST revenue statement, in the communique issued on Wednesday.

                    Instead, State GST revenue trends for the first seven months of 2023-24 were shared, including the amounts States were credited from collections of the Integrated GST (IGST). Following such IGST settlements, State GST revenues were up 12% between April and October 2023, with just two States reporting negative growth — Manipur (-19%) and Himachal Pradesh (-2%).

                    “The average gross monthly GST collection in the FY 2023-24 now stands at ₹1.66 lakh crore and is 11% more than that in the same period in the previous financial year,” the Ministry said.

                    Deadline effect

                    Experts believe October’s GST kitty, stemming largely from transactions that took place in September, got a fillip from some festive spending as well as compliance deadlines and steps to curb evasion.

                    “One of the reasons for this rise is the time barring period for financial year 2017-18. Moreover, the spate of notices and anti-evasion drive have led to substantial collections,” said Parag Mehta, partner, indirect tax at N.A. Shah Associates.

                    ICRA chief economist Aditi Nayar said the “higher than anticipated” collections would have got a leg-up from quarter-end adjustments as well as the overall momentum in the economy.

                    KPMG indirect tax head and partner Abhishek Jain also linked the significantly increased collection to settlement of disputes for 2017-18 as the normal period of limitation was ending on September 30. “A mid-year collection of such a high number is definitely worth a cheer and the ongoing festivities driven consumption could help this continue,” he reckoned.

                    Last month’s GST revenues included Central GST (CGST) of ₹30,062 crore, ₹38,171 crore of State GST, and ₹91,315 crore of IGST. “The government has settled ₹42,873 crore to CGST and ₹36,614 crore to SGST from IGST. The total revenue of Centre and the States in the month of October 2023 after regular settlement is ₹72,934 crore for CGST and ₹ 74,785 crore for SGST.

                    Significance of India’s GST Revenues Growth

                    The growth in India’s gross Goods and Services Tax (GST) revenues reaching a 10-month high in October is a positive indicator for the country’s economy. A 13.4% increase in tax collections signifies a strong rebound and breaks a three-month streak of deceleration. This growth indicates increased economic activity, both in domestic transactions and services imports.

                    Features of October’s GST Revenues

                    • October’s GST revenues reached a second-highest monthly tally of ₹1.72 lakh crore.
                    • GST levies on imports of goods rose 13.9% in October, faster than the growth from domestic transactions.
                    • GST Compensation Cess collections, including levies on goods imports, hit a record high of ₹12,456 crore.

                    Objectives of Goods and Services Tax (GST)

                    The Goods and Services Tax (GST) system in India was introduced to simplify the indirect tax structure and create a unified tax regime across the country. The main objectives of GST are:

                    1. To eliminate cascading taxes and reduce the multiplicity of taxes.
                    2. To create a seamless national market for goods and services.
                    3. To promote ease of doing business and improve the competitiveness of Indian businesses.
                    4. To improve tax compliance and increase tax revenues for the government.

                    Effects of October’s GST Revenues Growth

                    The growth in GST revenues has positive effects on the Indian economy:

                    • Increased tax collections provide more funds for the government to invest in infrastructure development, welfare programs, and other public services.
                    • Improved revenue collection indicates higher economic activity and consumer spending.
                    • Strengthened tax compliance helps in curbing tax evasion and promoting a fairer tax system.

                    Pros and Cons of GST Revenues Growth

                    Pros:

                    • Boosts government revenue and fiscal stability.
                    • Encourages economic growth and development.
                    • Fosters a transparent and simplified tax system.

                    Cons:

                    • Possible burden on small businesses due to compliance requirements.
                    • Impact on prices of goods and services, which may affect consumers.
                    • Challenges in administering and implementing GST across diverse sectors and regions.

                    Fun Fact

                    October’s GST revenues saw an uptick in part due to festive spending and compliance deadlines. This reflects how cultural celebrations and legal requirements can influence economic activities and revenue growth.

                    Mutiple Choice Questions

                    1. What was the growth rate of India’s gross Goods and Services Tax (GST) revenues in October?
                    a) 10.2%
                    b) 13.4%
                    c) 27%
                    d) 5.7%
                    Explanation: The growth rate of India’s gross Goods and Services Tax (GST) revenues in October was 13.4%, as mentioned in the article.

                    2. When did growth in India’s GST revenues bounce back?
                    a) September
                    b) October
                    c) November
                    d) December
                    Explanation: Growth in India’s GST revenues bounced back in October, according to the article.

                    3. What was the growth in October’s GST receipts compared to September?
                    a) 5.7%
                    b) 10.2%
                    c) 27%
                    d) 13.4%
                    Explanation: October’s GST receipts were 5.7% over the kitty in September, as mentioned in the article.

                    4. What was the uptick in October’s revenues from domestic transactions and services imports?
                    a) 10.2%
                    b) 13.9%
                    c) 5.7%
                    d) 13%
                    Explanation: October’s revenues from domestic transactions and services imports yielded a 13% uptick, as mentioned in the article.

                    5. What were the GST levies on imports of goods in October?
                    a) 13.4%
                    b) 13%
                    c) 13.9%
                    d) 10.2%
                    Explanation: GST levies on imports of goods rose 13.9% in October, which is faster than the growth from domestic transactions, as mentioned in the article.

                    6. What was the highest collection of the GST Compensation Cess in October?
                    a) ₹1,294 crore
                    b) ₹12,025 crore
                    c) ₹12,456 crore
                    d) ₹1.72 lakh crore
                    Explanation: The highest collection of the GST Compensation Cess in October was ₹12,456 crore, as mentioned in the article.

                    7. How much were State GST revenues up between April and October 2023?
                    a) 2%
                    b) 19%
                    c) 12%
                    d) -2%
                    Explanation: State GST revenues were up 12% between April and October 2023, as mentioned in the article.

                    8. What is the average gross monthly GST collection in the FY 2023-24?
                    a) ₹1.66 lakh crore
                    b) ₹1.72 lakh crore
                    c) ₹1,294 crore
                    d) ₹12,025 crore
                    Explanation: The average gross monthly GST collection in the FY 2023-24 now stands at ₹1.66 lakh crore, as mentioned in the article.

                    9. What were the reasons for the rise in October’s GST collection?
                    a) Festive spending and compliance deadlines
                    b) Economic momentum and settlement of disputes
                    c) Anti-evasion drive and time barring period
                    d) All of the above
                    Explanation: The rise in October’s GST collection was due to festive spending, compliance deadlines, and steps to curb evasion, as mentioned in the article.

                    10. How much was the Central GST (CGST) in October?
                    a) ₹30,062 crore
                    b) ₹38,171 crore
                    c) ₹91,315 crore
                    d) ₹72,934 crore
                    Explanation: The Central GST (CGST) in October was ₹30,062 crore, as mentioned in the article.

                    Brief Summary | UPSC – IAS

                    In October, India’s gross Goods and Services Tax (GST) revenues rebounded, increasing by 13.4% to reach ₹1.72 lakh crore, the second-highest monthly tally in 10 months. This growth comes after a slower period in September, when GST revenues only saw a 10.2% increase. The 13.4% growth is the sharpest year-on-year increase since December 2022, breaking a three-month streak of deceleration. The majority of the growth came from domestic transactions and services imports, with GST levies on imports of goods rising by 13.9%. GST Compensation Cess collections also hit a record high of ₹12,456 crore in October.

                    “Salary Increase Trends in India: 9.8% Expected for 2024”

                    Companies in India likely to give 9.8% salary raise in 2024, highest in APAC: Report

                    Salary Increase Forecast for Companies in India in 2024


                    Image used for representative purpose only.

                    Image used for representative purpose only. | Photo Credit: AFP

                    Companies in India are expected to give a salary raise of 9.8% in 2024, slightly lower than the actual salary increase of 10% in 2023, as companies across industries are still closely monitoring their cost structures, says a survey.

                    Significance

                    The salary increase forecast for companies in India in 2024 holds significance as it provides insights into the future compensation trends and reflects the economic conditions and business outlook of the country. It helps professionals and job seekers understand the potential salary growth in various sectors.

                    Features

                    The Willis Tower Watson’s ‘Salary Budget Planning India Report’ indicates that the median salary increase in India is projected to be 9.8% in 2024, close to the actual salary increase of 10% in 2023. This forecast is based on responses from approximately 32,512 companies across 150 countries, including 708 participants from India.

                    Objectives

                    The objective of the survey and the salary increase forecast is to provide organizations and individuals with valuable information for planning budgets, setting salary structures, and making informed decisions related to compensation. It helps companies attract and retain talent by offering competitive wages.

                    Effects

                    The salary increase forecast influences various aspects of the job market and economy. It impacts organizations’ financial planning, employee morale, and consumer spending. Higher salary increments can lead to increased disposable incomes and an improved standard of living for employees.

                    Pros and Cons

                    Pros:

                    • Provides valuable information for salary reviews and negotiations.
                    • Helps professionals plan their career paths based on potential salary growth.
                    • Encourages companies to stay competitive in talent acquisition and retention.

                    Cons:

                    • Higher salary increases may lead to inflationary pressures.
                    • Certain sectors may struggle to afford higher salary increments, impacting their competitiveness.

                    Fun Fact

                    Salary increases in India continue to be the highest across the Asia Pacific region. In 2024, Vietnam is projected to have a salary increase of 8%, followed by China (6%), the Philippines (5.7%), and Thailand (5%).

                    Note: The article content is a placeholder and may not represent actual information.

                    Mutiple Choice Questions

                    1. According to Willis Tower Watson’s ‘Salary Budget Planning India Report’, what is the forecasted median salary increase in India for 2024?
                    a) 10%
                    b) 9%
                    c) 9.8%
                    d) 8%

                    Explanation: According to the report, the forecasted median salary increase in India for 2024 is 9.8%.

                    2. In which year did companies in India give a salary increase of 10%?
                    a) 2022
                    b) 2023
                    c) 2024
                    d) 2025

                    Explanation: Companies in India gave a salary increase of 10% in the year 2023.

                    3. Which country in Asia Pacific is projected to have the highest salary increase for 2024?
                    a) China
                    b) India
                    c) Vietnam
                    d) Philippines

                    Explanation: Vietnam is projected to have the highest salary increase of 8% in Asia Pacific for 2024.

                    4. In which sector are salary increments expected to reduce for 2024?
                    a) IT sector
                    b) Manufacturing sector
                    c) Pharmaceuticals sector
                    d) Media sector

                    Explanation: Salary increments are expected to reduce in the IT sector for 2024.

                    5. What are some of the major concerns influencing salary increase budget changes for 2024?
                    a) Tighter labour markets and rising inflation
                    b) Decreased demand in the market
                    c) Decreased profitability for companies
                    d) Government regulations

                    Explanation: According to the report, tighter labour markets and rising inflation have been cited as some of the major concerns influencing salary increase budget changes for 2024.

                    6. Which sectors are expected to see the highest salary increase at 10% for 2024?
                    a) Technology, media and gaming
                    b) Financial services and retail sectors
                    c) Manufacturing and engineering sectors
                    d) IT and pharmaceutical sectors

                    Explanation: The technology, media and gaming, financial services, and retail sectors are expected to see the highest salary increase at 10% for 2024.

                    7. What is the voluntary attrition rate in India for 2023?
                    a) 15.3%
                    b) 14.6%
                    c) 12.9%
                    d) 16.8%

                    Explanation: The voluntary attrition rate in India for 2023 is 14.6%.

                    Brief Summary | UPSC – IAS

                    Indian companies are anticipated to increase salaries by 9.8% in 2024, slightly less than the actual increase of 10% in 2023, according to Willis Tower Watson’s Salary Budget Planning India Report. The survey revealed that salary increases in India continue to be among the highest in the Asia Pacific region. While the IT sector is expected to see a decrease in salary increments, sectors such as manufacturing, pharmaceuticals, media, gaming, and global captive centres are expanding. Tighter labor markets and rising inflation are cited as major concerns impacting salary budget changes, but more companies have increased their salary hike budgets compared to 2022.

                    Record 7.65 crore Income Tax Returns filed, highest in assessment year

                    IT return filings climb to record at 7.65 crore  

                    Record High Income Tax Return Filings: Significance, Features, Objectives, Effects, Pros, and Cons


                    Income Tax Return (ITR) filings for this assessment year crossed a record 7.65 crore by October 31, about 11.7% higher than the 6.85 crore returns filed by November 7 last year, the Income Tax Department said on Wednesday. 

                    Income Tax Return (ITR) filings for this assessment year crossed a record 7.65 crore by October 31, about 11.7% higher than the 6.85 crore returns filed by November 7 last year, the Income Tax Department said on Wednesday. 
                    | Photo Credit: Twitter/@IncomeTaxIndia 

                    Income Tax Return (ITR) filings for this assessment year crossed a record 7.65 crore by October 31, about 11.7% higher than the 6.85 crore returns filed by November 7 last year, the Income Tax Department said on Wednesday.

                    Moreover, the total ITRs filed so far in this financial year, for all assessment years, also hit an all-time high of 7.85 crore, compared with a total of 7.78 crore ITRs filed in all of 2022-23.

                    October 31 was the deadline for taxpayers whose accounts are required to be audited and who do not have any international or specified domestic transactions. Some crucial statutory forms also have to be filed by the same date, and more than 1.44 crore such forms had been filed by Tuesday, the department said.

                    By July 31, which was the filing deadline for most taxpayers, total ITRs filed this year had touched a high of 6.77 crore, reflecting a 16.1% increase, with 53.67 lakh taxpayers filing returns for the first time.

                    The IT department said most of the returns filed had been verified and processed already. “Out of the 7.65 crore ITRs filed for Assessment Year 2023-24, more than 7.51 crore ITRs have already been verified.,” the department said. “Out of the 7.51 crore verified ITRs, 7.19 crore [or almost 96%] have already been processed” till October 31, it added.

                    Significance of Record High Income Tax Return Filings

                    The record high income tax return filings for this assessment year indicate an increased compliance among taxpayers. It showcases a growing awareness and importance placed on fulfilling tax obligations. The significant increase in the number of filings compared to the previous year suggests that more individuals and businesses are actively participating in the tax system.

                    Features of the Income Tax Return Filings

                    – Income Tax Return (ITR) filings have reached a record high of 7.65 crore by October 31, an increase of 11.7% compared to last year’s filings.
                    – The total ITRs filed in the current financial year, across all assessment years, have also achieved an all-time high of 7.85 crore.
                    – The deadline for filing ITRs for taxpayers whose accounts require auditing and who have no international or specified domestic transactions was October 31.
                    – By July 31, a total of 6.77 crore ITRs had been filed, representing a 16.1% increase from the previous year.
                    – More than 1.44 crore crucial statutory forms were filed by the deadline date.

                    Objectives of Income Tax Return Filings

                    The objective of income tax return filings is to ensure proper reporting and assessment of taxable income by individuals and businesses. It helps to:

                    1. Promote Compliance: The filing process encourages taxpayers to accurately report their income and pay the appropriate amount of taxes, thus promoting tax compliance.
                    2. Facilitate Revenue Collection: Income tax return filings enable the government to collect revenue for funding public services and projects.
                    3. Assess Eligibility for Deductions and Benefits: Filing ITRs allows individuals to claim deductions, exemptions, and benefits they are eligible for under the tax laws.
                    4. Establish Financial History: Consistent filing of ITRs builds a financial history for individuals and businesses, which can be valuable for various financial transactions, such as applying for loans or obtaining credit.

                    Effects of High Income Tax Return Filings

                    The effects of a high number of income tax return filings are:

                    1. Increased Revenue: Higher filings indicate a boost in the government’s tax revenue, allowing for increased public expenditure on welfare, infrastructure, education, healthcare, and more.
                    2. Enhanced Tax Transparency: With more taxpayers participating in filing returns, the tax system becomes more transparent, reducing the possibility of tax evasion and encouraging fair and equitable taxation.
                    3. Strengthened Governance: Greater tax compliance strengthens governance and promotes efficiency, accountability, and transparency in financial management.

                    Pros and Cons of Income Tax Return Filings

                    Pros:
                    – Encourages tax compliance and responsible citizenship.
                    – Provides an opportunity for individuals to claim deductions and benefits.
                    – Supports funding for government initiatives and public services.
                    – Establishes a transparent and efficient tax system.

                    Cons:
                    – Can be complex and time-consuming for individuals with limited tax knowledge or resources.
                    – May create a burden for small businesses or self-employed individuals with multiple tax obligations.
                    – Potential privacy concerns regarding the collection and sharing of personal financial information.

                    *Fun Fact: The total number of Income Tax Return filings for this assessment year is even higher than the previous year, displaying a positive trend of increasing tax compliance and participation in the tax system.*

                    In conclusion, the record high income tax return filings demonstrate the growing significance and participation of individuals and businesses in fulfilling their tax obligations. The increase reflects enhanced tax compliance, transparency, and revenue collection. While the filing process may have its challenges, it aims to promote responsible citizenship, support government initiatives, and establish a fair and equitable tax system.

                    Mutiple Choice Questions

                    1. What is the total number of Income Tax Return (ITR) filings for this assessment year?
                    a) 7.85 crore
                    b) 7.65 crore
                    c) 6.85 crore
                    d) 7.78 crore

                    Explanation: The total number of ITR filings for this assessment year is 7.65 crore.

                    2. How much higher are the ITR filings for this assessment year compared to the previous year?
                    a) 10%
                    b) 11.7%
                    c) 12%
                    d) 13%

                    Explanation: The ITR filings for this assessment year are about 11.7% higher than the previous year.

                    3. What is the deadline for taxpayers whose accounts are required to be audited and who do not have any international or specified domestic transactions?
                    a) October 31
                    b) November 7
                    c) July 31
                    d) December 31

                    Explanation: The deadline for taxpayers whose accounts are required to be audited and who do not have any international or specified domestic transactions is October 31.

                    4. How many statutory forms had been filed by the deadline?
                    a) 1.44 crore
                    b) 1.65 crore
                    c) 1.78 crore
                    d) 1.51 crore

                    Explanation: More than 1.44 crore statutory forms had been filed by the deadline.

                    5. What was the total number of ITR filings by July 31, the filing deadline for most taxpayers?
                    a) 6.85 crore
                    b) 6.77 crore
                    c) 7.65 crore
                    d) 7.78 crore

                    Explanation: The total number of ITR filings by July 31 was 6.77 crore.

                    6. What percentage of the filed ITRs have already been processed?
                    a) 86%
                    b) 90%
                    c) 96%
                    d) 100%

                    Explanation: Out of the filed ITRs, almost 96% have already been processed.

                    Note: The questions and explanations are based on the provided information.

                    Brief Summary | UPSC – IAS

                    A record-breaking 7.65 crore Income Tax Return (ITR) filings have been submitted for this assessment year by October 31, an 11.7% increase compared to last year. The total number of ITRs filed for all assessment years this financial year is 7.85 crore, surpassing the total of 7.78 crore filed in 2022-23. The majority of filings have already been verified and processed by the Income Tax Department. The deadline for tax returns requiring audits and lacking international or specified domestic transactions was October 31, with over 1.44 crore statutory forms filed by October 30.

                    “Financial Dependency and Limited Control: Challenges of Indian City Governments”

                    Staff shortage, financial dependency plague local governance in India | Data

                    The State of Local Governments in Indian Cities: An Analysis


                    Mega cities: The illuminated view of the Brihan Mumbai Municipal Corporation building.

                    Mega cities: The illuminated view of the Brihan Mumbai Municipal Corporation building.
                    | Photo Credit: ROY CHOWDHURY A

                    Introduction

                    An annual survey of Indian cities reveals the current state of local governments and their functioning. This survey indicates that most local governments are financially dependent on their State governments, limiting their control over hiring and work distribution. Additionally, the survey identifies various issues in terms of power, transparency, and staff shortage that impact the effectiveness and efficiency of local governance.

                    Significance and Objectives

                    The report aims to shed light on the challenges faced by Indian cities in terms of local governance and highlight the need for reforms. By identifying the areas where local governments lack powers, transparency, and adequate staff, the report seeks to prompt policymakers and stakeholders to take necessary actions.

                    Key Features and Findings

                    • Financial Dependency: The survey reveals that a majority of local governments rely on their State governments for funding.
                    • Limited Control: Local governments have limited control over hiring and work distribution.
                    • State Approval for Borrowing: Except for five States, all others require State approval before borrowing money.
                    • Staff Appointment and Promotions: Local governments have limited power in appointing staff and initiating disciplinary proceedings.
                    • Lack of Transparency: Many cities lack transparency in publishing civic information, hindering citizens’ access to important data and reports.
                    • Financial Transparency: The report highlights that few cities publish their financial statements, budgets, and internal audit information.
                    • Staff Shortage: Due to poor control over staff appointments, a significant percentage of posts in municipal corporations are vacant.

                    Effects and Implications

                    The findings of the survey indicate the following effects of the current state of local governments:

                    • Limited Accountability: The lack of power and transparency restricts local governments’ ability to hold workers accountable.
                    • Inefficiency and Ineffectiveness: Financial dependence, limited control, and staff shortage hinder the efficiency and effectiveness of local governance.
                    • Democracy and Representation: The asymmetry of power between city categories raises concerns about democratic processes and representation.

                    Pros and Cons

                    While the survey highlights several drawbacks in the functioning of local governments, it also provides an opportunity for improvement. The report serves as a valuable tool for policymakers to identify areas of improvement and implement necessary reforms. However, implementing these reforms may require significant effort and coordination between multiple stakeholders.

                    Fun Fact: Staff Shortage in Indian Cities

                    Comparisons with other metropolises like New York, London, and Johannesburg reveal a significant difference in the number of city workers per one lakh population. Indian cities such as Bengaluru, Hyderabad, and Mumbai have a considerably lower number of city workers compared to their global counterparts. For example, New York and London have nearly 10 times more city workers per one lakh population than Bengaluru and Hyderabad.

                    Conclusion

                    The annual survey sheds light on the state of local government in Indian cities. It highlights the financial dependency, limited power, lack of transparency, and staff shortage that hinder the effectiveness of local governance. The findings of this report emphasize the need for reforms to empower local governments, promote transparency, and address staff shortages. By addressing these issues, Indian cities can improve their governance and better serve their citizens.

                    Mutiple Choice Questions

                    1. According to the Annual Survey of India’s City-Systems, which of the following statements is true?
                    A. All Indian cities have complete control over their finances.
                    B. Cities with a population of less than 0.5 million have more say in the city’s finances.
                    C. Megacities have mayors with a five-year tenure who are directly elected.
                    D. The Janaagraha Centre for Citizenship and Democracy is a for-profit institution.

                    Explanation: The correct answer is C. The report states that megacities have more say over their finances, but their mayors do not have a five-year tenure and are not directly elected.

                    2. Which of the following is NOT mentioned as a limitation of mayors and councils in staff appointments and promotions?
                    A. Cities lack control over their senior management teams.
                    B. No city has complete power over its staff.
                    C. Cities have the authority to appoint municipal commissioners.
                    D. Disciplinary proceedings against senior management teams are challenging to initiate.

                    Explanation: The correct answer is C. The report mentions that only a handful of States have empowered their city governments to appoint municipal commissioners, indicating that most cities lack this authority.

                    3. What percentage of municipal corporation posts in India are vacant, according to the data?
                    A. 28%
                    B. 35%
                    C. 41%
                    D. 58%

                    Explanation: The correct answer is B. The data shows that 35% of posts in India’s municipal corporations are vacant.

                    4. Which of the following statements is true regarding the availability of civic data in capital cities?
                    A. All capital cities in India publish their internal audit reports.
                    B. 17 capital cities have enacted the Public Disclosure Law.
                    C. Only one capital city publishes annual reports.
                    D. Two capital cities make available their decision-making process.

                    Explanation: The correct answer is D. The report states that 17 capital cities make available their decision-making process, indicating that two capital cities publish annual reports and eleven publish their minutes of meetings.

                    5. How does the number of municipal staff per one lakh population in Indian cities compare to global cities like New York and London?
                    A. Indian cities have significantly more municipal staff.
                    B. New York and London have more municipal staff than Indian cities.
                    C. The number of municipal staff is similar in Indian and global cities.
                    D. Bengaluru has the highest number of municipal staff per one lakh population.

                    Explanation: The correct answer is B. The report mentions that there are 5,906 city workers in New York and 2,936 in London for every one lakh population, indicating that these cities have more municipal staff compared to Indian cities.

                    Brief Summary | UPSC – IAS

                    A recent survey of Indian cities conducted by the Janaagraha Centre for Citizenship and Democracy reveals that most local governments in India are financially dependent on their State governments. The survey also found that city governments have limited control over hiring and work distribution, with only Assam empowering its city governments to collect all key taxes. Additionally, mayors and councils have limited power in staff appointments and promotions, leading to high vacancy rates in municipal positions. Furthermore, the survey highlights the lack of transparency in publishing civic information and financial statements. These issues contribute to the poor functioning of Indian cities compared to international counterparts like New York and London.

                    “State of Working India 2023: Job Creation, Social Security, and Economic Challenges”

                    Did EFLU release backdated circulars during protests?

                    The Changing Landscape of Regular Wage Jobs in India

                    The share of workers with regular wages in India has experienced significant growth since 2004, according to a report titled “State of Working India 2023: Social Identities and Labour Market Outcomes” prepared by economists and researchers at the Azim Premji University. The report highlights the increase in regular job creation, with the country producing three million regular jobs annually between 2004 and 2017, and five million jobs from 2017 to 2019. However, the report also sheds light on the recent slowdown in job creation due to economic downturns and the COVID-19 pandemic.

                    The researchers discovered that only 6% of these regular wage jobs provide any form of social security, such as health insurance or accidental care insurance. The findings are based on data sourced from National Statistical Organisation surveys, census reports, periodic labour force surveys, and other government sources.

                    Over the years, the percentage of men working in regular jobs with fixed monthly or bi-weekly salaries has increased from 18% to 25%, while the proportion of women in such jobs has jumped from 10% to 25%.

                    Caste-based Segregation

                    The report also examines caste-based segregation in employment. In 2004, more than 80% of sons of casual wage workers engaged in casual employment, regardless of their caste. However, the incidence of better-quality work, such as regular salaried jobs, increased for non-SC/ST castes, reducing the percentage to 53% by 2018. Even among SC/ST castes, the percentage decreased, though to a lesser extent, from 86% to 76%. The study recognizes a decline in caste-based segregation and highlights that representation of SCs in waste management and sewerage decreased but increased slightly again in 2011.

                    Gender-based Earnings Disparities

                    The report suggests a reduction in gender-based earnings disparities over the past 20 years. In 2004, salaried women workers earned only 70% of what men earned. By 2017, this gap had narrowed, and women were earning 76% of men’s salaries. Since then, the gender pay gap has remained relatively constant till 2021-22, indicating some progress in addressing gender inequality in the labor market.

                    Effects of the COVID-19 Pandemic

                    The report delves into the impact of the COVID-19 pandemic on employment rates. Surprisingly, the unemployment rate was lower post-COVID than it was before the pandemic for all education levels. However, it remained above 15% for graduates, particularly concerning was the fact that it spiked to a staggering 42% for graduates under 25 years old. Additionally, the rate of women unemployment has risen due to a distress-led increase in self-employment. Prior to the pandemic, 50% of women were self-employed, but this number increased to 60% in the aftermath of COVID-19. Consequently, earnings from self-employment declined in real terms during this period, reaching only 85% of the pre-pandemic levels by the second quarter of 2021.

                    Significance

                    The findings of this report provide crucial insights into the changing dynamics of the Indian labor market, highlighting both the progress made in terms of regular wage job creation and the challenges the country faces in terms of providing social security benefits for workers. The report sheds light on the need for policies and interventions to bridge the ongoing gender-based earnings disparities and address caste-based segregation in employment. Additionally, the impact of the COVID-19 pandemic amplifies the urgency to prioritize employment opportunities for graduates, especially women, and ensure their financial stability.

                    Fun Fact

                    Did you know that the number of regular wage jobs created annually in India increased from three million between 2004 and 2017 to five million between 2017 and 2019? This signifies the efforts made to generate stable employment opportunities in the country and improve the livelihoods of its citizens.

                    Mutiple Choice Questions

                    1. According to the report, the share of workers with regular wage has increased since which year?
                    a) 2004
                    b) 2017
                    c) 2019
                    d) 2023

                    Explanation: According to the report, the share of workers with regular wage has increased since 2004.

                    2. How many regular jobs did the country create annually till 2017, according to the report?
                    a) 1 million
                    b) 3 million
                    c) 5 million
                    d) 10 million

                    Explanation: According to the report, the country created three million regular jobs annually till 2017.

                    3. Why did the pace of regular wage jobs creation decrease since 2019, according to the report?
                    a) Economic growth
                    b) Government policies
                    c) Economic slowdown and the pandemic
                    d) Increase in automation

                    Explanation: According to the report, the pace of regular wage jobs creation decreased since 2019 due to economic slowdown and the pandemic.

                    4. What percentage of regular wage jobs provide social security, according to the report?
                    a) 20%
                    b) 35%
                    c) 50%
                    d) 6%

                    Explanation: According to the report, only 6% of regular wage jobs provide any kind of social security.

                    5. What is the percentage increase in men working in regular jobs over the years, according to the report?
                    a) 7%
                    b) 10%
                    c) 18%
                    d) 25%

                    Explanation: According to the report, the percentage of men working in regular jobs has increased from 18% to 25% over the years.

                    6. How has gender-based earnings disparity changed in the last 20 years, according to the report?
                    a) Decreased
                    b) Increased
                    c) Remained constant
                    d) Fluctuated

                    Explanation: According to the report, gender-based earnings disparities have reduced in the last 20 years.

                    7. What is the unemployment rate among graduates under 25 years, according to the report?
                    a) 15%
                    b) 25%
                    c) 42%
                    d) 50%

                    Explanation: According to the report, the unemployment rate among graduates under 25 years is 42%.

                    8. What is the percentage of women who were self-employed before COVID, according to the report?
                    a) 40%
                    b) 50%
                    c) 60%
                    d) 70%

                    Explanation: According to the report, before COVID, 50% of women were self-employed.

                    9. What has happened to self-employment earnings post-COVID, according to the report?
                    a) Increased
                    b) Stayed the same
                    c) Decreased
                    d) Fluctuated

                    Explanation: According to the report, earnings from self-employment declined in real terms post-COVID.

                    Brief Summary | UPSC – IAS

                    A report from Azim Premji University reveals that the rate of regular wage job creation in India has slowed down since 2019 due to economic downturn and the pandemic. Only 6% of these jobs offer any form of social security, such as health insurance. However, the share of workers with regular wages has increased over the years, with men increasing from 18% to 25% and women increasing from 10% to 25%. Caste-based segregation in employment has also decreased, particularly among non-SC/ST castes. Gender-based earnings disparities have reduced, but unemployment rates remain high, especially for graduates and young women in self-employment.

                    Indian Economy to Grow at 6.5% Despite Oil Price & Climate Uncertainty, says NITI Aayog Official

                    Did EFLU release backdated circulars during protests?

                    The Indian Economy Set to Grow at 6.5% in the Current Fiscal Year, Says NITI Aayog Member

                    The Indian economy is projected to grow at around 6.5% in the current fiscal year, according to Arvind Virmani, a member of NITI Aayog. This growth is expected despite challenges such as high crude oil prices and increased uncertainty due to climate change. Mr. Virmani highlights the consistent increase in gross household savings in India as a positive indicator.

                    Significance

                    The projected growth of the Indian economy is significant as it indicates stability and resilience in the face of external challenges. It demonstrates the ability of the Indian economy to navigate through global fluctuations and maintain a reasonable growth rate. The increase in gross household savings also reflects the financial consciousness and saving habits of Indian households.

                    Features

                    According to Mr. Virmani, the fluctuations in global GDP have more or less balanced out for India, assuming normal changes. This suggests that India’s growth projection of 6.5% has been calculated by taking into account global economic fluctuations. He also emphasizes the importance of understanding how GDP is constructed to avoid misunderstandings and claims of inflated economic growth.

                    Objectives

                    The objective of projecting a 6.5% GDP growth rate is to provide a realistic outlook for the Indian economy in the current fiscal year. This projection serves as a guide for policymakers, businesses, and individuals to make informed decisions based on the expected economic growth. It also reassures investors and international agencies about India’s economic potential.

                    Effects

                    The projected GDP growth rate of 6.5% has several effects on different aspects of the economy. It instills confidence in businesses, leading to increased investments and expansion plans. It also creates job opportunities and promotes consumer spending, contributing to overall economic growth. Additionally, the increase in gross household savings reflects a healthier financial position for households, providing a cushion against unforeseen expenses.

                    Pros and Cons

                    The projected GDP growth rate of 6.5% has several pros, including economic stability, job creation, and increased investments. It indicates that the Indian economy is resilient and can withstand external challenges. However, there may be cons associated with high inflation due to rising crude oil prices. Inflation can impact the purchasing power of consumers, leading to decreased discretionary spending and potential economic slowdown.

                    Fun Fact

                    A fun fact related to the Indian economy is that it is the world’s sixth-largest economy by nominal GDP and the third-largest by purchasing power parity. India has made significant progress in recent years, becoming a major player in global trade and investment.

                    In conclusion, the projected GDP growth rate of 6.5% for the current fiscal year demonstrates the resilience and stability of the Indian economy. It highlights the increase in gross household savings and reaffirms India’s economic potential. However, challenges such as high crude oil prices and inflation should be effectively managed to ensure sustained economic growth.

                    Mutiple Choice Questions

                    1. According to NITI Aayog member Arvind Virmani, what is the projected GDP growth for the Indian economy in the current fiscal year?
                    a) 6.5% plus minus 0.5%
                    b) 7.2%
                    c) 9.1%
                    d) 6.83%

                    Explanation: Arvind Virmani projected that the GDP growth for the Indian economy in the current fiscal year is 6.5% plus minus 0.5%.

                    2. Which factor presents a risk for India’s economy, according to Arvind Virmani?
                    a) Climate change
                    b) Consumer debt
                    c) Crude oil prices
                    d) Falling household savings

                    Explanation: Arvind Virmani mentioned that the risk for India’s economy is crude oil prices, as they have increased in recent years.

                    3. How did the Finance Ministry respond to the criticism of inflated GDP?
                    a) By dismissing the criticism and stating that income side estimates were used
                    b) By acknowledging the criticism and promising to revise their GDP calculations
                    c) By ignoring the criticism and refusing to provide any explanation
                    d) By blaming international agencies for the inflated GDP figures

                    Explanation: The Finance Ministry dismissed the criticism of inflated GDP by stating that they have followed the consistent practice of using income side estimates to compute economic growth. They also highlighted that many international agencies have revised upwards their forecast after seeing the first quarter data.

                    4. According to Arvind Virmani, why is the net household savings ratio in India falling?
                    a) Increased debt-to-GDP ratio
                    b) Decreased gross household savings
                    c) Falling consumer debt
                    d) Rise in crude oil prices

                    Explanation: Arvind Virmani explained that the net household savings ratio in India is falling because consumer debt is increasing faster, but the gross household savings ratio has consistently gone up.

                    5. How has the rise in crude oil prices impacted inflation, according to Arvind Virmani?
                    a) It has led to a decrease in inflation
                    b) It has had no impact on inflation
                    c) It has caused inflation to increase
                    d) It has stabilized inflation at a moderate level

                    Explanation: Arvind Virmani stated that the rise in crude oil prices will have some inflationary impact, as the income of the people goes down. However, he also mentioned that the government has managed food inflation reasonably well.

                    6. How did former Chief Economic Advisor Arvind Subramanian argue that India’s GDP should be measured?
                    a) From the expenditure side
                    b) From the productivity side
                    c) From the income side
                    d) From the savings side

                    Explanation: Arvind Subramanian argued that India’s GDP should be measured from the expenditure side rather than the productivity side.

                    7. How did Chief Economic Advisor V Anantha Nageswaran respond to criticism of “statistical discrepancy” in the first quarter GDP data?
                    a) He acknowledged the discrepancy and promised to address it
                    b) He dismissed the criticism and referred to past data
                    c) He blamed the statistical authority for the discrepancy
                    d) He called for a revision in the methodology of calculating GDP

                    Explanation: Chief Economic Advisor V Anantha Nageswaran rejected criticism of “statistical discrepancy” in the first quarter GDP data by referring to past data. He stated that when the same statistical authority reported the severest contraction in the first quarter of 2020, the naysayers had called it credible as it suited their narrative.

                    Brief Summary | UPSC – IAS

                    The Indian economy is expected to grow at around 6.5% in the current fiscal year, despite challenges such as high crude oil prices and increased uncertainty due to climate change, according to NITI Aayog member Arvind Virmani. He stated that fluctuations in global GDP have balanced out for India. Virmani dismissed claims by US-based economists that India is overstating economic growth, arguing that they lack an understanding of how GDP is constructed. The Finance Ministry also defended the country’s GDP data, highlighting other indicators such as purchasing managers’ indices and bank credit growth. High crude oil prices and climate change were highlighted as risks. Gross household savings in India have consistently increased, although net household savings have fallen due to rising consumer debt. Virmani noted that India’s debt-to-GDP ratio is low compared to other countries and said the government has managed food inflation reasonably well.

                    “GDP Growth: Unveiling the Nuances and Disparities in India’s Economic Performance”

                    Tracking India’s growth trajectory - The Hindu

                    The Nuanced Story of India’s GDP Growth Rate: A Comprehensive Analysis


                    For representative purposes.

                    For representative purposes.
                    | Photo Credit: Getty Images

                    The conventional way to assess a country’s economic situation is to look at the quarterly (three-month) and annual (12-month) GDP (gross-domestic-product) growth rate and compare it to previous quarters as well as years. In the quarterly release of GDP figures by the NSO (National Statistical Office), the country’s performance is likened to reviewing a report card of its economic performance. However, a critical difference between reviewing a report card and India’s economic figures is that the latter tells a far more nuanced story.

                    The Q1 data covering the GDP growth rate from April to June of FY24 boasts a nominal growth rate of 8% and a real growth rate of 7.8%. The growth story currently posits that the numbers reflect an uptick in the agriculture sector growing at 3.5%, unlikely to be sustained due to pressure from the El Niño phenomenon, and the services industry, with financial, real estate, and professional services growing at 12.2%. Moreover, there is also talk of sustaining a close to 6.5% growth rate for the current financial year. However, a closer look at the numbers provides a far more interesting interpretation of the growth.

                    Calculating GDP

                    The first factor to consider is that calculating the GDP growth rate involves many complex statistical choices and sophisticated statistical operations. One such decision the NSO made while conducting their research was to use the income approach of calculating GDP rather than the expenditure approach. The income approach involves summing up all national incomes from the factors of production and accounting for other elements such as taxes, depreciation, and net foreign factor income. The assumption generally is that both methods lead to similar results.

                    However, the expenditure approach dictates headline growth to be 4.5% rather than 7.8% which is a large discrepancy. Moreover, another essential statistical operation is the adjusting for inflation using the price deflator. Typically, the deflator is meant to adjust growth figures when they are overstated by inflation. In this case, deflation due to falling commodity prices, reflected in the wholesale price index, has worked to overstate the real growth. Furthermore, there is a base effect from the COVID-19 degrowth period, which continues to plague India’s growth figures. Although less pronounced in FY24, the base effect has a role in comparative statistics due to sporadic growth in the years following FY20-21.

                    Additionally, one must consider whether the proposed, supposedly cooled, inflation rate calculated through the consumer price index can be sustained at current levels with the impending depreciation of the Indian rupee against the dollar due to capital outflow pressures resulting from the RBI’s reluctance to raise interest rates. India is a net importer, and its most significant import consists of crude petroleum, whose price seems to be rising due to Saudi’s $100 per barrel push and rupee depreciation. The domestic consumption of diesel, a proxy for economic activity in India, fell by 3% in August, which, if sustained, does not paint a rosy growth picture for the coming quarters.

                    Revenue from taxes

                    Moreover, the government’s tax revenue from direct taxes has weakened over the previous quarter while the indirect tax revenue remained strong, indicating a K-shaped pattern. The income streams from progressive taxation (more significant tax burden on those higher on the income ladder) seem to be a laggard compared to its regressive counterpart. A muted growth of direct tax collected in an economy boosted by the services industry is a statistical discrepancy that remains unexplained in the proposed GDP growth story. Direct and personal taxes should (in the absence of any significant policy changes) have grown closer to the nominal growth rate than it has currently. Narrowing revenue streams indicate forced austerity measures, as the government intends to control the budget deficit, and hence the interest rate. Therefore, growth in FY24 stemming from government expenditure seems to be a pipe dream.

                    A nuanced approach

                    In conclusion, after a meticulous analysis of India’s Q1 FY24 economic transcript, it becomes palpable that the reported growth narrative might be somewhat overembellished. The divergence in growth figures brought forth by the income and expenditure approaches manifest a significant disparity, raising fundamental questions about the veracity of the promulgated optimistic narrative. Moreover, the underpinnings of this growth story, nuanced by inflationary adjustments and conspicuous fluctuations in tax revenue streams, signal a cautious trajectory. Additionally, the apprehensive outlook on the agriculture sector and potential fiscal constraints paint an arguably more restrained picture than initially portrayed. Therefore, it seems prudent to assert that India’s economic performance, although showing signs of resilience, does not quite emerge as the unequivocal success story depicted in initial observations, urging a more nuanced and critical approach in assessing the trajectory ahead.

                    Anand Srinivasan is a consultant and Sashwath Swaminathan is a research assistant at Aionion Investment Services

                    Significance of India’s GDP Growth Rate

                    India’s GDP growth rate is a crucial metric used to assess the country’s economic performance. It provides insights into the overall health and sustainability of the economy. The growth rate influences investor confidence, policy decisions, and public sentiment. Understanding the nuances of these figures is essential to make informed judgments and predictions about the future trajectory of the economy.

                    Key Features of India’s GDP Growth Rate

                    • The nominal growth rate for Q1 FY24 is reported at 8%, while the real growth rate stands at 7.8%.
                    • The growth is driven by the agriculture sector (3.5%) and the services industry, particularly financial, real estate, and professional services (12.2%).
                    • Growth figures are adjusted for inflation using the price deflator.
                    • The income approach is used for calculating GDP, taking into account factors like national incomes and taxes.
                    • The divergence between income and expenditure approaches results in significant disparities in growth figures.

                    Objectives and Effects of GDP Growth Rate

                    The primary objective of achieving a positive GDP growth rate is to ensure economic stability, improve living standards, and reduce unemployment. Sustainable and robust growth can lead to increased investment, higher incomes, and improved infrastructure. However, an overly optimistic or misrepresented growth narrative can result in misallocation of resources, policy misjudgments, and inaccurate economic forecasts.

                    Pros and Cons

                    Pros:

                    • Positive GDP growth rate reflects economic progress and potential for development.
                    • Increased growth can attract foreign investment and boost exports.
                    • Provides opportunities for job creation and poverty alleviation.

                    Cons:

                    • Overstated growth figures can lead to unrealistic expectations and misinformed policy decisions.
                    • Unequal distribution of growth benefits can exacerbate income inequality.
                    • Environmental implications of growth, such as increased carbon emissions, resource depletion, and ecological degradation.

                    Fun Fact

                    India is the world’s seventh-largest economy by nominal GDP and third-largest by purchasing power parity. Its GDP growth rate has been a topic of significant interest and debate among economists, policymakers, and investors due to its potential to drive global economic performance.

                    Mutiple Choice Questions

                    1. What is the conventional way to assess a country’s economic situation?
                    A) Analyzing the quarterly and annual GDP growth rates
                    B) Reviewing the report card of the country’s economic performance
                    C) Comparing the current GDP figures with previous quarters and years
                    D) All of the above

                    Explanation: The conventional way to assess a country’s economic situation is by looking at the quarterly and annual GDP growth rates and comparing them to previous quarters and years, similar to reviewing a report card of its economic performance.

                    2. What is the nominal growth rate of India’s GDP in Q1 of FY24?
                    A) 4.5%
                    B) 7.8%
                    C) 8%
                    D) 12.2%

                    Explanation: The nominal growth rate of India’s GDP in Q1 of FY24 is 8%.

                    3. Which sector of the Indian economy is unlikely to sustain its growth due to the El Niño phenomenon?
                    A) Agriculture sector
                    B) Services industry
                    C) Financial sector
                    D) Real estate sector

                    Explanation: The agriculture sector is unlikely to sustain its growth due to the pressure from the El Niño phenomenon.

                    4. Which approach did the NSO use to calculate India’s GDP growth rate?
                    A) Income approach
                    B) Expenditure approach
                    C) Both approaches
                    D) None of the above

                    Explanation: The NSO used the income approach to calculate India’s GDP growth rate.

                    5. What is the headline growth rate of India’s GDP according to the expenditure approach?
                    A) 4.5%
                    B) 7.8%
                    C) 8%
                    D) 12.2%

                    Explanation: According to the expenditure approach, the headline growth rate of India’s GDP is 4.5%.

                    6. What is the purpose of using the price deflator in adjusting growth figures?
                    A) To overstate the real growth
                    B) To adjust for inflation
                    C) To calculate the nominal growth rate
                    D) To calculate the GDP per capita

                    Explanation: The purpose of using the price deflator is to adjust growth figures when they are overstated by inflation.

                    7. What is the significance of the base effect on India’s growth figures?
                    A) It causes inflationary adjustments
                    B) It reflects the impact of the El Niño phenomenon
                    C) It is a result of falling commodity prices
                    D) It affects comparative statistics

                    Explanation: The base effect from the COVID-19 degrowth period has a role in comparative statistics due to sporadic growth in the years following FY20-21.

                    8. Why is the impending depreciation of the Indian rupee against the dollar a concern for India’s growth?
                    A) It leads to capital outflow pressures
                    B) It increases import costs
                    C) It affects the consumer price index
                    D) It causes a decline in direct tax revenue

                    Explanation: The impending depreciation of the Indian rupee against the dollar leads to capital outflow pressures and increases import costs, which can impact India’s growth.

                    9. Which sector serves as a proxy for economic activity in India?
                    A) Agriculture sector
                    B) Services industry
                    C) Financial sector
                    D) Crude petroleum sector

                    Explanation: The domestic consumption of diesel serves as a proxy for economic activity in India.

                    10. What does the weakening of direct tax revenue compared to indirect tax revenue indicate?
                    A) A progressive taxation system
                    B) A regressive taxation system
                    C) A K-shaped pattern
                    D) A decline in government expenditure

                    Explanation: The weakening of direct tax revenue compared to indirect tax revenue indicates a K-shaped pattern, where progressive taxation is lagging behind.

                    Brief Summary | UPSC – IAS

                    India’s reported GDP growth rate of 7.8% for Q1 of FY24 may be overstated due to various factors, including the use of the income approach instead of the expenditure approach, which would result in a lower growth rate of 4.5%. The adjustment for inflation using the price deflator has also worked to overstate real growth, and there is a base effect from the COVID-19 pandemic that continues to impact growth figures. In addition, there are concerns about sustaining low inflation rates and the impact of rising crude oil prices and a depreciating rupee. Furthermore, tax revenue streams indicate forced austerity measures and government expenditure may not contribute significantly to growth in the current financial year. Overall, a nuanced and critical approach is needed when assessing India’s economic trajectory.

                    “ISRO’s Chandrayaan-3 Success Spurs Interest in Space Collaboration”

                    Inter-ministerial discussion under way to ease FDI norms in space sector: Official

                    The Liberalization of Foreign Direct Investment in India’s Space Sector


                    After the touchdown by ISRO’s Chandrayaan-3 spacecraft near the moon’s South pole, three G-20 countries have expressed interest in possible collaborations or partnerships with India in the space sector.

                    After the touchdown by ISRO’s Chandrayaan-3 spacecraft near the moon’s South pole, three G-20 countries have expressed interest in possible collaborations or partnerships with India in the space sector.
                    | Photo Credit: PTI

                    Significance

                    The liberalization of foreign direct investment (FDI) norms in India’s space sector holds immense significance as it aims to attract overseas players and private companies. With the recent success of ISRO’s Chandrayaan-3 spacecraft, India has become an attractive partner for potential collaborations and partnerships in the space industry.

                    Features

                    The proposed changes in FDI norms in the space sector are currently being discussed among different ministries. The objective is to create a favorable environment for foreign companies to invest in India’s rapidly growing space sector. The exact details of the proposed changes have not been disclosed yet.

                    Objectives

                    The main objective of liberalizing FDI norms in the space sector is to attract more foreign investments, which will spur technological advancements, enhance research and development capabilities, and foster collaborations in space exploration and related activities. This move also aligns with the Indian Space Policy 2023, which focuses on increasing private sector participation in the space industry.

                    Effects

                    If implemented successfully, the liberalization of FDI norms in the space sector can have several positive effects. It can stimulate economic growth through increased investments and job creation. It can also lead to the transfer of advanced space technologies from foreign companies to India, boosting the country’s space capabilities. Furthermore, collaborations with international partners can accelerate space exploration and contribute to scientific discoveries.

                    Pros and Cons

                    While the liberalization of FDI norms in the space sector has numerous advantages, there are also potential drawbacks to consider. Pros include attracting capital inflow, fostering a robust private space ecosystem, and establishing sustainable market demand for startups. However, cons may involve concerns about foreign influence on the country’s space agenda and the need to safeguard national interests and security.

                    Fun Fact

                    According to a Deloitte-CII report, the global space economy is valued at about USD 546 billion in 2022, projected to reach about USD 1 trillion by 2040. This growth is driven by cost reduction efforts and technological advancements.

                    Mutiple Choice Questions

                    1. Which sector is the Indian government looking to further liberalize foreign direct investment (FDI) norms?
                    a) Education sector
                    b) Health sector
                    c) Space sector
                    d) Automotive sector

                    Explanation: The Indian government is looking to further liberalize foreign direct investment (FDI) norms in the space sector to attract overseas players and private companies.

                    2. What is the current limit for FDI in the space sector?
                    a) 50%
                    b) 75%
                    c) 100%
                    d) No limit

                    Explanation: Currently, FDI in the space sector is allowed up to 100% in the area of satellite establishment and operations through government route only.

                    3. Which countries have expressed interest in possible collaborations or partnerships with India in the space sector?
                    a) G-7 countries
                    b) BRICS countries
                    c) G-20 countries
                    d) ASEAN countries

                    Explanation: After the touchdown by ISRO’s Chandrayaan-3 spacecraft near the moon’s South pole, three G-20 countries have expressed interest in possible collaborations or partnerships with India in the space sector.

                    4. What is the estimated value of the global space economy in 2022?
                    a) USD 100 billion
                    b) USD 546 billion
                    c) USD 1 trillion
                    d) USD 2 trillion

                    Explanation: The global space economy is valued at about USD 546 billion in 2022 and is projected to reach about USD 1 trillion by 2040.

                    5. What is the purpose of the Indian Space Policy 2023?
                    a) To promote space tourism
                    b) To institutionalize private sector participation in the space sector
                    c) To establish a moon base
                    d) To discover extraterrestrial life

                    Explanation: The Indian Space Policy 2023 seeks to institutionalize private sector participation in the space sector, with ISRO focusing on research and development of advanced space technologies.

                    6. What is the role of NewSpace India Limited (NSIL) according to the Indian Space Policy-2023?
                    a) Research and Development (R&D) outfits
                    b) Manufacturers of space hardware
                    c) Providers of space-enabled products and services
                    d) Space sector PSU

                    Explanation: The Indian Space Policy-2023 delineated the roles and responsibilities of ISRO, space sector PSU NewSpace India Limited (NSIL), and Indian National Space Promotion and Authorization Center (IN-SPACe).

                    7. How can the Indian government incentivize companies engaged in space sector activities?
                    a) Tax exemptions
                    b) Tax holidays
                    c) Accelerated depreciation
                    d) All of the above

                    Explanation: The Indian government can provide tax exemptions, tax holidays, and accelerated depreciation for companies directly or indirectly engaged in space sector activities to incentivize them.

                    8. According to a report, what is the need for creating a sustainable market demand for private startups in the space sector?
                    a) To attract investors
                    b) To establish a robust private space ecosystem in India
                    c) To enhance government contracts
                    d) To drive cost reduction efforts

                    Explanation: There is a need for creating a sustainable market demand for the private startups, which in turn contributes to the establishment of a robust private space ecosystem in India.

                    9. What is the initial customer base for numerous startups in the space sector?
                    a) General consumers
                    b) Governments
                    c) Investors
                    d) Space agencies

                    Explanation: Within the space industry, governments often serve as the initial customers for numerous startups, while also acting as stable clients for companies engaged in strategic space and national security initiatives.

                    10. How are space agencies fostering capital inflow in the space sector?
                    a) Offering government contracts
                    b) Providing tax incentives
                    c) Attracting foreign investors
                    d) All of the above

                    Explanation: Space agencies are fostering capital inflow in the space sector by offering government contracts, providing tax incentives, and attracting foreign investors.

                    Brief Summary | UPSC – IAS

                    Three G-20 countries have expressed interest in collaborating with India in the space sector following the successful touchdown of ISRO’s Chandrayaan-3 spacecraft near the moon’s South pole. To attract foreign players and private companies, the Indian government is currently discussing the liberalisation of foreign direct investment (FDI) norms in the space sector. Presently, FDI is allowed up to 100% for satellite establishment and operations through the government route only. The Indian Space Policy 2023, which aims to involve the private sector in the space industry, has already been approved. The global space economy is projected to reach $1 trillion by 2040.

                    “Finance Ministry Confident in 6.5% FY24 Growth despite Risks”

                    No alarms about crude oil surge yet, says Finance Ministry

                    Finance Ministry Exudes Confidence in India’s Economic Growth


                    Finance Ministry exuded confidence that the country will achieve 6.5% growth in FY24 on the back of improved corporate profitability, private capital formation and bank credit growth, notwithstanding the risks of rising crude oil prices and monsoon deficit.

                    Finance Ministry exuded confidence that the country will achieve 6.5% growth in FY24 on the back of improved corporate profitability, private capital formation, and bank credit growth, notwithstanding the risks of rising crude oil prices and monsoon deficit.

                    Significance

                    The Finance Ministry’s confidence in India’s economic growth is significant as it provides reassurance to investors and stakeholders about the country’s economic prospects. The projected growth rate of 6.5% in FY24 indicates a positive outlook and potential progress for the Indian economy.

                    Features

                    The Finance Ministry highlighted key factors contributing to the expected growth, including improved corporate profitability, private capital formation, and bank credit growth. These factors indicate a favorable business environment and increased investment activity in the country.

                    Objectives

                    The objective of the Finance Ministry is to promote and sustain economic growth in India. By expressing confidence in achieving a 6.5% growth rate, the ministry aims to instill optimism and attract investment in various sectors, thereby driving economic development.

                    Effects

                    If the country indeed achieves a growth rate of 6.5% in FY24, it would lead to several positive effects on the Indian economy. These may include job creation, increased government revenue, improved living standards, and enhanced investor confidence.

                    Pros and Cons

                    While the projected growth is promising, there are potential risks to consider. Rising crude oil prices and monsoon deficit pose challenges that can impact economic stability. However, the Finance Ministry acknowledges these risks and remains confident in the country’s ability to overcome them.

                    Fun Fact

                    Did you know that India is one of the world’s fastest-growing major economies, and its GDP is expected to surpass several developed countries in the coming years? The Finance Ministry’s confidence in achieving 6.5% growth further reinforces India’s growth trajectory and economic potential.

                    Mutiple Choice Questions

                    1. According to the Finance Ministry, what factors contribute to the projected 6.5% growth in FY24 for the country?
                    a) Improved corporate profitability, private capital formation, and bank credit growth
                    b) Rising crude oil prices and monsoon deficit
                    c) Global stock market correction and private sector formation cycle
                    d) Record e-way bills generation and electronic toll collections

                    Explanation: The correct answer is a) Improved corporate profitability, private capital formation, and bank credit growth. The Finance Ministry stated that these factors are expected to contribute to the projected growth.

                    2. What are the risks identified by the Finance Ministry for the Indian economy?
                    a) Climbing oil prices and monsoon deficit
                    b) Overdue global stock market correction and low private sector formation
                    c) Record e-way bills generation and electronic toll collections
                    d) High food inflation and declining core inflation

                    Explanation: The correct answer is a) Climbing oil prices and monsoon deficit. The Finance Ministry identified these as risks to the economic outlook.

                    3. What indicators were cited by the Finance Ministry as signals of healthy economic activity?
                    a) Record e-way bills generation and electronic toll collections
                    b) Climbing oil prices and monsoon deficit
                    c) High food inflation and declining core inflation
                    d) International bond yield and S&P 500 index

                    Explanation: The correct answer is a) Record e-way bills generation and electronic toll collections. The Finance Ministry cited these indicators as signals of healthy economic activity.

                    4. What does the Finance Ministry’s monthly economic review for August reveal about the private sector?
                    a) Private sector is in good health and businesses are investing
                    b) Private sector is facing a decline in advance tax payments
                    c) Private sector is experiencing a stock market correction
                    d) Private sector formation cycle has come to a halt

                    Explanation: The correct answer is a) Private sector is in good health and businesses are investing. The review revealed that the private sector is in good health based on data on advance tax payments for the second quarter.

                    5. According to the Finance Ministry, what is the outlook for inflation in the country?
                    a) Food inflation remains high, but core inflation has declined
                    b) Inflation is within the RBI tolerance limit of 5.6%
                    c) Core inflation is the lowest in the last 40 months
                    d) Government interventions have targeted specific crops to ease inflation

                    Explanation: The correct answer is a) Food inflation remains high, but core inflation has declined. The review mentioned that food inflation eased due to government interventions, but core inflation has declined for the last three consecutive months.

                    Brief Summary | UPSC – IAS

                    The Indian Finance Ministry is confident that the country’s economy will achieve 6.5% growth in the fiscal year 2024. Despite concerns over rising crude oil prices and a monsoon deficit, the ministry believes that improved corporate profitability, private capital formation, and bank credit growth will drive the growth. While the rise in global oil prices is a concern, the ministry does not believe it is cause for alarm yet. Additionally, the ministry expects food prices to stabilize and inflation to ease due to government interventions. The ministry also highlighted positive indicators such as high e-way bill and toll collections, as well as increased capital goods imports.

                    “Global Debt Hits Record $307 Trillion as Borrowing Soars in Q2”

                    What are the reasons for rise in global debt? | Explained

                    The Rising Global Debt: Significance, Features, Objectives, Effects, and Pros and Cons


                    Global debt refers to the borrowings of governments as well as private businesses and individuals. Photo: imf.org

                    The story so far: Global debt rose to an all-time high of $307 trillion in the second quarter, by the end of June 2023, the Institute of International Finance (IIF) said in a report released last week. Quite notably, global debt has risen by about $100 trillion over the last decade. Further, global debt as a share of gross domestic product (GDP) has started to increase once again to hit 336% after dropping quite steeply for seven consecutive quarters.

                    What is Global Debt?

                    Global debt refers to the borrowings of governments as well as private businesses and individuals. Governments borrow to meet various expenditures that they are unable to meet through tax and other revenues. Governments may also borrow to pay interest on the money that they have already borrowed to fund past expenditures. The private sector borrows predominantly to make investments.

                    Why is Global Debt Rising?

                    Both global debt in nominal terms and global debt as a share of GDP have been rising steadily over the decades. The rise came to a halt during the pandemic as economic activity turned sluggish and lending slowed down. But global debt levels, it seems, have started to rise again in the last few quarters. Most (over 80%) of the rise in global debt in the first half of the year has come from advanced economies such as the U.S., the U.K., Japan, and France. Among emerging market economies, China, India, and Brazil have seen the most growth in debt. During the first half of 2023, total global debt rose by $10 trillion. This has happened amid rising interest rates, which was expected to adversely affect demand for loans.

                    However, a rise in debt levels over time is to be expected since the total money supply usually steadily rises each year in countries across the globe. In other words, the rise in global debt levels witnessed during the first half of the year is nothing out of the ordinary and does not per se have to mean trouble for the global economy. In fact, even a simple rise in the total amount of savings in an economy can cause a rise in debt levels as these increased savings are channeled into investments.

                    What is more interesting than rising debt levels is the drop in global debt as a share of GDP over seven consecutive quarters prior to 2023.

                    The IIF attributes the decline in global debt as a share of GDP to the rise in price inflation, which it claims has helped governments to inflate away the debts denominated in their local currencies. Inflating away of debt refers to the phenomenon wherein the central bank of a country either directly or indirectly uses freshly created currency to effectively pay off outstanding government debt by, for example, purchasing government bonds in the market. But the creation of fresh money causes prices to rise, thus imposing an indirect tax on the wider economy to pay the government’s debt.

                    Is Rising Global Debt a Cause for Worry?

                    Rising global debt levels usually lead to concerns about the sustainability of such debt. This is particularly true in the case of government debt, which is prone to rise rapidly due to reckless borrowing by politicians to fund populist programs. And when central banks raise interest rates, servicing outstanding debt becomes a challenge for governments with a heavy debt burden.

                    It should be noted that despite rising debt levels over the last decade, the interest that governments had to pay lenders largely remained manageable due to extremely low interest rates, particularly in western economies. This is set to change now as central banks have let interest rates rise in order to fight high price inflation since the pandemic. Rising interest rates can increase pressure on governments and force them to either default outright or inflate away their debt. Many analysts, in fact, believe that several governments will never be able to pay their debt in full and that inflating away debt is the only way for such governments to avoid an outright default on their debt.

                    In its report, the IIF has also warned that the international financial infrastructure is not equipped to handle unsustainable domestic debt levels. Generally, rapidly rising private debt levels also lead to worries among analysts about their sustainability. This is because such a rise is linked to unsustainable booms that end in economic crises when such lending is not backed by genuine savings.

                    Also read | India’s FY23 external debt rises to $624.7 billion: RBI

                    The most recent example of the same was the 2008 global financial crisis. The crisis was immediately preceded by an economic boom fueled by the U.S. Federal Reserve’s easy credit policy.

                    Fun Fact:

                    Did you know that global debt has risen by approximately $100 trillion over the last decade?

                    Mutiple Choice Questions

                    1) What does global debt refer to?
                    a) Borrowings of governments only
                    b) Borrowings of private businesses and individuals only
                    c) Borrowings of governments as well as private businesses and individuals
                    d) Borrowings of international organizations

                    Explanation: Global debt refers to the borrowings of governments as well as private businesses and individuals. Governments borrow to meet various expenditures, while the private sector borrows predominantly to make investments.

                    2) What has been the trend in global debt over the last decade?
                    a) It has remained stable
                    b) It has decreased by $100 trillion
                    c) It has increased by $100 trillion
                    d) It has fluctuated periodically

                    Explanation: Global debt has risen by about $100 trillion over the last decade, reaching an all-time high of $307 trillion in the second quarter of 2023.

                    3) Why has global debt started to rise again in recent quarters?
                    a) Economic activity has turned sluggish
                    b) Lending has slowed down
                    c) Advanced economies have significantly increased their borrowing
                    d) Emerging market economies have significantly increased their borrowing

                    Explanation: Global debt levels have started to rise again in recent quarters, with most of the rise coming from advanced economies such as the U.S., the U.K., Japan, and France. China, India, and Brazil have also seen significant growth in debt.

                    4) How has the decline in global debt as a share of GDP been attributed?
                    a) Rise in price inflation
                    b) Government’s purchase of government bonds
                    c) Increase in money supply
                    d) Creation of fresh money causing prices to rise

                    Explanation: The decline in global debt as a share of GDP over seven consecutive quarters prior to 2023 has been attributed to the rise in price inflation. Inflating away of debt refers to the phenomenon where the central bank uses freshly created currency to effectively pay off outstanding government debt.

                    5) What are the concerns associated with rising global debt levels?
                    a) Sustainability of debt
                    b) High interest rates
                    c) Risk of default
                    d) All of the above

                    Explanation: Rising global debt levels lead to concerns about the sustainability of such debt, particularly in the case of government debt. When central banks raise interest rates, servicing outstanding debt becomes a challenge for heavily indebted governments, increasing the risk of default.

                    6) What is the potential consequence of rising interest rates on governments with heavy debt burdens?
                    a) Default on debt
                    b) Inflating away debt
                    c) Increase in savings
                    d) Decrease in borrowing

                    Explanation: Rising interest rates can increase pressure on governments with heavy debt burdens and force them to either default outright or inflate away their debt. Many analysts believe that inflating away debt is the only way for governments to avoid an outright default.

                    7) What is the concern associated with rapidly rising private debt levels?
                    a) Unsustainable booms
                    b) Economic crises
                    c) Lack of genuine savings
                    d) All of the above

                    Explanation: Rapidly rising private debt levels lead to worries about unsustainable booms that can end in economic crises when such lending is not backed by genuine savings.

                    Overall Explanation: Global debt refers to the borrowings of governments as well as private businesses and individuals. It has risen by about $100 trillion over the last decade, reaching an all-time high of $307 trillion in the second quarter of 2023. The recent rise in global debt levels can be attributed to increased borrowing by both advanced and emerging market economies. The decline in global debt as a share of GDP over seven consecutive quarters prior to 2023 was due to the rise in price inflation. Concerns associated with rising global debt levels include debt sustainability, high interest rates, and the risk of default for heavily indebted governments. Rising interest rates can increase pressure on governments to either default or inflate away their debt. Rapidly rising private debt levels can lead to unsustainable booms and economic crises when not backed by genuine savings.

                    Brief Summary | UPSC – IAS

                    Global debt reached a record high of $307 trillion by the end of June 2023, a $100 trillion increase over the past decade, according to the Institute of International Finance (IIF). Debt-to-GDP ratios have started to rise again, reaching 336% after seven consecutive quarters of decline. The majority of the increase in global debt in the first half of the year came from advanced economies like the US, UK, Japan, and France, as well as emerging markets such as China, India, and Brazil. While rising debt levels are a concern, the decline in debt as a share of GDP in previous quarters was attributed to inflation helping governments inflate away their debt. Rising interest rates could increase pressure on governments to pay their debt, and the IIF has warned that the international financial infrastructure is not equipped to handle unsustainable levels of debt.

                    “Ineptitude of Modi Government: Rising Unemployment and Inflation Strain Ordinary Households, says Congress MP”

                    Ordinary households, small businesses hit due to high unemployment and inflation: Jairam Ramesh

                    Ordinary households and small businesses under intense pressure, says Congress MP Jairam Ramesh


                    Congress MP Jairam Ramesh. File

                    Ordinary households and small businesses are currently facing intense pressure due to high unemployment and inflation levels. This statement was made by Congress General Secretary in-charge of Communications, Jairam Ramesh, who cited data points from the Reserve Bank of India’s latest bulletin and other sources to support his claim. The statement aims to highlight the difficulties faced by the majority of people amidst the government’s claims of economic growth.

                    According to Mr. Ramesh, the government’s argument that declining savings were a result of car and home purchases is invalid. Instead, he pointed to RBI data showing a significant increase in gold loans and personal loans in the last year, indicating that people are going into debt to meet basic expenses. These figures indicate clear signs of distress among the population.

                    Mr. Ramesh further criticized the Modi government’s response to the COVID-19 pandemic, stating that the latest RBI bulletin exposes its failure to execute a recovery. He highlighted the decline in labor force participation, with only 40% of the population in the labor force as of now compared to 43% in February 2020. He also mentioned the significant gender pay gap that still exists, as women are earning only 85% of what they made before the pandemic. Additionally, he cited a report from Azim Premji University, revealing that over 42% of graduates under the age of 25 were unemployed in 2021-22.

                    Rise in prices

                    Mr. Ramesh drew attention to the rising prices of essential commodities such as pulses, sugar, atta, besan, and gur, which have had a direct impact on the household budgets of ordinary families. He also noted a 16% fall in Foreign Direct Investment (FDI), attributing this decline to the government’s failed economic policies and communal tensions.

                    The Congress leader emphasized how small businesses are suffering under the Modi government’s crony capitalism, making it nearly impossible for MSMEs to compete. He referenced a Marcellus report which states that 80% of profits in 2022 went to just 20 companies. Moreover, he highlighted the decline in the share of sales for small businesses, dropping from 7% before 2014 to 4% in Q1 of 2023.

                    Mr. Ramesh concluded his statement by stating that the Modi government has mismanaged the economy across all sectors, leading to increasing unemployment, rising prices, shrinking MSME sales, slow domestic credit growth, increased household financial liabilities, and declining FDI. He remarked that the government is too inept to resolve these issues.

                    Significance: Jairam Ramesh’s statement sheds light on the challenging economic conditions faced by ordinary households and small businesses. It highlights the discrepancy between the government’s claims of economic growth and the reality experienced by the majority of citizens. This brings attention to the need for effective policies to alleviate the financial strain on the population.

                    Features: The statement includes data points from the Reserve Bank of India and other sources to support the claims made by Jairam Ramesh. It addresses various aspects of the economy, such as unemployment, inflation, labor force participation, gender pay gap, rising prices of essential commodities, and the impact on small businesses.

                    Objectives: The main objective of the statement is to highlight the struggles faced by ordinary households and small businesses due to economic hardships. It aims to criticize the government’s handling of the economy and call attention to the need for effective measures to alleviate these difficulties.

                    Effects: The statement may create public awareness about the economic challenges faced by individuals and small businesses. It may also put pressure on the government to address these issues and formulate better economic policies to promote growth, reduce unemployment, and control inflation.

                    Pros:
                    – Draws attention to the economic hardships faced by ordinary households and small businesses
                    – Provides data evidence to support the claims made
                    – Raises awareness about the government’s alleged mismanagement of the economy
                    – Calls for effective measures to alleviate financial strain and promote economic growth

                    Cons:
                    – The statement may be perceived as politically motivated due to the involvement of a Congress party representative
                    – Critics may argue that the statement only presents a one-sided view and ignores positive aspects of the economy
                    – Some may question the accuracy or reliability of the data presented

                    Fun Fact: Did you know that India is the world’s largest consumer of gold? The demand for gold in the country is driven by cultural traditions and the belief in gold as a symbol of wealth and prosperity.

                    Mutiple Choice Questions

                    1. According to Jairam Ramesh, Congress General Secretary, what is the current state of households and small businesses in India?
                    a) They are flourishing and experiencing economic growth
                    b) They are under intense pressure due to high unemployment and inflation levels
                    c) They are facing no significant challenges or issues
                    d) They are thriving due to effective government policies

                    Answer: b) They are under intense pressure due to high unemployment and inflation levels

                    Explanation: Jairam Ramesh states in his statement that ordinary households and small businesses in India are under intense pressure due to high unemployment and inflation levels.

                    ———————————————————————————————————————–

                    2. Based on RBI data, what are the clear signs of distress mentioned by Jairam Ramesh?
                    a) A decline in savings due to increased car and home purchases
                    b) A decline in personal loans and a decrease in gold loans
                    c) A 23% increase in gold loans and a 29% increase in personal loans
                    d) A decrease in debt and basic expenses

                    Answer: c) A 23% increase in gold loans and a 29% increase in personal loans

                    Explanation: Jairam Ramesh highlights RBI data which shows a 23% increase in gold loans and a 29% increase in personal loans in the last year, which he considers as clear signs of distress as people go into debt to meet basic expenses.

                    ———————————————————————————————————————–

                    3. According to Jairam Ramesh, what does the latest bulletin of the RBI show about the Modi government’s recovery from the COVID-19 pandemic?
                    a) A successful execution of the recovery
                    b) A partial failure in executing the recovery
                    c) A complete failure in executing the recovery
                    d) A steady progress in executing the recovery

                    Answer: c) A complete failure in executing the recovery

                    Explanation: Jairam Ramesh states that the latest bulletin of the RBI shows the complete failure of the Modi government to execute a recovery from the COVID-19 pandemic.

                    ———————————————————————————————————————–

                    4. What percentage of the population was in the labor force as of February 2020 according to Mr. Ramesh?
                    a) 43%
                    b) 40%
                    c) 85%
                    d) 42%

                    Answer: a) 43%

                    Explanation: Jairam Ramesh mentions that around 43% of the population was in the labor force as of February 2020.

                    ———————————————————————————————————————–

                    5. What is the impact of price rise in essential commodities, according to Jairam Ramesh?
                    a) It is not affecting ordinary families’ household budgets
                    b) It is leading to increased savings for ordinary families
                    c) It is impacting the household budget of ordinary families
                    d) It is not a major concern for ordinary families

                    Answer: c) It is impacting the household budget of ordinary families

                    Explanation: Jairam Ramesh highlights the price rise in essential commodities such as pulses, sugar, atta, besan, and gur, and states that it is impacting the household budget of ordinary families.

                    ———————————————————————————————————————–

                    6. According to Jairam Ramesh, what is the reason for the decline in small businesses’ share in sales?
                    a) Increased competition from large corporations
                    b) Decreased demand for their products or services
                    c) Ineffective government policies
                    d) Modi government’s crony capitalism

                    Answer: d) Modi government’s crony capitalism

                    Explanation: Jairam Ramesh states that small businesses are losing out because of the Modi government’s crony capitalism, which has made it “impossible for the MSMEs to compete.”

                    ———————————————————————————————————————–

                    7. How has the Modi government mismanaged the economy, according to Jairam Ramesh?
                    a) By effectively managing all sectors
                    b) By increasing unemployment and household financial liabilities
                    c) By decreasing inflation and improving savings
                    d) By implementing successful economic policies

                    Answer: b) By increasing unemployment and household financial liabilities

                    Explanation: Jairam Ramesh accuses the Modi government of mismanaging the economy by increasing unemployment, rising prices of household essentials, shrinking MSME sales, slow domestic credit growth, increased household financial liabilities, and declining FDI.

                    Brief Summary | UPSC – IAS

                    Congress General Secretary Jairam Ramesh criticized the Indian government for its failure to address the economic challenges faced by ordinary households and small businesses. Ramesh cited data from the Reserve Bank of India’s bulletin, showing a rise in gold loans and personal loans, as clear signs of distress as people go into debt to meet basic expenses. He also mentioned a decrease in savings and highlighted the impact of rising prices of essential commodities. Ramesh further criticized the government for crony capitalism, which he claimed disadvantaged small businesses and deterred foreign investors. He concluded by stating that the government was inept in managing the economy.

                    “Aadhaar Security and Privacy Dismissed by Electronics and IT Ministry in Response to Moody’s Report”

                    Government rebuffs Moody’s Aadhaar views; says a billion Indians trust it

                    Understanding Aadhaar: Significance, Features, Objectives, Effects, and Pros and Cons

                    September 25, 2023 11:09 pm | Updated September 26, 2023 11:52 am IST – NEW DELHI

                    Representational image of a person going through the process of a fingerprint scanner for the Unique Identification (UID) database system at an Aadhaar enrollment centre
                    | Photo Credit: Reuters

                    The Aadhaar system, also known as the Unique Identification (UID) database system, has been a topic of discussion lately after a report from Moody’s Investors Service raised questions about its efficacy. The report highlighted concerns about security and privacy, as well as the reliability of biometric authentication systems in hot and humid conditions. In response, the Electronics and IT Ministry dismissed these concerns, emphasizing the trust and confidence expressed by over a billion Indians who have used Aadhaar over 100 billion times for authentication. Let’s delve deeper into Aadhaar’s significance, features, objectives, effects, and consider the pros and cons of this centralised system.

                    Significance of Aadhaar

                    Aadhaar holds immense significance as it serves as a unique identification system for individuals in India. It provides a 12-digit identification number based on biometric and demographic data. Aadhaar is considered the most trusted digital ID in the world, with numerous international agencies and institutions lauding its effectiveness. The system has gained widespread acceptance among the Indian population, with over a billion individuals using it for authentication.

                    Features of Aadhaar

                    Aadhaar’s features include biometric authentication systems such as fingerprint scanning, face authentication, and iris authentication. Additionally, mobile OTP (One-Time Passcode) is available for various use cases. The system also ensures privacy and security through robust technological and organizational arrangements. The data is encrypted both at rest and in motion, and the system adheres to international security and privacy standards.

                    Objectives of Aadhaar

                    The main objectives of Aadhaar are:

                    1. To establish a unique identification system for individuals in India.
                    2. To streamline and simplify the process of accessing government services and subsidies.
                    3. To enhance financial inclusion by facilitating the opening of bank accounts.
                    4. To eliminate duplicate and fake identities, reducing identity-related fraud and corruption.
                    5. To enable the delivery of services and benefits directly to the intended beneficiaries.

                    Effects of Aadhaar

                    Aadhaar has had several significant effects since its implementation:

                    • Enhanced access to government services and subsidies for individuals, particularly those in rural areas.
                    • Promotion of financial inclusion by providing a unique identification system linked to bank accounts.
                    • Reduction in identity-related fraud and corruption.
                    • Streamlined administration and delivery of services, leading to improved efficiency and accountability.

                    Pros and Cons of Aadhaar

                    As with any system, Aadhaar has its share of pros and cons:

                    Pros:

                    1. Simplifies access to government services and subsidies, making them more accessible to the general population.
                    2. Reduces identity-related fraud and corruption by eliminating duplicate and fake identities.
                    3. Enhances financial inclusion by linking Aadhaar to bank accounts, making it easier for individuals to access financial services.
                    4. Streamlines administration and service delivery, improving efficiency and accountability in governance.

                    Cons:

                    1. Concerns about security and privacy of personal data in a centralised system.
                    2. Reliability issues with biometric authentication systems, especially in hot and humid conditions.

                    Overall, while Aadhaar has brought significant benefits and convenience to individuals in India, it is essential to address the concerns related to privacy and security.

                    Fun Fact: The G-20 New Delhi Declaration has welcomed India’s plan to build and maintain a Global Digital Public Infrastructure Repository (GDPIR), a virtual DPI repository shared voluntarily by G-20 members and beyond, indicating the trust and recognition of India’s expertise in digital identification systems.

                    Mutiple Choice Questions

                    1. What is the title of the note issued by the Electronics and IT Ministry?
                    a) “Aadhaar and its Impact on Digital ID Systems”
                    b) “Moody’s Report: Concerns about Aadhaar’s Efficacy”
                    c) “The Trustworthiness of Aadhaar as a Digital ID”
                    d) “International Agencies’ Opinions on Aadhaar”

                    Explanation: The note issued by the Electronics and IT Ministry is titled “Aadhaar, the most trusted digital ID in the world — Moody’s Investors Service opinions baseless”.

                    2. According to the Ministry, how many times have Indians used Aadhaar to authenticate themselves?
                    a) Over 100 million times
                    b) Over 1 billion times
                    c) Over 100 billion times
                    d) Over 1 trillion times

                    Explanation: The Ministry stated that over a billion Indians have expressed their trust in Aadhaar by using it to authenticate themselves “over 100 billion times”.

                    3. What risks did Moody’s highlight regarding Aadhaar’s biometric authentication systems?
                    a) Service denials and unreliable performance in hot and humid conditions
                    b) Privacy breaches and security vulnerabilities
                    c) Lack of trust and low adoption rates
                    d) Inaccuracy in data collection and user identification

                    Explanation: Moody’s highlighted risks such as service denials for users and the unreliability of biometric authentication systems in hot and humid conditions.

                    4. How does the Ministry refute Moody’s concerns regarding biometric authentication and service denials?
                    a) By emphasizing the use of mobile OTP and contactless biometric submission methods
                    b) By conducting a comprehensive study on the performance of Aadhaar in manual labour-intensive sectors
                    c) By implementing stricter regulations on the usage of biometric data
                    d) By developing a more advanced biometric authentication system

                    Explanation: The Ministry refutes Moody’s concerns by highlighting that biometric submission is possible through contactless means like face authentication and iris authentication. They also mention the availability of mobile OTP as an alternative authentication method.

                    5. What security measures are in place for the Aadhaar system, according to the Ministry?
                    a) Encryption of data and compliance with international security and privacy standards
                    b) Regular system audits and vulnerability assessments
                    c) Use of AI and machine learning algorithms for data protection
                    d) Collaboration with international cybersecurity organizations

                    Explanation: The Ministry mentions that the Aadhaar system has state-of-the-art security solutions in place, with a federated database and encryption of data both at rest and in motion. They also highlight that the system is certified as per international security and privacy standards.

                    6. According to the G-20 Global Partnership for Financial Inclusion, what role has Aadhaar played in enhancing ownership of transaction accounts?
                    a) It has led to a decrease in ownership of transaction accounts.
                    b) It has had no significant impact on ownership of transaction accounts.
                    c) It has played a critical role in enhancing ownership of transaction accounts.
                    d) It has had a negative impact on the adoption of transaction accounts.

                    Explanation: The G-20 Global Partnership for Financial Inclusion, in a report prepared by the World Bank, stated that the implementation of Aadhaar, along with Jan Dhan bank accounts and mobile phones, has played a critical role in enhancing ownership of transaction accounts.

                    Brief Summary | UPSC – IAS

                    India’s Electronics and IT Ministry has rejected a report by Moody’s Investors Service that questioned the effectiveness of the country’s Aadhaar system. The ministry cited praise from international agencies and over a billion users who have authenticated themselves “over 100 billion times” as proof of the system’s success. Moody’s had raised concerns about service denials due to biometric authentication issues and the security of centralised systems, but the ministry said these claims lacked evidence. The ministry also highlighted that the G-20 New Delhi Declaration supported India’s plan to develop a Global Digital Public Infrastructure Repository.

                    “New Rules for Valuation of Startup Shares: I-T Department’s Amendments and Implications”

                    I-T notifies 'Angel Tax' rules for valuing investments in startups

                    The Amended Rules for Valuation of Startup Investments: A Game Changer

                    Image for representation

                    Image for representation
                    | Photo Credit: Getty Images

                    The Income Tax department has recently introduced new rules for the valuation of equity and compulsorily convertible preference shares (CCPS) issued by startups to both resident and non-resident investors. These changes, which came into effect on September 25, are set to bring significant benefits to both startups and investors.

                    Significance of the Amended Rules

                    The amendments to Rule 11UA of the Income Tax (I-T) Act hold great significance as they offer taxpayers greater flexibility through multiple valuation methods. This simplifies the valuation process, incentivizes venture capital investments, and encourages foreign investment in Indian startups. The rules also provide clarity on the valuation of CCPS, which is an important aspect for investors.

                    Key Features of the Amended Rules

                    The amended rules retain the five new valuation methods proposed in the draft rules:

                    1. Comparable Company Multiple Method
                    2. Probability Weighted Expected Return Method
                    3. Option Pricing Method
                    4. Milestone Analysis Method
                    5. Replacement Cost Method

                    These methods enable startups to determine the fair market value of their unquoted equity shares accurately. Additionally, the rules introduce a tolerance threshold for minor valuation discrepancies, enhancing efficiency and fairness in tax assessments.

                    Objectives and Effects of the Amended Rules

                    The primary objective of these rules is to bridge the gap between the regulations outlined in the Foreign Exchange Management Act (FEMA) and the Income Tax Act. So far, only investments by domestic investors or residents in closely-held companies or unlisted firms were subject to taxation above the fair market value, commonly known as “angel tax.”

                    The amendments aim to ensure that investments over and above the fair market value are taxed, regardless of whether the investor is a resident or non-resident. This helps tackle concerns related to the calculation of fair market value under different laws and promotes transparency in valuation practices.

                    Pros and Cons

                    The implementation of the amended rules brings several advantages for startups, investors, and the government. Some of the pros include:

                    • Greater flexibility in valuation methods, attracting domestic and foreign investments
                    • Simplified valuation process, reducing complexities for startups
                    • Specific guidelines for CCPS valuation, providing clarity for investors
                    • Tolerance threshold for minor valuation discrepancies, fostering fairness in tax assessments

                    However, it is essential to consider the potential cons of these rules. One challenge could be ensuring accurate and consistent valuation across different methods. Startups may also face increased scrutiny from tax authorities, requiring them to maintain thorough documentation and evidence for fair market value determination.

                    Fun Fact: The Rise of Startup Investments

                    In recent years, startup investments have witnessed remarkable growth globally. According to a report, global venture capital investment in startups reached a record high of $295 billion in 2021. This surge indicates the growing interest and confidence in the startup ecosystem, making the amended rules for valuation even more relevant and crucial.

                    In conclusion, the Income Tax department’s amendments to the rules for valuation of equity and CCPS investments provide much-needed flexibility, clarity, and simplicity to startups and investors. By encouraging venture capital investments and attracting foreign funding, these rules contribute to the growth and development of the startup ecosystem in India.

                    Mutiple Choice Questions

                    1. According to the changes in Rule 11UA of the Income Tax rules, what can be used as the basis for the valuation of compulsorily convertible preference shares (CCPS) issued by startups?
                    a) Comparable Company Multiple Method
                    b) Fair market value of unquoted equity shares
                    c) Replacement Cost Method
                    d) Option Pricing Method

                    Explanation: The changes in Rule 11UA allow the valuation of CCPS to be based on the fair market value of unquoted equity shares.

                    2. Which organization has notified the rules for the valuation of equity and compulsorily convertible preference shares issued by startups?
                    a) Income Tax department
                    b) Central Board of Direct Taxes (CBDT)
                    c) Nangia & Co LLP
                    d) AKM Global

                    Explanation: The Income Tax department has notified the rules for the valuation of equity and compulsorily convertible preference shares issued by startups.

                    3. What are the five new valuation methods proposed in the draft rules for consideration received from non-resident investors?
                    a) Comparable Company Multiple Method, Probability Weighted Expected Return Method, Option Pricing Method, Milestone Analysis Method, Replacement Cost Method
                    b) Fair market value, Replacement Cost Method, Option Pricing Method, Comparable Company Multiple Method, Milestone Analysis Method
                    c) Option Pricing Method, Replacement Cost Method, Probability Weighted Expected Return Method, Milestone Analysis Method, Comparable Company Multiple Method
                    d) Option Pricing Method, Comparable Company Multiple Method, Replacement Cost Method, Milestone Analysis Method, Probability Weighted Expected Return Method

                    Explanation: The five new valuation methods proposed in the draft rules for consideration received from non-resident investors are: Comparable Company Multiple Method, Probability Weighted Expected Return Method, Option Pricing Method, Milestone Analysis Method, and Replacement Cost Method.

                    4. What positive changes do the amendments to Rule 11UA of the Indian Income Tax Act bring?
                    a) Flexibility through multiple valuation methods
                    b) Incentivizing venture capital investments
                    c) Providing clarity on CCPS
                    d) All of the above

                    Explanation: The amendments to Rule 11UA bring positive changes by offering taxpayers flexibility through multiple valuation methods, simplifying the valuation date consideration, incentivizing venture capital investments, facilitating investments from notified entities, providing clarity on CCPS, and encouraging foreign investments.

                    5. What is the purpose of the changes in the angel tax rules?
                    a) To bridge the gap between the rules outlined in FEMA and the Income Tax
                    b) To tax investments over and above the fair market value
                    c) To encourage foreign exchange fluctuations
                    d) To encourage domestic investors to invest in startups

                    Explanation: The changes in the angel tax rules are aimed at bridging the gap between the rules outlined in FEMA and the Income Tax.

                    Brief Summary | UPSC – IAS

                    The Income Tax department in India has notified rules for the valuation of equity and convertible preference shares issued by startups to both resident and non-resident investors. The changes to the rules include allowing the valuation of convertible preference shares to be based on the fair market value of unquoted equity shares. The amended rules also retain five new valuation methods proposed in the draft rules for consideration received from non-residents. These changes aim to incentivize venture capital investments, facilitate investments from notified entities, and encourage foreign investments. The rules are also aimed at bridging the gap between the rules outlined in the Foreign Exchange Management Act and the Income Tax Act.

                    “EU’s Ill-Conceived Carbon Tax Threatens Manufacturing Sector: Piyush Goyal”

                    CBAM will kill EU manufacturing, India will have its own carbon taxes: Goyal

                    The European Union’s Proposed Carbon Tax and its Impact on India’s Manufacturing Sector

                    India’s Commerce and Industry Minister, Piyush Goyal, has criticized the European Union’s proposed Carbon Tax on imports, claiming that it would be detrimental to the EU’s manufacturing sector. He states that even if the plan is implemented, India would counteract it by imposing its own carbon tax.

                    Features of the European Union’s Carbon Tax Plan

                    • The Carbon Border Adjustment Mechanism (CBAM) has introduced reporting requirements for exporters of items such as steel.
                    • The tax aims to create a level playing field for carbon pricing in both the EU and countries exporting to the EU.

                    Objectives of the Proposed Carbon Tax

                    • Ensure that carbon-intensive products imported into the EU are subject to the same carbon pricing policies as those produced within the EU.
                    • Encourage countries to adopt cleaner and more sustainable energy practices.
                    • Promote the reduction of carbon emissions globally.

                    Effects of the Carbon Tax on India

                    The Indian Commerce and Industry Minister argues that the tax is unfair as the carbon pricing in India differs from that in Europe. He suggests that European producers may choose to relocate their production to India to avoid the tax, providing an opportunity for India’s manufacturing sector to grow. However, this could potentially lead to negative consequences for the European auto sector, which heavily relies on steel and aluminum.

                    Pros and Cons of the Carbon Tax

                    Pros:

                    • Creates a level playing field for carbon pricing globally.
                    • Encourages the adoption of cleaner energy sources.
                    • Reduces carbon emissions and promotes sustainability.

                    Cons:

                    • Possible negative impact on industries heavily reliant on carbon-intensive materials.
                    • May cause tensions between exporting countries and the EU.
                    • Could lead to potential trade disputes and retaliation from affected nations.

                    Fun Fact: The European Union is the world’s largest single market, making its carbon tax proposal significant in terms of global efforts to combat climate change and promote sustainable practices.

                    Note: The HTML heading tags (h1, h2, h3) have been used to structure the article and provide semantic meaning to each section.

                    Mutiple Choice Questions

                    1. What is the European Union’s proposed Carbon Tax on imports?
                    a) A tax on carbon emissions for imported goods
                    b) A tax on all imports from non-EU countries
                    c) A tax on all exports to non-EU countries
                    d) A tax on carbon emissions within the EU

                    Answer: a) A tax on carbon emissions for imported goods

                    Explanation: The European Union’s proposed Carbon Tax on imports is a tax specifically targeting carbon emissions associated with imported goods.

                    2. When is the EU’s Carbon Border Adjustment Mechanism (CBAM) set to kick in?
                    a) 2022
                    b) 2024
                    c) 2026
                    d) 2028

                    Answer: c) 2026

                    Explanation: The EU’s Carbon Border Adjustment Mechanism (CBAM) is set to kick in from 2026, according to the information provided.

                    3. Why does Commerce and Industry Minister Piyush Goyal believe the EU’s Carbon Tax would be detrimental to its manufacturing sector?
                    a) The tax would increase the cost of production in Europe
                    b) The tax would discourage foreign investment in European manufacturing
                    c) The tax would make European exports less competitive
                    d) The tax would lead to job losses in the manufacturing sector

                    Answer: a) The tax would increase the cost of production in Europe

                    Explanation: Commerce and Industry Minister Piyush Goyal believes that the EU’s Carbon Tax would cause the death of manufacturing in Europe because it would increase the cost of production, making it less competitive.

                    4. According to Piyush Goyal, what sector of the European economy may be the first casualty of the Carbon Tax?
                    a) Agriculture
                    b) Manufacturing
                    c) Tourism
                    d) Financial services

                    Answer: b) Manufacturing

                    Explanation: Piyush Goyal suggests that the auto sector of Europe, where steel and aluminum are used, may be the first casualty of the Carbon Tax.

                    5. How does Piyush Goyal believe the Carbon Tax would benefit India?
                    a) It would attract European producers to move production to India
                    b) It would decrease the cost of inputs for Indian manufacturers
                    c) It would reduce carbon emissions in India
                    d) It would increase India’s exports to the EU

                    Answer: a) It would attract European producers to move production to India

                    Explanation: According to Piyush Goyal, the Carbon Tax would provide India with a competitive edge as European producers may move their production to India due to the tax.

                    6. What does Piyush Goyal suggest as a countermeasure to the EU’s Carbon Tax?
                    a) Levying India’s own carbon tax
                    b) Imposing trade sanctions on European imports
                    c) Negotiating a lower tax rate with the EU
                    d) Implementing stricter carbon emission regulations in India

                    Answer: a) Levying India’s own carbon tax

                    Explanation: Piyush Goyal suggests that India would neutralize the EU’s Carbon Tax by levying its own carbon tax.

                    7. How does Piyush Goyal propose India could avoid additional CBAM tax at the European border?
                    a) By negotiating a lower tax rate with the EU
                    b) By increasing the competitiveness of Indian exports
                    c) By utilizing the tax collected for India’s green energy transition
                    d) By imposing retaliatory trade measures against the EU

                    Answer: c) By utilizing the tax collected for India’s green energy transition

                    Explanation: Piyush Goyal suggests that if India collects the tax internally and uses it for its own green energy transition, there would be no additional CBAM tax at the European border.

                    8. What is the government’s current status in the negotiation with the EU regarding the Carbon Tax?
                    a) The negotiation is ongoing and no agreement has been reached yet
                    b) The negotiation has been successful and the Carbon Tax has been dropped
                    c) The negotiation has failed and the government is planning retaliatory measures
                    d) The negotiation has been postponed indefinitely

                    Answer: a) The negotiation is ongoing and no agreement has been reached yet

                    Explanation: The government is still in dialogue with its EU counterparts on the levy, indicating that the negotiation is ongoing and no agreement has been reached yet.

                    Brief Summary

                    Indian Commerce and Industry Minister, Piyush Goyal, has criticized the European Union’s proposed Carbon Border Adjustment Mechanism (CBAM) as an “ill-conceived” move that would harm the EU’s manufacturing sector. Goyal argued that carbon cannot be priced the same in India and Europe, and therefore the CBAM is unfair. He suggested that India would neutralize the impact of the CBAM by imposing its own carbon tax. Goyal believes that European producers would likely move their production to India as a result of the tax, and that the EU would eventually realize the need to drop the CBAM.

                    Malnutrition in India its types, causes and effects | UPSC – IAS

                    Types of Malnutrition | UPSC - IAS

                    Malnutrition in India its types, causes and effects | UPSC – IAS

                    Malnutrition is a term that refers to any deficiency, excess or imbalance in somebody’s intake of energy and/or nutrients. It can either be due to inadequate intake or an excess intake of calories. The term malnutrition covers two broad groups of conditions are as follows:-

                    • Undernutrition – This includes stunting (low height for age), wasting (low weight for height), underweight (low weight for age) and micronutrient deficiencies or insufficiencies (a lack of important vitamins and minerals)
                    • Overnutrition – This includes overweight, obesity and diet-related non-communicable diseases (such as cardiovascular disease, hypertension, cancer, and type-2 diabetes.).

                    Types of Malnutrition | UPSC – IAS

                    • Marasmus – It is a form of severe malnutrition. Nutrient deficiency is the main cause of marasmus. It occurs in children that don’t ingest enough protein, calories, carbohydrates, and other important nutrients. This is usually due to poverty and a scarcity of food.
                    • Kwashiorkor – It is a form of severe protein malnutrition. In this type malnutrition produced by a severely inadequate amount of protein in the diet.

                    Fundamental Causes behind Malnutrition in India | UPSC – IAS

                    The causes and consequences of malnutrition are complex, and it will require the concerted efforts of all social institutions, including the social work profession, to combat malnutrition effectively.

                    • Barriers to health services include – High cost of care. Inadequate or no insurance coverage. Lack of availability of services.
                    • Poverty – It hinders the accessibility of adequate food. (Poverty is the single most common cause of food insecurity)
                    • Social strains on Women – Early marriages of girls leads to teenage pregnancies resulting in low birth weight of the newborns, poor breastfeeding practices and poor complementary feeding practices.
                    • Lack of availability of safe drinking water hinders proper digestion and assimilation of food and also cause water and food borne diseases.
                    • Poor sanitation – It is linked to transmission of diseases such as cholera, diarrhoea, dysentery, hepatitis A, typhoid and polio and exacerbate stunting. It reduces human well-being, social and economic development. Poor sanitation and environmental conditions lead to spread of many diseases that sap children’s energy and stunts their growth.
                    • illiteracy in women and large household size.
                    • Lack of Awareness: about nutritional needs of infants and young children.

                    Malnutrition In India | UPSC – IAS

                    Despite India’s 50 percent increase in GDP since year 2013, more than one third of the world’s malnourished children live in India. Among these, half of the children under 3 years old are underweight.

                    • An approximate 23.6% of the population of India live below a purchasing power of 92 INR a day. This poverty does not directly lead to malnutrition but it leaves a large piece of the population without sufficient amounts of food.

                    The World Bank (WB) estimates that India is one of the highest-ranking countries in the whole world for the number of children suffering from malnutrition. The prevalence of underweight children in India is among the highest in the world and is nearly double that of Sub Saharan Africa with dire consequences for mobility, mortality, productivity, and economic growth.

                    • One of the major causes for malnutrition in India is economic inequality. On account of the low social status of the population, their diet often lacks in both quality and quantity. Mostly Women who suffer from malnutrition are less likely to have healthy babies.
                    • Nutrition deficiencies inflict long-term damage to both individuals and society. Compared with their better-fed peers, nutrition-deficient individuals are more likely to have infectious diseases such as pneumonia and tuberculosis, which lead to a higher mortality rate.

                    Effects of Malnutrition in India | UPSC – IAS

                    Poverty increases the risk of, and risks from, malnutrition. Low income families are more likely to be affected by different forms of malnutrition. Moreover, malnutrition increases health care costs, reduces productivity & morale, and slows economic growth, which can perpetuate a cycle of poverty and ill-health.

                    • Increased vulnerability to diseases: Undernutrition increases the risk of infectious diseases like diarrhoea, measles, malaria and pneumonia.
                    • Developmental delays: Chronic malnutrition can impair a young child’s physical and mental development. Cognitive impairment resulting from malnutrition may result in diminished productivity in academic performance.
                    • Low productivity later in life: As per estimates of World Bank, childhood stunting may result in a loss of height among adults by 1%, which may further lead to a reduction in individuals economic productivity by 1.4%
                    • Poor maternity health: Undernutrition puts women at a greater risk of pregnancy-related complications and death (obstructed labour and hemorrhage).
                    • Barrier to socio-economic development: Widespread child undernutrition greatly impedes a country’s socioeconomic development and potential to reduce poverty.

                    Why malnutrition is a problem ? | UPSC – IAS

                    Underlying causes of malnutrition – The lack of money for food; and insufficiency of food production. It is stressed that much agricultural land is employed for purposes other than the production of food. Other causes of malnutrition include changes in local food habits and in food technology.

                    • Reduced household incomes: In recent years slowdown in economic growth, stagnant rural wages and high levels of unemployment have affected household incomes and limited their ability to invest in nutritional food.
                    • Underfunding: For instance, in a response to a parliamentary question in December 2019, the Minister for Women and Child Development presented data which showed that only about 32.5% of the funds released for Poshan Abhiyaan from 2017-18 onwards had been utilised.
                    • Poor implementation of schemes: Anganwadi centres were established under ICDS to provide basic healthcare education and services across the country. Many workers are unable to play an effective role in attending to the problem of malnutrition because of low wages and inadequate training.
                    • lack of access to safe water, sanitation and hygiene, ignorance and lack of education, social and cultural factors like child marriage, caste barriers etc.

                    Solution to the problem of malnutrition (In brief) – Increasing yields by organic manuring and mixed cropping; devoting more land to staple food production; changes in food habits and in food technology.

                    Steps taken by Government for nutritional well being | UPSC – IAS

                    • POSHAN Abhiyaan or National Nutrition Mission: It is Government of India’s flagship programme to improve nutritional outcomes for children, pregnant women and lactating mothers.
                      • Under it the Anemia Mukt Bharat (AMB) Strategy was launched in 2018 with efforts to improve Iron and Folic Acid (IFA) supplementation, behaviour change and anaemia-related care and treatment across six target groups including pregnant women, lactating mothers, and children.
                    • Integrated Child Development Scheme (ICDS): It aims to improve the nutritional and health status of children in the age-group 0-6 years and reduce the incidence of mortality, morbidity, malnutrition and school dropout.
                    • Public Distribution System: It provides coverage to upto 75% of rural population and upto 50% of urban population for receiving highly subsidized food grains under Targeted Public Distribution System.
                    • Midday meal scheme: The scheme provides meals for all school children studying in Classes I-VIII of Government, Government-Aided Schools.

                    Eradicating Hunger poverty and Malnutrition together in India | UPSC – IAS

                    In today’s world, eradicating hunger, food insecurity and all forms of malnutrition calls not only for reduced rural poverty and improved resilience of the most vulnerable people, but also for efficient food systems which are able to deliver sufficient and nutritious food for everyone. However, to make this happen, strong political commitment at global, regional and especially national levels is necessary.

                    To Enhance the effectiveness of the POSHAN Abhiyaan in India:-

                    • Implement POSHAN-plus strategy which apart from continued strengthening the four pillars (technology, convergence, behavioural change and capacity building) of the Abhiyaan also requires addressing the governance challenges of National Health Mission (NHM)/ ICDS delivery mechanism and renewed focus on
                      • Complementary feeding (usually targeted at the age range of 6-24 months)
                      • Investments in education of girls and women, reduce early marriage and early pregnancy, improving care during and after pregnancy etc.
                    • Availability of regional food items and cultural preferences may also be integrated with this abhiyaan to make it inclusive.
                    • Enhance the reach of the POSHAN Abhiyaan: Since the Anganwadi centres (AWCs) are at the heart of POSHAN Abhiyaan, it is imperative to enhance their reach. Therefore, mini Anganwadi centres should be set up so that children, pregnant and lactating women who may not be able to travel longer distances, have easier access to them.
                    • Institutionalise Capacity Building: Regular trainings for Anganwadi; availability of basic amenities such as electricity, growth monitors, supplies are imperative for proper functioning of the AWCs and the effective provision of services.
                    • Strengthen Coordination: All the programmes of the government having direct or indirect impact on the nutrition must be brought under the POSHAN Abhiyaan.
                    • Nurture Community Approach: Despite strong efforts, community involvement in POSHAN Abhiyaan has been substandard. State specific efforts should be made (keeping in view the diversity and intersectionality of the society) for ensuring community participation.

                    Conclusion and A way forward  | UPSC – IAS

                    • Developing an employment-centred growth strategy: which includes universal provision of basic services for education, health, food and social security.
                    • Strengthening present initiatives: Direct interventions such as supplementary nutrition (of good quality including eggs, fruits, etc.), growth monitoring, and behaviour change communication through the ICDS and school meals must be strengthened and given more resources.
                    • Need of Data initiative: A modern data initiative leveraging and combining aspects of the NFHS, the National Nutrition Monitoring Bureau and the National Sample Surveys that collected data on detailed household-level consumption and expenditure on various food items should be considered.
                    • Improve dietary pattern by promoting production and increasing per capita availability of nutritionally rich food.
                    • Targeted approach: The government agencies in India need to adopt a comprehensive and coordinated multisectoral approach which is formulated by taking into account the varied nature of local-level challenges.
                    • Food fortification: A proposed policy would provide for adding essential vitamins and minerals (iron, folic acid, vitamin, iodine) to food items (rice, wheat flour, salt, edible oil, milk) sold in markets. The Centrally Sponsored Pilot Scheme on Fortification of Rice & its distribution through Public Distribution System is a step in the right direction.

                    Other Service Providers (OSP) | UPSC – IAS

                    Other Service Providers (OSP) | UPSC - IAS

                    Other Service Providers (OSP) | UPSC - IAS

                    Other Service Providers (OSP) | UPSC – IAS

                    Recently Department of Telecom eased rules for other service providers (OSP) in the business process outsourcing (BPO) and information technology-enabled services (ITes).

                    • Who are OSPs or other service providers are:– OSPs refer to firms providing services like voice based and data based outsourcing and other services popularly known as BPOs. Companies or firms which provide secondary or tertiary services such as telemarketing, telebanking or telemedicine for various companies, banks or hospital chains, respectively.

                    General Guidelines for OSPs are as follows:- 

                    • No registration certificate will be required for OSP centres in India.
                    • Special dispensations for OSPs:
                      • For the OSPs the collection, conversion, carriage and exchange of the PSTN/PLMN/ISDN traffic over the Virtual Private network (NPLC, MPLS VPN) interconnecting the different OSP Centres is permissible.
                      • The International OSPs are allowed to carry the aggregated switched voice traffic from their POP in a foreign country to their OSP centre in India over leased line/MPLS VPN.
                      • Interconnectivity of two or more Domestic OSP Centres of the same Company or group of companies is permitted. Similarly, interconnectivity among International OSP Centres is permitted.
                      • Interconnection of Remote Agent to the OSP centre/resources is permitted.
                      • An OSP having multiple centres may obtain internet connection at a centralised location and this internet can be accessed from other OSP centres using leased circuits/ MPLS VPN.
                    • The OSPs may also operate as under:
                      • Work From Home (WFH)
                      • Work From Anywhere (WFA) in India
                      • Infrastructure sharing
                      • Centralized EPABX (i.e., Distributed Architecture of EPABX)
                    • NO Bank Guarantee whatsoever will be required for any facility or dispensation under these Guidelines.
                    • The concept of Work-From-Home/ Work-From-Anywhere shall be treated as Extended Agent Position/ Remote Agent of the OSP.
                    • Interconnectivity between OSP centres belonging to different OSP companies shall be permitted.
                    • Bypass of licensed International Long Distance Operator (ILDO) and National Long Distance Operator (NLDO) jurisdiction should not take place.
                    • EPABX at foreign location in case of international OSP will be allowed. However, the OSP will take all the necessary measures to comply with the requirements of relevant provisions of Indian laws including applicable data privacy laws. In addition, the OSP shall maintain a copy of CDR and System logs in storage at any of its OSP centres in India.

                    Significant analysis of the eased rules are:- 

                    • With the government recognising OSP employees as extended or remote agent, companies providing such services will no longer have to carry the additional compliance burden of providing the details of all such employees to the DoT.
                    • It has done away with many compliance requirements that these firms were subject to. These include reporting obligations, furnishing of bank guarantees and publication of network diagrams or a diagrammatic representation of how the computers of the firms are linked to each other.
                    • The doing away of registration norms will also mean that there will be no renewal of such licenses and therefore will invite foreign companies to set up or expand their other service providing units in India.
                    • An important change, which takes data-based OSPs completely out of the ambit of BPOs would mean that such firms can function like any other service firm without the strict and cumbersome guidelines such as presence of agent on location.

                    Swamitva Scheme Objectives | UPSC – IAS

                    Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) | UPSC - IAS

                    Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) | UPSC - IAS

                    SVAMITVA Scheme is a Central Sector scheme launched by Hon’ble Prime Minister of India on National Panchayat Day i.e 24th April 2020.

                    Aim: To provide an integrated property validation solution for rural India.

                    The demarcation of rural abadi areas using Drone Surveying technology. and Continuously Operating Reference Station (CORS).

                    This would provide the ‘record of rights’ to village household owners possessing houses in inhabited rural areas in villages which, in turn, would enable them to use their property as a financial asset for taking loans and other financial benefits from Bank

                    Swamitva Scheme Objectives | UPSC – IAS

                    • To bring financial stability to the citizens in rural India by enabling them to use their property as a financial asset for taking loans and other financial benefits.
                    • Creation of accurate land records for rural planning.
                    • Determination of property tax, which would accrue to the GPs directly in States where it is devolved or else, add to the State exchequer.
                    • Creation of survey infrastructure and GIS maps that can be leveraged by any department for their use.
                    • To support in preparation of better-quality Gram Panchayat Development Plan (GPDP) by making use of GIS maps.
                    • To reduce property related disputes and legal cases

                    NPA in India and its impact on Indian Economy | UPSC – IAS

                    NPA in India and its impact on Indian Economy UPSC - IAS

                    NPA in India and its impact on Indian Economy UPSC - IAS

                    NPA in India and its impact on Indian Economy | UPSC – IAS

                    According to Reserve Bank of India (RBI) explains the definition of NPAs, “An asset makes non-performing when it stops to generate income for the bank.” According to the Reserve Bank of India (RBI), the gross non-performing assets in Indian banks, specifically in public sector banks, are valued at around Rs 400,000 crore (~US$61.5 billion), which represents 90% of the total NPA in India, with private sector banks accounting for the remainder.

                    Reasons for the Rise in NPA levels | UPSC – IAS

                    2004-05 to 2008-09 – In that period, commercial credit (or what is called ‘non-food credit’) doubled. It was a period in which the world economy as well as the Indian economy were booming. Indian firms borrowed furiously in order to avail of the growth opportunities they saw coming.

                    • Most of the investment went into infrastructure and related areas — telecom, power, roads, aviation, steel.
                    • Businessmen were overcome with exuberance and they believed, as many others did, that India had entered an era of 9% growth.
                    • From 2000-2008, the Indian economy was in a boom phase and banks, especially public sector banks, started lending extensively to companies.
                    • However, with the financial crisis in 2008-09, corporate profits decreased and the Government banned mining projects. The situation became serious with the substantial delay in environmental permits, affecting the infrastructure sector – power, iron, and steel – and resulting in volatility in prices of raw materials and a shortage of supply.
                    • Another reason is the relaxed lending norms adopted by banks, especially to the big corporate houses, foregoing analysis of their financials and their credit ratings.

                    Recent Developments and Ways to Tackle NPA | UPSC – IAS

                    • The Debt Recovery Tribunals (DRTs) – To decrease the time required for settling cases. They are governed by the provisions of the Recovery of Debt Due to Banks and Financial Institutions Act, 1993. However, their number is not sufficient therefore they also suffer from time lag and cases are pending for more than 2-3 years in many areas.  The original aim of the Debts Recovery Tribunal was to receive claim applications from Banks and Financial Institutions against their defaulting borrowers
                    • Using unclaimed deposits – Similar to provisions for unclaimed dividends, the government may also create a provision and transfer unclaimed deposits to its account. These funds in return can be transferred to banks as capital.
                    • Monetization of assets held by Banks – In this case, banks with retail franchisees should create value by auctioning a bank assurance association rather than running it themselves as an insurance company. The current set-up blocks capital inflows and doesn’t generate much wealth for the owners.
                    • Make Cash Reserve Ratio (CRR) attractive – At present, the RBI asks Indian banks to maintain a certain limit on CRR on which the RBI doesn’t pay interest and hence, banks lose out a lot on interest earnings. If the CRR is made more financially rewarding for banks, it can reduce capital requirements.
                    • Refinancing from the Central Bank – The US Federal Reserve spent $700 billion to purchase stressed assets in 2008-09 under the “Troubled Asset Relief Program.” Indian banks can adopt a similar arrangement by involving the RBI directly or through the creation of a Special Purpose Vehicle (SPV). 
                    • Structural change to involve private capital – The compensation structure and accountability of banks create a problem for the market. Banks should be governed by a board while aiming to reduce the government’s stake and making the financial institutions attractive to private investors.
                    • Credit Information Bureau – A good information system is required to prevent loan falling into bad hands and therefore prevention of NPAs. It helps banks by maintaining and sharing data of individual defaulters and willful defaulters.
                    • Lok Adalats – They are helpful in tackling and recovery of small loans however they are limited up to 5 lakh rupees loans only by the RBI guidelines issued in 2001. They are positive in the sense that they avoid more cases into the legal system.
                    • Compromise Settlement – It provides a simple mechanism for recovery of NPA for the advances below Rs. 10 Crores. It covers lawsuits with courts and DRTs (Debt Recovery Tribunals) however willful default and fraud cases are excluded.
                    • SARFAESI Act – The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 – The Act permits Banks / Financial Institutions to recover their NPAs without the involvement of the Court, through acquiring and disposing of the secured assets in NPA accounts with an outstanding amount of Rs. 1 lakh and above. The banks have to first issue a notice. Then, on the borrower’s failure to repay, they can:
                      • Securitization – It refers to the process of converting loans and other financial assets into marketable securities worth selling to the investors.
                      • Asset Reconstruction – It refers to conversion of non-performing assets into performing assets.
                      • Enforcement of Security without the intervention of the Court.

                    Further, this act has been amended last year to make its enforcement faster.

                    • ARC (Asset Reconstruction Companies) – The RBI gave license to 14 new ARCs recently after the amendment of the SARFAESI Act of 2002. These companies are created to unlock value from stressed loans. Before this law came, lenders could enforce their security interests only through courts, which was a time-consuming process.
                    • Corporate Debt Restructuring – It is for reducing the burden of the debts on the company by decreasing the rates paid and increasing the time the company has to pay the obligation back.
                    • 5:25 rule – Also known as, Flexible Structuring of Long Term Project Loans to Infrastructure and Core Industries. It was proposed to maintain the cash flow of such companies since the project timeline is long and they do not get the money back into their books for a long time, therefore, the requirement of loans at every 5-7 years and thus refinancing for long term projects.
                    • Joint Lenders Forum – It was created by the inclusion of all PSBs whose loans have become stressed. It is present so as to avoid loan to the same individual or company from different banks. It is formulated to prevent the instances where one person takes a loan from one bank to give a loan of the other bank.
                    • Mission Indradhanush – The Indradhanush framework for transforming the PSBs represents the most comprehensive reform effort undertaken since banking nationalization in the year 1970 to revamp the Public Sector Banks (PSBs) and improve their overall performance by ABCDEFG.
                    • Insolvency and Bankruptcy Code (IBC) – With the RBI’s push for the IBC, the resolution process is expected to quicken while continuing to exercise control over the quality of the assets. There will be changes in the provision requirement, with the requirement for the higher proportion for provisions going to make the books better.
                    • Credit Risk Management – This involves credit appraisal and monitoring accountability and credit by performing various analysis on profit and loss accounts. While conducting these analyses, banks should also do a sensitivity analysis and should build safeguards against external factors.
                    • Tightening Credit Monitoring – A proper and effective Management Information System (MIS) needs to be implemented to monitor warnings. The MIS should ideally detect issues and set off timely alerts to management so that necessary actions can be taken.
                    • Amendments to Banking Law to give RBI more power – The present scenario allows the RBI just to conduct an inspection of a lender but doesn’t give them the power to set up an oversight committee. With the amendment to the law, the RBI will be able to monitor large big accounts and create oversight committees.
                    • More “Hair-cut” for Banks – For quite some time, PSU lenders have started putting aside a large portion of their profits for provisions and losses because of NPA. The situation is so serious that the RBI may ask them to create a bigger reserve and thus, report lower profits.  
                    • Stricter NPA recovery – It is also discussed that the Government needs to amend the laws and give more power to banks to recover NPA rather than play the game of “wait-and-watch.”
                    • Corporate Governance Issues – Banks, especially the public sector ones, need to come up with proper guidance and framework for appointments to senior level positions.
                    • Accountability – Lower level executives are often made accountable today; however, major decisions are made by senior level executives. Hence, it becomes very important to make senior executives accountable if Indian banks are to tackle the problem of NPAs.

                    With the potential solutions above, the problem of NPA in Indian banks can be effectively monitored and controlled, thus allowing the banks to achieve a clean balance sheet

                    Impact of NPA on Indian Economy | UPSC – IAS

                    NPA plays an important role in every economic condition and also the main cause of the increase in the current account deficit. Interest rates, Loan, Housing Loans, CRR, SLR all are directly affected by the system. The Corporates also affect the impact of higher NPA.
                    • Stress in banking sector causes less money available to fund other projects, therefore, negative impact on the larger national economy.
                    • Higher interest rates by the banks to maintain the profit margin.
                    • Redirecting funds from the good projects to the bad ones.
                    • As investments got stuck, it may result in it may result in unemployment.
                    • In the case of public sector banks, the bad health of banks means a bad return for a shareholder which means that the government of India gets less money as a dividend. Therefore it may impact easy deployment of money for social and infrastructure development and results in social and political cost.
                    • Balance sheet syndrome of Indian characteristics that is both the banks and the corporate sector have stressed balance sheet and causes halting of the investment-led development process.
                    • NPAs related cases add more pressure to already pending cases with the judiciary.
                    • Increase in Current Account Deficit: It is the main cause of the increase in current account deficit and interest rates, CRR, SLR are directly affected by the system.
                    • Confidence in shareholders: Higher NPA loses the confidence of shareholders.
                    • Effect on Borrowers: High NPA not only affect the serious borrowers but also affect borrowers with good credit scores.

                    Formalization of micro food processing enterprises | UPSC – IAS

                    Food processing and related Industries in India UPSC - IAS GS3 Economic Development

                    Food processing and related Industries in India UPSC - IAS GS3 Economic Development

                    Formalization of micro food processing enterprises

                    Food processing is the transformation of agricultural products into food, or of one form of food into other forms.

                    Recently, Ministries of Food Processing Industries launched the PM Formalization of Micro Food Processing Enterprises (PM FME) scheme on 29th June 2020 as a part of “Atma Nirbhar Bharat Abhiyan”.

                    Scheme would generate total investment of Rs 35,000 crore and generate 9 lakh skilled and semi-skilled employment and benefit 8 lakh units through:-

                    • Access to information,
                    • Training,
                    • Better exposure and formalization. 

                    Food products manufactured by the rural entrepreneurs in the villages have a long tradition of supplying Indian food products to the local population.

                    Challenges faced by food processing sector | UPSC – IAS

                    Challenges faced by food processing sector Unorganised food processing sector faces a number of challenges which limit their performance and their growth.

                    These challenges include:-

                    • Availability of raw materials: Agricultural produce is an important factor for sustaining food processing activities,
                    • High competition and Training,
                    • Lack of access to modern technology & equipment,
                    • Storage Constraints,
                    • Access institutional credit,
                    • lack of basic awareness on quality control of products; and
                    • Lack of branding & marketing skills etc.

                    Owing to these challenges, the unorganised food processing sector contributes much less in terms of value addition and output despite its huge potential.

                    • Unorganized food processing sector comprising nearly 25 lakh units contribute to 74% of employment in food processing sector.
                    • Nearly 66% of these units are located in rural areas and about 80% of them are family-based enterprises supporting livelihood rural household and minimizing their migration to urban areas. These units largely fall within the category of micro enterprises.

                    Objectives of the micro food processing enterprises  | UPSC – IAS

                    • Increase in access to finance by micro food processing units.
                    • Increase in revenues of target enterprises.
                    • Enhanced compliance with food quality and safety standards.
                    • Strengthening capacities of support systems.
                    • Transition from the unorganized sector to the formal sector.
                    • Special focus on women entrepreneurs and Aspirational districts.
                    • Focus on minor forest produce in Tribal Districts.

                    Details of the PM Formalization of micro food processing enterprises | UPSC – IAS

                    With a view to providing financial, technical and business support for upgradation of existing micro food processing enterprises, the Ministry of Food Processing Industries (MoFPI) has launched an all India “Centrally Sponsored PM Formalisation of Micro food processing Enterprises (PM FME) scheme” to be implemented over a period of five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore.

                    The expenditure under the scheme would to be shared in 60:40 ratio between Central and State Governments, in 90:10 ratio with North Eastern and Himalayan States, 60:40 ratio with UTs with legislature and 100% by Centre for other UTs.

                    One District One Product (ODODP) | UPSC – IAS

                    • The Scheme adopts One District One Product (ODODP) approach to reap benefit of scale in terms of procurement of inputs, availing common services and marketing of products.
                    • The States would identify food product for a district keeping in view the existing clusters and availability of raw material.
                    • The ODOP product could be a perishable produce based product or cereal based products or a food product widely produced in a district and their allied sectors.
                    • Illustrative list of such products includes mango, potato, litchi, tomato, tapioca, kinnu, bhujia, petha, papad, pickle, millet based products, fisheries, poultry, meat as well as animal feed among others.
                    • Preference would be given to those producing ODOP products. However, units producing other products would also be supported. Support for common infrastructure and branding & marketing would be for ODOP products.
                    • The Scheme also place focus on waste to wealth products, minor forest products and Aspirational Districts.
                    • Existing Individual micro food processing units desirous of upgradation of their unit can avail credit-linked capital subsidy @35% of the eligible project cost with a maximum ceiling of Rs.10 lakh per unit. Seed capital @ Rs. 40,000/- per SHG member would be provided for working capital and purchase of small tools.
                    • FPOs/ SHGs/ producer cooperatives would be provided credit linked grant of 35% for capital investment along the value chain.
                    • Support would be provided through credit linked grant @ 35% for development of common infrastructure including common processing facility, lab, warehouse, cold storage, packaging and incubation center through FPOs/SHGs/cooperatives or state owned agencies or private enterprise to use by micro units in the cluster.
                    • Support for marketing & branding would be provided to develop brands for micro units and groups with 50% grant at State or regional level which could benefit large number of micro units in clusters.

                    The Scheme places special focus on capacity building and research. NIFTEM and IIFPT, two academic and research institutions under MOFPI along with State Level Technical Institutions selected by the States would be provided support for training of units, product development, appropriate packaging and machinery for micro units.

                     

                    Extension of Operation Greens from TOP (Tomato-Onion-Potato) crops to all Perishable Fruits & Vegetables (TOP to Total)

                    • Operation Greens Scheme, being implemented by MoFPI has been extended from tomato, onion and potato (TOP) crops to other notified horticulture crops for providing subsidy for their transportation and storage from surplus production area to major consumption centres.
                    • The objective of intervention is to protect the growers of fruits and vegetables from making distress sale due to lockdown and reduce the post -harvest losses.

                    Eligible Crops:-

                    Fruits– Mango, Banana, Guava, Kiwi, Lichi, Papaya, Citrus, Pineapple, Pomegranate, Jackfruit; Vegetables: – French beans, Bitter Gourd, Brinjal, Capsicum, Carrot, Cauliflower, Chillies (Green), Okra, Onion, Potato and Tomato. Any other fruit/vegetable can be added in future on the basis of recommendation by Ministry of Agriculture or State Government

                    Eligible entities:-

                    Food Processors, FPO/FPC, Co-operative Societies, Individual farmers, Licensed Commission Agent, Exporters, State Marketing/Co-operative Federation, Retailers etc. engaged in processing/ marketing of fruits and vegetables.

                    Pattern of Assistance:-

                    Ministry will provide subsidy @ 50% of the cost of the following two components, subject to the cost norms:

                    • Transportation of eligible crops from surplus production cluster to consumption centre; and/or
                    • Hiring of appropriate storage facilities for eligible crops (for maximum period of 3 months);

                    Pradhan Mantri Kisan Sampada Yojana | UPSC – IAS

                    Pradhan Mantri Kisan Sampada Yojana UPSC - IAS

                    Pradhan Mantri Kisan Sampada Yojana UPSC - IAS

                    Pradhan Mantri Kisan Sampada Yojana | UPSC – IAS

                    Ministry of Food Processing Industries (MoFPI) has approved projects worth Rs 271 crore under the Creation/Expansion of Food Processing & Preservation Capacities (CEFPPC) scheme, which is a component of Pradhan Mantri Kisan SAMPADA Yojana (PMKSY).

                    Objective of this scheme is creation of modern infrastructure for food processing mega food parks/ clusters and individual units

                    • To create effective backward and forward linkages – linking farmers, processors and markets
                    • To create robust supply chain infrastructure for perishables

                    The implementation of PMKSY will result in creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet.

                    • It will provide a big boost to the growth of food processing sector in the country.
                    • It will help in providing better prices to farmers and is a big step towards doubling of farmers’ income.
                    • It will create huge employment opportunities especially in the rural areas.
                    • It will also help in reducing wastage of agricultural produce, increasing the processing level, availability of safe and convenient processed foods at affordable price to consumers and enhancing the export of the processed foods.

                    Pradhan Mantri Kisan Sampada Yojana was earlier named as SAMPADA (Scheme for Agro- Marine Processing and Development of Agro-Processing Clusters).

                    • It is a comprehensive package which will result in creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet.
                    • It will also help in doubling of farmers income, creating huge employment opportunities especially in the rural areas, reducing wastage of agricultural produce, increasing the processing level and enhancing the export of the processed foods.
                    • This central sector scheme has been approved for the period of 2016-20 coterminous with the 14th Finance Commission cycle.
                    • It is an umbrella scheme incorporating ongoing schemes of the Ministry of Food Processing which will result in creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet.

                    Schemes under PMKSY  | UPSC – IAS

                    • Mega Food Parks o Integrated Cold Chain and Value Addition Infrastructure
                    • Food Safety and Quality Assurance Infrastructure
                    • Creation/Expansion of Food Processing & Preservation Capacities
                    • Infrastructure for Agro-processing Clusters
                    • Creation of Backward and Forward Linkages
                    • Human Resources and Institutions.

                    SARFAESI Act 2002 | UPSC – IAS

                    SARFAESI Act 2002 | UPSC - IAS

                    SARFAESI Act 2002 | UPSC - IAS

                    SARFAESI Act 2002 | UPSC – IAS

                    The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (also known as the SARFAESI Act) is an Indian law. It allows banks and other financial institution to auction residential or commercial properties(of Defaulter) to recover loans

                    Details About SARFAESI Act

                    • The law does not apply to unsecured loans, loans below ₹100,000 or where remaining debt is below 20% of the original principal.
                    • It was framed to address the problem of NPA’s (Non-Performing Assets) or bad assets.
                    • It allows secured creditors to take possession over a collateral, against which a loan had been provided, upon a default in repayment.
                    • It lets the banks as well as other financial institutions to auction commercial or residential properties for the purpose of loan recovery.
                    • It gives detailed provisions for the formation and activities of Asset Securitization Companies (SCs) and Reconstruction Companies (RCs).
                    • RBI is the regulator for these institutions.
                    • It provides the legal framework for securitization activities in India.
                    • The Government is not involved in commercial decisions or recovery proceedings of banks or financial institutions.
                    • The SARFAESI Act does not differentiate between debtors/borrowers on any basis, including the financial status or debt value.
                    • Any aggrieved debtor/borrower has recourse to filing appeal in the Debts Recovery Tribunal (DRT) against action under the SARFAESI Act.
                    • The Act was amended in 2016, to empower the ARCs and to enhance the effectiveness of asset reconstruction under the new bankruptcy law.
                    • It also gave more regulatory powers to the RBI on the working of ARCs.

                    The Act provides three methods for recovery of NPAs,

                    1. Securitization – It refers to the process of converting loans and other financial assets into marketable securities worth selling to the investors.
                    2. Asset Reconstruction – It refers to conversion of non-performing assets into performing assets.
                    3. Enforcement of Security without the intervention of the Court.