InstaLinks : help you think beyond the issue but relevant to the issue from UPSC prelims and Mains exam point of view. These linkages provided in this ‘hint’ format help you frame possible questions ina your mind that might arise(or an examiner might imagine) from each current event. InstaLinks also connect every issue to their static or theoretical background. This helps you study a topic holistically and add new dimensions to every current event to help you think analytically
Table of Contents:
- Economic Survey 2023: Here are the key takeaways
- 21st-century India needs a real-time fiscal data portal
Content for Mains Enrichment (Ethics/Essay/ Governance)
- Microsoft’s Project ELLORA
- Quotes on Life
Facts for Prelims
- e-Gram SWARAJ Portal
- Visakhapatnam to be Andhra Pradesh’s new capital
- HNIs and Institutional investors
- IMF’s latest World Economic Outlook update
- Inaugural iCET dialogue
- Researchers find a new way to improve the storage time of quantum information
- NASA’s Fermi Detects First Gamma-Ray Eclipses From ‘Spider’ Star Systems
- ‘Soliga ecarinata’: Meet the new wasp genus
GS Paper 3
Syllabus: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development, and Employment
Direction: The article discusses the state of the Indian economy, its future prospects, and its challenges, as highlighted by the Economic Survey 2023.
Context: The Economic Survey 2023, presented by the Finance Minister in Parliament, painted an optimistic picture of the Indian economy’s prospects, claiming that the pandemic-induced blues are over.
What is the Economic Survey?
- It provides a detailed report of the state of the national economy (from agriculture to unemployment to infrastructure) for the year that is coming to a close (2022-23) with forecasts of the upcoming financial year (2023-24).
- It is prepared by the Economic Division of the Department of Economic Affairs (DEA), Ministry of Finance, under the guidance of the chief economic adviser (CEA).
- Once prepared, the Survey is approved by the Finance Minister and the comments or policy solutions contained in the Survey are not binding on the government.
- The first Economic Survey was presented for 1950-51 and until 1964, it was presented along with the Budget.
Key highlights of the Economic Survey 2023:
|Key parameters||Projections/ Performance||Drivers/ Takeaways|
|GDP growth||India is to witness GDP growth of 6.0 – 6.8% in 2023-24, depending on the trajectory of economic and political developments globally||● The rebound of private consumption
● Higher Capital Expenditure (Capex)
● Near-universal vaccination Return of migrant workers to cities
● strengthening the balance sheets of the Corporates,
● Well-capitalized public sector banks ready to increase the credit supply to the MSME sector
|Inflation||● The RBI has projected headline inflation at 6.8% in FY23, outside its comfort zone of 2% to 6%.
● However, the Survey sounded optimistic about the inflation levels.
|Not high enough to deter private consumption and not low to weaken the inducement to invest|
|Employment-Unemployment||The PLFS showed that the urban unemployment rate for people aged 15 years and above declined from 9.8% in the quarter ending September 2021 to 7.2% one year later.||● Despite layoffs, the number of direct jobs created by Indian startups rose 36% in 2022.
● Improvement in the labor force participation rate
● The initial surge in exports
● A strong release of the “pent-up” demand
● A swift rollout of the capex.
|Health||● India’s budgeted expenditure on the health sector reached 2.1% of the GDP in the financial year 2023 (Budget estimates) and 2.2% in FY 2022 (revised estimates).
● The National Health Policy 2017 as well as the 15th Finance Commission recommended 2.5% by 2025.
|● Increase in the share of government health expenditure (in comparison to the total health expenditure)
● This is due to expenditure incurred on the national Covid-19 vaccination program, Aatmanirbhar Bharat Abhiyaan, Intensified Mission Indradhanush (MI) program
● The decline in out-of-pocket expenditure
● Ayushman Bharat Jan Arogya Yojana (AB-JAY) falling short of the target: Less than 50% of the originally targeted 50 crore beneficiaries under the scheme.
|Education||As a share of total GDP, the budgetary allocation for education saw only a minimal gain of 0.1 percentage points, from 2.8% to 2.9% during the same seven-year period.||● Decline in the govt share of expenditure, while the expenditure on social services increased.
● COVID worsens dropout rates at primary and upper primary school levels
● Higher education enrolment increased
|Agriculture||● The Indian agriculture sector has been growing at an average annual growth rate of 4.6% during the last six years.
● In recent years, India has also rapidly emerged as the net exporter of agricultural products (an all-time high of $50.2 billion during 2021-22)
|● Strong agri growth led to a YoY dip in monthly demand for MGNREGS.
● Interventions like the PM Kisan, PMFBY, and the push given to Kisan Credit Cards have been significant.
● The sector needs “re-orientation” given challenges like adverse impacts of climate change, fragmented landholdings, and rising input costs.
|Services: Source of strength
|● India has been placed among the top 10 service-exporting countries in the year 2021.
● The commercial services export has increased from 3% in 2015 to 4% in 2021.
|● Contact-intensive services like hotel, tourism, retail trade, entertainment, and recreation, have registered a sequential growth of 16% at pre-pandemic levels.
● Non-contact intensive services like ICT, financial, professional, and business services have contributed significantly to the economy.
|Industry: Steady recovery||The industry not only accounts for 31% of the GDP but also has a significant contribution in generating employment for up to 12.1 crore people in the financial year 2023, directly or indirectly.||● Path-breaking measures such as PM GatiShakti, the National Logistics Policy, and the Production-Linked Incentive schemes to boost manufacturing output.|
|Infrastructure||Digital infra: In 2022, over a billion people have unique digital ID documents, more than 80% have bank accounts, and over 600 cr digital payment transactions have been completed on a monthly basis.||● Digital infrastructure has given robust growth during the pandemic era.
● Digital infra can add 60-100 bps to GDP growth.
● Government’s vision for physical infrastructure development – Public Private Partnerships, National Infrastructure Pipeline, National Monetisation Pipeline, etc.
|Climate Change and Environment: Preparing to Face the Future
|● India declared the Net Zero Pledge to achieve a net zero emissions goal by 2070.
● India achieved its target of 40% installed electric capacity from non-fossil fuels ahead of 2030.
|● National Green Hydrogen Mission to enable India to be energy independent by 2047.
● The Survey highlights the progress on eight missions under the NAPCC to address climate concerns and promote sustainable development.
● E- vehicle sales to touch 1Cr units by 2030.
|Shipbuilding||· As of date, more than 130 warships have been constructed at Indian shipyards, and currently, 41 of 43 ships and submarines are being constructed at various public and private sector shipyards in India
|· Shipbuilding has one of the highest employment multipliers and is capable of generating mass employment in remote, coastal, and rural areas
|Startups||· Despite layoffs, the number of direct jobs created by Startups rose 36 percent to around 2.7 lakh last year
· The number of start-ups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) has increased from 452 in 2016 to 84,012 in 2022
|· Start-ups are being envisioned as the spine of the ‘new India’ as they encouraged youth to become job creators rather than job seekers|
|Electronics||· India is on the “right trajectory” to reach $300 billion worth of electronics manufacturing and $120 billion in exports by FY26 due to an improvement in manufacturing and export over the last five years.||· India has become the second-largest mobile phone manufacturer globally
· Domestic companies, such as Tata, have indicated an interest in establishing semiconductor fabrication plants in the country
- Uncertainty remains: The Survey signals that vulnerabilities to India’s growth mainly stem from external factors, while domestic drivers remain strong.
- For example, there are upside risks to commodity prices from external factors such as the Russia-Ukraine conflict, China rapidly reopening its economic activity, etc.
- 2023 = 2003: The Survey argued that the situation in 2023 is similar to 2003, as the period between 2014 and 2022 is analogous to 1998-2002 when despite transformative reforms by the government, the Indian economy lagged in growth returns.
- This was due to temporary shocks such as the US sanctions after India’s nuclear test, two successive droughts, the collapse of the tech boom, etc. But once these shocks faded, the structural reforms paid growth dividends from 2003.
- Similarly, the successive shocks in recent years, such as the ILFS collapse, the COVID-19 pandemic, etc., have led to a lag in the growth effects of sweeping reforms across multiple dimensions.
- Vigilant on inflation, and deficit: Monetary and fiscal authorities will need to stay proactive and vigilant on inflation as well as the worsening CAD front, which is facing multiple risks due to slowing exports, rising import bills, etc.
- The private sector should take the lead: Though the fiscal policy has supported public investments for infrastructure projects, the time has probably come for the private sector to take on the baton of contributing to economic growth.
Conclusion: Despite challenges, the Indian economy has almost “recouped” what it lost in 2022–2023 and has “renewed” and “re-energized” what had slowed down due to the pandemic.
Q. Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments. (UPSC 2019)
Prelims Links: UPSC 2015
GS Paper 3
Source: Live Mint
Context: Former Economic Adviser, Arvind Subramanian, in his book mentioned that the accounting techniques(‘creative accounting’) used made it difficult to gauge the precise extent of the fiscal deficit.
Hence, the government should make efforts to draft a more transparent and accessible budget for India’s citizens and investors.
Issues with present fiscal data:
- Not Comprehensive: Fiscal data in India is fragmented, incomplete, and often comes with lags.
- Data mismatch: The data shown in various sources as a transfer by the higher tier (Union or state government) often does not match the amount shown as receipt by the lower tier (state or local government).
Need for Real-time fiscal data portal:
- A real-time fiscal data portal that tells us how funds are flowing across the three tiers of government—Centre, state, and local governments—would be an invaluable resource to understand the Indian economy.
- Greater scrutiny of public finances would in turn improve the quality of reporting, driving up the efficiency of public spending.
- Such a portal would also allow government vendors and related businesses to plan their purchases and inventories better.
- Financial institutions would be able to estimate the borrowing needs of different levels of government accurately.
Committee recommendations that demand a real-time fiscal data portal:
- A 2018 committee on fiscal statistics appointed by the National Statistical Commission (NSC) argued for a complete overhaul of India’s fiscal database.
- The committee found that a) local government accounts were simply unavailable for most states, b) India’s fiscal data lacks compilation, classification into suitable categories, and eventual publication on a website or in printed form.
- The report mentions that as many parts of the financial system have been digitized, it is possible to build a comprehensive real-time fiscal data warehouse.
- A number of Finance Commission reports have advocated the setting up of an apex fiscal council to aggregate fiscal data. Such a council can help clean up public finance statistics and provide a more accurate view of the flow of public funds across the country.
A federal fiscal organization can help bring about more consistent reporting standards. A transparent fiscal data portal that provides granular real-time data can bring about economy-wide efficiency gains, and pre-empt fiscal crises in the future.
Off-Budget financing: It refers to expenditure that’s not funded through the budget. For instance, the government may set up a special purpose vehicle (SPV) to borrow money for a particular task such as constructing a bridge. Since the loan is not taken directly by the govt, it does not reflect in the budget document. Since such off-budget financing is not mentioned in the Budget document, the numbers also do not reflect in the fiscal deficit. Such financing tends to hide the actual extent of government spending, borrowings, and debt and increase the interest burden.
Mains Link: UPSC 2013
What were the reasons for the introduction of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003? Discuss critically its salient features and their effectiveness.
Prelims Link: UPSC 2017.
Content for Mains Enrichment
Microsoft’s Project ELLORA
It is an initiative to bring ‘rare’ Indian languages such as Gondi, and Mundari online. Under the project, researchers are building digital resources of the languages, so as to preserve them.
- Microsoft launched Project ELLORA or Enabling Low Resource Languages in 2015.
- Researchers are taking the help of AI and the local community in the data collection process, researchers hope to create a dataset that is both accurate and culturally relevant.
Quotes on Life:
Source: Indian Express
Gandhi- “ Life and death are but phases of the same thing, the reverse, and obverse of the same coin. Death is necessary for man’s growth as life itself is. “
Rabindra Nath Tagore: “ Let life be beautiful like summer flowers and death be like autumn leaves
Usage: The quotes can be used to show the continuum of life and death in a philosophical essay. Death is as necessary as life is. It is said that ” Live life so completely that when death comes to you like a thief in the night, there will be nothing left for him to steal. ”These are various perspectives about life and death.
Facts for Prelims
e-Gram SWARAJ Portal
Context: Ministry of Panchayati Raj organized Manthan: Charting New Paths, an Industry consultation on e-Gram SWARAJ 2.0
- To support the ‘Minimum Government, Maximum Governance’ vision at the third tier of Government by the means of technology
- Longevity of social, economic, and environmental welfare at the grassroots level by enhancing rural governance through the adoption of Digital tools and Technology
- To bring in better transparency and strength of the e-Governance in Panchayati Raj Institutions (PRIs) across the country through decentralized planning, progress reporting, and work-based accounting.
About e-Gram SWARAJ Portal:
As a part of Panchayat Enterprise Suite (PES) under the e-Panchayat Mission Mode Project (MMP), the portal aims at capacity building of its functionaries using technological interventions.
Other initiatives: The PRIASoft (Panchayati Raj Institutions Accounting Software) is the Online Payment Module whereby Gram Panchayats are carrying out online payments to the vendors and service providers.
Visakhapatnam to be Andhra Pradesh’s new capital
Source: Indian Express
Context: Andhra Pradesh government has announced that Visakhapatnam would become the capital of the state soon, even as the matter of developing Amaravati as the capital of Andhra Pradesh lies pending in the Supreme Court.
The background of the issue:
In 2019, Jagan Mohan Reddy first proposed the idea of “decentralized development” and advocated for the establishment of three capitals in the state- Amaravati (Legislative capital); Visakhapatnam (Executive Capital), and Kurnool (Judicial Capital).
- However, the state government later changed its views in 2021.
- In March 2022, Andhra Pradesh High Court directed the state government to develop the proposed capital Amaravati.
- Andhra Pradesh government challenged the High Court’s order in the Supreme Court. The SC stayed the HC order and the matter is in SC currently.
The Andhra Pradesh Reorganisation Act of 2014 (Telangana Act, on 2nd June 2014) bifurcated the state of Andhra Pradesh into Telangana and the residuary Andhra Pradesh state, as an outcome of the Telangana movement.
Sivaramakrishnan committee constituted by the Union Government to suggest the place to build the capital city of Andhra Pradesh submitted its report on 27 August 2014 to Home Minister Rajnath Singh in New Delhi.
- This committee had also opposed creating a Single ‘Super Capita’ like Amaravati
- Insta curious: 13 countries in the world have more than 1 capital. Example – South Africa
HNIs and Institutional investors
Source: Live Mint
Context: Institutional investors and high net worth individuals (HNIs) salvaged the follow-on public offering (FPO) of Adani Enterprises Ltd, ensuring the issue was subscribed 1.12 times.
Who are Institutional Investors or Qualified Institutional Investors (QIIs)?
Commercial banks, mutual fund houses, public financial institutions, and foreign portfolio investors fall under this category. SEBI has mandated that QIIs cannot be allocated more than 50% of shares
Who are High Net Worth Individuals (HNIs)?
Individual investors or institutions (large trusts, big companies, and similar institutions) who are willing to invest more than ₹2 lakh are categorized as High Net Worth Individuals.
What is an FPO?
FPO (Follow on Public Offer) is a process by which a company, which is already listed on an exchange, issues new shares to the investors or the existing shareholders, usually the promoters
What is FPO oversubscription?
An FPO oversubscription is a condition when an FPO receives more applications from investors than the total number of shares offered. For example, Adani’s FPO was oversubscribed 1.12 times, meaning there were 112 interested investors for 100 shares of the company.
IMF’s latest World Economic Outlook update
Source: Indian Express
Context: In its recent update of the World Economic Outlook (WEO) report, the IMF has marginally improved the forecast for global growth in 2023 — a relief, given the fears of a global recession in 2023.
The IMF releases the WEO twice every year, in April and October, apart from updating it twice — in January and July.
Global growth will bottom out in 2023
- IMF rules out a global recession: “Negative growth in global GDP or global GDP per capita—which often happens when there is a global recession—is not expected.”
Global inflation has peaked but relief will be slow
- Inflation, which destabilized the global economy, is expected to have peaked in 2022 but the disinflation (the fall in inflation rate) will be slow and take all of 2023 and 2024.
- The price rise is slowing for two main reasons. One is monetary tightening all across the world — higher interest rates reduce overall demand for goods and services and that, in turn, slows down inflation. Two, in the wake of faltering demand, prices of different commodities — both fuel and non-fuel — have come down from their recent highs.
India will stay the world’s fastest-growing major economy in 2023 and 2024
- India’s GDP growth rate is expected to be significantly higher than all its comparable economies, especially China (which is set to grow at 5.4% in 2023 and 4.5% in 2024).
Inaugural iCET dialogue
Context: India and the US National Security Advisor are due to meet for the inaugural of the iCET dialogue ( Initiative on Critical and Emerging Technologies).
More about iCET:
- It was announced in 2021, the iCET is spearheaded by the National Security Councils of both countries
- It aims to expand the India-US partnership for critical and emerging technologies– that will drive global growth, bolster both countries’ economic competitiveness, and protect shared national security interests.
Areas of cooperation: R&D; Quantum computing; Defence innovations; Space; 6G, Semiconductors, etc.
Significance of iCET:
- iCET will accelerate America’s technology partnership and strategic convergence and policy alignment with India
- It is important for India’s role as a trusted supply chain partner
- Important for the next industrial revolution, space, and future defense needs
- This will allow the gradual lifting of the US’s export control restrictions on India.
- Sustaining a free, open, and secure global economy that can ensure the future happiness of humanity
Other India-US technology partnerships:
- NISAR (NASA-ISRO): to be launched by September 2023, it will scan earth’s land, croplands, hazard sites, ice sheets, and sea ice
- Joint Indo–S. Quantum Coordination Mechanism
- Launching a new “Innovation Bridge” that will connect U.S. and Indian defense startups
- Lockheed Martin-Tata will produce planes at Hyderabad
- India-USA strategic clean energy partnership
Researchers find a new way to improve the storage time of quantum information
Context: An international team of scientists has made a breakthrough in retaining the quantum coherence of quantum dot spin qubits
- The research has improved the storage of quantum information beyond hundreds of microseconds.
The issues with quantum coherence:
Quantum coherence refers to the ability of a quantum state to maintain its entanglement and superposition in the face of interactions. Quantum dots are needed for the storage of information and for its transmission to longer distances. Spin-photon allows it to do so. However, extending its storage time beyond a few microseconds has puzzled physicists.
Significance of the breakthrough:
- It will enable practical quantum networks and quantum computers
- The technologies will alter a wide range of enterprises and research initiatives, from information security to the search for novel materials and chemicals, to measurements of sensors
What are Quantum dots?
Quantum dots are tiny particles or nanocrystals of a semiconducting material with diameters in the range of 2-10 nanometers (10-50 atoms). They are used for LEDs, displays, and various other applications (see the below image)
What is Quantum technology?
Until the early 20th century, it was thought that classical physics – two objects cannot occupy the same space at the same moment. However, the principles of quantum mechanics allow it, and quantum technologies are based on it. It is exhibited by microscopic particles (photons, electrons, atoms, etc).
The principles behind quantum technology:
India’s effort in the field of quantum computing: National Mission on Quantum Technology (2021); the Indian army opened a quantum research facility in Madhya Pradesh.
NASA’s Fermi Detects First Gamma-Ray Eclipses From ‘Spider’ Star Systems
Source: Hindustan Times
Context: Scientists have discovered the first gamma-ray eclipses from a special type of binary star system using data from NASA’s Fermi Gamma-ray Space Telescope.
- These so-called spider systems each contain a pulsar – the superdense, rapidly rotating remains of a star that exploded in a supernova – that slowly erodes its companion.
About Spider systems:
- Spider systems develop because one star in a binary evolves more swiftly than its partner. When the more massive star goes supernova, it leaves behind a pulsar. This stellar remnant emits beams of multiwavelength light, including gamma rays, that sweep in and out of our view, creating pulses so regular they rival the precision of atomic clocks.
- Early on, a spider pulsar “feeds” off its companion by siphoning away a stream of gas. As the system evolves, the feeding stops as the pulsar begins to spin more rapidly, generating particle outflows and radiation that superheat the companion’s facing side and erode it.
- Scientists divide spider systems into two types named after spider species whose females sometimes eat their smaller mates. Black widows contain companions with less than 5% of the Sun’s mass. Redback systems host bigger companions, both in size and mass, weighing between 10% and 50% of the Sun.
- One of the most important goals for studying spiders is to try to measure the masses of the pulsars
‘Soliga ecarinata’: Meet the new wasp genus
Source: Deccan Herald
Context: Researchers have unearthed a “strikingly colorful” new genus of wasp from the forests of Biligiri Rangana Hills in Karnataka and other locations.
About Soliga ecarinata:
- The wasp has been named ‘Soliga ecarinata’ after the indigenous community that resides in BR Hills and Male Mahadeshwara Hills in Chamarajanagar.
- The wasp belongs to the subfamily Metopiinae of the Darwin wasps family Ichneumonidae.
- Metopiinae has 862 species across 27 genera, most of which are seen only in the Palaearctic, Neotropical, and Nearctic regions.
- The species’ name ‘ecarinata’ denotes the absence of ridges in some of its body regions.
- The entomologists described the insect as “strikingly colorful and distinct from all its relatives”.
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