Tag: Trade Deficit of India

UPSC DAILY CURRENT AFFAIRS (27TH MAY, 2024) Pulses Imports have hit a Seven-year High Syllabus: GS3/Agriculture Context In April 2024, the annual retail inflation for pulses was 16.84% and the imports hit a seven-year high. Production of Pulses in India India is the largest producer (25% of global production), consumer (27% of world consumption) and importer (14%) of pulses in the world. Pulses account for around 20 percent of the area under food grains and contribute around 7-10 percent of the total foodgrains production in the country. Though pulses are grown in both Kharif and Rabi seasons, Rabi pulses contribute more than 60 percent of the total production. Gram is the most dominant pulse having a share of around 40 percent in the total production followed by Tur/Arhar at 15 to 20 percent and Urad/Black Matpe and Moong at around 8-10 percent each. The regions with high productivity are Punjab, Haryana, Western Uttar Pradesh, West Bengal delta region, coastal Andhra Pradesh, Tamil Nadu, Kerala, coastal and eastern Karnataka and some parts of Maharashtra. Surge in imports of Pulses India’s pulses imports were valued at $3.75 billion in 2023-24 (April-March), the highest since the record $3.90 billion and $4.24 billion of 2015-16 and 2016-17. In quantity terms, import of major pulses totaled 4.54 mt in 2023-24, up from 2.37 mt and 2.52 mt in the preceding two fiscals, although lower than the all-time-highs of 5.58 mt, 6.36 mt and 5.41 mt in 2015-16, 2016-17 and 2017-18 respectively. Domestic production: There is a decline in domestic pulses production from 27.30 million tonnes (mt) in 2021-22 and 26.06 mt in 2022-23 to 23.44 mt in 2023-24, as per the Agriculture Ministry’s estimates. Reasons for Low Production in India Low Productivity: Pulses have traditionally been a neglected crop because of the instability of its yields. Climate Variability: Pulses are often grown in rainfed areas where they are highly susceptible to climate variability, like erratic rainfall, droughts etc. which lead to yield fluctuations and lower production. The El Niño-induced patchy monsoon and winter rain, is causing a decline in domestic pulses production in 2023-24 Residual Crop: Pulses in India are considered a residual crop and grown under rain-fed conditions in marginal/less fertile lands, with very little focus on pest and nutrient management. Preference for Cash Crops: Farmers may prefer cultivating cash crops such as rice, wheat, and sugarcane over pulses due to assured procurement, higher market prices, and perceived lower production risks. Post Harvest Losses: There are post-harvest losses during storage, due to excessive moisture and attack by stored grain pests especially the pulse beetle With the advent of the Green Revolution, which promoted rice and wheat, pulses were pushed to the marginal lands. This resulted in decline in productivity and land degradation. Penetration and adoption of high yielding varieties (HYV) seeds are also low. Measures taken by government to increase production PM-AASHA: To ensure remunerative prices to farmers, Government implements an umbrella scheme PM-AASHA comprising Price Support Scheme (PSS), Price Deficiency Payment Scheme (PDPS) and Private Procurement Stockist Scheme (PPSS) in order to ensure Minimum Support Price (MSP) to farmers for their produce of notified oilseeds, pulses and copra. Integrated scheme of Oilseeds, Pulses, Oil Palm and Maize (ISOPOM) was launched in 14 major pulses growing states. National Food Security Mission: The Department of Agriculture & Farmers Welfare is implementing the National Food Security Mission (NFSM)-Pulses with the objectives of increasing production through area expansion and productivity enhancement in all the districts. Research and Development: Indian Council of Agricultural Research (ICAR) is undertaking basic and strategic research in collaboration with State Agricultural Universities for developing location-specific high yielding varieties of Pulses. Rashtriya Krishi Vikas Yojna: It was launched under which states can undertake Pulses Development Programmes. Way Ahead Pulses offer a range of social, economic, and environmental benefits, making them valuable components of sustainable agriculture. Also consistent efforts are being made to attain self-sufficiency in pulses by 2027. Further enhancing farmer awareness and capacity-building initiatives can help improve productivity and production levels in the pulses sector. Corporate Governance Regulations for Insurers (2024) Syllabus: GS2/Government Policies & Interventions; GS4/Transparency & Accountability; Corporate Governance Context Recently, the Insurance Regulatory and Development Authority of India (IRDAI) has introduced new corporate governance rules to prevent conflicts of interest in key management roles and to ensure that no individual holds multiple significant positions. Corporate Governance It refers to the system of rules, practices, and processes by which a company is guided and controlled. It aims to ensure that the company operates in a fair and responsible manner, safeguarding the interests of all stakeholders. It is a critical aspect that ensures transparency, accountability, and ethical conduct within companies. It defines the relationship between the Board of Directors, senior management, and shareholders. It is a system of financial and other controls within a corporate entity. Robust corporate governance is essential for sustainable growth, investor confidence, and long-term success. Historical Context of Corporate Governance– Corporate governance is not a new concept in India.– As far back as the 3rd century BC, Chanakya elaborated on the duties of a king, which align with modern corporate governance principles.– These duties included:1. Raksha: Protecting shareholders’ wealth.2. Vriddhi: Increasing income through proper asset utilisation.3. Palana: Maintaining profitability.4. Yogakshema: Safeguarding shareholders’ interests. Regulatory Framework India has a well-defined regulatory framework for corporate governance. Key institutions include the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), the Ministry of Corporate Affairs (MCA), and the Companies Act, 2013. Corporate Governance for Insurers Regulations, 2024 of IRDAI These regulations aim to enhance governance structures within insurance companies to safeguard the interests of stakeholders, including policyholders. IRDAI’s Role: The IRDAI outlines governance responsibilities of the Board in managing insurance functions through various regulations. These comprehensive guidelines supplement provisions of the Companies Act, 1956, Insurance Act, 1938, and other relevant laws. Key Provisions The regulations focus on promoting transparency, accountability, and ethical practices in the insurance sector. Objective: The regulations aim to provide a robust governance structure for insurers by focusing on the responsibilities and functions of the board and management, ensuring sound and prudent principles and practices while meeting stakeholder expectations, especially policyholders. Applicability: These guidelines are applicable to all insurers, including Foreign Reinsurance Branches and Insurance Intermediaries regulated by the IRDAI. They came into force on April 1, 2024 and will be reviewed every three years. Governance Structure: The regulations cover various aspects of corporate governance, including: Appointment of directors, key management persons, and statutory auditors. Powers and roles of the board of directors: To promote checks and balances, it is good practice for the chair of the board to be a non-executive board member and not serve as chair of any board committee. Other governance aspects such as disclosure, reporting to IRDAI, and environmental, social, and governance considerations. Four Fundamental Keystones Fairness: Ensuring fair treatment of all stakeholders. Transparency: Providing clear and accurate information to stakeholders. Accountability: Holding management accountable for their actions. Responsibility: Fulfilling obligations toward shareholders and society. Conflict of Interest: The regulations prohibit conflicts of interest in key management positions. Holding both business and control functions by a single key management person or holding multiple control positions by one individual is forbidden. Insurance Regulatory and Development Authority of India (IRDAI)– It was constituted in 1999 as an autonomous body after the recommendations of the Malhotra Committee report to regulate and develop the insurance industry.– It was incorporated as a Statutory Body in 2000, after passing of the Insurance Regulatory and Development Authority Act, 1999.– It has the power to frame regulations under Section 114A of the Insurance Act, 1938.– It is under the jurisdiction of the Ministry of Finance, Government of India.Objective– To protect the interests of the policyholder and regulate the insurance industry.– It has framed regulations ranging from registration of companies for carrying on insurance business to protection of policyholders’ interests. Benefits of Corporate Governance Greater Accountability: Improved accountability to shareholders. Lower Cost of Capital: Good governance attracts investors and reduces capital costs. Higher Firm Valuation: Well-governed companies tend to have higher valuations. Objectivity and Transparency: Decision-making processes become more objective and transparent. Effective Compliance: Ensures compliance with regulatory requirements and ethical business conduct. Issues/Obstacles and Solutions Selection Procedure and Term of Board Members: It is a significant challenge for good corporate governance. Ensuring that qualified and independent directors are appointed is crucial. The tenure of board members impacts governance. Striking a balance between continuity and fresh perspectives is essential. Performance Evaluation of Directors: Regular evaluation of directors’ performance is essential. However, many companies struggle with effective evaluation mechanisms. Evaluating directors based on their contributions, independence, and adherence to governance principles is critical. Independence of Directors: Independence is vital for effective governance. Ensuring that independent directors maintain their autonomy and act in the best interest of the company is challenging. Avoiding conflicts of interest and undue influence from promoters or dominant shareholders is crucial. Transparency and Data Protection: Transparency in financial reporting, disclosures, and decision-making processes is essential. However, achieving transparency remains a challenge. Balancing transparency with data protection and confidentiality is a delicate task. Business Structure and Internal Conflicts: Companies with complex structures (such as conglomerates) face challenges in managing internal conflicts and ensuring alignment across subsidiaries. Addressing conflicts of interest between different stakeholders (shareholders, management, employees, etc.) is critical. Founder/Promoter’s Role: Balancing the influence of founders or promoters with the need for independent decision-making is a challenge. Ensuring that the founder’s vision aligns with the company’s long-term interests is crucial. Regulatory Oversight and Multiplicity of Regulators: Effective regulatory oversight is necessary to enforce governance norms. However, coordinating among multiple regulators can be complex. Harmonising regulations across different sectors and ensuring consistent enforcement is a challenge. Linkage of Good Governance to Good Performance: Demonstrating the positive impact of good governance on business performance remains a challenge. Companies need to communicate how strong governance practices contribute to sustainable growth and shareholder value. Conclusion The Corporate Governance for Insurers Regulations, 2024 emphasises transparency, accountability, and ethical behaviour within insurance companies, ultimately benefiting all stakeholders. These regulations play a crucial role in ensuring the long-term sustainability and trustworthiness of the insurance industry in India. Trade Deficit of India Syllabus: GS 3/Economy In News India has recorded a trade deficit, the difference between imports and exports, with nine of its top 10 trading partners, including China, Russia, Singapore, and Korea, in 2023-24 Key Highlights The data showed that the deficit with China, Russia, Korea, and Hong Kong increased in the last fiscal compared to 2022-23, while the trade gap with the UAE, Saudi Arabia, Russia, Indonesia, and Iraq narrowed. China has emerged as India’s largest trading partner with $118.4 billion of two-way commerce in 2023-24, edging past the U.S. India’s total trade deficit in the last fiscal narrowed to $238.3 billion as against $264.9 billion in the previous fiscal. Do you know ?– India has a free trade agreement with four of its top trading partners — Singapore, the UAE, Korea and Indonesia (as part of the Asian bloc). What is the trade deficit ? A trade deficit occurs when a country imports more than it exports. In other words, when a country buys more than it sells, it has a trade deficit. Causes There are multiple factors that can be responsible. One of them is some goods not being produced domestically. In that case, they have to be imported. This leads to an imbalance in their trade. A weak currency can also be a cause as it makes trade expensive. Impacts A bilateral trade deficit with a country isn’t a major issue unless it makes us overly reliant on that country’s critical supplies. However, a rising overall trade deficit is harmful to the economy. A rising trade deficit, even from importing raw materials and intermediates, can cause the country’s currency to depreciate because more foreign currency is needed for imports. This depreciation makes imports more expensive, worsening the deficit More imports than exports, according to economists, impact the jobs market and lead to an increase in unemployment To cover the growing deficit, the country might need to borrow more from foreign lenders, increasing external debt and this can deplete foreign exchange reserves and signal economic instability to investors, leading to reduced foreign investment. Steps of India for reducing trade deficit Government has taken several steps to reduce import reliance so as to curb the trade deficit. These include creating/enhancing of domestic capacity, incentivizing domestic manufacturing through Production Linked Incentive (PLI) schemes, phased manufacturing plans, timely use of trade remedy options, adoption of mandatory technical standards, enforcement of FTA Rules of Origin (RoO) and development of import monitoring system Government launched the Foreign Trade Policy 2023 which aims at process re-engineering and automation to facilitate ease of doing business for exporters Suggestions A deficit is not always bad, if a country is importing raw materials or intermediary products to boost manufacturing and exports. However, it puts pressure on the domestic currency. Cutting the trade deficit requires boosting exports, reducing unnecessary imports, developing domestic industries, and managing currency and debt levels effectively. NSA suggests integration of Central Armed Police Forces (CAPF) Syllabus: Internal Security Context National Security Adviser Ajit Doval suggested the integration of Central Armed Police Forces (CAPF) on the lines of joint theater commands in the armed forces. Central Armed Police Forces (CAPF) The Central Armed Police Forces (CAPF) is the collective name of central police organizations under the Ministry of Home Affairs of India. These forces are responsible for internal security and guarding the borders. CAPF is classified as; Assam Rifles (AR): It is a central police and paramilitary organization responsible for border security, counter-insurgency, and law and order in Northeast India. Border Security Force (BSF): It is primarily deployed along the Pakistan and Bangladesh borders, since 2009 it is also posted in Left Wing Extremism (LWE) affected areas. Indo-Tibetan Border Police (ITBP): It is deployed for guarding duties on the Indo-China border Sashastra Seema Bal (SSB): It guards the Indo-Nepal and Indo-Bhutan borders. National Security Guard (NSG): It is a counter-terrorism unit under the Ministry of Home Affairs. All personnel are deputed from other CAPFs and the Indian Army. Central Reserve Police Force (CRPF): It is deployed for internal security duties and has a large presence in North East, LWE theater and Jammu and Kashmir. Central Industrial Security Force (CISF): It provides security to various Public Sector Undertakings (PSUs) and other critical infrastructure installations, major airports across the country and provides security during elections and other internal security duties and VVIP protection. Challenges faced by CAPF High Stress: Continuous deployment in challenging environments with little rest leads to high stress and low morale among personnel. According to data provided by the Ministry of Home Affairs (MHA), over 50,000 CAPF personnel had quit their jobs in the past five years, Overburdening: There are often vacancies within the forces, leading to overburdening of the existing personnel, which affects their efficiency and mental health. Bureaucratic Hurdles: Slow decision-making processes and bureaucratic red tape hinder timely procurement of equipment, sanctioning of welfare measures, and implementation of reforms. Issue of selecting leaders for the top level: There is a lot of resentment in the forces when officers with no experience in the CAPF are just para-dropped as head of that force. Lack of coordination with State Police: Collaboration and coordination between CAPFs and state police are crucial. often issues arise due to differences in jurisdiction, communication gaps, or conflicting strategies. Way Ahead Homogeneity: The integration was required in CAPFs or the paramilitary and it was not only about saving money but also to bring in homogeneity in deployment whether it is “war or peace.” Optimal use of Resources: The forces will be able to pool their resources efficiently, resulting in the optimum utilization of platforms, weapon systems, and assets. Better Coordination: With an integrated structure, the communication processes between different forces will be simpler and more efficient. FACTS IN NEWS ‘Doordarshan’: In the Era of Artificial Intelligence Syllabus:GS3/Awareness in the Field of IT Context Recently, DD Kisan launched two AI anchors, namely AI Krish and AI Bhoomi, that can speak in fifty languages. About the AI Anchors (Krish and Bhoomi) DD Kisan is the first government TV channel in India to feature AI anchors. These AI anchors are designed to provide essential information to farmers across the country, from Kashmir to Tamil Nadu and Gujarat to Arunachal Pradesh. AI Krish and AI Bhoomi are the virtual news anchors who can work tirelessly, 24/7, without fatigue. Key Features of AI Anchors Human-like Interaction: AI Krish and AI Bhoomi closely mimic human news anchors. They read news, deliver updates, and engage with viewers just like their human counterparts. Multilingual Capability: These anchors can communicate in fifty languages, bridging linguistic barriers and ensuring that farmers receive critical information regardless of their native tongue. Uninterrupted Service: Unlike human anchors, AI Krish and AI Bhoomi don’t need breaks. They tirelessly report on agricultural research, market trends, weather changes, and government schemes, ensuring farmers stay informed. DD Kisan’s Objectives– DD Kisan is the only TV channel in India, which has been established by the Government of India and dedicated to the farmers.– Empowering Farmers: DD Kisan was established in May, 2015 and for the past nine years, it has kept farmers informed about weather updates, global and local markets, and other relevant information.– Showcasing Progressive Efforts: The channel highlights the efforts of progressive farmers, promoting best practices in agriculture, animal husbandry, and plantation.– Holistic Development: DD Kisan contributes to holistic rural development by educating and informing farmers, enabling them to make informed decisions. Smart Electricity Metres Syllabus: GS2/Government Policy and Intervention; GS3/Infrastructure Context Recently, Residents of Gujarat have protested against ‘pre-paid smart electricity metres‘ claiming that they had been ‘overcharged’. Smart Metres These are advanced digital devices that replace traditional analog metres for measuring electricity consumption. Unlike conventional metres, smart metres offer real-time data collection, bi-directional communication, and enhanced features. Key Features Real-Time Data: Smart metres provide accurate, real-time information about electricity consumption. Consumers can monitor their usage patterns and adjust accordingly. Remote Reading: Utility companies can read smart metres remotely, eliminating the need for manual metre reading visits. Bi-directional Communication: Smart metres track energy consumption every 30 minutes and send updates to both the consumer’s smartphone and the distribution company. Prepaid Options: Smart metres enable prepaid billing, allowing consumers to pay for electricity in advance. It promotes better financial planning and reduces arrears. Reduced Theft and Losses: Smart metres help detect theft and technical losses more efficiently, leading to improved revenue collection for utilities. They are equipped with firmware to alert the discom in case of an emergency such as overheating, power failure, etc. Do You Know?– As of February 2023, Power Distribution Companies (DisComs) in India have deployed 5.5 million smart metres.– The ambitious goal under the Revamped Distribution Sector Scheme (RDSS) is to replace 250 million conventional electricity metres with smart prepaid metres by 2025-26. Benefits of Smart Metering: Smart metres empower consumers in terms of Energy Conservation, Billing Accuracy, Load Management, and Consumer Empowerment. Challenges and Concerns: Affordability and overpricing the electricity, gap in infrastructure, lack of consumer awareness, and data privacy and security etc. Astronomical Transients Syllabus:GS3/Science and Technology Context Recently the Indian-American astronomer Shrinivas Kulkarni was awarded the Shaw Prize for Astronomy in 2024 for his work on the physics of astronomical transients. What are Astronomical Transients? In astronomy, a ‘transient’ is any celestial object whose brightness changes in short spans of time. There are many kinds of astronomical transients, all of them united by phenomena that are violent in some measure. Astronomers study transients to understand where their violence comes from and what that can tell us about non-transient events. Examples of Astronomical Transients Supernovae: A supernova is what happens when a star has reached the end of its life and explodes in a brilliant burst of light. Active galactic nucleus (AGN): The centers of massive galaxies host supermassive black holes. Sometimes, these black holes actively feast on matter in their orbit. Interactions between the black holes and the matter in this process cause the latter to acquire energy and glow with a changing brightness. Fast radio burst (FRB): It was discovered in 2007 and can emit more than 10-times as much energy as the Sun in a few milliseconds. Zero Debris Charter Syllabus:GS3/Science and Technology Context Twelve nations and the European Space Agency (ESA) have signed the Zero Debris Charter at the ESA/EU Space Council. About The Zero Debris Charter is a world-leading effort to become debris neutral in space by 2030 that was unveiled at the ESA Space Summit in Seville meeting in November 2023. Parties: Austria, Belgium, Cyprus, Estonia, Germany, Lithuania, Poland, Portugal, Romania, Slovakia, Sweden and the United Kingdom have all pledged to adhere to the charter. Need for the charter ESA estimates that there are currently more than one million pieces of space debris larger than one cm in Earth orbit. Each of these objects is capable of causing catastrophic damage to space assets. Hence quick and decisive action is required to improve the sustainability of space activities. Special Categories of Voters, and Their Voting Methods Syllabus: GS2/Statutory Body; Representation of the People Act (1951) Context India’s electoral framework allows certain categories of voters to exercise their franchise even if they are unable to make it to the polling station on the day of voting. About the Special Categories of Voters India’s electoral framework ensures that every eligible citizen has the right to vote. While most voters cast their ballots in person at designated polling stations using Electronic Voting Machines (EVMs), there are special exceptions for certain categories of voters. These exceptions allow them to exercise their franchise even if they cannot physically make it to the polling station on election day. Alternative Voting Methods and Eligibility Postal Ballot: It allows voters who cannot be physically present at polling stations to vote remotely. It is specified in Section 60 of the Representation of the People Act, 1951 (RPA). Key features: Voting takes place outside the polling station without EVMs. Polling takes place before the designated poll date in the constituency. Eligible Categories: Special Voters: Individuals holding declared office under Section 20(4) of the RPA. It includes the President, Vice President, Governors, Cabinet Ministers, and other high-ranking dignitaries, along with their spouses. Service Voters: Members of the Indian armed forces, paramilitary forces, armed state police serving outside their state, or government employees stationed abroad (and their spouses residing with them). Alternative Voting Methods, and EligibilityBy Post Facilitation CenterPostal Voting CenterHome/HospitalSpecial Voters, Service Voters, Electors subjected to preventive detention (also through special messenger)Voters on election dutyPersons employed in essential servicesSenior citizens; Persons with disability; Persons affected or suspected of having Covid-19 Electors Subjected to Preventive Detention: It also includes absentee voters under Section 60(C) of the RPA, 1951. It was introduced in 2019 and covers senior citizens aged 85+, persons with disabilities (at least 40% disability), Covid-19 suspects or affected individuals, and essential services employees. Voters on Election Duty: It includes Commission’s observers, presiding officers, polling officers, agents, police personnel, and public servants assigned official tasks on polling day. Cannes Film Festival Awards Syllabus :Miscellaneous In News The Cannes Film Festival, held and saw several Indian artists win major prizes and receive critical acclaim for their works. Director Payal Kapadia’s debut feature film, All We Imagine As Light, won the coveted Grand Prix prize. About The Festival de Cannes Festival de Cannes or Cannes Film Festival is an international film festival that opens a platform for the display of global cinema . It is an international film festival for filmmakers, screenwriters, photographers, actors and musicians from all over the world. It is one of the world’s most widely publicized events and certainly the most important film festival in terms of worldwide impact. This year, India made its presence felt at the festival through four movie screenings, accompanied by Indian celebrities, social media influencers, and even entrepreneurs representing the country. Objectives : It aims to encourage the development of cinematographic art in all its forms, and create and foster a spirit of collaboration between all film-producing countries. German Cockroach Syllabus :GS 3/Species in news In News A new study traces the German cockroach’s evolution throughout human history, About German cockroach(Blattella germanica) It is one most widely found around the world. It seeks warm moist conditions with access to food and water. It is common in domestic kitchens and commercial food-handling areas and is active at night, hiding during the day in dark, secure places. The recent analysis revealed that the German cockroach evolved from the Asian cockroach (Blattella asahinai) about 2,100 years ago. The two species are still very similar today. According to the researchers, the insects originally adapted to human settlements in India and Myanmar. Issues and Concerns : Cockroaches act as vectors for a great many bacteria, viruses and fungi. They can trigger allergies and cause diarrhea, colitis, hepatitis A, anthrax, salmonella and tuberculosis. Cockroaches can also spread foot-and-mouth disease.

Tag: Trade Deficit of India

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