Daily Prelims Notes 16 November 2023

November 16, 2023
Posted by: OptimizeIAS Team
Category: DPN

Daily Prelims Notes

16 November 2023

Table Of Contents

1. Trade deficit hits record high in October driven by gold imports

Subject: Economy

Section: External Economy

Context: According to official data released by the Commerce and Industry Ministry, festive demand also boosted silver imports which leaped 125 per cent to $1.31 billion,

Details:

Driven by gold and silver imports during the festive season, India’s trade deficit in October surged to a record high even as India’s goods exports entered the positive territory after eight consecutive months of decline due to weak demand in the Western countries and in China due to its property sector crisis.
The trade deficit swelled to $31.46 billion in October after gold imports surged by a massive 95 per cent to $7.2 billion last month compared to October last year. Festive demand also boosted Silver imports which leaped 125 per cent to $1.31 billion, official data released by the Commerce and Industry Ministry on Wednesday showed.
While merchandise exports jumped 3 per cent to $33.57 billion compared to October last year, imports surged over 12 per cent to a record $65.03 billion. Notably, labour-intensive sectors such as gems and jewellery, textiles, and leather declined 9.82 per cent, 5 per cent, and 8.08 per cent respectively. On the contrary, outbound shipments of electronic, and engineering goods registered a steep jump of 28.23 per cent and 7.20 per cent respectively last month compared to October last year.

Why buying gold is bad for the Indian economy

India is the largest consumer of gold. India accounts for more than 30 per cent of the global gold market. However, the domestic production of gold in India is minimal. India meets the high demand of gold from its domestic consumers by importing it.
Though the universal acceptance, liquidity and safe haven against economic or political turmoil makes gold lucrative, it does not add much of a value to the economy.
Most of the gold bought by us Indians is used for consumption purpose in the form of jewellery. Even from the investment perspective, majority of the Indians still prefer the traditional way of holding it in the physical form. Gold ETFs, which were first introduced in India in 2007, witnessed slow growth in the initial years. Over the past couple of years, investments in gold ETFs gained momentum.
However, as per the statistics of Gold Council, jewellery accounts for nearly 75 per cent of the gold demand in India. When we compare this consumption rate with the global scenario, even the second largest importer of gold, i.e., China lags by more than 30 per cent in terms of consumer demand. If we compare these demand levels against the size of economy of major nations, India’s GDP is much lower than that of China or the US. The high consumption rate of gold among Indians is unproductive for the Indian economy.
Current account deficit: The first major problem the Indian economy faces with this high gold consumption rates is the increasing current account deficit (CAD). India has to pay for its gold imports using its foreign exchange reserves.
Foreign exchange reserves hold a key especially among the developing countries, which have to import and use the industrial metals. Higher consumption of industrial commodities supports industrial production. The goods produced by consuming such commodities can be exported and the revenues can be used to fund the current account deficit. Even during its higher prices, the demand for gold did not go down. The oil imports are a huge burden on India’s balance of payments. But oil consumption is something which India cannot reduce keeping its industrial usage in perspective. High gold imports and weak rupee have been the biggest stress points when it comes to narrowing the current account deficit.
Mis allocation of resource: Misallocated capital is the second problem faced by the Indian economy due to its gold rush. Keeping the consumption aside, physical gold (mostly jewellery) is also considered as an investment among Indians.
However, it is an investment that does not add much value to the productive capacity of the economy. Investments in the physical form of gold are either stored in bank lockers or get exchanged for making jewellery. It seldom gets traded for money. Imagine the same amount being invested in the capital markets. It allows the companies to raise capital in the form of debt or equity and expand their business. It can make a huge difference to the productive capacity of the economy. It not only just adds to the physical goods produced, it also has a potential to improve employment in a vastly populated country like India.
It is a given fact that over the last decade, gold has given returns which no other asset class has been able to match. However, the demand for gold among Indians has always been price independent. Gold is a traditional investment strategy Indians follow. The effect of high prices has been minimal on the volume of gold imported. The lower prices may increase the demand in the coming days. It is the economies of the US and Europe that play a major role in determining the price movements of gold. By importing gold for our consumption, we Indians are investing in the international markets and helping their economies.
Over the last few years, the Indian markets are supported majorly by the foreign inflows. Participation of Indian domestic investors becomes all the more important for the Indian markets to prosper. Even for the transition of India from a developing market to developed market, it is important that the domestic investors stay invested in the capital markets.
The lack of alternative investments is one of the reasons attributed for Indian investors favoring gold over domestic capital markets. More investors in the capital markets will also drive more investment options in the domestic markets. More than looking at it as an alternative investment, we invest in gold and real estate because we understand it easily.

Some steps taken by Government to curb gold imports

Gold Monetization Scheme:

This was introduced to mobilize fallow gold in homes and institutions, use it productively, and lower import prices.

Sovereign Gold Bond (SGB) Scheme:

Bonds are issued by the Reserve Bank of India on behalf of the Government of India.
The bond has a term of 8 years and has an option to terminate from the 5th year.
Its objective is to reduce demand for physical gold by shifting a part of the gold purchase by people to invest in gold bonds.

Trade Deficit:

Trade deficit or negative balance of trade (BOT) is the gap between exports and imports.
When money spent on imports exceeds that spent on exports in a country-a trade deficit occurs.
The opposite of a trade deficit is a trade surplus.
India tends to have a trade deficit every year because it imports far more (in terms of value, measured in $) than it exports.
A trade deficit implies that Indians need dollars/forex more than the rest of the world needs rupees for the trades to settle.
A trade deficit puts pressure on the rupee’s exchange rate against the dollar and persistently high trade deficits tend to weaken the rupee’s exchange rate.
It is a part of the Current Account Deficit.
- The current account records exports and imports in goods and services and transfer payments. It represents a country’s transactions with the rest of the world and, like the capital account, is a component of a country’s Balance of Payments (BOP).
- There is a deficit in Current Account if the value of the goods and services imported exceeds the value of those exported.
- Major components are:
  - Goods,
  - Services, and
  - Net earnings on overseas investments (such as interests and dividend) and net transfer of payments over a period of time, such as remittances.
- Current Account Balance = Trade gap + Net current transfers + Net income abroad.
  - Trade gap/Trade deficit = Exports – Imports

What causes a trade deficit?

Fall in export and rise in import volume
Rise in Import price or fall in the export price-India’s exports of a particular commodity, say bananas, doubles in value terms ($ terms) not because India exports more bananas, but because the price of bananas in the international market has doubled.

Is a trade deficit bad for a country’s economy?

If the trade deficit increases, a country’s GDP decreases.
A higher trade deficit can decrease the local currency’s value.
Impact the jobs market and lead to an increase in unemployment. If more mobiles are imported and less produced locally, then there will be less local jobs in that sector.
More imports contribute to imported inflation and an increase in the fiscal imbalance, which is damaging to a developing country.

Balance of Payments

Balance of Payments (BoP) of a country can be defined as a systematic statement of all economic transactions of a country with the rest of the world during a specific period usually one year.

For preparing BoP accounts, economic transactions between a country and the rest of the world are grouped under – Current account, Capital account and Errors and Omissions. It also shows changes in Foreign Exchange Reserves.

Current Account: It shows export and import of visibles (also called merchandise or goods – represent trade balance) and invisibles (also called non-merchandise). Invisibles include services, transfers and income. Thus,
- The balance of trade in goods
- The balance of trade in services.
- Net current income e.g. profit from overseas investment.
- Transfer payments e.g. payments to the EU.

The balance of exports and imports of goods is referred to as the trade balance. Trade Balance is a part of ‘Current Account Balance’.

Capital Account: It shows a capital expenditure and income for a country. It gives a summary of the net flow of both private and public investment into an economy. External Commercial Borrowing (ECB), Foreign Direct Investment, Foreign Portfolio Investment, etc form a part of capital account.
Errors and Omissions: Sometimes the balance of payments does not balance. This imbalance is shown in the BoP as errors and omissions. It reflects the country’s inability to record all international transactions accurately.
Changes in Foreign Exchange Reserves: Movements in the reserves comprises changes in the foreign currency assets held by the Reserve Bank of India (RBI) and also in Special Drawing Rights (SDR) balances.

Overall the BoP account can be a surplus or a deficit. If there is a deficit then it can be bridged by taking money from the Foreign Exchange (Forex) Account

Current Account Deficit-

It is expected that the current account deficit of India will widen to a 10-year high of 3 percent of GDP in FY23 due to the Ukraine War

A current account deficit occurs when the total value of goods and services a country imports exceeds the total value of goods and services it exports. If there is a deficit on the current account, there will be a surplus on the Financial/Capital account to compensate for the net withdrawals.

The size of current account deficit/surplus is affected by several factors including:

Overvalued exchange rate-If the currency is overvalued, imports will be cheaper, and therefore there will be a higher quantity of imports. Exports will become uncompetitive, and therefore there will be a fall in the quantity of exports
Economic growth-If there is an increase in national income, people will tend to have more disposable income to consume goods. If domestic producers cannot meet the domestic demand, consumers will have to import goods from abroad.
Saving rates – influencing the level of import spending, thus increasing the deficit.
Decline in competitiveness/export sector-In the UK, there has been a decline in the exporting manufacturing sector because it has struggled to compete with developing countries in the far east. This has led to a persistent deficit in the balance of trade.
Higher inflation-If India’s inflation rises faster than our main competitors then it will make UK exports less competitive and imports more competitive. However, inflation may also lead to a depreciation in the currency to offset this decline in competitiveness.
Recession in other countries-If India’s main trading partners experience negative economic growth, then they will buy less of our exports, worsening India’s current account.
Borrowing money-If countries are borrowing money to invest e.g. third world countries, then this will lead to deterioration in current account position.
Financial flows to finance the current account deficit.-If a country can attract more financial flows (either short-term portfolio investment or long-term direct investment), then these flows on the financial account will enable the country to run a larger current account deficit.

Impact for the economy

Cost Push inflation- due to supply shortage
Rise in import bill
Decline in forex reserve
Rise capital inflows- If there is a deficit on the current account, there will be a surplus on the Financial/Capital account to compensate for the net withdrawals. However, capital flows are likely to be lower than the current account deficit due to war led outflows.
Higher external borrowing

2. FY24 fiscal deficit seen at 5.9% even if nominal GDP misses Budget assumption: Official

Subject :Economy

Section: National Income

Details:

Concerns have risen about nominal GDP growth not meeting the Budget assumption of 10.5 per cent as wholesale inflation has been negative for seven consecutive months.
The Centre is confident of meeting its fiscal deficit target of 5.9 per cent of the Gross Domestic Product (GDP) for financial year 2023-24 even if there is any variation in nominal GDP growth as the tax revenue trend is comfortable so far, a senior government official said Wednesday. The government is not looking at any curbs on spending, with some reallocation of savings expected to happen as it looks towards additional allocation for existing or new schemes in the supplementary demands for grants in the upcoming Parliament session.
Concerns have risen about nominal GDP growth not meeting the Budget assumption of 10.5 per cent as wholesale inflation has been negative for seven consecutive months. Some estimates have pegged the nominal GDP growth to be around 9 per cent which could result in a lower GDP deflator as it is primarily made of the Wholesale Price Index (WPI). The fiscal slippage risks arise from the fact that the government’s fiscal deficit target of 5.9 per cent is calculated as a percentage of the GDP. The latest print for WPI inflation rate unexpectedly fell to (-) 0.52 per cent in October, data released on November 14 showed.

Real v/s Nominal GDP

The nominal GDP is the value of all the final goods and services that an economy produced during a given year. It is calculated by using the prices that are current in the year in which the output is produced. In economics, a nominal value is expressed in monetary terms.

For example, a nominal value can change due to shifts in quantity and price. The nominal GDP takes into account all of the changes that occurred for all goods and services produced during a given year. If prices change from one period to the next and the output does not change, the nominal GDP would change even though the output remained constant. It is also called GDP at current prices.

The real GDP is the total value of all of the final goods and services that an economy produces during a given year, accounting for inflation and deflation. It is calculated using the prices of a selected base year. To calculate Real GDP, you must determine how much GDP has been changed by inflation since the base year, and divide out the inflation each year. Real GDP, therefore, accounts for the fact that if prices change but output doesn’t, nominal GDP would change.

In economics, real value is not influenced by changes in price, it is only impacted by changes in quantity. Real values measure the purchasing power net of any price changes over time. The real GDP determines the purchasing power net of price changes for a given year. Real GDP accounts for inflation and deflation. It transforms the money-value measure, nominal GDP, into an index for the quantity of total output. It is also called GDP at constant price

Real GDP= Nominal GDP/Price level in base year *100

3. Wall Street gains on inflation data, but rocky on geopolitics

Subject: Economy

Section: Inflation

Wall Street’s main indexes gained on Tuesday, shaking off an unconfirmed report of Russian missiles crossing into Poland that sparked volatility, as investors seized on softer-than-expected inflation data that raised hopes of a pullback in rate hikes by the U.S. Federal Reserve.
Equities were boosted by Tuesday’s inflation report that showed producer prices rising 8% in the 12 months through October against an estimated 8.3% rise.
The gains built on a rally that was kicked off late last week by a cooler-than-expected report on consumer prices.
The 10-year US Treasury yield, which shocked investors by leaping over5per cent in October, tumbled below 4.5percent following the soft inflation report in the US. Dow Jones index of the New York Stock Exchange gained 1.43 per cent on Tuesday. Nasdaq rose 2.37percent
The market’s strong gap up jumps in response to positive global cues on account of this often than anticipated US and UK inflation data highlights the optimism for an end to the interest rate cycle as evidenced by the ease in bond yields
This is likely to draw FPI flows in to emerging markets, which is good for India considering the current better earnings season and the festive demand pick-up. The drop in the retail inflation for India also improved the mood. India’s annual retail inflation eased to four-month low of 4.87 per cent in October from5.02percent in the previous month

4. PM launches mission for most backward of the Scheduled Tribes

Subject: Schemes

Section: Tribal

Context:

Prime Minister of India launched the PM-PVTG Development Mission for most backward of the Scheduled Tribes.

What is the PM PVTG Development Mission?

The Rs 24,000-crore project is aimed at the development of the PVTGs.
As part of the mission, basic facilities will be provided to areas where these tribal groups live as these are mostly remote, scattered and inaccessible such as: road and telecom connectivity, electricity, safe housing, clean drinking water and sanitation, improved access to education, health and nutrition and sustainable livelihood opportunities.
Several ministries will work in tandem to implement development projects.
The schemes include: Pradhan Mantri Gram Sadak Yojana, Pradhan Mantri Gramin Awas Yojana, Jal Jeevan Mission, etc.
The mission will be launched as part of ‘Reaching The Last Mile’, one of the seven Saptarishi priorities enlisted in the Union Budget 2023-24.
The PM Janjati Adivasi Nyaya Maha Abhiyan is meant to ensure last-mile welfare scheme delivery and protection for Particularly Vulnerable Tribal Groups (PVTGs).

Who are Particularly Vulnerable Tribal Groups?

PVTGs are a more vulnerable group among tribal groups in India.
These groups have: primitive traits, geographical isolation, low literacy, zero to negative population growth rate and backwardness.
They are largely dependent upon hunting for food and a pre-agriculture level of technology.
PVTGs also collect Non-Timber Forest Produce (NTFP) like honey, gum, bamboo and wax for consumption as well as sale.
Due to their diet, these tribes often suffer diseases like anaemia, malaria, gastrointestinal disorders and skin infections.
Government of India created PVTG list with the purpose of enabling improvement in the conditions of those communities in priority basis.
During the fourth Five Year Plan a sub-category was created within Scheduled Tribes to identify groups that considered to be at a lower level of development.
This was created based on the Dhebar Commission report and other studies.
This sub-category was named “Primitive tribal group”.
Groups that satisfied any one of the criterion were considered as PTG.
There are total of 75 PVTGs in India.
No new group was declared as PTG on the basis of the 2001 census.
In 2006 the government of India renamed “Primitive tribal group” as Particularly vulnerable tribal group.
Criteria for identification of PVTGs: Pre-agricultural level of technology, Low level of literacy, Economic backwardness, A declining or stagnant population.
The government of India initiated the identification of these PVTGs in 1975, and an additional 23 groups were added to the category in 1993.

Need for identification:

Due to their vulnerability, PVTGs require greater support and development compared to other tribal groups.
The more developed and assertive tribal groups often receive a larger portion of tribal development funds, leaving PVTGs in need of more targeted support.
According to the 2011 Census, Odisha has the largest population of PVTGs.
It is followed by Madhya Pradesh and Andhra Pradesh (including Telangana).
The largest PVTG is Odisha’s Saura community.

5. NASA and ISRO prepare to launch joint space mission

Subject : Science and Tech

Section: Space technology

Context

The collaborative effort between NASA and ISRO i.e. NASA-ISRO Synthetic Aperture Radar (NISAR) mission, is on track for its scheduled launch in the first quarter of 2024.

About the Mission

The Joint Collaboration: NISAR is a Low Earth Orbit observatory developed jointly by NASA and ISRO, highlighting international collaboration in space exploration.
Launch Vehicle: The mission is set to launch from the Satish Dhawan Space Centre in Sriharikota onboard ISRO’s GSLV Mark-II launch vehicle.
Data Utility: NISAR data will offer unprecedented detail and assist researchers in various ways, including monitoring volcanic activity, tracking groundwater use effects, measuring ice sheet melt rates, and observing changes in global vegetation distribution.
Mission Life: The $1.5-billion NISAR mission has a planned mission life of three years and will survey Earth’s land and ice-covered surfaces every 12 days following a 90-day commissioning period.

Advanced SAR Technology

Dual-Band SAR: NISAR carries L and S dual-band Synthetic Aperture Radar (SAR) using the Sweep SAR technique, providing both wide coverage and high-resolution data.
Observatory Structure: The SAR payloads are mounted on the Integrated Radar Instrument Structure (IRIS) along with the spacecraft bus, forming an observatory.
Contributions: NASA’s Jet Propulsion Laboratory (JPL) provides the L-band SAR and several key components, while ISRO’s U R Rao Satellite Centre contributes the spacecraft bus, S-band SAR electronics, launch vehicle, and mission operations.

Important Milestones achieved

Thermal Vacuum Testing: The thermal vacuum testing, a critical system-level test, was successfully completed in Bengaluru.This test ensures that the spacecraft can operate effectively under extreme temperature conditions.
EMI and EMC Testing: Electromagnetic interference (EMI) and electromagnetic compatibility (EMC) testing have also been successfully accomplished.
Upcoming Vibration Tests: The next phase involves conducting vibration tests to simulate the harsh launch environment. This test will subject the satellite to intense vibrations while mimicking the conditions of a rocket launch.

6. Raychaudhuri, the physicist who quietly defied the system

Subject : Science and Tech

Section: Scientists

Context:

Amal Kumar Raychaudhuri, an Indian physicist, overcame obstacles and restrictions to make a profound contribution to the field of general relativity.

Introduction

Amal Kumar Raychaudhuri, born in Barisal (now in Bangladesh) in 1923, was a renowned Indian physicist with a profound impact on general relativity.
His birth centenary falls this year.

Breakdown in General Relativity

General relativity, developed by Albert Einstein in 1916, predicted singularities where gravity could become infinitely strong.
This opened up the question of whether singularities were anomalies or inherent features of the universe.
This signalled issues with the model and could have led to the rejection of this theory.

Institutional Hurdles

Meghnad Saha, the director of the Indian Association of Cultivation of Science (IACS), opposed Raychaudhuri’s pursuit of general relativity.
General relativity was deemed impractical; Raychaudhuri was instructed to focus on ‘useful’ topics or find another job.
Despite institutional constraints, Raychaudhuri persisted and delved into the problem of singularities in his spare time.

Raychaudhuri Equation

Raychaudhuri devised an innovative approach that circumvented mathematical challenges.
Explored the motion of matter in the curved fabric of spacetime, drawing an analogy with northbound ships converging at the North Pole.
Discovered an elegant formula known as the Raychaudhuri Equation.
Described how the volume of matter spread across a region would always decrease in curved spacetime, leading to convergence.

Global Impact

Raychaudhuri’s equation played a crucial role in the work of physicists Roger Penrose and Stephen Hawking.
This was central to Hawking’s area theorem, demonstrating that the surface area of a black hole never decreases.

Recognition and Career Challenges

Raychaudhuri faced a lack of appreciation in India until his work gained recognition in the West.
His contributions didn’t significantly transform his career, facing challenges such as scuttled promotions and rejections from academic institutions.

Legacy and Inspiration

Eventually joining Presidency College, Kolkata, Raychaudhuri became a legendary teacher, inspiring future physicists.
His story emphasizes the importance of scientists following their passion and the challenges faced when dictated what to work on.

7. Plastic-free planet: Protecting sanitation workers & waste-pickers, just transition discussed on Day 2 of INC-3

Subject :Environment

Section: International Conventions

Context:

The third session of the Intergovernmental Negotiating Committee (INC-3) on Plastic Pollution is going on.

Details:

By 2040, up to 19 per cent of global greenhouse gas emissions will stem from plastics.
To meet the goal of 1.5 degrees Celsius global temperature rise and to beat plastic pollution, there is a need for a treaty that reduces plastic production.
- The Plastics treaty must protect the right to science, including indigenous peoples’ rights to their knowledge, practices and innovations.
The Group of Latin America and Caribbean Countries — a UN regional group composed of 33 member states from Central and South America — presented an official position advocating for the rights of waste pickers, which should be explicitly mentioned.
El Salvador and Guatemala also supported the protection of sanitation workers and waste-pickers.

Just Transition:

It is a mechanism for multilateral financing by developed countries to support an energy transition in developing countries.
It aims to reduce emissions in the energy sector and accelerate the coal phase-out.
Transition describes the gradual movement towards lower carbon technologies, while ‘Just’ qualifies that this transition will not negatively impact society, jobs and livelihoods.

Intergovernmental Negotiating Committee on Plastic Pollution (INC):

In March 2022, at the resumed fifth session of the UN Environment Assembly (UNEA-5.2), a historic resolution was adopted to develop an international legally binding instrument on plastic pollution, including in the marine environment.
Goal: To bring a legally binding treaty on plastic pollution by 2024.
The first session of the INC (INC-1) took place in Punta del Este, Uruguay, followed by a second session (INC-2) in Paris, France, and the third session (INC-3) is ongoing at the UNEP Headquarters in Nairobi, Kenya.

International Alliance of Waste pickers:

It is a networking process started after the 1st World Conference of Waste pickers held in Bogotá, Colombia, in 2008.
Waste pickers organizations and allies from more than 30 countries participated in this first global event organized by the Bogota Waste Pickers’ Association, Kagad Kach Patra Kashtakari Panchayat waste pickers’ collective of Pune, India (KKPKP), the Latin American Waste pickers’ Network, Avina Foundation and Women in Informal Employment: Globalizing and Organizing (WIEGO).
Since then, an International Steering Committee has met once a year in Durban, Belo Horizonte, Bangkok and Pune to give direction to our strategic vision and work.
It is currently focusing on the sharing and exchange of information and solidarity among thousands of waste pickers’ organizations.

Source: Down To Earth

8. 2nd National Spice Conference (NSC) in Hyderabad

Subject : Economy

Section: External Sector

Organizers: The World Spice Organization (WSO) is hosting the 2nd National Spice Conference as the technical partner of the All India Spices Exporters Forum (AISEF).
Dates: The conference is scheduled to take place on November 18 and 19.
Objective: The NSC aims to provide a crucial platform for discussions within the Indian spice industry, fostering collaboration among farmer producers, spice manufacturers, and traders.
Collaborators: The conference is organized in collaboration with GIZ and IDH, the Sustainable Trade Initiative. Rainforest Alliance serves as the sustainability partner for the event.
Theme: This year’s NSC revolves around the theme “Food Safe Spices: The Way Forward to a Stable & Sustainable Income.”
Perspective: The conference will offer a 360-degree perspective on food safety and its positive impacts on income and profit in the spice industry.
Business-Focused Segments: Various sessions will cover topics such as increasing income through sustainable and eco-friendly practices, technology-driven farming, food safety and compliance, funding opportunities for farmers/FPOs (Farmer Producer Organizations), better input management, improving productivity, and innovative processes and market trends.

National Spice Conference 2023: Overview

Theme:
- “Food Safe Spices: The Way Forward to a Stable & Sustainable Income”
Organizer:
- World Spice Organisation (WSO):
  - The WSO is spearheading efforts toward food safety, quality, and sustainability in the spice industry.
Focus:
- Building on the conclusions drawn from the previous National Spice Conference (NSC), the focus is on understanding the positive impacts of food safety on income and profit for the farming community.
Scope:
- The conference aims to cover all nodes and aspects of the spice supply chain, providing a comprehensive, 360° vision on food safety.
Rationale:
- Effective food safety and quality control systems are emphasized not only for safeguarding public health but also for fostering economic development.
- The goal is to improve livelihoods by expanding access to regional and international markets through enhanced food safety measures.

The NSC-2023 aims to contribute to the advancement of the spice industry by addressing critical aspects of food safety, quality, and sustainability, thereby ensuring a stable and sustainable income for the farming community.

World Spice Organisation (WSO): Inception

Formation:
- The WSO was established in Kochi, known as the spice capital of India.
- It operates as a not-for-profit organization registered under the Travancore Cochin Literary, Scientific, and Charitable Societies Act, 1956.
Primary Objective:
- Facilitating the Spice Industry:
  - The primary focus of WSO is to facilitate the spice industry in addressing issues related to “Food Safety & Sustainability.”
Stakeholder Involvement:
- WSO aims to achieve its objectives by involving all key stakeholders:
  - General Public
  - Industry Representatives
  - Academia
  - End-Users
Spice Renaissance:
- WSO envisions a “spice renaissance,” signifying a revival or rebirth of the spice industry.

The establishment of WSO reflects a concerted effort to bring together diverse stakeholders and address critical issues faced by the spice industry, with a particular emphasis on food safety, sustainability, and social responsibility.

World Spice Congress (WSC):

Inception and Purpose:
- The World Spice Congress (WSC) was planned and conceived in 1990 as a platform for discussion and interaction between importers and exporters of spices.
- It serves as the conglomeration of the global spice industry, providing a forum for deliberating concerns and considerations in the sector.
Organizer:
- Organized under the leadership of the Spices Board, Ministry of Commerce and Industry, Government of India.
Theme of WSC 2023:
- The theme for WSC 2023 is “VISION 2030: S-P-I-C-E-S,” representing sustainability, productivity, innovation, collaboration, excellence, and safety.
Key Facts about the Spices Board of India:
- The Spices Board of India was constituted on February 26, 1987, under the Spices Board Act of 1986. It resulted from the merger of the erstwhile Cardamom Board (1968) and Spices Export Promotion Council (1960).
- Functioning under the Ministry of Commerce & Industry, the board is responsible for export promotion of the 52 scheduled spices and the development of Cardamom (both small and large).
- It acts as a link between Indian exporters and importers abroad.
Main Functions of the Spices Board:
- Research, development, and regulation of domestic marketing of small and large cardamom.
- Post-harvest improvement of all spices.
- Promotion of organic production, processing, and certification of spices.
- Development of spices in the North East.
- Provision of quality evaluation services.

About All India Spices Exporters Forum (AISEF)

The All India Spices Exporters Forum (AISEF) is an organization that represents the interests of spice exporters in India.

Formation:
- AISEF is a forum that brings together exporters of spices from across India.
Objective:
- The primary objective of AISEF is to represent and promote the interests of spice exporters in the country.
Membership:
- The forum consists of members who are engaged in the export of various spices.
Advocacy and Representation:
- AISEF serves as a platform for advocacy on behalf of spice exporters, addressing issues related to trade policies, regulations, and market access.

About Codex Committee on Spices and Culinary Herbs (CCSCH)

The Codex Committee on Spices and Culinary Herbs (CCSCH) plays a crucial role in developing worldwide standards for spices and culinary herbs.

Codex Committee on Spices and Culinary Herbs (CCSCH):

Establishment:
- CCSCH was established in 2013.
Main Function:
- The committee’s primary function is to elaborate global standards for spices and culinary herbs, particularly in their dried and dehydrated states, covering whole, ground, and cracked or crushed forms.
Host Country and Secretariat:
- India serves as the host country for CCSCH.
- The Secretariat responsible for organizing the committee’s sessions is the Spices Board under the Ministry of Commerce and Industry in India.

Codex Alimentarius Commission (CAC):

Establishment:
- CAC was established in 1963 as an intergovernmental body under the joint framework of the Food and Agriculture Organization (FAO) and the World Health Organization (WHO).
Secretariat:
- The CAC Secretariat is hosted at FAO headquarters in Rome.
Objectives:
- CAC aims to protect consumer health and ensure fair practices in the food trade.
Meetings:
- The commission convenes in regular sessions once a year, alternating between Geneva and Rome.
Membership:
- Currently, CAC has 189 Codex Members.

Codex Alimentarius:

Nature:
- Codex Alimentarius is a compilation of international food standards adopted by CAC.
Coverage:
- The standards encompass various food categories, including processed, semi-processed, or raw foods, as well as materials used in further food processing.
Scope of Provisions:
- Codex provisions address the hygienic and nutritional quality of food, covering aspects such as microbiological norms, food additives, and residues of pesticides and veterinary drugs.

Spice exports from India

Despite the COVID Pandemic, spices export from India has continued its upward trend during 2020-21 and has attained an all-time high of US $ 4.0 billion mark for the first time in the history of spices export and the same trend continued during 2021-22.

During 2022-23, the export of spices/spice products from the country has been 1404357 tons valued Rs.31761 crore (3952.60 million US$).

9. Efforts to Stop Coal Imports by FY26: Key Points

Subject :Economy

Section: External Sector

Objective: The Ministry of Coal is actively working to cease coal imports by the fiscal year 2025-26.
Comprehensive Approach: Various measures are being undertaken, including the enhancement of production from commercial and captive mines, to achieve the goal of self-sufficiency in coal.
Reforms: The Ministry is implementing a series of reforms to boost coal production and reduce dependency on imports.
Underground Mines Production: The target is to increase coal production from underground mines to 100 million tonnes (mt) by 2030, employing mass production technology.
Commercial Mining: The eighth round of commercial coal mines has been launched, involving the auction of 39 coal blocks located in Jharkhand, Odisha, Maharashtra, West Bengal, and Bihar.
Legislation: The coal blocks fall under the purview of the Coal Mines (Special Provisions) Act (CMSP) and the Mines and Minerals (Development and Regulation) Act (MMDR).
Advisory Role: SBI Capital Markets is the sole transaction advisor for the Ministry in these commercial coal mine auctions.
Rail Connectivity: Efforts are being made to enhance rail connectivity for the efficient transportation of coal from mines.
Captive/Commercial Contribution: Captive and commercial coal mines are making a substantial contribution to overall production, according to Coal Secretary Amrit Lal Meena.
Future Investment: The Ministry emphasizes that investment in the coal sector offers good returns, considering the anticipated increase in domestic coal demand.
Underground Mining Expansion: The Ministry aims to increase production from underground coal mines to 100 mt by 2030, focusing on policy measures to promote underground mining.
Environmental Impact: Underground mining is highlighted for its lower environmental impact compared to open-cast mining, as it requires less deforestation and involves minimal displacement of people.

Underground Mining:

Underground mining is a method of extracting minerals and valuable resources from beneath the Earth’s surface.
Unlike surface mining, where minerals are extracted from an open pit, underground mining involves digging tunnels and shafts to reach the deposits located deep below the surface.
This method is used for various types of minerals, including coal, metals, gemstones, and other geological resources.

Commercial Mining:

Commercial mining refers to the process where private sector entities are permitted to engage in coal mining activities for commercial purposes without any end-use restrictions. The key features of commercial mining include:
The introduction of commercial mining represents a shift from the earlier regime, where coal mining was largely dominated by public sector entities. This reform is aimed at attracting private investment, fostering competition, and promoting efficiency in the coal mining sector.

Star Rating Registration process for Coal and Lignite Mines

The Ministry of Coal has initiated the Star Rating Registration process for Coal and Lignite Mines for the financial year 2022-23.

Parameters Evaluated: The Star Rating policy assesses mines based on seven key parameters:

Mining Operations
Environment-related parameters
Adoption of Technologies
Best Mining Practices
Economic performance
Rehabilitation & Resettlement
Worker-related Compliance and Safety & security.

Process:

Participating mines undergo a self-evaluation process.
The top 10% performing mines undergo validation through inspections by a committee.
The remaining 90% undergo an online review process.
All participants can contribute to the evaluation by reviewing other mines.
The Coal Controller’s Organization conducts the evaluation.
Ratings range from Five Star to NO Star, comprehensively assessing each mine’s achievements.

Aim: The Star Rating system aims to:

Foster competitiveness among mines.
Recognize outstanding performance based on compliance with statutory provisions.
Acknowledge the adoption of advanced mining technology.
Recognize economic achievements.

The Star Rating Registration process aims to improve competitiveness and recognize excellence in the coal and lignite mining sector based on a comprehensive evaluation of various parameters.

About Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act)

The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) has undergone several amendments to address various issues and bring about reforms in the mineral sector.

2015 Amendment:
- Introduced auction-based mineral concession allocation to enhance transparency.
- Established District Mineral Foundation (DMF) for the welfare of communities affected by mining activities.
- Created the National Mineral Exploration Trust (NMET) to promote exploration.
- Imposed stricter penalties for illegal mining.
2021 Amendment:
- Focused on further reforms in the sector.
- Removed the distinction between captive and merchant mines, aiming for a more competitive and efficient mining industry.

About Coal Controller Organisation

The Coal Controller Organisation, under the Ministry of Coal, plays a crucial role in overseeing and regulating various aspects of coal production, quality, and commercial transactions in India.

Inspection of Collieries:
- Conducting inspections of coal mines to ensure the accuracy of the class, grade, or size of coal produced.
Directive Issuance:
- Issuing directives related to the declaration and maintenance of grades of coal from a seam mined in a colliery.

About Directorate General of Mines Safety (DGMS)

The Directorate General of Mines Safety (DGMS) is another important regulatory agency, focusing on safety standards and practices in the mining industry. The mission of DGMS includes improving safety and health standards, implementing proactive safety and health strategies, and ensuring the well-being of personnel in the mining and petroleum industries.

About National Coal Index (NCI)

The National Coal Index (NCI) is a price index introduced in June 2020 in India. It serves as a measure reflecting changes in coal prices relative to a fixed base year, which is the Financial Year 2017-18.

The NCI incorporates prices from various coal sales channels, including imports, and calculates the revenue share per tonne using a specific formula.

Key features of the National Coal Index (NCI) include:

Composition:
- The NCI comprises five sub-indices, categorizing them into three for Non-Coking Coal and two for Coking Coal. This subdivision allows for separate indices for different types of coal.
Purpose:
- The primary purpose of the NCI is to provide a comprehensive and representative measure of coal price changes. It is used to assess and reflect the dynamics of coal prices over time.
Auction Basis:
- The Ministry of Coal utilizes the National Coal Index (NCI) for the commercial auction of coal mines. The revenue share in these auctions is determined based on the NCI.
Inclusion of Imports:
- The NCI considers prices from all coal sales channels, including imported coal. This inclusive approach provides a holistic view of coal price movements.
Revenue Share Calculation:
- The formula used in the NCI determines the revenue share per tonne. This calculation is crucial for commercial coal mine auctions, where the revenue-sharing mechanism is employed.
Dynamic Indicator:
- By reflecting changes in coal prices, the NCI serves as a dynamic indicator that can be used by stakeholders in the coal industry for decision-making and planning.
Types of Coal Covered:
- The inclusion of sub-indices for Non-Coking Coal and Coking Coal acknowledges the different characteristics and uses of these types of coal in industrial processes.

10. CEA Nageswaran calls on World Bank to make governance indicators transparent

Subject: IR

Section: International Organisation

Context: CEA Nageswaran calls on World Bank to make governance indicators transparent

More about the news:

Chief Economic Adviser V Anantha Nageswaran has urged the World Bank to enhance the transparency of its Worldwide Governance Indicators, stating that their subjective nature is leading to inappropriate assessments of developing countries’ sovereign ratings by global rating agencies.
Speaking at a seminar in the Capital, Nageswaran emphasized that making governance indicators “less arbitrary” is the “easiest way” for Multilateral Development Banks (MDBs) to aid member countries in accessing capital for global challenges and development needs.
He highlighted the significant role these indicators play in the opaque credit rating assessment process used by major agencies, including S&P Global, Moody’s Investors Service, and Fitch Ratings.
The World Bank compiles the Worldwide Governance Indicators from various credible sources, but concerns have been raised about the methodological problems of these indicators, including those from the Freedom in the World Index and the Economist Intelligence Unit Democracy Index.

What is Worldwide Governance Indicators:

The World Governance Indicators (WGI) constitute a research dataset that consolidates the perspectives of a significant number of respondents, including corporate, citizen, and expert survey participants from both developed and developing nations, regarding the quality of governance.
The WGI was developed in 1999 by two World Bank researchers, Daniel Kaufmann and Aart Kraay. The data are updated annually each September
The WGI covers six key dimensions of governance:
- Voice and Accountability
- Political Stability and Absence of Violence
- Government Effectiveness
- Regulatory Quality
- Rule of Law
- Control of Corruption
Various reports on which India’s WGI ranking based on-
- Economist Intelligence Unit
- Varieties of Democracy Project
- Heritage Foundation Index of Economic Freedom
- Freedom House Report

11. India ,US and other IPEF member ink supply chain resilience pact

Subject: IR

Section: International Groupings

Context: India, US, 12 other IPEF members sign supply chain resilience agreement

More about the news:

India, the US, and 12 other Indo-Pacific Economic Framework (IPEF) members have signed a supply chain resilience agreement to reduce dependence on China and shift manufacturing of crucial goods within member nations.
The 14 countries, constituting 40% of global GDP and a third of global trade, aim to fortify global supply chains, enhance adaptability, stability, and sustainability.
The IPEF focuses on four pillars: trade, supply chains, clean economy, and fair economy.
India has joined all pillars except the trade pillar.
The agreement is expected to make IPEF supply chains more resilient and well-integrated, contributing to regional economic development.
The pact will also seek to improve crisis coordination and response to supply chain disruptions and work together to support the timely delivery of affected goods during a crisis
Three new IPEF Supply Chain bodies could be set up to facilitate cooperation among the partners. The bodies will be – the supply chain council; the supply chain crisis response network, and the IPEF Labor Rights Advisory Board.
The other benefits of the pact include supply chain diversification, mobilisation of investments, deeper integration of India in global value chains, support to MSMEs and creation of a seamless regional trade ecosystem, which would facilitate the flow of Indian products.

Some facts about Indo-Pacific Economic Framework for Prosperity (IPEF)

It is a regional initiative aimed at fostering cooperation and economic integration in the Indo-Pacific region, launched by United States President Joe Biden on May 23, 2022.
The framework seeks to promote resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness among member economies,
IPEF seeks to complement and build on existing regional architecture while supporting the global rules-based trading system.
The framework includes 14 partner countries: Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the United States, and Vietnam.
The economic framework is built upon four pillars:
- Trade
- Supply chain resilience
- Clean Energy, Decarbonization, and Infrastructure
- Taxes and anti-corruption measures
While not constituting a Free Trade Agreement (FTA), the IPEF allows members to negotiate specific aspects of interest. India has actively engaged in the IPEF but has chosen not to participate in the trade pillar, citing misalignment with its trade policies on most promoted issues.

12. Birsa Munda and Munda rebellion

Subject: History

Section: Modern India

Birsa Munda lived a short — just 25 years — but valiant life.
Born on November 15, 1875, in Ulihatu village in present-day Jharkhand, Birsa spent his childhood in abject poverty in a tribal Munda family.
The Britishers introduced a feudal zamindari system in the Chhota Nagpur region, destroying the tribal “Khuntkatti” agrarian system.
The Raj brought in the outsiders — moneylenders and contractors, as well as feudal landlords — who aided the British in their exploitation.
During the 1880s, Birsa closely witnessed the SardariLarai movement in the region, which demanded the restoration of tribal rights through non-violent methods like sending petitions to the Raj.
- However, the oppressive colonial regime paid no heed to these demands.
- The zamindari system soon reduced the tribals from the status of landowners to that of labourers.
- The feudal setup intensified the forced labour (vethbigari) in the forested tribal areas.
This culminated in Birsa taking up the cause of Adivasis. He shed new light on the religious domain.
- He stood firm against missionaries who were belittling tribal life and culture.
- At the same time, Birsa worked to refine and reform religious practices, discouraged many superstitious rites.
- He brought in new tenets, prayers and worked to restore tribal pride.
- Birsa impressed upon the Adivasis the importance of “sirmarefirun raja jai” or “victory to the ancestral king” — thus invoking the sovereignty of the tribals’ ancestral autonomous control over the land.
- Birsa became a mass leader and began to be considered as Bhagwan and Dharati Aba by his followers.
The Mundas, Oraons, other Adivasis and non-Adivasis responded to his call and joined the “Ulgulan” or revolt against the colonial masters and exploitative dikus.
- Birsa asked the people not to pay any rent, and attacked the outposts of feudal, missionary and colonial authorities. With traditional bows and arrows, the tribals of Central and Eastern India waged an effective armed resistance against the British.
Soon, he was captured by British police and lodged in jail, where he died in captivity on June 9, 1900.
But BhagwanBirsa Munda’s spirited struggle did not go in vain. It compelled the British to take cognisance of the plight and exploitation of tribals, and bring in the Chhota Nagpur Tenancy Act of 1908 for their protection.
- This Act restricted the transfer of tribal land to non-tribals, giving Adivasis a huge relief and became a landmark legislation for the protection of tribal rights.
- The British regime also took steps to abolish VethBigari or forced labour.
India’s freedom struggle was strengthened by several tribal communities such as Mundas, Oraons, Santhals, Tamars, Kols, Bhils, Khasis, Koyas and Mizos, to name a few.

Other tribal leaders referred by PM

Referring to the inspiring struggle of Bhagwan Birsa Munda for tribal pride, the Prime Minister mentioned the association of the land of Jharkhand with the innumerable tribal heroes. He mentioned that many heroes like Tilka Manjhi, Sidhu Kanhu, Chand Bhairav, Phulo Jhano, Nilambar, Pitambar, Jatra Tana Bhagat and Albert Ekka have made this land proud. The Prime Minister said Adivasi warriors took part in the freedom struggle in every nook and corner of the country and mentioned Govind Guru of Mangarh Dham, Tantya Bhil of Madhya Pradesh, Bhima Nayak, Martyr Veer Narayan Singh of Chhattisgarh, Veer Gundadhur, Rani Gaidinliu of Manipur, Veer Ramji Gond of Telangana, Alluri Sitaram Raju of Andhra Pradesh, Rani Durgavati of Gond Pradesh. Lamenting the neglect of such personalities, the Prime Minister expressed satisfaction on remembering these heroes during the Amrit Mahotsava.