Daily Prelims Notes 3 February 2024

Daily Prelims Notes

3 February 2023

Table Of Contents

1. World Wetlands Day 2024 celebrated at Sirpur lake, a Ramsar site in Indore
2. GHAR (GO Home and Re-Unite) Portal for Restoration and Repatriation of Child launched by NCPCR
3. Plan to Resurface a Pyramid in Granite Draws Heated Debate
4. Union Budget 2024-25 set blueprint for India’s New Green Deal
5. World Wetlands Day 2024: Before we save them, we have to know where they actually are
6. Rising tides, rooted solutions
7. Exposing India’s financial markets to the vultures
8. Population Priorities

1. World Wetlands Day 2024 celebrated at Sirpur lake, a Ramsar site in Indore

Subject: Environment

Sec: Ecosystem

Context: The Ministry of Environment, Forest & Climate Change (MoEF&CC) in collaboration with Government of Madhya Pradesh, organized a national event at Sirpur Lake, Indore through Indore Municipal Corporation and Environmental Planning & Coordination Organisation (EPCO), Government of Madhya Pradesh to celebrate World Wetlands Day (WWD) 2024.

More on news:

• The theme of WWD-2024 is ‘Wetlands and Human Wellbeing’ which underscores the critical role wetlands play in enhancing our lives. 
• It highlights how wetlands contribute to flood protection, clean water, biodiversity and recreational opportunities, all of which are essential for human health and prosperity. 
• Three publications were also released during the event including revised guidelines for
  • ‘National Plan for Conservation of Aquatic Ecosystems (NPCA)’, 
  • ‘Management Effectiveness Tracking Tool: A Practitioners’ Guide’, and 
  • a Compendium on Phyto-diversity of Ramsar Sites in India’.
• The NPCA Guidelines 2024 provides specific guidance to the State/UT Wetland Authorities, Ramsar Site managers and knowledge partners on the regulatory framework of wetland management in India including Framework Management Plan structure and steps to be followed for its preparation.
• The compendium, developed by Botanical Survey of India, includes the rapid assessment of plant diversity in and around all the 75 Ramsar Sites of India under the aegis of Amrit Dharohar initiative of MoEF&CC and the practitioners guide is a self-appraisal tool to support adaptive wetland management and assess progress over time.
• Two brochures were also released that included a brochure titled ‘Wetlands Conservation: Approach and Initiatives’ that highlights Government of India initiatives on wetlands conservation since its inception.
• The second brochure, ‘People’s Documentation of Biodiversity of 75 Ramsar Sites’ gives an overview of the Biodiversity Management Committees (BMCs) situated around Ramsar Sites.
• A series of educational videos developed jointly by MoEF&CC and Central Institute of Educational Technology (CIET), NCERT were also launched for sensitizing primary, middle and senior level school students on the importance of wetlands conservation and management.

About World Wetlands Day (WWD):

• World Wetlands Day is observed on 2nd February every year worldwide to commemorate the signing of the Ramsar Convention on Wetlands of International Importance in 1971.
• India has been a party to the Convention since 1982 and on the eve of WWD 2024, India has increased its tally of Ramsar sites (Wetlands of International Importance) to 80 by designating five more wetlands as Ramsar sites. 
• Three of these sites, Ankasamudra Bird Conservation Reserve, Aghanashini Estuary and Magadi Kere Conservation Reserve are located in Karnataka whereas two, Karaivetti Bird Sanctuary and Longwood Shola Reserve Forest are in Tamil Nadu. 
• With the addition of these five wetlands to List of Wetlands of International Importance, the total area covered under Ramsar sites is now 1.33 million ha which is an increase of 5,523.87 ha from existing area (of 1.327 million ha.
• Tamil Nadu continues to have the maximum number of Ramsar Sites (16 sites) followed by Uttar Pradesh (10 sites). 
• India now has 80 Ramsar sites covering an area of 1.33 million hectares.
• India added five more Ramsar sites to its portfolio ahead of this year’s World Wetlands Day on February 2, taking its total tally to 80 from the existing 75.
• The Ramsar Convention sets nine criteria for identifying Wetlands of International Importance. These include sites containing representative, rare or unique wetland types and sites of international importance for conserving biological diversity.

About Newly Added Sites:

The Karaivetti Birds Sanctuary in Tamil Nadu:

• The Karaivetti Birds Sanctuary in Tamil Nadu spans over 453 hectares and “is one of the most important freshwater feeding grounds for migratory water birds in the state of Tamil Nadu.
• It hosts over 188 bird species, of which 82 are water birds.
• Apart from water birds, the sanctuary is also an important nesting site for threatened species like the spotted eagle and the tawny eagle.
• The Karaivetti Bird Sanctuary is an important nesting site for the threatened spotted eagle. 

The Longwood Shola Forest in the Nilgiris(TamilNadu)

• The Longwood Shola Forest in the Nilgiris is among the “last vestiges of urban shola forest, where everything else has been lost to tea cultivation and other land use changes.
• The shola is a high-altitude wetland that acts as a water source for 18 villages downstream.
• It is also considered an Important Bird Area (IBA), hosting several endemic bird species. 
• The Longwood Shola is recognised and protected as a Reserve Forest. 

Aghanashini Estuary Karnataka:

• The mangroves along the Aghanashini river “act as a nursery for fishes and prawns.
• It is  considered an important fish breeding and spawning area. 
• Several species of fish visit nutrient rich mangrove areas for laying eggs so that the juveniles grow amidst abundance of food before they leave for the sea.
• The mangroves that flank the Aghanashini river serve as crucial nurseries for fishes and prawns and play a vital role in their breeding and spawning processes.

Magadi Kere(Karnataka)

• Magadi Kere Conservation Reserve, is a human-made wetland with an area of nearly 50 hectares which was constructed to store rainwater for irrigation purposes.
• It is home to over 166 species of birds, of which 130 are migratory. 
• It is one of the largest wintering grounds for bar-headed goose in southern India

Ankasamudra Reserve(Karnataka)

• It is also an artificial tank. 
• It is home to 210 species of plants, 8 species of mammals, 25 species of reptiles, 240 species of birds and 41 species of fishes, apart from frogs, butterflies and other insects.
• The Site is a human-made wetland built for storing monsoon run-off water coming from the Tungabhadra River and providing irrigation to surrounding drought-risk areas.
• The Site is widely known for its rich bird diversity and has been declared as a conservation reserve, managed mainly for bird protection. 

About Sirpur Lake Indore:

• Sirpur Lake was created by the Holkars of Indore State in the early 20th century.
• The lake was recognized by BirdLife International as one of the 19 important bird areas (IBAs) of Madhya Pradesh in 2015.
• In July, 2022, the Sirpur wetland was declared a Ramsar site.
• Another IBA near Indore is Yashwant Sagar, which was also declared a Ramsar site in August, 2022.

About Amrit Dharohar initiative:

• The Amrit Dharohar initiative is a part of the 2023-24 budget announcement.
• It was launched by MoEF&CC during June 2023 to promote unique conservation values of the Ramsar Sites in the country while generating employment opportunities and supporting local livelihoods.
• This initiative is to be implemented over three years in convergence with various Central Government ministries and agencies, State Wetland Authorities, and a network of formal and informal institutions and individuals, working together for a common cause.

2. GHAR (GO Home and Re-Unite) Portal for Restoration and Repatriation of Child launched by NCPCR

Subject: Schemes

Sec: Education

Context: 

• The Ministry of Women and Child Development developed the “Track Child Portal”, which enables tracking of the missing and found children in all States/UTs including Maharashtra, Chhattisgarh, North Eastern States and Jharkhand.

More on news:

• GHAR portal aims to digitally monitor & track restoration and repatriation of children as per protocols under Juvenile Justice (Care and Protection of Children) Act, 2015.
•  The Track Child portal is implemented with support and involvement of various stakeholders namely Ministry of Home Affairs, Ministry of Railways, State Governments/ UT Administrations, Child Welfare Committees, Juvenile Justice Boards, National Legal Services Authority, etc. 
• Standard operating procedures(SOPs) have been issued for the “TrackChild” Portal.
• Advisories have also been issued to all States and UTs including Director General of Police of all States & UTs and other stakeholders regarding implementation of TrackChild portal.
• The TrackChild portal is also integrated with the CCTNS or Crime and Criminal Tracking & Network Systems of the Ministry of Home Affairs.
• This portal  allows interoperability in terms of matching of F.I.Rs of missing children with the database of TrackChild to trace and match missing children by the concerned State/UT police.
• One component of TrackChild Portal has “Khoya-Paya” where any citizen can report for any missing or sighted children.

About GHAR-GO Home portal:

• A portal namely GHAR – GO Home and Re-Unite (Portal for Restoration and Repatriation of Child) has been developed and launched by NCPCR. 
• The GHAR portal has been developed to digitally monitor and track the restoration and repatriation of children as per the protocols under the Juvenile Justice (Care and Protection of Children) Act, 2015 and Rules thereof.

The following are the salient features of the portal:

• Digital tracking and monitoring of children who are in the Juvenile Justice system and have to be repatriated to another Country/State/District.
• Digital transfer of cases of children to the concerned Juvenile Justice Board/Child Welfare Committee of the State for speedy repatriation of children.
• Where there is a requirement of a translator/interpreter/expert, a request to be made to the concerned State Government.
• Child Welfare Committees and District Child Protection Officers can ensure proper restoration and rehabilitation of children by digitally monitoring the progress of the case of the child.
• A checklist format will be provided in the forms so that the children who are hard to repatriate or children who are not getting their entitled compensation or other monetary benefits can be identified.
• List of Government implemented schemes are provided, so that at the time of restoration the Child Welfare Committees can link the child with the schemes to strengthen the family and ensure that child remains with his/her family.

3. Plan to Resurface a Pyramid in Granite Draws Heated Debate

Subject: History

Sec: Art and Culture

Context:

• A project to restore granite blocks that once covered a greater portion of the Pyramid of Menkaure in Giza has been criticized by some preservationists.

More on news:

• The initiative was announced by Mostafa Waziri, the secretary general of Egypt’s Supreme Council of Antiquities, who called it “the project of the century” .
• The debate over the pyramid reflects a constant tension in the field of conservation: whether to try to return ancient structures to their earlier splendour or minimize intervention as much as possible.

About Pyramids:

• Almost every ancient culture and civilization, be it Mesopotamian, Chinese, Egyptian, or Mayan, has left a legacy of towering ancient pyramids.
• A pyramid is a structure whose visible surfaces are triangular and converge to a point at the top, making the shape roughly a pyramid in the geometric sense.
• The base of a pyramid can be of any polygon shape, such as trilateral or quadrilateral.
• The Great Pyramid of Cholula, also known as Tlachihualtepetl is the biggest archaeological site of a pyramid (temple) in the New World.
• The Step Pyramid Of Djoser, a 4,700-year-old step pyramid in Egypt, built in the 27th century BC is the oldest pyramid on Earth.
• A specific count of pyramids across the world has not been done.
• Egypt, which is most renowned for its pyramids, has 118 pyramids.
• The Great Pyramid of Giza is the largest Egyptian pyramid and served as the tomb of pharaoh Khufu, who ruled during the Fourth Dynasty of the Old Kingdom.
• The Great Pyramid was the world’s tallest human-made structure for more than 3,800 years.
• The Pyramid of Menkaure was built to house the tomb of King Menkaure, who ruled Egypt more than 4,000 years ago.
• It is the only one of the three main pyramids at Giza that was encased in multiple levels of Aswan granite, a red stone that comes from quarries more than 550 miles south of Giza.

Pyramids From Around The World To Witness

• Pyramid of Djoser – Saqqara, Egypt (2660 BCE)
• While there are over a hundred pyramids in Egypt, the Pyramid of Djoser is the oldest. 
• Built by the Pharaoh Djoser (Zoser), this step pyramid predates those at Giza by more than a century. Before this, pharaohs’ tombs were flat-topped mounds.
• It was Djoser’s chief architect, Imhotep, who placed these mounds one on top of the other, creating the Pyramid of Djoser, the world’s first-step pyramid.
• Djoser was the first king of the Third Dynasty of Egypt. 
• Pyramid of the Sun – Teotihuacan, Mexico (100 CE)
• The central Mexican city of Teotihuacan is an architectural marvel, filled with intricate structures and massive step pyramids.
• The most impressive of these is the 240-foot-tall Pyramid of the Sun, constructed in five layers.
• It is located along a central Avenue of the Dead which also connects it to a smaller Pyramid of the Moon. The material used to construct this awe-inspiring structure was hewed tezontle, a red coarse volcanic rock of the region.
• On the west side of the pyramid, there are 248 uneven stair steps that lead to the top of the structure.
• El Castillo – Yucatan, Mexico (1000 CE)
• One of the most spectacular Mayan temples, the 98-foot-tall Chichen Itza pyramid nicknamed El Castillo, or the Temple of Kukulcan, has special astronomical significance.
• Each of its faces has 91 steps, which, when combined with the shared step at the top, make 365 steps, one for each day of the year.
• This massive structure is situated near the small town of Piste and you can get there by bus from the airports of Mérida and Cancun or other Mexican cities. 
• A fascinating feature of this pyramid is that during the spring and autumn equinoxes, light and shadow form a series of triangles on the side of the north staircase.
• Prang Temple – Koh Ker, Cambodia (940 CE)
• Ancient Khmer Pyramid, Koh Ker Temple near Siem Reap town, Cambodia
• Once the ancient capital of Cambodia, Koh Ker was home to almost 100 temples, most of which are still standing.
• Among the structures and pyramids built under the reign of Jayavarman IV, this seven‑tiered and 118-foot-tall pyramid is truly unparalleled. 
• However, very few of its beautiful sculptures are left at the site, having either been looted over the years, or placed in museums by the government.
• Koh Ker is an offbeat destination that not many tourists are aware of.
• The temple complex was once ridden with landmines and has only recently been open to the public. There are several temple ruins to explore in Koh Ker making it the perfect destination for history buffs.
• Pyramid of Khufu – Cairo, Egypt (2560 BCE)
• When most people think of Egyptian pyramids, the towering Pyramids of Giza probably come to mind.
• Of the three, it is the pyramid built for Pharaoh Khufu, known as the Great Pyramid, that was, for millennia the largest manmade structure in the world and still remains a popular site.
• It is also the only remaining wonder of the ancient world.
• This famous pyramid contains an estimated 2,300,000 blocks, some of which are upwards of 50 tons.
• Khufu’s pyramid is constructed of inner, rough-hewn, locally quarried core stones, which is what we can still see today.
• Borobudur Temple – Java, Indonesia (800 CE)
• Considered the world’s largest Buddhist temple, the nine stacked platforms of the Borobudur Temple may not be considered a traditional pyramid, but it is truly majestic.
• Constructed in the 9th century by the Sailendra Dynasty, its traditional Javanese Buddhist architecture shows the influences of Indian Gupta art.
• Tikal – Peten, Guatemala
  • The Tikal ruins are the biggest attraction of Tikal National Park, which was established in the 1950s and designated a UNESCO World Heritage site in 1979.
  • Tikal reached its artistic peak between 600 and 800 after which it suffered significant artistic deterioration.
• Tomb of the General – Ji’an, China (400 CE)
• Ziggurat of Ur – Iraq (2000 BCE)
• Tomb of Kashta – Meroe, Sudan (500 BCE)
• Borobudur Temple – Java, Indonesia (800 CE)
• Bent Pyramid – Dahshur, Egypt (2600 BCE)
• Pyramid of Cestius – Rome, Italy (12 BCE)
• Sukuh – Java, Indonesia (15th century CE)

4. Union Budget 2024-25 set blueprint for India’s New Green Deal

Subject: Schemes

Sec: Environment

Context:

• India’s 2024-25 interim budget marks a significant shift towards green growth and sustainability, aligning with global efforts to combat climate change.

New Green Deal for India:

• The government, building on previous commitments such as the Net Zero by 2070 declaration made in Glasgow in 2021, has outlined a New Green Deal for India.
• This includes substantial investments in green energy, particularly offshore wind energy, with a viability gap funding for an initial capacity of 1 gigawatt to address growth challenges in the wind energy sector.
• The budget focuses on creating a market for clean fuels, including the mandatory blending of compressed biogas (CBG) in natural gas, and announces funding to overcome biomass aggregation challenges in the bio-energy industry.
• Additionally, it introduces a scheme for bio-manufacturing to provide eco-friendly alternatives to traditional materials and aims to advance coal gasification to reduce dependence on crude oil, thereby insulating India from petroleum price shocks.
• Investments in the National Green Hydrogen Mission, bioethanol production, and the expansion of clean transport options, such as electric vehicles (EVs) and rapid rail transit systems, underscore the government’s commitment to diversifying India’s fuel basket and reducing emissions.
• The budget also addresses the need for secure supply chains for critical minerals and technologies essential for a green economy, alongside initiatives for rooftop solarisation to support EV charging and reduce greenhouse gas emissions.
• The emphasis on a Blue economy, with measures for coastal resilience and sustainable aquaculture, highlights the comprehensive approach to integrating environmental sustainability with economic development.
• This green growth model, aimed at generating employment and positioning India as a leader in the global fight against climate change, represents a balanced approach to environmental and economic priorities.

5. World Wetlands Day 2024: Before we save them, we have to know where they actually are

Subject: Environment

Sec: Ecosystem

Context:

• The wetlands in Uttar Pradesh, constituting about 90% outside protected areas, are facing significant threats due to encroachments and conversion into real estate.

Details:

• Till October 2023, as many as 75 wetlands in the country have been categorised as Ramsar sites, out of which 10 are in Uttar Pradesh. 
• The first national inventory of wetlands was prepared by the Space Applications Centre of the Indian Space Research Organisation (ISRO), Ahmedabad using remote-sensing satellite data from 1992-93.
• In 2007, the Space Application Centre prepared another digital database of wetlands under “National Wetland Inventory and Assessment” using remote-sensing techniques.
• Many wetlands are formed by oxbow lakes (U-shaped lakes), which in turn formed naturally by the meandering streams.
• The Wetlands (Conservation and Management) Rules of 2010, enacted under the Environment Protection Act of 1986, make it compulsory for the state government to identify, demarcate and officially designate all wetlands across the state within a stipulated period of two years.
• Due to various anthropogenic threats, including high loads of pollutants from agricultural runoff, industrial waste and sewage, native species of wetlands are being replaced by invasive species. Invasive species can outcompete native plants and animals within wetlands. This can lead to a disturbance in the ecosystem, ultimately diminishing the overall health of the wetland.

What is a Wetland?

• A wetland is a piece of land that serves as a transition between terrestrial and aquatic ecosystems, typically with a water table that is at or near the surface or on the surface of shallow water.
• It supplies a diverse range of ecosystem services, including aquifer recharge, water storage, water purification, flood mitigation, and erosion control.
• Wetlands provide habitat to a variety of native species of plants and animals as well as thousands of winter migratory birds. They prevent settlements from getting flooded by absorbing excess rainwater and then releasing it slowly during dry seasons or droughts. They also help sequestrate carbon, which helps mitigate climate change.

Wetlands (Conservation and Management) Rules of 2017: Salient features

• It specifies that a State Wetland Authority (SWA) be established in each state and union territory, to be led by the state’s environment minister.
• A variety of government representatives will be present. Hydrology, socioeconomics, landscape design, fisheries, and wetland ecology each had one specialist.
• They will choose the “smart use principle” that will control how wetlands are managed.
• The principles of sustainable use that are acceptable to conservation are referred to as “wise use.” Powers have been decentralised as a result of this.
• The SWA must compile a thorough list of the activities that must be governed and approved in the notified wetlands and their zone of influence.
  • Add further activities that should be forbidden in some wetlands.
  • Develop plans for a more effective use of wetlands.
  • Recommend actions to protect wetlands and to increase local communities’ and stakeholders’ knowledge of the significance of wetlands.
• The Central Wetlands Regulatory Authority will be replaced by the National Wetland Committee (NWC), which will be led by the MoEFCC secretary.
• The rules forbid activities like encroachment of any kind, the establishment and growth of industries, waste disposal, and the discharge of untreated wastes and effluents from businesses, cities, towns, villages, and other human settlements.
• State authorities are required to compile a list of all wetlands and a list of wetlands that need to be informed within six months.
• It will serve as the foundation for the creation of an exhaustive digital inventory of all wetlands, which will be updated every 10 years.

Drawbacks of the 2017 rules:

• River channels, paddy fields, man-made water bodies/tanks specifically constructed for drinking water purposes, and structures specifically constructed for aquaculture, salt production, recreation, and irrigation purposes are not included in the 2017 rules’ definition of wetland.
• According to this new definition (excluding the aforementioned wetlands), nearly 65 per cent of the country’s wetlands will lose their status.
  • Because they are not considered wetlands, the management and protection granted to river channels and man-made wetlands will be ineffective.
• Wetlands are defined and included by the respective state or territory. This may result in a lack of consistency in defining and conserving the country’s wetlands.
• In the 2017 Rules, the older provision of appealing to the National Green Tribunal no longer exists.
• There is also no timetable for eliminating the dumped of solid waste and untreated waste into wetlands.
• The new rules do not take into account the Supreme Court’s decision in Jagpal Singh vs. State of Punjab (2011) for the restoration of encroached wetlands across the country.
• Understanding multiple-use regimes is important for wetland conservation, but so is preserving and managing the wetland ecosystem’s integrity.

Source: DTE

6. Rising tides, rooted solutions

Subject: Environment

Sec: Ecosystem

Mangroves:

• Mangroves, with their unique ability to thrive in brackish waters where the sea meets freshwater, form a crucial barrier between land and sea, hosting a rich biodiversity and providing vital ecosystem services.
• These trees and shrubs (found in tropical and subtropical regions) are adapted to live in the intertidal zone with complex root systems that stabilize soil and cope with varying salinity levels, making them some of the most productive wetlands. Despite their importance, mangroves face threats from habitat loss, climate change, and anthropogenic activities.

Mangroves in India:

• According to the Indian State Forest Report 2021, the Mangrove cover in India is 4992 sq. Km which is 0.15% of the country’s total geographical area.
  • Sundarbans in West Bengal are the largest mangrove forest regions in the world. It is listed as a UNESCO World Heritage Site.
  • Besides the Sundarbans, the Andamans region, the Kachchh and Jamnagar areas in Gujarat too have substantial mangrove cover.
• The country’s mangrove ecosystems are categorized into Deltaic mangroves on the east coast, influenced by large river deltas, and Non-Deltaic and Island mangroves on the west coast and islands, respectively.
• The east coast has more extensive mangrove areas due to broader river deltas like the Ganga and Brahmaputra, contributing to richer mangrove biodiversity in comparison to the narrower estuaries of the west coast.
• India stands out globally for its mangrove species richness, hosting over 4107 species, including 925 plant and 3182 animal species, underscoring the critical need for conservation efforts to protect these vital ecosystems from ongoing threats.

International Day for the Conservation of the Mangrove Ecosystem:

• It is celebrated every year on 26 July and aims to raise awareness of the importance of mangrove ecosystems as “a unique, special and vulnerable ecosystem” and to promote solutions for their sustainable management, conservation and uses.
• This International Day was adopted by the General Conference of the UN Educational, Scientific and Cultural Organization (UNESCO) in 2015.

How do mangroves impact human well-being?

• Mangroves play a crucial role in supporting food security and livelihoods for communities through the aquaculture industry, acting as nurseries for fish species vital for global fisheries.
• They provide a range of food products and have significant medicinal and economic value.
• Beyond their role in supporting biodiversity and local economies, mangroves act as a natural barrier against extreme weather events, reducing wave height and protecting coastal regions from cyclones and tsunamis, thus earning the title of a ‘bio shield’.
• Their effectiveness in mitigating natural disasters has been underscored by instances like the 2004 Indian Ocean Tsunami and Cyclone Gaja in 2018, where mangroves significantly reduced damage and saved lives.
• The importance of mangroves in coastal protection is increasingly recognized, especially in the context of climate change and its associated impacts.
• However, the protective capacity of mangroves depends on factors such as the age and density of the forest, highlighting the need for conservation and restoration efforts to maintain and enhance these vital ecosystems.

Coastal metropolises are losing their mangroves:

• Indian metropolises like Mumbai, Chennai, and Kolkata, located along the country’s extensive coastline, are highly vulnerable to climate change-induced hazards such as sea level rise, coastal erosion, flooding, and storm surges.

Government Initiatives Related to Mangrove Conservation:

1. MISHTI (Mangrove Initiative for Shoreline Habitats & Tangible Incomes)
2. Sustainable Aquaculture In Mangrove Ecosystem (SAIME) initiative

Source: Mongabay

7. Exposing India’s financial markets to the vultures

Subject: Economy

Sec: External sector

Context:

• In September 2023, J.P. Morgan unveiled its plan to include Indian local currency government bonds (LCGBs) in its Government Bond Index­ Emerging Markets(GBI­EM)  Global index suite.
• The inclusion is set to be effective from June 2024, prompting anticipation from other index providers like Bloomberg-Barclays and FTSE Russell.

Bloomberg’s Move:

• On January 8, 2024, Bloomberg Index Services proposed the addition of India’s “fully accessible route (FAR)” bonds to the Bloomberg Emerging Market Local Currency Index.
• This addition is scheduled to take effect in September 2024, aligning with the global trend toward incorporating Indian bonds in benchmark indices.

FTSE Russell’s Watchlist and the Call for Reforms:

• FTSE Russell declared India’s retention on its watchlist for a potential upgrade, emphasizing the need for reforms in the government bond market as anticipated by global investors.
• The move by J.P. Morgan has triggered a chain reaction among prominent index providers, reflecting a growing interest in Indian bonds on the global stage.

India’s Initiative for Global Bond Market Integration:

• India initiated the process of incorporating its government bonds into global indices in 2019, officially allowing foreign investors access to a segment of government bonds by 2020 through the introduction of the FAR.
• Despite delays related to capital gains taxes and local settlement, the fundamental policy remained unchanged.

Benefits and Risks Outlined in RBI Report:

• A report by the Inter-Departmental Group (IDG) of the Reserve Bank of India (RBI) in October 2022 detailed efforts to internationalize the rupee, emphasizing benefits such as diminishing dependence on domestic institutions and greater stability of funds tracking indices.
• The report acknowledges potential risks but asserts that the perceived benefits outweigh them.

Potential Benefits of Opening Local Bond Markets:

• Opening local bond markets to foreign investors could facilitate financing of current account and fiscal deficits by engaging institutional investors with long-term investment horizons.
• It is anticipated that the influx of funds into LCGBs would lower domestic interest rates, reducing the cost of public borrowing.

Concerns and Risks Associated with Bond Market Internationalization:

• The “original sin” problem is addressed by borrowing in local currency, shifting exchange rate risk onto international lenders.
• However, internationalization entails a significant loss of autonomy for emerging economies in controlling long-term rates and exposes them to greater interest rate risks.

Volatility and Risks in Foreign Portfolio Inflows:

• Foreign portfolio inflows into local currency bond markets (LCBM) are perceived as stable, but they can be volatile due to exchange rate risk borne by investors.
• Experiences in Malaysia and Türkiye highlight the potential for sudden stops and exits, leading to reserve losses and currency declines.

Risks Associated with Offshore Markets and Currency Internationalization:

• Malaysia’s experience during the 1997 Asian crisis demonstrates the challenges posed by offshore currency markets, leading to speculative activities and financial distress.
• Turkiye’s recent experience in 2022, with the offshore lira market in London, also indicates the potential for speculation against the domestic currency.

Y.V. Reddy’s Perspective and Caution:

• Y.V. Reddy, former Governor of the RBI, emphasizes that currency internationalization requires a long evolutionary process and sustained development of the financial system.
• The Indian rupee is yet to be regarded as an international currency, and its internalization is likely to be an outcome of continued financial system development and improved economic performance.

Overall Assessment and Caution:

• The internationalisation of bond markets and currencies in emerging economies is often presented as a solution, but the risks involved are underestimated.
• Increased exchange rate instability and boom-bust cycles in capital flows may be likely outcomes, posing challenges to managing financial integration effectively.

8. Population Priorities

Subject: Geography

Sec: Human and human geo

Context: 

• The Union Finance Minister Nirmala Sitharaman said that a high-powered committee will be constituted to consider the challenges arising from “fast population growth and demographic changes”. But no survey can substitute the Census, which is yet to be conducted for this decade.

Postponing the decennial Census

• With the Union government repeatedly postponing the decennial Census — it has not been conducted for the first time in a decade since 1881.
• It is evident that India is now the most populous country, but the Sample Registration System statistical report in 2020 and the National Family Health Survey-5 (2019-21) have shown that the total fertility rate (TFR) in India has fallen to 2 overall, with only a few States — Bihar (2.98), Meghalaya (2.91), Uttar Pradesh (2.35), Jharkhand (2.26) and Manipur (2.17) — having a TFR above 2.1.
• Clearly, the high population growth of the kind seen in the 20th century has been largely arrested — the TFR fell from 5.7 in 1950 to 2 in 2020, albeit differentially across regions.
• The population share of the southern States, reduced to 21% in 2011 from 26% in 1951, largely a consequence of a rapid reduction in TFR due to better socio-economic outcomes and education, and despite higher migration to these States.

Role of Surveys

• While the surveys mentioned are robust and necessary, they are no substitute for the comprehensive Census; the continued delay in its implementation reflects poorly on the Union Home Ministry that is motivated by other priorities rather than executing a vital programme of Indian governance.

Democracy shift in India

• The demographic shift in India and rising life expectancy have resulted in challenges and opportunities.
• The much-touted demographic dividend — the relatively high proportion of the working age population in the developing world — is meaningful only if there are sufficient jobs and if they enjoy some degree of social security that will help them when they age.
• With high unemployment and the creation of non-farm jobs, which will increase productivity and cater to skilled employment, relatively slack in the last few years, there is the possibility of the country squandering this dividend.
• The “high-powered” committee will be performing a crucial role if it engages meaningfully in addressing questions related to jobs and social security and the challenges citizens face due to rapid urbanization and mechanization of work.