Daily Prelims Notes 4 April 2022

Daily Prelims Notes

4 April 2022

Table Of Contents

1. Oligotrophic Ecosystem
2. Opium Poppy Cultivation
3. NFC technology for instant payments
4. LAF
5. First complete human genome
6. SC to examine practices in death penalty sentencing
7. Sikkim tax free
8. Demographic Dividend
9. Export basket

1. Oligotrophic Ecosystem

Subject: Environment

Section: Ecosystem

Context- Cave ecosystems are understudied in India. Caves have a microclimate of their own. The cave-dwelling fauna could be more sensitive to minor changes and climate change could exacerbate local extinctions, according to scientists.

Concept-

What are Oligotrophic Ecosystems:

• Oligotrophic environments are those that offer little to sustain life.
• These environments include deep oceanic sediments, caves, glacial and polar ice, deep subsurface soil, aquifers, ocean waters, and leached soils.
• An oligotroph is an organism that can live in an environment that offers very low levels of nutrients.

Caves as Oligotrophic Ecosystem:

• Caves form an Oligotrophic ecosystem, which has no direct energy source – there is no sunlight or vegetation.
• Their primary source of energy comes in through either a bird’s or bat’s guano or droppings.
• Invertebrates in the cave were exclusively dependent on the swiftlet guano or droppings.
• With caves having a microclimate of their own, he states that the cave-dwelling fauna could be even more sensitive to minor changes and climate change could exacerbate local extinctions.
• Oligotrophic caves are characterized by very limited sources of organic material and simplified trophic structure due to their predominant isolation from surface ecosystems.
• In nutrient-poor caves heterotrophic bacteria dominate accompanied by a number of chemoautotrophs that gain energy from inorganic chemicals through chemosynthesis and fix inorganic carbon.
• Phosphorus is usually considered to be the most limiting nutrient in temperate oligotrophic ecosystems.
• The majority of aquatic ecosystems in regions sensitive to acidification are oligotrophic, since their watersheds are on thin soils with granitic or gneiss bedrock.

Difference between Oligotrophic & Eutrophic Lakes:

2. Opium Poppy Cultivation

Subject: Agriculture

Section: Crops

Context- Taliban order ban on poppy cultivation.

Concept-

• The Taliban announced on Sunday a ban on the cultivation of narcotics in Afghanistan, the world’s biggest opium producer.
• The cultivation of poppy has been strictly prohibited across the country.
• Afghanistan is the world’s largest producer of opium, according to the United Nations Office on Drugs and Crime (UNODC).
• Its opium harvest accounts for more than 80% of the world’s supply.
• In 2018 the UNODC estimated opium production contributed up to 11% of the country’s economy.

Opium Poppy:

• Opium poppy (Papaver somniferous) plant is the source of opium gum which contains several indispensable alkaloids such as morphine, codeine and thebaine.
• Morphine is the best analgesic in the world. In case of extreme and excruciating pain such as that of terminally ill cancer patients, nothing alleviates the suffering except morphine. Codeine is commonly used in manufacture of cough syrups.

Uses:

• Opium is unique in its therapeutic value and is indispensable in the medical world.
• It also finds use in Homeopathy and Ayurveda or Unani systems of indigenous medicines.
• The opium which is used as Analgesics, Anti-Tussive, Anti spasmodic and as a source of edible seed-oil, acts as a medicinal herb.

Opium Cultivation In India:

• After independence, the control over cultivation and manufacture of opium became responsibility of the Central Government with effect from April, 1950.
• At present the Narcotics Commissioner along with the subordinates exercises all powers and performs all functions relating to superintendence of the cultivation of the opium poppy and production of opium.
• The Commissioner derives this power from the Narcotic Drugs & Psychotropic Substances Act 1985 and Narcotic Drugs & Psychotropic Substances Rules, 1985.
• License for manufacture of certain types of narcotic drugs and psychotropic substances as well as permits for export and import of narcotic drugs, psychotropic and controlled substances are issued with the approval and permission of the Narcotics Commissioner.
• The Government of India announces the licensing policy for cultivation of opium poppy every year, prescribing the minimum qualifying yield for issue of or renewal of licence, maximum area that can be cultivated by an individual cultivator, the maximum benefit that can be allowed to a cultivator for damage due to natural causes, etc.
• The opium poppy can be cultivated only in such tracts as are notified by the Government.
• At present these tracts are confined to three States, viz. Madhya Pradesh, Rajasthan and Uttar Pradesh.
• Mandsaur district of Madhya Pradesh and Chittorgarh and Jhalawar Districts of Rajasthan constitute about 80% of the total area cultivated.
• India is one of the few countries internationally permitted (by the United Nations Office on Drugs and Crime ) to cultivate opium poppy for export.

3. NFC technology for instant payments

Subject: Science & Tech

Section: Computer

Context- Google Pay has recently launched a new feature in India, ‘Tap to pay for UPI’, in collaboration with Pine Labs. The feature makes use of Near Field Communication (NFC) technology.

Concept-

• Google Pay has been the first among UPI apps to bring the Tap to Pay feature working on POS terminals.
• It will allow users with UPI accounts configured on Google Pay to make payments just by tapping their NFC-enabled Android smartphones on any Pine Labs Android POS terminal.
• Till now, Tap to Pay was only available for cards.
• The process is much faster compared to scanning a QR code or entering the UPI-linked mobile number which has been the conventional way till now.

Are other companies using NFC tech for payments using smartphones?

• In February this year, Apple introduced Tap to Pay on the iPhone.
• It will allow merchants across the U.S. to use their iPhones to accept Apple Pay, contactless credit and debit cards, and other digital wallets through a tap to their iPhone without the need for any additional hardware or payment terminal.

What is NFC and how does it work?

• NFC is a short-range wireless connectivity technology that allows NFC-enabled devices to communicate with each other and transfer information quickly and easily with a single touch — whether to pay bills, exchange business cards, download coupons, or share a document.
• NFC transmits data through electromagnetic radio fields, to enable communication between two devices.
• Both devices must contain NFC chips, as transactions take place within a very short distance.
• NFC-enabled devices must be either physically touching or within a few centimetres from each other for data transfer to occur.

What are the other applications of NFC technology?

• NFC tech has a wide range of applications besides driving payment services like Google Wallet and Apple Pay.
• It is used in contactless banking cards to perform money transactions or to generate contact-less tickets for public transport.
  • Contactless cards and readers use NFC in several applications from securing networks and buildings to monitoring inventory and sales, preventing auto theft, keeping tabs on library books, and running unmanned toll booths, according to investopedia.
• It also has an application in healthcare, to monitor patient stats through NFC-enabled wristbands.
• NFC is used in wireless charging too.

How safe is this technology?

• NFC technology is designed for an operation between devices within a few centimetres from each other.
• This makes it difficult for attackers to record the communication between the devices compared to other wireless technologies which have a working distance of several metres.
• The security level of the NFC communication is by default higher compared to other wireless communication protocols.

When did NFC tech start?

• In 2004, consumer electronics companies, Nokia, Philips and Sony together formed the NFC Forum, which outlined the architecture for NFC technology to create powerful new consumer-driven products.
• Nokia released the first NFC-enabled phone in 2007.

4. LAF

Subject: Economy

Section: Monetary Policy

Concept:

• Liquidity adjustment facility (LAF), also known as the liquidity corridor, essentially indicates the difference between the repo rate and the reverse repo rate.
• It was introduced in year 2000 following recommendation of Narasimham Committee Report on Banking Reforms. Before that in April 1999, an Interim LAF was introduced to provide a ceiling.
• Under the scheme, RBI conducts auctions to absorb (through reverse repo auctions) and inject (through repo auctions) liquidity into the financial system. The funds from the Facility are expected to be used by the banks for their day-to-day mismatches in liquidity. Presently the repo and reverse repo at 4% and 3.35% respectively.

5. First complete human genome

Subject: Science & Tech

Section: Biotech

Context:

In 2003, the Human Genome Project made history when it sequenced 92% of the human genome. But ever since then, scientists have struggled to decipher the remaining 8%. Now, a team of nearly 100 scientists from the Telomere-to-Telomere (T2T) Consortium has unveiled the complete human genome — the first time it’s been sequenced entirely, researchers say.

Genome sequencing

Definition and Description: German botanist Hans Winkler coined the word “genome” in 1920, combining the word “gene” with the suffix “-ome,” meaning “complete set,” to describe the full DNA sequence contained within each cell. Researchers still use this word a century later to refer to the genetic material that makes up an organism.

Genome is an anthology containing the DNA instructions for life. It’s composed of a vast array of nucleotides (letters) that are packaged into chromosomes (chapters). Each chromosome contains genes (paragraphs) that are regions of DNA which code for the specific proteins that allow an organism to function. “Genetic material is made of DNA tightly packaged into chromosomes. Only select regions of the DNA in a genome contain genes coding for proteins”

While every living organism has a genome, the size of that genome varies from species to species. An elephant uses the same form of genetic information as the grass it eats and the bacteria in its gut. But no two genomes look exactly alike. Some are short, like the genome of the insect-dwelling bacteria Nasuiadeltocephalinicola with just 137 genes across 112,000 nucleotides. Some, like the 149 billion nucleotides of the flowering plant Paris japonica, are so long that it’s difficult to get a sense of how many genes are contained within.

The human genome contains roughly 3 billion nucleotides and just under 20,000 protein-coding genes — an estimated 1 per cent of the genome’s total length. The remaining 99 per cent is non-coding DNA sequences that don’t produce proteins. Some are regulatory components that work as a switchboard to control how other genes work. Others are pseudogenes, or genomic relics that have lost their ability to function. And over half of the human genome is repetitive, with multiple copies of near-identical sequences.

What is repetitive DNA?

Satellites DNA:

The simplest form of repetitive DNA is blocks of DNA repeated over and over in tandem called satellites. While how much satellite DNA a given genome has varies from person to person, they often cluster toward the ends of chromosomes in regions called telomeres. These regions protect chromosomes from degrading during DNA replication. They’re also found in the centromeres of chromosomes, a region that helps keep genetic information intact when cells divide.

Researchers still lack a clear understanding of all the functions of satellite DNA. But because satellite DNA forms unique patterns in each person, forensic biologists and genealogists use this genomic “fingerprint” to match crime scene samples and track ancestry. Over 50 genetic disorders are linked to variations in satellite DNA, including Huntington’s disease.

• Satellite DNA tends to cluster toward the ends of chromosomes in their telomeres. Here, 46 human chromosomes are colored blue, with white telomeres.

Transposable elements:

Some scientists have described them as selfish DNA because they can insert themselves anywhere in the genome, regardless of the consequences. As the human genome evolved, many transposable sequences collected mutations repressing their ability to move to avoid harmful interruptions. But some can likely still move about. For example, transposable element insertions are linked to a number of cases of hemophilia A, a genetic bleeding disorder.

But transposable elements are not just disruptive. They can have regulatory functions that help control the expression of other DNA sequences. When they are concentrated in centromeres, they may also help maintain the integrity of the genes fundamental to cell survival.

They can also contribute to evolution. Researchers recently found that the insertion of a transposable element into a gene important to development might be why some primates, including humans, no longer have tails. Chromosome rearrangements due to transposable elements are even linked to the genesis of new species like the gibbons of southeast Asia and the wallabies of Australia.

When the Human Genome Project first launched in 1990, technological limitations made it impossible to fully uncover repetitive regions in the genome. Available sequencing technology could only read about 500 nucleotides at a time, and these short fragments had to overlap one another in order to recreate the full sequence. Researchers used these overlapping segments to identify the next nucleotides in the sequence, incrementally extending the genome assembly one fragment at a time.

Since then, sequence patches have gradually filled in gaps of the human genome bit by bit. And in 2021, the Telomere-to-Telomere (T2T) Consortium, an international consortium of scientists working to complete a human genome assembly from end to end, announced that all remaining gaps were finally filled.

• With the completion of the first human genome, researchers are now looking toward capturing the full diversity of humanity.

This was made possible by improved long-read DNA sequencing technology capable of reading longer sequences thousands of nucleotides in length. With more information to situate repetitive sequences within a larger picture, it became easier to identify their proper place in the genome. Like simplifying a 1,000-piece puzzle to a 100-piece puzzle, long-read sequences made it possible to assemble large repetitive regions for the first time. But one complete genome doesn’t capture it all. Efforts continue to create diverse genomic references that fully represent the human population and life on Earth. With more complete, “telomere-to-telomere” genome references, scientists’ understanding of the repetitive dark matter of DNA will become more clear.

What is Human Genome Project?

The Human Genome Project (HGP) was the international, collaborative research program whose goal was the complete mapping and understanding of all the genes of human beings. All our genes together are known as our “genome.”

Goals:

• The main goals of the Human Genome Project were first articulated in 1988 by a special committee of the U.S. National Academy of Sciences, and later adopted through a detailed series of five-year plans jointly written by the National Institutes of Health (NIH) and the Department of Energy (DoE).
• Congress funded both the NIH and the DoE to embark on further exploration of this concept, and the two government agencies formalized an agreement by signing a Memorandum of Understanding to “coordinate research and technical activities related to the human genome.”
• James Watson was appointed to lead the NIH component, which was dubbed the Office of Human Genome Research. The following year, the Office of Human Genome Research evolved into the National Center for Human Genome Research.
• In 1990, the initial planning stage was completed with the publication of a joint research plan, “Understanding Our Genetic Inheritance: The Human Genome Project, The First Five Years, FY 1991-1995.” This initial research plan set out specific goals for the first five years of what was then projected to be a 15-year research effort.
• HGP researchers deciphered the human genome in three major ways:
• determining the order, or “sequence,” of all the bases in our genome’s DNA;
• making maps that show the locations of genes for major sections of all our chromosomes; and
• producing what are called linkage maps, through which inherited traits (such as those for genetic disease) can be tracked over generations.

APPLICATION OF HUMAN GENOME PROJECT

• The sequencing of the human genome holds benefits for many fields, from molecular medicine to human evolution.
• It helps in the identification of mutations that are linked to different forms of cancer.
• It helps in identifying the disease-causing gene in our body.
• The sequence of the DNA is stored in databases that are available to anyone on the internet.
• The U.S National Centre for Biotechnology Information stores the gene sequence in a database known as GenBank, along with sequences of known and hypothetical genes and proteins.
• The Genomics and Bioinformatics branch has developed due to this project.
• It has improved forensic science where genetic fingerprinting helps to match a suspect to the biological material found at a crime scene.

6. SC to examine practices in death penalty sentencing

Subject: Polity

Section: Supreme Court

Context: While hearing death sentence appeals since September 2021, the Supreme Court has repeatedly expressed concern over the manner in which trial courts and High Courts have carried out sentencing with very little (relevant) information.

What has caused the SC to examine practices in death penalty sentencing?

• The court is undertaking an exercise to reform the procedures by which information necessary in a death penalty case is brought before courts. In so doing, the Supreme Court is acknowledging concerns with the manner in which death penalty sentencing is being carried out. While the death penalty has been held to be constitutional, the manner in which it has been administered has triggered accusations of unfairness and arbitrariness.

How are judges supposed to choose between life and death sentences?

• In May 1980, when the Supreme Court upheld the constitutional validity of the death penalty in Bachan Singh’s case, a framework was developed for future judges to follow when they had to choose between life imprisonment and the death penalty.  At the heart of that framework was the recognition that the legislature in the Criminal Procedure Code had made it clear that life imprisonment would be the default punishment and judges would need to give “special reasons” if they wanted to impose the death sentence. Through the 1980 framework — popularly but inaccurately known as the “rarest of rare” framework — the Supreme Court said that judges must consider both aggravating and mitigating factors concerning the crime and the accused when deciding if the death penalty is to be imposed.
• The judgment also made it clear that life imprisonment as a sentence would have to be “unquestionably foreclosed” before judges imposed the death sentence.

What has happened to this framework in the four decades since Bachan Singh?

• The Supreme Court has repeatedly lamented the inconsistency in application of the Bachan Singh framework. Similar concerns have been expressed by the Law Commission of India (262nd Report). One of the main concerns has been the crime-centred approach to sentencing, often in violation of the mandate in Bachan Singh that factors relating to both the crime and the accused have to be considered. There has been widespread concern that the imposition of death sentences has been arbitrary

What is the reason for this?

• One of the main reasons is that very sparse sentencing information about the accused is brought before the judges. While the judgment in Bachan Singh did develop a framework, it was a framework that depended on the relevant information brought before the court. But the framework did not have any mechanisms to ensure the actual collection of such information and its presentation before judges.
• Also, sentencing judges have often dismissed the consideration of mitigating factors depending on their perception of the crime despite there being no basis in the law for dismissing the relevance of such factors. It points to a deeper gap — that there has been no real guidance on how judges must go about assigning weight to aggravating and mitigating factors, and how they should approach weighing one factor against another.

Who can collect all this information?

• The Supreme Court has recognised that it is important to collect this complex interplay of information sentencing is to be done in a proper manner. The judgments in Santa Singh (1976) and Mohd Mannan (2019) have recognised the interdisciplinary nature of such an exercise, and that it requires professionals other than lawyers to collect such information.

Is this practical in India’s justice system?

• There must be a very high degree of fairness in a system that is interested in subjecting individuals to the experience of death row, and ultimately taking lives through the instrumentality of law. With that as the starting point, the criminal justice system needs to do all it can to ensure that systems are created for procedural fairness.

Is death sentence banned?

• Death penalty is not yet prohibited under the International law. However, it’s abolition is encouraged and may be imposed within very strict limitations.
• According to the United Nations official data, today, more than two – third of the member states of the UN have either abolished the death penalty or they simply do not implement it.
• The General Assembly adopted a resolution in 2007 on a moratorium on the use of the death penalty. On 21 December 2010, it adopted a third resolution on the moratorium which was approved by a broader margin and stated that “ States still maintain the death penalty to progressively restrict its use, to reduce the number of offences for which it may be imposed, and to establish a moratorium on execution with a view to abolish the death penalty.”
• The International Covenant on Civil and Political Rights does not abolish death penalty, however, there are certain instruments that work towards the abolition of capital punishment. At the International level, the most important provision of law that deals with the death penalty is Article 6 of the International Covenant on Civil and Political Rights (ICCPR). During the draft of the ICCPR, only ten member nations had been signatories to it for the abolition of the death penalty.

7. Sikkim tax free

Subject: Economy

Section: Fiscal policy

Context:

The market share of Sikkim-based traders on the Multi Commodity Exchange

(MCX) in Mumbai climbed to 5.5 per cent from nil just over a couple of years ago as compared to some of the densely populated States that are seeing much less volume despite having a larger number of traders mainly due to the commodity market speculation by Sikkim resident traders and other states which use sikkim traders as proxy.

Cause of rise in commodity market speculation in Sikkim:-

Sikkim, an erstwhile kingdom, was merged into India on condition that its old laws and special status, as envisaged in Article 371(f) of the Constitution, remain intact. Thus, the State followed its own Sikkim Income Tax Manual 1948, which governed the tax laws. Under it, no resident was supposed to pay taxes to the Centre. However, in 2008 Sikkim’s tax laws were repealed which led to following measures by the Centre.

• Exemption from mandatory requirement of PAN-for investments in the securities market, commodity market and mutual funds, provided they gave a proof of residency, led to a decline in tax filings.
• Section 10 (26AAA by the Centre– Under this, the income accrued to the Sikkimese individuals in the State or by way of dividend or interest on securities from elsewhere was exempt from tax.

Concept:

Multi Commodity Exchange (MCX) as the name suggests is an exchange like BSE and NSE where commodities are traded. It is under the ownership of Ministry of Finance, Government of India.

It is a platform for commodity traders that facilitate online trading, settlement and clearing of commodity futures transactions, thereby providing a platform for risk management (hedging).

It was established in November 2003 under the regulatory framework of FMC (Forward Markets Commission).

In 2016, the FMC was merged with SEBI and MCX as an exchange that falls under the regulatory purview of SEBI.

It is India’s largest commodity derivatives exchange and located in Mumbai.

MCX offers options trading in gold and futures trading in non-ferrous metals, bullion, energy, and a number of agricultural commodities (mentha oil, cardamom, crude palm oil, cotton, and others).

Commodities traded include –

• Metal – Aluminium, Copper, Lead, Nickel, Zinc
• Bullion – Gold, Gold Mini, Gold Guinea, Gold Petal, Gold Petal ( New Delhi), Gold Global, Silver, Silver Mini, Silver Micro, Silver 1000.
• Agro Commodities – Cardamom, Cotton, Crude Palm Oil, Kapas, Mentha Oil, Castor seed, RBD Palm Olein, Black Pepper.
• Energy – Crude Oil, Natural Gas.

National Commodity & Derivatives Exchange Limited (NCDEX):

National Commodity & Derivatives Exchange Limited (NCDEX/ the Exchange) is an Indian-based agricultural product exchange with a large market share in the agricultural products segment.

It is composed of a Board of Directors with experience in the agricultural products market. The NCDEX main objective is to provide an exchange platform for market players seeking to trade in agricultural products.

It is a public limited company that was incorporated on 23 April 2003 under the Companies Act, 1956, beginning operations on 15 December 2003  and regulated by the SEBI.

Future and Option Transactions:

Derivatives are products whose value is derived from the value of one or more basic variables, which are called Underlying Assets. The underlying asset can be equity, index, foreign exchange (Forex), commodity or any other asset. Futures and options represent two of the most common forms of “Derivatives”.

• A Futures Contract is an agreement between buyer and seller to buy or sell an asset at a certain time in the future at a certain price. The contract has to be honored by both parties on the due date. This is used by traders or speculators who are engaged in arbitrage. Arbitrage means that the trader shall buy the stock at a low price today as he wants to sell it on a future date at a high price.

E.g: If a farmer is producing corn and it takes 1 year for his produce to develop. Currently the price of the corn is Rs. 100 per kg and after 1 year he wants to sell it but he doesn’t know the price of the corn. So he enters into a forward contract or a futures contract with a buyer to sell at say “Rs. 110 per kg” after 1 year.

Now the buyer has decided this rate based on some mathematical calculations which could involve current rate of the commodity, probable future date, risk free returns etc. So he is willing to take the risk and buy corn at Rs. 110 per kg from the producer. He might make a profit or loss but this cannot be predicted but the producer makes a decent profit.

The report on India’s Demographic Dividend released by industry body CII argues that the rise in India’s working age population is necessary but not sufficient for it to sustain the economic growth.

• An option is a contract that gives the buyer the Right but not the obligation to buy a commodity at a specified price at a specified future date.

If a farmer has 50 kg of corn and wants to sell it for Rs. 50000. Now a trader is interested to buy but he doesn’t have the money currently. So he enters into an “option contract” with the farmer. This contract states that the buyer shall have the Option to purchase the Corn at a specified price at a future date say 3 months. The buyer shall have to pay the price of the Option which is say Rs. 1000.

Now if the buyer returns after 3 months and the price of the corn is Rs. 5 lakh but he can still buy it for Rs. 50000 as he has bought a contract and wants to exercise his Right to buy. He thus makes a profit.

However if the Corn market crashes and the produce is worth only Rs. 5000 now he can exercise his Right to not buy the Corn from the farmer and the option contract expires. Thus he loses only the Rs. 1000 he invested in the Option.

8. Demographic Dividend

Subject: Economy

Section: Economic Development

Context:

About the report:

The report on India’s Demographic Dividend released by industry body CII argues that not only is there a shortage of time, but also that the rise in India’s working age population is necessary but not sufficient for it to sustain the economic growth.

About the report

• India will add 183 million people to the working age group of 15-64 years between 2020-50 i.e. 22% of the incremental global share as per the UN Population Statistics database.
• If India does not create enough jobs and its workers are not adequately prepared for those jobs, its demographic dividend may turn into a liability. Thus, education and skill development will be the biggest enablers for reaping this dividend.
• 2020-50 provides India with a short window of opportunity to harness its demographic dividend as India will add 101 million people in the working age population between 2020-30, this number will reduce to 61 million and then to 21 million for 2030-40 and 2040-50, respectively. It is expected that India’s working age population will start declining in the decade post 2050.

What is demographic dividend?

Demographic dividend means that the country’s dependency ratio, as measured by the share of the young and the elderly as a fraction of the population, will come down more sharply in the coming decades. Increase in the share of working age population means more workers in the productive age groups that will add to the total output, generate more savings, accrue more capital per worker, and all these leading to higher economic growth.

Issues:-in reaping the demographic dividend

• Learning loss due to the COVID pandemic
• Labour market imbalances –due to shortage skill skilled labour and skill mismatch.. In 2019-20, only 73 million of India’s 542 million strong workforce received any form of vocational training (whether formal or informal).
• The proportion of formally skilled workers as a percentage of total workforce stands at 24 per cent in China, 52 percent in USA, 68 per cent in UK and 80 per cent in Japan, against a paltry 3 per cent in India.

Suggestions:

• The report suggests that youth may be offered skill vouchers and scholarships which can be linked to the national skill qualification framework. Thus leading to a transformation from supply-based to demand-based skill system.
• The government should also consider setting up multi skill training institutes in MSME clusters to impart skills based on local demand.
• Corporate investment in employee education and training should continue to play a critical role to meet the demand for high-skilled workers. Thus, greater government-industry collaboration holds the key for skilling the burgeoning workforce.

Concept:

Definition

According to United Nations Population Fund (UNFPA), demographic dividend means, “the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older)”.

With fewer births each year, a country’s working-age population grows larger relative to the young dependent population. With more people in the labor force and fewer children to support, a country has a window of opportunity for economic growth if the right social and economic investments and policies are made in health, education, governance, and the economy.

Causes-Change in population structure occur due to

• Falling birth rate
• Lower fertility rate-As fertility declines, the share of the young population falls and if this decline is rapid, the increase in the population of working ages is substantial, yielding the ‘demographic dividend’.
• Increased longevity

Falling birth rate and lower fertility rate will contribute to a reduction in expenditure, increased longevity will lead to an increase in the size of the working-age population.

India’s trends

• India has one of the youngest populations in an aging world. In 2022, the median age in India will be just 29, compared to 37 in China and the US, 45 in Western Europe, and 49 in Japan.
• Since 2018, India’s working-age population (people between 15 and 64 years of age) has grown larger than the dependent population — children aged 14 or below as well as people above 65 years of age. This bulge in the working-age population is going to last till 2055, or 37 years from its beginning.
• This transition happens largely because of a decrease in the total fertility rate (TFR, which is the number of births per woman) after the increase in life expectancy gets stabilized.
• While India is a young country, the status and pace of population ageing vary among States. Southern States, which are advanced in demographic transition, already have a higher percentage of older people.
  • While Kerala’s population is already ageing, in Bihar the working age cohort is predicted to continue increasing till 2051.
  • By 2031, the overall size of our vast working age population would have declined in 11 of the 22 major States.
  • The differences in age structure reflect differences in economic development and health of the states.

9. Export basket

Subject: Economy

Section: External Sector

Context:

India’s exports of goods surged to a record high of $417.8 billion in FY22.

Exports for the year were 43.2 percent higher than shipments of $291.8 billion in FY21 and 26.6 percent higher than exports of $330.1 billion in FY19, which saw India’s previous record high.

Causes:– both value and volume of exports increased due to Covid pandemic, supply chain diversification initiatives, Ukraine crisis etc..

• Majority rise in volume of export-Higher shipments of petroleum products, engineering goods, gems and jewellery and textile products, according to the data released by the Commerce Ministry.
• Significant jump in exports to developed countries such as the US, the Netherlands, Hong Kong, Singapore, the UK, Belgium and Germany.
• Higher global commodity prices have boosted the value of India’s exports.

FY22 is also expected to mark record high imports and trade deficit for India, with imports for the first 11 months of the fiscal having grown by 59.2 per cent to $550.1 billion and almost doubling India’s trade deficit to $176.1 billion in the period.

India’s export basket:

Export Commodities (% share in total export)

Note- In 2020-21 top 5th good to be exported was electric machinery and equipment with total share in export at 2.8% and top 6th Organic chemicals with a share of 2.6%

Agricultural Export Products($US Billion)

The USA remained the top export destination, followed by UAE and China. Belgium has replaced Malaysia and entered into the top 10 leading export destinations of India

Export Destinations of India in 2021-22 (Apr-Nov) by % share

India has diversified its export destinations in the last 25 years, yet more than 40% India’s exports are still accounted for by only 7 countries.