17 April 2024 CNA
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TABLE OF CONTENTS
A. GS 1 Related B. GS 2 Related C. GS 3 Related D. GS 4 Related E. Editorials INTERNATIONAL RELATIONS 1. Israel should stand down to avoid a regional war in West Asia POLITY 1. Reforms needed in the voting process ECONOMY 1. Why has India allowed FIIs to invest in its green bonds? F. Prelims Facts 1. IMF forecasts India’s economy to grow 6.8% this fiscal year 2. Imported inflation: how import costs can increase the prices of goods and services G. Tidbits H. UPSC Prelims Practice Questions I. UPSC Mains Practice Questions
A. GS 1 Related
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B. GS 2 Related
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C. GS 3 Related
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D. GS 4 Related
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E. Editorials
Category: INTERNATIONAL RELATIONS
1. Israel should stand down to avoid a regional war in West Asia
Syllabus: GS-2, Effect of Policies and Politics of Developed and Developing Countries on India’s Interests
Mains: Middle East on the boil and possible solution for de-escalation
Introduction: Escalating Tensions in West Asia
- Iran’s Retaliatory Strike: Following the bombing of its embassy in Damascus, Iran launched a significant drone and missile attack on Israel, resulting in casualties among Iranian military personnel. This action marked a departure from previous responses, targeting Israel directly.
- International Response: Israel, aided by allies like the US, UK, France, and Jordan, successfully intercepted the majority of Iranian projectiles. While some praised Israel’s defence capabilities, others, including allies of Israel, urged restraint to prevent further escalation and avoid a regional war.
Roots of Conflict and Failed Policies:
- Context of Conflict: The region’s volatility stems from longstanding issues, including Israel’s occupation of Palestinian territories and the ongoing conflict with groups like Hamas. Previous attacks, such as Hamas’ assault on Israel from Gaza, have fueled retaliatory measures and exacerbated tensions.
- Failure of Leadership: Prime Minister Benjamin Netanyahu’s security strategies have faced criticism, with failures to prevent attacks and effectively manage conflicts. Israel’s military campaigns in Gaza and provocative actions in the region, including the bombing of Iran’s embassy, have heightened the risk of all-out war.
Potential Consequences and Call for De-escalation:
- Risk of Regional War: Both Israel and Iran possess significant military capabilities, raising concerns that a full-scale conflict could devastate the region and disrupt global energy supplies.
- The Urgency for De-escalation: Amid mounting tensions, there is a pressing need for Israel to recognize the opportunity presented by its successful defence systems and choose de-escalation over further confrontation. Doing so could mitigate the risk of a broader conflict and promote stability in West Asia.
Nut Graf: Iran’s direct strike on Israel escalates tensions in West Asia. Amidst failed policies and the risk of regional war, calls for Israeli de-escalation grow, emphasizing the need to avert catastrophe and promote stability.
Category: POLITY
1. Reforms needed in the voting process
Syllabus: GS-2, Salient Features of the Representation of People’s Act
Mains: Making EVM robust
Introduction:
- EVMs were first introduced on a trial basis in 1982 in Kerala and were gradually deployed across India in subsequent elections.
- Concerns about EVMs include susceptibility to hacking, lack of scientific criteria in matching EVM count with VVPAT slips, and the potential for booth-wise profiling and intimidation.
International Practices:
- Many Western democracies like England, France, and the U.S. have reverted to paper ballots for national elections after trials with EVMs.
- Germany declared the use of EVMs unconstitutional in 2009, while Brazil continues to use them.
- Among India’s neighbours, Pakistan does not use EVMs, and Bangladesh reverted to paper ballots after experimenting with EVMs in 2018.
Features of EVMs:
- EVMs have significantly reduced booth capturing, eliminated invalid votes, and improved the efficiency of the electoral process.
- Mechanisms like random allocation of EVMs, mock polls, and sharing serial numbers with candidates’ agents ensure integrity.
- Despite advantages, doubts persist, with the primary concern being susceptibility to hacking and lack of comprehensive verification mechanisms.
Way Forward:
- While 100% use of VVPAT provides some assurance, additional steps are needed to ensure robustness in the counting process.
- The sample size for matching EVM count with VVPAT slips should be determined scientifically by dividing states into large regions.
- In case of any error, full counting of VVPAT slips for the concerned region should be conducted to ensure accurate results.
- Introducing ‘totaliser’ machines to aggregate votes from multiple EVMs before revealing candidate-wise counts can enhance voter anonymity and confidence.
Nut Graf: Despite benefits, concerns about Electronic Voting Machines (EVMs) persist, including hacking vulnerabilities. To address these, a scientific approach to VVPAT verification and the introduction of totaliser machines for aggregated counting are proposed.
Category: ECONOMY
1. Why has India allowed FIIs to invest in its green bonds?
Syllabus: GS-3, Inclusive Growth and issues arising from it
Mains: Green bonds
Context: The Reserve Bank of India (RBI) has allowed Foreign Institutional Investors (FIIs) to invest in India’s Sovereign Green Bonds (SGrBs) to fund projects aimed at accelerating the country’s transition to a low-carbon economy.
Significance of FIIs Investment:
- Widens capital pool: FIIs, including insurance companies, pension funds, and sovereign wealth funds, increase the available capital for India’s ambitious green goals, such as achieving 50% of energy from non-fossil fuel sources by 2070 and reducing carbon intensity by 45%.
- Diversification and regulatory support: FIIs seek to diversify green investments and benefit from regulatory support, particularly in developed countries, making India’s green bonds an attractive investment opportunity.
Green Transition Acceleration:
- Utilizing green G-Secs: India issued SGrBs worth ₹16,000 crores to fund projects like offshore wind harnessing, grid-scale solar power, and promoting electric vehicles.
- Green taxonomy framework: To prevent greenwashing and ensure transparency, India established its SGrB Framework in 2022, detailing eligible projects and receiving validation from Norway-based Cicero.
Conclusion: Leveraging FIIs’ interest in green investments and ensuring credible audit trails for project selection will optimize the deployment of proceeds from SGrBs, facilitating India’s transition to a sustainable, low-carbon economy.
Nut Graf: The RBI’s decision to allow FIIs to invest in India’s Sovereign Green Bonds expands funding avenues for ambitious green initiatives, driving the country’s transition to a low-carbon economy through increased capital and transparent project selection.
F. Prelims Facts
1. IMF forecasts India’s economy to grow 6.8% this fiscal year
Context: The International Monetary Fund (IMF) has upgraded India’s GDP growth forecast for the fiscal year 2024/25 to 6.8%, an increase of 0.3 percentage points from its previous projection in January.Â
About:
- The IMF anticipates a 6.5% expansion in the following year. This adjustment reflects improved economic prospects despite ongoing global challenges.
- In its World Economic Outlook for April 2024, the IMF highlighted the resilience of the global economy, which has defied expectations of stagnation or recession despite post-pandemic supply disruptions, geopolitical tensions such as Russia’s invasion of Ukraine, and tightening monetary policies worldwide. However, concerns remain regarding inflation, particularly in service sectors, despite declines in energy prices.
- IMF economists underscored the need for policy reforms to liberalize foreign investment and stimulate private demand, potentially boosting exports and job creation. They emphasized the importance of addressing unemployment concerns and ensuring a balanced risk outlook for the Indian economy.
Significance: While the IMF projects a soft landing for global inflation, vigilance is warranted, especially as services inflation remains high. Efforts to minimize economic scarring and navigate potential challenges in the path of disinflation are essential to sustain growth and economic stability.
2. Imported inflation: how import costs can increase the prices of goods and services
Context: Imported inflation, the uptick in a nation’s prices due to increased import costs, poses significant economic challenges.Â
About:
- A weakening domestic currency triggers this phenomenon, as it compels consumers to pay more in local currency for foreign goods. This depreciation can result from various factors, including interest rate hikes in major economies, exacerbating import expenses across industries.
- Even without currency devaluation, rising import costs can drive inflation. For instance, surges in global commodity prices, like crude oil, can inflate costs for economies reliant on imports, leading to widespread price hikes.
- Critics, however, contest the notion that escalating import expenses directly causes inflation. They argue that consumer demand fundamentally determines prices, not production costs. This perspective, rooted in economic theories like Carl Menger’s value imputation, suggests that prices reflect consumer preferences rather than input costs.
Significance: Currency depreciation is seen more as a symptom than a cause of inflation, reflecting increased demand for foreign goods rather than driving price hikes independently. In essence, it’s consumer demand for imports that influences both import costs and currency devaluation, underscoring the complex dynamics of imported inflation in the global economy.
G. Tidbits
Nothing here for today!!!
H. UPSC Prelims Practice Questions
Q1. Which of these countries border Iran?
- Turkmenistan
- Kuwait
- Azerbaijan
- Armenia
Choose the correct answer from the code given below:
- Only one
- Only two
- Only three
- All four
CHECK ANSWERS:-
Answer: c
Explanation: Kuwait does not border Iran. It borders Saudi Arabia and Iraq.Â
Q2. Consider the following statements:
- Green bonds are issued by companies, countries & multilateral organisations to exclusively fund projects that have positive environmental or climate benefits.
- India released its first Sovereign Green bond framework in 2022.Â
Which of these statements is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
CHECK ANSWERS:-
Answer: c
Explanation: Both the statements are correct.Â
Q3. Consider the following statements:
- Imported inflation occurs when the cost of imported goods and services rises, leading to higher overall domestic prices.
- A major cause of imported inflation is an increase in the value of the local currency.
Which of these statements is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
CHECK ANSWERS:-
Answer: a
Explanation: A major cause of imported inflation is where a fall in the value of the local currency increases the cost of purchasing foreign goods.
Q4. Consider the following statements with reference to the Asian Development Bank (ADB):
- It was established in 1966 to foster economic growth and cooperation in the Asia-Pacific Region.
- Its headquarters is in Beijing, China.
- ADB has 68 members, all from Asia and the Pacific.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
CHECK ANSWERS:-
Answer: a
Explanation: It is headquartered in Manila, Philippines. It has 68 members of which 49 are from within Asia and the Pacific and 19 from outside.
Q5. Consider the following statements with respect to the National Green Tribunal:
- NGT was formed based on recommendations of the Gadgil Committee.
- The NGT has the power to grant relief in the form of compensation and damages to affected persons.
- NGT has jurisdiction over criminal and civil cases related to environmental offenses.
How many of the statements given above are incorrect?
- Only one
- Only two
- All three
- None
CHECK ANSWERS:-
Answer: b
Explanation: NGT was formed based on recommendations of the Supreme Court and the Law Commission. NGT does not have jurisdiction over criminal cases; it deals with civil cases related to environmental issues.
I. UPSC Mains Practice Questions
- Examine the role of Sovereign Green Bonds in financing India’s climate goals. Discuss how the inclusion of Foreign Institutional Investors (FIIs) in the purchase of these bonds could impact India’s transition to a sustainable economy. (10 marks, 150 words) [GS-3, Economy]
- Discuss the implications of administrative lapses on urban planning and environmental sustainability. (10 marks, 150 words) [GS-3, Environment]
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