CNA 04 July 2023:- Download PDF Here
TABLE OF CONTENTS
A. GS 1 Related B. GS 2 Related C. GS 3 Related ENVIRONMENT 1. A stocktake before the Global Stocktake D. GS 4 Related E. Editorials INTERNATIONAL RELATIONS 1. India should refuse America’s ‘NATO Plus’ bait POLITY 1. The legality of the Delhi Ordinance F. Prelims Facts 1. Greedflation and its counter arguments G. Tidbits 1. RBI reports 76% of ₹2,000 notes return 2. ‘Human error’ led to Balasore train tragedy, report says, pinning blame on signal dept. 3. ‘Indian refiners paying in yuan for Russian oil’ H. UPSC Prelims Practice Questions I. UPSC Mains Practice Questions
A. GS 1 Related
Nothing here for today!!!
B. GS 2 Related
Nothing here for today!!!
C. GS 3 Related
1. A stocktake before the Global Stocktake
Syllabus: Environment: Conservation, environmental pollution and degradation, environmental impact assessment, disaster management.
Prelims: Awareness of international environmental agreements and conferences
Mains: Climate change-related issues, global efforts to combat climate change
Context:
The Bonn Climate Change Conference marked an important milestone in climate negotiations before the Global Stocktake under the Paris Agreement. The conference addressed key issues such as mitigation pathways, climate finance, and just transition pathways.
Introduction
- The Bonn Climate Change Conference served as a significant milestone in climate negotiations before the first Global Stocktake under the Paris Agreement.
- The Global Stocktake is mandated to assess collective progress towards long-term global climate goals, including greenhouse gas reduction, resilience building, and securing finance.
Mitigation Pathways and Climate Finance
- Mitigation pathways compatible with the temperature goal and climate finance flows were points of contention between developing countries and the Environmental Integrity Group.
- Developing countries were urged to be more ambitious in emission reduction, while developed countries emphasised the need for adequate finance to support developing nations.
Just Transition Pathways
- Climate change negotiators reached a compromise on “just transition pathways” during the conference.
- India’s climate policy emphasised the need for financing a “just transition” in sectors like energy and transport to achieve net-zero emissions by 2070.
- Just transition pathways aim to ensure a fair and inclusive transformation towards low-carbon development.
Aligned with Paris Agreement Principles
- The adoption of just transition pathways aligns with the Paris Agreement’s self-differentiation principle.
- Developing countries were able to strengthen just transition pathways, while developed countries focused more on mitigation efforts.
- Just transition also respects soft obligations from the UN Sustainable Development Goals and the ILO’s guidelines on just transition.
Mobilising Climate Finance
- Climate finance flows are not aligned with countries’ identified priorities in their nationally determined contributions.
- The $100 billion annual climate finance goal has not been fully realized, and adaptation finance lags behind mitigation finance.
- The Environmental Integrity Group suggested that the Mitigation Work Programme should contribute to financing, deviating from major international public finance transfers.
Integrating the World Bank and Ensuring Equity
- Efforts to align climate finance with the Paris Agreement’s temperature goals require integrating the World Bank in climate change negotiations and holding it accountable for investments in fossil fuels.
- The pursuit of the Global Stocktake should comply with principles of equity, justice, and fairness.
Nut Graf: The Bonn Climate Change Conference highlighted the need for developing countries to be more ambitious in emission reduction while emphasising the importance of adequate finance from developed nations. The conference also focused on the adoption of “just transition pathways” and the alignment of climate finance with the Paris Agreement’s goals. The upcoming Global Stocktake will provide guidance for countries to enhance their climate actions.
D. GS 4 Related
Nothing here for today!!!
E. Editorials
Category: INTERNATIONAL RELATIONS
1. India should refuse America’s ‘NATO Plus’ bait
Syllabus: GS-2, Effect of policies and politics of developed and developing countries on India’s interests
Mains: NATO Plus and Critical Analysis of India’s Inclusion into NATO
Recent Developments
- Recently during the Prime Minister of India’s visit to the U.S., the Senate India Caucus Co-Chair shared his plans to table a bill to bring India into the NATO Plus fold.
- The United States Permanent Representative to NATO quoted during a virtual press briefing in 2023 that the NATO alliance is open to more engagement, should India seek that.
- A recent United States congressional report stated the United States should strengthen the NATO Plus arrangement to include India.
- India’s External Affairs Minister has stated that India has no intention of joining NATO, citing that the military alliance is not suitable for India.
What is NATO?
- NATO is a transatlantic military alliance made up of 31 nations, with the majority of its members being from Europe.
- Finland has become the 31st member of the NATO alliance.
- NATO appears to be gaining much-needed ground for survival as a result of Russia’s invective against it and the invasion of Ukraine.
Read more about the North Atlantic Treaty Organization (NATO) here.
What is NATO Plus?
- NATO plus refers to a security partnership between NATO and the five nations that make up the United States treaty allies: Australia, New Zealand, Japan, Israel, and South Korea.
- NATO Plus is a privileged group within the alliance umbrella that includes AUKUS countries as well as Japan and South Korea.
India’s Inclusion in NATO Plus
- The inclusion of India in NATO Plus is being proposed in order to confront China and strengthen Taiwan’s deterrent.
- Australia, Japan, South Korea, New Zealand, and Israel are five more NATO Plus members that are regarded as US friends.
- The US is currently inviting India to join this wider coalition that stands against enemies.
Why did the US invite India to join NATO?
- The United States is of the opinion that India should participate in NATO in order to protect its borders from Chinese intrusion and to strengthen international security against Chinese aggression in the Indo-Pacific area.
- It aspires to improve international defense cooperation and triumph over China in the strategic rivalry.
- The US and India’s close alliance would be strengthened by including India in NATO Plus security arrangements, which would prevent Chinese aggression and strengthen global security.
- The US seeks to isolate Russia, obtain India’s defense contracts, and take advantage of the country’s advantageous location in the Indo-Pacific.
Gains with India being a NATO member
- India might benefit from a security umbrella, protection from prospective attacks, and deterrent if it joins NATO Plus in view of the growing regional security issues.
- The expansion of NATO is viewed as a geopolitical measure to further secure the security of countries under Chinese pressure, such as Taiwan and India.
- Greater military support for India, particularly in the Indo-Pacific, would result from joining NATO.
- Additionally, it conveys to China the importance of fortifying partnerships among its rivals.
- Additionally, India would likely have access to developments in military technology and intelligence exchange among NATO members.
- India might have access to cutting-edge military innovations, platforms for intelligence-sharing, and member-state interoperability. This might improve India’s defense capability and modernization initiatives.
Also read: Membership in NATO
Concerns about India being a NATO member
- India’s Strategic Autonomy in Danger: The strategic autonomy India enjoys over its nuclear weapons may be impacted by NATO membership, which could result in restrictions on free trade.
- Tussle in India – Russia Ties: If India joins the US-led NATO alliance which is backing Ukraine in the current war with Russia, it will directly impact India’s strong, established and deep ties with Russia.
- US Military Base in India: The US would eventually have a military facility in India if it joined NATO Plus considering the other NATO+ members, who are all currently home to US military installations. India, on the other hand, thinks it can defend itself against any Chinese assault without such an arrangement.
- Countering Chinese Aggression: India emphasizes China’s current economic problems, which is demonstrated by decreased imports and exports, undermining the need for NATO membership to thwart Chinese aggression. India insists that it is capable of meeting any difficulties that China may present on its own.
- India will be Dragged into American Conflicts: India would effectively be drawn into American battles if it joined NATO. Due to China’s threats, it may seem alluring to join an alliance system led by the United States, but doing so could ultimately be damaging and unproductive.
- Limit India’s Freedom of Action: India’s security will be made more difficult if it joins the U.S.’s Taiwan strategy under NATO Plus at a time when it has its own bilateral difficulties with China and an Indo-Pacific strategy.
Way Forward
India’s priority is to confront its own regional dynamics, which include a distinct set of security concerns such as border disputes, terrorism, and regional conflicts. Although NATO has some capabilities to address these problems, it’s bigger geopolitical agenda, which spans from Eurasia to the Indo-Pacific, may divert resources and attention from these urgent problems, making it less helpful to India. While China still dominates its summits, India’s posturing through the Quad now appears more promising than the NATO Plus bait.
Nut Graf: While NATO’s initial focus was on the Soviet Union and is now on Russia, NATO Plus is unmistakably focused on limiting China. Some academics even predict the start of Cold War 2.0 as NATO expands. Despite the temptations to join the NATO plus grouping considering the Chinese threats, India should take the middle path and give utmost importance to strategic autonomy in matters of security and defence.
1. The legality of the Delhi Ordinance
Syllabus: GS-2, Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein.
Mains: GNCTD Act and Validity of the Ordinance
Background:
- The President’s Ordinance amending the Government of National Capital Territory of Delhi Act of 1991 (GNCTD Act) removed some services from the Delhi government’s purview.
- The Supreme Court had already restored the services to the Delhi government in a landmark decision. The Ordinance invalidates the Supreme Court’s decision.
- The Court had determined that the paralysis of government that would result from a lack of authority over an administration’s personnel could not have been the objective of the Constitution’s framers when they incorporated Article 239AA.
Study in detail about the Government of NCT of Delhi (Amendment) Act, 2021.
Validity of the Ordinance
- The Delhi Ordinance that overturned the court’s ruling poses severe legal and constitutional concerns.
- The first concern is whether the Court’s ruling can be overturned by a President-issued Ordinance or a Bill approved by Parliament.
- The Supreme Court has ruled in numerous cases that because Parliament lacks judicial authority, it cannot overturn the court’s ruling without altering the decision’s foundation.
- The Ordinance does not provide any justification for overturning the court’s ruling.
- The Supreme Court relied on Article 239AA of the Constitution in making its decision to place the services under the control of the Delhi Assembly and the government.
- The Executive and Legislative have equal authority, hence the Government of NCTD has complete control over the provision of services.
- No one may be told by a higher authority that a court order is invalid or should not be followed.
- The Ordinance is no longer tenable in court since it offers no new justification for overturning the ruling.
Also read: Constituent Assembly Debate on Ordinance Making Power of the President
Overriding the Chief Minister
- The National Capital Civil Services Authority, which consists of a chairman and two members, is granted authority under the Ordinance over posting, transfer, and disciplinary actions.
- The Chief Secretary and the Home Secretary are added as members, with the Chief Minister serving as chairman.
- The two officers will make all decisions about posting, transfer, disciplinary actions, etc., and the Chief Minister’s opinion won’t matter.
- The Delhi Lieutenant-Governor will then receive these decisions, and his or her choice will be final.
Other key provisions
- Another peculiar feature of this Ordinance is that if the secretary to the council of ministers believes that a cabinet decision is not in compliance with the law or the rules of procedure, he may bring it to the Lieutenant Governor’s attention for his decision.
- The secretary effectively has the authority to reverse a cabinet decision. The secretary just needs to have an opinion, that’s all.
- In response, he can take action by recommending the Lieutenant Governor, who has the authority to revoke the cabinet decision.
- Another clause establishes a new process for calling a special Assembly session and proroguing it.
- The government makes the choice to call a session of the legislature under the current constitutional framework. The governor then receives it and signs the summons.
- According to this new procedure, the Lieutenant Governor and the Chief Minister must first be consulted for their “opinion” before the summons to the Assembly is issued.
Conclusion
Supplementing the provisions does not imply creating contradictory provisions. The latest amendment does not grant the Parliament any authority to pass legislation giving the Lieutenant Governor complete authority over the management of Delhi’s territory. It also does not give the President the authority to pass legislation giving officials the authority to review cabinet decisions or to remove the Chief Minister in cases involving posting, transfer, and disciplinary measures.
Nut Graf: The President’s Promulgated Ordinance removed services from the Delhi government’s purview. However, the Supreme Court has ruled in a significant number of cases that because Parliament lacks judicial authority, its judgment cannot be overturned.
F. Prelims Facts
1. Greedflation and its counter arguments
Syllabus: GS3- Economy
Prelims: Greedflation
Details
- Greedflation refers to price inflation caused by corporate greed for high profits.
- Progressives in the United States have accused corporate greed as a major reason for historically high price inflation in the U.S. since the pandemic.
Proponents of Greedflation Theory
- Corporate profit margins have risen significantly since the pandemic, despite the struggling larger economy.
- Allegedly, U.S. corporations increased prices of goods beyond what was necessary to compensate for higher input costs due to supply chain bottlenecks.
- Seen as a sign of increased market dominance by corporations.
- Some proponents call for efforts to rein in the market power of large corporations and even advocate for a ban on price hikes to prevent “profiteering.”
Questioning the Narrative
- Many economists question the validity of the greedflation argument, seeing it as a political narrative rather than a serious economic explanation for high inflation.
- Businesses set prices based on what consumers are willing to pay, not arbitrary decisions driven solely by corporate greed.
- Ultimately, consumers determine the price of any product in the market, not just corporations.
The Primacy of Consumers
- Inflation refers to a general rise in the price level across the economy, not just individual goods and services.
- Corporations can influence the overall price level by reducing supply, but there is no evidence of a deliberate reduction in the output of U.S. corporations.
- Current high inflation is better explained by the U.S. Federal Reserve’s expansionary monetary policy during the pandemic, increasing money supply and causing demand-pull inflation.
Where Did the Profits Come From?
- Rising input costs have outpaced the pace at which consumer goods prices have risen, making the rise in corporate profit margins surprising.
- Large U.S. corporations may have benefited from the demise of smaller businesses during the pandemic, capturing more market share.
- Rising profit margins may indicate increased market dominance but do not necessarily cause high inflation.
Comparison with Cost-Push Inflation
- Greedflation has been compared to other theories of “cost-push” inflation, attributing inflation to a rise in input costs.
- Critics argue that the cost of producing any good is determined indirectly, but ultimately, by consumers themselves through competitive bidding in the market.
G. Tidbits
1. RBI reports 76% of ₹2,000 notes return
- According to the Reserve Bank of India (RBI), 76% of the ₹2,000 banknotes in circulation as of May 19, 2023, have been returned.
- The RBI is urging members of the general public to deposit or exchange their ₹2,000 banknotes within the next three months.
- As of June 30, the total value of ₹2,000 banknotes received back from circulation since May 19 amounts to ₹2.72 lakh crore.
- The remaining banknotes in circulation as of June 30 have a value of ₹0.84 lakh crore.
- Approximately 87% of the total returned banknotes in ₹2,000 denomination are in the form of deposits, while the remaining portion has been exchanged for other denomination banknotes.
- The total value of ₹2,000 banknotes in circulation, which was ₹3.62 lakh crore on March 31, 2023, has decreased to ₹3.56 lakh crore as of May 19, 2023.
2. ‘Human error’ led to Balasore train tragedy, report says, pinning blame on signal dept.
- A report by the Commissioner of Railway Safety blames lapses in the Signal and Telecommunication (S&T) department that were found to be responsible for the Balasore train collision.
- The report points out specific errors in the signalling-circuit alteration at the north signal goomty (track switch) of the Bahanaga Bazaar station.
- Lapses in the execution of signalling work related to the replacement of the electric lifting barrier at the level crossing gate 94 also contributed to the collision.
- Human error and a failure of the fail-safe method were identified as factors contributing to the accident.
- These lapses led to wrong signalling to Train 12841 (Shalimar-Chennai Coromandel Express), resulting in a rear collision with a goods train and the derailment of Train 12864 (Yeshwantpur-Howrah Express).
- The report also emphasises the need for corrective measures based on a past incident.
- Recommendations for the Railway Ministry include updating documentation, following standard practices, conducting tests, and issuing competency certificates for modification work.
3. ‘Indian refiners paying in yuan for Russian oil’
- Indian refiners have started paying for some oil imports from Russia in Chinese yuan due to Western sanctions forcing Moscow and its customers to find alternatives to the dollar for settling payments.
- The global trade dynamics have been reshaped due to Western sanctions imposed following Russia’s invasion of Ukraine, resulting in India becoming the primary purchaser of seaborne Russian oil.
- Due to international sanctions that have excluded Moscow from the dollar and euro financial networks, the yuan is increasingly becoming significant in Russia’s financial system, even though the U.S. dollar has traditionally been the dominant global oil currency, including for India.
- Indian Oil Corporation became the first to pay for some Russian purchases in yuan.
- The rise in yuan payments contributes to Beijing’s efforts to internationalise its currency, with Chinese banks promoting its use for the Russian oil trade.
- Some non-dollar payments for Russian oil have also been settled in the United Arab Emirates dirham.
- Indian refiners prefer to pay in dollars but sometimes pay in other currencies like dirham and yuan when sellers ask for it.
H. UPSC Prelims Practice Questions
Q1. Consider the following statements with reference to the Paris Agreement:
- It aims to substantially reduce global greenhouse gas emissions to limit the global temperature increase to 2 degrees Celsius or even further to 1.5 degrees.
- Countries are expected to submit updated national climate action plans, known as Nationally Determined Contributions (NDCs), every five years.
- To limit global warming to 1.5°C, greenhouse gas emissions must decline by 43% by 2030.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
CHECK ANSWERS:-
Answer: c
Explanation:
The Paris Agreement aims to limit global warming to below 2°C, with a strive for 1.5°C. Countries implement it through NDCs on a five-year cycle, requiring a 43% emission reduction by 2030 to achieve the 1.5°C target.
Q2. Which of the following best describes the concept of ‘Greedflation’?
- Greedflation is a term used to describe the wage-price spiral that leads to inflation.
- Greedflation refers to price inflation caused by a corporate desire for higher profits.
- Greedflation is a phenomenon where central banks print excess money leading to inflation.
- Greedflation refers to excessive consumer demand causing inflationary pressures.
CHECK ANSWERS:-
Answer: b
Explanation:
Greedflation simply means (corporate) greed is fuelling inflation. In other words, instead of the wage-price spiral, it is the profit-price spiral that is in play.
Q3. Consider the following countries in relation to the concept of "NATO Plus":
- India
- New Zealand
- Japan
- Israel
How many of the countries mentioned above are part of the concept of “NATO Plus”?
- Only one
- Only two
- Only three
- All four
CHECK ANSWERS:-
Answer: c
Explanation:
“NATO plus” refers to a security arrangement of NATO and the five treaty allies of the U.S. — Australia, New Zealand, Japan, Israel, and South Korea as members — to enhance global defence cooperation.
Q4. Which of the following is not a function of the Reserve Bank of India?
- Issuing currency notes and coins
- Regulating the banking system
- Banker to the Government
- Advancing loans to the public
CHECK ANSWERS:-
Answer: d
Explanation:
The Reserve Bank of India issues currency, regulates banks, and acts as the Government’s banker. It does not advance loans to the public.
Q5. According to the IMF's Special Drawing Rights (SDR) basket, which currency is included along with the US Dollar, Euro, Japanese Yen, and British Pound?
- Indian Rupee
- Chinese Yuan
- Canadian Dollar
- Australian Dollar
CHECK ANSWERS:-
Answer: b
Explanation:
The SDR is based on a basket of five currencies—the US dollar, the euro, the Chinese yuan, the Japanese yen, and the British pound sterling.
CNA 04 July 2023:- Download PDF Here
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