23 Jul 2022: UPSC Exam Comprehensive News Analysis

E. Editorials

Category: SOCIETY

1. Being Sarna: a fight to define tribal identity

Category: GS1- Society

Syllabus: Indian society and diversity – Salient aspects.

Mains: Protection of tribal identity against the resistance of the non-tribal world.

Context: Hundreds of tribal men and women in traditional attire sat on a fast and staged a dharna at Jantar Mantar in New Delhi for inclusion of the Sarna code in the religion column in the next census.

In November 2020, the Jharkhand government passed a resolution to send the Union a letter to recognise the Sarna religion and include it as a separate code in the Census of 2021.

What is the Sarna religion?

• The followers of Sarna are nature worshippers who believe in protecting the forest areas. The holy grail of the faith is “Jal, Jungle, Zameen”.
• It is believed that 50 lakh tribal people in the entire country put their religion as ‘Sarna’ in the 2011 census, although it was not a code.

Politics around the faith:

• Tribals in Jharkhand are Sarna followers and do not consider themselves Hindus. 
• Out of 32 tribal groups of Jharkhand, who make up 26% of the population, only a minor number of people identify themselves as Christian, Hindu, or Muslim. 
• Implementation of a separate Sarna religious code in census surveys would allow the tribals to be identified as followers of the Sarna faith during Census 2021.
• With the Union Government dropping the “Others” option from the religion column for Census 2021, Sarna followers would be forced to either skip the column or declare themselves members of one of the six specified religions: Hindu, Muslim, Christian, Buddhist, Jain and Sikh and in the process damaging the separate identity of the tribals.

History of Tribal Identity:

• There was a separate category for the tribal population in earlier census surveys during 1871-1951 which was dropped later.
• Post-independence, the tribal identity has been about constitutional provisions promising to protect their rights and land. Yet, these tribal groups have never been recognised as separate religious groups.
• The National Commission for Scheduled Tribes did recommend the addition of this code for the Census 2011.

Need for the separate code:

• Indigenous tribal people are often caught up in a battle to maintain their unique indigenous identity amid religious conversions and cultural assimilation of tribals who move out of forests.
• A separate code will restore the identity linked to the land and forests of Jharkhand in the context of long historical marginalization of Adivasi cultural and religious norms.
• The population of tribals in Jharkhand had declined from 38.3 per cent in 1931 to 26.02 per cent in 2011.
• A separate religious code will help in recording their population as the declining numbers affect the constitutional rights given to them and how the rights will be bestowed upon the Adivasis under the 5th Schedule of the Constitution.
• The inclusion of a separate Sarna religion code would help in the preservation of separate tribal identity both culturally and in terms of religion.

Nut Graf:  The protection of their unique language and history is an important aspect of Adivasis.Today, when there is global attention on reducing pollution and protecting the environment, it is important and wise that Sarna becomes a religious code as the soul of this religion is to protect nature and the environment.
Category: ECONOMY

1. Despite pressures, the rupee’s remarkable resilience

Category: GS3-Economy

Syllabus: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Mains: Effects of rupee depreciation on the Indian economy

Context: Recently, the rupee hit an all-time low against the dollar weakening past the 79 rupees to a dollar mark. But the depreciation has been relatively lower, unlike in previous times.

 Rupee Depreciation:

• The Rupee has depreciated more than 7% against the U.S. dollar since the beginning of 2022.
• The dollar has strengthened against all currencies, emerging or developed. Even the historically strong euro and the British pound are weakening more than the rupee.
• Notably, current rupee depreciation has been relatively lower compared with past crises such as the global financial crisis of 2008 and the Taper Tantrum of 2013 due to reduced external vulnerability measured in terms of a relatively high import cover and low short-term Tantrum.
  • India’s import cover is at over 7 months as compared to around twelve months in the current period. 

Reasons behind currency depreciation:

• Russia-Ukraine conflict leading to rise in crude oil prices and other imports.
• Widening current account deficit.
• Growing risk-off sentiment as a result of geopolitical tensions.
• Strong dollar index
  • The dollar index strengthened by over 11% in 2022 so far, taking it to a 20- year high due to the rate hiking by the US Federal Reserve which appreciated the dollar value.
  • The dollar index is a measure of the dollar’s value against a basket of 6 major currencies.
• Continuous sell-off by foreign portfolio investors due to global monetary policy tightening and higher risk-free returns being available in the U.S.
  • There is an FPI outflow of $29.6 billion in Indian equity and debt.
  • With the prospect of more, sharp interest rate increases by the Federal Reserve to tame four-decade-high U.S. inflation are likely to do little to staunch the outflows. 

Impact of weak rupee:

• The export advantage due to the rupee’s weakening has been countered with concurrent depreciation of currencies of India’s competitors such as Malaysia, Bangladesh and South Korea.
  • Slower global demand also results in poor exports.
• Domestic manufacturers and service providers now have to pay higher dollar prices for the raw materials, equipment or other supplies they procure from overseas.
• Prices of a few import commodities such as oil, coal, gold, edible oil have risen due to the weak rupee thus impacting the imported component of inflation. 
• It also affects the corporate debt denominated in dollars.
• A continuous decrease in exchange rate deters foreign investors from making fresh investments, which keep losing value in dollar terms. 

RBI Measures to address rupee depreciation:

• The Reserve Bank of India (RBI) has made timely interventions in the spot and forward foreign exchange markets to arrest the rupee depreciation. 
• It has announced various measures to liberalize foreign inflows and make them more attractive. They are,
  • Promoting trade settlements between India and its trade partners in rupee terms.
  • Offering higher interest rates on fresh Foreign Currency Non-Resident (Bank) and Non-Resident External deposits.
  • Interest rate relaxation and amount ceiling for External Commercial Borrowing loans.

Way Forward:

• The Government could promote some of the large market cap companies to be added to the major global indices such as MSCI and FTSE. 
  • This will help increase the weight of Indian equities in these indices, compensating for foreign portfolio outflows.
• Any excessive capital inflow leading to an appreciation of the currency should be avoided.

Nut Graf: The rupee’s real effective exchange rate (REER), indicates that the Indian currency is still overvalued and can further depreciate. Although India has adequate forex reserves the RBI will need to judiciously utilize every dollar to ensure that global uncertainty, high commodity prices and rising U.S. interest rates do not add more undue pressure on the rupee. The maintenance of the U.S.-India interest rate differential along with timely foreign exchange market interventions by RBI to manage volatility will aid in preserving the rupee value against the dollar.