C. GS 3 Related

Category:Economics

1. Does inequality lead to growth?

Syllabus: Inclusive Growth and issues arising from it

Mains: Debate of Inequality vs Growth

Debate on Inequality:

• Some argue inequality harms democratic processes.
• Others believe inequality incentivises entrepreneurship, boosting employment and welfare.
• The view that inequality is beneficial is mistaken, as it can have harmful economic effects.

Monopoly Power and Its Impact:

• Billionaires often draw wealth from monopoly power, allowing them to set prices and lower real wages.
• Monopolies lead to lower real wages and output, causing a welfare loss.
• Current cost-of-living crises and “greedflation” in developed economies illustrate the negative impact of monopolies.

Inequality and the Multiplier Effect:

• Investment leads to increased incomes and consumption, known as the ‘multiplier’ effect.
• Monopolies reduce real wages and consumption power, weakening the multiplier effect.
• Unequal economies place less income in the hands of those with higher consumption propensities, leading to weaker economic expansion.

Potential Benefits of Redistribution:

• Redistribution can enhance the multiplier effect by increasing income for those with higher consumption propensities.
• Curtailing monopolies can lead to lower prices, higher real wages, and greater demand.
• Proposals like taxing billionaire wealth and providing basic income could spur new entrepreneurship and economic activity.

Balanced Approach:

• Redistribution should be used judiciously with other policy measures.
• Excessive taxation can harm the economy, but balanced redistribution can lead to a healthier economic environment.

Nut Graf: The debate over inequality’s impact on economic growth involves the influence of monopoly power, consumption patterns, and the effectiveness of redistribution. While some argue for its benefits, others highlight its adverse effects, calling for balanced policy approaches.

E. Editorials

Category:Polity

1. The message from the Andhra Pradesh bifurcation

Syllabus: Issues and Challenges Pertaining to the Federal Structure

Mains: Debate around bifurcation of State

Historical Context and Division:

• Division Timeline: Andhra Pradesh was divided into two states, Andhra Pradesh and Telangana, ten years ago.
• Historical Background: The regions were under different political authorities for about 150 years but had been united since 1956.
• Lack of Nostalgia: The vitriol surrounding the bifurcation has disappeared, and both states have moved on with little nostalgia for their shared past.

Regional Perspectives Post-Bifurcation:

• Regional Disconnect: People from Andhra Pradesh only remember Hyderabad from Telangana, while people from Telangana have little connection to Andhra Pradesh.
• Historical Unity: Despite long periods of shared governance, a strong sense of unity did not develop, unlike in Kannada and Marathi regions.

Implications of Linguistic Division:

• Telugu Unity: The division questions the strength of linguistic unity among Telugu-speaking elites compared to Kannada and Marathi-speaking elites.
• Future of Linguistic States: The fate of Andhra Pradesh raises questions about the viability of other linguistic states and the potential need for an alternative organizing principle beyond language.

Political and Economic Consequences:

• Political Clout: The bifurcation altered political dynamics, reducing Andhra Pradesh’s representation from 42 to 25 Lok Sabha seats, and affecting its influence compared to other southern states.
• Unequal Representation: Disparities in state sizes and representation could lead to political friction and regional inequalities within the federal structure.
• Future Strains: Unequal power distribution might cause disenchantment and alienation among states, affecting national cohesion.

Lessons and Future Considerations:

• Handling of Bifurcation: The bifurcation process was messy and poorly managed, leading to unresolved issues and potential future grievances.
• Telangana’s Euphoria: Telangana is currently focused on showcasing its success, but underlying issues may surface once the initial euphoria fades.
• Andhra Pradesh’s Challenges: Andhra Pradesh has faced financial strains due to its focus on building a new capital and welfare schemes, with unresolved promises from the central government adding to its challenges.
• Need for Thoughtful Reorganization: The linguistic reorganisation of India was well-debated, but the departure from this principle in the case of Andhra Pradesh was politically expedient and poorly executed, necessitating a deeper examination to ensure stable governance.

Nut Graf: The bifurcation of Andhra Pradesh into two states highlights the complexities and long-term implications of linguistic reorganisation in India, questioning the stability of language-based state divisions and underscoring the need for thoughtful, well-managed approaches to political reconfigurations.

Syllabus: Issues and Challenges Pertaining to the Federal Structure

Mains: Debate around bifurcation of State

Historical Context and Division:

• Division Timeline: Andhra Pradesh was divided into two states, Andhra Pradesh and Telangana, ten years ago.
• Historical Background: The regions were under different political authorities for about 150 years but had been united since 1956.
• Lack of Nostalgia: The vitriol surrounding the bifurcation has disappeared, and both states have moved on with little nostalgia for their shared past.

Regional Perspectives Post-Bifurcation:

• Regional Disconnect: People from Andhra Pradesh only remember Hyderabad from Telangana, while people from Telangana have little connection to Andhra Pradesh.
• Historical Unity: Despite long periods of shared governance, a strong sense of unity did not develop, unlike in Kannada and Marathi regions.

Implications of Linguistic Division:

• Telugu Unity: The division questions the strength of linguistic unity among Telugu-speaking elites compared to Kannada and Marathi-speaking elites.
• Future of Linguistic States: The fate of Andhra Pradesh raises questions about the viability of other linguistic states and the potential need for an alternative organizing principle beyond language.

Political and Economic Consequences:

• Political Clout: The bifurcation altered political dynamics, reducing Andhra Pradesh’s representation from 42 to 25 Lok Sabha seats, and affecting its influence compared to other southern states.
• Unequal Representation: Disparities in state sizes and representation could lead to political friction and regional inequalities within the federal structure.
• Future Strains: Unequal power distribution might cause disenchantment and alienation among states, affecting national cohesion.

Lessons and Future Considerations:

• Handling of Bifurcation: The bifurcation process was messy and poorly managed, leading to unresolved issues and potential future grievances.
• Telangana’s Euphoria: Telangana is currently focused on showcasing its success, but underlying issues may surface once the initial euphoria fades.
• Andhra Pradesh’s Challenges: Andhra Pradesh has faced financial strains due to its focus on building a new capital and welfare schemes, with unresolved promises from the central government adding to its challenges.
• Need for Thoughtful Reorganization: The linguistic reorganisation of India was well-debated, but the departure from this principle in the case of Andhra Pradesh was politically expedient and poorly executed, necessitating a deeper examination to ensure stable governance.

Nut Graf: The bifurcation of Andhra Pradesh into two states highlights the complexities and long-term implications of linguistic reorganisation in India, questioning the stability of language-based state divisions and underscoring the need for thoughtful, well-managed approaches to political reconfigurations.

1. Tonga volcano could cause unusual weather for rest of decade: study

Underwater Eruption, Unique Consequences:

• Hunga Tonga erupted in January 2022, underwater, causing a tsunami and global shockwaves.
• Unlike typical eruptions, it emitted vast water vapour into the stratosphere instead of smoke and sulfur dioxide.

Stratospheric Water Vapor’s Role:

• The eruption’s aftermath saw a significant presence of water vapour in the stratosphere.
• Water vapour acts as a potent greenhouse gas, contributing to complex climate effects.

Modelling the Future Climate:

• Researchers utilized climate models to predict the volcano’s influence on future climate patterns.
• Comparing scenarios with and without the added stratospheric water vapour helped discern its effects on ozone depletion, regional weather patterns, and global temperatures.

Long-lasting Effects on Weather:

• The study predicts a range of impacts on regional weather patterns across the globe.
• Northern Australia may experience colder and wetter winters until approximately 2029, while North America could see warmer winters.
• Scandinavia may face colder winters than usual, attributed to alterations in atmospheric wave patterns caused by the volcano

H. UPSC Prelims Practice Questions

Q1. Which amongst the following leads to increase in India’s forex reserves?

Q2. ‘Brent’ and ‘West Texas Intermediate’, these terms are often in news. 
What are they related to?

Q3. Siddha traditional medicine originated in -

Q4. The National Cooperative Dairy Federation of India (NCDFI) promotes 
cooperative model of development for –

Q5. Consider the following statements:

I. UPSC Mains Practice Questions

1. ‘How does domestic factors of other countries influence Indian foreign policy? Examine. (250 words, 15 marks) (UPSC 2020) (General Studies – II, International Relations)​
2. What is a Blue Water Navy? Why does Indian Navy aspire to be one? Analyse critically . (250 words, 15 marks) (UPSC 2020) (General Studies – III, Internal security)​​​

Read previous CNA articles here.​​