30 Mar 2024: UPSC Exam Comprehensive News Analysis

30 March 2024 CNA
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TABLE OF CONTENTS

A. GS 1 Related
B. GS 2 Related
INTERNATIONAL RELATIONS
1. Discussed ‘peace formula’ with India, says Ukraine Foreign Minister
C. GS 3 Related
INDIAN ECONOMY
1. ‘GeM may offer works contracts’
D. GS 4 Related
E. Editorials
POLITY
1. Bonds, big money and an imperfect democracy
ECONOMY
1. A balancing act
F. Prelims Facts
1. Indian Navy seizes hijacked Iranian vessel, rescues crew
G. Tidbits
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions
FIP Magazine

Category: ECONOMY

1. A balancing act

Syllabus: GS-3, Indian Economy and Budgeting  

Prelims: Fiscal deficit 

Context:​ The Centre’s fiscal deficit has witnessed a notable increase, reaching ₹15 lakh crore by the end of February, representing 86.5% of the revised target of ₹17.3 lakh crore. Despite this spike, the fiscal deficit target for the year seems achievable, albeit with certain challenges and adjustments. Understanding the trajectory of fiscal deficit and its implications is crucial for assessing the government’s fiscal management strategies.

Factors Influencing the Fiscal Deficit

  • Increased Transfers to States: The Centre transferred around ₹2.15 lakh crore to States through tax devolution shares, compared to ₹1.4 lakh crore last year, contributing to the deficit surge in February.
  • Capital Expenditure Boost: Capital expenditure witnessed a significant rise, from ₹47,600 crore to ₹84,400 crore, primarily aimed at fulfilling the government’s ambitious ₹10 lakh crore target. However, further scaling up to ₹1.4 lakh crore in March may face challenges due to the mid-month implementation of the Model Code of Conduct for the Lok Sabha polls.

Targets and Recalibrations

  • GDP Proportion: Last year’s fiscal deficit stood at 6.4% of GDP, with the original target for this year set at 5.9% and revised to 5.8% by Finance Minister Nirmala Sitharaman. The government aims to narrow it to 4.5% by 2025-26, with a 5.1% target for 2024-25, subject to adjustments based on economic conditions and government priorities post the general election.
  • Economic Outlook: The Centre anticipates a shift towards private investment driving growth, amidst challenges posed by high inflation, unpredictable monsoon patterns, and fluctuating consumption demand, necessitating flexibility in fiscal policies.

Spending and Revenue Management

  • Remaining Spending Room: Despite the deficit, the government retains approximately ₹6 lakh crore of spending capacity for March, with critical ministries like Agriculture, Rural Development, and Consumer Affairs holding over ₹1.03 lakh crore, indicating potential for positive surprises in meeting targets.
  • Impact of Missed Targets: Persistent deviations from spending goals undermine intended outcomes and highlight the need for better planning and reduced borrowing in subsequent years to ensure fiscal prudence.

Solutions

  • Strategic Planning: Enhancing efficiency in expenditure planning and execution to align with fiscal targets, thereby optimizing resources and minimizing fiscal deficits.
  • Policy Adaptation: Flexibility in fiscal policies to accommodate economic fluctuations and prioritize areas crucial for sustainable growth and welfare outcomes.
  • Transparency and Accountability: Strengthening mechanisms for monitoring spending patterns and ensuring accountability in achieving fiscal objectives to maintain investor confidence and economic stability.

Nut Graf: The trajectory of the fiscal deficit presents a balancing act between meeting expenditure needs and adhering to fiscal targets, reflecting the government’s efforts to navigate economic challenges while sustaining growth momentum.

F. Prelims Facts

1. Indian Navy seizes hijacked Iranian vessel, rescues crew

Context: The Indian Navy recently intercepted and freed a hijacked Iranian fishing vessel, Al-Kambar, in the Arabian Sea. The successful operation involved the deployment of Indian Navy ships Sumedha and Trishul, resulting in the rescue of the vessel’s crew from the clutches of armed pirates.

Operation Details

  • Coercive Tactical Measures: Indian Navy ships Sumedha and Trishul implemented intense coercive tactical measures in accordance with Standard Operating Procedures, compelling the pirates to surrender after over 12 hours of engagement.
  • Rescue Operation: The crew of the hijacked vessel, consisting of 23 Pakistani nationals, was safely rescued by the Indian Navy. Specialist teams are conducting thorough sanitization and seaworthiness checks on the vessel to ensure its safe escort to resume normal fishing activities.

Incident Background

  • Hijacking Incident: Al-Kambar, an Iranian fishing vessel, was hijacked by nine armed pirates approximately 90 nautical miles southwest of Socotra. Prompt action was taken by the Indian Navy following inputs about a potential piracy incident, leading to the interception and rescue operation.
  • Piracy Trends: The hijacking of Al-Kambar is part of a series of piracy incidents in the Arabian Sea and off the coast of Somalia in recent months. Previous incidents, including the hijacking of the MV Ruen, involved Iranian fishing vessels repurposed as pirate mother vessels.

Significance of the Operation

  • Maritime Security: The successful interception and rescue operation underscore the Indian Navy’s commitment to maintaining maritime security in the region, safeguarding vessels from piracy threats.
  • Humanitarian Impact: The rescue of the crew members from the hijacked vessel highlights the humanitarian aspect of the Navy’s operations, ensuring the safety and well-being of seafarers amidst perilous conditions.

G. Tidbits

Nothing here for today!!!

H. UPSC Prelims Practice Questions

Q1. Consider the following statements about the National Investigation Agency (NIA):
  1. The National Investigation Agency (NIA) was established under the Unlawful Activities (Prevention) Act, 1967.
  2. NIA is under the Ministry of Defence (MoD), Government of India.
  3. NIA is functioning as the Central Counter Terrorism Law Enforcement Agency in India, for investigating and prosecuting offences affecting the sovereignty, security, and integrity of India.

Which of the following is/are correct?

  1. 1 only
  2. 1 and 3 only
  3. 3 only
  4. 1, 2 and 3
CHECK ANSWERS:-

Answer: c

Q2. Which of the following statements regarding the Tiger Triumph 2024 is/are correct?
  1. Operation Tiger Triumph was a joint military exercise between India and the United States.
  2. Tiger Triumph 2024 primarily focused on counter-terrorism operations.

Options:

  1. Only 1
  2. Only 2
  3. Both 1 and 2
  4. None of the above
CHECK ANSWERS:-

Answer: a

Q3. Which of the following statements is/are correct regarding the Citizenship 
Amendment Act (CAA), 2019?
  1. The Citizenship Amendment Act (CAA) 2019 aims to protect and provide citizenship to persecuted minorities from all neighbouring countries of India.
  2. The CAA amends the Citizenship Act of 1955 to expedite the Indian citizenship-acquiring process.
  3. Notification of rules for CAA is given by the Ministry of External Affairs.

How many statements is/are correct?

  1. Only one
  2. Only two
  3. Only three
  4. All of the above
CHECK ANSWERS:-

Answer: a

Q4. Which of the following statements is/are correct regarding Government 
e-Marketplace (GeM)?
  1. Government e-Marketplace (GeM) is an online platform launched by the Government of India for the procurement of goods and services by government departments and agencies.
  2. GeM is managed and operated by the Ministry of Finance, Government of India.

Which statements is/are correct?

  1. Only 1
  2. Only 2
  3. Both 1 and 2
  4. None of the above
CHECK ANSWERS:-

Answer: a

Q5. Which of the following is/are the exclusive power(s) of Lok Sabha?
  1. To ratify the declaration of Emergency.
  2. To pass a motion of no-confidence against the Council of Ministers.
  3. To impeach the President of India.

Select the correct answer using the code given below:

  1. 1 and 2 only
  2. 2 only
  3. 1 and 3 only
  4. 3 only
CHECK ANSWERS:-

Answer: b

Click on the link for the video explanation of the above questions and answers.

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