GROWTH RECESSION
1. Context
2. Key points
- The US stock markets have been soaring in 2023, even though many experts believe that the US economy is headed for a recession.
- A growth recession is a situation in which an economy is growing, but at a rate that is significantly below its potential.
- It is difficult to say definitively whether India is experiencing a growth recession.
- However, there are some signs that the Indian economy is slowing down.
- If the Indian economy continues to slow down, it could have a significant impact on the lives of ordinary Indians.
3. Reasons for the US economy growing so Slowly
Several factors are contributing to the slowdown in US economic growth. These include:
- The Federal Reserve's efforts to combat inflation, which have led to higher interest rates.
- The ongoing trade war between the US and China.
- The global slowdown in economic growth.
500 and the Nasdaq 100 have registered quite remarkable gains over just the past six months.
4. Is India also experiencing a growth recession?
- India's economy has also been growing at a slower pace in recent years.
- However, it is not clear whether India is currently experiencing a growth recession.
- Some experts believe that India's economy is still growing at a rate that is above its potential, while others believe that it is now growing at a rate that is below its potential.
5. About Growth recession
- The term "growth recession" is often used to describe a situation where an economy experiences a slowdown in economic growth, even though it is not in a technical recession (i.e., two consecutive quarters of negative GDP growth).
- While the United States has been a powerhouse of economic growth for many years, it is not immune to periods of slower growth.
- In recent times, the term "growth recession" has been used to describe certain periods of sluggish economic expansion in the U.S.
- In this essay, we will explore the concept of growth recession in the U.S., its causes, and potential implications.
6. Causes of Growth Recession
Several factors can contribute to a growth recession in the U.S. economy
External Factors: Economic growth in the U.S. is influenced by global economic conditions. Weak global demand, trade tensions, geopolitical uncertainties, and economic slowdowns in major trading partners can have adverse effects on U.S. exports and overall growth.
Domestic Factors: Internal factors, such as changes in fiscal or monetary policy, can impact economic growth. Tightening monetary policy, higher interest rates, reduced government spending, or policy uncertainty can dampen business and consumer confidence, leading to slower growth.
Structural Issues: Structural challenges, such as demographic changes, income inequality, labour market dynamics, and productivity slowdown, can also contribute to a growth recession. These factors can limit the economy's potential growth rate and lead to a prolonged period of subdued expansion.
7. Implications of Growth Recession
A growth recession can have significant implications for various aspects of the economy:
Job Market: Slower economic growth can result in a weaker job market, with reduced hiring activity and potentially rising unemployment. This can lead to income stagnation and financial hardships for individuals and households.
Business Investment: Uncertain economic conditions and lower growth prospects may discourage businesses from making long-term investments. Reduced investment can impact productivity, innovation, and overall economic competitiveness.
Government Revenues: Slower growth can affect government revenues, potentially leading to fiscal challenges. Governments may face constraints in funding essential programs, such as infrastructure development, education, and healthcare.
Consumer Spending: Reduced economic growth can dampen consumer confidence and spending. This, in turn, can hurt retail sales, services, and other sectors heavily reliant on consumer demand.
8. Policy Responses
To address a growth recession, policymakers can employ various measures
Monetary Policy: Central banks can lower interest rates to stimulate borrowing and investment, providing a boost to economic activity. Additionally, they can employ unconventional monetary policy tools, such as quantitative easing, to provide liquidity and support financial markets.
Fiscal Policy: Governments can implement expansionary fiscal policies, such as increased government spending or tax cuts, to stimulate demand and investment. These measures aim to boost economic growth and create jobs.
Structural Reforms: Addressing structural issues, such as labour market inefficiencies, education and skills development, regulatory reforms, and technological innovation, can enhance productivity and promote long-term economic growth.
Trade and International Cooperation: Collaborative efforts to reduce trade barriers, resolve trade disputes, and promote international cooperation can support global economic stability and contribute to stronger growth.
9. Conclusion
- While the United States has experienced periods of slower economic growth, referred to as growth recessions, these phases are typically temporary and can be addressed through appropriate policy measures.
- Understanding the causes of a growth recession, whether they are external or internal, and employing effective monetary, fiscal, and structural policies can help mitigate the impact and stimulate economic activity.
- The focus should be on promoting investment, innovation, and productivity, and addressing long-standing structural challenges to ensure sustained and inclusive economic growth.
For Prelims: Growth Recession, GDP, Fiscal Policy, United States, inclusive economic growth,
For Mains:
1. Define a "growth recession"? Discuss its implications for an economy. Provide examples of recent growth recessions in the US and their causes. (250 Words)
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Previous Year Questions
1. In the context of the Indian economy, consider the following pairs: (UPSC 2010)
Term Most appropriate description
1. Meltdown Fall in stock prices
2. Recession Fall in growth rate
3. Slow down Fall in GDP
Which of the pairs given above is/are correctly matched?
A. 1 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
Answer: A
2. Which among the following steps is most likely to be taken at the time of an economic recession? (UPSC 2021)
A. Cut in tax rates accompanied by increase in interest rate
B. Increase in expenditure on public projects
C. Increase in tax rates accompanied by reduction of interest rate
D. Reduction of expenditure on public projects
Answer: B
3. 'Fiscal policy' means (UPSC ESE 2019)
A. Balancing the revenue collection and expenditure
B. Establishing equilibrium between demand and supply of goods and services
C. Use of taxation, public borrowing and public expenditure by Government for purposes of 'stabilization' or 'development'
D. Deficiency as an instrument of growth
Answer: C
4. Which of the following can aid in furthering the Government's objective of inclusive growth? (UPSC 2011)
1. Promoting Self-Help Groups
2. Promoting Micro, Small and Medium Enterprises
3. Implementing the Right to Education Act
Select the correct answer using the codes given below:
A. 1 only B. 1 and 2 only C. 2 and 3 only D. 1, 2 and 3
Answer: D
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CMV AND ToMV
2. What are viruses?
- Viruses are microscopic infectious agents consisting of genetic material (DNA or RNA) enclosed within a capsid protein coat. They are considered obligate intracellular parasites because they cannot replicate or carry out metabolic processes outside a host cell.
- Viruses cannot reproduce independently and instead rely on infecting living cells of organisms, such as plants, animals, or microorganisms, to replicate and produce new viral particles.
- They hijack the cellular machinery of the host cell to replicate their genetic material, assemble new virus particles, and spread to other cells or hosts.
- Viruses can infect all forms of life, including animals, plants, bacteria, fungi, and even other viruses.
- They cause a wide range of diseases, including common colds, influenza, measles, HIV/AIDS, COVID-19, and many others. Viruses can also impact agricultural productivity by causing diseases in crops and livestock.
- Due to their simplicity and dependence on host cells, viruses are often regarded as biological entities that exist on the boundary between living and non-living things. They are highly diverse and can exhibit a variety of shapes, sizes, and genetic compositions.
3. About CMV and ToMV
- ToMV (Tomato mosaic virus) and CMV (Cucumber mosaic virus) are two plant pathogens that cause similar damage to crops.
- ToMV belongs to the Virgaviridae family and is closely related to the tobacco mosaic virus (TMV), while CMV has a larger host pool and was first identified in cucumber in 1934.
- ToMV primarily spreads through infected seeds, saplings, agricultural tools, and human touch, whereas CMV is primarily spread by aphids, although human transmission is also possible but rare.
- Conditions of high temperature and intermittent rain favor the spread of CMV by promoting aphid multiplication.
- In Maharashtra, farmers have blamed seed manufacturers and nurseries for the spread of ToMV, emphasizing the importance of maintaining bio-safety and implementing seed treatment at nurseries to prevent future virus spread.
4. Symptoms
- Both ToMV and CMV can result in nearly 100% crop loss if not treated promptly.
- ToMV-infected plants exhibit alternating yellowish and dark green areas on the foliage, often appearing as blisters. Leaf distortion, twisting, and necrotic spots on the fruit leading to overripening are common symptoms. Young plants are stunted, and fruit setting is impacted.
- CMV also causes leaf distortion but typically affects leaves at the top and bottom while leaving the middle relatively unaffected. In cucumber, CMV causes a mosaic-like pattern of yellow and green spots. In tomatoes, fruit formation is hindered, resulting in distorted and small fruit.
- In general, CMV causes stunting and reduced crop production, with specific effects varying depending on the host plant.
5. Prevention and Control of the Virus
- Dr. Reddy emphasizes the importance of adhering to biosafety standards in nurseries and implementing compulsory seed treatment to prevent the spread of ToMV.
- Farmers purchasing trays of saplings should carefully inspect them before planting and discard any visibly infected material.
- Vigilance for signs of infection throughout the cropping cycle is crucial, and infected plants should be promptly removed without allowing contact with healthy plants.
- ToMV can remain dormant in weeds and plant residues, so thorough clearing of fields from weeds and plant material is necessary before fresh planting.
- ToMV cannot be cured, but its infection can be controlled through good agricultural practices.
- Reports of ToMV are now emerging from various states beyond Maharashtra, including Karnataka and Andhra Pradesh.
- Controlling CMV is challenging due to its wide range of host plants. The most effective approach is to control aphids, which can be achieved by spraying quick-acting insecticides or mineral oils on plants.
- Care must be taken not to disturb aphids, as it can lead to the spread of the virus to other fields.
- Monitoring aphid migration is essential to implement preventive measures during crop planting.
For Prelims: ToMV (Tomato mosaic virus), CMV (Cucumber mosaic virus), DNA, RNA, Viruses, Replication, Aphid, Leaf Distortion.
For Mains: 1. Discuss the control and prevention strategies for two plant viruses, Tomato mosaic virus (ToMV) and Cucumber mosaic virus (CMV). (250 Words)
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Previous year Question
1. Which of the following statements is/are correct? (UPSC 2013)
1. Viruses lack enzymes necessary for the generation of energy.
2. Viruses can be cultured in any synthetic medium.
3. Viruses are transmitted from one organism to another by biological vectors only.
Select the correct answer using the codes given below.
A. 1 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3
Answer: A
2. Viruses can infect (UPSC 2016)
1. Bacteria
2. Fungi
3. Plants
Select the correct answer using the code given below.
A. 1 and 2 only
B. 3 only
C. 1 and 3 only
D. 1, 2 and 3
Answer: D
3. Consider the following statements : (UPSC 2021)
1. Adenoviruses have single-stranded DNA genomes whereas retroviruses have double-stranded DNA genomes.
2. Common cold is sometimes caused by an adenovirus whereas AIDS is caused by a retrovirus.
Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2
Answer: B
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SOCIAL POLICY FOR MIGRANTS IN INDIA
1. Context
2. Introduction
Migration is a complex phenomenon, and it has both positive and negative impacts on the lives of migrants. On the one hand, migration can provide migrants with better economic opportunities, access to education and healthcare, and a chance to improve their lives. On the other hand, migrants can face discrimination, exploitation, and a lack of access to basic services.
3. The key components of social policy for migrants
Healthcare: Access to quality healthcare is a fundamental human right, yet migrants in India frequently encounter barriers in accessing healthcare services. An inclusive social policy should ensure that migrants have equal access to affordable healthcare facilities, regardless of their legal status. This can be achieved through measures such as establishing migrant-friendly health centers in areas with high migrant populations, providing multilingual healthcare services, and disseminating information about available healthcare schemes. Furthermore, health insurance schemes targeted specifically at migrants can offer financial protection and enhance healthcare accessibility.
Education: Education plays a pivotal role in empowering individuals and fostering social mobility. However, migrant children often face difficulties in accessing education due to language barriers, discrimination, and lack of documentation. An inclusive social policy must guarantee the right to education for all migrant children, irrespective of their migration status. This can be achieved by setting up bridge courses and language support programs to facilitate their integration into mainstream educational institutions. Special provisions should be made to ensure continuity of education, even when migrants move across different regions.
Employment: Migrants contribute significantly to the workforce, especially in sectors like construction, agriculture, and domestic work. However, they are vulnerable to exploitation, low wages, and unsafe working conditions. An inclusive social policy should prioritize decent work conditions and fair wages for migrants. This can be accomplished through the enforcement of labor laws, regular monitoring of workplaces, and provision of legal aid to address labor rights violations. Additionally, skill development programs and vocational training initiatives can equip migrants with the necessary skills to access better job opportunities.
Social Integration: Social integration is crucial for migrants to feel a sense of belonging and participate fully in society. An inclusive social policy should foster social cohesion by promoting dialogue, cultural exchange, and community engagement between migrants and host communities. Initiatives such as language classes, cultural festivals, and community centers can serve as platforms for interaction and mutual understanding. Efforts should also be made to combat discrimination and xenophobia through awareness campaigns and legal frameworks that protect migrants' rights.
Legal and Social Protection: Migrants often face legal and social vulnerabilities due to their precarious status. An inclusive social policy should provide legal safeguards and social protection mechanisms to address these vulnerabilities. This can include measures such as simplifying the process of obtaining legal documentation, ensuring access to justice through legal aid services, and creating social safety nets that cater to migrants' specific needs. Furthermore, efforts should be made to raise awareness about migrants' rights and provide them with information on available support systems.
4. Social policy for migrants would include the following elements:
- Universal access to social protection: Migrants should have the same access to social protection programs as citizens, such as health insurance, pension schemes, and unemployment benefits.
- Portability of social protection benefits: Migrants should be able to access social protection benefits in their destination states, even if they have not contributed to those schemes in the past.
- Enforcement of labor laws: The government should enforce labor laws to ensure that migrant workers are not exploited by their employers.
- Access to education and healthcare: Migrants should have access to quality education and healthcare, regardless of their location.
- Protection from discrimination: Migrants should be protected from discrimination in housing, employment, and access to public services.
5. In addition to the above, the following are some specific initiatives that could be taken to improve the lives of migrants in India:
- Improved data collection: The government needs to improve its data collection on migration so that it can better understand the needs of migrants and target its policies accordingly.
- Increased awareness: The government needs to raise awareness about the rights of migrants and the services that are available to them. This can be done through public education campaigns, training for government officials, and partnerships with civil society organizations.
- Strengthened coordination: The government needs to strengthen coordination between different levels of government and with other stakeholders, such as employers, trade unions, and non-governmental organizations. This will help to ensure that migrants are able to access the services they need and that their rights are protected.
For Mains: 1. Discuss the key components of an inclusive social policy for migrants in India. How can such a policy address the challenges faced by migrants in accessing healthcare, education, employment, and social integration? |
DATA PROTECTION BILL 2023
1. Context
- The Indian government has approved a new data privacy law, the Digital Personal Data Protection (DPDP) Bill, 2022. The law is expected to be tabled in Parliament's Monsoon Session that begins on July 20.
- The bill plays a crucial role in India's trade negotiations, particularly with the European Union and its GDPR.
- It is part of a broader technology regulations framework, including the Digital India Bill, Indian Telecommunication Bill, and non-personal data governance policy.
2. key provisions of the bill
- Consent: Individuals will have the right to give or withhold consent for the collection, use, and sharing of their personal data.
- Data minimization: Data fiduciaries (organizations that collect and process personal data) will be required to minimize the amount of personal data they collect and process.
- Data security: Data fiduciaries will be required to take appropriate measures to protect the security of personal data.
- Data breach notification: Data fiduciaries will be required to notify individuals and the government if there is a data breach.
- Right to access: Individuals will have the right to access their personal data and to request that it be corrected or deleted.
- Right to be forgotten: Individuals will have the right to request that their personal data be deleted if it is no longer necessary for the purpose for which it was collected.
3. The key benefits of the DPDP
- It will give individuals more control over their personal data.
- It will help to protect personal data from unauthorized access, use, and disclosure.
- It will promote the responsible use of personal data by organizations.
- It will help to build trust in the digital economy.
4. Scope and Application
- The proposed law covers the processing of digital personal data within India.
- It also applies to data processing outside India if it involves offering goods or services or profiling individuals in India.
- Data fiduciaries are required to maintain data accuracy, and security, and delete data once its purpose is fulfilled.
5. Enforcement and Penalties
- The bill allows entities violating its provisions to enter voluntary settlements with the data protection board.
- Repeat offences may lead to higher financial penalties.
- The highest penalty for failing to prevent a data breach is set at Rs 250 crore per instance, subject to interpretation by the data protection board.
6. Concerns with the Draft Bill
- The retained provisions from the November 2022 draft include wide-ranging exemptions for the central government and its agencies.
- The control of the central government in appointing members of the data protection board raises concerns.
- Protection of personal data of government functionaries under the bill may impact the Right to Information Act.
7. Expected Changes
- The bill may adopt a 'blacklisting' mechanism for cross-border data flows instead of a whitelisting approach.
- Global data flows would be allowed by default to jurisdictions, not on the specified 'negative list.'
- The provision on "deemed consent" may be reworded to be stricter for private entities while allowing government departments more leeway based on national security and public interest.
8. Comparison with Other Countries
- The GDPR serves as the template for most data protection legislation worldwide, focusing on comprehensive data protection.
- The US model emphasizes individual liberty protection but has been criticized for being narrow in focus.
- China has recently implemented laws on data privacy and security, including the Personal Information Protection Law and Data Security Law.
9. The Way Forward
- The Digital Personal Data Protection Bill, if enacted, will have far-reaching implications for data protection in India.
- While concerns regarding exemptions and the data protection board persist, the bill aims to align with global standards and facilitate trade negotiations.
- The final version of the bill is expected to address key issues raised during public consultations and strike a balance between privacy and national interests.
For Prelims: data privacy law, Digital Personal Data Protection Bill 2022, Parliament's Monsoon Session, European Union, Digital India Bill, Indian Telecommunication Bill, non-personal data governance policy, Right to Information Act,
For Mains:
1. Analyze the provisions of the Digital Personal Data Protection Bill, 2022, and discuss its significance in India's technology regulatory framework. (250 Words)
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Previous Year Questions
1. Which of the following adopted a law on data protection and privacy for its citizens known as 'General Data Protection Regulation' in April 2016 and started implementation of it from 25th May 2018? (UPSC 2019)
A. Australia B. Canada C. The European Union D. The United States of America
Answer: C
2. Read the following: (DSSSB TGT 2018)
1. In India, parliament has 4 sessions in a year.
2. Budget session is presided over by the Chairman of Rajya Sabha, that is the Vice-president of India.
3. During the monsoon session, the President of India addresses the Parliament. Select the correct code:
A. Only 2 B. Only 1 C. Only 3 D. None of the above
Answer: D
3. There are usually three Parliamentary sessions in India, viz, the Budget session, the Monsoon session, and _______. (SSC CHSL 2018)
A. the Autumn session
B. the Summer session
C. the Winter session
D. None of these
Answer: C
4. Which of the following is NOT a routine session of the Indian Parliament? (RRB JE 2019) (HTET TGT Social Studies 2013 - 2014)
A. Summer Session B. Budget Session C. Winter Session D. Monsoon Session
Answer: A
5. Find out the odd in relation to the Indian Parliament. (NTPC Tier I 2016)
A. Budget Session B. Summer Session C. Monsoon Session D. Winter Session
1. A 2. C 3. D 4. B
Answer: 4
6. The interval between two sessions of parliament must not exceed ________. (IB ACIO Grade II 2017)
A. 3 months B. 6 months C. 4 months D. 100 days
Answer: B
7. The period between the prorogation of a House and its reassembly in a new session is called ______ (SSC JE CE 2021)
A. recess B. zero hour C. quorum D. question hour
Answer: A
8. In terms of Article 85(1), the President must summon each House of Parliament within _____ between the date of its last sitting in a session and the date of the first sitting in the next session. (DSSSB TGT 2018)
A. Six months B. Four and a half months C. Four months D. Five months
Answer: A
9. In which session of the year, President addresses both the Houses of Parliament? (IB ACIO Grade II 2012)
A. First session (Budget) B. Second session (Monsoon)
C. Third session (winter) D. none of the above
Answer: A
10. Consider the following statements about European Union: (MPSC 2019)
(a) It is a Political and Economic Union.
(b) It was formally established by the Maastricht Treaty.
(c) In 2007 Austria and Sweden became the members of European Union.
(d) In 2012 the European Union received the Nobel Peace Prize.
Which of the above statements are correct?
1. (a), (b), (c) 2. (c), (d) 3. (a), (b), (d) 4. All above
Answer: 3
11. The headquarters of the European Union (EU) is at: (UKSSSC Forest Guard 2020)
A. Paris B. London C. Berlin D. Brussels
Answer: D
12. Which among the following European Union countries is the first to officially recognize the State of Palestine? ( BPSC 2015)
A. Sweden B. Denmark C. Norway D. Italy
Answer: A
13. Which of the following is/are the aim/aims of "Digital India" Plan of the Government of India? (UPSC 2018)
1. Formation of India's own Internet companies like China did.
2. Establish a policy framework to encourage overseas multinational corporations that collect Big Data to build their large data centres within our national geographical boundaries.
3. Connect many of our villages to the Internet and bring Wi-Fi to many of our schools, public places and major tourist centres.
Select the correct answer using the code given below.
A. 1 and 2 only B. 3 only C. 2 and 3 only D. 1, 2 and 3
Answer: B
14. In India, which one of the following is responsible for the implementation of the Government of India's policy in all matters concerning telecommunications? (CDS 2022)
A. Digital Communications Commission
B. Telecom Regulatory Authority of India
C. Telecom Advisory Committee
D. Telecommunications Consultants India Limited
Answer: A
15. With reference to communication technologies, what is/are the difference/differences between LTE (Long-Term Evolution) and VoLTE (Voice over Long-Term Evolution)? (UPSC 2019)
1. LTE is commonly marketed as 3G and VoLTE are commonly marketed as advanced 3G.
2. LTE is data-only technology and VoLTE is voice-only technology.
Select the correct answer using the code given below.
A. 1 only B. 2 only C. Both 1 and 2 D. Neither 1 nor 2
Answer: D
16. Consider the following statements: (UPSC 2017)
1. National Payments Corporation of India (NPCI) helps in promoting the financial inclusion in the country.
2. NPCI has launched RuPay, a card payment scheme Which of the statements given above is/are correct?
A. 1 only B. 2 only C. Both 1 and 2 D. Neither 1 nor 2
Answer: C
17. Consider the following statements: (UPSC 2019)
1. The 44th Amendment to the Constitution of India introduced an Article placing the election of the Prime Minister beyond judicial review.
2. The Supreme Court of India struck down the 99th Amendment to the Constitution of India as being violative of the independence of the judiciary.
Which of the statements given above is/are correct?
A. 1 only B. 2 only C. Both 1 and 2 D. Neither 1 nor 2
Answer: B
18. Which of the following statements are correct? (MPSC 2018)
a. Parliament can increase a tax.
b. Parliament cannot reduce a tax.
c. Parliament can abolish a tax.
d. Parliament cannot increase a tax.
e. Parliament can reduce a tax.
1. a, c and e 2. b, c and d 3. c, d and e D. c and d
Answer: 3
19. According to the Right to Information Act 2005, if a person seeks information that concerns the life and security of a person, it shall be provided within a period of _______ from the time of receipt of the request. (Kerala SET 2017) (UP Police SI 2017)
A. 24 hours B. 48 hours C. 3 days D. 7 days
Answer: B
20. The Right to Information Act was passed by parliament on (TNPSC Group 4 2019)
A. 18 October 2005. B. 12 May 2005 C. 25 October 2005 D. 12 October 2005
Answer: B
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BRICS
Move over SCO and BRICS! Goldman Sachs, the global investment bank that talked of “dreaming with the BRICs” two decades ago, has a new idea now — “swing states” that will shape the global balance of power. Unlike BRICS and SCO, whose salience can only dim in the Indian strategic calculus, “swing states” are beginning to loom larger in Delhi’s strategic priorities. The concept of BRICs — Brazil, Russia, India, and China — was about Goldman Sachs drawing investor attention to the economic potential of the four nations at the turn of the millennium. But the idea acquired a political life of its own
2. Multipolarity
- As many as 19 countries are said to be in the queue to join BRICS
- Among the countries that have been mentioned frequently since last year: Argentina, Nicaragua, Mexico, Uruguay, Venezuela from Latin America; Nigeria, Algeria, Egypt, Senegal, Morocco from Africa; Saudi Arabia, the UAE, Türkiye, Syria, Iran from West Asia; Kazakhstan from Central Asia; Bangladesh and Afghanistan from South Asia; and Indonesia and Thailand from South-east Asia
- It is not clear which countries might be admitted, but any expansion can be seen as strengthening the group’s heft as a spokesperson of the developing world
- By admitting some key countries in the list, BRICS could lay claim to representing more than half the world’s population. Significantly, the list includes big oil producers Saudi, Iran, the UAE, Nigeria, and Venezuela.
- There is considerable anti-US sentiment in the world, and all these countries are looking for a grouping where they can use that sentiment to gather together
- There is a lot of appetite for multipolarity, for a platform where countries of the Global South can express their solidarity
3. China in BRICS
- The idea of BRICS came between 2001 and 2003 from then Goldman Sachs chief economist Jim O’Neill, who projected that the four emerging markets of Brazil, Russia, India, and China would be the future economic powerhouses of the world, with South Africa being added later
- While the economic performance of BRICS has been mixed, the war in Ukraine which has brought the West together on the one hand and strengthened the China-Russia partnership on the other has turned it into an aspiring bloc that appears to be challenging the Western geopolitical view
- Significantly, China does not use the word multipolarity instead using “multilateralism” whenever it hits out at “US hegemony”
- The theme of BRICS 2023 is: “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism”
4. India in BRICS
- If India’s presence at the G7 summit in Hiroshima, where Prime Minister Narendra Modi also participated in an informal Quad summit, was seen as a sign of New Delhi’s US tilt, the importance it attaches to the “anti-West” BRICS is an apparent contradiction much like the several others it has negotiated through the last year
- On contrary, India should not be seen as ganging up with an anti-West coalition, India is also part of the Shanghai Cooperation Organisation (SCO), and despite problems, it has relations with Russia, with China
- Some analysts see BRICS as an improbable grouping, with hostiles like India and China unlikely to ever find common ground a situation that could get pronounced as it adds members
5. Common Currency
- The idea of a common currency was proposed by Russia’s President Vladimir Putin at the Beijing BRICS summit last year
- The idea got a cautious reception, with the leaders deciding to set up a committee to study its viability
- The last year of war has seen economies around the world feel the impact of the sanctions on Russia, the resultant spike in energy prices, combined with the rising value of the dollar
- An insulation from the dollar is a tempting proposal, but not all members believe that it is an idea whose time has come
- There are other complications, such as the setting up of a common central bank of member countries that have different economic and political systems and are located on different continents
- An option is for members to trade with each other in their respective currencies — but as the India-Russia example has shown, this is not easy either
- Moscow wants payments in dollars because it does not import enough from India to use rupee payments
6. Significance of BRICS
- BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa.
- The BRICS Leaders’ Summit has convened annually. It does not exist in the form of an organisation, but it is an annual summit between the supreme leaders of five nations.
- BRICS is successfully expanding its external relations that were established at the Durban meeting between the five BRICS leaders, the leaders of the African Union and the leaders of eight leading African integration associations.
- BRICS is an important grouping bringing together the major emerging economies from the world, comprising:
- 41% of the world population,
- 24% of the world GDP
- over 16% share in world trade.
- The total combined area of 29.3% of the total land surface of the world
- BRICS countries have been the main engines of global economic growth over the years.
- Over a period of time, BRICS countries have come together to deliberate on important issues under the three pillars:
- political and security,
- economic and financial and
- cultural and people to people exchanges.
- During the Sixth BRICS Summit in Fortaleza (Brazil) in 2014, the leaders signed the Agreement establishing the New Development Bank (NDB - Shanghai, China). They also signed the BRICS Contingent Reserve Arrangement to provide short-term liquidity support to the members.
- During the Sixth summit of BRICS in Fortaleza (2014), leaders signed an agreement to establish a new bank. New Development Bank was established in 2015 by BRICS Countries.
- New Development Bank aims to ensure that all projects financed by its funds are implemented sustainably and their ESG impacts are assessed, minimised and mitigated during project implementation
- It is headquartered in Shanghai, china
- In 2018, NDB received observer status in United Nations General Assembly
- Each participant will have the vote and no other countries have veto power unlike World Bank
- Bank will mobilise resources for infrastructure and sustainable development projects in BRICS Countries and other economies as well as in developing countries too
For Prelims: New Development Bank, BRICS
For Mains: 1. BRICS can be the pillar of emerging countries. Discuss the probable changes of BRICS after math of the Russia-Ukraine war (250 words)
2. BRICS gained importance due to US "hegemony". Discuss the Common currency proposed by Russia and associated issues surrounding it with respect to contemporary times (250 Words)
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Previous Year Questions:
1. With reference to a grouping of countries known as BRICS, Consider the following Statements: (UPSC 2014)
1. First Summit of BRICS was held in Rio de Janeiro in 2009
2. South Africa was the last to join the BRICS grouping
Which of the above-given statement is/are true
A. 1 Only B. 2 Only C. Both 1 and 2 D. Neither 1 nor 2
Answer : B
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