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DAILY CURRENT AFFAIRS, 03 FEBRUARY 2024

GROSS DOMESTIC PRODUCT (GDP)

 
 
1. Context
Finance Minister Nirmala Sitharaman Thursday presented the Union Budget for the next financial year (2024-25). It was her sixth budget presentation, but was different from all the others because this was an interim budget.
 
2. Gross Domestic Product (GDP)
Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. It is often used as a measure of a country's economic health
GDP provides insight into the overall economic health of a nation and is often used for comparing the economic output of different countries.

There are three primary ways to calculate GDP:

  1. Production Approach (GDP by Production): This approach calculates GDP by adding up the value-added at each stage of production. It involves summing up the value of all final goods and services produced in an economy.

  2. Income Approach (GDP by Income): This approach calculates GDP by summing up all the incomes earned in an economy, including wages, rents, interests, and profits. The idea is that all the income generated in an economy must ultimately be spent on purchasing goods and services.

  3. Expenditure Approach (GDP by Expenditure): This approach calculates GDP by summing up all the expenditures made on final goods and services. It includes consumption by households, investments by businesses, government spending, and net exports (exports minus imports).

3. Measuring GDP

GDP can be measured in three different ways:

  1. Nominal GDP: This is the raw GDP figure without adjusting for inflation. It reflects the total value of goods and services produced at current prices.

  2. Real GDP: Real GDP adjusts the nominal GDP for inflation, allowing for a more accurate comparison of economic performance over time. It represents the value of goods and services produced using constant prices from a specific base year.

  3. GDP per capita: This is the GDP divided by the population of a country. It provides a per-person measure of economic output and can be useful for comparing the relative economic well-being of different countries.

The GDP growth rate is the percentage change in the GDP from one year to the next. A positive GDP growth rate indicates that the economy is growing, while a negative GDP growth rate indicates that the economy is shrinking

The GDP is a useful measure of economic health, but it has some limitations. For example, it does not take into account the distribution of income in an economy. It also does not take into account the quality of goods and services produced.

Despite its limitations, the GDP is a widely used measure of economic health. It is used by economists, policymakers, and businesses to track the performance of an economy and to make decisions about economic policy

4. Gross Value Added (GVA)

 

Gross Value Added (GVA) is a closely related concept to Gross Domestic Product (GDP) and is used to measure the economic value generated by various economic activities within a country. GVA represents the value of goods and services produced in an economy minus the value of inputs (such as raw materials and intermediate goods) used in production. It's a way to measure the contribution of each individual sector or industry to the overall economy.

GVA can be calculated using the production approach, similar to one of the methods used to calculate GDP. The formula for calculating GVA is as follows:

GVA = Output Value - Intermediate Consumption

Where:

  • Output Value: The total value of goods and services produced by an industry or sector.
  • Intermediate Consumption: The value of inputs used in the production process, including raw materials, energy, and other intermediate goods.
5. GDP vs GNP

Gross Domestic Product (GDP) and Gross National Product (GNP) are both important economic indicators used to measure the size and health of an economy, but they focus on slightly different aspects of economic activity and include different factors. Here are the key differences between GDP and GNP:

  1. Definition and Scope:

    • GDP: GDP measures the total value of all goods and services produced within a country's borders, regardless of whether the production is done by domestic or foreign entities. It only considers economic activities that take place within the country.
    • GNP: GNP measures the total value of all goods and services produced by a country's residents, whether they are located within the country's borders or abroad. It takes into account the production of residents, both domestically and internationally.

  2. Foreign Income and Payments:

    • GDP: GDP does not consider the income earned by residents of a country from their economic activities abroad, nor does it account for payments made to foreigners working within the country.
    • GNP: GNP includes the income earned by a country's residents from their investments and activities abroad, minus the income earned by foreign residents from their investments within the country.

  3. Net Factor Income from Abroad:

    • GDP: GDP does not account for net factor income from abroad, which is the difference between income earned by domestic residents abroad and income earned by foreign residents domestically.
    • GNP: GNP includes net factor income from abroad as part of its calculation.

  4. Foreign Direct Investment:

    • GDP: GDP does not directly consider foreign direct investment (FDI) flowing into or out of a country.
    • GNP: GNP considers the impact of FDI on the income of a country's residents, both from investments made within the country and from investments made by residents abroad.

  5. Measurement Approach:

    • GDP: GDP can be calculated using three different approaches: production, income, and expenditure approaches.
    • GNP: GNP is primarily calculated using the income approach, as it focuses on the income earned by residents from their economic activities.
 
 
 
 
For Prelims: GDP, GVA, FDI, GNP
For Mains: 1.Discuss the recent trends and challenges in India's GDP growth
2.Examine the role of the service sector in India's GDP growth
3.Compare and contrast the growth trajectories of India's GDP and GNP
 
 
Previous Year Questions
1.With reference to Indian economy, consider the following statements: (UPSC CSE, 2015)
1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade.
2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade.
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)
2.A decrease in tax to GDP ratio of a country indicates which of the following? (UPSC CSE, 2015)
1. Slowing economic growth rate
2. Less equitable distribution of national income
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 (a)
Previous year UPSC Mains Question Covering similar theme:
Define potential GDP and explain its determinants. What are the factors that have been inhibiting India from realizing its potential GDP? (UPSC CSE GS3, 2020)
Explain the difference between computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015. (UPSC CSE GS3, 2021)
 
Source: indianexpress
 

FREE TRADE AGREEMENT 

1. Context

With new Bilateral Investment Treaties (BITs) drying up after India adopted the model BIT in 2016, Finance Minister Nirmala Sitharaman during her Interim Budget speech said that India is negotiating BITs with trade partners to boost the inflow of foreign direct investments (FDI)
 

2. About the Free Trade Agreement

  • A Free Trade Agreement (FTA) is an agreement between two or more countries to reduce or eliminate barriers to trade, such as tariffs, quotas, and subsidies.
  • FTAs can also include provisions on other issues, such as investment, intellectual property, and labour standards.
  • The goal of an FTA is to promote trade and economic growth between the signatory countries.
  • By reducing or eliminating trade barriers, FTAs can make it easier for businesses to export their goods and services to other countries, which can lead to increased production, employment, and innovation.

3. Types of Free Trade Agreement

  • Bilateral Free Trade Agreement (BFTA) involves two countries, aiming to promote trade and eliminate tariffs on goods and services between them.  It establishes a direct trade relationship, allowing for a more focused and tailored agreement between the two nations.
  • Multilateral Free Trade Agreement (MFTA) Involving three or more countries, an MFTA seeks to create a comprehensive trade bloc, promoting economic integration on a larger scale. It requires coordination among multiple parties, addressing diverse economic interests and fostering a broader regional economic landscape.
  • Regional Free Trade Agreement (RFTA) involves countries within a specific geographic region, aiming to enhance economic cooperation and integration within that particular area. It focuses on addressing regional economic challenges and fostering collaboration among neighbouring nations.
  • Preferential Trade Agreement (PTA) involves a reciprocal reduction of tariffs and trade barriers between participating countries, granting preferential treatment to each other's goods and services. It allows countries to enjoy trading advantages with specific partners while maintaining autonomy in their trade policies with non-participating nations.
  • Comprehensive Economic Partnership Agreement (CEPA) is a broad and advanced form of FTA that goes beyond traditional trade barriers, encompassing various economic aspects such as investment, intellectual property, and services. It aims for a more comprehensive economic partnership, encouraging deeper integration and collaboration between participating countries.
  • Customs Union While not strictly an FTA, a Customs Union involves the elimination of tariffs among member countries and the establishment of a common external tariff against non-member nations. It goes beyond standard FTAs by harmonizing external trade policies, creating a unified approach to trade with the rest of the world.
  • Free Trade Area (FTA) with Trade in Goods (TIG) and Trade in Services (TIS): Some FTAs specifically emphasize either trade in goods or trade in services, tailoring the agreement to the specific economic strengths and priorities of the participating countries. This approach allows nations to focus on areas where they have a comparative advantage, fostering specialization and efficiency.

4. India's Free Trade Agreements

India is a member of several free trade agreements (FTAs) and is currently negotiating others.  India's FTAs have helped to reduce trade barriers and promote trade and economic growth. They have also helped to attract foreign investment and create jobs. 

  • The South Asian Free Trade Agreement (SAFTA) was signed in 1995 by the seven countries of the South Asian Association for Regional Cooperation (SAARC). SAFTA aims to reduce or eliminate tariffs on trade between the member countries.
  • The India-Bangladesh FTA was signed in 2010 and came into force in 2011. It is a comprehensive FTA that covers goods, services, and investments.
  • The India-Sri Lanka FTA was signed in 1999 and came into force in 2000. It is a comprehensive FTA that covers goods, services, and investments.
  • The India-ASEAN Free Trade Agreement was signed in 2002 and came into force in 2010. It is a comprehensive FTA that covers goods, services, and investments.
  • The India-Korea Comprehensive Economic Partnership Agreement (CEPA) was signed in 2010 and came into force in 2011. It is a comprehensive FTA that covers goods, services, and investments.
  • The India-Japan Comprehensive Economic Partnership Agreement(CEPA) was signed in 2022 and came into effect in 2023. It is a comprehensive FTA that covers goods, services, and investments.
  • The India-UAE Comprehensive Partnership Agreement (CEPA) was signed in 2022 and came into effect in 2022. It is a comprehensive FTA that covers goods, services, and investments.
  • The India-Australia Economic Cooperation and Trade Agreement (ECTA) was signed in 2022 and came into effect in 2022. It is a comprehensive FTA that covers goods, services, and investments.
  • The India-Malaysia Comprehensive Economic Cooperation Agreement (CECA) was signed in 2010 and aims to enhance economic ties by addressing trade in goods and services, as well as investment and other areas of economic cooperation.
  • The India-Thailand Free Trade Agreement was signed in 2003 and focuses on reducing tariffs and promoting trade in goods and services between India and Thailand.
  • The India-Singapore Comprehensive Economic Cooperation Agreement (CECA) has been operational since 2005, this agreement covers trade in goods and services, as well as investment and intellectual property.
  • The India-Nepal Trade Treaty While not a comprehensive FTA, India and Nepal have a trade treaty that facilitates the exchange of goods between the two countries.
  • The India-Chile Preferential Trade Agreement was signed in 2006 and aims to enhance economic cooperation and reduce tariffs on certain products traded between India and Chile.

5.  India - UK Free Trade Agreement

5.1. Background

  • Both countries have agreed to avoid sensitive issues in the negotiations.
  • The interim (early harvest agreement) aims to achieve up to 65 per cent coverage for goods and up to 40 per cent coverage for services.
  • By the time the final agreement is inked, the coverage for goods is expected to go up to "90 plus a percentage" of goods.
  • India is also negotiating a similar early harvest agreement with Australia, which is supposed to set the stage for a long-pending Comprehensive Economic Cooperation Agreement that both countries have been pursuing for nearly a decade.
  • While the commencement of negotiations does mark a step forward in the otherwise rigid stance adopted and when it comes to trade liberalisation, experts point to impediments and the potential for legal challenges going ahead.

5.2. GATT (General Agreement on Trade and Tariffs)

  • The exception to the rule is full-scale FTAs, subject to some conditions.
  • One rider, incorporated in Article XXIV.8 (b) of GATT, stipulates that a deal should aim to eliminate customs duties and other trade barriers on "Substantially all the trade" between the WTO member countries that are signatories to an FTA.
  • For this Agreement, a free-trade area shall be understood to mean a group of two or more customs territories in which the duties and other restrictive regulations of commerce are eliminated on substantially all the trade between the constituent territories in products originating in such territories.
  • It is often beneficial to negotiate the entire deal together, as an early harvest deal may reduce the incentive for one side to work towards a full FTA.
  • These agreements are not just about goods and services but also issues like investment.
  • If you are trying to weigh the costs and benefits, it is always better to have the larger picture in front of you.
  • In the case of the early harvest agreement inked with Thailand, automobile industry associations had complained that relaxations extended to Bangkok in the early harvest had reduced the incentive for Thailand to work towards a full FTA.
  • Early harvest agreements may serve the function of keeping trading partners interested as they promise some benefits without long delays, as India becomes known for long-drawn negotiations for FTAs.
  • Government emphasis on interim agreements may be tactical so that a deal may be achieved with minimum commitments and would allow for contentious issues to be resolved later.
 
For Prelims: Free Trade Agreement, India-U.K, Bilateral Free Trade Agreement, G-20 Summit, Agenda 2030, Covid-19 Pandemic, SAARC, General Agreement on Trade and Tariffs, Comprehensive Economic Partnership Agreement, Multilateral Free Trade Agreement, Regional Free Trade Agreement, Preferential Trade Agreement, Customs Union, 
For Mains: 
1. Evaluate the potential impact of the India-UK FTA on the Indian economy, considering both positive and negative aspects (250 Words)
2. Critically evaluate the significance of Free Trade Agreements (FTAs) in promoting trade and economic growth, considering their potential benefits and drawbacks. (250 Words)
 
 
Previous Year Questions
 
1. Consider the following countries:
1. Australia
2. Canada
3. China
4. India
5. Japan
6. USA
Which of the above are among the free-trade partners' of ASEAN? (UPSC 2018)
A. 1, 2, 4 and 5          B.  3, 4, 5 and 6      C.  1, 3, 4 and 5       D.  2, 3, 4 and 6
 
Answer: C
 

2. Increase in absolute and per capita real GNP do not connote a higher level of economic development, if (UPSC 2018)

(a) Industrial output fails to keep pace with agricultural output.
(b) Agricultural output fails to keep pace with industrial output.
(c) Poverty and unemployment increase.
(d) Imports grow faster than exports.

Answer: C

3. The SEZ Act, 2005 which came into effect in February 2006 has certain objectives. In this context, consider the following: (2010)

  1. Development of infrastructure facilities.
  2. Promotion of investment from foreign sources.
  3. Promotion of exports of services only.

Which of the above are the objectives of this Act?

(a) 1 and 2 only     (b) 3 only         (c) 2 and 3 only           (d) 1, 2 and 3

Answer: A

4. A “closed economy” is an economy in which (UPSC 2011)

(a) the money supply is fully controlled
(b) deficit financing takes place
(c) only exports take place
(d) neither exports nor imports take place

Answer: D

5. With reference to the “G20 Common Framework”, consider the following statements: (UPSC 2022)
1. It is an initiative endorsed by the G20 together with the Paris Club.
2. It is an initiative to support Low Income Countries with unsustainable debt.
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
 
 Source: The Hindu

LINE OF ACTUAL CONTROL (LAC)

 
1.Context
The Indian military’s modernisation budget for 2024-25 saw a meagre hike of 6.17 per cent despite the ongoing standoff with China along the Line of Actual Control in eastern Ladakh and a slew of terror attacks on security forces in Jammu and Kashmir last year
Pic credits: TRT WORLD
 
2.About Line of Actual Control (LAC)
The LAC is the demarcation that separates Indian-controlled territory from Chinese-controlled territory.
India considers the LAC to be 3,488 km long, while the Chinese consider it to be only around 2,000 km
It is divided into three sectors:
 
The eastern sector which spans Arunachal Pradesh and Sikkim,
The middle sector in Uttarakhand and Himachal Pradesh, and the western sector in Ladakh
 
3.The disagreement
  • The alignment of the LAC in the eastern sector is along the 1914 McMahon Line, and there are minor disputes about the positions on the ground as per the principle of the high Himalayan watershed
  • This pertains to India’s international boundary as well, but for certain areas such as Longju and Asaphila
  • The line in the middle sector is the least controversial but for the precise alignment to be followed in the Barahoti plains.
  • The major disagreements are in the western sector where the LAC emerged from two letters written by Chinese Prime Minister Zhou Enlai to PM Jawaharlal Nehru in 1959, after he had first mentioned such a ‘line’ in 1956.
  • In his letter, Zhou said the LAC consisted of “the so-called McMahon Line in the east and the line up to which each side exercises actual control in the west”
  • After the 1962 War, the Chinese claimed they had withdrawn to 20 km behind the LAC of November 1959
  • During the Doklam crisis in 2017, the Chinese Foreign Ministry spokesperson urged India to abide by the “1959 LAC”
  • India rejected the concept of LAC in both 1959 and 1962. Even during the war, Nehru was unequivocal: “There is no sense or meaning in the Chinese offer to withdraw twenty kilometres from what they call ‘line of actual control’
4.India's agreement to LAC
  • LAC was discussed during Chinese Premier Li Peng’s 1991 visit to India, where PM P V Narasimha Rao and Li reached an understanding to maintain peace and tranquillity at the LAC. 
  • India formally accepted the concept of the LAC when Rao paid a return visit to Beijing in 1993 and the two sides signed the Agreement to Maintain Peace and Tranquillity at the LAC
  • The reference to the LAC was unqualified to make it clear that it was not referring to the LAC of 1959 or 1962 but to the LAC at the time when the agreement was signed
  • To reconcile the differences about some areas, the two countries agreed that the Joint Working Group on the border issue would take up the task of clarifying the alignment of the LAC
5.How is the LAC different from the Line of Control with Pakistan?

The LoC emerged from the 1948 ceasefire line negotiated by the UN after the Kashmir War. It was designated as the LoC in 1972, following the Shimla Agreement between the two countries. It is delineated on a map signed by DGMOs of both armies and has the international sanctity of a legal agreement.

The LAC, in contrast, is only a concept – it is not agreed upon by the two countries, neither delineated on a map or demarcated on the ground.

 

For Prelims: LAC, LOC

For Mains:

1.What is this ‘line of control’? Is this the line China have created by aggression. Comment

2.What we know about the clash between Indian and Chinese soldiers in Arunachal Pradesh

 

Previous Year Questions

1.The Line of Actual Control (LAC) separates  (Karnataka Civil Police Constable 2020)

A.India and Pakistan

B.India and Afghanistan

C.India and Nepal

D.India and China

Answer (D)

2.LAC (Line of Actual Control) is an effective border between India and ______. (SSC CHSL 2020)

A.Pakistan

B.Bhutan

C.Sri Lanka

D.China

Answer (D)
 
 
 
Source:indianexpress
 

PRADHAN MANTRI SURYODAYA YOJANA

 
 
1. Context
 
People availing of the government’s newly-announced rooftop solar scheme will be entitled to 300 units of free electricity every month and help them save up to Rs 18,000 annually
 
2.What is the Pradhan Mantri Suryodaya Yojana?
 
  • Prime Minister Narendra Modi introduced the 'Pradhanmantri Suryodaya Yojana' on January 22, following his participation in the consecration of the new Ram temple in Ayodhya. During the announcement, Modi outlined plans to install rooftop solar systems in "one crore houses," although he did not specify a timeline for achieving this target.
  • While comprehensive details of the scheme were not immediately available, Finance Minister Sitharaman, in her Budget speech, highlighted its potential to generate significant savings for participating households, ranging from Rs 15,000 to Rs 18,000 annually. This would be accomplished through the provision of free solar electricity and the opportunity to sell surplus power to distribution companies.
  • Sitharaman also emphasized the positive impact of the scheme on the adoption of electric vehicles (EVs), as it would facilitate the installation of charging stations at home. Additionally, the 'Pradhanmantri Suryodaya Yojana' was anticipated to stimulate entrepreneurship and create employment opportunities in the areas of supplies, installation, and maintenance.
  • It's worth noting that the new scheme builds upon an existing rooftop solarization program that has been ongoing for at least a decade. The government had initially aimed to achieve 40 gigawatts (GW), or 40 percent, of its 100 GW solar capacity target by 2022 through rooftop systems. However, as of the end of 2023, the country's total solar capacity reached 73.3 GW, with grid-connected rooftop systems constituting only approximately 11 GW, or 15 percent of the total capacity
3.Rooftop Solar Scheme
 

The Rooftop Solar Scheme, officially known as the Surya Mitra program, is an initiative launched by the Ministry of New and Renewable Energy (MNRE) of the Government of India to promote the installation of rooftop solar power systems across the country. It aims to make India more energy-independent, reduce electricity bills, and create a sustainable energy future.

Key features of the Rooftop Solar Scheme:

  • Financial assistance: The scheme provides financial assistance in the form of subsidies and loans to make rooftop solar more affordable. The subsidy amount depends on the capacity of the system and the location. For example, in India, the subsidy for residential systems can be up to 40% of the system cost, with a maximum cap of ₹40,000
  • Net metering: Net metering allows consumers to sell their excess solar energy back to the grid, earning credits that can be used to offset their electricity bills. This makes rooftop solar even more attractive, as it can generate income in addition to saving on electricity costs.
  • Simplified process: The application process for the Rooftop Solar Scheme has been simplified to make it easier for people to participate. Applications can now be submitted online through the National Portal for Rooftop Solar.
  • Wide range of benefits: Rooftop solar offers a wide range of benefits, including:
    • Reduced electricity bills: By generating their own electricity, consumers can significantly reduce their dependence on the grid, leading to lower electricity bills.
    • Increased energy independence: Rooftop solar helps to reduce reliance on fossil fuels and imported energy, making the country more energy independent.
    • Environmental benefits: Solar energy is a clean and renewable source of energy, which helps to reduce greenhouse gas emissions and combat climate change.
    • Job creation: The Rooftop Solar Scheme is expected to create a large number of jobs in the solar energy sector.

Eligibility for the Rooftop Solar Scheme:

The Rooftop Solar Scheme is open to a wide range of individuals and institutions, including:

  • Residential households
  • Industrial units
  • Commercial establishments
  • Government buildings
  • Educational institutions
 
What is India’s current solar capacity?
 
India had a total solar capacity of around 73.3 gigawatts (GW).  The installed solar capacity was 73.32 GW.
 
 
4.Why is an expansion of solar energy important for India?
 
The expansion of solar energy is considered crucial for India due to several reasons, encompassing environmental, economic, and social factors. Here are some key reasons why the growth of solar energy is important for India:
 
  • Solar energy is a clean and renewable energy source that produces electricity without emitting harmful pollutants or greenhouse gases. Expanding solar capacity helps reduce India's reliance on fossil fuels, mitigating air pollution and contributing to efforts to combat climate change
  • Diversifying the energy mix by incorporating solar power enhances energy security. India is heavily dependent on imported fossil fuels, and an increased reliance on indigenous solar resources helps reduce vulnerability to fluctuations in global energy markets.
  • Solar energy contributes to mitigating the impacts of climate change by decreasing the carbon footprint associated with traditional energy sources. India has committed to reducing its carbon intensity and increasing the share of renewable energy in its total energy mix as part of its climate action efforts
  • Solar energy is particularly beneficial for rural areas where grid connectivity is limited. Off-grid solar solutions, such as solar home systems and mini-grids, can provide electricity to remote regions, improving living standards and supporting economic development
  • The solar industry has the potential to generate employment opportunities in various stages, including manufacturing, installation, maintenance, and research and development. This can contribute to India's economic growth and address unemployment challenges
  • Over the years, the cost of solar technology has significantly decreased, making it more economically viable. The expansion of solar energy in India can lead to lower electricity costs, making it an attractive option for consumers and businesses.
  • India has ambitious goals to provide electricity access to all its citizens. Solar energy, especially decentralized solutions like rooftop solar, can play a crucial role in meeting this objective by providing power to remote and off-grid areas
  • Investing in solar energy encourages research and development in renewable energy technologies. This fosters innovation, drives technological advancements, and positions India as a leader in the global clean energy transition
5.How this scheme can help in the adoption of electric vehicles (EVs)?
 
The integration of solar energy schemes, such as the 'Pradhanmantri Suryodaya Yojana,' can play a significant role in promoting the adoption of electric vehicles (EVs) in several ways:
  • Solar schemes often include provisions for the installation of solar-powered charging stations. By having solar-based charging infrastructure at home or in public spaces, EV users can access clean and renewable energy for charging their vehicles. This addresses one of the concerns associated with EV adoption – the availability of convenient and sustainable charging options
  • Solar energy generated through rooftop installations can be used to charge electric vehicles, leading to cost savings for EV owners. By utilizing the free energy generated from the sun, EV users may experience reduced charging costs, making electric vehicles more economically attractive.
  • Governments may introduce incentives or subsidies for individuals who integrate solar power with their EV charging infrastructure. These incentives can include tax benefits, rebates, or other financial rewards, encouraging more people to adopt both solar energy and electric vehicles
  • Solar energy systems, when combined with EV charging, can help manage grid loads more efficiently. Charging EVs during daylight hours when solar production is at its peak can offset the demand on the grid and contribute to a more balanced and sustainable energy distribution system
  • Both electric vehicles and solar energy contribute to environmental sustainability. The combined use of solar power and EVs creates a synergistic effect, reducing greenhouse gas emissions and promoting a cleaner and more sustainable transportation ecosystem
  • By combining solar energy for both residential power needs and EV charging, individuals can achieve a higher level of energy independence. This aligns with the broader goal of reducing reliance on traditional energy sources and fostering a more decentralized and resilient energy system
  • The integration of solar energy and electric vehicles aligns with the broader trend toward sustainable and eco-friendly lifestyles. It encourages individuals to make environmentally conscious choices, contributing to the overall shift toward a low-carbon and sustainable future
  • The introduction of such schemes raises public awareness about the interconnected benefits of renewable energy and electric vehicles. This can influence consumer attitudes, making them more open to adopting both solar power and electric vehicles as part of a holistic approach to sustainable living
6.Way forward
 
The integration of solar energy schemes with EV adoption creates a symbiotic relationship that addresses charging infrastructure concerns, provides cost advantages, supports environmental sustainability, and contributes to a more comprehensive shift toward clean and renewable energy solution
 
 
For Prelims: Economic and Social Development
For Mains: General Studies III: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.
 
 
Previous Year Questions
 
1.Consider the following statements: (UPSC CSE 2016)
1. The International Solar Alliance was launched at the United Nations Climate Change Conference in 2015.
2. The Alliance includes all the member countries of the United Nations.
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 (A)
 
Source: Indianexpress

SNOW LEOPARD

 
 
 
1. Context 
 
 
Recently, The National Board for Wildlife meeting in New Delhi released the report on the Status of Snow Leopards in India by the Union Minister of Environment, Forest, and Climate Change (MoEFCC).
 
 
2. About Snow Leopard
  • The snow leopard (Panthera uncia) is a large, elusive cat native to the mountainous regions of Central and South Asia.
  • Snow leopards are found in alpine and subalpine zones at elevations ranging from 3,000 to 4,500 meters (9,800 to 14,800 feet) in the high mountain ranges of Central Asia, including the Himalayas, Karakoram, Hindu Kush, and Altai Mountains.
  • They have a thick, long fur coat with a unique pattern of rosettes and spots that provide excellent camouflage in their rocky, snowy habitat.
  • The tail of a snow leopard is long and thick, aiding in balance and acting as a warm covering when wrapped around the body during colder temperatures.
  • Snow leopards have several physiological adaptations to thrive in their high-altitude environments, including large nasal cavities for efficient oxygen intake and powerful hind limbs for climbing and leaping.
  • The primary diet of snow leopards consists of blue sheep (bharal), Himalayan tahr, marmots, and other small mammals. They are solitary hunters and are known for their ability to traverse steep and rugged terrains.
  •  Snow leopards are listed as "Vulnerable" on the International Union for Conservation of Nature (IUCN) Red List of Threatened Species. The main threats to their survival include poaching, habitat loss, retaliatory killings by herders, and climate change.
  • Estimating the population of snow leopards is challenging due to their elusive nature and remote habitat. Conservation efforts, such as the Snow Leopard Population Assessment in India (SPAI), aim to provide more accurate population figures.
  • Various organizations and countries are involved in conservation initiatives to protect snow leopards and their habitats. These efforts often include community-based conservation, anti-poaching measures, and research to better understand and conserve these magnificent big cats.
  • Snow leopards hold cultural significance in the regions where they are found. They are often considered symbols of strength and resilience and are sometimes associated with local folklore and mythology.
 
3. About Snow Leopard Population Assessment in India (SPAI)
 
  • The SPAI Program is the first-ever comprehensive scientific exercise aimed at assessing the population of snow leopards in India.
  • The Wildlife Institute of India (WII) served as the National Coordinator for the SPAI, with support from snow leopard range states and conservation partners, the Nature Conservation Foundation (NCF), Mysuru and World Wildlife Fund(WWF)-India.
  • The Snow Leopard Population Assessment in India (SPAI) has successfully estimated a population of 718 snow leopards across key regions, including Ladakh, Jammu and Kashmir, Himachal Pradesh, Uttarakhand, Sikkim, and Arunachal Pradesh. Conducted between 2019 and 2023, this study marks a significant advancement in our understanding of the elusive and keystone species, the snow leopard.
  • Snow leopards, known as the 'ghost of the mountains,' are found to inhabit approximately 1 lakh sq km of the higher Himalayan terrains in India. As recently as 2016, the status of these cats remained unknown in about one-third of their range, resonating with the mystery and stealth attributed to these elusive creatures.
  • The study underscores the crucial link between human actions and the conservation of snow leopards. Understanding the status of the species across its range is imperative for crafting effective conservation policies. Given the snow leopard's habitat as the source of major Himalayan rivers vital for sustaining life across much of India, securing the future of this species becomes integral to securing our own.
  • Despite the necessity of studying snow leopards to formulate appropriate conservation strategies, a national effort to count these elusive creatures faced daunting challenges. Referred to colloquially as 'studying abundance,' this initiative aimed to address the complexities of surveying snow leopards across their vast and challenging range.

4. Challenges in Counting Snow Leopards

Accurately counting snow leopards, these majestic but elusive inhabitants of the Himalayas, present a unique set of challenges.

  • Rugged Terrain: Snow leopards call the unforgiving high Himalayas home, ranging from 10,500 to 17,000 feet above the tree line. Much of this habitat lacks motorable roads, and the thin air makes even basic tasks like setting camera traps a test of endurance.
  • AI Limitations: Camera traps capture valuable data, but analyzing photos presents a unique challenge. While specialized software can identify individuals based on stripes or rosettes in other big cats, snow leopards pose a problem. Their thick fur can obscure markings, and unlike tigers or zebras, they don't easily conform to AI algorithms.
  • Misidentification Woes: Accurately distinguishing individual snow leopards is crucial. However, their variable fur patterns can lead to misidentification, especially when ruffled or photographed at different angles. To overcome this, researchers rely on manual evaluation of at least three marking patterns by multiple independent analysts.
  • Capturing the Right Angle: The head and tail offer the best identification markers. Strategies like positioning cameras to capture the forehead region, as done in Ladakh's SPAI study, can help. However, this requires multiple cameras at each location, stretching resources.

5. Unveiling India's Snow Leopard Population

The Snow Leopard Population Assessment in India (SPAI) employed a meticulous protocol to estimate the elusive cat's numbers across its vast and rugged habitat.

Nationwide Effort

Acknowledging the challenges posed by the snow leopard's secretive nature and challenging terrain, SPAI partnered with NGOs to develop a standardized estimation protocol in 2019. Over the next three years, researchers meticulously collected data from 1,971 camera trap locations, ultimately identifying 241 unique individuals. This data was then used to estimate a national population of 718 snow leopards.

Regional Variations

  • Ladakh: Camera traps covered 8,604 sq km for 120-180 days, capturing 10,789 images and identifying 126 unique adults based on their distinctive forehead patterns. This translated to an estimated population of 477 across 47,572 sq km.
  • Jammu & Kashmir: Despite deploying 278 camera traps, only 9 unique individuals were identified, falling short of providing a comprehensive population estimate for the 949 sq km area.
  • Himachal Pradesh: 44 unique individuals were identified from 284 camera traps, leading to an estimated population of 51 across 25,000 sq km.
  • Uttarakhand: 396 photos revealed 41 unique individuals, suggesting a population of 124 occupying 12,768 sq km.
  • Eastern Himalayas: Arunachal Pradesh estimated a population of 36 across 14,156 sq km based on 8 unique individuals identified from 115 camera traps. Sikkim identified 14 unique individuals from 64 photos, estimating a population of 21 across 400 sq km.
 
6. The outlook for snow leopards
  • In the 1980s, a guesstimate of a global population of 4,000–7,500 snow leopards cited 400–700 individuals in India. In the 1990s, another guesstimate put 200-600 snow leopards in India out of a global count of 3,020-5,390. In 2016, India’s leading snow leopard researchers came together to put the national estimate at 516 (238- 1039).
  • The present count of 718 (594-825) is consistent with the trend and suggests overall population stability. Yet, this is just the beginning of understanding the elusive species, its dispersal and competitive land use patterns and mortality trends at a landscape level.
  • Infrastructure development, particularly highways and hydropower projects, is causing a rapid influx of labourer camps in the higher Himalayas who often depend on scarce natural resources for fuel and food. Such migrations, along with a boom in tourism in snow leopard areas have also led to garbage mismanagement which, in turn, is fuelling an explosion in the free-ranging dog population that competes with snow leopards.
  • While climate change is likely to determine the snow leopard’s fate in the long term, mitigating the impact of such rapid demographic changes on the species is essential to secure its immediate future. 
 

7. Historical Perspectives on Snow Leopard Population Estimates

  • In the 1980s, a rough estimation of the global snow leopard population ranged from 4,000 to 7,500, with approximately 400 to 700 individuals believed to inhabit India. Subsequent estimates in the 1990s suggested a population of 200 to 600 snow leopards in India out of a global count of 3,020 to 5,390. By 2016, leading snow leopard researchers in India proposed a national estimate of 516 (238-1039) individuals.
  • The recent count of 718 (594-825) snow leopards in India aligns with the historical trend and indicates overall population stability. However, this figure represents just the initial phase of comprehending the elusive species, including its dispersal patterns, competitive land use dynamics, and mortality trends at a landscape level.
  • The rapid development of infrastructure, particularly highways and hydropower projects, is triggering an influx of labourer camps in the higher Himalayas. These labourers often rely on scarce natural resources for fuel and food. Concurrently, an increase in tourism in snow leopard habitats has led to inadequate garbage management, contributing to a surge in the free-ranging dog population. This growing dog population poses a direct competition with snow leopards for resources.
  • While climate change is expected to play a crucial role in determining the long-term fate of snow leopards, immediate efforts are necessary to mitigate the impacts of rapid demographic changes induced by infrastructure development and human activities. Ensuring the coexistence of snow leopards with human communities and managing environmental pressures resulting from these changes becomes imperative for securing the species' immediate future.
 
8. The Way Forward
 
The SPAI report offers valuable insights into India's snow leopard population. However, it also underscores the need for ongoing conservation efforts to address emerging threats and secure the long-term future of these magnificent creatures.
 
 
For Prelims: Snow Leopard, IUCN Red List, SPAI, National Board for Wildlife
For Mains: 
1. Discuss the challenges posed by climate change to the survival of snow leopards in the Himalayas. Suggest mitigation measures that can be implemented at national and international levels. (250 Words)
 
 
Previous Year Questions

1. Consider the following: (UPSC 2012)

  1. Black-necked crane
  2. Cheetah
  3. Flying squirrel
  4. Snow leopard

Which of the above are naturally found in India?

(a) 1, 2 and 3 only         (b) 1, 3 and 4 only            (c) 2 and 4 only              (d) 1, 2, 3 and 4

2. The National Board for Wild Life (NBWL) was constituted by the Central Government under Section ______ of the Wildlife (Protection) Act, 1972. (UP Police SI 2021)

A. Section 13      B. Section 2 A         C. Section 10          D. Section 5 A

Answers: 1-B, 2- D
Source: The Indian Express
 

MULTIDIMENSIONAL POVERTY 

 
 
 
1. Context 
 
Recently, In her Interim Budget address, Finance Minister Nirmala Sitharaman announced that over the past decade, the government's commitment to 'Sabka ka Saath' had resulted in lifting 25 crore Indians out of multidimensional poverty. She emphasized that through collaborative efforts, the government had successfully provided freedom from poverty to this significant population.

2. Basis for the Assessment 

  • The basis for this assessment is outlined in a discussion paper titled "Multidimensional Poverty in India Since 2005-06," published by NITI Aayog on January 15.
  • The paper incorporates technical inputs from the United Nations Development Programme (UNDP) and the Oxford Policy and Human Development Initiative (OPHI). 
  • The study reveals that multidimensional poverty in India witnessed a decline from 29.17% in 2013-14 to 11.28% in 2022-23, resulting in approximately 24.82 crore people escaping poverty during this period.
  • At the state level, Uttar Pradesh led the way with 5.94 crore people emerging from poverty, followed by Bihar with 3.77 crore and Madhya Pradesh with 2.30 crore.
 
3. About Multi-dimensional Poverty Index

While traditional poverty measures rely solely on income or expenditure levels, the Multidimensional Poverty Index (MPI) offers a more nuanced picture. Developed by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP), the MPI takes into account not just income, but also various deprivations across three key dimensions:

  • Health: This dimension incorporates indicators like nutrition and child mortality, reflecting access to basic healthcare and well-being.
  • Education: Years of schooling and school attendance are used to gauge educational attainment and opportunities for future development.
  • Standard of living: A set of six indicators, including housing, household assets, cooking fuel types, sanitation access, water availability, and electricity, capture essential living conditions and resource ownership.

In the Indian context, the MPI goes a step further by including two additional indicators:

  • Maternal health: Recognizing the importance of mothers' well-being for family health, this indicator reflects access to proper care during pregnancy and childbirth.
  • Bank accounts: This indicator signifies financial inclusion and the potential for accessing financial services, which can be crucial for escaping poverty.

4. Calculation of the Multidimensional Poverty Index (MPI)

To determine the Multidimensional Poverty Index (MPI), the process involves three distinct calculations according to the MPI methodology:

  1. Incidence of Multidimensional Poverty (H): This calculation determines the proportion of multidimensionally poor individuals in the population. It is achieved by dividing the number of multi-dimensionally poor individuals by the total population. In simpler terms, it answers the question: How many people are considered poor?
  2. Intensity of Poverty (A): The intensity of poverty assesses the average proportion of deprivation experienced by multidimensionally poor individuals. To compute intensity, the weighted deprivation scores of all poor individuals are summed and then divided by the total number of poor people. More technically, it answers the question: How poor are the individuals who are considered multidimensionally poor?
  3. Multidimensional Poverty Index (MPI): The MPI is derived by multiplying the incidence of multidimensional poverty (H) and the intensity of poverty (A). The MPI value for a given population is, therefore, the share of weighted deprivations faced by multidimensionally poor individuals divided by the total population.
 
5. Data Sources 
 
  • The data for the years 2013-14 and 2022-23 were gathered through established methods, with the health metrics relying on information from various rounds of the National Family Health Survey (NFHS).
  • Conducted every five years, the most recent round of NFHS pertains to the period from 2019 to 2021.
  • The NFHS serves as a crucial data source, offering insights into health-related indicators that contribute to the assessment of multidimensional poverty.
  • The utilization of NFHS data ensures a comprehensive and periodic evaluation of health metrics, providing a reliable basis for the assessment of multidimensional poverty over the specified time frames.
 

6. Calculation Methodology for MPI in 2012-13 and 2022-23

The determination of the Multidimensional Poverty Index (MPI) for the years 2012-13 and 2022-23 involved a process of interpolation for the former and extrapolation for the latter, as outlined in the paper.

  • Interpolation for 2012-13: The estimation for the year 2013-14 served as a reference point. To obtain MPI values for the preceding year, interpolation techniques were applied, allowing for a comprehensive understanding of poverty and deprivation in 2012-13.
  • Extrapolation for 2022-23: For the year 2022-23, extrapolation methods were employed to project MPI values based on the available data points. This forward projection allowed for an assessment of poverty and deprivation in the specified year.

 

7. The Way Forward

The NITI Aayog paper provides valuable insights, understanding the basis for the assessment requires considering the limitations of interpolation and extrapolation used for crucial years and the lack of detailed information about the methods employed. Transparency in data sources and methodologies is crucial for a more comprehensive evaluation of the claim.

 

For Prelims: Poverty, Interim Budget, Niti Aayog, UNDP, Multidimensional Poverty Index 
For Mains: 
1. Critically examine the role of government policies and programs in contributing to the reduction of multidimensional poverty in India. Suggest potential interventions that could further address this issue. (250 Words)
2.  Imagine you are appointed as a policy advisor to the government. Design a multi-pronged strategy to address multidimensional poverty in a specific rural or urban community in India. Consider the economic, social, and environmental dimensions of poverty reduction. (250 Words)
 
Previous Year Questions
 
1. Which of the following are the Objectives of 'National Nutrition Mission'? (UPSC 2017)
1. To Create Awareness relating to malnutrition among pregnant women and lactating mothers
2. To reduce the incidence of anaemia among young children, adolscent girls, and women
3. To promote the Consumption of millets, coarse cereals, and unpolished rice
4. To promote the consumption of poultry eggs
Select the correct answer using the code given below
A. 1 and 2 Only       B.1, 2 and 3         C. 1, 2 and 4           D. 3 and 4
 
2. In a given year in India, official poverty lines are higher in some States than in others because (UPSC 2019)
A. Poverty rates vary from State to State
B. Price levels vary from State to State
C. Gross State Product varies from State to State
D. Quality of public distribution varies from State to State
 
Answers: 1-A, 2- B
 
Source: The Indian Express
 
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