FLOOR TEST
1. Context
The new Champai Soren government won the trust vote on the floor of the Jharkhand Assembly on Monday after 47 Jharkhand Mukti Morcha (JMM)-led alliance legislators voted for the motion and 29 against it. Mr. Champai Soren moved the motion on which a debate was held.
2. What is a Floor Test?
- The floor test is a constitutional mechanism to ensure that the government is accountable to the legislature. It prevents the government from becoming authoritarian and allows the people to have a say in the government.
- The Speaker of the Assembly asks the members to vote whether they have confidence in the government.
- If the government gets a majority of votes, it is deemed to have passed the floor test. Otherwise, the government is defeated and has to resign.
- This is a crucial aspect of the constitutional framework that ensures the democratic functioning of the government
2.1. Key Features of floor test
Here's how a floor test in a constitutional context typically works:
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No-Confidence Motion: A floor test is usually initiated when a no-confidence motion is submitted by the opposition or other members of the legislative body. This motion expresses a lack of confidence in the current Chief Minister (in the case of a state assembly) or the Prime Minister (in the case of the national parliament).
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Debate: Before the actual vote, there is often a debate during which members of the legislative body discuss the reasons for the no-confidence motion and the performance of the government. The Chief Minister or Prime Minister is given an opportunity to defend their government's actions and seek the support of the members.
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Voting: After the debate, a formal vote is conducted. Members of the legislative body, including ruling party members, opposition members, and independents, cast their votes. They can vote in favor of the government, against it, or abstain. The Chief Minister or Prime Minister must secure a majority of votes in their favor to continue in office.
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Outcome: If the Chief Minister or Prime Minister wins the majority of votes (i.e., they have the confidence of the legislative body), they remain in office. If they fail to secure a majority, they are required to resign, and the legislative body may take steps to form a new government, which could involve electing a new leader or calling for fresh elections.
3. What is 'Collective responsibility'?
- "Collective responsibility" is a fundamental principle in parliamentary systems of government, particularly in countries with a Westminster-style parliamentary system like the United Kingdom and India.
- It refers to the collective accountability of government ministers or members of the executive branch to the legislative body (parliament or a similar institution)
- In parliamentary systems, the executive branch of the government is headed by a Prime Minister or Chief Executive, and it includes various government ministers responsible for different portfolios (e.g., finance, foreign affairs, defense).
- These ministers, collectively known as the cabinet, are usually drawn from the majority party or coalition in the legislature
- Collective responsibility means that all members of the cabinet are collectively responsible for government policies and decisions.
- They act as a team and present a united front in support of government actions and policies, even if they personally disagree with them. This principle promotes the idea that the cabinet stands or falls together.
4.Tenth Schedule of the Indian Constitution
The Tenth Schedule of the Indian Constitution, also known as the "Anti-Defection Law," deals with the disqualification of elected members of legislatures on the grounds of defection to another political party.
It was added to the Constitution through the 52nd Amendment Act, 1985, and it has been subsequently amended to address various issues related to defection in Indian politics.
Key provisions of the Tenth Schedule include:
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Definition of Defection: The Tenth Schedule specifies the circumstances under which a member of a legislature (Member of Parliament or Member of a Legislative Assembly) can be disqualified on the grounds of defection. Defection is broadly defined as voluntarily giving up the membership of the political party on whose ticket the member was elected, or voting against the party's whip on certain significant matters.
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Disqualification: If a member of a legislature is found to have defected according to the provisions of the Tenth Schedule, they can be disqualified from their membership. The disqualification is determined by the Presiding Officer (Speaker in the case of the Lok Sabha or Legislative Assemblies) of the respective legislative body.
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Exemptions: There are certain situations in which defection is not considered grounds for disqualification. For example, if one-third or more members of a party decide to merge with another party, they are not disqualified. However, this exemption has certain conditions.
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Anti-Defection Tribunals: The Tenth Schedule allows for the establishment of Anti-Defection Tribunals to adjudicate disputes related to defection. These tribunals have the authority to decide on matters of disqualification.
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Decision of the Presiding Officer: The decision of the Presiding Officer regarding disqualification can be challenged in the courts. However, until the court makes a decision, the member remains disqualified.
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For Prelims: Tenth Schedule of Indian Constitution, Article 164
For Mains: 1.Discuss the significance of the Tenth Schedule of the Indian Constitution in the context of maintaining the integrity of political parties and promoting party discipline. How has it evolved since its inception, and what challenges does it address?
2.Explain the concept of a "floor test" in the Indian parliamentary system. How does it ensure the accountability of the government to the legislature? Provide recent examples where floor tests played a crucial role in Indian politics.
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Previous Year Questions
1.Which one of the following Schedules of the Constitution of India contains provisions regarding anti-defection? (UPSC CSE Prelims 2014)
(a) Second Schedule (b) Fifth Schedule (c) Eighth Schedule (d) Tenth Schedule Answer (d)
2.With reference to the Legislative Assembly of a State in India, consider the following statements: (UPSC CSE Prelims 2019 )
1. The Governor makes a customary address to Members of the House at the commencement of the first session of the year. 2. When a State Legislature does’ not have a rule on a particular matter, it follows the Lok Sabha rule on that matter. 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)
3.Which of the following are the discretionary powers given to the Governor of a State? (UPSC CSE Prelims, 2014)
1. Sending a report to the President of India for imposing the President’s rule 2. Appointing the Ministers 3. Reserving certain bills passed by the State Legislature for consideration of the President of India 4. Making the rules to conduct the business of the State Government Select the correct answer using the code given below. (a) 1 and 2 only
(b) 1 and 3 only
(c) 2, 3 and 4
(d) 1, 2, 3, 4
Answer (b)
Mains
1.Discuss the conditions for the exercise of the legislative powers by the Governor. Discuss the legality of re- promulgation of ordinances by the Governor without placing them before the Legislature. (UPSC Mains GS2, 2022)
2.The role of individual MPs (Members of Parliament) has diminished over the years and as a result healthy constructive debates on policy issues are not usually witnessed. How far can this be attributed to the anti-defection law, which was legislated but with a different intention? (UPSC Mains GS2, 2013)
3.“Once a speaker, Always a speaker’! Do you think the practice should be adopted to impart objectivity to the office of the Speaker of Lok Sabha? What could be its implications for the robust functioning of parliamentary business in India. (UPSC Mains GS2, 2020)
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Source: indianexpress
QUAD
1. Context
Leaders of the Quad nations may not be able to meet for a summit in India before the U.S. elections, U.S. Ambassador Eric Garcetti said, stressing that the Quad agenda would be “more productive” by 2024-end. Australia, India, Japan, and the U.S. form the Quad
2. Quadrilateral Security Dialogue (QUAD)
- The Quad, short for the Quadrilateral Security Dialogue, is a strategic forum comprising four major Indo-Pacific countries: the United States, Japan, India, and Australia.
- The Quad was initiated in 2007 but was relatively dormant for several years before experiencing a revival and increased prominence in recent times.
3. Objectives
- The Quad aims to promote a free, open, and inclusive Indo-Pacific region. Its core objectives include ensuring regional security, stability, and economic prosperity.
- It seeks to uphold the rules-based international order and address common challenges such as maritime security, infrastructure development, economic connectivity, and disaster response.
4. Member Countries
- United States: As a major Pacific power, the U.S. plays a central role in the Quad, emphasizing its commitment to the Indo-Pacific region's security and stability.
- Japan: Japan is a key member, contributing its economic and technological prowess, and advocating for a rules-based international order.
- India: India brings its strategic location and growing influence in the Indo-Pacific to the Quad, strengthening regional security cooperation.
- Australia: Australia is a significant player, contributing to maritime security efforts and championing economic development in the Indo-Pacific.
5. Meetings and Engagement
- The Quad holds regular meetings at various levels, including ministerial meetings and consultations among senior officials.
- It engages in dialogues on a wide range of regional and global issues, from security and defense to infrastructure development and technology cooperation.
Regional Implications:
- The Quad has been viewed as a response to China's rising influence in the Indo-Pacific. However, member countries emphasize that it is not an alliance against any specific country but rather a platform for cooperation on shared interests.
- Some view the Quad as a potential counterbalance to China's assertive behavior in the South China Sea and its Belt and Road Initiative (BRI) infrastructure projects.
Expanding Partnerships:
- The Quad has sought to expand its partnerships with other countries in the Indo-Pacific, including Southeast Asian nations. This approach reflects its commitment to inclusivity and regional engagement.
6. Significance of QUAD for India
The Quad holds significant importance for India due to several strategic, economic, and geopolitical reasons:
Countering Regional Challenges:
- The Quad provides India with a platform to collaborate with like-minded countries, such as the United States, Japan, and Australia, to address common regional challenges. These challenges include maritime security, territorial disputes, and economic concerns in the Indo-Pacific.
Strengthening Regional Security:
- As a member of the Quad, India gains access to enhanced security cooperation, intelligence sharing, and joint exercises. This bolsters its ability to protect its interests and contribute to regional stability in the face of security threats.
Balancing China's Influence:
- India views the Quad as a mechanism to balance China's growing influence in the Indo-Pacific. It helps deter aggressive actions and assertive behavior by China, particularly in areas like the South China Sea and the Indian Ocean region.
Economic Opportunities:
- The Quad promotes economic connectivity and infrastructure development in the Indo-Pacific. India can leverage these initiatives to enhance its trade, investment, and connectivity in the region, which is vital for its economic growth.
Strengthening Ties with Key Allies:
- The Quad allows India to deepen its strategic partnerships with key allies, such as the United States and Japan. These relationships have resulted in increased defense cooperation, technology sharing, and economic collaboration.
Regional Leadership Role:
- Participation in the Quad elevates India's status as a regional leader in the Indo-Pacific. It aligns with India's "Act East" policy, reinforcing its commitment to the stability and prosperity of the broader region.
7. Challenges
- China's Territorial Claims: China claims that it has historical ownership over nearly the entire region of the South China Sea, which gives it the right to manufacture islands. However, the International Court of Arbitration rejected the claim in 2016.
- China's Closeness to ASEAN: The ASEAN countries also have a well-knit relationship with China. The Regional Cooperation Economic Partnership (RCEP) is a recent example of China's increasing influence over ASEAN nations.
- Economic Power of China: Considering the economic might of China and the dependence of QUAD nations like Japan and Australia on China, the QUAD nations can not afford to have strained relations with it.
- Convergence among Quad Nations: The nations in the Quad grouping have different aspirations, and aims at balancing their own interest. Therefore, coherence in the vision of the Quad nation as a grouping is absent.
8. Way forward
The Quad represents a forum for strategic cooperation among four major Indo-Pacific nations, with a focus on regional security, economic development, and upholding the rules-based international order. Its evolving role in the region will likely be a subject of ongoing geopolitical interest and debate.
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For Prelims: Quadrilateral Security Dialogue (QUAD), South China Sea, Belt and Road Initiative (BRI), Indo-Pacific region, ASEAN, and Regional Cooperation Economic Partnership (RCEP).
For Mains: 1. Discuss the evolution, objectives, and geopolitical significance of the Quad (Quadrilateral Security Dialogue) in the context of the Indo-Pacific region. Analyze the challenges and opportunities it presents for the member countries, particularly India. (250 words).
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Source: The Indian Express
DUSTED APOLLO
1.Context
Dusted Apollo (Parnassius stenosemus), a rare high-altitude butterfly, has been sighted and photographed for the first time in Himachal Pradesh, indicating the flourishing diversity of Apollo butterflies in the region, bringing cheers to butterfly enthusiasts
2.What is Dusted Apollo Butterfly?
The Dusted Apollo (Parnassius stenosemus) is a rare high-altitude butterfly found in the inner Himalayas, ranging from Ladakh to West Nepal. It typically flies between 3,500 and 4,800 meters above sea level.
This butterfly was first discovered in 1890 and is quite elusive. In fact, it was only recently photographed for the first time in the Indian state of Himachal Pradesh in September 2023. This sighting is significant as it indicates the flourishing diversity of Apollo butterflies in the region.
The Dusted Apollo is a medium-sized butterfly with a wingspan of about 50-60 mm. Its wings are white with black markings, and the hindwings have a row of red spots. The forewings have a distinctive discal band that is complete and extends from the costa to vein one. This feature helps to distinguish it from the similar-looking Ladakh Banded Apollo, whose discal band is incomplete.
The Dusted Apollo is a threatened species due to habitat loss and climate change. Conservation efforts are underway to protect this beautiful butterfly and its fragile ecosystem
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3. What are rare Species?
Rare species are those that have a very limited population size or a restricted geographic range, making them vulnerable to various threats. The rarity of a species can be influenced by factors such as habitat destruction, pollution, climate change, over-exploitation, and other human activities
Here are some characteristics of rare species:
- Small population size: Rare species typically have a small number of individuals worldwide, often fewer than 10,000. This small population size makes them more vulnerable to extinction from threats like habitat loss, disease, and climate change.
- Restricted geographic range: Many rare species are found in only a small area, such as a particular mountain range, island, or type of habitat. This restricted range makes them more vulnerable to threats that impact that specific area.
- Specialized adaptations: Some rare species have unique adaptations that allow them to survive in specialized environments. These adaptations can make them more vulnerable to changes in their environment.
Here are some examples of rare species:
- The Sumatran Orangutan: This critically endangered ape is found only on the island of Sumatra in Indonesia. There are only about 14,600 individuals left in the wild.
- The Amur Leopard: This beautiful big cat is found in the Russian Far East and northeastern China. There are only about 60 individuals left in the wild
- The Saola: This elusive antelope was only discovered in 1992 and is found in the Annamite Mountains of Vietnam and Laos. There are only about 25 individuals left in the wild
There are different categories for classifying the rarity of species, and they may include:
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Endangered Species: Species that are at significant risk of extinction in the near future. They face serious threats to their survival.
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Vulnerable Species: Species that are not currently endangered but are at risk of becoming endangered if their decline continues.
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Near Threatened Species: Species that are close to being classified as vulnerable but are not yet facing a significant risk of extinction.
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Critically Endangered Species: Species facing an extremely high risk of extinction in the wild.
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Data Deficient Species: Species for which there is insufficient information to assess their conservation status.
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Extinct in the Wild: Species that exist only in captivity or cultivation, with no remaining populations in their natural habitat.
4.Wildlife Protection Act, 1972
The Wildlife Protection Act of 1972 is a legislation in India that aims to protect the country's wildlife and biodiversity. It was enacted to address the escalating threats to wildlife due to poaching, habitat destruction, and other human-induced pressures. The act provides legal measures for the protection of specified plants, animals, and their habitats, and it establishes a framework for wildlife conservation and management.
Rare Species are Protected under Schedule II of the Wildlife Protection Act, 1972
Key features of the Wildlife Protection Act, 1972, include:
- The act categorizes species into various schedules, providing different levels of protection. Species listed in Schedule I and Part II of Schedule II receive the highest level of protection.
- The act strictly prohibits the hunting of specified animals, including those listed in Schedule I and Part II of Schedule II. It also outlines penalties for offenses related to hunting and poaching
- The act empowers the government to declare areas as wildlife sanctuaries or national parks for the conservation of wildlife. It defines the procedures for notifying and managing these protected areas.
- The act regulates the trade of wildlife and wildlife products. It prohibits the trade of certain animal species and imposes restrictions on the trade of others.
- The act prescribes penalties for offenses such as hunting, poaching, and illegal trade of wildlife. Penalties can include fines and imprisonment.
- The act allows for the establishment of Wildlife Advisory Boards at the national and state levels to advise the government on matters related to wildlife conservation.
5.Way forward
The WLPA has played a significant role in conserving India's rich biodiversity. It has helped in stabilizing or increasing populations of many threatened species like tigers, rhinos, and elephants.However, challenges remain due to factors like habitat loss, poaching, and human-wildlife conflict. Continued enforcement and improvement of the Act are crucial for effective wildlife conservation
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Previous Year Questions
1.According to the Wildlife (Protection) Act, 1972, which of the following animals cannot be hunted by any person except under some provisions provided by law? (UPSC CSE 2017)
1. Gharial
2. Indian wild ass
3. Wild buffalo
Select the correct answer using the code given below :
A.1 only
B.2 and 3 only
C.1 and 3 only
D.1, 2 and 3
Answer (D)
2.With reference to Indian laws about wildlife protection, consider the following statements: (UPSC CSE 2022)
1. Wild animals are the sole property of the government.
2. When a wild animal is declared protected, such animal is entitled for equal protection whether it is found in protected areas or outside.
3. Apprehension of a protected wild animal becoming a danger to human life is sufficient ground for its capture or killing.
Which of the statements given above is/are correct?
A.1 and 2
B.2 only
C.1 and 3
D.3 only
Answer (B)
3.Which of the following is a rare species as per International Union for Conservation of Nature (IUCN)? (SSC CHSL 2022)
A.Gangetic dolphin
B.Blue sheep
C.Asiatic buffalo
D.Lion tailed macaque
Answer (C)
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Source: The Hindu
UNIFORM CIVIL CODE (UCC)
1. Context
The Uttarakhand Cabinet approved the final draft of the Uniform Civil Code (UCC) without any changes, a day before the state Assembly convenes for a special session to take up the Bill
2. 22nd law commission on UCC
- Underlining that the Uniform Civil Code is “neither necessary nor desirable at this stage”, the 21st Law Commission of India, in 2018, argued for reform of family laws of every religion through amendments and codification of certain aspects so as to make them gender-just
- In its ‘Consultation Paper on Family Law Reforms’, the Law Commission took a stand in favour of “equality ‘within communities’ between men and women” (personal law reform), “rather than ‘equality between’ communities” (UCC)
- According to the 22nd Law Commission Cultural diversity cannot be compromised to the extent that our urge for uniformity itself becomes a reason for threat to the territorial integrity of the nation
- women must be guaranteed their freedom of faith without any compromise on their right to equality
3. What is the Uniform Civil Code
- A UCC would provide for one law for the entire country, applicable to all religious communities, in their personal matters such as marriage, divorce, inheritance, adoption etc
- Currently, Indian personal law is fairly complex, with each religion adhering to its own specific laws
- Separate laws govern Hindus including Sikhs, Jains and Buddhist, Muslims, Christians, and followers of other religions
- Moreover, there is diversity even within communities. All Hindus of the country are not governed by one law, nor are all Muslims or all Christians
- For instance, in the Northeast, there are more than 200 tribes with their own varied customary laws
- The Constitution itself protects local customs in Nagaland. Similar protections are enjoyed by Meghalaya and Mizoram. Even reformed Hindu law, in spite of codification, protects customary practices
- The exception to this rule is the state of Goa, where all religions have a common law regarding marriages, divorces, and adoption
4. Constitution on UCC
- Article 44 of the Constitution lays down that the state shall endeavour to secure a UCC for citizens throughout the territory of India
- Article 44 is among the Directive Principles of State Policy. Directive Principles are not enforceable by court, but are supposed to inform and guide governance
- However, in some senses, Article 44 is unique in this manner. While Article 44 uses the words “state shall endeavour”, other Articles in the ‘Directive Principles’ chapter use words such as “in particular strive”; “shall in particular direct its policy”; “shall be obligation of the state
- The phrase “by suitable legislation” is absent in Article 44. All this implies that the duty of the state is greater in other directive principles than in Article 44
5. Uniform Code for Personal Law
Article 25 lays down an individual’s fundamental right to religion; Article 26(b) upholds the right of each religious denomination or any section thereof to “manage its own affairs in matters of religion”
Article 29 defines the right to conserve distinctive culture
An individual’s freedom of religion under Article 25 is subject to “public order, health, morality” and other provisions relating to fundamental rights, but a group’s freedom under Article 26 has not been subjected to other fundamental rights
6. Way forward
Over the next 30 days, the Law Commission will receive views of the public and stakeholders
The notice said the stakeholders concerned are at liberty to make submissions in the form of consultation/discussion/working papers on any of the issues pertaining to the UCC to the Member Secretary, Law Commission of India
After reviewing the submissions, the Law Commission will again make observations/recommendations regarding a UCC, which may or may not differ from the previous Commission’s observations
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For Prelims: Unifrom Civil Code (UCC), DPSP, Fundamental rights, Law Commission
For Mains: 1. What is the Uniform Civil Code? What are the challenges in implementing a Uniform Civil Code in a diverse country like India?
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Source: indianexpress
FISCAL CONSOLIDATION
1. Context
As per the Fiscal Responsibility and Budget Management (FRBM) law, which the Vajpayee-headed NDA government had enacted in 2003, the general government debt was supposed to be brought down to 60% of GDP by 2024-25. The Centre’s own total outstanding liabilities were not to exceed 40% within that time schedule.
2. About fiscal deficit
- A fiscal deficit signifies the disparity between a government's revenue and its expenditure. When a government's spending surpasses its income, it is compelled to resort to borrowing or selling assets to cover the deficit. Taxes constitute the primary revenue source for any government.
- In the fiscal year 2024-25, the government anticipates tax receipts amounting to ₹26.02 lakh crore, contributing to a total projected revenue of ₹30.8 lakh crore. In contrast, the Union government's expected expenditure is estimated at ₹47.66 lakh crore.
- A fiscal surplus occurs when a government's revenue exceeds its expenditure. However, such surpluses are uncommon in contemporary governance. Most governments prioritize maintaining control over the fiscal deficit rather than aiming for a surplus or budgetary balance.
- It is crucial to differentiate between fiscal deficit and national debt. The national debt represents the cumulative amount owed by a government to its lenders at a specific point in time. This debt accrues over years of running fiscal deficits and resorting to borrowing to bridge the financial gaps.
- Fiscal deficit is typically expressed as a percentage of a country's Gross Domestic Product (GDP). This representation aims to gauge the government's ability to repay its lenders. A higher fiscal deficit, relative to GDP, suggests a potentially challenging scenario for lenders to be repaid. Larger economies may sustain higher fiscal deficits in absolute monetary terms.
3. Funding the Fiscal Deficit
- To bridge its fiscal deficit, the government primarily turns to the bond market, where lenders compete to finance the deficit by purchasing government-issued bonds. In the fiscal year 2024-25, the Centre anticipates borrowing a gross sum of ₹14.13 lakh crore from the market, a figure slightly below the earlier projection. The government aims to fund its expenditures through increased Goods and Services Tax (GST) collections in the same period, contrary to economists' expectations of a higher borrowing target.
- Central banks, such as the Reserve Bank of India (RBI), play a significant role in the credit market. While not always directly purchasing government bonds, central banks may acquire them in the secondary market from private lenders who initially bought the bonds. Through 'open market operations,' the RBI creates fresh money, potentially impacting the money supply and contributing to rising prices in the broader economy over time.
- Government bonds are generally considered risk-free, as the government has the ability, in extreme scenarios, to seek assistance from the central bank. This support enables the government to create fresh currency for repaying lenders. Consequently, governments usually find it relatively easy to borrow from the market. However, the challenge lies in the interest rate at which the money is borrowed. Worsening government finances can lead to decreased demand for government bonds, prompting the government to offer higher interest rates to lenders, resulting in elevated borrowing costs.
- Monetary policy plays a pivotal role in determining government borrowing costs. Sharp rises in central bank lending rates, observed post-pandemic, increase the expense for governments to borrow money. This aspect contributes to the government's motivation to curb its fiscal deficit.
4. Significance of Fiscal Deficit
- The fiscal deficit holds significant importance for various reasons, one being its direct correlation with inflation. A persistently high fiscal deficit can lead to increased inflation, as the government resorts to using freshly issued money by the central bank to cover the deficit. Notably, the fiscal deficit peaked at 9.17% of GDP during the pandemic but has since shown improvement, projected to decline to 5.8% currently.
- The level of the fiscal deficit communicates the government's commitment to fiscal discipline to the market. A lower fiscal deficit can enhance the ratings assigned to the government's bonds, signaling prudent financial management. When the government relies more on tax revenues and borrows less, it instills confidence in lenders, thereby reducing the government's borrowing costs.
- A high fiscal deficit can impede the government's ability to manage its overall public debt effectively. Concerns have been raised, with the International Monetary Fund (IMF) cautioning that India's public debt might surpass 100% of GDP in the medium term, despite differing opinions from the Centre. Managing public debt becomes crucial, especially as the government expresses interest in tapping into the international bond market. A lower fiscal deficit can facilitate the government's bond sales overseas, providing access to more affordable credit.
5. Fiscal Challenges in 2024-25
- The Centre outlines ambitious plans to reduce its fiscal deficit to 5.1% of GDP in the fiscal year 2024-25, despite intentions to boost capital expenditure and allocate funds for various programs. Achieving this goal hinges largely on augmenting revenue through increased tax collections. The government anticipates an 11.5% growth in tax collections for the mentioned period.
- To align with fiscal targets, the Centre envisions trimming expenditure in specific areas. A notable adjustment includes a reduction in the fertilizer subsidy, from ₹1.88 lakh crore in 2023-24 to ₹1.64 lakh crore in 2024-25. Similarly, the projected expenditure on food subsidy is slated to decrease from ₹2.12 lakh crore to ₹2.05 lakh crore during the same period.
- While the government aims to balance the budget primarily through elevating tax rates to bolster collections, this approach raises concerns about potential repercussions on economic growth. Heightened taxes can act as a dampener on economic activity. Striking a delicate equilibrium between fiscal discipline and sustaining economic momentum becomes imperative.
- The feasibility of meeting the ambitious fiscal deficit target remains uncertain. Projections are susceptible to inaccuracies, and the government's ability to achieve its fiscal goals may face challenges. Relying solely on raising tax rates poses risks to economic growth, emphasizing the need for a comprehensive and dynamic approach to fiscal management.
6. The Way Forward
India's fiscal consolidation journey in 2024-25 will require careful planning, flexibility, and a commitment to long-term economic well-being. By adopting a balanced and forward-thinking approach, the government can navigate this crucial year and lay the foundation for a sustainable fiscal future.
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For Prelims: Fiscal Consolidation, RBI, International Monetary Fund (IMF), GDP, Monetary Policy
For Mains:
1. Critically evaluate the effectiveness of the Fiscal Responsibility and Budget Management (FRBM) Act in achieving its objectives in the context of India's current fiscal situation. Suggest any necessary modifications or reforms to make the Act more efficient. (250 Words)
2. What are the implications of rising public debt on India's economic stability and long-term growth prospects? Analyze the risks associated with high debt levels and suggest strategies for effective debt management. (250 Words)
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Previous Year Questions
1. With reference to the Indian economy, consider the following statements: (UPSC 2022)
1. An increase in the Nominal Effective Exchange Rate (NEER) indicates the appreciation of the rupee.
2. An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness.
3. An increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER.
Which of the above statements are correct?
A. 1 and 2 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
2. With reference to Indian economy, consider the following statements: (UPSC 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
3. Consider the following statements: (UPSC 2018)
1. The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a debt to GDP ratio of 60% for the general (combined) government by 2023, comprising 40% for the Central Government and 20% for the State Governments.
2. The Central Government has domestic liabilities of 21% of GDP as compared to that of 49% of GDP of the State Governments.
3. As per the Constitution of India, it is mandatory for a State to take the Central Government's consent for raising any loan if the former owes any outstanding liabilities to the latter.
Which of the statements given above is/are correct?
A. 1 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
4. Recently, which one of the following currencies has been proposed to be added to the basket of IMF’s SDR? (UPSC 2016)
A. Rouble
B. Rand
C. Indian Rupee
D. Renminbi
5. Rapid Financing Instruments" and "Rapid Credit Facility" are related to the provisions of lending by which one of the following? (UPSC 2022)
A. Asian Development Bank
B. International Monetary Fund
C. United Nations Environment Programme
D. Finance Initiative World Bank
6. 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 7. 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 Answers: 1-C, 2-B, 3-C, 4-D, 5-B, 6-B, 7-A
Mains
1. Define potential GDP and explain its determinants. What are the factors that have been inhibiting India from realizing its potential GDP? (UPSC 2020) 2. Explain the difference between computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015. (UPSC 2021) |
Source: The Hindu
MYANMAR'S CIVIL WAR AND INDIA'S INTEREST
1. Context
2. A conflict within a conflict
- The capture of Paletwa has sparked a new dimension in the ongoing conflict, creating tensions between the Chin and Arakan ethnic groups. Predominantly inhabited by the Chin community, Paletwa is viewed as an integral part of their homeland. However, a faction in the Rakhine State argues that, historically, the township belonged to the Arakan Hill Tracts during colonial rule.
- Even before the coup, there were instances of dissatisfaction among Chin ethnic organizations regarding the Arakan Army's activities in Paletwa. While the Chin armed groups and the Arakan army jointly confront the Myanmar military, they have refrained from forcefully delineating their perspectives on provincial borders.
- To maintain stability, the Chin and Arakan groups must establish an inclusive governance framework for Paletwa and its surrounding areas. Achieving inter-ethnic solidarity is essential for an effective resistance against the military. However, finding a compromise on contentious issues such as Paletwa's status proves to be a complex challenge.
- Given Paletwa's strategic location on the western border, it serves as a significant operational base for the Arakan Army. The town's position on the Kaladan River enhances its economic importance, making it a desirable hub for any armed group seeking to benefit from regional economic activities.
3. India's Interests in Flux
- The evolving situation in Paletwa holds implications for India's ambitious Kaladan Multimodal Transit Transport Project (KMTTP) in Myanmar, which has already encountered significant delays. Conceived to address the geo-economic and geo-political challenges of northeast India, the project aims to provide an alternative route for transporting goods to and from the landlocked region.
- The partition of the subcontinent and the subsequent tightening of borders rendered northeast India landlocked, with the transportation of goods through the narrow Siliguri corridor proving to be both expensive and potentially vulnerable in the worst-case scenario involving China. The Kaladan project was envisioned to offer northeast India access to the sea, alleviating these challenges.
- Signed in 2008, the framework agreement for the Kaladan project between India and Myanmar faced delays in operationalization due to rugged terrain, insufficient inter-departmental coordination, political instability, and security challenges within Myanmar. While the Sittwe port and inland water terminal at Paletwa have been completed in recent years, road construction faces hurdles amid the prevailing security situation in Myanmar. It becomes imperative to consider the attitudes of local ethnic organizations towards the Kaladan project for its expeditious implementation.
- The people of Mizoram, along with their counterparts in the Chin State across the border, are keen on the swift completion of the Kaladan project, anticipating the economic boost it would bring to the region. However, there exists a perception in India that the Arakan Army may not be supportive of the Kaladan project. Reports before the coup suggested coordinated operations between India and Myanmar against Arakan Army units near Mizoram, posing threats to the Kaladan project. In 2019, the Arakan Army reportedly kidnapped five Indian workers involved in the project, leading to the tragic death of one due to a cardiac arrest while in captivity.
4. China's Strategic Investments and Geopolitical Influence in Myanmar
- The Arakan Army, part of the Three Brotherhood alliance with the Myanmar National Democratic Alliance Army and the Ta’ang National Liberation Army, is suspected by some to receive support from China. The alliance has explicitly committed to safeguarding Chinese investments in Myanmar. Reports indicate substantial financial and military support from China to the Arakan Army, raising concerns in Delhi about potential Chinese interference to impede India's connectivity projects in Myanmar.
- China's economic presence along Myanmar's Bay of Bengal coast has significantly expanded, marked by operational oil and natural gas pipelines from the Shwe gas fields in Rakhine State to Yunnan province. Recent agreements with the Myanmar military signal China's efforts to operationalize a deep-sea port and a special economic zone near Kyaukpyu. Additionally, plans for a railway line from China's Yunnan to Kyaukpyu, part of the China-Myanmar Economic Corridor (CMEC), are reportedly underway.
- China's permanent membership in the United Nations Security Council enhances its influence, allowing it to garner support from various state and non-state actors seeking international backing. This positions China to provide political and military support to ethnic armed groups and the Myanmar military, safeguarding its economic interests in the region.
- The progress of the Kaladan project underscores the scrutiny India faces due to its status as a liberal democracy. As India engages externally, it must be mindful of potential impacts on sectarian and identity-based violence in its neighbourhood. While security agencies assess engagements with armed groups, there's a call to intensify humanitarian and development assistance in collaboration with a broader spectrum of ethnic organizations and local communities for the timely execution of projects like Kaladan.
5. The Way Forward
As India navigates its interests in the region, the completion of the Kaladan project and the overall stability in Myanmar are crucial. China's strategic investments and influence add a layer of complexity, necessitating careful monitoring of the evolving situation. A unified approach, involving experts and collaboration with ethnic organizations and local communities, is essential for the successful implementation of connectivity and development projects in India's immediate neighbourhood.
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For Prelims: Kaladan Project, China-Myanmar Economic Corridor (CMEC), Arakan Army, Chin, Siliguri corridor,
For Mains:
1. Assess the economic and strategic significance of the Kaladan Multimodal Transit Transport Project (KMTTP) for India, particularly in relation to the landlocked Northeast region. Discuss the factors hindering the project's progress and suggest potential solutions. (250 Words)
2. Imagine you are a policy advisor to the Indian government. Based on your understanding of the situation in Myanmar and India's interests, draft a comprehensive strategy for India's engagement with Myanmar in the current scenario. (250 Words)
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Previous Year Questions
1. With which neighboring country of India, Kaladan multi-model transport project has been undertaken? (SSC CGL 2017) (SSC CHSL 2018)
A. China B. Nepal C. Bhutan D. Myanmar
2. With reference to India's projects on connectivity, consider the following statements:
(UPSC 2023)
1. East-West Corridor under Golden Quadrilateral Project connects Dibrugarh and Surat.
2. Trilateral Highway connects Moreh in Manipur and Chiang Mai in Thailand via Myanmar.
3. Bangladesh-China-India-Myanmar Economic Corridor connects Varanasi in Uttar Pradesh with Kunming in China.
How many of the above statements are correct?
A. Only one B. Only two C. All three D. None
3. India and China were engaged in a territorial dispute over Doklam in 2017. Doklam area is situated at the corner of the ______ tri-junction. (SSC CHSL 2020)
A. Bhutan, Arunachal Pradesh and China
B. Pakistan, Jammu & Kashmir and China
C. Bhutan, Sikkim and China
D. Bhutan, West Bengal and China
Answers: 1-D, 2-D, 3-C
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Source: The Hindu
