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DAILY CURRENT AFFAIRS, 17 APRIL 2024

MAHAD SATYAGRAHA

 
 
1. Context
On Ambedkar Jayanti, commemorating the birth anniversary of Dr. B.R. Ambedkar, it's fitting to reflect on the significance of the Mahad Satyagraha in his lifelong struggle for social justice and equality
 
2. Situations led to Satyagraha
  • The events that led to the Mahad Satyagraha began to unfold in August 1923.
  • The Bombay Legislative Council passed a resolution moved by the social reformer Rao Bahadur S K Bole, which said “the Untouchable classes be allowed to use all public water sources, wells and dharmashalas which are built and maintained out of public funds or administered by bodies appointed by the Government or created by statute, as well as public schools, courts, offices and dispensaries.”
  • Albeit with reluctance, the Bombay government adopted the resolution in the following month, and issued directions for its implementation
  • The situation on the ground, however, remained unchanged  upper caste Hindus would not allow the lower castes to access public water sources
  • At that point, Ramchandra Babaji More, a Mahad-based Dalit political leader, approached Ambedkar to preside “over a conference of the Untouchables in Konkan”
  • Ambedkar at the time was helping Dalits fight against the social evil of untouchability through the Bahishkrit Hitkarini Sabha, the institution that he had founded in 1924
  • Ambedkar agreed to More’s proposition, and involved himself in overseeing the preparations for the conference, which was to take place in Mahad town in the Konkan (now in Maharashtra’s Raigad district) on March 19 and 20, 1927
  • He conducted meetings with local Dalit leaders, stressed on creating “a wave of awakening” among the lower caste people of Konkan, and directed other organisers to conduct meetings to propagate news of the conference
  • The volunteers collected Rs 3 from each of the 40 villages and also collected rice and wheat to feed the participants at Mahad. It took nearly two months of preparations to hold the Conference
  • Workers and leaders personally met depressed class people and explained to them the importance of the Conference
  • Soon after the conference came to an end, a priest of a local temple went around the town claiming that Dalits were planning to enter the temple, and asked people to help thwart them.
  • This resulted in a clash in which “20 people were seriously injured and 60-70 people, including 3 to 4 women were wounded”, Teltumbde wrote.
  • Some upper caste Hindus filed a case in court against Ambedkar and his followers on December 12, claiming that the tank was private property
  • Two days later, the court issued a temporary injunction, prohibiting Babasaheb and other Dalits from going to the tank or taking water from it until further orders.
3. Significance of Satyagraha
  • The Mahad Satyagraha is considered to be the “foundational event” of the Dalit movement. This was the first time that the community collectively displayed its resolve to reject the caste system and assert their human rights.
  • Although anti-caste protests had taken place before the Mahad Satyagraha, they were mostly localised and sporadic
  • The difference between (the) Mahad (Satyagraha) and them mainly lay in the organisation and leadership; they lacked in elements of organisation and the charismatic leadership of Dr Ambedkar
  • The Mahad Satyagraha was to become the blueprint for organising future movements against the caste system and its practices.
  • It marked an important point in Ambedkar’s political journey, catapulting him to the leadership of the downtrodden and oppressed classes in the country
 
 
Previous Year Questions:
1. In 1927, Who started the Mahad Satyagraha in Maharashtra (NDA 2022)
A. Mahatma Gandhi
B. Sardar Vallabhai Patel
C. Dr. Ambedkar
D. Jyotiba Phule
 
Answer: C
 
 
Source: indianexpress
 

IMD MONSOON FORECAST

 
 
1. Context
 
This is the first time in a decade that the India Meteorological Department (IMD) has predicted “above normal” rainfall at the first stage itself, nearly 45 days ahead of the beginning of the four-month monsoon season. It is usually more conservative with its predictions in the first stage
 
2. How do ocean currents impact the monsoon in a region?
Ocean currents can have a significant impact on the monsoon in a region by influencing factors such as sea surface temperatures (SSTs), moisture availability, and atmospheric circulation patterns.
 
Here's how ocean currents affect the monsoon:
  • Ocean currents transport heat from one region to another, affecting sea surface temperatures. Warmer SSTs provide more energy and moisture to the atmosphere, which can enhance the intensity of monsoon rains. Cooler SSTs, on the other hand, can suppress rainfall by reducing moisture availability and destabilizing atmospheric conditions
  • Ocean currents play a crucial role in supplying moisture to the atmosphere. Warm ocean currents increase evaporation rates, leading to higher atmospheric moisture content. This moisture is then transported inland by prevailing winds, contributing to the development of rainfall during the monsoon season
  • Ocean currents influence atmospheric circulation patterns, such as the formation of high and low-pressure systems. These pressure systems, in turn, drive the movement of air masses and the onset, duration, and intensity of the monsoon. For example, the interaction between ocean currents and the atmosphere in the Indian Ocean can influence the position and strength of the Indian summer monsoon
  • Changes in ocean currents can alter regional climate patterns, including the distribution of rainfall and temperature. Variations in ocean currents, such as El Niño and La Niña events in the Pacific Ocean, can disrupt normal monsoon patterns by affecting atmospheric circulation and SSTs, leading to droughts or floods in affected regions
  • Ocean-atmosphere interactions create feedback mechanisms that can amplify or dampen the effects of the monsoon. For example, warm SSTs can enhance atmospheric convection and cloud formation, leading to increased rainfall. Conversely, cooler SSTs can inhibit convection and reduce rainfall, creating a feedback loop that influences the strength and duration of the monsoon
3. Important Ocean Currents
 

  • North Atlantic Drift (Gulf Stream): This warm ocean current flows from the Gulf of Mexico northeastward along the eastern coast of North America before turning eastward toward Europe. It impacts the climate of the eastern United States and Western Europe.

  • Kuroshio Current: The Kuroshio is a strong western boundary current in the North Pacific Ocean. It flows northeastward along the eastern coast of Taiwan and Japan before turning eastward toward the North Pacific. The Kuroshio influences weather patterns and marine ecosystems in the region.

  • East Australian Current: This warm ocean current flows southward along the eastern coast of Australia, transporting warm tropical waters toward the temperate regions of the southeast. It influences the climate and marine biodiversity along the Australian coast.

  • Peru Current (Humboldt Current): The Peru Current is a cold ocean current that flows northward along the western coast of South America, originating from Antarctica. It brings cold, nutrient-rich waters to the surface, supporting productive fisheries off the coast of Peru and Chile.

  • California Current: This cold ocean current flows southward along the western coast of North America, parallel to the coast of California. It originates from the North Pacific and influences the climate and marine ecosystems of the region.

  • Agulhas Current: The Agulhas is a warm ocean current that flows southward along the eastern coast of Africa, transporting warm Indian Ocean waters toward the Southern Ocean. It plays a significant role in the climate and marine ecology of the Indian Ocean region.

  • North Pacific Current: This warm ocean current flows eastward across the North Pacific Ocean, between Japan and the Aleutian Islands. It influences the climate and marine habitats in the North Pacific region.

4. What is the Southwest Monsoon?
 
  • The Southwest Monsoon, also known as the summer monsoon, is a seasonal wind pattern that brings heavy rainfall to the Indian subcontinent and surrounding regions during the summer months. It is one of the most significant weather phenomena in South Asia and has a profound impact on the region's climate, agriculture, economy, and society.
  • The Southwest Monsoon typically occurs from June to September, originating from the Indian Ocean and Arabian Sea. During the summer months, the landmass of the Indian subcontinent heats up more rapidly than the surrounding ocean waters. This temperature difference creates a low-pressure area over the Indian subcontinent, drawing moist air from the Indian Ocean.
  • As the warm, moisture-laden air moves inland, it encounters the Western Ghats mountain range along the western coast of India. The Western Ghats act as a barrier, forcing the moist air to ascend and cool rapidly, leading to condensation and the formation of heavy rainfall. This phenomenon is known as orographic rainfall.
  • The Southwest Monsoon winds also interact with the Himalayas in northern India, leading to orographic rainfall in the foothills and contributing to the formation of major river systems such as the Ganges, Brahmaputra, and Indus.
  • The onset and intensity of the Southwest Monsoon are influenced by various factors, including sea surface temperatures, atmospheric pressure patterns, and the presence of phenomena such as the El Niño-Southern Oscillation (ENSO).
  • The Southwest Monsoon is crucial for agriculture in the Indian subcontinent, as it provides the majority of the region's annual rainfall. Farmers rely on the monsoon rains to irrigate crops such as rice, wheat, and sugarcane, which form the backbone of the region's economy
5.IMD Forecast Key takeaways
 
  • IMD forecasts the monsoon condition every year. It has predicted a good monsoon rainfall during the southwest monsoon season
  • The transition of the weakening El-Nino into a neutral condition ahead of the monsoon onset. EL-Nino is associated with suppressed rainfall during the Indian monsoon.
  • The emergence of La-Nina during the second-half of the monsoon is expected to bring higher than normal rainfall over the country. La-Nina is known to help rainfall activity during monsoon.
  • There is a possibility of a positive phase of the Indian Ocean Dipole (IOD). IOD is the Indian Ocean counterpart of El Nino. The positive phase of IOD is good for rainfall over India.
  • Another positive factor is the below average snow cover along Eurasia and the northern hemisphere during December-March

IMD has categorized rainfall during monsoon on the 50-year average of rainfall:

Rainfall between 105-110%: Above normal rainfall 

Rainfall between 96%-104%: Normal rainfall

Rainfall between 90-95%: Below normal rainfall

Rainfall less than 90%: Deficient rainfall
 
 
6. What is the El Nino Southern Oscillation (ENSO)?
 

The El Niño-Southern Oscillation (ENSO) is a climate phenomenon characterized by fluctuations in sea surface temperatures (SSTs) and atmospheric pressure across the equatorial Pacific Ocean. It has significant impacts on weather patterns, temperature, and precipitation around the globe.

ENSO consists of three phases:

  • El Niño: During El Niño events, warmer-than-average sea surface temperatures develop in the central and eastern Pacific Ocean, near the coast of South America. This warming disrupts normal atmospheric circulation patterns, leading to changes in weather and climate across the Pacific and beyond. El Niño typically brings drier and warmer conditions to the western Pacific, including Australia and Indonesia, while increasing rainfall in the central and eastern Pacific, including parts of South America.

  • La Niña: La Niña events are characterized by cooler-than-average sea surface temperatures in the central and eastern Pacific Ocean. This cooling enhances normal atmospheric circulation patterns, leading to opposite effects compared to El Niño. La Niña often brings increased rainfall to the western Pacific, including Australia and Indonesia, while causing drier and cooler conditions in the central and eastern Pacific, including parts of South America.

  • Neutral: Neutral conditions occur when sea surface temperatures in the equatorial Pacific are near average. During neutral phases, ENSO does not exert a significant influence on global weather patterns, although other climate drivers may still play a role

 
7. Way Forward

 In a normal year, the eastern side of the Pacific Ocean, near the northwestern coast of South America, is cooler than the western side near the islands of Philippines and Indonesia. The reason for this is the prevailing wind systems that move from east to west sweep the warmer surface waters towards the Indonesian coast. The relatively cooler waters from below come up to replace the displaced water

 

 

For Prelims: Indian and World Geography – Physical, Social, Economic geography of India and the World.

For Mains:  GS-I, Important Geophysical phenomena such as earthquakes, Tsunami, Volcanic activity, cyclones. etc., geographical features and their location-changes in critical geographical features (including water-bodies and ice-caps) and in flora and fauna and the effects of such changes
 
Source: Indianexpress

IMPORTED INFLATION

 
 
1. Context
The Asian Development Bank recently warned that India could face imported inflation as the rupee could depreciate amid the rise in interest rates in the West. A rise in interest rates in the West tends to cause the currencies of developing countries to depreciate
 
2. What is Imported Inflation?
 
Imported inflation refers to the phenomenon where a country experiences inflationary pressure due to rising prices of imported goods and services
Imported inflation can have a cascading effect. When imported goods become more expensive, it can raise the cost of production for domestically manufactured goods that rely on imported materials or components. Producers may then pass on these increased costs to consumers by raising prices, leading to general inflation across the economy

This can occur for various reasons:

  • Exchange Rates: If the domestic currency depreciates against other currencies, it makes imports more expensive. As a result, the cost of imported goods and services rises, leading to inflationary pressures.

  • Global Commodity Prices: Fluctuations in global commodity prices can affect the cost of imported raw materials and energy, which in turn can lead to higher prices for domestically produced goods and services.

  • Trade Policies: Changes in trade policies, such as tariffs or quotas, can influence the cost of imports. If tariffs increase, for example, it raises the cost of imported goods, contributing to inflation.

  • Supply Chain Disruptions: Disruptions in global supply chains, such as natural disasters, geopolitical tensions, or pandemics, can lead to shortages of imported goods. When demand exceeds supply, prices tend to rise, causing inflation.

 
3. A Fall in the rupee value
 
  • A decrease in the worth of a nation's currency is generally regarded as the primary cause of imported inflation within an economy.
  • This is because when a nation's currency loses value, its residents need to spend more of their local currency to acquire the necessary foreign currency for purchasing foreign goods or services.
  • Consequently, they effectively end up paying more for any imports. The Asian Development Bank recently cautioned that India might encounter imported inflation due to the potential depreciation of the rupee amidst increasing interest rates in Western countries.
  • Elevated interest rates in the West typically result in the depreciation of currencies in developing nations against Western currencies, thereby escalating import expenses for these nations.
  • Moreover, a surge in import expenses, even in the absence of currency depreciation, is believed to induce import-related inflation.
  • For instance, an increase in global crude oil prices due to a reduction in oil production is anticipated to trigger price hikes across an economy reliant on oil imports for producing goods and services.
  • It's important to note that the concept of imported inflation essentially reflects a form of cost-push inflation, indicating that a surge in input costs can lead to inflation in the prices of final goods and services
4. Consumers and Prices
 
  • Critics of the idea that increasing import expenses can lead to inflation argue that it is a flawed economic concept.
  • They contend that while it may seem intuitive to assume that input costs dictate prices, and therefore higher costs should result in higher prices for goods and services—given that many businesses in reality raise prices when their input costs increase—this perspective doesn't hold true from an economic standpoint.
  • Instead, critics argue that prices are determined by what customers are willing to pay for final goods and services. They emphasize that producers decide what price they can sell their final output for to customers, and based on this, they determine the cost they're willing to pay for inputs.
  • Critics stress that if input costs were set higher than what producers are willing to pay (in line with final consumer demand), the excess supply of inputs would remain unsold because producers wouldn't purchase them.
  • Consequently, this surplus would drive down the price of inputs in line with final consumer demand.
  • In essence, critics assert that value is attributed retroactively from final consumer goods and services to the inputs used in their production
5. Effects of Imported Inflation
 
Imported inflation can have several effects on an economy:
  •  As the cost of imported goods and services increases, consumers may experience higher prices for a wide range of products. This can lead to a decrease in purchasing power and a reduction in the standard of living for households
  • Imported inflation can contribute to overall inflationary pressures in the economy, particularly if imported goods and services are significant components of the consumer basket. This can prompt central banks to tighten monetary policy to control inflation, potentially leading to higher interest rates and reduced economic growth
  • Businesses that rely heavily on imported inputs may face higher production costs, which can squeeze profit margins. In response, they may pass on some of these increased costs to consumers through higher prices, leading to a further rise in inflation
  • A sustained increase in import prices can worsen a country's trade balance if the higher cost of imports is not offset by increased export revenues. This can lead to a deterioration in the current account balance and put downward pressure on the domestic currency
  • Imported inflation can affect different income groups unevenly. Lower-income households, which typically spend a larger proportion of their income on essentials like food and fuel, may be disproportionately impacted by price increases
  • Policymakers may face challenges in addressing imported inflation, especially if it is driven by external factors such as exchange rate movements or global commodity prices
 
6. Way Forward
It can be further argued that even when import costs rise due to a depreciating currency, the rise in costs is still ultimately driven by the demand for the final output among consumers. To understand this, it should be noted that the value of a currency depreciates against a foreign currency when its supply becomes relatively more abundant than the foreign currency in the forex market. In other words, the exchange rate of a currency depreciates to reflect the greater demand for the foreign currency in terms of the local currency. So, the resulting rise in import costs due to depreciation itself can be seen simply as a reflection of a change in the nominal demand for inputs
 

For Prelims: Inflation, MPC, CPI, WPI, food Inflation, RBI, Headline inflation, Core inflation

For Mains: 
 1. Explain the concept of inflation and its impact on an economy. Discuss the various causes of inflation and the measures that can be taken to control it, with specific reference to India. (250 Words)
2. What are the challenges and opportunities associated with managing inflation in India? Evaluate the effectiveness of recent policy measures in addressing inflationary pressures and maintaining price stability. Suggest strategies for sustainable economic growth while managing inflation risks. (250 Words)
 
 
Previous Year Questions
 
1. Consider the following statements:  (UPSC 2021)
1. The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government.
2. Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in the public interest.
3. The Governor of the RBI draws his natural power from the RBI Act.
Which of the above statements is/are correct? 
A. 1 and 2 only    B.  2 and 3 only     C. 1 and 3 only     D. 1, 2 and 3
 
 
2. Concerning the Indian economy, consider the following: (UPSC 2015)
  1. Bank rate
  2. Open Market Operations
  3. Public debt
  4. Public revenue

Which of the above is/are component(s) of Monetary Policy?

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

 

3. An increase in Bank Rate generally indicates: (UPSC 2013)

(a) Market rate of interest is likely to fall.
(b) Central bank is no longer making loans to commercial banks.
(c) Central bank is following an easy money policy.
(d) Central bank is following a tight money policy.
 

4. Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)? (UPSC 2017) 

1. It decides the RBI's benchmark interest rates.
2. It is a 12-member body including the Governor of RBI and is reconstituted every year.
3. It functions under the chairmanship of the Union Finance Minister.

Select the correct answer using the code given below:

A. 1 only      B.  1 and 2 only      C. 3 only      D. 2 and 3 only

 
5. Read the following passage and answer the question that follows. Your answers to these items should be based on the passage only.
Policymakers and media have placed the blame for skyrocketing food prices on a variety of factors, including high fuel prices, bad weather in key food producing countries, and the diversion of land to non-food production. Increased emphasis, however, has been placed on a surge in demand for food from the most populous emerging economics. It seems highly probable that mass consumption in these countries could be well poised to create a food crisis.
With reference to the above passage, the following assumptions have been made: (UPSC 2021)
1. Oil producing countries are one of the reasons for high food prices.
2. If there is a food crisis in the world in the near future, it will be in the emerging economies. Which of the above assumptions is/are valid?
A. 1 only        B. 2 only           C. Both 1 and 2         D.  Neither 1 nor 2
 
 
6. India has experienced persistent and high food inflation in the recent past. What could be the reasons? (UPSC 2011)
1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30.
2. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change.
3. The food supply chain has structural constraints.
Which of the statements given above are correct? 
A. 1 and 2 only          B. 2 and 3 only        C. 1 and 3 only          D. 1, 2 and 3
 
 
7. With reference to inflation in India, which of the following statements is correct? (UPSC 2015) 
A. Controlling the inflation in India is the responsibility of the Government of India only
B. The Reserve Bank of India has no role in controlling the inflation
C. Decreased money circulation helps in controlling the inflation
D. Increased money circulation helps in controlling the inflation
 
 
8. With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct? (UPSC 2016)
1. The Agreement was signed by all the member countries of the UN and it will go into effect in 2017
2. The Agreement aims to limit greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2°C or even 1.5°C above pre-industrial levels.
3. Developed countries acknowledged their historical responsibility in global warming and committed to donate $ 1000 billion a year from 2020 to help developing countries to cope with climate change.
Select the correct answer using the code given below:
A. 1 and 3 only     B.  2 only        C. 2 and 3 only        D. 1, 2 and 3
 
Answers: 1-C, 2-C, 3-D, 4-A, 5-D, 6-B, 6-C, 7-B
Source: The Hindu

SOVEREIGN GREEN BONDS

 
 
 
1. Context
 
 
Recently, the Reserve Bank of India (RBI) approved investments in India's Sovereign Green Bonds (SGrBs) by Foreign Institutional Investors (FIIs). These investors include entities such as insurance companies, pension funds, and sovereign wealth funds of nations. SGrBs represent a form of government debt dedicated to financing projects aimed at expediting India's shift towards a low-carbon economy.
 
 
2. About Sovereign Green Bonds
 
  • Sovereign Green Bonds are a type of government debt instrument issued by a sovereign nation specifically to finance environmentally sustainable projects. These bonds are dedicated to funding initiatives that contribute to the transition to a low-carbon economy, mitigate climate change, and promote environmental sustainability.
  • The proceeds from Sovereign Green Bonds are earmarked for projects such as renewable energy infrastructure development, energy efficiency improvements, green transportation initiatives, sustainable agriculture, and other environmentally friendly endeavours.
  • The key characteristic of Sovereign Green Bonds is their alignment with internationally recognized green finance principles and standards.
  • Issuers typically establish a framework outlining the types of projects eligible for financing through these bonds, ensuring transparency and accountability in the allocation of funds.
  • Investors in Sovereign Green Bonds are attracted not only by the financial returns but also by the opportunity to support sustainable development and address pressing environmental challenges.
 

3. Facilitating the Green Transition

 

  • Enabling Foreign Institutional Investors (FIIs) to invest in India's green projects expands the financial resources available to support the country's ambitious goals for transitioning to a greener economy by 2070. These goals include ensuring that 50% of India's energy is sourced from non-fossil fuel-based sources and reducing the carbon intensity of the nation's economy by 45%, as pledged by Prime Minister Narendra Modi at COP26 in Glasgow in 2021.
  • The Reserve Bank of India (RBI) had issued Sovereign Green Bonds (SGrBs) worth ₹16,000 crore in two tranches in January and February of the previous year, with maturities in 2028 and 2033. While these bonds were oversubscribed on both occasions, the primary participants were domestic financial institutions and banks, limiting the avenues for government borrowing. Additionally, these green Government-Securities (G-Secs) were classified under the Statutory Liquidity Ratio (SLR), further constraining the financial institutions' lending capacity.
  • SGrBs typically offer lower interest rates compared to conventional G-Secs, leading to what is termed as a "greenium" - the amount foregone by a bank by investing in them. However, central banks and governments worldwide are encouraging financial institutions to embrace green investments to accelerate the transition to a sustainable future.
  • Climate finance experts believe that allowing FIIs to invest in green G-Secs would benefit India. They point out that FIIs are seeking to diversify their portfolio of green investments, especially in light of significant regulatory support in developed countries. Investing in India's green G-Secs presents an opportunity for them to do so.
  • FIIs may also be motivated to acquire green credentials, particularly when such investment opportunities are limited in their home markets. India's successful implementation of the Sovereign Green Bonds Framework in late 2022 has addressed concerns about greenwashing, further enhancing the attractiveness of these investments.
 

4. Understanding the Green Taxonomy Gap

 

  • In the 2022-23 Union Budget, Finance Minister Nirmala Sitharaman announced the government's decision to issue Sovereign Green Bonds (SGrBs) to expedite funding for various government projects, including initiatives such as offshore wind harnessing, grid-scale solar power production, and promoting the transition to battery-operated Electric Vehicles (EVs).
  • However, a critical gap emerged as the Reserve Bank of India (RBI) had not established a green taxonomy or a standardized method to evaluate the environmental or emissions credentials of investments. This gap raised concerns about potential greenwashing, wherein projects falsely claim environmentally friendly characteristics to secure funding.
  • To bridge this gap, the Finance Ministry unveiled India's inaugural SGrB Framework on November 9, 2022, outlining the types of projects eligible for funding through this category of Government-Securities (G-Secs).
  • These projects encompassed a range of initiatives, including investments in small-scale solar/wind/biomass/hydropower energy projects with integrated energy generation and storage, upgrades to public lighting systems (e.g., transitioning to LED lights), construction of low-carbon buildings, energy-efficiency retrofits for existing buildings, enhancements to public transportation infrastructure, subsidies to promote EV adoption, and the establishment of EV charging infrastructure.
  • Furthermore, the government sought validation from Norway-based validator Cicero to compare India's SGrB Framework with the green principles outlined by the International Capital Market Association (ICMA).
  • Cicero rated India's framework as a "green medium," highlighting its good governance practices.
  • The importance of identifying new green projects with credible audit trails and significant impact, particularly those areas that have received limited private capital, such as Distributed Renewable Energy and clean energy transition finance for Micro, Small, and Medium Enterprises (MSMEs).
  • Addressing this gap is crucial for effectively deploying the proceeds from SGrBs and advancing India's sustainable development goals.
 
5. The Way Forward
 
India can leverage Sovereign Green Bonds as a powerful tool to mobilize resources, foster international collaboration, and achieve its ambitious green goals. This integrated approach will pave the way for a sustainable and low-carbon future for the nation.
 
 
For Prelims: Sovereign Green Bonds, MSMEs, Climate Change, RBI, International Capital Market Association, Government-Securities
For Mains: 
1. Discuss the significance of Sovereign Green Bonds (SGrBs) in India's transition to a low-carbon economy. How can the issuance of SGrBs attract foreign investment and support the country's ambitious green goals?  (250 Words)
 
 
Previous Year Questions
 
1. Which of the following statements regarding the Green bonds is NOT true? (UPPSC RO/ARO 2020)
A. Green Bond investment is only for climate friendly projects
B. Green bonds were first introduced by European Investment Fund in 2007
C. Green Bonds are Financial Market Innovation
D. Green Bonds are fixed interest loan is short date maturities
 
2.  Indian Government Bond Yields are influenced by which of the following? (2021)
1. Actions of the United States Federal Reserve
2. Actions of the Reserve Bank of India
3. Inflation and short-term interest rates

Select the correct answer using the code given below.

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

3. With reference to ‘IFC Masala Bonds’, sometimes seen in the news, which of the statements given below is/ are correct? (2016)

1. The International Finance Corporation, which offers these bonds, is an arm of the World Bank.
2. They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.

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: 1-D, 2-D, 3-C

 Source: The Hindu

ELECTION AND VOTING PROCESS

 
 
 
1. Context
 
 
The Supreme Court has decided to hear petitions seeking 100% cross-verification of the Voter Verifiable Paper Audit Trail (VVPAT) slips with the vote count as per Electronic Voting Machines (EVMs).
 

2. The Evolution of the Voting Process

 

  • In the inaugural two general elections of 1952 and 1957, a distinct box was designated for each candidate alongside their election symbol. Voters were required to deposit a blank ballot paper into the box corresponding to the candidate of their choice. Subsequently, starting from the third election, the ballot paper featuring the names of candidates and their symbols was introduced, with voters marking their choice by stamping the candidate's name.
  • The Electronic Voting Machine (EVM) made its debut on a trial basis in 1982 in the Assembly constituency of Paravur, Kerala. Its full deployment across all booths occurred during the Assembly elections of Tamil Nadu, Kerala, Puducherry, and West Bengal in 2001. The Supreme Court, through various judgments, has consistently upheld the validity of utilizing EVMs in elections. By the 2004 general elections to the Lok Sabha, EVMs were operational in all 543 constituencies.
  • In the case of Subramanian Swamy versus the Election Commission of India (2013), the Supreme Court emphasized that a paper trail is an essential prerequisite for ensuring free and fair elections. The 2019 elections witnessed the use of EVMs with 100% Voter Verifiable Paper Audit Trail (VVPAT) coverage in all constituencies.

3. International Voting Practices

 
  • Numerous Western democracies maintain the tradition of utilizing paper ballots for their electoral processes. Countries such as England, France, The Netherlands, and the United States have opted out of Electronic Voting Machines (EVMs) for national or federal elections following trials conducted in the past two decades.
  • In Germany, the nation's Supreme Court declared the use of EVMs in elections unconstitutional in 2009.
  • While some countries like Brazil continue to employ EVMs for their elections, others have chosen not to adopt them.
  • Among our neighbouring countries, Pakistan does not utilize EVMs. Bangladesh experimented with EVMs in a few constituencies in 2018 but reverted to paper ballots for the general elections held in 2024.

 

4. Features of Electronic Voting Machines (EVMs)

 

Electronic Voting Machines (EVMs) offer significant advantages to the electoral process.
  1. They have effectively curbed booth capturing by restricting the rate of vote casting to four votes per minute, thus prolonging the time required for any attempt to stuff false votes.
  2. EVMs have eliminated the issue of invalid votes, which was a common problem with paper ballots and often led to disputes during the counting process.
  3. Considering the substantial size of our electorate, which is close to one billion, the use of EVMs is environmentally friendly as it reduces paper consumption.
  4. EVMs provide administrative convenience for polling officers on election day and have streamlined the counting process, making it faster and more accurate.
  • Several mechanisms are in place to ensure the integrity of the EVM and Voter Verifiable Paper Audit Trial (VVPAT) process. These include the random allocation of EVMs to booths before polls, the conduct of mock polls to verify the accuracy of EVMs and VVPATs before the actual polling begins, and the sharing of the serial numbers of EVMs along with the total votes polled with agents of candidates to verify the count during the vote counting process.
  • Despite these advantages, doubts about the functioning of EVMs have been raised by various political parties and civil society activists over time.
  • The most common allegation is that EVMs are susceptible to hacking due to being electronic devices.
  • The Election Commission of India (ECI) has repeatedly clarified that EVMs are standalone devices, similar to calculators, with no connectivity to external devices, making them immune to external hacking attempts.
  • Currently, the sample size for matching the EVM count with VVPAT slips is five per assembly constituency/segment, which is not based on any scientific criteria and may fail to detect defective EVMs during counting.
  • Moreover, the present process allows for the identification of booth-wise polling behaviour by various parties, which can lead to profiling and intimidation.
 
5. Enhancing Transparency in the Election Process
 
  • In a transparent democracy, every citizen should be able to understand and verify each step of the election process without requiring specialized technical knowledge.
  • The widespread use of Voter Verifiable Paper Audit Trail (VVPAT) has empowered voters to confirm that their votes are accurately recorded.
  • However, to enhance the robustness of the entire process and ensure that votes are accurately counted, several additional measures can be adopted.
  • Instead of the impractical and scientifically unfeasible 100% match of EVM count with VVPAT slips, a more systematic approach can be implemented.
  • Experts suggest dividing each state into larger regions and determining a scientifically sound sample size for matching the EVM count with VVPAT slips.
  • In case of any discrepancy, even in a single instance, the VVPAT slips for the respective region should be fully counted, forming the basis for determining results. This approach would imbue the counting process with statistically significant confidence.
  • Furthermore, to provide additional protection for voters at the booth level, the introduction of "totalizer" machines could be considered. These machines would aggregate votes from 15-20 EVMs before revealing the candidate-wise count, offering a layer of anonymity and security for voters.
 
6. The Way Forward
 
 
By implementing these measures, electoral authorities can enhance transparency, integrity, and public trust in the electoral process, thereby strengthening democracy and upholding the principles of free and fair elections.
 
 
For Prelims: EVMs, VVPATs, Election Commission of India
For Mains: 
1. "In a transparent democracy, every citizen should be able to understand and verify each step of the election process." Elaborate on the significance of the Voter Verifiable Paper Audit Trail (VVPAT) in empowering voters and enhancing electoral transparency. Propose additional steps to further strengthen the electoral process and uphold democratic values. (250 Words)
 
 
Previous Year Questions

1. Consider the following statements: (UPSC 2017)

1. The Election Commission of India is a five-member body.
2. Union Ministry of Home Affairs decides the election schedule for the conduct of both general elections and bye-elections.
3. Election Commission resolves the disputes relating to splits/mergers of recognised political parties.

Which of the statements given above is/are correct?

A. 1 and 2 only         B. 2 only      C. 2 and 3 only           D. 3 only

2. Consider the following statements : (UPSC 2021)

1. In India, there is no law restricting the candidates from contesting in one Lok Sabha election from three constituencies.
2. In the 1991 Lok Sabha Election, Shri Devi Lal contested from three Lok Sabha constituencies.
3. As per the- existing rules, if a candidate contests in one Lok Sabha election from many constituencies, his/her party should bear the cost of bye-elections to the constituencies vacated by him/her in the event of him/her winning in all the constituencies.
Which of the statements given above is/are correct?
A. 1 only       B. 2 only       C. 1 and 3         D. 2 and 3
 
3. Consider the following statements : (UPSC CSE 2021)
1. The Montagu-Chelmsford Reforms of 1919 recommended granting voting rights to all women above the age of 21.
2. The Government of India Act of 1935 gave women reserved seats in the legislature.
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

Answers: 1-D, 2-B, 3-B

Mains

1. In the light of recent controversy regarding the use of Electronic Voting Machines (EVM), what are the challenges before the Election Commission of India to ensure the trustworthiness of elections in India? (UPSC 2018)
Source: The Hindu

WHOLESALE PRICE INDEX (WPI)

 
 
1. Context

The headline wholesale price index ( WPI)based inflation inched up to a three-month high of 0.53 per cent in March from 0.2 per cent in February.

It thus remained in positive terrain for the fifth consecutive month, after it was in deflationary territory for the major part of financial year 202324 (FY24)

 

2. What is the Wholesale Price Index(WPI)?

The Wholesale Price Index (WPI) is a measure of the changes in the prices of goods sold and traded in bulk by wholesale businesses to other businesses or retailers. It is one of the key indicators used to measure inflation and economic performance in a country.

WPI tracks the average price changes of goods at the wholesale level, providing insights into inflationary pressures in the economy. It includes various categories of goods such as agricultural products, industrial raw materials, fuel and power, and manufactured goods.

Governments and policymakers use WPI data to monitor inflation trends, formulate monetary and fiscal policies, and assess the overall health of the economy. It serves as a crucial tool for businesses to adjust pricing strategies, forecast costs, and make informed decisions regarding production and investment

3. Importance of WPI

 

The Wholesale Price Index (WPI) holds several significant roles in economic analysis and policymaking:

  • WPI is a key indicator used to measure inflationary pressures in the economy. By tracking changes in the prices of goods at the wholesale level, it provides insights into the direction and magnitude of inflation. This data is crucial for policymakers in formulating monetary and fiscal policies to maintain price stability
  • WPI serves as a barometer of economic performance, reflecting changes in production costs, input prices, and overall market conditions. Fluctuations in WPI can indicate shifts in supply and demand dynamics, business confidence, and economic activity levels
  • Governments and central banks rely on WPI data to formulate and adjust monetary and fiscal policies. By assessing inflationary trends captured by WPI, policymakers can make informed decisions regarding interest rates, money supply, taxation, and government spending to achieve macroeconomic objectives such as price stability, economic growth, and employment generation
  • Businesses utilize WPI as a tool for forecasting production costs and adjusting pricing strategies. By monitoring changes in wholesale prices of goods, companies can anticipate future cost pressures, optimize supply chain management, and make pricing decisions to maintain profitability and competitiveness in the market
  • WPI data is also crucial for analyzing trends in international trade. Changes in wholesale prices can affect export competitiveness, import demand, and trade balances. Policymakers use WPI information to assess the impact of exchange rate fluctuations, trade policies, and global economic conditions on domestic industries and trade relations
4. What is the Consumer Price Index(CPI)?
 

The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is one of the most widely used indicators for tracking inflation and assessing changes in the cost of living over time.

CPI is calculated by collecting price data for a representative sample of goods and services that are typically purchased by urban consumers. The prices of these items are then aggregated and weighted according to their relative importance in the average consumer's expenditure. The resulting index reflects the average price level experienced by consumers

CPI is used by governments, central banks, businesses, and households for various purposes:

  • CPI is primarily used to measure inflation, which is the rate at which the general level of prices for goods and services is rising. By tracking changes in the CPI over time, policymakers can gauge the extent of inflationary pressures in the economy and adjust monetary and fiscal policies accordingly
  • Many labour contracts, pension plans, and government benefits are indexed to CPI. This means that payments or wages are adjusted periodically based on changes in the CPI to maintain purchasing power and account for changes in the cost of living
  • Central banks often use CPI as a key input in their monetary policy decisions. By targeting a specific inflation rate, central banks aim to achieve price stability and support sustainable economic growth. CPI data helps policymakers assess whether monetary policy actions are effectively controlling inflation
  • Investors and financial analysts use CPI data to adjust their investment strategies and financial planning. Understanding inflation trends can help investors anticipate changes in interest rates, bond yields, and stock market performance, which in turn influence investment decisions
  • CPI data provides insights into consumer behavior and spending patterns. Changes in the prices of specific goods and services reflected in the CPI can affect consumer preferences, purchasing decisions, and overall economic activity
5.What is the distinction between WPI and CPI?
 
Subject Wholesale Price Index (WPI) Consumer Price Index (CPI)
Scope of Goods and Services Measures changes in prices of goods traded in bulk by wholesalers, including raw materials, intermediate goods, and finished goods. Tracks changes in prices of goods and services purchased by households for consumption, including food, housing, transportation, etc.
Target Audience Relevant to businesses, policymakers, and analysts involved in production, manufacturing, and trade. Important for individuals, households, labor unions, and policymakers involved in setting wages, pensions, and social security benefits.
Weighting and Composition Based on a fixed basket of goods and services weighted according to their relative importance in wholesale trade. Based on a basket of goods and services representative of urban consumer spending patterns.
Policy Implications Changes in WPI affect production costs, supply chain management, and business profitability. Used by policymakers to assess inflation trends and formulate industrial and trade policies. Changes in CPI directly impact the cost of living for households and influence consumer behavior, purchasing power, and welfare. Used by policymakers to adjust wages, social benefits, and taxation policies.
 
6. Way Forward
 
Both WPI and CPI are measures of price levels, they differ in their scope, target audience, composition, and policy implications. WPI focuses on wholesale trade and production costs, while CPI reflects consumer spending patterns and the cost of living for households
 
For Prelims: Consumer Price Index, Wholesale Price Index, Inflation,  retail inflation, Producer Pirce Index, National Statistical Office, OPEC+, Crude oil, Kharif season, Monsoon, 
For Mains: 
1. Analyse the factors contributing to high food inflation in India in recent months. Discuss the impact of high food inflation on the Indian economy and suggest measures to mitigate it. (250 words)
2. Explain the concept of sticky inflation. What are the various factors that contribute to sticky inflation? Discuss the implications of sticky inflation for the Indian economy. (250 words)
 
 
Previous Year Questions
 
1. With reference to inflation in India, which of the following statements is correct? (UPSC 2015)
A. Controlling the inflation in India is the responsibility of the Government of India only
B. The Reserve Bank of India has no role in controlling the inflation
C. Decreased money circulation helps in controlling the inflation
D. Increased money circulation helps in controlling the inflation
 
Answer: C
 
2. With reference to India, consider the following statements: (UPSC 2010)
1. The Wholesale Price Index (WPI) in India is available on a monthly basis only.
2. As compared to Consumer Price Index for Industrial Workers (CPI(IW)), the WPI gives less weight to food articles.
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. Consider the following statements: (UPSC 2020)
1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).
2. The WPI does not capture changes in the prices of services, which CPI does.
3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.
Which of the statements given above is/are correct?
 A. 1 and  2 only       B. 2 only       C. 3 only           D. 1, 2 and 3
 
4. India has experienced persistent and high food inflation in the recent past. What could be the reasons? (UPSC 2011)
1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30.
2. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change.
3. The food supply chain has structural constraints.
Which of the statements given above are correct? 
A. 1 and 2 only          B. 2 and 3 only        C. 1 and 3 only          D. 1, 2 and 3
 
Answer: B
 
 
5. The Public Distribution System, which evolved as a system of management of food and distribution of food grains, was relaunched as _______ Public Distribution System in 1997. (SSC JE EE 2021) 
A. Evolved         B. Transformed      C. Tested            D. Targeted
 
Answer: D
 
6. Under the Antyodaya Anna Yojana, up to what quantity of rice and wheat can be purchased at a subsidised cost? (FCI AG III 2023) 
A. 35 kg          B. 40 kg          C. 30 kg           D. 25 kg           E. 50 kg
 
Answer: A
 
7. As per the the National Statistical Office (NSO) report released on 7 January 2022, India's Gross domestic product (GDP) is expected to grow at ___________ per cent (in first advance estimates) in the fiscal year 2021-22?  (ESIC UDC 2022) 
A. 17.6 per cent     B. 9.5 per cent     C. 11 per cent        D. 9.2 per cent   E. None of the above
 
Answer: D
 
8. The main emphasis of OPEC (Organisation of the Petroleum Exporting Countries) is on which of the following? (UKPSC 2016)
A. The production of petroleum
B. Control over prices of petroleum
C. Both (a) and (b)
D. None of the above
 
Answer: C
 
9. In the context of global oil prices, "Brent crude oil" is frequently referred to in the news. What does this term imply? (UPSC 2011)
1. It is a major classification of crude oil.
2. It is sourced from the North Sea.
3. It does not contain sulfur.
Which of the statements given above is/are correct?
A. 2 only    B. 1 and 2 only        C. 1 and 3 only         D. 1, 2 and 3
 
Answer: B
 
10. The term 'West Texas Intermediate', sometimes found in news, refers to a grade of (UPSC 2020)
A. Crude oil   B. Bullion         C. Rare earth elements       D.  Uranium
 
Answer: C
 
11. With reference to the cultivation of Kharif crops in India in the last five years, consider the following statements: (UPSC 2019)
1. Area under rice cultivation is the highest.
2. Area under the cultivation of jowar is more than that of oilseeds.
3. Area of cotton cultivation is more than that of sugarcane.
4. Area under sugarcane cultivation has steadily decreased.
Which of the statements given above are correct? 
A. 1 and 3 only        B.  2, 3 and 4 only        C. 2 and 4 only         D. 1, 2, 3 and 4
 
Answer: A
 
Source: The Hindu
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