MULLAPERIYAR DAM
1. Context
Tamil Nadu continued to release water from the Mullaperiyar dam in Kerala on Tuesday. The State operates and maintains the British-era dam in Idukki district under a 999-year lease agreement.
2. New Guidelines
- The CWC (Central Water Commission) implemented a set of guidelines for dam construction following Kerala's preparation of the DPR (Detailed Project Report) in 2011. Those informed about the situation mentioned that the costs for various project components have increased since the last DPR, hence the need for a revision.
- Recently, the State government approached the CWC to expedite approval for a new dam's construction. Additionally, the State expressed its readiness to supply water to Tamil Nadu from this new dam.
- Kerala and Tamil Nadu have been embroiled in a prolonged legal dispute regarding the stability and other related aspects of the current dam. Kerala has been advocating for a new dam primarily on safety grounds.
- Both states witnessed significant protests after Kerala raised safety concerns and called for the decommissioning the existing dam
3. What do we Know about the Mullaperiyar Dam?
The Mullaperiyar Dam is located in the southern Indian state of Kerala, but it's owned and operated by the Government of Tamil Nadu.
Here are some key points about the dam:
- Situated in the Western Ghats, the Mullaperiyar Dam is built across the Periyar River in the state of Kerala
- Although the dam is located in Kerala, it is owned, maintained, and operated by the Government of Tamil Nadu based on a 999-year lease agreement signed in 1886
- The primary purpose of the dam is to divert water from the Periyar River's catchment area to the Vaigai River basin in Tamil Nadu for irrigation and drinking water purposes
- The dam has been a subject of contention between Kerala and Tamil Nadu due to concerns over its structural integrity. Kerala has raised concerns about the dam's safety due to its age and the potential risk to downstream areas in case of a dam failure. Tamil Nadu contends that the dam is safe and necessary for meeting its water needs
- The two states have engaged in a prolonged legal battle over the Mullaperiyar Dam's safety and the need for a new dam. Kerala has called for decommissioning the existing dam and constructing a new one, while Tamil Nadu has insisted on raising the dam's water level, citing its necessity for irrigation
- The issue has reached the Supreme Court of India multiple times, and the court has issued various directives regarding the water level and safety measures to address concerns from both states
4.What is the Dispute regarding Mullaperiyar dam?
The dispute surrounding the Mullaperiyar Dam primarily revolves around several key issues:
- Kerala has raised serious concerns about the dam's structural integrity due to its age and the potential risks associated with a dam failure. There have been apprehensions that the dam, which is over a century old, might not withstand a major earthquake or natural calamity, posing a threat to the downstream areas in Kerala
- Tamil Nadu, which owns and operates the dam, asserts its rights to receive a certain amount of water from the Periyar River through the dam for irrigation purposes in the Vaigai River basin. There have been disagreements between the two states regarding the permissible water level in the dam and the quantity of water to be released to Tamil Nadu
- The disagreement between Kerala and Tamil Nadu has escalated into a legal battle that has been ongoing for decades. Both states have filed numerous cases and counter-cases in courts, including the Supreme Court of India, seeking decisions on issues related to the dam's safety, water sharing, and the need for a new dam
- The Mullaperiyar Dam issue has significant political implications for both states. It has been a point of contention in the political landscape of Kerala and Tamil Nadu, with each state advocating for its respective stance on the dam's safety and water-sharing agreements
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Periyar river
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5. What is the Dam Safety Act?
- The Dam Safety Act, introduced to the Rajya Sabha in December 2021, aimed to address issues of inadequate monitoring and maintenance that have led to dam-related disasters.
- This legislation outlined specific duties and required the establishment of both national and state-level bodies to enforce its provisions.
- It proposed the creation of a National Committee on Dam Safety responsible for overseeing policies and regulations, a National Dam Safety Authority tasked with implementation and the resolution of state-level disputes, designating the Chairman of the Central Water Commission (CWC) to lead national dam safety protocols, and the formation of State Committees on Dam Safety (SCDS) and State Dam Safety Organizations (SDSO)
- The Dam Safety Act (DSA) 2021 was enacted by the Union Government of India to prevent dam failure-related disasters. The act focuses on the proper surveillance, inspection, operation, and maintenance of specified dams. It also establishes an institutional mechanism to ensure their safe functioning
- The act was notified by the Government of India on December 14, 2021, and came into effect on December 30, 2021.
- The act provides for institutional mechanisms for surveillance, inspection, operation, and maintenance of the specified dams. The Central Water Commission (CWC) provides technical expertise and guidance on all matters related to dams.
- Failure to comply with any provision of the act is punishable with imprisonment and/or fines. If such obstruction or refusal to comply with directions results in loss of lives or imminent danger thereof, the entity shall be punishable with imprisonment for a term which may extend to two years
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Previous Year Questions
1. Which one of the following pairs is not correctly matched? (UPSC CSE 2010) Dam/Lake River (a) Govind Sagar : Satluj Answer: (b) 2.Consider the following statements: (UPSC CSE 2009)
Which of the statements given above is/are correct? (a) 1 only Answer: (d) |
Source: The Hindu
QUAD
1. Context
The coast guards of QUAD nations — India, Japan, the United States, and Australia — have launched the QUAD at Sea Ship Observer Mission to deepen maritime cooperation in the Indo-Pacific.
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
IMD'S COLOUR CODED WEATHER ALERTS
1. Context
The monsoon rainfall in July, the most important month for agricultural operations, will be “above normal”, or nearly 6% more than the 28 cm it usually receives.However, several States, including Chhattisgarh, Odisha, and Telangana, “ought to be watchful” as the heavy rain could lead to the catchment areas of several river basins, including the Krishna, Godavari, and Mahanadi, receiving surplus rain, Mrutunjay Mohapatra, Director-General, India Meteorological Department (IMD), said at a press briefing on Monday
2. Weather alerts issued by IMD
The India Meteorological Department (IMD) frequently releases color-coded alerts to inform the public about impending weather events and their intensity. These alerts are triggered by adverse weather conditions like rain, snowfall, thunderstorms, squalls, hailstorms, dust storms, and extreme temperatures, including heat waves and cold waves. The issuance of these color codes—Green, Yellow, Orange, and Red—depends on specific criteria, primarily the probability of the event and the potential impact. These warnings are typically valid for up to five days
3. How are alerts are issued?
Alerts are issued by the India Meteorological Department (IMD) based on the assessment of various weather parameters and the potential impact of upcoming weather events. The process generally involves the following steps:
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Weather Monitoring and Data Analysis: The IMD continuously monitors weather patterns using satellite imagery, radar data, and ground-based observations. Meteorologists analyze this data to predict the likelihood and severity of different weather events.
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Forecasting: Based on the analysis, weather models are run to forecast conditions such as rainfall, thunderstorms, snowfall, heatwaves, cold waves, etc. The forecasts are generated for different regions and time periods, typically ranging from a few hours to several days in advance.
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Risk Assessment: The IMD evaluates the potential impact of the predicted weather event on people, property, and infrastructure. This assessment considers factors like the intensity of the event, the affected area, and the vulnerability of the population.
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Color-Coded Alerts:
- Green Alert: No significant weather; no action is required.
- Yellow Alert: Be aware; indicates weather conditions that could escalate but are not expected to cause significant harm.
- Orange Alert: Be prepared; indicates potentially dangerous weather that could cause disruption and require precautions.
- Red Alert: Take action; indicates severe weather that is likely to cause significant damage and pose a high risk to life and property.
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Dissemination: Once the appropriate alert level is determined, the IMD issues the alert through various channels, including their official website, social media, mobile apps, television, radio, and coordination with local authorities.
4. Significance of these alerts
The significance of the color-coded alerts issued by the India Meteorological Department (IMD) lies in their ability to enhance preparedness, minimize risks, and protect lives and property during adverse weather conditions.
Here's how these alerts are important:
- The primary purpose of these alerts is to safeguard the public. By providing early warnings of severe weather conditions, people can take necessary precautions, such as seeking shelter during a storm, avoiding travel during hazardous conditions, or preparing for extreme temperatures
- These alerts enable government agencies, local authorities, and disaster management teams to prepare for potential emergencies. This may include deploying resources, setting up shelters, issuing evacuation orders, or mobilizing rescue operations in anticipation of the event.
- Alerts help individuals and businesses make informed decisions. For example, farmers can protect their crops, fishermen can avoid going out to sea, and airlines can reschedule flights, all based on the severity of the alert
- By alerting businesses and industries to impending weather disruptions, these alerts help minimize economic losses. For instance, construction sites can secure equipment, supply chains can adjust logistics, and events can be rescheduled to avoid damage.
- Regularly issued alerts foster a culture of awareness and preparedness within communities. People become more attuned to weather patterns and more responsive to warnings, reducing the likelihood of injury or loss.
- In cases of environmental hazards like floods, landslides, or wildfires, these alerts play a crucial role in preventing further environmental degradation by prompting timely interventions.
- Vulnerable groups, such as the elderly, children, and those with health conditions, are more susceptible to the impacts of extreme weather. Alerts allow caregivers and authorities to take proactive steps to protect these individuals
- IMD's alerts are also significant for international and regional cooperation, as weather events often transcend borders. Sharing information helps neighboring countries or regions prepare for the potential spread of weather impacts
5. India Meteorological Department (IMD)
The India Meteorological Department (IMD) is the national meteorological agency of India, responsible for weather forecasting, monitoring, and issuing warnings related to weather events. Established in 1875, the IMD operates under the Ministry of Earth Sciences and plays a crucial role in providing meteorological services to various sectors of the Indian economy
Key functions of IMD:
- IMD provides short-term and long-term weather forecasts for different regions of India, helping people, businesses, and government agencies plan and prepare for various weather conditions
- IMD issues color-coded alerts (Green, Yellow, Orange, and Red) to inform the public and authorities about impending severe weather events such as cyclones, heatwaves, cold waves, heavy rainfall, and thunderstorms
- The department monitors the climate of India and conducts research on various climatic patterns and phenomena. It also tracks and analyzes data related to monsoons, droughts, and climate change
- IMD plays a vital role in tracking cyclones and issuing timely warnings to coastal regions, helping in the evacuation and disaster management processes
- IMD provides weather-related information and advisories to the agricultural sector, aiding farmers in making informed decisions about sowing, irrigation, and harvesting
- IMD offers meteorological services to the aviation industry, providing weather forecasts and warnings that are critical for flight safety and operations
- IMD collaborates with various international meteorological organizations and contributes to global weather and climate studies
6. Way forward
IMD operates a vast network of observatories, radar stations, and satellite systems to collect and analyze meteorological data. It also uses advanced computer models and technology to improve the accuracy of weather predictions and warnings
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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
GEOGRAPHICAL INDICATION TAG
1. Context
On June 25, at its Spring/Summer 2026 menswear show in Milan, Italian luxury brand Prada unveiled footwear inspired by India’s Geographical Indication (GI)-tagged Kolhapuri chappals, sparking accusations of ‘cultural misappropriation’.
2. About Geographical Indication (GI) Tag
- A Geographical Indication (GI) is a label that is applied to products that have a specific geographical origin and that have characteristics related to that particular location.
- For Example, a GI tag for Amroha Dholak indicates that the dholaks must be made in Amroha, Uttar Pradesh, using traditional methods and materials.
3. Importance of GI Tag
- GI tags are important because they help to produce the reputation and authenticity of products from a particular region.
- They also help to promote fair trade and sustainable practices. In the case of the seven products from Uttar Pradesh that have received GI tags, these tags will help to ensure that these products are made using traditional methods and that they are of high quality.
- This will benefit the artisans who make these products and it will also help to preserve the unique cultural heritage of Uttar Pradesh.
4. Products from Uttar Pradesh Get GI Tag
4.1. Amroha Dholak
- It is a musical instrument crafted from natural wood, particularly mango, jackfruit and teakwood.
- Skilled artisans carve hollow blocks of various sizes and shapes from mango and sheesham trees, which are then fitted with animal skin, typically goatskin, to produce the instrument.
- It is produced by around 300 small units, employing over 1, 000 artisans. The Artisans Welfare Society in Mohalla Danishmandan, Amroha, Uttar Pradesh applied the GI Tag.
Image source: One district-one product4.2. Baghpat Home Furnishings
- Exquisite Handloom Craft The Directorate of Handloom and Textile Industries, Government of Uttar Pradesh and the Master Weavers Cooperative Society Limited applied the Baghpat Home Furnishings.
- Baghpat and Meerut are renowned for their exclusive handloom home furnishing products and the tradition of weaving cotton yarn fabrics for generations.
- The handloom weaving process in Baghpat is known for utilizing only cotton yarn and the distinctive frame loom technique.
Image source: One district-one product4.3. Barabanki Handloom Product
- A GI Tag for Traditional Weaving The Barabanki Handloom Product has also been honoured with a GI tag.
- The application for this product was filed by the Directorate of Handloom and Textile Industries, Government of Uttar Pradesh, along with Bhartiya Bunkar Sahkari Samiti Limited.
- The filing reveals that the Barabanki cluster comprises approximately 50, 000 weavers and 20, 000 looms in Barabanki and its adjoining areas.
- The annual turnover of this cluster is projected to be around ₹150 crores.
Image source: One district-one product4.4. Kalpi Handmade Paper
- An Age-old Craft application for the Kalpi Handmade Paper was submitted by the Hasht Nirmit Kagaj Samiti in the Industrial Estate of Kalpi, Uttar Pradesh.
- Kalpi has a rich history of handmade paper manufacturing. Munnalal Khaddari a Gandhian formally introduced the craft in the 1940s, although some locals claim its roots go even further back.
- The Kalpi handmade paper-making cluster engages over 5, 000 craftsmen and operates approximately 200 units.
Image Source: Magzter4.5. Mahoba Gaura Patthar Hastashlip
- Crafted from the Pyro Flight Stone Mahoba Gaura Pattar Hastashlip represents the stone craft of the region, specifically using the unique and delicate Pyro Flight Stone.
- This radiant white stone is predominantly found in Mahoba and is carved into various pieces to create stunning craft items.
Image Source: Jagran4.6. Manipuri Tarkashi
- Intricate Brass Wire Inlay Work on Wood Mainpuri Tarkashi is a popular art form originating from Mainpuri, Uttar Pradesh.
- It involves intricate brass wire inlay work on wood. Traditionally, it was employed in the creation of Khadaous (wooden sandals) an essential household item when leather was considered unclean.
Image source: One district-one product
4.7. Sambhal Horn Craft
- Unique Handcrafted Art The Sambhal Horn Craft utilizes raw materials obtained from dead animals and showcases the skilful handiwork of artisans.
- This craft involves completely handmade creations and is recognized for its distinctiveness.
Image source: One district-one product
4.8.Kapdaganda shawl
Woven and embroidered by the women of the Dongria Kondh tribe, a particularly vulnerable tribal group (PVTG) in the Niyamgiri hills in Odisha’s Rayagada and Kalahandi districts, the shawl reflects the rich tribal heritage of the Dongria Kondhs.
It is embroidered on an off-white coarse cloth with red, yellow and green coloured threads, with each colour holding significance. Green symbolises the mountains and hills, and yellow stands for peace and happiness. Red stands as the symbol of blood.
It is embroidered on an off-white coarse cloth with red, yellow and green coloured threads, with each colour holding significance. Green symbolises the mountains and hills, and yellow stands for peace and happiness. Red stands as the symbol of blood.
The motifs in the shawls are mostly lines and triangles, believed to be a reflection of the importance of mountains for the community. The shawl is worn by both men and women and the Dongrias gift it to their family members as a token of love and affection
4.9.Lanjia Saura Painting
The painting, one of the oldest tribal art forms, is also known as Idital. The artworks are famous for their beauty, aesthetics, ritualistic association and iconography.
The art form belongs to the Lanjia Saura community, a PVTG largely residing in the Rayagada district. These paintings are in the form of exterior murals painted on the mud walls of homes. White paintings figure over a crimson-maroon background.
It is believed that the Lanjia Sauras paint their walls with Idital artworks to show gratitude to their deities and forefathers, and also for the well-being of their community. Reflecting the love and affection of the primitive tribes for nature, they feature subjects like tribal humans, trees, animals, birds, the Sun and the Moon.
4.10. Koraput Kala Jeera Rice
The black-coloured rice variety, also known as the ‘Prince of Rice’, is famous for its aroma, taste, texture and nutritional value. Tribal farmers of the Koraput region have preserved the rice variety for around 1,000 years. As the rice grains resemble cumin seeds, it is also called Kala Jeera. Consumption of the rice variety helps in increasing haemoglobin levels and improves metabolism in the body
The farmers and producers of Koraput Kala Jeera rice have followed the traditional knowledge and practices in cultivation. Ancient tales also speak about the physical, mental and spiritual delights resulting from the consumption of the rice variety
4.11.Similipal Kai chutney
The chutney made with red weaver ants is a traditional delicacy of the tribals in Odisha’s Mayurbhanj district. The ants are found in the forests of Mayurbhanj, including in the Similipal forests – Asia’s second-largest biosphere. Rich in medicinal and nutritional value, the chutney is believed to be a good source of nutrients like protein, calcium, zinc, vitamin B-12, iron, magnesium, potassium, etc
The tribals prepare the Kai chutney by grinding the ants manually on a Sil Batta or the grinding stone. Mayurbhanj’s tribals also earn their livelihood by selling the red ants and the chutney made from the ants. They believe that its consumption helps boost immunity and prevents diseases
4.12.Nayagarh Kanteimundi Brinjal
Nayagarh Kanteimundi Brinjal is known for its prickly thorns on the stems and the whole plant. The green and round fruits contain more seeds as compared to other genotypes. It is famous for its unique taste and relatively short quick cooking time. The plants are resistant to major insects and can be grown with minimal pesticide.
It is being widely cultivated in Nayagarh district of the state. The growers are getting a yield of up to 200 quintals per hectare and selling at around Rs 60 per kg. Historical records also suggest that the locals got the brinjal from the hilly areas. They collected seeds from it and started raising seedlings nearly 100 years ago
4.13.Odisha Khajuri Guda
Odisha’s “Khajuri Guda” or jaggery is a natural sweetener extracted from date palm trees and has its origin in the Gajapati district. Traditionally, the jaggery is prepared in a trapezoidal form called ‘Patali Gur’ and is organic by nature. It is dark brown and has a unique taste
4.14.Dhenkanal Magji
Dhenkanal Magji is a type of sweet made from cheese from buffalo milk, with distinct characteristics in terms of appearance, taste, flavour, shape, and size. It also has unique nutritional values that distinguish it from other cheese-based sweets.
Thousands of people were said to be earning their livelihood through animal husbandry, especially buffalo rearing, during the British era. The region was the hinterland of buffalo milk production and cheese was the third largest produce, after milk and curd. Mandar-Sadangi area of Gondia block is believed to be the centre of origin of the sweet stuff, which has now been spread to the entire district.
The sweet is prepared by draining moisture from the cheese and then frying it, finally forming balls from the mixture
5. Way forward
A marker of authentic products, the GI tags also help protect the interests of the local growers and artisans by preventing duplicity of the products and sale from unauthorised traders. Consumers, through the tags, can know which goods are certified
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For Prelims: Geographical Indication Tag, Uttar Pradesh, Amroha Dholak, Mahoba Gaura Patthar Hastashlip, Manipuri Tarkashi, Sambhal Horn Craft, Baghpat Home Furnishings, Barabanki Handloom Product, Kalpi Handmade Paper,
For Mains:
1. Discuss the potential economic and cultural benefits of obtaining GI tags for regional products in terms of enhancing their market value and preserving traditional knowledge. (250 Words)
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Previous Year Questions 1. Which of the following has/have been accorded 'Geographical Indication' status? (UPSC 2015) 1. Banaras Brocades and Sarees
2. Rajasthani Daal-Bati-Churma
3. Tirupathi Laddu
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: C
2. India enacted The Geographical Indications of Goods (Registration and Protection) Act, 1999 in order to comply with the obligations to (UPSC 2018)
A. ILO B. IMF C. UNCTAD D. WTO
Answer: D
3. On the basis of 'one district one product' programme in Uttar Pradesh, which one of the following pairs is NOT correctly matched? (UPPSC Combined State Exam 2022)
A. Gautam Buddh Nagar - Readymade Garments
B. Amethi - Moonz Products
C. Agra - Leather Products
D. Baghpat - Wooden Toys
Answer: D
4. In which of the following states was the Monpa handmade paper making unit inaugurated in December 2020? (SSC CHSL 2021)
A. Manipur B. Tripura C. Assam D. Arunachal Pradesh
Answer: D
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Source: The Indian Express
GLOBAL GENDER GAP
1. Context
Across the world, women are under-represented in STEM (science, technology, engineering, and mathematics). Their absence has consequences: it narrows perspectives in STEM, potentially hinders progress in research, and perpetuates gender differences at the workplace.
2. What is the Global Gender Gap?
The Global Gender Gap refers to the measurement of gender-based disparities across various aspects of life, including but not limited to economic participation and opportunity, educational attainment, political empowerment, and health and survival. It is commonly assessed and reported by the World Economic Forum (WEF) through its annual Global Gender Gap Report.
The Global Gender Gap Index ranks countries based on their progress towards gender parity. It measures the gap between women and men across four key areas:
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Economic Participation and Opportunity: This includes indicators such as labor force participation, wage equality for similar work, and the ratio of women to men in leadership positions and skilled roles.
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Educational Attainment: This assesses the gap in access to and completion of education between women and men at all levels, from primary to tertiary education.
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Health and Survival: This measures differences in life expectancy and sex ratio at birth, reflecting disparities in health outcomes between women and men.
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Political Empowerment: This evaluates the gap in political representation and participation between women and men, including the ratio of women to men in decision-making positions and parliamentary representation.
The Global Gender Gap Report serves as a tool to assess progress and identify areas where interventions are needed to address gender disparities. It highlights both achievements and challenges in achieving gender equality globally and provides policymakers, businesses, and civil society organizations with data-driven insights to inform their efforts toward gender equality and women's empowerment
3.What explains the gender pay gap?
The gender pay gap refers to the difference in average earnings between men and women in the workforce. Several factors contribute to the gender pay gap, including:
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Occupational Segregation: Women are often concentrated in lower-paying industries and occupations compared to men. This occupational segregation is influenced by various factors, including social norms, discrimination, and differences in educational and career choices.
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Unequal Pay for Equal Work: Even within the same occupation and industry, women may earn less than men for performing similar roles. This can be due to factors such as discrimination in hiring, promotion, and compensation decisions, as well as negotiation disparities.
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Motherhood Penalty: Women who become mothers often experience a reduction in earnings compared to women without children and men with children. This can be attributed to factors such as career interruptions, decreased work hours, and bias against working mothers in the workplace.
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Lack of Representation in Leadership Positions: Women are underrepresented in senior leadership roles and executive positions, which typically come with higher salaries and bonuses. This lack of representation contributes to the gender pay gap at the highest levels of organizations.
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Unpaid Care Work: Women are more likely to take on a disproportionate share of unpaid care work, such as childcare and eldercare responsibilities. This can limit their ability to work full-time or pursue higher-paying career opportunities.
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Gender Stereotypes and Bias: Societal stereotypes and biases about gender roles and capabilities can influence hiring, promotion, and compensation decisions, leading to disparities in pay between men and women
4. Global Gender Gap Report 2023-What are the Key Findings?
- The International Labour Organization (ILO) defines the gender pay gap as the disparity between the average wages of all women and all men in the labor market, regardless of whether they receive monthly salaries, hourly wages, or daily pay rates. It clarifies that this gap differs from the concept of "equal pay for equal work," which stipulates that individuals with the same qualifications and performing identical tasks should receive equivalent compensation.
- Moreover, there isn't a universally accepted method for calculating this discrepancy. For instance, while Pew Research found in 2012 that women earned 84% of men's earnings in the United States, the US Bureau of Labor Statistics reported a figure of 81 cents to the dollar shortly before that.
- Several factors contribute to this gap. Firstly, women's lower participation in paid employment compared to men, influenced by societal perceptions of gender roles, is a significant factor, as indicated by the labor force participation rate.
- The ILO states that globally, women's labor force participation rate stands at just under 47%, while for men, it is 72%. In India, according to the 2011 Census, only 25.51% of women participate in the workforce, compared to 53.26% of men.
- Secondly, the types of occupations women enter upon joining the workforce play a role. According to the ILO's Women in Business and Management report, women are underrepresented in managerial and leadership positions, especially at higher levels. Additionally, when women do hold managerial roles, they tend to be concentrated in support functions such as human resources and financial administration, which typically offer lower salaries compared to more strategic roles occupied by men.
- A survey conducted by Georgetown University in 2013 revealed that the top 10 highest-paying professions, predominantly in engineering and computer science, were dominated by men, whereas the 10 lowest-paying professions, primarily in fields like arts and education, were dominated by women.
- Furthermore, in 73 countries (based on 2018 data), women outnumber men as part-time workers. The ILO suggests that women's opportunities for full-time employment may be constrained compared to men's, leading them to opt for part-time work, which often comes with fewer benefits and lower remuneration over time.
- Institutional and socio-economic factors also contribute significantly to the gender pay gap, including the perception that men should be the primary breadwinners, unequal investments in women's education, and safety concerns during commute and in the workplace
5. How is the gender pay gap calculated?
The gender pay gap is typically calculated by comparing the average earnings of all women to the average earnings of all men within a specific workforce or labor market. Here's a basic outline of the calculation:
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Collect Data: Gather data on earnings for both men and women within the chosen population, whether it's a particular company, industry, region, or country. This data can be obtained from payroll records, government databases, surveys, or other sources.
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Calculate Average Earnings: Determine the average earnings for men and women separately by summing up the total earnings of each group and dividing by the number of individuals in that group.
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Calculate the Gap: Subtract the average earnings of women from the average earnings of men to find the absolute difference.
Gap = Average Earnings of Men - Average Earnings of Women
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Express the Gap as a Percentage: To express the gap as a percentage, divide the absolute difference by the average earnings of men and then multiply by 100.
Percentage Gap = (Gap / Average Earnings of Men) * 100
This percentage represents the gender pay gap, indicating the difference in average earnings between men and women as a proportion of men's average earnings
6.The Global Gender Gap Index and Gender Inequality Index (GII)
| Subject | Global Gender Gap Index (GGGI) | Gender Inequality Index (GII) |
|---|---|---|
| Measurement | Measures gender-based disparities across four key areas: Economic participation and opportunity, Educational attainment, Health and survival, Political empowerment. | Measures gender inequality in three dimensions: Reproductive health, Empowerment, Labor market participation. |
| Focus | Focuses on gender disparities and gender parity in various aspects of life, including economic, educational, health, and political participation. | Focuses specifically on gender inequality, highlighting disparities in reproductive health, empowerment, and labor market participation. |
| Components | Includes economic participation and opportunity, educational attainment, health and survival, political empowerment. | Includes maternal mortality ratio, adolescent birth rate, women in parliament, educational attainment, labor force participation. |
| Data Sources | Relies on data collected by the World Economic Forum (WEF) through its annual Global Gender Gap Report. | Utilizes data from various sources, including United Nations agencies and other international organizations. |
| Ranking Method | Ranks countries based on their progress towards gender parity in each component and overall. | Ranks countries based on a composite index that combines indicators from the three dimensions of reproductive health, empowerment, and labor market participation. |
| Scope | Covers a broad range of gender disparities and focuses on the gender gap within each country. | Specifically targets gender inequality and highlights countries where women face significant barriers to equal rights and opportunities. |
| Policy Implications | Provides policymakers with insights into areas where interventions are needed to address gender disparities and promote gender equality. | Helps policymakers identify areas where targeted interventions are required to address gender inequality and improve women's rights and opportunities. |
| Global Rankings | Provides a global ranking of countries based on their performance in closing the gender gap. | Provides a global ranking of countries based on their level of gender inequality, highlighting countries with the highest levels of disparity. |
| Publication Frequency | Published annually by the World Economic Forum (WEF). | Published annually by the United Nations Development Programme (UNDP). |
7. Way forward
One notable study conducted by the World Economic Forum (WEF) as part of its Global Gender Gap Report has consistently highlighted the gender wage disparity in India. The report typically provides an estimate of the gender wage gap based on the ratio of female to male earned income. In the most recent report available to me, India's gender wage gap was significant, with women earning substantially less than men. However, it's essential to note that this data may have changed since then, as gender wage gap figures can fluctuate over time due to various economic and social factors
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For Prelims: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc
For Mains:
General Studies I: Social empowerment • General Studies II: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections. • General Studies II: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources |
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Previous Year Questions
1.Which of the following gives 'Global Gender Gap Index' ranking to the countries of the world? (UPSC CSE 2017)
A.World Economic Forum
B.UN Human Rights Council
C.UN Women
D.World Health Organization
Answer (A)
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Source: Indianexpress
GOODS AND SERVICE TAX (GST)
1. Context
As the Goods and Services Tax (GST) completes eight years of implementation on July 1, tax experts acknowledge its successes but say a lot more work needs to be done in terms of simplification and rationalisation of rates. Among the big reforms suggested are the inclusion of fuel in the GST regime, the reduction in the number of tax slabs, and streamlining audits and investigations.
2. What is the Goods and Services Tax (GST)?
- The Goods and Services Tax (GST) is a value-added tax levied on the supply of goods and services at each stage of the production and distribution chain. It is a comprehensive indirect tax that aims to replace multiple indirect taxes imposed by the central and state governments in India.
- GST is designed to simplify the tax structure, eliminate the cascading effect of taxes, and create a unified national market. Under the GST system, both goods and services are taxed at multiple rates based on the nature of the product or service. The tax is collected at each stage of the supply chain, and businesses are allowed to claim a credit for the taxes paid on their inputs.
- The GST system in India came into effect on July 1, 2017, replacing a complex tax structure that included central excise duty, service tax, and state-level taxes like VAT (Value Added Tax), among others. The GST Council, consisting of representatives from the central and state governments, is responsible for making decisions on various aspects of GST, including tax rates and rules.
- GST is intended to create a more transparent and efficient tax system, reduce tax evasion, and promote economic growth by fostering a seamless flow of goods and services across the country. It has a significant impact on businesses, as they need to comply with the new tax regulations and maintain detailed records of their transactions for GST filing
3.Goods and Services Tax (GST) and 101st Amendment Act, 2016
The Goods and Services Tax (GST) in India was introduced through the 101st Amendment Act of 2016. This constitutional amendment was a crucial step in the implementation of GST, which aimed to create a unified and comprehensive indirect tax system across the country.
Here are some key points related to the 101st Amendment Act and GST:
- The 101st Amendment Act was enacted to amend the Constitution of India to pave the way for the introduction of the Goods and Services Tax.
- It added a new article, Article 246A, which confers concurrent powers to both the central and state governments to levy and collect GST
- The amendment led to the creation of the GST Council, a constitutional body consisting of representatives from the central and state governments. The council is responsible for making recommendations on GST rates, exemptions, and other related issues
- The amendment introduced a dual GST structure, where both the central government and the state governments have the power to levy and collect GST on the supply of goods and services
- For inter-state transactions, the 101st Amendment Act provides that the central government would levy and collect the Integrated Goods and Services Tax (IGST), which would be a sum total of the central and state GST
- The amendment also included a provision for compensating states for any revenue loss they might incur due to the implementation of GST for a period of five years
The 101st Amendment Act was a critical legislative step that provided the constitutional framework for the implementation of GST in India. It addressed the need for a unified tax system, simplifying the tax structure and promoting a common market across the country. The subsequent establishment of the GST Council has played a pivotal role in the ongoing management and evolution of the GST system in India
4. What are the different types of Goods and Services Tax (GST)?
In India, the Goods and Services Tax (GST) is structured into different tax rates based on the nature of the goods and services. As of my last knowledge update in January 2022, the GST rates are divided into multiple slabs. It's important to note that tax rates may be subject to changes, and new amendments could have been introduced since then. As of my last update, the GST rates are as follows:
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Nil Rate:
- Some goods and services are categorized under the nil rate, meaning they attract a 0% GST. This implies that no tax is levied on the supply of these goods or services.
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5% Rate:
- This is a lower rate, applicable to essential goods such as certain food items, medical supplies, and other basic necessities.
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12% Rate:
- Goods and services falling in this category attract a 12% GST rate. Items such as mobile phones, processed foods, and certain services fall under this slab.
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18% Rate:
- A higher rate of 18% is applicable to goods and services such as electronic items, capital goods, and various services.
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28% Rate:
- The highest GST rate of 28% is applied to luxury items, automobiles, and certain goods and services that are considered non-essential or fall into the luxury category.
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Compensation Cess:
- In addition to the above rates, some specific goods attract a compensation cess, which is levied to compensate the states for any revenue loss during the transition to GST. This is often applied to items like tobacco and luxury cars.
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Zero Rate:
- Certain categories of goods and services may be specified as "zero-rated," which means they are effectively taxed at 0%. This is different from the nil rate, as it allows businesses to claim input tax credit on inputs, capital goods, and input services.
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Exempt Supplies:
- Some goods and services may be exempt from GST altogether. This means that they are not subject to any GST, and businesses cannot claim input tax credit on related inputs
5.Central GST (CGST), State GST (SGST), Union territory GST (UTGST) and Integrated GST (IGST)
| Subject | Central GST (CGST) | State GST (SGST) | Union Territory GST (UTGST) | Integrated GST (IGST) |
|---|---|---|---|---|
| Levied by | Central Government | Respective State Governments | Union Territory Administrations | Central Government (on inter-state transactions) |
| Applicability | On intra-state supplies (within the same state) | On intra-state supplies (within the same state) | On intra-union territory supplies (within the same union territory) | On inter-state supplies (across states or union territories) |
| Rate Determination | Determined by the Central Government | Determined by the Respective State Government | Determined by the Union Territory Administration | IGST rate is a sum of CGST and SGST rates |
| Revenue Collection | Collected by the Central Government | Collected by the Respective State Government | Collected by the Union Territory Administration | Collected by the Central Government (on inter-state transactions) |
| Utilization of Revenue | Shared between Central and State Governments | Retained by the Respective State Government | Retained by the Union Territory Administration | Shared between Central and State Governments |
| Purpose | Part of the dual GST structure, meant to cover central taxes | Part of the dual GST structure, meant to cover state taxes | Applicable in union territories for intra-territory supplies | Applied to regulate and tax inter-state supplies |
| Input Tax Credit (ITC) | ITC available for CGST paid on inputs and services | ITC available for SGST paid on inputs and services | ITC available for UTGST paid on inputs and services | ITC available for both CGST and SGST paid on inputs |
| Tax Jurisdiction | Applies within a particular state | Applies within a particular state | Applies within a particular union territory | Applies to transactions across states and union territories |
| GSTN Portal for Filing Returns | Central GSTN portal | State-specific GSTN portals | UTGSTN portal | Integrated GSTN portal |
6.What are the benefits of Goods and Services Tax (GST) in India?
The Goods and Services Tax (GST) in India was implemented with the aim of bringing about significant reforms in the indirect tax structure. Several benefits have been associated with the introduction of GST.
Here are some key advantages:
- GST replaced multiple indirect taxes levied by the central and state governments, simplifying the tax structure. This streamlined system reduces the complexity of compliance for businesses
- GST eliminates the cascading effect of taxes, where taxes are levied on top of other taxes. With a seamless credit mechanism, businesses can claim input tax credit on the taxes paid on their purchases, leading to a more transparent and efficient system
- GST has facilitated the creation of a common national market by harmonizing tax rates and regulations across states. This has reduced trade barriers and promoted the free flow of goods and services throughout the country
- The GST system has incorporated technology-driven processes, including electronic filing and real-time reporting, making it harder for businesses to evade taxes. This has contributed to increased tax compliance
- The input tax credit mechanism under GST benefits manufacturers, as they can claim credits for taxes paid on raw materials and input services. This has a positive impact on the cost of production and enhances the competitiveness of Indian goods in the international market
- GST brings transparency to the taxation system. The online filing of returns and the availability of transaction-level data make it easier for tax authorities to monitor and track transactions, reducing the scope for corruption
- GST has replaced a complex system of filing multiple tax returns with a more straightforward mechanism. Businesses now need to file fewer returns, reducing the compliance burden
- The implementation of GST has contributed to an improvement in the ease of doing business in India. The unified tax system has made it simpler for businesses to operate across states and has reduced the paperwork and bureaucratic hurdles associated with tax compliance
- GST has led to the harmonization of tax rates across states and union territories, minimizing the tax rate disparities that existed earlier. This creates a more predictable tax environment for businesses
7.Goods and Services Tax (GST)-Issues and Challenge
- Despite the intention to simplify the tax structure, the multi-tiered rate system (0%, 5%, 12%, 18%, and 28%) and the inclusion of cess on certain goods have introduced complexity. The classification of goods and services under different tax slabs can be challenging, leading to disputes and confusion
- The successful implementation of GST relies heavily on technology. Issues such as technical glitches on the GSTN (Goods and Services Tax Network) portal, especially during the initial phases, have caused difficulties for businesses in filing returns and complying with regulations
- The compliance requirements for businesses under GST, including multiple returns filing, have been perceived as burdensome. Smaller businesses, in particular, may find it challenging to adapt to the new system and comply with the various provisions
- The transition from the previous tax regime to GST posed challenges, especially for businesses in terms of understanding the new tax structure, reconfiguring accounting systems, and ensuring a smooth transition of credits from the old tax system to the GST system
- The classification of certain goods and services into specific tax slabs has been a source of contention. Ambiguities in classification have led to disputes and litigations, with businesses seeking clarity on the applicable tax rates
- The implementation of GST has increased compliance costs for businesses due to the need for sophisticated IT infrastructure, the hiring of tax professionals, and efforts to ensure accurate reporting and filing
- Challenges related to availing and matching input tax credits have been reported. Timely matching of credits and resolving discrepancies can be cumbersome, leading to concerns about the seamless flow of credit across the supply chain
- The anti-profiteering provisions were introduced to ensure that businesses pass on the benefits of reduced tax rates to consumers. However, the implementation of anti-profiteering measures has been criticized for its complexity and potential for disputes
- The periodic changes in the GST return filing system have created challenges for businesses in adapting their processes. Delays and complexities in return filing can affect working capital management
8.Goods and Services Tax Council (GST Council)
The Goods and Services Tax Council (GST Council) is a constitutional body in India that makes recommendations on the Goods and Services Tax (GST). It was established under the Constitution (122nd Amendment) Act, 2016, which introduced the GST in India
The GST Council consists of the following members:
- The Union Finance Minister, who is the Chairperson of the Council.
- The Union Minister of State in charge of revenue or any other Minister of State nominated by the Union Government.
- One Minister from each state, nominated by the Governor of that state.
- The Chief Secretary of each state, ex-officio.
- If the President, on the recommendation of the Council, so directs, one representative of each Union territory which has a legislature, to be nominated by the Lieutenant Governor of that Union territory.
- Three to seven members (other than Ministers) to be nominated by the Union Government, of whom at least one member shall be from the field of economics and another from the field of chartered accountancy, legal affairs or public finance
9. Way forward
It's important to note that the composition and structure of the GST Council may evolve over time, and there might have been changes since my last update in January 2022. To obtain the latest and most accurate information about the GST Council and its members, it is recommended to refer to official government sources or recent announcements by the relevant authorities
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For Prelims: Economic and Social Development and Indian Polity and Governance
For Mains: General Studies II: Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein
General Studies III: Inclusive growth and issues arising from it |
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Previous Year Questions
1.Which of the following are true of the Goods and Services Tax (GST) introduced in India in recent times? (UGC Paper II 2020)
A. It is a destination tax
B. It benefits producing states more
C. It benefits consuming states more
D. It is a progressive taxation
E. It is an umbrella tax to improve ease of doing business
Choose the most appropriate answer from the options given below:
A.B, D and E only
B.A, C and D only
C.A, D and E only
D.A, C and E only
Answer (D)
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Source: Indianexpress
FREE TRADE AGREEMENT
1. Context
The Free Trade Agreements (FTAs) concluded by India and the ones it is working on will bring opportunities for the manmade fibre (MMF) textile sector, Union Minister of State for Textiles Pabitra Margherita said here
2. About the Free Trade Agreement
- A Free Trade Agreement (FTA) is an agreement between two or more countries to reduce or eliminate barriers to trade, such as tariffs, quotas, and subsidies.
- FTAs can also include provisions on other issues, such as investment, intellectual property, and labour standards.
- The goal of an FTA is to promote trade and economic growth between the signatory countries.
- By reducing or eliminating trade barriers, FTAs can make it easier for businesses to export their goods and services to other countries, which can lead to increased production, employment, and innovation.
3. Types of Free Trade Agreement
- Bilateral Free Trade Agreement (BFTA) involves two countries, aiming to promote trade and eliminate tariffs on goods and services between them. It establishes a direct trade relationship, allowing for a more focused and tailored agreement between the two nations.
- Multilateral Free Trade Agreement (MFTA) Involving three or more countries, an MFTA seeks to create a comprehensive trade bloc, promoting economic integration on a larger scale. It requires coordination among multiple parties, addressing diverse economic interests and fostering a broader regional economic landscape.
- Regional Free Trade Agreement (RFTA) involves countries within a specific geographic region, aiming to enhance economic cooperation and integration within that particular area. It focuses on addressing regional economic challenges and fostering collaboration among neighbouring nations.
- Preferential Trade Agreement (PTA) involves a reciprocal reduction of tariffs and trade barriers between participating countries, granting preferential treatment to each other's goods and services. It allows countries to enjoy trading advantages with specific partners while maintaining autonomy in their trade policies with non-participating nations.
- Comprehensive Economic Partnership Agreement (CEPA) is a broad and advanced form of FTA that goes beyond traditional trade barriers, encompassing various economic aspects such as investment, intellectual property, and services. It aims for a more comprehensive economic partnership, encouraging deeper integration and collaboration between participating countries.
- Customs Union While not strictly an FTA, a Customs Union involves the elimination of tariffs among member countries and the establishment of a common external tariff against non-member nations. It goes beyond standard FTAs by harmonizing external trade policies, creating a unified approach to trade with the rest of the world.
- Free Trade Area (FTA) with Trade in Goods (TIG) and Trade in Services (TIS): Some FTAs specifically emphasize either trade in goods or trade in services, tailoring the agreement to the specific economic strengths and priorities of the participating countries. This approach allows nations to focus on areas where they have a comparative advantage, fostering specialization and efficiency.
4. India's Free Trade Agreements
India is a member of several free trade agreements (FTAs) and is currently negotiating others. India's FTAs have helped to reduce trade barriers and promote trade and economic growth. They have also helped to attract foreign investment and create jobs.
- The South Asian Free Trade Agreement (SAFTA) was signed in 1995 by the seven countries of the South Asian Association for Regional Cooperation (SAARC). SAFTA aims to reduce or eliminate tariffs on trade between the member countries.
- The India-Bangladesh FTA was signed in 2010 and came into force in 2011. It is a comprehensive FTA that covers goods, services, and investments.
- The India-Sri Lanka FTA was signed in 1999 and came into force in 2000. It is a comprehensive FTA that covers goods, services, and investments.
- The India-ASEAN Free Trade Agreement was signed in 2002 and came into force in 2010. It is a comprehensive FTA that covers goods, services, and investments.
- The India-Korea Comprehensive Economic Partnership Agreement (CEPA) was signed in 2010 and came into force in 2011. It is a comprehensive FTA that covers goods, services, and investments.
- The India-Japan Comprehensive Economic Partnership Agreement(CEPA) was signed in 2022 and came into effect in 2023. It is a comprehensive FTA that covers goods, services, and investments.
- The India-UAE Comprehensive Partnership Agreement (CEPA) was signed in 2022 and came into effect in 2022. It is a comprehensive FTA that covers goods, services, and investments.
- The India-Australia Economic Cooperation and Trade Agreement (ECTA) was signed in 2022 and came into effect in 2022. It is a comprehensive FTA that covers goods, services, and investments.
- The India-Malaysia Comprehensive Economic Cooperation Agreement (CECA) was signed in 2010 and aims to enhance economic ties by addressing trade in goods and services, as well as investment and other areas of economic cooperation.
- The India-Thailand Free Trade Agreement was signed in 2003 and focuses on reducing tariffs and promoting trade in goods and services between India and Thailand.
- The India-Singapore Comprehensive Economic Cooperation Agreement (CECA) has been operational since 2005, this agreement covers trade in goods and services, as well as investment and intellectual property.
- The India-Nepal Trade Treaty While not a comprehensive FTA, India and Nepal have a trade treaty that facilitates the exchange of goods between the two countries.
- The India-Chile Preferential Trade Agreement was signed in 2006 and aims to enhance economic cooperation and reduce tariffs on certain products traded between India and Chile.
5. India - UK Free Trade Agreement
5.1. Background
- Both countries have agreed to avoid sensitive issues in the negotiations.
- The interim (early harvest agreement) aims to achieve up to 65 per cent coverage for goods and up to 40 per cent coverage for services.
- By the time the final agreement is inked, the coverage for goods is expected to go up to "90 plus a percentage" of goods.
- India is also negotiating a similar early harvest agreement with Australia, which is supposed to set the stage for a long-pending Comprehensive Economic Cooperation Agreement that both countries have been pursuing for nearly a decade.
- While the commencement of negotiations does mark a step forward in the otherwise rigid stance adopted and when it comes to trade liberalisation, experts point to impediments and the potential for legal challenges going ahead.
5.2. GATT (General Agreement on Trade and Tariffs)
- The exception to the rule is full-scale FTAs, subject to some conditions.
- One rider, incorporated in Article XXIV.8 (b) of GATT, stipulates that a deal should aim to eliminate customs duties and other trade barriers on "Substantially all the trade" between the WTO member countries that are signatories to an FTA.
- For this Agreement, a free-trade area shall be understood to mean a group of two or more customs territories in which the duties and other restrictive regulations of commerce are eliminated on substantially all the trade between the constituent territories in products originating in such territories.
- It is often beneficial to negotiate the entire deal together, as an early harvest deal may reduce the incentive for one side to work towards a full FTA.
- These agreements are not just about goods and services but also issues like investment.
- If you are trying to weigh the costs and benefits, it is always better to have the larger picture in front of you.
- In the case of the early harvest agreement inked with Thailand, automobile industry associations had complained that relaxations extended to Bangkok in the early harvest had reduced the incentive for Thailand to work towards a full FTA.
- Early harvest agreements may serve the function of keeping trading partners interested as they promise some benefits without long delays, as India becomes known for long-drawn negotiations for FTAs.
- Government emphasis on interim agreements may be tactical so that a deal may be achieved with minimum commitments and would allow for contentious issues to be resolved later.
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For Prelims: Free Trade Agreement, India-U.K, Bilateral Free Trade Agreement, G-20 Summit, Agenda 2030, Covid-19 Pandemic, SAARC, General Agreement on Trade and Tariffs, Comprehensive Economic Partnership Agreement, Multilateral Free Trade Agreement, Regional Free Trade Agreement, Preferential Trade Agreement, Customs Union,
For Mains:
1. Evaluate the potential impact of the India-UK FTA on the Indian economy, considering both positive and negative aspects (250 Words)
2. Critically evaluate the significance of Free Trade Agreements (FTAs) in promoting trade and economic growth, considering their potential benefits and drawbacks. (250 Words)
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Previous Year Questions
1. Consider the following countries:
1. Australia
2. Canada
3. China
4. India
5. Japan
6. USA
Which of the above are among the free-trade partners' of ASEAN? (UPSC 2018)
A. 1, 2, 4 and 5 B. 3, 4, 5 and 6 C. 1, 3, 4 and 5 D. 2, 3, 4 and 6
Answer: C
2. Increase in absolute and per capita real GNP do not connote a higher level of economic development, if (UPSC 2018) (a) Industrial output fails to keep pace with agricultural output. Answer: C 3. The SEZ Act, 2005 which came into effect in February 2006 has certain objectives. In this context, consider the following: (2010)
Which of the above are the objectives of this Act? (a) 1 and 2 only (b) 3 only (c) 2 and 3 only (d) 1, 2 and 3 Answer: A 4. A “closed economy” is an economy in which (UPSC 2011) (a) the money supply is fully controlled Answer: D 5. With reference to the “G20 Common Framework”, consider the following statements: (UPSC 2022)
1. It is an initiative endorsed by the G20 together with the Paris Club. 2. It is an initiative to support Low Income Countries with unsustainable debt. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Answer: C
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Source: The Hindu
