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DAILY CURRENT AFFAIRS, 16 SEPTEMBER 2025

PREVENTION OF MONEY LAUNDERING ACT (PMLA)

1. Context

The Enforcement Directorate (ED) on Monday said the agency has secured convictions in 50 of the 53 cases in the special courts under the Prevention of Money Laundering Act (PMLA), achieving a conviction rate of more than 94%, and facilitated restitution of assets worth over ₹34,000 crore to victims and legitimate claimants.

2. Why is the PMLA verdict under review?

The PMLA verdict is under review because of several concerns raised by petitioners and legal experts about the constitutionality of the law and the extent of the powers granted to the Enforcement Directorate (ED).

Specific Concerns

  • The PMLA's retrospective application, allowing for the prosecution of offences committed before the law's enactment, has been challenged as violative of the fundamental right against ex post facto laws.
  • The PMLA places the burden of proof on the accused to establish innocence, a departure from the general principle of criminal law that presumes innocence until proven guilty.
  • Critics argue that the PMLA's provisions are overly broad and draconian, giving the ED excessive powers to arrest, detain, and seize assets without adequate judicial oversight.
  •  The PMLA's lack of adequate safeguards against arbitrary actions and misuse of power has raised concerns about the potential for abuse of authority by the ED.
  •  The PMLA's provisions have been criticized for potentially infringing upon fundamental rights such as the right to personal liberty, the right to property, and the right against self-incrimination.

3. Money laundering

  • Money laundering is the illegal process of making large amounts of money.
  • This money is generated by criminal activity but may appear to come from a legitimate source.
  • Criminal activities include drug trafficking, terrorist funding, illegal arms sales, smuggling, prostitution rings, insider trading, bribery and computer fraud schemes that produce large profits.

3.1. Different stages in money laundering

Generally, money laundering is a three-stage process:
  1. Placement: The crime money is injected into the formal financial system.
  2. Layering: Money injected into the system is layered and spread over various transactions and book-keeping tricks to hide the source of origin.
  3. Integration: Laundered money is withdrawn from the legitimate account to be used for criminal purposes. Now, Money enters the financial system in such a way that the original association with the crime is disassociated.  The money now can be used by the offender as legitimate money.
All three sources may not be involved in money laundering. Some stages could be combined or repeated many times.

3.2. Impact of Money Laundering on Economic Development

Money laundering can have a significant impact on economic development by:

  • When money laundering occurs, it can undermine public confidence in banks and other financial institutions. This can lead to increased risk aversion and a decline in investment, which can hamper economic growth.
  • Money laundering can distort economic activity by directing funds away from legitimate businesses and into criminal enterprises. This can lead to inefficient allocation of resources and slower economic growth.
  • Money laundering can facilitate corruption by providing a means to conceal the proceeds of corrupt activities. This can weaken governance and undermine the rule of law, further hindering economic development.
  • Money laundering can also lead to a loss of tax revenue, as criminals seek to evade taxes on their illicit gains. This can deprive governments of much-needed funds for essential services, such as education and healthcare.
  • Money laundering is often used to finance organized crime groups, which can lead to an increase in violence and instability.
  • Money laundering can also be used to finance terrorist activities, posing a serious threat to international security.
  • Money laundering can also have a direct impact on individuals and businesses, who may lose money or be victims of fraud as a result of this crime.

4. Prevention of Money-Laundering Act, 2002 (PMLA)

The Prevention of Money-Laundering Act, 2002 (PMLA) is a comprehensive legislation enacted by the Indian Parliament to combat money laundering and other financial crimes. It aims to prevent the use of proceeds of crime, particularly those derived from drug trafficking, organized crime and corruption, from being laundered and utilized to finance further criminal activities or to gain legitimacy.

4.1. Key Features of the PMLA

  • The PMLA prohibits the process of money laundering, defined as the act of concealing or disguising the proceeds of crime.
  • The PMLA empowers the Enforcement Directorate (ED), the designated agency for investigating money laundering cases, to attach and seize property derived from or involved in money laundering.
  • The PMLA provides for the confiscation of property that is involved in money laundering, even if it is not in the possession of the accused person.
  • The PMLA grants the ED extensive powers to conduct searches, make arrests, and detain individuals suspected of money laundering.
  • The PMLA facilitates international cooperation in combating money laundering through mutual legal assistance treaties and other mechanisms.

4.2. Significance of the PMLA

The PMLA has played a crucial role in strengthening India's anti-money laundering framework and enhancing its global standing in combating financial crimes. It has enabled the investigation and prosecution of numerous money laundering cases, leading to the recovery of substantial illicit funds.

4.3. Challenges in Implementing the PMLA

Despite its significance, the implementation of the PMLA has faced certain challenges, including:

  • The PMLA and other laws, such as the Narcotics Drugs and Psychotropic Substances Act, have overlapping jurisdictions, which can lead to confusion and delays in investigations.
  • There have been concerns about the lack of adequate safeguards against arbitrary actions and misuse of power under the PMLA.
  • The ED faces resource constraints in terms of manpower and infrastructure, which can hamper its ability to effectively investigate and prosecute money laundering cases.
 
5. About the Directorate of Enforcement 
 
  • The Directorate of Enforcement (ED) is an agency in India that primarily deals with the enforcement of economic laws and regulations to combat money laundering, foreign exchange violations, and financial fraud.
  • The ED is part of the Department of Revenue under the Ministry of Finance, Government of India.
  • The Directorate of Enforcement was established on 1st May 1956, as the "Enforcement Unit" within the Department of Economic Affairs.
  • Its primary focus was on preventing and detecting violations of the Foreign Exchange Regulation Act (FERA) of 1947.
  • Over the years, the agency's role expanded, and in 1999, the Enforcement Directorate was established as a separate entity under the Ministry of Finance.
  • The enactment of the Prevention of Money Laundering Act (PMLA) in 2002 further broadened its jurisdiction, giving it the power to investigate cases related to money laundering.
  • Since its establishment, the ED has played a crucial role in combating economic offences and ensuring compliance with economic laws in India.
  • It has been involved in several high-profile cases, including those related to financial scams, money laundering by influential individuals, and cross-border financial crimes.
  • The ED collaborates with various domestic and international agencies, including financial intelligence units, law enforcement agencies, and Interpol, to gather information, share intelligence, and effectively coordinate efforts to combat economic offences.

5.1. Functions and Roles of ED

  • Enforcing Economic Laws: The primary function of the ED is to enforce two key economic laws in India: the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA). It ensures compliance with these laws and investigates money laundering, foreign exchange violations, and economic fraud cases.
  • Money Laundering Investigations: The ED investigates cases involving money laundering, which is the process of concealing the origins of illegally obtained money to make it appear legitimate. It identifies and seizes properties and assets derived from illicit activities and prevents their further use.
  • Foreign Exchange Violations: The ED is responsible for investigating cases related to violations of foreign exchange laws and regulations. It monitors and controls foreign exchange transactions to maintain the stability of the Indian rupee and prevent illegal activities such as smuggling and illegal money transfers.
  • Financial Frauds: The ED also investigates and takes action against financial frauds, including bank frauds, Ponzi schemes, and other fraudulent activities affecting the Indian financial system. It works closely with other law enforcement agencies, such as the Central Bureau of Investigation (CBI), to tackle complex financial crimes.
 
For Prelims: Prevention of Money Laundering Act, ED, CBI, Foreign Exchange Management Act, 
For Mains: 
1. Critically evaluate the Prevention of Money Laundering Act, 2002 (PMLA) in its effectiveness in combating money laundering in India. (250 Words)
 
 
Previous Year Questions
 
1. Which one of the following is not correct in respect of Directorate of Enforcement? (CDS  2021)
A. It is a specialized financial investigation agency under the Department of Revenue, Ministry of Finance.
B. It enforces the Foreign Exchange Management Act, 1999.
C. It enforces the Prevention of Money Laundering Act, 2002.
D. It enforces the Prohibition of Benami Property Transaction Act, 1988.
 
2. The Prevention of Money Laundering Act, 2002 become effective since which one of the following dates? (UKPSC RO/ARO 2012)
 
A. July 2002          B. August 2003        C. July 2004         D. July 2005
 
3. FEMA (Foreign Exchange Management Act) was finally implemented in the year (UPPSC  2013)
A. 1991         B. 1997         C. 2000             D. 2007
 
4. The Foreign Exchange Regulation Act was replaced by the ______ in India. (SSC Steno 2020) 
A. Foreign Exchange Currency Act
B. Foreign Exchange Finances Act
C. Foreign Exchange Funds Act
D. Foreign Exchange Management Act
 
5. "Central Bureau of Intelligence and Investigation" is listed in the __________ list given in the Seventh Schedule of the Constitution of India. (SSC CGL 2017) 
A. Union             B. State             C. Global          D. Concurrent
 
Answers: 1-D, 2-D, 3-C, 4-D, 5-A
 
Source: The Indian Express
 

EARTHQUAKE

 

1. Context

Recently, some countries, including India, Afghanistan, China, and the US, experienced natural disasters in the form of heavy rains, floods, and earthquakes, causing loss of lives and damage to infrastructure. Although these phenomena are not new, their increasing frequency and intensity are a serious cause of concern..

2. What is an Earthquake?

 
  • An earthquake is an intense shaking of the ground caused by movement under the earth’s surface. It happens when two blocks of the earth suddenly slip past one another, according to USGS.
  • This releases stored-up ‘elastic strain’ energy in the form of seismic waves, which spreads through the earth and cause the shaking of the ground.
  • An earthquake is the sudden shaking or trembling of the earth’s surface caused by the release of energy stored in the earth’s crust.
  • This energy is usually released when rocks deep underground break or slip along faults due to accumulated stress, sending out seismic waves that make the ground vibrate
  • The earth’s crust is made of huge slabs of rock called tectonic plates, which are constantly moving slowly.

  • When these plates grind against, collide, or move past each other, stress builds up at their boundaries or within faults.

  • Once the stress exceeds the strength of rocks, they break suddenly, releasing energy in the form of seismic waves.

 

3. How do exactly Earthquakes Occur?

  • As we know, the earth’s outermost surface, crust, is fragmented into tectonic plates. The edges of the plates are called plate boundaries, which are made up of faults.
    The tectonic plates constantly move at a slow pace, sliding past one another and bumping into each other.
  • As the edges of the plates are quite rough, they get stuck with one another while the rest of the plate keeps moving.
  • Earthquake occurs when the plate has moved far enough and the edges unstick on one of the faults.
  • The location below the earth’s surface where the earthquake starts is called the hypocenter, and the location directly above it on the surface of the earth is called the epicenter.”

4. Earthquake waves

The release of energy during an earthquake generates waves which are called Earthquake Waves. Earthquake waves are basically of two types body waves and surface waves.
Body waves: They are generated due to the release of energy at the focus and move in all directions traveling through the body of the earth. Hence, the name body waves. The body waves interact with the surface rocks and generate a new set of waves called surface waves.
Surface waves: These waves move along the surface. The velocity of waves changes as they travel through materials with different densities. The denser the material, the higher the velocity. Their direction also changes as they reflect or refract when coming across materials with different densities.

There are two types of body waves. They are called P and S-waves.

P-waves or ‘primary waves’ move faster and are the first to arrive at the surface. The P-waves are similar to sound waves. They travel through gaseous, liquid, and solid materials.
P-waves vibrate parallel to the direction of the wave. This exerts pressure on the material in the direction of propagation. As a result, it creates density differences in the material leading to stretching and squeezing of the material.
S-waves or secondary waves arrive at the surface with some time lag. They can travel only through solid materials. This characteristic of the S-waves is quite important. It has helped scientists to understand the structure of the interior of the earth.
The direction of vibrations of S-waves is Perpendicular to the wave direction in the vertical plane. Hence, they create troughs and crests in the material through which they pass. Surface waves are considered to be the most damaging waves.

5. Measuring of Earthquakes

  • The earthquake events are scaled either according to the magnitude or intensity of the shock.
  • The magnitude scale is known as the Richter scale. The magnitude indicates the energy released during the quake. It is expressed in absolute numbers 0-10.
  • The intensity scale is named after Mercalli, an Italian seismologist. The intensity scale indicates the visible damage caused by the event. The range of intensity scale is from 1-12.

6. Turkey and Syria lie in a seismically active region

  • The region where the earthquake struck lies along a well-known seismic fault line called the Anatolia tectonic block that runs through northern, central, and eastern Turkey.
  • It is a seismically active zone-though not as active as, say, the Himalayan region which is one of the most dangerous regions in the world from the perspective of earthquakes.
  • Large earthquakes, of magnitude 5 or higher, have not been very frequent in recent years. According to USGS, only three earthquakes of magnitude 6 or more have happened in the region since 1970. The last major quake in this area came in January 2020.
  • The seismicity in this region is a result of interactions between the African, Eurasian, and Arabian plates. The Arabian plate is known to be pushing northward, which results in a slight westward movement for the Anatolian plate, where Turkey is located.
  • The earthquake happened around the near-vertical fault line on the eastern Anatolian block, close to the Syrian border.

7. Shallow Earthquakes cause much greater damage

  • Earthquakes in Turkey emerged from relatively shallow depths which made them devastating. The first earthquake, of magnitude 7.8, originated 17.9 km below the earth's surface.
  • All the subsequent ones, including one of 7.5 magnitudes, emerged from even closer to the surface.
  • Shallow earthquakes are generally more devastating because they carry greater energy when they emerge on the surface.
  • Deeper earthquakes lose much of their energy by the time they come to the surface. The deeper quakes spread farther though- the seismic waves move conically upwards to the surface even as they lose energy while traveling greater distances and hence cause less damage.

8. Can earthquakes be predicted?

  • An accurate prediction of an earthquake requires some sort of a precursory signal from within the earth that indicates a big quake is on the way.
  • Moreover, the signal must occur only before large earthquakes so that it doesn’t indicate every small movement within the earth’s surface. Currently, there is no equipment to find such precursors, even if they exist.
  • Theoretically, it is possible to offer a lead time of a few seconds between the time of the origin of the earthquake and the time it reaches the Earth’s surface.
  • Seismic waves travel significantly slower than the speed of light between 5 and 13 km
    per second. So if the earthquake is detected as soon as it is triggered, information about it can be related a few seconds ahead of it reaching the ground.
  • Such systems are already in use in some locations to issue alerts about earthquakes. However, these are not predictions. The alerts are issued post-event.
  • Attempts to find reliable predictors of earthquakes have not been fruitful so far. Scientists have been able to map the areas that are earthquake-prone, and are likely to generate earthquakes in the future, but there is no way to predict when.

For Prelims & Mains

For Prelims: Earthquake, Tectonic plates, Hypocenter, Epicenter, Body waves, Surface waves, P-waves or ‘primary waves’, S-waves or secondary waves, Richter scale, and Seismic waves.
For Mains: 1. What is an Earthquake? How do exactly Earthquakes Occur? Discuss the effects of Earthquakes.
 
Previous Year Questions
 

1.Consider the following: (2013)

  1. Electromagnetic radiation 
  2. Geothermal energy 
  3. Gravitational force 
  4. Plate movements 
  5. Rotation of the earth 
  6. Revolution of the earth 

Which of the above are responsible for bringing dynamic changes on the surface of the earth? 

(a) 1, 2, 3 and 4 only 
(b) 1, 3, 5 and 6 only 
(c) 2, 4, 5 and 6 only 
(d) 1, 2, 3, 4, 5 and 6 

 
Source: The Indian Express
 

DEFENCE ACQUISITION COUNCIL

1. Context

Defence Minister Rajnath Singh Sunday approved the Defence Procurement Manual (DPM) 2025 — the document governing defence revenue procurements including those for spares and ammunition — which adds a new chapter to promote self-reliance through innovation and indigenisation, among other changes.

2. About the Defence Acquisition Council

The Defence Acquisition Council (DAC) is the apex body for all defence acquisitions in India. It was formed after recommendations made by the Group of Ministers on 'Reforming the National Security System' in 2001, post-Kargil war. The DAC is headed by the Defence Minister and comprises the following members:

  • Chief of the Defence Staff (CDS)
  • Secretary, Department of Defence Production
  • Secretary, Finance
  • Secretary, Defence Research and Development
  • Controller General of Defence Accounts
  • Other senior officers from the Ministry of Defence and the Services

The Role of the Defence Acquisition Council

The DAC's primary role is to:

  • Accord approval for AoN (Acceptance of Necessity) for Capital Acquisition Proposals.
  • Categorise the acquisition proposals into 'Buy, Buy & Make, & Make'.
  • In-principle approval of 15-Year Long-Term Integrated Perspective Plan (LTPP) for Defence Forces.
  • Delegate powers to Services/C&AS for the acquisition of items up to a certain value.
  • Consider and approve other issues as may be referred to it by the Defence Minister.

Functions of the Defence Acquisition Council

The DAC's primary functions are to:

  • Approve capital acquisitions for the Indian Armed Forces.
  • Formulate and implement policies and procedures for defence acquisitions.
  • Monitor the progress of defence acquisitions.
  • Oversee the implementation of the Defence Procurement Procedure (DPP).

Reasons for the creation of the Defence Acquisitions Council 

The DAC was created to address the following shortcomings of the previous defence acquisition system:

  • Lack of a clear and transparent decision-making process.
  • Delays in the procurement of defence equipment.
  • Escalation of costs.
  • Lack of coordination between different agencies involved in the procurement process.

3. About Defence acquisition

Defence acquisition is the process of acquiring goods and services for the Indian Armed Forces. It is a complex and time-consuming process that involves the identification of requirements, the preparation of specifications, the selection of vendors, the negotiation of contracts, and the delivery of equipment. The Indian defence acquisition process is governed by the Defence Procurement Procedure (DPP), which is a set of guidelines that outlines the process for acquiring defence equipment.

The key stages of the defence acquisition process:

  •  The first step is to identify the requirements of the Armed Forces. This is done through a detailed assessment of the operational needs of the Armed Forces and the availability of resources.
  • Once the requirements have been identified, the next step is to prepare the specifications for the equipment to be acquired. The specifications must be clear, detailed, and unambiguous so that the vendors can understand what is required.
  • The next step is to select the vendors who will be invited to participate in the bidding process. The vendors are selected based on their technical ability, financial strength, and experience.
  • Once the vendors have been selected, the next step is to negotiate the contracts. The contracts must be fair and reasonable, and they must protect the interests of the government.
  • The final step is to deliver the equipment to the Armed Forces. Once the equipment has been delivered, it must be tested and accepted by the Armed Forces.

4. The Defence Procurement Procedure (DPP)

The Defence Procurement Procedure (DPP) is the guideline for defence acquisitions in India. The DPP was first introduced in 2006 and has been revised several times since then. The DPP outlines the process for defence acquisitions, from the identification of a requirement to the final acceptance of a product.

The DPP is designed to ensure that defence acquisitions are conducted in a transparent, efficient, and cost-effective manner. The DPP also seeks to promote indigenous defence production and to maximize the involvement of Indian companies in the defence sector.

Key features of the DPP

  • The DPP emphasizes the need for transparency in all stages of the defence acquisition process. This includes publishing all relevant documents online and making them available to the public.
  • The DPP aims to streamline the defence acquisition process and reduce delays. This includes simplifying the tendering process and reducing the number of approvals required.
  • The DPP seeks to ensure that defence acquisitions are conducted cost-effectively. This includes negotiating the best possible price for goods and services and promoting indigenous defence production.
  • The DPP promotes indigenous defence production by giving preference to Indian companies in the tendering process. The DPP also provides incentives for Indian companies to invest in research and development.
  • The DPP seeks to maximize the involvement of Indian companies in the defence sector. This includes encouraging Indian companies to form joint ventures with foreign companies.

5. The Way Forward

The DAC and the DPP play a vital role in ensuring that the Indian Armed Forces are equipped with the latest and best possible weapons and equipment. The DAC and the DPP are also important for promoting indigenous defence production and for maximizing the involvement of Indian companies in the defence sector.

 

For Prelims: Defence Acquisition Council, Defence Procurement Procedure, Light Combat Aircraft, Tejas Mk 1 A and 156, Light Combat Helicopters, Hindustan Aeronautics Limited, Kargil war
For Mains: 
1. Critically analyze the role of the Defence Acquisition Council (DAC) in streamlining and expediting defence acquisitions in India. (250 Words)
 
Previous Year Questions
 
1. The Light Combat Aircraft (LCA) designed and developed by HAL is also known as (MP Police Constable 2017)
A. Suryakiran        B. Aryabhatta      C. Tejas         D. Prakash
 
 
2. Which of the following statements is true about the recent procurement of Tejas fighter’s aircraft by IAF? (IB ACIO Grade II 2021) 
(1) The IAF has recently purchased 83 Tejas fighters aircraft from HAL
(2) The total deal is Rs. 78,000-crore
A. 1 only         B. Neither 1 nor 2         C.  Both 1 and 2      D. 2 only
 
 
3. What is the name of India's indigenously built Light Combat Helicopter? (OSSC BSSO  2022) 
A. Nag         B. Trishul         C. Prachand          D. Agni
 
 
4. The headquarters of the Hindustan Aeronautics Limited is located at _______________. (MP Police Constable 2017) 
A. Chennai        B. Bengaluru        C.  Dewas     D. Koraput
 
 
5. What was Kargil war otherwise known as? (MP Patwari  2017) 
A. Operation Vijay       B. Operation Vishwas   C. Operation Shaurya   D. Operation Paramveer
 
Answers:1-C, 2-A, 3-C, 4-B 5-A
 
Mains
1. Analyze the circumstances that led to the Tashkent Agreement in 1966. Discuss the highlights of the Agreement. (UPSC 2013)
 
Source: The Indian Express
 

OPERATION POLO

 
1. Context
September 13th marks the 75th anniversary of Operation Polo, the military action launched by the Indian Army on September 13, 1948, to integrate the princely state of Hyderabad
The Nizam of Hyderabad was dithering on joining India ever since Independence on August 15, 1947
 
2. Operation Polo
 
 
  • Operation Polo, also known as the Police Action, was a military operation conducted by the Indian government in September 1948 to integrate the princely state of Hyderabad into the newly formed Dominion of India.
  • Hyderabad was one of the princely states that had not immediately acceded to either India or Pakistan after the partition of British India in 1947
  • The Nizam of Hyderabad state, Mir Osman Ali Shah, had the intention of keeping his state as an independent entity and did not join India or Pakistan after Independence
  • he Nizam took advantage of the fact that the Indian government got preoccupied with the Kashmir war soon after Independence and all focus and resources were diverted toward tackling the Pakistani threat to Jammu and Kashmir.
  • The Nizam signed a standstill agreement with India in November 1947
  • This essentially meant that a status quo would be maintained between the Indian dominion and the Hyderabad state till a solution was found to the imbroglio
  • The agreement was signed for a period of one year during which the Indian government would not exercise any authority over Hyderabad and all conditions prevalent at the time of signing the agreement would continue.
 
3. Background to launch Operation Launch
 
 
  • Situated in the Deccan, Hyderabad was one of the most populous and richest states and had 17 districts including Aurangabad (now in Maharashtra) and Gulbarga (now in Karnataka)
  • The landlocked state had a majority Hindu population with the state administration almost entirely run by its Muslim rulers.
  • There was no common border with Pakistan but the Nizam had every intention to have fraternal relations with that country
  • The Nizam’s administration in Hyderabad had taken advantage of the standstill agreement signed with India and the lull which followed to increase the number of its irregular force called Razakars which was led by Maj Gen SA El Edroos, the Arab commander in chief of the Hyderabad state forces
  • The excesses of the Razakars on the predominantly Hindu population of the state, their belligerence along the state borders through cross-border raids, the overtures being made to Pakistan and the intention to establish an independent country in the heart of India were the reasons why the Indian government decided to act against Hyderabad and remove the threat of secession.
 
4.Nizam's forces vs Indian Army
 
  • Hyderabad state forces numbered little less than 25,000 and only a fraction was well-trained. By one estimate, there were not more than two brigades worth of opposition.
  • There were a substantial number of Razakars in the state but these ill-trained volunteers were more of a nuisance than any particular military opposition
  • The Prime Minister of Hyderabad, Mir Laik Ali, had boasted that if the Indian Army acted against the state, then a force of 1,00,000 troops was ready to meet the challenge. In the end, this proved to be a hollow claim and the Hyderabad opposition to the Indian Army crumbled within the first two days of the offensive.
  • The Indian forces were led by Maj Gen Jayanto Nath Chaudhuri, the General Officer Commanding of 1 Armoured Division, who later went on to become the Chief of Army Staff
  • The primary strike against Hyderabad state forces was led by Maj Gen Chaudhuri’s division from the west aided by subsidiary and supporting thrusts from north, south and east of the state
  • The primary strike by 1 Armoured Division from the west included 1 Horse (less one squadron) and 9 Dogra (less one company). This strike element included a Smash Force comprising 3 Cavalry, 17 Horse (less one squadron) and one company of 9 Dogra
  • There was a Kill Force led by 7 Infantry Brigade which comprised 2 Sikh, 1 Grenadier, 14 Rajpur and one squadron of 14 Horse
  • The Nizam of Hyderabad announced a ceasefire on September 17.
  • On September 18, Maj Gen Chaudhuri entered Hyderabad city with his forces and Maj Gen El Edroos surrendered to him. Maj Gen Chaudhuri was later appointed the Military Governor of Hyderabad
 
 
Previous Year Questions
1.Operation Polo was undertaken to merge which of the following State? (MPSC 2018)
A.Junagadh
B. Hyderabad
C. Kasmir
D. Limdi
Answer (B)
Source: indianexpress
 
 

SOUTH CHINA SEA

1. Context

Recently, The Philippines accused China’s coast guard of installing a “floating barrier” in a disputed area of the South China Sea, saying it prevented Filipinos from entering and fishing in the area.

2. China's South China Sea Escalation

  • Amid the global pandemic, China is intensifying its presence in the South China Sea, particularly focusing on the disputed Spratly Islands and Paracel Islands.
  • This move has raised concerns among neighbouring countries, such as Vietnam and the Philippines, who also claim sovereignty over these territories.
  • China has unilaterally renamed 80 islands and geographical features in the South China Sea, a controversial action that has drawn criticism from neighbouring nations.
  • This renaming effort exacerbates the ongoing territorial dispute and has the potential to strain diplomatic relations in the Asia-Pacific region.
  • The Spratly Islands dispute involves China, Taiwan, Vietnam, the Philippines, and Malaysia, all vying for control over this archipelago and its surrounding features.
  • Although these islands are largely uninhabited, they are believed to harbour significant untapped natural resources.
  • However, due to the dispute, exploration and resource assessment efforts remain limited.

3. Historical Background

  • The discovery of oil near the Palawan coast in the 1970s further fueled territorial claims, even though some reports suggest limited oil and gas reserves in the region.
  • This historical context underscores the complexity of the Spratly Islands dispute.
  • The Paracel Islands dispute is equally complex, with China and Vietnam both laying historical claims to this archipelago.
  • Historical texts from various periods, including colonial-era records, have been cited to support these conflicting claims.
  • Tensions escalated in 1974 when China took control of the islands, sparking a prolonged dispute involving Vietnam and, later, Taiwan.
Image Source: Forbes

4. Contemporary Developments

  • Since 2012, China, Taiwan, and Vietnam have pursued various strategies to bolster their territorial claims, including constructing government buildings, promoting tourism, reclaiming land, and expanding military presence on these islands.
  • China's recent establishment of new administrative districts in both the Spratly and Paracel Islands prompted the Chinese government to rename numerous geographical features.
  • This move is reminiscent of a similar initiative in 1983 when China renamed 287 features in the disputed region.
  • China's increased military activity and the creation of artificial islands for military and economic purposes in the South China Sea have raised concerns among neighbouring countries and Western powers.
  • Recent incidents, such as the sinking of a Vietnamese fishing trawler near the Paracel Islands and the construction of Chinese research stations on disputed Philippine territory, have further inflamed tensions.

5.What is the dispute between the Philippines and China over the South China Sea?

  • The dispute between the Philippines and China over the South China Sea primarily revolves around territorial claims, maritime boundaries, and access to resources.
  • China claims a significant portion of the South China Sea, demarcated by what's known as the "nine-dash line," a boundary that encompasses about 90% of the sea, overlapping with claims by several other nations, including the Philippines.
  • The Philippines contests China's claims, particularly in areas that fall within its Exclusive Economic Zone (EEZ) and territorial waters as defined by the United Nations Convention on the Law of the Sea (UNCLOS).
  • Tensions escalated due to China's construction of artificial islands and military installations in disputed waters, which the Philippines and other neighboring countries view as a violation of their sovereignty and a threat to regional stability.
  • The Philippines filed a case against China in 2013 with the Permanent Court of Arbitration (PCA) in The Hague, challenging the legality of China's claims based on UNCLOS.
  • In 2016, the PCA ruled in favor of the Philippines, declaring that China's claims had no legal basis. However, China has consistently rejected the ruling, asserting historical rights over the South China Sea.
  • Despite the ruling, the situation remains contentious, with ongoing diplomatic efforts and occasional confrontations between the two countries' vessels in the region
6.What is the nine-dash line?
  • The nine-dash line is a demarcation line used by China to outline its territorial claims in the South China Sea. It's a U-shaped boundary that encompasses about 90% of the South China Sea, covering various islands, reefs, atolls, and waters.
  • Originally, the nine-dash line was drawn by the Republic of China (ROC, now Taiwan) in the late 1940s to illustrate its territorial claims over the South China Sea. After the Chinese Civil War, when the Communist Party took control of mainland China in 1949, the People's Republic of China (PRC) continued to uphold this demarcation.
  • However, the line's legal basis and specifics have been ambiguous. It has never been clearly defined, and China has not provided precise coordinates or explanations for its claim. The line overlaps with the exclusive economic zones (EEZs) and territorial waters of several Southeast Asian nations, including Vietnam, the Philippines, Malaysia, Brunei, and Taiwan. This has led to territorial disputes and heightened tensions in the region.
  • The international community, including the United States and many other countries, does not recognize China's nine-dash line claim as valid under international law, particularly the United Nations Convention on the Law of the Sea (UNCLOS), which outlines maritime entitlements and territorial claims based on geographical features and historical rights.
The Nine Dash Line and Its Basis in International Law - Sourabh Gupta -  CHINA US Focus

7. Conclusion

  • The South China Sea remains a highly volatile region, with the potential for further diplomatic tensions and military escalations.
  • The ongoing territorial disputes, fueled by historical claims and concerns over natural resources, pose a significant challenge to stability in the Asia-Pacific region and require careful diplomatic efforts to find peaceful resolutions.
 
For Prelims: South China Sea, Paracel Islands, Spratly Islands, 
For Mains: 
1. Discuss the historical background of the territorial disputes in the South China Sea. How have historical claims contributed to the complexity of the issue? (250 Words)
 
 
Previous Year Questions
 
1. The South China Sea Dispute involves which of the following countries?  (CDS GK  2019)
1. China
2. Vietnam
3. Malaysia
4. Indonesia
Select the correct answer using the code given below. 
A. 1 and 4           B. 1 and 2 only           C. 1, 2 and 3          D. 2, 3 and 4
 
Answer: C
 
2. Which one of the following statements best reflects the issue with Senkaku Islands, sometimes mentioned in the news? (UPSC CSE 2022)
A. It is generally believed that they are artificial islands made by a country around South China Sea.
B. China and Japan engage in maritime disputes over these islands in East China Sea.
C. A permanent American military base has been set up there to help Taiwan to increase its defence capabilities.
D. Though International Court of Justice declared them as no man's land, some South-East Asian countries claim them.
 
Answer: B
 
Source: The Indian Express
 

TARIFFS

 
 
1. Context
 
US President Donald Trump has often chided India as the “tariff king’ and his trade adviser Peter Navarro has dubbed India the “tariff maharaja”. Is this mere rhetoric, or is there some truth to these accusations? We examine here the tariff structures of G20 countries which account for roughly 85 per cent of the global GDP, 75 per cent of global trade, and two-thirds of the world’s population
 

2. What is a Tariff?

  • Most countries are limited by their natural resources and ability to produce certain goods and services.
  • They trade with other countries to get what their population needs and demands. However, trade isn't always conducted in an amenable manner between trading partners.
  • Policies, geopolitics, competition, and many other factors can make trading partners unhappy. One of the ways governments deal with trading partners they disagree with is through tariffs.
  • A tariff is a tax imposed by one country on the goods and services imported from another country to influence it, raise revenues, or protect competitive advantages.

3. Key Take Aways

  • Governments impose tariffs to raise revenue, protect domestic industries, or exert political leverage over another country.
  • Tariffs often result in unwanted side effects, such as higher consumer prices.
  • Tariffs have a long and contentious history, and the debate over whether they represent good or bad policy still rages.

4. History of Tariffs

4.1 Pre Modern Europe

  • In pre-modern Europe, a nation's wealth was believed to consist of fixed, tangible assets,  such as gold, silver, land, and other physical resources.
  • Trade was seen as a Zero-sum game that resulted in either a clear net loss or a clear net gain of wealth.
  • If a country imported more than it exported, a resource, mainly gold, would flow abroad, thereby draining its wealth. Cross-border trade was viewed with suspicion, and countries preferred to acquire colonies with which they could establish exclusive trading relationships rather than trading with each other.
  • This system, known as mercantilism, relied heavily on tariffs and even outright bans on trade. The colonizing country, which saw itself as competing with other colonizers, would import raw materials from its colonies, which were generally barred from selling their raw materials elsewhere.
  • The colonizing country would convert the materials into manufactured wares, which it would sell back to the colonies. High tariffs and other barriers were implemented to ensure that colonies only purchased manufactured goods from their home countries. 

4.2 Late 19th and early 20th Centuries

  • Relatively free trade enjoyed a heyday in the late 19th and early 20th centuries when the idea took hold that international commerce had made large-scale wars between nations so expensive and counterproductive that they were obsolete.
  • World War I proved that idea wrong, and nationalist approaches to trade, including high tariffs, dominated until the end of World War II.
  • From that point on, free trade enjoyed a 50-year resurgence, culminating in the creation in 1995 of the World Trade Organisation  (WTO), which acts as an international forum for settling disputes and laying down ground rules.
  • Free trade agreements, such as the North American Free Trade Agreement (NAFTA) now known as the United States-Mexico-Canada Agreement (USMCA) and the European Union (EU), also proliferated.

4.3 In the 21st Century

  • Skepticism of this model sometimes labeled neoliberalism by critics who tie it to 19th-century liberal arguments in favor of free trade grew, however, and Britain in 2016 voted to leave the European Union.
  • That same year Donald Trump won the U.S. presidential election on a platform that included a call for tariffs on Chinese and Mexican imports, which he implemented when he took office.
  • Critics of tariff-free multilateral trade deals, who come from both ends of the political spectrum, argue that they erode national sovereignty and encourage a race to the bottom regarding wages, worker protections, and product quality and standards.
  • Meanwhile, the defenders of such deals counter that tariffs lead to trade wars, hurt consumers, and hamper innovation.

5. Understanding Tariffs

  • Tariffs are used to restrict imports. Simply put, they increase the price of goods and services purchased from another country, making them less attractive to domestic consumers.
  • A key point to understand is that a tariff affects the exporting country because consumers in the country that imposed the tariff might shy away from imports due to the price increase. However, if the consumer still chooses the imported product, then the tariff has essentially raised the cost to the consumer in another country.

There are two types of tariffs:

  • A specific tariff is levied as a fixed fee based on the type of item, such as a $500 tariff on a car.
  • An ad-valorem tariff is levied based on the item's value, such as 5% of an import's value.

6. Why Government Imposes Tariffs?

Governments may impose tariffs for several reasons
6.1 Raise Revenues

Tariffs can be used to raise revenues for governments. This kind of tariff is called a revenue tariff and is not designed to restrict imports. For instance, in 2018 and 2019, President Donald Trump and his administration imposed tariffs on many items to rebalance the trade deficit. In the fiscal year 2019, customs duties received were $18 billion. In FY 2020, duties received were $21 billion.

6.2 Protect Domestic Industries

Governments can use tariffs to benefit particular industries, often doing so to protect companies and jobs. For example, in May 2022, President Joe Biden proposed a 25% ad valorem tariff on steel articles from all countries except Canada, Mexico, and the United Kingdom (the U.K. has a quota of an aggregate of 500,000 metric tons it can trade with the U.S.). This proclamation reopens the trade of specific items with the U.K. while taking measures to protect domestic U.S. steel manufacturing and production jobs.

6.3 Protect Domestic Consumers

By making foreign-produced goods more expensive, tariffs can make domestically-produced alternatives seem more attractive. Some products made in countries with fewer regulations can harm consumers, such as a product coated in lead-based paint. Tariffs can make these products so expensive that consumers won't buy them.

6.4 Protect National Interests

Tariffs can also be used as an extension of foreign policy as their imposition on a trading partner's main exports may be used to exert economic leverage. For example, when Russia invaded Ukraine, much of the world protested by boycotting Russian goods or imposing sanctions. In April 2022, President Joe Biden suspended normal trade with Russia. In June, he raised the tariff on Russian imports not prohibited by the April suspension to 35%.

7. Advantages of Tariffs

  • Produce revenues: As discussed, tariffs provide a government a chance to bring in more money. This can relieve some of the tax burdens felt by a county's citizens and help the government to reduce deficits.
  • Open negotiations: Tariffs can be used by countries to open negotiations for trade or other issues. Each side can use tariffs to help them create economic policies and talk with trade partners.
  • Support a nation's goals: One of the most popular uses for tariffs is to use them to ensure domestic products receive preference within a country to support businesses and the economy.
  • Make a market predictable: Tariffs can help stabilize a market and make prices predictable.

8. Disadvantages of Tariffs

  • Create issues between governments: Many nations use tariffs to punish or discourage actions they disapprove of. Unfortunately, doing this can create tensions between two countries and lead to more problems.
  • Initiate trade wars: A typical response for a country with tariffs imposed on it is to respond similarly, creating a trade war in which neither country benefits from the other.

For Prelims: Tariffs, Zero-sum game, Cross-border trade, World Trade Organisation  (WTO), North American Free Trade Agreement (NAFTA), United States-Mexico-Canada Agreement (USMCA), and the European Union (EU).

For Mains: 1. What is a Tariff and explain why government imposes tariffs. Discuss the advantages and disadvantages associated with Tariffs. (250 Words).

Source: Investopedia
 

HINDI DIWAS

1. Context

September 14 is observed as Hindi Diwas, or Hindi Day, to commemorate the Constituent Assembly of India making Hindi the official language of the Union government

2. Hindi Language

  • Hindi is the fourth most spoken language in the world and is written in Devanagari script. The language got its name from the Persian word 'Hind' - meaning 'land of the Indus River', and is a descendant of Sanskrit.
  • Turk invaders in the early 11th century named the language of the region Hindi, 'language of the land of the Indus River'.
  • It is the official language of India, English being the other official language.
  • Hindi is also spoken in some countries outside India, such as in Mauritius, Fiji, Suriname, Guyana, Trinidad & Tobago and Nepal.
  • Hindi in its present form emerged through different stages, during which it was known by other names. The earliest form of old Hindi was Apabhramsa. In 400 AD Kalidas wrote a romantic play in Apabhramsa called Vikramorvashiyam.
  • The modern Devanagari script came into existence in the 11th century.

3. Debates in the Constituent Assembly

The Constituent Assembly debated the issue of the official language for three days in September 1949. There were many different views expressed, with some members arguing for Hindi, some for Hindustani, and some for English.

  1. RV Dhulekar from Uttar Pradesh argued that Hindi should be the national language, not just the official language. He said that the nation was not ready to wait for 15 years to start reading the Vedas and the Upanishads, the Ramayana and the Mahabharata, and Lilavati and other mathematical works in Hindi.
  2. Frank Anthony from Central Provinces and Berar made a case for English. He said that English was one of the greatest assets that India possessed in the international field and that it should not be given up.
  3. Pandit Lakshmi Kanta Maitra from Bengal argued that Sanskrit should be the national and official language. He said that Sanskrit was the revered grandmother of languages of the world and that it was still alive with full vigour and vitality.
  4. Qazi Syed Karimuddin from Central Provinces and Berar argued that Hindustani should be the national language. He said that Mahatma Gandhi had championed Hindustani and that it was the only language in which both Hindus and Muslims could easily express themselves.
  5. TA Ramalingam Chettiar from Madras said that they had agreed to Hindi simply because it was spoken by a large number of people in the country. He argued that Hindi could not be the national language, because it was no more national to them than English or any other language.

4. Munshi-Ayyangar Formula

  • In the end, the Constituent Assembly adopted the Munshi-Ayyangar formula as a compromise solution.
  • This formula said that Hindi would be the official language of the Union government, but English would continue to be used for all official purposes of the Union for 15 years.

5. Constitutional Provisions

  • Article 343 of the Indian Constitution, as adopted in 1950, established Hindi in the Devanagari script as the official language of the Union.
  • It also specified that English would continue to be used for official purposes for 15 years.
  • After this period, concerns arose about the imposition of Hindi in non-Hindi-speaking regions, particularly Tamil Nadu.

6. Conclusion

  • The debate on the official language of India was a long and heated one, with different members of the Constituent Assembly expressing different views.
  • The Munshi-Ayyangar formula was eventually adopted as a compromise solution, making Hindi the official language of the Union government, but also allowing English to continue to be used for all official purposes for fifteen years. The debate over the official language of India continues to this day.
 
For Prelims: Official language, National Language, Hindi Diwas, Munshi-Ayyangar Formula, Constituent Assembly of India, RV Dhulekar,  Vedas, the Upanishads, the Ramayana, the Mahabharata, Lilavati, Frank Anthony, Pandit Lakshmi Kanta Maitra, Sanskrit, Qazi Syed Karimuddin, Hindustani, TA Ramalingam Chettiar, 
For Mains: 
1. Discuss the historical context and the debates within the Constituent Assembly regarding the choice of the official language of India. How did the Munshi-Ayyangar formula attempt to address the linguistic diversity of the country? (250 Words)
 
 
Previous Year Questions
 
1. Official language of the Indian Union is  (ACC 121 CGAT 2019) 
A. Hindi in Devnagari script
B. Hindi and English
C. English
D. Hindi, English and Urdu
 
Answer: A
 
2. When is 'Hindi Diwas' celebrated? (HP TGT (Arts) TET 2014)
A. 14 September  B. 15 September    C. 16 September    D. 17 September
 
Answer: A
 
3. On which day is “World Hindi Day’ (WHD) observed every year to mark the first anniversary of World Hindi Conference (WHC), which was held in 1975? (RRC Group D 2018) 
A. 5th September    B. 14th October      C. 10th January         D. 26th January
 
Answer: C
 
4. Who said in the Constituent assembly debate on 27 August 1947, “I believe separate electorates will be suicidal to the minorities." (NTPC CBT-I  2021) 
A. R V dhulekar     
B. 'Govind Bhallabh Pant
C. B. Pocker Bahadur
D. Sardar Vallabhbhai Patel
 
Answer: B
 
5. What are Upanishads? (HP TGT (Arts) TET 2017)
A. Religious book of Hindus
B. Book dealing with ancient Hindu Laws
C. Book on Social Behaviour of man
D. Book of prayer to God
 
Answer: A
 
6. Ramcharitmanas was the influential work on Ramayana by: (MP Jail Prahari 2018) 
A.Tulsidas       B. Kalidas   C. Ramananda         D. Kabirdas
 
Answer: A
 
7. Who wrote the book Ramayana? (Soldier GD 2021)
A. Surdas        B. Kalidas          C. Veda Vyasa          D. Valmiki
 
Answer: D
 
8. The Lilavati of Bhaskara is a standard text on: (CDS GK 2016) 
A. Mathematics        B. Surgery       C. Poetics        D.  Linguistics
 
Answer: A
 
9. The author of 'Lilavati', Bhaskar-IInd was - (UKPSC 2022)
A. Physician        B. Mathematician       C. Musician         D. Sculptor
 
Answer: B
 
10. Who was the first nominated Deputy Chairman of the Constituent Assembly? (MPPSC 2020)
A. T. T. Krishnamachari   
B. V. T. Krishnamachari
C. H.C. Mukherjee
D. Frank Anthony
 
Answer: D
 
11. With reference to Dhrupad, one of the major traditions of India that has been kept alive for centuries, which of the following statements are correct? (UPSC 2012)
1. Dhrupad originated and developed in the Rajput kingdoms during the Mughal period.
2. Dhrupad is primarily devotional and spiritual music.
3. Dhrupad Alap uses the Sanskrit syllabus from Mantras.
Select the correct answer using the codes given below:
A. 1 and 2 only       B.  2 and 3 only      C. 1, 2 and 3         D.  None of the above is correct
 
Answer: B
 
Source: The Indian Express
 
 

PERIODIC LABOUR FORCE SURVEY (PLFS)

 
 

1. Context

Recently, the Ministry of Statistics and Programme Implementation released the results of the Periodic Labour Force Survey for the period July 2022 to June 2023. This is the sixth PLFS report and each tracks 12 months between July and June.

2. About The Periodic Labour Force Survey (PLFS)

  • The Periodic Labour Force Survey (PLFS) is a sample survey conducted by the National Sample Survey Office (NSSO) of India to provide information on the labour force and employment situation in the country.
  • The survey is conducted annually in all the states and union territories of India.
  • The PLFS provides data on various employment indicators, including the labour force participation rate (LFPR), unemployment rate (UR), worker population ratio (WPR), and employment by industry and occupation.
  • The PLFS sheds light on the proportion of individuals seeking employment, the unemployment rate, gender disparities in employment and wages, and the sectoral distribution of workers.
  • Additionally, it details the types of employment, such as casual labour, self-employment, and regular salaried jobs.
  • This comprehensive data is crucial for understanding the dynamics of the Indian labour market and formulating effective employment strategies.
 
3. Data Collection Methods in PLFS
  • The Periodic Labour Force Survey (PLFS) collects employment data using two methods: Usual Status (US) and Current Weekly Status (CWS).
  • In the US method, respondents are asked to recall their employment details for the past year, while in the CWS method, they are asked to recall their employment details for the past week.
  • The labour force estimate derived from the US method includes individuals who worked or were seeking/available for work for a significant portion of the past year, as well as those who worked for at least 30 days during the reference period.
  • Conversely, the labour force estimate based on the CWS method encompasses those who worked for at least one hour or sought/were available for work for at least one hour on any day during the past week.
  • The global trend has shifted towards a greater emphasis on CWS data due to the improved accuracy of recall for shorter reference periods. 


4. Latest findings of the Report

Unemployment Rate (UER)

  • The UER is often the most talked about metric in popular discourse. Simply put, it refers to the proportion of people who demanded work over the past year and failed to get it.
  • As the data in Table 1 shows, for the population above 15 years of age, the UER has fallen significantly from 6.6% to 5.1% over the last year (that is, July to June cycle).
  • Simply put, 5.1% of all the people above 15 years of age who demanded work failed to get one. 

Labour Force Participation Rate (LFPR)

  • The Unemployment Rate (UER) is calculated as a proportion of the population that is demanding work.
  • However, this population also fluctuates for various reasons. The Labor Force Participation Rate (LFPR) is a measure of the total population demanding work, expressed as a proportion of the total population above 15 years of age.
  • As seen in Table 1, India's LFPR, which had been gradually increasing, has experienced a significant surge in the past year.
  • As of 2022-23, 54.6% of all Indians above the age of 15 were actively seeking employment.
 

LFPR for women

  • This metric looks at LFPR among women to ascertain where the additional demand for jobs is coming from.
  • The data shows that female LFPR has gone up over the years but there were two discrete step-ups one in 2019-20 (when India’s GDP growth rate had slowed down to less than 4% and this was before the Covid pandemic hit) and the second in 2022-23 when it rose to 31.6%.

Worker Population Rate
  • Since the proportion of people demanding work (the LFPR) goes up and down and the percentage of those failing to get a job (the UER) is expressed as a proportion of the former, it can throw off analysis.
  • As such, there is another way to look at the labour market: Worker Population Ratio (WPR).
  • The WPR is the percentage of persons employed among the persons in the population.
  • Thus, instead of looking at how many demand a job and how many fail to get it, the WPR simply gives a measure of how many people have a job as a proportion of the total population.
  • This metric too has been going up and especially noteworthy are the two discrete
    step-ups in 2019-20 and 2022-23.

WPR among women

This metric throws light on the WPR for women to understand what’s leading to the spike in overall WPR. Again, the WPR for women has been going up but two main spikes have been in 2019-20 and 2022-23.

Monthly earnings

The PLFS reports also provide a sense of how much people earn in different types of jobs.
While it is true that incomes have broadly gone up after falling during Covid the main takeaway from this data emerges when one compares how little have monthly incomes changed over the past 6 years, especially in the face of a sharp rise in inflation. To be sure, since late 2019, annual consumer inflation has always been above the RBI’s target of 4%.
 

Distribution of workers

To accurately make sense of more and more people working, it is important to know not just what they earn but also what kind of work they do. For this, we look at data collected over the usual status by PLFS. Table 3 alongside gives the details of the three main classifications: self-employment, casual labour (say a construction worker) and regular salaried job. Self-employed has two sub-categories:
(i) own account worker and employer and
(ii) unpaid helper in household enterprises. 
 
The data shows that self-employment has risen and jobs in the other two categories have fallen in proportion. It is also noteworthy that self-employment among women is the key driver for this overall trend. 
 

5. Key Trends in PLFS 2022-23

  • Upon initial analysis, the Periodic Labour Force Survey (PLFS) for 2022-23 reveals several encouraging trends. The unemployment rate is on a downward trajectory, and both the Labor Force Participation Rate (LFPR) and Workforce Participation Rate (WPR) exhibit substantial increases. A particularly heartening development is the notable rise in the participation of women in the workforce. This suggests a positive correlation between economic recovery and the creation of more employment opportunities, especially for women.
  • However, a closer examination of the nature and remuneration of these new jobs alters the understanding. The predominant trend is the emergence of jobs falling under the category of "self-employment." Typically, in a growing economy, businesses tend to hire more employees. Conversely, during economic challenges, individuals often transition from regular employment to "self-employed" status. This nuanced perspective prompts a reconsideration of the quality and sustainability of the employment being generated.
  • Analyzing the trends among women across various metrics reveals an interesting dynamic. The data suggests that economic strains on household finances have led more women, previously outside the workforce, to join in. However, a noteworthy observation is the prevalence of women taking up roles as "unpaid helpers in household enterprises," highlighting a complex interplay between economic conditions and women's workforce participation.
  • Furthermore, an examination of the sectoral landscape indicates a regressive shift in India's employment patterns. Notably, there has been an increase in the proportion of Indians employed in agriculture over the past year, while the numbers in manufacturing have witnessed a decline. This shift underscores the evolving economic dynamics and sectoral preferences shaping the employment scenario.
  • In a thriving economy, one would expect an improvement in monthly incomes. However, the Indian scenario deviates from this expectation. Despite positive indicators in other areas, the data suggests that the overall economic boom is not translating into significant improvements in monthly incomes for individuals in India. This anomaly prompts a closer examination of the factors contributing to this divergence.

6. The WayForward

While there are positive signals in the headline indicators, a more nuanced analysis reveals complexities like job creation, women's participation dynamics, sectoral shifts, and income patterns. This holistic perspective is essential for a comprehensive understanding of the multifaceted impact of economic trends on the labour market in India.

 
For Prelims: Periodic Labour Force Survey, National Sample Survey Office, labour force participation rate, worker population ratio
For Mains:
1. Examine the changing nature of employment in India, as reflected in the increasing share of self-employment and the declining proportion of regular salaried jobs. Discuss the implications of this shift for the quality and sustainability of employment. (250 Words)

 

Previous Year Questions

1. Given below are two statements, one is labeled as Assertion (A) and the other as Reason (R). (UPPSC 2019)
Assertion (A): The labour force participation rate is falling sharply in recent years for females in India.
Reason (R): The decline in labour force participation rate is due to improved family income and an increase in education.
Select the correct answer from the codes given below:
Codes:
A. Both (A) and (R) are true and (R) is the correct explanation of (A)
B. Both (A) and (R) are true and (R) is not the correct explanation of (A)
C. (A) is true, but (R) is false
D. (A) is false, but (R) is true
 
 
2. Which of the following statements about the employment situation in India according to the periodic Labour Force Survey 2017-18 is/are correct? (UPSC CAPF 2020)
1. Construction sector gave employment to nearly one-tenth of the urban male workforce in India
2. Nearly one-fourth of urban female workers in India were working in the manufacturing sector
3. One-fourth of rural female workers in India were engaged in the agriculture sector
Select the correct answer using the code given below:
A. 2 only       B. 1 and 2 only            C. 1 and 3 only           D. 1, 2 and 3
 
 
3. Disguised unemployment generally means (UPSC 2013)

(a) large number of people remain unemployed
(b) alternative employment is not available
(c) marginal productivity of labour is zero
(d) productivity of workers is low

 

4.  Assertion (A): Workers - population ratio in India is low in contrast to that in developed countries.

Reason (R): Rapid growth of population, low female worker population rate and omission of unpaid family workers lead to low worker-population ratio.

Choose the correct answer: (Telangana Police SI Mains 2018)

A. (A) is true, but (R) is false.
B. (A) is false, but (R) is true.
C. Both (A) and (R) are true, but (R) is not a correct explanation of (A).
D. Both (A) and (R) are true, but (R) is the correct explanation of (A).

Answers: 1-C, 2-B, 3-C, 4-D

Mains

1. Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements. (UPSC 2023)

Source: The Indian Express


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