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DAILY CURRENT AFFAIRS, 02 FEBRUARY 2026

EL NINO AND LA NINA

 
 
1. Context
There is a chance that the El Nino phenomenon — a warming of the central Pacific Ocean frequently linked to weak monsoon rainfall in India — may occur after July, but clarity will only emerge in April, says M. Mohapatra, Director-General of the India Meteorological Department (IMD)
 
2.What are El Niño and La Nina?
 
  • El Niño and La Niña, translating to “little boy” and “little girl” in Spanish, are climatic events arising from interactions between the ocean and atmosphere. They influence water temperatures in the central and eastern tropical Pacific Ocean, thereby affecting global weather patterns.
  • The Earth's rotation from east to west causes winds between 30 degrees north and south of the equator to tilt in their paths. This results in winds flowing southwest in the northern hemisphere and northwest in the southern hemisphere, a phenomenon known as the Coriolis Effect.
  • Consequently, trade winds blow westward on either side of the equator. Typically, these winds move west from South America towards Asia, leading to upwelling, where cold water from beneath the ocean surface rises, replacing warmer surface waters.
  • Occasionally, weakened trade winds shift back towards South America, preventing upwelling. This leads to warmer-than-normal sea surface temperatures along the equatorial Pacific Ocean, marking the onset of El Niño conditions.
  • In contrast, during La Niña, stronger trade winds push warm water towards Asia, enhancing upwelling and bringing cold, nutrient-rich water to South America.
  • Thus, El Niño and La Niña represent opposite phases of the El Niño Southern Oscillation (ENSO) cycle, which also includes a neutral phase.
  • El Niño events are more common than La Niña ones, occurring every two to seven years when neutral ENSO conditions are disrupted by either phase. Recently, La Niña conditions were observed from 2020 to 2023
3.How could the incoming La Nina impact global weather?
 
  • Due to ENSO and the associated changes in ocean temperatures, air circulation in the region is also influenced. This, in turn, affects precipitation levels in nearby areas and has an impact on the Indian monsoon.
  • The current El Niño event, which started last June, has weakened considerably. It is anticipated that by June, neutral ENSO conditions will be in place. Following this, La Niña conditions are expected to develop, potentially starting to have an impact by August
4.La Nina’s impact on the world
  • Like India, countries such as Indonesia, the Philippines, Malaysia, and their neighbors experience abundant rainfall during a La Niña year. This year, Indonesia has already experienced flooding.
  • Conversely, droughts are common in the southern parts of North America, where winters tend to be warmer than usual.
  • Canada and the northwestern coast of the United States face heavy rainfall and flooding. Southern Africa experiences above-average rainfall, while the eastern regions of the continent receive below-average rainfall.
  • ENSO significantly influences hurricane activity over the Atlantic Ocean, with La Niña years typically seeing an increase in hurricanes. For example, in the La Niña year of 2021, the Atlantic Ocean saw a record 30 hurricanes
5.Is climate change affecting ENSO?
  • In India, El Niño is known to reduce southwest monsoon rainfall, leading to higher temperatures and more intense heatwaves, as seen this summer.
  • Historically, monsoon seasons following an El Niño, such as in 1982-1983 and 1987-1988, saw abundant rainfall in 1983 and 1988. A similar pattern may occur this year.
  • From 2020 to 2023, the longest La Niña event of the century took place. This was followed by ENSO neutral conditions, which transitioned to El Niño by June 2023.
  • However, El Niño has been weakening since last December. According to Rajeevan, this rapid shift to La Niña is a natural occurrence and has happened many times in the past.
  • Scientists suggest that climate change will impact the ENSO cycle. Various studies indicate that global warming may alter the average oceanic conditions in the Pacific Ocean, leading to more frequent El Niño events.
  • The World Meteorological Organization (WMO) also predicts that climate change will likely affect the intensity and frequency of extreme weather and climate events associated with El Niño and La Niña
 
For Prelims: Indian and World Geography 
For Mains: GS-I, GS-III: Important Geophysical phenomena and environment
 
 
 
Source: Indianexpress
 

NATIONAL GREEN TRIBUNAL

 

1. Context

 The National Green Tribunal has pulled up cricket stadiums across the India for using groundwater to irrigate their grounds, instead of treated wastewater, as per a recent order.

2. What is National Green Tribunal (NGT)?

  • The National Green Tribunal (NGT) is a specialized judicial body established in India to handle cases related to environmental protection and conservation.
  • It was established under the National Green Tribunal Act, of  2010, and its primary objective is to effectively and expeditiously address environmental disputes and promote sustainable development.
  • With the establishment of the NGT, India became the third country in the world to set up a specialized environmental tribunal, only after Australia and New Zealand, and the first developing country to do so.
     
  • NGT is mandated to make disposal of applications or appeals finally within 6 months of the filing of the same.
  • The NGT has five places of sittings, New Delhi is the Principal place of sitting, and Bhopal, Pune, Kolkata and Chennai are the other four.

3. Structure of the National Green Tribunal (NGT)

  • Chairperson: The NGT is headed by a full-time Chairperson who is a retired judge of the Supreme Court of India. The Chairperson is responsible for the overall administration and functioning of the tribunal.
  • Judicial Members: The NGT consists of judicial members who are retired judges of either the Supreme Court or a High Court. These members have extensive legal knowledge and experience in handling environmental matters.
  • Expert Members: The tribunal also includes expert members who possess expertise in areas such as environmental science, ecology, hydrology, and forestry. These members provide valuable technical insights and guidance in the resolution of environmental disputes.
  • The NGT is organized into multiple benches located across different regions of India. These benches are responsible for hearing cases specific to their respective jurisdictions. Each bench is headed by a judicial member and consists of one or more expert members, as required.

4. What are the Important Landmark Judgements of NGT?

The National Green Tribunal (NGT) has delivered several landmark judgments that have had a significant impact on environmental protection and conservation in India. Here are some of the important landmark judgments delivered by the NGT:

  • Vardhaman Kaushik v. Union of India (2013): This case dealt with the issue of groundwater depletion due to illegal extraction by industries in Uttar Pradesh. The NGT directed the closure of industries that were extracting groundwater without proper permissions and ordered the payment of compensation for environmental damage caused.
  • Alembic Pharmaceuticals Ltd. v. Rohit Prajapati & Ors. (2014): In this case, the NGT ordered the closure of an industrial unit in Gujarat for releasing untreated effluents into a water body, causing pollution and harm to the environment and public health.
  • M.C. Mehta v. Union of India (2014): The NGT issued a landmark judgment in this case regarding the pollution of the Yamuna River. It directed several measures to clean and rejuvenate the river, including the establishment of sewage treatment plants and the regulation of industries contributing to pollution.
  • Subhash Chandra Sharma v. Union of India (2015): This case focused on the issue of air pollution caused by solid waste burning in open areas. The NGT imposed a ban on burning waste in open spaces and directed municipal authorities to take measures to manage waste effectively.
  • Raghu Nath Sharma v. State of Himachal Pradesh (2016): The NGT ordered the closure of illegal hotels and structures in the eco-sensitive Rohtang Pass area of Himachal Pradesh to protect the fragile Himalayan ecosystem.
  • Yamuna Muktikaran Abhiyan v. Union of India (2017): This case dealt with the rejuvenation of the Yamuna River and led to the NGT issuing directions to clean and restore the river, including measures to prevent encroachments and pollution.
  • M.C. Mehta v. Union of India (2017): The NGT banned the use of disposable plastic in Delhi and the National Capital Region (NCR) and directed authorities to take steps to prevent the use and sale of such plastic.
  • Shailesh Singh v. Hotel Holiday Regency (2019): In this case, the NGT imposed heavy fines on a hotel in Shimla, Himachal Pradesh, for causing air pollution by running diesel generators without proper emission control measures.
  • Subhash Chandran vs. Tamil Nadu Pollution Control Board (2020): This judgment highlighted the importance of safeguarding coastal areas and wetlands from unauthorized construction and development activities, emphasizing the need for stringent environmental norms.
  • In Re: Report by Comptroller and Auditor General of India (2021): The NGT directed the formulation of guidelines for the regulation of groundwater extraction and management to prevent overexploitation and depletion.

5. What is a dissolved oxygen level?

  • Dissolved oxygen (DO) level refers to the concentration of oxygen gas (O2) that is dissolved in a liquid, typically water.
  • It is a crucial parameter in aquatic ecosystems as it directly affects the survival and well-being of aquatic organisms.
  • In natural water bodies like lakes, rivers, and oceans, oxygen dissolves from the atmosphere through processes such as diffusion and aeration.
  • Aquatic plants, algae, and phytoplankton also contribute to the production of oxygen through photosynthesis. However, the level of dissolved oxygen can fluctuate based on various factors, including temperature, altitude, water flow, pollution, and organic matter decomposition.
  • Dissolved oxygen is essential for aquatic organisms because they rely on it for their respiration process, similar to how animals breathe oxygen from the air.
  • Insufficient levels of dissolved oxygen can lead to hypoxia, a condition where organisms are deprived of the oxygen they need to survive. This can result in stress, reduced growth, reproductive issues, and even mortality in aquatic species.

Different species of aquatic organisms have varying tolerance levels for dissolved oxygen. For example:

  • Fish and other aquatic animals often require dissolved oxygen levels between 4 to 6 milligrams per liter (mg/L) to thrive.
  • Some species of fish, insects, and other aquatic organisms can tolerate lower levels of dissolved oxygen, even below 2 mg/L, while others require higher concentrations.

6. What are chemical oxygen demand and biological oxygen demand?

Chemical Oxygen Demand (COD):

  • COD is a measure of the amount of oxygen required to chemically oxidize and break down organic and inorganic substances present in water.
  • It provides an indication of the total amount of pollutants that can be chemically oxidized by a strong oxidizing agent. COD is expressed in milligrams per liter (mg/L) of oxygen consumed.
  • COD is useful in assessing the overall pollution load in a water sample, including both biodegradable and non-biodegradable substances.
  • It is commonly used for industrial wastewater monitoring, as it provides a rapid estimation of the organic content and potential pollution levels. However, COD does not differentiate between different types of pollutants or indicate the potential impact on aquatic life.

Biological Oxygen Demand (BOD):

  • BOD measures the amount of dissolved oxygen consumed by microorganisms (bacteria) during the biological degradation of organic matter in water.
  • It is a key indicator of the level of biodegradable organic pollutants present in water. BOD is expressed in milligrams per liter (mg/L) of oxygen consumed over a specific time period, usually 5 days (BODâ‚…).
  • BOD is particularly important in assessing the impact of organic pollution on aquatic ecosystems.
  • High BOD levels indicate that a water body may have a significant amount of organic pollutants, which can lead to oxygen depletion as microorganisms break down the organic matter. This oxygen depletion, known as hypoxia, can harm aquatic organisms and disrupt the ecological balance of the water body.

Comparing BOD and COD:

  • BOD primarily measures the biologically degradable organic matter and provides information about the potential impact on aquatic life.
  • COD measures both biologically and chemically degradable pollutants, giving an indication of the overall pollution load and oxygen demand.
  • BOD is a more specific and ecologically relevant parameter, but it takes longer to determine (5 days), while COD can be measured more quickly.
For Prelims: National Green Tribunal (NGT), National Green Tribunal Act, of  2010, Dissolved oxygen (DO), Chemical Oxygen demand (COD), and Biological Oxygen Demand (BOD).
For Mains: 1. Discuss the significance of Chemical Oxygen Demand (COD) and Biological Oxygen Demand (BOD) as critical indicators for assessing water pollution and quality. (250 Words)
 

Previous year Question

1. How is the National Green Tribunal (NGT) different from the Central Pollution Control Board (CPCB)? (UPSC 2018)
1. The NGT has been established by an Act whereas the CPCB has been created by the executive order of the Government.
2. The NGT provides environmental justice and helps reduce the burden of litigation in the higher courts whereas the CPCB promotes cleanliness of streams and wells, and aims to improve the quality of air in the country.
Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2
Answer: B
 
2. The National Green Tribunal Act, 2010 was enacted in consonance with which of the following provisions of the Constitution of India? (UPSC 2012)
1. Right of a healthy environment, construed as a part of the Right to life under Article 21
2. Provision of grants for raising the level of administration in the Scheduled Areas for the welfare of Scheduled Tribes under Article 275(1)
3. Powers and functions of Gram Sabha as mentioned under Article 243(A)
Select the correct answer using the codes given below:
A. 1 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3
Answer: A
Source: The Indian Express
 
 

FREE TRADE AGREEMENT 

1. Context

Negotiations on the India-European Union Free Trade Agreement (FTA) — dubbed the ‘mother of all deals’ by leaders on both sides — officially concluded on January 27, closing about two decades worth of intermittent talks. The deal, which has benefits for both, simultaneously avoids intractable sensitive issues while securing advantageous concessions on most others.
 

2. About the Free Trade Agreement

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

3. Types of Free Trade Agreement

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

4. India's Free Trade Agreements

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

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

5.  India - UK Free Trade Agreement

5.1. Background

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

5.2. GATT (General Agreement on Trade and Tariffs)

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

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

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

Answer: C

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

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

Which of the above are the objectives of this Act?

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

Answer: A

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

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

Answer: D

5. With reference to the “G20 Common Framework”, consider the following statements: (UPSC 2022)
1. It is an initiative endorsed by the G20 together with the Paris Club.
2. It is an initiative to support Low Income Countries with unsustainable debt.
Which of the statements given above is/are correct?
(a) 1 only         (b) 2 only            (c) Both 1 and 2          (d) Neither 1 nor 2
Answer: C
 
 Source: The Hindu
 
 

ELECTRIC VEHICLES

1. Context

An ambitious ₹18,100 crore scheme to facilitate the manufacture of advanced chemistry cell batteries in India, particularly for Electric Vehicles (EVs), is floundering. The Advanced Chemistry Cell Production Linked Incentive (ACC PLI) had a target of making battery cells worth 50 gigawatt-hour (GWh) by 2025, but only 1.4 GWh has been installed; approximately 8.6 GWh is ‘under development’ but delayed, while 20 GWh has seen no progress at all. Additionally, the scheme has generated only 1,118 jobs — just 0.12% of the estimated 1.03 million — and attracted only 25.58% of its targeted investment.

2. What are Electric Vehicles?

  • An E-vehicle or Electric Vehicle is one that needs an electric motor to generate power and function instead of an internal-combustion engine that generates power by burning a mix of gases and fuel.
  • Electric Vehicles have a battery that can be charged by an electric supply.
  • This electric energy is used to run the motor. There is a hybrid electric vehicle as well, which means a combination of an electric motor and a combustion engine.

3. Types of Electric Vehicles

  • Plug-in electric – Such Electric Vehicles run purely on electricity, and it is powered when it is plugged in to charge. They don’t produce emissions like petrol or diesel.
  • Plug-in hybrid – Their primary source of power is electricity, but these vehicles also have a fuel engine. These cars produce emissions only when they run on fuel engines but not when they run on electricity.
  • Hybrid-electric – These Electric Vehicles primarily run on petrol or diesel, but they’re also fitted with an electric battery. One can charge the battery through regenerative braking. It comes with a button that lets you switch from using a fuel engine to using an electric battery (EV mode.)
  • Fuel Cell Electric Vehicles (FCEVs)– these vehicles use a highly efficient electrochemical process to convert hydrogen into electricity, and it powers the electric motor.

4. Initiatives by the Government

The government has set a target of 30% new sales of electric vehicles and two-wheelers by 2030. The government is working towards it by following the initiative and various government schemes.

National Electric Mobility Mission Plan (NEMMP)

  • It is a road map/document for India’s fuel security by promoting and faster adoption of electric vehicles in India with the initial allocation of Rs 75 crore. The ambition is to have around 6 million vehicles on the road by 2020.
  • This plan is for affordable and environmentally friendly transportation in the country and to achieve automotive leadership in global manufacturing.
Faster Adoption and Manufacturing of (hybrid and) electric vehicles (FAME)
  • The scheme was announced by the government in 2015 with the objective of market creation and developing a manufacturing ecosystem with sustainable development.
  • It is formulated by the Department of Heavy Industry, having 4 key areas- technology creation, demand creation, pilot projects, and infrastructure related to charging.
Faster Adoption and Manufacturing of (hybrid and) electric vehicles (FAME) II
  • Based on the result and experience of phase I of the scheme, phase II was launched with an allocation of Rs 10000 Crore over three years, recently approved by the cabinet.
  • This scheme vision a holistic approach to the EV industry, including infrastructure for charging, manufacturing of batteries, market creation, public demand, and push for EVs in public transport.
  • It also offers incentives to the manufacturer of electric vehicles and their components.
  • It enables the creation of charging infrastructure in selected cities and major highways at an interval of 25 km.

5. Electric Vehicle Policy, 2020

Electric Vehicle Policy 2020 has been announced by the Delhi Government, where it put emphasis on the replacement of two-wheelers, shared vehicles, public transport, and private four-wheelers with Electric Vehicles. Some of the Features of EV Policy 2020 are given below:

  • As per Electric Vehicle Policy, the focus is given to e-mobility, which includes e-buses and e-autos.
  • The government has decided to give low-interest loans so that people can purchase Electric Vehicles easily.
  • The main goal of the E-Vehicle Policy in India is to reduce pollution and curb health issues in Delhi.
  • State EV Fund will be introduced for the expenditure of EV Policy.

6. Challenges in promoting Battery Electric Vehicle (BEV) Adoption

  • Subsidy Limitations: In contrast to countries like Norway, where extensive subsidies have spurred BEV adoption, India's subsidy structure primarily benefits the middle or upper middle classes. This inequality raises concerns about the effectiveness and fairness of upfront purchase subsidies, which tend to benefit those who can afford BEVs.
  • Charging Network: Investing in comprehensive charging infrastructure is crucial for driving BEV adoption. Countries like Norway and China have seen success by expanding public charging stations while providing purchase subsidies. However, India's charging infrastructure remains insufficient, particularly for two- and three-wheelers, which dominate the vehicle mix. Adapting charging strategies to accommodate different vehicle types and power requirements is essential for promoting widespread adoption.
  • Electricity Source: India's reliance on coal-fired thermal plants for electricity generation poses a challenge to the potential environmental benefits of BEVs. While EVs may reduce tailpipe emissions, continued reliance on thermal plants contributes to pollution. Shifting towards renewable energy sources is necessary to mitigate these concerns and achieve cleaner electric mobility.
  • Limited Access to the Global Lithium Value Chain: India's heavy reliance on imports for lithium-ion batteries raises concerns about supply chain vulnerabilities. The concentration of global lithium production and key battery components in a handful of countries creates dependency risks. Diversification of the country's battery technology and exploring alternative options to lithium-ion batteries is crucial for long-term sustainability.
  • Technology Agnostic Approach: While BEVs have gained traction in the two-wheeler and three-wheeler segments, the four-wheeler segment lags behind. Governments must adopt a technology-agnostic approach that encourages the adoption of various electrification technologies, including hybrids and fuel-cell vehicles. Such an approach promotes innovation, fosters competition, and allows manufacturers to meet emissions objectives irrespective of technology.
  • Exploring Alternative Technologies: Hybrids serve as an intermediate step toward full electrification, offering improved fuel efficiency without relying solely on charging infrastructure. Additionally, exploring flex-fuel vehicles running on multiple fuel types, fuel cell electric vehicles, hydrogen internal combustion engine vehicles, and synthetic fuels can provide alternative options for reducing emissions and promoting sustainable mobility.
For Prelims: Electric Vehicles, Fuel Cell Electric Vehicles (FCEVs), Electric Vehicle Policy, 2020, National Electric Mobility Mission Plan (NEMMP), Faster Adoption and Manufacturing of (hybrid and) electric vehicles (FAME), Global Lithium Value Chain.
For Mains: 1. Analyze the challenges and opportunities in promoting the adoption of electric vehicles (EVs) in developing countries like India. Discuss the key factors that hinder EV penetration and propose strategies to overcome them.(250 Words)
 
 

Previous year Question

1. Which of the following Indian States/Union Territories launched Electric Vehicle Policy on 7th August 2020? (UPPSC 2020)

A. Madhya Pradesh
B. Uttar Pradesh
C. Delhi
D. Tamil Nadu
Answer: C
Source: The Indian Express
 
 

16TH FINANCE COMMISSION

1. Context

The 16th Finance Commission (16th FC) has recommended that the Centre retain the 41% share of tax devolution to States as has been in force since 2021. Finance Minister Nirmala Sitharaman, in her Budget speech, announced that the Centre has accepted the recommendations.

2. Finance Commission

  • The Finance Commission is a crucial constitutional body in India responsible for the distribution of financial resources between the central government and the state governments.
  • It plays a vital role in maintaining fiscal federalism by ensuring a fair and equitable distribution of financial revenues and grants-in-aid among the various tiers of government.
  • The Finance Commission is set up every five years, or at such earlier intervals as the President of India may decide, as per Article 280 of the Indian Constitution.
  • It consists of a Chairman and four other members, each appointed by the President. These members are experts in the fields of economics, finance, and public administration.

3. Mandate and Functions

  • The primary objective of the Finance Commission is to make recommendations to the President regarding the distribution of the net proceeds of taxes between the Union (central government) and the states, and the allocation of resources among the states.
  • It also suggests measures to improve the financial position of the states, if necessary. The Commission's recommendations are aimed at addressing regional imbalances and ensuring the overall economic development of the country.

4. The specific functions of the Finance Commission include

  • Tax Revenue Sharing: The Commission reviews the trends in revenue collections and recommends the percentage of the divisible pool of taxes that should be shared with the states. The divisible pool includes taxes like income tax, corporate tax, and excise duty.
  • Grants-in-Aid: Besides the devolution of taxes, the Finance Commission also suggests grants-in-aid to states to support their financial requirements for various developmental projects and schemes.
  • Debt Relief: The Commission may recommend measures to provide relief to states facing a high burden of debt, thereby promoting fiscal discipline.
  • Macro-Fiscal Management: It examines the overall financial situation of the country and suggests measures to maintain macroeconomic stability.
  • Any Other Matter: The President may also refer specific matters to the Commission for examination and recommendations.

5. Process of Working

  • The Finance Commission follows a consultative process while formulating its recommendations.
  • It seeks input from various stakeholders, including the central and state governments, local bodies, financial experts, and economists.
  • The Commission examines historical data, financial indicators, and the needs of states to arrive at a comprehensive and objective assessment.
  • After conducting detailed studies and consultations, the Commission submits its report to the President.
  • The recommendations of the Finance Commission are ordinarily binding in nature, and both the central and state governments are expected to implement them. However, their acceptance depends on the discretion of the central government.

6. Importance

  • The Finance Commission is crucial in maintaining the federal structure of India and ensuring that all states receive adequate financial support for their development.
  • By promoting equitable distribution of resources, helps in reducing regional disparities and fostering balanced economic growth across the country.
  • The Commission's recommendations also play a vital role in shaping the fiscal policies of both the central and state governments.

7. Recommendations of the Previous Finance Commission

13th Finance Commission Recommendations:

  • Increase the number of court working hours using existing infrastructure.
  • Enhance support to Lok Adalats.
  • Provide additional funding to State Legal Services Authorities to enhance legal aid for the marginalized.
  • Promote the use of Alternative Dispute Resolution (ADR) mechanisms.
  • Enhance the capacity of judicial officers and public prosecutors through training programs.
  • Support the creation of a judicial academy in every state for training purposes.
  • Allocate funds for the setting up of specialized courts.
14th Finance Commission's Recommendations:
  • Raised states' share in the divisible pool of central taxes to 42%
  • Revised to 41% after the number of states reduced to 28
  • The withdrawal of Planning Commission grants helped manage the situation

15th Finance Commission Recommendations:

  • Gather quantifiable data on the level of various services available in different states.
  • Collect corresponding unit cost data to estimate cost disabilities among states.
  • Fill gaps in statistical data through the efforts of the Ministry of Statistics.

8. Need for realistic expectations regarding  the following 16th Finance Commission

  • Acknowledging Implementation Challenges: Recognize the challenges and complexities involved in implementing Finance Commission recommendations, such as coordination issues, administrative capacity, and resistance to change. This understanding will help shape realistic expectations and strategies for addressing these challenges.
  • Strengthening Implementation Mechanisms: Focus on improving the implementation mechanisms and processes. This includes enhancing coordination and cooperation between the Union and state governments, strengthening administrative capacity at all levels, and streamlining the implementation of conditionalities to facilitate smoother execution.
  • Robust Monitoring and Evaluation: Establish effective monitoring and evaluation mechanisms to track the progress and outcomes of implemented reforms. Regular assessment will help identify implementation gaps and provide opportunities for course correction and improvement.
For Prelims: Finance Commission, Article 280, Fiscal Consolidation, Fiscal Federalism, and Alternative Dispute Resolution (ADR) mechanism.
For Mains: 1. Discuss the Role and Challenges of the Finance Commission in Promoting Fiscal Federalism and Ensuring Equitable Resource Distribution in India. (250 words).
 

Previous year Question

1. With reference to the Finance Commission of India, which of the following statements is correct? (UPSC 2011)
A. It encourages the inflow of foreign capital for infrastructure development.
B. It facilitates the proper distribution of finances among the Public Sector Undertaking.
C. It ensures transparency in financial administration.
D. None of the statements (a), (b), and (c) given above is correct in this context.
Answer: D
 
2. With reference to the Fourteenth Finance Commission, which of the following statements is/are correct? (UPSC 2015)
1. It has increased the share of States in the central divisible pool from 32 percent to 42 percent.
2. It has made recommendations concerning sector-specific grants.
Select the correct answer using the code given below.
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2
Answer: A
 
3. Which of the following is/are among the noticeable features of the recommendations of the Thirteenth Finance Commission? (UPSC 2012)
1. A design for the Goods and Services Tax, and a compensation package linked to adherence to the proposed design.
2. A design for the creation of lakhs of jobs in the next ten years in consonance with India's demographic dividend.
3. Devolution of a specified share of central taxes to local bodies as grants
Select the correct answer using the codes given below: 
A. 1 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3
Answer: C
 
 Source: The Hindu
 
 

MICRO SMALL MEDIUM ENTERPRISES (MSME)

 
 
 
1. Context
 
Labour-intensive textile and apparel and Micro, Small and Medium-scale Enterprise (MSME) sector impacted by geopolitical developments in the last two years received a boost from the Budget with new schemes and higher allocations
 
2. Definition of 'MSME'
Micro, Small, and Medium Enterprises (MSMEs) are businesses that are characterized by their relatively small size in terms of employees, assets, and revenue. These enterprises play a crucial role in economies around the world, contributing to employment generation, economic growth, and innovation. The definitions of MSMEs can vary from country to country, but there are general guidelines provided by international organizations like the World Bank and the United Nations.

The definition of MSME varies from country to country. In India, an MSME is defined as a business with:

  • Micro enterprise: Up to 10 employees and an investment of up to INR 1 crore (approximately USD 130,000)
  • Small enterprise: Up to 50 employees and an investment of up to INR 10 crore (approximately USD 1.3 million)
  • Medium enterprise: Up to 200 employees and an investment of up to INR 50 crore (approximately USD 6.5 million)
3. Importance of MSME's

The importance of MSMEs in an economy includes:

  • Employment Generation: MSMEs are significant contributors to employment, especially in economies with limited opportunities for large-scale industrial employment.

  • Local Economic Development: MSMEs often operate at a local level, contributing to the development of local communities and economies.

  • Innovation and Entrepreneurship: Many innovative ideas and entrepreneurial ventures start as MSMEs. They have the flexibility to adapt quickly to changing market demands and experiment with new business models.

  • Diversity and Resilience: A diverse ecosystem of MSMEs can contribute to a more resilient economy by reducing dependence on a few large corporations.

  • Contributions to GDP: The combined contributions of MSMEs to a country's Gross Domestic Product (GDP) can be significant, even if individual businesses are relatively small.

4. New Criteria for MSME's

The new criteria for the classification of micro, small and medium enterprises (MSMEs) in India was notified by the Ministry of Micro, Small and Medium Enterprises (MSME) on June 1, 2020. The new criteria are based on the investment in plant and machinery or equipment and the annual turnover of the enterprise.

The following are the new criteria for the classification of MSMEs:

  • Micro enterprise: An enterprise with:
    • Investment in plant and machinery or equipment not more than Rs.1 crore (approximately USD 130,000)
    • Annual turnover not more than Rs. 5 crore (approximately USD 650,000)
  • Small enterprise: An enterprise with:
    • Investment in plant and machinery or equipment not more than Rs.10 crore (approximately USD 1.3 million)
    • Annual turnover not more than Rs. 50 crore (approximately USD 6.5 million)
  • Medium enterprise: An enterprise with:
    • Investment in plant and machinery or equipment not more than Rs.50 crore (approximately USD 6.5 million)
    • Annual turnover not more than Rs. 250 crore (approximately USD 3.25 million)
5. Challenges faced by MSME's

Micro, small, and medium enterprises (MSMEs) play a vital role in the Indian economy, accounting for over 90% of all enterprises and employing over 40% of the workforce. However, MSMEs face a number of challenges, including:

  • Access to finance: MSMEs often find it difficult to obtain loans from banks and other financial institutions due to their lack of collateral and track record. This can make it difficult for them to expand their businesses or invest in new technologies.
  • Lack of skills: MSMEs often lack the skills and knowledge needed to compete in the global market. This can make it difficult for them to develop new products and services, or to adopt new technologies.
  • Competition from large businesses: MSMEs often face competition from large businesses, which have more resources and economies of scale. This can make it difficult for MSMEs to compete on price or quality.
  • Bureaucracy: MSMEs often face a number of bureaucratic hurdles, such as obtaining licenses and permits. This can be time-consuming and costly, and can discourage entrepreneurs from starting or expanding their businesses.
  • Infrastructure constraints: MSMEs often face infrastructure constraints, such as poor roads and electricity supply. This can make it difficult for them to transport their goods and services, or to operate their businesses efficiently.
  • Unstable government policies: MSMEs are often affected by unstable government policies, such as changes in tax rates or import duties. This can make it difficult for them to plan for the future and make investment decisions.
6. Government Schmes for MSME's
 

Here are some of the prominent schemes and programs for MSMEs by the Union Government of India:

  1. Micro Units Development and Refinance Agency (MUDRA) Yojana:

    • MUDRA Yojana aims to provide financial support to small and micro enterprises by offering loans through various financial institutions. It consists of three categories: Shishu, Kishor, and Tarun, based on the loan amount.

  2. Pradhan Mantri Mudra Yojana (PMMY):

    • PMMY is a scheme to provide financial assistance for the establishment, expansion, and modernization of MSMEs. It offers loans without collateral security up to a certain limit.

  3. Credit Linked Capital Subsidy Scheme (CLCSS):

    • CLCSS provides capital subsidy to MSMEs for technology upgradation, modernization, and replacement of their plant and machinery to improve competitiveness.

  4. Zero Defect Zero Effect (ZED) Certification Scheme:

    • ZED certification encourages MSMEs to adopt best practices and quality standards to enhance product quality while minimizing environmental impact.

  5. Make in India Initiative:

    • The Make in India campaign encourages domestic and foreign companies to manufacture products in India, fostering the growth of the manufacturing sector and MSMEs.

  6. Stand Up India Scheme:

    • This scheme aims to promote entrepreneurship among women and Scheduled Caste/Scheduled Tribe communities by providing loans for starting new enterprises.

  7. Technology Upgradation Support for MSMEs (TEQUP):

    • TEQUP focuses on supporting MSMEs in adopting modern technology and upgrading their production processes to improve quality and competitiveness.

  8. National Manufacturing Competitiveness Programme (NMCP):

    • NMCP includes various components such as Lean Manufacturing Competitiveness Scheme, Design Clinic Scheme, and more, aimed at enhancing the competitiveness of the manufacturing sector, including MSMEs.

  9. Entrepreneurial and Managerial Development of SMEs (EMD-SME):

    • EMD-SME focuses on providing training, capacity-building, and skill development to entrepreneurs and managers of MSMEs.

  10. Skill India Initiative:

    • While not exclusively for MSMEs, the Skill India program aims to provide skill training to individuals, including those in the MSME sector, to improve employability and entrepreneurship.

  11. Export Promotion Capital Goods (EPCG) Scheme:

    • The EPCG scheme allows MSMEs to import capital goods for the purpose of upgrading technology and enhancing export competitiveness with certain duty benefits.

  12. Udyog Aadhaar Registration:

    • The Udyog Aadhaar registration process simplifies the process of registering and obtaining various benefits for MSMEs, such as easier access to credit and government schemes.
7. Way forward
Addressing these challenges often requires a combination of government support, industry initiatives, access to finance, skill development programs, technology adoption, networking opportunities, and tailored solutions that take into account the unique needs of MSMEs.
 

Previous year Questions

1. Consider the following statements with reference to India: (UPSC 2023)
1. According to the 'Micro, Small and Medium Enterprises Development (MSMED) Act, 2006', the 'medium enterprises' are those with investments in plant and machinery between Rs. 15 crore and Rs. 25 crore.
2. All bank loans to the Micro, Small, and Medium Enterprises qualify under the priority sector.
Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2
Answer: B
 
2. Which of the following can aid in furthering the Government's objective of inclusive growth? (UPSC 2011)
1. Promoting Self-Help Groups
2. Promoting Micro, Small and Medium Enterprises
3. Implementing the Right to Education Act
Select the correct answer using the codes given below:
A. 1 only
B. 1 and 2 only
C. 2 and 3 only
D. 1, 2 and 3
Answer: D
 Source: The Hindu
 
 

CENSUS 2027

 
 
 
1. Context
 

The Union Home Ministry got an increase of 9.44% in the total allocation in the Union Budget 2026-27. The overall Budget has increased from ₹2,33,210 crore to ₹2,55,233.53 crore.

The Intelligence Bureau has seen an increase of ₹2,889 crore in Budget allocation from the ₹3,893 crore Budget Estimate in 2025-26 to ₹6,782 crore BE in 2026-27. The Budget was revised to ₹4,193 crore in the current fiscal. The provision is for meeting the administrative expenses of the bureau.

The Population Census, 2027 has been allocated ₹6,000 crore

 
2. Registrar General of India
 
 

  • The Indian Census is the world’s largest administrative and statistical exercise. The Office of the Registrar General and Census Commissioner of India (ORG&CCI), under the Ministry of Home Affairs, is tasked with conducting the decennial census.

  • As per the Census India website, prior to 1951, a temporary Census Organisation was set up for each census. In 1948, the Census Act was enacted to establish a structured process for conducting population censuses and to define the responsibilities of census officials.

  • To systematically collect data on population size, growth, and related statistics, the Government of India decided in May 1949 to create an organisation within the Ministry of Home Affairs under the Registrar General and ex-Officio Census Commissioner.

  • This body was tasked with generating population statistics, including vital statistics and census data, and was later given the responsibility to implement the Registration of Births and Deaths Act, 1969 across the country.

  • Mritunjay Kumar Narayan is the current RGI, assuming office on November 1, 2022. His tenure was extended last year until August 4, 2026, or until further orders.

  • According to the Census India website, the RGI’s office oversees the following key functions:

    • Housing & Population Census: The Census Commissioner is the statutory authority responsible for conducting the Housing & Population Census under the Census Act, 1948 and its rules.

    • Civil Registration System (CRS): As Registrar General of India under the Registration of Births & Deaths (RBD) Act, 1969, the RGI ensures the compulsory registration of births and deaths, coordinating civil registration and vital statistics across all States and Union Territories.

    • National Population Register (NPR): Prepared under the Citizenship Rules, 2003, the NPR collects information on all individuals who are usually resident in India, as part of the broader Citizenship Act, 1955 framework.

    • Mother Tongue Survey: This survey records mother tongues consistently reported across multiple Census decades and documents linguistic features of selected languages.

    • Sample Registration System (SRS): The ORG&CCI implements the SRS, a large-scale sample survey conducted semi-annually to estimate vital statistics such as birth rate, death rate, infant mortality rate, and maternal mortality rate at the state level

 
3. History of Census in India
 

  • India’s first nationwide census, though non-synchronous, was carried out in 1872. It attempted to count people across most regions of the country, but some areas under British rule were not covered.

  • The first synchronous census of India was conducted in 1881 under the supervision of W.C. Plowden.

  • The 1881 Census represented a major step toward a modern, coordinated census system, focusing not only on complete population coverage but also on the classification of demographic, social, and economic features

 
4. Census 2027
 
 

  • The Census 2027 will mark India’s 16th decennial Census overall and the eighth since Independence. The exercise will gather population data at the village, town, and ward levels, covering parameters such as housing conditions, amenities, assets, demographic characteristics, religion, Scheduled Castes and Scheduled Tribes, language, literacy and education, economic activity, migration, and fertility.

  • On June 16, the Centre officially notified its plan to conduct the Census 2027. This marks the first time a decennial Census has been delayed by six years. Some key features of the upcoming Census include:

    • Digital Census: For the first time, Census 2027 will be fully digital, with data collected via dedicated mobile applications. Citizens will also have the option to self-enumerate, and caste data will be recorded electronically.

    • Caste enumeration: On April 30, the Cabinet Committee on Political Affairs (CCPA) approved the inclusion of caste data in the Census.

    • Real-time monitoring and management: The Registrar General of India (RGI) is developing a Census Monitoring & Management System (CMMS) website to enable real-time oversight of the exercise. Over 35 lakh enumerators and supervisors will be deployed, which is more than 30% higher than the 27 lakh personnel used for the 2011 Census

 

5.  NPR

  • The NPR, unlike the Census, is a comprehensive identity database of every "usual resident" in the country and the data proposed to be collected at the family level can be shared with States and other government departments.
  • Though Census also collects similar information, the Census Act of 1948 bars sharing any individual's data with the State or Centre and only aggregate data at the administrative level can be released.
  • According to Citizenship Rules 2003 under the Citizenship Act, 1955, NPR is the first step towards a compilation of the National Register of Indian Citizens (NRIC/NRC).
  • Assam is the only State where an NRC has been compiled based on the directions of the Supreme Court, with the final draft of Assam's NRC excluding 19 lakhs of the 3.29 crores applicants.
  •  Assam Government has rejected the NRC in its current form and demanded re-verification of 30 per cent of names included in the NRC in areas bordering Bangladesh and 10 per cent in the remaining State.
  • In 2020, the NPR was opposed by several State governments such as West Bengal, Kerala, Rajasthan, Odisha, Bihar, Andhra Pradesh, Telangana, Punjab and Chhattisgarh and Civil Society Organisations due to its link with the proposed NRC as it might leave many people stateless for want of legacy documents.
  • There are apprehensions that the Citizenship Amendment Act 9 (CAA), 2019 allows citizenship based on religion to six undocumented religious communities from Pakistan, Afghanistan and Bangladesh who entered India on or before December 31, 2014, will benefit non-Muslims excluded from the proposed citizens' register, while excluded.
  • Muslims will have to prove their citizenship. The government has denied that the CAA and NRC are linked and there are currently any plans to compile a countrywide NRC.

5.1. The current status of NPR

  • The NPR was first collected in 2010 when the Congres government was in power at the Centre.
  • It was updated in 2015 and already has details of 119 crore residents.
  • In March 2020, the Ministry of Home Affairs (MHA) amended the Census Rules framed in 1990 to capture and store the Census data in an electronic form and enabled self-enumeration by respondents.
  • The NPR is scheduled to be updated with the first phase of Census 2021.
  • For this phase (house listing and household phase), 31 questions have been notified, while for the population enumeration, the second and main phase 28 questions have been finalised but are yet to be notified.
  • The NPR is expected to collect details on 21 parameters of all family members, up from 14 questions in 2010 and 2015.
  • The Sub-heads include passport number, relationship to head of the family, whether divorced/ widowed or separated, mother tongue if non-worker, cultivator, labourer, government employee, daily wage earner among others.
  • The form also has a column on Aadhar, mobile phone, Voter ID and driver's licence.
  • Though the government has claimed that the NPR form has not been finalised yet, the sample form is part of the Census of India 2021 Handbook for Principal/District Census Officers and Charge Officers in 2021.
  • The NPR has retained contentious questions such as "mother tongue, place of birth of father and mother and last place of residence", possible indicators to determine inclusion in the Citizenship register.
  • The questions were opposed by the State governments of West Bengal, Kerala, Rajasthan and Odisha in 2020.
  • The final set of questions of both the phases and NPR was asked during a pre-test exercise in 2019 in 76 districts in 36 States and Union Territories covering a population of more than 26 lakhs.
 
 
 
For Prelims: NPR, CAA, Census, Covid-19, Expenditure Finance Committee, Registrar General of India, Registration of Births and Deaths Act, of 1969, The Treatise on Indian Censuses Since 1981, Assam, 
For Mains:
1. How can citizens file Census details online? Explain the norms being laid down and discuss the reasons for National Population Register being made compulsory for those who want to fill out the form digitally. (250 Words)
 
 
Previous Year Questions
 
Prelims:
 
1. Consider the following statements: (UPSC 2009)
1. Between Census 1951 and Census 2001, the density of the population of India has increased more than three times.
2. Between Census 1951 and Census 2001, the annual growth rate (exponential) of the population of India has doubled.
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: D
 
2. In the context of vaccines manufactured to prevent COVID-19 pandemic, consider the following statements: (UPSC 2022)
1. The Serum Institute of India produced COVID-19 vaccine named Covishield using mRNA platform.
2. Sputnik V vaccine is manufactured using vector based platform.
3. COVAXIN is an inactivated pathogen based vaccine.
Which of the statements given above are correct?
A. 1 and 2 only            B. 2 and 3 only                   C. 1 and 3 only              D. 1, 2 and 3
 
Answer: B
 
3. Sinovac given for Covid-19 is a  (UPPSC Combined State Exam 2022)
A. Protein sub-unit
B. Non-replicating viral vector
C. Whole virus vaccine
D. mRNA vaccine
 
Answer: C
 
4. Along with the Budget, the Finance Minister also places other documents before the Parliament which Include "The Macro Economic Framework Statement". The aforesaid document is presented because this is mandated by (UPSC 2020) 
A. Long-standing parliamentary convention
B. Article 112 and Article 110 (1) of the Constitution of India
C. Article 113 of the Constitution of India
D. Provisions of the Fiscal Responsibility and Budget Management Act, 2003
Answer: D
 
5. Who is the Census Commissioner of India in 2021? (ICAR Technician 2022)
A. Dr Vivek Joshi
B. Dr C Chandramouli
C. Shri Sailesh
D. DK Sikri
 
Answer: A
 
6. The Registration of Birth and Death Act came into force in the year _____. (UPSSSC Junior Assistant 2020) 
A. 1964      B. 1969    C.  1972        D.1981
 
Answer: B
 
7. Consider the following States: (UPSC 2022)
1. Andhra Pradesh
2. Kerala
3. Himachal Pradesh
4. Tripura
How many of the above are generally known as tea-producing States?
A. Only one State
B. Only two States
C. Only three States
D. All four States
 
Answer: C
 
8. Consider the following rivers (UPSC 2014) 
1. Barak
2. Lohit
3. Subansiri
Which of the above flows/flow through Arunachal Pradesh? 
A. 1 only    B.2 and 3 only     C. 1 and 3 only      D. 1, 2 and 3
Answer: B
 
Mains:
1. Two parallel run schemes of the Government, viz the Adhaar Card and NPR, one as voluntary and the other as compulsory, have led to debates at national levels and also litigations. On merits, discuss whether or not both schemes need run concurrently. Analyse the potential of the schemes to achieve developmental benefits and equitable growth. (UPSC 2014)
 
Source: The Hindu
 

GROSS DOMESTIC PRODUCT (GDP)

 
 
1. Context
 
The Centre’s fiscal deficit target, which is broadly the amount by which its expenditure exceeds revenue, has been set at 4.3% of the GDP for the financial year 2026-27, entailing a reduction from 4.4% as reported in the Revised Estimates for 2025-26.
 
2. Gross Domestic Product (GDP)
 
Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. It is often used as a measure of a country's economic health
GDP provides insight into the overall economic health of a nation and is often used for comparing the economic output of different countries.

There are three primary ways to calculate GDP:

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

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

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

3. Measuring GDP

GDP can be measured in three different ways:

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

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

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

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

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

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

4. Gross Value Added (GVA)

 

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

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

GVA = Output Value - Intermediate Consumption

Where:

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

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

  1. Definition and Scope:

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

  2. Foreign Income and Payments:

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

  3. Net Factor Income from Abroad:

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

  4. Foreign Direct Investment:

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

  5. Measurement Approach:

    • GDP: GDP can be calculated using three different approaches: production, income, and expenditure approaches.
    • GNP: GNP is primarily calculated using the income approach, as it focuses on the income earned by residents from their economic activities.
 
 
 
 
For Prelims: GDP, GVA, FDI, GNP
For Mains: 1.Discuss the recent trends and challenges in India's GDP growth
2.Examine the role of the service sector in India's GDP growth
3.Compare and contrast the growth trajectories of India's GDP and GNP
 
 
Previous Year Questions
1.With reference to Indian economy, consider the following statements: (UPSC CSE, 2015)
1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade.
2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer (b)
2.A decrease in tax to GDP ratio of a country indicates which of the following? (UPSC CSE, 2015)
1. Slowing economic growth rate
2. Less equitable distribution of national income
Select the correct answer using the code given below:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer (a)
Previous year UPSC Mains Question Covering similar theme:
Define potential GDP and explain its determinants. What are the factors that have been inhibiting India from realizing its potential GDP? (UPSC CSE GS3, 2020)
Explain the difference between computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015. (UPSC CSE GS3, 2021)
 
Source: indianexpress
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