Current Affairs Reverse Engineering- Care (21-11-2024)
| News at a Glance |
| International Relations: India, Australia agree on tie-up in clean energy, push for trade pact |
| Modi first Indian PM to visit Guyana in 56 years, signs 10 pacts to expand ties |
| Social Issues: India to have 350 million children by 2050, faces urgent challenges to secure their future: UNICEF report |
| Economy: Why India’s trade deficit is not necessarily a weakness |
| How can urbanisation boost skills and create employment? |
India, Australia agree on tie-up in clean energy, push for trade pact
Source: Indian Express
UPSC Syllabus Relevance: GS2 International Relations
Context: India and Australia Agreement
Why in News
- The recent partnership between India and Australia focuses on cooperation in renewable energy, defence, economic growth, and strategic sectors like space and shipbuilding, while also advocating for reforms in global institutions.
Overview
- India and Australia have strengthened their partnership through a series of initiatives and agreements aimed at enhancing cooperation in various sectors, including renewable energy, defence, trade, and regional security.
- These efforts were highlighted during a recent meeting between the leaders of both countries on the sidelines of the G20 Leaders’ Summit in Brazil.
Key Agreements and Areas of Focus:
- Renewable Energy Partnership (REP): The two countries launched the Renewable Energy Partnership (REP), which will guide practical cooperation in renewable energy sectors like solar energy, green hydrogen, energy storage, and related investments. This initiative highlights both nations’ commitment to addressing climate change and promoting clean energy sources.
- Defence and Security Cooperation: India and Australia are working towards a stronger, long-term partnership in defence and security. This includes enhancing collective strength and contributing to regional peace and security. The countries also agreed to renew and strengthen their Joint Declaration on Defence and Security Cooperation in 2025 to reflect their growing collaboration in this area.
- Comprehensive Economic Cooperation Agreement (CECA): Both nations expressed their commitment to further developing their economic relationship through the Comprehensive Economic Cooperation Agreement (CECA). This will build on the success of the Economic Cooperation and Trade Agreement (ECTA) signed in 2022, which has already led to a 40% increase in trade between the two countries over the last two years.
- Strategic Collaboration in Critical Sectors: Future cooperation is planned in key sectors such as critical minerals, shipbuilding, space exploration, and sports. The two countries also see significant potential in aligning India’s “Make in India” initiative with Australia’s “Future Made in Australia” vision, which is expected to generate new jobs, foster economic growth, and secure long-term prosperity.
- Regional Peace and Diplomacy: Both nations reiterated their commitment to regional peace, particularly in the Indo-Pacific region, and emphasized the importance of resolving conflicts through dialogue and diplomacy. This reflects a shared goal of ensuring stability and prosperity in the region.
- Global Institutions and Reforms: The two countries discussed the need for reforms in global institutions to better reflect current geopolitical realities and challenges. They both advocate for a more inclusive and effective global governance system.
- Quad Summit and Future Collaboration: India invited Australia to participate in an upcoming summit of the Quad, a strategic forum that promotes a free and open Indo-Pacific.
- Indian Diaspora: Australia reaffirmed its commitment to supporting the Indian community, particularly students, who make up a significant portion of the diaspora in Australia.
Conclusion:
- The meeting between Modi and Albanese marks a significant step in deepening the strategic, economic, and cultural ties between India and Australia.
- Their collaboration across renewable energy, defence, trade, and regional security will likely shape the future of both countries’ relationship, with a focus on shared values of peace, prosperity, and innovation in a rapidly changing world.
| CARE MCQ | UPSC PYQ |
| Q1. Which of the following are key areas of cooperation between India and Australia, as discussed in their recent partnership agreement?
1. Renewable Energy Partnership (REP) focusing on solar energy, green hydrogen, and energy storage. 2. Strengthening the defence and security collaboration, including a long-term vision for regional peace. 3. Comprehensive Economic Cooperation Agreement (CECA) to enhance bilateral trade and economic growth. 4. Cooperation in the fields of space exploration, shipbuilding, and critical minerals. 5. Reaffirmation of support for global institutions without advocating for any reforms. Select the correct answer using the code below: A) 1, 2, 3, and 4 only |
Q. Consider the following statements 2022
Which of the statements given above are correct? a) 2 and 4 only b) 3 and 5 only c) 1, 3 and 4 only d) 1 and 2 only Ans: C |
| Answer – 1 – A
Explanation – The recent partnership between India and Australia includes the following key areas of cooperation:
· Therefore, option A is the correct answer. |
Modi first Indian PM to visit Guyana in 56 years, signs 10 pacts to expand ties
Source: Indian Express
UPSC Relevance: GS2 International Relations
Context: Prime Minister Narendra Modi’s Guyana visit
Why in News
- The visit to Guyana focused on strengthening bilateral cooperation in energy, digital payments, defence, healthcare, agriculture, and trade through the signing of 10 agreements.
Overview
- Prime Minister Narendra Modi’s visit to Guyana marked a significant milestone in strengthening bilateral relations between India and Guyana, with the two countries sealing 10 agreements across a variety of sectors.
- This visit, the first by an Indian Prime Minister to Guyana in 56 years, emphasizes the growing partnership between the two nations in areas like energy, defence, digital payment systems, pharmaceuticals, and agriculture.
Key Areas of Cooperation:
- Energy Partnership: A significant area of focus was the development of a long-term partnership in hydrocarbons, with Guyana playing a key role in India’s energy security. The countries agreed to prepare a blueprint for future cooperation in the energy sector, particularly in the context of Guyana’s expanding oil reserves.
- Digital Payments System: India’s Unified Payments Interface (UPI), a widely successful digital payment platform, will be deployed in Guyana. This will facilitate smoother financial transactions between the two nations, promoting cashless payments and financial inclusion in Guyana.
- Defence Cooperation: Both countries agreed to enhance collaboration in defence through capacity-building initiatives, including scholarships and training programs. Additionally, India supplied two Dornier aircraft to Guyana to aid in maritime surveillance, strengthening the country’s defence capabilities.
- Healthcare and Pharmaceuticals: The establishment of a Jan Ausadhi Kendra in Guyana was also agreed upon, which will provide affordable medicines and improve healthcare access. This aligns with India’s ongoing efforts to support global healthcare needs by making medicines more accessible.
- Agriculture and Food Security: Cooperation in agriculture was expanded, with India contributing to Guyana’s food security. For instance, millet seeds were provided to enhance local food production, helping strengthen the country’s agricultural capacity and food supply.
- Trade and Economic Growth: The countries agreed to work on expanding mutual trade and economic cooperation, focusing on sectors such as energy, agriculture, and pharmaceuticals. These agreements are expected to foster new economic opportunities and increase collaboration between businesses.
- Regional and Global Cooperation: Discussions also covered regional and global issues, emphasizing the importance of continued collaboration on international platforms. Both nations are keen to work together to address global challenges, particularly in areas that affect developing countries.
- Personal and Diplomatic Ties: The visit was seen as a significant milestone in the relationship between the two nations, highlighting shared values and the desire to enhance cooperation in various sectors. The strengthening of ties reflects the mutual respect and understanding between the two countries.
Conclusion:
- This visit to Guyana represents a deepening of the bilateral relationship, with agreements that focus on energy, defence, digital innovation, agriculture, healthcare, and trade.
- These initiatives aim to foster long-term cooperation, bringing mutual benefits and setting the foundation for a more prosperous and collaborative future.
| CARE MCQ | UPSC PYQ |
| Q2 Which of the following areas were included in the agreements signed between India and Guyana during the recent visit?
1. Energy cooperation, including a long-term partnership in hydrocarbons. 2. Deployment of India’s UPI digital payment system in Guyana. 3. Capacity-building initiatives in the field of defence. 4. Establishment of a research facility for space exploration. 5. Expansion of agricultural cooperation, particularly in food security. Select the correct answer using the code below: A) 1, 2, 3, and 5 only |
Q. Consider the following statements : (2022)
Which of the statements given above is/are correct? a) 1 and 2 only b) 2 only c) 2 and 3 only d) 3 only Ans: C |
| Answer 2– A
Explanation – The agreements signed between India and Guyana during the visit included cooperation in the following areas:
· Therefore, option A is the correct answer. |
India to have 350 million children by 2050, faces urgent challenges to secure their future: UNICEF report
Source: Indian Express
UPSC Relevance: GS1 Social issues
Context: UNICEF report titled “The Future of Children in a Changing World
Why in News
- The UNICEF report titled “The Future of Children in a Changing World”, part of its flagship State of the World’s Children 2024, highlights significant challenges and opportunities India must navigate to ensure the well-being of its children by 2050.
India’s Demographic Projections
- By 2050, India is projected to have 350 million children, accounting for 15% of the global child population.
- Despite a decline of 106 million children compared to today, India will remain one of the largest contributors to the global child population alongside China, Nigeria, and Pakistan.
Key Challenges Identified
- Exposure to Climate and Environmental Hazards
- By the 2050s, children will face heightened exposure to climate crises:
- Extreme heatwaves: Nearly eight times more children will be exposed compared to the 2000s.
- Risks from floods, air pollution, and water scarcity will particularly affect rural and low-income communities.
- India ranks 26th in the Children’s Climate Risk Index, indicating significant vulnerability.
- By the 2050s, children will face heightened exposure to climate crises:
- Urbanization and Infrastructure
- By 2050, half of India’s population is expected to live in urban areas.
- This necessitates child-friendly and climate-resilient urban planning to address challenges like pollution, overcrowding, and inadequate infrastructure.
- Health and Education
- Climate crises will disproportionately impact children’s health, education, and access to basic resources like clean water and food.
- Increased urbanization and population pressure may strain existing health and education systems.
- Digital Divide
- Technological advancements like AI present opportunities but reveal stark inequalities:
- Only 26% of people in low-income countries have internet access compared to 95% in high-income countries.
- Bridging this gap is critical to ensuring equitable digital opportunities for children.
- Technological advancements like AI present opportunities but reveal stark inequalities:
Opportunities and Recommendations
- Strategic Investments
- Investments in healthcare, education, skilling, and urban infrastructure must be prioritized.
- The focus should be on sustainable development to mitigate resource limitations in lower-income areas.
- Child-Centric Policies
- Children’s rights and well-being should be central to strategies and policies.
- Climate education and empowerment are vital to make children active participants in climate solutions.
- Inclusive Technological Growth
- Development of inclusive frontier technologies to ensure safe and equitable access for all children.
- Programs to address the digital divide, especially in rural and low-income areas.
- Climate-Resilient Planning
- Climate-resilient urban development must cater to the needs of children in urban and semi-urban settings.
- Engaging children in policy-making processes and equipping them with knowledge to combat climate change.
Global Context
- The report identifies three global megatrends affecting children worldwide:
- Demographic Shifts
- Climate Crises
- Frontier Technologies
- The report stresses that decisions made today will shape the future world for children.
Launch and Advocacy
- Released in New Delhi, the report’s launch was accompanied by UNICEF’s #GoBlue campaign, which illuminated monuments like Rashtrapati Bhavan and India Gate in blue.
- Advocates like UNICEF Youth Advocate Kartik Verma emphasized the need for climate education and child empowerment as solutions to the climate crisis.
Conclusion
- The report underscores the importance of inclusive, sustainable, and child-centric approaches to address India’s unique demographic and environmental challenges.
- By fostering strategic investments, innovative urban planning, and technological inclusivity, India can secure a prosperous and sustainable future for its children.
| CARE MCQ | UPSC PYQ |
| Q3. With reference to the UNICEF report “The Future of Children in a Changing World”, consider the following statements:
1. By 2050, India is projected to house the largest child population globally, accounting for 20% of the global child population. 2. India ranks 26th on the Children’s Climate Risk Index, indicating significant exposure to climate risks such as heatwaves and floods. 3. Nearly 95% of children in low-income countries are expected to have internet access by 2050, bridging the digital divide. 4. The report emphasizes the need for child-friendly, climate-resilient urban planning, as half of India’s population is projected to live in urban areas by 2050. Which of the statements given above are correct? (A) 1 and 3 only |
Q. The term ‘Intended Nationally Determined Contributions’ is sometimes seen in the news in the context of (2016)
(a) pledges made by the European countries to rehabilitate refugees from the war-affected Middle East (b) plan of action outlined by the countries of the world to combat climate change (c) capital contributed by the member countries in the establishment of the Asian Infrastructure Investment Bank (d) plan of action outlined by the countries of the world regarding Sustainable Development Goals Ans: (b)
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| Answer 3– B
Explanation – · Statement 1: Incorrect. India will account for 15% of the global child population, not 20%. · Statement 2: Correct. India ranks 26th on the Children’s Climate Risk Index, highlighting vulnerabilities to climate risks. · Statement 3: Incorrect. Only 26% of people in low-income countries have internet access; the digital divide remains stark. · Statement 4: Correct. The report highlights the need for child-friendly and climate-resilient urban planning, as half of India’s population is projected to live in urban areas by 2050. · Therefore, option B is the correct answer. |
Why India’s trade deficit is not necessarily a weakness
Source: Indian Express
UPSC Relevance: GS3 Economy
Context: India’s Trade Deficit and Its Implications
Why in News
- India’s adoption of gender-responsive budgeting highlights its commitment to gender equality, despite challenges like limited data and programme coverage, as noted in the UN’s Beijing + 30 Review
Overview
- India’s trade deficit has been a subject of ongoing debate, often viewed as a weakness in the country’s manufacturing sector.
- However, a deeper understanding reveals that this deficit is not necessarily a sign of weakness but can be attributed to India’s relative strengths in services and its attractiveness as an investment destination.
Trade Deficit and Its Nature
- A trade deficit occurs when a country imports more goods and services than it exports. India has historically had a trade deficit, especially in goods, where imports surpass exports.
- However, this does not necessarily reflect poor performance in manufacturing but rather the strong position of India in services, such as IT and software exports.
- This services export strength offsets the goods trade deficit, meaning India remains a net importer of goods, but has a net surplus in services.
Capital Inflows and Current Account Deficit
- The trade deficit must be viewed in the context of capital inflows and the current account balance. The current account consists of trade (goods and services), income, and current transfers, while the capital account deals with investment flows.
- A country that attracts foreign investment, especially in the form of foreign direct investment (FDI) or portfolio investments, typically experiences a current account deficit.
- This is because capital inflows (in the form of investments) need to be balanced by an outflow on the current account, either in the form of a trade deficit or an accumulation of reserves.
- In simpler terms, capital inflows (money coming into the country for investments) are matched by either a trade deficit or an increase in foreign exchange reserves. For example, if India attracts foreign investment, it will likely have a current account deficit, as the investment inflows contribute to the economy without immediately corresponding to an export surplus.
Reserves: Need and Cost
- India’s foreign exchange reserves are maintained as a cushion against economic shocks (such as global oil price hikes or sudden financial crises). These reserves are crucial for ensuring stability and preventing balance-of-payments crises.
- However, holding excessive reserves incurs costs because the return on reserves is typically lower than the returns provided to foreign investors. Hence, India should aim to maintain adequate reserves to protect against emergencies but avoid accumulating more than necessary.
- The relationship between capital inflows, current account deficits, and reserve accumulation is mathematical. If India attracts significant foreign investment (capital inflows), it will likely face a current account deficit (outflows). If reserves are built, these too will need to be matched with capital inflows. Therefore, capital inflows, current account deficits, and reserves are closely linked.
India’s Trade Deficit as a Feature of Economic Attractiveness
India’s current account deficit is largely seen as the flip side of its success in attracting foreign capital. A net capital inflow is necessary to support economic growth and increase investment, which in turn contributes to the country’s development. India has made a conscious policy choice to maintain a manageable current account deficit (around 2% of GDP) while attracting sufficient foreign capital.
- Current Account Deficit: This deficit is not inherently negative. It reflects the fact that India is an attractive investment destination, drawing foreign investments that complement domestic savings.
- Capital Inflows: As India attracts foreign investments, the capital account balance (inflows) increases, necessitating a matching current account deficit or reserves accumulation.
Composition of India’s Current Account Deficit
India’s current account deficit is primarily driven by the goods trade deficit, meaning India imports more goods than it exports. However, India has a strong export base in services, which helps balance the trade deficit. Some of India’s most notable exports include:
- Pharmaceuticals: India is a major exporter of pharmaceutical products, particularly to the US, where it supplies over one-third of the pharmaceutical consumption.
- Automobiles and Auto Components: India’s automobile industry is another significant contributor to exports.
- IT and Software Services: India’s services sector, particularly IT and business process outsourcing (BPO), is a global leader, which compensates for the goods trade deficit.
India exports these services because of its comparative advantage in areas like software development, IT outsourcing, and skilled labor. The strength of the services sector means that India is a net exporter of services.
Manufacturing and Domestic Demand
- While India’s manufacturing exports are essential, they are not enough to completely eliminate the current account deficit. India’s manufacturing exports, though growing, are smaller compared to countries like Vietnam or Bangladesh. However, this does not mean that Indian manufacturing is weak; rather, it reflects India’s comparative advantage in services over manufacturing.
- The key to boosting Indian manufacturing lies in domestic demand. The argument is that for manufacturing to grow at a faster pace, it needs to be driven by increased domestic consumption. India’s vast and growing population presents a substantial domestic market. If this demand is realized and grows, the need for imports could be met more by domestic production, leading to greater industrial growth and a more balanced trade account.
Key Insights from the Analysis
- Current Account Deficit: A healthy current account deficit in India reflects the country’s attractiveness as an investment destination and the strength of its services sector.
- Capital Inflows and Deficit: Capital inflows and current account deficits are two sides of the same coin. Foreign investments lead to current account deficits, but these inflows are essential for growth.
- Manufacturing Growth: To accelerate manufacturing, the primary driver must be domestic demand rather than focusing solely on exports.
Conclusion
- India’s trade deficit, especially in goods, is not an indicator of a weak economy but rather a reflection of its strength in services and its role as an attractive investment destination.
- The relationship between capital inflows, the current account deficit, and foreign reserves is crucial to understanding this dynamic.
- For India’s manufacturing sector to grow faster, fostering domestic demand should be prioritized, while maintaining a stable and manageable current account deficit that balances foreign investment with economic growth.
| CARE MCQ | upsc pyq |
| Q4. Consider the following statements regarding India’s persistent trade deficit:
1. India’s trade deficit reflects weakness in Indian manufacturing. 2. The trade deficit is a result of India’s relative strength in services and its attractiveness as an investment destination. 3. India’s manufacturing growth can be driven by exports, especially in goods where it holds a comparative advantage. Which of the above statements are correct? A) 1 and 2 only |
Q. Which of the following gives ‘Global Gender Gap Index’ ranking to the countries of the world? (2017)
(a) World Economic Forum Ans: (a)
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| Answer 4- D
Explanation · Statement 1 is incorrect: The trade deficit reflects a structural feature of India’s economy, where the country imports more goods than it exports. However, this does not imply weakness in manufacturing. India’s comparative advantage lies in services, such as IT and pharmaceuticals. · Statement 2 is correct: India’s trade deficit largely arises because it is a net importer of goods while being a net exporter of services. India’s services sector, such as IT and software services, is a significant strength. The trade deficit is partly offset by inflows of capital due to the country’s attractiveness as an investment destination. · Statement 3 is Incorrect: While exports can contribute to manufacturing growth, India’s manufacturing sector is not primarily export-driven. The growth of manufacturing should be driven by domestic demand, not just exports, to ensure sustainable growth. · Therefore, option D is the correct answer. |
How can urbanisation boost skills and create employment?
Source: Indian Express
UPSC Syllabus Relevance: GS3- Economy
Context: Urbanisation and employment
Why in News
- The sixth edition of The Indian Express’s THINC: CITIES seminar series, held in Lucknow, focuses on how urbanisation can enhance skill development and create employment opportunities.
Overview
- This shift from rural to urban areas is primarily driven by the need for jobs, as rural India, with its agriculture-based economy, is unable to create enough employment opportunities for India’s growing population. In contrast, cities offer better prospects for job creation, skill development, and higher incomes.
Key Points:
- Urbanization and Job Creation:
- Shift to Cities: India has been witnessing a growing trend of people moving from rural to urban areas. This shift is largely driven by the aspiration for better jobs and higher income, something that rural India, especially through its agricultural sector, cannot fully provide.
- Role of Cities: Cities are seen as hubs for job creation, offering opportunities not only in terms of employment but also in skill development. However, many cities are struggling to create enough jobs to meet the demands of their growing populations, particularly the youth.
The THINC: CITIES Seminar:
- Event Overview: Sixth edition of The Indian Express’s THINC: CITIES seminar series, will focus on the future of cities in India and the challenges of urbanization.
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Q5. Consider the following statements regarding urbanisation and its impact on employment and skill development in India:
Which of the above statements is/are correct?
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Q. With reference to the Indian economy after the 1991 economic liberalization, consider the following statements: (2020)
Which of the statements given above is/are correct? (a) 1 and 2 only (b) 3 and 4 only (c) 3 only (d) 1, 2 and 4 only Ans: (b)
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| Answer 5- D
Explanation Explanation:
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