Current Affairs Reverse Engineering – CARE (13-06-2024)
| News at a Glance |
| Economy: Rural inflation still over 5%; food inflation nears 9% in urban India |
| Society: Countering early marriage: Assam girl students to get monthly stipends under Mukhya Mantri Nijut Moina scheme |
| Environment and Ecology: 3 states seek shrinking of eco-sensitive areas in Western Ghats |
| International Relations: India & UAE Forge New Path with Local Currency Settlement System to Reshape Economic Relations |
| Social Issues: India Slips in Global Gender Gap Index, Ranks 129th |
Rural inflation still over 5%; food inflation nears 9% in urban India
Source: The Hindu
UPSC Syllabus Relevance: GS 3 Inflation, Economy
Context: New data on food and rural inflation in India
Why in News
- India’s retail inflation eased further to a 12-month low of 4.75% in May but food inflation remained elevated and almost unchanged at 8.69%.
Key Highlights
- India’s consumer price inflation eased a tad from 4.83% in April to a one-year low of 4.75% in May, but food price rise remained unchanged at 8.7%, with urban households facing a sharper 8.83% spike in food inflation.
- Retail inflation stood at 4.31% in May 2023, with food prices rising less than 3%.
- The Consumer Price Index (CPI) was up 0.5% in May, while the food price index had risen 0.73% from April’s levels.
- The sequential rise in food prices was 0.7% for rural consumers and 0.9% for their urban counterparts.
- The gap between urban and rural consumers’ inflation trends was sharp for the third consecutive month, with rural households seeing a 5.3% rise in prices in May.
- For urban consumers, the retail inflation pace was 4.15%, just fractionally higher than 4.14% in March and 4.11% in April.
- While retail inflation has now been below 6% since September 2023, it is still far from the central bank’s 4% target.
- The Reserve Bank of India (RBI) expects retail inflation to average 4.5% this year and has projected an average of 4.9% for the April to June quarter.
- With April and May inflation coming in slightly below that, it is likely that price rise may resurge to over 5% this month.
Vegetable prices
- Barring spices, where the inflation rate cooled to 4.3%, the lowest level in at least two years, price pressures persisted for most food items.
- Vegetable prices rose 27.3% in May, while the inflation rate accelerated for cereals (8.7%), eggs (7.6%), fruits (6.7%) as well as pulses.
- With prices rising 17.14% in May, pulses have now completed a year of over 10% inflation.
Food Prices
- Terming the rising inflation in key food items such as cereals and pulses, and the rigidity in vegetable prices as worrying.
- The progress of the southwest monsoon would influence the food inflation trajectory over the next few months and there could be softening this month.
- Meat and fish prices were up 7.3% in May, easing a tad from 8.2% in April.
- Edible oil prices were down 6.7% from last year compared with a 9.4% dip in April, making it the mildest decline in prices in at least 14 months.
Inflation
- Inflation refers to the overall increase in the prices of goods and services, coupled with a decrease in people’s purchasing power.
- This means that when inflation rises (without an equivalent rise in your income), you are able to buy fewer things than you could buy previously, or you have to pay more money for the same stuff now.
- A “rising” inflation rate implies that the rate (at which the prices rise) itself is increasing.
Food Inflation
- Food inflation is the rise in the price of food commodities. It is a dynamic concept.
- The increase in production, labour and transportation costs, population and climate changes, hoarding of food products, and land exploitation cause food inflation.
Consumer Price Index (CPI)
- CPI inflation, also known as retail inflation, is the rate at which the prices of goods and services that consumers buy for personal use increase over time.
- It measures the change in the cost of a basket of goods and services that are typically purchased by households, including food, clothing, housing, transportation, and medical care.
- Four types of CPI are as follows:
- CPI for Industrial Workers (IW).
- CPI for Agricultural Labourer (AL).
- CPI for Rural Labourer (RL).
- CPI for Urban Non-Manual Employees (UNME).
| CARE MCQ | UPSC PYQ |
Q1. Consider the following statements:
Which of the above statements is/are incorrect?
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Q. Consider the following statements: (2020)
Which of the statements given above is/are correct? (a) 1 and 2 only (b) 2 only (c) 3 only (d) 1, 2 and 3 Ans: (a) |
| Answer 1– B
Explanation –
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Assam Girl students to get monthly stipends under Mukhya Mantri Nijut Moina scheme
Source: The Hindu
UPSC Relevance: GS 1- Society
Context: Mukhya Mantri Nijut Moina scheme
Why in News
- The Assam government has announced a fiscal scheme for girl students, Mukhya Mantri Nijut Moina scheme, in a bid to prevent them from being married off before they come of age.
Mukhya Mantri Nijut Moina scheme
- Mukhya Mantri Nijut Moina scheme is an admission assistance to help increase the enrolment of girls in institutes of higher studies.
- According to the scheme, girl students enrolled in Class 11, the first year of a degree course, and the first year of post-graduation in government-run schools, colleges, and universities will be provided with a monthly stipend.
- The monthly stipend for girls enrolled in Class 12, first year of graduation, and post-graduation (B.Ed. included) in the first year will be ₹1,000, ₹1,250, and ₹2,500 for 10 months.
Exclusions
- The financial support will be irrespective of the economic status of the girls but the daughters of MLAs and girls studying in private institutions have been excluded from the scheme.
- Meritorious girls eligible for a scooty worth ₹70,000 under an ongoing scheme will also not be eligible for Nijut Moina unless they forego the two-wheeler and opt for the monthly stipend.
Rights and Privileges
- The Chief Minister said the fiscal incentive for girl students was in line with the government’s efforts to stop child marriages in the State.
- Hence, married girls will not be beneficiaries of the scheme except for the post-graduation courses.
- Beneficiaries who drop out or get married while studying up to the degree level will cease to get the stipends.
- The stipend will be transferred to the account of each beneficiary student on the 11th of every month.
- The government seeks to take the responsibility of educating the girls by reducing the economic burden on their parents or guardians.
- More than two lakh girls are estimated to benefit from Nijut Moina, which aims to increase the overall gross enrolment ratio beyond Matriculation and help eliminate the social evil of child marriage.
- He also announced a one-time grant of ₹10,000 under the Anundoram Borooah Scheme for boys and girls who score more than 75% marks in the Class 12 exams.
| CARE MCQ | UPSC PYQ |
Consider the following statements:
Which of the above statements is/are correct?
|
Q. Which of the following provisions of the Constitution does India have a bearing on Education? (2012)
Select the correct answer using the codes given below: (a) 1 and 2 only (b) 3, 4 and 5 only (c) 1, 2 and 5 only (d) 1, 2, 3, 4 and 5 Ans- (d) |
| Answer 2– B
Explanation –
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3 states seek shrinking of eco-sensitive areas in Western Ghats
Source: Indian Express
UPSC Relevance: GS3- Environment and Ecology
Context: Eco-sensitive areas (ESA)
Why in News
- Karnataka, Maharashtra and Goa, three of the six states where the Centre has proposed eco-sensitive areas (ESA) to protect the Western Ghats, have sought a reduction in the extent of these ESAs to allow development works.
Key Highlights
- Sources said the expert committee will submit its report to the Environment Ministry by September despite a June-end deadline.
- While the panel will consider the states’ demands, it will stick to the principles of ecological protection and follow a uniform approach, they said.
- The panel, headed by Sanjay Kumar, former Director General of Forests, and comprising members from the Indian Institute of Science, Bengaluru, and the Indian Institute of Remote Sensing, was appointed in July 2022.
- It has since held multiple meetings with officials from the six Western Ghat states — Gujarat, Maharashtra, Goa, Karnataka, Kerala and Tamil Nadu — besides seeking inputs from Geological Survey of India, National Institute of Hydrology, Forest Survey of India and Indian Institute of Tropical Meteorology.
What is Eco-Sensitive Areas (ESA)?
- The National Environment Policy (2006) defined the Eco-Sensitive Zones “as areas/zones with identified environmental resources having incomparable values which require special attention for their conservation” because of its landscape, wildlife, biodiversity, historical and natural values.
- Eco-Sensitive Areas (ESAs)are located within 10 kms around Protected Areas, National Parks and Wildlife Sanctuaries.
- ESAs are notified by the Ministry of Environment, Forest and Climate Change (MoEFCC) under Environment Protection Act 1986.
- The basic aim is to regulate certain activities around National Parks and Wildlife Sanctuaries so as to minimise the negative impacts of such activities on the fragile ecosystem encompassing the protected areas.
Background of Eco-Sensitive Areas (ESA)
- The government had constituted a High-Level Working Group under the Chairmanship of Dr. Kasturirangan to conserve and protect the biodiversity of Western Ghats while allowing for sustainable and inclusive development of the region.
- The Committee had recommended that identified geographical areas falling in the six States of Kerala, Karnataka, Goa, Maharashtra, Gujarat and Tamil Nadu may be declared as Ecologically Sensitive Areas.
- The Committee recommended to bring just 37% of the Western Ghats under the Ecologically Sensitive Area (ESA) zones — down from the 64% suggested by the Gadgil Committee report.
- The Western Ghats Ecology Expert Panel, also known as the Gadgil Committee was an environmental research commission appointed by the government in 2011.
- A draft notification related to the same was issued in 2018 mentioning the areas to be notified in the ESA.
Reasons of Reduction in ESA
- The states flagged the need for rationalisation of these ESAs, spread over 56,825 sq km in the Ghats in their discussions with an expert panel appointed by the Centre to finalise a draft notification.
- Karnataka, where an area of 20,668 sq km was proposed as ESA, maintained its opposition to the K Kasturirangan panel report, which formed the basis for the original draft, saying the livelihood of people in the region would be hit.
- The Kasturirangan panel had identified 37 percent of the Ghats as ecologically sensitive and recommended prohibition or regulation of certain activities.
- Goa, on the other hand, demanded reduction of the 1,461 sq km earmarked as ESAs in the state by nearly 370 sq km. Johnson Fernandes, Director, Dept. of Environment and Climate Change, Goa said, the reduction of ESAs has been sought in the Sattari, Canacona and Ponda talukas.
Kasturirangan Committee
- The Kasturirangan Commission sought to balance the development and environment protection in contrast to the system proposed by the Gadgil report.
The committees’ major recommendations were:
- Instead of the total area of Western Ghats, only 37% of the total area to be brought under ESA.
- Complete ban on mining, quarrying and sand mining in ESA.
- No thermal power projects to be allowed and hydropower projects be allowed only after detailed study.
- Red industries i.e. which are highly polluting to be strictly banned.
- The report recommended exclusion of inhabited regions and plantations from the purview of ESAs making it a pro farmer approach.
| CARE MCQ | UPSC PYQ |
Q3. Consider the following statements with reference to the Eco-Sensitive Areas (ESA):
Which of the statements given above is/are correct?
|
Q. In which one among the following categories of protected areas in India are local people not allowed to collect and use the biomass? (2012)
(a) Biosphere Reserves (b) National Parks (c) Wetlands declared under Ramsar Convention (d) Wildlife Sanctuaries Ans: (b) |
| Answer 3 A
Explanation
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India & UAE Forge New Path with Local Currency Settlement System to Reshape Economic Relations
Source: News on Air
UPSC Syllabus Relevance: GS 2- International Relations, GS-3 Economy
Context: India & UAE Forge New Path with Local Currency Settlement System to Reshape Economic Relations.
Why in News
- The introduction of the Local Currency Settlement System, or LCSS, is set to revolutionize how transactions are conducted between India & UAE economies.
Key Findings
- In a landmark move during a visit by Indian Prime Minister Narendra Modi last year, India and the UAE laid the groundwork for a Local Currency Settlement System.
- During the PM’s visit, the Reserve Bank of India and the Central Bank of the UAE signed a Memorandum of Understanding to this effect.
- At a high-profile event held at the Taj Dubai last week, the Indian Business and Professional Council, the National Payments Corporation of India, and the Reserve Bank of India came together to discuss the far-reaching implications of this system.
- Soon, the deployment of the RuPay Stack as a domestic card scheme called JAYWAN in the UAE is scheduled, with the customer roll-out beginning in July 2024 and additional features planned for October 2024.
Local Currency Settlement System, or LCSS
- The Local Currency Settlement System (LCSS) is a cross border payment mechanism which allows trading entities from two countries to make payments in their own national currencies.
- Local Currency Settlement System, or LCSS system will allow exporters and importers to invoice and pay for goods and services in their respective domestic currencies-Indian Rupees and UAE Dirhams.
- The LCSS framework offers several benefits apart from reducing seigniorage costs; LCSS also facilitates easier access to trade credit and export advances in partner currencies and greater economic and financial integration between India and the UAE.
What does the LCSS mean for businesses and consumers?
- LCSS simplifies the process of cross-border transactions, making it easier and cheaper to do business between the two countries.
- The elimination of intermediary currency conversion will significantly reduce costs.
- For industries like gold, gems, and jewelry-major trade commodities between India and the UAE can translate to substantial savings and efficiency.
- The MOU signed also includes plans to link domestic debit and credit card networks.
- This will enable direct processing of transactions, benefiting millions of Indian tourists who frequent the UAE, and enhancing their convenience and spending power.
- Currently, RuPay cards are already accepted in the UAE, and with the LCSS, more robust digital payment solutions are on the horizon.
- Initiatives are underway to facilitate UPI payments and integrate various financial messaging systems, ensuring secure and swift transactions.
Significance of LCSS
- Integrating India’s advanced Unified Payments Interface (UPI) with the UAE’s payment infrastructure will create a seamless, transparent, and cost-effective financial ecosystem.
- This step reduces dependency on intermediary currencies like the US Dollar, thereby cutting down transaction costs and settlement times.
- These initiatives collectively aim to strengthen India’s digital payment ecosystem, making it more convenient, secure, and efficient for retail customers and businesses.
- With efforts like integrating UPI with the Aani service to facilitate personal remittances and money transfers, and enabling bilateral acceptance of RuPay cards internationally, the future looks promising.
- The strategic benefits of this system are profound.
- Additionally, reducing reliance on foreign currencies, enhances financial stability and provides a natural hedge against currency fluctuations.
- The mutual acceptance of domestic card networks and the facilitation of direct card transactions without relying on international card networks not only benefits the residents and businesses in both countries but also enhances the ease of doing business for tourists and expatriates.
- For Indian tourists, who form the largest tourist demographic in the UAE, this means seamless transactions, fewer currency conversion hassles, and better financial transparency.
India- UAE Relations
- As of March 31, 2024, trade between India and the UAE stood at approximately $84 billion.
- With the comprehensive economic partnership agreement signed in 2022, the two nations are well on their way to achieving the $100 billion non-oil trade target by 2030.
- The UAE is India’s second-largest trading partner and the largest export destination, while India ranks as the UAE’s third-largest trading partner and second-largest export destination.
Way Forward
- In essence, the Local Currency Settlement System is not just about easing transactions; it’s about fostering deeper economic integration, enhancing financial transparency, and building a resilient economic partnership.
- As we move forward, this initiative is expected to set a precedent for similar arrangements globally, highlighting the importance of innovative financial solutions in a globalised world.
| CARE MCQ | UPSC PYQ |
| Q4. Consider the following statements:
Statement I: Local Currency Settlement System, or LCSS facilitates transactions in local currencies, reducing reliance on foreign currency exchanges. Statement II: Recently UAE refused to cooperate with implementation of the Local Currency Settlement System (LCSS) with India. Which one of the following is correct in respect of the above statements? A. Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I B. Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-1 C. Statement-I is correct but Statement-II is incorrect D. Statement-I is incorrect but Statement-II is correct |
Q.81 In the context of India, which of the following factors is/are contributor/contributors to reducing the risk of a currency crisis?(2019)
1. The foreign currency earnings of India’s IT sector. 2. Increasing government expenditure. 3. Remittances from Indians abroad.
Select the correct answer using the code given below. (a) 1 only (b) 1 and 3 only (c) 2 only (d) 1,2 and 3 only Ans – b |
| Answer 4 C
Explanation
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India Slips in Global Gender Gap Index, Ranks 129th; Strong in Education & Political Empowerment
Source: News on Air
UPSC Syllabus Relevance: GS 2- Social Issues
Context: Global Gender Gap Index
Why in news
- India has slipped two places to the 129th position in the recently released Global Gender Gap Index by the World Economic Forum.
Key highlights
- India has slipped two places to the 129th position, while Iceland retained its top spot.
- Within South Asia, India ranked fifth after Bangladesh, Nepal, Sri Lanka, and Bhutan, with Pakistan ranked last.
- Despite the drop, India showed strong gender parity in secondary education enrollment and political empowerment, securing the 10th position for the number of years with female/male heads of state in the last 50 years.
- However, India’s overall gender gap closure stands at 64.1 per cent in 2024, a slight decline from 64.2 per cent last year.
What is Global Gender Gap Index?
- Global Gender Gap Index benchmarks countries on their progress towards gender parity in four Key dimensions with Submatrices.
- Economic Participation and Opportunity
- Educational Attainment
- Health and Survival
- Political Empowerment
- The report tracks gender gap in the world on four key parameters, namely, economic participation and opportunity, educational attainment, health and survival, and political empowerment.
- India is ranked 129 among 146 countries in the 2024 report, which is two positions down from where it was in 2023.
- On each of the four sub-indices as well as on the overall index the GGG index provides scores between 0 and 1, where 1 shows full gender parity and 0 is complete imparity.
- It is the longest-standing index, which tracks progress towards closing these gaps over time since its inception in 2006.
- Objectives:
- To serve as a compass to track progress on relative gaps between women and men on health, education, economy and politics.
- Through this annual yardstick, the stakeholders within each country are able to set priorities relevant in each specific economic, political and cultural context.
Indian Initiatives to reduce Gender Gap
- Economic Participation and Health and Survival: Beti Bachao Beti Padhao: It ensures the protection, survival and education of the girl child.
- Mahila Shakti Kendra: Aims to empower rural women with opportunities for skill development and employment.
- Mahila Police Volunteers: It envisages engagement of Mahila Police Volunteers in States/UTs who act as a link between police and community and facilitates women in distress.
- Rashtriya Mahila Kosh: It is an apex micro-finance organization that provides micro-credit at concessional terms to poor women for various livelihood and income generating activities.
- Sukanya Samriddhi Yojna: Under this scheme girls have been economically empowered by opening their bank accounts.
- Female Entrepreneurship: To promote female entrepreneurship, the Government has initiated Programmes like Stand-Up India and Mahila e-Haat (online marketing platform to support women entrepreneurs/ SHGs/NGOs), Entrepreneurship and Skill Development Programme (ESSDP).
- Kasturba Gandhi Balika Vidyalaya: They have been opened in Educationally Backward Blocks (EBBs).
| CARE MCQ | UPSC PYQ |
| Q5. Consider the following pairs with regards to Global Gender Gap Index 2024:
Country Rank
Which of the pairs given above are correct?
|
Q. Which of the following gives ‘Global Gender Gap Index’ ranking to the countries of the world? (2017)
(a) World Economic Forum (b) UN Human Rights Council (c) UN Women (d) World Health Organization Ans: (a) |
| Answer 5 C
Explanation
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