9 PM UPSC Current Affairs Articles 27 November, 2024

Mains Oriented Articles

GS PAPER - 2

Trump’s Tariffs and Their Impact on Trade

Source: The post Trump’s Tariffs and Their Impact on Trade has been created, based on the article “Trump’s tariff plans could impact global trade — including India” published in “Indian Express” on 27th November 2024.

UPSC Syllabus Topic: GS Paper2- International Relations-Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

Context: The article discusses Donald Trump’s proposed tariffs on imports from Mexico, Canada, and China, aiming to boost U.S. manufacturing and address immigration issues. It highlights potential inflation, bipartisan protectionism, and India’s need to adapt by attracting investments and reforming its economy.

What is Donald Trump’s Tariff Proposal?

1. Donald Trump proposed a 60% tariff on Chinese imports and 10-20% on other countries during his campaign.
2. After his election, he announced a plan to impose a 25% tariff on all products from Mexico and Canada, and an additional 10% on China.
3. These tariffs aim to encourage U.S. manufacturing, rebalance trade, and improve government finances.

What Impact Could These Tariffs Have?

1. The tariffs could disrupt supply chains, lead to inflation, increase costs for consumers and businesses, and affect interest rates.
2. Economists at the Peterson Institute of International Economics suggest that these tariffs could cost U.S. households more than $2,600 annually.

How Have Tariffs Been Received Politically?

1. Trump’s tariff policies have received support from both Republicans and Democrats. His administration imposed tariffs on various products in 2018 and 2019.
2. The Biden administration has largely kept these tariffs and introduced additional hikes, indicating a shift towards protectionism in U.S. trade policy.

For detailed information on Decline of multilateralism, especially with Donald Trump’s re-election read this article here

What is the Situation with India?

1. India was not initially targeted by Trump’s tariffs, despite him previously labeling India as a “tariff king” and a “trade abuser.”
2. India needs to use its diplomatic channels to negotiate with the U.S. and should work towards making its economy more open and less protectionist to attract more investments.
3. This could help India capitalize on the opportunities arising from Trump’s trade policies.

For detailed information on Trump’s Re-election and India US Relations read this article here

Question for practice:

Discuss the potential impacts of Donald Trump’s proposed tariffs on the U.S. economy and global trade.

India’s Inequality and Neoliberal Reforms Versus Constitution

Source: The post India’s Inequality and Neoliberal Reforms Versus Constitution has been created, based on the article “From a republic to a republic of unequals” published in “The Hindu” on 27th November 2024

UPSC Syllabus Topic: GS Paper2- Constitution of India —historical underpinnings, evolution, features, amendments, significant provisions and basic structure.

Context: The article discusses how India’s Constitution aims for an egalitarian society through state intervention, but neoliberal reforms have widened economic and social inequalities. It highlights rising wealth concentration, overlapping with caste-based inequality, threatening the Constitution’s vision of equality.

For detailed information on Status of Inequality In India read this article here

How does the Constitution promote an egalitarian society?

1. Egalitarian Vision: The Constitution seeks to minimize inequalities in income, status, and opportunities, aiming for an egalitarian society. Article 38(2) and Article 39(c) emphasize reducing wealth concentration and ensuring equality.
2. Affirmative Action: Policies like reservations and treating unequals unequally were introduced to bridge historical and social gaps.
3. Fundamental Rights and DPSP: Part III and Part IV ensure equality of liberties, opportunities, and addressing economic disparities, inspired by Rawls’ egalitarian liberalism.
4. Judicial Interpretation: In D.S. Nakara vs Union of India (1982), the Supreme Court emphasized socialism as ensuring social security and a decent life for all. In Samatha vs State of Andhra Pradesh (1997), it affirmed that reducing income inequality and creating equal opportunities align with constitutional values.

What impact have neoliberal reforms had on inequality?

1. Neoliberal reforms in the 1990s shifted India’s focus from welfare policies to market-driven growth, widening inequalities.
2. The top 1% of earners increased their income share from 6% in the 1980s to 22.6% by 2022-23 (Chancel and Piketty).
3. Wealth concentration worsened; the top 1% owned 40.1% of total wealth in 2022-23, surpassing pre-Independence levels.
4. Economic and social inequalities overlap, with upper castes owning 90% of billionaire wealth by 2022-23, while Scheduled Tribes had none and OBC representation fell from 20% in 2014 to 10%.
5. Oxfam reported a rise in billionaires, from 9 in 2000 to 119 in 2023, highlighting extreme inequality.
6. This shift violates constitutional ideals of reducing inequality, as wealth concentration benefits a privileged few while marginalizing the majority.

What is the risk to constitutional democracy?

1. Neoliberalism undermines the Constitution’s vision by increasing inequalities.
2. Social and economic inequalities risk political democracy, as warned by Dr. B.R. Ambedkar.
3. To honor the Constitution, India must critically evaluate its policies and refocus on equality.

Question for practice:

Examine how neoliberal reforms have impacted the Constitution’s vision of an egalitarian society in India.

Challenges faced by the High Seas Treaty

Source: The post challenges faced by the High Seas Treaty has been created, based on the article “Between hope and hurdles on the high seas” published in “The Hindu” on 27th November 2024

UPSC Syllabus Topic: GS Paper2-International Relations-Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Context: The article discusses the High Seas Treaty, signed by India, aiming to protect marine biodiversity and regulate resources beyond national jurisdictions. It highlights challenges like weak enforcement, geopolitical tensions, and gaps in aligning high-seas governance with coastal regulations.

What is the High Seas Treaty?

1. The High Seas Treaty, officially known as the Biodiversity Beyond National Jurisdiction (BBNJ) Agreement, aims to protect marine ecosystems and promote sustainable use of resources in areas beyond national jurisdictions.
2. It is the third implementing agreement under UNCLOS, after treaties on deep-sea mining and fisheries management.
3. Key goals include: Conserving marine biodiversity, sharing benefits from marine genetic resources, Requiring environmental impact assessments (EIAs) for harmful activities.

For detailed information on The UN High Seas Treaty read this article here

What are the challenges to the High Seas treaty?

1. Low Ratification Levels: Out of 104 signatories, only 14 have ratified the treaty, far from the required 60 for enforcement.
2. Maritime Disputes: Territorial conflicts, like in the South China Sea, delay consensus on Marine Protected Areas (MPAs). Coastal states worry MPAs may harm local economies and livelihoods.
3. Marine Genetic Resources: Wealthier nations might underreport profits from marine genetic resources, undermining the global sharing fund.
4. Overlapping Regulations: The treaty may conflict with the Convention on Biological Diversity, creating enforcement gaps and disadvantaging smaller nations.
5. Limited Technology Transfer: Low-income nations lack resources for maritime research. The treaty offers no enforcement mechanisms for equitable partnerships.
6. Overlooked Ecosystem Interconnections: Pollution and overfishing in Exclusive Economic Zones (EEZs) affect international waters, as seen in the 2021 X-Press Pearl disaster and overfishing in West Africa.
7. Weak Enforcement Framework: EIAs are required for planned activities but the treaty excludes harmful practices like oil and gas exploration. Coastal states often avoid international review of EIAs. Weak institutions and conflicting legal standards make enforcement difficult, especially in developing regions.

How can the treaty succeed?

1. Align Coastal and High-Seas Governance: Integrate regulations to address ecosystem interconnections, such as overfishing in West Africa depleting high-seas stocks.
2. Support Global South: Provide technical and financial aid for equitable participation in ocean research.
3. Commitment from Wealthier Nations: They must provide technical and financial aid.

Question for practice:

Examine the challenges faced by the High Seas Treaty in achieving its goals and suggest measures to ensure its successful implementation.

GS PAPER - 3

India’s Growth: Strengths, Challenges, and Prospects

Source: The post India’s Growth: Strengths, Challenges, and Prospects has been created, based on the article “Revival on the cards for Indian economy” published in “Indian Express” on 27th November 2024

UPSC Syllabus Topic: GS Paper3-Indian Economy and issues relating to planning, mobilisation, of resources, growth, development and employment.

Context: The article discusses India’s economic growth, expected above 7% this year. It highlights positive indicators like strong GST collections, rising vehicle sales, and good crop prospects. Concerns remain about inflation and urban stress, but investment momentum is strong.

For detailed information on India’s Economic Growth and challenges read this article here

What is the current state of India’s economic growth?

1. India’s economy is growing healthily, expected to achieve a growth rate above 7% this year.
2. Purchasing Managers Index (PMI): For the last three months, both services and manufacturing PMIs have been high, between 57-60, indicating expansion.
3. GST Collections: Collections have reached Rs 12.74 lakh crore in the first seven months of the year, surpassing last year’s Rs 11.64 lakh crore.
4. Vehicle Sales: Two-wheeler sales are up by 16% this year. Car sales increased by 9% in October due to the festival season.

What challenges are affecting India’s economic growth?

1. Urban Stress: Some consumer goods companies report subdued consumption, partly due to the “shradh” period affecting sales.
2. Inflation Concerns: Inflation is at 6.2%, driven by high food prices, especially onions and pulses.
3. Rural Demand Weakness: Rural demand remains muted due to lower farm output and past inflation.
4. Uneven Investment Activity: Consumer goods industries face underutilized capacity, limiting new investments.
5. Global Risks: Potential global disruptions, like U.S. policy changes, could affect inflation and growth.

How is investment momentum performing?

1. Private Sector: Investment is recovering, supported by bank credit and other financial instruments.
2. Government Spending: Central and state government capex was slow initially due to elections, but it’s picking up.
3. Infrastructure: Sectors like metals, cement, and power, especially renewables, are seeing significant investment.

What Does the Future Look Like?

The Bank of Baroda forecasts a growth rate of 7.3-7.4% for the year, a slight decrease from last year’s 8.2%. The RBI predicts a 7.2% growth rate, maintaining its anti-inflation stance with no immediate rate cuts expected.

Question for practice:

Discuss the factors contributing to India’s economic growth and the challenges it faces in sustaining this momentum.

Prelims Oriented Articles (Factly)

National Small Savings Fund (NSSF)

News: The Delhi government has submitted a proposal to the Union Finance Ministry to borrow Rs 10,000 crore from the National Small Savings Fund (NSSF).

About National Small Savings Fund (NSSF)

1. NSSF is a fund that collects money from various small savings schemes.

2. It was established in 1999 within the Public Account of India.

3. The fund is administered by the Ministry of Finance, under the National Small Savings Fund (Custody and Investment) Rules, 2001. These rules are based on Article 283(1) of the Constitution.

4. The money held in the NSSF is used by the Centre and states to cover their fiscal deficits. The remaining amount is invested in central and state government securities.

5. Loans made from NSSF are more expensive than market borrowings.

About Small saving Schemes

1. These are government-backed savings instruments designed to encourage citizens of all ages to save consistently.

2. Savings scheme funds can be used for a mortgage, child’s education, marriage, or medical emergencies.

3. Features:

• They offer returns higher than bank fixed deposits.
• They come with sovereign guarantees and provide tax benefits.
• The interest rates on small savings schemes are revised quarterly.

4. Small Saving Schemes can be grouped under three heads:

(a) Post office Deposits: Post Office Savings Account, Post Office Time Deposits (1,2,3 and 5 years), Post Office Recurring Deposits and Post Office Monthly Account.

(b) Savings Certificates: National Savings Certificate and Kisan Vikas Patra

(c) Social Security Schemes: Public Provident Fund, Senior Citizens Savings Scheme and Sukanya Samriddhi Account

Alternative investment funds (AIFs)

News: According to SEBI’s latest data, Alternative Investment Funds (AIFs) have raised over ₹5 trillion. Investment commitments have also surpassed ₹12 trillion for the first time.

About Alternative investment funds (AIFs)

1. An AIF is a fund established or incorporated in India that serves as a privately pooled investment vehicle. These investment vehicles adhere to the SEBI (Alternative Investment Funds) Regulations, 2012.

2. AIF collects funds from sophisticated investors, both Indian and foreign, to invest according to a defined investment policy for the benefit of its investors.

3. An AIF can be established or incorporated in the form of a trust or a company or a body corporate or a limited liability partnership

4. Categories of Alternative Investment Funds (AIFs)

• Category I-They invest in start-up or early-stage ventures or other areas which the government considers as socially or economically desirable. Examples include venture capital funds like angel funds, SME Funds, social venture funds, infrastructure funds etc.
• Category II– They are those which are not classified under Category I or Category III. They do not use leverage or borrowing, except for daily operational needs and as allowed by regulations. Examples include real estate funds, debt funds, private equity funds, and funds for distressed assets.
• Category III– They are funds which employs complex or diverse trading strategies and may use leverage, including investing in listed or unlisted derivatives. Examples include hedge funds and PIPE funds.

Note– Category I and II AIFs are required to be close ended and have a minimum tenure of three years. Category III AIFs may be open ended or close ended.

5. Minimum number of investors- No scheme of an AIF (other than angel fund) shall have more than 1000 investors. In case of an angel fund, no scheme shall have more than forty-nine angel investors.

SC rejects ballot paper plea

News: The Supreme Court dismissed a Public Interest Litigation (PIL) that called for the reinstatement of ballot papers instead of Electronic Voting Machines (EVMs).

About Electronic Voting Machine (EVM)

1. It is a device used to electronically record, and count votes cast in elections.

2. They were first used in the Paravur Assembly Constituency of Kerala in the year 1982.

3. It is manufactured and supplied to the Election Commission of India (ECI) by Bharat Electronics Limited (under the Ministry of Defense) and Electronic Corporation of India Limited (under the Department of Atomic Energy).

4. EVM consists of three units:

• Ballot Unit– Functions like a keyboard using which the voters cast their votes.
• Control Unit– It controls the operations of the Ballot Units and manages the data. It remains with the Presiding Officer or a Polling Officer.
• Voter Verifiable Paper Audit Trail (VVPAT) – Allow the voters to verify that their votes are cast as intended. When a vote is cast, a slip is printed containing the serial number, name and symbol of the candidate and remains exposed through a transparent window for 7 seconds.

Note– Presently, the M3 Model of ECI-EVM and VVPAT are used.

Mechanism for verification of EVM Burnt Memory

In April 2024, the Supreme Court allowed losing candidates to request verification of the burnt memory in EVMs and VVPAT machines.

1. Candidates finishing 2nd or 3rd can request verification of the microcontroller memory in 5% of EVMs, including the control unit, ballot unit, and VVPAT per Assembly segment or Lok Sabha segment to check for tampering.

2. Candidates must identify the EVMs to be verified by polling station or serial number and can be present during the process.

3. Requests for verification must be submitted within 7 days of the result declaration.

4. Candidates bear the verification cost, but expenses are refunded if tampering is found.

Verification Process:

1. The District Electoral Officer (DEO) oversees the verification.

2. Candidates can select units to be verified by polling station number or serial number of the EVM components like Ballot Unit, Control Unit, and VVPAT.

3. A written request must be submitted to the DEO.

4. DEOs send the list of requests to the State Chief Electoral Officer, who informs the EVM manufacturers (BEL and ECIL) within 30 days of the result declaration.

5. Verification will begin after the 45-day period following the declaration of results, during which Election Petitions can be filed.

6. If no petitions are filed, the checking process will proceed. If a petition is filed, checking will only start after a court order permits it.

7. The process must begin within 30 days of manufacturers being notified about any Election Petitions.