Note4Students
From UPSC perspective, the following things are important :
Prelims level: What is the dependency ratio?
Mains level: What are the opportunities for India?
Why in the News?
In a recent statement, the Finance Minister highlighted the pressing need for sophistication in India’s manufacturing sector to drive economic growth and competitiveness.
- The sophisticated manufacturing sector provides a conducive environment to enhance the efficiency of producing goods and services.
What is the current state of Indian Manufacturing?
- India’s manufacturing sector’s Gross Value Added (GVA) as a percentage of GDP has shown an upward trend (since 2014), currently hovering around 18%. There is a consensus that to compete on a global scale, Indian manufacturing needs to evolve and embrace sophistication in its processes, technologies, and products.
- India’s Dependency Ratio: The dependency ratio is a measure that compares the number of dependents (people who are either too young or too old to work) to the working-age population.
- According to the Economic Survey 2018-19, India’s Demographic Dividend will peak around 2041, when the share of working-age,i.e. 20-59 years, population is expected to hit 59%.
Importance of Sophistication in Manufacturing:
- Leveraging the Demographic Dividend: India’s young population and low dependency ratio offer a significant advantage in terms of labor force and consumption. To capitalize on this demographic dividend, there is a strong focus on ramping up skills in the Indian workforce through initiatives like the Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
- Enhancing Productivity and Quality: Embracing sophistication is crucial for enhancing productivity, quality, and competitiveness in the global market. By investing in technology, automation, and research and development, manufacturers can improve efficiency and deliver high-quality products.
- Increasing Share in Global Value Chains: To increase India’s share in global manufacturing and value chains, the government is considering providing policy support. This will help reduce dependence on imports and make India more Self-reliant (Atmanirbhar).
- Attracting Investments: Sophistication in manufacturing can attract significant investments from global companies looking to reduce their dependence on China. According to a Capgemini Research Institute report, 65% of senior executives in the U.S. and Europe plan to increase manufacturing investments significantly in India.
- Unlocking Opportunities in Specific Sectors: Sophistication in manufacturing can help unlock opportunities in sectors such as food spending, financial services, and consumer markets. By 2031, India’s consumer market is projected to double, presenting a $2.9 trillion opportunity.
What are the Challenges hindering the growth of the Sophisticated Manufacturing sector?
- Inadequate infrastructure: Lack of reliable power supply, poor connectivity, and limited access to advanced technologies. Difficulty in obtaining credit, especially for small and medium enterprises (SMEs), to invest in technology upgradation.
- Skill gaps: Shortage of skilled workers trained in modern manufacturing techniques and technologies
- Weak Intellectual Property Rights: Insufficient protection of patents, trademarks, and copyrights, discouraging innovation
- Regulatory hurdles: Complex bureaucratic processes, lack of clarity in policies, and inconsistent implementation
Government Initiatives and Support
- Make in India Initiative: Launched in 2014, the program aims to transform India into a global manufacturing hub by facilitating investment, fostering innovation, building best-in-class infrastructure, and making doing business easier. It focuses on 25 sectors, including automobiles, aviation, chemicals, and pharmaceuticals.
- National Manufacturing Policy: Introduced in 2011, it aims to increase the share of manufacturing in GDP to 25% and create 100 million jobs by 2022. It focuses on enhancing skill development, promoting innovation, and creating a favorable business environment.
- Production Linked Incentive (PLI) Scheme: It provides financial incentives to boost domestic manufacturing and attract investments in key sectors such as electronics, pharmaceuticals, automobiles, and telecom. It has helped reduce import dependence and increase exports in sectors like telecom and mobile manufacturing
Way Forward:
- Role of Financial Institutions: By providing access to capital, facilitating technology adoption, and offering financial expertise, they can empower manufacturers to invest in sophistication and drive growth.
- Enhanced Strategies: Manufacturers need to prioritize investments in technology, automation, research and development, and skill development to enhance sophistication. Collaborating with financial institutions for tailored financial solutions can help accelerate this transformation.
- Competitive Outlook: As Indian manufacturing embraces sophistication, it is poised to unlock new opportunities, improve competitiveness, and contribute significantly to the country’s economic growth. By aligning with the Finance Minister’s vision, the sector can chart a path towards sustainable success in the global market.
Conclusion: The Finance Minister’s call for sophistication in Indian manufacturing underscores the need for a strategic shift towards innovation, efficiency, and quality. With concerted efforts from stakeholders, including the government, financial institutions, and manufacturers, India can elevate its manufacturing sector to new heights of success and competitiveness.
Mains PYQ:
Q Demographic Dividend in India will remain only theoretical unless our manpower becomes more educated, aware, skilled and creative.” What measures have been taken by the government to enhance the capacity of our population to be more productive and employable? (UPSC IAS/2016)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: NSG group and NPT
Mains level: Why did India choose to conduct nuclear tests?
Why in the News?
In the year 2024, India’s Pokhran-I have completed 50 years of its tests. The present variation in adopting Nuclear policies (especially Russia and China) around the world, reminds us of the historic Pokhran tests of 1974 by the Indian Government that were held amid secrecy.
Background:
- Post-World War II, new global alliances and alignments emerged amidst the Cold War between the US and USSR.
- The Nuclear Nonproliferation Treaty (NPT) signed in 1968, aimed to prevent the spread of nuclear weapons. It defined nuclear-weapon states and non-nuclear states, but India objected to its discriminatory nature towards non-nuclear states.
- India refused to sign the NPT due to its failure to address India’s concerns about the discriminatory nature of the treaty, particularly regarding non-nuclear states’ obligations.
Why did India choose to conduct Nuclear Tests?
- India viewed the NPT as discriminatory towards non-nuclear states like itself, leading to its decision to conduct nuclear tests independently.
- Indian scientists, notably Homi J Bhabha and Vikram Sarabhai, laid the groundwork for nuclear energy in India. The Department of Atomic Energy (DAE) was established in 1954.
- Changes in leadership post-1960s, coupled with conflicts with China and Pakistan, influenced India’s decision to pursue nuclear capabilities. China’s nuclear tests in 1964 also played a role.
How did Pokhran-I happen?
- In Secrecy and Uncertainty: India conducted the nuclear test at Pokhran in 1974 without prior announcement, even amidst internal uncertainty among key decision-makers.
- Operation Smiling Buddha (MEA designation: Pokhran-I) was the code name of India’s first successful nuclear weapon test on 18 May 1974.
- The test demonstrated India’s nuclear capabilities and its ability to defend itself, though India chose not to weaponize immediately. The choice of Buddha Jayanti for the test date carried symbolic significance.
- By Autonomous Approval: Despite opposition from some advisers, Prime Minister Indira Gandhi gave the go-ahead for the test, signaling India’s resolve.
What was the impact of the Pokhran-I Test?
- Global Criticism: India faced criticism and sanctions from various countries, including the US, following the tests. The US enacted the Nuclear Non-Proliferation Act in 1978, halting nuclear assistance to India.
- Despite international criticism, India asserted itself as a nuclear-capable nation, paving the way for future developments like Pokhran-II in 1998.
- Diplomatic Goals: India sought acceptance as a responsible nuclear power and aimed to join international groups like the Nuclear Suppliers Group (NSG), facing resistance from some countries, notably China.
- India’s nuclear tests marked a significant milestone in its defense and foreign policy, shaping its stance on nuclear issues and its position in global nuclear politics.
Way forward for being in the NSG group:
Engage in Diplomatic Outreach:
- Strengthen bilateral relations with NSG member countries.
- Engage in diplomatic dialogue to address concerns and build consensus on India’s membership.
Demonstrate Commitment to Nonproliferation:
- Continue adhering to nonproliferation norms and standards.
- Showcase India’s responsible nuclear behaviour and track record in nuclear security.
Mains PYQ
Q With growing energy needs should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy. (250 Words, 15 Marks) (UPSC IAS/2018)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Wood Age; Schoningen Wooden Artefacts; Prehistory vs. History; Christian Jorgensen Thomsen’s classification
Why in the News?
New research suggests the Stone Age be termed the “Wood Age” due to advanced wooden tools found in Schoningen, Germany.
About Schoningen Wooden Artefacts
- A study of around 300,000-400,000-year-old wooden artefacts excavated from a coal mine in Schoningen, Germany, between 1994 and 2008.
- It reveals that these were not merely “sharpened sticks” but “technologically advanced tools” requiring skill, precision, and time to build.
- The tools demonstrated a broad spectrum of wood-working techniques including splitting, scraping or abrasion.
Back2Basics: Periodising Human Prehistory
- Prehistory vs. History: Human ‘history’ began with the advent of writing, while everything before that is ‘prehistory,’ studied using archaeological evidence and ethnographic research.
- 19th Century Periodization: Danish archaeologist Christian Jorgensen Thomsen introduced the Stone Age, Bronze Age, and Iron Age classification based on technological advancements. This classification has been refined to reflect diverse cultural experiences.
The Stone Age Timeline
- Beginning: The Stone Age began when hominids first used stone tools, around 3.4 million years ago in Ethiopia, and lasted until about 6,000-4,000 BP (Before Present).
- Divisions: The Stone Age is divided into:
- Palaeolithic (Old Stone Age): Characterized by rudimentary stone tools and a hunter-gatherer lifestyle, ending around 11,650 BP.
- Mesolithic (Middle Stone Age): A transitional phase.
- Neolithic (New Stone Age): Beginning roughly 12,000 BP in West Asia, marked by settled agriculture and domestication of animals.
|
Use of Wood: Preservation Bias and Archaeological Evidence
- Stone Tools: Stone tools provide significant insight into the lives and capabilities of early humans. Charles Darwin noted that even the rudest stone tools required a high degree of mental sophistication and physical dexterity.
- Other Materials: Evidence shows the use of bones, antlers, clay, and some metalworking alongside stone tools. However, evidence of woodworking is limited due to wood’s perishable nature.
- Lesser Evidence of Wood: Wood has been recovered from less than 10 of thousands of Lower Palaeolithic sites (up to around 200,000 BP). The earliest wooden dwellings date to only 700,000 BP, much later than the earliest stone tools.
PYQ:
[2021] With reference to the period of the Gupta dynasty in ancient India, the towns Ghantasala, Kadura and Chaul were well-known as
(a) ports handling foreign trade
(b) capitals of powerful kingdoms
(c) places of exquisite stone art and architecture
(d) important Buddhist pilgrimage centres |
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Asset Reconstruction Companies, SARFAESI Act, 2002;
Mains level: NA
Why in the News?
- After the allegations of ‘unethical practices’ by ARCs, including aiding defaulting promoters, the RBI intervened, with the Deputy Governor urging integrity and ethical conduct in their operations.
The new guidelines laid out by the RBI:
- Enhanced Capital Requirements:
- Minimum Capital Requirement Increase: ARCs are now mandated to maintain a minimum capital requirement of Rs 300 crore, a significant increase from the previous Rs 100 crore stipulation established on October 11, 2022.
- Transition Period for Compliance: Existing ARCs are granted a transition period to reach the revised Net Owned Fund (NOF) threshold of Rs 300 crore by March 31, 2026.
- Interim Requirement: However, by March 31, 2024, ARCs must possess a minimum capital of Rs 200 crore to comply with the new directives.
- Supervisory Actions for Non-Compliance:
- ARCs failing to meet the prescribed capital thresholds will face supervisory action, potentially including restrictions on undertaking additional business until compliance is achieved.
- Expanded Role for Well-Capitalized ARCs:
- Empowerment of Well-Capitalized ARCs: ARCs with a minimum NOF of Rs 1000 crore are empowered to act as resolution applicants in distressed asset scenarios.
- Investment Opportunities: These ARCs are permitted to deploy funds in government securities, scheduled commercial bank deposits, and institutions like SIDBI and NABARD, subject to RBI specifications. Additionally, they can invest in short-term instruments such as money market mutual funds, certificates of deposit, and corporate bonds commercial papers.
- Investment Cap: Investments in short-term instruments are capped at 10% of the NOF to mitigate risk exposure.
About Asset Reconstruction Company (ARC):
|
Description |
| About |
ARC is a special financial institution that acquires debtors from banks at a mutually agreed value and attempts to recover the debts or associated securities. |
| Regulation |
- ARCs are registered under the RBI.
- Regulated under the SARFAESI Act, 2002 (Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act).
(Note: For reading more details on SARFAESI Act you can visit on our article named “RBI asks for SARFAESI Act Compliance” of Sept 2023) |
| Objective |
ARCs take over a portion of the bank’s non-performing assets (NPAs) and engage in asset reconstruction or securitization, aiming to recover the debts. |
| Functions |
- Asset Reconstruction: Acquisition of bank loans or other credit facilities for realization.
- Securitization: Acquisition of financial assets by issuing security receipts.
|
| Foreign Investment |
100% FDI allowed in ARCs under the automatic route. |
| Limitiations |
- ARCs are prohibited from undertaking lending activities.
- They can only engage in securitization and reconstruction activities.
|
| Working |
- Bank with NPA agrees to sell it to ARC at a mutually agreed value.
- ARC transfers assets to trusts under SARFAESI Act.
- Upfront payment made to bank, rest through Security Receipts.
- Recovery proceeds shared between ARC and bank.
|
| Security Receipts |
Issued to Qualified Institutional Buyers (QIBs) for raising funds to acquire financial assets. |
| Significance |
- Banks can clean up their balance sheets and focus on core banking activities.
- Provides a mechanism for resolution of NPAs and debt recovery
|
PYQ:
[2018] With reference to the governance of public sector banking in India, consider the following statements:
- Capital infusion into public sector banks by the Government of India has steadily increased in the last decade.
- To put the public sector banks in order, the merger of associate banks with the parent State Bank of India has been affected.
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 |
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Baobab Trees and its conservation status
Mains level: NA
Why in the News?
A recent study uncovers the origins and evolution of Baobabs, uniquely shaped trees in Madagascar, with species also native to Africa and Australia.
Do you know?
- Mandu, in the Dhar district of Madhya Pradesh, is perhaps the only place in India where baobab trees are found in abundance, with an estimated 1,000 trees in the periphery of the town.
- Madhya Pradesh state government has plans to apply for a GI (Geographical Indication) tag for the Khorasani Imli or the fruit of the baobab.
- A Baobab tree near the Golconda Fort in Andhra Pradesh is believed to be more than 400 years old.
- Aside from Mandu, baobab trees have been recorded in Prayagraj (formerly Allahabad) in Uttar Pradesh, Wai in Maharashtra, and some places in Gujarat and Andhra Pradesh.
|
About Baobab Trees
- Baobabs are deciduous trees (that lose their leaves in autumn) belonging to the genus Adansonia. It comprises 8 distinct species:
- Adansonia digitata in continental Africa.
- Adansonia gregorii in Northwestern Australia.
- 6 other species endemic to Madagascar.
- Baobabs are known for:
- Great heights, with some extending up to 50 metres.
- Exceptionally long lifespans, going up to 2,000 years.
- They have trunks with large circumferences; thin, spindly branches.
- Nicknamed “upside down” trees because their tops resemble uprooted plants turned upside down.
Conservation Status:
- ‘Threatened’ with extinction according to the IUCN Red List of Threatened Species.
- ‘Least Concern’ category but still faces threats such as residential and commercial development and livestock farming and ranching.
Importance of Conservation:
- The study emphasized the conservation of the baobab as a keystone species:
- Keystone species provide essential resources, such as food or shelter, for a guild of animals.
- In return, these animals provide essential services, such as pollination or diaspore dispersal.
Why Baobab tree is called the “Mother of Forests”?
- They can store large amounts of fresh water in their extraordinary trunks.
- It also allows the baobab tree to produce nutritious fruits even during the driest years.
- This makes them true life savers during times when water is scarce.
- In local cultures, they are revered for multiple uses:
- Edible fruits and seeds.
- Seed oil used for cooking.
- Bark fibre used for clothing.
|
PYQ:
[2021] “Leaf litter decomposes faster than in any other biome and as a result the soil surface is often almost bare. Apart from trees, the vegetation is largely composed of plant forms that reach up into the canopy vicariously, by climbing the trees or growing as epiphytes, rooted on the upper branches of trees.” This is the most likely description of-
(a) Coniferous forest
(b) Dry deciduous forest
(c) Mangrove forest
(d) Tropical rain forest |
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
