PYQ Relevance:
Q) Explain the difference between the computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015. (UPSC CSE 2021) |
Mentor’s Comment: UPSC mains have always focused on India’s Gross Domestic Product (2021), and India from realizing its potential GDP (2020).
An economy grows through two key factors: supply (production of goods and services) and demand (spending on these goods and services). Among demand sources, investment is crucial as it creates a multiplier effect, boosting jobs and income. Consumption follows growth but cannot drive it alone, as sustainable expansion requires strong investment and production.
Today’s editorial talks about India’s GDP growth factors based on demand and supply. This content would help in GS Paper 3 mains Paper.
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Let’s learn!
Why in the News?
An economy’s growth is like navigating two interconnected boats—one representing the supply or production of goods and services.
Is consumption enough to drive growth?
Consumption plays a crucial role in driving economic growth, but it is not sufficient on its own for sustainable long-term growth.
- Consumption-Led Growth is Slower: While consumption boosts demand, it does not create long-term productive capacity. Example: India’s GDP growth in recent years has been driven by consumption (60.3% of GDP in 2023), but it lags behind China’s investment-driven growth.
- Limited Multiplier Effect: Unlike investment, increased consumption has a weaker impact on overall income and job creation. Example: If people buy more smartphones, it benefits retailers but does not significantly boost domestic production if phones are imported.
- Investment is Crucial for Sustainable Growth: Higher investment in infrastructure, industries, and technology leads to job creation and productivity gains. Example: China’s high investment rate (41.3% of GDP in 2023) has helped it achieve rapid economic growth and higher per capita income than India.
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Why is economic growth dependent on two factors?
- Balanced Growth Requires Both Supply & Demand: Economic growth happens when goods and services are produced (supply) and purchased (demand) in a balanced manner.
- Example: A country increasing factory production (supply) must also have enough consumers to buy the products (demand), ensuring sustainable growth.
- Mismatch Leads to Economic Problems
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- If demand > supply, inflation rises due to excessive spending with limited goods.
- If supply > demand, businesses suffer from unsold stock, leading to job losses.
- Example: Post-pandemic, supply chain disruptions led to high demand but low supply, causing inflation.
- Investment Drives Long-Term Growth: Investment in infrastructure, industries, and technology increases production capacity (supply) while also creating jobs, which boosts spending power (demand).
- Example: China’s high investment in infrastructure and manufacturing led to rapid economic growth by expanding both supply and demand.
- Government Policies Impact Both Sides: Fiscal and monetary policies help balance supply-side growth (e.g., industrial incentives) and demand-side expansion (e.g., tax cuts or subsidies).
- Example: India’s Production-Linked Incentive (PLI) scheme boosts manufacturing (supply), while government social schemes increase purchasing power (demand).
- Exports and Imports Affect Domestic Growth: A strong export sector increases supply, bringing foreign exchange, while controlled imports ensure domestic industries remain competitive.
- Example: India’s IT exports generate revenue (supply), while consumer imports like electronics influence domestic demand.
What role does investment play in economic growth?
- Boosts Production Capacity: Investment in factories, infrastructure, and technology increases the ability to produce goods and services, leading to higher GDP. Example: China’s heavy investment in manufacturing and infrastructure helped it become the world’s largest exporter.
- Creates Employment Opportunities: New industries and infrastructure projects generate jobs, increasing income and overall demand in the economy. Example: India’s road and metro projects have created millions of direct and indirect jobs, boosting economic activity.
- Multiplier Effect on Demand & GDP: Investment leads to increased income, which in turn increases consumption and demand, further driving growth. Example: A ₹100 investment in building highways can create ₹125 in overall economic output due to increased business activities along the route.
- Encourages Private Sector Confidence: When the government invests in key sectors, it builds confidence among private businesses to invest further. Example: India’s Production-Linked Incentive (PLI) scheme for electronics manufacturing has attracted global tech firms to set up production units.
- Leads to Technological and Industrial Development: Investments in research, innovation, and new industries enhance productivity and global competitiveness. Example: South Korea’s investment in R&D and technology made it a leader in electronics and automobile industries.
How have India and China experienced changes in per capita income?
- Similar Per Capita Incomes in the Early 1990s: In the early 1990s, India and China had nearly equal per capita incomes, with both countries being 1.5% of the U.S. average. Example: In 1992, both nations were considered low-income economies with similar economic structures.
- China’s Investment-Led Growth Model: China prioritized high investment rates, focusing on infrastructure, state-owned enterprises, and manufacturing. Example: In 1992, China’s investment rate was 39.1% of GDP, much higher than India’s 27.4%.
- Diverging Growth Post-2000s: India’s investment rate rose to 35.8% in 2007, almost matching China’s, but declined after 2012 due to policy uncertainty and global economic slowdown.Example: By 2013, China’s investment rate increased to 44.5%, while India’s fell to 31.3%.
- China’s Faster Rise in Per Capita Income: By 2023, China’s per capita income was 5 times India’s in nominal terms and 2.4 times higher in purchasing power parity (PPP). Example: As a percentage of U.S. per capita income in 2023: China: 15%, India: 3%.
- India’s Consumption-Driven Growth Model: India’s economic growth has been mainly driven by domestic consumption, while China maintained higher investment levels. Example: In 2023, consumption was 60.3% of India’s GDP, compared to 39.1% in China.
- Long-Term Impact on Growth and Inequality: India’s lower investment and trade deficits have led to slower per capita income growth, affecting job creation and economic equality. Example: China’s investment rate in 2023 was 41.3%, whereas India’s was only 30.8%, limiting economic expansion.
What measures has the Indian government taken to promote investment in India?
- Infrastructure Development: The government has launched massive infrastructure projects to boost investment and improve connectivity. Example: PM Gati Shakti (National Master Plan) aims to integrate multi-modal transport networks and reduce logistics costs.
- Production-Linked Incentive (PLI) Scheme: Introduced to boost manufacturing and attract foreign and domestic investments in key sectors. Example: PLI schemes for electronics, pharmaceuticals, and renewable energy have encouraged global firms to set up production in India.
- Corporate Tax Reforms: India reduced corporate tax rates to make the investment climate more competitive. Example: In 2019, the corporate tax rate was slashed to 22% for existing companies and 15% for new manufacturing firms.
- Ease of Doing Business & FDI Reforms: Simplified regulatory processes, digital approvals, and single-window clearances to attract investments. Example: 100% FDI allowed in sectors like defense, telecom, and insurance under automatic route.
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Way forward:
- Enhancing Investment-Led Growth: India should focus on increasing capital formation by boosting infrastructure, industrial productivity, and R&D investments. Strengthening public-private partnerships (PPPs) and expanding the PLI scheme to emerging sectors can accelerate long-term economic growth.
- Balancing Consumption and Supply-Side Expansion: While consumption remains a key driver, policies should encourage domestic manufacturing and export competitiveness to reduce reliance on imports. Strengthening skill development and labour market reforms will enhance productivity and job creation.
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Note4Students
From UPSC perspective, the following things are important :
Mains level: Issues related to the Judiciary;
Why in the News?
The Supreme Court recently halted a Lokpal order that sought to include High Court judges under its jurisdiction, calling the anti-corruption body’s interpretation “very disturbing.”
Why did the Supreme Court stay the Lokpal order?
- Violation of Judicial Independence (Article 50 & Article 121): The Supreme Court held that bringing High Court judges under Lokpal’s jurisdiction undermines judicial independence, which is a part of the Basic Structure Doctrine.
- Article 50 mandates the separation of the judiciary from the executive, preventing interference in judicial functioning.
- Article 121 prohibits Parliament from discussing the conduct of judges except in matters of impeachment, reinforcing judicial autonomy.
- Judges Are Appointed Under the Constitution (Article 124 & Article 217): The Supreme Court rejected Lokpal’s argument that High Courts were created by British laws, emphasizing that all judges are appointed under the Constitution.
- Article 124 establishes the Supreme Court, while Article 217 governs the appointment of High Court judges, ensuring their independence from executive control.
- Judicial Oversight Is an Internal Process (Article 124(4) & Article 217(1)(b)): The Supreme Court reaffirmed that judicial misconduct should be handled internally, either through the in-house procedure or the impeachment process.
- Article 124(4) (for Supreme Court judges) and Article 217(1)(b) (for High Court judges) provide for removal only through Parliamentary impeachment, making external investigations by the Lokpal unconstitutional.
What is suo motu case?
Suo motu (Latin: on its own motion) refers to the Supreme Court or High Courts taking up a case on their own initiative, without a formal petition being filed.
In which circumstances do courts in India exercise suo motu powers?
- Constitutional Concerns (Separation of Powers, Judicial Independence): Courts intervene suo motu when an issue threatens constitutional principles like the separation of powers or judicial independence.
- Example: In re: Article 370 of the Constitution (2023) – The Supreme Court took up the matter of abrogation of Article 370 to examine whether the Union government’s decision upheld constitutional principles.
- Fundamental Rights Violations: Courts act suo motu when fundamental rights under Articles 14 (equality), 19 (freedom), and 21 (right to life) are violated.
- Example: Suo Motu Writ Petition (Criminal) No.1 of 2020 – The Supreme Court intervened during COVID-19 migrant crisis, directing the government to provide food, shelter, and transport to stranded workers.
- Public Interest or Institutional Integrity: Courts take suo motu cognizance to protect public interest and prevent harm to democratic institutions.
- Example: Suo Motu Cognizance of Lakhimpur Kheri Violence (2021) – The Supreme Court intervened to monitor the UP government’s investigation into the killing of protesting farmers, ensuring transparency and accountability.
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Why did the Lokpal order bring High Court judges under its jurisdiction?
- Interpretation of ‘Public Servants’ Under Lokpal Act: The Lokpal classified High Court judges as public servants under the Lokpal and Lokayuktas Act, 2013, making them subject to its jurisdiction.
- Reliance on Section 14(1)(f) of the Lokpal Act: This section grants Lokpal jurisdiction over any body or authority established by an Act of Parliament.
- The Lokpal argued that High Courts were established by British Parliamentary Acts (Indian High Courts Act, 1861 & Government of India Act, 1935), making them fall within this clause.
- Distinction Between High Courts and Supreme Court: The Lokpal reasoned that Article 124 of the Constitution explicitly established the Supreme Court, but Article 214 only recognized High Courts, implying that High Courts were not directly created by the Constitution.
- Based on this, the Lokpal ruled that Supreme Court judges were outside its jurisdiction, but High Court judges were not.
- Lack of Explicit Exemption for Judges: The 2013 Lokpal Act does not explicitly exclude High Court judges from its jurisdiction, which the Lokpal interpreted as allowing it to investigate them.
- Case-Specific Justification: The complaint involved a High Court judge allegedly influencing judicial decisions for personal benefit. The Lokpal argued that since the judge was serving in a High Court of a State reorganized by an Act of Parliament, it had jurisdiction over the matter.
Way forward:
- Judicial Accountability Within Constitutional Framework: Strengthen in-house mechanisms for judicial oversight while ensuring compliance with constitutional provisions like Articles 124(4) and 217(1)(b), which mandate impeachment as the sole removal process for judges.
- Clarify Lokpal’s Jurisdiction Through Legislative Review: Amend the Lokpal and Lokayuktas Act, 2013, to explicitly define its jurisdiction, ensuring it does not encroach upon judicial independence while maintaining transparency in the judiciary.
Mains PYQ:
Q Judicial Legislation is antithetical to the doctrine of separation of powers as envisaged in the Indian Constitution. In this context justify the filing of large number of public interest petitions praying for issuing guidelines to executive authorities. (UPSC IAS/2020)
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Note4Students
From UPSC perspective, the following things are important :
Mains level: India-China relation;
Why in the News?
India’s Foreign Secretary Vikram Misri visited China in January 2025, where both countries made important announcements about their future relationship.
What are the latest diplomatic discussions between India and China?
- Resumption of Direct Air Services: After nearly five years, both nations agreed to restart direct flights, aiming to enhance connectivity and facilitate people-to-people exchanges.
- Facilitation of Journalist Exchanges: The two countries decided to ease the process for journalists to operate in each other’s territories, promoting better mutual understanding and media cooperation.
- Revival of the Kailash Mansarovar Yatra: Plans were made to resume the annual pilgrimage to Mount Kailash in Tibet, a significant site for Hindu devotees, which had been suspended since 2020 due to the pandemic and border tensions.
- Addressing Economic and Trade Issues: Both sides discussed specific concerns in economic and trade areas, aiming to resolve issues and promote long-term policy transparency and predictability.
- Commitment to Strengthening Bilateral Relations: High-level meetings underscored the importance of mutual support and understanding, with both nations expressing a desire to move beyond past disputes and enhance cooperation across various sectors.
What are the challenges between India and China?
- Border Disputes and Military Standoff: The unresolved Line of Actual Control (LAC) dispute remains a major flashpoint. Example: The 2020 Galwan Valley clash led to casualties on both sides and heightened tensions, leading to prolonged military deployments in Ladakh.
- Trade Imbalance and Economic Restrictions: India faces a significant trade deficit with China, as it imports more than it exports. Example: In 2023, India’s trade deficit with China exceeded $100 billion, prompting India to impose restrictions on Chinese investments and apps.
- Geopolitical Rivalry and Strategic Alliances: Both countries compete for influence in South Asia, the Indian Ocean, and global institutions. Example: China’s Belt and Road Initiative (BRI), which India opposes, includes projects in Pakistan and Sri Lanka, challenging India’s regional influence.
- China’s Support to Pakistan and India’s Response: China’s close ties with Pakistan, including military and economic aid, pose security concerns for India. Example: China’s role in developing Gwadar Port in Pakistan and supplying weapons to Pakistan’s military affects India’s security calculus.
- Tensions in Multilateral Forums: India and China often clash diplomatically in international organizations. Example: China has blocked India’s bid for UNSC permanent membership and has repeatedly blocked India’s attempts to list Pakistan-based terrorists in the UN.
What measures has the Indian government taken after the Galwan clash?
- Strengthening Military Presence and Infrastructure at LAC: India rapidly deployed additional troops, upgraded surveillance, and enhanced military infrastructure along the Line of Actual Control (LAC).
- Example: India constructed all-weather roads, bridges, and airstrips, such as the Darbuk-Shyok-Daulat Beg Oldi (DSDBO) road in Ladakh, to improve troop movement.
- Ban on Chinese Apps and Economic Restrictions: The government banned over 300 Chinese apps, citing security concerns and took steps to reduce economic dependence on China.
- Example: TikTok, PUBG Mobile, WeChat, and AliExpress were among the banned apps, impacting China’s digital market in India.
- Increased Focus on Atmanirbhar Bharat (Self-Reliant India): India pushed for domestic manufacturing in defense, telecom, and electronics to reduce reliance on Chinese imports.
- Example: The government placed restrictions on Chinese firms participating in 5G trials, and promoted Indian alternatives in the telecom sector.
- Diplomatic and Strategic Realignments: India strengthened partnerships with like-minded countries to counterbalance China’s influence.
- Example: India reinforced ties with the Quad alliance (U.S., Japan, Australia, India), holding Malabar naval exercises to enhance security cooperation.
- Revised Foreign Direct Investment (FDI) Policies: India introduced stricter FDI regulations, requiring government approval for investments from China and other neighboring countries.
- Example: The new FDI rules in 2020 prevented automatic approvals for Chinese investments in Indian startups and infrastructure projects.
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Way forward:
- Strengthening Diplomatic and Strategic Engagement: India and China should prioritize sustained diplomatic dialogue and confidence-building measures to prevent conflicts and enhance cooperation in multilateral forums.
- Example: Establishing a structured mechanism for LAC dispute resolution and expanding bilateral trade dialogues to address economic concerns.
- Enhancing Economic and Technological Self-Reliance: India should continue efforts toward Atmanirbhar Bharat by boosting domestic manufacturing, diversifying supply chains, and strengthening critical sectors like semiconductors and defence.
- Example: Expanding the Production Linked Incentive (PLI) scheme to reduce dependency on Chinese imports and developing strategic alliances for tech collaborations.
Mains PYQ:
Q Critically examine the aims and objectives of SCO. What importance does it hold for India? (UPSC IAS/2021)
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 101(4)
Why in the News?
Amritpal Singh’s detention has raised concerns over his parliamentary position, as Article 101(4) states that an MP’s seat can be vacated after 60 consecutive absences without permission. He has missed 46 sittings so far.
About Article 101(4) and its Feature
- Article 101(4) states that if a Member of Parliament (MP) is absent from all meetings of the House for a period of 60 days, their seat may be declared vacant.
- The 60-day period is counted continuously (excluding adjournments but including recess).
- If the MP remains absent without prior permission from the House, the seat can be vacated under Article 101(4).
- No MP has ever lost a seat under Article 101(4) in practice.
- The House may grant condonation (excuse the absence) if a valid reason is provided.
- This provision ensures active participation of MPs and prevents prolonged absenteeism.
- If an MP does not attend any session of Lok Sabha or Rajya Sabha for 60 days without permission, the House can initiate proceedings to declare the seat vacant.
Legal Options
- Like past MPs, Amritpal can formally request permission to remain absent due to his incarceration.
- Former MP from Uttar Pradesh Atul Rai received similar permission in 2023 while in jail.
- The Lok Sabha must formally vote to declare his seat vacant, making disqualification unlikely unless actively pursued.
PYQ:
[2012] Regarding the office of the Lok Sabha speaker, consider the following statements:
- He/She holds the office during the pleasure of the President.
- He/She need not be a member of the House at the time of his/her election but has to become a member of the House within six months from the date of his/her election.
- If he/she intends to resign, the letter of his/her resignation has to be addressed to the Deputy Speaker.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 3 only
(c) 1, 2 and 3
(d) None |
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: National Consumer Helpline (NCH)
Why in the News?
The National Consumer Helpline (NCH) has seen a 300% rise in complaints in Arunachal Pradesh, reflecting increased awareness and trust in consumer grievance redressal.
What is National Consumer Helpline (NCH)?
- NCH is an initiative of the Department of Consumer Affairs, Ministry of Consumer Affairs, Food & Public Distribution to provide a nationwide grievance redressal system for consumers.
- It offers advice, guidance, and assistance to consumers facing issues with products, services, and unfair trade practices.
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- Toll-Free Consumer Helpline: 1800-11-4000 / 1915 (Available from 9:30 AM – 5:30 PM, except national holidays).
- Multi-Channel Complaint Registration: Website, mobile app, email, WhatsApp, and SMS-based complaint filing.
- Covers a Wide Range of Sectors: E-commerce, telecom, banking, insurance, transport, healthcare, digital payments, etc.
- Operated under: The Centre for Consumer Studies at the Indian Institute of Public Administration (IIPA).
How has the NCH succeeded in Northeast India?
- Complaints rose from 9,162 in 2020 to 36,609 in 2024, with Arunachal Pradesh seeing a 50-fold rise in consumer grievances.
- 517% increase in online complaint registrations; introduction of regional language assistance to enhance accessibility.
- Workshops, SHG partnerships, and NGO collaborations helped rural and tribal communities understand consumer rights.
- “Jago Grahak Jago” initiatives, grants to NE states, and Panchayat training programs increased consumer participation.
- Consumers experienced faster redressal in cases like e-commerce refunds, delayed product deliveries, and service-related issues.
PYQ:
[2012] With reference to consumers rights/privileges under the provisions of law in India, which of the following statements is/are correct?
1. Consumers are empowered to take samples for food testing.
2. When a consumer files a complaint in any consumer forum, no fee is required to be paid.
3. In case of death of a consumer, his/her legal heir can file a complaint in the consumer forum on his/her behalf.
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 |
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Majorana 1 Chip
Why in the News?
Microsoft has unveiled Majorana 1, a groundbreaking quantum chip that introduces a more stable and scalable approach to quantum computing.
What is Microsoft’s Majorana 1 Chip?
- Majorana 1 is Microsoft’s latest quantum processor that introduces a new type of stable and scalable qubit based on Majorana fermions.
- Microsoft believes that this breakthrough could enable practical quantum computing by 2027-29.
- Majorana Fermions:
- First theorized by Ettore Majorana in 1937.
- Exotic particles that act as their own antiparticles.
- Microsoft engineered them using topological conductors, making qubits more stable and resistant to errors.
Features of Majorana 1 Chip:
- Uses topological qubits, which require less error correction compared to traditional superconducting qubits.
- More scalable, allowing the quantum chip to reach up to 1 million qubits in the future.
- Built from indium arsenide-aluminum topo-conductors, unlike conventional silicon-based quantum chips.
- Operates at near absolute zero temperature, tuned with magnetic fields to create a stable quantum environment.
- Currently an 8-qubit chip, but designed with an architecture that supports significant expansion.
What is Quantum Computing?
- Quantum computing is a new approach to computation based on the principles of quantum mechanics that allows computers to process information exponentially faster than classical computers.
- Unlike classical computers that use binary bits (0 or 1), quantum computers use qubits, which can exist in both 0 and 1 simultaneously (superposition).
- Key Principles of Quantum Computing:
- Superposition: Qubits exist in multiple states at once.
- Entanglement: –Qubits can be linked, meaning a change in one affects the other instantly.
- Quantum Tunneling: Qubits can pass through energy barriers.
- Quantum Interference: Enhances correct probabilities while canceling out incorrect ones.
- Quantum computers solve complex problems that are impossible for classical computers, such as simulating molecules, optimizing logistics, and advancing AI.
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PYQ:
[2022] Which one of the following is the context in which the term “qubit” is mentioned?
(a) Cloud Services
(b) Quantum Computing
(c) Visible Light Communication Technologies
(d) Wireless Communication Technologies |
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: BOD
Why in the News?
The National Green Tribunal (NGT) has raised concerns over the water quality of the Ganga at Triveni Sangam in Prayagraj, Uttar Pradesh. The river is failing to meet bathing standards due to high Biological Oxygen Demand (BOD) and faecal coliform contamination.
Key Findings of the Ganga Water Quality Assessment at Triveni Sangam:
- Water is unsafe for bathing as per Central Pollution Control Board (CPCB) standards.
- BOD levels exceeded the permissible limit of 3 mg/L on multiple days in January 2025.
- Government releasing 10,000-11,000 cusecs of fresh water to improve quality.
- Faecal coliform levels (E. coli) far exceed safe limits due to sewage contamination.
- Safe limit: 2,500 MPN/100 ml; Detected levels: 49,000 MPN/100 ml (Ganga) and 33,000 MPN/100 ml (Yamuna).
What is Biological Oxygen Demand (BOD)?
- BOD measures the amount of oxygen required by bacteria to break down organic matter in water.
- Higher BOD levels indicate higher organic pollution, which can lead to oxygen depletion and aquatic life destruction.
- Safe limit for bathing water is below 3 mg/L.
- Excessive BOD levels suggest sewage, industrial waste, or decomposing organic matter contamination.
- BOD levels above safe limits can cause waterborne diseases and disrupt aquatic ecosystems.
PYQ:
[2017] Biological Oxygen Demand (BOD) is a standard criterion for:
(a) Measuring oxygen levels in blood
(b) Computing oxygen levels in forest ecosystems
(c) Pollution assay in aquatic ecosystems
(d) Assessing oxygen levels in high-altitude regions |
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