Archives: News

UN Permanent Forum on Indigenous Issues (UNPFII)

17 April 2024 | IOCR | International Relations

Mains GS2: GS2-18.Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Why in the News?

The 23rd session of the UN Permanent Forum on Indigenous Issues, commenced on April 15 in New York.
- It focuses on the pressing need to accelerate the recognition and protection of Indigenous Territories (ITs) worldwide.

About UN Permanent Forum on Indigenous Issues (UNPFII):

	Details
What is it?	One of three UN bodies mandated to deal specifically with indigenous peoples’ issues. Others are- Expert Mechanism on the Rights of Indigenous Peoples and Special Rapporteur Rights of Indigenous Peoples.
Formation	28 July 2000
Headquarters	New York, USA
Parent Organization	United Nations Economic and Social Council (ECOSOC)
Membership	16 independent experts serving *three-year terms, with eight nominated by member governments and eight directly nominated by indigenous organizations Countries:* Finland, Nepal, Chad, Australia, Colombia, Bolivia, United States, Russia, China, Ecuador, Burundi, Denmark, Mexico, Namibia, Estonia, and one additional rotating seat
Mandate	Provide expert advice and recommendations on indigenous issues to the Council, UN programs, funds, and agencies through ECOSOC. Raise awareness and promote integration of indigenous issues within the UN system. Prepare and disseminate information on indigenous issues.
Secretariat	Established by General Assembly in 2002. Based in New York within Division for *Inclusive Social Development (DISD)* of UN *Department of Economic and Social Affairs (DESA)*

PYQ:

[UPSC CSE 2009] With reference to the United Nations, consider the following statements:

The Economic and Social Council (ECOSOC) of UN consists of 24 member States.
It is elected by a 2/3rd majority of the General Assembly for a 3-year term.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

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Tiger Conservation Efforts – Project Tiger, etc.

Mapping: Mudumalai Tiger Reserve

17 April 2024 | National Parks/WS Prelims Only | Environment

Mains GS3: GS3-18.Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment.

Why in the news?

A pack of wild dogs, or Dholes, in Mudumalai Tiger Reserve (MTR) have suffered severe exfoliating skin infection which is an alarming fungal and bacterial infection.

About Mudumalai Tiger Reserve

Mudumalai Tiger Reserve is situated in Tamil Nadu’s Nilgiris District, at the intersection of Karnataka, Kerala, and Tamil Nadu.
It forms part of the Nilgiri Biosphere Reserve, India’s first biosphere reserve, alongside Wayanad Wildlife Sanctuary (Kerala), Bandipur National Park (Karnataka), Mukurthi National Park, and Silent Valley.
The name “Mudumalai” signifies “the ancient hill range,” dating back 65 million years to the formation of the Western Ghats.
Flora: The reserve boasts tall grasses, including Elephant Grass, and diverse flora such as giant bamboo, Teak, and Rosewood.
Fauna: It is home to flagship species like the Tiger and Asian Elephant, as well as the Indian Gaur, Spotted Deer, Malabar Giant Squirrel, and Jungle Cat, among others.
- With over 260 bird species, Mudumalai hosts 8% of India’s avian species, including rare birds like the Malabar grey hornbill and Malabar pied hornbill.

Asiatic Wild Dog (Dhole)

	Details
Name	Dhole (Cuon alpinus)
Native Range	Central, South, East, and Southeast Asia
Distribution in India	Most of India south of the Ganges, Central Indian Highlands, Western and Eastern Ghats, Arunachal Pradesh, Assam, Meghalaya, West Bengal, Terai region of Indo-Gangetic Plain
Other Names	Asian wild dog, Asiatic wild dog, Indian wild dog, whistling dog, red dog, mountain wolf
Conservation Status	IUCN Red List: Endangered CITES: Appendix II Wildlife Protection Act, 1972: Schedule 1
Social Structure	Lives in big, loosely organized groups with several breeding females
Factors Contributing to Decline	Habitat loss, loss of prey, competition with other species, persecution due to livestock predation, disease transfer from domestic dogs
Significance	Besides the tiger, it is the only large carnivore in India that is under IUCN’s ‘endangered’ category.

PYQ:

[2019] Which of the following are in Agasthyamala Biosphere Reserve?

(a) Neyyar, Peppara and Shendurney Wildlife Sanctuaries; and Kalakad Mundanthurai Tiger Reserve

(b) Mudumalai, Sathyamangalam and Wayanad Wildlife Sanctuaries; and Silent Valley National Park

(d) Kawal and Sri Venkateswara Wildlife Sanctuaries; and Nagarjunasagar-Srisailam Tiger Reserve

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Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Growth in Ashwagandha Exports

17 April 2024 | Prelims Only | Agriculture

Mains GS3: Major Crops & Cropping Patterns

Why in the news?

Ashwagandha exports have surged by 8 times in the past six years, penetrating markets like the United States, Czech Republic, and Canada.

The Ayurvedic industry in India has been growing at a Compound Annual Growth Rate (CAGR) of 17%, with the industry size increasing from $3 billion in 2014 to $24 billion today.
Gujarat, with about 850 Ayurvedic manufacturing units, ranks fourth in the country after Uttar Pradesh, Kerala, and Maharashtra.
India leads in Ashwagandha production and export, with states like Rajasthan and Madhya Pradesh emerging as key producers.
The herb is exported primarily as extracts and has gained significant traction in the United States, where it competes with Chinese Ginseng.

What is Ashwagandha?

Also known as Indian Ginseng or Withania somnifera, Ashwagandha belongs to a group of herbs known as ‘adaptogens’( best rejuvenating agent).
It is available in various forms such as extracts, powder, and raw herbs, catering to domestic and international markets.

Medicinal Properties and Usage:

In treatment of rheumatic pain, inflammation of joints, nervous disorders and epilepsy.
Used as a tonic for hiccup, cold, cough, female disorders, as a sedative, in care of senile debility, ulcers, etc.
Leaves are applied for carbuncles, inflammation and swellings. Leaf juice is useful in conjunctivitis.
Bark decoction is taken for asthma and applied locally to bed sores.
Ashwagandha and its extracts are used in the preparation of herbal tea, powders, tablets, and syrups.

Cultivation of Ashwagandha

Ashwagandha-growing states: Rajasthan, Punjab, Haryana, Uttar Pradesh, Gujarat, Maharashtra and Madhya Pradesh.
- Being a hardy and drought-tolerant crop, Ashwagandha requires a relatively dry season throughout its growing period.
- It is grown as late rainy season (kharif) crop between 600-1200 m altitudes.
- It grows well in sandy loam or light red soil having pH 7.5 to 8.0 (alkaloid) with good drainage.
Black soil or such heavy soil is suitable for cultivation.

With inputs from: https://agritech.tnau.ac.in/farm_enterprises/Farm%20enterprises_%20Ashwagantha.html

PYQ:

[2010] Consider the following statements:

The Taxus tree is naturally found in the Himalayas
The Taxus tree is listed in the Red Data Book.
A drug called “taxol” is obtained from Taxus tree is effective against Parkinson’s disease

Which of the above statements is/are correct?

(a) 1 only

(b) 1 and 2 only

(d) 3 only

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Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

India could face ‘Imported Inflation’: Asian Development Bank (ADB)

17 April 2024 | Prelims Only | Economics

Mains GS3: Indian Economy

Why in the News?

The Asian Development Bank recently issued a cautionary note for India’s susceptibility to imported inflation due to potential rupee depreciation amidst escalating interest rates in the West.

What is Imported Inflation?

Imported inflation refers to the increase in the prices of goods and services within a country caused by a rise in the cost or price of imports.
This phenomenon occurs when factors such as a depreciating currency, higher import costs, or increased international prices lead to elevated expenses for imported goods and services.
Consequently, producers may adjust their prices upward to offset these higher costs, resulting in inflationary pressures within the domestic economy.
This idea connects with the theory of cost-push inflation, which means that when input costs go up, it can cause prices for final products to go up too.

Reason behind the imported inflation:

Capital Flows: Increased interest rates in Western economies attract foreign investors seeking higher returns, leading to capital outflows from countries like India and potentially depreciating the Indian rupee.
- When a currency depreciates, local consumers require more of their domestic currency to procure foreign goods, consequently elevating import prices.
Borrowing Costs: Indian businesses and the government may face higher borrowing costs for infrastructure projects and investments if they raise funds in foreign currency-denominated international markets.
Inflationary Pressures: Capital outflows can pressure the Indian rupee, causing imported inflation as the cost of imported goods rises due to currency depreciation.
Trade Competitiveness: Exchange rate fluctuations from Western interest rate changes affect India’s trade competitiveness, impacting exports, imports, and domestic consumption.

Back2Basics: Asian Development Bank (ADB)

	Information
Establishment	Established in 1966 as a result of the Conference on Asian Economic Cooperation held by the United Nations Economic Commission for Asia and the Far East.
Headquarters	Manila, Philippines
Official Status	Official United Nations Observer
Objectives	Reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Providing Loans, technical assistance, and Grants. Offering “hard” loans on commercial terms primarily to middle income countries and “soft” loans with lower interest rates to poorer countries. Providing direct financial assistance to private sector companies for projects with clear social benefits. Maximizing development impact through policy dialogues, advisory services, and co-financing operations.
Membership	67 members, with 48 from the Asia and Pacific region. Admits members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and non-regional developed countries.
Funding	Japan and United States hold the largest proportion of shares at 15.607%. China holds 6.444%, India holds 6.331%, and Australia holds 5.786%.
Sources	Bond issues on the world’s capital markets. Members’ contributions and retained earnings from lending operations. Repayment of loans.

PYQ:

[2021] With reference to Indian economy, demand-pull inflation can be caused/increased by which of the following?

Expansionary policies
Fiscal stimulus
Inflation-indexing wages
Higher purchasing power
Rising interest rates

Select the correct answer using the code given below.

(a) 1, 2 and 4 only

(b) 3, 4 and 5 only

(d) 1, 2, 3, 4 and 5

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Global Geological And Climatic Events

India’s Arctic imperative

16 April 2024 | Explained | Environment

Mains GS1: Salient Features Of World’S Physical Geography

Why in the news?

The Indian government appears interested in capitalizing on seabed mining and resource exploitation in the Arctic

About Artice Region:

The Arctic region is rich in energy resources, including oil, natural gas, and renewable energy sources such as wind, solar, hydro, geothermal, and tidal power.
The Arctic covers an area of approximately 8 million square kilometers, with interests belonging to Denmark, Canada, Iceland, Finland, Russia, Norway, Sweden, and the United States

The reason behind the growing interest in the Arctic Region:

Climate Change Concerns: India’s increased interest in the Arctic stems from scientific data revealing accelerated warming in the region.
Trade Route Opportunities: India seeks to capitalize on the opening up of Arctic sea routes, particularly the Northern Sea Route, to enhance its trade efficiency.
Geopolitical Considerations: India’s focus on the Arctic is also driven by geopolitical factors, including concerns over China’s expanding presence and Russia’s decisions regarding access to Arctic routes.
Historical Engagement: India’s involvement in the Arctic dates back to 1920 with the signing of the Svalbard Treaty.

Indian Initiatives:

Arctic Council: As an Observer in the Arctic Council, India actively participates in various working groups and expert meetings. India’s involvement in these discussions helps in understanding Arctic governance issues and contributes to the development of sustainable policies for the region.
INS Himadri: In 2019, India launched its first scientific expedition to the Arctic with the INS Himadri, an ice-class research vessel. The expedition aimed to study climate change, oceanography, and marine biodiversity, furthering India’s expertise in polar research.
PAME: India’s commitment to sustainable development in the Arctic is reflected in its engagement with Arctic Council initiatives like the ‘Protection of the Arctic Marine Environment’ (PAME).

Way Forward – Potential for Collaboration:

Green Energy and Clean Industries: India’s current policy emphasizes cooperation with Arctic countries, particularly Norway, in green energy and clean industries. This aligns with India’s goal of positioning itself as a responsible stakeholder in global environmental initiatives.
Transformational Partnership: Collaboration with Norway could be transformative for India, offering opportunities for increased participation in Arctic Council working groups
Scientific Research and Environmental Protection: A partnership with Norway is expected to focus on scientific research, climate, and environmental protection. These areas align with India’s Arctic Policy pillars, emphasizing the importance of addressing environmental challenges through research and cooperation.

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Air Pollution

What share of Global CO2 Emissions comes from Aviation?

16 April 2024 | Explained | Environment

Mains GS3: GS3-18.Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment.

Why in the news?

Aviation accounts for 2.5% of global CO2 emissions. But it has contributed around 4% to global warming to date

Year-wise Global Aviation demand, Energy Efficiency, and CO2 emissions

Global Co2 emissions from aviation

The reason behind Aviation accounts for 2.5% of global CO2 emissions:

CO2 Emissions: When jet fuel burns, it releases carbon dioxide (CO2) into the atmosphere, much like any other combustion process. CO2 as a greenhouse gas has contributed around 4% to global warming to date.
Non-CO2 effects: In addition to CO2, aircraft emissions also include other substances like nitrogen oxides, soot, water vapor, and sulfate aerosols. These substances interact with the atmosphere in various ways and can have different climate impacts. For example:
- Contrails: These are the visible trails of condensed water vapor and ice crystals that form behind aircraft in certain atmospheric conditions. Contrails can contribute to the formation of cirrus clouds, which can have a warming effect on the climate.
- Induced cirrus cloud formation: Aircraft can also induce the formation of cirrus clouds through their emissions, further contributing to warming.

Initiatives taken by the Indian Government:

India is a Party to the United Nations Framework Convention on Climate Change (UNFCCC), its Kyoto Protocol (KP) and the Paris Agreement (PA).
As a Party to the UNFCCC, India periodically submits its National Communications (NCs) and Biennial Update Reports (BURs) to the UNFCCC which includes national Greenhouse Gas (GHG) inventory.
The energy sector contributed 75%, Industrial Process and Product Use 8%, the agriculture sector 14%, and the waste sector contributed 3% of total greenhouse gas emissions in 2016.
The Land Use Land-Use Change and Forestry (LULUCF) sector was the net sink and absorbed about 15% of the carbon dioxide in 2016.

Way Forward:

Transitioning to Alternative Fuels: Invest in Research and Development of sustainable aviation fuels (SAFs), such as biofuels, hydrogen, or synthetic fuels, which emit fewer CO2 emissions compared to conventional jet fuel.
Improving Aircraft Efficiency: Encourage the adoption of more fuel-efficient aircraft and technologies, including advanced aerodynamics, lightweight materials, and efficient engines.
Implementing Operational Improvements: Enhance air traffic management systems to optimize flight routes, reduce delays, and minimize fuel consumption during taxiing, takeoff, and landing.

Mains PYQs:

Describe the major outcomes of the 26th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). What are the commitments made by India in this conference? (2021)
Discuss in detail the photochemical smog emphasizing its formation, effects and mitigation. Explain the 1999 Gothenburg protocol. (2022)

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Oil and Gas Sector – HELP, Open Acreage Policy, etc.

How are hydrocarbons extracted from under the ground? | Explained

16 April 2024 | Explained | Economics

Mains GS3: GS3-13.Infrastructure: Energy, Ports, Roads, Airports, Railways etc:

Why in the news?

The geological processes, extraction methods, and environmental impact of hydrocarbon extraction.

BACK2BASICS

Where are Hydrocarbons located?

Hydrocarbons originate from plant and animal fossils that were formed by the forces of temperature and weight over millennia.
They are mostly found deep underground, in porous rock formations, such as sandstone, limestone, and shale. Hydrocarbons exist in Subterranean rock formations in various forms like natural gas, coal, crude oil, and petroleum, typically found in reservoirs.
The primary source of hydrocarbons in underground rocks is kerogen, organic matter deposits originating from lakes, marine ecosystems, or terrestrial ecosystems.
Different types of kerogen yield various hydrocarbon products such as waxy oils, oil and gas, light oils, gas, and coal.
Petroleum geologists utilize tools and techniques from petroleum geology to evaluate these rocks, assessing factors like porosity and permeability.

How Hydrocarbons are extracted?

The extraction of hydrocarbons, such as oil and gas, has several negative impacts on the environment:

Damage to Marine Life and Ecosystems: The extraction process can lead to the release of toxic substances and chemicals, which can harm marine life and ecosystems. This can lead to the death of fish, birds, and other marine animals, as well as the destruction of habitats.
Deforestation and Destruction of Flora: The search for hydrocarbon deposits often involves the clearing of large areas of land, which can lead to deforestation and the destruction of plant life. This can have a significant impact on local ecosystems and biodiversity.
Water Pollution: The extraction process can lead to the contamination of groundwater and surface water.
Destruction of Fertile Land: The extraction process can destroy fertile land, which can have serious consequences for agriculture and food production. This can lead to soil erosion, desertification, and the loss of biodiversity.

Renewable sources that can serve as alternatives for hydrocarbons include:

Hydroelectricity: This is the most significant renewable energy source at 6% of the global total
Solar Energy: Solar power is a promising renewable energy source that can be harnessed using solar panels to convert sunlight into electrical energy. The solar power development sector is the fastest-growing renewable energy sector in the U.S
Wind Energy: Wind turbines can generate electricity from wind power, and this technology is becoming increasingly popular and efficient
Biomass Energy: Biomass energy can be derived from organic materials such as wood, agricultural waste, and municipal solid waste.
Geothermal Energy: Geothermal energy is generated and stored in the Earth’s crust. This energy source can be used for heating, cooling, and electricity generation
Renewable Natural Gas (RNG): RNG is a pipeline-quality gas that can be utilized by utilities interchangeably with conventional natural gas. RNG can be produced from methane waste sources such as farm and landfills

Conclusion: Hydrocarbons, found in subterranean rock formations, are extracted using petroleum geology techniques. Extraction poses environmental risks like marine damage, deforestation, and water pollution. Renewable alternatives include hydroelectric, solar, wind, biomass, geothermal energy, and renewable natural gas.

Mains PYQ:

Q Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain.

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Indian Army Updates

Siachen: 40 years of Operation Meghdoot

16 April 2024 | Explained | Internal Security

Mains GS3: GS3-24. Various Security Forces and Agencies and their Mandate.

Why in the News?

April 13, 2024, marks the 40th anniversary of Operation Meghdoot, which was launched by the Indian Army to pre-empt Pakistan and occupy the Siachen Glacier in the Karakoram ranges.

The genesis of Operation Meghdoot

Launched: April 13, 1984 (by the Indian Armed Forces);
Aim: To seize control of the Siachen Glacier in Kashmir, marking the first assault in the world’s highest battlefield.
- It was a response to Pakistan’s Operation Ababeel.
Indian troops, including the Kumaon Regiment and Ladakh Scouts, successfully gained control of critical peaks and passes like Sia La, Bilafond La, and Gyong La, along with the commanding heights of the Saltoro Ridge, giving India a strategic advantage in the region.
Operation Meghdoot resulted in the first of its kind and the only army in the world to have deployed tanks and heavy ordnance at such high altitudes.
The Siachen Glacier conflict arose due to a vague demarcation of territories in the Karachi Agreement of 1949, leading to both India and Pakistan claiming the barren heights and the glacier, which escalated tensions in the region.

Significance of Siachen Glacier:

Preventing ingress from Pakistan and China: Siachen forms a hub between Shaksgam Valley, Karakoram Pass, and Aksai Chin, making it vital for India to prevent ingress not only from Pakistan but also from China.
Maintaining the status quo: The Indian Army’s presence in the region has helped maintain the status quo and prevent any territorial changes that could compromise India’s security.
Watershed and drainage: The Siachen Glacier acts as a watershed, with its melting waters being the main source of the Nubra River in the Indian region of Ladakh, which drains into the Shyok River and ultimately the Indus River, a major water source for Pakistan.

Recent developments on the Glacier

Technological Advancements: The introduction of VSAT technology has revolutionized communication on the glacier, improving mobile and data connectivity for troops. This has enhanced real-time situational awareness and telemedicine capabilities.
Improved Mobility and Logistics: The induction of Chinook heavy-lift helicopters, logistic drones, and All-Terrain Vehicles (ATVs) has significantly improved mobility across the glacier and the supply of essential provisions to remote posts, especially during winters. New logistics chains ensure the availability of fresh rations and vegetables for forward posts.
Aircraft Support: Various aircraft from the Indian Air Force (IAF) operate in support of Operation Meghdoot, providing crucial support to troops in remote posts. Helicopters, including Chinook, remain a lifeline for troops.
Enhanced Medical Facilities: Medical facilities in Partapur and Base Camp boast some of the best medical and surgical specialists in the country.

Way forward:

Continued Diplomatic Talks: India and Pakistan may continue to engage in diplomatic dialogues, potentially at higher levels, to discuss the demilitarization of Siachen and other related issues. These talks could aim to find common ground and address mutual concerns.
Authentication of AGPL: India’s insistence on authenticating the Actual Ground Position Line (AGPL) as the first step towards demilitarization could remain a key sticking point. Efforts may be made to find a mutually acceptable way to verify and authenticate the AGPL.
Involvement of Third Parties: Third-party mediation or involvement from international organizations could be explored to facilitate discussions and help build trust between India and Pakistan.

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Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

What is Exoatmospheric Interception?

16 April 2024 | Prelims Only | Science and Technology

Mains GS3: GS3-17.Awareness in the fields of IT, Space, Computers, Robotics, Nano-technology, Bio-technology and issues relating to Intellectual Property Rights.

Why in the news?

Israel successfully intercepted an Iranian missile outside Earth’s atmosphere using an Exoatmospheric kill vehicle.

Israeli Air-Defence Systems

Israel’s multi-layered air defence system, including Iron Dome, The Arrow, and David’s Sling, was activated in anticipation of the attack.

IRON DOME: The short-range Iron Dome air defence system was built to intercept the kind of rockets fired by the Hamas in Gaza. Developed by state-owned Rafael Advanced Defense Systems with US backing, it became operational in 2011. Each truck-towed unit fires radar-guided missiles to blow up short-range threats like rockets, mortars and drones in mid-air.
ARROW: The long-range Arrow-2 and Arrow-3 system, developed by Israel with an Iranian missile threat in mind, is designed to intercept ballistic missiles outside the earth’s atmosphere, using a detachable warhead that collides with the target. It operates at an altitude that allows for the safe dispersal of any non-conventional warheads.
DAVID’S SLING: This mid-range system is designed to shoot down ballistic missiles fired from 100 km to 200 km away. Developed and manufactured jointly by Israel’s state-owned Rafael Advanced Defense Systems and the U.S. Raytheon Co, David’s Sling is also designed to intercept aircraft, drones and cruise missiles.

What are Exoatmospheric Missiles?

Exoatmospheric missiles, or anti-ballistic missiles (ABMs), operate beyond Earth’s atmosphere to intercept incoming ballistic missiles.
They employ advanced sensors and guidance systems to detect, track, and destroy targets in space.
Kinetic kill vehicles, like the Exoatmospheric Kill Vehicle (EKV), rely on high-speed collisions to neutralize threats.
It travels at hypersonic speed.

Working Mechanism of Exoatmospheric Missiles:

The EKV uses a solid rocket booster to propel itself into space.
Advanced sensors and onboard computers identify and track incoming threats.
Precise maneuvering allows the missile to navigate towards the target.
Impact from a high-speed collision eliminates the threat without traditional warheads, enhancing speed and accuracy.

PYQ:

[2018] What is “Terminal High Altitude Area Defense (THAAD)”, sometimes seen in the news?

(a) An Israeli radar system

(b) India’s indigenous anti-missile programme

(d) A defence collaboration between Japan and South Korea

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Food Processing Industry: Issues and Developments

What is Shrinkflation?

16 April 2024 | Prelims Only | Economics

Mains GS3: GS3-10.Food processing and related industries in India-scope’ and significance, location, upstream and downstream requirements, supply chain management

Why in the news?

As input prices turn inflationary, the FMCG (Fast-Moving Consumer Goods) segment faces the spectre of shrinking packs, impacting consumer choices and industry dynamics.

What are FMCGs?

Fast-moving consumer goods, also known as consumer packaged goods, are products that are sold quickly and at a relatively low cost.
Examples include non-durable household goods such as packaged foods, beverages, toiletries, candies, cosmetics, over-the-counter drugs, dry goods, and other consumables.

What is Shrinkflation?

Shrinkflation is a business practice where companies reduce the size or quantity of a product while keeping its price the same.

Causes for Shrinkflation:

Cost Management: It helps companies manage rising production costs, such as raw materials or labor, without sacrificing profitability.
Market Competition: In competitive markets, companies may use shrinkflation to maintain their market share by keeping their prices competitive.

Effects of Shrinkflation:

Consumer Perception: If consumers notice the change, it can lead to negative perceptions of the brand, loss of trust, and reduced customer loyalty.
Accuracy of Inflation Measurement: Shrinkflation complicates accurate measures of inflation since the price remains constant while the quantity decreases.
Limitations: Companies can only implement shrinkflation discreetly and for a limited number of times before consumers become aware and react negatively. Overuse can damage brand reputation.

PYQ:

[2015] With reference to inflation in India, which of the following statements is correct?

(a) Controlling the inflation in India is the responsibility of the Government of India only

(b) The Reserve Bank of India has no role in controlling the inflation

(d) Increased money circulation helps in controlling the inflation

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