Note4Students
From UPSC perspective, the following things are important :
Prelims level: World Economic Outlook (WEO), IMF
Mains level: Impact of COVID on employment and economic growth
The International Monetary Fund (IMF) has unveiled its 2nd World Economic Outlook (WEO) Report.
About WEO Report
- The WEO is a report by the IMF that analyzes key parts of the IMF’s surveillance of economic developments and policies in its member countries.
- It also projects developments in the global financial markets and economic systems.
- The report comes out twice every year — April and October.
- It is based on a wide set of assumptions about a host of parameters — such as the international price of crude oil — and set the benchmark for all economies to compare one another with.
Key takeaways from the October 2021 WEO
- The central message was that the global economic recovery momentum had weakened due to the pandemic-induced supply disruptions.
- It is the increasing inequality among nations that IMF was most concerned about.
- The dangerous divergence in economic prospects across countries remains a major concern.
Reasons for the slowdown
There are two key reasons:
- Large disparities in vaccine access
- Differences in policy support
What about Employment?
Ans. There is a lag.
- Employment around the world remains below its pre-pandemic levels.
- This reflects a mix of negative output gaps, worker fears of on-the-job infection in contact-intensive occupations, childcare constraints, labour demand changes due to automation etc.
- The main concern is the gap between recovery in output and employment which is likely to be larger in emerging markets and developing economies than in advanced economies.
- Further, young and low-skilled workers are likely to be worse off than prime-age and high-skilled workers, respectively.
Implications for India
Ans. Reduce India’s growth momentum
- IMF has suggested that India’s economic recovery is gaining ground.
- Some sectors such as the IT-services sectors have been practically unaffected by Covid, while the e-commerce industry is doing brilliantly.
- However, the recovery in unemployment is lagging the recovery in output (or GDP).
- This matters immensely for India as it reflects jobless growth.
- India was already facing a deep employment crisis before the Covid crisis, and it became much worse after it.
- Lack of adequate employment levels would again drag down overall demand and affect the growth momentum.
Threats to growth momentum
- Usual unemployment: Even before the pandemic, India already had a massive unemployment crisis.
- Sector-wise recovery: India is witnessing a K-shaped recovery. That means different sectors are recovering at significantly different rates.
- Unorganized sector: A weak recovery for the informal/unorganized sectors implies a drag on the economy’s ability to create new jobs or revive old ones.
- Contact-based services: Such services which can create many more jobs, are not seeing a similar bounce-back.
How informal is India’s economy?
- A NSO report titled ‘Measuring Informal Economy in India’ gives a detailed account of informal Indian economy.
- It shows the share of different sectors of the economy in the overall Gross Value Added and the share of the unorganised sector therein.
- The share of informal/unorganised sector GVA is more than 50% at the all-India level, and is even higher in certain sectors.
- It creates a lot of low-skilled jobs such as construction and trade, repair, accommodation, and food services.
This is why India is more vulnerable.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: North Atlantic Treaty Organization (NATO)
Mains level: Russia Vs. Nato
Russia has decided that it would halt the activities of its diplomatic mission to NATO after it expelled eight Russian diplomats in a row over spying.
Why such move?
- NATO had set up a prohibitive regime for Russian diplomats in Brussels by banning them from its headquarters building.
- Relations between Moscow and the West have been strained for years, but the immediate impetus for the Russian move was a spy scandal.
- Military tensions have also escalated in recent years, including last spring when Russian troops massed along Ukraine’s border (probably for invasion).
Significance of the move
- The decision will end a post-Cold War experiment, never very successful, in building trust between Russia and the Western alliance.
- It was established decades ago to contain the Soviet Union, which officials in Moscow accused of later encroaching on former Soviet territory.
About North Atlantic Treaty Organization (NATO)
- NATO is a military alliance established by the North Atlantic Treaty (also called the Washington Treaty) of April 4, 1949.
- It sought to create a counterweight to Soviet armies stationed in Central and Eastern Europe after World War II.
- Its original members were Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the United Kingdom, and the United States.
- NATO has spread a web of partners, namely Egypt, Israel, Sweden, Austria, Switzerland and Finland.
Why was it founded?
Ans. Communist sweep in Europe post-WWII and rise of Soviet dominance
- After World War II in 1945, Western Europe was economically exhausted and militarily weak, and newly powerful communist parties had arisen in France and Italy.
- By contrast, the Soviet Union had emerged from the war with its armies dominating all the states of central and Eastern Europe.
- By 1948 communists under Moscow’s sponsorship had consolidated their control of the governments of those countries and suppressed all non-communist political activity.
- What became known as the Iron Curtain, a term popularized by Winston Churchill, had descended over central and Eastern Europe.
Ideology of NATO
- NATO ensures that the security of its European member countries is inseparably linked to that of its North American member countries.
- It commits the Allies to democracy, individual liberty and the rule of law, as well as to the peaceful resolution of disputes.
- It also provides a unique forum for dialogue and cooperation across the Atlantic.
The Article 5
- The heart of NATO is expressed in Article 5, in which the signatory members agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all.
Why in news now?
- The relationship between NATO and Russia is at its lowest point since the end of the Cold War.
- The NATO (rather US) sees their aggressive actions, not least against Ukraine, but also the significant military buildup and violations of important arms control agreements.
- NATO suspended practical cooperation with Russia in 2014 after it annexed Ukraine’s Crimean Peninsula.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CoP, UNFCCC
Mains level: Paris Agreement
The UK will host the COP 26 UN Climate Change Conference from October 31 to November 12.
Conference of Parties (CoP): A Backgrounder
- The CoP comes under the United Nations Climate Change Framework Convention (UNFCCC) which was formed in 1994.
- The UNFCCC was established to work towards “stabilisation of greenhouse gas concentrations in the atmosphere.”
- It laid out a list of responsibilities for the member states which included:
- Formulating measures to mitigate climate change
- Cooperating in preparing for adaptation to the impact of climate change
- Promoting education, training and public awareness related to climate change
- The UNFCCC has 198 parties including India, China and the USA. COP members have been meeting every year since 1995.
COP1 to COP25: Key takeaways
COP1: The first conference was held in 1995 in Berlin.
COP3: It was held in Kyoto, Japan, in 1997, the famous Kyoto Protocol (w.e.f. 2005) was adopted. It commits the member states to pursue limitation or reduction of greenhouse gas emissions.
COP8: India hosted the eighth COP in 2002 in New Delhi. It laid out several measures including, ‘strengthening of technology transfer… in all relevant sectors, including energy, transport and R&D, and the strengthening of institutions for sustainable development.
COP21: it is one of the most important that took place in 2015, in Paris, France. Here countries agreed to work together to ‘limit global warming to well below 2, preferably at 1.5 degrees Celsius, compared to pre-industrial levels.’
Significance of COP26
- The event will see leaders from more than 190 countries, thousands of negotiators, researchers and citizens coming together to strengthen a global response to the threat of climate change.
- It is a pivotal movement for the world to come together and accelerate the climate action plan after the COVID pandemic.
COP26 goals
According to the UNFCCC, COP26 will work towards four goals:
- Secure global net-zero by mid-century and keep 1.5 degrees within reach
- The UNFCCC recommends that countries ‘accelerate the phase-out of coal, curtail deforestation, speed up the switch to electric vehicles and encourage investment in renewables’ to meet this goal.
- Adapt to protect communities and natural habitats
- Countries will work together to ‘protect and restore ecosystems and build defences, warning systems and resilient infrastructure and agriculture to avoid loss of homes, livelihoods and even lives.’
- Mobilise finance
- To deliver on first two goals, developed countries must make good on their promise to mobilise at least $100bn in climate finance per year by 2020.
- Work together to deliver
- Another important task at the COP26 is to ‘finalise the Paris Rulebook’. Leaders will work together to frame a list of detailed rules that will help fulfil the Paris Agreement.
What India could do to reach its targets?
- Update NDCs: It is time for India to update its Nationally Determined Contributions or NDCs. (NDCs detail the various efforts taken by each country to reduce the national emissions)
- Effective planning: Sector by sector plans are needed to bring about development. We need to decarbonise the electricity, transport sector and start looking at carbon per passenger mile.
- Energy transition: Aggressively figure out how to transition our coal sector
- Robust legal framework: India also needs to ramp up the legal and institutional framework of climate change.
Try answering this PYQ:
With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct?
- The Agreement was signed by all the member countries of the UN and it will go into effect in 2017.
- The Agreement aims to limit the greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2 degree Centigrade or even 5 degree Centigrade above pre-industrial levels.
- Developed countries acknowledged their historical responsibility in global warming and committed to donate dollar 1000 billion a year from 2020 to help developing countries to cope with climate change.
Select the correct answer using the code given below:
(a) 1 and 3 only
(b) 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Global Hunger Index
Mains level: Food and nutrition security of India
The Global Hunger Index 2021 has ranked India at 101 positions out of a total 116 countries.
Note the parameters over which the GHI is based and their weightage composition.
Global Hunger Index (GHI)
- The Global Hunger Index is a peer-reviewed annual report, jointly published by Concern Worldwide and Welthungerhilfe.
- It determines hunger on a 100-point scale, where 0 is the best possible score (no hunger) and 100 is the worst.
- It is designed to comprehensively measure and track hunger at the global, regional, and country levels.
- The aim of the GHI is to trigger action to reduce hunger around the world.
For each country in the list, the GHI looks at four indicators:
- Undernourishment (which reflects inadequate food availability): calculated by the share of the population that is undernourished (that is, whose caloric intake is insufficient)
- Child Wasting (which reflects acute undernutrition): calculated by the share of children under the age of five who are wasted (that is, those who have low weight for their height)
- Child Stunting (which reflects chronic undernutrition): calculated by the share of children under the age of five who are stunted (that is, those who have low height for their age)
- Child Mortality (which reflects both inadequate nutrition and unhealthy environment): calculated by the mortality rate of children under the age of five
India’s (poor) performance
- India is among the 31 countries where hunger has been identified as serious.
- Only 15 countries fare worse than India.
- Some of these include Afghanistan (103), Nigeria (103), Congo (105), Mozambique (106), Sierra Leone (106), Timor-Leste (108), Haiti (109), Liberia (110), Madagascar (111) and Somalia (116).
- India was also behind most of the neighbouring countries.
- Pakistan was placed at 92 rank, Nepal at 76 and Bangladesh also at 76.
Reasons for such poor performance
- Poor maternal health: Mothers are too young, too short, too thin and too undernourished themselves, before they get pregnant, during pregnancy, and then after giving birth, during breast-feeding.
- Poor sanitation: Poor sanitation, leading to diarrhoea, is another major cause of child wasting and stunting.
- Food insecurity: Low dietary diversity in India is also a key factor in child malnutrition.
- Poverty: Almost 50 million households in India are dependent on these small and marginal holdings.
- Livelihood loss: The rural livelihoods loss after COVID and lack of income opportunities other than the farm sector have contributed heavily to the growing joblessness in rural areas.
Issues over credibility of GHI
- India has ranked among many African countries while it is among the top 10 food-producing countries in the world.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Kunming Declaration, CBD
Mains level: Not Much
The Kunming Declaration was adopted by over 100 countries at the first part of the ongoing virtual 15th meeting of the Conference of the Parties to the United Nations Convention on Biological Diversity.
Kunming Declaration
- It calls upon the parties to “mainstream” biodiversity protection in decision-making and recognise the importance of conservation in protecting human health.
- The theme of the declaration is Ecological Civilization: Building a Shared Future for All Life on Earth.
- By adopting this, the nations have committed themselves to support the development, adoption and implementation of an effective post-2020 implementation plan for the Cartagena Protocol on biosafety.
- Signatory nations will ensure that the post-pandemic recovery policies, programs and plans contribute to the conservation and sustainable use of biodiversity.
About Convention on Biological Diversity (CBD)
- The CBD (wef 1993) known informally as the Biodiversity Convention, is a multilateral treaty.
- The convention has three main goals:
- the conservation of biodiversity
- the sustainable use of its components
- the fair and equitable sharing of benefits arising from genetic resources
- Its objective is to develop national strategies for the conservation and sustainable use of biological diversity, and it is often seen as the key document regarding sustainable development.
- It has two supplementary agreements, the Cartagena Protocol and Nagoya Protocol.
(1) Cartagena Protocol
- It is an international treaty governing the movements of living modified organisms (LMOs) resulting from modern biotechnology from one country to another.
(2) Nagoya Protocol
- It deals with Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (ABS).
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From UPSC perspective, the following things are important :
Prelims level: ISA, OSOWOG
Mains level: Solar Energy
The Union Minister for Power and New and Renewable Energy (MNRE) has addressed the Ministerial session of the Green Grids Initiative-One Sun One World One Grid (OSOWOG) Northwest Europe Cooperative Event.
One Sun, One World, One Grid
- The mega plan of OSOWOG calls for trans-national electricity grid supplying solar power across the globe.
- It will connect 140 countries through a common grid that will be used to transfer solar power.
- The idea was first floated by PM Modi in 2018 during the first assembly of the International Solar Alliance (ISA).
- The vision behind the OSOWOG mantra is “the Sun never sets” and is a constant at some geographical location, globally, at any given point of time.
With India at the fulcrum, the solar spectrum can easily be divided into two broad zones viz:
- Far East: It would include countries like Myanmar, Vietnam, Thailand, Lao, Cambodia and
- Far West: It would cover the Middle East and the Africa Region
Implementation phases of the plan
The plan is divided into three phases:
- Phase 1: It will connect the Indian grid with the Middle East, South Asia and South-East Asian grids to share solar and other renewable energy resources
- Phase 2: It will connect the first phase nations with the African pool of renewable sources
- Phase 3: It will be the concluding step of global interconnection
How novel is the idea?
(1) Scale of the program
- Not limited by national boundaries, it can tackle global challenges linked to energy.
- It will tackle access for underserved people and communities the world over.
- It will enable 3 billion people to access clean drinking water (via solar pumps), give 2 billion women access to clean cooking and bring light to the homes of 750 million people.
(2) Pivotal moment in India’s energy history
- Going back even further, almost a decade ago, the price of solar energy (then INR 15 a unit) had raised question marks about its commercial feasibility.
- Today OSOWOG envisions dispatching surplus electricity at near-zero cost as India produces the cheapest solar-powered electricity anywhere in the world.
(3) Sustainability
- OSOWOG directly tackles two key problems that are emerging as energy systems try to deliver both energy sustainability and access to underserved populations.
- Countries like Singapore or Bangladesh simply may not have enough empty land to generate solar energy.
- Many nations’ policies also prioritise food security (i.e., devoting land to farming) over solar energy. These countries can still benefit from the solar energy dispatched to them via OSOWOG.
(4) India extending leadership
- Having international associations is not a new trend for the energy sector which already has a strong geopolitical organisation such as OPEC.
- Several countries including China have initiated infrastructure projects in other countries, which is seen as a sign of asserting supremacy by several policy experts.
- While India is a partner nation with most trade associations, with ISA and OSOWOG, it is planning to take a leadership position.
Significance of OSOWOG
- Successful ambitious project: It is obviously a very grand and ambitious project with a looming success.
- Pathbreaking idea: It is also clear that a new energy sector paradigm is needed as we are facing a huge inflection point in electricity generation and consumption.
- Green benefits: Potential benefits include widespread scale up in energy access, abatement in carbon emissions, lower cost and improved livelihoods.
- Energy alternative: With battery and storage technology becoming cheaper, electricity consumption at source end is a more feasible idea for solar power.
Limitations of OSOWOG
- Low financial benefits: This may sound a geopolitically a clever strategy. However, it is to be seen if this makes sense, technology-wise and in terms of financial benefits.
- Cost-sharing challenge: The mechanism of cost-sharing will be challenging, given the varied priorities of participating countries depending on their socio-economic orders.
- Pace of progress: The OSOWOG will turn out to be an expensive, complex and very slow progress project.
- Geopolitical issue: Any disruption caused due to any bilateral/multilateral issues can potentially affect critical services in multiple continents and countries.
- Grid parameters: There is a difference in voltage, frequency and specifications of the grid in most regions. Maintaining grid stability with just renewable generation would be technically difficult.
Way forward
- While India has taken baby steps with ISA, a major investment drive is still missing. This is planned to be achieved through OSOWOG.
- India will need a strong coalition of international partners to realise this vision.
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Back2Basics: International Solar Alliance
- Officially announced during UN Climate Change Conference in Paris in 2015, the ISA is a partnership of solar-resource rich countries.
- Currently, there are 121 countries that have agreed to be members for ISA.
- Most of these are countries with large participation from Africa, South-east Asia and Europe.
- Pakistan and China are not a part of ISA.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: RE Country Attractiveness Index (RECAI)
Mains level: Renewable Energy in India
India has retained the third rank in the Renewable Energy Country Attractiveness Index released by consultancy firm EY.
RE Country Attractiveness Index (RECAI)
- The RECAI ranks the world’s top 40 markets on the attractiveness of their renewable energy investment and deployment opportunities.
- The rankings reflect assessments of market attractiveness and global market trends.
India’s performance
- India remained at the third position since three consecutive years.
- India’s thriving renewable energy market conditions, inclusive policy decisions, investment and technology improvements focusing on self-reliant supply chains have pushed the transition.
- RECAI highlights that corporate power purchase agreements (PPAs) are emerging as a key driver of clean energy growth.
- A new PPA Index – introduced in this edition of RECAI – focuses on the attractiveness of renewable power procurement and ranks the growth potential of a nation’s corporate PPA market.
- India is ranked sixth among the top 30 PPA markets.
Global scenario
- The US, mainland China and India continue to retain the top three rankings and Indonesia is a new entrant to the RECAI.
- The top-performing markets have held their ground in this latest issue – with no movement into or out of the top eight.
- France (fourth position, up by one) and the UK (fifth position, down by one), while Germany (sixth position, up by one) has edged back ahead of Australia (seventh position, down by one).
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From UPSC perspective, the following things are important :
Prelims level: IEA
Mains level: Read the attached story
International Energy Agency (IEA) has invited India, the world’s third-largest energy consumer, to become its full-time member.
International Energy Agency (IEA)
- The IEA is an autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis.
- Based in Paris, IEA was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market.
- In the decades since, its role has expanded to cover the entire global energy system, encompassing traditional energy sources such as oil, gas, and coal as well as cleaner and faster growing ones such as solar PV, wind power and biofuels.
- It is best known for the publication of its annual World Energy Outlook.
Role and responsibility
- The Agency’s mandate has broadened to focus on providing analysis, data, policy recommendations and solutions to help countries ensure secure, affordable and sustainable energy for all.
- In particular, it has focused on supporting global efforts to accelerate the clean energy transition and mitigate climate change.
- The IEA has a broad role in promoting rational energy policies and multinational energy technology co-operation with a view to reaching net zero emissions.
India and IEA
- India, in March 2017, became an associate member of the Paris-based body which advises industrialised nations on energy policies.
- Today the IEA acts as a policy adviser to its member states, as well as major emerging economies such as Brazil, China, India, Indonesia and South Africa to support energy security and advance the clean energy transition worldwide.
Significance of the invitation
- This proposal if accepted will require New Delhi to raise strategic oil reserves to 90 days requirement.
- India is becoming increasingly influential in global energy trends.
Try this MCQ:
Q.The Global Energy Transition Index recently seen in news is released by:
a) International Energy Agency (IEA)
b) World Economic Forum (WEF)
c) International Renewable Energy Agency (IRENA)
d) International Solar Alliance
Post your answers here.
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From UPSC perspective, the following things are important :
Prelims level: Trends in global trade post covid
Mains level: Slowdown in China and opportunities for India
The World Trade Organization (WTO) has upgraded its world merchandise trade growth outlook to nearly 11 percent for this year, higher than 8% estimated in March.
About WTO
- The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade between nations.
- Governments use the organization to establish, revise, and enforce the rules that govern international trade.
- It officially commenced operations on 1 January 1995, pursuant to the 1994 Marrakesh Agreement, thus replacing the General Agreement on Tariffs and Trade (GATT) that had been established in 1948.
- The WTO is the world’s largest international economic organization, with 164 member states representing over 96% of global trade and global GDP.
- The WTO facilitates trade in goods, services and intellectual property among participating countries.
- It prohibits discrimination between trading partners, but provides exceptions for environmental protection, national security, and other important goals.
Report on Global trade
- According to a WTO, global goods trade is expected to grow by 10.8 per cent compared to the forecast of 8 per cent in March, but with varied recovery, depending on the region.
- The report said export volume growth in 2021 will be 8.7 per cent in North America, 7.2 per cent in South America, 9.7 per cent in Europe, 7 per cent in Africa, 5 per cent in West Asia and the highest for Asia at 14.4 per cent.
- On the other hand, imports are expected to grow at a faster pace as compared to exports. Inbound shipments into North America are set to grow by 12.6 per cent.
- It will be 19.9 per cent in South America, 9.1 per cent in Europe, 13.1 per cent in CIS, 11.3 per cent in Africa, 9.3 per cent in West Asia and 10.7 per cent in Asia.
Key highlights for India
- Exports from India have been rising consistently over the last few quarters, after plummeting for a few months as the outbreak of Covid-19 disrupted global trade.
- India’s exports to its top trading partners such as the US, European Union, nations in West Asia, among others, are expected to rise.
- Exports data during the first six months of the current fiscal year is emblematic of the fact that external demand has been robust.
- Besides, supply-side disruptions can also be exacerbated by the rapid and unexpectedly strong recovery of demand in advanced and many emerging economies.
Competing with China
- Experts said with rising global demand, India should be able to compete in various segments vis-a-vis China.
- Currently, China is facing supply-side as well as demand-side issues owing to several internal challenges (energy, debt crisis).
- Therefore, India is in a good position to increase its exports, and can become a substitute for China across various product categories or sectors.
- India can take advantage of the increasing global demand, which can ultimately translate into demand for Indian exports.
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From UPSC perspective, the following things are important :
Prelims level: Global Minimum Tax, BEPS
Mains level: Global Minimum Tax Debate
A global deal to ensure big companies pay a minimum tax rate of 15% and make it harder for them to avoid taxation has been agreed by 136 countries.
What is the news?
- The OECD said four countries – Kenya, Nigeria, Pakistan and Sri Lanka – had not yet joined the agreement.
- However, the countries behind the accord together accounted for over 90% of the global economy.
Why a global minimum tax?
- With budgets strained after the COVID-19 crisis, many governments want more than ever to discourage multinationals from shifting profits – and tax revenues – to low-tax countries.
- Increasingly, income from intangible sources such as drug patents, software and royalties on intellectual property has migrated to these jurisdictions.
- This has allowed companies to avoid paying higher taxes in their traditional home countries.
- The minimum tax and other provisions aim to put an end to decades of tax competition between governments to attract foreign investment.
How would a deal work?
- The global minimum tax rate would apply to overseas profits of multinational firms with 750 million euros ($868 million) in sales globally.
- Govts could still set whatever local corporate tax rate they want.
- However, buif companies pay lower rates in a particular country, their home governments could “top up” their taxes to the 15% minimum, eliminating the advantage of shifting profits.
- A second track of the overhaul would allow countries where revenues are earned to tax 25% of the largest multinationals’ so-called excess profit – defined as profit in excess of 10% of revenue.
What happens next?
- The next step is for finance ministers from the Group of 20 economic powers to formally endorse the deal, paving the way for adoption by G20 leaders at an end October summit.
- Nonetheless, questions remain about the US position which hangs in part on a domestic tax reform the Biden administration wants to push through the US Congress.
- The agreement calls for countries to bring it into law in 2022 so that it can take effect by 2023, an extremely tight timeframe given that previous international tax deals took years to implement.
- Countries that have in recent years created national digital services taxes will have to repeal them.
What will be the economic impact?
- The OECD, which has steered the negotiations, estimates the minimum tax will generate $150 billion in additional global tax revenues annually.
- Taxing rights on more than $125 billion of profit will be additionally shifted to the countries were they are earned from the low tax countries where they are currently booked.
- Economists expect that the deal will encourage multinationals to repatriate capital to their country of headquarters, giving a boost to those economies.
- However, various deductions and exceptions baked into the deal are at the same time designed to limit the impact on low tax countries like Ireland, where many US groups base their European operations.
Back2Basics: Base Erosion and Profit Shifting (BEPS)
- BEPS refers to corporate tax planning strategies used by multinationals to “shift” profits from higher-tax jurisdictions to lower-tax jurisdictions.
- It thus “erodes” the “tax base” of the higher-tax jurisdictions.
- Corporate tax havens offer BEPS tools to “shift” profits to the haven, and additional BEPS tools to avoid paying taxes within the haven.
- It is alleged that BEPS is associated mostly with American technology and life science multinationals.
Try this:
Q.3) What are the factors that led to the demand of global minimum corporate tax? What will be its implications for India? (10 Marks)
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From UPSC perspective, the following things are important :
Prelims level: Free Trade Agreement
Mains level: India-ASEAN Relations
The Commerce and Industry Minister has called for a renegotiation of the India-ASEAN free trade agreement (FTA).
Why such move?
- The MCI aims to prevent its misuse by ‘third parties’ and remove trade restrictions as well as non-tariff barriers that he said had hurt Indian exports disproportionately since the pact was operationalized in 2010.
- The focus needed to be on new rules to eliminate misuse ‘by third parties outside ASEAN’, the minister said, hinting at China.
- India had to deal with several restrictive barriers on exports in the ASEAN region, particularly in the agriculture and auto sectors.
About ASEAN
- Members:
- Officially the Association of Southeast Asian Nations, ASEAN is an economic union comprising 10 member states in Southeast Asia.
- It promotes intergovernmental cooperation and facilitates economic, political, security, military, educational, and sociocultural integration between its members and other countries in Asia.
India-ASEAN Free Trade Agreement
- The initial framework agreement for ASEAN–India Free Trade Area (AIFTA) was signed on 8 October 2003 in Bali, Indonesia.
- The FTA came into effect on 1 January 2010.
- The FTA had emerged from a mutual interest of both parties to expand their economic ties in the Asia-Pacific region.
Background of the AIFTA
- India’s Look East policy was reciprocated by similar interests of many ASEAN countries to expand their interactions westward.
- After India became a sectoral dialogue partner of ASEAN in 1992, India saw its trade with ASEAN increase relative to its trade with the rest of the world.
- Between 1993 and 2003, ASEAN-India bilateral trade grew at an annual rate of 11.2%, from US$2.9 billion in 1993 to US$12.1 billion in 2003.
- Total Indian FDI into ASEAN from 2000 to 2008 was US$1.3 billion.
Acknowledging this trend and recognising the economic potential of closer linkages, both sides recognised the opportunities to pave the way for the establishment of an ASEAN–India Free Trade Area (FTA).
Structure of the AIFTA
- The signing of the ASEAN-India Trade in Goods Agreement paves the way for the creation of one of the world’s largest FTAs – a market of almost 1.8 billion people with a combined GDP of US$2.8 trillion.
- It sees tariff liberalisation of over 90 percent of products traded between the two dynamic regions, including the so-called “special products”.
- The products include palm oil (crude and refined), coffee, black tea and pepper.
Criticism
While there are many benefits to the ASEAN-India FTA, there is concern in India that the agreement will have several negative impacts on the economy.
- Opening-up its market: This FTA will allow them to increase the market access of their products.
- No specific gains: It is criticised, however, that India will not experience as great an increase in market access to ASEAN countries as ASEAN will in India.
- Export driven ASEAN: The economies of the ASEAN countries are largely export-driven. Considering India’s expansive domestic market, the ASEAN countries will look eagerly towards India as a home for its exports.
- Huge trade deficit: Since the early 2000s, India has had an increasing trade deficit with ASEAN. It is feared that a gradual liberalisation of tariffs and a rise in imported goods into India will threaten several sectors of the economy.
- Inaccessible Markets: As a dominant exporter of light manufacturing products, ASEAN has competitive tariff rates that make it difficult for India to gain access to the industry market in ASEAN countries.
- Cheaper imports: The state of Kerala is an important exporter in the national export of plantation products. It fears that cheap imports of oil palm, rubber, coffee, and fish would lower domestic production, adversely affecting farmers and ultimately its economy.
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From UPSC perspective, the following things are important :
Prelims level: NATO
Mains level: Not Much
NATO has withdrew the accreditation of eight Russian officials to the military alliance in response to a rise in malign activities by Moscow.
NATO
- NATO is a military alliance established by the North Atlantic Treaty (also called the Washington Treaty) of April 4, 1949.
- It sought to create a counterweight to Soviet armies stationed in Central and Eastern Europe after World War II.
- Its original members were Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the United Kingdom, and the United States.
- NATO has spread a web of partners, namely Egypt, Israel, Sweden, Austria, Switzerland and Finland.
Why was it founded?
Ans. Communist sweep in Europe post-WWII and rise of Soviet dominance
- After World War II in 1945, Western Europe was economically exhausted and militarily weak, and newly powerful communist parties had arisen in France and Italy.
- By contrast, the Soviet Union had emerged from the war with its armies dominating all the states of central and Eastern Europe.
- By 1948 communists under Moscow’s sponsorship had consolidated their control of the governments of those countries and suppressed all non-communist political activity.
- What became known as the Iron Curtain, a term popularized by Winston Churchill, had descended over central and Eastern Europe.
Ideology of NATO
- The NATO ensures that the security of its European member countries is inseparably linked to that of its North American member countries.
- It commits the Allies to democracy, individual liberty and the rule of law, as well as to peaceful resolution of disputes.
- It also provides a unique forum for dialogue and cooperation across the Atlantic.
The Article 5
- The heart of NATO is expressed in Article 5, in which the signatory members agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all.
Why in news now?
- The relationship between NATO and Russia is at its lowest point since the end of the Cold War.
- The NATO (rather US) sees their aggressive actions, not least against Ukraine, but also the significant military buildup and violations of important arms control agreements.
- NATO suspended practical cooperation with Russia in 2014 after it annexed Ukraine’s Crimean Peninsula.
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From UPSC perspective, the following things are important :
Prelims level: High Ambition Coalition (HAC)
Mains level: NA
India has officially joined the High Ambition Coalition for Nature and People, a group of more than 70 countries encouraging the adoption of the global goal to protect 30×30.
High Ambition Coalition (HAC)
Aim: To promote an international agreement to protect at least 30 % the of world’s land and ocean by 2030
- The HAC is an informal group of approximately 61 countries within the UN Framework Convention on Climate Change (UNFCCC).
- It is committed to advancing progressive proposals on climate ambition.
- The HAC was founded by the Republic of the Marshall Islands in 2014 with the aim of ensuring the Paris Agreement, adopted in 2015, was as ambitious as possible.
- The Republic of the Marshall Islands serves as the convener and secretariat of the HAC.
- The global 30×30 goal is currently a centerpiece of the treaty.
Members
- HAC members currently include a mix of countries in the global north and south; European, Latin American, Africa and Asia countries are among the members.
- India is the first of the BRICS bloc of major emerging economies (Brazil, Russia, India, China and South Africa) to join the HAC.
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From UPSC perspective, the following things are important :
Prelims level: Industrial Park Ratings System (IPRS)
Mains level: NA
The Department for Promotion of Industry and Internal Trade (DPIIT) has released the Industrial Park Ratings System Report.
Industrial Park Ratings System (IPRS)
- The IPRS pilot exercise was launched in 2018 with an objective of enhancing industrial infrastructure competitiveness and supporting policy development for enabling industrialization across the country.
- The IPRS report is an extension of the India Industrial Land Bank which features more than 4,400 industrial parks in a GIS-enabled database.
- It seeks to help investors identify their preferred location for investment.
- With this report, the investors can even remotely refer to this report to identify the suitable investable land area, as per the various parameters of infrastructure, connectivity, business support services and environment and safety standards.
Highlights of the report
- 41 Industrial Parks have been assessed as “Leaders” in the Industrial Park Ratings System Report released by DPIIT.
- 90 Industrial Parks have been rated as under the Challenger category while 185 have been rated as under “Aspirers”.
- These ratings are assigned on the basis of key existing parameters and infrastructure facilities etc.
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From UPSC perspective, the following things are important :
Prelims level: Read the attached story
Mains level: Outer Spaces and its utility
In opening new pathways for outer space cooperation in the recent US visit, PM Modi has positioned India to engage more productively with a rapidly evolving domain that is seeing more commerce and contestation.
Outer Space Cooperation: A backgrounder
- International cooperation is the new normal in space exploration, but it’s not a new concept.
- One example of this cooperation is the International Space Station (ISS).
- Another advance in international cooperation in the peaceful exploration of outer space came with the Artemis Accords.
- Introduced in October 2020, the Artemis Accords establish a set of principles to guide space cooperation among countries participating in NASA’s Artemis program.
There are five treaties that deal with issues related to outer space
- Moon Treaty: Non-appropriation of outer space by any one country, arms control, the freedom of exploration
- Liability Convention: Liability for damage caused by space objects
- Rescue Agreement: Safety and rescue of spacecraft and astronauts
- Outer Space Treaty: Prevention of harmful interference with space activities and the environment
- Registration Convention: Notification and registration of space activities, scientific investigation and exploitation of natural resources in outer space and the settlement of disputes
Why does Outer Spaces matter?
- Space situational awareness (SSA) involves monitoring the movement of all objects — natural (meteors) and man-made (satellites) — and tracking space weather.
- Today, space is integral to our lives and disruption of space-based communications and earth observation will have serious consequences.
India’s strategic interest in Outer Space
Delhi’s new strategic interest in outer space is based on a recognition of two important trends.
- Centrality of emerging technologies in shaping the 21st-century global order
- Urgency of writing new rules for the road to peace and stability in outer space
Why need US for this?
- Technology cooperation has always been an important part of India-US relations.
- But it has been a boutique discourse between the relevant agencies of the two governments.
- The US has traditionally dominated outer space in the commercial domain.
- As emerging technologies overhaul global economic and security structures, Delhi and Washington now have to widen the interface of technology.
Why need a comprehensive outer space treaty?
- Although human forays into space began in the middle of the 20th century, the intensity of that activity as well as its commercial and security implications have dramatically increased in recent decades.
- Outer space has become a location for lucrative business as well as a site of military competition between states.
- Until recently, outer space has been the sole preserve of states. But private entities are now major players in space commerce.
- At the same time, as space becomes a critical factor in shaping the military balance of power on the earth, there is growing competition among states.
Expanding QUAD in this term
- Until now, the maritime domain has dominated the strategic cooperation bilaterally between Delhi and Washington as well as within the Quad.
- The annual Malabar naval exercise, for example, began nearly three decades ago as a bilateral venture in 1992 and became a quadrilateral one in 2020 with the participation of Australia.
Why does US need India in OST?
- India, which has developed significant space capabilities over the decades, is a deeply invested party.
- The US recognises that it can’t unilaterally define the space order anymore and is looking for partners.
- International cooperation on space situational awareness is similar to the agreements on maritime domain awareness — that facilitate sharing of information on a range of ocean metrics.
- India has been strengthening its maritime domain awareness through bilateral agreements as well as the Information Fusion Centre for the Indian Ocean Region (IFC-IOR) at Gurugram.
- India has also taken tentative steps to cope with the unfolding military challenges in outer space.
- It has also initiated space security dialogue with close partners like the US, Japan, and France.
Making a first global move
- When signed, the agreement with the US on SSA will be the first of its kind for India.
- Washington has agreements with more than two dozen countries on SSA.
- The US and Indian delegations have also discussed a US initiative called the Artemis Accords — that seek to develop norms for activity in the Moon and other planetary objects.
Way forward
- As commercial and military activity in outer space grows, the 20th-century agreements like Outer Space Treaty and the Moon Treaty (1979) need reinforcement and renewal.
- The growing strategic salience of outer space demands substantive national policy action in India.
- That can only be mandated by the highest political level. Back in 2015, PM Modi’s speech on the Indian Ocean focused national attention on maritime affairs.
- India could do with a similar intervention on outer space today.
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From UPSC perspective, the following things are important :
Prelims level: UNGA
Mains level: Mandate of the UN General Assembly
Every year since the 10th United Nations General Assembly (UNGA) in 1995, Brazil has been the first to address the delegation, followed by the United States.
About UNGA
- The UNGA is one of the six principal organs of the United Nations (UN), serving as the main deliberative, policymaking, and representative organ of the UN.
- Its powers, composition, functions, and procedures are set out in Chapter IV of the United Nations Charter.
- It also establishes numerous subsidiary organs to advance or assist in its broad mandate.
- The UNGA is the only UN organ wherein all member states have equal representation.
Why does Brazil always get to speak first?
- Brazil has been the first speaker at the UNGA annual general debate for over six decades now.
- While some assume that the order is determined alphabetically, this is not the case.
- This tradition dates back to the early years of the United Nations, following its formation soon after the end of World War II.
- In those days, most countries were reluctant to be the first to address the chamber.
- Brazil, at the time, was the only country that volunteered to speak first.
So, why does the US go next?
- In the list of speakers, the United States always goes second after Brazil as it is the host nation.
- US President Joe Biden addressed the chamber on Tuesday, detailing his vision for a new era of diplomacy in his first-ever UNGA speech.
How is the order of the remaining speakers determined?
- After the US and Brazil, the order of speakers depends on a number of factors.
- Generally the order is determined by the rank of the representative — heads of state, heads of government, crown princes, and foreign ministers would be amongst the initial speakers, followed by deputies and ambassadors.
- Other criteria like geographic balance also play a role in determining the order.
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From UPSC perspective, the following things are important :
Prelims level: SAARC
Mains level: Success and failures of SAARC
A meeting of foreign ministers from the South Asian Association for Regional Cooperation (SAARC) countries, which was set to be held in New York has been cancelled.
About SAARC
- The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of states in South Asia.
- Its member states are Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.
- The SAARC comprises 3% of the world’s area, 21% of the world’s population and 4.21% (US$3.67 trillion) of the global economy, as of 2019.
- The SAARC was founded in Dhaka on 8 December 1985. Its secretariat is based in Kathmandu, Nepal.
- The organization promotes development of economic and regional integration. It launched the South Asian Free Trade Area in 2006.
- The SAARC maintains permanent diplomatic relations at the United Nations as an observer and has developed links with multilateral entities, including the European Union.
Formation of SAARC
- After the USSR invaded Afghanistan in 1979, the security situation in South Asia rapidly deteriorated. In response, the foreign ministers of the initial seven members met in Colombo in 1981.
- At the meeting, Bangladesh proposed forming a regional association that would meet to discuss matters such as security and trade.
- While most of the countries present were in favour of the proposal, India and Pakistan were sceptical.
- Eventually, both countries relented and in 1983 in Dhaka, joined the other five nations in signing the Declaration.
What has SAARC done so far
- Despite its lofty ambitions, SAARC has not become a regional association in the mould of the European Union or the African Union.
- Its member states are plagued by internal divisions, most notably the conflict between India and Pakistan.
- This in turn has hampered its ability to form comprehensive trade agreements or to meaningfully collaborate on areas such as security, energy and infrastructure.
- The 18th and last SAARC summit was held in 2014 with Pakistan scheduled to host the 19th summit in 2016.
- Many nations pulled out of the summit, citing fears of regional insecurity caused by Pakistan and a lack of a conducive environment for the talks.
Limited success to count
- Despite these setbacks, SAARC has achieved a modicum of success.
- It has provided a platform for representatives from member countries to meet and discuss important issues, something that may have been challenging through bilateral discussions.
- India and Pakistan for example would struggle to publicly justify a meeting when tensions between the two are particularly high, but representatives from both countries could come together under the banner of SAARC.
- The bloc has also made some headway in signing agreements related to climate change, food security and combatting the Covid-19 crisis.
- It has the potential to do far more but that is contingent upon cooperation on key issues between member states.
Why was the recent meet cancelled?
Ans. Pakistan’s insistence to include the Taliban
- The member states are unable to agree upon the participation of Afghanistan, with Pakistan and India in particular at loggerheads over the issue.
- After Pakistan objected to the participation of any official from the previous Ghani administration, SAARC members reportedly agreed to keep an “empty chair” as a symbolic representation of Afghanistan.
- However, Islamabad later insisted that the Taliban be allowed to send its representative to the summit, a notion that all of the other member states rejected.
- After no consensus could be formed, Nepal, the ‘host’ of the summit, officially cancelled the meeting.
Why did countries object?
Ans. Taliban is not a legitimate govt
- The Taliban has not been recognised as the official government of Afghanistan by any SAARC countries barring Pakistan.
- Several top Taliban leaders are blacklisted by the US and/or designated as international terrorists.
- Senior leaders who are not blacklisted are known for supporting terrorist activities or affiliating with terrorist organisations.
- Allowing Taliban to represent Afghanistan in SAARC would legitimise the group and serve as a formal recognition of their right to govern.
- Apart from Pakistan, which has close ties to the Taliban, particularly its violent subgroup, the Haqqani Network, none of the other SAARC members recognise the Taliban.
Why nations should not recognize the Taliban?
- PM Modi has referred to the Taliban as a non-inclusive government, warning other nations to think before accepting the regime in Afghanistan.
- SAARC members are deeply aware of the threat of spillover terrorism from Afghanistan under the Taliban regime, with Bangladesh in particular, concerned with the effect it may have on extremism.
- Developments in Afghanistan could lead to uncontrolled flow of drugs, illegal weapons and human trafficking.
Conclusion
- With Pakistan headfast in its support for the Taliban and the rest of SAARC weary to acknowledge the group, any future summit is unlikely until the issue has been resolved.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: AUKUS, Quad
Mains level: Focus areas and challenges for AUKUS
The announcement of the new Australia-U.K.-U.S. (AUKUS) trilateral security pact has naturally generated animated debate in strategic circles, before the QUAD summit.
What is the AUKUS?
- The first major initiative of AUKUS would be to deliver a nuclear-powered submarine fleet for Australia.
- The nuclear-powered submarines will give Australia naval heft in the Pacific, where China has been particularly aggressive.
- While the US and Britain have had the capability for decades, Australia has never had an n-sub.
Motive: To counter China
- China has nuclear-powered submarines, as well as submarines that can launch nuclear missiles.
- The three signatories to the AUKUS deal have made it clear though, that their aim is not to arm the new subs with nuclear weapons.
- China has been one of Australia’s biggest trading partners, but the relationship has soured over the last few years.
- It was in consideration of Chinese sensibilities that Australia had pulled out of the Malabar Naval Exercise with the US, India, and Japan after participating in the 2007 edition (of which Singapore too, was part).
- Australia came back to Malabar in 2020, which marked the first time in 13 years that the navies of the four Quad nations war-gamed together.
Australia at the Centrestage
- This is primarily because a nuclear-powered submarine gives a navy the capability to reach far out into the ocean and launch attacks.
- A nuclear-powered submarine offers long distances dives, at a higher speed, without being detected gives a nation the ability to protect its interests far from its shores.
- In the context of the AUKUS agreement, nuclear-powered submarines will give the Royal Australian Navy the capability to go into the South China Sea.
- It conclusively puts to rest a long-standing domestic debate on whether it was time for Australia to assess China through the strategic lens, overcoming the purely mercantile considerations that tended to dominate its China policy.
What makes nuclear submarines so important?
- A nuclear-powered submarine is classified as an “SSN” under the US Navy hull classification system, wherein ‘SS’ is the symbol for submarine, and ‘N’ stands for nuclear.
- A nuclear-powered submarine that can launch ballistic missiles is called “SSBN”.
- Conventional diesel-engine submarines have batteries that keep and propel — though not very fast — the vessel underwater. The life of these batteries can vary from a few hours to a few days.
- The newer Air-Independent Propulsion (AIP) submarines have additional fuel cells that allow them to stay underwater for longer and move faster than the conventional vessels.
- However, the fuel cells are used only at strategic times, when the endurance to remain submerged is required.
- Both conventional and AIP subs need to come to the surface to recharge their batteries using the diesel engine.
- The diesel engine also propels the vessel on the surface. However, the fuel cells of AIP can only be charged at on-land stations, not while at sea.
Why is France unhappy about Australia getting these submarines?
- The deal has complicated the relations between France and Australia, and also France and the US.
- France is upset as it has been kept out of the loop. But, with the core objective of pushing back against China’s aggression, all five countries — US, UK, Australia, France and India — are on the same track.
- The deal between France and Australia had been marked by delays and other issues.
- The first submarine was expected to be operational around 2034.
Does India have nuclear-powered submarines?
- Yes, India is among the six nations that have SSNs. The other five are the US, the UK, Russia, France and China.
- India has had the capacity since it got the Soviet-built K-43 Charlie-class SSN in 1987.
- Commissioned with the Red Fleet of the USSR in 1967, it was leased to the Indian Navy, and was rechristened INS Chakra. The submarine was decommissioned in 1991.
Indo-Pacific is the core issue
- France, which like the UK has historically been an Indo-Pacific power with territories and bases across the region.
- It has participated in a multi-nation naval exercise in the Bay of Bengal with the four Quad nations.
- There is no gainsaying the fact that rapid accretion in China’s economic and military capacities, but more particularly its belligerence, has led to a tectonic shift in regional security paradigms.
- Several countries have been obliged to review their defence preparedness in response to China’s rising military power and its adverse impact on regional stability.
A chance for the UK
- The AUKUS pact is also an emphatic assertion of the relevance of the U.S.-Australia Security Treaty (ANZUS).
- New Zealand, the outlier, walked away in 1984 from the treaty that ironically still bears its initials.
- Its “nuclear-free” stance ran counter to the U.S. Navy’s non-disclosure policy in regard to nuclear weapons aboard visiting vessels.
- Close ties notwithstanding, Australia’s future fleet of nuclear submarines will not be permitted access to New Zealand’s ports or waters, as averred by PM Jacinda Ardern.
- AUKUS provides a fresh opportunity to the United Kingdom to reinsert itself more directly into the Indo-Pacific.
- It is already a member of the Five Eyes (FVEY), an intelligence-sharing alliance built on Anglo-Saxon solidarity (Australia, Canada, New Zealand, the U.K., and the U.S.).
AUKUS is not a substitute for the Quad
- It does not erode the Quad’s significance as a platform for consultations and coordination on broader themes of maritime security, free and open trade, health care, critical technologies, supply chains and capacity-building.
- The AUKUS submarine deal, on the other hand, is an undiluted example of strategic defence collaboration, and a game-changer at that.
Chinese reception of AUKUS
- China, expectedly, has strongly criticised AUKUS and the submarine deal as promoting instability and stoking an arms race.
The exposed double standards
- China has the world’s fastest-growing fleet of sub-surface combatants.
- This includes the Type 093 Shang-class nuclear-powered attack submarine (SSN) and the Type 094 nuclear-powered Jin-class ballistic missile submarine (SSBN).
- Its nuclear submarines are on the prowl in the Indo-Pacific.
- Yet, China denies Australia and others the sovereign right to decide on their defence requirements.
What’s in the box of AUKUS?
Ans. Greater role for Australia
- Australia’s proposed nuclear submarines will give quite a punch in terms of a stand-off capability.
- The growing focus on anti-submarine warfare across a more expansive region is clearly altering calculations.
- Australia’s nuclear submarines would help create a new balance of power in the Indo-Pacific, especially in tandem with the U.S. and the U.K.
- It will now have a more meaningful naval deterrence of its own to protect its sovereign interests.
- It is set to play a more robust role in ensuring peace and stability in the Indo-Pacific.
Way forward
- The setback ‘down under’ may spur France to focus afresh on partners such as India.
- India must strike a balance between continuing imports and implementing the all-important Atmanirbhar Bharat in defence manufacturing.
- France should take AUKUS as a business deal.
- Its momentary reaction at the cancellation of the contract by Australia should soon subside.
- As a major Indo-Pacific power, France is an important part of the regional security calculus.
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From UPSC perspective, the following things are important :
Prelims level: Demographic transition of India
Mains level: Minority population issues
The religious composition of India’s population since Partition has remained largely stable according to a new study published by the Pew Research Centre, a non-profit based in Washington DC.
About the report
- The study, based on data sourced from India’s decennial census and the National Family Health Survey (NFHS), looked at the three main factors that are known to cause changes in the religious composition of populations — fertility rate, migration, and conversions.
- Both Hindus and Muslims, the two largest religious groups, shown not only a marked decline but also a convergence in fertility rates.
- In terms of absolute numbers, every major religion in India saw its numbers rise.
Significance of the report
- These findings, which come as a complement on religious tolerance and segregation in India.
- It is significant in the context of two major issues that have occupied centre stage in recent times — the controversy over the Citizenship Amendment Act (CAA) and the National Register of Citizens (NRC).
- This report also gives a strong message to those fundamentalists who perceive India as a living hell for minorities.
Key findings
(a) Fertility Rates are declining
- With regard to fertility rates, the study found that Muslims, who had the highest fertility rate, also had the sharpest decline in fertility rates.
- From 1992 to 2015, the total fertility rates of Muslims declined from 4.4 to 2.6, while that of Hindus declined from 3.3 to 2.1.
- This indicates that the gaps in childbearing between India’s religious groups are much smaller than they used to be.
- The average fertility rate in India today is 2.2, which is higher than the rates in economically advanced countries such as the U.S. (1.6), but much lower than what it was in 1992 (3.4) or 1951 (5.9).
(b) Marked slowdown
- Although growth rates have declined for all of India’s major religious groups, the slowdown has been more pronounced among religious minorities, who outpaced Hindus in earlier decades.
- From 2001 to 2011, the difference in growth between Muslims (24.7%) and Indians overall (17.7%) was 7 percentage points.
- India’s Christian population grew at the slowest pace of the three largest groups in the most recent census decade — gaining 15.7% between 2001 and 2011, a far lower growth rate than the one recorded in the decade following Partition (29.0%).
(c) ‘No’ Religions group
- Interestingly, out of India’s total population of 1,200 million, about 8 million did not belong to any of the six major religious groups.
- Within this category, mostly comprising adivasi people, the largest grouping was of Sarnas (nearly 5 million adherents), followed by Gond (1 million) and Sari Dharma (5,10,000).
(d) Migration
- The study says that since the 1950s, migration has had only a modest impact on India’s religious composition.
- More than 99% of people who live in India were also born in India, and migrants leaving India outnumber immigrants three-to-one, with “Muslims more likely than Hindus to leave India”, while “immigrants into India from Muslim-majority counties are disproportionately Hindu.”
(e) Religious conversions
- Religious conversion has also had a negligible impact on India’s overall composition, with 98% of Indian adults still identifying with the religion in which they were raised.
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From UPSC perspective, the following things are important :
Prelims level: Global Innovation Index
Mains level: Innovation ecosystem in India
India has climbed 2 spots and has been ranked 46th by the World Intellectual Property Organization in the Global Innovation Index 2021 rankings.
Global Innovation Index
- The Global Innovation Index (GII) is an annual ranking of countries by their capacity for, and success in, innovation.
- It is published by Cornell University, INSEAD, and the World Intellectual Property Organization, in partnership with other organizations and institutions.
- It is based on both subjective and objective data derived from several sources, including the International Telecommunication Union, the World Bank and the World Economic Forum.
- The index was started in 2007 by INSEAD and World Business, a British magazine. It was created by Prof. Soumitra Dutta.
Components of GII
- The GII is computed by taking a simple average of the scores in two sub-indices, the Innovation Input Index and Innovation Output Index, which are composed of five and two pillars respectively.
India’s performance
- India has been on a rising trajectory, over the past several years in the Global Innovation Index (GII), from a rank of 81 in 2015 to 46 in 2021.
- India attributed its improved performance due to the pivotal role played by the Department of Atomic Energy, the Department of Science and Technology, the Department of Biotechnology and the Department of Space.
Global scenario
- Switzerland topped the league table, followed by Sweden, the US and the UK.
- Among Asian economies, South Korea jumped to the fifth position, up from 10 last year.
- China was in the 12th position.
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