UPSC Daily Current Affairs: 24 July 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly PDF Download

GS1/Indian Society

For the social sector, it is old wine in an old bottle

Source: The Hindu

Why in news?

Budget 2024 maintains the same approach as previous years regarding social sector allocations.

Decreasing allocations in the Budget for social sector schemes

• Education Sector: The allocations for school education increased by ₹5,000 crore and for higher education by ₹3,000 crore. The increased recoveries from fees and self-financing schemes suggest a shift towards cost recovery in educational institutions.
• Health Sector: The allocation for the Department of Health and Family Welfare rose by only ₹1,500 crore.
• Food Subsidy: There is a limited increase in food subsidies despite rising economic costs and the need to update coverage based on the latest population figures.
• Shift in Approach: The government is giving greater emphasis on cost-effectiveness and privatization in education and health, shifting focus towards contributory schemes like the Atal Pension Yojana.

Social Sector Schemes in Budget 2024-25

• Social Protection Schemes: There is a slight increase from ₹11,600 crore to ₹12,467 crore, but still less than the actual expenditure in 2022-23.
• Saksham Anganwadi Scheme: The allocation increased to ₹21,200 crore from ₹20,554 crore, but no increase in salaries for Anganwadi workers or honorarium for mid-day meal cooks.
• Maternity and Social Assistance

  Samarthya Scheme: The budget reduced to ₹2,517 crore from ₹2,582 crore. The PMMVY scheme’s maternity benefits have remained unchanged since 2017.

• NSAP

  Allocation for social security pensions remains unchanged at ₹9,652 crore, reducing real coverage and value.

Schemes for the Unemployed

• The ‘Prime Minister’s Package for Employment and Skilling’ includes government-sponsored internships, formalization of jobs through incentives for EPFO enrollments, and skill development programs.

• An allocation of ₹2 lakh crore over five years for the employment package, linked to industry response.

Schemes for Street Vendors

• The PM SVANidhi Scheme (PM Street Vendor’s AtmaNirbhar Nidhi) aims to benefit over 50 Lakh street vendors across India.

• All lending institutions, including NBFCs, are participating in the scheme to provide affordable loans to street vendors.

Employment Challenges

• Stagnant Wages and Dampened Demand: The Indian economy faces significant challenges with stagnant wages, which affect consumer demand. This stagnation can hinder overall economic growth and employment generation.
• Reliance on the Private Sector for Job Creation:  The government is increasingly looking to the private sector to address employment challenges. Initiatives like incentivizing private sector job creation through government-sponsored internships and skill development programs.
• Limited Budgetary Allocations: The budgetary allocations for employment-related schemes are limited, with the entire employment package amounting to ₹2 lakh crore over five years.

• Focus on Supply-Side Solutions

  The current approach emphasizes supply-side measures to incentivize the private sector rather than addressing the underlying demand-side issues, such as low consumer spending and economic uncertainty.

Way forward

• Enhance Social Sector Investments: The government should significantly increase budget allocations for critical social sector schemes, particularly in education, health, and social protection.

• Comprehensive Employment Strategy: There is a need to develop a holistic approach to employment that addresses both supply and demand-side issues.

GS1/History & Culture

Birth Anniversary of Chandrashekhar Azad and Lokmanya Tilak

Source: The Week

Why in news?

Prime Minister paid his tributes to legendary freedom fighters Bal Gangadhar Tilak and Chandra Shekhar Azad on their birth anniversaries.

About Chandrashekhar Azad

• Born Chandra Shekhar Tiwari on 23 July 1906;
• Indian revolutionary leader of HSRA;
• Died 27 February 1931.
• Early Life: 
  • From Bardarka, Uttar Pradesh;
  • Joined Non-Cooperation Movement at 15;
  • Famously declared his name as “Azad” when arrested.
• Revolutionary Life: 
  • Hindustan Republican Association (HRA), participated in Kakori Train Robbery, avenged Lala Lajpat Rai’s death;
  • Reorganized HRA into Hindustan Socialist Republican Association (HSRA);
  • Influenced by socialist literature;
  • Support from Congress, financially supported by Motilal Nehru;
  • Activities in Jhansi: Used Jhansi as a base, practiced shooting, lived as Pandit Harishankar Bramhachari, taught children, connected with local revolutionaries.
• Collaboration with Bhagat Singh: Reorganized HRA into HSRA, planned to assassinate James A. Scott, mistakenly killed John P. Saunders.
• Death: Surrounded by police in Alfred Park, Allahabad; Ensured companion’s escape; shot himself to avoid capture on 27 February 1931.

About Lokmanya Tilak

• Born Bal Gangadhar Tilak on 23rd July 1856 in Ratnagiri, Maharashtra;
• Died on 1st August 1920.
• Education:
  • Founded Deccan Education Society (1884) and Fergusson College (1885) in Pune.
• Ideology:
  • Devout Hindu using scriptures to inspire resistance;
  • Advocated for self-rule (Swarajya); famous slogan: “Swaraj is my birthright and I shall have it!”;
  • Emphasized cultural and religious revival;
  • Popularized Ganesh Chaturthi and Shiv Jayanti festivals.
• Political Life:
  • Early advocate for complete independence; Part of the Lal-Bal-Pal trio; joined Indian National Congress (INC) in 1890.
  • Surat Split (1907): Split INC into Extremists (led by Tilak) and Moderates (led by Gopal Krishna Gokhale) due to leadership disputes and differing approaches.
• Contribution to Freedom Movement:
  • Promoted swadeshi movements, boycott of foreign goods; co-led Indian Home Rule Movement (1916); Founded All India Home Rule League; Involved in Lucknow Pact (1916) for Hindu-Muslim unity.
• Imprisonment:
  • Imprisoned from 1908 to 1914 in Mandalay Prison for defending revolutionaries Khudiram Bose and Prafulla Chaki.
• Publications:
  • Edited weekly Kesari (Marathi) and Mahratta (English); Authored books “Gita Rahasya” and “Arctic Home of the Vedas.”

GS3/Economy

Key takeaways from the 2023-24 Economic Survey

Source: The Hindu

Why in news?

The 2023-24 Economic Survey highlights realistic challenges for India’s growth, projecting GDP growth at 6.5%-7% for FY 2024-25 despite 8% growth in FY 2023-24.

Major five issues with the Indian Economy

• Weak Demand: In India, an unfavourable environment for FDI growth is due to high interest rates in developed countries, which increases the cost and opportunity cost of investment in India.
• Dependence on China: Due to over-reliance on China for imports, particularly in key sectors like renewable energy, limits India’s manufacturing capabilities and increases vulnerability to geopolitical tensions.
• Tepid Private Investment: Despite tax cuts aimed at stimulating capital formation, the corporate sector has not significantly increased investment, leading to a lack of job creation and economic dynamism.
• Employment Challenges: The need to generate approximately 78.5 lakh jobs annually in the non-farm sector until 2030 to accommodate the growing workforce, coupled with insufficient data on job creation, complicates labour market analysis.
• Infrastructure Deficiencies: Inadequate infrastructure, such as roads, railways, and sanitation, continues to hinder economic development and efficiency, requiring substantial investment and reform to improve productivity.

What are the suggestions given in the Economic Survey?

• Private Sector’s Role in Job Creation: The corporate sector should take responsibility for creating jobs, as it is in their enlightened self-interest.
• Embracing Healthy Lifestyle: Indian businesses should learn from India’s traditional lifestyle, food, and recipes to live healthily and in harmony with nature.
• Focusing on Agriculture: The farm sector can generate higher value addition, boost farmers’ income, create opportunities for food processing and exports, and make the sector attractive to urban youth.
• Removing Regulatory Bottlenecks: Licensing, inspection, and compliance requirements imposed by various levels of government are an onerous burden on businesses, especially MSMEs.
• Improving Data Quality: The lack of availability of timely data on the absolute number of jobs created in various sectors precludes an objective analysis of the labour market situation.

Way forward

• Enhance Infrastructure Development: Need to prioritize investments in essential infrastructure such as roads, railways, and sanitation to boost economic efficiency and productivity.
• Strengthen Data Collection and Analysis: The government should develop robust mechanisms for timely and accurate data collection on employment and other key economic indicators.

Mains PYQ

Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments. (2019)

GS-III/Economy

What is Angel Tax that was scrapped in Budget 2024?

Source: Hindustan Times

Why in News?

Finance Minister announced the abolition of the angel tax, aiming to strengthen the startup ecosystem and support innovation in India.

What is Angel Investment?

An angel investor is an individual who provides financial backing to early-stage startups or entrepreneurs, typically in exchange for equity in the company. Angel investors are typically high-net-worth individuals who invest their own personal funds, rather than investing on behalf of a firm or institution.

Features of Angel Investing:

• Early-stage funding
• Equity investment
• High-risk, high-reward
• Active involvement
• Personal investment
• Flexible terms and shorter investment horizon

What is Angel Tax?

Referred to as Angel Tax, this rule is described in Section 56(2)(vii)(b) of the Income Tax Act, 1961. Essentially, it's a tax on capital receipts unique to India in the global context. This clause was inserted by the Finance Act in 2012 to prevent laundering of black money, round-tripping via investments with a large premium into unlisted companies. The tax covers investment in any private business entity, but only in 2016 was it applied to startups.

Why was angel tax introduced?

The complicated nature of VC fundraising with offshore entities, multiple limited partners, and blind pools is contentious. There has been some element of money laundering or round-tripping under guise.

Details of its levy

The Angel Tax is being levied on startups at 9% on net investments in excess of the fair market value. For angel investors, the amount of investment that exceeds the can be claimed for a 100% tax exemption. However, the investor must have a net worth of ₹2 crores or an income of more than ₹25 Lakh in the past 3 fiscal years.

Key Issues with Angel Tax

• Share Valuation: The tax impacted the valuation of shares, causing complications for startups in raising funds.
• Discounted Cash Flow (DCF) Method: Issues arose with the treatment of estimated figures in the DCF method, leading to disputes.
• Scrutiny of Funding Sources: The scrutiny of funding sources and investor credibility added another layer of complexity for startups.
• Retrospective Application: The retrospective application of the tax and its effect on the conversion of convertible instruments into equity were also significant points of dispute.

Significance for the Startup Community

Startups have long advocated for a more supportive and less restrictive environment for fundraising. With this change, the government aims to create a more favorable atmosphere for innovation and investment in India.

GS-I/History and Culture

Bihar's Vishnupad and Mahabodhi Temples

Source: Indian Express

Why in News?

Finance Minister announced during her Union Budget speech that corridor projects will be built for the Vishnupad Temple Gaya and the Bodh Gaya in Bihar. These will be modelled on the Kashi Vishwanath Temple Corridor, to transform them into world-class pilgrim and tourist destinations.

About the Vishnupad Temple at Gaya

•  Details:  Dedicated to Lord Vishnu
•  Significance:  Contains a 40 cm long footprint of Lord Vishnu; considered sacred in Hinduism; attracts pilgrims for “Pind Daan” rituals.
•  Historical Importance:  Believed to be over 1000 years old; associated with various legends and historical references in Hindu texts.
•  Architecture:  Built in Shikhara style; features intricate carvings and silver-plated flagposts; constructed of grey granite blocks.
•  Built by:  Queen Ahilyabai Holkar of Indore in 1787.
•  Festivals and Rituals:  Major site for “Pind Daan” rituals during Pitru Paksha; attracts thousands of pilgrims during this period.
•  Mythology:  The footprint is believed to be where Lord Vishnu placed his foot to subdue the demon Gayasur.
•  Associated River:  Located on the banks of the Phalgu River, considered sacred for ritual offerings.
•  Access and Visitation:  Accessible year-round; major pilgrimage site with facilities for devotees.
•  Recent Developments:  Ongoing efforts for preservation and restoration; improved infrastructure for pilgrims.

About the Mahabodhi Temple Complex:

•  Location:  Bodh Gaya, Bihar; marks the location where Buddha attained enlightenment.
•  UNESCO Status:  World Heritage Site since 2002; one of the four holy sites related to Buddha’s life (Enlightenment).
•  Original Construction:  Built by Mauryan Emperor Ashoka around 260 BCE.
•  Reconstruction:  Reconstructed in brick during the late Gupta period (5th or 6th centuries).
•  Archaeological Finds:  Indicates site of veneration since the Mauryan period.
•  Vajrasana (Diamond Throne):  Located within the temple, dated to the third century BCE.
•  Main Temple Structure:  Dates from the 6th century CE, incorporates parts from 2nd or 3rd century CE.
•  Architectural Features:  Two large shikhara towers, the largest over 55 meters high; influenced Jain, Hindu, and Buddhist architecture globally.
•  Materials:  Made mostly of brick covered with stucco.
•  Bodhi Tree:  Direct descendant of the original tree under which Buddha attained enlightenment.
•  Traditional Accounts:  Describes 7 weeks Buddha spent meditating after enlightenment at various spots within the complex.
•  Decline and Revival:  Declined after Huna invasions and early Islamic invasions; revived under the Pala Empire (8th-12th century); declined again after 12th century CE invasions by Turk armies.

GS-III/Economics

What is a Climate Finance Taxonomy, announced by FM Sitharaman?

Source: Indian Express

Why in news?

The 2024 Union Budget, presented by Finance Minister, includes developing a taxonomy for climate finance. The aim is to enhance the availability of capital for climate adaptation and mitigation.

What is a Climate Finance Taxonomy?

A climate finance taxonomy is a classification system that identifies which economic activities can be marketed as sustainable investments. It serves as a guide for investors and financial institutions to direct capital towards projects that contribute to climate adaptation and mitigation, aligning with broader environmental goals.

Significance of a Climate Finance Taxonomy

• Net-Zero Economy: With global temperatures rising and the adverse effects of climate change worsening, countries need to transition to a net-zero economy.
• Alignment with Transition Pathways: Taxonomies help ascertain if economic activities are aligned with credible, science-based transition pathways.
• Deployment of Climate Capital: They provide an impetus for the deployment of climate capital by directing investments towards sustainable projects.
• Reduction of Greenwashing Risks: Taxonomies help reduce the risks of greenwashing by providing clear criteria for what constitutes a sustainable investment.

Why does India need a Green Taxonomy?

According to the IFC, India needs an estimated $10.1 trillion to achieve net-zero by 2070. Public investments alone can't match this goal, calling for standardization in investments.

Benefits for India

• For India, a taxonomy could attract more climate funds from international sources.
• Currently, green finance flows in India are falling short of the country's needs, accounting for only around 3% of total FDI inflows, according to the Landscape of Green Finance in India 2022 report by the Climate Policy Initiative. Lack of clarity on what constitutes sustainable activity is a significant reason for the low green finance flows. A taxonomy would address this issue.
• India's Climate Commitments:
  • India aims to achieve a
    • The country has pledged to reduce the emissions intensity of its GDP by 45% by 2030, compared to the 2005 level.
    • India has also committed to achieving about 50% of its cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.

Steps taken by India

• In January 2021, India established a task force on sustainable finance under the Department of Economic Affairs, Ministry of Finance. The task force's objectives include creating a framework for sustainable finance, establishing pillars for a sustainable finance roadmap, suggesting a draft taxonomy of sustainable activities, and creating a framework of risk assessment by the financial sector.
• In April 2021, the RBI joined the Central Banks and Supervisors Network for Greening the Financial System (NGFS) as a member. RBI is also a member of a task force on climate-related financial risks set up by the Basel Committee on Banking Supervision and the International Platform on Sustainable Finance.

Potential for Green Investments in India

• According to a report by the International Finance Corporation (IFC), India has a climate-smart investment potential of $3.1 trillion from 2018 to 2030. The largest investment opportunity lies in the electric vehicle segment, with a potential of $667 billion as India aims to electrify all new vehicles by 2030. The renewable energy sector also presents a substantial investment opportunity, estimated at $403.7 billion.

International Adoption of Taxonomies

• Many countries have either started developing or have finalized their taxonomies. Countries with developed taxonomies include South Africa, Colombia, South Korea, Thailand, Singapore, Canada, and Mexico. The European Union has also developed its own taxonomy.

GS3/Economy

Summary of the Union Budget 2024-2025 – Part I

Source: PIB

Why in news?

Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Union Budget 2024-25 in Parliament.

Key highlights of Union Budget 2024-2025 – Part I

• Article 112 of the Constitution requires the government to present to Parliament a statement of estimated receipts and expenditure in respect of every financial year, from April 1 to March 31. This statement is called the annual financial statement. It is divided into three parts - Consolidated Fund, Contingency Fund, and Public Account. For each of these funds, the government has to present a statement of receipts and expenditure.
• Focus on 4 major groups, namely ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth), and ‘Annadata’ (Farmer)
• Theme: Focus was given on employment, skilling, MSMEs, and the middle class. FM announced the Prime Minister’s package of 5 schemes and initiatives to facilitate employment, skilling, and other opportunities for 4.1 crore youth over a 5-year period with a central outlay of ₹2 lakh crore. This year, ₹1.48 lakh crore has been allocated for education, employment, and skilling.

Priority 1: Productivity and resilience in Agriculture

• New 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers.
• In the next two years, 1 crore farmers across the country will be initiated into natural farming supported by certification and branding.
• 10,000 need-based bio-input resource centres will be established.
• For achieving self-sufficiency in pulses and oilseeds, government will strengthen their production, storage and marketing and to achieve ‘atmanirbharta’ for oil seeds such as mustard, groundnut, sesame, soybean, and sunflower.
• Government, in partnership with the states, will facilitate the implementation of the Digital Public Infrastructure (DPI) in agriculture for coverage of farmers and their lands in 3 years. A provision of ₹1.52 lakh crore for agriculture and allied sector was announced this year.

Other announcements

• Issuance of Jan Samarth based Kisan Credit Cards in 5 states
• Financial support for setting up a network of Nucleus Breeding Centres for Shrimp Broodstocks
• National Cooperation Policy to be framed with an objective to Fast-tracking growth of rural economy

Priority 2: Employment & Skilling

• The government will implement 3 schemes for ‘Employment Linked Incentive’, as part of the Prime Minister’s package. These will be based on enrolment in the EPFO, and focus on recognition of first-time employees, and support to employees and employers.
• Higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishing creches.
• FM announced a new centrally sponsored scheme, as the 4th scheme under the Prime Minister’s package, for skilling. 20 lakh youth will be skilled over a 5-year period and 1,000 Industrial Training Institutes will be upgraded in hub and spoke arrangements with outcome orientation.

Model Skill Loan Scheme

• It will be revised to facilitate loans up to ₹7.5 lakh with a guarantee from a government-promoted Fund. This is expected to help 25,000 students every year.

For helping the youth...

• Announcement of financial support for loans up to ₹10 lakh for higher education in domestic institutions. E-vouchers for this purpose will be given directly to 1 lakh students every year for annual interest subvention of 3 per cent of the loan amount.

Priority 3: Inclusive Human Resource Development and Social Justice

• Purvodaya: Government will formulate a plan, Purvodaya, for the all-round development of the eastern region of the country covering Bihar, Jharkhand, West Bengal, Odisha and Andhra Pradesh. This will cover human resource development, infrastructure, and generation of economic opportunities to make the region an engine to attain Viksit Bharat.
• Pradhan Mantri Janjatiya Unnat Gram Abhiyan: For improving the socio-economic condition of tribal communities. It will be launched by adopting saturation coverage for tribal families in tribal-majority villages and aspirational districts covering 63,000 villages and benefitting 5 crore tribal people.

Other announcements

• More than 100 branches of India Post Payment Bank will be set up in the North East region to expand the banking services.
• A provision of ₹2.66 lakh crore for rural development including rural infrastructure was made this year. ₹3 lakh crore for schemes benefitting women and girls.

Priority 4: Manufacturing & Services

• Support for promotion of MSMEs: A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to ₹100 crore, while the loan amount may be larger. Similarly, Public sector banks will build their in-house capability to assess MSMEs for credit, instead of relying on external assessment.

Mudra Loans

• The limit of Mudra loans will be enhanced to ₹20 lakh from the current ₹10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category.

MSME Units for Food Irradiation, Quality & Safety Testing

• Financial support for setting up of 50 multi-product food irradiation units in the MSME sector will be provided. Setting up of 100 food quality and safety testing labs with NABL accreditation will also be facilitated.

To enable MSMEs...

• E-Commerce Export Hubs will be set up in public-private-partnership (PPP) mode. Internship in Top Companies: As the 5th scheme under the Prime Minister’s package, government will launch a comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years. 12-month Prime Minister’s Internship with a monthly allowance of Rs 5000.

Priority 5: Urban Development

• Urban Housing: Under the PM Awas Yojana Urban 2.0, housing needs of 1 crore urban poor and middle-class families will be addressed with an investment of ₹10 lakh crore. This will include the central assistance of ₹2.2 lakh crore in the next 5 years.
• Water Supply and Sanitation: Government will promote water supply, sewage treatment, and solid waste management projects and services for 100 large cities through bankable projects.
• PM SVANidhi: This was launched to transform the lives of street vendors. Now, Govt envisions a scheme to support each year, over the next five years, the development of 100 weekly ‘haats’ or street food hubs in select cities.

GS3/Economy

Summary of the Union Budget 2024-2025 – Part II

Source: PIB

Why in news?

Key highlights of Union Budget 2024-2025 – Part II

Priority 6: Energy Security

• PM Surya Ghar Muft Bijli Yojana launched to install rooftop solar plants for free electricity to 1 crore households.
• 1.28 crore registrations and 14 lakh applications received for the scheme.

Priority 7: Infrastructure

• Improving infrastructure results in a strong multiplier effect on the economy.

Priority 8: Innovation, R&D

• Operationalization of Anusandhan National Research Fund for basic research and prototype development.
• Setting up a mechanism for private sector-driven research and innovation with a financing pool of ₹1 lakh crore.
• Space Economy
  • Venture capital fund of ₹1,000 crore to expand the space economy fivefold in the next 10 years.

Priority 9: Next Generation Reforms

• Labour related reforms including e-shram portal integration for job seekers and skill providers.
• Revamping of Shram Suvidha and Samadhan portals for ease of compliance in industry and trade.
• Development of a climate finance taxonomy to enhance capital availability for climate adaptation and mitigation.
• Foreign Direct Investment and Overseas Investment
  • Simplification of rules and regulations for FDI and Overseas Investments to facilitate investments and promote opportunities for using the Indian Rupee.
• NPS Vatsalya
  • Introduction of NPS-Vatsalya plan for contributions by parents and guardians for minors.
  • Seamless conversion of the plan into a normal NPS account upon reaching the age of majority.
• New Pension Scheme (NPS)
  • Committee progress on NPS review to address relevant issues while ensuring fiscal prudence.
• Taxation in Budget 2024-25
  • Budget estimates for 2024-25 with total receipts, expenditure, net tax receipts, and fiscal deficit projections.
  • Market borrowings details for the fiscal year.
  • Abolishment of Angel Tax to boost entrepreneurial spirit and start-up ecosystem.
  • Changes in Capital Gain Tax rates and exemptions to benefit lower and middle-income classes.
• Vivad se Vishwas Scheme 2024
  • Introduction of the scheme for resolving income tax disputes pending in appeal.
  • Increased monetary limits for filing appeals related to direct taxes in various courts and tribunals.

GS2/International Relations

Nepal, Sri Lanka, Seychelles secure more funds under Budget allocation for MEA

Source: The Hindu

Why in news?

The Union Budget presented by Finance Minister Nirmala Sitharaman prioritized India-funded projects in neighbouring countries, receiving the majority of the Ministry of External Affairs’ allocation.

What are the India-funded projects in the neighbourhood?

• India has provided significant aid to including funding for hydroelectric power plants like Pardi, Trishuli, and Devighat.
• Afghanistan: India has provided over $3 billion in assistance and was involved in over 400 projects across 34 provinces, including major infrastructure projects like the Salma Dam and the Zaranj-Dalaram Highway.
• Myanmar: Kaladan Multi-Modal Transit Transport Projects is a $484 million project that aims to connect the northeastern Indian state of Mizoram to the Sittwe port in Myanmar’s Rakhine state.

In the 2024-25 budget, India allocated ₹700 crore to Nepal (up from ₹550 crore), ₹245 crore to Sri Lanka (up from ₹150 crore), and ₹30 crore to Seychelles (up from ₹10 crore).

Reasons for reduced focus on Bhutan

• Bhutan, the largest recipient of MEA’s annual allocation, saw a dip in funding by ₹332.02 crore to ₹2,068.56 crore.
• However, this slight reduction does not indicate a decrease in funding for projects in Bhutan, as India and Bhutan recently cleared 61 projects amounting to ₹4,958 crore.

Importance of Bhutan for India:

• Strategic Importance: Bhutan shares borders with India and China, acting as a buffer state between the two. Its strategic location is crucial for India’s security interests.
• Economic Importance: India is Bhutan’s largest trading partner, accounting for 98% of its exports and 90% of its imports.
• Cultural Ties: Bhutan and India share strong cultural ties, as both countries are predominantly Buddhist.

Future scope for India’s Neighbourhood Policy (Way forward)

• Strengthening Bilateral Ties: Need to negotiate free trade agreements, promote investments, and collaborate on infrastructure projects to boost economic ties.
• Promoting Regional Cooperation: Need to collaborate on regional initiatives such as the BBIN (Bangladesh, Bhutan, India, Nepal) Motor Vehicles Agreement for seamless movement of goods and people.

Mains PYQ:

• Evaluate the economic and strategic dimensions of India’s Look East Policy in the context of the post-Cold War international scenario. (UPSC IAS/2016)

GS2/Polity

Supreme Court’s Split Verdict on Permission for GM Mustard

Source: Indian Express

Why in  News?

The Supreme Court on July 23 pronounced a split verdict on the validity of the Centre’s 2022 decision granting conditional approval for environmental release of genetically modified (GM) mustard crops.

About Genetically Modified (GM) Crops:

• Genetically Modified (GM) crops are plants whose DNA has been altered through genetic engineering techniques to introduce desirable traits.
• These traits may include resistance to pests, diseases, or environmental conditions, improved nutritional content, or increased yield.
• Unlike traditional crossbreeding methods, genetic modification allows for the direct manipulation of a plant’s genetic material, often incorporating genes from different species to achieve specific results.

Benefits of GM Crops:

• Increased Yield: GM crops can produce higher yields, contributing to food security.
• Pest and Disease Resistance: Crops can be engineered to be resistant to specific pests and diseases, reducing the need for chemical pesticides.
• Herbicide Tolerance: Some GM crops are designed to withstand certain herbicides, making weed control more effective.
• Enhanced Nutritional Content: Crops can be modified to contain higher levels of essential nutrients, addressing malnutrition in developing countries.
• Environmental Benefits: Reduced need for chemical inputs can lower the environmental impact of agriculture.

Concerns / Controversies w.r.t. GM Crops:

• Environmental Impact: There is ongoing debate about the potential for GM crops to affect non-target species and lead to a reduction in biodiversity.
• Health Concerns: While extensive research indicates that GM foods are safe to eat, public concern about potential long-term health effects persists.
• Economic Issues: GM seeds are often patented, leading to concerns about corporate control over the food supply and the economic impact on small-scale farmers.
• Ethical and Labeling Issues: There are ethical debates surrounding the manipulation of genetic material, and many advocate for clear labeling of GM products to inform consumer choice.

Regulations w.r.t. GM Crops in India:

• In India, the Ministry of Environment, Forest, and Climate Change oversees all activities, operations, and products associated with genetically modified organisms.
• These are regulated under the Environment (Protection) Act, 1986.
• Genetic Engineering Appraisal Committee (GEAC), part of MoEFCC, has the authority to review, monitor, and approve all GMO-related activities, including import, export, transportation, manufacture, use, and sale.
• GEAC is a statutory body established under the Environment Act.
• Additionally, GM foods must comply with the regulations set by the Food Safety and Standards Authority of India (FSSAI).

About GM Mustard:

• In 2023, the GEAC had recently given the green light for the commercial cultivation of genetically modified mustard.
• Dhara Mustard Hybrid (DMH-11), created by scientists at Delhi University, employs genes from soil bacteria to make mustard, typically a self-pollinating plant, more suitable for hybridization than traditional methods.
• The GEAC approved "the environmental release of mustard hybrid DMH-11 for seed production and testing in accordance with existing ICAR guidelines and other applicable regulations prior to its commercial release."

Supreme Court’s Split Verdict on Permission for GM Mustard:

• The SC delivered a split verdict on the Centre's 2022 decisions regarding the environmental release of the genetically modified mustard hybrid DMH-11 for seed production and testing.

Petitions:

• The court was responding to pleas by activist Aruna Rodrigues and the NGO 'Gene Campaign.
• The petition called for a moratorium on the release of any GMOs into the environment until a comprehensive, transparent, and rigorous biosafety protocol is publicly available and conducted by independent experts.

Divergent Opinions:

• Justice Nagarathna: She deemed the October 2022 decisions of the GEAC invalid due to the absence of a health department member and the absence of eight members from the meeting.
• Justice Karol: He found no manifest arbitrariness in the GEAC decisions and stated that field trials should proceed with strict safeguards.

Next Steps:

• The bench referred the matter to Chief Justice of India D Y Chandrachud for further adjudication by the appropriate bench.

National Policy on GM Crops:

• Both justices agreed on the need for a national policy on Genetically Modified (GM) crops.
• They directed the Centre to consult all stakeholders and experts within four months to formulate this policy.