Weekly Current Affairs (8th to 14th June 2024) Part - 1 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Creation of Andhra Pradesh and Special Category Status

Why in News?

• Recently, Andhra Pradesh commemorated the 10th anniversary of its division into Andhra Pradesh and Telangana.

This significant political transformation provides an intriguing opportunity to examine its wide-ranging impacts on the political, economic, and historical aspects of the Telugu people.

How Andhra Pradesh has been Divided on Linguistic Basis?

• Background: At the Nagpur session of the Indian National Congress in December 1920, it was decided to organize the Provincial Congress Committees based on language to support various linguistic groups.
• Agitation for Linguistic State: The demand for a separate Andhra Pradesh state for Telugu-speaking individuals arose to preserve and promote their language and culture.

Commission for Linguistic Reorganisation of States

• Dar Commission (1948): Examined state reorganization feasibility but prioritized administrative efficiency over linguistic homogeneity.
• JVP Committee (1948-1949): Recommended against reorganizing states solely on language lines to avoid administrative challenges.
• Fazal Ali Commission (1953-1955): Proposed creating linguistic states with considerations for national integration and administrative ease.

Formation of Andhra State

• After intense protests following Potti Sreeramulu's death, the Indian government formed the state of Andhra to cater to Telugu speakers, marking India's first linguistic state.
• In 2014, Telangana was carved out of northwestern Andhra Pradesh through the Andhra Pradesh Reorganisation Act, 2014.

Special Category Status (SCS)

• About: SCS assists states with geographical and socio-economic disadvantages for development, introduced in 1969.
• Factors for SCS: Include challenging terrain, low population density, strategic locations, economic backwardness, and financial viability issues.
• Current Status: The 14th Finance Commission reserved SCS for certain states, excluding most, except for Northeastern and three hill states.

Important Facts about Andhra Pradesh

• Bordered by: Chhattisgarh, Odisha, Telangana, Karnataka, Tamil Nadu, and the Bay of Bengal.
• Festivals: Ugadi, Pedda Panduga, Pongal
• Art & Culture: Various traditional dances and art forms like Kuchipudi and Kalamkari.
• Wildlife: Home to diverse wildlife and bird sanctuaries like Nagarjunsagar-Srisailam Tiger reserve and Pulicat Lake Bird Sanctuary.
• Tribes: Chenchu, Gadabas, Sawara, Kondh, Kolam, Porja

NOTA Option in Indian Elections

Why in News?

• Recently, in Indore, Madhya Pradesh, the NOTA (None of the Above) option received over 2 lakh votes in the Lok Sabha elections, marking the highest ever NOTA votes in any constituency.

What is NOTA in Indian Elections?

• NOTA is a choice on ballots and Electronic Voting Machines (EVMs) allowing voters to express disapproval of all candidates without selecting any.

It empowers voters to show dissatisfaction and lack of support for candidates while keeping their vote secret.

Background

• In 1999, the Law Commission discussed negative voting but made no final recommendations due to practical issues.
• In 2013, the Supreme Court directed the Election Commission to introduce NOTA to protect voter secrecy.
• The People's Union for Civil Liberties (PUCL) advocated for voter secrecy in 2004.

First Use of NOTA

• NOTA debuted in the 2013 Assembly elections and later in the 2014 General Elections.
• It followed a Supreme Court directive in the PUCL vs Union of India Case.

What Happens if NOTA Receives the Highest Votes?

• NOTA votes are counted as 'invalid votes' and do not alter election outcomes.
• The Supreme Court is considering guidelines for situations where NOTA wins the most votes.

Landmark Judgments Related to NOTA

• Various court cases have shaped the use of NOTA in elections.
• These cases have highlighted the importance of voter empowerment and fair elections.

Arguments For and Against NOTA

• NOTA empowers voters but has limitations like lack of electoral impact and potential for misuse.
• Debates exist on how NOTA affects democracy and candidate selection.

Way Forward

• Recommendations include re-elections if NOTA wins and barring candidates with fewer votes.
• Efforts to raise voter awareness on NOTA's purpose are crucial.

Conclusion

• NOTA in Indian elections offers voters a way to express dissent and signal dissatisfaction with candidates.
• It aims to enhance accountability and integrity in the electoral process.

Regional Rapid Transit System (RRTS)

Why in News?

• Currently, the NCRTC is constructing 900 rainwater harvesting pits along the Delhi-Ghaziabad-Meerut RRTS corridor for environmental sustainability.

Key Facts Regarding the RRTS

• In 2005, a task force was created to plan transportation in the Delhi NCR.
• 8 corridors were identified, with 3 prioritized for the RRTS: Delhi-Meerut, Delhi-Panipat, and Delhi-Alwar.
• The RRTS is a new transit system for the NCR, with the Delhi-Meerut corridor being rail-based, semi-high-speed, and having 22 stations.

Advantages of RRTS

• High Speed & Capacity: Trains travel at over 160 km/h with high passenger capacity, reducing congestion.
• Dedicated Corridor: Separate tracks ensure reliable travel times.
• Environmental Impact: RRTS reduces air pollution and encourages public transport use.
• Economic Growth: Improved connectivity leads to balanced development and reduced reliance on central hubs.
• Sustainable Future: RRTS sets an example for efficient public transport systems in India.

Geographical Theories associated with RRTS

• Central Place Theory: Settlements develop around central locations, improving access to services.
• Gravity Model: Interaction between places is influenced by population and distance.
• Diffusion Theory: Ideas spread across space, leading to urban development patterns along the RRTS corridor.

India's Initiatives for Urban Transportation

• PM-eBus Sewa
• Gati Shakti Terminal (GCT) policy
• National Logistics Policy (NLP)
• Bharatmala Project
• Dedicated Freight Corridors
• Smart Cities

Conclusion

• The Delhi-Meerut RRTS project showcases a future-oriented urban development approach with a focus on sustainability and efficient public transportation.

Household Consumption Expenditure Survey 2022-23

Why in News?

• Recently, the detailed report of Household Consumption Expenditure Survey (HCES) 2022-23 was released by Ministry of Statistics and Programme Implementation (MoSPI).
• It provided valuable insights into the spending habits of rural and urban households across different states.

What is the Household Consumption Expenditure Survey?

About:

• The HCES is conducted by the National Statistical Office (NSO) every 5 years.
• It collects information on the consumption of goods and services by households.
• The data collected in HCES is used for various macroeconomic indicators.
• The survey covers the entire Indian Union except for a few inaccessible villages.

Information Generated:

• Provides details on spending on goods and services.
• Calculates estimates for Monthly Per Capita Consumer Expenditure (MPCE) and analyzes distribution across different MPCE categories.

Highlights of the Recent Household Consumption Expenditure Survey

Food Expenditure Preferences:

• Beverages, Refreshments, and Processed Food: Significant spending percentages in Tamil Nadu.
• Milk and Milk Products: Popular in northern states like Haryana and Rajasthan.
• Egg, Fish, and Meat: Kerala households show high expenditure in this category.

Food vs. Non-Food Expenditure:

• Food Expenditure: Represents a notable portion of total household consumption, especially in rural areas.
• Non-Food Expenditure: Increasing trend in spending on non-food items over the years.

Major Non-Food Expenditure Categories:

• Conveyance: Top non-food expenditure in both rural and urban settings.
• Medical Expenses: Particularly high in certain states for both rural and urban areas.
• Durable Goods: Kerala leads in expenditure on durable goods.
• Fuel and Light: Significant spending seen in specific regions.

Regional Variations:

• Different states exhibit diverse preferences in spending, reflecting cultural and economic distinctions.

Growth in Consumption Expenditure:

• Substantial increase in consumption expenditure over the past decade.
• Rural monthly consumption per person grew faster compared to urban areas.
• Difference between urban and rural expenditure has decreased over the years.

Financing of Large Infrastructure Projects

Why in News?

• Recent News: The Reserve Bank of India (RBI) has introduced a new plan to enhance the regulation of funding for lengthy projects in infrastructure, non-infrastructure, and commercial real estate sectors.
• Challenges Faced: These projects often encounter issues like delays and increased costs.

Key Provisions Proposed by RBI for Project Financing

• Credit Event Prevention: The focus is on avoiding credit events such as loan defaults, extensions of the project's commercial operation start date, additional debt needs, or a decrease in the Net Present Value (NPV) of the project.
• Increased Provisioning: Banks will need to set aside more funds to cover potential losses. Provisioning during the construction stage will rise from 0.4% to 5% of the loan amount, to be implemented gradually by FY27.
• Reduced Provisioning During Operations: If a project shows positive cash flow and reduces its debt after starting operations, provisioning can be reduced.

Potential Impacts of the Proposed Framework

• On Banks: Higher provisioning may affect bank profits in the short term, leading to possible slight increases in loan pricing.
• On Borrowers: Borrowers may face stricter terms and higher interest rates, although the aim is to enhance project viability in the long run.

Financing Issues Faced by Large Infrastructure Projects in India

• Fiscal Burden: Government reliance on funding infrastructure limits spending on other social programs.
• Asset-Liability Mismatch: Commercial banks prefer short-term loans, causing issues for long-term infrastructure projects.
• PPP Investment: Private sector participation in projects through PPPs has been lower than expected due to various challenges.
• Corporate Bond Market: India's corporate bond market is not sufficiently developed to support infrastructure financing.
• Investment Obligations: Regulations limit insurance and pension funds from investing in riskier infrastructure projects.

Government Initiatives Related to Financing Large Infrastructure Projects in India

• National Infrastructure Pipeline (NIP)
• National Bank for Financing Infrastructure and Development (NaBFID)
• National Investment and Infrastructure Fund (NIIF)
• Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs)
• PPP Model Reforms: Measures to simplify processes and attract private investors
• Sovereign Wealth Funds (SWFs): Engaging with countries to secure long-term funding for projects

Measures to Improve Financing of Large Infrastructure Projects in India

• Enhance Project Preparation and Risk Mitigation
• Attract Private Sector Participation
• Diversify Funding Sources
• Streamline Approvals and Clearances
• Improve Project Execution and Efficiency

Why in News?

• The first United Nations Global Supply Chain Forum (UNGSCF) recently took place, hosted by UN Trade and Development (UNCTAD) and the Government of Barbados. It focused on critical issues and initiatives to tackle growing disruptions in global supply chains.

Key Issues Highlighted at the UNGSCF

• The forum underlined the instability in global trade and the pressing need to make supply chains more inclusive, sustainable, and resilient.
• Global disruptions are leading to longer ship travel times and increased greenhouse gas emissions.
• Challenges posed by climate change, geopolitical tensions, and the Covid-19 pandemic on global supply chains were discussed.
• Ports were emphasized as vital for sustaining global value chains through technology and sustainable methods.
• The Port of Bridgetown in Barbados was showcased as a model for other Small Island Developing States (SIDS).
• The forum explored reducing carbon emissions in global shipping, particularly for developing nations rich in renewable energy sources.
• A new initiative, the "Manifesto for Intermodal, Low-Carbon, Efficient and Resilient Freight Transport and Logistics," was launched, advocating for eco-friendly fuels, optimized logistics, and sustainable value chains to limit global warming below 1.5°C.
• SIDS face increased risks from climate change's impacts on transportation infrastructure, necessitating enhancements in multimodal transport networks and customs procedures.
• Blockchain traceability and advanced customs automation were highlighted as crucial for streamlining trade and enhancing transparency.
• Guidelines for an electronic single window for trade were presented by UN Trade and Development to simplify processes.
• A new Trade-and-Transport Dataset, developed with the World Bank, was introduced, offering comprehensive data on over 100 commodities and various transport modes to improve understanding and optimization of global trade flows.

Need for Supply Chain Resilience for India

• Supply Chain Resilience: In international trade, it means diversifying supply risks across multiple countries to prevent reliance on a single source.
• Why it's Needed: Events like natural disasters or conflicts can disrupt trade, impacting economies reliant on specific supplies.
• India's Situation: The Covid-19 pandemic highlighted the risks of depending on one nation, like China, for supplies.
• Initiatives: India is working on various initiatives like the Supply Chain Resilience Initiative (SCRI) and others to strengthen its supply chains and reduce dependency on single sources.

Suggestions for Improving Supply Chain Resilience in India

• Diversification: Reduce reliance on a single source by diversifying raw material and product suppliers.
• Integration of MSMEs: Integrate small businesses into global value chains to enhance resilience.
• Increase Indian Fleet Share: Boost India's fleet capacity to improve trade efficiency.
• Boosting Global Trade Share: India needs to increase its share in global trade gradually.
• Invest in Logistics Infrastructure: Upgrade transportation networks to reduce logistics costs.
• Promote Domestic Production: Support domestic production of critical items to reduce reliance on imports.
• Enhance Digital Integration: Implement digital solutions across the supply chain for better transparency and risk management.

Proportional Representation 

Why in News?

Recently, there is a growing consensus among a broad cross-section of citizens and political parties in India that the current First-Past-The-Post (FPTP) electoral system must be replaced with a  Proportional Representation (PR) electoral system as one viable alternative.

First-Past-The-Post (FPTP) Electoral System

It is a simple system where voters choose one candidate, and the candidate with the most votes wins.

• Voters select one candidate from a list.
• The candidate with the most votes wins, even if it's not a majority.
• Used in countries like the UK, US, Canada, and India.

Proportional Representation (PR) Systems

It ensures parties get seats in proportion to their votes.

• Political parties get seats based on their share of votes.
• Types include Single Transferable Vote (STV) and Party-List PR.
• Mixed-Member Proportional Representation (MMP) balances stability and representation.

Advantages of PR Systems

• Every vote counts towards seat allocation.
• Encourages diverse representation and reduces gerrymandering.

Disadvantages of PR Systems

• May lead to unstable governments and be more complex.
• PR systems can be expensive and neglect local needs.

Need for Shift from FPTP to PR System

FPTP can lead to over or under representation and lack representation for minority groups.

• Voters may feel pressured to vote strategically.
• Smaller parties can struggle to win under FPTP.

Recommendations and Conclusion

Exploring proportional representation can enhance democracy in India.

• The Law Commission recommended the introduction of Mixed Member Proportional Representation (MMPR).
• Implementing MMPR could lead to a fairer and more balanced system.

Aspirational Goals of RBI

Why in News?

• Recently, the Reserve Bank of India (RBI) has set ambitious goals as it prepares for India's rapidly growing economy, aiming to be well-prepared by its centenary year, RBI@100.

These goals include

Capital Account Liberalisation and INR Internationalisation:

• Full capital account convertibility proposed, allowing free conversion between rupee and foreign currencies for capital transactions.
• Internationalisation of the Rupee to enable non-residents to use it for cross-border transactions.
• Calibrated approach towards interest-bearing deposits for non-residents.
• Promotion of Indian MNCs and Global Brands by supporting overseas investments.
• Universalisation of the Digital Payment System through domestic and global expansion.
• Introduction of Central Bank Digital Currency (e-Rupee) through phased implementation.
• Globalisation of India's Financial Sector by aligning banking sector growth with national economic development.
• Monetary Policy Framework Review to balance price stability and economic growth.
• Initiatives for addressing climate change risks in the financial sector.

Challenges in Achieving the Aspirational Goals of RBI

The challenges include:

• Triffin Dilemma, which poses a conflict between domestic monetary policy and international reserve currency issuer roles.
• Increased Exchange Rate Volatility due to opening up to international markets.
• Impact on Exports due to the increased demand for the Rupee in global markets.
• Limited international demand for the Rupee compared to global goods trade share.
• Concerns regarding full convertibility of INR for global trade and finance.
• Cybersecurity Threats in digital payment systems.
• High Non-Performing Assets in Indian banks, especially in the public sector.

Steps Needed to Reach the Aspirational Goals

To achieve these goals, steps include:

• Full convertibility of the Rupee by 2060 as recommended by the Tarapore committee.
• Implementing reforms suggested by the committee, including strong fiscal management and liberalized remittance schemes.
• Encouraging a deeper bond market and increasing the Rupee's presence in international trade.
• Globalizing India's financial sector by supporting domestic banking expansion.
• Reviewing the monetary policy framework and addressing climate change initiatives.