Weekly Current Affairs (22nd to 31st May 2024) Part - 2 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Microplastics

Context: Microplastics are a matter of concern due to their widespread presence and potential impacts on the environment and human health.

Definition and Harmful Effects

Microplastics are plastic particles smaller than five millimeters, posing risks to marine life and ecosystems.

• Primary Microplastics: Small particles intentionally produced or shed from products like microbeads and fibers.
• Secondary Microplastics: Result from the breakdown of larger plastic items like bottles due to environmental factors.

Applications

Microplastics find use in various sectors such as medicine, industry, and personal care.

• Medical and Pharmaceutical Uses: Aid in drug delivery systems.
• Industrial Applications: Employed in cleaning technology and textile production.
• Cosmetics and Personal Care Products: Act as exfoliants in different products.

Current Developments

Ongoing studies and findings shed light on the prevalence and consequences of microplastic pollution.

• Microplastics in Testicular Tissues: Recent research indicates high levels of microplastics in human and canine testicles, potentially impacting reproductive health.
• Global Plastic Overshoot Day: Predicted to occur when plastic waste exceeds global management capacity, emphasizing the urgency of addressing plastic pollution.
• Microplastics in Drinking Water: Concerns raised regarding the presence of microplastics in water sources and the need for standardized testing methods.
• Microplastic contamination in Ashtamudi Lake: Highlighting significant pollution levels and associated risks to aquatic life and human health.

Challenges and Solutions

Addressing the environmental, health, and regulatory challenges posed by microplastics requires concerted efforts and innovative solutions.

• Environmental Challenges: Persistence and widespread distribution of microplastics threaten ecosystems and wildlife.
• Health Challenges: Human exposure to microplastics raises concerns about potential health impacts.
• Regulatory and Policy Challenges: Inconsistent regulations and monitoring hinder effective pollution control measures.
• Detection and Analysis Challenges: Difficulties in identifying and quantifying microplastics necessitate improved methodologies.
• Way Forward: Emphasizing research, regulation, innovation, and public awareness to mitigate microplastic pollution.

Need for New Agriculture Export-Import Policy

Context:

• India experienced an 8.2% decrease in agricultural exports in 2023-24, amounting to USD 48.82 billion, mainly due to government restrictions on various commodities.
• Agricultural imports also fell by 7.9% as a result of lower prices of edible oils.

Current State of Indian Agricultural Exports and Imports

Agricultural Exports

• In the fiscal year 2023-24, India saw an 8.2% decline in agricultural exports, reaching USD 48.82 billion, following a record high of USD 53.15 billion in the previous year.

Declined Commodities

• Sugar Exports: No sugar exports were permitted from October 2023, leading to a decrease to USD 2.82 billion from USD 5.77 billion.
• Non-Basmati Rice Exports: Restrictions on white non-basmati rice exports resulted in a drop to USD 4.57 billion from USD 6.36 billion.
• Wheat Exports: Stopped in May 2022, resulting in a decrease to USD 56.74 million in 2023-24.
• Onion Exports: Restrictions were lifted in May 2024, with a floor price and duty imposed, leading to exports of USD 467.83 million.

Growth in Other Commodities

• Basmati rice and spices exports increased, with basmati rice reaching USD 5.84 billion.
• Exports of marine products, castor oil, and other cereals also grew.

Agricultural Imports
In 2023-24, India's agricultural imports decreased by 7.9%, mainly due to lower global prices, notably in edible oils.

Reduced Edible Oil Imports:

• Import bill for vegetable fats fell below USD 15 billion due to lower global prices.

Surge in Pulse Imports:

• Pulse imports doubled to USD 3.75 billion, indicating continued reliance on foreign sources.

Key Factors Influencing India's Agricultural Exports and Imports

Factors include:

• Export Restrictions on commodities like rice, wheat, sugar, and onions to manage domestic availability and food inflation.
• Global Price Movements affecting India's competitiveness in agricultural exports.
• Government Policies impacting domestic production and import decisions.

Agricultural Export Policy

About Agricultural Export Policy:

• An agricultural export policy involves government regulations and actions to boost the export of agricultural goods.

India's Agriculture Export Policy, 2018:

• Implemented in December 2018 with the aim of doubling agricultural exports to over USD 60 billion by 2022.
• Focuses on promoting various types of agricultural products and establishing monitoring mechanisms.

Challenges to India's Agri-Export Policy

Challenges include:

• Policy Instability and Double Standards affecting farmers and traders.
• Conflicting Goals in terms of import duties and crop diversification.
• Subsidy Centric Schemes impacting fiscal discipline and sector health.
• Inadequate R&D Investment hindering growth.
• Quality and Standards compliance posing challenges for exports.
• Competitiveness issues in pricing, quality, and exchange rates.

Steps Ahead for a Stable Agri-Export Policy in India

Actions for a Stable Policy:

• Balance Interests and Long-Term Goals through predictable policies.
• Strategic Buffer Stocks and Market Intervention for stability.
• Focus on Farmer's Welfare and fair pricing.
• Support for Domestic Consumers and food security.
• Productivity Enhancement through investments in R&D and farming practices.
• Diversify Export Basket and target various markets.
• Invest in Infrastructure Development for competitiveness.
• Learn from International Best Practices to negotiate better trade agreements.

Rising Debt Strained Household Savings

Context:

• There has been a discussion surrounding the significant drop in Household Net Financial Savings in comparison to GDP Ratio in 2022-23, attributed to a higher Borrowing to GDP ratio.
• Interpretation Variance: The Chief Economic Advisor (CEA) of the Indian Government views this as a mere shift in the composition of household savings, where increased borrowing was utilized to finance higher physical savings. However, some experts argue that there might be deeper economic reasons behind this shift.

Current Changes in the Saving Pattern

• Increased Borrowing and Asset Stagnation: A notable increase in borrowing (2.5 % points) has resulted in reduced net financial savings (-2.0% points), although physical savings and investment have not seen significant growth (only 0.3% points).
• Decline in Household Financial Wealth to GDP Ratio: The ratio of household financial wealth to GDP has declined sharply, while the debt-to-net-worth ratio has risen, indicating that households are getting relatively poorer compared to the overall economy.

Rise in Interest Payment Burden

• Interest Payment Dynamics: The interest payment burden is influenced by the interest rate and debt-income (DTI) ratio. A higher DTI ratio suggests a risk of loan default, while a lower ratio indicates more disposable income for debt coverage.
• Factors Affecting Debt-Income Ratio: Changes in the debt-income ratio can result from a higher net borrowing-income ratio or an increase in interest rates compared to nominal income growth.

Household Income Growth vs. Lending Rate

• Disparity: Between 2019-20 and 2022-23, the growth rate of household disposable income has lagged behind the weighted average lending rate, suggesting a potential financial strain on households.

Decline in Savings and Investment Trends

• Historical Analysis: From 2003-04 to 2007-08, the growth rate of Average Gross National Income (GNI) surpassed the average lending rate, indicating a period where incomes were increasing faster than borrowing costs.

Fisher Dynamics Influence Since 2019-20

• Debt-Income Dynamics: The concept of Fisher dynamics, characterized by a rising debt-income ratio due to changes in interest rates and nominal income, has been observed in the Indian economy since the 2019-20 economic slowdown.

Macroeconomic Implications of Rising Household Debt Burden

• Debt Repayment Challenges: Rising interest rates compared to income growth can make debt repayment difficult, impacting the financial sector and reducing credit availability for businesses.
• Impact on Consumption Demand: High household debt levels can lead to reduced consumption as financially insecure households tend to save more and spend less, potentially slowing down the overall economy.
• Role of Interest Rates in Inflation Control: Increasing interest rates to combat inflation can exacerbate household debt burdens, potentially pushing them into a debt trap due to higher debt servicing costs.
• Financialisation Trends: The shift towards financial assets in household balance sheets suggests a growing financialisation of the economy, potentially increasing its vulnerability to financial crises.

Way Forward

• Focus on Income Growth and Debt Control: Addressing the gap between interest rates and income growth while slowing down the growth of household debt in comparison to income is crucial.
• Boosting Income Growth: Initiatives that promote job creation, wage increases, and overall economic growth play a vital role in enhancing household financial stability.
• Debt Management Strategies: Encouraging responsible borrowing practices and regulating excessively high lending rates can aid households in managing debt effectively.
• Wage Growth Importance: Ensuring that wage increases outpace interest rate hikes can provide households with more disposable income to manage debt and potentially increase spending levels.

Political and Economic Reforms in 1991

Context:

• India is preparing for the 2024 general election, prompting a look back at the crucial 1991 Indian general elections that reshaped the nation's trajectory.

Key Electoral Reforms by T. N. Seshan

• T. N. Seshan, as the Chief Election Commissioner from 1990 to 1996, introduced transformative reforms in the Indian electoral system:
• Voter ID Cards: EPIC (Electors Photo Identity Card) was launched to prevent fraud and impersonation.
• Stringent MCC Enforcement: Seshan enforced the Model Code of Conduct rigorously to prevent misuse of power.
• Combatting Malpractices: Seshan tackled 150 malpractices including vote buying, intimidation, and misuse of power.
• Impartial Elections: He ensured fair elections by deploying central forces and advocating for Election Commission autonomy.

Seshan’s Reforms Impact on the 1991 Elections:

• The 1991 elections were marked by enhanced integrity and transparency, setting new standards for future electoral processes.
• The voter turnout was 56.73%, reflecting genuine participation despite prevailing political turbulence.

Long-term Impacts:

• Transformed the Election Commission into an active enforcer of electoral laws.
• Strengthened the autonomy and integrity of the Election Commission, ensuring free and fair elections.

Recognition:

• Seshan’s efforts in electoral reforms were recognized with the prestigious Ramon Magsaysay Award in 1996, underscoring his global impact on electoral integrity.

Political Context of the 1991 Elections

• In May 1991, Rajiv Gandhi's assassination by the LTTE created a politically charged atmosphere during the elections.
• PV Narasimha Rao assumed office as Prime Minister on 21st June 1991 following Gandhi's demise.

Economic Reforms Under Rao’s Government

• Economic Crisis: India faced a severe economic crisis with depleted reserves and high deficits due to factors like the Gulf War (1991).
• Immediate Measures: To tackle the crisis, Rao implemented measures like rupee devaluation and pledging gold reserves.
• LPG Reforms: Rao and Manmohan Singh introduced Liberalization, Privatization, and Globalization reforms to revive the economy.

Liberalisation

• New Trade Policy:
• Exim Scrips were introduced to replace export subsidies, boosting exports.
• The policy ended state-owned import monopolies, allowing private sector imports.
• License Raj was dismantled, easing business regulations.

Privatisation

• FDI Reforms:
• Public sector monopolies were restricted, and FDI approval was streamlined.
• Market opening attracted foreign investments and goods.

Globalisation

• The reforms aimed at integrating India into the global economy for trade and investment.
• Export competitiveness increased, leading to economic growth.

Impact of LPG Reforms:

• The reforms propelled high economic growth, increasing GDP significantly.
• FDI inflows surged, industrial growth expanded, and poverty alleviation efforts were initiated.
• Despite positive outcomes, concerns about job quality and income inequality persist.
• India's integration into the global economy boosted trade and investment, enhancing its global economic footprint.

Hyperpoliticisation of Indian Higher Education

Context: Indian higher education has a history of intertwining with political agendas, which has intensified recently, affecting academic life and institutional integrity.

How Politics Have Shaped Indian Higher Education

• Indian higher education institutions have been influenced by political agendas, with politicians establishing colleges to advance their careers.
• Many institutions were founded to address socio-cultural demands, reflecting India's diverse society.
• Educational institutions have been strategically located by governments to cater to socio-cultural requirements.
• Naming and renaming of universities, often driven by political motives, are common.
• Example: Uttar Pradesh Technical University (UPTU), Lucknow underwent multiple renamings.
• Academic appointments and promotions have sometimes been influenced by political factors rather than candidate qualifications.
• Some Indian states express dissent over the appointment of state governors as university chancellors.
• While academic freedom norms haven't always been strictly followed, universities generally adhere to international standards, allowing professors to teach, research, and publish freely.
• Self-censorship is rising, particularly in social sciences and humanities, with repercussions for academics publishing controversial material.

Consequences of Hyperpoliticisation of Education

• Decreased Academic Freedom: Political influence may compromise academic freedom, pressuring faculty and students to align with ideologies.
• Global Reputation Impact: Politicized environments might deter talented individuals from Indian institutions, hindering the country's educational leadership aspirations.
• Diversity of Thought Reduction: Dominance of political agendas can stifle open debate and exploration of differing viewpoints.
• Potential for Student Activism: Increased politicization can lead to student activism, disrupting academic life if excessively political.
• Erosion of Public Trust: When universities are seen as political tools, public trust in academic research's value and objectivity diminishes.
• Decreased Research Funding: Short-term political goals might reduce investment in long-term research, affecting innovation and competitiveness.
• Reduced Employability: An ideology-focused education may leave graduates ill-prepared for workforce demands.

Mitigating Political Interference

• Institutional Autonomy: Strengthen autonomy to resist undue influence, diversify funding sources, and uphold academic freedom.
• Implement Recommendations: Follow NKC and Yash Pal Committee suggestions for greater autonomy and quality improvement.
• Depoliticize Governance: Select leaders based on merit, not political considerations.
• Protect Dissent: Safeguard faculty's right to research and express views without fear of censorship.
• Student Union Independence: Ensure autonomous student unions without political interference.
• Empowered Ombudsman: Establish an independent body to address complaints of interference or violations.

Competition in Digital Markets

Recent Event Highlights

• The Chairperson of the Competition Commission of India (CCI) emphasized the trend of market concentration in digital markets, potentially leading to monopolistic behaviors.
• Control of large datasets by digital platforms can create entry barriers for new players, compromise platform neutrality, and result in algorithmic collusion.
• The Attorney-General for India also underlined the scrutiny required for e-commerce platforms' monopoly over user data and the necessity for legal innovation to balance the free market with social benefits.
• The digital economy presents vast opportunities for innovation and growth, challenging traditional competition laws globally.
• Utilization of tools like behavioral economics is essential in understanding human preferences in digital markets.

Definition of Digital Market

• Digital markets, also known as online markets, are platforms where businesses and consumers engage through digital technologies.
• Examples include E-commerce Marketplaces, Digital Advertising, Social Media Marketing, and Search Engine Optimization (SEO).

Characteristics Leading to Monopolistic Tendencies

• Factors such as low variable costs, high fixed costs, and strong network effects contribute to the dominance of a few firms in digital markets.

Challenges in Digital Markets

Market Dominance and Anti-Competitive Practices:

• Issues like self-preferencing, tying and bundling, and exclusive deals can stifle innovation and limit consumer choice.
• Example: Google's alleged favoritism towards its own shopping results.

Network Effects and Winner-Take-All Dynamics:

• Increasing platform value with more users can lead to high switching costs and reduced innovation.
• Example: Social media platforms like WhatsApp gaining more value with increased users.

Data Advantage and Privacy Concerns:

• Concerns over consumer privacy and an uneven playing field due to data advantage of established players.

Regulatory Challenges:

• Regulatory difficulties in addressing antitrust issues and defining dominant firms in digital ecosystems.

Possible Solutions for Monitoring Digital Markets

Proactive Measures:

• Designation of Systemically Important Digital Intermediaries (SIDIs) and prohibition of anti-competitive practices.
• Example: Banning self-preferencing by platforms in search results.

Data Sharing and Interoperability:

• Mandating data sharing and platform interoperability to enhance user flexibility.
• Example: Allowing users to transfer their online shopping carts between platforms.

Strengthening the Competition Commission of India (CCI) and promoting innovation with data protection.

Conclusion:

• Digital markets offer opportunities for growth but also pose challenges like monopolies and data privacy concerns, necessitating proactive solutions for a conducive environment for startups.

Mangrove Ecosystem Overview

Context:

• The recent report by the International Union for Conservation of Nature (IUCN) warns that half of the world's mangrove ecosystems are in danger of collapsing.
• The study, known as the "Red List of Mangrove Ecosystems," identifies various threats to these vital ecosystems.

Key Findings

• The study divides the world's mangrove ecosystems into 36 regions and evaluates the risk of collapse in each.
• More than 50% of global mangroves are at risk, with a significant portion facing severe dangers.
• South Indian mangroves are particularly vulnerable, while some regions like the Bay of Bengal are less threatened.

Threats to Mangrove Ecosystems

• Climate change poses the most significant risk, impacting a third of all mangroves globally.
• Other threats include deforestation, development, pollution, and extreme weather events like cyclones.
• Regions like the Northwest Atlantic and the South China Sea are expected to face substantial impacts.

Mangroves in India

• India harbors about 3% of South Asia's mangrove cover, with significant portions in West Bengal, Gujarat, and the Andaman & Nicobar Islands.
• Efforts like the Coastal Regulation Zone Notification and various conservation schemes aim to protect and manage India's mangrove areas.

India's Conservation Initiatives

• The Coastal Regulation Zone Notification of 2019 categorizes coastal areas, restricting damaging activities like waste dumping and land reclamation.
• The Central Sector Scheme offers financial aid to states for mangrove conservation, while initiatives like MISHTI focus on promoting mangrove health.

Significance of Mangrove Ecosystems

• Mangroves support biodiversity, coastal protection, carbon sequestration, fisheries, water quality, and tourism.
• They provide habitats for diverse wildlife, including species like the Royal Bengal tiger and contribute to local economies.

Challenges and Conservation

• Threats to mangroves include habitat destruction, climate change, pollution, lack of integrated management, overfishing, and invasive species.
• Conservation strategies involve stricter laws, community involvement, research, bio-restoration, and diverse species restoration efforts.

Protecting Mangrove Ecosystems

• Stricter regulations, adoption programs, research initiatives, community engagement, and bio-restoration techniques are vital for mangrove preservation.
• Efforts should focus on empowering local communities, restoration diversity, and sustainable conservation practices.