In News:

Nepal starts exporting energy to Bangladesh with Indian grid support.

Significance of the Power Transfer:

• Energy Cooperation:
  • A major step in regional energy cooperation among Nepal, India, and Bangladesh.
  • Strengthens sub-regional connectivity in the power sector.
• Nepal’s Hydropower Potential:
  • Nepal, a Himalayan nation, possesses untapped hydropower resources, and this agreement opens the door for future cross-border electricity cooperation.
  • Nepal’s energy exports are a green energy initiative, supporting sustainable industrial growth in Bangladesh and regional prosperity.
• Electricity Crisis in Bangladesh:
  • Bangladesh is facing an ongoing electricity shortage, worsened by the suspension of power supply from Adani’s Godda plant and the maintenance of the Payra thermal unit.
  • The addition of 40 MW of Nepalese hydroelectric power aims to alleviate the energy shortfall in Bangladesh.

Tripartite Power Sales Agreement:

• Agreement Details:
  • The agreement for power transfer was signed in October 2023 between:
    • NTPC Vidyut Vyapar Nigam (NVVN) (India)
    • Nepal Electricity Authority (NEA) (Nepal)
    • Bangladesh Power Development Board (BPDB) (Bangladesh).
  • Power Export: Nepal has started exporting 40 MW of electricity, which marks a significant milestone in trilateral power cooperation.

Key Entities Involved:

• NTPC Vidyut Vyapar Nigam (NVVN):
  • A wholly owned subsidiary of NTPC Ltd. (National Thermal Power Corporation), created to facilitate power trading.
  • NVVN is diversifying into renewables, e-mobility, and green fuel solutions.
• NTPC Ltd.:
  • A Maharatna PSU under India’s Ministry of Power, established to develop power resources in India.
  • Involved in large-scale power generation and clean energy initiatives

In News:

India continues to make significant strides in intellectual property filings, ranking among the top 10 countries for patents, trademarks, and industrial designs.

India’s Performance in Global Intellectual Property (IP) Filings:

• Overall Growth: India continues to make significant strides in intellectual property filings, ranking among the top 10 countries for patents, trademarks, and industrial designs.
• Patent Applications: India recorded a +15.7% growth in patent applications in 2023, marking its fifth consecutive year of double-digit growth, placing it among the top contributors to global patent filings.
• Trademark Filings: India ranks 4th globally in trademark filings, reflecting the country’s growing focus on brand protection.
• Industrial Designs: India saw a 36.4% surge in industrial design applications, emphasizing creativity and design innovation.

India’s Global Patent Ranking:

• Global Rank: India ranks 6th globally for patent applications with 64,480 filings in 2023.
• Resident Filings: For the first time, over half (55.2%) of India’s patent applications were filed by residents, highlighting growing domestic innovation.
• Patent Grants: A 149.4% increase in granted patents in 2023 underscores the efficiency of India’s patent office and the rising quality of applications.

Key Metrics and Trends in Patents:

• Patent-to-GDP Ratio: India’s patent-to-GDP ratio grew from 144 in 2013 to 381 in 2023, signaling a knowledge-driven economy.
• Sectoral Diversity: India’s patent filings span diverse sectors, including agriculture, pharmaceuticals, IT, and renewable energy, showcasing the broad scope of innovation.

Surge in Industrial Design Applications:

• Growth Rate: A 36.4% increase in industrial design filings in 2023, reflecting a shift towards value-added industries focused on product design and functionality.
• Leading Sectors: Key sectors driving design filings include textiles, accessories, tools, machines, and health & cosmetics.
• Manufacturing Transformation: This growth signals India’s transition from basic manufacturing to a more design-driven, innovation-focused ecosystem.

Trademark Filings:

• Global Rank: India ranks 4th globally in trademark filings with a 6.1% increase over the previous year.
• Resident Filings: Nearly 90% of trademark filings in India were made by domestic entities, highlighting a strong focus on brand protection.
• Active Trademarks: India now has over 3.2 million active trademarks, the second-largest in the world, reflecting a competitive and dynamic domestic marketplace.

Sectoral Trends in Trademarks:

• Leading Sectors: Health (21.9%), agriculture (15.3%), and clothing (12.8%) were the top sectors for trademark filings, underscoring India’s leadership in pharmaceuticals, food production, and fashion.
• Global Expansion: The rise in trademark filings also mirrors the increasing global demand for Indian products and services.

India’s Contribution to Global IP Growth:

• Global Trend: In 2023, a record 3.55 million patent applications were filed worldwide, with India contributing significantly to this surge, particularly in emerging markets.
• Local Innovation Focus: India’s rising resident filings in patents and trademarks point to a shift towards local innovation, with more Indian businesses and startups protecting their intellectual property.

Government Initiatives Fueling IP Growth:

• National IPR Policy: Launched in 2016, this policy fosters innovation, improves IP awareness, and supports domestic IP development.
  • Key Measures: Modernization of IP offices, improvements in procedural requirements, and IP education initiatives.
• Atmanirbhar Bharat: Government campaigns like Atmanirbhar Bharat have supported local innovation and made Indian businesses more IP-conscious.
• Startup India & Atal Innovation Mission: These initiatives have further strengthened India’s innovation ecosystem by promoting entrepreneurship, research, and technological advancement.
  • Startup India: Over 1,49,000 recognized startups as of September 2024.
  • Atal Innovation Mission: More than 10,000 Atal Tinkering Labs in schools and 3,500+ startups incubated across India.

In News:

A Semiconductor Plant has been set up in Morigaon, Assam, projected for completion by mid-2025.

Overview of the Morigaon Semiconductor Plant:

• Location: Morigaon, Assam.
• Investor: Tata Semiconductor Assembly and Test Pvt Ltd (TSAT).
• Investment: ?27,000 crore.
• Production Capacity: Expected to produce 48 million semiconductor chips daily.
• Technology: Utilizes advanced packaging technologies such as flip chip and Integrated System in Package (ISIP).
• Sectors Served: Automotive, electric vehicles, telecommunications, consumer electronics.
• Completion: Projected to be completed by mid-2025.
• Job Creation: Expected to generate 15,000 direct jobs and 11,000-13,000 indirect jobs.
• Market Reach: Will serve both domestic and international markets, enhancing India's position in the global semiconductor supply chain.

India's Semiconductor Industry and Market Growth:

• Market Size (2023): Estimated at $38 billion.
• Projected Growth: Expected to grow to $109 billion by 2030.
• Government Initiatives: Several initiatives have been launched to promote domestic semiconductor manufacturing, including the India Semiconductor Mission (ISM) and the Semicon India Program.

India Semiconductor Mission (ISM):

• Objective: To build a self-reliant semiconductor ecosystem in India.
• Launched: 2021 with a financial outlay of ?76,000 crore.
• Scope: Covers semiconductor fabs, packaging, display manufacturing, Outsourced Semiconductor Assembly and Testing (OSAT), sensors, and other critical components.
• Support Schemes: Includes Modified Schemes for setting up Semiconductor and Display Fabs, as well as support for Compound Semiconductors, Silicon Photonics, and Sensors.

Key Projects in Semiconductor Industry:

• Morigaon Facility: Part of the broader government-backed initiative to enhance semiconductor production in India.
• Other Facilities: New semiconductor units by Tata Electronics (Dholera, Gujarat), CG Power (Sanand, Gujarat), and KaynesSemicon Pvt Ltd (Sanand, Gujarat).
• Modernization: The Semi-Conductor Laboratory in Mohali is being modernized, alongside initiatives like the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and the Production Linked Incentive (PLI) Scheme.

Strategic Importance of Semiconductors:

• Role in Modern Electronics: Semiconductors are critical for a wide range of devices like computers, smartphones, solar cells, LEDs, and integrated circuits.
• Global Dependence: The global semiconductor market has significant reliance on suppliers like Taiwan (44%), China (28%), and South Korea (12%).
• Global Shortage: The 2021 chip shortage highlighted the vulnerability of global supply chains, prompting efforts by countries to boost domestic semiconductor production.

Government Support for Semiconductor Manufacturing:

• Financial Incentives: The government offers fiscal support for setting up semiconductor manufacturing plants:
  • 50% of project cost support under the Semiconductor Fab Scheme and the Display Fab Scheme.
  • Support for Compound Semiconductors and Chips to Startup (C2S) initiatives.
  • Training 85,000 engineers through the C2S Programme in collaboration with academic institutions, R&D organizations, and MSMEs.

In News:

The digital euro, a central bank digital currency (CBDC) being developed by the European Central Bank (ECB), aims to revolutionize Europe’s digital payment landscape. However, while the ECB has marketed it as a convenient, free, anonymous, and reliable alternative to existing cashless options like credit cards and mobile payment apps, the true purpose of the digital euro goes beyond these simplified claims.

Key Aspects of the Digital Euro

• Direct Issuance by the ECB: Unlike traditional digital payments that rely on intermediaries like banks or payment service providers, the digital euro is issued directly by the European Central Bank. This allows for peer-to-peer transactions without the need for third-party banks or payment gateways. It can be used for offline transactions, which is a major technical innovation that sets it apart from other digital currencies.
• A Digital Version of Cash: The digital euro is essentially a digital version of legal tender (cash), providing an alternative to cash in a world increasingly dominated by digital payments. Its key feature is direct payment between users, bypassing the traditional banking system. It aims to offer the same advantages as cash, such as anonymity, but with the convenience of digital transactions.
• Cost Reduction and Micro-Payments: The digital euro promises to lower transaction costs, especially for micro-payments that are currently prohibitively expensive using conventional bank transfers or digital services like PayPal. This cost efficiency is intended to enable new business models by lowering the friction in digital transactions, thus encouraging innovation in commerce.

The ECB’s Claims vs. the Real Motivation

While the ECB portrays the digital euro as a means to make payments easier, faster, and more secure, there is an underlying political and economic agenda that goes beyond improving consumer convenience.

• Sovereignty and Competition: One of the main drivers behind the digital euro is Europe’s desire to assert its digital sovereignty. The ECB positions the digital euro as a tool to strengthen the euro’s competitiveness against non-European payment providers, particularly those from the United States like PayPal, Apple Pay, and Google Pay. The EU is concerned that foreign companies may dominate the digital payment landscape, thereby reducing Europe's ability to control its own financial systems.
  • This is a defensive measure to protect European financial interests. By creating a state-backed alternative to privately controlled digital payment systems, the EU aims to ensure that Europe does not become reliant on foreign corporations for essential services.
• Not About Citizens’ Convenience Alone: While the ECB frames the digital euro as a user-friendly solution for consumers, the real concern is about the control over digital currency. The digital euro offers a more centralized alternative compared to the decentralized nature of cryptocurrencies like Bitcoin. The ECB aims to harness the power of the state in regulating and controlling digital transactions, thus consolidating private property and ensuring the smooth functioning of Europe’s monetary policies.
• A Tool for Strengthening the Euro: The digital euro is also seen as part of Europe’s broader ambition to establish the euro as a dominant global currency. As the first fully-regulated digital currency issued by a central bank, it could position the euro to compete against other digital currencies, including the digital yuan or the U.S. dollar. The EU sees the digital euro as a way to expand its geopolitical influence by promoting its own currency as a global standard for digital payments.

In News:

In a bid to enhance India’s clout in the global merchant shipping sector, the government recently hosted a two-day global maritime conference – Sagarmanthan: The Great Oceans Dialogue.

Key Highlights:

• Purpose of the Conference:

• To enhance India's maritime influence and position India as a key player in the global maritime sector, especially in merchant shipping and maritime trade.
• To showcase India's ambitions in expanding its role in global maritime trade, governance, and collaboration.

• India's Maritime Ambitions:

• Despite being the most populous nation and one of the largest global economies, India’s maritime clout has been relatively lower than expected.
• The dialogue aims to shift global attention towards India's growing role and contributions to maritime trade and shipping.

• India's Maritime Growth:

• India contributed to 16% of global maritime growth in 2023 and is on track to become the third-largest global economy within three years.
• As India’s economic and geopolitical influence expands, maritime governance will become increasingly significant, necessitating deeper international collaborations in commerce, connectivity, and trade.

• Focus Areas of the Dialogue:

• Global Maritime Trade: India's expanding role in international shipping, trade routes, and maritime security.
• International Collaborations: Promoting deeper engagement in maritime governance and policy-making ecosystems.
• Human Well-being: Highlighting the role of maritime trade in supporting human welfare, particularly in the context of sustainable development and climate change.

• Significance for India:

• The conference serves as a platform to discuss India’s aspirations, policies, and presence in global maritime affairs.
• It is an opportunity to strengthen maritime relations and address issues of global relevance such as trade routes, shipping governance, and environmental sustainability

In News:

The Reserve Bank of India (RBI) retained the State Bank of India, HDFC Bank and ICICI Bank as Domestic Systemically Important Banks (D-SIBs).

Overview of D-SIBs

• Definition: D-SIBs are banks that are 'Too Big to Fail' (TBTF) and their failure could significantly disrupt essential banking services, affecting the economy.
• RBI Classification: The Reserve Bank of India (RBI) has designated SBI, HDFC Bank, and ICICI Bank as D-SIBs.
• Bucketing System: These banks are classified into different buckets based on their systemic importance.

Importance of D-SIBs

• Systemic Importance: Banks are considered systemically important due to their:
  • Size
  • Cross-jurisdictional activities
  • Complexity
  • Interconnectedness with the economy
• Impact of Failure: Failure of a D-SIB could cause significant disruption in the banking system and economy, impacting services like payments, loans, etc.

Why D-SIBs are Created

• Risk of Disruption: The failure of a large bank can disrupt essential services and lead to a broader economic crisis.
• TBTF Perception: These banks are often perceived as Too Big to Fail, leading to an expectation of government support during crises. This creates moral hazard, encouraging riskier behavior.

Assessment and Selection of D-SIBs

• Two-Step Process:
  • Step 1: Selection of banks based on their size, complexity, and interconnectedness. Only banks with systemic importance are assessed (e.g., banks with assets > 2% of GDP).
  • Step 2: Calculation of systemic importance score based on a range of indicators. Banks above a certain threshold are classified as D-SIBs.
• Indicators: Size (measured by Basel III Leverage Ratio Exposure Measure), interconnectedness, substitutability, and complexity are key factors.

Bucket Allocation and Capital Requirements

• D-SIBs are assigned to five buckets based on their systemic importance score:
  • Bucket 1: Lowest capital surcharge (e.g., ICICI Bank).
  • Bucket 5: Highest capital surcharge.
• Additional Capital Requirements:
  • SBI: Additional 0.80% CET1 (Common Equity Tier 1) on Risk-Weighted Assets (RWAs).
  • HDFC Bank: Additional 0.40% CET1.
  • ICICI Bank: Additional 0.20% CET1.
  • The higher the bucket, the higher the capital surcharge.

Global Systemically Important Banks (G-SIBs)

• Global List: Identified by the Financial Stability Board (FSB) based on data from the previous year.
• 2023 G-SIB List includes banks like JP Morgan Chase, Bank of America, HSBC, etc.
• Capital Requirement for G-SIBs in India: Foreign G-SIBs with branch presence in India must meet additional CET1 requirements, proportional to their operations in India.

Key Terms

• Risk-Weighted Assets (RWAs): These are used to calculate the minimum capital a bank must hold. It accounts for the risk level of a bank’s assets.
• Common Equity Tier 1 (CET1): The highest quality of capital a bank can hold, primarily made up of common stock, to absorb losses in times of distress.

In News:

• The State Fisheries Department in Kerala launched a sea ranching project by releasing 20,000 pompano (Trachinotus blochii) fingerlings off the Vizhinjam coast as part of the artificial reef project.
• Coordinates: The fingerlings were released near artificial reef modules placed 1.5 nautical miles off the coast.
• Follow-up to Artificial Reef Project: The release of fingerlings is a follow-up to the artificial reef project aimed at replenishing marine fishery resources and promoting sustainable fishing practices.

Project Details

• Fingerling Release: The first batch of 20,000 pompano was released as part of the broader initiative to release 10 lakh fingerlings (pompano and cobia) at 10 locations along the Thiruvananthapuram coast.
• Location and Quantity: At each location, 1 lakh fingerlings will be released, where artificial reefs have already been deployed under the Pradhan Mantri Matsya Sampada Yojana (PMMSY).
• Reef Design: Artificial reefs consist of 150 reef modules (triangular, flower, and pipe-shaped) created at 42 locations off 33 fishing villages in the Thiruvananthapuram district.

Objective and Benefits

• Marine Resource Replenishment: The primary aim is to replenish marine fishery resources in the region by enhancing biodiversity through the introduction of fingerlings.
• Sustainable Fishing: The project aims to promote sustainable fishing practices by supporting fish populations and ensuring long-term fishery health.
• Attraction of Fish Species: The artificial reefs have already attracted a variety of fish species, including tuna, trevally, and mackerel, enhancing the fishing ecosystem.

Implementation and Funding

• Scheme: The project is being implemented under the Pradhan Mantri Matsya Sampada Yojana (PMMSY), which focuses on sustainable fisheries development.
• Central Approval: The National Fisheries Development Board (NFDB) approved the ?3 crore funding for the initial phase in Thiruvananthapuram.
• Proposed Expansions:
  • Phase II: A proposal for extending the artificial reef project to 96 villages in the districts of Kollam, Alappuzha, Ernakulam, and Thrissur with an estimated cost of ?29.76 crore.
  • Phase III: A similar proposal for 96 villages in the northern districts of Malappuram, Kozhikode, Kannur, and Kasaragod with an estimated cost of ?25.82 crore.

Mission and Fingerlings Details

• Fingerlings:
  • Pompano (Trachinotus blochii) and Cobia (Rachycentron canadum) fingerlings were reared at the Ayiramthengu fish farm.
  • Each fingerling weighs between 8 to 10 grams.
  • The release aims to stock marine areas with species that will contribute to biodiversity and fisheries sustainability.

Pradhan Mantri Matsya Sampada Yojana (PMMSY)

• Launched: PMMSY is a Centrally funded scheme under the Ministry of Fisheries, Animal Husbandry, and Dairying.
• Goal: The scheme focuses on sustainable fisheries development to enhance fisheries production, boost aquaculture, and promote responsible fishing practices.
• Funding: The scheme involves both Central and State Government funding for projects related to fisheries management, infrastructure development, and resource conservation.

Mission Fingerling

• Launched: 2017 by the Union Ministry of Agriculture and Farmers’ Welfare.
• Objective: To achieve the Blue Revolution by holistically developing and managing fisheries in India.
• Production Target: The mission aimed to increase fisheries production from 10.79 MMT (2014-15) to 15 MMT by 2020-21.

In News:

• In 2023, the Organisation for Economic Co-operation and Development (OECD) revealed that Indian farmers faced the highest implicit taxation globally, amounting to USD 120 billion.
• Implicit Taxation: This taxation arises from government policies like export bans, duties, and price controls, aimed at lowering food prices for consumers but reducing the income of farmers.
• Export Restrictions: Key commodities affected include rice, sugar, onions, and de-oiled rice bran.

Impact on Indian Farmers

• Market Price Support (MPS):
  • Negative MPS: In 2023, Indian agricultural policies resulted in a negative MPS of USD 110 billion.
  • Farmers received lower prices than international market rates due to export bans and trade restrictions, impacting their income.
• Budgetary Support: Despite government subsidies and the Minimum Support Price (MSP) worth USD 10 billion, negative MPS outweighed positive support, leading to an overall loss for farmers.
• Farmer’s Share in Global Negative Support:
  • India’s share of global negative price support in 2023 was 62.5%, a significant increase from 61% in 2000-02.

Global Agricultural Policy Trends

• Global Support: Total support for agriculture across 54 countries averaged USD 842 billion annually (2021-2023). However, there was a decline in support in 2022-23 from the pandemic-era peak.
• Challenges:
  • Geopolitical Tensions (e.g., Russia-Ukraine war) and climate change are exacerbating global agricultural production and trade.
  • Export Restrictions in various countries are distorting international agricultural markets.
  • Farmer Protests across countries reflect the economic and social struggles of the farming community.
• Sustainability Issues: Global agricultural productivity growth is slowing, posing challenges to feeding a growing population sustainably.

India's Agricultural Policies

• Export Bans and Restrictions: These policies are intended to control domestic prices but undermine farmers’ income by lowering market prices for key agricultural products.
• Minimum Support Price (MSP): MSP is meant to protect farmers, but is often set below international market rates, leading to a negative price effect.
• Regulatory Constraints: Policies like the Essential Commodities Act (1955) and APMC Act (2003), though aimed at ensuring food security, often lead to price suppression for farmers.
• Price Depressing Policies: India's agricultural policies result in lower farm-gate prices due to price controls, government-set procurement prices, and lack of market access.

Negative Market Price Support (MPS)

• Historical Trends:
  • From 2014-2016, India’s Producer Support Estimate (PSE) was -6.2%, driven mainly by negative MPS (-13.1%).
  • The PSE measures the annual value of transfers to farmers, both from consumers and the government.
• Inefficiencies:
  • Infrastructure Gaps: Poor infrastructure and high transaction costs lower the prices farmers receive.
  • Inefficient Resource Allocation: Short-term subsidies for inputs (fertilizers, irrigation) don’t address long-term agricultural challenges like climate change and market access.

Government Support Programs

• Subsidies and Schemes:
  • National Mission on Sustainable Agriculture (NMSA)
  • Paramparagat Krishi Vikas Yojana (PKVY) for organic farming.
  • Rashtriya Krishi Vikas Yojana (RKVY) to promote agricultural development.
  • Digital Agriculture Mission and Unified Farmer Service Platform (UFSP) for modernizing agricultural practices.
• Sustainability Efforts:
  • The government has introduced initiatives like AgriStack and Mission Organic Value Chain Development in the North East to enhance sustainable agricultural practices and reduce the negative impacts on farmers.

Global Context and Recommendations

• Environmental Public Goods Payments (EPGP): Only 0.3% of total producer support is dedicated to environmental sustainability, despite the growing need for climate-resilient agriculture.
• Sustainable Agricultural Practices: The OECD advocates for governments to tie producer support to sustainable farming practices, including the use of metrics like Total Factor Productivity (TFP) and Agri-Environmental Indicators (AEIs).
  • TFP measures agricultural efficiency, while AEIs assess the environmental impacts of farming.

OECD Overview

• OECD Function: Founded in 1961, the OECD is an international organization of 38 countries that promotes prosperity, equality, and well-being through economic reports, data, and policy analysis.
• India’s Role: India has been an OECD Key Partner since 2007, engaging with the OECD on various policy issues, though it is not a member.

In News:

The Reserve Bank of India (RBI) directed foreign portfolio investors (FPIs) to obtain necessary approvals from the government and concurrence from the investee companies when their equity holdings go beyond the prescribed limits and they reclassify the holdings as foreign direct investment (FDI).

• Approval Requirement:
  • FPIs (Foreign Portfolio Investors) must obtain necessary government approvals when reclassifying their foreign portfolio investments (FPIs) into Foreign Direct Investment (FDI).
  • Approvals are mandatory, including those related to investments from countries sharing a land border with India.
• Investment Limits:
  • According to FEMA (NDI) Rules, 2019, an FPI’s investment in an Indian company should not exceed 10% of the total paid-up equity capital (on a fully diluted basis).
  • If the FPI exceeds this limit, it has 5 trading days from the settlement of trades to either divest or reclassify the excess holdings as FDI.
• Restrictions on Reclassification:
  • Reclassification to FDI is not allowed in sectors where FDI is prohibited.
  • FPIs must ensure compliance with FDI norms, such as entry routes, sectoral caps, investment limits, pricing guidelines, and other related conditions.
• Concurrence from Investee Companies:
  • The FPI must obtain the concurrence of the investee company for reclassifying the investment into FDI.
  • This ensures that the company adheres to conditions related to prohibited sectors, sectoral caps, and government approvals.
• Reclassification Procedure:
  • The FPI must clearly state its intent to reclassify the investment to FDI and provide the necessary approvals and concurrence to its custodian.
  • The custodian is responsible for freezing the FPI's purchase transactions in the investee company’s equity instruments until the reclassification is complete.
• Regulatory Adherence:
  • The reclassification must follow the relevant provisions for FDI, including compliance with the Foreign Exchange Management Act (FEMA) and FDI guidelines.

In News:

A mechanically stable, biodegradable, hydrophobic nanocoating material can enhance the nutrient use efficiency of chemical fertilizers by tuning them for slow release, thereby limiting their interaction with the rhizosphere soil, water and microbes.

Development of Slow-Release Fertilizers:

• A biodegradable, hydrophobic nanocoating has been developed to enhance the nutrient use efficiency of chemical fertilizers.
• The nanocoating allows for slow release of nutrients, thus limiting excessive interaction with soil, water, and microbes, and optimizing fertilizer usage.

Coating Composition:

• The coating is made from nanoclay-reinforced binary carbohydrates, primarily chitosan (a biopolymer from chitin) and lignin (a plant-based polymer).
• These materials are low-cost, naturally derived, and eco-friendly, ensuring sustainability and reducing the environmental impact of fertilizer use.

Technological Innovation:

• The coating process involves using a drum rotor method to uniformly coat fertilizers, improving their efficiency.
• The tuning of hydrophobicity in the nanocoating alters the release kinetics of fertilizers, ensuring that nutrients are released in accordance with the crop’s nutrient uptake needs.

Sustainability and Biodegradability:

• The nanocoating is biodegradable, which ensures that it does not harm the environment post-application, unlike conventional chemical fertilizers that may lead to soil degradation and water pollution.
• Life cycle assessment confirms the product's long-term sustainability compared to traditional fertilizers.

Enhanced Crop Productivity:

• The slow-release coating enables a reduced fertilizer dose, while maintaining or even increasing crop yields, particularly for staple crops like rice and wheat.
• This technology facilitates higher agricultural output with fewer inputs, contributing to food security.

Industrial Viability:

• The mechanical stability of the coated fertilizers ensures they can withstand transportation and handling, making them suitable for large-scale industrial application.
• The rotary drum system used for coating ensures uniform application and superior mechanical performance, ensuring that the fertilizers are not damaged during the supply chain process.

Economic Benefits:

• The use of slow-release fertilizers can reduce overall fertilizer costs for farmers while enhancing yields, leading to improved socio-economic conditions for farmers.
• The technology holds potential for economic growth by boosting agricultural productivity and reducing the financial burden on farmers for chemical fertilizer inputs.

Global Relevance:

• The research is significant in the context of global sustainable development goals, aiming to reduce the over-reliance on conventional chemical fertilizers that contribute to soil degradation, water contamination, and greenhouse gas emissions.

Research Collaboration:

• This breakthrough was achieved by scientists from the Institute of Nano Science and Technology (INST), Mohali, in collaboration with the Department of Science and Technology (DST).
• The findings were published in the peer-reviewed journal Environmental Science: Nano, highlighting its scientific validation.

In News:

• India's annual hidden costs from agrifood systems total $1.3 trillion, the third-largest globally, after China ($1.8 trillion) and the US ($1.4 trillion).
• These costs are mainly driven by unhealthy dietary patterns leading to non-communicable diseases (NCDs), such as heart disease, diabetes, and stroke.

Major Contributors to Hidden Costs:

• Unhealthy Diets: Over 73% of India’s hidden costs stem from unhealthy dietary habits, including:
  • Excessive consumption of processed foods and additives ($128 billion).
  • Low intake of plant-based foods, fruits, and beneficial fatty acids ($846 billion).
• These dietary risks contribute to a significant health burden, increasing the prevalence of NCDs and reducing labor productivity.

Global Context:

• Global hidden costs of agrifood systems amount to $12 trillion annually.
• 70% of these costs (~$8.1 trillion) arise from unhealthy dietary patterns, which include high intakes of sugar, salt, and processed foods, contributing to diseases and economic losses.

Health Impacts:

• The report identifies 13 dietary risk factors that contribute to NCDs, including insufficient intake of whole grains, fruits, vegetables, and excessive sodium, with varying effects across different agrifood systems.

Environmental and Social Costs:

• Environmental Costs: High costs from unsustainable agricultural practices, including greenhouse gas emissions and nitrogen runoff. In some agrifood systems, environmental costs can reach up to 20% of GDP.
• Social Costs: High poverty rates among agrifood workers and undernourishment in systems like protracted crises and traditional agrifood systems contribute significantly to the hidden costs.

India’s Agrifood System Profile:

• India’s agrifood system faces significant challenges related to low wages, poor productivity, and poverty among agrifood workers, driven by distributional failures.
• Climate Change and Environmental Degradation: Issues like droughts, floods, and soil degradation threaten food security and agricultural sustainability in India.

Recommendations for Transformative Change:

• True Cost Accounting: Implementing this method can help better capture hidden costs and enable more informed decision-making for a sustainable agrifood system.
• Healthier Diets: Policies to make nutritious food more affordable and accessible to reduce health-related hidden costs.
• Sustainability Incentives: Encouraging practices that reduce greenhouse gas emissions, harmful land-use changes, and biodiversity loss, using labelling, certification, and industry standards.
• Consumer Empowerment: Providing accessible information about the environmental, social, and health impacts of food choices, ensuring even vulnerable households benefit from healthier options.

India’s Path Forward:

• India has several ongoing initiatives for sustainable agriculture, including:
  • National Mission for Sustainable Agriculture (NMSA).
  • Eat Right Initiative.
  • Digital Agriculture Mission (DAM).
• However, challenges like climate change, soil degradation, and low productivity among smallholder farmers hinder progress toward sustainable food systems.

Key Focus Areas for India’s Agrifood Systems:

• Support for Smallholder Farmers: Enhancing access to technology, markets, and financial services for marginalized farmers.
• Sustainable Practices: Adoption of water-efficient practices, soil health restoration, and environmentally friendly farming methods.
• Collaboration with International Agencies: Cooperation with FAO, WFP, and others to strengthen agricultural reforms and support smallholder farmers.

In News:

• NTPC has achieved the first-ever synthesis of CO? (captured from flue gas) and hydrogen (produced via a PEM electrolyzer) into methanol at its Vindhyachal plant.
• This marks a significant step in carbon management technology, aimed at advancing sustainable fuel production.

About CO?-to-Methanol Conversion:

• Carbon Dioxide Capture:
  • CO? is captured from industrial sources, such as power plants, or directly from the atmosphere.
• Hydrogen Production:
  • Renewable energy sources like solar or wind power are used to produce hydrogen through water electrolysis.
• Methanol Synthesis:
  • The captured CO? is combined with hydrogen in the presence of a catalyst to produce methanol, typically under high pressure and temperature conditions.

Benefits of CO?-to-Methanol Conversion:

• Carbon Capture and Utilization (CCU):
  • This technology reduces the impact of CO? on the atmosphere by converting it into useful products.
• Renewable Fuel Source:
  • Methanol produced through this process can be used as a fuel for transportation, power generation, or as a feedstock for chemicals.
• Energy Storage:
  • Methanol offers a more practical storage and transportation option than hydrogen, making it a potential energy storage solution and aiding the transition to hydrogen-based energy systems.
• Versatile Feedstock:
  • Methanol is widely used in producing chemicals, solvents, and plastics, supporting various industrial applications.

What is Methanol?

• Brief: Methanol, also known as methyl alcohol or wood alcohol, is the simplest form of alcohol. It is a clear, colorless, and flammable liquid with a distinctive odor.
• Key Properties:
  • Colorless, miscible with water, toxic if ingested, flammable.

In News:

• India is in talks with Oman, UAE, Saudi Arabia, Maldives, and Singapore to establish cross-border electricity transmission lines.
• This is part of the ambitious OSOWOG initiative to create a global renewable energy grid.

Key Points:

• Proposed by the Prime Minister of India at the 2018 International Solar Alliance (ISA) Assembly.
• Aims to create a transnational electricity grid that delivers power worldwide.
• Led by India and the UK, in collaboration with ISA and the World Bank Group.

Vision of OSOWOG:

• Connect regional grids through a common infrastructure for the transfer of renewable energy, focusing on solar power.
• Harness solar and other renewable energy from regions where the sun is shining and efficiently transmit it to areas of need.
• Aim to provide power to 140 countries using clean and efficient solar energy.

Phases of OSOWOG:

• Phase 1:
  • Connect the Indian grid with grids in the Middle East, South Asia, and South-East Asia.
  • Share solar and other renewable energy resources.
• Phase 2:
  • Expand the interconnected grid to include renewable resources from Africa.
• Phase 3:
  • Achieve a global interconnection aiming for 2,600 GW by 2050.
  • Integrate as many countries as possible into a single renewable energy grid.

Global Collaboration:

• Involves national governments, international organizations, legislators, power operators, and experts.
• Focus on accelerating infrastructure development for a clean energy-powered world.

In News:

India's journey toward a sustainable energy future has gained significant momentum with a series of policy reforms designed to reduce reliance on fossil fuels and accelerate the shift to clean energy. The recent Asia-Pacific Climate Report from the Asian Development Bank (ADB) highlights India's remarkable progress in reforming its fossil fuel subsidy system and its efforts to foster renewable energy, positioning the country as a leader in the region's green transformation.

Key Highlights from the Report:

India's Fossil Fuel Subsidy Reform

• India has successfully reduced fossil fuel subsidies by 85%, from a peak of $25 billion in 2013 to just $3.5 billion by 2023.
• The reform strategy is built on a "remove, target, and shift" approach, which involved phasing out subsidies on petrol and diesel from 2010 to 2014, followed by incremental tax hikes on these fuels through 2017.
• These fiscal changes created space for funding renewable energy projects, such as solar parks, electric vehicle initiatives, and infrastructure improvements.

Role of Taxation in Supporting Clean Energy

• Between 2010 and 2017, India introduced a cess on coal production and imports, which contributed significantly to funding clean energy projects. Approximately 30% of the cess was directed to the National Clean Energy and Environment Fund.
• This funding supported major renewable energy initiatives, including the National Solar Mission and Green Energy Corridor project, helping reduce the cost of utility-scale solar energy and expand off-grid renewable energy solutions.
• The introduction of the Goods and Services Tax (GST) in 2017 altered the financial landscape, redirecting the cess funds to GST compensation rather than directly to clean energy.

Government Schemes and Initiatives

• India is advancing its clean energy agenda through several key government schemes:
  • National Green Hydrogen Mission: Aimed at establishing India as a leader in green hydrogen production.
  • PM-KUSUM Scheme: Focused on promoting solar energy among farmers, allowing them to produce renewable power.
  • PM Surya Ghar: Muft Bijli Yojana: A program designed to provide solar energy access to rural communities, reducing dependency on fossil fuels.

A Strategic Shift: From Subsidies to Clean Energy

• India’s subsidy reforms are an important part of its strategy to transition from a reliance on fossil fuels to a focus on renewable energy investments.
• These changes reflect India’s long-term goal of achieving net-zero emissions by 2070, as outlined in its climate action plans.

Global Significance of India’s Efforts

• The reduction in fossil fuel subsidies and the surge in clean energy investment serve as a model for other nations seeking to balance economic development with climate action.
• India’s approach demonstrates that policy reforms and innovative financing mechanisms can be used to accelerate the transition to a cleaner, greener economy while creating job opportunities and fostering economic growth.

In News:

Department of Agriculture & Farmers’ Welfare has released the Operational Guidelines of Central Sector Scheme “NAMO DRONE DIDI”

Key Highlights:

Objective:

• Empower women through Self-Help Groups (SHGs) by providing drones for agricultural rental services.
• Aim to support 14,500 SHGs from 2024 to 2026.

Scheme Overview:

• Type: Central Sector Scheme, under the Deendayal Antyodaya Yojana – National Rural Livelihood Mission (DAY-NRLM).
• Ministry: Ministry of Agriculture & Farmers Welfare.
• Target: Women SHGs for providing drone services in agriculture (e.g., nutrient and pesticide spraying).

Key Features:

• Financial Assistance:
  • 80% subsidy (up to ?8 lakh) for SHGs to purchase drones.
  • Loans for the remaining 20% via the National Agriculture Infra Financing Facility (AIF) with 3% interest subvention.
• Drone Package:
  • Includes drones, spray assemblies, batteries, cameras, chargers, and measurement tools.
  • Additional batteries and propellers allow up to 20 acres of coverage per day.
• Training Program:
  • One SHG member will be selected for 15 days of mandatory training.
  • Focus on drone operation and agricultural tasks (nutrient and pesticide spraying).
• Implementation & Oversight:
  • Central Governance: Empowered Committee comprising secretaries from key ministries (Agriculture, Rural Development, Fertilizers, Civil Aviation, and Women and Child Development).
  • State Level: Lead Fertilizer Companies (LFCs) will implement the scheme in coordination with state departments and SHG federations.
  • Monitoring: IT-based Management Information System (MIS) through the Drone Portal for real-time tracking and fund disbursement.
• Financial Flexibility:
  • SHGs can access loans through other Ministry of Rural Development schemes if needed.

Implementation Details:

• Governance: Central level oversight by the Empowered Committee and state-level execution by Lead Fertilizer Companies (LFCs).
• Ownership: Drones procured by LFCs will be owned by SHGs or their Cluster Level Federations (CLFs).
• Monitoring: The scheme will be tracked and managed through the Drone Portal, ensuring transparency and accountability.

In News:

• The Union Government has decided to introduce four new components under the Mission for Integrated Development of Horticulture (MIDH), aimed at promoting modern farming techniques:Hydroponics, Aquaponics, Vertical Farming&Precision Agriculture

Key Features of MIDH:

• MIDH is a Central Sponsored Scheme (CSS) aimed at the integrated development of various horticulture crops, including:
  • Fruits, vegetables, root and tuber crops, mushrooms, spices, flowers, aromatic plants, coconut, cashew, cocoa, and bamboo.
• The scheme focuses on pre-production, production, post-harvest management, processing, and marketing activities.

Revision of Operational Guidelines and Cost Norms:

• The Ministry of Agriculture and Farmers' Welfare is revising the MIDH operational guidelines and cost norms, which were last updated in April 2014.
• The revised guidelines are expected to be released within one month.
• Cost norms are likely to increase by 20% compared to the existing rates, addressing concerns from various states about outdated guidelines.

Reason for Revision:

• Several states, including Odisha, have raised concerns over the old rates under MIDH. For example, Odisha’s Agriculture Minister highlighted that the state was still using 10-year-old rates.
• The Union Cabinet had already approved the rationalization of all CSS operating under the Ministry into two umbrella schemes:
  • Pradhan Mantri Rashtriya Krishi Vikas Yojana (PM-RKVY)
  • Krishonnati Yojana (KY)

Growth in India's Horticulture Sector:

• India’s horticulture production has significantly increased in recent years:
  • Total production reached 334.60 million metric tonnes in 2020-21, up from 240.53 million metric tonnes in 2010-11.
• India is now the second largest producer of fruits and vegetables globally, surpassing food grain production.
• MIDH Annual Budget:The annual allocation for MIDH in the current financial year (2024-25) is ?2,000 crore.

In News:

The Livestock Census is a crucial tool for understanding the current status of India’s livestock sector and its contribution to the economy and society.

What is the Livestock Census?

• The Livestock Census is a nationwide survey conducted every five years to assess the number, species, breed, age, sex, and ownership status of domesticated animals and poultry, including stray animals.
• Purpose: It helps in collecting comprehensive data about the livestock population and their role in the economy and society.
• First Census: The first livestock census was conducted in 1919, and this is the 21st edition.
• Next Census: The 21st Livestock Census will be conducted between October 2024 and February 2025 by approximately 87,000 enumerators across 30 crore households in India.

Animals Covered in the Census

• The census will account for 16 species of animals, including:
  • Cattle, Buffalo, Mithun, Yak, Sheep, Goat, Pig, Camel, Horse, Ponies, Mule, Donkey
  • Dog, Rabbit, Elephant
  • Poultry: Fowl, Chicken, Duck, Turkey, Geese, Quail, Ostrich, and Emu
• The census will also collect data on 219 indigenous breeds of these species recognized by the ICAR-National Bureau of Animal Genetic Resources (NBAGR).

Objectives of the Livestock Census

• Economic Contribution: The livestock sector contributes approximately:
  • 30% of the Gross Value Added (GVA) of the agricultural sector
  • 4.7% of India's overall GVA
  • It plays a crucial role in rural employment, particularly in poultry and animal husbandry.
• Policy Formulation and Planning:
  • The data from the census is critical for formulating and implementing policies related to livestock, ensuring sustainable growth in the sector.
  • It helps in monitoring and estimating GVA from livestock.
• Sustainable Development Goals (SDGs):
  • Provides vital data for tracking the progress towards Goal 2 of SDGs (Zero Hunger) and Target 2.5, which focuses on maintaining genetic diversity in livestock, particularly addressing local breeds at risk of extinction (Indicator 2.5.2).
• Sectoral Monitoring:
  • The census helps in monitoring the performance and health of India’s livestock sector, which is vital for ensuring food security, rural livelihoods, and economic growth.

Key Features of the 21st Livestock Census

• Digitization:
  • Like the 2019 Census, this year’s census will be fully digitized, with data collected via a mobile application.
  • Digital Monitoring: A dashboard will monitor progress at various levels, and the latitude and longitude of the data collection locations will be recorded.
  • A software-based livestock census report will be generated to streamline analysis.
• New Data Points:
  • For the first time, data on pastoral animals and pastoralists will be collected, focusing on their socio-economic status and livestock holdings.
  • Granular Data: The census will gather information on:
    • Proportions of households that rely on livestock for major income.
    • Gender-based data on stray cattle.
• Extended Scope:
  • In addition to animal population statistics, the census will also focus on the socio-economic contributions of the livestock sector, gender inclusion, and employment.

Significance of the Livestock Census

• A Comprehensive Livestock Profile:
  • Provides a holistic view of livestock population and the interlinkages between animal husbandry, agriculture, and rural economies.
  • Assists in the management and preservation of indigenous animal breeds.
• Informed Decision-Making:
  • Helps policymakers, researchers, and development organizations in formulating strategies for sectoral growth, genetic diversity preservation, and livelihood enhancement for rural communities.
• Monitoring Livestock Health:
  • The census helps in tracking the health and sustainability of India’s livestock population, which is essential for ensuring food security and preventing animal diseases.

Findings of the 2019 Livestock Census

• Total Livestock Population: 535.78 million
  • Cattle: 192.9 million
  • Goats: 148.88 million
  • Buffaloes: 109.85 million
  • Sheep: 74.26 million
  • Pigs: 9.06 million
  • Other species contributed a small fraction to the total livestock population (0.23%).

In News:

Recently, the Financial Services Secretary stated that Microfinance institutions (MFIs) have played a crucial role in fostering financial inclusion but they should refrain from any reckless lending.

Microfinance Institutions (MFIs) and Financial Inclusion:

• MFIs provide small loans and financial services to low-income and marginalized groups, particularly those without access to formal banking services.
• Goal: To promote financial inclusion and empower marginalized communities, especially women, by enabling them to become self-sufficient and improve their socio-economic status.

• In India, over 168 MFIs serve around 3 crore clients across 29 states and 563 districts.
• The sector has grown significantly and is crucial for empowering Self-Help Groups (SHGs) and Joint Liability Groups (JLGs) to access credit and other financial services.

Concerns over Reckless Lending:

• The Financial Services Secretary, emphasized that MFIs should avoid reckless lending practices that could harm both borrowers and the sector.
• Poor underwriting and irresponsible lending could lead to unsustainable debt, especially for Self-Help Groups (SHGs) and Joint Liability Groups (JLGs) with limited financial literacy.
• Key Advice: Lending practices must be responsible, careful, and should aim to empower borrowers, not exploit their limited understanding.

Government Programs Supporting MFIs:

• SHG-Bank Linkage Programme: Over 77 lakh SHGs with a total loan outstanding of ?2.6 lakh crore, benefiting around 10 crore households.
• Lakhpati Didi Yojana: Aimed at empowering women, this scheme helps transform SHG members into women entrepreneurs.

Challenges Facing Microfinance Institutions:

• Regulatory Scrutiny: Many MFIs face scrutiny for high interest rates and non-compliance with borrower assessments. The RBI has urged MFIs to reassess lending practices.
• Over-Indebtedness: Many borrowers take loans from multiple MFIs, leading to unsustainable debt. As of March 2024, over 12% of borrowers had multiple loans, risking defaults.
• Low Financial Literacy: A significant challenge is low financial literacy among borrowers, which increases the risk of defaults and harms the reputation of MFIs.

RBI Guidelines on Microfinance (2022):

• Collateral-Free Loans: For households with income up to ?3 lakh, loans should be collateral-free.
• Repayment Cap: Monthly loan repayments should not exceed 50% of the borrower’s monthly income.
• Flexibility in Repayment: MFIs must offer flexible repayment options and ensure proper income assessment.
• Interest Rate Cap: The RBI has implemented guidelines to limit excessive interest rates charged by MFIs.

Government Schemes for Microfinance:

• Pradhan Mantri Mudra Yojana (PMMY): Provides financial assistance to non-corporate, non-farm small/micro enterprises.
• National Rural Livelihoods Mission (NRLM): Promotes rural livelihoods through the formation and capacity building of Self-Help Groups (SHGs).
• Deen Dayal Upadhyaya Antyodaya Yojana: Focuses on the empowerment of rural poor through skill development and income generation.
• Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE): Provides guarantee cover to micro and small enterprises.

Way Forward for Microfinance Sector:

• Responsible Lending: MFIs must prioritize affordable lending practices, ensuring borrower’s repayment capacity is carefully assessed to avoid over-indebtedness.
• Enhancing Financial Literacy: MFIs should focus on financial education for borrowers, enabling them to make informed choices.
• Adherence to Regulatory Guidelines: MFIs should comply strictly with RBI regulations, including interest rate caps and borrower income assessments, to enhance sector transparency and trust.
• Malegam Committee Recommendations: Implementing suggestions like capping interest rates, tracking multiple loans, and improving transparency to prevent over-indebtedness.
• Diversifying Funding Sources: To reduce vulnerability to economic downturns, MFIs should work on diversifying their funding sources, reducing dependence on external capital.

In News:

• Mormugao Port Authority (MPA) has been globally recognized as an incentive provider on the Environmental Ship Index (ESI) platform, acknowledged by the International Association of Ports and Harbours (IAPH).
• Mormugao is India's first port to implement Green Ship Incentives through the ESI, contributing to global efforts to reduce maritime air emissions.

 ‘Harit Shrey’ Scheme:

• Launched in October 2023, the ‘Harit Shrey’ scheme provides discounts on port fees based on the Environmental Ship Index (ESI) scores of commercial vessels.
• Ships with higher ESI scores (indicating better environmental performance) are rewarded with incentives to encourage eco-friendly practices in shipping.

ESI and Global Efforts for Emission Reduction:

• The Environmental Ship Index (ESI) is a global system to evaluate and reward ships based on their environmental performance, particularly their emissions of nitrogen oxides (NOx) and sulphur oxides (SOx).
• The 2023 IMO greenhouse gas strategy aims to reduce the carbon intensity of international shipping by at least 40% by 2030.

Incentives and Benefits:

• The Harit Shrey scheme has already benefitted several vessels, promoting greenhouse gas emission reductions and contributing to sustainable maritime operations.
• The scheme aligns with global sustainability goals, particularly in reducing the carbon footprint of shipping operations.

Sustainability Recognition:

• The Mormugao Port Authority has submitted the Harit Shrey scheme for consideration in the IAPH Sustainability Awards under the World Port Sustainability Programme (WPSP), reflecting its commitment to environmental sustainability.

The Environmental Ship Index (ESI):

• ESI is a system that evaluates and rewards ships for better environmental performance than the standards set by the International Maritime Organization (IMO).
• Ships are assessed based on their emissions of NOx and SOx, with greenhouse gas reporting also included in the evaluation.

Main Features of ESI:

• Port-Centric: Developed as a port-to-port system, where ports can offer incentives based on the ESI score.
• Voluntary Participation: Shipowners participate voluntarily to demonstrate their vessels' environmental performance.
• Automated Calculation: The ESI score is automatically calculated and updated.
• Incentives: Ships with higher ESI scores may receive benefits such as reduced port fees and priority berthing.

In News:

• The International Monetary Fund (IMF) has maintained India’s GDP growth forecast at 7% for FY2024, marking a moderation from 8.2% in 2023.
• FY2025 Projection: Growth is expected to slow further to 6.5% in FY2025.
• India’s growth is expected to be stronger than most other large economies, yet the downward revision reflects challenges in the global economy and moderation in domestic economic momentum.

Global Economic Growth Projections:

• Global Growth (2024-2025): Global growth is projected at 3.2% in 2024 and 2025, which is stable but modest. This growth rate is largely unchanged from previous IMF forecasts.
• Long-Term Outlook: The IMF's long-term projection for global growth is 3.1%, which is considered subpar compared to pre-pandemic growth rates, signaling a potential era of low growth.

Key Risks and Uncertainties:

• The IMF highlights several downside risks to global growth, including:
  • • Monetary tightening: Central banks' high-interest rate policies to combat inflation could have long-term negative effects on economic growth and financial stability.
    • Geopolitical Tensions: Ongoing conflicts, such as the Russia-Ukraine war, could disrupt global supply chains and trade, exacerbating inflation and slowing growth.
    • China’s Economic Slowdown: China, the world’s second-largest economy, is facing a slower growth trajectory, especially in its real estate sector, which is dragging down its overall growth.
    • Structural Challenges: The aging population and weak productivity are long-term growth inhibitors in many advanced economies, adding uncertainty to future growth prospects.
• Inflation and Monetary Policy:
  • The IMF's inflation forecast shows global inflation cooling:
    • 2023: Global inflation is expected to reach 6.7%.
    • 2024: It is forecast to fall to 5.8%, with advanced economies expected to return to inflation targets sooner than emerging markets.
    • 2025: A further decline to 4.3%.
  • The primary driver of disinflation is not interest rate hikes but the unwinding of pandemic-related shocks, supply chain improvements, and the gradual return of labor supply.
  • Monetary Policy: Central banks are likely to ease policies once inflation nears target levels, but risks of further commodity price spikes or geopolitical tensions could delay this.

US and Europe Growth:

• Emerging Markets and Developing Economies:
  • Growth Outlook: The IMF forecasts growth in emerging markets and developing economies at 4.2% for 2024 and 2025, with a slight moderation to 3.9% by 2026.
  • Emerging Asia: Growth in emerging Asia (led by India and China) is expected to slow, from 5.7% in 2023 to 5% in 2025.
  • India’s Relative Strength: India’s growth continues to outperform many emerging economies, though the slowdown from 8.2% in 2023 to 7% in 2024 reflects global economic headwinds.
• Income Inequality Risks:
  • The IMF warns that low growth over an extended period (4+ years) could exacerbate income inequality within countries, as sluggish growth affects job creation and wage growth.
  • Countries with slow economic recovery are likely to see a widening gap between rich and poor, undermining social cohesion and stability.

In News:

• ?1.2 lakh crore is the projected financial loss due to cyber frauds in India over the next year (2024), according to the Indian Cyber Crime Coordination Centre (I4C) under the Union Home Ministry.
  • This could amount to 0.7% of India’s GDP.
• Mule Accounts:
  • Mule accounts are a significant contributor to cyber frauds. These accounts are used to facilitate money laundering and illegal transactions.
  • On average, around 4,000 mule accounts are identified daily by I4C.
  • Mule accounts typically facilitate the transfer of funds out of India, often through cryptocurrency transactions.
• Sources of Cyber Scams:
  • A majority of frauds are linked to Chinese entities or China-based operations, with about half of the cybercrime complaints originating from China.
  • Other major hubs for cyber frauds include Cambodia, Myanmar, and Laos, which house call-centre-like scam compounds.
  • Azerbaijan has also been identified as a new hotspot for such scams.
• International Dimension:
  • Fraudulent withdrawals have been reported from ATMs in Dubai, Hong Kong, Bangkok, and Russia using mule accounts.
  • The international nature of these scams often involves routing stolen funds through various countries, using methods like cryptocurrency exchanges.
• Cybercrime and Terror Financing:
  • Cyber scams have potential ramifications beyond financial losses; they can be used for terror financing and money laundering.
  • Cryptocurrency is a common medium for laundering money, with an example cited of ?5.5 crore laundered through 350 transactions in a short span.
• ATM Hotspots and Fraudulent Withdrawals:
  • 18 ATM hotspots have been identified across India where fraudulent withdrawals occur.
  • Fraudsters exploit these locations to withdraw money, often using mule bank accounts and cross-border ATM networks.
• Government Response:
  • The Ministry of Home Affairs (MHA) is working to combat these frauds by convening meetings with the Union Finance Ministry and the Reserve Bank of India (RBI).
  • The objective is to curb the operation of mule accounts and strengthen the banking system to prevent such frauds.
  • Banks are being urged to flag unusually high-value transactions or accounts with low balances that are engaging in suspicious activity.
• Fraudulent Calls and Scam Compounds:
  • Indian fraudsters, in collaboration with international scam rings, use Indian mobile phone numbers to deceive citizens.
  • Countries like Cambodia, Myanmar, Laos, and Azerbaijan have been identified as hubs for investment scams involving fraudulent calls.
• Helpline and Cyber Fraud Reporting System:
  • The Citizen Financial Cyber Fraud Reporting and Management System (part of I4C) and the 1930 helpline provide mechanisms to report financial frauds.
  • ?11,269 crore in financial frauds was reported during the first half of 2024 via these channels.
  • The system also involves cooperation with over 200 financial intermediaries, including banks and wallets.

In News:

The International Monetary Fund (IMF) has revised India's GDP growth forecast for the fiscal year 2024-25 to 7%, up by 20 basis points from its previous estimate of 6.8%.

• India’s Growth Projections:
  • Current Fiscal Year (FY2024-25): India’s GDP growth is projected at 7%, unchanged from June 2024 estimates.
  • Next Fiscal Year (FY2025-26): Growth expected at 6.5%.
  • Growth Decline from FY2023 (8.2%): The slowdown is attributed to the exhaustion of pent-up demand post-pandemic and the economy returning to its potential.

• Global Economic Growth:
  • World Output: Projected global growth at 3.2% in both 2024 and 2025.
  • Advanced Economies: U.S. GDP growth revised upward to 2.8% in 2024 and 2.2% in 2025.
  • Emerging Markets & Developing Economies: Growth revised upwards, largely due to stronger economic activity in Asia, with China and India being key contributors.

• Global Inflation and Monetary Policy:
  • Inflation Decline: Global inflation has decreased from its peak of 9.4% in Q3 2022 to 3.5% projected by end-2025.
  • Inflation Outlook: Despite reductions in inflation, price pressures persist in some regions.
  • Monetary Policy Tightening: IMF acknowledges challenges due to tight monetary conditions in several economies and their potential impacts on labor markets.

• Global Risks and Challenges:
  • Geopolitical Tensions: Ongoing Russia-Ukraine war and escalating conflicts in West Asia (e.g., Lebanon) have increased geopolitical risks, potentially affecting commodity markets.
  • Protectionism: Growing protectionist policies worldwide are a risk to global trade and economic stability.
  • Sovereign Debt Stress: Debt burdens in several countries could become a source of instability.
  • Weak Chinese Economy: Slower-than-expected recovery in China remains a significant concern for global economic growth.
  • Monetary Policy Risks: Prolonged tight monetary policies in some countries could impact labor markets and economic recovery.

• IMF’s Policy Recommendations for Medium-Term Growth:
  • Monetary Policy Neutrality: Countries should adopt a neutral monetary policy stance to balance growth and inflation control.
  • Fiscal Policy Adjustment: Build fiscal buffers after years of loose fiscal policy to ensure stability.
  • Structural Reforms: Implement structural reforms to boost productivity and cope with challenges like aging populations, the climate transition, and the need for youth employment.

• India’s Economic Outlook - Key Drivers:
  • Rural Consumption Growth: The upward revision of India's FY2024-25 GDP forecast to 7% is driven by improved consumption, especially in rural areas.
  • Upward Revisions for 2023: The increased growth forecast also reflects positive carryover effects from India's 8.2% growth in 2023.
  • Emerging Asia's Growth: The growth outlook for emerging Asia is supported by India and China, though long-term growth prospects for China are weaker (projected to slow to 3.3% by 2029).

• Global Economic Outlook:
  • World Growth Projections: Global growth is expected to remain at 3.2% in 2024 and 3.3% in 2025.
  • Diverging Growth Rates: Growth across economies is converging as output gaps close, particularly in advanced economies (e.g., U.S. labor market cooling, euro area recovery).

In News:

• India has extended a ?487.60 crore Line of Credit (LoC) to Mauritius for financing a water pipeline replacement project.
• This initiative is part of the Indian Development and Economic Assistance Scheme (IDEAS), which supports developmental projects in partner countries through concessional loans.

About the IDEAS Scheme

• Origin: Launched in 2003-04 as the India Development Initiative, later renamed as IDEAS Scheme.
• Objective: To promote India’s political, economic, and strategic interests by providing developmental assistance to developing countries.
• Administering Body: The scheme is managed by the Ministry of External Affairs (MEA) with support from the Exim Bank.

Key Features of the IDEAS Scheme

• Lines of Credit (LoCs):
  • Provides LoCs to developing countries for funding projects in various sectors, including:
    • Infrastructure
    • Water supply
    • Education
    • Other key developmental areas.
• Project Recommendations:
  • Projects funded under the scheme are recommended by MEA and are aimed at bolstering socio-economic development in the partner countries.
• Concessional Financing:
  • The scheme offers concessional terms for the financing of these projects, reducing the financial burden on the recipient countries.
• Diplomatic and Strategic Benefits:
  • The IDEAS scheme strengthens India’s diplomatic ties and fosters goodwill with countries in the Global South.
• Focus on Development:
  • It aims to support key developmental goals in partner countries while advancing India's role as a leader in global development cooperation.

Significance

• The Mauritius water pipeline project is a part of the larger efforts under IDEAS to support infrastructure and socio-economic development in partner nations, helping to improve the quality of life and fostering closer bilateral relations.

In News:

India's semiconductor market is poised to exceed $100 billion by 2030, according to a report from the India Electronics and Semiconductor Association and Counterpoint Research. Currently valued at $45 billion in 2023, the market is projected to grow at an annual rate of 13%, driven by demand in mobile handsets and IT sectors, which together account for over 75% of revenues.

Key Highlights:

• Growth Drivers: The growth is supported by strong demand for electronics and government initiatives like the production-linked incentive scheme. Semiconductors are essential for various industries, including electronics, defense, healthcare, and automotive.
• Importance of Semiconductors: These materials, which include silicon and germanium, are crucial for electronic devices. They can conduct electricity under certain conditions, making them fundamental in transistors, integrated circuits, and devices like LEDs and solar cells.
• Global Context: The global semiconductor supply chain has shown vulnerabilities, particularly during the chip shortage of 2021. Major producers include Taiwan (44% market share), China (28%), South Korea (12%), the U.S. (6%), and Japan (2%). Countries are now focusing on building domestic chip industries to reduce dependency on a few key suppliers.

Factors Favoring India's Growth in Semiconductors:

1. Skilled Workforce: India has a vast pool of STEM graduates, providing a skilled workforce for semiconductor manufacturing and design.
2. Cost Advantage: Lower labor costs and efficient supply chains position India favorably for semiconductor manufacturing.
3. Supply Chain Diversification: India is becoming a hub for back-end assembly and testing operations, with potential for front-end manufacturing.
4. Government Support: Initiatives like Semicon India and the India Semiconductor Mission aim to create a robust semiconductor ecosystem, offering substantial fiscal incentives for companies.

Government Initiatives:

• Semiconductor Fab Scheme: Provides 50% project cost support for semiconductor manufacturing.
• Display Fab Scheme: Offers similar support for display manufacturing.
• Chips to Startup (C2S) Programme: Trains 85,000 engineers across academic and R&D institutions.
• Recent approvals for the establishment of semiconductor plants in Gujarat and Assam further bolster this initiative.

In News:

The winners of this year’s Economics Nobel, or the Sveriges Riksbank Prize awarded for economic sciences, Daron Acemoglu, Simon Johnson and James Robinson (AJR), pioneers in new institutional economics, emphasised the role of institutions in the direction of development.

The Great Divergence

• Definition: Refers to the economic and political development gap between the West and East, particularly during the 17th and 18th centuries.
• Key Factors:
  • Industrialization in Western Europe enabled the projection of political power globally.
  • Colonial institutions established during this period have long-lasting effects on post-colonial nations.

Role of Institutions in Development

• Nobel Prize Winners: Daron Acemoglu, Simon Johnson, and James Robinson (AJR) awarded for their work in new institutional economics.
• Institutions Defined: Set of rules constraining human behavior, ensuring law and order, and preventing coercion.
• Types of Institutions:
  • Extractive Institutions: Concentrate wealth among elites, historically prevalent in colonized regions (e.g., Sub-Saharan Africa, Latin America).
  • Inclusive Institutions: Promote broader participation in economic growth, more common in countries like the U.S., Canada, and Australia.

Research Contributions

• Natural Experiments: AJR used historical data to show how differing colonial practices influenced economic outcomes.
• Key Findings:
  • Areas with landlord-based colonial systems had lower agricultural investment and productivity.
  • Regions under direct colonial rule lagged in infrastructure like schools and health centers.

Implications of AJR's Work

• Economic Institutions: Reflect collective choices shaped by political power, which can be either de jure (formal) or de facto (informal).
• Challenges in Reform: Conflicting interests often hinder agreement on the nature of beneficial institutions.

Critical Perspectives

• Skepticism of AJR's Framework: Some scholars argue that AJR's emphasis on Western liberal institutions overlooks the complexities of historical contexts, including corruption and systemic inequalities in early U.S. history.
• Modern Economic Dynamics: AJR caution against assuming that inclusive institutions will automatically lead to prosperity, as evidenced by concerns regarding China's future growth under extractive political systems.

Insights from Nobel Prize Research

• Key Focus Areas:
  • Institutional structures in colonized countries significantly shape economic prosperity.
  • Example of Nogales, Arizona, and Nogales, Mexico illustrates the impact of institutions on economic opportunities.

About the Nobel Prize Recipients

1. Daron Acemoglu:
   • MIT professor and co-author of influential works on power and prosperity.
   • Advocates for democracy's role in economic growth while acknowledging its challenges.
2. Simon Johnson:
   • Former IMF chief economist, current MIT professor.
   • Emphasizes the complexity of addressing entrenched poverty due to institutional frameworks.
3. James A. Robinson:
   • University of Chicago professor, co-author of works on economic disparity.
   • Highlights historical transitions toward inclusive societies and their importance in economic development.

Nobel Prize in Economic Sciences

• Established: 1968 by the Swedish central bank.
• Purpose: Complement existing Nobel Prizes, recognizing contributions to economic sciences.
• Notable Previous Laureates: Include Claudia Goldin (2023) for gender pay gap research and Abhijit Banerjee et al. (2019) for poverty alleviation studies.

In News:

Samarth is a demand-driven and placement-oriented umbrella skilling program of the Ministry of Textiles. Samarth Scheme has been extended for two years (FY 2024-25 and 2025-26) with a budget of Rs. 495 Crore to train 3 lakh persons in textile-related skills.

Key Details:

• Scheme Name: Samarth (Scheme for Capacity Building in Textile Sector)
• Nodal Ministry: Ministry of Textiles
• Extension Period: FY 2024-25 and 2025-26
• Budget: ?495 Crores
• Target: Train 3 lakh individuals in textile-related skills

Objectives

• Skilling Programs: Provide demand-driven, placement-oriented training.
• Industry Support: Encourage job creation in organized textile and related sectors.
• Skill Enhancement: Focus on upskilling and reskilling in traditional sectors (handloom, handicraft, silk, jute).

Implementation

• Implementing Partners:
  • Textile Industry/Industry Associations
  • Central/State government agencies
  • Sectoral Organizations (e.g., DC/Handloom, Central Silk Board)
• Current Achievements:
  • Total Trained: 3.27 lakh candidates
  • Employment Rate: 2.6 lakh (79.5%) have secured jobs
  • Women Empowerment: 2.89 lakh (88.3%) women trained

Scheme Features

• Coverage: Entire textile value chain, excluding spinning and weaving.
• Training Focus:
  • Entry-level skilling
  • Upskilling/reskilling existing workers in apparel and garmenting
• Beneficiaries: Handicraft artisans and job seekers in the textile sector.

Background

• Cabinet Approval: The scheme is a continuation of the Integrated Skill Development Scheme from the 12th Five Year Plan.
• Implementation Agency: Office of the Development Commissioner (Handicrafts).

In News:

The National e-Governance Division (NeGD) has announced the integration of the UMANG app with DigiLocker- India’s Digital Wallet. This collaboration aims to provide citizens with seamless access to a wide range of government services bringing greater convenience and allowing users to manage multiple services through a single platform.

UMANG app

• The UMANG app is accessible to all Android users with an expansion to iOS in the pipeline.
• The UMANG mobile app is an all-in-one single, unified, secure, multi-channel, multi-lingual, multi-service mobile app.
• It provides access to high-impact services of various organizations of the Union and States. 

Simplified Citizen-Government interaction

This integration makes it easier for citizens to interact with the Government in an efficient, digital-first manner. DigiLocker has always been a pioneer in simplifying access to personal and official documents, and after integration with UMANG, it has expanded the range of services you can access on the go.

About DigiLocker
DigiLocker is a flagship initiative under the Digital India program aimed at providing secure cloud-based storage of essential documents. By integrating with e-governance services such as UMANG, DigiLocker further is committed to further enhance accessibility and ease of living.

In News:

• The Prime Minister commended the completion of three years of the PM GatiShakti National Master Plan, calling it a transformative initiative for India’s infrastructure development.
• Key Benefits: The plan enhances multimodal connectivity and improves efficiency across various sectors, contributing to logistics, job creation, and innovation.

Overview of PM GatiShakti National Master Plan

• Launch Date: October 2021
• Objective: A transformative initiative worth ?100 lakh crore aimed at revolutionizing India’s infrastructure over five years.
• Development Tool: Created as a Digital Master Planning tool by the Bhaskaracharya National Institute for Space Applications and Geoinformatics (BISAG-N).
• GIS Platform: Utilizes a dynamic Geographic Information System to integrate action plans from various ministries into a comprehensive database.
• Goals: Accelerate project completion, reduce timelines, and enhance India’s global competitiveness by addressing inter-ministerial challenges.

Key Features

• Digital Integration: A digital platform coordinating the efforts of 16 ministries for seamless infrastructure planning.
• Multi-Sector Collaboration: Incorporates initiatives from major programs like Bharatmala and Sagarmala.
• Economic Zones Development: Focuses on key areas such as textile clusters and pharmaceutical hubs to boost productivity.
• Technology Utilization: Employs advanced spatial planning tools and ISRO satellite imagery for data-driven project management.

Core Sectors Driving the Plan

• The National Master Plan is centered around seven primary sectors that enhance economic growth and connectivity, supported by sectors like energy transmission and social infrastructure.

Six Pillars of PM GatiShakti

1. Comprehensiveness: Integrates various initiatives through a centralized portal, ensuring efficient planning.
2. Prioritisation: Allows ministries to prioritize projects based on national importance and resource allocation.
3. Optimisation: Identifies infrastructure gaps and selects the most efficient transportation routes.
4. Synchronisation: Ensures coordinated efforts across ministries to avoid delays.
5. Analytical Capabilities: Offers extensive data layers for improved spatial planning and decision-making.
6. Dynamic Monitoring: Uses satellite imagery for real-time project tracking and adjustments.

Achievements of PM GatiShakti

• District-Level Expansion: Extended to 27 aspirational districts, with plans for 750 in the near future.
• Technological Integration: Enhanced real-time infrastructure planning using geospatial tools.
• Global Outreach: The GatiShakti tool showcased to 30 countries and highlighted at international conferences.
• Social Sector Benefits: Identified areas for new healthcare facilities and improved planning in various districts.
• Rural and Urban Development: Implemented projects for irrigation and city logistics in multiple states.
• Employment Initiatives: Utilized for setting up training institutes near industrial clusters.

In News:

NABARD has published the findings from its second All India Rural Financial Inclusion Survey (NAFIS) for 2021-22, which offers primary data based on a survey of 1 lakh rural households, covering various economic and financial indicators in the post-COVID period. 

Survey Overview:

• Inaugural survey conducted for 2016-17, results released in August 2018.
• Aims to analyze changes in rural economic conditions since 2016-17.
• Included all 28 states and Union Territories of Jammu & Kashmir and Ladakh.

Insights from NAFIS 2021-22

• Increase in Average Monthly Income:
  • Average monthly income rose by 57.6% from Rs. 8,059 (2016-17) to Rs. 12,698 (2021-22).
  • Nominal CAGR of 9.5%, with annual nominal GDP growth at 9%.
  • Agricultural households earned Rs. 13,661; non-agricultural households earned Rs. 11,438.
  • Salaried employment contributed 37% to total income; cultivation contributed one-third for agricultural households.
• Rise in Average Monthly Expenditure:
  • Average monthly expenditure increased from Rs. 6,646 (2016-17) to Rs. 11,262 (2021-22).
  • Agricultural households reported higher consumption (Rs. 11,710) compared to non-agricultural households (Rs. 10,675).
  • Expenditure exceeded Rs. 17,000 in states like Goa and Jammu & Kashmir.
• Increase in Financial Savings:
  • Annual average financial savings grew to Rs. 13,209 in 2021-22 from Rs. 9,104 in 2016-17.
  • 66% of households saved in 2021-22, up from 50.6% in 2016-17.
  • 71% of agricultural households reported savings, compared to 58% of non-agricultural households.
  • States like Uttarakhand (93%) and Uttar Pradesh (84%) had high saving rates, while Goa (29%) and Kerala (35%) had lower rates.
• Kisan Credit Card (KCC) Coverage:
  • 44% of agricultural households possessed a valid KCC.
  • Among larger landholders and those with recent agricultural loans, 77% reported having a KCC.
• Insurance Coverage:
  • Households with at least one insured member increased from 25.5% (2016-17) to 80.3% (2021-22).
  • Vehicle insurance was most common (55%), followed by life insurance (24%).
• Pension Coverage:
  • Households with at least one member receiving any form of pension rose from 18.9% to 23.5%.
  • 54% of households with members over 60 years old reported receiving a pension.
• Financial Literacy:
  • Good financial literacy increased by 17 percentage points, from 33.9% to 51.3%.
  • Sound financial behavior improved from 56.4% to 72.8%.

Conclusion

• The NAFIS 2021-22 highlights significant advancements in rural financial inclusion since 2016-17.
• Improvements in income, savings, insurance coverage, and financial literacy are notable.
• Government welfare schemes (e.g., PM Kisan, MGNREGS) have positively impacted rural lives.
• Continued support and investment in rural development are essential for economic empowerment and financial security in India's rural population.