2024 Nobel Prize in Economics - PDF

3. ECONOMY 3.1. NOBEL PRIZE IN ECONOMICS Why in the news? The 2024 Nobel Prize in Economics was awarded to Daron Acemoglu, Simon Johnson and James A. Robinson for their research on “how institutions are formed and their impact on prosperity”. More on news The research demonstrated the importanc...

3. ECONOMY 3.1. NOBEL PRIZE IN ECONOMICS Why in the news? The 2024 Nobel Prize in Economics was awarded to Daron Acemoglu, Simon Johnson and James A. Robinson for their research on “how institutions are formed and their impact on prosperity”. More on news The research demonstrated the importance of societal institutions for a country’s prosperity. Research also highlighted that democracy developed in various colonies as the threat of revolution by the masses could not be tackled through the promise of social reforms. Key Highlights of their research Colonial Impact on Prosperity: Colonizers established systems from the 16th century that caused a "reversal of fortunes" - the poorest became the richest. Factors influencing the type of institutions: Settler mortality rates, which were higher in disease-prone areas near the equator, and population density influenced the types of institutions established during colonization. Types of Institutions: o Extractive Institutions: Formed in some colonies to exploit the indigenous population and extract natural resources to benefit the colonisers. > In such environments, individuals face significant risks of confiscation, leading to a lack of motivation for long-term investment. o Inclusive Institutions: Colonisers built inclusive political and economic systems for the long-term benefit of European Settlers in colonies that were sparsely populated and supported more European settlers. > These institutions offered individuals a strong incentive to work, save and invest in the long run. o E.g, The divided city of Nogales highlights differences created by the type of institution. 29 www.visionias.in ©Vision IAS  > On the north side (USA), residents have better economic conditions, secure property rights, and political freedoms. > In contrast, the south side (Mexico) struggles with organized crime and corruption. > The main difference lies in their institutional frameworks, showing how colonial legacies affect present- day living conditions. Institutional Traps: The researchers explain that some societies are trapped in extractive institutions, limiting progress. o However, they emphasize that change is possible; reforms can lead to democracy and the rule of law, reducing poverty. Role of Economic and Political Institutions in Shaping National Prosperity Resource Allocation and Property Rights: Economic institutions dictate resource allocation and protection. o E.g. Article 300A (Right to Property) ensures that no person shall be deprived of their property except by authority of law. o Niti Aayog: It is the premier policy think tank of the Government. Incentives for Investment: Inclusive institutions foster competition and entrepreneurship, promoting development. o E.g. The National Innovation Foundation (NIF) promotes grassroots innovation. Sustainability: Effective institutions ensure sustainable resource management. Poor institutions can lead to over- extraction, harming the environment and future growth. o E.g., Article 48A (Directive Principles of State Policy) provides for the protection and improvement of the environment and the safeguarding of forests and wildlife o E.g., the National Green Tribunal a specialised judicial body equipped for the purpose of adjudicating environmental cases Regulations: Good regulation promotes competition and innovation. o E.g., Competition Commission of India (CCI) promotes fair competition and prevents monopolies and anti- competitive practices. Governance and Rule of Law: Political institutions ensure stable governance and the rule of law, reducing corruption and fostering a fair environment for investment. o E.g., Article 14 provides equality before the law. o E.g., The Central Vigilance Commission (CVC) for promoting integrity, transparency, and accountability in the country's public administration. Inclusiveness: Democratic institutions promote participation in decision-making, leading to policies that meet the population's needs. o E.g., Tribal Advisory Council (TAC) for the welfare and advancement of Scheduled tribes in states. Conflict Resolution: Effective institutions that provide conflict resolution mechanisms promote political stability, attract investment, and support economic growth. o E.g., National Legal Services Authority (NALSA), along with other legal Services Institutions , organizes Lok Adalats to resolve disputes efficiently and reduce legal bottlenecks Steps Taken by India to Build Strong Economic Steps Taken by India to Build Strong Political Institutions Institutions Nationalization of Banks: In the late 1960s, India India’s democratic framework: It feature regular nationalized major banks to control credit and direct elections and a multiparty system, promoting resources to key sectors like agriculture and small accountability and representation. industries. Decentralization: The 73rd and 74th LPG Reforms: Since 1991, India has liberalized its Constitutional Amendments empowered local economy by reducing bureaucratic barriers, lowering governments, improving grassroots governance tariffs, and improving the ease of doing business, and citizen involvement. which has attracted foreign investment and stimulated Grievance Redressal: Initiatives like fast-track growth. courts and digital management aim to enhance Enforcement Directorate (ED): It combats economic the judicial system’s efficiency and uphold justice. crimes such as money laundering, enhancing 30 www.visionias.in ©Vision IAS  transparency and accountability in financial Anti-Corruption Measures: Institutions like the transactions. Lokpal and the Comptroller and Auditor General Parliamentary Committees: Committees like the of India promote government accountability and Public Accounts Committee and the Estimate help reduce corruption. Committee review economic policies, ensuring Civil Society Engagement: Supporting NGOs and accountability and fostering public debate to align civil society enhances inclusivity and reforms with national interests. responsiveness to the needs of citizens. Conclusion The relationship between economic and political institutions is key to national prosperity. Strong economic institutions that protect property rights and encourage investment, combined with effective political institutions that ensure good governance and inclusiveness, foster growth. About The Sveriges Riksbank Prize in Economic Sciences commonly known as Nobel Prize of economics Establishment: In 1968 by Sveriges Riksbank (Sweden’s central bank). o It is not one of the five Nobel Prizes established by Alfred Nobel's will in 1895. First recipients: To Ragnar Frisch and Jan Tinbergen in 1969. o Amartya Sen was the first Indian to receive Nobel Prize for Economics in 1998 for his contributions to welfare economics and social choice theory. Prize consists: A medal, a personal diploma, and a cash award. 3.2. B READY INDEX Why in the news? World Bank (WB) launches the first edition of its Business-Ready (B-Ready) Index. More on News As a new project, B-Ready is in a three-year rollout phase, spanning 2024 to 2026. o The assessment currently includes 50 economies (excluding India) and plans to expand to 180 by 2026. The B-READY framework replaces the World Bank's Ease of Doing Business (EoDB) rankings, which measured how easy it was to start and operate a business. o The EoDB report was discontinued in 2021 due to irregularities in data and ethical concerns. The 2024 Business Reform Action Plan rankings prepared by the Department for Promotion of Industry and Internal Trade will include some of the indicators tracked by B-Ready index. What is the B Ready Index? About: It is a new data collection and analysis project of the world bank group to assess the business and investment climate worldwide, accompanied by an annual corporate report. Aim: To promote private investment, create jobs, and enhance productivity to support inclusive and sustainable economic development. o It also aims to ensure that the data produced are both comparable across economies and representative within each economy. It aims to achieve objective by focusing on three main areas o Reform Advocacy: Encourages policy reforms by sharing benchmarks and fostering dialogue among governments, businesses, and the World Bank. o Policy Guidance: Offers tailored recommendations for policy changes based on data comparisons to global best practices. o Analysis and Research: Supplies detailed data to support research on private sector development factors. What is the Analytical Framework of the B Ready Index? o It is structured topics crucial for private sector development, reflecting different stages in a business's lifecycle, including opening, operating (or expanding), and closing (or reorganizing) a business. 31 www.visionias.in ©Vision IAS  Cross-Cutting Themes: covers three important cross-cutting areas across the ten topics o Digital Adoption: Examines how governments and businesses integrate digital tools. o Environmental Sustainability: Evaluates regulations that affect business environmental practices. o Gender: Analyzes anonymized gender data to assess the impact of programs and regulations on businesses. For each of the 10 topics, B-READY considers three pillars What is the difference between the Ease of Doing Business and the B-ready index? Aspects EODB B Ready Focus of Primarily small and medium enterprises. Targets private sector development as a whole. Assessment Assessment Examine only burden of regulation on Examines regulatory burden on firms and quality firms. of regulation. Analytical 10 indicators across various categories. Ten topics, three pillars, three themes. Framework Data Collection Expert consultations and case studies Combines expert insights and firm surveys for a Method emphasized either legal (de jure) or balanced view of regulations, improving data practical (de facto) regulations, but not comparability across economies. both consistently. Geographical Main business city in 191 economies and a Aims for wider coverage, including local regulations Reach second city in 11 What is the significance of the adoption of B ready index for India? Boosting Competitiveness: The B-Ready Index helps India improve its business environment to attract foreign investment, essential for economic growth. E-commerce Support: Targeting $200 billion in e-commerce exports by 2030, the index helps identify and streamline issues in digital trade and logistics. Informed Policy: The data from the index provides insights into business challenges, guiding policymakers to create targeted reforms in trade and compliance. Encouraging Innovation: By emphasizing digitalization and sustainability, the index motivates businesses to innovate, boosting productivity. Promoting Inclusivity: The index includes gender equality measures, supporting India’s goals for inclusive growth and better access for women and underrepresented groups. Monitoring: Regular updates allow India to monitor its progress and adjust strategies to remain competitive in the global market. 32 www.visionias.in ©Vision IAS  Transparency & Data Integrity: It ensures data integrity through strict gathering processes and safeguards, while promoting transparency by making foundational documents, such as the B-READY manual and handbook. Way Forward Enhancing Governance: Building the ability of government institutions to create and enforce effective policies. Involving Stakeholders: Engaging businesses, civil society, and other groups in the reform process to foster collaboration and support. Capacity Building: Providing training and resources to local governments to better assist businesses. Promoting Inclusivity: Ensuring that reforms benefit a diverse range of businesses, especially small and medium enterprises. 3.3. SCALING OF INDIA’S SMALL COMPANIES Why in the news? A recent paper highlighted the rise of Multi-plant phenomena in the Indian manufacturing sector. About multi-plant phenomena The tendency of manufacturing firms to distribute their workforce across multiple factories/plants in the same state, rather than scaling up a single plant is called multi-plant phenomena. According to the paper, Indian firms are increasingly opting for multiple plants in a single state. o This phenomenon has been growing over time and accounts for over 25.16% of total employment in all plants and 35.48% of employment in large plants. Issues like missing middle phenomena, dwarfism of firms, that pose barriers to growth of manufacturing sector and job creation in India, have already been documented. o The multi-plant phenomenon further highlights the difficulties that Indian firms encounter when attempting to scale up effectively. How a multi-plant phenomenon is different from dwarf firm, and missing middle phenomena? A dwarf firm is a firm that doesn’t scale with time and remains small, while in multi-plant phenomena, the firm itself is large but it operates multiple small plants. The ‘Missing Middle’ phenomenon points to lower share of mid-sized firms in the Indian manufacturing sector in comparison to the shares of small-sized and the large-sized firms. Small companies: According to Companies (Specification of definition details) Amendment Rules, 2022, paid-up capital and turnover of the small company shall not exceed rupees four crore and rupees forty crore respectively. Challenges faced by Indian firms in scaling up Regulations: India's labour laws often exempt smaller firms from compliance, promoting size-based incentives and inflexible regulations that encourage firms to remain small for benefits retention. o E.g., Industrial Disputes Act (IDA), 1947, requires companies with over 100 employees to obtain government permission before retrenchment. Risk management: Firms open multiple small plants to diversify legal, regulatory and political risk. Handling Capital-labor relations: E.g., Multi-plants also provide protection in the event of labor-related dispute at one site. Flexibility: If the order decreases at one plant, the firm can redeploy workers to another plant without terminating their employment, which is the only option in a single plant establishment. 33 www.visionias.in ©Vision IAS  Economic and Market Structure: The fragmentation of the market and the prevalence of informal sectors contribute to multi-plants and smaller firms. Management: A study highlighted that lack of professional management, due to the tendency to engage family and relatives in management, is keeping Indian businesses small. Other challenges: o Difficulties in acquiring land in contiguous parcels to sustain large plants. o Smaller plants can be closer to geographically dispersed labour pools, especially of women. Implications of Indians firms and plants remaining small Low Productivity: The working paper highlights that single and larger plants are more productive than smaller and multi-plants due to economies of scale. o As per Economic Survey 2018-19, despite accounting for more than half of all the organized firms, dwarf firms contribute mere 8% to productivity. Impact on Export competitiveness: Lower productivity of small plants and firms impacts competitiveness and export performance. Job creation: As per Economic Survey 2018-19, the contribution of dwarf firms to employment is only 14%. Employment quality: As per Economic Survey 2018-19, small firms struggle to maintain the jobs they create, while large firms generate more permanent jobs in larger numbers. Initiatives taken to promote large firms Production Linked Incentive (PLI) Schemes: PLI schemes have been launched for various sectors to bring economies of size and scale in the manufacturing sector and make Indian manufacturers globally competitive. National Industrial Corridor Development Programme: Aims to develop futuristic industrial cities in India which can compete with the best manufacturing and investment destinations in the world. “Raising and Accelerating MSME Performance” (RAMP) scheme: It is a World Bank assisted Central Sector scheme of the Ministry of Micro, Small and Medium Enterprises (MoMSME) to scale up the implementation capacity and coverage of MSMEs with impact enhancement of existing MSME schemes. Codification of labour laws: 29 Labour Laws have been codified into 4 labour codes to enhance Ease of Doing Business in the country. Way Forward Sunset clause: The Economic Survey 2018-19 recommended that all size based incentives must have a sunset clause of less than ten years with necessary grand-fathering. Management and Skill Development: Encourage professional management and support training programs for entrepreneurial and management skills to boost operational efficiency. Access to capital: Direct credit flow to young firms in high employment elastic sectors to accelerate employment generation by re-calibrating Priority Sector Lending (PSL) guidelines. Promote more Industrial Clusters: Creating industrial zones can help firms scale up by providing shared infrastructure, market linkages and improved access to technology, finance and talent. 3.4. PM GATISHAKTI NATIONAL MASTER PLAN Why in the News? Recently, the PM GatiShakti National Master Plan, launched in 2021, has completed three years. About PM GatiShakti (PMGS) PM GatiShakti: It is an approach for growth accelerating trustworthy infrastructure through synchronized, holistic, integrated, and comprehensive planning based on knowledge, technology and innovation. o The approach is driven by 7 engines - Railways, Roads, Ports, Waterways, Airports, Mass Transport, and Logistics Infrastructure. Objectives: To enhance ease of living, ease of doing business, minimize disruptions and expedite completion of works with cost efficiencies. PM GatiShakti National Master Plan (PMGS NMP) 34 www.visionias.in ©Vision IAS  o It has been developed by the Digital Master Planning tool developed by BISAG-N (Bhaskaracharya National Institute for Space Applications and Geoinformatics) using GIS platform. o It’s built on open-source tech, hosted on Meghraj (Government of India’s cloud) & Integrates ISRO satellite imagery and Survey of India basemaps. o It provides comprehensive database of the ongoing & future projects of various Ministries. E.g., Bharatmala, Sagarmala, inland waterways, dry/land ports, and UDAN. 35 www.visionias.in ©Vision IAS Why there was a need of PM GatiShakti National Master Plan? Disjointed Planning o Lack of coordination leads to repeated road excavation for laying cables, gas pipes, and water lines by different departments independently, causing continuous public disruption and wasteful expenditure. Non-/ under-utilization of installed infrastructure o Capacity inefficient planning results in completed infrastructure projects operating below optimal capacity, leading to significant revenue losses. o E.g., LNG terminal in Kochi operated below capacity since 2013, due to delayed pipeline connectivity. Lack of Standardization o Each component of infrastructure is designed as a unique project despite similar specifications which leads to wasteful expenditure across departments. o E.g., Every Railway Over Bridge (ROB) requires fresh Ministry of Road Transport & Highways design and Ministry of Railways approval, stretching timelines and causing public inconvenience. Lack of coordination and delays in clearances/approvals: o Delays in obtaining even a single approval (clearances, land acquisition, etc) can cascade into significant project setbacks. o E.g., A portion of Delhi-Meerut Expressway faced 11-month delay due to pending railway approval for one ROB, despite complete road construction. How PM GatiShakti is removing barriers for infrastructure growth? Geospatial intelligence for smarter planning & monitoring: Utilising real-time data from GIS and satellite imagery, PMGS provides data-driven insights for more informed decision-making. Smart logistics for enhanced efficiency: The Unified Logistics Interface Platform (ULIP) is designed to improve efficiency, transparency, and coordination within the logistics sector. Breaking silos for a collective vision: The Network Planning Group (NPG) is synchronising efforts across ministries to ensure cohesive infrastructure development. Revolutionising project planning: With digital surveys, project preparation is now faster and more accurate. E.g., In a year, the Ministry of Railways has planned over 400 railway projects covering 27,000 km of railway lines. Multimodal Connectivity: By integrating highways, railways, ports, airports, mass urban transportation, and inland waterways, this initiative ensures the seamless movement of goods. Streamlines clearance procedures across agencies: E.g., Environment Ministry’s online environmental clearance system has reduced approval timelines from 600 days to just 162 days. What are the challenges faced by PM GatiShakti National Master Plan? Issue of interoperability and non-digitization of government data: Lack of standardization and universal protocols in government data storage and processing hinders data integration and development of integrated solutions. o Inadequate digitization of Government data such as land records adversely impacts integrated decision- making. Data security concerns: Ministry of Electronics and IT have expressed reservations about sharing valuable infrastructure data. o Risk of private companies potentially monetizing sensitive infrastructure data from the platform. Limited data sharing with private sector: It hampers optimal decision-making for projects under Rs 6 trillion national monetisation pipeline (NMP) involving core infrastructure assets. Major issue falling beyond the ambit of PMGS: Land acquisition is frequently the major roadblock to India's development. Due to issues regarding land acquisition, many development projects are postponed. Other Challenges not addressed by PMGS: E.g., legal problems, alienation of local populations due to infrastructural development, and environmental standards not complied with, etc. How can India improve the implementation of PM Gati Shakti? Simplify bureaucratic procedures related to land acquisition and project approvals. Enhancing inter-departmental coordination can expedite these processes, which is crucial for timely project completion. Address certain key issues: Address structural and macroeconomic stability issues that result from large public spending. 36 www.visionias.in ©Vision IAS  o Tackle land acquisition decisions: Instead of acquiring new lands, policymakers should focus on using GIS and remote sensing to identify and redevelop already degraded or polluted areas for infrastructure projects. Open up Gati Shakti platform to the private sector: By granting private companies access to non-sensitive, shareable data, the government can foster an environment of collaboration and transparency. District-level expansion: PM Gati Shakti District Master Plan portal would ensure decentralized planning, promoting inclusive growth across regions and local communities. Conclusion The PM Gati Shakti initiative represents a transformative approach to infrastructure development in India, aiming to create a seamless and efficient multimodal transportation network. By integrating the efforts of various ministries and leveraging advanced technologies, this initiative seeks to enhance connectivity and reduce logistics costs across the nation. 3.5. 10 YEARS OF MAKE IN INDIA Why in the News? Launched on September 25, 2014, the "Make in India" initiative has recently completed 10 years. About ‘Make in India’ Aim: The ‘Vocal for Local’ initiative was devised to transform India into a global design and manufacturing hub. Objectives o To increase the growth rate of Indian industry to 12-14% per year. o To create 100 million industrial jobs by 2022. o To increase the share of the manufacturing sector to 25% of GDP by 2022 (the target year has been revised to 2025). Sectors: At present, Make in India 2.0 (launched in 2021) focuses on 27 sectors implemented across various Ministries/ Departments and state governments. Pillars of ‘Make in India’ o New Processes: The motto ‘Ease of doing Business’ became the core for promoting entrepreneurship. o New Infrastructure: Development of industrial corridors and smart cities, integrating state-of-the-art technology and high-speed communication to create world-class infrastructure. o New Sectors: FDI opened up in Defence Production, Insurance, Medical Devices, Construction, and Railway infrastructure. o New Mindset: The government embraced a role as a facilitator rather than a regulator. Major Achievements under ‘Make in India’ India's new manufacturing prowess: It is evident across sectors – India produces 400 million Toys annually and it’s the world's 4th largest renewable energy producer. o India is the second-largest mobile manufacturer in the world and has significantly reduced its reliance on smartphone imports, now manufacturing 99% domestically. Improved Ease of doing Business: Through policy reforms such as the Insolvency and Bankruptcy Code, the GST for indirect taxation, the Jan Vishwas Act, etc. o India climbed from 142nd in 2014 to 63rd in the World Bank’s Doing Business Report (DBR), 2020 before its discontinuation. Boosted India’s manufacturing competitiveness: India has now the lowest tax rates in Asia, enhancing its global economic appeal. Other steps taken: o Over 40000 compliances have been reduced and 3,800 provisions decriminalized. o National Single Window System: Over seventy-five thousand approvals granted simplifying investor processes. Resource Mobilization: FDI inflows have steadily risen, starting from ~$45 billion (Bn) in 2015 to a record ~$85 Bn in 2022. Merchandise exports: Export of ~$437 Bn recorded in 2024, reflecting the country's growing role in global trade. India also ventured in high-end products Export growth. 37 www.visionias.in ©Vision IAS  o E.g., Drugs and pharmaceutical ($27 Bn); India supplies nearly 60% of the world's vaccines. ⁠Defense exports: Major defence platforms such as the Dhanush Artillery Gun System, Main Battle Tank (MBT) Arjun, Light Combat Aircraft (LCA) Tejas, submarines, etc., have been developed and exported to various countries. Prioritization of high-value manufacturing and R&D: As a result, India has risen 42 spots in the Global Innovation Index since 2015, currently ranking 39th, ensuring its global competitiveness. A path taken towards Sustainable growth: E.g., National Green Hydrogen Mission will generate over six lakh jobs and reduce reliance on imported natural gas and ammonia, leading to savings of ₹1 lakh crore. Concerns with ‘Make in India’ Manufacturing sector falls short of 25% GDP target: Despite ‘Make in India’ scheme, the manufacturing sector’s contribution was still stagnant at 17.7% in 2023. o Manufacturing growth rate has averaged around 6% since 2014, lower than the benchmarked 12-14%. Job losses in manufacturing sector: Despite a goal of creating 100 million jobs, the manufacturing workforce declined from 51 million (2017) to 35 million (2023). Slowdown in real GVA: According to the National Accounts Statistics (NAS), the manufacturing real gross value added (GVA) growth rate has slowed down from ~8% (2012) to 5.5% (2023). Declining investment rates: India's rate of productive investment (Gross Capital Formation) has weakened, falling from 39.1% in 2008 to 32.2% in 2023. FDI-driven development strategy has had limited success: FDI as a percentage of GDP has averaged ~1.8% from 2015 to 2023, down from ~2.1% in the previous decade. o The majority of FDI since 2017 has been concentrated in just 9 sectors, starting with services (especially IT), while 53 other sectors – mainly manufacturing – have received just 30% of total FDI. Weakening export performance: In spite of substantial FDI inflow in absolute terms, India's merchandise exports have fallen steadily in relative terms from ~10% of GDP in 2013-14 to just ~8% in 2022-23. 38 www.visionias.in ©Vision IAS  Concerns related to viability of PLI Schemes: The growing cost of PLI schemes, such as the $2.75 billion microprocessor factory set up by Micron in Gujarat where the government financed most of the investment. Way Forward Improving Capabilities: By adopting new technologies (AI, machine learning, etc), rapidly skilling the labour force, strengthen education ecosystem, etc. Encourage entrepreneurial spirit: By creating conditions for better educated workers to be entrepreneurial: E.g., India currently produces about 2.2 million STEM graduates, post-graduates and PhDs. Enhance innovation ecosystem: A triple helix model of academia-industry-government collaboration is essential for translating knowledge into wealth and in this regard, India should establish institutions dedicated to scouting early-stage IP from academia. o Recently established Anushandhan National Research Foundation (ANRF) as an apex body to provide high- level strategic direction of scientific research in the country is a step in right direction. Optimize core strengths: It is easier for India to focus on services and manufacturing-related services than to expand in manufacturing. Fostering creative excellence: By leveraging India’s democratic advantage (absent in China) to encourage new ideas and innovations. E.g., Chip technology of Russia (authoritarian) was behind the US (democracy) as Russian could not innovate in that area. Conclusion As the "Make in India" initiative celebrates its 10th anniversary, it stands as a testament to India’s determination to reshape its manufacturing landscape and enhance its global standing. With strategic reforms, investment-friendly policies, and a strong focus on infrastructure development, the initiative has significantly enhanced India's industrial capabilities. 3.6. POVERTY IN INDIA Why in the News? Recently, World Bank has released ‘Poverty, Prosperity, and Current Status of Poverty in India (as per NITI Ayog) Planet: Pathways out of the Polycrisis’ report which offers Poverty Headcount Ratio has decreased from first post-pandemic assessment of global progress toward 29.17% (2013-14) to 11.28% (2022-23) these interlinked goals. 24.82 crore Indians escaped multidimensional Key findings of the Report poverty in last 9 years. Stalled Global poverty reduction: It has slowed to a near Poorer states record faster decline in poverty standstill during past 5-years impacted by ‘polycrisis’. indicating reduction in disparities. o Polycrisis refers to a situation where the multiple o Uttar Pradesh, Bihar, Madhya Pradesh, crises of slow economic growth, increased fragility, Odisha, and Rajasthan saw fastest reduction climate risks, and heightened in the proportion of multidimensional poor. uncertainty have come together at the same time. India is on track to achieve SDG Target o This makes national development strategies and 1.2 (reducing multi-dimensional poverty by at international cooperation difficult. least half) much ahead of 2030. 39 www.visionias.in ©Vision IAS  Non-attainment of targets: Global population living in extreme poverty is projected to be 7.3% in 2030 (8.5% in 2024). This is double the World Bank target of 3% and farther from the elimination target of SDGs. Global Prosperity Gap: Stalled progress since pandemic, highlighting slowdown in inclusive income growth. o Prosperity Gap is the average factor by which incomes need to be multiplied to bring everyone in the world to the prosperity standard of $25 per person per day. India: Significant fall in Indians living in extreme poverty from 431 million (1990) to 129 million (2024). o Currently, World Bank defines extreme poverty as living on less than $2.15 per person per day History of Poverty Estimation in India Pre-Independence Dadabhai Naoroji (book-Poverty and the Un-British Rule in India), National Planning Committee (1938), and Bombay Plan’ (1944) were related with estimation of poverty. Post-Independence Planning Commission (1962), VM Dandekar and N Rath (1971), Alagh Committee (1979), Lakdawala Committee (1993) were related to poverty estimation. Post 2000s Tendulkar Committee (2009): It was constituted to review the methodology for poverty estimation. The national poverty line for 2011-12 was estimated at Rs. 816 per capita per month for rural areas and Rs. 1,000 per capita per month for urban areas. It recommended: o To shift away from basing poverty lines from calorie norms o uniform all-India urban Poverty Line Baskets(PLB) across rural and urban India instead of two separate PLBs for rural and urban poverty lines o use of Mixed Reference Period (MRP) based estimates, as opposed to Uniform Reference Period (URP) Rangarajan Committee (2014): Constituted in backdrop of widespread criticism of Tendulkar Committee, it reverted to the practice of having separate all-India rural and urban poverty line baskets and deriving state- level rural and urban estimates from these. o However, government did not take a call on the report of the Rangarajan Committee. Factors behind Poverty in India Historical Reasons: Exploitative colonial rule Key Terminologies Related to Poverty destroyed the local industries leading to de- industrialization and drain of wealth resulting in Absolute Poverty: It usually reflects a minimum cost poverty. necessary to cover basic needs without reference to social o E.g. British colonial rules turned India into context or norms. It is characterized by severe an exporter of raw materials and imported deprivation of basic human needs, such as food, safe of finished goods impacting income of drinking water. farmers, artisans. Relative poverty: It defines poverty in relation to the Low Agricultural Productivity: Fragmented land economic status of other members of the society i.e. holdings, lack of capital, and reliance on people are poor if they fall below prevailing standards traditional farming methods limit yields. of living in a given societal context. o E.g. Lower yield of crops in India than Poverty Rate/ Poverty Incidence/Headcount Ratio: It is developed economies affects income of the share or percentage of population living below the farmers. poverty line. It measures ‘how many are poor?’ Population Explosion: India’s rapid population Intensity of poverty: It measures how bad the poverty is growth has led to increased pressure on for those who are poor or the distance from the poverty resources and services exacerbating headcount line. Thus it measures’ How much poor are the poor?’ ratio of poverty. Multidimensional Poverty Index (MPI): It is globally o E.g. India’s population is expected to peak recognized comprehensive measure that captures poverty in early 2060s (at 1.7 billion) and remain in multiple dimensions beyond monetary aspects. world’s most populous country throughout century (UNDESA) 40 www.visionias.in ©Vision IAS  Economic Inequality: Disparities in income and wealth distribution concentrate resources among a few giving rise to relative poverty. E.g. Top 10% of the Indian population holds 77% of the total national wealth (Oxfam). Social Inequalities: Instances such as caste discrimination and gender disparities lead to social exclusion. E.g. India has 53% of women outside the labour force due to care responsibilities(ILO) o Moreover, rigid caste system restricts access to resources and opportunities for marginalized groups, perpetuating poverty across generations leading to Intra-generational and Intergenerational issues of equity. Geographical Disparities: Dense forests, hilly terrains or areas vulnerable to natural disasters contribute to higher poverty rates. o E.g. Recurrent floods in Assam and Bihar displaces millions of people and pushes them into absolute poverty every year. Initiatives taken to tackle Poverty Affordable Social Security and Financial Inclusion Employment and Entrepreneurship Healthcare Empowerment and Welfare Skill Development Ayushman Bharat Pradhan Mantri PM Jan Dhan Mahatma Gandhi PM MUDRA Yojana Garib Kalyan Yojana National Rural Yojana Pradhan Mantri Anna Yojana Atal Pension Employment PM SVANidhi Bharatiya (PMGKAY) Yojana Guarantee Deendayal Janaushadhi Jal Jeevan Mission PM Shram Yogi Scheme Antyodaya Pariyojana PM Awas Yojana Maandhan PM Kaushal Vikas Yojana – (PMBJP) (Rural and Urban) Yojana Yojana National Rural Pradhan Mantri PM Ujjwala PM Kisan National Livelihood Matru Vandana Yojana Maandhan Apprenticeship Mission (DAY- Yojana (PMMVY) Saubhagya Yojana Promotion NRLM) Yojana Scheme Way Forward Suggestions by NITI Ayog to combat poverty o Employment-intensive Sustained Rapid Growth: by creating better jobs and generation of additional revenues for government to expand social expenditures at faster pace. It calls for second green revolution in agriculture particularly in eastern India. o Making anti-poverty programs effective: It can be done by better targeting of schemes with use of technologies to reduce inclusion and exclusion errors. E.g. use of Jan Dhan Yojana, Aadhaar, Mobile (JAM) trinity Focus on "Amartya Sen's 'Development as Freedom' and the Capability Approach": It calls for investment in people's capabilities with a focus on education, skills to expand their opportunities and freedoms thereby leading to citizen’s empowerment and reduction in poverty o E.g. enhancing slum dwellers capabilities influences their entrepreneurship development and contributes to urban poverty reduction 41 www.visionias.in ©Vision IAS 3.7. GLOBAL INNOVATION INDEX 2024 AND SOCIAL ENTREPRENEURSHIP Why in the news? Recently, the Global Innovation Index (GII), 2024 was released by the World Intellectual Property Organization (WIPO), Cornell University and INSEAD Business School. GII 2024: Key Findings Theme: Unlocking the Promise of Social Entrepreneurship. Criteria for measurement of innovation: Institutions, human capital and research, infrastructure, credit, investment, linkages; creation, absorption and diffusion of knowledge; and creative outputs. Top ranking: Switzerland followed by Sweden, the US and Singapore. India: o India ranked 39th among 133 nations, improving ranking by one position from 40th in 2023 with a score of 38.3. o India holds the top rank in both lower middle-income economies as well as the Central and Southern Asia region for Knowledge and technology outputs, Creative outputs, Institutions and Business sophistication. o Bengaluru, Delhi, Chennai and Mumbai are among the top 100 S&T clusters. Social entrepreneurship and enterprises Social entrepreneurship is a way to achieve the generation of economic wealth while addressing various issues like poverty, environmental sustainability and social injustice. o It combines efficiency, innovation, and resources of profit-making entrepreneurs with the passion, values, mission, and concerns of non-profit organizations. Difference between Traditional companies and Social enterprises Traditional Company Social Enterprise Mission/ Generation of economic value by Creation of social value by addressing social issues Motivation tapping the market opportunities and through creative problem-solving to create economic generation of social value being one value. of the ways of generating economic value. Goal of To gain an economic and market edge An inclusive and collaborative approach with innovation over competitors and have greater community involvement with maximising the social processes market presence. benefit. E.g. Open-source knowledge Utilization of To increase economic gains of Reinvestment towards solving the social issue and surplus stakeholders. forwarding the social mission. Expected future Evolving according to the market needs Creation of an inclusive market, uplifting the excluded changes based on profit maximization. communities and prioritising the social impact. Potential/Significance of Social Entrepreneurship and Social Enterprises Economic growth: Estimates suggest there are up to 11 million social enterprises and 30 million social entrepreneurs globally, contributing around USD 2 trillion to global GDP. o The estimated market opportunity and potential for social enterprises in India is estimated to be US$ 8 billion by 2025. Influencing Policy through expertise: According to a study of over 800 social entrepreneurs, 63% have achieved legislative change or influenced policy and 62% have provided research and or data to policymakers. o E.g. Ethiopian policymakers collaborated with Tebita Ambulance (a social enterprise) to build emergency medical service standards and licensing system. Sustainable development: Provide for a golden mean for ensuring sustainable development and meeting the Sustainable Development Goals (SDGs). o E.g. SELCO, a social enterprise in India, provides sustainable energy solutions to under-served households and businesses. 42 www.visionias.in ©Vision IAS  Sensitization and engagement: Provides an opportunity of educating people about need for addressing societal issues with collective engagement along with economic development. Integrate social innovation into Corporations: Aids traditional corporations in shifting from Corporate Social Responsibility (CSR) to Corporate Social Innovation. Social transformation: Empowering of the vulnerable sections of society and tackling the rising economic inequality due to traditional business models. India’s Initiatives to promote Social Entrepreneurship Atal Innovation Mission (AIM); ASPIRE – A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship; and Aatmanirbhar Bharat ARISE-ANIC program to promote research & innovation and increase competitiveness of Indian startups and MSMEs Corporate social responsibility (CSR): Mandatory provision of Companies Act, 2013 for certain Companies to take up CSR projects towards social welfare activities. Social Stock Exchange (SSE): Aimed at providing social enterprises with enhanced visibility and access to capital. Social Impact Bonds: Innovative funding method capitalizing on the increasing investor awareness regarding the social and ecological impact of their investments. E.g. Green Bonds, Social Bonds, Sustainability Bonds, Skill Impact Bond etc. o E.g. The Special Window for Affordable and Mid-Income Housing (SWAMIH) Investment Fund is India’s largest social impact fund. The Social Innovation Programme: By NASSCOM foundation is a TechForGood initiative that fosters inclusion for all by providing a platform for young social innovators to turn their ideas into reality. 43 www.visionias.in ©Vision IAS Conclusion Social entrepreneurship and enterprises offer a transformative approach to tackling global challenges, by merging business innovation with social goals. By investing in supportive policies, infrastructure and financing, it is possible to create an environment where social enterprises thrive, driving sustainable development and creating lasting positive impacts on a global scale. 3.8. NATIONAL MISSION ON EDIBLE OILS – OILSEEDS (NMEO-OILSEEDS) Why in news? The Union cabinet approved National Mission on Edible Oils – Oilseeds (NMEO-Oilseeds) for seven-year period, from 2024-25 to 2030-31. About National Mission on Edible Oils – Oilseeds Targets for 2030-31: o Increase primary oilseed production to 69.7 million tonnes (from 39 million tonnes in 2022-23). o Increase domestic edible oil production to 25.45 million tonnes and meet around 72% of our projected domestic requirement together with NMEO-OP (Oil Palm). 44 www.visionias.in ©Vision IAS  o Expand oilseed cultivation by an additional 40 lakh hectares by targeting rice and potato fallow lands, promoting intercropping, and promoting crop diversification. Focus: o Increasing the production of key primary oilseed crops such as Rapeseed-Mustard, Groundnut, Soybean, Sunflower, and Sesamum o Enhancing extraction efficiency from secondary sources like Cottonseed, Rice Bran, and Tree Borne Oils. Key features of the Scheme o ‘Seed Authentication, Traceability & Holistic Inventory’ (SATHI) Portal: For an Online 5-year rolling seed plan for timely availability of seeds. > It will enable states to establish advance tie-ups with seed-producing agencies, including cooperatives, Farmer Producer Organizations (FPOs), and government or private seed corporations. o Development of 600 Value Chain Clusters across 347 unique districts, covering more than 10 lakh hectares annually. > Farmers in these clusters will have access to high-quality seeds, training on Good Agricultural Practices (GAP), and advisory services on weather and pest management. o Other features: > Adoption of high-yielding high oil content seed varieties. > Utilization of advanced technologies like genome editing for the development of high-quality seeds. > Setting up of 65 new seed hubs and 50 seed storage units in public sector. > Information, Education, and Communication (IEC) campaign for awareness of recommended dietary guidelines for edible oils. > Support to FPOs, cooperatives, and industry players to establish or upgrade post-harvest units. Need for self- sufficiency in Edible Oil Importance: Oilseeds are the second- largest crop category in India after food grains, with nine annual oilseed crops cultivated across diverse agro-ecological conditions. Increasing demand: Urbanization and increasing Average Monthly Per Capita Consumption Expenditure (MPCE) in India is expected to increase the consumption of processed foods high in edible oil content. Increasing import dependence: India is heavily reliant on imports which account for 57% of its domestic demand for edible oils. Challenges in attaining self-sufficiency in Edible Oil in India Lower yield per hectare: The yield gap is primarily due to other countries using genetically modified (GM) herbicide-tolerant varieties. Cultivation challenges: 76% of oilseed cultivation is rainfed, making it vulnerable to biotic and abiotic stresses. Crop-specific concentrations: Production of specific oilseeds is concentrated in certain states, calling for policies to encourage more balanced and resilient cultivation. o E.g. Gujarat, Rajasthan, Tamil Nadu, Andhra Pradesh, and Karnataka collectively contribute 83.4% of the country's total groundnut production. 45 www.visionias.in ©Vision IAS  Demand-Supply Gap: India is projected to maintain high import growth of vegetable oils to meet growing domestic demand. Low contribution to global palm and sunflower oil production. Other Steps taken for self-sufficiency Key programs: o National Food Security Mission - Oilseeds & Oil Palm (NFSM-OS&OP): Launched in 2018-19, it focuses on Seed components (breeding, production, distribution), Production inputs (equipment, chemicals, fertilizers) and Technology transfer (demonstrations, training). o National Mission on Edible Oils - Oil Palm (NMEO-OP): Launched in 2021-22, it aims to increase oil palm cultivation area from 3.70 to 10.00 lakh hectares by 2025-26 and focus on North Eastern States and Andaman & Nicobar Islands. o Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) ensures that oilseed farmers receive MSP through price support scheme and price deficiency payment scheme. o Rashtriya Krishi Vikas Yojana - RAFTAAR (RKVY-RAFTAAR): Has provisions for crop production related activities on oilseeds. Other measures: o MSP for seven key oilseeds, namely groundnut, sunflower, soybean, sesame, nigerseed, rapeseed & mustard, and safflower. o Imposition of 20% import duty on edible oils to protect domestic producers from cheap imports and encourage local cultivation. 2024 Budget announcements: o Strategy for self-sufficiency in oilseeds (mustard, groundnut, sesame, soybean, sunflower) o Focus on research, modern farming techniques, market linkages, and crop insurance. Yellow Revolution: It was a movement started in 1986–1987 to boost the production of edible oil, particularly from mustard and sesame seeds. Conclusion The NMEO-Oilseeds will help increase domestic oilseed output and support hard-working farmers by developing value chain clusters, providing high-yielding, high-oil content seed varieties, and improving overall infrastructure such as seed hubs, seed storage units etc. Furthermore, expanding oilseed cultivation to fallow regions, investments in research and data-driven approaches, as well as public-private partnerships, can be explored to transform the sector. 3.9. NEWS IN SHORTS 3.9.1. RESPONSIBLE CAPITALISM Need for responsible capitalism for large economies highlighted by Union Finance Minister At the Tech Leaders Roundtable in Mexico, Minister while emphasizing on need for responsible capitalism said that for large economies, the challenge is not just to grow but also to reduce inequality and create opportunities for everyone. What is meant by Responsible Capitalism? It can be understood as an economic approach that integrates ethical values into business practices. It emphasizes balancing profit with social responsibility, ensuring businesses contribute to societal well-being, fairness, and environmental sustainability, rather than focusing solely on shareholder returns. 46 www.visionias.in ©Vision IAS What’s the need for Responsible Capitalism? Addressing global challenges: It can help companies and governments respond to challenges like sustainability, inequality, and exclusion. Long-term business sustainability: Purely profit-driven models may not be viable in long-term; responsible capitalism can also help in better adaptation to tech-disruptions like AI, etc. Ethical Governance and Stakeholder Capitalism: Promotes fairness in decision-making, ensuring stakeholders are treated justly and business operations comply with legal and moral standards. Measures taken to promote Responsible Capitalism in India Corporate Social Responsibility (CSR): Mandated under section 135 of Companies Act, 2013. Environmental regulations: Plastic Waste Management Rules, stricter emission norms for vehicles under BS-VI, etc. Labor reforms: Code on Wages, Occupational Safety; Health and Working Conditions Code, 2020, etc. Financial sector initiative: RBI’s Priority Sector Lending norms, SEBI’s Green Bond guidelines, etc. 3.9.2. ANNUAL SURVEY OF INDUSTRIES (ASI) FOR FY 2022-23 ASI released by Ministry of Statistics and Programme Implementation (MoSPI) for FY 2022-23 ASI provides insight into dynamics of change in composition, growth and structure of manufacturing industries in terms of key economic indicators. Key Highlights Manufacturing Gross Value Added (GVA): Grew by 7.3% in current prices in 2022-23 over 2021-22. o Maharashtra topped followed by Gujarat in terms of Manufacturing GVA. Growth in economic parameters: Surpassed pre- pandemic level in absolute value terms e.g. in invested capital, GVA, employment and wages etc. Growth drivers of Manufacturing-Sector: Manufacture of Basic metal, Coke & Refined Petroleum Products, Food Products, etc. Employment: 7.4% increase in manufacturing employment in 2022-23 over previous year. o Highest Employing States: Tamil Nadu followed by Maharashtra. About ASI: Conducted by Collection of Statistics Act, 2008 except in Jammu & Kashmir (Conducted under J&K Collection of Statistics Act, 2010). Industries covered: o Factories registered under Sections 2m(i &ii) of Factories Act,1948 o Bidi and cigar manufacturing establishments under the Bidi & Cigar Workers (Conditions of Employment) Act,1966 o Electricity undertakings not registered with Central Electricity Authority (CEA) o Units with 100 or more employees registered in the Business Register of Establishments (BRE) maintained by the States. 47 www.visionias.in ©Vision IAS 3.9.3. INPUT TAX CREDIT Recently, Supreme Court laid down twin tests - ‘functionality’ and ‘essentially’ - for Input Tax Credit eligibility in construction. Court stated that if a building is essential for supplying services like renting or leasing (as per Schedule 2, clauses 2 and 5 of CGST Act), it may be considered a plant. Functionality test determines whether a building qualifies as a plant or not. About Input Tax Credit It is a mechanism to avoid cascading of taxes, i.e, ‘tax on tax’. A registered taxable person under GST Act who is paying tax due in the course or furtherance of business can claim and avail ITC credited in electronic ledge. 3.9.4. REMISSION OF DUTIES AND TAXES ON EXPORTED PRODUCTS (RODTEP) SCHEME Government approved changes to the RoDTEP scheme. Key Changes For Domestic Tariff Area (DTA) units: Extended by 1 year till 30th September, 2025. For Authorisation holders (except Deemed exports), export-oriented units and special economic zone units: Applicable till the end of this year. Applicability of New rates: From October 10th, 2024 based on the recommendations of RoDTEP Committee. About RoDTEP Scheme Introduced in 2021 by Ministry of Commerce and Industry Aim: Refunding taxes, duties, and levies at the central, state and local levels on the exported products. It replaced the Merchandise Exports from India scheme which was challenged at World Trade Organization. 3.9.5. RBI RELEASED REPORT OF THE COMMITTEE ON MIBOR BENCHMARK Recently, RBI released a report recommending key changes in methodology for computation of Mumbai Interbank Outright Rate (MIBOR) and proposed transition to a new secured money market benchmark for widely used product derivatives. What is MIBOR? First introduced by National Stock Exchange (NSE) in 1998, it is the interest rate benchmark at which banks borrow unsecured funds from one another in the Indian interbank market. It is computed and published by Financial Benchmarks India Pvt. Ltd. (FBIL) on a daily basis. Currently, it is computed based on trades executed on Negotiated Dealing System or NDS-Call system in the first hour. Issues with current MIBOR: Based on a narrow volume (1% of daily money market volume) of call transactions, thin call money market volumes making MIBOR susceptible to volatility, etc. Key recommendations of the report Change in computation methodology of MIBOR: Include transactions based on first 3-hours instead of first hour, to make MIBOR more representatives of transactions in call money market and potentially increase its reliability. Benchmark based on secured money market: FBIL to develop and publish a benchmark based on secured money market computed from trades in the first three hours of basket repo and the TREP (tri-party repo) segments. 48 www.visionias.in ©Vision IAS 3.9.6. RBI STUDY ON MONETARY POLICY TRANSMISSION Reserve Bank of India (RBI) released study on Monetary Policy Transmission (MPT) and Labour Markets in India. Study analyzes impact of informality in labor markets on inflation stabilization and monetary policy offering new insights on MPT. About Monetary Policy (MP) MP is a set of actions available to a nation's central bank (RBI in India) to achieve sustainable economic growth & Maintaining price stability by adjusting money supply. Statutory Basis: RBI, Act,1934 (amended in 2016). MP Framework: Central Government, in consultation with RBI, determines inflation target in terms of Consumer Price Index (CPI) every 5 years. o Flexible Inflation Targeting: Currently, it is 4% (with a tolerance of +/- 2%) till March, 2026. Tools: Direct and indirect instruments like Repo Rate, Reverse Repo Rate etc. Types: Expansionary (Lowering interest rate to stimulate economic activity); and Contractionary (Increasing interest rate to slow down activity and prevent inflation) Key findings of Study: MP Transmission: Improves with more formality in the labor market. Impact on Unemployment: Contractionary Monetary Policy (CMP) leads to Rise in unemployment in both formal and informal markets. Impact on Macroeconomic variables: Contractionary Monetary Policy (CMP) leads to a decline in aggregate consumption, inflation, investment, output, capital stock, etc. 3.9.7. INDIA FOREX RESERVE CROSS 700 BILLION DOLLAR India is now the fourth country in the world to have over $700 billion in foreign reserves, following China, Japan, and Switzerland. India's reserves can cover 11.9 months of imports, well above the general norm of six-months. About Forex (Foreign Exchange) Reserve- It comprises of different assets that are held by a central bank. o In India, the RBI Act of 1934 contains the enabling provisions for the Reserve Bank of India (RBI) to act as the custodian of forex reserve, and manage reserves within the defined objectives. Components of Reserve (in descending order as per their value)- o Foreign Currency Assets (FCA): It is valued in currencies other than the country's own o Gold reserves o Special Drawing Rights: A reserve asset provided by International Monetary Fund (IMF). > It is value is based on a mix of five major currencies- the US dollar, euro, Chinese renminbi, Japanese yen, and British pound sterling. o Reserve Tranche Position (RTP): It is equal to the member’s quota less the IMF’s holdings of the member’s currency in account. Key deriving factor behind rise in reserve: Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI), Remittances, etc. 49 www.visionias.in ©Vision IAS 3.9.8. UPI 123 AND UPI LITE To encourage wider adoption of Unified Payments Interface (UPI), RBI enhances transaction limits for UPI123Pay, UPI Lite. UPI123Pay Started in March 2022 to enable feature-phone users to use UPI. It is available in 12 languages. Technology alternatives include IVR number, app functionality, missed-call and proximity sound-based payments. RBI enhanced the per-transaction limit from ₹5000 to ₹10,000. UPI Lite It allows users to make low-value transactions without entering a UPI PIN. RBI enhanced per-transaction limit to ₹1,000 from ₹500 and overall wallet limit to ₹5,000 from ₹2000. For more information on UPI, refer to Article 3.2 Unified Payments Interface in January 2024 Monthly Current Affairs Magazine 3.9.9. CAREEDGE RELEASED ITS INAUGURAL SOVEREIGN CREDIT RATINGS CareEdge released its inaugural report on Sovereign Ratings, covering 39 Global Economies. Thus, CareEdge became the first Indian credit rating agency to enter the global scale ratings space, including sovereign ratings. Key Highlight Assigned an AAA rating to Germany, Netherlands, Singapore, and Sweden. India was assigned BBB+, citing its resilient post-pandemic recovery and its focus on infrastructure investment. India's general government debt-to-GDP ratio is projected to reduce from 80% (currently) to 78 % by FY30. About Sovereign Credit Rating (SCR) Credit ratings are forward-looking opinions on the relative ability of an entity to meet its financial commitments, i.e., credit risk or relative creditworthiness of a borrower. o SEBI regulates domestic credit rating agencies (CRISIL, ICRA, CARE etc.). SCR represent an assessment of a country's or sovereign entity's ability to meet debt obligations, including both capability and willingness to repay debt. SCR facilitates borrowing from global capital markets at low cost, boosts investors’ confidence, attracts foreign investment, etc. Currently, SCRs are dominated by 3 US-based rating agencies – S&P, Moody’s, and Fitch. 50 www.visionias.in ©Vision IAS 3.9.10. GLOBAL FAMILY FARMING FORUM (GFFF) LAUNCHED Global Family Farming Forum (GFFF) was launched at Food and Agriculture Organization’s World Food Forum (WFF). GFFF celebrates essential role of family farmers in building sustainable agrifood systems and tackling the impacts of the climate crisis. GFFF also marked the halfway completion of the United Nations Decade of Family Farming 2019-28 (UNDFF). o UNDFF was declared by United Nations General Assembly and it serves as a framework for countries to develop public policies and investments to support family farming. About Family farming Family Farming: Is a means of organizing agricultural, forestry, fisheries, pastoral and aquaculture production that is managed and operated by a family, and is predominantly reliant on the family labour of both women and men. Significance of Family farming o Food security: With over 550 million farms worldwide, it is the backbone of food production. > It produces 70 to 80%of the world’s food in value terms. o Nutritional diversity: Family farming, in low- and middle-income countries, grow diverse, nutritious food and support crop biodiversity. o Sustainable stewardship: Family farmers use traditional methods, minimal external inputs to maintain soil health and build climate resilience naturally. Challenges faced by Family farming: Financial barriers, limited access to assistance, genetics and knowledge., fragmentation of land, market access difficulties, climate threats, lack of generational succession support, etc. In a related news On the sideline WFF, Food and Agriculture Organization (FAO) & Global Framework on Water Scarcity in Agriculture (WASAG), adopted the Rome Declaration on Water Scarcity in Agriculture. The WASAG initiative: Launched at the United Nations Climate Conference in Marrakesh in 2016 to support countries in addressing water scarcity challenges. Objectives: Mobilise greater political support in terms of policies, legal and institutional frameworks, access to financing, and responsible water governance. 3.9.11. COMMITMENT TO REDUCING INEQUALITY (CRI) INDEX 2024 RELEASED CRI is released by Oxfam and Development Finance International. CRI assessed the commitment of 164 countries and regions to fight inequality. o SDG 10 aims to reduce inequality. It assessed the performance on the basis of three parameters: Public Services Spending, Progressive taxation and Labour rights and wages. Key Highlights of the Index Ranking: o Top performers: Norway, Canada, and Australia o Worst performers: South Sudan, Nigeria, etc. 51 www.visionias.in ©Vision IAS  o India’s rank: 127 > Other South Asian countries such as Nepal (115) and Sri Lanka (118) have performed better than India. Rising Inequality: o Gap between the Global South and the Global North has suddenly grown more rapidly than at any time since World War II. o Billions of people face the terrible hardship of high and rising food prices and hunger, while the number of billionaires has doubled in the last decade. o Key Deriving Factor: Conflict, debt crisis, and climate shocks, these are constraining spending in low- and lower middle-income countries. > 84% of countries have reduced their spending on education, health and/or social protection. Key Recommendations to Reduce Inequality Put in place realistic and timebound National Inequality Reduction Plans (NIRPs) to reduce inequality, with regular monitoring All countries should ensure that health budget is at least 15% of total public expenditure and education 20%. Increase progressive taxation by taxing the income of the richest 1% Measure taken to reduce inequality in India Job Creation: E.g. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) Financial Inclusion: E.g. PM Jan Dhan Yojana Education and Skilling: E.g. Right to education Act, 2009 Other: Startup India, etc. 3.9.12. ALL INDIA RURAL FINANCIAL INCLUSION SURVEY 2021-22 NABARD released Second All India Rural Financial Inclusion Survey (NAFIS) 2021-22. NAFIS was launched in 2016-17 as a national level survey that offers comprehensive overview of rural population in terms of their status of livelihoods and level of financial inclusion (including loans, insurance, pension etc.). Second NAFIS provides key insight into economic and financial indicators of rural development since 2016-17. Key highlights of survey Average monthly income of households increased by 57.6%. Share of food in consumption basket of households declined from 51% to 47%. Kisan Credit Card as a prominent instrument of financial inclusion in rural farm sector has been found to be very effective. Average size of landholding declined to 0.74 hectare from 1.08 hectare. Proportion of respondents indicating good financial literacy increased from 33.9% to 51.3%. Proportion of agricultural households that took loans from institutional sources increased from 60.5% to 75.5%. Reasons for rise in rural income Government Support: Example, under Mahatma Gandhi National Rural Employment Guarantee Scheme, 5.6 crore households availed employment (January 2023), thus increasing their incomes and provides livelihood security. Rise in Rural Female Labour Force Participation Rate: From 19.7% in 2018-19 to 27.7% in 2020-21 (Economic Survey 2022-23). About NABARD (National Bank for Agriculture and Rural Development) It was formed based on recommendation of B. Sivaraman Committee. It is India’s apex development bank, established in 1982 under an Act of Parliament to promote sustainable and equitable agriculture and rural development. NAFINDEX: Measure of Financial Inclusion Based on field level data collected through NAFIS 2016-17, NAFINDEX has been constructed for different states of India. Three dimensions, traditional banking products, modern banking products, and payment systems, are considered for constructing the index. 52 www.visionias.in ©Vision IAS For more information on Financial Inclusion, refer to Article 3.3 Financial Inclusion And 10 Years of PMJDY in September 2024 Monthly Current Affairs Magazine 3.9.13. GOVERNMENT NOTIFIES OFFSHORE AREAS OPERATING RIGHT RULES, 2024 Rules notified under Offshore Areas Mineral (Development and Regulation) Act, 2002 aim at regulating exploration and production of minerals in specified offshore regions. This is significant in the backdrop of the planned first-ever offshore mineral auction of 10 blocks. These blocks will include sand, lime mud, and polymetallic nodules. Key Highlights of Rules Applicability: All minerals in offshore areas, except Mineral oils and hydrocarbons and specified Atomic minerals Lease Surrender: Provides for surrender of lease after 10 years in case of uneconomic production operations. Provide for Priority access to government and government-owned companies, in case of operating rights for reserved offshore zones. Offshore mining and its significance: Also called deep sea mining, Offshore mining is process of retrieving mineral deposits from deep seabed i.e. ocean below 200m. o It will cater to increasing demand for metals in context of depleting terrestrial deposits and reduce dependence on mineral imports. Issues/Challenges in offshore Mining: Potential environmental damage: Can endanger biodiversity by habitat destruction, underwater noise, and pollution. Impact on fishing communities: May harm fish populations, impacting livelihood of fishing communities. Technology: Lack of adequate R&D and technological development for deep-sea mining. 3.9.14. NATIONAL ELECTRICITY PLAN (TRANSMISSION) Union Ministry of Power launched National Electricity Plan (Transmission). National Electricity Plan (NEP) (Transmission) has been developed by the Central Electricity Authority (CEA), entrusted under Electricity Act 2003. Transmission system establishes the link between source of generation and distribution system, which is connected to load / ultimate consumer. Key highlights of NEP (Transmission) Aim of transmitting of 500 GW of Renewable Energy Installed Capacity by 2030 and over 600 GW by 2032. It is aimed at meeting a peak demand of 458 GW by 2032 and will expand transmission network from 4.85 lakh ckm (circular kilometer) in 2024 to 6.48 lakh ckm in 2032. Inter-regional transmission capacity is planned to increase to 168 GW by 2032, from present level of 119 GW. 53 www.visionias.in ©Vision IAS  Incorporates innovative elements in transmission sector such as integration of 10 GW offshore wind farms, 47 GW battery energy storage systems, and 30 GW pumped storage plants. Aims to address power needs of Green Hydrogen and Green Ammonia Manufacturing hubs of coastal locations. Covers Cross border interconnections with Nepal, Bhutan, Myanmar, Bangladesh, Sri Lanka and probable interconnections with Saudi Arabia, UAE etc. Challenges in India’s Transmission System: Transmission losses, issues in integration with renewable sources, obsolete technology, skewed focus of regulators towards generation, cyber security etc. 3.9.15. HAND-IN-HAND (HIH) INITIATIVE Food and Agriculture Organization (FAO) opened the 2024 Hand-in-Hand Investment Forum. About HIH Launched in 2019 by FAO It supports the implementation of nationally led, ambitious programmes to accelerate agrifood systems transformations by eradicating poverty (SDG1), ending hunger and malnutrition (SDG2), and reducing inequalities (SDG10). o It uses advanced geospatial modeling and analytics, as well as a robust partnership-building approach. Areas of intervention: Developing value chains for priority commodities, building agro-industries, etc. Members:72 countries (India is not a member) 3.9.16. NATIONAL AGRICULTURE CODE (NAC) Bureau of Indian Standards is creating a NAC similar to National Building Code and National Electrical Code. About NAC Code will have two parts. First will contain general principles for all crops, and second will deal with crop- specific standards for paddy, wheat, oilseeds, and pulses. NAC will cover all agriculture processes and post-harvest operations, like crop selection, land preparation, sowing/transplanting etc. Objectives o Create national agricultural code that considers agro-climatic zones, crop types, etc. o Create comprehensive guide for farming community to ensure effective decision making in agricultural practices. o Address horizontal aspects of agriculture like SMART farming, sustainability, etc. 3.9.17. CENTRAL SILK BOARD Recently, the platinum jubilee of the Central Silk Board was celebrated. About Central Silk Board Statutory body established in 1948 by an Act of Parliament. 54 www.visionias.in ©Vision IAS  Ministry: Ministry of Textiles Mandate: o Advise the government on all matters concerning sericulture and silk industry. o Standardization of various production processes, etc. HQ: Bengaluru About Silk Production in India India is 2nd largest silk producer in the world with 42% of global production (2023) Karnataka contributed around 32% of the total silk production, followed by Andhra Pradesh. Silk Produced: Mulberry, Eri, Tasar and Muga. 3.9.18. HUMSAFAR POLICY Union Minister of Road Transport & Highways launched the Humsafar Policy. About Humsafar Policy Aim: To provide a comprehensive framework to ensure that the commuters have access to standardized, well- maintained, and hygienic facilities along National Highways and Expressways Key Benefits: o Registered service providers will be able to avail a waiver of renewal fees for access permissions, if they maintain an average rating of 3 or higher. o Reliable passenger convenience establishments at regular intervals 3.9.19. CRUISE BHARAT MISSION (CBM) LAUNCHED Mission has been launched by the Ministry of Ports, Shipping and Waterways. About Cruise Bharat Mission Aim: To excel in India’s vision to become a global hub for cruise tourism and promote the country as the leading global cruise destination. It also aims to o double cruise passenger traffic within five years; i.e. by 2029. > In 2024 passengers traffic is 4.6 lakh. o double volume of cruise calls from 254 in 2024 to 500 by 2030. Phasewise implementation: o Phase 1 (2024 to 2025): Focus will be on forming cruise alliances with neighbouring countries, etc. o Phase 2 (2025 to 2027): Developing new cruise terminals, destinations etc. o Phase 3 (2027 to 2029): Integrating all cruise circuits across the Indian Subcontinent. Three key cruise segments: o Ocean & Harbour Cruise segment: Encompasses ocean cruises, including deep-sea and coastal cruises, along with harbour-based yachting and sailing cruises. o River & Inland Cruise segment: Focuses on river and inland cruises on canals, backwaters, creeks, and lakes. o Island Cruise segment: Highlights inter-island cruises, lighthouse tours, etc. 55 www.visionias.in ©Vision IAS 3.9.20. Z-MORH PROJECT Recently militants attacked Z-Morh Project site in Jammu and Kashmir. About Z-Morh Project: It is a 6.4-km tunnel on the Srinagar-Sonamarg highway at an altitude of 8,500 feet aimed at all weather connectivity to Sonamarg, a famous tourist destination. It has acquired its name from presence of a Z-shaped road stretch at the construction location. Strategic importance: o It is part of the Zojila tunnel project that aims to provide all weather connectivity from Srinagar to Ladakh throughout the year. o It connects Srinagar, Dras, Kargil and Leh regions , apart from this all-weather connectivity reduces army’s reliance on air transport. 56 www.visionias.in ©Vision IAS