CURRENT ACCOUNT DEFICIT
Context:
India’s current account balance recorded a deficit of $36.4 billion — or a nine-year high of 4.4% of GDP — in the second quarter ended September, rising from $18.2 billion (2.2% of GDP) in the previous quarter, according to Reserve Bank data.
Relevance:
GS III- Indian Economy (Growth and Development)
Dimensions of the Article:
- What is the Current Account Deficit?
- What is Balance of Payments?
- What are the reasons for the current account deficit?
What is the Current Account Deficit?
- A current account deficit occurs when the total value of goods and services a country imports exceeds the total value of goods and services it exports.
- The balance of exports and imports of goods is referred to as the trade balance. Trade Balance is a part of ‘Current Account Balance’.
- According to an earlier report of 2021, High Oil Imports, High Gold Imports are the major driving force, widening the CAD.
What is Balance of Payments?
- BoP of a country can be defined as a systematic statement of all economic transactions of a country with the rest of the world during a specific period, usually one year.
- Purposes of Calculation of BoP:
- Provides information about a country’s financial and economic situation.
- Can be used to evaluate whether the value of a country’s currency is appreciating or depreciating.
- Assists the government in making budgetary and trade policy decisions.
- Provides crucial data for analysing and comprehending the economic dealings of a country with other countries.
Components of the Balance of payments (BOP)
- Current account: It includes the financial transactions dealing with the export and import of goods, services, unilateral transfers, investment income etc.
- Capital account: It includes the financial transactions dealing with assets such as foreign direct investment, foreign portfolio investment, foreign loans etc.
- Official reserve transactions: It conducted by the central bank in case of the BOP deficit or BOP surplus.
- Errors and omissions: It is the element of BOP (other than the current account and the capital account) which refers to the balancing items reflecting the inability to record all the international financial transactions.
What are the reasons for the current account deficit?
- Intensifying geopolitical tensions and supply chain disruptions leading to crude oil and commodity prices soaring globally have been exerting upward pressure on the import bill.
- A rise in prices of coal, natural gas, fertilizers, and edible oils have added to the pressure on trade deficit.
- However, with global demand picking up, merchandise exports have also been rising.
-Source: The Hindu
BORDER ROW
Context:
Belagavi (also known as Belgaum) has been at the centre of a long-standing territorial dispute between the states of Maharashtra and Karnataka.
Relevance:
GS II: Polity and Governance
Dimensions of the Article:
- Details
- The 2022 resolution
- Belagavi is transferred from Bombay state to Mysore state
- Karnataka affirms the findings of the Fazal Ali Commission
- Gokak agitation
- MES continues its hold over Belagavi
Details:
- Currently in Karnataka, Maharashtra has claimed a Belagavi and surrounding areas which contain a significant population of Marathi speakers.
- Recently, both Karnataka and Maharashtra state assemblies have passed resolutions affirming their respective positions on the issue.
- For Karnataka, this is the sixth such resolution passed by the state government since 1967.
The 2022 resolution
- Recently, Karnataka Chief Minister passed a unanimous resolution in both houses of the state legislature, affirming its complete claim over Belagavi and disputed areas as well as criticising the behaviour of Maharashtra government leaders who were “trying to interfere in Karnataka’s matters and disturbing law and order.”
- It signifies a hardening of Karnataka’s stand on the issue with no settlement in sight. The Maharashtra government passed its own resolution soon after.
- The Belagavi territorial dispute stretches back to India’s decision to create states on linguistic lines in 1956.
Belagavi is transferred from Bombay state to Mysore state
- According to the 1881 census, 64.39 percent people in Belagavi were Kannada speakers while 26.04 percent were Marathi speakers.
- However, the Marathi speaking population dominated (and continue to do so) in social, economic and political arenas of the region.
Maharashtra Ekikaran Samiti
- The Maharashtra Ekikaran Samiti (MES), a socio-political committee based out of Belagavi, was formed in 1948.
- Since its inception, it has campaigned for Belagavi to be a part of the Marathi speaking state (then, Bombay state, now Maharashtra).
- Under MES’s influence, Belagavi city council passed a resolution in 1948 declaring the district was Marathi majority and a part of “Samyukta Maharashtra”. At the time, Belagavi was part of Bombay State.
State Reorganisation Act, 1956
- The State Reorganisation Act, 1956, based on the findings of Justice Fazal Ali Commission, reorganised states on the basis of linguistic lines.
- Consequently, 10 taluks of the erstwhile Bombay State, including the town of Belagavi, were transferred to then Mysore State, which would be renamed Karnataka in 1973.
- Notably, Justice Fazal Ali’s report was challenged by the then Bombay state government.
- The state demanded Belagavi, Nippani and Karwar as integral parts of its territory.
Karnataka affirms the findings of the Fazal Ali Commission
- For Marathi leaders, the decision to “give away” Belagavi to Karnataka was grossly unjust.
- In 1966, Marathi leader Senapati Bapat staged a public hunger strike demanding the central government to right its wrong.
- Under pressure, the central government formed the Mahajan Commission to take another look at the issue.
- In response, Karnataka’s fourth chief minister, and first Kannadiga to become president of the All India Congress Committee, S Nijalingappa passed a resolution in 1967, upholding the State Reorganisation Act of 1956 and the Justice Fazal Ali Commission report.
- Crucially, while the Mahajan Commission recommended the exchange of a certain number of villages between the two states, it rejected Maharashtra’s claim over Belagavi town.
The dispute gets violent
- In 1974, the MES-led Belagavi city council passed a resolution stating that Belagavi should be a part of Maharashtra.
- In 1976, when at least four MLAs of the MES were pushing their agenda in the state, Karnataka chief minister D. Devaraj Urs passed a resolution reaffirming that the state accepted the State Reorganisation Commission Act of 1956 and that Belagavi was a part of Karnataka.
Gokak agitation:
- In the 1980s, the Gokak agitation (Gokak is a taluka headquarters in the Belagavi district, located 70 km from the town) pushed the then chief minister Gundu Rao to give Kannada the status of the official and first language of the state.
- The Gokak agitation is considered to be a momentous moment in Karnataka history, associated with linguistic pride.
- However, there was stern opposition in Belagavi to this move.
- In 1985, Chief Minister Ramakrishna Hegde made Kannada mandatory for a job in state government service.
Seema Ladai:
- Then first-time MP and Congress leader Sharad Pawar led a ‘Seema Ladai’ march to Belagavi and staged a protest against this decision.
- The protests got violent and ended up claiming the lives of nine people.
- Interestingly, Maharashtra’s current CM, Eknath Shinde, was part of the agitation and was jailed in Karnataka for a while.
- In 1986, Hegde passed another resolution reiterating the legitimacy of the State Reorganisation Act and the Justice Fazal Ali Commission report.
MES continues its hold over Belagavi
- Through the years, the Maharashtra Ekikaran Samiti (MES), remained a potent force in the Belagavi region.
- In 2005, MES’s Belagavi City Corporation mayor Vijay More passed a resolution saying that Belagavi must become a part of Maharashtra.
- This drew the ire of Kannada activists. Karnataka Rakshana Vedike, a pro-Kannada organisation, became a household name in the state when its activists smeared black paint on More’s face.
- In 2006, Chief Minister HD Kumaraswamy passed a resolution stating that Belagavi will remain part of Karnataka.
- He then began a concerted effort to weaken the MES and end the issue once and for all.
Suvarna Soudha
- To strengthen its claim on Belagavi, the Karnataka government built the Suvarna Soudha in the city.
- The building was built to commemorate the Golden Jubilee of Karnataka’s formation.
- Inaugurated in 2012, the Karnataka legislature holds its winter sessions in Belagavi.
-Source: Indian Express
BRAHMOS
Context:
Recently, The Indian Air Force (IAF) successfully fired the extended range (ER) version of BrahMos and air-launched the supersonic cruise missile against a ship target from a SU-30MKI fighter aircraft.
Relevance
GS-III Internal Security Challenges, Science and Technology
Dimensions of the Article:
- About BrahMos supersonic cruise missile
- About Defence Research and Development Organisation (DRDO)
About BrahMos supersonic cruise missile
- The BrahMos is a medium-range ramjet supersonic cruise missile that can be launched from submarine, ships, aircraft, or land.
- It is the fastest supersonic cruise missile in the world.
- BRAHMOS is a joint venture between the Defence Research and Development Organisation of India (DRDO) and the NPOM of Russia.
- Brahmos is named on the rivers Brahmaputra and Moskva.
- It is a two-stage (solid propellant engine in the first stage and liquid ramjet in second) air to surface missile with a flight range of around 300 km.
- However, India’s entry into the Missile Technology Control Regime (MTCR) has extended the range of the BRAHMOS missile to reach 450 km-600km, a shade above its current MTCR capped range of 300 km.
- Brahmos is a multiplatform i.e., it can be launched from land, air, and sea and multi capability missile with pinpoint accuracy that works in both day and night irrespective of the weather conditions.
- It operates on the “Fire and Forgets” principle i.e., it does not require further guidance after launch.
- Brahmos is one of the fastest cruise missiles currently operationally deployed with speed of Mach 2.8, which is 3 times more than the speed of sound.
About Defence Research and Development Organisation (DRDO)
- The Defence Research and Development Organisation (DRDO) is an agency of the Government of India, charged with the military’s research and development.
- It is headquartered in Delhi, India and has its 50+ labs all across the country.
- It was formed in 1958.
- It is under the administrative control of the Ministry of Defence, Government of India.
- With a network of 52 laboratories, which are engaged in developing defence technologies covering various fields, like aeronautics, armaments, electronics, land combat engineering, life sciences, materials, missiles, and naval systems, DRDO is India’s largest and most diverse research organisation.
Objectives of DRDO
- Design, develop and lead to production state-of-the-art sensors, weapon systems, platforms and allied equipment for our Defence Services.
- Provide technological solutions to the Services to optimise combat effectiveness and to promote well-being of the troops.
- Develop infrastructure and committed quality manpower and build strong indigenous technology base.
Issues with DRDO:
- Inadequate Budgetary Support
- It also suffers from inadequate manpower in critical areas to the lack of proper synergy with the armed forces.
- Cost escalation and long delays have damaged the reputation of DRDO.
- DRDO is big on promise and small on delivery. There is no accountability. Nobody is taken to task for time and cost overruns.
- Equipments are obsolete and is just tinkering with World War II equipment instead of working on cutting-edge technology.
-Source: The Hindu
CHANDA KOCHAR CASE
Context:
Recently, the Central Bureau of Investigation(CBI)arrested private lender ICICI Bank’s former Managing Director and Chief Executive Officer (MD &CEO)Chanda Kochhar along with her husband, Deepak Kochhar. The CBI also arrested Videocon promoter Venugopal Dhoot.
Relevance:
GS II: Polity and Governance
Dimensions of the Article:
- What is the case about?
- Central Bureau of Investigation (CBI)
What is the case about?
- This was in a case pertaining to fraudulent disbursal of loans amounting to ₹1,875 crore between 2009-11to the Videocon group of companies, during her tenure at the helm of the private lender.
- Ms. Kochhar is accused of conspiring with her husband to abuse her powers at the helm of the private lender for extending loans to the Videocon Group.
- Between June 2009 and October 2011, ICICI Bank had sanctioned six high value loans to varied companies owned by Videocon.
- The financial transactions resulted in wrongful loss to the private lender.
- Further, they were in violation of the credit (extending) policy and were later deemed to be non-performing assets (NPAs) for the lender.
- On August 26, 2009,the private lender sanctioned Rupee Term Loan (RTL) of ₹300 crore(of which ₹283.45 crore was eventually disbursed)to Videocon.
- The loan was disbursed on September 7.It was on the very next day that Mr Dhoot transferred ₹64 crore to Nu Power Renewables Ltd (NRL)managed by Mr. Kochhar.
- The ₹64 crore in question, thus, is being alleged to be part of a reciprocal arrangement between Mr. Kochhar and Mr. Dhoot.
What is their defence?
- Arguing for his bail plea in the Bombay High Court, Mr. Kochhar’s defence had stated that Videocon has been a client of the private lender since 1985.
- It had extended several loans and credit facilities to the group as part of their long-standing relationship.
- It also stated that Videocon’s investment in NRL was in the nature of equity where the return “would be gathered by capital appreciation on the basis of growth of the company and valuation of its assets”.
Central Bureau of Investigation (CBI)
- The Central Bureau of Investigation (CBI) was set up in 1963 after the recommendation of Santhanam committee under Ministry of Home affairs and was later transferred to the Ministry of Personnel and now it enjoys the status of an attached office.
- Now, the CBI comes under the administrative control of the Department of Personnel and Training (DoPT) of the Ministry of Personnel, Public Grievances and Pensions.
- The CBI derives its powers from the Delhi Special Police Establishment Act, 1946, however, it is NOT a Statutory Body.
- CBI is the apex anti-corruption body in the country – Along with being the main investigating agency of the Central Government it also provides assistance to the Central Vigilance Commission and Lokpal.
- The CBI is required to obtain the prior approval of the Central Government before conducting any inquiry or investigation.
- The CBI is also the nodal police agency in India which coordinates investigations on behalf of Interpol Member countries.
- The CBI’s conviction rate is as high as 65 to 70% and it is comparable to the best investigation agencies in the world.
- The CBI is headed by a Director and he is assisted by a special director or an additional director. It has joint directors, deputy inspector generals, superintendents of police.
Functions of CBI
- Investigating cases of corruption, bribery and misconduct of Central government employees
- Investigating cases relating to infringement of fiscal and economic laws, that is, breach of laws concerning export and import control, customs and central excise, income tax, foreign exchange regulations and so on. However, such cases are taken up either in consultation with or at the request of the department concerned.
- Investigating serious crimes, having national and international ramifications, committed by organized gangs of professional criminals.
- Coordinating the activities of the anti-corruption agencies and the various state police forces.
- Taking up, on the request of a state government, any case of public importance for investigation.
- Maintaining crime statistics and disseminating criminal information.
- The CBI acts as the “National Central Bureau” of Interpol in India.
-Source: The Hindu
TRIPLE TEST SURVEY
Context:
After the Allahabad High Court ordered the Uttar Pradesh government to hold urban local body elections without reservation for Other Backward Classes (OBCs) because the ‘triple test’ requirement for the quota had not been fulfilled, the state set up a commission for this purpose.
- The five-member commission will conduct a survey to ensure that the OBCs are provided reservation on the basis of the triple test, as mandated by the Supreme Court.
Relevance:
GS II: Polity and Governance
Dimensions of the Article:
- What is triple test?
- What procedure was UP following before this?
What is triple test?
- The triple test requires the government to complete three tasks for finalisation of reservation to OBCs in the local bodies. These include:
- To set up a dedicated commission to conduct a rigorous empirical inquiry into the nature and implications of the backwardness in local bodies;
- To specify the proportion of reservation required in local bodies in light of recommendations of the commission, so as not to fall foul of overbreadth;
- To ensure reservation for SCs/STs/OBCs taken together does not exceed an aggregate of 50 per cent of the total seats.
- These triple test/conditions were outlined by the Supreme Court in the case of Vikas Kishanrao Gawali vs. State of Maharashtra and others, decided on March 4, 2021.
What procedure was UP following before this?
- The Urban Development Department of the UP government had on April 7, 2017 issued orders to conduct a rapid survey for determining the population of OBCs.
- Based on such a rapid survey in each constituency of a municipality, seats were reserved in proportion to the population of the backward class of citizens in the constituency/ward concerned.
- Recently, The BJP government said that all previous governments since 1994 had used the same rapid survey, for the polls held in 1995, 2000, 2006, 2012 and 2017.
- The arrangement for reservation of backward classes in local bodies was made in the UP Municipalities Act, 1916 in 1994.
-Source: Indian Express
ETHYLENE GLYCOL
Context:
The Health Ministry of Uzbekistan has reported the death of 18 children (with acute respiratory disease) from taking excessive doses of a cough syrup – Doc-1 Max manufactured by an Indian firm.
Relevance:
GS II: Health
Dimensions of the Article:
- Details
- Why are the syrups not sold in India?
- What are the Related Regulations in India?
Details:
- The cough syrups contained ethylene glycol, a substance that ought not to be present in cough syrup.
- Earlier, Gambia also reported “unacceptable levels” of diethylene glycol (DEG) and ethylene glycol (EG) in India manufactured cough syrups.
Diethylene glycol and ethylene glycol:
- Both are chemical contaminants that may be present in the solvent that is used in the syrups.
- It is toxic to humans, and can result in abdominal pain, vomiting, diarrhoea, inability to pass urine, headache, and altered mental state.
- It can also lead to acute kidney injury that may be fatal in children.
- In 2020, 17 children died in Jammu and Kashmir after consuming a syrup with high levels of diethylene glycol.
Why are the syrups not sold in India?
- A drug regulatory expert who was part of the investigation into the 2020 J&K deaths said India has phased out syrups in favour of suspensions.
- In syrup, the active pharmaceutical ingredient (API) is completely mixed in the solvent — imagine a sugar solution.
- In a suspension, on the other hand, API particles are suspended uniformly in a solvent — imagine cooked dal.
- That is why it says on labels on the bottles, ‘shake well before use’, otherwise the API will settle at the bottom.
- APIs such as paracetamol and others contained in the four syrups are not water-soluble, and hence need a base solvent like propylene glycol. “Propylene glycol is available in two varieties — one type is meant for industrial use, the other for pharmaceutical use.
- To save on costs, some companies use the industrial propylene glycol that may contain diethylene glycol and ethylene glycol as contaminants.
- Suspensions do not need propylene glycol as the active ingredient does not have to be dissolved. They use a liquid base called carboxymethylcellulose (CMC), with no risk of containing the two contaminants.
What are the Related Regulations in India?
The Drugs and Cosmetics Act:
- The Drugs and Cosmetics Act, 1940 and Rules 1945 have entrusted various responsibilities to central and state regulators for regulation of drugs and cosmetics.
- It provides the regulatory guidelines for issuing licenses to manufacture Ayurvedic, Siddha, Unani medicines.
- It is mandatory for the manufacturers to adhere to the prescribed requirements for licensing of manufacturing units & medicines including proof of safety & effectiveness, compliance with the Good Manufacturing Practices (GMP).
Central Drugs Standard Control Organisation(CDSCO):
- Prescribes standards and measures for ensuring the safety, efficacy and quality of drugs, cosmetics, diagnostics and devices in the country.
- Regulates the market authorization of new drugs and clinical trials standards.
- Supervises drug imports and approves licences to manufacture the above-mentioned products.
- CDSCO regulates export of drugs in India, any manufacturer with the certification from CDSCO can export drugs outside India.
Drugs Controller General of India:
- Drugs Controller General of India is a department of the Central Drugs Standard Control Organization of the Government of India responsible for approval of licenses of specified categories of drugs such as blood and blood products, IV fluids, vaccines, and sera in India.
- It comes under the Ministry of Health & Family Welfare.
- It also sets standards for manufacturing, sales, import, and distribution of drugs in India.
- It lays down the standard and quality of manufacturing, selling, import and distribution of drugs in India.
