General Studies Paper 2

Context: Recently MV-ITT LION (V-273) was flagged off from Syama Prasad Mookerjee Port, Kolkata as the inaugural shipment to operationalize the Sittwe Port in Rakhine State of Myanmar.

• The Port has been built under grant assistance from the Government of India as part of Kaladan Multimodal Transit Transport Project (KMTTP).

Kaladan Multimodal Transit Transport Project (KMTTP)

• It is a massive connectivity project to connect the Haldia port (West Bengal) to Mizoram through Myanmar.
• The route envisages a marine journey from Haldia to Sittwe port in Myanmar. It will then link Sittwe seaport to Paletwa  via the Kaladan river boat route, and then from Paletwa to Zorinpui in Mizoram state in Northeast India by road.

Significance of KMTTP Project

• This project will reduce distance from Kolkata to Sittwe by approximately 1,328 km and will reduce the need to transport goods through the narrow Siliguri corridor, also known as Chicken’s Neck.
• This strategic and important route will further enhance trade, commerce and economic ties with Myanmar, our North-Eastern States and South Asian Countries.’
• The start of operation of Sittwe port will pave a new avenue for Sittwe to become a maritime hub for Myanmar and enhance regional connectivity.
• It will help in countering Chinese expansion in the region.

Another project – alternate route to northeast India

• India is also developing railway route from Cox’s Bazar deep water port to South Tripura district by rehabilitating the railway link from Santirbazar in India to Feni in Bangladesh, where a road and rail bridge is being built to connect the “Belonia, India–Parshuram, Bangladesh road and rail crossing checkposts”.

India -Myanmar Relations

• The two countries share a long land border of over 1,600 km and a maritime boundary in the Bay of Bengal
• India-Myanmar-Thailand Trilateral Highway– The project involves the construction of a 1,360 km road from Moreh in India to Mae Sot in Thailand via Myanma.
• Operation Sunrise is coordinated efforts between the security forces of India and Myanmar to target insurgent groups operating along the border between the two countries.
• Indo-Myanmar border is an open border with free movement regime (FMR) within 16 kms on both sides of the border.
• India has been investing in Myanmar’s energy sector, including the construction of a gas pipeline from Myanmar to India.
• India has been providing training and equipment to Myanmar’s security forces to enhance their capacity to deal with security threats.

General Studies Paper 3

Context: Chartered accountants, Company secretaries, and cost and works accountants who carry out financial transactions on behalf of their clients are now under the ambit of the Prevention of Money Laundering Act (PMLA).

Recent Amendment

• Amendments under the PMLA in line with the recommendations of the FATF.
• An activity will be recognized under the PMLA if these professionals carry out financial transactions on behalf of their client such as buying and selling of any immovable property; managing of client money, securities or other assets; management of bank, savings or securities accounts; organization of contributions for the creation, operation or management of companies; creation, operation or management of companies, limited liability partnerships or trusts, and buying and selling of business entities.
• The financial professionals who have obtained certificates of practice as chartered accountants, company secretaries, cost and work accountants would be defined as relevant persons for reporting transactions on behalf of their individual clients.
• The reporting entities shall be expected to maintain the record of all transactions and would be required to furnish these to the Director (Financial Intelligence Unit).
• The reporting entities would also be expected to conduct KYC before commencement of each specified transaction and will have to examine the ownership and financial position including sources of funds of the client and to record the purpose behind conducting the specified transaction.

Criticism of the Amendment

• Tax experts said given the onerous compliance, and low conviction rate under the law, the inclusion of CAs, CS, and CWAs, was uncalled for.
• Concerns amongst financial professionals that they could possibly not just face penalty for non-compliance but could also have potential run-ins with investigative agencies like ED.

Other recent changes

• Over a month ago, in March, the government had widened the ambit of reporting entities under money laundering provisions to incorporate more disclosures for non-governmental organizations and defined politically exposed persons (PEPs).

About Prevention of Money Laundering Act,2002 (PMLA)

• The Parliament enacted the PMLA as a result of international commitment to sternly deal with the menace of money laundering of proceeds of a crime having transnational consequences and on the financial systems of the countries.

Objectives:

• The PML Act seeks to combat money laundering in India and has three main objectives:
• To prevent and control money laundering
• To confiscate and seize the property obtained from the laundered money;
• To deal with any other issue connected with money laundering in India.

General Studies Paper 2

India’s Evacuation Missions have become increasingly vital for safeguarding its citizens during global crises, as exemplified by the recent Sudan conflict in 2023. In this mission, India demonstrated its unwavering commitment to ensuring the safety and well-being of thousands of its nationals trapped in the African nation. However, these missions also present a myriad of challenges, including geopolitical complexities, operational difficulties, and resource constraints.

Why there is a rising complexity in India’s Evacuation Missions?

• Unstable Regions: India’s evacuation missions often involve unstable regions where the security situation can change rapidly, making it difficult to plan and execute safe evacuations. The recent rescue of Indians from Sudan highlights this complexity, as the IAF faced intelligence challenges and a rough landing environment.
• Global Crises: Global crises like the COVID-19 pandemic and the recent conflict in Afghanistan have led to an increased need for evacuation missions in challenging circumstances. In the Kabul mission of August 2021, the pilots faced chaotic and uncontrolled airspace, emphasizing the complexity of such operations.
• Diverse Nationalities: India’s evacuation missions often involve not only Indian citizens but also foreign nationals, adding to the logistical challenges of coordinating with other governments and international organizations. During “Operation Raahat” in 2015, India evacuated over 4,600 Indians and 950 nationals from 41 countries amid the Yemen crisis.
• Coordination Challenges: India’s evacuation missions require close coordination between various government agencies, the armed forces, and international partners. This increases the complexity of such operations, as demonstrated by India’s efforts to evacuate its citizens from Ukraine during the COVID-19 pandemic or from Iraq and Syria.
• Evolving Security Threats: India’s evacuation missions are becoming more complex due to evolving security threats, such as terrorism and cyberattacks. These threats can directly impact the safety and security of evacuees and the personnel involved in the missions, requiring robust planning and countermeasures to mitigate risks.
• Climate-Related Disasters: Natural disasters caused by climate change, such as cyclones and floods, can hamper evacuation missions.
• Growing Indian Diaspora: With an increasing number of Indians living, working, and studying abroad, the potential for India’s evacuation missions to involve a more diverse group of people is growing. This can create additional complexities in terms of communication, cultural understanding, and logistical coordination during evacuation operations.

What is the policy support provided by the government for India’s Evacuation Missions?

• Strong Political Commitment and Continuous Assessment: India’s Prime Minister’s directive to prepare evacuation plans for Indian citizens in Sudan in 2023 and his emphasis on regular monitoring and assessment of their safety demonstrate the government’s unwavering dedication to protect its nationals abroad.
• Interagency Coordination: The high-level meeting chaired by India’s PM to discuss the situation of Indians trapped, this was attended by officials from the Ministry of External Affairs, the Indian ambassador to Sudan, the Foreign Secretary, and high-level officials from the air force and navy, highlighting the importance of interagency coordination in evacuation missions.
• Diplomatic Efforts: India’s External Affairs Minister meeting with UN Secretary-General Antonio Guterres to discuss the situation, emphasizing the role of diplomacy in facilitating evacuation missions.
• Resource Allocation: The Indian government’s allocation of resources, such as the deployment of Indian Air Force C-130J Super Hercules aircraft for evacuation missions like the one in Sudan in 2023, demonstrates support for the missions.
• Public Communication: The Ministry of External Affairs’ cautionary statement to Indians in Sudan about active fighting near the Indian mission in Khartoum, emphasizing the role of effective public communication in ensuring the safety of citizens during evacuation missions.
• Specialized Training: The specialized training provided to the IAF’s special operations crew, like the C-130J squadrons, which helped in successful evacuation missions such as the ones in Afghanistan and Sudan.
• Coordination with Host Countries: During the Vande Bharat Mission in 2020, India worked closely with host countries to ensure the safe repatriation of Indian citizens from various nations, emphasizing the importance of coordination with host countries for successful evacuation missions.

What are the operational challenges faced in India’s Evacuation Missions?

• Limited Intelligence: Evacuation missions can face challenges due to insufficient information about local conditions, hindering effective planning and execution.
• Logistical Hurdles: Coordinating transportation, navigating difficult terrain, and providing basic necessities like food and water can be challenging during evacuation missions. For instance, Indian citizens trapped in Sudan in 2023 faced difficulties due to a lack of electricity, food, and water, highlighting the logistical challenges in evacuation missions.
• Communication Barriers: Language differences, poor communication infrastructure, and limited access to local authorities can complicate coordination and rescue efforts.
• Time Constraints: In many evacuation scenarios, the situation on the ground can change rapidly, requiring flexibility and adaptability from the mission planners and the personnel involved. This adds another layer of complexity to India’s evacuation missions, as decision-makers must quickly respond to new information and adjust their plans accordingly.
• Uncertainty in Evacuee Numbers: Estimating the exact number of citizens who require evacuation can be difficult, leading to challenges in planning and executing evacuation missions.
• Navigating Political Sensitivities: Evacuation missions may involve coordinating with foreign governments or navigating complex political situations, such as India maintaining contact with the U.S., Saudi Arabia, the U.K., and the UAE during the Sudan evacuation in 2023.

What are the advantages associated with the success of India’s Evacuation Missions?

• Enhanced National Reputation: Successful evacuation missions, like the 2023 Sudan evacuation, demonstrate India’s commitment to its citizens abroad and bolster the country’s international standing.
• Improved Military Capabilities: Complex operations help strengthen India’s military expertise, particularly in the areas of special operations and logistics.
• Strong Diplomatic Relations: Coordinating with multiple nations during evacuation missions, as India did with the U.S., Saudi Arabia, the U.K., and the UAE in the Sudan case, fosters international cooperation and strengthens diplomatic ties.
• Greater Public Confidence: Successfully executing evacuation missions instils confidence in Indian citizens, both at home and abroad, that their government is committed to their safety and wellbeing.
• Showcase of Technological Advancements: Successful evacuations, such as the Wadi Seidna mission, highlight the capabilities of advanced aircraft like the C-130J Super Hercules. This shows India’s technological progress in the defence sector.

Way forward:

• Enhance Intelligence Gathering: Collaborate with regional and global partners to improve intelligence collection and sharing for better situational awareness, like during the Yemen evacuation mission, which involved coordination with several countries.
• Strengthen Coordination Mechanisms: Establish joint task forces with friendly countries to streamline coordination between different government agencies, foreign governments, and international organizations, similar to the collaboration during the Nepal earthquake relief operations.
• Advanced Technology: Continue investing in cutting-edge technology, such as the C-130J Super Hercules and C-17 Globemaster aircraft, to enhance evacuation capabilities and ensure mission success, as seen in the Sudan evacuation.
• Train and Equip Special Forces: Strengthen the training and capabilities of special forces like the Garud commandos, who participated in the Herat embassy evacuation mission, to guarantee the safety of Indian citizens abroad.
• Develop Contingency Plans: Conduct regular simulations and exercises with regional partners to prepare comprehensive contingency plans for different scenarios, ensuring timely and effective responses in real-life situations.
• Maintain Diplomatic Engagement: Actively participate in regional forums and establish joint mechanisms with countries in the region, as well as those with significant citizens in crisis zones. This will ensure smooth cooperation during evacuation missions.

General Studies Paper 2

Context: Many State governments are announcing reversion to the old pension scheme (OPS) and some are speculating to do the same. Many economists have said that this is a bad economics. But that is not correct.

Why do many economists think the reversal of OPS is bad economics?

This is because a) the State has to bear the full burden of pensions, b) the scheme will become fiscally unsustainable in the medium to long run, and c) the unsustainable rise in pension allocation can only come at the cost of essential welfare expenditures allocated to the poor and marginalised sections.

What are the concerns associated with continuing NPS?

Those who defend the NPS say that a) The returns in the market do not stay the same, and it may actually be higher and better than the OPS, b) NPS is inflation-covered because, under normal circumstances, the returns are higher than the inflation.

But they failed to understand that the NPS puts the entire burden of uncertainty on employees alone and not on the employers.

What can be done to provide OPS without any fiscal constraints?

• The government should rationalise taxes as these are either negligible or non-existent in India. This can be done by implementing inheritance and wealth taxes.
• Instead of OPS, the government can implement a contributory guaranteed pension scheme (CGPS).

How a CGPS can be implemented without any fiscal constraints?

• Let’s assume that the employee contribution of CGPS is 10% like NPS and the return is 50% of the last drawn salary like OPS.
• The State pays an additional balance of the difference between the 50% guaranteed pension and the market-determined pension amount. If the market returns are higher, then the State governments might get revenue.
• Based on the chart, one can derive that, a) When the market return is 9%, the State ends up paying the gap, i.e. 28, but when the return is 12%, it gets to pocket the extra 58%, b) Under the CGPS, the burden is only the employer’s contribution part.
• So, it is safe to assume that the CGPS gives guaranteed pensions to the employees without putting the exchequer under additional burden necessarily.

General Studies Paper 2

Context: The US and the EU countries have changed their mind towards their strategy of decoupling from China. This could be seen from their speeches.

What are some of the speeches from the US for China?

• The US secretary recently said that the US will speak out when its interest is at stake. However, this does not mean that it wants to decouple its economy from China’s.
• This is because a full separation of our economies would be disastrous for both countries. It would also be destabilising for the rest of the world.
• A similar kind of message was given by the US national security adviser. He said that the US thinks of de-risking and diversifying, not decoupling from China.

What is the new de-risk strategy of the US and how does it differ from the previous decoupling strategy?

• The new ‘de-risk’ strategy is a departure from the ‘decouple’ plan. It also intends to change the perspective of the US from the fact of geo-economic containment of China is not easy.
• The decouple plan stated that the geo-economic containment of China would preserve the world’s equilibrium without involving any form of conflict.
• It was suggested that the US should restrict trade with China; deny China access to key raw materials; and stop technology transfers that China would need. These all would slow China’s economic growth.
• This advice was accepted by both Biden and Trump which aimed at starting New Cold War. However, it is different from the Old Cold War with the Soviet Union.

What are the differences between New Cold War and the Old Cold War?

• The Old Cold War sought the Soviet Union to be geopolitically contained while the New Cold War aims at geo-economic containment of China.
• However, it is not easy to sustain the New Cold War because China is the world’s biggest manufacturing and trading nation with almost every country around the world having economic relations with it.
• Hence, the US and the EU have discovered that it is not easy to achieve the geo-economic containment of China in the long run because they remain dependent on China in many ways and reducing these dependencies will take time.
• They have also realised that countries and industries around the world are deeply integrated into China’s economy, and vice versa. Hence, due to the complex global supply and value chains, decoupling is not easy.

What steps have been taken by India to reduce its dependence on China and what are the associated concerns?

• In 2019, the Indian government opted out of the Regional Comprehensive Economic Partnership agreement to reduce India’s trade dependence on China.
• However, four years later India’s trade deficit with China reached an all-time high of over $85 billion.
• Indian businesses urged GoI that while decoupling is tough, even de-risking would require investments and policy changes that are not easily forthcoming.
• Hence, it is not easy to substitute the dependence on China for India as well as the rest of the world.

General Studies Paper 1

Context: Unseasonal rains in India have once again highlighted the vulnerabilities of our agricultural sector. While rain is generally seen as a blessing, unseasonal rains can be a curse for farmers already reeling under the impact of low crop prices, rising input costs, and changing weather patterns.

Unseasonal rains can have a cascading effect on the overall inflationary trend. The impact of unseasonal rain is not just limited to the agricultural sector but also extends to other sectors of the economy.

What are the Causes of Unseasonal Rains?

Climate Change:

• Climate change can result in unpredictable weather patterns, including unseasonal rain.
• Global warming, weak western disturbances and strong subtropical jet stream are the causes of recent unseasonal rains.

El Nino:

• El Nino is a weather phenomenon that occurs when warm water from the western Pacific Ocean flows eastward.
• This can result in drought conditions in some regions and unseasonal rain in others.

La Nina:

• La Nina is a weather phenomenon that occurs when cool water from the eastern Pacific Ocean flows westward.
• This can result in excess rainfall in some regions, including unseasonal rain.

Atmospheric Instability: Atmospheric instability can also result in unseasonal rain. When there is a sudden change in atmospheric pressure, it can result in precipitation, even during non-monsoon seasons.

Human Activities:

• Human activities such as deforestation, urbanization, and pollution can also contribute to unseasonal rain.
• Deforestation can disrupt the water cycle, while urbanization and pollution can affect the microclimate, resulting in unseasonal rain.

What is the Impact of Unseasonal Rains?

Agricultural Sector:

• Unseasonal rains can lead to crop loss and impact post-harvest crops, leading to a rise in prices of perishable commodities such as vegetables and fruits.
• Farmers already reeling under the impact of low crop prices, rising input costs, and changing weather patterns are adversely affected.
• Construction Sector: Disruption caused by unseasonal rains can lead to a rise in prices of key raw materials such as cement and steel.
• Consumption Patterns: The rise in prices of essential commodities can lead to a fall in the overall demand for non-essential goods and services.
• Social Impact: Unseasonal rain can have a social impact, especially on the vulnerable sections of society such as small farmers, daily wage laborers, and migrant workers.

Political Impact:

• Unseasonal rain has a significant political impact as well, especially in the context of the upcoming state and national elections.
• The ruling political party often faces criticism from the opposition for not doing enough to address the concerns of farmers.
• Political blame game happens, with each party trying to score points over the other.

What are Government Measures to Protect Farmers?

• The government has launched several initiatives such as the Pradhan Mantri Fasal Bima Yojana(PMFBY), Pradhan Mantri Krishi Sinchai Yojana(PMKSY), and Soil Health Card Scheme(SHC) to address the concerns of farmers.
• PMFBY: It is a crop insurance scheme launched by the Government of India in 2016 to provide financial support to farmers in case of crop failure or damage due to natural calamities, pests, or diseases. Under this scheme, farmers have to pay a nominal premium, and the remaining amount is paid by the government. The premium rates are fixed based on the type of crop, location, and the level of coverage chosen by the farmer. The scheme covers all food and oilseed crops and commercial and horticultural crops.

PMKSY:

• It is a flagship scheme of the Government of India that aims to provide water to every field and improve water use efficiency in the country.
• The Pradhan Mantri Krishi Sinchai Yojana aims to boost irrigation infrastructure and promote water-use efficiency.

The scheme has four components:

• Accelerated Irrigation Benefit Programme: This component aims to provide financial assistance to states for completing their incomplete irrigation projects
• Har Khet Ko Pani: This component aims to provide water to every field by ensuring water conservation and efficient use through micro-irrigation, water harvesting, and other such techniques.
• Per Drop More Crop: This component aims to enhance water use efficiency by promoting micro-irrigation techniques like drip and sprinkler irrigation.
• Watershed Development: This component aims to conserve rainwater by promoting watershed development activities like afforestation, horticulture, and pasture development.

SHC Scheme:

• Under the Soil Health Card scheme, soil samples are collected from farmers’ fields and analyzed in laboratories to assess the soil’s nutrient status.
• Based on the analysis, a soil health card is generated for each farmer, which provides information about the soil’s nutrient status, as well as recommendations for the application of fertilizers and other soil amendments

What is the Multi-Pronged Approach to Address the Issue?

Short-term Measures:

• Centre and States can provide compensation for crop loss, supply seeds and fertilizers at subsidized rates. Minimum Support Price could be increased.

Long-term Measures:

• Structural reforms in the agricultural sector can make it more resilient to changing weather patterns.
• Promote crop diversification, encourage the use of modern technologies and farming practices, and strengthen the supply chain infrastructure to reduce wastage and post-harvest losses.

Mitigating Climate Change:

• India needs to take a proactive approach towards mitigating its impact. This requires a coordinated effort between the Centre and States, civil society organizations, and the private sector.

Conclusion

• The impact of unseasonal rain is not just limited to the agricultural sector but also extends to other sectors of the economy. A multi-parenged approach involving both short- and long-term measures is needed to address the issue. Mitigating climate change is crucial to ensure the resilience of the agricultural sector. The government has launched several initiatives to address the concerns of farmers, but greater coordination between the central and state governments is needed.

General Studies Paper 3

Context: Recently, the Reserve Bank of India’s (RBI) Department of Economic and Policy Research (DEPR) released a Report on Currency & Finance 2022-23.

About the report 

• The report, themed ‘Towards a Greener Cleaner India’,does not represent the views of the RBI, and is based on the findings and conclusions of the contributors from the Department of Economic and Policy Research.
• It covers four major dimensions of climate change to assess future challenges to sustainable high growth in India.
  • The areas are the unprecedented scale and pace of climate change; its macroeconomic effects; implications for financial stability; and policy options to mitigate climate risks.

Major Findings 

• The cumulative total expenditure for adapting to climate change in India is estimated to reach ?85.6 lakh crore (at 2011-12 prices) by 2030.
• India’s goal of achieving the net zero target by 2070 would require an accelerated reduction in the energy intensity of GDP by about 5% annually and a significant improvement in its energy mix in favour of renewables to about 80% by 2070-71.
• India’s green financing requirement is estimated to be at least 5% of GDP annually till 2030 to address the infrastructure gap caused by climate events.
• Results of a climate stress test reveal that public sector banks (PSBs) may be more vulnerable than private sector banks. 
• Globally, however, the measurement of climate-related financial risks remains a work in progress.
• CBDCs can be more energy efficient than much of the current payment landscape, including credit and debit cards.
  • The CBDC helps curb emissions by nullifying operations such as printing, storage, transportation, and replacement of physical currency.

Recommendations 

• In order to speed up and drive green finance in the country and meet climate goals, India needs to put in place a broad-based carbon pricing system in-line with emerging global best practices and introduce a carbon tax.
• It also recommended introducing an Emissions Trading System (ETS) linked to green taxonomy, covering all sectors of the economy, which can partly balance subsidy and tax.
• There is a need to properly record public spending on climate change and related issues and report them in a climate budget report as a supplement to the annual budget.
• India should explore ways to improve access to technology and critical mineral resources through multilateral, regional, and bilateral strategic partnerships, and step up efforts to address the variability in wind and solar power supply through appropriate energy storage technology and demand management mechanisms using smart grids.
• Other suggestions: Complementing green building standards with the Internet of Things (IoT)-based monitoring and AI and ML to manage and reduce energy demand;
  • Boosting climate resilient agriculture;
  • Production of green hydrogen using renewable energy; and investment in carbon capture and storage technologies.
• Central banks could mandate banks and other financial institutions to consider climate and environmental risks through various regulations.

Future Outlook 

• A balanced policy intervention with progress ensured across all policy levers would enable India to achieve its green transition targets by 2030, making the net zero goal by 2070 attainable.

General Studies Paper 2

Context: Recently, the government in the Supreme Court (SC) has said it has initiated the “Process of Re-examination” of Section 124A (sedition) of the Indian Penal Code (IPC) and consultations are in its “final stage”.

In May 2022, the court, in an interim order, had suspended the use of Section 124A, stalling pending criminal trials and court proceedings under Section 124A across the country.

What is Sedition Law?

Historical Background:

• Sedition laws were enacted in 17th century England when lawmakers believed that only good opinions of the government should survive, as bad opinions were detrimental to the government and monarchy.
• The law was originally drafted in 1837 by Thomas Macaulay, the British historian-politician, but was inexplicably omitted when the IPC was enacted in 1860.
• Section 124A was inserted to IPC in 1870 by an amendment introduced by Sir James Stephen when it felt the need for a specific section to deal with the offence.
• Today the Sedition is a crime under Section 124A of the IPC.

Current Scenario:

Section 124A IPC:

• It defines sedition as an offence committed when “any person by words, either spoken or written, or by signs, or by visible representation, or otherwise, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection towards the government established by law in India”.
• Disaffection includes disloyalty and all feelings of enmity. However, comments without exciting or attempting to excite hatred, contempt or disaffection, will not constitute an offence under this section.
• The SC in Balwant Singh v. State of Punjab (1995), reiterated that the real intent of the speech must be taken into account before labelling it seditious.

Punishment:

• It is a Non-Bailable Offence. Punishment under Section 124A ranges from imprisonment up to three years to a life term, to which a fine may be added.
• A person charged under this law is barred from a government job.
• They have to live without their passport and must produce themselves in the court at all times as and when required.

What is the Significance of Sedition Law?

Reasonable Restrictions:

• The Constitution of India guarantees the freedom of speech and expression to its citizens.
• However, this right is not absolute, and the government can restrict it under certain circumstances to ensure that it is not abused.
• These restrictions are considered reasonable and are laid out in Article 19(2) of the Constitution.

Maintaining Unity & Integrity:

• Sedition law helps the government in combating anti-national, secessionist and terrorist elements.
• Maintaining Stability of State:
• It helps in protecting the elected government from attempts to overthrow the government with violence and illegal means.
• The continued existence of the government established by law is an essential condition of the stability of the State.

What are the Issues?

Reminiscence of Colonial Era:

• During British rule in India, sedition laws were used to imprison people who criticized British policies.
• Many leaders of the Indian freedom movement, such as Lokmanya Tilak, Mahatma Gandhi, Jawaharlal Nehru, Bhagat Singh, etc were convicted and imprisoned for their speeches, writings, and activities.

Stand of Constituent Assembly:

• The Constituent Assembly did not agree to include sedition in the Constitution as the members felt it would curtail freedom of speech and expression.
• They argued that the sedition law can be turned into a weapon to suppress people’s legitimate and constitutionally guaranteed right to protest.

Repressing Democratic Values:

Increasingly, India is being described as an elected autocracy primarily because of the callous and calculated use of sedition law.

What are the Previous SC Rulings regarding Sedition?

• As early as 1950, the SC in Romesh Thapar v State of Madras held that “criticism of the government exciting disaffection or bad feelings towards it, is not to be regarded as a justifying ground for restricting the freedom of expression and of the press, unless it is such as to undermine the security of or tend to overthrow the state.”
• Subsequently, two high courts — the Punjab and Haryana High Court in Tara Singh Gopi Chand v. The State (1951), and the Allahabad High Court in Ram Nandan v. State of Uttar Pradesh (1959) — declared that Section 124A of the IPC was primarily a tool for colonial masters to quell discontent in the country and declared the provision unconstitutional.
• In the Kedarnath Singh v State of Bihar (1962) ruling on sedition the SC overruled the earlier rulings of the high courts and upheld the constitutional validity of IPC Section 124A. However, the court attempted to restrict its scope for misuse.

What are Recent Developments?

• In February 2021, the Supreme Court protected a political leader and six senior journalists from arrest, for allegedly tweeting and sharing unverified news, in multiple sedition FIRs registered against them.
• In June 2021, the SC while protecting two Telugu (language) news channels from coercive action by the Andhra Pradesh government emphasized on defining the limits of sedition.
• In July 2021, a petition was filed in the SC, that sought a relook into the Sedition Law,
• The Court ruled that a law that criminalizes speech based on vague and unconstitutional definitions of terms like ‘disaffection towards Government’ is not a reasonable restriction on the fundamental right to free expression guaranteed under Article 19(1)(a).
• Such a law creates a chilling effect on speech, that means people will self-censor or refrain from expressing their opinions out of fear of being punished by the government.

Way Forward

• The court’s intervention is crucial because in case it strikes down the provision, it will have to overrule the Kedar Nath ruling and uphold the earlier rulings that were liberal on free speech.
• However, if the government decides to review the law, either by diluting the language or repealing it, it could still bring back the provision in a different form.
• The higher judiciary should use its supervisory powers to sensitize the magistracy and police to the constitutional provisions protecting free speech.
• The definition of sedition should be narrowed down, to include only the issues pertaining to the territorial integrity of India and sovereignty of the country.

General Studies Paper 2

Context: The historic India-UAE Comprehensive Economic Partnership Agreement (CEPA) which came into force on May 1st, 2022, has recently completed one successful year.

India-UAE Comprehensive Economic Partnership Agreement (CEPA):

• About: A Comprehensive Economic Partnership Agreement (CEPA)was signed between India and UAE a year ago to strengthen the trade ties between the two nations.
• Aim: The agreement aimed to increase the total value of bilateral trade in goods to over US$100 billion and trade in services to over US$ 15 billion within five years.

Significance:

• Keeping in mind that the gems and jewellery sector contributes a substantial portion of India’s exports to the UAE the agreement is expected to significantly benefit this sector by providing tariff concessions.
• Overall, India is expected to benefit from preferential market access provided by the UAE on over 97 percent of its tariff lines which account for 99 percent of Indian exports to the UAE in value terms, particularly from labor-intensive sectors such as:
  • Gems and jewelry, textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, pharmaceuticals, medical devices, and automobiles.
• With regards to trade in services,Indian service providers have enhanced access to around 111 sub-sectors from the 11 broad service sectors.

Review of the 1st year of India-UAE CEPA

• Trade success:
  • According to the reports, this was the Fastest Executed Bilateral Agreement where imports and exports increased between India and United Arab Emirates (UAE).
  • The agreement also boosted trade which benefited the domestic market. Labour-intensive sectors also boomed as a result of this tie-up.
• Increase in India’s exports:
  • India’s global export rose by 5.3 percent and exports to UAE increased by 11.8 percent.
  • While the export of commodities like jewelry, car, and beauty products rose, in particular – aircrafts, spacecrafts and exports of parts increased as UAE is a transit hub between Asia and Europe and Americas.
• Increase in UAE’s exports:
  • Similarly, imports also increased from the UAE by 18.8 percent.
  • The nation’s non-oil imports from UAE increased by 4.1 percent and global imports increased by 7.8 percent.
• Certificate of Origin:
  • The report further stated that CEPA ranked second in issuing Certificate of Origin– a document that confirms the ‘nationality’ of a product and serves as a declaration to satisfy customs or trade requirements– in the last 11 months.
• Below expectation export commodities:
  • On the other hand, the export of commodities such as iron, steel, and apparel did not grow as expected.

India-UAE Relations

• Evolution of relations:
  • Beginning of diplomatic relations:
    • India and the United Arab Emirates (UAE) established diplomatic relations in 1972.
    • UAE opened its Embassy in Delhi in 1972& India opened its Embassy in Abu Dhabi in 1973.
  • 2015:
    • The traditionally strong bilateral relations enjoyed by India & UAE received an impetus with the visit of PM Modi to UAE on 16-17 August 2015 which marked the beginning of a new strategic partnership between the two countries.
  • The ‘Order of Zayed’:
    • Modi’s last visit to the UAE was in August 2019, when he received the UAE’s highest award, ‘Order of Zayed’.
  • 2022:
    • In February 2022 both sides signed a Comprehensive Economic Partnership Agreement (CEPA).
    • The Dubai-based DP World and India’s National Skills Development Council signed an agreement to set up a Skill India Centre in Varanasi to train local youth in logistics, port operations and allied areas so that they can pursue overseas employment.
  • Trade:
    • Bilateral trade in FY 2021-22was about US$ 72 billion.
    • UAE is India’s third largest trade partner and second largest export destination.
    • UAE’s FDI in India has increased over the past few years and currently stands at over $12 billion.
  • Defence and Security Cooperation:
    • Bilateral Defence Interaction between India and UAE has been steadily growing in accordance with other aspects of the bilateral relationship.
      • The ships of the Navies of both countries have regularly made port calls enhancing bilateral defence co-operation.
      • India and UAE signed a comprehensive strategic partnership in 2017, and hold annual defence dialogues.
      • More recently, UAE is a key part of the Indian Ocean Region dialogue.
      • Both sides take part in military exercises with each other and there have been several Military chiefs visits.
    • Technology partnerships:
      • India and the UAE have signed a number of digital innovation, technology partnerships, and also plans for ISRO and UAESA to cooperate on missions like the Red Moon mission.
      • The Emirates has offered“golden visa” residency permits for doctors, engineers, PhD scholars and specialists in high-end technology fields such as artificial intelligence (AI), Big Data, virology and epidemiology, and brought over the former ISRO chief K. Radhakrishnan to their space agency.
    • Cultural Relations:
      • The importance given to Indian culture by the UAE was further highlighted in April, 2019 when India participated as the Guest of Honour Country in Abu Dhabi International Book Fair 2019.
      • Indian cinema/ TV / radio channels are easily available and have good viewership; major theatres/cinema halls in the UAE screen commercial Hindi, Malayalam and Tamil films.
      • The Emirati community also participates in our annual International Day of Yoga events and various schools of yoga & meditation centres are running successfully in the UAE.

Way ahead

• India and UAE continue to forge closer partnership in these areas, building on their close and friendly relations and historical people-to-people connect. India-UAE has a strong energy partnership which is now acquiring a new focus on renewable energy.
• It will take a sustained public diplomacy effort to further improve the relations.

General Studies Paper 3

Context: There’s a growing trend of countries sidestepping the US dollar (de-dollarisation) and choosing to use their own local currencies for bilateral trade.What is de-dollarisation?

De-dollarisation is a term that refers to the process whereby countries tend to reduce their reliance on the US dollar as a reserve currency, medium of exchange, and also a unit of account.

Why is the US dollar used so widely? 

• Dominance of Dollar: After World War II,the US dollar replaced the British pound as the dominating currency worldwide. In 1944, the Bretton Woods Agreement established the dollar as the world’s reserve currency. The original Bretton Woods Agreement is dead, but the dollar remains the international reserve currency.
• Trade deficit of US:  S. has been running a persistent trade deficit for decades now (in fact the last time the U.S. ran a trade surplus was way back in 1975). Theexcess dollars that the rest of the world accumulates due to the U.S. ‘s trade deficit has been invested in U.S. assets such as in debt securities issued by the US government.
• Popularity of U.S. assets among investors: The high level of trust that global investors have in the S. financial markets,perhaps owing to the ‘rule of law’ in the U.S., is considered to be a major reason why investors prefer to invest in U.S. assets.

What is Reserve Currency?

• Reserve currencies are foreign currencies held by central banks and other monetary authorities to facilitate international transactions, stabilize exchange rates, and bolster financial confidence.
• These currencies are typically characterized by their stability, liquidity, and wide acceptance in global markets, which make them attractive for holding and conducting international transactions.
• A reserve currency is also used by central banks to prepare for international debt obligations and to influence their domestic exchange rate.

Global Efforts Towards Dedollarization

• In recent years, several countries and regions have embarked on the path towards dedollarization, driven by a combination of geopolitical, economic, and strategic considerations. 
• Notable examples include China, Russia, Brazil and the European Union, each of which has taken steps to reduce their reliance on the US dollar in international transactions and financial markets.

Why are de-dollarisation attempts being made? 

• Sanctions by U.S.: The U.S. imposed several sanctions that restricted the use of the U.S. dollar to purchase oil and other goods from Russia, and this has been seen by many countries as an attempt to weaponise the dollar.
• Power to control transactions by U.S.:Since international transactions carried out in the U.S. dollar are cleared by American banks, this gives the U.S. government significant power to oversee and control these transactions.
• To end U.S Hegemony:Some countries, like China and Russia, have sought to diminish the influence of the US dollar as a means of countering perceived American hegemony and mitigating the impact of US sanctions.
• To Promote their own currency: Other countries, particularly those in the Eurozone, have pursued dedollarisation to promote the international use of their currency, the euro, in a bid to enhance their global economic standing and secure greater financial autonomy.

Challenges Towards Dedollarisation

• Threat to Global Financial Stability: As countries reduce their reliance on the US dollar, adjustments in the composition of global reserve assets may lead to shifts in capital flows and changes in asset prices.In the absence of adequate policy coordination and risk management, these fluctuations could create financial instability.
• Alternative currency:Creating a viable alternative to the US dollar presents a formidable challenge. To achieve the requisite degree of stability, liquidity, and acceptability, an alternative reserve currency must be underpinned by a robust economy, deep and liquid financial markets, and sound monetary and fiscal policy frameworks. Currently, no single currency fully meets these criteria, although the euro and the Chinese yuan have made strides in this regard.
• Increased volatility in Exchange rates: Dedollarisation could result in increased volatility in currency exchange rates, particularly during the initial phases of transition. This, in turn, could impact trade, investment, and capital flows,particularly for countries with less developed financial markets or limited policy tools to manage exchange rate volatility.

Should India Focus on De-dollarisation?

• Benefits:It could reduce the vulnerability to fluctuations in US monetary policy and enhance monetary autonomy, enabling them to better tailor policy actions to the domestic economic conditions. 
  • Moreover, the diversification of reserve currencies could provide a buffer against currency fluctuations and capital flow reversals, reducing the likelihood of financial crises and improving overall financial stability.
• Challenges:As developing countries transition away from the US dollar, they may face heightened exchange rate volatility, which could impact trade, investment, and capital flows.
  • Additionally, the development of deep and liquid domestic financial markets – a prerequisite for currency internationalisation – could prove to be a formidable challenge for countries with less developed financial systems.
  • Furthermore, the potential costs associated with the transition, such as adjustments to existing trade and financial arrangements, may be significant and could strain limited resources.

Way Ahead

• In light of these considerations, developing countries like India should adopt a prudent and measured approach towards dedollarisation. Policymakers must strike a delicate balance between the potential benefits of reducing reliance on the US dollar and the risks and costs associated with such a transition.
• While dedollarisation presents opportunities for a more diversified and resilient global financial system, it also poses significant challenges that must be carefully managed to ensure the preservation of global financial stability and sustained economic growth.
• Developing countries such as India must carefully weigh the potential benefits and risks associated with this transition.