General Studies Paper -3

Context: This article discusses how the government’s financial plans and budget for 2024-25 seem more focused on showing the government in a positive light, rather than addressing the ongoing problems in agriculture.

What are the special provisions for the agricultural sector in the Budget for 2025?

Growth in Agriculture GDP: Agriculture GDP in 2023-24 showed a modest growth of 1.8%, a decrease from 4% in the previous year.

Budget Allocations for Agriculture Departments:

• The Department of Agriculture and Farmers Welfare saw a slight increase of 0.6%.
• The Department of Agricultural Research and Education received Rs 99.4 billion, a marginal increase of 0.7% over the previous year.
• Ministry of Fisheries, Animal Husbandry, and Dairying: Experienced a significant budget increase of 27%.

Overall Budget Support for Agri-food Sector:

Includes PM-KISAN, credit subsidy, and PM-Fasal Bhima Yojana, totaling Rs 5.52 trillion for FY25, slightly less than Rs 5.8 trillion in FY24.

Food and Fertilizer Subsidies:

• Food subsidy reduced to Rs 2.05 trillion in FY25, a drop of 3.3% from FY24.
• Fertilizer subsidies decreased from Rs 1.89 trillion in FY24 to Rs 1.64 trillion in FY25.

What does the official data show about the agricultural sector in India?

• Decline in Agricultural Prices: Official data indicates a significant decline in agricultural prices, causing a reduction in farmers’ incomes. The sectoral deflator in agriculture decreased from 9.4 in 2013-14 to 3.7 in 2023-24.
• Slowed Growth of MSP: The growth of Minimum Support Prices (MSP) for major crops slowed down considerably, from an 8-9% annual increase between 2003-04 and 2012-13 to about 5% between 2013-14 and 2023-24.
• Drop in Farmers’ Incomes: Despite a promise to double farmers’ real incomes from 2015 to 2022, incomes from cultivation actually fell by about 1.4% between 2012-13 and 2018-19.
• Rising Rural Unemployment: Rural unemployment rates increased, with a notable rise from 2011-12 to 2018-19, and remained higher in 2022-23 compared to 2011-12.
• Stagnation of Rural Wages: Real wages in rural India have not increased since 2016-17 and even decreased after 2020-21.
• Lack of Capital Investment: Capital investment in agriculture and allied sectors didn’t increase. Much of the long-term bank credit meant for agriculture was diverted to corporates and agri-business firms as short-term loans.

What are the issues with the government’s report on the agricultural sector in India?

• Selective Data Presentation: The government’s report emphasizes the increase in agricultural production but neglects the overall decline in growth rates. For example, growth rates dropped from 3.1% annually (2003-04 to 2010-11) to 2.7% (2011-12 to 2022-23).
• Ignoring Yield Decline: The report omits the significant fall in yield growth rates, from 3.3% per year to 1.6% per year in the same periods.
• Budget Cuts in Agriculture: The 2024-25 budget plans to reduce spending in crucial agricultural areas, such as fertilizer subsidies (from ₹1.9 lakh crore to ₹1.6 lakh crore) and rural infrastructure projects.
• No Clear Strategy for Growth: The report and the budget lack a comprehensive plan to revive agricultural growth, with no significant measures to address the ongoing decline.
• Unchanged Support Despite Inflation: The PM-Kisan scheme’s allocations remain the same as in 2019, not accounting for inflation, which reduces the real value of cash transfers to farmers.

What should be done?

• Rationalize Food Subsidy: Implement rationalization of the food subsidy system, similar to the strategy used by former PM Atal Bihari Vajpayee in the Targeted Public Distribution System (TPDS). This could save around Rs 50,000 crore.
• Redirect Subsidy Savings: Use the funds saved from food subsidy rationalization for enhancing agricultural research and development, particularly in areas like micro-irrigation.
• Reform Fertilizer Subsidies: Shift from subsidizing the price of urea to direct cash transfers to farmers. This approach is expected to save Rs 30,000-40,000 crore, which can be reinvested in agricultural development programs like PM-KISAN.
• Focus on Sustainable Agriculture: Allocate the saved funds towards sustainable agriculture practices, which is crucial for ensuring food security under the challenges of climate change.

General Studies Paper -2

Context: The U.S. Assistant Secretary of State for Energy Resources recently said, India-U.S. nuclear cooperation envisaged under the nuclear deal two decades ago is “an important piece of unfinished business”.

• Speaking on clean energy and climate change, he stressed on getting away from Chinese domination of clean technology supply chains.
• He also emphasises using India’s capacities in manufacturing and labour costs to build up a real alternative supply chain.

India-U.S. Nuclear Cooperation

History and Milestones:

• 1974: India conducts its first nuclear test, leading to U.S. sanctions and limited cooperation.
• 2005:The landmark S.-India Civil Nuclear Agreement is signed, paving the way for civil nuclear trade and cooperation.
• 2008:The U.S. Congress approves the agreement, allowing nuclear fuel and technology transfers to India.
• 2010: The first U.S.-built nuclear power plant in India begins construction in Kudankulam.
• 2015:The Westinghouse Electric Company signs an agreement to build six nuclear reactors in India in Kovvada, Andhra Pradesh.

The U.S.-India Civil Nuclear Agreement

• The U.S.-India Civil Nuclear Agreement, also known as the 123 Agreement, is a landmark agreement signed in 2005 that marked a significant shift in the nuclear relationship between the two countries.

Key Provisions:

• Separation of Programs: India agreed to separate its civilian and military nuclear facilities, placing civilian facilities under International Atomic Energy Agency (IAEA) safeguards.
• Nuclear Trade: The agreement allowed the U.S. to supply nuclear fuel and technology to India for its civilian nuclear program.
• Non-proliferation Commitments: India reaffirmed its commitment to non-proliferation and agreed to additional safeguards against transferring sensitive nuclear technology or materials.

Expected benefits for India:

• Energy Security: Reduced dependence on fossil fuels for electricity generation, which is crucial for a growing economy. Cleaner energy source with lower greenhouse gas emissions.
• Economic Growth:Creation of jobs in the nuclear power sector, potential for attracting investments and technology transfers.
• Strategic Partnership:Stronger relationship with the U.S., with implications for regional security and global non-proliferation efforts.
• Access to Advanced Technology:Acquisition of modern nuclear reactors and fuel, promoting technological advancements and improved safety standards.
• Environmental protection: Reduced reliance on coal-fired power plants, contributing to lower air pollution and greenhouse gas emissions.
• Regional stability: Cooperation on nuclear energy could foster trust and collaboration between India and neighboring countries.
• Global leadership: Demonstrating responsible nuclear cooperation could set a positive example for other countries.

Current Status:

• Even after eight years of announcing that the nuclear deal was done in 2015, there is still no techno-commercial offer.
• The progress has been slower than initially expected due to various Challenges.
• Domestic challenges in India: Complex regulatory procedures, limited infrastructure, and liability concerns.
• Geopolitical considerations:Evolving global nuclear landscape and concerns about technology transfer.
• S. domestic politics: Concerns about non-proliferation and Congressional approval processes.

Measures/Suggestions:

• India and the U.S. needs to make fresh efforts for practical cooperation in the civil nuclear energy sector.
• Also, India needs to revise laws to enable private companies to participate in the civil nuclear sector.
• Further, there is a “shared interest” to move forward, both on the large traditional reactors which were foreseen as part of the nuclear deal and also on Small and Modular Reactor (SMR) technology.

Way Ahead:

• Despite the challenges, both countries remain committed to the agreement and continue to work towards expanding cooperation.
• The success of the agreement will depend on addressing outstanding challenges and building mutual trust to unlock its full potential.

General Studies Paper -3

Context: The Interim Budget 2024-25 has increased the Gender Budget.

• The quantum of Gender Budget reported in 2024-25 is 38.6%more than budget estimates of 2023-24.
• The share of Gender Budget in the total Union Budget increased to 5% in 2024-25 from 5% in 2023-24.

What is Gender Budgeting?

• Gender Budgeting is a strategy with gender responsive formulation of legislation, policies, plans, programmes, and schemes; resource allocation; implementation; tracking of expenditure, audit, and impact assessment.
• It aims to ensure that public resources are collected and spent efficiently based on differing gender needs and priorities.
• Gender Budgets are not separate budgets for women; neither do they imply that funds be divided into half for men and women or that budgets should be divided into half.
• They are attempts to disaggregate the government’s budget according to its differential impact on different Genders, and reprioritize allocations to bridge gender gaps.
• Gender-responsive budgeting in India was adopted in It comprises two parts: 
• Part A: It encompasses schemes that allot100 percent of the funds for women (such as maternity benefits).
• Part B: It consists of schemes that allocate at least 30 percent of funds for women (such as the Mid-Day Meal scheme).

Need for Gender budgeting

• Addressing Gender Inequality:  The Gender Gap Report 2023 ranked India at 127 out of 146 
• Gender budgeting provides a systematic framework for addressing these inequalities by allocating resources towards programs and initiatives that promote gender equality.
• Enhancing Development Outcomes: Gender equality yields significant development benefits, including poverty reduction, improved health outcomes, and enhanced economic growth.
• Gender budgeting helps in mainstreaming gender considerations across all sectors of the economy, thereby contributing to more inclusive and sustainable development outcomes.
• International Commitments:India is a signatory to various international agreements and conventions that mandate the promotion of gender equality and women’s rights, including the Sustainable Development Goals (SDGs) and the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW). Gender budgeting is necessary to fulfill these commitments.
• Ensuring Targeted Interventions:Gender budgeting helps in identifying and prioritizing the specific needs and priorities of women and girls.

Challenges

• Data Availability and Quality: Gender budgeting relies on accurate gender-disaggregated data to identify specific needs and assess the effectiveness of interventions.
• However, data collection mechanisms lack gender disaggregation, making it challenging to formulate evidence-based policies and allocate resources efficiently.
• Fragmentation of Initiatives:Gender-related initiatives in India are fragmented across different ministries and departments, leading to duplication of efforts, inefficiencies, and gaps in service delivery.
• Regular monitoring:Absence of robust monitoring mechanisms to evaluate the accountability and progress of gender budgeting initiatives reduces its effectiveness.

Way Forward

• Gender budgeting is a critical tool for advancing gender equality, promoting women’s empowerment, and achieving inclusive and sustainable development in India.
• By addressing the challenges in implementation of gender budgeting  India can address the root causes of gender disparities and work towards creating a more equitable and just society.

General Studies Paper -2

Context: Recently, the Reserve Bank of India released a report on Finances of Panchayati Raj Institutions (PRIs) for 2022-23 which presents an assessment of their finances and their role in India’s socio-economic development.

Key Findings of the Report

• About 1% of the revenue of Panchayats was earned by them, with the rest being raised as grants from the State (about 15%) and the Union Government (about 80%).
• Panchayats had recorded a total revenue of ₹35,354 crore in 2022-23.
• In 2022-23: Each panchayat earned just ₹21,000 as its own tax revenue and ₹73,000 as non-tax revenue.
• Each panchayat earned about ₹17 lakh as grants from the Central government and more than ₹3.25 lakh as grants from the State governments.
• Panchayats earned ₹1,494 crore through non-tax revenue, which is mostly earnings from interest payments and Panchayati Raj programmes.
• They earned ₹24,699 crore as grants from the Union Government and ₹8,148 crore as grants from the State governments.
• State Wise Performances: In Kerala, the average revenue raised by each panchayat was over ₹60 lakh in 2022-23.
• West Bengal came a close second with an average revenue of ₹57 lakh per panchayat.
• The revenue was over ₹30 lakh per panchayat in Assam, Bihar, Karnataka, Odisha, Sikkim, and Tamil Nadu; and less than ₹6 lakh in Andhra Pradesh, Haryana, Mizoram, Punjab, and Uttarakhand.
• The revenue receipts of panchayats formed just 0.1%of the State’s own revenue in Andhra Pradesh.
• The revenue of panchayats in Uttar Pradesh formed 2.5%of the State’s own revenue, the highest among States.

Functions and Finances of the PRIs in India

• Until 1992, the responsibilities of the PRIs were primarily focused on sanitation efforts, conservancy services, building and maintaining fair-weather roads, access to domestic water supply, and street lighting.
• In 1992, the 73rd Amendment introduced a significant change, specifying 29 subjects (outlined in the Eleventh Schedule of the Constitution) for which Panchayats were entrusted with the responsibility of devising and executing plans aimed at fostering local economic development and social justice. It empowers the local self-governing institutions viz. PRIs.

Fundings of PRIs

• PRIs have their own resources of tax and non-tax revenue (e.g., fair tax, building tax, fees, rent on land and buildings, water reservoirs, etc.) and capital receipts from the sale of land.
• They receive funds from the Union and State Government in the form of grants-in-aid/loans for general administration, implementation of developmental schemes/works, and creation of infrastructure in rural areas, etc.
• Funds are also provided under the recommendations of the State Finance Commission.

Challenges and Constraints highlighted in the report

• Limited Own Revenues:Panchayats rely on limited sources like property taxes, fees, and fines, which constitute a minor share of their revenue.
• Own revenues, generated through local taxes, contribute only about 1.1% to their total revenue in 2022-23.
• Low Expenditure:The revenue expenditure of panchayats is less than 0.6% of the gross state domestic product for all states.
• Grant Dependency: Approximately 95% of Panchayats’ revenues come in the form of grants from higher government levels, limiting their financial autonomy.
• Inter-State Variations in Devolution:There are significant variations in the devolution of powers and functions to Panchayats across states.
• States with higher devolution levels show improved socio-economic outcomes.
• Inconsistency in Data:The assessment of the fiscal health of Panchayati Raj Institutions is hindered by inconsistent data on their finances.
• Challenges in Local Tax Revenue Generation:Panchayats face challenges in generating local tax revenue due to a limited tax base, administrative infrastructure shortages, lack of trained staff, and unclear guidelines.

Way Forward and Conclusion

• The RBI report suggests several measures to improve the fiscal position of PRIs, such as boosting revenue-generating capabilities, effectively implementing Article 243 (I)for fair revenue sharing through established Finance Commissions, strengthening local administrative skills for better financial management, and promoting decentralisation.
• PRIs bridge the gap between the rural population and the higher levels of government. They are the most appropriate institutions for grassroots development.
• These need to devise innovative approaches for generating adequate revenue.
• The recommendations of the Finance Commissions and the recent digital initiatives have collectively enhanced transparency and accountability at the Panchayat level, thereby contributing significantly to the empowerment of Panchayats.
• According to Mahatma Gandhi, ‘Independence must begin at the bottom. Thus, every village will be a Republic or Panchayat having full powers’.

General Studies Paper -3

Context: There are concerns over GDP, expenditure cuts, and Fiscal deficit etc. in the recently presented Interim Union Budget for the 2024-25.

On GDP Growth:

• The nominal Gross Domestic Product (GDP)is the size of the Indian economy in terms of current prices.
• It is the actual observed value.
• The real GDP growth and its rate are derived from the nominal GDP data by removing the effect of inflation.
• For instance, if nominal GDP growth in a particular year is 12% and inflation is 4%, then the real GDP growth will be 8%.
• However, for all budget-related work, it is the nominal GDP that is used.
• It means a decent growth rate in nominal GDP is not good for India’s real growth rate.
• For the coming year, the nominal GDP is likely to grow by just 10.5%.
• If an inflation rate of 4-4.5%it would suggest a GDP growth rate of 6% to 6.5% in 2024-25.

On the reduction in Fiscal Deficit:

• Fiscal deficit essentially shows the amount of money that the government borrows from the market. It does so to bridge the gap between its expenses and income.
• If a government borrows more, it leaves a smaller pool of money for the private sector to borrow from.
• It, in turn, leads to higher interest rates, thus disincentivizing borrowings by the private sector and further dragging down economic activity in the form of lower consumption and production.
• If the government tries to print more money instead of borrowing from the market, that too leads to negative effects such as inflation.
• If fiscal deficits continue to grow unrestrained— repaying the debt and associated annual interest payments tends to become a critical concern.
• It eventually requires governments to tax its citizens, which, again, slows down economic activity.

Capital Expenditure (Capex) Target:

• All government expenditure can be divided into two broad categories:
• Revenue expenditure to meet daily needs such as fuel bills, salaries, etc. and;
• Capital expenditure to make productive assets such as roads, schools, bridges, ports, etc.
• There is a clear advantage for the broader economy when the government ramps up Capital expenditure.
• Every Rs 100 spent on capex leads to a Rs 250 increase in GDP. On the other hand, the revenue expenditure returns less than Rs 100.
• The Capex was Rs 10 lakh crore in the Budget 2023-24— more than double the Rs 4.39 lakh crore of 2020-21.
• However, Revised Estimates (RE)show that this Capex target was not met in the current year — it stands at Rs 9.5 lakh crore.

Expenditure on Health and Education:

• Historically, in India, budget allocations towards health and education have been lower than required.
• These allocations were in the range between 2.5% to 1.5%of the total government expenditure.
• However, the Revised Estimates show that even those targets have not been met in the current financial year.
• The Budget 2024-25 estimated to be 1.9% of the total expenditure for the Union Ministry of Health, continuing the trend of staying below the 2% mark from 2022-23.

Reduction in Core Schemes:

• The Revised Estimates for the outlays on ‘core of core schemes’ show the reduction in funds that was meant for the most disadvantaged sections of society, such as SCs, STs and minorities.
• For example, the Umbrella Scheme for Development of Scheduled Castes is Rs 6,780 (Revised Estimates) crore against the Budget Estimates of Rs 9,409 crore.
• For Scheduled Tribes, the Revised Estimates is Rs 3,286 crore against a Budget Estimates of Rs 4,295 crore.
• For minorities, the fall has been the sharpest.

Recently, the Union Finance Minister informed that nearly 25 crore people have been raised from multi-dimensional poverty in the last 10 years.

General Studies Paper -3

Context: Recently, the Union Finance Minister presented the Union Budget for the next financial year (2024-25) in the Parliament.

 Key Takeaways in the Budget

Capital Expenditure (2024-25):

• It was raised to ₹11.1 lakh crore for FY25 from the ₹9.5 lakh crore in the previous fiscal.
• This would be4% of the GDP.
• The proportion of capital expenditure (excluding grant in aid) to total expenditure stands at 23.31%.
• In 2024-25, the total expenditure is estimated at ₹47.66 lakh crore, a 6.1% increase over the revised estimates of 2023-24.

Fiscal Prudence:

• The budget estimates for the fiscal deficit for FY 25 was pegged at 5.1%, down from the revised estimates of 5.8% last fiscal year.

Achievement of Taxation Reform:

• Direct Taxes: 
• Direct tax collections have more than tripled in the last ten years, with return filers increasing by 2.4 times.
• Reduction and rationalisation of tax rates implemented:
• No tax liability for income up to Rs 7 lakh under the new tax scheme, increased from Rs 2.2 lakh in FY 2013-14.
• Introduction of Faceless Assessment and Appeal for greater efficiency and transparency.
• Indirect Taxes:
• GST unified the indirect tax regime, reducing compliance burdens.
• GST transition viewed positively by 94% of industry leaders; 80% reported supply chain optimization.
• GST tax base more than doubled; average monthly gross GST collection nearly doubled to Rs 1.66 lakh crore.
• States benefited from SGST revenue, showing a higher tax buoyancy post-GST.
• Customs:Import release time significantly reduced at Inland Container Depots, air cargo complexes, and sea ports.

State-wise Allocation of Central Taxes and Duties:

Allocation to Ministries:

• The Union Budget allocated a massive ₹6.21 lakh crore for the Defence Ministry, followed by Road Transport & Highways with ₹2.78 lakh crore and Railways with ₹2.55 lakh crore.

For Example:

• Education budget for 2024-25 seen at Rs 1.25 lakh crore, 14.5% higher than revised estimate of Rs 1.1 lakh crore for 2023-24.
• Housing: New housing plan for the middle class; 2 crore houses to be built under PM Aavas Yojana; Pradhan Mantri Awas Yojana (Grameen)close to achieving target of 3 crore houses, additional 2 crore targeted for next 5 years.
• Agriculture: Investment in post-harvest activity by both private and public sector support; Empowering dairy farmers; More efforts to control Foot and mouth disease; Application of Nano-DAP to be expanded in all agro-climatic zones; Crop insurance has been given to 4 crore farmers under PM Fasal Bima Yojana; Five integrated Aqua Park to be set up; Blue Economy 2.0 to promote aquaculture; Implementation of Pradhan Mantri Matsaya Sampada Yojana; and Direct financial assistance to 11.8 crore farmers under PM-KISAN.
• Renewable energy:Viability gap funding for wind energy; Setting up of coal gasification and liquefaction capacity; Phased mandatory blending of CNG, PNG and compressed biogas; Financial assistance for procurement of biomass aggregation machinery; 1 crore households will be enabled to obtain up to 300 units of free electricity per month.

Health Expenditure:

• The expenditure for the Department of Health & Family Welfare for FY25 is Rs. 10,000 crores more than the revised estimates of the current FY.
• But the allocation to the Union Ministry of Health is estimated to be 1.9% of the total expenditure, continuing the trend of staying below the 2% mark from 2022-23.
• Healthcare facilities under Ayushman Bharat will be extended to all Asha workers, Aanganwadi workers.
• Vaccination of 9-14 year old girls for cervical cancer
• Saksham Anganwadi and Poshan 2.0to be expedited for improved nutrition delivery, early childhood care and development

Railway Budget in a Glance:

• Railway projects have been identified under the PM Gati Shakti Yojana for enabling multi-modal connectivity.
• It aims to ‘improve logistics efficiency and reduce costs’.
• Railway Infrastructure: To expand India’s railway infrastructure, three major railway economic corridors were announced.
• These include an energy, mineral and cement corridor, a port connectivity corridor and a high traffic density corridor.
• It emphasised that these corridors, along with dedicated freight corridors, aim to accelerate the country’s GDP and reduce logistic costs.
• Additionally, there will be 40,000 normal train bogies to be converted into high-speed Vande Bharat ones.

Conclusion:

• The Interim Budget is a temporary budget that is presented by the government in an election year. It ranged from railways, tourism, healthcare, technology, aviation, green energy, aquaculture, housing, etc.
• However, the new government will present its full budget after the newly elected Lok Sabha, outlining the government’s financial roadmap for the entire fiscal year.

General Studies Paper -2

Context: Recently, the Union Cabinet approved the signing and ratification of a Bilateral Investment Treaty (BIT) with the United Arab Emirates (UAE) to significantly boost bilateral economic engagement, including Foreign Direct Investment (FDI).

About the Bilateral Investment Treaty (BIT):

• It is an agreement between two countries that sets the terms and conditions for private investment by nationals and companies of one state in another.
• It is a part of the International Investment Agreements (IIAs)under the United Nations Conference on Trade and Development (UNCTAD).
• It is expected to improve investor confidence, increase foreign investments and overseas direct investment opportunities, and have a positive impact on employment generation.

India and BIT

• India has been actively negotiating Bilateral Investment Treaties (BITs) with various countries to boost foreign direct investment (FDI).
• India’s Position on BITs:Recent Interim Budget highlighted that India is negotiating BITs with trade partners to boost FDI inflow.
• It emphasised that these negotiations are being conducted from a position of strength.
• India’s Model BIT:India adopted the model BIT in 2016.
• The objective is to provide appropriate protection to foreign investors in India and Indian investors in the foreign country, while maintaining a balance between the investor’s rights and the Government obligations.
• India’s Economic Integration with Western Nations:India is pursuing economic integration with western nations such as the United Kingdom (UK) and the European Union through Free Trade Agreements and investment treaties.

Significances of BITs

• Investor Confidence: BITs can boost the confidence of investors by providing a level playing field and non-discrimination in all matters.
• They provide an independent forum for dispute settlement by arbitration.
• Foreign Direct Investment (FDI):BITs can help increase the inflow of FDI.
• For example, India is negotiating BITs with trade partners to improve its ease of enforcing contracts, which is currently a hurdle for FDI inflows.
• The FDI inflow during 2014-23 was $596 billion.
• Economic Growth: By attracting foreign investment, BITs can contribute to economic growth and employment generation in the host country.
• Legal Protection:BITs offer legal protection to investors, which can be particularly important for investments in countries where the domestic legal framework is unpredictable or unstable.
• BITs impose obligations under international law on host states to protect foreign investment from the other state.

Challenges associated with the BITs

• Unequal Distribution of Rights and Obligations: BITs often create an unequal distribution of rights and obligations between developed countries, which are the source of most foreign direct investment, and developing countries, which are mainly recipients.
• Risk of Litigation: BITs lead to an increased risk of litigation. Some developing countries have been sentenced by international arbitral tribunals to pay millions of dollars as a result of alleged violations to these treaties.
• Ambiguous Legal Standards: Most of these awards are based on expansive interpretations of ambiguous legal standards and concepts such as ‘fair and equitable treatment’ and ‘indirect expropriation’.
• Limitations in Addressing Issues:BITs can’t address every problem that companies face abroad.
• For example, American companies in China face challenges in protecting and enforcing their intellectual property rights (IPR).
• Loss of Policy Space: BITs can lead to a loss of policy space for the host country, limiting its ability to regulate in the public interest.
• Treaty Shopping:Investors might take advantage of the most favourable nation clause in BITs to sue a host country under a treaty to which it is not a party.

Conclusion and Way Forward

• Current trends in the world economy and global politics provide evidence that the global south is at ‘normal capitalism’, bringing with it new patterns of uneven development, inequality, and injustice.
• They are seen as a tool to boost the confidence of investors by assuring a level playing field and non-discrimination in all matters while providing for an independent forum for dispute settlement by arbitration.
• However, the negotiation and implementation of BITs can be complex and require careful balancing of interests.
• The challenges need for careful negotiation and implementation of BITs, balancing the interests of both the investing and host countries.

General Studies Paper -1

Context: Recently, the Union Finance Minister informed that nearly 25 crore people have been raised from multi-dimensional poverty in the last 10 years.

About the Poverty

• It is a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living, such as housing, clean water, healthy food, and medical attention.
• Traditionally, poverty is calculated based either on income levels or, if income data are not available, on expenditure levels.
• The ‘poverty lines’ are actually expenditure levels that are considered minimum enough for someone to be called poor.
• A person who is poor can suffer multiple disadvantages like poor health or malnutrition, a lack of clean water or electricity, poor quality of work or little schooling.
• Focusing on one factor alone, such as income, is not enough to capture the true reality of poverty.

What is the Multidimensional Poverty Index (MPI)?

• Globally, the MPI uses 10 indicators covering three main areas:
• Health includes nutrition and child & adolescent mortality indicators.
• Education includes years of schooling and school attendance indicators.
• Standard of living includes six household-specific indicators: housing, household assets, type of cooking fuel, access to sanitation, drinking water, and electricity.
• The Indian MPI has two additional indicators:
• Maternal Health(under the health dimension) and;
• Bank Accounts(under the standard of living dimension).

Multidimensional Poverty in India Since 2005-06:

• It is published by NITI Aayog with technical inputs from the United Nations Development Programme (UNDP) and the Oxford Policy and Human Development Initiative (OPHI).
• It uses indicators covering three main areas: health, education, and standard of living.
• It was found to decline from 29.17% in 2013-14 to 11.28% in 2022-23with about 24.82 crore people escaping poverty during this period.
• At the States’ level, Uttar Pradesh topped the list with 5.94 crore people escaping poverty followed by Bihar at 3.77 crore and Madhya Pradesh at 2.30 crore.
• However, the largest number of poor people in the world — 228.9 million — lived in India in 2020.

Related Data

• The NFHS-5 (2019-21): About 96% of India’s populationare multidimensionally poor compared to 24.85% of the population that was multidimensionally poor based on the 2015-16 (NFHS-4).
• It shows that nearly 135 million individuals escaped poverty during the 5-year period.
• A UNDP study highlighted that 415 million Indians came out of multidimensional poverty in the last 15 years.
• According to the IMF, the ‘extreme poverty’ was as below 1% in 2020 due to the Pradhan Mantri Garib Kalyan Ann Yojana (PMGKY).

Reason for Poverty in India

• Economic Slowdown and Policy Decisions:The economy has been slowing for nine quarters prior to the outbreak of the novel coronavirus pandemic.
• Unemployment had reached a 45-year high in 2017-18.
• Child Malnutrition:India’s poor score comes almost entirely from the child stunting and wasting
• Almost 35% of Indian children are stunted, and although this is much better than the 54.2% rate of 2000, it is still among the world’s worst.
• Almost 17.3% of Indian children under five are wasted, which is the highest prevalence of child wasting in the world.
• Pandemic Impact:The pandemic led to a ‘sudden increase in poverty’.
• Over an eight month period (March to October 2020), average incomes of the bottom 10% of households were lower by Rs 15,700.
• Homelessness:Increasingly, a large number of persons are being rendered homeless across the world.
• There are both natural as well as man-made reasons that are contributing to this crisis

Government Efforts

• Interventions through Policies/Schemes:The government has expanded the social security net through schemes like Pradhan Mantri Suraksha Bima Yojana (Accident Insurance), Atal Pension Yojana (Unorganized Sector), and Pradhan Mantri Jeevan Jyoti Yojana (Life Insurance).
• The MUDRA Yojana has enabled about eight crore people to start new businesses.
• Rural Development:The Ministry of Rural Development has implemented various programs to increase livelihood opportunities, empower rural women, provide a social safety net, and improve infrastructure in rural areas.
• The main focus is on increasing livelihood opportunities, empowering rural women, providing a social safety net, skilling rural youth, infrastructure development, increasing land productivity, etc.
• Nutrition and Health:Despite the progress in economic development, a significant portion of the Indian population cannot afford healthy food.
• Initiatives like Poshan Abhiyan and Anaemia Mukt Bharat have been launched to address this issue.
• State-Level Efforts: States like Uttar Pradesh, Bihar, and Madhya Pradesh have recorded the largest decline in the number of multidimensionally poor people.

Various Committees

• There are various committees formed with the objective to estimate the number of people living in poverty in India. These are:
• The Working Group of 1962;
• V N Dandekar and N Rath in 1971;
• Y K Alagh in 1979;
• D T Lakdawala in 1993;
• Suresh Tendulkar in 2009;
• C Rangarajan in 2014.
• The Lakdawala Committee assumed that health and education is provided by the state.
• Therefore, expenditure on these items was excluded from the consumption basket it proposed. Since expenditure on health and education rose significantly in the 1990s, the Tendulkar Committee included them in the basket.

A Way Forward

• Poverty eradication remains India’s top priority, but there is still work to be done. Strategies such as increasing livelihood opportunities, empowering rural women, providing a social safety net, and skilling rural youth, infrastructure development, increasing land productivity, etc seem to be effective in reducing poverty.
• There is a need to address the inequalities of income, education, and opportunity that are all interconnected that can foster social cohesion and boost general well-being.
• It is essential that the government should provide education and health services free of cost for the deserving citizens and those from the socially oppressed classes.

General Studies Paper -1

Context: Recently the Odisha government announced measures for the welfare of tribal Population.

• The Odisha government announced the launch of LABHA (Laghu Bana Jatya Drabya Kraya) Yojana, for minor forest produce (MFP).
• It has also approved the establishment of aCommission for the Preservation and Promotion of the Tribal Languages of the Scheduled Tribes of Odisha.

LABHA (Laghu Bana Jatya Drabya Kraya) Yojana

• It is a 100% State-funded minimum support price (MSP)scheme for minor forest produce (MFP). The MSP will be determined every year by the State government.
• Under the scheme, a primary collector (a tribal person) will be able to sell the MFP.
• It will be collected at the procurement centers by the Tribal Development Cooperative Corporation Limited of Odisha (TDCCOL).
• These procurement centers will be managed by SHGs and any other notified agencies assisted by TDCCOL.
• As 99% of primary collectors are tribals and the majority of them are women, the LABHA Yojana will integrate the efforts with Mission Shakti’s Women SHGs(self help groups).
• The procurement automation system will be set up to capture the total collection of MFPs, the details of the primary collectors, and the procurement point.
• Significance: The LABHA Yojana will also eliminate the possibility of distress sale of produce to middlemen

Commission for the Preservation and Promotion of the Tribal Languages

• The Commission will encourage multilingual education, document and preserve tribal languages, promote the use and protect linguistic rights.
• The Commission will make efforts for inclusion of tribal languages like Ho, Mundari, Kui and Saora in the 8th Schedule of the Indian Constitution

Tribal Population in Odisha

• Odisha is home to 62 distinct tribes, including 13 Particularly Vulnerable Tribal Groups (PVTG).
• The Scheduled Tribes in Scheduled Areas constitute approximately 09%of the total tribal population in the State.
• It ranks as the third largest concentration of a tribal population, trailing behind Madhya Pradesh and Maharashtra.
• There are 21 tribal languages in Odisha.

General Studies Paper -1

Context: Rajasthan and Madhya Pradesh signed a Memorandum of Understanding (MoU) with the Union Ministry of Jal Shakti to implement the Modified Parbati-Kalisindh-Chambal-ERCP (Modified PKC-ERCP) Link Project.

• The project envisages integration of the long-pending PKC river link project with the Eastern Rajasthan Canal Project, under the national perspective plan of interlinking of rivers (ILR) programme.
• PKC: The Parbati-Kalisindh-Chambal (PKC)link project is one of the 30 links included in the National Perspectives Plan.
• ECRP:The Eastern Rajasthan Canal Project (ERCP) is aimed at intra-basin transfer of water within the Chambal basin, by utilising surplus monsoon water.
• Linking of Both Project:Rajasthan came up with the proposal of the ERCP in 2019, and to utilise water resources optimally, the Task Force for Interlinking of Rivers (TFILR) discussed its merger with the PKC link project.
• This integration was approved by the Special Committee for Interlinking of Rivers in 2022.
• The Government of India formulated a National Perspective Plan (NPP) for interlinking of rivers (ILR) in 1980. 
• National Water Development Agency (NWDA)has been entrusted with the work of Interlinking of Rivers under the National Perspective Plan (NPP).
• The NPP has two components, viz; Himalayan Rivers Development Component and Peninsular Rivers Development Component. 
• 30 link projectshave been identified under the NPP.
• Under theHimalayan Rivers Development Component of the NPP, 3 link projects, viz; Kosi-Mechi Link project , Kosi-Ghaghra link project and Chunar-Sone Barrage link project
• It envisages transfer of water from Kosi, Ghaghra and Gandak rivers flowing down from Nepal to the other rivers in the State of Bihar.
• Peninsular Rivers Development Component is divided intofour major parts:
• Interlinking of Mahanadi-Godavari-Krishna-Cauvery Rivers: This part involves interlinking of the major river systems where surpluses from the Mahanadi and the Godavari are intended to be transferred to the needy areas in the south, through Krishna and Cauvery rivers.
• Interlinking of west flowing rivers, north of Bombay and south of Tapi:The scheme provides for taking water supply canal to the metropolitan areas of Mumbai; it also provides irrigation in the coastal areas in Maharashtra.
• Interlinking of Ken-Chambal: The scheme provides for a water grid for Madhya Pradesh, Rajasthan and Uttar Pradesh and an interlinking canal backed by as much storage as possible.
• Diversion of other west flowing rivers: The high rainfall on the western side of the Western Ghats runs down into numerous streams which discharge into the Arabian Sea.
• The construction of an interlinking canal system backed up by adequate storage could be planned to meet all requirements of Kerala as also for transfer of some waters towards east to meet the needs of drought affected areas.

Significance of River Linking Projects

• Reduction of Water Scarcity:Interlinking rivers can help transfer surplus water from water-rich regions to water-deficient areas, addressing water scarcity issues.
• Improved Water Availability for Agriculture:Increased water availability in dry regions can enhance agricultural productivity, supporting the cultivation of crops and promoting food security.
• Mitigation of Floods:Interlinking rivers can help distribute excess water during periods of heavy rainfall, reducing the risk of floods in specific regions.
• Increased Hydropower Potential:The construction of reservoirs and canals for interlinking projects can create opportunities for hydropower generation, contributing to a cleaner and more sustainable energy mix.
• Improved Navigation:Connecting rivers can enhance the navigability of waterways, facilitating transportation of goods and reducing the dependence on road and rail networks.
• Drought Mitigation:By redistributing water resources, interlinking projects can help mitigate the impact of droughts by providing water to affected regions.
• Job Creation:The construction and maintenance of interlinking infrastructure can create job opportunities, contributing to economic development.
• Conflict Resolution:River interlinking projects can potentially reduce inter-state disputes over water resources by providing a more equitable distribution of water.

Concerns with the River Linking Projects

• Ecosystem Disruption:Altering natural river courses and diverting water can disrupt ecosystems, leading to habitat loss, changes in biodiversity, and potential extinction of species.
• Displacement of Communities:The construction of dams, reservoirs, and canals for river interlinking can result in the displacement of communities, leading to social and economic hardships for affected populations.
• Inter-State Disputes: River interlinking projects often involve multiple states, and disagreements can arise over water sharing, leading to inter-state disputes.
• Financial Viability: The construction of large-scale infrastructure for river interlinking projects can be economically challenging, with costs often exceeding initial estimates.
• The return on investment for such projects may take a long time, raising questions about their financial viability.
• Seismic Risks: Areas prone to earthquakes may face increased risks due to the construction of large dams and other infrastructure associated with river interlinking.
• Maintenance Issues:The proper operation and maintenance of the interconnected water infrastructure are crucial for the success of these projects. Neglecting maintenance can lead to system failures and adverse consequences.
• Community Resistance:Local communities and environmental activists may oppose river interlinking projects due to concerns about their impact on the environment, livelihoods, and cultural heritage.

Conclusion

• Addressing the concerns requires comprehensive planning, environmental impact assessments, community engagement, and transparent decision-making processes.
• Sustainable water management practices, incorporating modern technologies and adaptive strategies, are essential to mitigate the potential negative consequences of river interlinking projects.