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Today's UPSC current affairs 12-13 June 2024 from The Hindu and Indian Express

A Reboot at G7

General Studies Paper:

  • GS Paper II: International Relations

  • Optional Subject: Political Science and International Relations

  • Essay Topic: "India's Foreign Policy and Global Diplomacy"

Summary:

Introduction:

  • PM Narendra Modi's first foreign trip in his third term to the G7 summit in Italy, aiming to improve relations with the US and Europe.

  • The trip marks a significant legacy of Modi’s tenure, focusing on reenergizing ties with Western leaders.

G7 Summit and Global Dynamics:

  • The G7 meeting in Italy's Isano marks its 50th anniversary, showcasing Western unity against the backdrop of Sino-Russian alliances.

  • Modi’s participation symbolizes India’s strategic diplomacy, leveraging new opportunities and addressing diplomatic challenges.

Engagement with Global Leaders:

  • Modi will engage with Xi Jinping and Vladimir Putin at the Shanghai Cooperation Organisation summit in Kazakhstan.

  • Strengthened relations with Italian PM Giorgia Meloni, supporting a transformation of Italy’s ties with India.

  • Modi’s brief address at the summit emphasized India’s successful democracy and positive international relations.

India's Role and Challenges:

  • The return of competitive politics and the reaffirmation of democracy in India bolster its position in global geopolitics.

  • Modi’s foreign policy aimed at recalibrating India’s relations with the West amidst conflicts like the Ukraine war and regional tensions.

  • Western appreciation of India’s democratic resilience enhances India’s international standing.

Specific Diplomatic Actions and Alliances:

  • G7's focus on enhancing cooperation with Africa and the Mediterranean, emphasizing security and economic development.

  • Modi’s visits to Arab and Mediterranean nations, addressing challenges in West Asia, migration, and economic ties.

  • Engagements with non-Western leaders from nations like Argentina, Brazil, Egypt, Kenya, and others, showcasing India’s diverse diplomatic outreach.

Strategic Objectives and Domestic Implications:

  • Modi’s non-attendance at the Ukraine peace conference highlights India’s nuanced stance on global conflicts.

  • The visit aims to reaffirm India’s democratic ideals and economic potential, aligning with global expectations.

Economic and Security Considerations:

  • India’s energy consumption and production position in global debates, including discussions on immigration and labor movement.

  • Contributions to global governance discussions, balancing India’s interests with broader geopolitical trends.

Concluding Insights:

  • Modi’s third-term diplomacy reflects a continuation and strengthening of India's role on the global stage.

  • The strategic engagements at the G7 and beyond highlight India’s proactive approach to international relations and global challenges.

Background:

The G7, comprising the world's major advanced economies, serves as a platform for addressing global economic and political issues. India's engagement with the G7 and Western nations reflects its strategic diplomacy, emphasizing democratic values and economic cooperation. PM Modi's attendance at the G7 summit during his third term underscores India's efforts to strengthen ties with the West amidst evolving global challenges, including the Ukraine conflict and rising Sino-Russian influence. This diplomatic effort aligns with India's broader goal of enhancing its international standing and addressing key global issues through active participation in multilateral forums.

Impact of Oriental Despotism and the Idea of Otherness

General Studies Paper:

  • GS Paper I: Indian Heritage and Culture, History, and Geography of the World and Society

  • Optional Subject: History, Political Science,Sociology

  • Essay Topic: "Understanding the Idea of Otherness in Historical Context"

Summary:

Concept and Historical Evolution:

  • Origins and Early Use:

  • Oriental despotism emerged in Greek thought, terms like "despot" and "despotism" established Greek identity and superiority over "barbarous" nations, notably Persians.

  • Aristotle viewed a clear foundation for the concept in his book "Politics," focusing on monarchy as suitable for societies perceived as barbarous, such as Persia.

  • Various Interpretations:

  • Medieval and Early Modern Period:

  • Byzantine Empire and medieval European authors sustained the idea, influenced by Aristotelian classification.

  • 18th Century:

  • François Bernier and Jean Bodin expanded the concept in relation to property rights and absolute power.

  • Montesquieu's "The Spirit of the Laws" associated despotism with a lack of separation between the ruler and the subjects.

  • Later Thinkers:

  • Thinkers like Karl August Wittfogel connected Oriental despotism to modern critiques of communist regimes.

Role in the Asiatic Mode of Production:

  • Hegel and Marx:

  • Hegel viewed Oriental despotism as the initial historical stage where individual autonomy was limited.

  • Marx associated despotism with property rights and political systems in Asiatic societies, which needed European colonialism to modernize and Westernize them.

  • Max Weber:

  • He explored economic and geographical factors, stressing a more controlled and centralized power in Asiatic societies.

Oriental Despotism and Modern Critique:

  • French and British Perspectives:

  • Montesquieu criticized Eastern political systems.

  • François Bernier criticized Mughal despotism in comparison with European systems.

  • 20th Century Revisions:

  • Wittfogel extended the concept to critique modern communist regimes.

Contemporary Analysis:

  • Oriental despotism shaped the modern European mind, and contemporary analysts show how the stereotype of Oriental despotism created a sense of otherness and perpetuated imperial ideologies.

Background :

The concept of Oriental despotism has its roots in ancient Greek thought, where it was used to contrast Greek democratic ideals with the perceived tyranny of Eastern rulers. Over centuries, the idea was shaped by European thinkers to justify colonial and imperial agendas, portraying Eastern societies as fundamentally different and inferior. The notion was further expanded and critiqued in the modern era to analyze totalitarian regimes, revealing its lasting influence on Western perceptions of the East.



Topic: Heatwaves as Disaster

General Studies Paper:

  • GS Paper III: Disaster Management

  • Optional Subject: Geography

  • Essay Topic: "Climate Change and Its Impact on India"

Summary:

Introduction:

  • The article discusses the inclusion of heatwaves as notified disasters under the Disaster Management Act (DM Act) of 2005.

  • Currently, heatwaves are not officially notified as disasters, requiring states to use their funds for management and relief.

Notified Disasters:

  • The DM Act was enacted post the 1999 Odisha super cyclone and the 2004 Indian Ocean tsunami.

  • Defines disasters as events causing substantial loss of life, destruction of property, or environmental damage, reducing community coping capacity.

  • Notified disasters allow states to draw from two funds: National Disaster Response Fund (NDRF) and State Disaster Response Fund (SDRF).

Current Status and Fund Utilization:

  • States can use the SDRF for 12 notified disasters (cyclone, drought, earthquake, fire, flood, tsunami, hailstorm, landslide, avalanche, cloudburst, pest attack, frost/cold waves).

  • Heatwaves are not a notified disaster, leading states to use their own resources.

  • Demand for notifying heatwaves as disasters due to their increased frequency and severity.

Statistics and Financial Allocations (FY 2023-24):

  • Allocations for SDRF and NDRF for various states, showing disparities in fund distribution.

  • Example allocations include Andhra Pradesh (SDRF: 1,312.52 crores, NDRF: 493.6 crores), Bihar (SDRF: 1,664.68 crores, NDRF: 861.4 crores), and Maharashtra (SDRF: 3,788.8 crores, NDRF: 1,820 crores).

Impact and Challenges of Heatwaves:

  • Increased frequency of heatwaves, exacerbating risks for vulnerable populations.

  • Heatwaves cause health issues like heat stroke and affect outdoor workers.

  • States like Andhra Pradesh, Odisha, and Kerala have added heatwaves to their SDRF list despite not being a nationally notified disaster.

Issues and Recommendations:

  • States' demand for heatwaves to be officially recognized to access NDRF.

  • Finance Commission (FC) recommendations currently do not support this.

  • The need for a clear provision under the DM Act for compensating victims and managing heatwave impacts.

Government Response and Future Prospects:

  • Increased heat-related deaths and the need for preventive measures.

  • Allocation discrepancies and practical difficulties in fund utilization.

  • Emphasis on improving governance, infrastructure, and proactive measures to handle heatwaves efficiently.

Background :

The inclusion of heatwaves as a notified disaster under the Disaster Management Act has been a topic of debate due to the increasing frequency and severity of heatwaves in India. Notified disasters allow states to access national funds, reducing financial burdens during crises. Currently, states use their own funds, leading to calls for policy changes. The Finance Commission's recommendations play a crucial role in disaster fund allocations, but heatwaves have yet to be officially recognized. The discussion highlights the need for better preparedness and governance to manage the impacts of climate change effectively.



Topic: India's Looming Financial Crisis

General Studies Paper:

  • GS Paper III: Indian Economy and Issues Relating to Planning, Mobilization of Resources, Growth, Development, and Employment

  • Optional Subject: Economics

  • Essay Topic: "Economic Growth and Financial Stability: The Indian Context"

Summary:

Introduction:

  • Rapid credit growth, despite promises of prosperity, can lead to financial crises, as explained by economists Carmen Reinhart and Kenneth Rogoff.

  • The narrative that "this time is different" drives optimism about India’s financial future, focusing on infrastructure, innovation, and inclusion.

Current Financial Situation:

  • Analysts predict a surge in personal loans and stagnant lending to industry as a warning sign.

  • In December 2023, the IMF highlighted India’s financial sector’s weak performance in bank lending and NPAs.

  • The National Council of Applied Economic Research reported a 20% increase in bank lending, mostly in personal loans, while industrial lending struggled.

Concerns and Risks:

  • Rapid credit growth diverts attention from core economic issues, such as debt and fiscal deficits.

  • Expansion in lending leads to increased financial sector vulnerability, often resulting in financial crises when loans cannot be repaid.

  • High household and business debt make repaying loans difficult, potentially causing an economic downturn.

Signs of a Looming Crisis:

  • Bad credit from unchecked market optimism, high corporate investment, and high consumer spending.

  • Overvalued exchange rates and lack of proper data handling by Indian authorities are key signals of a looming financial crisis.

  • Economic and financial policies pushed growth rates, but increased bad debt and a weakened financial sector followed.

Problems in Financial Services:

  • Liberalization has led to an unsustainable financial services industry.

  • Major financial institutions, scheduled commercial banks, and NBFCs face high NPAs, reducing lending capacity.

  • Over-competition and low returns on investments create financial instability.

Impact on the Economy:

  • High household debt at 40% of GDP, with household debt-to-income ratio at 12%, among the highest globally.

  • Household spending, often driven by credit cards and loans, can lead to defaults and financial strain.

  • The 2024 election results may influence economic policies, but the risk of a financial crisis remains high due to systemic issues.

Examples and Case Study:

  • Rohans, an average family, illustrate the dangers of over-leveraging debt for consumption, leading to financial instability.

  • Households relying heavily on loans face increased pressure to meet financial obligations.

Government and Policy Responses:

  • The Reserve Bank of India’s (RBI) efforts to curb inflation and manage interest rates are crucial.

  • Policymakers are committed to structural reforms but face challenges in ensuring stable economic growth.

  • Immediate focus on addressing financial vulnerabilities and promoting sustainable lending practices is necessary.

Background :

India's financial sector faces significant challenges due to rapid credit growth and high levels of household debt. Historical precedents show that such economic patterns can lead to financial crises. The IMF and economic analysts warn about the fragile state of India's financial services, emphasizing the need for prudent policies and robust financial regulation. The upcoming 2024 elections add to the uncertainty, with economic reforms being a crucial agenda. Understanding these dynamics is essential for predicting and mitigating potential financial instabilities in India's future.

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