UPSC CURRENT AFFAIRS – 27 April 2024

InstaLinks : Insta Links help you think beyond the issue but relevant to the issue from UPSC prelims and Mains exam point of view. These linkages provided in this ‘hint’ format help you frame possible questions in your mind that might arise(or an examiner might imagine) from each current event. InstaLinks also connect every issue to their static or theoretical background. This helps you study a topic holistically and add new dimensions to every current event to help you think analytically.

InstaLinks : Insta Links help you think beyond the issue but relevant to the issue from UPSC prelims and Mains exam point of view. These linkages provided in this ‘hint’ format help you frame possible questions in your mind that might arise(or an examiner might imagine) from each current event. InstaLinks also connect every issue to their static or theoretical background. This helps you study a topic holistically and add new dimensions to every current event to help you think analytically.

Table of Contents:

GS Paper 3:

• India’s declining net Household Savings

Facts for Prelims (FFP)

• Reports in News

• UNCTAD rebranded as ‘UN Trade and Development’

• Weapon-free outer space

• Corporate Sustainability Due Diligence Law

• Marrakesh Agreement

• Network as a Service (NaaS)

• Climate Technology Centre and Network (CTCN)

Mapping

• Blue Whales makes a comeback in Seychelles

India’s declining net Household Savings

#### GS Paper 3

Syllabus: Indian Economy

Source: BBC

Context: Recent data from the Reserve Bank of India reveals that India’s net household savings are at a 47-year low, standing at 5.3% of the GDP in the fiscal year 2023, down from 7.3% in 2022.

• This decline is accompanied by a sharp increase in household debt (at 5.8% of GDP) reaching the second-highest level since the 1970s.

What is the Household Saving Rate?

The Household Saving Rate refers to the percentage of disposable income that households save instead of spending on consumption. It is a key economic indicator that reflects the propensity of households to save for the future.

Household savings consist of three main parts:

• Financial assets: This includes cash, bank deposits, retirement funds, insurance policies, stocks, and other investments.

• Physical assets: These are investments in tangible assets like real estate, land, and property.

• Gold and silver ornaments: Savings in the form of precious metals like gold and silver jewellery or bullion.

A higher saving rate indicates greater financial prudence and potential for investment, while a lower saving rate may suggest higher consumer spending and less savings for future needs.

Household net savings are the total money and investments families have, like deposits, stocks and bonuses, minus any money they owe, like loans and debt.

Why are domestic savings important for India’s economy?

Domestic savings are vital for India’s economy as they fuel investment in key sectors like infrastructure and industries. This capital formation supports economic growth, job creation, and prosperity.

What is Household debt?

Household debt refers to the total amount of money that individuals owe to creditors, such as banks, financial institutions, or other lenders.

Reasons for declining Household savings in India and Increasing Household Debt:

Reasons for Declining Household Savings in India | Reasons for Increasing Household Debt

Low-interest rates discourage saving | Higher borrowing for consumption, including consumer durables

Rising inflation reduces purchasing power | Increased reliance on debt to fund expenses and investments

Global Economic uncertainty (such as the Russia-Ukraine war, and Gaza Crisis) led to precautionary saving | Growth in non-mortgage loans, such as farm and business loans

Changing consumer mindset favouring current consumption over saving for the future | Credit widening, with more borrowers taking out loans, rather than credit deepening

Lack of adequate financial literacy and planning |

Increasing costs of living outpacing income growth |

As households borrow more to support consumption, their savings diminish. Increased borrowing means more income goes toward debt repayment, reducing the amount available for savings.

The fall in household savings can have several macroeconomic implications:

• Increased household debt: The fall in household savings means people have less money set aside for the future, which can lead to more borrowing.

• Impact of high-interest rates: Policy measures like higher interest rates aimed at controlling inflation can inadvertently lead to increased household debt levels, potentially trapping them in a debt cycle.

• Effect on demand: High-interest rates can weigh on households’ ability to consume, thereby reducing demand in the economy.

• Fragility and joblessness: This shift towards a more financialized economy could make the economy fragile and potentially lead to job losses

• Rising inequality – The rise in financial liabilities with falling asset levels could be a sign of rising inequality.

• Dependence on foreign capital– A dip in household savings would lead to more dependence on foreign capital to fund growth.

Steps to Increase Household Savings in India:

• Implement initiatives to enhance financial literacy among households, empowering them to make informed decisions about savings and investments.

• Introduce tax incentives or deductions for savings instruments such as retirement accounts, fixed deposits, and insurance policies to encourage households to save more.

• Government Savings Schemes: Promote government-sponsored savings schemes like the Public Provident Fund (PPF), National Savings Certificate (NSC), and Sukanya Samriddhi Yojana (SSY) to attract households to invest in safe and secure avenues.

• Employer Contributions: Encourage employers to contribute to their employees’ retirement savings through schemes like the Employees’ Provident Fund (EPF) and the National Pension System (NPS).

• Financial Inclusion: Expand access to banking and financial services in rural and underserved areas to include more households in the formal financial system, offering them opportunities to save.

Steps to Reduce Household Debt in India:

• Debt Counseling Services: Establish debt counselling services to provide guidance and support to households struggling with debt management,

• Regulation of Lending Practices: Implement stricter regulations on lending practices by financial institutions to prevent predatory lending and discourage households from taking on excessive debt burdens.

• Debt Relief Programs: Introduce debt relief programs or schemes to assist households facing financial hardship esp. farmers.

• Alternative Financing Options: Promote alternative financing options such as peer-to-peer lending, microfinance, and community-based savings and credit groups as alternatives to traditional banking loans, offering households access to affordable credit sources with reasonable terms and conditions.

Conclusion:

While some interpret reduced savings in India as a sign of confidence in future income prospects, others express concerns about financial fragility and sustainability, especially given India’s low per capita income among G20 nations. The situation underscores the delicate balance between consumption aspirations, inadequate public amenities, and income instability for Indian households.

Insta Links:

Household Consumption Expenditure Survey 2022-23

Prelims Link:

As per the NSSO 70th Round “Situation Assessment Survey of Agricultural Households”, consider the following statements: (UPSC 2018)

• Rajasthan has the highest percentage share of agricultural households among its rural households.

• Out of the total agricultural households in the country, a little over 60 percent belong to OBCs.

• In Kerala, a little over 60 percent of agricultural households reported to have received maximum income from sources other than agricultural activities.

Which of the statements given above is/are correct?

(a) 2 and 3 only (b) 2 only (c) 1 and 3 only (d) 1, 2 and 3

Ans: C

Q2. In a given year in India, official poverty lines are higher in some States than in others because (UPSC 2019)

(a) poverty rates vary from State to State (b) price levels vary from State to State (c) Gross State Product varies from State to State (d) quality of public distribution varies from State to State

Ans: B

UNCTAD rebranded as ‘UN Trade and Development’

#### Facts for Prelims (FFP)

Source: UNCTAD

Context: UNCTAD, the United Nations Conference on Trade and Development, has undergone a significant rebranding as “UN Trade and Development” to mark its 60th anniversary.

• This strategic move reflects its commitment to enhancing its impact and amplifying its voice on behalf of developing countries.

• The rebranding initiative includes a new visual identity aimed at better reflecting the organization’s work and values.

• The organization will adopt its new name and logo across all official channels in the six UN languages.

About UNCTAD:

The United Nations Conference on Trade and Development (UNCTAD) is a permanent intergovernmental organization that promotes the interests of developing countries in world trade.

It was established by the United Nations General Assembly on December 30, 1964 and has its headquarters in Geneva.

UNCTAD’s work focuses on trade, development, finance, technology, investment, and sustainable development.

It collects data, conducts research, and analyses policies to help countries frame policies in these areas.

UNCTAD also outlines recommendations for realigning the global debt architecture with developing countries’ needs.

Weapon-free outer space

#### Facts for Prelims (FFP)

Source: UN

Context: Russia blocks a US and Japan-sponsored draft resolution urging against space-based nuclear weapons after its amendment extending the ban to all weapons failed to pass.

• The resolution called for all states, particularly those with significant space capabilities, to contribute to the peaceful use of outer space and prevent an arms race there.

However, the Security Council rejected the resolution with 13 members in favour, one against (Russia), and one abstention (China).

Corporate Sustainability Due Diligence Law

#### Facts for Prelims (FFP)

Source: Forbes

Context: The European Parliament gave its approval for the Corporate Sustainability Due Diligence Directive (CSDDD), a significant step toward its formal adoption by the European Union.

• The CSDDD introduces a legal liability for companies regarding environmental and human rights violations within their supply chains.

• It applies not only to a company’s direct actions but also to its subsidiaries and supply chain.

• The CSDDD will be phased in over five years, affecting larger companies first.

Despite being diluted from its original proposal, the directive establishes a standard of corporate due diligence on sustainability issues, focusing on environmental concerns, climate change, and human rights.

Marrakesh Agreement

#### Facts for Prelims (FFP)

Source: WTO

Context: The World Trade Organization (WTO) commemorates the 30th anniversary of the Marrakesh Agreement, a milestone in global trade cooperation

About Marrakesh Agreement:

The Marrakesh Agreement, also known as the Agreement Establishing the World Trade Organization (WTO), was signed on April 15, 1994, in Marrakesh, Morocco by 123 nations.

The agreement defines the WTO’s structure, functions, and scope, and incorporates agreements negotiated under the General Agreement on Tariffs and Trade (GATT) and agreements concluded during the Uruguay Round.

The WTO officially came into existence on January 1, 1995.

Reports in News

#### Facts for Prelims (FFP)

Source: Multiple

Reports | Description

Global Report on Food Crises (GRFC) | The latest Global Report on Food Crises (GRFC) reveals that in 2023, nearly 282 million people across 59 countries and territories faced high levels of acute hunger

Key findings include acute malnutrition among children and women, and worsening situations for those displaced by conflict and disasters. E.g., Sudan faced the largest deterioration due to conflict, with 8.6 million more people facing high levels of acute food insecurity as compared with 2022

Drivers: Conflict, extreme weather events, and economic shocks were identified as key drivers of the crisis.

The GRFC is produced annually by the Food Security Information Network (FSIN) and launched by the Global Network Against Food Crises (GNAFC)

GNAFC was established in 2016 by the European Union, the UN’s Food and Agriculture Organization (FAO), and the World Food Programme (WFP). GNAFC aims to enhance coordination among existing initiatives and organizations to tackle the underlying causes of food crises.

UNESCO releases 2024 gender report of the Global Education Monitoring Report, titled “Technology on her Terms” | The report examines the impact of technology on girls’ education and the role of education in shaping future technological development. It highlights how ICT can help overcome barriers to education access, but also emphasizes the digital gender gap, negative effects of social media, and underrepresentation of women in STEM fields

UNESCO (est. 1945; HQ: Paris, France) the United Nations Educational, Scientific and Cultural Organization, is a specialized agency of the United Nations. Parent organization: United Nations Economic and Social Council. Objective: To build peace through international cooperation in Education, the Sciences, and Culture. India has been a member of the UNESCO since its inception

WHO-led study on Global Immunization | Global immunizations have saved at least 154 million lives over the past 50 years

The study analyzed the WHO’s Expanded Programme on Immunization (EPI), launched in 1974 to provide life-saving vaccines to all children globally.

Measles vaccination had the most significant impact on reducing infant mortality

The Global Alliance for Vaccines and Immunization (GAVI), launched in 2000, aims to expand vaccine coverage, with India becoming the first implementing country to donate to GAVI in 2014.

The World Health Organization (WHO) is a UN agency established in 1948 to promote global public health. Headquartered in Geneva, Switzerland, with six regional offices and 150 field offices worldwide, it sets health standards, provides technical assistance, and collects global health data.

PwC India released a report titled ‘Navigating India’s Transition to Sustainability’ | The report analyzes how companies are adjusting to SEBI’s Business Responsibility and Sustainability Reporting (BRSR) requirements, which mandate disclosures on environmental, social, and governance (ESG) aspects for the top 1000 listed companies.

BRSR aims to enhance compliance, consistency, and communication regarding non-financial disclosures, with SEBI introducing BRSR Core in 2023 to bolster the reliability of ESG disclosures.

IUCN released a report titled “Towards a Regenerative Blue Economy – Mapping the Blue Economy” | The report outlines the concept of a Regenerative Blue Economy (RBE), which prioritizes the effective regeneration and protection of ocean ecosystems while supporting sustainable economic activities and fair prosperity

Global initiatives like IUCN’s Nature 2030, Great Blue Wall Initiative, Clean Seas Campaign, Moroni Declaration and Cape Town Manifesto are examples of efforts promoting RBE

India’s Initiatives include Maritime India Vision 2030, Deep Ocean Mission, Pradhan Mantri Matsya Sampada Yojana, etc.

The International Union for Conservation of Nature (IUCN), headquartered in Gland, Switzerland, is a global organization founded in 1948. It focuses on nature conservation and sustainable use of natural resources, serving as a leading authority on global environmental issues.

‘Re-aligning Agri-food Policies for Protecting Soil, Water, Air & Biodiversity (SWAB) | Released by ICRIER

The report sheds light on the influence of agri-food policies on India’s agricultural production and emphasizes on synergy of SWAB for sustainable food systems.

Recommendations include offering premium MSP for low-carbon crops and exploring carbon markets for carbon farming credits.

ICRIER, established in 1981, is a non-profit economic think tank providing research and policy advice on economic matters to the Indian government and other entities. It aims to enhance policy-making by offering analytical research and objective policy recommendations.

Network as a Service (NaaS)

#### Facts for Prelims (FFP)

Source: FE

Context: In India’s rapidly advancing internet economy, embracing Network as a Service (NaaS) holds promise for enhancing user experiences.

What is Network as a Service (NaaS)?

Network as a Service (NaaS) is a cloud-like networking model where network resources are provided to customers on demand. It offers networking functionality without the need for customers to invest in hardware or manage infrastructure directly.

With over 850 million active internet users and a digital economy projected to contribute 20% to GDP by 2026, NaaS offers a cloud-like networking model, providing on-demand network resources without the need for direct infrastructure management.

Other such terminologies:

Concept | Explanation | Example

SaaS | Software as a Service (SaaS) delivers software applications over the internet. | Google Workspace (formerly G Suite), Microsoft Office 365, Salesforce, Dropbox

PaaS | Platform as a Service (PaaS) provides a platform allowing customers to develop, run, and manage applications without dealing with infrastructure. | Heroku, Microsoft Azure App Service, Google App Engine

IaaS | Infrastructure as a Service (IaaS) delivers virtualized computing resources over the Internet, allowing users to rent servers, storage, and networking resources. | Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), DigitalOcean

Climate Technology Centre and Network (CTCN)

#### Facts for Prelims (FFP)

Source: UNEP

Context: The Climate Technology Centre and Network (CTCN) celebrates its 10-year anniversary as a key player in advancing climate technology and innovation.

About Climate Technology Centre and Network (CTCN):

• Established as the implementation arm of the United Nations Framework Convention on Climate Change (UNFCCC) Technology Mechanism and hosted by the UN Environment Programme (UNEP), the CTCN facilitates the development and transfer of environmentally sound technologies for low-carbon and climate-resilient development.

• It operates through a global network of over 760 civil society, finance, private sector, and research institutions, providing technical assistance and capacity building to developing countries upon request.

• Over the past decade, the CTCN has funded over 300 technical assistance projects across 112 developing nations, supporting them in meeting their sustainable development commitments under the Paris Agreement.

• Through projects spanning various sectors such as green building standards, drought risk modelling, industrial energy efficiency, and policy development for e-mobility, the CTCN aims to catalyse climate resilience and innovation globally.

Blue Whales makes a comeback in Seychelles

#### Mapping

Source: TH

Context: Blue whales, the largest mammal on Earth, have made a remarkable return near the Seychelles after a 60-year absence. Commercial whaling activities decimated their populations, leading to an 89-97% decline. However, recent expeditions conducted by researchers revealed sightings of up to 10 blue whales in the region, a surprising and encouraging discovery.

About the Blue Whales:

It is the largest and loudest animal on the planet and inhabits all oceans except the Arctic. With an estimated lifespan of 80 to 90 years, they typically swim alone or in pairs, occasionally forming small groups. Their diet consists mainly of krill and marine crustaceans. Threats to blue whales include vessel strikes and historical commercial whaling, leading to their endangered status according to the IUCN.

About the Republic of Seychelles

It is Africa’s smallest country and is an archipelago of 155 islands situated in the Indian Ocean, southeast of mainland Africa. Seychelles boast beaches, coral reefs, nature reserves, and unique wildlife, including giant Aldabra tortoises. It is located in the northeast of Madagascar, with Kenya about 1,600 kilometres to the west.