UPSC CURRENT AFFAIRS – 8 July 2024
Kartavya Desk Staff
UPSC CURRENT AFFAIRS – 8 July 2024 covers important current affairs of the day, their backward linkages, their relevance for Prelims exam and MCQs on main articles
InstaLinks : Insta Links help you think beyond the current affairs issue and help you think multidimensionally to develop depth in your understanding of these issues. 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.
Table of Contents
GS Paper 1: (UPSC CURRENT AFFAIRS – 8 July 2024)
• American Declaration of Independence
American Declaration of Independence
GS Paper 3:
• How to Read India’s Balance of Payments
How to Read India’s Balance of Payments
• India’s Indigenous Defence Production
India’s Indigenous Defence Production
Content for Mains Enrichment (CME)
• Thazhakara creates People’s Biodiversity Register (PBR)
Thazhakara creates People’s Biodiversity Register (PBR)
Facts for Prelims (FFP)
• Aphelion Point
Aphelion Point
• Sea Groynes
Sea Groynes
• SEHER program
SEHER program
• Credit-Deposit (CD) ratios
Credit-Deposit (CD) ratios
• Indo-French Liver and Metabolic Disease Network (InFLiMeN)
Indo-French Liver and Metabolic Disease Network (InFLiMeN)
UPSC CURRENT AFFAIRS – 08 July 2024
#### GS Paper 1:
American Declaration of Independence
Syllabus: World History
Source: IE
Context: July 4 marked the 248th Independence Day of the United States. It was the day when the Declaration of Independence, the document which marked the foundation of the US as a union of states liberated from Britain, was signed.
What was the American War of Independence?
The American War of Independence, also known as the American Revolutionary War (1775-1783), was a conflict between the thirteen American colonies and Great Britain. The colonies sought to gain independence from British rule due to various grievances, including taxation without representation and a desire for self-governance. The war ended with the Treaty of Paris in 1783, where Britain recognized the sovereignty of the United States, leading to the establishment of an independent nation.
Circumstances leading up to the American Independence:
Circumstance | Description
Seven Years War | The end of the Seven Years’ War in 1763 and the transfer of Canada from France to England removed the fear of French attack from the minds of the Americans. They could now fully focus on countering the British adversities.
Granville Measures | British PM Granville passed a series of Acts affecting American colonies’ interests, such as The Sugar Act of 1764, The Stamp Act of 1765, and The Quartering Act. These measures were opposed by colonists who raised the slogan “No Taxation without Representation.”
Townshend Laws | In 1767, British minister Townshend imposed new taxes on glass, paper, tea, paints, etc. Americans protested these measures and boycotted British goods. The protest led to the Boston Massacre, where five Americans were killed by British soldiers.
Boston Tea Party | In 1773, the Tea Act imposed a tax on tea imports, sparking American protests. A group of Americans, dressed as Red Indians, boarded ships and threw tea bundles into the sea at Boston Harbor, an event known as the Boston Tea Party.
Philadelphia Congress | In 1774 and 1775, representatives of American colonies met in Philadelphia. They appealed to the British King to remove trade restrictions and not impose taxes without consent. Their appeal and the Olive Branch Petition were rejected.
Declaration of Independence | A pamphlet titled “Common Sense” advocated against hereditary monarchy and for democratic government, inspiring Americans to fight. On July 4, 1776, the American Declaration of Independence was adopted, emphasizing “Life, Liberty, and Pursuit of Happiness.”
Role of Enlightenment thinkers in the American Revolution:
• John Locke: Advocated for natural rights (life, liberty, property), social contract theory, and government by consent of the governed, influencing the Declaration of Independence and the U.S. Constitution.
• Thomas Paine: Wrote “Common Sense,” promoting republican government, equality, and the urgency of American independence.
• Benjamin Franklin: Facilitated the exchange of Enlightenment ideas between America and Europe, contributed to the Declaration of Independence, and negotiated the Treaty of Paris.
• Montesquieu: Advocated for separation of powers and influenced the structure of American government through ideas in “The Spirit of Laws.”
Consequences of the American Revolution:
Political Changes:
• Birth of the United States of America, was acknowledged under the Treaty of Paris (1783).
• Replacement of the Articles of Confederation with the U.S. Constitution (1787), establishing a federal republic with separation of powers.
• Introduction of a written constitution, separation of church and state, and a system of checks and balances.
Geopolitical Changes:
• France regained colonies; Spain recovered Minorca and Florida.
• England lost American colonies and faced increased national debt.
• Financial strain contributed to the French monarchy’s downfall, inspiring future revolutions.
Significance:
• Inspired European revolutions and promoted Enlightenment ideals.
• Demonstrated the feasibility of overthrowing oppressive regimes.
• Promoted ideas of individual liberty, equality, and democracy globally.
• Influenced future democratic movements and constitutional developments worldwide.
How the American Revolution impact India?
The American Revolution indirectly impacted India by inspiring ideas of liberty, democracy, and self-determination. It set a precedent for challenging colonial rule and sparked discussions on rights and independence among Indian intellectuals. The principles of freedom and resistance against oppression influenced India’s later struggle for independence from British rule in the 20th century.
Insta Links:
• American Revolution
#### UPSC CURRENT AFFAIRS – 8 July 2024 GS Paper 3:
How to Read India’s Balance of Payments
Syllabus: Indian Economy
- •Source: IE*
Context: India’s current account registered a surplus in Q4 of 2023-24. However, a surplus is not always good, nor is a deficit always bad.
About Balance of Payments (BoP):
Aspect | Description
Definition | Balance of Payments (BoP) is a systematic statement of all economic transactions of a country with the rest of the world during a specific period, usually one year. It shows if the country has a trade surplus (exports > imports) or a trade deficit (imports > exports).
Purposes of Calculation of BoP | Reveals the financial and economic status of a country. Indicates whether the country’s currency value is appreciating or depreciating. Helps the Government decide on fiscal and trade policies.
Components of BoP | Current Account: Shows export and import of visible (merchandise/goods) and invisible (non-merchandise/services, transfers, income). A surplus occurred in Q4 of 2023 due to higher service exports and remittances, despite a trade deficit.
Capital Account: Shows capital expenditure and income, including ECB, FDI, and FPI. Q4 of 2023 showed a net surplus of $25 billion
Errors and Omissions: Reflects the country’s inability to record all international transactions accurately.
Changes in Foreign Exchange Reserves: Shows movements in foreign currency assets held by the RBI and in Special Drawing Rights (SDR) balances.
Overall BoP Status | The BoP account can be a surplus or a deficit. A deficit can be bridged by drawing from the Foreign Exchange (Forex) Account. If forex reserves fall short, it leads to a BoP crisis.
Difference between BoP and BoT:
Topic | Balance of Payment (BoP) | Balance of Trade (BoT)
Components | The current account, capital account, financial account, errors and omissions | Trade in goods (merchandise trade)
Coverage | Trade in goods, services, income flows, and transfers (current and capital) | Trade in physical goods (raw materials, manufactured goods, commodities)
Definition | A comprehensive record of all economic transactions between residents of a country and the rest of the world over a specific period | Difference between the value of a country’s exports and imports of goods (merchandise trade) over a specific period
Focus | A comprehensive view of a country’s economic transactions with the rest of the world | Focuses solely on the trade of goods
Inclusion of Services, Income Flows, and Transfers | Yes | No
Why Current account surplus is not always good, nor is a deficit always bad?
A surplus is not always good because it can indicate reduced domestic investment or economic activity, as seen during economic downturns. Conversely, a deficit is not always bad because it can signal strong domestic demand and investment in growth, such as importing capital goods to boost future production capacity. In essence, the context and underlying reasons behind the surplus or deficit are crucial for determining their impact on the economy.
Importance of Balance of Payments (BoP):
Importance | Description
Economic Indicator | Reflects a country’s economic relationships with the rest of the world, providing insights into trade flows, financial transactions, and overall economic health.
Policy Formulation | Helps policymakers design and evaluate economic policies, offering insights into competitiveness, trade performance, capital flows, and monetary stability.
Exchange Rate Management | Central banks use the BoP to assess foreign currency supply and demand, manage exchange rate stability, and determine the need for currency interventions.
External Debt Management | Assists in monitoring the capacity to service foreign debt and assessing borrowing sustainability, promoting prudent debt management.
Investment Decisions | Investors analyze the BoP to gauge a country’s investment attractiveness, where a favourable BoP indicates stability and positive economic prospects.
Policy Coordination | Facilitates international policy coordination, helping to identify areas of cooperation, address global imbalances, and promote financial stability.
Insta Links:
• India’s balance of payments
Prelims Links:
Q1. Which of the following has/have occurred in India after its liberalization of economic policies in 1991? (UPSC 2017)
• Share of agriculture in GDP increased enormously.
• Share of India’s exports in world trade increased.
• FDI inflows increased.
• India’s foreign exchange reserves increased enormously.
Select the correct answer using the codes given below:
(a) 1 and 4 only
(b) 2, 3 and 4 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
Ans: (b)
Q2. With reference to Balance of Payments, which of the following constitutes/constitute the Current Account? (UPSC 2014)
• Balance of trade
• Foreign assets
• Balance of invisibles
• Special Drawing Rights
Select the correct answer using the code given below:
(a) 1 only
(b) 2 and 3
(c) 1 and 3
(d) 1, 2 and 4
Ans: (c)
India’s Indigenous Defence Production
Syllabus: Internal Security
- •Source: TH*
Context: India’s indigenous defence production reached a record ₹1.27 lakh crore in FY 2023-24, growing 16.7% from the previous year, per the Defence Ministry.
What is Indigenous Defence Production?
Indigenous defence production refers to the development and manufacturing of defence equipment and technology within a country’s own borders, using its own resources, skills, and industries. This approach aims to achieve self-reliance and reduce dependence on foreign imports for defence needs.
According to the Stockholm International Peace Research Institute (SIPRI), India was the world’s largest importer of major arms between 2019 and 2023, accounting for 9.8% of global arms sales
Need for defence indigenisation:
• For self-reliance
• To reduce dependency on the foreign player and ensure the security of the nation
• To reduce the Balance of Payment deficit
• To promote employment and also exports
• To reduce the cost of production to India and thereby reduce fiscal deficit.
Key Highlights of India’s Defence Production:
• Over 79% of defence production was contributed by DPSUs/PSUs, and nearly 21% by the private sector.
• Since 2019-20, the value of defence production has increased by over 60%.
• By 2028-29, annual defence production is expected to reach ₹3 lakh crore, with defence exports hitting ₹50,000 crore.
Background of Defence Indigenisation in India:
India shifted from Soviet-dependent license-based production to indigenous design-focused defence industrialization in the mid-1980s, emphasizing R&D. A significant step was the 1983 Integrated Guided Missile Development Programme (IGMDP) for developing five missile systems: Prithvi, Akash, Trishul, Nag, and Agni. Despite the 1990 Self Reliance Review Committee’s goal to boost the self-reliance index from 30% to 70% by 2005, this target remains unmet. Insufficient indigenous efforts led to co-development and co-production with foreign partners, starting with the 1998 India-Russia BrahMos missile agreement, and extending to collaborations with Israel and France.
Potential of Defence Indigenisation in India:
• Rising Demand: The Indian defence manufacturing industry is growing due to national security concerns and ongoing territorial disputes with Pakistan and China.
• Growth Opportunities: India’s proactive foreign trade policies and joint defence manufacturing agreements with countries like the UAE, Kazakhstan, and the US offer significant growth potential.
• Experienced Industry: India has the necessary manpower and industries, such as the Ordnance Factory and HAL, actively contributing to defence indigenisation. Three Indian companies (HAL, Ordnance Factory Board, BEL) are among the top 100 defence companies globally.
• Future Contracts: The defence ministry estimates potential contracts worth ~₹4 lakh crore (US$ 57.2 billion) for the domestic industry in the next 5-7 years (2025-2027).
Success Achieved:
Key Achievements | Details
INS Vikrant Development | Millennium Aero Dynamics and Cochin Shipyard jointly developed and produced INS Vikrant, India’s first indigenously built aircraft carrier.
Indigenous Nuclear Submarine | BARC and DRDO jointly developed India’s first indigenous nuclear submarine, Arihant.
Missile Development | Under the Integrated Guided Missile Development Programme (IGMDP), India developed 5 missiles: Akash, Prithvi, Agni, Trishul, and Nag.
Helicopter and Aircraft Development | HAL and Taneja Aerospace and Aviation Limited (TAAL) are developing Dhruv multirole helicopters, Light Combat Helicopter (LCH), Rudra armed helicopter, and manufacturing Tejas Light Combat Aircraft.
IRST System Development | HAL and Bharat Electronics Limited (BEL) signed a contract for the co-development and co-production of the Long Range Dual Band Infra-Red Search and Track System (IRST) for the Su-30 MKI under the MAKE-II procedure of Defence Acquisition Procedure (DAP) 2020.
Unmanned Aerial Vehicle Development | DRDO is currently developing an indigenous unmanned aerial vehicle named Nishant.
Growth in Exports | Defence exports surged from ₹1,940 crore (US$ 255 million) in 2014-15 to over ₹15,000 crore in 2022-23 (at 21000 cr currently)
Export Deals with Countries | Indian defence companies are exporting to over 85 Friendly Foreign Countries (FFCs) in Africa, South Asia, Southeast Asia, and West Asia.
Reasons for Increase in Exports | The surge in exports attributed to policy initiatives and private sector involvement, contributed 70% to total defence exports in FY 2021-22.
Policy Initiatives: Liberalising FDI policies, issuing Positive Indigenisation Lists, and simplifying export procedures have contributed to growth in defence exports.
Future of Indian Exports: The Draft Defence Production & Export Promotion Policy (DPEPP) 2020 aims to export ₹35,000 crore worth of aerospace and defence equipment annually by 2025, aligning with the goal of achieving a ₹1.75 lakh crore (US$ 25 billion) turnover in defence manufacturing.
Government’s Initiative towards Defence Indigenisation:
Government’s Initiative | Details
Defence Acquisition Procedure (DAP) 2020 | Streamlines defence procurement under Atmanirbhar Bharat Abhiyaan, emphasizing Make in India and MSME benefits. Key features include:
Reservation for Indian Vendors: Encourages domestic industry with up to 100% FDI allowed (74% Automatic, beyond 74% Government route).
Enhancement of Indigenous Content: Focus on procuring indigenously manufactured products and technologies.
Make and Innovation: Supports indigenization through Make I/II/III initiatives and iDEX for startups.
Buy (Global-Manufacturing in India): Mandates manufacturing processes be conducted by Indian subsidiaries of foreign investors.
Ease of Doing Business: Simplifies operations through the Project Management Unit, favouring complete product manufacturers.
Innovations for Defence Excellence (iDEX) | Engages MSMEs, start-ups, individual innovators, R&D institutes, and academia with grants, funding, and support.
SPRINT Challenges | A NIIO-DIO initiative to integrate at least 75 new indigenous technologies/products into the Indian Navy.
Indigenous Manufacturing | Simplifies industrial licensing extends validity periods, and liberalizes FDI policy (up to 74% Automatic). Defence procurement from foreign sources reduced from 46% to 36%.
Defence Industrial Corridors | Established in Uttar Pradesh and Tamil Nadu to create regional aerospace and defence hubs.
Positive Indigenisation Lists | Prioritizes procurement from domestic sources under the Buy Indian (IDDM) category with embargoes on imports.
E-Biz Portal | Digitizes application process for Industrial License (IL) and Industrial Entrepreneur Memorandum (IEM).
Challenges in Defence Indigenisation
• Lack of a defence manufacturing base in India.
• Low private participation due to the absence of a permanent arbitration committee for dispute resolution.
• Conflict between manufacturers and defence forces on equipment design and capacity.
• High costs and lack of an assured market, lead to delays and credibility issues.
• Poor technological transfer by foreign companies.
• Bureaucratic delays and licensing issues hinder the ease of doing business.
Way Forward for Defence Indigenisation
• Ensure a level playing field for private industry, DRDO, DPSUs, and OFB.
• Utilize software industry and technologies like AI and cyber security.
• Provide financial and administrative autonomy to DRDO.
• Improve in-house design capabilities, as seen with the Navy’s success.
• Develop a robust supply chain, with Indian SMEs playing a key role in the global OEM supply chain.
Conclusion
Going ahead, the requirement for higher indigenous content is expected to help defence product manufacturers in India as well as encourage foreign companies to set up operations in India. France and Russia have already agreed to manufacture in India.
Insta Links:
• India’s Defence Exports Reaches an All-time High
Mains Links:
• Foreign Direct Investment (FDI) in the defence sector is now set to be liberalized: What influence this is expected to have on Indian defence and economy in the short and long run? (UPSC 2014)
Prelims Links:
What is “Terminal High Altitude Area Defence (THAAD)”, sometimes seen in the news? (UPSC 2018)
A. An Israeli radar system
B. India’s Indigenous anti-missile programme
C. An American anti-missile system
D. A defence collaboration between Japan and South Korea
Answer: (c)
Which one of the following is the best description of ‘INS Astradharini’, that was in the news recently? (UPSC 2016)
A. Amphibious warfare ship
B. Nuclear-powered submarine
C. Torpedo launch and recovery vessel
D. Nuclear-powered aircraft carrier
Answer: (c)
#### UPSC CURRENT AFFAIRS – 8 July 2024 Content for Mains Enrichment (CME)
Thazhakara creates People’s Biodiversity Register (PBR)
- •Source: Th*
Context: Thazhakara, a gram panchayat in Alappuzha and one of the first in Kerala, has created and published a People’s Biodiversity Register (PBR), involving local communities.
What is the People’s Biodiversity Register (PBR)?
The PBR serves as a comprehensive record of biodiversity, including habitats, domesticated animals, micro-organisms, and local biological knowledge, as mandated by the Biological Diversity Act (2002). Biodiversity Management Committees (BMCs) oversee the development of PBRs across India, aiming to conserve biodiversity, promote sustainable use, and protect traditional knowledge.
Thazhakara’s PBR will aid in conservation efforts and guide local projects in sectors like agriculture and waste management, emphasizing biodiversity conservation and fair benefit-sharing.
The example above demonstrates ethical values such as community involvement, transparency, conservation ethics, and equitable benefit-sharing in biodiversity management.
#### UPSC CURRENT AFFAIRS – 8 July 2024 Facts for Prelims (FFP)
Aphelion Point
- •Source: IE*
- •Context: Recently, Earth has reached aphelion.*
What is Aphelion Point?
Aphelion is when Earth is farthest from the Sun in its elliptical orbit, approximately 152 million kilometres away. This occurs annually in early July, contrasting with perihelion in early January when Earth is about 147 million kilometres close. Despite the 5 million kilometre difference, the tilt of Earth’s axis primarily determines seasons, with aphelion receiving about 7% less sunlight compared to perihelion.
Sea Groynes
- •Source: TH*
Context: Coastal residents in Ernakulam district, Kerala, protested against sea incursion and incompletion erection of Sea Groynes, by blocking the Fort Kochi-Alappuzha State Highway near Kannamaly.
What is Sea Groynes?
Sea groynes are structures built perpendicular to the shoreline, extending into the sea. They are designed to reduce coastal erosion by trapping sand and sediment carried by currents, thereby stabilizing the beach and protecting the coast from the sea’s impact.
SEHER program
- •Source: PIB*
Context: The Women Entrepreneurship Platform (WEP) and TransUnion CIBIL launched the SEHER program.
• WEP is a public-private partnership platform incubated at NITI Aayog aiming at empowering women entrepreneurs
What is the SEHER program?
The SEHER program aims to empower women entrepreneurs in India with financial literacy and business skills. It focuses on improving awareness about accessing and managing credit, helping women entrepreneurs grow their businesses and contributing to economic development.
India has 63 million micro, small, and medium enterprises, with 20% owned by women, employing 27 million people. Accelerating women’s entrepreneurship could create over 30 million new women-owned enterprises and 150 to 170 million more jobs.
SEHER Program is part of WEP’s Financing Women Collaborative (FWC), a first-of-its-kind initiative aimed at accelerating access to finance for women entrepreneurs
Credit-Deposit (CD) ratios
Source: FE
Context: The RBI is concerned about banks with high Credit-Deposit (CD) ratios, notably exceeding the industry average of 80%.
What are Credit-Deposit (CD) ratios?
The Credit-Deposit (CD) ratio is a financial metric that shows the percentage of a bank’s total deposits that are given out as loans. A higher CD ratio indicates that a larger portion of the bank’s deposits is being used for lending, which can impact liquidity and credit risk.
The Reserve Bank of India (RBI) has directed banks to narrow the gap between credit and deposit growth, aiming to reduce the CD ratio. According to the RBI’s Financial Stability Report, the CD ratio has risen steadily, reaching 78.8% by December 2023. Over 75% of banks with CD ratios above 75% are private sector banks.
Reasons for high CD ratios include robust credit growth, particularly in retail and MSME sectors, coupled with slower deposit growth due to competitive pressures and shifts in customer savings behaviour towards investments. High CD ratios can pressure Net Interest Margins (NIM), increase liquidity risk, and elevate credit risk for banks.
Indo-French Liver and Metabolic Disease Network (InFLiMeN)
- •Source: PIB*
Context: Union Minister Dr Jitendra Singh launched the Indo-French Liver and Metabolic Disease Network (InFLiMeN) to prevent and cure metabolic liver diseases.
What is the Indo-French Liver and Metabolic Disease Network (InFLiMeN)?
It is a collaborative initiative launched to prevent and treat metabolic liver diseases. It aims to address non-alcoholic fatty liver disease (NAFLD) and other related conditions through joint efforts by Indian and French experts. The program focuses on developing low-cost diagnostic tests and India-specific solutions to manage liver diseases effectively.
One in three Indians has fatty liver, a condition that predates Type 2 Diabetes and other metabolic disorders.
About Liver:
The liver is a vital organ located in the upper right abdomen, responsible for various functions including detoxification, protein synthesis, and production of biochemicals necessary for digestion.
Metabolic liver diseases are caused by disruptions in the liver’s metabolic processes, often due to factors such as:
• Obesity: Excess body fat can lead to fat accumulation in the liver.
• Diabetes: Type 2 diabetes can increase the risk of liver fat accumulation.
• High cholesterol and triglycerides: Elevated levels can contribute to liver fat buildup.
• Genetic predispositions: Certain inherited conditions can affect liver metabolism.
• Poor diet: High intake of sugar and fats can lead to liver fat accumulation.
• Alcohol consumption: Excessive alcohol intake can damage liver cells and affect metabolism.
UPSC CURRENT AFFAIRS – 8 July 2024 [PDF]
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