16 Jan 2024 : Daily Current Affairs

Daily Current Affairs


1. Davos 2024: Global Leaders Converge to Tackle Climate Crisis, AI Dominance, and Rising Geopolitical Tensions

Topic: GS2 – International Relations – Important International institutions

This topic is not much relevant in the context of Prelims but more for Mains in the context of global challenges, geopolitics, climate change, and technological advancements.

  • In its forthcoming edition, the annual World Economic Forum in Davos, Switzerland, is expected to tackle a wide range of urgent global concerns.
  • With nearly 2,800 participants—60 of whom are heads of state—the purpose of this event is to offer a forum for conversations on issues ranging from Middle East conflicts and climate change to the difficulties facing the global economy and Ukraine’s defence against Russia.

Attendees and Ambitions: Heads of State and Decision-Makers:

  • Presidents Isaac Herzog of Israel and Volodymyr Zelenskyy of Ukraine will be among the dignitaries attending Davos, along with heads of international organisations, academic institutions, and the arts.
  • The occasion acts as a focal point for lofty goals that include commercial innovation, endeavours to bring about peace, collaboration in security, and improvements in healthcare.

Davos in Current Times: Global Challenges and COVID-19:

  • Despite criticism, Davos’ significance in promoting in-person discussions on common global challenges is emphasised, especially in light of the COVID-19 pandemic.
  • As seen by the Russian delegation’s absence last year, regional issues like the crisis in Ukraine can cast a shadow over the forum’s general focus on the larger picture.
  • This year, Israeli President Herzog and leaders from Qatar, Jordan, and Lebanon will contribute to discussions.

Technology’s Role: Artificial Intelligence and Misinformation

  • At Davos, there is an apparent shift in emphasis towards technology, with artificial intelligence occupying the main stage in about thirty sessions.
  • The theme delves into AI’s potential to propel the economy and society forward.
  • A discussion titled “Dangers of “bots and plots” on democracies will be held in anticipation of issues in the next elections across countries that together have a population of 4.2 billion people, in light of the growing threat of misinformation.

Perennial Challenge: Fighting Climate Change:

  • Among the many aspirational objectives, finding innovative and promising ways to tackle climate change is always the main emphasis of Davos.
  • The continued emphasis on environmental issues and sustainable practices is a reflection of the pressing need for global recognition of these issues.
PYQ: Which of the following gives ‘Global Gender Gap Index’ ranking to the countries of the world? (2017)
(a) World Economic Forum
(b) UN Human Rights Council
(c) UN Women
(d) World Health Organization
Ans: (a)
Practice Question: Discuss the potential contributions and limitations of international forums like Davos in shaping a sustainable and secure future.
(150 words/10 m)

2. India’s CPI Inflation at 5.7% in December: Implications for Fiscal and Monetary Policies Examined

Topic: GS3 – Indian Economy  –  Issues relating to growth 

This topic relevant for both Prelims and Mains in the context of detailed analysis of the Consumer Price Index (CPI) based inflation in India, including its calculation, components, regional variations, and implications for monetary and fiscal policies. 

  • India’s Consumer Price Index (CPI)-based inflation rate hit 5.7% in December, according to the most recent official release.
  • This regular monthly publication is especially significant because it coincides with fiscal policy as the final inflation statistics before the Union Budget on February 1.
  • Furthermore, it offers vital data for the Reserve Bank of India’s Monetary Policy Committee’s monetary policy decisions later in February.
  • Interestingly, it’s the first release of the year before the election, which could mean more political weight.

Understanding CPI Inflation:

  • Different from the wholesale price index-based inflation rate, the Consumer price Index (CPI) gauges the rate of inflation experienced by consumers.
  • Changes in the overall level of prices are reflected in the CPI’s basket of chosen products and services.
  • At the national level, the CPI is derived from 299 items and is intended for use by both rural and urban consumers.

Calculation and Components of CPI:

  • After establishing 2012 as the base year, the CPI is obtained by giving that year a value of 100. Price level variations are then computed.
  • Food and drink, tobacco, clothing, housing, fuel, and other services make up the six major components of the CPI.
  • Articles involving food carry the most weight (54%), with cereals making up a sizeable portion (12.4%).

Inflation Data Analysis: YoY and MoM Perspectives

  • There are two methods to analyse the inflation rate: monthly (MoM) and year-over-year (YoY).
  • According to the data, YoY inflation will increase towards the end of 2023 due to a relative increase in the cost of food, especially cereals, vegetables, pulses, spices, and other food items.
  • On the other hand, December’s MoM data shows deflation.

Regional Variations and Analyst Projections

  • Inflation rates vary significantly by region, with Odisha having the highest rate (8.7%) and Delhi having the lowest (2.9%).
  • In the upcoming months, analysts from CRISIL predict that government initiatives and the kharif harvest may lead to a possible decrease of inflation.
  • Nevertheless, the data points to a possible delay in the Reserve Bank of India’s interest rate reductions, which could have an effect on fiscal planning and monetary policy decisions due to political factors.

Impact on Monetary Policy and Fiscal Planning:

  • The importance of the inflation data extends to monetary policy choices, which might postpone interest rate reductions.
  • The upward trend in inflation observed in November and December casts doubt on the prior projections of an April rate drop.
  • Analysts emphasise how crucial it is to take food shocks and the dynamics of growth and inflation into account when determining the RBI’s position.
  • Increasing inflation presents difficulties for fiscal policy makers by creating uncertainty in the budgetary process, particularly in light of the impending elections.
PYQ: Consider the following statements: (2020)
1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).
2. The WPI does not capture changes in the prices of services, which CPI does.
3. The Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1, 2 and 3
Ans: (a)
Practice Question: Evaluate the challenges and opportunities posed by the inflation trend for fiscal policymakers, considering the upcoming Union Budget and the broader economic landscape. (200 words/12.5 m)

3. Modi-Putin Talks Strengthen ‘Special Partnership’: Roadmap for Future Initiatives Discussed Amidst Geopolitical Dynamics

Topic: GS2 – International Relations  – Bilateral relations 

This topic is not much relevant in the context of Prelims but more for Mains in the context of Indo- Russia relations

  • Russian President Vladimir Putin and Indian Prime Minister Narendra Modi had a fruitful discussion about a number of topics related to their “special and privileged strategic partnership.”
  • Modi announced plans to lay up a roadmap for further projects and voiced hope about the encouraging prospects.
  • In addition, regional and international concerns were discussed, with special attention to Russia’s impending BRICS presidency.

Bilateral Cooperation Progress Review:

  • The Prime Minister’s Office later released a statement in which they emphasised how positively the leaders saw the advancements in their bilateral relations.
  • Both leaders hailed the successes in practical collaboration across sectors such as trade, economics, science, technology, energy, and logistics.

BRICS Coordination and International Issues:

  • The official Kremlin summary highlighted successes in real-world cooperation while underlining Russia and India’s unique strategic partnership.
  • Both leaders stated that they were willing to closely coordinate how they approached the BRICS agenda, with India endorsing Russia as the group’s head.
  • The leaders also spoke about global concerns, such as the current war between Russia and Ukraine.

India’s Role in Ukraine Peace Formula

  • The phone conversation comes after a national security advisors’ conference in Davos, where topics of discussion included coming up with a peace plan for Ukraine.
  • Switzerland proposed that India may be a major player in using its influence with Russia, with Deputy NSA Vikram Misri serving as India’s representative.
  • The summit attendees stressed the value of communication above violence, mirroring India’s position.

Recent Diplomatic Engagements

  • Following External Affairs Minister S. Jaishankar’s recent visit to Russia, where India was praised for its responsible approach to tackling geopolitical hotspots like Ukraine, the leaders had a conversation. Jaishankar’s conversations with his counterpart from Ukraine provided insight into Russia’s latest escalation of hostilities.

Annual Summit and Scheduling Challenges:

  • Russia and India have historically held a yearly leaders’ meeting and alternate-year reciprocal visits.
  • But this trend was broken by the conflict in Ukraine, which created scheduling issues.
  • Modi’s scheduled visit to Russia for the yearly summit did not happen last year, which was a break from the norm.
  • The most recent summit took place in December 2021 when Putin was in Delhi. 
Practice Question: Evaluate the significance of India’s role in addressing the Russia-Ukraine conflict and its potential impact on the broader global geopolitical landscape. (150 words/10 m)

4. NITI Aayog Report: India Witnesses Dramatic Drop in Multidimensional Poverty, 24.82 Crore People Escaped Poverty in Nine Years

Topic: GS2 – Social Justice  – Issues relating to poverty and hunger. 

This topic is relevant for both Prelims and Mains in the context of reduction in multidimensional poverty in India.

  • According to a recent discussion paper by NITI Aayog, India’s multidimensional poverty has significantly decreased, with the percentage of the population falling into this category estimated to have dropped from 29.17% in 2013–14 to 11.28% in 2022–23.
  • Over the previous nine years, an estimated 24.82 crore people are believed to have escaped multidimensional poverty.

Sharpest Declines in States Like Uttar Pradesh and Bihar:

  • The states of Uttar Pradesh, Bihar, Madhya Pradesh, and Rajasthan experienced the greatest decline in the number of individuals categorised as poor, as determined by the Multidimensional Poverty Index (MPI).
  • The MPI takes into account twelve factors that include the quality of life, education, and health.

Trend Analysis: Severity of Deprivation and Reduction Patterns:

  • The discussion paper observes that, in comparison to the previous era of 2005–06 and 2013–14, there was a minor drop in the severity of deprivation between 2015–16 and 2019–21.
  • It’s interesting to note that after 2015–16, the percentage of MPI poor people in the overall population decreased more quickly, indicating a favourable trend.

COVID-19 Impact and Sustainable Development Goals

  • NITI Aayog suggests that the percentage of MPI poor in 2022–2023 would have been considerably lower in the absence of COVID–19, even though it acknowledges that the discussion paper may not adequately capture the economic impact of the pandemic.
  • The report emphasises how India may meet Target 1.2 of the Sustainable Development Goals (SDG) far in advance of the 2030 deadline.

Standard of Living Indicators and Indicator-Specific Improvements

  • The years 2005–06 saw the highest levels of deprivation in indicators pertaining to the standard of living dimension.
  • The population without access to cooking fuel decreased from 74.4% in 2005–06 to 43.9% in 2019–21, and the population without proper sanitary facilities decreased from 70.92% to 30.93% in the same time frame.
  • These are two noteworthy gains. 

State-Specific Reductions and India’s Multidimensional Poverty Definition:

  • The percentage of MPI poor people decreased significantly in Bihar, Jharkhand, and Uttar Pradesh between 2013–14 and 2022–2023—by 53%, 50%, and 59%, respectively.
  • Twelve variables, including nutrition, child and adolescent mortality, maternal health, schooling, attendance, water, electricity, housing, and assets, are used in India’s multidimensional poverty measurement methodology.
  • This technique offers a comprehensive view that goes beyond income levels.
PYQ: Despite Consistent experience of High growth, India still goes with the lowest indicators of human development. Examine the issues that make balanced and inclusive development elusive. (150 words/10m) (UPSC CSE (M) GS-2 2019)
Practice Question: Assess the role of NITI Aayog in shaping policies to address poverty and the potential impact of external factors, such as the COVID-19 pandemic. (150 words/10 m)

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