2 Jan 2024 : Daily Current Affairs

1. GST revenue growth dips to a 3-month low in Dec.

Topic: GS3 – Indian Economy – Issues relating to mobilization of resources Critical for UPSC as it gauges understanding of India’s economic health, fiscal policies, and GST dynamics, assessing contemporary financial trends.

Context:

India’s December 2023 GST revenues surpassed ₹1,64,800 crore, showing a 10.3% YoY growth. This holds significance for UPSC mains exam perspective, offering insights into fiscal health, policies, and current economic trends.

Understanding India’s Fiscal Health through December 2023 GST Growth:

• India’s GST revenues in December 2023 surpassed ₹1,64,800 crore, showing a 3% YoY growth.
• This growth rate is a three-month low, down from the previous month’s 15.1% rise.
• December’s GST collection is 8% lower than the previous month’s nearly ₹1.68 lakh crore.
• Goods import revenues grew at a milder pace of 3.65%.
• Gross GST collection during April-December 2023 grew 12% YoY, reaching ₹14.97 lakh crore.
• Thirteen states recorded a 13% revenue growth, matching the national average for domestic revenues or more.

GST Implementation in India

One Nation, One Tax: Introduced in 2017, GST unified India’s complex tax system under a single, nationwide framework. Simplifying Transactions: Reduced cascading taxes, making inter-state trade and business operations smoother. Boosting GDP: Lower compliance burden and improved logistics fueled economic growth, attracting foreign investment. Formalizing Economy: Broader tax base brought many informal businesses into the fold, increasing revenue and transparency. Challenges Remain: Integration issues, complex compliance for MSMEs, and fluctuating tax rates still need refinement. Evolving Journey: Continuous improvements, tech integration, and simplification efforts aim to make GST truly efficient and beneficial for all.

PYQ: Enumerate the indirect taxes which have been subsumed in the Goods and Services Tax (GST) in India. Also, comment on the revenue implications of the GST introduced in India since July 2017. (UPSC CSE (M) GS-3 2019)(250 words/15 m)

Practice Question: Evaluate the impact of the Goods and Services Tax (GST) on India’s economic landscape, critically analyzing its successes and remaining challenges. (250 words/15 m)

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2. XPoSat in orbit; to study black holes, neutron stars.

Topic: GS3 – Science and technology – Developing new technology – Space Critical for UPSC as it reflects India’s advancements in space research, X-ray astronomy, and global standing of India in space missions.

Context:

ISRO’s PSLV-C58 launched XPoSat, making India the second nation with an observatory for astronomical studies. XPoSat, the world’s second X-ray polarimetry mission, aims at space-based measurements of celestial X-ray emissions, featuring two crucial payloads.

Additional information on this news:

• ISRO launched the PSLV-C58 mission, placing the XPoSat into a 650 km orbit with a six-degree inclination.
• India becomes the second nation with an observatory studying astronomical sources like black holes and neutron stars.
• XPoSat is the world’s second X-ray polarimetry mission after NASA’s IXPE.
• It’s ISRO’s first dedicated scientific satellite for space-based polarisation measurements of X-ray emissions.
• XPoSat carries two payloads: POLIX (Polarimeter Instrument in X-rays) and XSPECT (X-ray Spectroscopy and Timing).
• POLIX developed by Raman Research Institute, XSPECT by Space Astronomy Group of URSC, Bengaluru.
• The mission executed the PSLV Orbital Experimental Module-3 experiment, achieving the objective of 10 other payloads.

The success marks India’s growing capabilities in space research and X-ray astronomy.

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3. India’s 1991 crisis and the RBI Governor’s role.

Topic: GS3 – Indian Economy – Issues relating to Planning Critical for UPSC as it assesses understanding of economic crises, policy responses, and the legacy of key figures in governance.

Context:

IAS Officer S. Venkitaramanan, as RBI Governor, navigated India through a severe 1990 balance of payments crisis, displaying economic courage by pledging gold. His economic reforms and intellectual engagement left a lasting legacy.

IAS Officer S. Venkitaramanan’s Notable Contributions:

Balance of Payments Crisis:

• India faced severe balance of payments stress in late 1990.
• Causes included a slowdown in inward remittances and increased oil prices post the Kuwait invasion.
• Current account deficit reached 3% of GDP in 1990-91, leading to concerns of default.

Gold Pledging and International Loans:

• RBI, led by Venkitaramanan, played a key role in managing the crisis.
• India raised $200 million through a sale of 20 tonnes of confiscated gold to Union Bank of Switzerland.
• In July 1991, 47 tonnes of gold were sent to the Bank of England, raising another $405 million.
• Pledging gold helped India repay international donors and creditors, creating a breathing space in the crisis.

Economic Reforms and Import Compression:

• RBI implemented import compression measures under Venkitaramanan’s leadership.
• Supplementary measures raised the cost of imports, leading to a significant reduction in the current account deficit.
• The strategy proved successful, with the deficit dropping from 3% in 1990-91 to 0.3% of GDP in 1991-92.

Role in Navigating Through Troubled Waters:

• RBI’s official history credits Venkitaramanan for navigating the country through the Balance of Payments crisis successfully.
• Immediate improvement in the balance of payments attributed to import compression measures.

Post-Crisis Economic Reforms:

• While Venkitaramanan’s role in crisis management is acknowledged, subsequent economic reforms led by Narasimha Rao and Manmohan Singh gained more public attention.
• The RBI Governor’s term ended with issues related to the Harshad Mehta scam in April 1992.

Remarkable Openness and Engagement:

• Venkitaramanan demonstrated openness by inviting economists, including critics, to discuss monetary policy.
• Actively engaged with over 20 economists to address the balance of payments crisis in September 1991.
• Belief in relying on India’s intellectual resources led to the establishment of the Development Research Group within the RBI.

1. Venkitaramanan’s Legacy:

• Venkitaramanan’s legacy includes his belief in utilizing intellectual resources for economic challenges.
• Establishment of the Development Research Group aimed at fostering professional interaction between the RBI and external stakeholders.
• Current struggles of the RBI in controlling inflation may reflect a focus on adhering to the current economic orthodoxy rather than understanding India’s specific economic dynamics.

PYQ: Has the Indian governmental system responded adequately to the demands of liberalisation, privatisation, globalisation, started in 1991? What can the government do to be responsive to this important change? (UPSC CSE (M) GS-2 2016) (200 words/12.5 m)

Practice Question: Analyze the key policy decisions and their outcomes that enabled India to navigate the 1991 economic crisis. (150 words/10 m)

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4. How radiocarbon dating revolutionised science.

Topic: GS3 – Science and Technology – Development & their applications Radiocarbon dating is crucial for UPSC aspirants as it elucidates archaeological chronology, pivotal for history and culture assessments.

Context:

Radiocarbon dating, employing carbon-14, revolutionized science by providing a reliable method to date organic materials. From its discovery in the 1940s by Libby to modern Accelerator Mass Spectrometry, it reshaped archaeology, geology, and our understanding of human history and the Earth’s past. Ongoing developments address challenges and expand its applications.

Introduction:

• Time is a crucial aspect in various scientific disciplines, influencing how we study the natural universe, social systems, and consciousness.
• Radiocarbon dating is a transformative method for determining the age of objects, primarily using the isotope carbon-14.

Formation of Carbon-14:

• Carbon-14 is generated in the Earth’s atmosphere through the interaction of cosmic rays with nitrogen-14 isotopes.
• Cosmic rays continually create carbon-14, maintaining its presence in the atmosphere.

Discovery and Early Insights:

• American chemists Martin Kamen and Sam Ruben synthesized carbon-14 in the lab in the 1940s, revealing a longer half-life than expected (around 5,000 years).
• Physicist Serge Korff demonstrated the production of carbon-14 by bombarding nitrogen-14 with neutrons.
• Willard Libby conceived the idea of using carbon-14 for dating organic materials in 1946, making assumptions later proven valid.

Principles of Radiocarbon Dating:

• Living organisms maintain a constant equilibrium of carbon-14 through activities like respiration and consumption.
• Upon death, the carbon-14 concentration decreases due to radioactive decay, allowing for age estimation.

Modern Radiocarbon Dating Techniques:

• Accelerator Mass Spectrometry (AMS) as a sophisticated method.
• AMS can analyze minute organic samples (50 mg) by isolating and examining carbon-14 using a particle accelerator.
• AMS has expanded dating capabilities beyond carbon-14, enabling geologists to date rocks based on isotope ratios (e.g., strontium-87).

Impact on Science:

• Termed the “radiocarbon revolution,” it provided the first objective dating method in archaeology and geology.
• Enabled dating of archaeological sites, comparison of object ages, and exploration of human history, migration, civilizations, languages, religions, and climate changes.

Political and Continued Relevance in India:

• Radiocarbon dating is politically significant in India, used to date objects from temples and mosques.
• Ongoing refinement of the technique; deviations from expected radiocarbon cycles noted in certain periods.

Practice Question: Discuss the transformative impact of radiocarbon dating on historical and archaeological studies, highlighting its significance in unraveling the timeline of civilizations. (150 words/10 m)

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 5. Nobel peace winner Muhammad Yunus convicted in Bangladesh labour law case.

Topic: GS2 – International Relations The conviction of Nobel laureate Muhammad Yunus raises concerns about political interference and labor law issues in Bangladesh, crucial for UPSC aspirants’ understanding of international developments.

Context:

Nobel laureate Muhammad Yunus, known for microfinance, convicted in Bangladesh for violating labor laws, deemed politically motivated by supporters. Prime Minister Hasina accused him, but Yunus denies charges; granted bail. Facing over 100 additional charges.

More information on the news:

• Muhammad Yunus, Nobel Peace laureate, was convicted on Monday of violating Bangladesh’s labor laws.
• The case is criticized by supporters as politically motivated.
• Yunus, credited with lifting millions out of poverty with his microfinance bank, has been at odds with Prime Minister Sheikh Hasina.
• Hasina has accused Yunus of “sucking blood” from the poor and made scathing verbal attacks against him.
• Yunus and three colleagues from Grameen Telecom, a firm he founded, were accused of violating labor laws by not creating a workers’ welfare fund in the company.
• Yunus faces over 100 other charges related to labor law violations and alleged graft.

Mohammed Yunus and the Nobel Prize

Pioneering Microfinance: In 1983, Yunus founded Grameen Bank, providing small loans to impoverished Bangladeshis without collateral. Empowering the Poorest: Grameen’s unique model relied on group support and social pressure for repayment, making it remarkably successful. Lifting Millions Out of Poverty: Grameen’s approach has helped millions of families around the world escape poverty, improve their lives, and contribute to their communities. Recognizing Economic Development as Key to Peace: The Nobel Committee in 2006 lauded Yunus and Grameen Bank for “their efforts through microcredit to create economic and social development from below.” Promoting Lasting Peace: The Committee further stated that “lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty.”