1 Feb 2024 : Indian Express Editorial Analysis

Indian Express Editorial Analysis

1-February-2024

1. Marathon, not sprint

Topic: GS3 – Indian Economy – Issues relating to growth This topic is relevant for Mains in the context of analysis of economic indicators, policy measures, and the broader implications for the country’s economic development.

Context:

The first advance GDP estimates from the National Statistical Office bring positive news for the Indian economy, projecting a growth of 7.3% for the current fiscal year. This surpasses the earlier prediction of 6.5% made in the Economic Survey in January 2023, indicating a more optimistic economic scenario than anticipated.

More about the news:
Resilience Amid Global Challenges:

• Despite facing challenges such as a sharp slowdown in agriculture and ongoing geopolitical uncertainties like the Russia-Ukraine conflict and Middle East crises, India is expected to maintain its position as the fastest-growing major economy.
• Various macroeconomic indicators, including a current account deficit within the safe zone, stable currency, and an anticipated decrease in headline inflation over the next quarters, contribute to a robust economic outlook.

Fiscal Policy Driving Post-Pandemic Recovery:

• Economic policies, particularly fiscal policy, have played a pivotal role in steering post-pandemic growth recovery.
• The shift from pandemic-focused welfare measures to a public investment-driven growth strategy has accelerated infrastructure development.
• Despite the positive impact on raising productive capacity, there’s a call for moderation in budgetary support to capital spending, emphasizing the need for fiscal rectitude, especially in an election year.

Growth Prospects and Fiscal Consolidation:

• The Finance Ministry’s review report anticipates the economy to grow close to 7% in the next fiscal year, with suggestions that India could potentially become a $7 trillion economy by the end of the decade.
• Medium-term growth prospects, as reflected in forecasts from multilateral agencies, show expectations of GDP growth moderating to 6.4% in the next fiscal year before accelerating thereafter.
• Achieving fiscal consolidation, targeting a 4.5% fiscal deficit as a percentage of GDP by 2025-26, is deemed feasible if growth remains robust.

Private Sector’s Role in Sustainable Growth:

• To ensure faster and sustained growth, there’s a crucial emphasis on the private sector taking a lead in investment.
• The government’s efforts to improve capacity utilization, implement the Production Linked Incentive (PLI) scheme, maintain a low corporate tax regime, and support medium and large-sized corporates’ healthy balance sheets are seen as factors that can revive capital expenditure.
• Lowering compliance costs and providing tax regime stability are identified as complementary measures to unleash a broad-based revival of the investment cycle.

Inflation Challenges and Agricultural Concerns:

• While core inflation has corrected quickly in India, headline inflation remains a concern due to high food inflation, influenced significantly by the underperformance of the agriculture and rural economy.
• Agriculture’s weight in GDP and its impact on food inflation necessitate supply-side measures falling under fiscal policy for effective control.

Climate Risks and Economic Challenges:

• India’s vulnerability to climate change is highlighted, with the review document pointing out the need for research, development, and complementary steps to adapt to climate change without compromising growth prospects.
• The “trade-off between energy security and economic growth versus energy transition” is recognized as a key challenge for the economy.

Policy Focus and External Resilience:

• Over the near and medium term, the review underscores domestic strengths, including healthy corporate balance sheets and the government’s focus on infrastructure build-up and digitalization.
• External markers for the economy are noted to remain resilient. Policymakers are urged to ensure sound macroeconomic fundamentals, fast-track skilling initiatives, pragmatic energy transition management, and a focus on reforms to transform the current growth uptick into a sustained marathon.

What are the Different Ways of Measuring Economic Growth?

Two Ways to Calculate Economic Growth: GDP: It involves examining people’s spending patterns (the expenditure side). GDP can be derived from Gross Value Added (GVA) by incorporating indirect taxes and subtracting government subsidies. GVA: It focuses on the income side of the economy. GVA, as defined by the RBI, is the value of a sector’s output minus the value of its intermediary inputs. This “value added” is distributed among the primary factors of production—labor and capital. Disparity Between the Two Methods: The disparity between the two methods is termed a discrepancy and has sparked controversies, notably during the release of first-quarter GDP data. For a nuanced analysis of quarterly economic trends, GVA numbers are often considered more reliable, while GDP (expenditure data) is preferred for assessing annual trends.

PYQ: Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments. (150 words/10m) (UPSC CSE (M) GS-3 2019)

Practice Question:  Evaluate the effectiveness of fiscal policies in post-pandemic recovery and recommend potential strategies for addressing the identified challenges. Support your answer with relevant data and examples. (150 words/10 m)

2. MIND AND MATTER

Topic: GS3 – Science & Technology – Development & their applications This topic is relevant for both Prelims and Mains in the context of critical analysis and discussion around ethical, regulatory, and societal aspects of emerging technology, specifically Neuralink’s brain-computer interface.

Context:

With Neuralink, Elon Musk’s latest venture, a careful separation between science and speculation is crucial. Musk recently disclosed on X (formerly Twitter) that the first human has received an implant from Neuralink, showing promising results in neuron spike detection. Despite controversies last year surrounding disclosures and investigations, this surgery marks an important milestone in human-computer interfaces designed to address physical and cognitive limitations.

More about the news:
BUILDING ON PAST BCI WORK:

• Neuralink builds upon the work of laboratories and companies predating it, dating back to the 1970s with the first Brain-Computer Interface (BCI).
• The wireless device implanted by Neuralink features a chip and arrays of electrodes, aiming to register thoughts related to movement.
• If successful, this technology could empower people with disabilities to control devices through their thoughts.
• However, Musk’s ambitious claims evoke a science fiction future, envisioning brain implants seamlessly merging with cognitive functions.

                                             Source: Times of India
 PRIVACY AND REGULATION CONCERNS:

• Privacy emerges as a primary concern. Controlling the data extracted from brains and ensuring protection against exploitation are critical considerations.
• Similar to AI, regulations must evolve hand-in-hand with BCI development to safeguard individual privacy.
• Additionally, ensuring that significant medical technologies like BCIs do not become monopolies is crucial.
• Publicly-funded research can minimize costs for end-users, ensuring accessibility beyond those who can afford cutting-edge interventions.

TOWARDS RESPONSIBLE TECHNOLOGICAL ADVANCEMENT:

• Drawing parallels to the development of the Oxford Astra-Zeneca Covid vaccine, publicly-funded efforts reaching more people than private-sector counterparts offer a model for ethical and inclusive advancement.
• As BCIs approach potential mass use, involving experts, ethicists, and the public in a dialogue becomes essential to prevent misuse or overuse.
• BCIs, while representing a potential paradigm shift in human-technology relations, must navigate these pitfalls through responsible development and deployment.

How does Neuralink function?

Implantation– A small chip called “link” is surgically inserted into a specific area of brain. “Link” has many wires which are even thinner than hair. Neurological signal detection– The electrodes in the wires detect electrical signals in the brain. Interpretation– These signals are used by the device for interpretation of their meaning. For ex- Ascertaining the type of movement represented by a particular sensory input. Communication– Device then transmits this data to an external computer. This is achieved without any physical connections, using advanced wireless technology. Application- The data is then processed by the external devices like computers for performing specific function which has been decoded like speech, movement of artificial limbs etc. Feedback- The system can provide sensory feedback to the brain device, closing the loop of communication. The brain can thus not only be used to control a device but also be used to receive inputs from that device like touch sensations from a robotic hand. Note – Neurons are nerve cells that use electricity and chemicals to send signals from your brain to the rest of your body to help it move, breathe, talk and eat. About Neuralink– It was founded in 2016 by Elon Musk. Some other companies operating in brain implant field – BlackRock Microsystems, Kernel, Medtronic and Synchron.

Practice Question:  Discuss the potential societal implications, ethical considerations, and regulatory challenges associated with the development and deployment of brain-computer interfaces, focusing on Neuralink’s recent milestone of conducting the first human implant. (250 words/15 m)

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