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The Hindu Editorial


1. Old-fashioned trust and credibility bind India-UAE ties.

Topic: GS2 – International Relations – Bilateral Relations Critical for UPSC: Examines India-UAE diplomatic ties, economic collaborations, and strategic importance, offering insights into global relations and regional dynamics.
●       The article highlights the significant personal relationship between PM Modi and UAE President Sheikh Mohamed bin Zayed, emphasizing diplomatic ties, economic collaborations, and regional concerns during Modi’s UAE visit
 Deep Personal Relationship:
  • Personal rapport between PM Narendra Modi and UAE President Sheikh Mohamed bin Zayed characterized by trust and credibility.
  • Deviation from transactional diplomacy, emphasizing strategic interests and regular interactions.
Key Visits and Interactions:
  • Ongoing third visit by PM Modi within eight months, showcasing the dynamic India-UAE relationship.
  • Various interactions, including bilateral visits, COP28, G-20 Summit, and Vibrant Gujarat Global Summit.
Temple Inauguration and Cultural Ties:
  • Unique timing of the visit aligned with the religious calendar for the inauguration of a grand Hindu temple in Abu Dhabi.
  • PM Modi’s requested in 2015 for land, fulfilling the religious and spiritual needs of the UAE’s large Hindu community.
  • Excitement within the 3.5 million Indian community in the UAE and the mega event “Ahlan Modi.”
Strategic Diplomacy and Global Presence:
  • Prime Minister’s role as guest of honor at the 11th World Government Summit in Dubai, focusing on ‘Shaping Future Governments.’
  • Platform for India to present views before an influential global audience.
  • Strengthening India’s economic ties and global presence.
Economic Initiatives and Agreements:
  • Launch of Bharat Mart to boost exports of Indian MSMEs, providing facilities in Dubai’s Jebel Ali Free Zone Area.
  • India-UAE Comprehensive Economic Partnership Agreement (CEPA) reinforces the UAE’s position as India’s third-largest trading partner.
  • CEPA and Bharat Mart combination potential to boost India’s manufactured goods exports and reduce transaction costs.
Other Major Achievements:
  • Initiation of the master’s program in energy transition and sustainability by the Indian Institute of Technology Delhi in Abu Dhabi.
  • UAE’s rising investments as the fourth highest source of foreign direct investment into India in 2022-23.
  • Indian Oil Corporation’s 14-year deal to buy liquefied natural gas from the Abu Dhabi National Oil Company for India’s energy security.
  • Progress in discussions on sensitive areas of defense cooperation.
Regional Security Concerns:
  • Talks addressing the deteriorating regional situation, including the war in Gaza and Houthi attacks on shipping in the Red Sea.
  • Potential risks to India’s economic growth, emphasizing the need for coordination with regional players like the UAE, Saudi Arabia, and Egypt.
  • In conclusion, Prime Minister Narendra Modi’s visit to the UAE reflects the enduring personal rapport with Sheikh Mohamed bin Zayed, shaping a robust bilateral relationship.
  • Beyond ceremonial events, the visit highlights economic collaborations, strategic partnerships, and joint efforts to address regional challenges, enhancing India-UAE ties.
PYQ: How will I2U2 (India, Israel, UAE and USA) grouping transform India’s position in global politics? (UPSC CSE (M) GS-2 2022) (150 words/10 m)
Practice Question:  Discuss the multifaceted dynamics of India-UAE relations, emphasizing personal diplomacy, economic collaborations, and the role of regional partnerships. (150 words/10 m)

2. Why India needs deep industrialisation.

Topic: GS3 – Indian economy – Changes in industrial policy and their effects on industrial growth.
Critical for UPSC as it addresses India’s economic hurdles, proposing unconventional solutions, and evaluates socio-cultural factors impacting industrialization.
●       The article discusses India’s economic challenges post-COVID-19, focusing on historical industrial stagnation, proposing high-skill services-led growth, and critiquing potential pitfalls and cultural factors inhibiting progress.
 Introduction: The Economic Landscape Post-COVID-19
  • The global economic landscape has undergone significant shifts in the aftermath of the COVID-19 pandemic.
  • A retreat from globalization is evident, and nations are embracing industrial policy and state-led economic interventions.
  • Notable examples include the Inflation Reduction Act in the U.S., the European Green Deal, and India’s Atmanirbhar Bharat.
  • While India has sustained growth post-pandemic, it faces challenges like premature deindustrialization and a skewed distribution of economic benefits.
India’s Historical Industrial Stagnation
  • India has struggled with industrialization over its 75-year history, with manufacturing consistently contributing below 20% to output and employment, except during the ‘Dream Run’ of 2003-08.
  • Despite economic reforms in 1991 promising labor-intensive industrialization, the reality remains stagnant.
  • India is at a critical juncture with stagnating industrial investment, rising unemployment, and an expanding trade deficit fueled by imported goods.
Rajan and Lamba’s Unconventional Perspective
  • In “Breaking the Mould: Reimagining India’s Economic Future,” Raghuram Rajan and Rohit Lamba propose a departure from traditional manufacturing-led growth.
  • Instead, they advocate for high-skill, services-driven growth powered by information technology.
Potential Pitfalls of Services-Led Growth
  • Poor Employment Elasticity: Services-led growth has poor employment elasticity. The service sector cannot absorb labor exiting agriculture as effectively as manufacturing could. Moreover, it demands a highly skilled workforce, exacerbating inequality.
  • Inequality Concerns: The relative wages in the service sector, particularly for workers with a college degree, are much higher than those without. This leads to higher inequality compared to manufacturing-led growth.
  • Education Disparities: Early investments in higher education have led to the neglect of mass school education. This has created an unequal distribution of human capital, favoring the traditional elite over first-generation graduates from rural areas and small towns.
Culturally Rooted Diagnosis for Industrial Stagnation
  • Lack of Mass Education: The absence of mass education, linked to cultural factors, has been a hindrance to industrialization. Joel Mokyr’s perspective suggests that the rise of useful knowledge is crucial for technological progress and economic growth.
  • Undervaluation of Vocational Skills: Certain occupations essential for manufacturing, such as electrical and welding, are undervalued in Indian culture, hindering organic innovation. Vocational skills are underappreciated even if they command higher wages.
  • Social Divide and Caste System: Fault lines in education and economic opportunities reflect both new and old class divides rooted in India’s caste system. The poor quality of state-run schools and colleges exacerbates these disparities.
Conclusion: The Need for Deep Industrialization
  • To address India’s economic challenges, there is a call for deep industrialization rather than solely relying on the service sector.
  • Mass education, a revaluation of labor, and a focus on inclusive economic growth are identified as crucial for building the foundations of a more robust and equitable society.
PYQ: Faster economic growth requires increased share of the manufacturing sector in GDP, Particularly of MSMEs. Comment on the present policies of the Government in this regard. (150 words/10m) (UPSC CSE (M) GS-3 2023)
Practice Question:  How can India overcome historical industrial stagnation and achieve inclusive growth, considering the role of unconventional strategies and socio-cultural factors? Discuss. (150 words/10 m)

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