News & Editorial Analysis 31 December 2022
1 – About the Fiscal Deficit:
GS III Topic Indian Economy
According to information provided by the Controller General of Accounts (CGA) on Friday, the government’s budget deficit at the end of November was 59% of the anticipated annual total.
The real fiscal deficit for the months of April through November in 2022–23 was 9,78,154 crore. Spending and revenue patterns diverge in this way.
The deficit for the same time last year was 46.2% larger than the budget estimate for 2021–22.
A fiscal deficit is defined as:
The gap between all of the government’s outlays and all of its receipts is known as the fiscal deficit (excluding borrowing). When this cost exceeds the revenue, there is a fiscal imbalance.
A fiscal deficit occurs when a government’s overall spending exceeds its revenue (excluding money from borrowings).
The debt, which is an accumulation of annual deficits, is distinct from the deficit.
The government’s ability to manage its finances is indicated by the fiscal deficit.
An persistent, significant budget imbalance is a sign of overly generous government expenditure.
The budgetary surplus is quite uncommon, although the fiscal deficit is pervasive in practically every economy. The massive budget deficit is not always a bad thing if the funds are used to build infrastructure, like roads, airports, and other things that will eventually bring in money.
Fiscal consolidation programmes are used by governments (at the national and sub-national levels) to reduce deficits and debt accumulation.
How the fiscal deficit is filled:
The budgetary shortfall is covered by two sources. Here are some of them:
borrowing money from a commercial bank or from other organisations such as the IMF, other governments, etc.
Deficit financing requires borrowing money from the RBI in exchange for its securities in order to create new money (so, RBI prints new currency).
It might be argued that a government’s whole borrowing needs for a year are equal to the fiscal deficit for that year because borrowing is used to pay down the deficit.
The fiscal policy framework of India:
The following is significant information about India’s fiscal policy strategy:
Per the Indian Constitution, a Finance Commission (FC) must be established every five years.
This will serve as the foundation for distributing a portion of the center’s income to the state governments and provide medium-term budgetary guidance because the states’ taxation authority might not always be sufficient in relation to their expenditure obligations.
Another part of fiscal policy is the Union Budget, which the government must present to the Parliament for approval and discussion of its proposed taxing and spending measures.
Economic restraint is addressed through the Fiscal Responsibility and Budget Management Act (FRBM) 2003.
2 – Details of the Forex Reserve:
GS III Topic Indian Economy
India’s foreign exchange reserves decreased by $691 million to $562.808 billion as of December 23, according to the RBI, marking the second week in a row that they had decreased.
The reserve total for the prior reporting week, which had been rising for the five preceding reporting weeks, actually fell by $571 million to $563.499 billion.
The nation’s foreign exchange holdings hit an all-time high of $645 billion in October 2021. The rupee has been under pressure as a result of the central bank using its reserves, particularly as a result of events on the international stage.
Foreign currency reserves:
Bonds, treasury bills, and other government securities are examples of the kind of assets that a central bank may maintain as reserves in foreign currencies.
It should be emphasised that US dollars make up the majority of the world’s foreign currency reserves.
India’s foreign exchange holdings include:
gold reserves held in foreign currencies.
Reserves provided by the International Monetary Fund and special drawing rights (IMF).
Goals of Keeping Foreign Exchange Reserves:
Promoting and preserving trust in monetary and exchange rate control techniques.
Allows for the protection of the national or union currency.
By keeping foreign currency liquidity to absorb shocks during times of crisis or when access to borrowing is restricted, reduces external vulnerability.
The importance of raising foreign reserve levels:
Thanks to increased foreign reserves, the government and the RBI are in an excellent position to manage the country’s domestic and international financial issues.
In the event of an economic balance-of-payments (BoP) crisis, crisis management acts as a safety net.
As reserves have grown, the rupee has strengthened against the dollar.
Market Confidence: Reserves will give markets and investors some comfort that a government can maintain its obligations to other countries.
3 – About the National Commission for Women:
GS II Topic Statutory and Non-Statutory Bodies
The National Commission for Women (NCW) has instructed all States to make sure that coaching facilities and educational institutions strictly abide by the law prohibiting workplace sexual harassment.
The NCW sent a letter to the chief secretaries of each State outlining its concerns regarding sexual harassment incidents at coaching facilities and requesting that officials ensure strict adherence to the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, and the regulations established under it.
What are the NCW’s origins and objectives?
Nearly 50 years ago, the Committee on the Status of Women in India (CSWI) suggested creating an NCW to carry out supervision duties, make conflict resolution easier, and hasten the socioeconomic growth of women.
The National Perspective Plan for Women, among other committees, commissions, and programmes, has advocated the creation of an apex body for women (1988-2000).
The National Commission for Women (NCW) became a statutory organisation in January 1992 as per the National Commission for Women Act of 1990.
On January 31, 1992, the First Commission was established, with Mrs. Jayanti Patnaik serving as chair.
A chairperson, a member secretary, and five other members make up the commission. The central government appoints the NCW’s chairperson.
Mission Statement and Goals:
It attempts to safeguard women’s legal rights and entitlements by the development of suitable policy, legislative action, etc., allowing them to achieve equality and equitable participation in all aspects of life.
Its duties include looking into the legal and constitutional protections for women.
Adopting corrective legislation is advised. assist in resolving complaints.
The government should receive recommendations on all issues of policy that impact women.
It has received several complaints, and it has taken independent action to expedite justice in certain instances.
Why is it crucial to broaden the NCW’s purview?
The Atmanirbhar Bharat (self-sufficient India) campaign has made it obvious how the development of the nation and women’s skills are related.
This transformation is obvious given that women account up over 70% of Pradhan Mantri MUDRA Yojana recipients.
Over the past six to seven years, more women’s self-help organisations have sprouted up around the country.
Similar to this, in 45% of the more than 60 000 new businesses that have started since 2016, there is at least one woman director.
Outdated Social Thought: The expertise and influence of women have contributed to the development of the dairy and textile industries.
India needs to encourage women to start businesses because MSMEs are essential to the nation’s economy.
Traditionalists, however, believe that women can only perform domestic work.
In comparison to the same period in 2020, the NCW states that there has been a 46% increase in complaints of crimes against women in the first eight months of 2021.
Domestic violence, dowry harassment, workplace sexual harassment, attempted rape, and cybercrimes are just a few of the crimes that hurt women.
4 – Details of the Pradhan Mantri Garib Kalyan Anna Yojna:
GS II Topic Government Schemes and Interventions
The government has added a further year to the Pradhan Mantri Garib Anna Kalyan Yojana’s rice supply, according to BJP national secretary Y. Satya Kumar (PMGKAY).
Y.S. Jagan Mohan Reddy, the state’s chief minister, and his cabinet colleagues blamed the Center for the State’s numerous development projects’ delays in execution. At a news conference held here on Thursday, Mr. Satya Kumar stated that the State administration was looking for additional funding instead of using the money that had already been authorised.
The Pradhan Mantri Garib Kalyan Package’s (PMGKP) PMGKAY initiative aids the underprivileged in their struggle against COVID-19.
The project aimed to give each person covered by the National Food Security Act of 2013 an additional 5 kg of free grains (rice or wheat) on top of the 5 kg of subsidised foodgrain that was being given out through the Public Distribution System (PDS).
An earlier announcement stated that 80 lakh ration card holders would be impacted over the course of three months (April, May, and June 2020). Later, September 2022 was added to the deadline.
The Ministry of Finance is its nodal Ministry.
Any migrant worker or ONORC programme participant can receive the free ration by transferring their benefits to one of the nation’s 5 lakh ration outlets.
Cost: The entire cost of PMGKAY for all phases will be Rs. 3.91 lakh crore.
Challenges: The National Food Security Act uses the most recent census to determine who is eligible (2011). Since then, the number of people without access to food has increased.
Costly: The expense of maintaining it increases the appeal of a plentiful supply of reasonably priced grains. Due to a poor harvest in 2022 that increased pressure on food prices and shook the world agricultural markets as a result of unpredictable adverse weather, India was forced to impose export restrictions on wheat and rice.
The government’s goal of maintaining the budget deficit at 6.4% of GDP may become more challenging to achieve as the deficit grows.
Inflation: There may be an impact on inflation from the programme decision. Because of lesser production brought on by a heatwave and irregular rains, rice and wheat prices are rising. These two items are responsible for about 10% of India’s retail inflation.
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The Hindu Editorial Analysis
In The Evolving New World, India Needs A New Vision
According to mythology, extraordinary efforts by industry, government, and science to immunise the entire world led to the eradication of the COVID-19 pandemic at the beginning of 2022. After this great success, daily life would restart and the human spirit would be renewed.
That was not the intended result, though. The Russia-Ukraine conflict broke out just two months into the new year when the world was in disorder due to a pandemic. Inflation, a recession, and a winter gas scarcity have all been brought on by retaliatory economic sanctions and the weaponization of trade dependencies, making millions of people’s lives miserable.
The trade war and a belligerent China:
The era of mass-produced consumer electronics that were imported from the US and Europe, used in China, Brazil, and India, and manufactured in Taiwan, Korea, and Japan appears to be coming to an end. America now supports trade barriers against its enemies, encourages commercial blocs among its allies, and lavishly funds domestic industry. Trusted international trade has degenerated into dishonest “foe trade,” which has prompted the creation of “friend trade” organisations and the exaltation of “economic nationalism.”
Over the past forty years, India’s exports have grown tremendously, generating millions of employment, significant foreign exchange reserves, and increasing domestic production and consumption. In a more bipolar world, India, which benefits from the current economic structure, cannot afford to be excluded from the trading blocs dominated by the west and Russia-China.
In the midst of such significant global shifts, China launches a surprise and perplexing military assault against India. China has successfully dominated the global system through the shrewd use of debt diplomacy, economic coercion, and an ideology of the “common opponent.” A single border issue with India or a bilateral conflict stand in no way for the Chinese threat. It suggests a significant reorganisation of world dynamics.
China’s economic might as the world’s largest manufacturer gives it the confidence and authority to make such decisions. Economic sanctions and trade restrictions on China are two examples of knee-jerk reactions by western nations that will backfire. India, which has a healthy economy, is opposed to a Chinese-controlled world system.
Social cohesion is necessary:
The best reaction to China is a prosperous India with industries that employ millions of people and provide the rest of the world with goods and services worth billions of dollars. But for India to become a big economic force, social cohesion is a necessity.
When workers from diverse identities coexist in the same workplace, factories cannot afford to foster mistrust and hatred on the basis of the workers’ caste, religion, or identity. All that matters is ability.
It makes sense that social harmony is the cornerstone of Indian administration since the country’s economic prosperity is the key to its internal security. India’s country is under danger, and we are to blame. There is a chance that a single, isolated communal event could turn into a significant escalation of violence and unrest. India’s unpredictability and intercommunal conflict are gifts for our adversaries.
The stable global equilibrium that has brought about enormous benefits could be disturbed in 2022. The apparent rational desire for wealth and peace is not the primary or even the exclusive motivation driving all nations and their leaders. We need to refute the assertion that there won’t be any more “shared reasonable objectives” in the upcoming new world order.
In light of this illogical world, it is crucial to rethink India’s overall strategy and its normative policy framework. We need a comprehensive military, diplomatic, social, and economic plan, and we shouldn’t be afraid to question accepted wisdom.
In order to avoid being constrained by out-of-date rules and procedures for military procurement, it is imperative that we modernise and enhance our defence capabilities with cutting-edge weapons.
Who India’s active allies are and who is content to remain neutral will be made clear by a hostile and belligerent China. India’s increasing ambition for trade and market access may now conflict with the current foreign policy orthodoxy of non-alignment, necessitating a reconsideration of it. For privileged access to specialised technology and investment from other countries in exchange for access to the domestic market, India needs a more audacious geoeconomic strategy.
The conventional instruments of welfare and governance are deteriorating, and the divide between the haves and have-nots is growing, thus India’s politicians will need to create a new social compact with the populace.
India’s economic development strategy must also address environmental issues, do away with the monopoly model of the private sector, forge a new inclusive path that emphasises the labour market, and stay away from GDP growth that is driven by financialization because it is no longer relevant for the average person.
To address the rising imbalance across States, India’s political governance model asks for changes to federalism and decentralisation. In the first fifty years following Independence, centralization was crucial to maintaining and establishing the republic.
At this point, the idea of “one nation, one policy” needs to be abandoned. Greater decentralisation is necessary for stronger institutions. Reforming public institutions will provide them more authority, freedom, resources, and accountability.
To put it briefly, the country requires a fresh viewpoint for the twenty-first century. But a peaceful, inclusive society that recognises India’s unique pluralism is the cornerstone of this new vision. Using the current frameworks, systems, and practises incrementally might not be sufficient. To come together and create a new vision, political leaders across the board must exert their combined efforts.
The Indian Express Editorial Analysis
A New Social Media, Meaverse & More AI
Modern most innovative Social media, AI, and other information technologies have inexorably merged with everyday life.
We occasionally fail to recognise the significance of an enabler technology in today’s society. If the existing technology hadn’t been created, many of the things we currently do or don’t do would be different. Our dependence on technology has only grown over the last year, in 2022, and it’s possible that it may get harder to change in the future.
India was prepared to make a significant technical advance with the rollout of 5G in the last quarter of the year. Even though many of us have updated to the most recent 5G technology, we may still be waiting to see how it has benefited our lives.
In 2023, IT is anticipated to have a prosperous year. As a result, user engagement in the sector of personal technology is experiencing a saturation issue.
Businesses are already having to reassess their strategy as a result, even if it is still unclear whether these new technologies will be prepared to be made available to users in the following year.
However, a number of new platforms will undoubtedly make their public debut, particularly those that are supported by artificial intelligence and the Metaverse.
What noteworthy developments should we be on the lookout for in 2023?
AI that is more developed and common:
Conversational AI has reached its zenith, as shown by Chat GPT.
It’s true that these AI components are now intelligent enough to start developing useful leave applications, even though the most of them are still contained in separate products and hence serve as more entertainment than work.
Imagine a version of Gmail that will not only auto-suggest but will also write your next email to the boss in the coming year as an example of how other products that we use every day will incorporate this intelligence.
In fact, artificial intelligence (AI) bots are a major topic of conversation right now. As these bots become more intelligent, they will start posing queries and changing the pre-written solutions.
We will need to either learn to be more sceptical of AI or learn to trust it more as it becomes more interwoven into our daily lives.
It’s now post-social time:
Twitter has shown us that social media as we know it might soon disappear this year.
Even if Twitter survives the storm it has made for itself, Facebook clearly struggles to remain relevant to an audience that is getting younger and more digital native.
They usually record their behaviours on noticeboards rather than using words, which indicates that their attitudes on social interaction are considerably different.
For instance, Meta understands that in order to act as the social connection when users, if any, migrate to the Metaverse, it will need to look beyond its current social media platforms.
But there’s a chance that won’t change anytime soon. The hole that is currently forming in the social media realm up until that moment is being filled by users who just post brief videos. Though not all platforms succeed in that market, that fad will eventually pass.
Given how difficult it is to create a new hook for the young, this is a fantastic opportunity for something new to appear, but it won’t be simple.
Younger users like emerging platforms like Discord, where debates take place more in private groups than in public forums, but Facebook’s user base continues to age year after year. The expansion of these platforms is already posing a threat to strategies for monetizing social media usage that have been in place for a while.
Social enclaves that are smaller and darker:
The Internet is getting more regionalized and multilingual as more people utilise it, especially in nations like India.
Since the English-language internet appears to have reached a worldwide plateau, search engines like Google are concentrating more on the ability to support smaller, regional languages.
Even though this raises a number of technological issues, it also offers a chance to test out cutting-edge technologies that can automatically adapt web material for these new consumers.
However, this is already creating regional bubbles in nations like India that have different patterns and are hardly ever seen on a national or worldwide scale.
One-size-fits-all features will have even less success as a result of the expanding mosaic-like structure of users, which will force new platforms to address additional regional problems.
There is also dark social behaviour, much of which takes place in encrypted pipelines, so we truly have no idea what the Internet is thinking.
How is the Metaverse doing right now?
It’s unlikely that Mark Zuckerberg will immediately implement his absurd interpretation of the Metaverse in the workplace.
Extended reality (XR) may be the solution for virtual collaboration and communication, as hybrid workforces are growing more prevalent and travel is still not as viable as it once was.
Due to the high cost of these virtual interaction tools, it may be up to employers to provide headsets and other equipment to their staff for frequent XR meetings.
The original implementation of this would resemble an improved form of video conferencing once interaction with virtual objects was added.
Throughout the year, regular users can anticipate using a few more commercial Metaverse versions.
It will be difficult to find hardware that will allow you to enter these virtual realms without becoming bankrupt in the real world. The primary disruptor may be a smartphone or other readily available technology that makes it easier for people to log into the Metaverse.
These technologies must be used to improve human connectivity, make life easier for individuals, and ultimately advance the welfare of human civilization. This is particularly important now that new IT and world technologies like social media, artificial intelligence, and the Metaverse are growing.
Because of this, it is essential for the government, businesses, and users to work together to ensure that these platforms are used properly and to develop the global community.
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