SEETHAKALI
- Seethakali, also spelled as Seethankali, is a traditional folk art form that originates from the southern Indian state of Kerala, particularly among the Malayalam-speaking communities.
- It is a unique and vibrant performance art that combines storytelling, music, dance, and elaborate costumes.
- Seethakali is primarily associated with the Bhagavathy (goddess) temples of Kerala and is performed as a form of devotion
- Seethakali is a centuries-old traditional art form that is thought to have started in Perinad in the Kollam region
- Seethakali is inspired by scenes from the Indian epic Ramayana. Seethakali performances bring mythic characters like Rama, Seetha, Ravana, and Hanuman to life, telling the story of Seetha’s journey from the time she followed Rama to the forests until her ascension to the skies
- This art form was first performed some 150 years back by the people of Vedar and Pulayar communities
- Seethakali was performed as part of the harvest festival Onam
Key features and elements of Seethakali art include:
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Narrative Storytelling: Seethakali performances typically revolve around episodes from the Hindu epic, Ramayana. The central story often focuses on the heroic deeds of Lord Rama, his wife Sita, and his loyal companion Hanuman. The narratives are typically presented through dialogues and songs.
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Elaborate Costumes: One of the most striking aspects of Seethakali is the elaborate costumes worn by the performers. The actors wear intricately designed masks and colorful attire, often representing characters from the Ramayana, such as Ravana, Hanuman, or various demons.
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Music and Instruments: Music plays a central role in Seethakali performances. Traditional percussion instruments like chenda (a cylindrical drum), maddalam (a barrel-shaped drum), and ilathalam (cymbals) are commonly used. The rhythms and melodies enhance the storytelling and dramatic elements.
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Choreographed Dance: The performers engage in choreographed dance movements that are often rhythmic and energetic. The dance sequences help convey the emotions and actions of the characters in the story.
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Mythological Themes: Seethakali is deeply rooted in Hindu mythology, and its performances often depict episodes of valor, devotion, and the triumph of good over evil. The stories may vary depending on the region and temple traditions.
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Devotional Context: Seethakali is typically performed in the precincts of Bhagavathy temples, especially during temple festivals and other religious events. It serves as an expression of devotion and a means of narrating the stories of Hindu deities to the community.
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Community Participation: Seethakali is a community-oriented art form that involves the participation of local performers, musicians, and artists. It is often passed down through generations within families or local troupes.
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Ritualistic Aspects: Seethakali performances are often accompanied by rituals, prayers, and offerings to the deity, adding a sacred dimension to the art form
INDIA- CANADA
1. Context
- The recent diplomatic crisis between India and Canada has the potential to create significant political and geopolitical consequences.
- It all began when Canadian Prime Minister Justin Trudeau made a startling allegation in Parliament, suggesting the Indian government's involvement in the murder of a Khalistani separatist in Canada.
- The situation escalated rapidly, with both countries taking drastic diplomatic measures.
2. Canada's Allegation
- Canadian Prime Minister Justin Trudeau accusation that Indian security agencies might be linked to the murder of a Canadian citizen, Hardeep Singh Nijjar, sent shockwaves through diplomatic circles.
- Such a serious charge by a foreign leader against another nation before conclusive proof is rare and demands a thorough investigation.
- Canada's Foreign Minister Melanie Joly has emphasized the need for cooperation between the two countries in the investigation.
3. Diplomatic Escalation
- Canada took the initial step in the escalation by expelling an Indian diplomat in Ottawa, identified as the head of the Indian intelligence agency.
- In response, India expelled a Canadian diplomat based in New Delhi.
- India also issued travel advisories for its citizens in Canada, raising concerns about their safety. Visa services were suspended, affecting various categories of travellers.
4. About the Khalistan movement
- The Khalistan movement is a Sikh separatist movement that seeks to create an independent Sikh state called Khalistan in the Indian state of Punjab.
- The movement began in the 1970s and has been marked by violence and political unrest.
- The Khalistan movement is based on the belief that the Sikhs are a distinct people with their own unique culture and history.
- Sikhs believe that they have been persecuted by the Indian government, and they demand an independent state where they can govern themselves.
- The Khalistan movement has been supported by some Sikhs in India and abroad.
- However, it is opposed by the Indian government, which considers it to be a threat to national security.
4.1. Khalistan Problem Resurfaces
- This crisis has brought the long-standing issue of Khalistan back into India-Canada relations.
- While the relationship faced challenges in the past, including Canada's criticism of India's nuclear tests in 1998, the current issue centres around Canada's perceived support for separatist Khalistani groups.
- Canada's Liberal Party has been accused of pandering to these groups for votes, particularly in constituencies where Khalistani sympathies hold sway.
4.2. Khalistan and Canadian Politics
- Jagmeet 'Jimmy' Dhaliwal, associated with Canada's New Democratic Party, is viewed with suspicion by the Indian establishment due to his pro-Khalistan sympathies.
- Canada's hosting of events attended by individuals linked to pro-Khalistan outfits, like Jaspal Atwal, during Trudeau's visit in 2018, further strained relations.
- The Khalistan "referendum," encouraged by Pakistani intelligence agencies, has been a significant irritant in recent years.
5. Social and economic indicators between India and Canada
Canada's FDI in India: Canada accounts for a modest 0.56% of India's total Foreign Direct Investment (FDI). Out of the $645,386.0884 million in FDI equity inflow into India between April 2000 and June 2023, Canada contributed 0.5644% ($3,642.5243 million).
Indian Diaspora in Canada: Canada is home to a significant portion of overseas Indians. Of the 3,21,00,340 overseas Indians, 5.26% (16,89,055) reside in Canada. This includes 1,78,410 Non-Resident Indians (NRIs) and 15,10,645 Persons of Indian Origin (PIOs).
Indian Students in Canada: Canada is a popular destination for Indian students. In 2022, out of an estimated 13,24,954 Indian students studying abroad, 13.83% (1,83,310) were enrolled in Canadian institutions, according to data from the Ministry of External Affairs.
Canada's Role in Indian Tourism: Canada is the fourth-largest source of tourists visiting India, based on 2021 figures. Canadian tourists accounted for 5.3% (80,437) of Foreign Tourist Arrivals (FTAs) in India during that year. Notably, a significant portion of these tourists (72.6%) were members of the Indian diaspora.
Bilateral Trade: India's bilateral trade with Canada amounted to $8,161.02 million in the financial year 2022-23, making up only 0.70% of India's total trade of $1,165,000.88 million. Despite its modest size, India maintains a trade surplus with Canada, with exports surpassing imports by $58.45 million.
Trade Highlights
India's major exports to Canada during 2022-23 included medicines, vannamei shrimp, smartphones, gold-set diamond jewellery, basmati rice, iron pipes for oil/gas pipelines, coaches powered by external electricity, diamonds, and cotton t-shirts.
Key imports from Canada included coking coal, potassium chloride, lentils (masur dal), newsprint, wood pulp (mechanical and chemical pulp processes), and copper ores and concentrates.
5.1. Top Indian Imports from Canada
6. Diplomatic Complexity
- Diplomats familiar with Canada's foreign policy assert that the country is often influenced by immigrant interests.
- Pro-Khalistan elements, though a minority in the Canadian Sikh community, control several influential gurdwaras and can exert political influence in key constituencies.
- This small but influential group shapes Canada's policy towards India.
7. Geopolitical Implications
- Canada holds a significant role in global geopolitics, being part of the G7 and sharing intelligence within the Five Eyes alliance.
- This diplomatic standoff poses a challenge for Western powers, including the US, UK, Australia, Germany, France, and Japan, as they maintain strategic partnerships with both Canada and India.
- Balancing these relationships becomes crucial in the wake of this crisis.
8. Conclusion
- The India-Canada diplomatic crisis underscores the importance of addressing each other's concerns and conducting a fair and impartial investigation into the allegations.
- Both nations must work to de-escalate tensions and find a way forward while considering the broader geopolitical implications of their actions.
- This crisis serves as a lesson for Canada and its partners on how to handle the sensitive issue of Khalistan in diplomatic relations.
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For Prelims: India-Canada, Khalistan, Foreign Direct Investment, Tourism, Bilateral Trade, Geo-politics, Wood Pulp, News Print, Lentils, Potassium Chloride, Coking Coal
For Mains:
1. Examine the resurgence of the Khalistan movement in India-Canada relations. How has Canada's perceived support for Khalistani groups affected bilateral ties? (250 Words)
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Previous Year Questions
1. In the context of bilateral trade negotiations between India and the European Union, what is the difference between European Commission and European Council? (UPSC 2010)
1. European Commission represents the EU in trade negotiations whereas the European Council participates in the legislation of matters pertaining to economic policies of the European Union.
2. European Commission comprises of the Heads of State or government of member countries whereas the European Council comprises of the persons nominated by European Parliament.
Which of the statements given above is/are correct?
A. 1 only B. 2 only C. Both 1 and 2 D. Neither 1 nor 2
Answer: D
2. With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic? (UPSC 2020)
A. It is the investment through capital instruments essentially in a listed company.
B. It is a largely non-debt creating capital flow.
C. It is the investment which involves debt-servicing.
D. It is the investment made by foreign institutional investors in the Government securities.
Answer: B
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ADVANCED MANUFACTURING
Key aspects and technologies associated with advanced manufacturing include:
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Automation and Robotics: Automation involves using machinery and control systems to perform tasks with minimal human intervention. Robotics, which includes industrial robots, collaborative robots (cobots), and autonomous vehicles, is a crucial component of advanced manufacturing, improving precision and efficiency.
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Additive Manufacturing (3D Printing): Additive manufacturing builds objects layer by layer, allowing for the creation of complex, customized, and lightweight parts. It is used in industries ranging from aerospace to healthcare.
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Digital Twin: A digital twin is a virtual replica of a physical product or system. It allows manufacturers to simulate, monitor, and analyze real-world performance, facilitating better decision-making and predictive maintenance.
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Artificial Intelligence and Machine Learning: AI and machine learning are used to optimize processes, predict maintenance needs, and improve quality control in manufacturing. They enable real-time data analysis and decision-making.
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Internet of Things (IoT): IoT connects machines, devices, and sensors to the internet, enabling data collection, remote monitoring, and control of manufacturing processes. It contributes to improved efficiency and predictive maintenance.
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Big Data and Analytics: The analysis of large datasets generated by manufacturing processes helps identify trends, anomalies, and opportunities for optimization.
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Advanced Materials: The development and use of new materials with unique properties, such as composites and smart materials, enable the production of lighter, stronger, and more durable products.
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Augmented Reality (AR) and Virtual Reality (VR): AR and VR technologies are used for training, maintenance, and design in manufacturing. They enable immersive experiences and remote collaboration.
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Advanced Machining and Tooling: High-precision machining and tooling technologies, including CNC (Computer Numerical Control) machining, enhance the manufacturing of complex parts.
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Supply Chain Integration: Advanced manufacturing often involves integrating the entire supply chain, from raw material suppliers to end customers, to streamline production and reduce lead times.
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Sustainability: Sustainable manufacturing practices, such as green materials, energy-efficient processes, and waste reduction, are increasingly integrated into advanced manufacturing strategies.
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Customization and Personalization: Advanced manufacturing enables the cost-effective production of customized and personalized products, catering to individual customer preferences.
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Agile Manufacturing: The ability to quickly adapt to changing market demands and design modifications is a key aspect of advanced manufacturing
The manufacturing industry is continually evolving due to a variety of issues and trends that shape its landscape. These factors have a significant impact on the way manufacturing companies operate and plan for the future. Here are some key issues and trends influencing the manufacturing industry:
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Digital Transformation (Industry 4.0): The adoption of digital technologies such as IoT, AI, robotics, and cloud computing is transforming manufacturing processes. Industry 4.0 aims to create "smart factories" with interconnected systems for improved efficiency, real-time monitoring, and predictive maintenance.
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Supply Chain Resilience: The COVID-19 pandemic exposed vulnerabilities in global supply chains. Manufacturers are now prioritizing supply chain resilience by diversifying sources, using local suppliers, and adopting technologies for better visibility and risk management.
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Sustainability: Environmental concerns are driving manufacturers to adopt sustainable practices. This includes reducing waste, using renewable energy sources, and developing eco-friendly products and packaging to meet consumer demands for more responsible consumption.
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Customization and Personalization: Consumers increasingly expect customized products. Manufacturers are using advanced manufacturing techniques like 3D printing and mass customization strategies to meet these demands efficiently.
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Advanced Materials: The development of new materials, including composites, superalloys, and smart materials, is enabling the creation of lighter, stronger, and more durable products for various industries.
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Workforce Challenges: An aging workforce and a skills gap in manufacturing are significant concerns. Automation and digital tools are being used to augment the workforce and make manufacturing jobs more appealing to the younger generation.
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Reshoring and Nearshoring: Some manufacturers are reevaluating offshoring strategies and moving production closer to their primary markets (nearshoring) or back to their home countries (reshoring) to reduce supply chain risks and transportation costs.
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Cybersecurity: As manufacturers become more connected and reliant on digital systems, the risk of cyberattacks increases. Protecting intellectual property and ensuring the security of data and operations is a growing priority.
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Regulatory Compliance: Manufacturers must adhere to various regulatory standards and environmental requirements, which can impact production processes and product design. Staying compliant while remaining competitive is a constant challenge.
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E-commerce Integration: The rise of e-commerce has led to changes in how manufacturers distribute products. Many are integrating e-commerce capabilities into their operations, focusing on direct-to-consumer sales and shorter lead times.
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Additive Manufacturing: 3D printing and additive manufacturing technologies are revolutionizing prototyping and production, allowing for rapid iteration and customization of products.
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Circular Economy: Manufacturers are exploring ways to reduce waste and extend the life of products through recycling, refurbishing, and remanufacturing.
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Responsible AI and Ethical Considerations: As AI adoption increases, manufacturers are addressing ethical and responsible AI use, including bias mitigation, transparency, and fairness.
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Global Trade Tensions: Trade disputes and tariffs can disrupt global supply chains and impact manufacturing costs and profitability.
Advanced manufacturing technologies and strategies play a crucial role in addressing the challenges and trends in the manufacturing industry. Here's how advanced manufacturing can help resolve some of these issues:
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Digital Transformation (Industry 4.0):
- Real-time Monitoring: Advanced manufacturing systems enable real-time monitoring of production processes and equipment, allowing for immediate issue detection and corrective actions.
- Predictive Maintenance: IoT sensors and AI algorithms can predict equipment failures, reducing downtime and maintenance costs.
- Data Analytics: Advanced analytics can provide insights into production efficiency, quality, and supply chain performance, facilitating data-driven decision-making.
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Supply Chain Resilience:
- Supply Chain Visibility: Advanced manufacturing systems provide end-to-end visibility into supply chains, helping manufacturers identify vulnerabilities and alternative sourcing options.
- On-demand Production: Technologies like 3D printing enable on-demand and localized production, reducing the need for extensive global supply chains.
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Sustainability:
- Efficient Resource Use: Advanced manufacturing techniques optimize material usage and minimize waste through precise control and customization.
- Green Technologies: Adoption of cleaner and energy-efficient processes and technologies aligns with sustainability goals.
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Customization and Personalization:
- Mass Customization: Advanced manufacturing allows for cost-effective mass customization by utilizing techniques like 3D printing and flexible automation systems.
- Digital Twinning: Digital twins enable virtual product development and testing, reducing the time and cost of customization.
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Advanced Materials:
- Material Development: Advanced manufacturing facilitates the use of innovative materials, such as composites and alloys, in production processes.
- Material Testing: Advanced technologies enable rigorous testing and quality control of materials, ensuring product reliability.
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Workforce Challenges:
- Skill Enhancement: Advanced manufacturing systems often require a different skill set. Training programs and upskilling initiatives can prepare the workforce for these roles.
- Cobot Integration: Collaborative robots (cobots) can work alongside human operators, enhancing worker productivity and safety.
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Reshoring and Nearshoring:
- Automation Efficiency: Advanced automation technologies can reduce labor costs, making reshoring and nearshoring more economically viable.
- Localization: Localized production using advanced manufacturing methods can reduce lead times and transportation costs.
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Cybersecurity:
- Cybersecurity Protocols: Implementing robust cybersecurity protocols and AI-based threat detection can safeguard digital manufacturing systems and data.
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Regulatory Compliance:
- Traceability: Advanced manufacturing systems often provide traceability and documentation capabilities, making it easier to comply with regulatory requirements.
- Customization for Compliance: Customizable production processes can be adapted to meet specific regulatory standards.
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E-commerce Integration:
- Direct-to-Consumer (DTC): Advanced manufacturing supports DTC models by enabling small-batch production and quick customization for online orders.
- Inventory Management: Efficient production and real-time demand forecasting help manage e-commerce inventory effectively.
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Additive Manufacturing:
- Rapid Prototyping: 3D printing allows for rapid prototyping and design iterations, reducing product development times.
- Complex Geometries: Advanced manufacturing techniques enable the production of complex and lightweight structures that were previously challenging to manufacture.
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Circular Economy:
- Remanufacturing: Advanced manufacturing supports remanufacturing processes by enabling the refurbishment of used products to extend their life.
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Responsible AI and Ethical Considerations:
- Bias Mitigation: Advanced AI algorithms can be designed to address bias and fairness concerns.
- Transparency: AI and machine learning models can be made more transparent, allowing for ethical oversight.
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Global Trade Tensions:
- Localized Production: Advanced manufacturing technologies facilitate localized production, reducing dependence on complex global supply chains.
The World Economic Forum (WEF) is known for its efforts to promote public-private cooperation and address global challenges. One of its key areas of focus is supporting industry transformation through various initiatives. Here are some notable initiatives by the World Economic Forum aimed at fostering industry transformation:
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The Fourth Industrial Revolution: The WEF introduced the concept of the Fourth Industrial Revolution, which emphasizes the transformative impact of emerging technologies like AI, blockchain, and the Internet of Things on industries and societies. They facilitate discussions, research, and partnerships to help industries adapt to this new era.
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Center for the Fourth Industrial Revolution (C4IR): The WEF has established several C4IR centers worldwide, including in San Francisco, Tokyo, and Beijing. These centers bring together governments, businesses, academia, and civil society to co-design policy and governance frameworks for emerging technologies.
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Advanced Manufacturing and Production: The WEF has launched initiatives to accelerate the adoption of advanced manufacturing technologies such as 3D printing and automation. These initiatives promote best practices and collaboration among industry stakeholders.
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Global Lighthouse Network: The WEF has identified a network of "lighthouse" factories that serve as beacons of successful Industry 4.0 adoption. These factories demonstrate how advanced technologies can improve productivity, sustainability, and worker well-being.
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Circular Economy: The WEF promotes the transition to a circular economy, which focuses on reducing waste and maximizing the reuse and recycling of materials. Their Circular Economy Initiative works with companies to develop circular business models.
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Shaping the Future of Advanced Electronics: This initiative seeks to drive innovation and responsible use of electronics. It explores topics such as AI in electronics, sustainability, and the role of electronics in healthcare and other sectors.
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Future of Mobility: The WEF's Future of Mobility initiative addresses the transformation of transportation systems through innovations like autonomous vehicles, electric mobility, and shared mobility services. It encourages collaboration among stakeholders to create more sustainable and efficient transportation solutions.
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Mining and Metals Industry: The WEF collaborates with stakeholders in the mining and metals industry to develop sustainable and responsible practices. This initiative addresses issues like responsible sourcing, environmental impact reduction, and community engagement.
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Clean Energy Transition: The WEF supports the transition to clean energy by facilitating public-private partnerships, sharing best practices, and advocating for policies that promote renewable energy adoption and reduce carbon emissions.
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Global Future Councils: The WEF convenes Global Future Councils composed of experts from various industries to address critical global issues, share insights, and develop innovative solutions. These councils cover a wide range of topics, including technology, energy, and the environment.
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Previous Year Questions
1.In the ‘Index of Eight Core Industries’, which one of the following is given the highest weight? (UPSC CSE 2015) (a) Coal production Answer (b)
Mains
1.“Industrial growth rate has lagged behind in the overall growth of Gross-Domestic-Product (GDP) in the post-reform period” Give reasons. How far are the recent changes in Industrial Policy capable of increasing the industrial growth rate? (UPSC CSE Mains, GS3 2017)
2.Normally countries shift from agriculture to industry and then later to services, but India shifted directly from agriculture to services. What are the reasons for the huge growth of services vis-à-vis the industry in the country? Can India become a developed country without a strong industrial base? (UPSC CSE Mains GS3 2014)
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PRAYUSHAN FESTIVAL
The festival has several important components and practices:
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Fasting: Many Jains choose to fast during Paryushana. Some may undertake a complete fast, consuming no food or water, while others may observe partial fasting, restricting their diet to certain foods. Fasting is seen as a means of purifying the body and mind and increasing one's spiritual focus.
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Self-Reflection: Paryushana is a time for introspection and self-examination. Jains engage in prayer, meditation, and study of religious scriptures to deepen their understanding of Jain teachings and principles.
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Forgiveness and Reconciliation: A significant aspect of Paryushana is seeking forgiveness and reconciling with others. Jains ask for forgiveness from friends, family members, and anyone they may have wronged intentionally or unintentionally. This practice is known as "Samvatsari Pratikramana."
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Reading of Religious Texts: Jains often engage in the recitation and study of sacred Jain texts, including the "Kalpa Sutra" and the "Bhagavati Sutra," during Paryushana. These texts contain the teachings and stories of Jain Tirthankaras (spiritual teachers).
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Sermons and Discourses: Many Jain temples and religious leaders deliver sermons and discourses on Jain philosophy and ethics during Paryushana, which serve as spiritual guidance for the community.
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Acts of Charity and Compassion: Jains emphasize acts of charity and compassion during Paryushana. They may engage in charitable activities, including donating to the needy and helping those less fortunate.
Jainism, an ancient religion that originated in India, has several important festivals and observances throughout the year. These festivals are significant for Jains as they provide opportunities for spiritual reflection, worship, and community gatherings. Here are some of the most important Jain festivals:
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Mahavir Jayanti: Mahavir Jayanti is the most significant Jain festival, celebrated to commemorate the birth of Lord Mahavira, the 24th and last Tirthankara (spiritual teacher) of Jainism. It usually falls in March or April and involves elaborate temple decorations, processions, prayers, and offerings.
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Paryushana Parva (Daslakshana Parva): Paryushana is an essential festival in Jainism, dedicated to spiritual reflection, fasting, and self-purification. It lasts for eight or ten days, depending on the Jain tradition. It includes practices like fasting, seeking forgiveness, and studying sacred texts.
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Diwali (Mahavira Nirvana): While Diwali is primarily known as a Hindu festival, Jains also celebrate it with great enthusiasm, albeit for a different reason. For Jains, Diwali marks the anniversary of Lord Mahavira's attainment of nirvana (liberation) and is observed with prayer, worship, and the lighting of lamps.
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Dipalika (Deepavali): This festival is celebrated the day after Diwali and is marked by lighting lamps and candles to symbolize the light of knowledge and truth. It is a time for reflection and meditation.
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Akshaya Tritiya: Akshaya Tritiya is celebrated in April or May and is considered an auspicious day for Jains. It is believed that undertaking charitable activities and performing good deeds on this day brings immense blessings and positive karma.
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Gyan Panchami: Gyan Panchami is observed on the fifth day of the bright half of the month of Kartika (usually in October or November). It commemorates Lord Mahavira's first discourse after attaining omniscience.
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Mauni Ekadashi: Mauni Ekadashi is a day of silence and meditation. Jains often observe silence on this day and spend it in deep reflection and spiritual practices.
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Parva Kshay (Samvatsari): This festival marks the conclusion of Paryushana and is celebrated with rituals seeking forgiveness and reconciliation. Jains ask for forgiveness from all living beings for any harm caused, and they also forgive others.
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Akhatrij: Akhatrij is a festival that marks the end of the four-month rainy season (chaturmas) during which monks and nuns traditionally stay in one place to avoid harming insects and other life forms. It involves processions and prayers.
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Kartik Purnima: Kartik Purnima is celebrated on the full moon day in the month of Kartika (October or November). It involves visiting temples, lighting lamps, and performing charitable acts.
INDIA'S GROWTH TRAJECTORY
1. Context
2. Key Points
- The National Statistical Office's quarterly release of GDP figures is often likened to reviewing an economic performance report card.
- However, there is a critical difference between reviewing a report card and India's economic figures: the latter tells a far more nuanced story.
- The current growth story posits that the numbers reflect an uptick in the agriculture sector (growing at 3.5%) and the services industry (with financial, real estate and professional services growing at 12.2%).
- Moreover, there is talk of sustaining a close to 6.5% growth rate for the current financial year.
- Agriculture: The growth in the agriculture sector is unlikely to be sustained due to pressure from the El Nino phenomenon. El Nino is a climate pattern that can cause droughts in India, which would have a negative impact on agricultural production.
- Services: The growth in the services sector is being driven by a few key industries, such as financial, real estate, and professional services. However, it is important to note that these industries are sensitive to global economic conditions. If the global economy slows down, it could have a negative impact on these industries and thus on India's overall GDP growth.
3. Complexities in Calculating GDP
- The National Statistical Office (NSO) has used the income approach to calculate GDP, which sums up all national incomes from the factors of production and accounts for other elements such as taxes, depreciation, and net foreign factor income.
- The expenditure approach, which dictates headline growth to be 4.5% rather than 7.8%, would lead to a large discrepancy.
- Another essential statistical operation is adjusting inflation using the price deflator.
- Typically, the deflator is meant to adjust growth figures when they are overstated by inflation.
- In this case, deflation due to falling commodity prices, reflected in the wholesale price index, has worked to overstate the real growth.
- Furthermore, there is a base effect from the COVID-19 degrowth period, which continues to plague India’s growth figures.
- Although less pronounced in FY24, the base effect has a role in comparative statistics due to sporadic growth in the years following FY20-21.
- Whether the proposed, supposedly cooled, inflation rate calculated through the consumer price index can be sustained at current levels with the impending depreciation of the Indian rupee against the dollar due to capital outflow pressures resulting from the RBI’s reluctance to raise interest rates.
- India is a net importer and its most significant import consists of crude petroleum, whose price seems to be rising due to Saudi’s $100 per barrel push and rupee depreciation.
- The domestic consumption of diesel, a proxy for economic activity in India, fell by 3% in August, which, if sustained, does not paint a rosy growth picture for the coming quarters.
4. Revenue from Taxes
- The government's tax revenue from direct taxes is weakening, while indirect tax revenue remains strong.
- This indicates a K-shaped pattern, where the wealthy are not paying as much in taxes as they should be, while the poor and middle class are paying more.
- The direct and personal taxes should have grown closer to the nominal growth rate, but they have not.
- This suggests that the government is not collecting as much tax revenue as it could be.
- The narrowing of revenue streams will lead to forced austerity measures, as the government tries to control the budget deficit and interest rates.
- This will make it difficult for the government to spend money on things like infrastructure and social programs, which could lead to slower economic growth in the future.
4.1. K-shaped recovery
- A K-shaped recovery is a type of economic recovery in which different sectors of the economy recover at different rates, or even in opposite directions.
- This can lead to a widening gap between the rich and the poor, as the sectors that recover more quickly tend to be those that employ higher-income workers.
- One example of a K-shaped recovery is the recovery from the COVID-19 pandemic.
- Some sectors, such as technology and e-commerce, have thrived during the pandemic, while others, such as hospitality and tourism, have been hit hard.
- This has led to a significant increase in income inequality in many countries.
Image Source: Investopedia5. A nuanced approach
- Taking a nuanced approach to the matter, it is evident that the reported growth narrative for India's Q1 FY24 warrants a closer examination.
- The divergence in growth figures stemming from the income and expenditure approaches presents a significant disparity, casting doubt on the reliability of the optimistic narrative being conveyed.
- Furthermore, the foundation of this growth story, influenced by adjustments for inflation and marked fluctuations in tax revenue streams, suggests a more cautious path.
- Moreover, the cautious outlook for the agriculture sector and the potential fiscal constraints introduce a layer of restraint to the economic picture, somewhat different from the initial portrayal.
- In light of these considerations, it is prudent to assert that while India's economic performance does display signs of resilience, it does not fully align with the unequivocal success story initially portrayed.
- This situation underscores the need for a more nuanced and critical approach when assessing the trajectory that lies ahead.
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For Prelims: GDP, inflation, Covid-19, K-shaped pattern,
For Mains:
1. Discuss the K-shaped pattern observed in government revenue patterns and its implications for the Indian economy. (250 Words)
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Previous Year Questions
1. With reference to Indian economy, consider the following statements: (UPSC CSE, 2015)
1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade. 2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Answer: B
2. A decrease in tax to GDP ratio of a country indicates which of the following? (UPSC CSE, 2015) 1. Slowing economic growth rate 2. Less equitable distribution of national income Select the correct answer using the code given below: (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Answer: A
3. With reference to inflation in India, which of the following statements is correct? (UPSC 2015)
A. Controlling the inflation in India is the responsibility of the Government of India only
B. The Reserve Bank of India has no role in controlling the inflation
C. Decreased money circulation helps in controlling the inflation
D. Increased money circulation helps in controlling the inflation
Answer: C
4. A rapid increase in the rate of inflation is sometimes attributed to the "base effect". What is "base effect"? (UPSC 2011)
A. It is the impact to drastic deficiency in supply due to failure of crops
B. It is the impact of the surge in demand due to rapid economic growth
C. It is the impact of the price levels of previous year on the calculation of inflation rate
D. None of the statements (a), (b) and (c) given above is correct in this context
Answer: C
5. In the context of vaccines manufactured to prevent COVID-19 pandemic, consider the following statements: (UPSC 2022)
1. The Serum Institute of India produced COVID-19 vaccine named Covishield using mRNA platform.
2. Sputnik V vaccine is manufactured using vector based platform.
3. COVAXIN is an inactivated pathogen based vaccine.
Which of the statements given above are correct?
A. 1 and 2 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
Answer: B
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