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| Exclusive for Subscribers Daily: Gross Domestic Product (GDP) for the UPSC Exam? Why are topics like real effective exchange rate (REER) and Capital Punishment important for both preliminary and main exams? Discover more insights in the UPSC Exam Notes for December 27, 2024 |
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Critical Topics and Their Significance for the UPSC CSE Examination on December 27, 2024
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World Bank raises China’s GDP forecast for 2024, 2025
For Preliminary Examination: Gross Domestic Product (GDP), Gross Value Added (GVA)
For Mains Examination: GS III - Indian Economy
Context:
The World Bank raised its forecast for China's economic growth in 2024 and 2025, but warned that subdued household and business confidence, along with headwinds in the country’s ailing property sector, would keep weighing it down next year
Read about:
Gross Domestic Product (GDP)
Gross Value Added (GVA)
Key takeaways:
- The world's second-largest economy has faced challenges this year, primarily due to a property market crisis and sluggish domestic demand.
- Concerns also loom over potential U.S. tariff increases on Chinese goods once President-elect Donald Trump assumes office in January, which could further impact economic growth.
- The World Bank projects China's GDP growth at 4.9% this year, slightly higher than its June forecast of 4.8%, driven by recent policy easing and short-term export momentum. Beijing has set a growth target of "around 5%" for the year, expressing confidence in achieving this goal.
- Growth in 2025 is anticipated to decline to 4.5%, although this remains above the World Bank's earlier projection of 4.1%. Slower household income growth and the negative wealth impact of falling home prices are likely to constrain consumption through 2025. In response, Chinese authorities plan to issue a record 3 trillion yuan ($411 billion) in special treasury bonds next year, according to a Reuters report.
- These measures and forecasts will be officially presented at the annual National People's Congress meeting in March 2025, though revisions are possible before then. While efforts by housing regulators aim to stabilize the real estate market, the World Bank does not expect a significant recovery in the sector until late 2025.
- China's middle class, which accounted for 32% of the population in 2021, has grown substantially since the 2010s.
- However, World Bank estimates indicate that around 55% of this group remains "economically insecure," highlighting the importance of creating more opportunities for financial stability
Gross Domestic Product (GDP):
- Types:
- Nominal GDP: Measured at current market prices, not adjusted for inflation.
- Real GDP: Adjusted for inflation, reflecting the actual growth in goods and services.
Gross Value Added (GVA):
- Formula: GVA=GDP−Taxes on products+Subsidies on products
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
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Answer (b)
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What is real effective exchange rate (REER)?
What is the difference between REER and Nominal Effective Exchange Rate (NEER)?
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The real effective exchange rate (REER) index of the rupee reached a record high of 108.14 in November, reflecting a 4.5% increase during the current calendar year, as per the latest data from the Reserve Bank of India (RBI).
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The REER gauges the rupee’s value not just against the dollar, but also against other global currencies. It is a weighted average of the rupee’s exchange rate against a basket of 40 currencies from countries that constitute about 88% of India’s annual trade. The REER also takes inflation differentials between India and these trading partners into account.
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The rupee's REER, based on a 2015-16 base year and currency weights derived from the trade shares of individual countries with India, fell from 105.32 in January 2022 to 99.03 in April 2023. However, it has been appreciating since then, rising to 107.20 in October and 108.14 in November of this year.
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The primary factor for this shift — the rupee’s occasional weakening and strengthening — is tied to the dollar’s performance over the past three months, particularly after Donald Trump’s victory in the U.S. presidential elections on November 5.
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Essentially, the rupee isn’t weakening as much as the dollar is strengthening against all currencies. The dollar has strengthened due to Trump’s statements advocating for widespread tariff hikes (especially on Chinese imports), tax cuts financed by deficits, and large-scale deportations of illegal immigrants.
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If the rupee was considered "fairly" valued in 2015-16, with the REER set at 100, any value above 100 indicates overvaluation, meaning the exchange rate hasn’t adjusted enough to counteract higher domestic inflation. Therefore, the rupee is currently overvalued, which makes imports cheaper and Indian exports less competitive. This likely explains why the RBI is now allowing the rupee to depreciate, particularly against the dollar.
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The exchange rate refers to the rate at which one currency can be exchanged for another, such as how many rupees are needed to buy a dollar or a euro.
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In the currency market, each currency behaves like a commodity, and its value relative to another currency is called the exchange rate. While exchange rates can remain stable, they typically fluctuate over time
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Answer (B)
India's foreign exchange reserves consist of the following major components:
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After the tragic rape and murder of a doctor on duty at Kolkata’s R.G. Kar Medical College and Hospital on August 9, there has been a strong demand for the death penalty for the accused. The Justice J.S. Verma Committee, whose recommendations led to the 2013 amendments in criminal laws, had explicitly stated that it did not support the death penalty for rape, even in the rarest of rare cases. The committee emphasized that pursuing the death penalty would be a backward step in terms of sentencing and reform.
What was the Union Cabinet's decision?
When the Union Cabinet approved an ordinance on sexual assault in 2013 and passed the criminal amendments into law, it chose not to adopt the committee’s recommendation against the death penalty. The Justice Verma Committee was formed in response to the horrific gang rape of a paramedic student in Delhi on December 16, 2012, and it presented its recommendations on January 23, 2013. However, the committee's key recommendation—that the death penalty may not effectively deter such crimes—was not accepted.
Significant amendments were introduced, including the death penalty for rape that results in the victim’s death or leaves her in a persistent vegetative state (under Section 376A of the Indian Penal Code) and for repeat offenders (Section 376E). In 2018, additional changes allowed for the death penalty for those involved in gang rapes of victims under 12 years old (Section 376DB) and life-long imprisonment for those convicted of raping victims under 16 (Section 376DA). The new Bharatiya Nyaya Sanhita includes various sections, such as 64, 65, and 70(2), which specify that the death penalty is the punishment for gang rape of a woman under the age of 18.
What did the committee recommend?
The Justice Verma Committee recommended enhanced sentences for rape, increasing the minimum sentence from 7 years to 10 years, 20 years, or life, but stopping short of the death penalty. The committee specified that those who leave a victim in a persistent vegetative state should face rigorous imprisonment for at least twenty years, potentially for life, meaning the rest of their natural life. The committee also argued that the supposed deterrent effect of the death penalty on serious crimes is a myth, citing evidence from the Working Group on Human Rights that the murder rate in India has consistently declined over the past 20 years despite a reduction in the execution of death sentences since 1980.
What was the stance on marital rape?
The Verma Committee recommended removing the exception for marital rape, asserting that a marital or other relationship between the perpetrator and the victim should not serve as a defense against rape or sexual violation. The committee agreed with the European Commission of Human Rights’ judgment in C.R. vs U.K., stating that a rapist remains a rapist regardless of his relationship with the victim. However, the Union government did not follow this recommendation and refused to criminalize marital rape. Under the Bharatiya Nyaya Sanhita, Exception 2 of Section 63 states that sexual intercourse or acts by a man with his wife, as long as the wife is not under 18 years of age, is not considered rape.
What about gender rights?
The Verma Committee highlighted that women’s empowerment goes beyond political equality and must also encompass social, educational, and economic equality. True empowerment requires that both law and public policy engage fully with women’s rights, opportunities, skill acquisition, and the ability to demand total equality in relationships with both society and the state. The committee noted that correcting gender-biased social mindsets is more dependent on social norms and that this change must be driven by societal leaders with support from necessary systemic changes in education and societal behavior
Follow Up Question
1.Which of the following statements about the death penalty in India is/are correct?
- The Justice J.S. Verma Committee recommended the death penalty for the crime of rape, considering it an effective deterrent.
- The 2013 criminal law amendments introduced the death penalty for certain categories of rape cases, including those resulting in the death of the victim or leaving the victim in a persistent vegetative state.
- The Supreme Court of India has ruled that the death penalty should be awarded only in the "rarest of rare" cases.
Select the correct answer using the code given below:
A) 1 and 2 only
B) 2 and 3 only
C) 1 and 3 only
D) 1, 2, and 3
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Answer (B)
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Greenwashing describes the increasing practice among companies, organizations, and even nations to make questionable or unprovable claims regarding the eco-friendliness of their activities, products, or services. As awareness of climate change grows, there is mounting pressure on businesses and governments to operate in a manner that minimizes environmental harm. Many of these entities also face legal obligations or targets related to their environmental impact.
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A prominent case of greenwashing is the Volkswagen scandal of 2015, where the German automaker was found to have manipulated emissions tests for its so-called environmentally friendly diesel vehicles. Other major companies, including Shell, BP, and Coca-Cola, have similarly faced accusations of misleading environmental practices.
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Nations can also be accused of greenwashing, particularly when they overstate their forests' capacity to absorb carbon dioxide or the effects of new carbon emissions regulations. Although carbon trading is a legitimate practice, it often faces scrutiny because the methods used to generate tradable credits may lack scientific validity. Additionally, carbon offset strategies, such as compensating for high carbon-emitting activities like air travel by planting trees, can create opportunities for greenwashing.
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An expert group has proposed several recommendations, emphasizing that companies aiming for net-zero emissions should not be permitted to invest in fossil fuels. They suggested that these corporations should establish short-term emissions reduction targets leading to net-zero and should halt activities that contribute to deforestation. Furthermore, companies were advised against utilizing offset mechanisms at the beginning of their net-zero journey
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Answer (A)
Conveying a false impression that a company's products are eco-friendly and environmentally sound. Greenwashing refers to misleading practices where companies present an exaggerated or false image of their environmental efforts to appear more sustainable or responsible than they actually are. This tactic is often used in marketing to attract eco-conscious consumers while masking harmful environmental practices. |
On Section 6A of the Citizenship Act
For Preliminary Examination: Current events of antional and international Importance
For Mains Examination: GS II - Indian Polity & Governance
Context:
In a landmark ruling, the Supreme Court on Thursday upheld the constitutional validity of Section 6A of the Citizenship Act, 1955, which granted citizenship to immigrants who entered Assam before January 1, 1966, and called for stricter implementation of laws against illegal immigration and judicial monitoring of the implementation of immigration and citizenship legislations
Read about:
What is Section 6A of the Citizenship Act, 1955?
What are the questions surrounding Section 6A?
What is the Assam Accord?
Key takeaways:
- The bench held that immigrants entering Assam on or after March 25, 1971, are not eligible for protection under Section 6A, and are therefore deemed illegal immigrants.
- Chief Justice of India (CJI) DY Chandrachud clarified that Section 6A does not violate Articles 6 and 7 of the Constitution, which set a specific cut-off date of January 26, 1950, for granting citizenship to migrants from East and West Pakistan at the time of the Constitution's commencement.
- He stated that the legislative purpose of Section 6A aimed to balance the humanitarian concerns of Indian-origin migrants with the economic and cultural needs of Indian states.
- Although other states have longer borders with Bangladesh, Assam faces a more significant impact from migration in terms of numbers and resources.
- Therefore, the criteria for migration to Assam are reasonable. The March 25, 1971, cut-off date is justified, as it coincides with the eve of the Pakistani Army's Operation Searchlight, launched on March 26, 1971, to suppress the Bangladeshi nationalist movement. Migrants arriving before this event were regarded as part of the Indian partition, and the chosen criteria are logically aligned with Section 6A’s purpose.
- The bench explained that undocumented migrants could have been registered as citizens under Section 5(1)(a) of the Citizenship Act before its amendment in 2003, which then excluded ‘illegal immigrants.’ Thus, the petitioner’s argument that Section 6A is unconstitutional because it allegedly encourages migration to Assam for citizenship purposes is incorrect.
- The ruling also stated that Section 6A aligns with constitutional principles, without violating the concepts of fraternity or Articles 6, 7, 9, 14, 21, 29, 326, and 355 of the Constitution of India. It does not conflict with the Immigrants (Expulsion from Assam) Act, 1950, or international law principles.
- Regarding Section 6A, introduced under the Assam Accord with a specific cut-off date, the Court affirmed its validity, noting that citizenship should not be narrowly interpreted to label one group as citizens and another as ‘illegal immigrants.’
- Agreeing with the majority opinion, CJI Chandrachud emphasized that while the Constitution protects the right to preserve culture, this right must be understood within the framework of India’s multicultural and pluralistic identity.
- The petitioners argued that Section 6A infringes on Article 29 by allowing residents from Bangladesh, who have a different cultural background, to live in Assam and gain citizenship, thereby impacting the preservation of Assamese culture. The Court, however, dismissed this argument
1.What is the position of the Right to Property in India? (UPSC 2021)
(a) Legal right available to citizens only
(b) Legal right available to any person
(c) Fundamental Rights available to citizens only
(d) Neither Fundamental Right nor legal right
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Answer (b)
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The role of constitution in shaping Indian and American democracies
For Preliminary Examination: Current events of national and international importance
For Mains Examination: GS II - Indian Polity & Governance
Context:
While India has completed its general elections in mid-2024 and the new government has assumed office, the US is gearing up for its own electoral process, with the presidential elections set to take place soon.
Read about:
India’s constitutional design
US constitutional system
Key takeaways:
India’s Constitutional Framework
The Indian Constitution establishes a parliamentary democracy characterized by a federal structure. It features a dual executive system, where the Prime Minister serves as the de facto executive and head of government, while the President acts as the de jure executive in a ceremonial capacity as the head of state.
This quasi-federal structure divides powers between a strong central government and the states, which are not permitted to secede from the union. The Indian Constitution effectively combines the American principle of judicial supremacy with the British principle of parliamentary supremacy. The Supreme Court of India has the authority to declare any parliamentary law unconstitutional, while Parliament can amend the Constitution, provided such amendments do not violate its basic structure.
The US Constitutional System
In contrast, the US Constitution outlines a presidential system where the President serves as both the de jure and de facto executive. This framework implements the separation of powers, which distinguishes the executive branch from the legislature, granting substantial authority to the President as both head of state and government.
Additionally, the US Constitution establishes a federal system that allows states greater autonomy relative to the federal government, with residual powers resting with the states. The US system of judicial supremacy empowers the Supreme Court to declare laws unconstitutional, providing a check on the legislative branch.
However, the amendment process in the US Constitution is more rigorous compared to India’s basic structure doctrine. Amendments require a two-thirds majority in both houses of Congress and must be ratified by three-quarters of the states, resulting in only 27 amendments since its ratification in 1787, whereas the Indian Constitution has undergone 106 amendments since its adoption in 1949 due to its more flexible provisions.
Similarities and Differences
Both constitutions exhibit several similarities while also showcasing key differences in their core philosophies and mechanisms. The Indian Constituent Assembly crafted the Constitution by integrating various ideas from global constitutions and adapting them to India's specific context. Dr. B.R. Ambedkar, the chairman of the drafting committee, famously noted that the Indian Constitution was created by "ransacking all the known constitutions of the world," with the US Constitution being one of its influences.
Several significant elements of the Indian Constitution, including provisions for fundamental rights, the independent judicial system, judicial review, impeachment processes for the President and judges of the Supreme and High Courts, and the role of the Vice President, have been adapted from the US Constitution.
Contrasting Features
Despite these similarities, there are substantial differences. India’s vibrant multi-party system starkly contrasts with the predominantly two-party system in the US. The fundamental rights outlined in the Indian Constitution not only protect against state interference but also promote social and economic rights, whereas the US Constitution primarily emphasizes individual freedoms and safeguards against government overreach.
Regarding emergency powers, India includes comprehensive provisions for declaring a state of emergency, enabling the government to assume extraordinary powers during crises. Conversely, the US Constitution lacks formal emergency provisions, permitting only the suspension of certain rights during war or insurrection.
While both countries have federal characteristics, India operates as a quasi-federal system described as an "indestructible union of destructible states," whereas the US is a true federation, referred to as an "indestructible union of indestructible states."
The judicial structures of the two nations also differ significantly. India features a unified judiciary led by the Supreme Court, which is at the top of a hierarchy that includes High Courts and subordinate courts, granting the Supreme Court the ultimate authority over all legal and constitutional matters
Follow Up Question
1.With reference to the Indian judiciary, consider the following statements: (UPSC CSE, GS1, 2020)
1. Any retired judge of the Supreme Court of India can be called back to sit and act as a Supreme Court judge by the Chief Justice of India with the prior permission of the President of India.
2. A High Court in India has the power to review its own judgement as the Supreme Court does.
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
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Answer (c)
Statement 1: "Any retired judge of the Supreme Court of India can be called back to sit and act as a Supreme Court judge by the Chief Justice of India with the prior permission of the President of India."
Statement 2: "A High Court in India has the power to review its own judgement as the Supreme Court does."
Since both statements are correct, the answer is (c) Both 1 and 2. |
| Subject | Topic | Description |
| History | Modern Indian History | Important Personalities |
| History | Modern Indian History | Independence and Partition |
| History | Modern Indian History | Constitutional Development in India |
| History | Modern Indian History | Peasants, Tribal and other movements |
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