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DAILY NEWS ANALYSIS

Monthly DNA

12 Oct, 2022

27 Min Read

World Economic Outlook: IMF

GS-II : Important reports Important reports

World Economic Outlook: IMF

  • The World Economic Outlook Report (WEO) 2022, the International Monetary Fund's most recent edition, was recently published.
  • It is a detailed report that the International Monetary Fund releases twice a year (IMF).

Major Report Highlights

  • The IMF has drastically reduced its projection for global growth, moving it from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023.
  • It is predicted that this year or next, the world economy will decline by more than one-third.
  • Global inflation is now anticipated to reach a peak of 9.5% in late 2022.
  • It is anticipated to stay high for longer than first anticipated and is only projected to drop to 4.1% by 2024.
  • Core inflation is the rate of inflation after subtracting the cost of gasoline and food. Compared to food and fuel inflation, core inflation normally increases and decreases more gradually.
  • On a fourth-quarter basis, it is anticipated that global core inflation, which is determined by excluding food and energy prices, will be 6.6%. This prediction reflects the pass-through of energy prices, supply chain cost pressure, and tight labour markets, particularly in advanced economies.
  • The world's three major economies—the United States, the European Union, and China—will stay stagnant, and rising price pressures—by squeezing real incomes and weakening macroeconomic stability—remain the most urgent threat to the prosperity of the present and the future.
  • The hardest policy task at hand may be high inflation and stalled GDP.
  • This is due to the fact that policies intended to control inflation frequently lead growth to decline more, whilst those intended to promote growth frequently cause inflation to rise.
  • Geopolitical risks: The Russian invasion of Ukraine, a cost-of-living problem brought on by persistent and expanding inflation pressures, and China's slowdown have all had a significant impact on the world economy.

India's image

The situation for India seems improved.

  • India's GDP growth rate is higher, and the country's inflation rate is lower.
  • These metrics, however, conceal the fact that, in absolute terms, India is just emerging from the recession it experienced in 2020, that it was home to the greatest number of people (5.6 crore, according to the World Bank) who were pushed below the poverty line in 2020, or that millions are unemployed.
  • India's growth in 2022–23 will be 5.8 percent if the RBI lowers its April growth rate prediction (7.2 percent) by the same amount as the IMF (1.4 percent points).

At least four factors pose a threat to India:

  • Domestic inflation will increase as the price of crude oil and fertiliser rise.
  • Exports will suffer from the global recession, which will hinder domestic growth and widen the trade deficit.
  • A high dollar would put pressure on the value of the rupee, lowering our foreign exchange reserves and limiting our ability to import products when times are tight.
  • Due to low demand from the majority of Indians, the government may be forced to spend more money on basic aid in the form of subsidies for food and fertiliser. The state of the government's finances will worsen as a result.

What suggestions has the IMF made?

Fighting Inflation:

  • The top priorities should be to combat inflation, normalise central bank balance sheets, and quickly and persistently boost real policy rates above their neutral level in order to restrain inflation and inflation expectations.

Coordination of Monetary and Fiscal Policy:

  • In economies with excess aggregate demand and hot labour markets, fiscal policy must work in tandem with monetary policy to reduce demand.
  • Any advantages from future growth could be offset by a resurgent cost-of-living squeeze in the absence of price stability.
  • The goals and procedures for achieving them must be communicated clearly by central banks while acting decisively.

Keeping the Vulnerable Safe During the Change:

  • Policymakers will need to safeguard the most defenceless elements of society from the effects of rising costs as the cost of living continues to grow.

Climate Change Policy:

  • Climate change will eventually have disastrous effects on health and economic consequences around the world if immediate corrective action is not taken.
  • Global temperature goals are not in line with current global targets. By the end of the decade, emissions must be reduced by at least 25% in order to meet these targets.
  • The ongoing energy crisis has also highlighted the advantages for energy security that nations might gain from gradually shifting away from fossil fuels and toward renewable and low-carbon energy sources.

About International Monetary Fund (IMF)

  • In the wake of the 1930s Great Depression, it was founded in 1944.
  • Because it was decided to establish both organisations at a summit in Bretton Woods, New York, the IMF and the World Bank are also known as the Bretton Woods twins.
  • Its 190 member nations, which represent a nearly global membership, are in charge of it and are responsible to them.
  • India joined the group in December 1945.
  • Goal: To maintain the stability of the international monetary system, which facilitates trade between nations and their inhabitants through the use of exchange rates and international payments.
  • All macroeconomic and financial sector issues that affect global stability were included to its 2012 mandate.
  • Finance: The majority of the IMF's funding comes from the quotas that new members must pay as capital subscriptions.
  • Each IMF member is given a quota based, in large part, on its relative standing in the global economy.
  • When nations encounter financial difficulties, they can borrow from this pool.

Publications:

Read Also: PM-DevINE

Source: The Hindu

Public-Private Partnership Model

GS-III : Economic Issues Infrastructure

Public-Private Partnership Model

  • 16 railway stations will soon be put up for bid under the public-private partnership (PPP) model, according to the Railway Ministry.
  • These train stations will be updated to provide better accessibility and fundamental amenities for travellers.
  • This is in addition to the 1253 railway stations that the Adarsh Station Scheme has designated for development.

About public-private partnership

  • It's a partnership between the public and private sectors for the delivery of public goods and/or services. Large-scale government projects like highways, bridges, or hospitals can be accomplished with private finance due to public-private partnerships.
  • In this kind of relationship, the private sector organisation makes investments for a predetermined amount of time.
  • PPP does not constitute privatisation because it entails the government's complete retention of responsibility for delivering the services.
  • The division of risk between the public institution and the private sector is clearly defined.
  • The private company is selected using an open, competitive bidding process and is compensated based on performance.
  • In developing nations when governments are constrained in their ability to borrow money for significant projects, the PPP approach may be an alternative.
  • It may also provide the necessary knowledge for large-scale project planning or execution.

Benefits:

  • The PPP model may present chances for investment, operational effectiveness, and cutting-edge, environmentally friendly technologies.
  • PPP railway projects that allow for shared use of the rail network may result in productivity improvements and a higher revenue base (or a lower cost base) for governments and private investors.
  • Additionally, it might result in increased competitiveness and upgrading of the rail network.

Challenges:

  • PPP initiatives have run into problems such as disagreements over preexisting contracts, a lack of money, and legal barriers to property acquisition.
  • In actuality, the Indian government has a terrible track record of regulating PPPs due to the lengthy land acquisition process.
  • It is thought that a sizable portion of the non-performing asset portfolio of public sector banks in India consists of loans for infrastructure projects.
  • PPP initiatives have become crony capitalism conduits in numerous industries.
  • "Politically connected firms" that have leveraged their political ties to gain contracts are in charge of many PPP projects in the infrastructure sector.
  • PPP companies take advantage of any chance to renegotiate contracts by blaming factors like decreased revenue or rising costs, which has become the norm in India.

Various Private Partnership (PPP) Models:

BOT: Build-Operate-Transfer

  • It follows a standard PPP paradigm where the private partner is in charge of designing, constructing, operating (during the agreed upon period), and handing back the facility to the public sector.
  • The project's private sector partner is required to provide the funding as well as assume construction and maintenance duties.
  • The public sector will permit business partners to charge users for services. A key illustration of the BOT paradigm is the national highway projects that NHAI contracted out under the PPP form.

Build-Own-Operate (BOO):

  • In this concept, the private party will be the owner of the newly constructed facility.
  • The public sector partner consents to 'buy' the products of the project on mutually agreed-upon terms and conditions.

Build, Own, Operate, Transfer (BOOT):

  • In this variation of BOT, the project is transferred to the government or to the private operator after the agreed-upon amount of time.
  • The BOOT model is employed in the building of ports and motorways.

Build-Operate-Lease-Transfer (BOLT):

  • With this strategy, the government grants a private entity a concession to construct a facility (and possibly to design it as well), own the facility, lease it to the public sector, and then transfer ownership of the facility to the government at the conclusion of the lease period.

Design-Build-Operate-Transfer (DBFO):

  • In this approach, the private party is solely responsible for the project's conception, development, financing, and management throughout the concession period.

Lease-Develop-Operate (LDO):

  • In this sort of investment model, the government or a public sector organisation retains ownership of the newly constructed infrastructure facility and gets payments under the terms of a lease agreement with the private promoter.

About Adarsh Station Scheme:

  • The Ministry of Railways' Adarsh station project intends to transform India's suburban stations into Adarsh stations. It first appeared in 2009.
  • The selection of railroad stations for this programme is made based on the amenities' determined need for improvement.

Important characteristics:

  • Modern amenities like an improvement to the station building's appearance will be made to Adarsh stations.
  • properly enhancing traffic flow
  • enhancing the platform's surface
  • Enhancing current waiting areas and restrooms
  • bathroom facilities
  • provision of pedestrian overpasses
  • offering elevators, escalators, etc.
  • The Indian Railways and the Indian Government will keep an eye on the upgrading process.

Way Forward

  • Large-scale transportation projects in particular are important for enhancing mobility and for the numerous changes in land use patterns. PPPs have the ability to expedite and improve the delivery of infrastructure projects. PPP contracts currently place more emphasis on financial advantages.
  • Before implementing this strategy, a thorough evaluation of the effectiveness and potential advantages of increased private sector involvement in rail projects is required.

Read Also: World Economic Outlook-IMF

Source: The economic Times

Prime Minister’s Development Initiative for North East

GS-III : Internal security Northeast Issues

Prime Minister’s Development Initiative for North East Region (PM-DevINE)

  • A new programme known as the Prime Minister's Development Initiative for the North East Region was recently authorised by the Union Cabinet (PM-DevINE).
  • In the Union Budget 2022–23, PM-DevINE was introduced to address development gaps in the North Eastern Region (NER).

PM-DevINE Scheme: What is it?

  • With an investment of Rs 6,600 crore, the programme will run for the final four years of the 15th Finance Commission, from 2022–2023 to 2025–2026.
  • With a focus on job creation, PM-DevINE will aim to create infrastructure, support industries, social development projects, and create livelihood opportunities for young people and women.
  • All primary healthcare facilities and government schools will have the bare necessities as part of these projects.

Finance and execution:

  • It has 100% government funding and is a central sector programme.
  • The Ministry of Development of the North Eastern Region (DoNER), the North Eastern Council, or central ministries and agencies will execute PM-DevINE.

Importance of North East India:

  • North-East India serves as a strategic entryway to South-East Asia and beyond. It serves as Myanmar's land border with India.
  • The northeastern states are on the eastern edge of India's engagement, according to its Act East Policy.

Cultural Significance:

  • One of the world's regions with the widest cultural diversity is North East India. There are more than 200 tribes there. The Hornbill Festival in Nagaland and Pang Lhabsol in Sikkim are two well-known celebrations.
  • India's northeast is a Dowry-Free Zone.
  • Highly developed Folk dance genres like Bihu in the Northeast reflect the region's complex tapestry of cultural influences (Assam).
  • In Manipur, it is customary to worship nature in sacred woods known as UmangLai.

Economic Significance:

  • The region has a wealth of "TOT" natural resources (Tea, Oil, and Timber).
  • With a potential hydropower output of 50,000 MW and a large supply of fossil fuels, it is a true powerhouse.

Ecological Significance:

  • The Indo-Burma biodiversity hotspot includes the North East. It represents one of the Indian subcontinent's highest levels of bird and plant biodiversity.
  • This region is renowned for housing every type of bear found in India.

Tourism

  • North-East unique geography, biodiversity and culture attract tourists from all over the world and India and have huge potential to create employment in the region.

Obstacles to the NER's Development

Terrain Challenges:

  • The North Eastern region is primarily mountainous, with the exception of the state of Assam, which contains a sizable portion of plains. Because of the issue with access to the remote locations, it is difficult for the government projects to be implemented in the area.

Areas in Need of Improvement:

  • Unlike mainlanders, residents of the North East Region are still pleased with a basic way of life and a lack of technology in their daily lives. Due to a lack of opportunities for high-income generating, the level of living remains low.
  • For instance, the farmers still use primitive farming techniques, while the tribal peoples in the nation continue to practise shifting agriculture.

Connectivity:

  • The North Eastern Territory is a landlocked region, as was already mentioned. As a result, it only has a little amount of maritime access. Similar to that, its challenging topography makes expressways and bigger roadways impractical.
  • The lack of a train infrastructure in the area makes this more difficult.

Lack of Social and Physical Infrastructure:

  • NER has complained of being treated like a second-class citizen by the mainland, particularly in the context of local development initiatives.
  • The absence of political and social stability in the nation is one of the main reasons for the lack of growth in the region. The tribal communities in the area have not entirely embraced the artificial boundaries left over from the British legacy, which is made worse by political opportunism.

Insurgencies:

  • Porous borders along Bangladesh, and Myanmar has made the region vulnerable to insurgencies. It also leads to the issue of arms and drug trafficking along the border.

What are the Northeast's Major Infrastructure Projects?

  • There are plans for 4,000 km of highways, 20 railway projects covering 2,011 km, and 15 air connectivity projects.
  • Better connection is being provided by the development of national waterways. (National Waterways (NW)-1 on the Ganges, NW-2 on the Brahmaputra, and NW-16 on the Barak).
  • 5,000 km of navigable waterways will be made available as part of the Eastern Waterways Connectivity Transport Grid, which would link the northeast with the rest of India.
  • The North Eastern Region Power System Improvement Project (NERPSIP) is a significant step towards the North Eastern Region's economic development by bolstering the intra-state transmission and distribution n

Northeast India

  • Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura make up the Northeast Region, also known as the "seven sisters" of Northeast India.
  • While Sikkim is a part of the Northeast and is separated from the other six states by the Siliguri Corridor, it is not considered to be one of the Seven Sisters, despite being a part of the region.
  • Another name for Sikkim is the "Brother" of the Seven Sisters.

Way Forward

  • In addition to creating jobs, infrastructure investment would significantly hinder secessionist activities in the North-East region.
  • National and international infrastructure development will be the best option for inclusive development in India's Northeast because it is bordered by national and international borders.
  • etworks.

Read Also: Northeast’s Integration

Source: PIB

Living Planet Report 2022

GS-III : Biodiversity & Environment Biodiversity & Environment

Living Planet Report 2022

  • Living Planet Report 2022 is published by the World Wide Fund for Nature (WWF).

About Living Planet Report

  • The Living Planet Report is the organization's main journal.
  • Every two years, it is made available.
  • It is an extensive analysis of changes in both global biodiversity and environmental health. It monitors shifts in the relative richness of populations of wild species all around the world.
  • Since the 2020 LPR was published, 11,011 new populations and 838 new species have been added to the LPI dataset.
  • The number of fish species that have been added to the Living Planet Report has significantly increased (481).

Principal findings of the report:

Population Reduction

  • Over the past 50 years, the number of mammals, birds, amphibians, reptiles, and fish has decreased by 69 percent on a global scale.
  • Between 1970 and 2018, there was an average 83% reduction in freshwater population size.
  • According to the IUCN Red List, amphibians are the species that are most in decline, followed by corals and cycads, an ancient genus of seed plants.

Region-specific evaluation

  • The region of Latin America and the Caribbean experienced the greatest loss (94 percent).
  • Africa saw a 66% decline in wildlife numbers between 1970 and 2018.
  • The monitored populations in Asia and the Pacific declined by 55%.
  • The location where species are most likely to experience serious challenges is Southeast Asia.
  • The largest effect probability for climate change were found in the polar regions, along with on Australia's and South Africa's east coasts, and were particularly driven by impacts on birds.

Mangroves

  • At a rate of 0.13 percent year, mangroves are still being lost to aquaculture, agriculture, and coastal development.
  • Loss of mangroves equates to loss of ecosystem services for coastal residents as well as habitat for wildlife.
  • Since 1985, the Sundarbans mangrove forest in India and Bangladesh has lost around 137 square kilometres to erosion, diminishing the ecological services it provides to many of the 10 million people who live there.
  • Corals A rising of 1.5 degrees Celsius will result in a loss of 70–90% of warm water corals. Approximately 50% of warm water corals have already been gone.
  • Following sea level rise, the little Australian rodent known as the Bramble Cay melomys was declared extinct.

Sharks

  • In the last 50 years, the global abundance of 18 of the 31 oceanic sharks has decreased by 71%, and the report stated that by 2020, three-quarters of sharks and rays would be gone.

Others

  • Only 37% of rivers longer than 1,000 km continue to flow freely along the whole length of the river.
  • The greatest threat to the environment at the moment is 41% land-use change.
  • According to the report, effort is required to stop global warming at 1.5°C and stop biodiversity loss by 2030.
  • We can cut down on agricultural land use by 41% and wildlife loss by up to 46% by switching to sustainable, healthy, and culturally appropriate diets.

???????

The particular study regarding India:

  • Some of the most vulnerable areas in the nation in terms of biodiversity loss include the Western Ghats and the Himalayan region, where biodiversity loss is predicted to accelerate in the future if temperatures rise.
  • During this time, India has observed population declines in 17 species of freshwater turtles as well as honeybees.???????

Issues mentioned in the report:

  • About half of the dangers to the fish species whose migration was being watched were caused by habitat loss and obstructions to their pathways.
  • In order to identify "threat hotspots" for terrestrial vertebrates, WWF selected six major threats to biodiversity: agriculture, hunting, logging, pollution, invasive species, and climate change.
  • The destruction or fragmentation of many plant and animal species' natural habitats on land, in freshwater, and in the sea is still the biggest danger to nature today.
  • Due to human-caused climate change and biodiversity loss, the well-being of both present and future generations is under jeopardy.
  • In addition to natural stressors like storms and coastal erosion, mangroves are also negatively impacted by overuse and pollution.
  • Important areas such as water resources, agriculture, natural ecosystems, health, and the food chain will be impacted by climate change in India.
  • Animals that dwell both on land and in water are more frequently threatened by agriculture, whereas birds and mammals are more frequently threatened by hunting and trapping.

Way Forward

Interlink-age

  • According to the worldwide organisation for animal conservation, biodiversity loss and the climate crisis should be treated as one problem rather than two separate ones because of their interconnection.

A future that benefits nature

  • It requires radical, paradigm-shifting changes in how we produce, consume, govern, and finance.

Read Also: Biodiversity And Environment

Source: The Hindu

World Sloth Bear Day

GS-III : Biodiversity & Environment Animals

World Sloth Bear Day

  • On October 12, 2022, the inaugural World Sloth Bear Day was marked in an effort to raise awareness about and support conservation efforts for this rare bear species that is only found on the Indian subcontinent.
  • The International Union for Conservation of Nature's (IUCN) Species Survival Commission (SSC) sloth bear expert team accepted the proposal made by Wildlife SOS India, an organisation that has been working to protect and conserve sloth bears for more than 20 years, and declared the day to be observed globally.

About Sloth Bear:

  • One of the eight bear species that can be found worldwide is the sloth bear.
  • In contrast to other bear species, sloth bears frequently carry their offspring on their backs and their main food sources are termites and ants.
  • They also enjoy honey, hence their alternate name of "honey bear."
  • Sloth bears do not go into hibernation.
  • They are fast and considered one of the most dangerous wild animals.
  • They are also known as the bear species with the least amount of research.
  • Melursus Ursinus is the scientific name.
  • Habitat: Currently Sloth bears are only found in India, Nepal, and a subspecies in Sri Lanka.
  • India is home to roughly 90% of the world's Sloth Bear population.
  • IUCN Red List status is vulnerable.
  • Schedule I of the Wildlife Protection Act of 1972.
  • Appendix I of the Convention on International Trade in Endangered Species (CITES).
  • Threats: An ethnic group known as the Kalandars, who were mostly poor, engaged in a practice known as a dancing bear, in which captured sloth bears are tortured in order to make them dance.
  • Several reports claim that their population has declined by 40 to 50% in the last three decades, owing primarily to habitat loss, fragmentation, poaching, and increased human-bear conflict.
  • Conservation efforts: Sloth bears are being rescued and reintroduced to their natural habitat by Wildlife SOS Bear rescue centres, where they are also receiving veterinary care.
  • Furthermore, in Kalandar community is working to prevent the poaching of wild animals, Wildlife SOS collaborated with the Kalandars to provide them with alternative sources of income and access to education.
  • Through the declaration of World Sloth Bear Day, Wildlife SOS and the IUCN-SSC (Species Survival Commission) Sloth Bear Expert Team hope to set an example for the rest of the world in promoting the conservation of Sloth bears and their habitats across their range.

Read Also: Animals-of-India-UPSC

Source: Times Of India

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