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CURRENT AFFAIRS – 08/02/2024

CURRENT AFFAIRS - 08/02/2024

CURRENT AFFAIRS – 08/02/2024

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  1. CURRENT AFFAIRS – 08/02/2024

CURRENT AFFAIRS – 08/02/2024

The key changes for Hindus and Muslims in marriage, inheritance

(General Studies- Paper II)

Source : The Indian Express

The Uttarakhand government presented the Uniform Civil Code (UCC) 2024 Bill in the Assembly, focusing on key modifications in marriage, divorce, and succession laws.

Key Highlights

  • Minimum Marriage Age Standardization:
    • The proposed UCC aligns the minimum age of marriage at 18 and 21 respectively, for both genders, bringing Muslim women and men in line with the Hindu Marriage Act, 1955, and the Special Marriage Act, 1954.
    • This addresses a longstanding debate where Muslim law allowed marriage at puberty (presumed at 13), conflicting with laws like the Protection of Children from Sexual Offences (POCSO) and the Prevention of Child Marriage Act.
  • Legal Challenge and Pending Supreme Court Case:
    • In December 2022, the National Commission for Women challenged the practice of allowing minors to marry, leading to a pending Supreme Court case.
    • The matter is currently before a bench led by Chief Justice of India D Y Chandrachud.
  • Changes in Testamentary Succession for Muslims:
    • The UCC introduces significant alterations in testamentary and intestate succession for Muslims.
    • Presently, Muslims can bequeath up to one-third of their property through a will, with the remaining divided according to Quranic and Hadith principles in the absence of a will.
    • However, under the proposed UCC, if a will exists, there are no restrictions on the portion of property bequeathed or the chosen beneficiaries.
    • This marks a departure from the current practice, potentially impacting the distribution of assets among legal heirs.
  • Intestate Succession Framework:
    • The UCC adheres closely to the Indian Succession Act, 1925, establishing a hierarchy for intestate succession.
    • In the absence of a will, property passes to Class-1 heirs, encompassing children, the widow, parents, and others.
    • If Class-1 heirs are unavailable, the property then transfers to Class-2 heirs, including siblings, nieces, nephews, and grandparents.
    • Should neither class have eligible heirs, the property may go to the person most closely related to the deceased.
  • Ban on Bigamy and Polygamy:
    • The UCC unequivocally outlaws bigamy and polygamy by incorporating a condition in Section 4 of the Bill.
    • This condition stipulates that neither party entering into marriage can have a living spouse at the time of the marriage, reinforcing the monogamous nature of marriages under the proposed UCC.
    • Without explicitly naming them, the UCC criminalizes specific Muslim marriage practices such as Iddat and NikahHalala.
    • These practices have been contentious, and the UCC addresses them by incorporating legal measures without directly mentioning their names.
  • Remarriage Rights and Criminal Sanctions:
    • Section 30 of the UCC addresses the right of an individual to remarry after divorce, explicitly stating that it can be exercised without additional conditions, such as marrying a third person before the intended remarriage.
    • Section 32 imposes criminal penalties on those who “compel, abet or induce” someone to meet such conditions, with potential imprisonment up to three years and a fine of Rs 1 lakh for individuals convicted under this section.
    • This provision aims to discourage practices resembling halala under Muslim personal law.
  • Unified Treatment of Ancestral and Self-acquired Property:
    • Under the UCC, the distinction between ancestral and self-acquired property, a crucial facet under Hindu law, is eliminated.
    • Coparcenary rights, as outlined in the Hindu Succession Act, no longer find mention in the UCC Bill.
    • In the Mitaksharaschool of law governing joint Hindu families, the UCC revokes the joint ownership of ancestral property across generations, allowing the father the freedom to dispose of self-acquired property without constraints.
  • Elevation of Both Parents as Class I Heirs:
    • A pivotal change in the UCC is the elevation of both parents, mother and father, as Class I heirs in cases of intestate succession, where an individual dies without leaving a will.
    • Hindu law traditionally included children, the widow, and the mother as Class I heirs, with the father falling under Class II heirs.
    • The UCC alters this framework, recognizing both parents as Class I heirs alongside children and the widow.
    • This adjustment mirrors a concept found in Shariat law, potentially impacting the distribution of property among legal heirs.
  • Implications for Siblings as Legal Heirs:
    • The inclusion of both parents as Class I heirs introduces the possibility of a person’s property passing through parents to siblings, a departure from Hindu law that traditionally does not recognize siblings as legal heirs.
    • This change could affect the share of inheritance allocated to children and widows, as the property may now travel through the parents, including siblings in the succession process.

About Mitakshara school of law

  • The Mitaksharaschool is a significant school of Hindu law, particularly known for its influence on the law of inheritance and property rights in India.
  • It represents one of the two major schools of Hindu law, the other being the Dayabhagaschool.
  • The Mitaksharaschool has had a substantial impact on legal practices and traditions in the Indian subcontinent, especially in matters related to family and succession.
  • Key Points:
    • The Mitaksharaschool is associated with Vijnaneswara, a Hindu jurist and scholar who lived in the 11th century.
    • His work “Mitakshara” is a commentary on the YajnavalkyaSmriti, an ancient Hindu legal text.
    • Vijnaneswara was the chief minister in the Chalukya dynasty, and his work has had a lasting impact on Hindu law, particularly in the southern and western regions of India.
  • Mitaksharaschool’s impact extends to various aspects of family law, including partition, joint family, coparcenary, and rights of heirs.
  • In this school, coparcenary is a key concept.
    • This means that ancestral property is owned jointly by all male family members, who share equal rights to it.
    • The Mitakshara school also acknowledges daughters’ right to inherit property, though with some limitations.
  • Dayabhaga is another school of Hindu law mainly practised in the eastern parts of India, particularly in Bengal.
    • It comes from a commentary written by Jimutavahana in the 13th century on the YajnavalkyaSmriti.
    • Unlike Mitakshara, Dayabhaga doesn’t consider coparcenary.
    • Instead, it emphasises individual ownership of property.
    • Inheritance of property in this school is based on the principle of lineal succession, where the nearest male relative in the family inherits the property.
    • Daughters also have the right to inherit property under this school, but their rights are more restricted and subject to specific conditions.

Downloading child pornography is an offence

(General Studies- Paper II)

Source : TH

The Madras High Court recently quashed judicial proceedings in the case of S. Harish vs Inspector of Police, where the accused was charged with downloading child pornography under Section 67B of the Information Technology (IT) Act, 2000.

  • The High Court held that downloading child pornography and watching it in private was not an offence under Section 67B of the IT Act.
  • The court emphasized that watching child pornography in private did not constitute an offence, as the accused had merely downloaded the material onto his electronic device.

Key Highlights

  • Reference to Kerala High Court Case:
    • The Madras High Court referred to a similar case decided by the Kerala High Court, where it was ruled that watching pornography in a private space was not an offence under Section 292 of the Indian Penal Code (IPC).
    • In the Kerala case, a youth was acquitted of charges related to watching pornographic material on his mobile phone in a public space at night.
  • Legal Framework:
    • The judgment focused on Section 67B(b) of the IT Act, which penalizes activities related to the creation, collection, seeking, browsing, downloading, advertising, promoting, exchanging, or distributing material depicting children in an obscene or sexually explicit manner.
    • The punishment on first conviction includes imprisonment for up to five years and a fine of up to ten lakh rupees.
    • The police, after investigation, filed a final report in the case, and cognizance had been taken by the High Court under Section 14(1) of the Protection of Children from Sexual Offences (POCSO) Act, 2012, in addition to Section 67B of the IT Act.
  • Undisputed Download of Child Pornography:
    • In the case of S. Harish vs Inspector of Police, it was established that the accused had downloaded two files of child pornography on his mobile phone.
    • The forensic science report verified the presence of these files, meeting the criteria of Section 67B(b) of the IT Act.
    • Despite the clear evidence, the High Court took a controversial stance by asserting that merely downloading child pornography material did not constitute an offence under Section 67B(b).
    • The court argued that to be deemed an offence, the accused must have gone further by publishing, transmitting, or creating material depicting children in a sexually explicit manner.
    • The High Court’s judgment did not provide a detailed analysis of Section 67B of the IT Act, which comprises five sub-clauses (a to e).
      • While sub-clause (a) addresses publishing or transmitting explicit material involving children,
      • sub-clause (b) specifically covers acts like downloading child pornography material.
      • The court’s failure to consider the broader context of Section 67B raises questions about the thoroughness of its interpretation.
      • The judgment did not delve into sub-clauses (c) to (e) of Section 67B, which address various aspects such as cultivating online relationships with children, facilitating online abuse, and recording explicit acts with children.
      • The omission suggests that the High Court reached its decision without a comprehensive analysis of the entire legislative provision.
    • Inappropriate Precedent Reference:
      • The Madras High Court’s decision in the S. Harish vs Inspector of Police case included a reference to a precedent from the High Court of Kerala without providing specific details such as the title or year.
      • This Kerala case, dealing with the scope of Section 292 of the IPC, held that watching obscene material in private was not an offence.
      • However, the flaw lies in the fact that this precedent does not apply to child pornography cases, especially those governed by Section 67B of the IT Act.
      • The Madras High Court failed to acknowledge a more recent case from September 2023 (Aneesh vs State of Kerala) that did not pertain to child pornography.
      • While watching adult pornography in private was deemed non-offensive under Section 292 of the IPC, the downloading of sexually explicit material involving children is explicitly an offence under the IT Act.
      • The Madras High Court’s reliance on inappropriate precedents highlights a misinterpretation of the legal context.
    • Improper Use of Inherent Powers:
      • The Madras High Court utilized its inherent powers under Section 482 of the Criminal Procedure Code (CrPC) to quash judicial proceedings, aiming to prevent the misuse of the court process.
      • However, this exercise of power is subject to certain guidelines laid down by the Supreme Court in State of Haryana vs Bhajan Lal (1992).
      • These guidelines specify that such powers can be invoked when the allegations, even if accepted at face value, do not prima facie constitute an offence or make a case against the accused.
      • In this case, where a clear offence was established under Section 67B(b) of the IT Act, the High Court’s use of inherent powers appears inappropriate.
    • Concerns Over Misapplication of POCSO Act:
      • While criticizing the police for wrongly applying Section 14 of the Protection of Children from Sexual Offences (POCSO) Act, the High Court acknowledged that there was no evidence of the accused using children for pornographic purposes.
      • Additionally, the court noted that Section 15 of the POCSO Act punishes the storage or possession of child pornographic material only if done with specific intent, such as sharing, transmitting, displaying, distributing, or for commercial purposes.
      • The court’s acknowledgment of these points adds complexity to the overall legal assessment in the case.
    • The Completeness of IT Act Sections 67, 67A, and 67B:
      • The content emphasizes that Section 67 of the Information Technology (IT) Act, in conjunction with Sections 67A and 67B, forms a comprehensive legal framework for addressing various cybercrimes, especially those related to child exploitation.
      • The amendment in October 2009 expanded the scope to explicitly criminalize acts like seeking or downloading child pornography, underscoring the legislative intent to safeguard children from sexual exploitation through specialized legal provisions.
    • National Crime Records Bureau’s Collaboration:
      • The National Crime Records Bureau, in collaboration with the American National Center for Missing & Exploited Children, actively pursues individuals involved in uploading child sexual abuse materials (CSAM).
      • The use of the term CSAM is favored over ‘child pornography’ as it avoids implying consent, which children are incapable of providing.
      • The collaboration’s geo-tagged CyberTipline reports facilitate legal actions against offenders nationwide, reinforcing the commitment to combatting child exploitation.
    • Call for Legislative Amendments:
      • Legislative changes are advocated to align with evolving understandings of child protection.
      • Proposals include replacing the term ‘child pornography’ with ‘CSAM’ in Indian laws, acknowledging the lack of consent in these cases.
      • Furthermore, the suggestion is made to amend the Protection of Children from Sexual Offences (POCSO) Act, recommending a distinct offence for mere possession of CSAM.
      • This move aims to eliminate inconsistencies between the provisions of the POCSO Act and the IT Act, streamlining the legal approach to child exploitation.

About the Information Technology (IT) Act, 2000

  • The Information Technology (IT) Act, 2000 is an Act of the Indian Parliament, notified on 17 October 2000.
  • It is the primary law in India dealing with cybercrime and electronic commerce.
  • The Act has 13 chapters and 94 sections, and its main objective is to provide legal recognition for electronic transactions and to address cybercrimes.
  • It covers offenses such as hacking, data theft, spreading computer viruses, identity theft, defamation, pornography, child pornography, and cyber terrorism.
  • The Act also gives legal validity to electronic contracts and recognition of electronic signatures.
  • It is considered one of the strictest privacy laws in the world and applies to all businesses and individuals operating in India.
  • The Act has been amended over the years to keep pace with technological advancements and emerging cyber threats.

About the Indian Penal Code (IPC)

  • The Indian Penal Code (IPC) is the primary criminal code of India, enacted in 1860 during the British colonial era and later amended several times.
  • It serves as the cornerstone of criminal law in India, defining various offenses, their penalties, and procedures for investigation and trial.
  • Key features:
    • The IPC is divided into 23 chapters, covering a wide range of criminal offenses.
    • Each chapter is further divided into sections, with each section addressing a specific offense.
    • The IPC outlines crimes against the person, such as murder (Section 300), culpable homicide (Section 299), assault (Section 351), and kidnapping (Section 359).
    • Various offenses related to property are addressed, including theft (Section 378), robbery (Section 390), dacoity (Section 391), and criminal trespass (Section 441).
    • The IPC includes provisions for offenses against the state, such as sedition (Section 124A), waging war against the government (Section 121), and promoting enmity between different groups (Section 153A).
    • The IPC covers white-collar crimes like cheating (Section 415), forgery (Section 463), counterfeiting (Section 489), and criminal breach of trust (Section 405).
    • Specific provisions address crimes against women, including rape (Section 376), dowry death (Section 304B), and cruelty by husband or relatives (Section 498A).
    • The IPC is complemented by the Code of Criminal Procedure (CrPC), which outlines the procedures for the investigation, arrest, trial, and punishment of offenders.
  • The IPC has undergone amendments over the years to address emerging issues and societal changes.

Note: The Indian Penal Code (IPC) has been replaced by the Bharatiya Nyaya (Second) Sanhita, 2023.

  • The Bharatiya Nyaya (Second) Sanhita, 2023 has 358 sections, as opposed to the earlier 511 sections, with 21 new offenses added and the tenure of punishment enhanced in 41 offenses.

Equity concerns in banning fossil fuel extraction

(General Studies- Paper III)

Source : TH

The insufficient responses from governments and corporations to address climate change are fueling a surge in climate change litigation worldwide.

  • The legal landscape is witnessing an increasing number of cases, reflecting a growing global concern about the inadequacy of current measures.

Key Highlights

  • Momentum for Phasing Out Fossil Fuel Subsidies:
    • The inadequacies have triggered a global push for the phase-out of fossil fuel subsidies and even a potential ban on fossil fuel extraction.
    • This momentum is further intensified by the call for a Fossil Fuel Non-Proliferation Treaty, showcasing a broader movement towards reevaluating and restructuring global policies regarding fossil fuels.
    • Within academic circles, there is a proposal advocating for a coal elimination treaty by 2030, aiming to cease both the mining and burning of coal.
    • The rationale is rooted in the concept of the Production Gap, as highlighted in the Production Gap Report (PGR) of 2023.
    • This report underscores the disparity between countries’ plans to produce 110% more fossil fuels by 2030 and the imperative of the Paris Agreement to limit warming below 1.5°C compared to pre-industrial levels.
  • Global Recognition at COP26 and COP28:
    • The notion of phasing out fossil fuels gained prominence at COP26 in Glasgow (2021), where there was an explicit reference to phasing down unabated coal power and phasing out inefficient fossil fuel subsidies.
    • COP28 in Dubai (2023) continued this trajectory by adopting a decision focused on transitioning away from fossil fuels in energy systems, aligning with the goal of achieving net-zero emissions by 2050.
  • Challenges in Aligning Proposals with Climate Change Principles:
    • While the global community rallies behind these proposals for fossil fuel phase-out, there is a critical question about aligning such initiatives with the foundational principles of the climate change regime, particularly the Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC) and Nationally Determined Contributions (NDC).
    • Balancing the urgent need for climate action with equitable distribution of responsibilities remains a challenge in shaping a cohesive and globally acceptable framework.
    • The UNFCCC, the Kyoto Protocol, and the Paris Agreement share the common goal of reducing greenhouse gas emissions and enhancing removal by sinks, aligning with the Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC) principles.
    • CBDR-RC considers per capita emissions, historic emissions by developed countries, and the financial and technological resources available to developed versus developing nations.
  • Challenges in Applying CBDR-RC to Fossil Fuel Extraction:
    • Despite its relevance, applying CBDR-RC to the context of fossil fuel extraction presents significant challenges.
    • Countries heavily reliant on fossil fuel revenues and employment face obstacles in transitioning away from this sector.
    • Countries like Canada, the United States, and the United Kingdom, with diversified economies and higher per capita income, possess greater capacity to transition away from fossil fuels.
    • In contrast, nations such as Azerbaijan, Congo, Iraq, Nigeria, Oman, and Timor Leste heavily rely on fossil fuel revenues, with less economic diversification, limiting their capacity to transition effectively.
  • Equity Concerns in Global Transition Efforts:
    • Such a transition would underscore the equity challenges in reconciling global climate goals.
    • While developed nations are better equipped to take the lead, ensuring an equitable transition requires considering the unique challenges faced by fossil fuel-dependent economies and formulating strategies that account for their limited capacity to shift away from fossil fuels.
  • State Rights and Due Diligence in Resource Use:
    • In the realm of international law, a state has the sovereign right to exploit natural resources within its territory for economic development.
    • However, this right is accompanied by the responsibility not to cause significant harm to another state when the natural resource has trans-boundary implications.
    • The duty to prevent harm is framed as a due diligence obligation, requiring a state to take appropriate measures considering the potential trans-boundary consequences of its projects.
  • Precedent in Trans-boundary Environmental Impact Assessment:
    • The application of this obligation has been predominantly tested in international water course situations.
    • The International Court of Justice (ICJ), in the Pulp Mills Case (2010), affirmed conducting trans-boundary environmental impact assessments (EIAs) as a part of customary international law.
    • While this duty is established in bilateral situations, its application in a global commons context remains unclear.
    • Scholars argue that a state may not be obligated to undertake an EIA for the extraction of fossil fuels, given its potential global environmental effects beyond local impact.
    • Scholars, particularly from Western countries, argue for a legal obligation for states to conduct EIAs for fossil fuel extraction to prevent global warming.
    • They also highlight the human rights implications of such extraction on local populations and indigenous people in regions like Chhattisgarh, Jharkhand, and Odisha, citing violations of the UN Declaration that emphasizes the free prior informed consent of tribal people.
  • Paris Agreement and Non-Binding Nature of NDCs:
    • The basis of the Paris Agreement lies in Nationally Determined Contributions (NDCs), which do not mandate a state to prohibit fossil fuel extraction.
    • This underscores the legal landscape where states may not be compelled to restrict fossil fuel activities solely based on global environmental concerns.
    • The tension between local and global implications of fossil fuel extraction and the associated legal obligations continues to be a subject of debate within the international legal framework.
  • India’s Fossil Fuel Dominance and Employment Concerns:
    • Despite strides in renewable energy, fossil fuels remain predominant in India’s power sector.
    • Around 3.6 million people in 159 districts are dependent on the fossil fuel economy, both directly and indirectly, particularly in coal mining and the power sector.
    • Given India’s significant unemployment challenges, transitioning to cleaner fuel requires careful consideration, necessitating adequate support for the affected workforce and the creation of new economic opportunities.
    • India’s subsidies on kerosene oil have also faced criticism from Western countries.
    • The subsidies are deemed inconsistent with Article 2(1)(c) of the Paris Agreement, and there are concerns about their inefficiency in promoting sustainable practices.
  • India’s Stance at COP26 and Differential Time-Frame:
    • In adherence to the Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC) principle, India played a strategic role at COP26.
    • India successfully amended language from “phasing out” to “phasing down” unabated coal, signaling a differential time-frame for addressing coal-related issues.
    • This adjustment reflects India’s commitment to balancing environmental goals with the need for economic stability and employment.
    • India is actively pursuing a coalition-building strategy with like-minded developing countries to counter what it perceives as the hypocrisy of developed countries.
    • Notably, major fossil fuel producers like Australia, Canada, and the U.S., as indicated by the Production Gap Report (PGR), plan to increase production while expecting developing nations to undergo radical economic shifts without sufficient support.
    • India is leveraging alliances to advocate for fairness and equity in global climate negotiations.
  • Challenges and Considerations in India’s Climate Approach:
  • India’s situation underscores the complex interplay between environmental goals, economic realities, and global negotiations.
  • Balancing the need for sustainable practices with employment concerns and aligning with international agreements remains a challenge, requiring nuanced and collaborative approaches to navigate the evolving landscape of climate action.

What is Production Gap Report (PGR) of 2023?

  • The Production Gap Report (PGR) of 2023 is a report that measures the misalignment between governments’ planned production of coal, oil, and gas and the global production levels consistent with meeting the Paris Agreement temperature goals.
  • The report identifies global pathways for coal, oil, and gas production from now until 2050 that are consistent with these goals.
  • It then assesses governments’ plans, projections, and policies for fossil fuel production and how aligned — or misaligned — they are with respect to these pathways.
  • The report finds that governments, in aggregate, still plan to produce more than double the amount of fossil fuels in 2030 than would be consistent with limiting warming to 1.5°C.
  • The report is produced by the Stockholm Environment Institute, Climate Analytics, E3G, the International Institute for Sustainable Development, and the United Nations Environment Programme (UNEP), and is based on recent and publicly accessible plans and projections for fossil fuel production.

About “Common but Differentiated Responsibilities and Respective Capabilities” (CBDR-RC)

  • The “Common but Differentiated Responsibilities and Respective Capabilities” (CBDR-RC) is a principle in international environmental law that recognizes the varying responsibilities and capabilities of different countries in addressing global environmental issues, particularly climate change.
  • It is mentioned under the preamble and article 3 of the United Nations Framework Convention on Climate Change (UNFCCC) and is a guiding principle of the Paris Agreement.
  • The CBDR-RC principle acknowledges that while all countries share a common responsibility to address environmental challenges, they have different capabilities to do so, based on their level of development and historical contributions to the issues, and therefore should take differentiated actions.

About Nationally Determined Contributions (NDCs)

  • On the other hand, “Nationally Determined Contributions” (NDCs) are specific climate action plans that each country sets for itself under the Paris Agreement.
  • These contributions outline the actions a country intends to take to address climate change, including its targets for reducing greenhouse gas emissions, adapting to the impacts of climate change, and the support it needs to achieve these goals.
  • NDCs are at the heart of the Paris Agreement and are intended to reflect each country’s unique national circumstances, capabilities, and priorities.
  • The CBDR-RC principle and NDCs are interconnected, as the former provides the overarching framework for differentiated responsibilities, while the latter represents the specific actions that each country commits to undertake in line with its national circumstances and capabilities to address climate change.

Road map for fiscal consolidation

(General Studies- Paper III)

Source : TH

The interim Budget for 2024-25, presented by Finance Minister Nirmala Sitharaman, maintains stability in tax rates, both for direct and indirect taxes.

  • Noteworthy aspects include a continued focus on increasing capital expenditures and a commitment to fiscal correction and consolidation.

Key Highlights

  • Buoyant Tax Revenue and Conservative Estimates:
    • The budget is characterized by a reasonable buoyancy of tax revenue, standing at 1.33 when based on the Budget Estimates of the current year, and 1.09 when using Revised Estimates as the base.
    • With a nominal GDP growth estimate of 10.5% for 2024-25, the projections provide a buffer for potential increases in expenditures or deficit reduction.
    • A nominal GDP growth at 10.5% also means an implicit price deflator-based inflation of 3.3% if we assume a 7% real growth.

Note: The implicit price deflator is a measure of the average change in prices of all new, domestically produced, final goods and services in an economy.

  • Capital Expenditure Growth and Investment Climate:
    • Recent budgets have seen a consistent emphasis on increasing capital expenditures by the Central government.
    • The interim Budget follows this trend, allocating a growth of 11.1% in capital expenditures compared to the 2023-24 Budget Estimates.
    • The objective is to improve the investment climate amid global developments, acting as a catalyst for private investment.
    • The growth rate of capital expenditures is projected at 16.9% compared to the Revised Estimates of 2023-24.
    • While lower than the budgeted growth, this could still support a real GDP growth of 7%, provided there’s an uptick in private sector investment and momentum in state government capital expenditures, supported by extended interest-free loan facilities.
  • Capital Expenditures and GDP Proportions:
    • In 2024-25, the capital expenditures of the Central government, as a proportion of GDP, are expected to marginally increase from 3.2% in 2023-24 to 3.4%.
    • Recognizing that in developing economies, growth is propelled by investment, sustaining a 7% growth rate requires an investment rate of 35%, assuming an Incremental Capital Output Ratio (ICOR) of 5.
    • The NSO’s first advance estimates for 2023-24 indicate a gross fixed capital formation to GDP ratio of 34.9%.
    • If government capital formation decreases in 2024-25, it may necessitate a corresponding increase in private sector investment to maintain overall investment levels.
  • Fiscal Deficit Projection:
    • The interim Budget for 2024-25 anticipates a reduction in the fiscal deficit to 5.1%, marking a 0.7 percentage point decrease from the previous year.
    • While the move is commendable in a pre-election budget, a clear roadmap is essential to achieve the targeted fiscal deficit.
    • The overarching objective is to set the fiscal deficit for the Central government at 3% of GDP, rather than the existing 4.5%.
    • When combined with the fiscal deficit of State governments, the overall target can be 6% of GDP.
    • This strategy is anchored in considerations related to household savings in financial assets and the net inflow of resources from abroad.
  • Household Sector’s Surplus and Economic Dynamics:
    • The household sector stands as the only surplus sector in the economy.
    • Its surplus plays a pivotal role in supporting both the public sector and the private corporate sector.
    • However, recent data indicates a decline in household savings in financial assets.
    • The logic behind maintaining a 3% fiscal deficit is tied to the need for the household sector’s surplus to contribute to the broader economic landscape.
  • Debt-GDP Ratio Targets and FRBM Act Committee Recommendations:
    • The committee tasked with reviewing the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 recommended that the debt-GDP ratio for the combined Centre and States should not exceed 60%, with a target of 40% for the Centre.
    • Simulations suggest that achieving a 3% fiscal deficit for the Centre, sustained with a nominal GDP growth of 11.1%, would result in a 40% debt-GDP ratio by 2034-35.
  • Inflation Concerns and the Importance of Targeted Fiscal Deficit:
    • Any fiscal deficit exceeding 6% of GDP for the combined Centre and States is seen as a potential trigger for inflation.
    • The emphasis is on setting a targeted fiscal deficit relative to GDP and establishing a time horizon for achieving this goal.
    • The overarching objective is to reach a fiscal deficit of 3% of GDP for both the Centre and the States.

Understanding GDP

  • Gross Domestic Product (GDP) is a key indicator used to measure the economic performance of a country.
  • It represents the total monetary value of all goods and services produced within a nation’s borders over a specific time period.
  • There are two main concepts related to GDP: Nominal GDP and Real GDP.
  • Nominal GDP:
    • Nominal GDP is the total value of goods and services produced in a country, measured in current market prices.
    • It reflects the changes in the quantity of goods and services produced as well as any changes in their prices.
    • Nominal GDP can be affected by inflation or deflation because it includes the current prices of goods and services, and it may not accurately represent changes in the actual production of goods and services.
    • Formula: Nominal GDP=Sum of all current market values of goods and services produced.
  • Real GDP:
    • Real GDP adjusts Nominal GDP for changes in price levels, providing a more accurate measure of a country’s economic output over time.
    • It reflects changes in the quantity of goods and services produced, excluding the impact of inflation or deflation.
    • Real GDP is considered a more reliable indicator for comparing economic performance across different time periods because it isolates the effects of price changes.
    • Formula: Real GDP=Nominal GDP÷GDP Deflator (or Price Index).
    • The GDP deflator is a measure of the overall price level in an economy, and it helps in adjusting Nominal GDP to obtain Real GDP.

What is Incremental Capital Output Ratio (ICOR)?

  • The Incremental Capital Output Ratio (ICOR) is an economic metric used to assess the efficiency of capital investment in generating additional output or economic growth.
  • It measures the amount of additional capital required to produce an additional unit of output or GDP (Gross Domestic Product).
  • ICOR is particularly relevant in the context of economic planning and development, as it helps policymakers and analysts evaluate the effectiveness of investment in terms of output expansion.

A history of the Northern Ireland conflict

(General Studies- Paper II)

Source : TH

On February 3, Michelle O’Neill, a pro-Irish unity politician from the Sinn Fein party, made history by becoming the first Nationalist First Minister of Northern Ireland.

  • This marked the resolution of a two-year political deadlock as the Democratic Union Party (DUP), the largest pro-U.K. party, returned to government.

Key Highlights

  • Background – Consociationalism and the Good Friday Agreement:
    • Northern Ireland operates under a power-sharing arrangement called consociationalism, established by the Good Friday Agreement (Belfast Agreement) in 1998.
    • This system aims to share power equally between Nationalists (pro-Irish unity) and Unionists (pro-U.K.).
    • The First Minister position is held by the party with the largest vote share, and the Deputy First Minister by the second-largest, ensuring representation from both factions.
  • 2022 Elections and Political Deadlock:
    • In the 2022 elections, Sinn Fein secured the largest vote share (29%), with the DUP in the second position (21.3%).
    • However, the formation of a government was hindered as the DUP objected to new border controls between Britain and Ireland, a consequence of Brexit.
    • The disagreement led to the DUP’s exit from Stormont (Northern Ireland’s Parliament), initiating a political deadlock.
    • Post-Brexit, Northern Ireland, sharing a land border with an EU country (Republic of Ireland), faced unique challenges.
    • The Northern Ireland Protocol, relocating the trade border to Irish ports, was contested by the DUP, considering it contradictory to the Good Friday Agreement.
    • This disagreement resulted in the DUP’s withdrawal from the government, contributing to the political impasse.
  • Resolution Through the Windsor Framework:
    • To address the deadlock, the U.K. and the EU introduced the Windsor Framework, specifying that goods entering Northern Ireland would undergo demarcation into a ‘green lane’ for no inspections, while those entering the Republic of Ireland (EU territory) would be subject to compliance checks in a ‘red lane.’
    • The U.K. provided assurances about Northern Ireland’s place in its internal market, prompting the DUP’s return to government.
  • Historical Background of Northern Ireland –
    • The Troubles – A 30-Year Civil War:
      • Northern Ireland witnessed a 30-year civil war known as ‘The Troubles’ from 1968 to 1998, marked by intense conflict between Republicans (mostly Catholic) and Unionists (largely Protestants).
      • The sectarian strife resulted in over 3,500 casualties, revealing deep-rooted religious and political divisions.
    • 1609 – Plantations and Religious Conflict:
      • Northern Ireland, initially part of the Ulster province, traces its conflicts back to 1609 when King James I encouraged migration from England and Scotland to Ulster.
      • This led to tensions between Protestants and Irish Catholics.
      • The broader religious war between Protestants and Catholics in Europe had a parallel impact in Ulster, setting the stage for centuries of discord.
    • Resistance Against English Rule – Impact of the Potato Famine:
      • The resistance against colonial English rule intensified over the years, particularly following the devastating Potato Famine in 1845, resulting in widespread death and starvation.
      • This period solidified sectarian and religious differences in the region.
    • 1916 Rising and Irish Independence:
      • In 1916, amid the First World War, Ireland staged a rebellion against colonial rule led by the Irish Republican Army (IRA).
      • Following a bloody conflict, Ireland achieved independence from England with the signing of the Anglo-Irish Treaty in 1921.
    • Partition and the Creation of Northern Ireland:
      • Despite gaining independence, Ireland was partitioned into two territories.
      • Due to a Protestant majority in Ulster, six out of the 32 counties in Ireland remained with the United Kingdom, forming the region of Northern Ireland.
      • This division laid the groundwork for ongoing tensions and conflicts between Nationalists and Unionists, marking a complex history that ultimately led to ‘The Troubles.’
    • The Path to the Good Friday Agreement:
      • After the 1921 partition, Northern Ireland faced years of discrimination and sectarian violence.
      • Irish Republicans, a minority, experienced discrimination in housing and public service jobs.
      • Gerrymandering practices in elections further fueled tensions.
      • In the late 1960s, protests against the Northern Ireland government escalated into violence, leading to a civil war.
      • Discrimination, gerrymandering, and allegations of collusion between the British Army and Unionists intensified the conflict.
      • The British Army’s presence aimed at maintaining peace but faced accusations of favoring Unionists.
      • Violence persisted, culminating in the infamous Bloody Sunday incident in 1972, further fueling hostilities.
    • Shift in the 1980s – Sinn Fein’s Political Role and Peace Talks:
      • In the 1980s, Sinn Fein, the political wing of the IRA, became active in Northern Ireland’s politics, contesting elections and engaging in governance.
      • Amidst ongoing violence, peace talks, mediated by the U.S., gained momentum.
      • The public’s weariness with violence played a crucial role in fostering an environment conducive to negotiations.
      • The 1990s witnessed a significant shift as both the IRA and Unionists declared a ceasefire, reflecting a growing desire for peace.
      • Peace talks became prominent, emphasizing a “twin approach” where peace negotiations and decommissioning of arms occurred simultaneously.
      • While the U.K. pressed for arms decommissioning, both parties were reluctant to entirely relinquish their weapons.
    • Signing of the Good Friday Agreement – April 10, 1998:
      • Amidst the twin approach, negotiations culminated in the signing of the Good Friday Agreement on April 10, 1998, in Belfast.
      • This historic agreement marked the end of the 30-year civil war in Northern Ireland, bringing a formal resolution to the deeply rooted conflicts between Republicans and Unionists.
    • Key Aspects of the Good Friday Agreement:
      • The Good Friday Agreement, a unique peace treaty, addressed demands from both Republicans and Unionists in Northern Ireland.
      • It included provisions for power-sharing, equal governance representation for Republicans and Unionists, the potential for reunification through a referendum, and the freedom for Northern Ireland citizens to choose Irish or British nationality or both.
      • The agreement eliminated border checks and facilitated the movement of people across the U.K. and Ireland.
    • Challenges and Tensions in Implementation:
      • Despite the historic agreement, tensions from the conflict persist, and the power-sharing system faces challenges.
      • Stormont, the Northern Ireland government, has experienced multiple collapses, leading to suspensions.
      • The most recent collapse occurred in February 2022 over disputes regarding border controls between the U.K. and Northern Ireland.
    • Significance of Nationalist First Minister – Possibility of Reunification Referendum:
      • The appointment of Michelle O’Neill, a Nationalist, as the First Minister holds significance, hinting at the possibility of a reunification referendum with Ireland in the next decade.
      • The power dynamics in Northern Ireland have shifted with a Nationalist holding the highest office.
      • The U.K. government, in a released paper, expressed skepticism about a border poll leading to a united Ireland, citing recent polling data.
      • Irish Premier Leo Varadkar, while supporting the idea of a united Ireland in principle, emphasized that the question of reunification is not an immediate consideration.
    • Current Uncertainties and Future Scenarios:
      • The region faces uncertainties as political dynamics evolve, with differing perspectives on the likelihood and timing of a reunification referendum.
      • While the Good Friday Agreement laid the foundation for peace, challenges in its smooth implementation persist, raising questions about the future of Northern Ireland’s political landscape.