DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 24th December 2024

Syllabus:

• Mains – GS 3

Context: With the new year around the corner, it is important to think ahead and recognize that the big economic issue in India in 2025 is likely to be the growth slowdown.

Background: –

• For a rich country like the US with an annual per capita GDP of $86,000, slowing growth does not hurt a lot. But for a poor country like India, with a per capita GDP of only $2,700, slowdowns are painful and worrisome.

Key takeaways

• The recently released GDP growth figures have triggered discussion over whether the slowdown is a temporary blip or a warning of a serious trend. Official statistics show that growth has declined in four out of the last five quarters.
• Consumption demand has been subdued. Partly as a consequence, private investment has been weak. While government investment has been growing over the past few years, propping up demand, it is soon going to run into fiscal constraints.
• There is one major opportunity for reigniting growth. India’s GDP is roughly $4 trillion while global GDP is a little more than $100 trillion. That means that India’s share of the global economy is around 4 per cent. But its share in global goods exports is much smaller, less than 2 per cent.
• Assume that India decides to bring its export share in sync with its share in the global economy. If this could be achieved, it would do wonders for growth.
• Many multinational companies are wanting to move out of China. And the only other country with a large population base and strong growth prospects is India.
• There is now a historic opening to attract foreign direct investment (FDI) in manufacturing, which all across Asia has been the key to increasing countries’ global export market share. The government, to its credit, has been trying to seize this opportunity by rolling out the well-funded Production Linked Incentives (PLI) subsidy scheme.
• India should adopt a well-defined export-led growth strategy, the critical component of which would be minimising risk and policy uncertainty. To give an important example, the country needs a consistent and coherent trade policy that does not involve frequent changes in import tariffs or worse still, import or export bans.

Source: Indian Express

Syllabus:

• Mains – GS 3

Context: Industry body CII has proposed reforms in India’s Priority Sector Lending (PSL) framework, suggesting the inclusion of emerging sectors and high-impact sectors like digital infrastructure, green initiatives, healthcare, and innovative manufacturing.

Background: –

• CII also suggested setting up of a high level committee to look at the revision of PSL norms and explore the need for any new Development Finance Institutions (DFIs) to cater to some of the new and emerging sectors.

Key takeaways

• Priority Sector Lending is a policy tool aimed at ensuring that key sectors crucial to the nation’s development receive adequate financial support. 
• Mandated by the Reserve Bank of India (RBI), PSL obligates banks to allocate a specified proportion of their loans to sectors such as agriculture, education, housing, and small industries etc.
• Despite success, the PSL framework requires regular recalibration to remain relevant. This recalibration is essential to ensure that the financial resources are optimally distributed.
• For instance, while agriculture contributes 14 per cent of the GDP today, its PSL allocation remains at 18 per cent, unchanged from when its GDP share exceeded 30 per cent.
• Similarly, sectors like infrastructure and innovative manufacturing lack adequate PSL focus despite their potential to drive economic growth.

Source: Livemint

Syllabus:

• Mains – GS 2

Context: The Ministry of Mines has identified 30 critical minerals. While it highlighted India’s complete import dependency for 10 critical minerals, it did not fully address a more pressing concern — the extent and nature of dependency on China.

Background:

• Transitioning away from China will require sustained investment and long-term commitment.

Is China a dominant player?

• China’s unparalleled dominance in critical minerals stems from its vast resource base and strategic investments across the value chain. 
• Reserves of minerals, particularly copper, lead, zinc, nickel, cobalt, lithium, gallium, germanium, and crystalline graphite, increased significantly, supported by robust exploration investment. 
• China’s dominance extends beyond reserves to include processing and refining, with control over 87% of rare earth processing, 58% of lithium refining, and 68% of silicon processing. 
• Furthermore, China has strategically invested in overseas mining projects and built unparalleled midstream refining capabilities, raising supply chain vulnerabilities for countries including India, the U.S., and EU nations.

What about China’s export controls?

• When it comes to China’s approach to weaponising critical mineral exports, it is strategic and calculated. 
• Beijing primarily targets minerals deemed critical by West and their allies, especially those essential for semiconductors, batteries, and high-tech manufacturing. However, China carefully balances these decisions against two constraining factors: it avoids controlling minerals which heavily depend on Western raw material imports, and it refrains from actions that could disrupt its domestic industry or export-dependent sectors. This strategy was evident in China’s 2010 rare earth embargo against Japan, its recent restrictions on antimony, gallium, and germanium exports, and its December 2023 ban on rare earth extraction and processing technologies.

Is India dependent on China?

• An in-depth examination of import data of 30 critical minerals spanning 2019 to 2024 reveals India’s acute vulnerability to Chinese supplies, particularly for six critical minerals where dependency exceeds 40%: bismuth (85.6%), lithium (82%), silicon (76%), titanium (50.6%), tellurium (48.8%), and graphite (42.4%). 

Why does India rely on imports?

• India’s heavy reliance on imports stem from several structural challenges in its mining and processing ecosystem. 
• Many critical minerals are deep-seated, requiring high-risk investments in exploration and mining technologies — a factor that has deterred private sector participation in the absence of adequate incentives and policy support. 
• The country’s processing capabilities are also limited. This is particularly evident in the case of the recently discovered lithium deposits in Jammu and Kashmir, where despite the presence of 5.9 million tonnes of resources in clay deposits, India lacks the technological capability to extract lithium from such geological formations.

What is the way forward?

• India has initiated a multi-pronged approach to reduce its dependency on China. 
• The government has established KABIL, a joint venture of three State-owned companies, to secure overseas mineral assets. 
• India has also joined strategic initiatives like the Minerals Security Partnership and the Critical Raw Materials Club to diversify its supply sources and strengthen partnerships. 
• The country is also investing in research through institutions like the Geological Survey of India and the Council for Scientific and Industrial Research while promoting recycling and circular economy practices to reduce virgin mineral dependency.

Source: The Hindu

Syllabus:

• Prelims – CURRENT EVENT

Context: National Farmers Day was celebrated on December 23.

Background: –

• National Farmers’ Day in India, is celebrated annually on December 23 to commemorate the birth anniversary of India’s former Prime Minister, Choudhary Charan Singh.

Key takeaways

• National Farmers Day, also known as Kisan Diwas, is celebrated in India on December 23rd each year. 
• This day honors the contributions of farmers to the nation’s economy and pays tribute to the birth anniversary of Chaudhary Charan Singh, India’s fifth Prime Minister, who is often referred to as the “Champion of India’s Farmers”.
• Chaudhary Charan Singh served as India’s Prime Minister from 1979 to 1980. 
• National Farmers Day was first celebrated in 2001 as an initiative by the Government of India.

Source: Hindustan Times

Syllabus:

• Prelims – GEOGRAPHY

Context: Donald Trump, the president-elect of the United States, has expressed an interest in buying Greenland.

Background: –

• The US’s interest in acquiring Greenland could start a whole new geopolitical ‘Great Game’ on top of the world in the fast-thawing Arctic.

Key takeaways

• Location: Greenland is located between the Arctic and Atlantic Oceans, east of the Canadian Arctic Archipelago. The territory comprises the island of Greenland and more than a hundred other smaller islands. Greenland has a 1.2-kilometer-long border with Canada on Hans Island.
• Size: It is the world’s largest island, covering an area of approximately 2,166,086 square kilometers.
• The highest elevation is the summit of Gunnbjørn Fjeld, the highest point in the Arctic at 3,694 meters
• Ice Coverage: About 80% of Greenland is covered by ice, including the Greenland Ice Sheet, which is the second largest ice sheet in the world after Antarctica.
• Danish Colonization: Danish colonization began in the 18th century, and Greenland became part of the Kingdom of Denmark in 1953.
• Home Rule and Self-Government: Greenland was granted home rule in 1979 and further autonomy in 2009, allowing it to manage most domestic affairs.

Demographics and Culture

• Population: As of 2024, the population of Greenland is estimated to be around 56,800.
• Ethnic Groups: The majority of the population is Inuit, with smaller communities of Danish and other Nordic people.
• Languages: The official language is Greenlandic, with Danish also widely spoken.

Economy and Resources

• Economy: Greenland’s economy is primarily based on fishing, hunting, and mining. There are also potential oil and gas reserves.
• Natural Resources: The island has significant deposits of coal, iron ore, lead, zinc, molybdenum, diamonds, gold, platinum, niobium, tantalite, uranium, and hydropower.

Interesting Facts

• Capital: The capital and largest city is Nuuk.
• Northernmost Point: Greenland is home to the northernmost point of land in the world, Kaffeklubben Island (northernmost permanent land).
• Time Zone: Greenland operates on multiple time zones, ranging from UTC-04:00 to UTC-01:00

Source: Down To Earth

Q1.) Which of the following is NOT a reason for India’s reliance on imports of critical minerals from China?

1. Limited exploration and mining technologies in India.
2. Absence of incentives for private sector participation.
3. Lack of domestic mineral resources for all critical minerals.
4. Insufficient policy support for processing capabilities.

Q2.) National Farmers Day in India, celebrated on December 23, honors which of the following leaders?

1. Lal Bahadur Shastri
2. Jawaharlal Nehru
3. Chaudhary Charan Singh
4. Sardar Vallabhbhai Patel

Q3.) Which of the following statements about Greenland is INCORRECT?

1. Greenland is the world’s largest island with significant ice coverage.
2. Greenland operates under the complete administrative control of Denmark.
3. It is rich in natural resources like coal, iron ore, and uranium.
4. Greenland was granted home rule in 1979 and further autonomy in 2009.

Comment the answers to the above questions in the comment section below!!

ANSWERS FOR ’  Today’s – Daily Practice MCQs’ will be updated along with tomorrow’s Daily Current Affairs

Q.1) – c

Q.2) – b

Q.3) – d