Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Effect of policies and politics of developed and developing countries on India’s interests
Clouds on the horizon: IMF forecast on global growth and India’s GDP growth
Introduction:
At recent International Monetary Fund (IMF) and World Bank meeting,
Finance Ministers and central bank Governors by and large played down fears about a slowing global economy.
Pause in the U.S.’s interest rate policy in February, ease in the country’s trade tensions with China, and receding risk of a hard Brexit have brought some respite.
However, IMF has consistently emphasised a cautious stance on the current growth trajectory for some months.
Key points:
IMF has projected that global growth will be 3.3% in 2019, down from 3.6% in 2018 and 4% in 2017.
This lower projection is due to a slower global expansion in the second half of 2018 caused by U.S.-China trade tensions, macroeconomic stress in Turkey and Argentina, growing uncertainty over Britain’s exit from the European Union, tighter credit policies in China and financial tightening, apart from a normalisation of monetary policy in advanced economies.
World has witnessed deteriorating trade climate in the last two years.
The pace of exports and imports was 4.6% in 2017, the strongest since the rebound after the 2007-08 financial crisis. But the 2018 figures were a modest 3% and could fall much further this year, says the WTO.
Beyond 2020, the report said global growth would be sustained at about 3.6% because of the increase in the relative size of economies such as China and India, which are projected to have robust growth.
IMF on India
India GDP growth seen at 7.3% in 2019-20 and 7.5% in 2020-21, 20 basis points lower than earlier IMF estimates.
Continued economic reforms, with efforts to reduce public debt, is essential to Indian economy’s growth, says IMF.
The IMF report emphasized enhancing governance of public sector banks and reforms to hiring and dismissal regulations that would incentivize job creation and absorb the country’s large demographic dividend.
Also efforts should also be enhanced on land reform to facilitate and expedite infrastructure development.
This should be supported by strengthening Goods and Services Tax compliance and further reducing subsidies.
IMF commended the government for taking steps to strengthen financial sector balance sheets through accelerated resolution of non-performing assets (NPAs) under a simplified bankruptcy framework.
Enumerate the list of various reports and their importance released by
IMF
World Bank
World Economic Forum
Critically examine the reasons for slowdown in the global economy with special reference to US and China.
NATIONAL/ENVIRONMENT
TOPIC: General studies 2
Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
General studies 3
Conservation, Environmental pollution and degradation, environmental impact assessment.
Water Pollution, Wastewater management
How to deal with India’s imminent water crisis?
Introduction:
Recently, Central Ground Water Board (CGWB) has projected that more than 60 large and small cities in India are on the verge of water scarcity.
According to the NITI Aayog report published last year –
Many Indian cities to face water supply crisis soon.
Delhi and 20 other large cities are going to run out of water by 2020.
The reason for this imminent crisis is an over-reliance on groundwater extraction, for most Indian cities are simply unable to meet their water demand with existing supply.
This rampant extraction will likely lead to zero groundwater levels in Delhi, Bangalore and Hyderabad by 2020.
Major Concerns:
Excess groundwater extraction
Excess groundwater extraction has already led to a 61% decline in groundwater level in wells in India between 2007 and 2017.
The depth of this crisis will only grow severe, if we do not take immediate action.
Do you know?
Today, nearly three-fourths of Indian households do not have access to drinking water supply at home.
Nearly 70% of water is contaminated and, as a result, India is placed 120th amongst 122 countries in the water quality index.
Poor agriculture practices
Poor agriculture practices can be blamed for the most part for depleting groundwater reserves.
As of today, use of water for irrigation accounts for 80% of the total available water.
Water-intensive crops like rice and sugar cane are widely grown in many northern states, often in blatant disregard to the available water supply.
The dominance of paddy-wheat crop rotation in Punjab is a case in point—it led to a rapid decline of water table.
Free or cheap electricity
As per a recent study, on average, a 10% reduction in electricity subsidy generated a 6.7% increase in groundwater extraction.
In order to make this move go down well with farmers who are used to free electricity, governments can incentivise power saving per unit with cash compensation for farmers.
The way ahead:
To avert or postpone this crisis, we need to act.
The government must disincentivise paddy and sugar cane cultivation in areas where soil and water supply conditions are not conducive for these crops.
States with sinking groundwater need to appropriate those cropping patterns that suit their agro-climatic zones.
Switching to less water-intensive crops will enhance their irrigation water efficiency.
Policymakers at both the Centre and states must encourage adoption of precision farming technologies, such as laser-guided land levelling, which can cut water use by as much as 30%.
At the same time, drip or micro irrigation ought to be incentivised amongst farmers in severely water-deficient states, like Punjab, Haryana, Uttar Pradesh, Maharashtra, Telangana and Tamil Nadu.
Another key focus point can be command area development (CAD). Now a part of the Pradhan Mantri Krishi Sinchayee Yojana, the CAD initiative centres on “more crop per drop” to increase water-use efficiency in irrigation.
Promoting rainwater harvesting and conducting systematic analysis of groundwater conservation methods.
Connecting the dots:
Many parts of the country are facing severe water crisis and drought conditions. There are many traditional water harvesting and conservation practices in various parts of India which can be employed locally to fight the ongoing crisis. Can you identify few such practices? Also mention the states where they are more prevalant.
Why has water become a stressed resource in many parts of the world? Analyse.
