AMIGOS IAS Daily Current Affairs (23^rd July 2024)

Key takeaways from Economic Survey 2023-24

GS 3: Economy: Economic Survey

Why is it in the news?

• On July 22, 2024, Union Finance Minister Nirmala Sitharaman presented the Economic Survey 2023-24 in both Houses of Parliament.
• This comprehensive annual report, prepared by the Economics Division of the Department of Economic Affairs under the Chief Economic Advisor (CEA), reviews the Indian economy for the closed financial year.
• The Economic Survey for 2023-24 provides a more realistic picture of the challenges before India’s economic growth compared to previous surveys.

Key takeaways from the survey

GDP Growth Projections

• The survey projects India’s GDP growth for the current fiscal year to be between 6.5% and 7%, a decrease from the previous year’s 8.2% growth rate.
• This slowdown is attributed to global challenges that may impact exports.

Fiscal Consolidation

• India has continued its path of fiscal consolidation despite a global trend of widening fiscal deficits.
• The fiscal deficit has been reduced from 6.4% of GDP in FY23 to 5.6% in FY24, based on provisional actuals data from the Office of Controller General of Accounts (CGA).

Capital Expenditure

• Capital expenditure for FY24 stood at ₹9.5 lakh crore, marking a 28.2% increase year-over-year and being 2.8 times the level seen in FY20.

• This emphasis on capital expenditure has been crucial for driving economic growth in a challenging global environment.

• Effective capital expenditure rose to 4.2% of GDP, amounting to ₹12.5 lakh crore in FY24, compared to 3.9% of GDP (₹10.5 lakh crore) in FY23.

External Sector Management

• India’s external sector is well-managed, with comfortable foreign exchange reserves and a stable exchange rate.
• As of the end of March 2024, forex reserves were sufficient to cover 11 months of projected imports.
• The Indian Rupee has also been one of the least volatile currencies among its emerging market peers in FY24.

External Debt and Remittances

• External debt indicators remain benign, with the ratio of external debt to GDP at 18.7% as of end-March 2024 while the ratio of foreign exchange reserves to total debt stood at 97.4% as of March 2024.

• Remittances, the second-largest source of external financing after service exports, are projected to grow by 3.7% to $124 billion in 2024, and by 4% to $129 billion in 2025. Primary sources of these remittances are oil-exporting countries, with remittances to India reaching $120 billion in 2023.

Impact on Agriculture and Food Prices

• Extreme weather, lower reservoir levels, and crop damage have affected farm output and food prices over the past two years.
• Food inflation, as measured by the Consumer Food Price Index (CFPI), increased from 3.8% in FY22 to 6.6% in FY23, and further to 7.5% in FY24. These adverse conditions particularly impacted the production of vegetables and pulses.

Foodgrain Production and Distribution

• Foodgrain production hit an all-time high of 329.7 million tonnes in FY22-23 but slightly decreased to 328.8 million tonnes in FY23-24 due to poor and delayed monsoons.

• The public distribution of food grains, calculated as a percentage of net availability, fell to 19.4% in FY23 compared to 21.6% in FY22.

• Note: Data from the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), which provides free food grains to about 81.35 crore beneficiaries, is not included for FY21 and FY22.

Inflation Trends

• Despite global supply chain disruptions and adverse weather conditions, domestic inflationary pressures moderated in FY24.
• Retail inflation, which averaged around 6.7% in FY23, decreased to 5.4% in FY24. Government measures, including open market sales, reductions in LPG cylinder prices, cuts in petrol and diesel prices, and increased policy rates by the RBI, contributed to this moderation.
• Consequently, inflation rates declined in most States and Union Territories, with 29 out of 36 reporting inflation rates below 6%.

Some of the key challenges flagged by the survey and the recommendations made to address them

Survey’s Diagnosis

Global Headwinds:

• The environment for foreign direct investment (FDI) growth is not highly favourable. High interest rates in developed countries have raised the cost of funding and increased the opportunity cost of investing in developing countries like India.
• Additionally, economies such as India have to compete with industrial policies in the developed world involving significant subsidies that encourage domestic investment. Moreover, Geopolitical uncertainties also continue to pose challenges.

China Challenge:

• The Chief Economic Advisor (CEA) highlighted India’s continued dependency on China for imports, especially for renewable energy.
• China has not relinquished the low-skills manufacturing space that India aims to occupy.

AI Threat:

• The survey notes that while there has been a boom in telecommunications and internet-facilitated business process outsourcing (BPO), the next wave of technological evolution might adversely impact this sector.

Tepid Private Investment:

• The corporate sector has not responded as expected, despite the Union government cutting taxes in September 2019 to facilitate capital formation.
• From FY20 to FY23, the profit before taxes of the Indian corporate sector nearly quadrupled, but hiring and compensation growth did not keep pace.

Employment Imperative:

• The Indian economy needs to generate an average of nearly 78.5 lakh jobs annually until 2030 in the non-farm sector to accommodate the rising workforce.

Data Deficiency:

• There is a lack of good quality and timely data, especially related to employment. The survey acknowledges this gap, which hinders proper analysis.
• The absence of timely data on the number of formal and informal jobs created across various sectors precludes an objective analysis of the labour market situation.

Lifestyle Disadvantages:

• The survey notes that “social media, screen time, sedentary habits, and unhealthy food” are a detrimental mix that can undermine public health and productivity, thus diminishing India’s economic potential.

Recommended Solutions

Job Creation by the Private Sector:

• The survey reiterates the government’s hope that the private sector will take on a dominant role in job creation.
• The CEA emphasizes that it is in the enlightened self-interest of the Indian corporate sector to take its responsibility to create jobs seriously, especially given their substantial profits.

Lifestyle Changes by Private Sector:

• The survey suggests that embracing India’s traditional lifestyle, food, and recipes, which promote healthy living and harmony with nature, makes commercial sense for businesses.
• These practices have a global market potential that is yet to be fully tapped.

Farm Sector as the Saviour:

• Traditional economic theories suggest a transition from agriculture to manufacturing and services as economies develop. However, the survey points out that trade protectionism, resource-hoarding, excess capacity and dumping, onshoring production, and the advent of AI are narrowing the scope for growth in manufacturing and services.
• This situation necessitates a return to agricultural practices and policymaking to generate higher value addition, boost farmers’ income, create opportunities for food processing and exports, and make the farm sector attractive and productive for urban youth.

Removing Regulatory Bottlenecks:

• The CEA stresses the need to alleviate the regulatory burden imposed on businesses, particularly the Medium, Small, and Micro Enterprises (MSMEs).
• Although the burden has lightened compared to the past, it remains heavier than desirable.

Building State Capacity:

• The CEA advocates for building state capacity to sustain and accelerate India’s progress, emphasizing the need for detailed, persistent efforts rather than big reforms at this stage.

Economic survey flags syncing skilling with learning to boost job prospects

GS 3: Economy: Economic Survey

Why is it in the news?

• The Economic Survey 2023-24, released on July 22, highlights the need to align educational outcomes with skill development to improve job prospects for India’s youth.
• With the median age of India’s workforce at 28, only 51% of graduates are employable. The survey stresses that improving learning outcomes and integrating them with skilling is crucial for leveraging this demographic advantage.

More about the news

Impact of New Education Policy

• The New Education Policy (NEP) 2020 aims to achieve foundational literacy and numeracy by the third grade. However, addressing learning loss from COVID-19 and improving educational outcomes is urgent.
• Skilling should be seen as essential for enhancing youth employability, not just a remedial measure for struggling students.

Learning Gaps and Education Expenditure

• The survey reveals a widening gap in learning outcomes since COVID-19, with significant drops in NAS scores for Mathematics, Science, Social Science, Language, and Environmental Studies.
• Moreover, Central government education expenditure for FY24 was ₹60,000 crore below budget estimates, affecting rural development and education.
• Overall, education expenditure has remained around 2.8% of the central budget.

Improvements in School Infrastructure

• Positive developments include 97% of schools having toilets in 2022-23, up from 88% in 2012-13.
• Handwash facilities increased from 36% to 94%, and access to electricity rose from 50% to nearly 92%.
• Additionally, 50% of schools now have computers and internet facilities.

Concerns About Social Media and Technology

• The survey notes concern about social media’s impact, comparing it to tobacco.
• A study found that 23.8% of children use smartphones in bed and 37.2% face reduced concentration due to smartphone use.

Academic Bank of Credits and International Education

• As of July 2024, 2,037 higher education institutions have adopted the Academic Bank of Credits (ABC), with 30.13 crore Automated Permanent Academic Account Registry (APAAR) IDs created. The ABC aims to enhance student mobility.
• The survey also discusses the International Financial Services Authority (IFSC) and the GIFT city, noting that foreign universities like Deakin University and the University of Wollongong are setting up campuses there, contributing to a more educated and skilled India.

How and when a bill can be defined as a Money Bill

GS 2: Polity: Money Bill

Why is it in the news?

• The Chief Justice of India (CJI) has agreed to list petitions before Constitution Benches that challenge the Centre’s use of the money Bill route to pass contentious laws and amendments.

What are Money and Financial Bills?

• The Constitution categorizes certain bills dealing with financial matters as money Bills and financial Bills.
• Article 110(1)(a) to (f) defines a money Bill as one containing ‘only’ provisions related to six specific matters: taxation, government borrowing, custody of consolidated or contingency funds, payment/withdrawal from such funds, appropriation from the consolidated fund, expenditure charged on the consolidated fund, and receipt/account/audit of Union or State accounts.
• Clause (g) of Article 110(1) includes any matter incidental to these six as a money Bill.
• Examples include the Finance Act and Appropriation Act, which primarily deal with taxation and spending from the consolidated fund.
• Article 117 describes two categories of financial Bills: Category I includes any of the six matters plus other issues, while Category II involves expenditures from the consolidated fund but not the six specific matters.

What Exactly is a Money Bill?

• As per Article 109, a money Bill must be introduced in the Lok Sabha. Once passed there, the Rajya Sabha has 14 days to recommend changes, which the Lok Sabha may or may not accept.
• Money Bills address crucial financial matters for the country’s administration, thus requiring only Lok Sabha approval, where the ruling government typically holds a majority.
• This procedure originates from the UK, where the 1911 Parliament Act curtailed the House of Lords’ budgetary powers, making the House of Commons the primary body for passing the Budget.
• The Speaker of the Lok Sabha certifies a Bill as a money Bill, emphasizing that it deals ‘only’ with financial matters. Financial Bills of Categories I and II do not follow this special procedure.

What are the Issues?

Aadhaar Act

• The Speaker’s certification of a Bill as a ‘money Bill’ came under judicial review during the scrutiny of the Aadhaar Act passed in 2016. This Act includes provisions for enrolment and authentication processes, authority establishment, safeguards mechanisms, and penalties for offences.
• Section 7 allows the Central or State government to require Aadhaar authentication for subsidies, benefits, or services funded from the consolidated fund.
• The Act was passed as a ‘money Bill’ since its primary purpose involved the consolidated fund, with other provisions deemed incidental.
• The Supreme Court upheld this classification with a 4:1 majority, though the current CJI dissented, arguing that the Aadhaar Act did not meet the ‘money Bill’ definition.

Finance Act, 2017

• The Finance Act, 2017, was more controversial, using the money Bill route to amend various Acts for reorganizing tribunals like the National Green Tribunal.
• In Rojer Mathew vs. South Indian Bank (2019), a five-judge Bench struck down these amendments and referred the matter to a larger Bench for an authoritative judgment on the definition of money Bills. A seven-judge Bench should be constituted to address this issue comprehensively. Further, the Speaker must also uphold the spirit of the money Bill definition when certifying such Bills.

Prevention of Money Laundering Act (PMLA) Amendments:

• Amendments to the Prevention of Money Laundering Act (PMLA) since 2015, passed as Money Bills, significantly empowered the Enforcement Directorate with authority over arrests and conducting raids.
• The Supreme Court affirmed the amendments’ legality but referred the question of their classification as Money Bills to a seven-judge Bench.
• These amendments have sparked concerns regarding potential misuse and the circumvention of rigorous legislative oversight.

Prelims Practice MCQ:

Q. With reference to Finance Bill and Money Bill in the Indian Parliament consider the following statements: (UPSC 2023)

1. When the Lok Sabha transmits Finance Bill to the Rajya Sabha, it can amend or reject the Bill.

2. When the Lok Sabha transmits Money Bill to the Rajya Sabha, it cannot amend or reject the Bill, it can only make recommendations.

3. In the case of disagreement between the Lok Sabha and the Rajya Sabha, there is no joint sitting for Money Bill, but a joint sitting becomes necessary for Finance Bill.

How many of the above statements are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Answer: A

Q. Regarding the Money Bill, which of the following statements is not correct? (UPSC 2018)

(a) A bill shall be deemed to be a Money Bill if it contains only provisions relating to the imposition, abolition, remission, alteration or regulation of any tax.

(b) A Money Bill has provisions for the custody of the Consolidated Fund of India or the Contingency Fund of India.

(c) A Money Bill is concerned with the appropriation of money out of the Contingency Fund of India.

(d) A Money Bill deals with the regulation of borrowing of money or giving of any guarantee by the Government of India.

Answer: C

Q. What will follow if a Money Bill is substantially amended by the Rajya Sabha? (UPSC 2013)

(a) The Lok Sabha may still proceed with the Bill, accepting or not accepting the recommendations of the Rajya Sabha.

(b) The Lok Sabha cannot consider the Bill further.

(c) The Lok Sabha may send the Bill to the Rajya Sabha for reconsideration.

(d) The President may call a joint sitting for passing the Bill.

Answer: A

Mains Practice Question:

Q. The Indian Constitution has provisions for holding joint session of the two houses of the Parliament. Enumerate the occasions when this would normally happen and also the occasions when it cannot, with reasons thereof. (UPSC 2017)

Economic survey notes rise in primary healthcare expenditure

GS 3: Economy: Economic Survey

Why is it in the news?

• The Economic Survey 2023-24, released on July 22, highlights significant changes in healthcare expenditure and its impact on primary healthcare.

More about the news

• According to the latest National Health Accounts (NHA) estimates for FY20, the share of Government Health Expenditure (GHE) in GDP and Total Health Expenditure (THE) has increased.
• Specifically, primary healthcare expenditure rose from 51.3% of GHE in FY15 to 55.9% in FY20, while the combined share of primary and secondary care in GHE increased from 73.2% to 85.5% over the same period.
• In contrast, the share of primary and secondary care in private health expenditure decreased from 83% to 73.7%, reflecting a shift towards government facilities for primary care and a rising tertiary disease burden.

• The survey also reports a notable rise in social security expenditure on health, from 5.7% in FY15 to 9.3% in FY20, and a reduction in out-of-pocket expenditure (OOPE) as a percentage of THE during the same timeframe.

• These changes have contributed to improvements in key health indicators, with the Infant Mortality Rate (IMR) declining from 39 per 1,000 live births in 2013 to 28 in 2020, and the Maternal Mortality Rate (MMR) dropping from 167 per lakh live births in 2014 to 97 in 2020.
• The Union government is also advancing efforts to enhance public health through various schemes, including Ayushman Bharat Pradhan Mantri Jan Aarogya Yojana (AB-PMJAY), PM Jan Aushadhi Kendras, and AMRIT (Affordable Medicines and Reliable Implants for Treatment).
• These initiatives are designed to promote preventive and promotive healthcare for all ages.

Additional Information:

• Understanding –
• Infant Mortality Rate (IMR): Infant mortality rate refers to the number of deaths of children under one year of age per 1,000 live births in a given year, commonly used to assess a country’s health status.
• Maternal Mortality Ratio (MMR) refers to the number of maternal deaths due to pregnancy-related causes or termination per 100,000 live births during a specified time period, regardless of the duration or site of the pregnancy.
• The term “maternal mortality” refers to a woman dying while pregnant or within 42 days after having given birth.

India has moved from women’s development to women-led development: Economic Survey

GS1&3: Indian Society & Economy: Economic Survey

Why is it in the news?

• The Economic Survey 2023-24, highlights India’s transition from women’s development to women-led development.
• It reports a remarkable 218.8% increase in the budgetary allocation for women’s welfare and empowerment schemes.
• The share of the Gender Budget in the total Union Budget has risen to 6.5% for FY25, the highest since the Gender Budgeting Scheme’s inception in FY06.

More about the news

Skilling and Employment Initiatives

• The survey emphasizes the government’s commitment to enhancing women’s employment opportunities through skilling programs.
• The proportion of women trained under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) has increased from 42.7% in FY16 to 52.3% in FY24.
• Similarly, women now make up about 82% of the beneficiaries under the Jan Shikshan Sansthan (JSS) scheme.
• Participation of women in ITIs and National Skill Training Institutes (NSTIs) has also risen from 9.8% in FY16 to 13.3% in FY24.

Rural Trends and Financial Inclusion

• Rural India has seen significant growth in female labour force participation, rising to 37% in 2022-23 from 23.3% in 2017-18.
• Labour Force Participation Rate (LFPR): Labour Force Participation Rate is defined as the percentage of persons in labour force (i.e. working or seeking or available for work) in the population.
• The Pradhan Mantri Jan Dhan Yojana (PMJDY) has facilitated the opening of 52.3 crore bank accounts, with 55.6% held by women as of May 2024.

Other Empowerment Initiatives for Women in India:

• Health and Education Initiatives:
• Efforts include improving the sex ratio from 918 (2014-15) to 930 (2023-24, provisional) at birth and reducing maternal mortality rates from 130/lakh live births in 2014-16 to 97/lakh live births in 2018-20 supported by initiatives like “Beti Bachao, Beti Padhao” and Sukanya Samriddhi Yojana.
• Institutional delivery rates have increased from 78.9 per cent in 2015-16 to 88.6 per cent in 2019-21, aided by programs such as Janani Shishu Suraksha Karyakram and PM Matru Vandana Yojana.
• Empowerment Through Infrastructure: Initiatives like Swachh Bharat Mission, Ujjwala Yojana, and Jal Jeevan Mission have alleviated women’s burdens, providing sanitation facilities, clean cooking gas, and tap water connections. These efforts also support women’s participation in productive activities.
• Health and Nutrition Programs: Mission Saksham Anganwadi & Poshan 2.0 focus on enhancing women’s health and nutrition, emphasizing micronutrient sufficiency and overall well-being.
• Education and Skill Development: Sarva Shiksha Abhiyan and Right to Education have achieved gender parity in school enrollment, while skill development schemes like PMKVY and Jan Shikshan Sansthan prioritize women’s participation, with increased representation in ITIs and NSTIs.
• Promotion of Women in STEM: Programs such as WISE KIRAN and Vigyan Jyoti aim to increase women’s participation in STEM fields, has benefitted nearly 1962 women scientists between 2018 and 2023 women scientists and 21,600 female students across various educational levels and districts as of December 2023.

Potential of the Care Economy

• The survey underscores the potential of the care economy, suggesting that direct public investment equivalent to 2% of GDP could generate 11 million jobs, with nearly 70% going to women.
• It cites international models from Australia, Argentina, Brazil, and the U.S. as examples for India.
• According to the International Labour Organisation (2018), the care sector is experiencing rapid global growth, with investments expected to create 475 million jobs in care services by 2030.

India now among top 25 arms exporter nations: Economic Survey

GS 3: Economy: Economic Survey

Why is it in the news?

• India has transitioned from being a major arms importer to ranking among the top 25 arms exporter nations, as highlighted by the Economic Survey 2023-24.

More about the news

• The country’s defense production has surged from ₹74,054 crore in FY16-17 to ₹108,684 crore in FY22-23, significantly boosting exports.
• About 100 domestic companies are now exporting a diverse range of defense products including Dornier-228 aircraft, artillery guns, BrahMos missiles, and Pinaka rockets.
• The survey notes an increase in export authorizations from 1,414 in FY23 to 1,507 in FY24, reflecting the growth in defense exports.
• Moreover, Government policy initiatives have simplified export procedures, enhancing ease of doing business, and the Aatmanirbhar Bharat initiative has bolstered indigenous defense production, reducing import dependency.
• Despite these advances, India remains the world’s top arms importer, with a 4.7% increase in imports from 2019 to 2023.
• The interim Budget for FY24 allocated ₹6.2 lakh crore to the Defense Ministry, including a capital allocation of ₹1.72 lakh crore, marking a 5.78% increase from the previous year.
• However, the Vice-Chief of the Indian Air Force has cautioned that self-reliance should not compromise national defense needs, noting concerns about the current pace of equipment procurement.

Mental health disorders are associated with significant productivity losses: Economic Survey

GS 3: Economy: Economic Survey

Why is it in the news?

• The Economic Survey 2023-24, presented by Union Finance Minister Nirmala Sitharaman, underscores the significant impact of mental health disorders on productivity and national development.

More about the news

• Mental health issues lead to considerable economic losses through absenteeism, decreased productivity, disability, and increased healthcare costs.
• The survey highlights how poverty exacerbates mental health risks, due to financial instability and stressful living conditions.
• According to the National Mental Health Survey 2015-16, 10.6% of adults in India suffer from mental health disorders, with a treatment gap ranging from 70% to 92% for various conditions.
• The prevalence of mental health issues is notably higher in urban areas (13.5%) compared to rural regions (6.9%) and smaller urban areas (4.3%).
• Additionally, the NCERT survey on school students reveals a rising trend in poor mental health among adolescents, with 11% feeling anxious, 14% experiencing extreme emotions, and 43% undergoing mood swings, exacerbated by the COVID-19 pandemic.
• To address these challenges, the survey recommends enhanced implementation of mental healthcare programs and closing gaps in existing services.
• Key government initiatives include the National Mental Health Programme, National Tele Mental Health Programme, and efforts to increase the number of mental health professionals.
• The survey also advocates for standardizing mental health service guidelines, integrating mental health interventions in schools, and developing age-appropriate mental health curricula for educators and students.

Additional Information:

Recognizing mental health as a fundamental aspect of overall well-being, the Survey underscores key initiatives and policies taken by the Government in this regard:

• National Mental Health Programme (NMHP) launched in 1982: Under the District Mental Health Programme of this scheme, more than 1.73 lakh Sub Health Centres, Primary Health Centres, Urban PHCs and Urban Health and Wellness Centres were upgraded to Ayushman Arogya Mandirs providing mental health services.
• The District Mental Health Program (DMHP), initiated in 1996 under the NMHP during the IX Five Year Plan, was modelled after the ‘Bellary Model’.
• National Tele Mental Health Programme:
• The aim is to offer nationwide, round-the-clock free tele-mental health services, prioritizing access for people in remote or underserved regions.
• With over 1600 trained counsellors in over 20 languages, 53 Tele MANAS cells were set up in 34 states/UTs and more than 8.07 lakh calls handled since Oct 2022, as of 31 March 2024.
• Increasing mental health personnel: 25 Centres of Excellence were sanctioned to increase PG students’ intake, support provided to 19 Government medical colleges/institutions to strengthen 47 PG Departments, mental health services provisioned for 22 AIIMS, and three Digital Academies providing online training courses to general healthcare medical and paramedical professionals set up.
• Rashtriya Kishor Swasthya Karyakram (RKSK):
• The RKSK program aims to foster holistic development among adolescents aged 10-19, embracing diverse backgrounds, including gender identities and sexual orientations, in both urban and rural areas, irrespective of schooling or socioeconomic status.
• It seeks to transition from clinic-centric services to proactive promotion and prevention strategies, involving adolescents in their environments like schools, families, and communities, alongside setting up Adolescent Friendly Health Clinics (AFHC) and implementing Peer education programs across the country.

MGNREGS demand not a real indicator of rural distress: Economic Survey 

GS 3: Economy: Economic Survey

Why is it in the news?

• The Economic Survey 2023-24, presented by Chief Economic Adviser V. Anantha Nageswaran, questions the reliability of MGNREGS demand as an indicator of rural distress.

More about the news

• It reveals that states like Tamil Nadu and Kerala, with minimal poor populations, utilized a significant portion of MGNREGS funds—15% and nearly 4% respectively in FY 2023-24—generating 51 crore person-days of employment.
• Conversely, Bihar and Uttar Pradesh, which house about 45% of the poor, received only 17% of the funds and generated 53 crore person-days.
• The survey indicates a weak correlation (0.3) between state poverty levels and MGNREGS person-days, suggesting that demand reflects state institutional capacity and wage variations more than actual poverty.
• Differences in fund usage are linked to varying state wage rates, as no national minimum wage exists for the scheme. States with higher wages, like Haryana and Tamil Nadu, see more fund usage.
• Furthermore, state administration efficiency impacts fund distribution, with only ₹90,000 released for unemployment allowances in FY24 and ₹7.8 lakhs across all states in FY23.

Additional Information:

What is MGNREGA Scheme?

• About: MGNREGS is a Centrally-Sponsored Scheme i.e., the scheme is jointly funded by the Central government and the State governments was passed into Indian law on August 25, 2005.
• Employment Guarantee: This scheme ensures a legal entitlement of one hundred days of employment per financial year to adult members of rural households who are willing to engage in unskilled manual labour at the prescribed minimum wage rate.
• If the guaranteed employment is not fulfilled, an “unemployment allowance” must be provided.
• Implementation Oversight: The Ministry of Rural Development (MRD), Government of India, oversees the complete implementation of this scheme in collaboration with state governments.
• Objective: The act aims to enhance the purchasing power of rural people, particularly those below the poverty line, through the provision of primarily semi-skilled or unskilled work opportunities in rural India.
• Eligibility: To avail of MGNREGA benefits, applicants must be Indian citizens aged 18 or above at the time of application, be part of a local household registered with the Gram Panchayat, and volunteer for unskilled labour.

Prelims Practice MCQ:

Q. Among the following who are eligible to benefit from the “Mahatma Gandhi National Rural Employment Guarantee Act”? (UPSC 2011)

(a) Adult members of only the scheduled caste and scheduled tribe households

(b) Adult members of below poverty line (BPL) households

(c) Adult members of households of all backward communities

(d) Adult members of any household

Answer: D

Economic Survey indicates limited progress on safety-related works in railways

GS 3: Economy: Economic Survey

About the news

• The Economic Survey 2023-24 highlights limited progress in railway safety measures despite recent increases in capital expenditure.
• The automatic train protection system Kavach has been deployed on only 2.14% of India’s 68,426 route km and 7,349 stations.
• Meanwhile, electronic interlocking systems, which were introduced 12 years ago, now cover 46% of stations, up from 40% in FY23, with 3,424 stations equipped as of March 31, 2024.
• Additionally, Automatic Block Signalling (ABS), a low-cost safety system, has been implemented on 4,431 route km, representing just 6.47% of the railway network.
• Despite significant investment in railway infrastructure, including a 77% increase in capex to ₹2.62 lakh crore in FY24, progress on safety-related works remains gradual.

Additional Information:

About Kavach:

• The ‘Kavach’ system, an Automatic Train Protection (ATP) technology, launched in 2020 was developed indigenously by the Research Design and Standards Organisation (RDSO) of Indian Railways in partnership with the Indian industry.
• This system utilizes electronic and Radio Frequency Identification devices across locomotives, signalling systems, and tracks, communicating via ultra-high radio frequencies to control train brakes and alert drivers based on programmed logic, ensuring Safety Integrity Level-4 (SIL-4) compliance and preventing signal overshoots.

What is an Automatic Block Signalling System?                   

• The Automatic Block Signalling System automates train control, enhancing efficiency and speeding up operations within its installed area, significantly boosting line capacity by enabling more trains to operate in the same section.

Proposed EU carbon tax protectionist, says Economic Survey

GS 3: Economy: Economic Survey

About the news

• The Economic Survey 2023-24 criticizes the European Union’s forthcoming Carbon Border Adjustment Mechanism (CBAM) as protectionist and contrary to the spirit of the Paris Agreement.
• Set to take effect on January 1, 2026, CBAM will impose tariffs on energy-intensive goods like iron, steel, and aluminium imported into the EU. This move aims to protect European manufacturers from competitive disadvantages due to differing emission norms in developing countries.
• India, a major exporter of these goods, is expected to face significant impacts. In 2022, 27% of India’s exports of iron, steel, and aluminium, worth $8.2 billion, went to the EU. The CBAM is projected to notably affect sectors such as steel.
• The Survey also highlights the challenge India faces in financing climate change adaptation, noting that while domestic resources have primarily funded climate action, international finance has been limited.
• India requires $28 billion annually to achieve net-zero emissions by 2070, with domestic sources contributing the majority of green finance.

CEA cautions against export bans, wants to emulate China to double farmers’ income

GS 3: Economy: Economic Survey

About the news

• Chief Economic Advisor V. Anantha Nageswaran, in the Economic Survey 2023-24, cautioned against export bans, advocating for farmers to benefit from higher international prices and suggesting such bans be used only in exceptional circumstances.
• He recommended allowing market mechanisms, like consumer substitution, to address supply issues rather than imposing bans that hurt farmers.
• The survey notes agriculture’s crucial role, contributing 18.2% to GDP and supporting 42.3% of the population. Despite a 4.18% average growth rate over five years, the sector’s growth fell to 1.4% in 2023-24 due to poor monsoons from El Niño.
• Foodgrain production hit 329.7 million tonnes in 2022-23 but slightly decreased to 328.8 million tonnes in 2023-24.
• Nageswaran urged a shift to high-value agriculture, such as fruits and dairy, to increase smallholder farmers’ incomes, suggesting India could emulate China’s success in doubling farmer incomes between 1978 and 1984.