Income and Wealth Inequality

Why in news?

According to the World Inequality Lab, the top 1% in India earned 22.6% of the national income in 2022-23, the highest share in the last 100 years.

What are the key highlights of the study?

• Inequality trends- Between 1960 and 1980, inequality in India was decreasing, which was attributed to the growth pattern and economic objectives of that era. However, the trend reversed with the economic liberalization that began in the 1980s and accelerated after the economic reforms of 1991.
• Wealth concentration- The period 2014-15 to 2022-23 seen a pronounced rise in wealth concentration, often referred to as the ‘Billionaire Raj’, indicating that the wealthiest individuals have amassed a large portion of the nation’s wealth.
• Historical comparison- The report makes a comparison with the British Raj, indicating that the modern economic elite in India have created a more unequal society than what existed under colonial rule.
• Impact on society- The report suggests that rising inequality has negative implications for both economic growth and poverty reduction efforts.

What are the challenges faced by India in achieving income and wealth equality?

• Moderate economic growth- China has maintained a higher growth rate with moderate inequality, while India’s growth has been moderate with extreme inequality.
• Dual challenge- India faces the dual challenge of achieving high economic growth and reducing inequality, human development and poverty reduction are crucial for achieving the twin objective.
• Poor human development- Human Development Report (HDR) 2023-2024 has ranked India 134 out of 193 countries, this shows that economic growth has not translated into growth in human development.

Despite being the fifth largest economy, India lags behind Sri Lanka, Bhutan, and Bangladesh in terms of human development.

• Economic inequality- HDR 2023-2024 reveals that India's human development score decreases by 31.1% when economic inequality is taken into account, this underscores the detrimental effect of inequality on the overall well-being and capabilities of the population.
• Regional disparity-

• Policy limitations- Existing policies, such as the Pradhan Mantri Garib Kalyan Anna Yojana are insufficient to address the scale of economic inequality.

Pradhan Mantri Garib Kalyan Anna Yojana launched in 2020 aims to provide free food grains to the poor and needy through the Public Distribution System

What lies ahead?

• There is a need for a balanced approach to economic policy, where human development is a precursor to and a component of economic growth, leading to more equitable outcomes.
• Human development is essential for high economic growth and reducing inequality, it is demonstrated by China and Vietnam and this suggests that the human development should come from economic growth for it to be long lasting.
• Sustainable and inclusive growth requires comprehensive policy interventions that focus on enhancing human capabilities, reducing poverty, and creating meaningful employment opportunities.
• Addressing inequality is not just a matter of economic policy but also crucial for maintaining social cohesion and political stability.

Reference

The Hindu- Towards a less poor and more equal country

Rules for Star Campaigners

Why in news?

Sunita Kejriwal, wife of Delhi Chief Minister Arvind Kejriwal, was appointed as a ‘star campaigner’ by the Aam Aadmi Party (AAP) for its campaign in Gujarat.

What are the legal provisions of star campaigners?

• Representation of People’s Act, 1951- Section 77 of the Act provides for law relating to expenditure incurred by ‘leaders of a political party’. These ‘leaders of a political party’ are popularly known as ‘star campaigners’.
• About- Star campaigners are prominent individuals appointed by political parties to attract more votes during elections. They are usually top leaders of a party but can also include other celebrities.

There’s no specific law defining who can be a star campaigner.

• Guidelines- The Election Commission has issued guidelines the Model Code of Conduct (MCC) regulating poll campaign by star campaigners.
• Eligibility- These campaigners must be members of the political party that appoints them.
• Appointment limits-

• Communication- The names of star campaigners must be communicated to the Election Commission (EC) and the Chief Electoral Officer (CEO) of the relevant states within seven days from the date of election notification.

• Multi-phase elections-In multi-phase elections, a political party can submit separate lists of star campaigners for different phases. However, major parties often provide a single list applicable to the entire state.
• Role of Election Commission- The Supreme Court has stated that the Election Commission does not have the authority to decide who can be a star campaigner.

What are the financial regulations for star campaigner?

Representation of the People Act (RP Act) outlines the financial regulations for election campaigning in India.

• Travel expenses- Expenditure incurred by star campaigners on travel for party campaigning is not counted as part of a candidate's election expenditure.
• Election expenditure limits-
  • Larger States- Rs 95 lakh per constituency
  • Smaller States- Rs 75 lakh per constituency.
• General campaigning- Star campaigners' expenses remain separate from candidates' expenses only if they limit themselves to general party campaigning.
• Rally/meeting participation- If a star campaigner explicitly seeks votes for a candidate or shares the stage with them, the rally/meeting expense is added to the candidate's expenditure.
• Multiple candidates- When multiple candidates share the stage with a star campaigner, the rally’s expenditure is divided equally among them.
• Candidate promotion- If a candidate’s posters or photographs are displayed at a star campaigner’s rally in their constituency, the entire expense of the rally is allocated to the candidate’s election expenses.
• Boarding/ Lodging expenses- Any boarding or lodging expenses incurred by a star campaigner for campaigning are included in the candidate's expenditure account, regardless of who pays for it.
• Joint travel- If a candidate travels with a star campaigner, 50% of the star campaigner's travel expenditure is apportioned to the candidate's expenditure.
• Special provision- MCC guidelines says that if Prime Minister or Former Prime Minister as star campaigner then the expenditure incurred on security including on the bullet-proof vehicles will be borne by the government and will not be added to the election expenses of the party or the individual candidate.
  • If another campaigner travels with the prime minister or former minister, the individual candidate must bear 50% of the expenditure incurred on security arrangements.
• Fair election- These rules ensure that while star campaigners can be effective vote-fetchers, their activities are regulated to maintain fair election expenditure practices.

What are the issues with star campaigning?

• Expenditure assessment- Assessing expenditure for star campaigner’s rallies often underestimate actual costs it is due to the rate card used by the Election Commission.
• Inefficiency- The expenditure assessment challenges is due to EC’s rate card as it does not reflect current market rates for various items which results in lower apportionment of expenditure to contesting candidates.
• Advisory- Election Commission (EC) issued an advisory to all political parties, emphasizing decorum and issue-based debates during campaigning. Star campaigners were put on notice regarding violations.
• Inappropriate language- Star campaigners from various parties have used inappropriate and abusive language against leaders of opposing parties. Appeals to caste or communal feelings and unsubstantiated allegations have been observed.
• Madhya Pradesh Assembly By-Election 2020- The Supreme Court stayed the EC’s decision to revoke Kamal Nath’s star campaigner status for derogatory remarks against a woman candidate.

What lies ahead?

• RP Act, 1951 could be amended to authorize the EC to revoke the ‘star campaigner’ status of a leader in case of serious violations of the Model Code of Conduct. This action would prevent party candidates from receiving expenditure relief for their campaigns.
• Such an amendment would encourage a sense of responsibility among star campaigners, ensuring that campaigns maintain necessary decorum and restraint.
• A more robust assessment and apportionment of rally/meeting expenses, especially when star campaigners campaign for specific candidates, would enhance transparency and fairness.
• The reforms for campaigners is essential to promote ethical campaigning practices and uphold the integrity of democracy.

References

1. The Hindu- Rules for star campaigners
2. PIB- ECI advisory for campaigners

Drop in Private Investments

Why in news?

The decline of private investment, indicated by the Gross Fixed Capital Formation has been a concern for the Indian economy since 2011-12.

Why there is a need of private investment for an economy?

• Multiplier effect- Private investments create both direct and indirect employment opportunities, stimulate consumption, and contribute to overall development.
• Effective collaboration- Faster development can be achieved when the public and private sector collaborate effectively, especially in critical areas such as infrastructure and long term investments.
• Essential development- India has established public-private partnerships to channel private sector funds effectively, it is crucial for directing investments into essential development areas like airports, industrial parks, higher education, and skill development.
• Long term growth- Countries with higher private investment tend to experience greater rates of growth over the long term. To boost economic growth and welfare, it’s essential to implement public policies that encourage sustained increases in private investment rates.
• Foster innovation- The investments are driven by competition, contribute to economic progress and technological advancement by enhancing efficiency, output, and innovation.
• Environment efficiency- It is crucial for both ecological conservation and economic growth, with resources like cash, budgets, communication systems, and infrastructure playing a significant role.

Why private investment has fallen?

• Low private consumption- It is the key reason for the lack of growth in private investment, especially since the pandemic as robust consumption is necessary to assure businesses of demand for their products, which would encourage investment in fixed capital.
• Challenges in financial sector- Issues in financial sector such as non-performing assets (NPAs) in banks and liquidity constraints can hinder private investments.
• Reluctance of bank- They resist to lend to businesses, especially small and medium enterprises (SMEs) can restrict access to capital needed for investment.
• Infrastructure deficit- The cost and risk of investment is increased due to unreliable power supply, poor transportation networks and bureaucratic delays in obtaining permits which limits efficiency and competitiveness of businesses.
• Global economic factors- Economic downturns or slowdowns in major global economies can impact investor sentiment and lead to reduced investment flows into emerging markets like India.
• Policy inertia- Delays or lack of progress in implementing structural reforms and policy initiatives aimed at improving the business environment, enhancing ease of doing business, and attracting investment can contribute to declining private investment.

What are the consequences of low private investment?

• Slower economic growth- When private investment remains low, it hampers the expansion of the fixed capital base. This, in turn, leads to slower economic growth.
• Crowding out effect- It is a scenario where the increased government spending ultimately decreases private sector spending.
• Impact on capital allocation- Private investors are often considered better allocators of capital than public officials as they are driven by profit motives, hence if low private investment this could mean less efficient capital allocation.
• High taxation- If private investment is low, the government may need to raise taxes to make up for the investment shortfall, which can further slow economic growth.
• Financial instability- Low levels of private investment can be associated with greater instability, increasing the risk of firms going bankrupt or experiencing slower growth.
• Impact on Infrastructure- It can lead to a decline in private capital, which might affect wages and productivity.

What lies ahead?

• The government should increase consumption by transferring more money to the people, which could, in turn, stimulate private investment.
• A healthy balance between private and government investment is crucial for sustainable economic growth.
• Private investments is crucial as it is profit driven hence encourages efficient resourceful utilization and help avoid wasteful spending.

Reference

 The Hindu- Explained why private investment dropped

Prelim Bits 25-04-2024 | UPSC Daily Current Affairs

Sodium-ion battery vs Li-ion battery

South Korean researchers have developed a high power hybrid sodium-ion battery that can be charged in seconds.

• Sodium-ion hybrid energy storage (SIHES) cells – It is a hybrid battery with high energy and high power density.
• It can be possible with integrated anode materials typically used in batteries with cathodes suitable for super capacitors.
• The combination helped the battery to achieve high storage capacities and rapid charge-discharge rates.

Reference

WION| Lithium-ion Batteries Vs Sodium-ion Batteries

Organ Donation

Centre asks states to monitor, inspect organ transplants involving foreigners.

• It is a surgical procedure that involves removing an organ, tissue, or group of cells from one person (the donor) and transplanting it into another person (the recipient).
• In India – It is regulated by the Transplantation of Human Organs and Tissues Act, 1994, and Rules, 2014
  • Organs from deceased donor are anonymously allocated to people waiting for a transplant.
  • Organs from living donor can be donated only if they (donor and recipient) are close relatives or share a close bond and want to donate altruistically.
• Altruistic donations – Allowed from distant relatives, in-laws, or long-time friends after ensuring there is no financial exchange.
• Commercial trading is not allowed under Indian laws.

Form 21 is a key document considered by the Authorisation Committee, which approves the transplants, to show that the donor and recipients are indeed related and there is no commercial trading of organs.

• Donations from close relatives – Require documents establishing their identities, family trees, and pictures to prove the donor-recipient relationship and they are also interviewed.
• Donations from unrelated persons – Require documents and photographic evidence to prove their long-term association or friendship which are examined by an external committee to prevent illegal dealings.
• Authorisation Committee – It oversees and approves organ transplant procedures for non-relative donors and recipients.
• Issues involving foreigners – In Delhi, poor Myanmar nationals were allegedly paid to donate kidneys.
• Centre’s directions – The states shall ensure a NOTTO ID is generated for both living & deceased donor and recipient.
• For living-donor transplant, it shall be generated at the earliest, maximum within 48 hours after the transplant surgery is done.
• States are required to devise a system for regular inspection of all transplant and retrieval centres to monitor the
  • Quality of transplantation, post-operative follow up of donors and recipients, and outcomes of transplantation.

References

1. The Indian Express| Organ Transplantation involving Foreigner’s
2. Indian Express| Organ Donations in India

Rumi Darwaza & General Wali Kothi

A heritage exhibition was organised on the occasion of World Heritage Day (April 18^th) with the theme ‘Discover and experience diversity’ by the Lucknow circle of Archaeological Survey of India (ASI).

• Rumi Darwaza – Often called the Turkish Gate due to its resemblance to Bab-i-Humayun gateway in Turkey.
• Located in – Lucknow, between Bara Imambara and Chhota Imambara.
• Constructed in – 1784, during the reign of Nawab Asaf-ud-Daula.
• It was initiated as a part of the Food for Work program during the period when the city was suffering from a severe famine.
• Architecture – The design, which resembles Mughal, Roman and Turkish styles later known as Awadhi architecture or the Lucknow School of Architecture.
• Unlike traditional Mughal monuments that often used red sandstone, it primarily relies on bricks with a lime coating.
• The structure's pinnacle is decorated with a chhatri (umbrella) was illuminated by a huge lantern and the beautiful flower buds carved on the arch's sides would release little water jets.
• It stands tall at a height of 60ft, it served as the entrance to Old Lucknow City in the past.

General Wali Kothi

• Located in – Lucknow, on the right bank or River Gomti (tributary of River Ganga).
• Period – During the reign of Nawab Saadat Ali Khan.
• Residential place – The 1^st resident of this Kothi (house) was Shas-ud daulah, Nawab Saadat Ali Khan's elder son and chief of the army.
• It rose to fame during the reign of Nawab Wajid Ali Shah, whose brother Hashmat Ali the army chief started to live in the kothi.
• Since Hashmat dressed as a general, the place got associated with him as 'general sahib ki kothi'.
• Structure – It is a double floor and well ventilated palace reflecting typical British architectural style.
• It has a number of Roman arches decorated with serpent head motifs.
• Renovation – It was used the Uttar Pradesh State police till 2006-07 when Archaeological survey of India got it vacated and initiated restoration work.

References

1. Hindustan Times| Rumi Darwaza
2. Times of India| History of General Wali Kothi

Sinking China

A recent research reported that big cities in China are sinking under their weight, suffering from moderate to severe subsidence.

• Study – A systematic national-scale satellite assessment of land subsidence in 82 of China’s major cities from 2015 to 2022.
• Technology used
  • Space-borne Sentinal-1 Interferometric Synthetic Aperture Radar (InSAR)
  • Ground-based GPS data.
• InSAR uses highly precise radar pulses to measure the change in distance between the satellite and the ground surface.
• Findings – Nearly 50% of major cities are sinking.
  • 45% of examined urban lands are subsiding faster than 3 millimeters (mm) per year
  • 16% are subsiding faster than 10mm per year
• The sinking is due to a range of factors, including groundwater extraction and the weight of the built environment.
• It could affect roughly one-third of the nation’s urban population.
• By 2120, 22-26% of China’s coastal lands will have a relative elevation lower than sea level, because of the combined effect of city subsidence and sea-level rise.
• Recommendations – Long-term and sustained control of ground water extraction.

Reference

India Today| Big Cities of China are sinking

Global Report on Food Crisis (GRFC)

The 2024 edition of Global Report on Food Crisis (GRFC) was released.

• Preparation – It is produced annually by the Food Security Information Network (FSIN).
• Launched by – The Global Network Against Food Crises (GNAFC).
• GNAFC – A multistakeholder initiative that includes UN organizations, the EU, the United States Agency for International Development, and NGO’s working together to tackle food crises.

Integrated Food Security Phase Classification (IPC) is a standardised scale developed by UN’s Food and Agriculture Organization for improving food security analysis and decision making.

• 2024 report – It analysed a population of 1.3 billion in 2023 across 59 countries.
• Food crisis – Nearly 282 million people faced high levels of acute food insecurity in 59 countries in 2023.
• It was marginally lower than in 2022, but the number of people affected increased by 24 million since 2022, marking the 5 consecutive year of rising numbers.
• Overall, 1 in 5 people assessed were in need of critical urgent action.

Acute food insecurity is when a person's inability to consume adequate food puts their lives or livelihoods in immediate danger.

• Vulnerable areas – The conflict hotspots in 2023, notably Palestine (Gaza Strip) and Sudan shows the high correlation between displacement and acute food insecurity.
• Sudan became the world’s biggest internal displacement crisis.
• The Gaza Strip became the area with the most severe food crisis in the last 8 years of GRFC reporting.
• Causes – Conflict / insecurity became the primary driver in 20 countries, directly affecting 135 million people.
• Extreme weather being the 2^nd most significant factor.
• Economic shocks were the 3^rd main driver in 21 countries, mostly low-income and import-dependent, where decreasing global food prices did not transmit.
• Positive signs – Food security improved in 17 countries with comparable data between 2022 and 2023, resulting in 7.2 million fewer people facing high levels of acute food insecurity.

Reference

Down To Earth| Global Report on Food Crisis 2024