• May 4, 2023

India’s Population Growth and Economics

Tags: GS1, Population & Associated Issues

In News

• According to the annual State of World Population report 2023 published by the UN Population Fund (UNFPA), India’s population will surpass China’s by the middle of this year at the latest.

History of India’s population

Population vs Economic development

• The argument made by Thomas Malthus in 1798 serves as the starting point for this discussion.
• Malthusianism is the theory that population growth is potentially exponential while the growth of the food supply or other resources is linear, which eventually reduces living standards to the point where a population decline is triggered. This occurrence is known as a Malthusian catastrophe.
• Since then, however, the global population has increased eightfold to 8 billion.
• During the 1950s and 1960s, economists generally believed that high birth rates and rapid population growth in impoverished countries would divert scarce capital away from savings and investment, thereby impeding economic growth.
• Nonetheless, between the 1970s and 1990s, a number of studies “failed to detect a robust relationship between national population growth rates and per capita income growth”
• In the 1990s, researchers once again discovered a distinct “negative association between population growth and economic performance” and the global perspective shifted.
• During this period, the world was also introduced to the concept of “demographic dividend,” which refers to rapid economic growth when there is an increase in the working-age population (roughly, population between 15 and 65 years).

In Indian Context

• Opportunities for India:

• According to the theory of demographic transition, population growth is related to overall economic development because more people are able to produce more products.
• The rising young population (>66% of the population between the ages of 15 and 59) provides India with a tremendous opportunity for growth and the potential for revolutionary innovation.
• Due to the heterogeneity of India’s population, this demographic dividend window opens at various times in different states.

• Agriculture and industry will benefit from economies of scale, which will increase tax revenues that can be spent on public goods such as healthcare and environmental initiatives.
• Population size is intrinsically linked to the global power dynamics that shape the relationships between nations and regions.
• Issues with population:

• The increase in the number of people of working age may result in a rise in unemployment, heightening economic and social hazards.
• High population growth accelerates the depletion of natural resources.
• By 2030, the proportion of people aged 65 and older will increase from 8.6% today to 13.0%.
• If India is unable to capitalize on its demographic dividend, it will experience a demographic catastrophe.

Lessons for India  

• India’s fertility rate (number of children per woman) is already lower than the replacement rate of 2.1, but the population will reach its zenith in 2064.
• The greater challenge now is determining how best to utilize India’s demographic dividend, as China, despite its remarkable economic growth over the past four decades, may grow elderly before becoming wealthy.
• Countries such as Singapore, Taiwan, and South Korea have previously demonstrated how demographic dividends can be utilized to accomplish phenomenal economic growth by:
• Increasing women’s labor force participation. In 2022, 29.4% of women were employed or actively seeking employment, down from 34.1% in 2003-2004.
• Increasing investments in children and adolescents, particularly in early childhood nutrition and education.
• Greater emphasis should be placed on the transition from secondary education to universal skilling and entrepreneurship, as South Korea has done.
• Health investments – According to the evidence, greater health facilitates increased economic output.
• Providing access to reproductive healthcare services using a rights-based framework. We must ensure that everyone has access to high-quality primary healthcare.
• India must address the diversity among the States. States in the South that are further along in the demographic transition already have a higher proportion of senior citizens.
• A new federal approach to governance reforms for demographic dividend is required for policy coordination between states on emergent population issues such as migration, aging, skill acquisition, female labor force participation, and urbanization.

Conclusion

• India has a window of opportunity until the 2040s to realize the benefits of the demographic dividend; otherwise, it could become a demographic liability or demographic catastrophe.

Source: TH

India provides the Maldives with two naval warships

Tags: GS 2 India & Foreign Relations

In News

• Continuing India’s capacity-building assistance in the Indian Ocean Region (IOR), the Defence Minister recently presented the Maldives National Defense Forces (MNDF) with a Fast Patrol Vessel (FPV) and a Landing Craft Assault ship.
• The MNDF Coast Guard ship Huravee, an FPV capable of coastal and offshore surveillance at fast speeds, was commissioned.

About

• Challenges & cooperation:
• The Defence Minister called for increased cooperation among IOR nations to address the region’s common challenges, including climate change and the sustainable exploitation of maritime resources.
•  The Defence Minister also called for increased cooperation among IOR nations to address the region’s common challenges, citing climate change and the sustainable exploitation of resources as the most significant.
• Significance:

• In recent years, India has significantly increased assistance for capacity building and capability enhancement for Indian Ocean littoral states and countries in the IOR.
• The transfer of the two platforms symbolizes India and the Maldives’ shared commitment to peace and security in the IOR.

Significance of Indian Ocean region

• Trade & commerce:
•  The Indian Ocean region enjoys a privileged location at the crossroads of global trade, linking the main economic engines of the North Atlantic and Asia-Pacific regions.
• Natural resources:

• The Indian Ocean contains abundant natural resources.

• Fishing:
• Forty percent of global offshore hydrocarbon production occurs in the basin of the Indian Ocean. Currently, fishing in the Indian Ocean accounts for approximately 15% of the global total.
• Mineral resources:
•  Mineral resources are of equal importance, with nodules containing nickel, cobalt, and iron, and enormous sulphide deposits of manganese, copper, iron, zinc, silver, and gold on the sea floor.
•   Indian Ocean coastal sediments are also significant sources of titanium, zirconium, tin, zinc, and copper.
• Strategic importance for India:

• The Indian Ocean is of particular importance to India, as the most populous of the littoral states.
• India’s leadership role will be crucial in determining the strategic future of the remainder of the Ocean’s littoral states and even those outside the region.

India – Maldives Relations

• Historical:

• Ethnic, linguistic, cultural, religious, and commercial ties exist between India and the Maldives.
• India was among the first to recognize the Maldives after its independence in 1965 and established its mission in Male in 1972.
• Their maritime boundary was officially and amicably determined in 1976.

• Political Relations:

• Both countries are founding members of the South Asian Association for Regional Cooperation (SAARC), the South Asian Economic Union, and signatories of the South Asia Free Trade Agreement.
• They have consistently supported each other in multilateral arenas such as the UN, the Commonwealth, the NAM, and the SAARC.

• Strategic Importance:

• Due to its location in the Indian Ocean, the Maldives holds strategic importance for India under the government’s ‘Neighbourhood First’ policy.
• The Maldives archipelago of 1,200 coral islands lies next to key shipping lanes that ensure uninterrupted energy supplies to countries such as China, Japan, and India.
• Both nations are cooperating to counter China’s presence in the Indian Ocean Region(IOR).

• Trade and Economy:

• India and Maldives signed a trade agreement in 1981 that provides for the export of essential commodities.
• Under the bilateral agreement, India provides essential food items such as rice, wheat flour, sugar, dal, onion, potato, and eggs as well as construction materials such as sand and stone aggregates to the Maldives on favourable terms.
• India and Maldives signed the $800 million Line of Credit Agreement in March 2019 to assist the Maldives in achieving sustainable socioeconomic development.
• India’s Trade Balance with the Maldives is positive.

• Development Assistance Programme:

• India has aided the Maldives in a variety of spheres to aid in the Maldives’ development, e.g.
• Indira Gandhi Memorial Hospital, Maldives Institute of Technical Education (currently known as Maldives Polytechnic),
• India-Maldives Faculty of Hospitality & Tourism Studies
• A port on Gulhifalhu, airport redevelopment at Hanimaadhoo, as well as a hospital and cricket stadium in Hulhumale, etc.

• India’s crucial help to the Maldives:
  • Operation Cactus: 

• On November 3, 1988, a group of Maldivians led by Abdullah Luthufi and assisted by armed mercenaries of a Tamil secessionist group from Sri Lanka, the People’s Liberation Organisation of Tamil Eelam (PLOTE), attempted to overthrow the government of the island republic of Maldives.
• The coup failed due to the intervention of the Indian Army, whose military operations efforts were code-named Operation Cactus.The Maldives requested assistance from India after the collapse of the island’s sole water treatment facility. In response, India dispatched heavy-lift transporters carrying bottled water, including the C-17 Globemaster III and II-76.

• Operation Neer: 
•  The Indian government took the initiative to aid the Maldives following a significant fire at the Male Water and Sewerage Company.
• Diaspora:

• The Maldives is home to 25,000 Indian nationals (the second largest expatriate community).
• In recent years, the proximity of location and advancements in air connectivity have led to a substantial increase in the number of Indian tourists and business travelers to the Maldives.
• Maldivians prefer to travel to India for education, medical care, recreation, and commerce.

• Defence:
•  A technical agreement on sharing ‘White Shipping Information’ was also signed between the Indian Navy and the Maldives National Defense Force, allowing the exchange of prior information on the movement of commercial, non-military vessels.
• Ekuverin is a joint military exercise between India and the Maldives.
• Pivot role in the SAGAR Initiative of India: 

• The Maldives are essential to India’s goal of becoming a regional maritime security provider.
• Anti-piracy and anti-terror operations can also be conducted with the Maldives’ assistance.

Source: TH

Chayan Portal at CU

Tags: GS 2 Education

In News

• The University Grants Commission (UGC) has introduced CU– Chayan, a centralized portal for faculty recruitment at Central universities.
• The UGC has created this portal to facilitate communication between universities and applicants.

Significance

• The portal would serve the needs of all parties involved in the recruitment process for teachers.
• The portal will provide a common platform for listing vacancies, advertisements, and jobs across all Central Universities.
• The portal makes the recruitment process entirely online, from application to screening, with alerts for all portal users.

Source: TH

De-dollarisation

Tags: GS 3 Indian Economy & Related Issues

In News

• There is a growing trend of countries avoiding the US dollar (de-dollarisation) and opting to conduct bilateral trade with their own local currencies.

What is de-dollarisation?

• De-dollarisation is the tendency for nations to reduce their reliance on the US dollar as a reserve currency, medium of exchange, and unit of account.

Why is the US dollar used so widely? 

• Dollar’s Dominance: Following globe War II, the US dollar replaced the British pound as the preeminent currency in the globe. The Bretton Woods Agreement of 1944 designated the dollar as the reserve currency of the globe. The original Bretton Woods Agreement is no longer in effect, but the dollar continues to serve as the international reserve currency.
• Trade deficit of the United States: The United States has been having a persistent trade deficit for decades (the last time it ran a trade surplus was in 1975). The excess dollars that the rest of the world accumulates as a result of the United States’ trade deficit have been invested in U.S. assets such as government-issued debt securities.

The high level of trust that global investors have in the U.S. financial markets, perhaps as a result of the ‘rule of law’ in the U.S., is regarded as a significant reason why investors prefer to invest in U.S. assets.

What is Reserve Currency?

• Reserve currencies are foreign currencies retained by central banks and other monetary authorities in order to facilitate international transactions, stabilize exchange rates, and increase financial confidence.
• Central banks use reserve currencies to prepare for international debt obligations and to influence the domestic exchange rate.

Global Efforts Towards Dedollarization

• Several countries and regions have embarked on the path toward dedollarization in recent years due to a combination of geopolitical, economic, and strategic factors.
• China, Russia, Brazil, and the European Union are notable examples of nations that have reduced their reliance on the US currency in international transactions and financial markets.

Why are de-dollarisation attempts being made? 

• Sanctions by the U.S.: The U.S. imposed several sanctions that restricted the use of the U.S. dollar to purchase oil and other products from Russia; many countries interpreted this as an effort to weaponize the dollar.
• Power to control transactions by U.S.: Since international transactions conducted in U.S. dollars are cleared by American institutions, the U.S. government has considerable power to supervise and control these transactions.
• To terminate U.S. Hegemony: Some nations, including China and Russia, have sought to reduce the dollar’s influence as a means of countering perceived American hegemony and mitigating the effects of US sanctions.
• To Promote Their Own Currency: Other nations, particularly those in the Eurozone, have pursued dedollarisation to promote the international use of their currency, the euro, in an effort to strengthen their global economic standing and attain greater financial independence.

Challenges Towards Dedollarisation

• Threat to Global Financial Stability: As countries reduce their reliance on the U.S. dollar, adjustments in the composition of global reserve assets may result in changes in capital flows and asset prices. These fluctuations could lead to financial instability in the absence of adequate policy coordination and risk management.
• Alternative currency: Creating a viable alternative to the U.S. dollar is a daunting task. An alternative reserve currency must be supported by a robust economy, deep and liquid financial markets, and solid monetary and fiscal policy frameworks in order to achieve the necessary levels of stability, liquidity, and acceptability. Currently, no single currency meets all of these criteria, although the euro and Chinese renminbi have made progress.
• Increased Volatility of Exchange Rates Dedollarization could result in an increase in the volatility of currency exchange rates, particularly during the transition’s initial phases. This, in turn, could have an effect on trade, investment, and capital flows, especially for nations with less developed financial markets or limited policy instruments to manage exchange rate volatility.

Should India Focus on De-dollarisation?

• Additionally, the diversification of reserve currencies could provide a buffer against currency fluctuations and capital flow reversals, thereby decreasing the likelihood of financial crises and enhancing overall financial stability.

Obstacles: As developing nations transition away from the U.S. currency, they may experience greater exchange rate volatility, which could have an effect on trade, investment, and capital flows.

• Furthermore, the development of substantial and liquid domestic financial markets – a precondition for currency internationalisation – could prove to be a formidable obstacle for nations with less developed financial systems.
• Additionally, the potential costs associated with the transition, such as adjustments to existing trade and financial arrangements, may be substantial and may burden limited resources.

Way Ahead

• In view of these considerations, developing nations like India should approach dedollarization with caution and moderation. Policymakers must establish a delicate balance between the potential benefits of reducing dollar dependence and the associated risks and expenses.
• While dedollarisation presents opportunities for a more diversified and resilient global financial system, it also poses significant challenges that must be managed carefully to ensure the maintenance of global financial stability and sustained economic growth.
• Developing nations such as India must balance the potential benefits and risks of this transition carefully.

Scheme for Vivad-se Vishwas

Tags: GS 3 Indian Economy & Related Issues

In News

• The Ministry of Finance has initiated the “Vivad se Vishwas I – Relief to MSMEs” program.

More about News

• The program was announced in the 2023-2024 federal budget.
• MSMEs will receive 95% of the performance security, bid security, and liquidated damages forfeited or deducted during the COVID-19 pandemic.
• If a company has been disqualified solely for failing to execute such contracts, such disqualification shall be revoked.
• Government e-Marketplace (GeM) has created a website dedicated to the implementation of this program. Claims that qualify must be processed exclusively through GeM.

Source: TH

Black Tiger (Royal Bengal Tiger with melanism)

Tags: GS 3 Species in News

In News

• A uncommon melanistic royal Bengal tiger, commonly referred to as a black tiger, was discovered dead in Simlipal National Park.
• The population of black tigers in Similipal is extremely small (eight tigers according to the 2018 Tiger Status Report). The demise may impact tiger reproduction in the region.

Black Tigers

• About: 
  • They are a rare color variant of the tiger and not a distinct species or geographic subspecies.
  • The colour of their fur distinguishes melanistic regal Bengal tigers from other tigers. Their white fur is caused by a lack of pheomelanin pigment.

• Reasons of Melanistic Nature: 

• The black tigers are anomalies; they are Bengal tigers with a single base substitution in the Taqpep gene.
• Melanistic tigers are said to grow quicker and weigh more.
• The rare mutation is primarily caused by genetic drift. Due to this geographical isolation, genetically related individuals in Similipal have interbred for many generations, resulting in inbreeding.

• Black tigers outside of Similipal:

• They were hatched in captivity at the Nandankanan Zoological Park in Bhubaneswar, Ranchi Zoo, and Chennai’s Arignar Anna Zoological Park.
• Genetic analysis demonstrated that these tigers born in captivity and Similipal tigers shared a common ancestor.

Simlipal National Park

• About:

• It is one of India’s largest biospheres. It is both a national park and a tiger reserve (designated in 1973 as part of Project Tiger).
• Its name is derived from the ‘Simul’ (silk cotton) tree.
• It was designated a biosphere reserve by the Indian government in June 1994.
• In May 2009, UNESCO added this National Park to its list of Biosphere Reserves.
• Simlipal has the highest rate of sightings of black tigers in the globe.

• Location:

• Northern portion of the Mayurbhanj district in Orissa.It resides within the Mahanadian east coastal region of the Oriental realm and the Chhotanagpur biotic province of the Deccan peninsular zone.

Source: DTE

Slab Track System in J

Tags: GS 3 Science & Technology

In News

• Japan will educate one thousand Indian engineers prior to transferring bullet train technology.

About

• Prior to the construction of the High-Speed Rail Track system for the Mumbai-Ahmedabad High-Speed Rail corridor (MAHSR), Indian engineers will receive training from Japanese experts.
• The bullet train between Mumbai and Ahmedabad will employ the same ballastless Slab Track system (also known as the J Slab track system) as the Shinkansen high-speed railways in Japan.

What is the J Slab Track System?

• A ballastless track or slab track is a variety of railway track infrastructure in which the elastic combination of ties/sleepers and ballast is replaced by a concrete structure.
• Slab Track was created and developed in Japan, where it is now synonymous with High Speed Track.

How did it came into use? 

• The Tokaido Shinkansen, the first high-speed rail in Japan, commenced operation between Tokyo and Shin-Osaka in 1964. The Tokaido Shinkansen adopted a conventional ballasted track structure.
• With a rise in traffic density, the geometry of conventional ballasted tracks used to be frequently disturbed. It was deemed necessary to introduce a low-maintenance track as a result of the problem of track geometry disturbance, the reduction in time available for maintenance, and the labor scarcity.

Significance

• Due to its greater flexural stiffness, the forces in Slab Track are disseminated over a larger area, resulting in significantly less deflections compared to ballasted track. As a result, the performance of Slab Track is superior to that of ballasted track for high-speed railways.
• Although the initial construction cost of Slab Track is higher than that of ballasted track, the difference is compensated within a few years of operation due to the reduced maintenance and labor needs of Slab Track.
• Due to its lightweight and streamlined design, the Slab Track structure is especially advantageous for viaducts and tunnels.

Source: TH