01 February 2025 : The Hindu Analysis (Daily Current Affairs)

Join WhatsApp community for Free Notifications, Updates, Study Material, Mock Tests, Internship Updates, and Current Affairs - CLICK HERE TO JOIN

1. Economy’s fundamentals robust amid ‘strong downsides’: Survey

(Source – The Hindu, International Edition – Page No. – 1)

Topic: Indian Economy

Context

• The Economic Survey 2024-25 outlines India's growth potential, investment challenges, and the necessity for deregulation.

Economic Growth Projections

• India’s economy is projected to grow between 6. 3% and 6. 8% in 2025-26, a slight increase from the estimated 6. 4% this year.
• The Economic Survey recognizes robust economic fundamentals but also points out external risks impacting investment and output.
• Private sector investment growth remains muted due to political uncertainties, global challenges, and overcapacity in certain industries.

Challenges in Achieving ‘Viksit Bharat’

• India aspires to attain developed nation status (Viksit Bharat) by 2047, necessitating sustained GDP growth of 8% for at least a decade.
• The investment rate must rise from the current 31% of GDP to 35% of GDP to support high growth.

To Enroll in Knowledge Nation Law Centre - Click Here

Focus on Domestic Growth Drivers

• As global trade slows due to geopolitical tensions, India needs to increasingly depend on domestic economic drivers.
• The Survey indicates that deregulation is vital for enhancing investment and economic growth.

Reducing Government Control

• The government should minimize excessive regulations and micromanagement to foster a business-friendly environment.
• Streamlining compliance processes and reducing bureaucratic delays will enable businesses to concentrate on growth.

Building Trust in the Economy

• The Survey underscores the importance of closing the trust gap among government authorities, businesses, and citizens.
• Excessive regulations often benefit large enterprises, leading to unfair competition and hindering overall economic development.
• The government must place confidence in businesses and individuals to effectively stimulate economic activities.

Join WhatsApp community for Free Notifications, Updates, Study Material, Mock Tests, Internship Updates, and Current Affairs - CLICK HERE TO JOIN

2. Higher profit share, stagnant wage growth slowing economy: Survey

(Source – The Hindu, International Edition – Page No. – 6)

Topic:  Indian Economy

Context

• The Economic Survey emphasizes the importance of balanced growth in corporate profits and wages to maintain economic expansion.

Growth in Corporate Profits vs. Wage Growth

• The Economic Survey asserts that corporate profits should increase alongside wages to stimulate the economy.
• Disparities between profits and wages may hinder demand, potentially slowing economic growth.

Concerns About Income Inequality

• A modest increase in the labour share of GVA (Gross Value Added) has been observed, yet significant corporate profits remain a pressing issue.
• High corporate profits coupled with stagnant wages can lead to reduced consumer spending, constraining economic demand.

To Enroll in Knowledge Nation Law Centre - Click Here

Economic Growth and Employment Incomes

• Sustained growth relies on enhancing employment incomes to promote consumer spending and investment in production.
• An equitable distribution of income between capital and labour is crucial for long-term stability.

Profit Growth and Employment

• Corporate profitability reached a 15-year high in FY 2023-24, primarily driven by the financial, energy, and automobile sectors.
• Profits increased by 22. 3%, while employment rose by only 1. 5%.
• Wage growth has decelerated, with employee expenses rising just 13% in FY24.

Improved Labour Market Indicators

• Post-pandemic recovery and formalization have led to better labour market indicators in India.
• Unemployment has decreased, and labour force participation has increased.
• Sectors such as the digital economy and renewable energy present opportunities for job creation.

Join WhatsApp community for Free Notifications, Updates, Study Material, Mock Tests, Internship Updates, and Current Affairs - CLICK HERE TO JOIN

3. Excessive financialisation can hurt India’s economy, cautions Survey

(Source – The Hindu, International Edition – Page No. – 6)

Topic: Indian Economy

Context

• The Economic Survey raises concerns about the risks associated with financialisation, advocating for a balance between the growth and stability of the financial sector.

Financialisation Risks for India

• The Economic Survey cautions against excessive financialisation, noting that increasing household investments in the stock market may be detrimental to the economy, particularly in low-to-middle-income countries such as India.
• Over-reliance on financial markets can elevate public and private sector debt, making economic growth contingent on rising asset values.
• This trend can exacerbate inequality and affect policy decisions.

To Enroll in Knowledge Nation Law Centre - Click Here

Need for Balance

• India must find a balance between the development of the financial sector and financialisation.
• This entails considering the country's unique context, which includes household savings, investment requirements, and levels of financial literacy.
• Policies should be designed to align the financial sector’s incentives with national growth objectives.

Financial Markets and Banking Sector Coordination

• As financial markets emerge as a key source of funding, it is essential that they coordinate with the banking sector to satisfy capital demands.

Regulatory Readiness

• India must prepare for the vulnerabilities associated with financialisation by implementing appropriate regulatory measures and government interventions when necessary.
• Banks must adapt to the digital economy and evolving household needs while maintaining their function in credit creation.

Join WhatsApp community for Free Notifications, Updates, Study Material, Mock Tests, Internship Updates, and Current Affairs - CLICK HERE TO JOIN

4. ‘Indigenisation an urgent task for India’s electric mobility transition’

(Source – The Hindu, International Edition – Page No. – 6)

Topic: Indian Economy

Context

• India must prioritize the indigenisation of EV technology and raw materials to decrease import dependence.

Indigenisation of Technology and Raw Materials

• India must concentrate on indigenising technology and raw materials for electric mobility to lower reliance on imports.
• The Economic Survey highlights the urgency of this initiative, especially in light of global trends aimed at reducing dependency on China.
• India's import intensity in electric vehicle (EV) production remains high, particularly with nations where trade deficits are significant.

To Enroll in Knowledge Nation Law Centre - Click Here

Challenges in Mineral Sourcing

• Many minerals necessary for EV manufacturing are either scarce or not processed within India.
• China dominates the global production and processing of essential minerals such as nickel, cobalt, lithium, and rare earth elements.
• Specifically, China represents 65% of nickel production, 68% of cobalt, 60% of lithium, and 90% of rare earth processing.
• The demand for lithium-ion batteries, critical for EVs, is projected to grow at 23% annually until 2030, further solidifying China’s dominance.

Supply Risks and Public Transportation Focus

• India’s Ministry of Mines has identified 24 out of 33 critical minerals as being at high risk of supply disruptions.
• The government supports enhancing public transportation systems to meet electric mobility objectives and reduce import reliance.
• Investing in efficient, reliable, and accessible public transit will assist India in achieving Net Zero targets while decreasing import dependence.

Join WhatsApp community for Free Notifications, Updates, Study Material, Mock Tests, Internship Updates, and Current Affairs - CLICK HERE TO JOIN

5. India should not shut coal plants without ‘alternatives’: Survey

(Source – The Hindu, International Edition – Page No. – 6)

Topic:  Indian Economy

Context

• The economic survey addresses the challenges India faces in its energy transition while balancing development, energy security, and sustainability objectives.

India’s Path to Development and Low-Carbon Future

• India aspires to be a developed nation by 2047 while pursuing a low-carbon pathway. To achieve this, it must utilize its best resources, advanced technologies, and expertise.
• However, coal-fired power plants should not be decommissioned without dependable alternatives to prevent disruptions.
• Energy Transitions Driven by Commercial Interests

Energy Transitions Driven by Commercial Interests

• Historically, energy transitions have been more influenced by commercial interests than by emission reduction efforts.
• Energy security and commercial interests remain the primary factors shaping the shift to cleaner energy.
• Both developed and developing nations are affected by these considerations in their energy decisions.

To Enroll in Knowledge Nation Law Centre - Click Here

Global Examples of Energy Transition

• The Economic Survey highlights France’s transition to nuclear power in the 1970s, prompted by oil embargoes. In 2022, the European Union introduced the REPowerEU plan, investing €10 billion (₹90,000 crore) in liquefied natural gas (LNG) infrastructure to decrease dependence on Russian gas.
• In 2023, the U. S. administration approved its largest oil-drilling project in Alaska, underscoring continued reliance on fossil fuels.

Challenges for Developing Nations

• Developed nations persist in their dependence on fossil fuels while advocating for developing countries to adopt more expensive and less efficient energy solutions.
• For India, closing coal plants would result in the underutilization of substantial investments made during the 2010s.

India’s Net-Zero Emissions Goal

• India’s ambition of achieving net-zero emissions by 2070 must remain a priority.
• The country should concentrate on innovation and investment in renewable energy, battery storage, grid infrastructure, and critical minerals.
• Transitioning to renewable energy faces challenges such as increased electricity prices and the complexities of managing both fossil fuels and renewables.

Join WhatsApp community for Free Notifications, Updates, Study Material, Mock Tests, Internship Updates, and Current Affairs - CLICK HERE TO JOIN

6. ‘Regulatory framework holding back MSMEs, limiting growth, innovation’

(Source – The Hindu, International Edition – Page No. – 7)

Topic:  Indian Economy

Context

• The economic survey addresses the challenges and government initiatives aimed at supporting and formalizing MSMEs in India.

Challenges Faced by MSMEs

• Micro, Small, and Medium Enterprises (MSMEs) employ 23. 24 crore individuals in India but encounter difficulties due to the regulatory environment.
• Compliance burdens in regulations impede formalization, diminish labor productivity, restrict employment growth, hinder innovation, and negatively affect overall growth.

Importance of MSMEs

• MSMEs are vital to the economy, second only to agriculture, as they create jobs at low capital costs.
• They stimulate economic growth, employment, and innovation but often remain small to evade regulatory oversight.
• This preference for staying small limits their access to capital, skilled labor, technology, and formal supply chains, resulting in low labor productivity and fostering an informal economy.

Government Efforts to Support MSMEs

• The government has prioritized improving MSMEs' access to finance, enhancing technological capabilities, providing market linkages, and addressing structural challenges.
• In 2023, the Udyam Assist Platform (UAP) was introduced in collaboration with SIDBI to formalize informal micro-enterprises.
• Over 2. 39 crore informal micro-enterprises were formalized through this platform.
• The TReDS platform is designed to assist MSMEs in receiving timely payments with reduced financing costs.

Funding and Development Programs

The Micro and Small Enterprises-Cluster Development Programme (MSE-CDP) focuses on enhancing technology, skills, and quality through Common Facility Centres (CFCs).

The government has launched the Self-Reliant India (SRI) Fund with ₹50,000 crore to provide equity funding to MSMEs with scaling potential.

Join WhatsApp community for Free Notifications, Updates, Study Material, Mock Tests, Internship Updates, and Current Affairs - CLICK HERE TO JOIN

7. Economic Survey 2024-25: Stability Amid Global Uncertainty, Calls for Deregulation to Boost Growth

(Source – Indian Express, Section – Explained – Page No. – 21)

Topic:  Indian Economy

Context

• The Economic Survey 2024-25 evaluates India’s economic performance against a backdrop of global uncertainties.

Analysis of the news:

Global Economic Challenges

• The Economic Survey identifies two primary issues affecting the global economy: rising trade protectionism and China’s dominance in manufacturing.
• The slowdown in trade and investment growth reflects a departure from globalization.
• Increasing uncertainty and fragmentation within the economy suggest signs of “secular stagnation. ”
• Furthermore, China’s significant contribution to global production, representing one-third of manufacturing output, presents challenges.
• Nevertheless, disruptions in global supply chains may create opportunities for economies like India.

India’s Economic Performance

• In spite of global hurdles, India’s economy remains robust.
• Real GDP growth for FY25 is expected to reach 6. 4%, with estimates ranging from 6. 3% to 6. 8% for FY26.
• Private final consumption expenditure, a crucial driver of demand, is projected to increase to 61. 8% of GDP, the highest level since FY03.
• On the supply side, Gross Value Added (GVA) has surpassed pre-pandemic levels and aligns with the decadal average, showcasing a consistent economic trajectory.

To Enroll in Knowledge Nation Law Centre - Click Here

Inflation and Employment Trends

• The Survey indicates that core inflation is easing, while food inflation has increased from 7. 5% in FY24 to 8. 4% due to supply chain disruptions and weather-related factors.
• Nonetheless, experts suggest that inflation, excluding certain volatile food items, is nearing the target.
• Employment indicators have shown improvement, bolstered by post-pandemic recovery and enhanced job formalization.
• Key metrics, including the unemployment rate and labor force participation, exhibit positive trends.

Policy Recommendations: Deregulation for Growth

• The Survey underscores the necessity of deregulating the economy to enhance employment, income generation, and consumer demand.
• The Chief Economic Advisor (CEA) advocates for the reduction of regulatory barriers, particularly for small businesses, to decrease operational costs and stimulate hiring.
• Referencing the Business Reform Action Plan (BRAP), the Survey proposes that enterprise-friendly policies can promote industrial growth, especially in aspiring and emerging states.

Shifting Tone in the Economic Survey

• While the Survey recognizes India’s recovery post-pandemic, it also highlights concerns surrounding domestic production capacity limitations.
• The CEA cautions that excessive regulation could result in stagnation.
• This cautious perspective contrasts with the optimism conveyed in the 2023 Survey, which anticipated strong growth momentum following the pandemic.
• The tonal shift indicates an acknowledgment of structural challenges that necessitate urgent policy interventions to facilitate long-term economic expansion.

Join WhatsApp community for Free Notifications, Updates, Study Material, Mock Tests, Internship Updates, and Current Affairs - CLICK HERE TO JOIN

Facts

1. 40-million-year-old whale fossil stolen in Meghalaya; hope to retrieve it soon: CM

(Source – The Hindu, International Edition – Page No. – 2)

Context

• A 40-million-year-old fossil of a whale ancestor was reported stolen from Meghalaya, prompting a police investigation and raising concerns about its preservation.

Analysis of the news:

• The fossil, approximately 40 million years old, is associated with an ancestor of modern whales.
• It was discovered in a cave in Tolegre village, situated in the South Garo Hills district of Meghalaya.
• The fossil is believed to belong to either Rodhocetus or Ambulocetus, both genera of Palaeogene whales.
• The discovery was announced in February 2024 by three speleologists from Core Geo Expeditions.
• This find is significant in the field of palaeontology, as it provides insights into the evolution of whales.
• The Meghalaya government intends to collaborate with specialists from the Geological Survey of India (GSI) to study and protect the fossil.
• The fossil was stolen in January 2024, leading to an ongoing police investigation.

Join WhatsApp community for Free Notifications, Updates, Study Material, Mock Tests, Internship Updates, and Current Affairs - CLICK HERE TO JOIN

2. ‘India’s tiger population rose 30% over two decades’

(Source – The Hindu, International Edition – Page No. – 3)

Context

• A study indicates that India’s tiger population has grown by 30% over the last 20 years, attributed to effective conservation strategies, legislative support, and socio-economic factors.

Analysis of the news:

• A recent study reveals that India’s tiger population has increased by 30% in the past two decades.
• Despite high human densities and economic challenges, India has achieved significant success in tiger conservation.
• Protected areas and land-sparing strategies have enabled 85% of breeding populations to flourish.
• Tigers now coexist with over 66 million people, exemplifying successful coexistence.
• Legislative frameworks such as the Wildlife Protection Act, Forest Conservation Act, and National Tiger Conservation Authority have aided in the species' recovery.
• Economic growth and cultural values have impacted tiger persistence, with regions experiencing lower poverty levels showing improved recolonization rates.
• Areas affected by Naxal activity in Chhattisgarh and Jharkhand have seen declining tiger populations.
• Tiger Population in India: India is home to 70% of the global wild tiger population. Government data from July 2024 indicates 2,226 tigers, an increase from 1,411 in 2006.

Join WhatsApp community for Free Notifications, Updates, Study Material, Mock Tests, Internship Updates, and Current Affairs - CLICK HERE TO JOIN

3. FDA Approves Non-Addictive Painkiller Suzetrigine, Offering Hope in the Fight Against Opioid Crisis

(Source – Indian Express, Section – Explained- Page No. – 21)

Context

• The United States Food and Drug Administration (FDA) has approved suzetrigine, a new non-opioid painkiller.

Analysis of the news

What Are Opioids?

• Opioids are pain-relieving drugs derived from or mimicking natural substances in the opium poppy plant. 
• Common examples include oxycodone, morphine, codeine, heroin, and fentanyl. 
• These drugs work by binding to opioid receptors in the brain, blocking pain signals and producing a sense of pleasure or euphoria. 
• This euphoric effect makes opioids highly addictive, often leading to dependence and misuse.

How Suzetrigine Works

• Suzetrigine targets pain signals before they reach the brain, unlike opioids, which alter pain perception in the brain. 
• It interrupts the pain pathway at the nerve level, preventing the brain from recognizing pain even when tissue damage exists. 
• Because it does not create euphoria, experts believe it has no addiction potential. 
• Suzetrigine is taken in 50-milligram doses every 12 hours, with an initial 100-milligram starter dose.

Significance of the Approval

• The opioid crisis remains a major public health issue in the U.S., with 82,000 opioid-related overdose deaths in 2022. 
• The country consumes 30 times more opioid painkillers than needed, leading to widespread addiction and illegal drug trade. 
• Former President Donald Trump declared opioids a national emergency in 2017, and has since threatened tariffs on Canada, Mexico, and China to curb fentanyl imports. 
• Suzetrigine’s approval offers a promising alternative that could help reduce opioid dependence and overdose deaths.

Join WhatsApp community for Free Notifications, Updates, Study Material, Mock Tests, Internship Updates, and Current Affairs - CLICK HERE TO JOIN