22-Feb-2024

#GS3 –01. Open Economy

I have looked at successful countries such as…Singapore, Taiwan, South Korea, China and India—these are the high-
growth examples. My conclusion is very clear—countries that have been open are the ones that have grown rapidly.

– 16th FC Chairman Arvind Panagariya

#GS3 — 02. Fertilizer Subsidy

Urea is a major component of the government’s subsidy basket, and we spend a huge chunk on urea subsidy. If gas prices go up, the production cost is bound to shoot up. Last year, gas prices went up significantly, putting upward pressure on production costs, and the government bore it. Similarly, in the case of DAP, if the international price of rock phosphate increases, the price will automatically flare up, and vice-versa.

The government’s efforts are to bring self-sufficiency in urea fertiliser by 2025 by increasing production to 31-31.5 million tonnes from the current 30 million tonnes, and replacing demand for 2.5 million tonnes with alternatives like nano urea and urea gold.

After entering into term agreements with Morocco, Senegal, Israel, Oman, Canada, Saudi Arabia and Jordan over the past two years, the country is now planning to ink a long-term contract with Mauritania for importing rock phosphate,
– PM Modi

India’s fertilizer requirement is about 59.5 million tonnes per year, of which only about 38.7 million tonnes are produced in the country, according to the 2022-23 economic survey.

Key Terms/Issues : Urea, DAP

#GS2–#GS4 –03. “Lesser Penalty Plus” against cartels

A new ‘lesser penalty plus’ regime to incentivize individuals and cartels already under scrutiny to provide information about other cartels that the regulator does not know about. CCI may waive or reduce the penalty on an entity (person or firm) involved in a cartel if the entity makes a full and true disclosure of alleged violations.

If a second participant of the Cartel comes clean, it is eligible For a waiver of up to50% of the penalty.

The leniency regime in India has led to the detection of several cartels in industries such as auto parts and alcobev (alcoholic beverage), allowing companies to benefit from up to a 100% waiver of their penal-ties. Similar provisions have resulted in increased enforcement action in other jurisdictions such as the United States, and it will be interesting to see the impact in India
– Commentary in News

#GS3 — 04. Rupee denominated Bonds

The World Bank’s lending arm and other global institutions have issued $1.4 billion worth of offshore rupee- denominated bonds so far this year to meet strong demand spurred by India’s inclusion in JP Morgan’s widely tracked emerging market debt index.

-Commentary in News

#GS2 — 05. India-Greece Relation

India and Greece aim to double their bilateral trade to nearly $4 billion by 2030 and enhance connectivity through infrastructure projects like the proposed India-Middle East-Europe Economic Corridor (Imec). The two countries identified pharmaceuticals, ports, chemicals, shipping, food, communications and defence as key sectors to help double their bilateral trade, which stood at $1.9 billion in 2022-23. Greece’s strategic location in the Mediterranean Sea makes it a major player in the global shipping industry. The country’s ship-owners own roughly one-fifth of the world’s shipping fleet and almost 60% of the European Union’s fleet.
– Commentary in News

#GS2 06. Education

Primary education has widened in India but left us short of capacity for higher-level schooling. This challenge must be met.

Investing in public education systems is crucial for countries seeking to leverage their demographic dividend. South Korea’s economic development, often called the ‘Miracle on the Han River,’ exemplifies the impact of strategic educational investments. During its rapid industrialization, the emphasis on education significantly improved literacy rates and provided the necessary skills for industrial and technological sectors.

According to World Bank studies, each additional year of schooling is associated with up to a 10% increase in individual earnings, and countries prioritizing educational quality generally exhibit higher economic growth rates. Similarly, a study by Unicef found that each additional year of schooling is associated with an increase of 0.37 percentage points in GDP growth. This can rise up to 1 percentage point with improved learning outcomes.
–PM EAC Chairman Bibek Debroy