Topic 1 : Growth and its discontents
Introduction: India is going to the election this year. It is natural to have a comparison of the performance of the current regime with the previous regimes on macroeconomic fronts.
The current macroeconomic status of India
- As we enter 2024, there is optimism on the macro-economic front.
- The NSO has estimated GDP growth for 2023-24 at 7.3 per cent in its first advance estimates.
- The Sensex is booming, having crossed the 72,000-mark first time in history.
- Foreign exchange reserves have crossed $620 billion as on December 22, 2023.
- Inflation has been contained within the RBI’s desirable band of 4 plus/minus 2 per cent.
- All this points to India being the best performer among G20 countries in 2023.
- And as per IMF projections, India is likely to outperform most G20 countries even in 2024.
A comparison of macroeconomics statistics of UPA and NDA governments
The GDP growth
- Looking at the GDP growth, we find that the average annual growth during the UPA period (2004-05 to 2013-14) was a notch higher at 6.8 per cent than during the Modi government at 5.8 per cent (from 2014-15 to 2023-24).
- This is as per the latest revised series data with the 2011-12 base.
- However, it is worth noting that the GDP growth stood at 7.7 per cent during the UPA period as per the older series (with 2004-05 base at factor cost).
- This was revised downwards to 6.8 per cent in 2018 when the older series was replaced with the new one with a 2011-12 base at market prices.
- The agri-GDP growth was 3.5 per cent during the UPA period, and marginally higher at 3.7 per cent under the Modi government.
- Agricultural performance is critical for the well-being of the masses as it still engages about 45 per cent of the workforce, and provides basic food security to the country.
The inflation rates
- The record of the UPA government was not good on the inflation front.
- The average annual inflation (measured by the Consumer Price Index, CPI) was 8.1 per cent during the UPA period compared to 5.1 per cent during the Modi period.
- In terms of food inflation, the UPA record was even worse at 9.2 per cent compared to 4.9 per cent during the Modi period.
Poverty reduction
- Measured in terms of the World Bank’s definition of extreme poverty at $2.15/day/per capita (in 2017 constant purchasing power parity, PPP), India’s headcount poverty level declined from 63.11 per cent to 39.91 per cent between 1977 and 2004.
- But despite this, the absolute population living in extreme poverty increased from 411 million to 453 million due to rapid population growth (2.1 per cent).
- As population growth was contained, absolute poverty numbers also came down in subsequent years.
- Interpolating the discrete poverty data as shown in the infographics, it would be safe to say that during the UPA-1 period, 2004-05 to 2008-09 (interpolated), extreme poverty declined by 1.12 per cent per annum (from 39.9 per cent to about 34.3 per cent).
- But during UPA-II, 2009-10 to 2013-14 (interpolated), poverty declined faster at 2.46 per cent per annum (32.9 per cent to 20.6 per cent).
- During the Modi-I period, poverty fell but at a declining rate, from about 19.7 per cent in 2014-15 (interpolated) to 11.1 per cent in 2018-19, that is, a 1.72 per cent decline per year.
- Surprisingly, during the Modi-II period, 2019-20 to 2023-24, poverty declined very meagrely at 0.3 per cent per annum.
- Covid-19 seems to have given a big shock and even in 2023, India had the highest number of people (160 million) in extreme poverty, marginally up from 152 million in 2018.
Increase in real farm wages
- The stunted decline in headcount poverty during the Modi-II period is not only puzzling but also concerning.
- It is also corroborated by the decline in the rate of growth in real farm wages for men.
- During the two terms of the UPA, real farm wages grew by 4.1 per cent compared to just 1.3 per cent during the Modi government’s 10-year period.
Decline in Multidimensional Poverty
- The UNDP’s Multidimensional Poverty Index (MPI), computed using 10 indicators under three dimensions — health, education and standard of living — halved from 55.1 per cent to 27.7 per cent between 2005-06 to 2015-16.
- That means about 271 million people moved out of poverty.
- Similarly, NITI Aayog’s national MPI (similar to UNDP’s MPI with 12 indicators) dropped from 24.85 per cent to 14.96 per cent between 2015-16 and 2019-21, indicating that about 135 million people were lifted out of multi-dimensional poverty.
- It was largely a result of improved access to sanitation, schooling, cooking fuel, etc.
Concern on Income poverty
- While this is very much welcome, it is crucial to address income poverty which is still very high and has remained defiant over the last five years.
- For that, policy needs to focus on spurring employment-intensive growth.
- Skill formation in rural areas to enable people to move out of agriculture to higher productivity jobs in urban areas, coupled with direct income transfers to the most vulnerable (antyodaya) can help.
Conclusion: That multidimensional poverty has declined is good news. But income poverty, which has remained defiantly high for the last five years, must be fixed.
Topic 2 : Here comes the sun
Introduction: India’s space-based solar observatory, Aditya-L1, is poised to provide new insights into the dynamics of the Sun. On Saturday, ISRO inserted the spacecraft into its destination orbit, L1 or Lagrange point, a patch between the Earth and the Sun, about 1.5 million km away.
The Lagrange point and its significance
- It’s a place where the gravity of the planet and the Sun and the centripetal force of the satellite cancel out one another, creating a stable point for the observatory.
- A spacecraft at LI can observe the Sun without eclipses or obstructions.
- L1 is not a fixed point in space. Its exact location varies slightly depending on the masses of the two objects involved.
- There are five Lagrange points in total. The other four are L2, L3, L4, and L5.
- L1 was first discovered by the Italian mathematician Joseph-Louis Lagrange in 1772.
Insertion of Observatory in L1 orbit: a milestone for ISRO
- This is another feather in ISRO’s cap — it is only the third space agency to place a spacecraft at this patch.
- Placing Aditya in a halo orbit in LI was a task enormously more complicated than putting a satellite in a celestial orbit around the Earth or any other planetary body.
- The conventional orbits are either circular or elliptical.
- The orbit at LI is almost perpendicular to the line joining the Earth and the Sun. Scientists say that ISRO would need to carry out periodic manoeuvres to keep the spacecraft in its orbit.
Significance of Aditya-L1
- So far, Indian scientists have been studying the Sun from ground-based telescopes.
- These enable observation of the star’s visible surface but not its atmosphere.
- Aditya-LI aims to observe the Sun’s corona — the outermost part of its atmosphere — and understand its extreme heat.
- The mission could provide clues to resolving a long-standing mystery: Why is the not-so-bright corona of the star closest to us a million degrees Celsius hot when the temperature on its surface is about 5,500 degrees Celsius?
- The mission could help scientists understand how the Sun’s radiation, flow of particles and magnetic fields affect the Earth.
- Solar flares have the potential to damage electronic equipment on satellites.
- About 7,000 satellites orbiting the Earth currently have a crucial role in several fields, ranging from telecommunications to weather prediction.
- The information gathered by India’s solar observatory could help scientists find ways to understand these bursts of radiation and even predict them.
- Aditya will also study “space weather” that results from solar storms using four instruments that are pointed at the star and three others that will monitor the solar wind and the effects of these storms on the sun’s magnetic field.
- All this could enrich the understanding of climatic changes in the coming decades.
The lifetime of Aditya Mission
- Aditya’s primary mission is expected to last five years.
- However, the spacecraft’s location at the extremely stable L1 could result in a much longer lifetime.
- NASA and the European Space Agency’s SOHO probe, for example, was expected to last about two years. But it has operated for 27 years from L1.
- The challenge, however, will be to keep Aditya-L1 in its desired configuration for the rest of its life.
- The coming years promise to be exciting ones for India’s space research agency.
Conclusion: Hence it can be concluded that Aditya-L1 could help unravel several mysteries of the star closest to the Earth. It’s another feather in ISRO’s cap.