Indian Express Editorial Topic-1 : Calling China’s Bluff
GS-2 Mains
Short Notes or Revision Notes
Question : Analyze China’s strategy of renaming places in Arunachal Pradesh and its implications for Indo-China relations.
China’s Provocations in Arunachal Pradesh
- Since 2017, China has been renaming places in Arunachal Pradesh, an Indian territory, calling it “Zangnan.”
- This is an ongoing tactic:
- 6 places renamed in 2017
- 15 added in 2021
- 11 more in 2023
- 30 new places in 2024 (including residential areas, mountains, rivers, etc.)
- India rejects these attempts, calling them “senseless.”
- China’s claims seem historically dubious:
- They use a fictionalized historical figure (Zheng He) to justify territorial claims.
- Similar claims made about ancestral graves in Arunachal Pradesh lack evidence.
India’s Response to China’s Aggression
Shifting Strategy
- Traditionally, India avoided military commitments beyond its borders.
- This changed with Foreign Minister Jaishankar’s visit to the Philippines in March 2024.
New Approach in the Philippines
- Jaishankar pledged India’s support to the Philippines in their South China Sea dispute with China.
- This signifies a significant shift from India’s previous non-committal stance.
- It indicates India’s willingness to confront China’s expansionism.
India’s Message
- India is a responsible nation that upholds the international legal order.
- China should respect international law, including the 2016 Hague ruling on the South China Sea.
China’s Reaction to India’s Stance
- Predictable Response
- China’s state media, Global Times, criticized Jaishankar’s visit to the Philippines.
- They accused India of trying to form an anti-China alliance and provoke conflict in the South China Sea.
- Futile Threats
- China threatened to damage bilateral relations if India gets involved in the South China Sea dispute.
- India maintains it is a responsible nation acting within the international legal order.
- India’s Message
- During his US visit, China’s President Xi Jinping emphasized peace, stability, and credibility in (guānxì – relations) with the US.
- India expects the same principles from China, including adherence to the rules-based international order.
- This was the core message Jaishankar conveyed in the Philippines.
Waiting for Summer’s Impact on Inflation
GS-3 Mains
Short Notes or Revision Notes
Question : Discuss the recent economic trends in India, highlighting the factors contributing to strong GDP growth while addressing concerns such as inflation and agricultural performance.
Strong Economic Growth
- India’s GDP growth is estimated at over 8% for the first three quarters of 2023-24.
- High-frequency data suggests continued momentum in Q4.
- Strong performance in construction, manufacturing, and financial services.
- Agricultural growth remains weak at 0.7%.
- Investment drives GDP growth, with private consumption lagging.
RBI Maintains Status Quo
- The RBI held rates steady on April 5th as expected.
- Inflation remains above target despite strong growth.
- RBI expects GDP growth of 7% in 2024-25.
Inflation Concerns
- Food inflation remains a key worry, averaging 7.4% in the first 11 months of 2023-24.
- Vegetable price volatility is a major concern (30.2% inflation in February).
- Core inflation (excluding food and fuel) is low at 3.4%.
Waiting for Summer Monsoon
- A normal monsoon and stable oil prices are expected to help cool food prices.
- El Niño’s impact is predicted to fade in the second half of 2024.
- La Niña conditions (associated with good rains) could bring relief.
CRISIL’s Expectations
- GDP growth to moderate to 6.8% in 2024-25.
- Lower fiscal deficit and tighter regulations may affect demand.
Overall
- The Indian economy is performing well, but inflation remains a concern.
- Summer monsoon and global oil prices will be crucial factors in controlling inflation.
Food Inflation Worries RBI
Persistent Food Price Issues
- Vegetable price volatility is a major concern for the RBI.
- Unlike usual fluctuations, vegetable inflation has remained high for an extended period.
- Foodgrain inflation, though softening, is still high at 9.8% (February 2024).
Impact of Food Inflation
- High food prices disproportionately affect lower-income groups.
- This is because food constitutes a larger portion of their spending.
- Weak consumption, especially in rural areas, is partly attributed to high food inflation.
- While government programs offer some relief, overall price reduction is necessary.
Looking Ahead
- Expectations of a normal monsoon and a healthy agricultural season are positive for rural consumption.
- Stable global oil prices are anticipated (around $80-$85 per barrel).
- However, recent surges due to geopolitical tensions raise some concerns.
Global Trends in Interest Rates
- Central Banks Hesitant to Cut Rates Yet
- The Federal Reserve and European Central Bank are waiting for inflation to cool further before easing rates.
- High core inflation, even with softening trends, is a concern.
- S&P Global expects inflation to stay above the Fed’s 2% target in 2024 due to persistent service price increases.
- Emerging Markets May Follow Suit
- Unlike the US, India sets rates based on domestic factors.
- However, global trends can influence emerging markets.
- S&P Global expects rate cuts in Latin American emerging markets to continue.
- Central banks in some Asian economies might start easing rates in the second half of 2024.
- India’s Outlook
- India’s rate cuts depend on its domestic situation.
- A good monsoon, stable weather, and controlled oil prices are crucial.
- These factors could allow India to potentially cut rates by the end of summer.
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