Indian Express Editorial Summary : Quality of growth
GS-3 Mains
Short Notes or Revision Notes
Question : Discuss the quality of growth in the Indian economy during 2023-24, highlighting key indicators and nuances.
Positive Indicators
- GDP growth at 8.4% in Q3 2023-24.
- PMI Manufacturing at a 16-month high (59.1) in March 2024.
- Healthy credit ratio (1.92) in H2 2023-24 (indicates strong corporate and banking sectors).
Growth Composition
- Above 8% GDP growth for the first 3 quarters of 2023-24.
- Growth led by investment, not consumption.
- Consumption GDP estimated at 3% (vs pre-pandemic 7%).
- Cautious consumer spending on FMCG products.
- Signs of improvement in rural demand:
- Nielsen report: FMCG volume growth in rural areas at 6.2% (H2 2023).
- Improvement in two-wheeler sales.
Outlook
- Normal monsoon expected to improve overall consumption demand.
- Continued government focus on capital expenditure (capex).
- Private investment pickup critical for sustained growth.
- Manufacturing capacity utilization at 74% (near long-term average) indicates potential for private capex acceleration.
- CMIE data suggests increased private sector investment intent.
Growth Drivers and Performance
- Growth led by manufacturing and services sectors, not agriculture (impacted by monsoon).
- Strong performance in hotels, auto, healthcare, realty, iron & steel, pharma, and jewelry retail.
- Weak external demand affected chemicals, textiles, and diamonds.
- Healthy services exports (especially software, business consulting, and travel) offset weak merchandise exports.
- Current account deficit estimated at a benign 0.6-0.7% of GDP in 2023-24 (around 1% in 2024-25).
External Factors and Inflows
- Very strong FII inflows ($41 billion in 2023-24) despite moderated FDI.
- Forex reserves at a comfortable $643 billion.
- Expected continued strong FII inflows due to Indian bond inclusion in global indices.
- Need for caution due to the volatile nature of FII flows.
Inflation and Monetary Policy
- Moderated CPI inflation below RBI’s target upper band (6%).
- Core inflation below 4% for the past 3 months (disinflation in services).
- High food inflation remains a concern (vegetables, pulses, spices).
- Expected CPI inflation to moderate to around 4.8% in 2024-25 (from 5.4% in 2023-24) assuming a normal monsoon.
- Potential for a shallow RBI rate cut in H2 2024-25 if the US Fed also cuts rates.
- Rapid rise in retail credit despite higher interest rates.
- RBI increased risk weightage for unsecured personal loans (moderation in growth).
- Need for vigilance on potential stress in retail loans.
- Strong overall bank credit growth with relatively weak deposit growth (liquidity risks and pressured margins).
- Healthy banks’ asset quality remains a comforting factor.
Overall Assessment and Outlook
- Indian economy likely to achieve around 7% GDP growth in 2023-24.
- Structural improvements (digitalization, formalization) suggest higher potential growth.
- Time for government to focus on quality of growth and mitigate lurking risks.
- Continued fiscal consolidation and public debt reduction remain crucial.
- With a strong foundation, India can pursue sustainable and inclusive growth.
Indian Express Editorial Summary : A call to action
GS-2 or GS-3 Mains
Short Notes or Revision Notes
Question : Discuss the role of the Supreme Court in addressing climate change issues in India, particularly in upholding environmental rights and advocating for climate mitigation measures.
India’s Vulnerability
- Growing evidence of climate change’s impact on India:
- More frequent and intense floods.
- Changing rainfall patterns.
- Heatwaves posing health risks.
- Studies warn of increasing risks to Indians in the coming years (e.g., IPCC report).
- IPCC report highlights future rise in heatwaves and humid heat stress in South Asia.
- Political class largely ignores climate change issues.
- SC’s intervention could be a turning point for wider public engagement.
- India ranked 7th most vulnerable country to climate change hazards (Global Climate Risk Index 2021).
Supreme Court’s Role
- Consistent approach to environmental protection through rights lens.
- C. Mehta v Union of India (1987) established right to pollution-free environment as part of Right to Life.
- Subsequent verdicts emphasize right to clean air, water, and healthy life.
- Recent climate change ruling connects human rights with climate mitigation:
- “Right to life not fully realized without a clean environment.”
- “Right to health impacted by climate change factors.”
Government’s Response
- History of neglecting SC rulings on environment-human dignity link.
- Delhi’s air pollution exemplifies gap between legal pronouncements and policy.
- Lack of executive action on environmental issues.
- Reactive approach to environmental problems (only during emergencies).
- Increasing extreme weather events expose unpreparedness of cities and rural areas.
- Development plans often insensitive to ecological concerns.
The Way Forward
- SC ruling underlines need for corrective measures: “States compelled to take effective measures to mitigate climate change.”
- The verdict should be a call to action for the government.
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