India, Malaysia upgrade strategic partnership, discuss entry to BRICS

BRICS

BRICS is an acronym for an association of five major emerging economies:

• Brazil
• Russia
• India
• China
• South Africa (joined in 2010)

Historical Background:

• 2001: The concept of BRICS was first introduced by economist Jim O''Neill, who suggested the grouping as “BRIC” to reflect the growing influence of these economies.
• 2009: The first official BRIC summit was held in Yekaterinburg, Russia.
• 2010: South Africa was invited to join, transforming BRIC into BRICS.

It comprises of (According to World Bank data of 2019):

• 41% of the world population,
• having 24% of the world GDP and
• over 16% share in the world trade

Key Areas of Cooperation:

• Economic Policy Coordination: Regular meetings of finance ministers and central bank governors.
• Trade and Investment: Promotion of trade and investment flows between member countries.
• Political Dialogue: Coordination on political issues and shared interests in international forums.
• Cultural Exchange: Encouraging cultural and people-to-people exchanges.

Key Institutions:

• New Development Bank (NDB): Established in 2014 to finance infrastructure and sustainable development projects in BRICS and other emerging economies.
• Contingent Reserve Arrangement (CRA): A framework for providing financial support to member countries in times of crisis.

Economic Impact:

• Growing Economies: BRICS countries are significant contributors to global GDP growth and have large, fast-growing markets.
• Investment Opportunities: Offer considerable investment opportunities due to their emerging market status.

Challenges and Criticisms:

• Diverse Economies: Different political systems, economic models, and development levels among members can lead to divergent interests.
• Geopolitical Tensions: Conflicts between some members, such as India and China, can impact collective goals.
• Implementation Issues: Achieving consensus on policies and projects can be challenging.

Latest development

• Five new members, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates have confirmed the invitation to join BRICS.
• Argentina has decided to not join.
• The last expansion of the BRICS occurred in 2010 when South Africa joined the group.

India and BRICS

India is an important member of the BRICS group, and its participation in the organisation has been beneficial in many ways. Some of the key reasons why BRICS is important for India are:

• Strategic cooperation: BRICS offers India a key platform for global engagement on security, terrorism, climate, and trade.
• Economic benefits: As a BRICS member, India gains access to a large market of 3+ billion people, offering vast business opportunities. NDB funding supports India''s development projects.
• Reform of multilateral institutions: As a member of BRICS, India has been able to work with other member countries to promote a more inclusive and equitable global order by promoting multilateral reforms.
• South-south cooperation: India, as a leading member of BRICS, has been able to use the platform to promote south-south cooperation in areas such as trade, investment, and technology transfer.
• Pillar of the New World Order: In the fifteenth BRICS Summit, after its expansion, the leaders called BRICS the pillar of the New World Order.
• Dilemma: However, the challenge before India is to choose between a China-centric or a West-centric world order or balance the two.

‘Abandoning inflation targeting could be counterproductive’

Inflation

Inflation is defined as a long-term increase in the general price level of goods and services in a given economy. It considers the pricing of most every day or standard products and services, such as food, clothes, housing, recreation, transportation, consumer staples, etc. Inflation is calculated as the average change in a basket of goods and services price over time. It’s calculated on a year-over-year (or monthly/weekly) basis. Point-to-point inflation is the rate of change in a specific month’s price level compared to the same month the previous year. Inflation is referred to as a positive when it helps improve consumer demand and consumption, and operate economic growth.

Types of Inflation and Causes of Inflation 

Depending on the reason, inflation can be classed as Demand-Pull Inflation or Cost-Push Inflation.

Demand-Pull Inflation-

• Demand-pull inflation occurs when the total demand for products and services grows faster than the economy’s production capability.
• It produces a demand-supply mismatch, with increased demand and lower supply, resulting in higher prices.
• This sort of inflation happens when the money supply expands; government spending grows, indirect taxes fall, and so on.

Cost-Push Inflation-

• Cost-Push Inflation is defined as an increase in the cost of production elements such as labor, raw materials, etc.
• As the cost of production increases, inflation  rises due to which companies strive to maintain profit margins by raising prices or offering goods and services at the same price but in fewer quantities. Cost-push inflation occurs in these situations.
• Increases in the cost of manufacturing, decrease in output (production), increases in indirect taxes, increases in the price of imported commodities, and other factors contribute to this inflation.
• Inflation may be classed into mild inflation, galloping inflation, hyperinflation, and so on, depending on the price increase.

Low Inflation

• Low inflation is a term that refers to a period of time where prices are slowly rising.
• Creeping inflation is another name for this sort of inflation. Crawling inflation occurs when prices rise by less than 3% each year.

Galloping Inflation

• Galloping inflation occurs when the economy’s prices of goods and services grow at a double-digit (i.e., 15%, etc.) or triple-digit (i.e., 100%, etc.) pace each year.
• Inflation that is galloping is also known as jumping inflation or running inflation.

Hyperinflation

• Hyperinflation occurs when the pace of growth in the prices of goods and services is remarkably rapid and occurs over a short period of time.
• In other terms, hyperinflation occurs when prices rise at a pace of more than three digits per year.

 Impacts of Rising Inflation

Positive Impacts

1. Debt Relief:

• Reduced Real Value of Debt: For borrowers with fixed-rate loans, rising inflation can reduce the real value of their debt. This means they repay their loans with money that is worth less than when they borrowed it, which can be beneficial for individuals and businesses with existing debt.

2. Encouragement of Spending and Investment:

• Incentive to Spend: Higher inflation can encourage consumers to spend rather than save, as the value of money decreases over time. This can boost economic activity and stimulate growth.
• Asset Investment: Investors might put their money into assets that are likely to appreciate in value with inflation, such as real estate or commodities, potentially leading to higher returns.

3. Wage Adjustments:

• Potential Wage Increases: Workers might negotiate higher wages to keep up with the cost of living, which can improve their standard of living if wage growth keeps pace with inflation.

4. Nominal Price Adjustment:

• Price Flexibility: Inflation can help adjust relative prices and wages in the economy, especially in scenarios where prices are sticky or slow to adjust. This can be particularly useful in situations of economic restructuring or adjustment.

Negative Impacts

1. Erosion of Purchasing Power:

• Higher Living Costs: Rising inflation decreases the purchasing power of money, meaning consumers can buy less with the same amount of money, which can reduce their standard of living.

2. Uncertainty and Volatility:

• Economic Uncertainty: High inflation can create uncertainty about future costs, which can make planning and budgeting more difficult for both consumers and businesses.
• Market Volatility: Inflation can lead to increased volatility in financial markets as investors react to changing economic conditions and adjust their strategies.

3. Interest Rates and Borrowing Costs:

• Higher Borrowing Costs: To combat inflation, central banks may raise interest rates, which can increase the cost of borrowing for consumers and businesses. This can slow down economic activity and investment.
• Impact on Business Investment: Higher interest rates can deter businesses from investing in new projects or expanding, potentially affecting economic growth.

4. Income Inequality:

• Disproportionate Impact on Lower-Income Households: Rising inflation often affects lower-income households more severely, as they spend a larger proportion of their income on essential goods and services. This can widen income inequality and create social challenges.

5. Savings Erosion:

• Reduced Real Value of Savings: Inflation can erode the real value of savings if interest rates on savings accounts or investments do not keep pace with inflation. This can undermine long-term financial security for individuals and households.

Measures to control inflation

Increase Interest Rates: Central banks can raise short-term interest rates to make borrowing more expensive and saving more attractive. Higher interest rates can help cool off an overheated economy by reducing consumer spending and business investment.

Sell Government Securities: By selling government bonds, central banks can reduce the money supply in the economy. This action can help reduce inflationary pressures by increasing interest rates and lowering the amount of money circulating in the economy.

Increase Reserve Requirements: Central banks can raise the reserve requirements for commercial banks, which reduces the amount of money banks can lend out. This can help control inflation by tightening the money supply.

Reduce Government Spending: The government can cut back on public expenditures to reduce overall demand in the economy. Lower demand can help ease inflationary pressures.

Increase Taxes: Raising taxes can reduce disposable income, leading to decreased consumer spending. This can help cool down inflation by reducing aggregate demand.

Encourage Investment: Policies that promote investment in technology and infrastructure can enhance productivity, which helps to increase supply and reduce inflationary pressures.

Enhance Skills and Training: Improving labour market efficiency through education and training can help to increase productivity and reduce wage-driven inflation.

Implement Temporary Price Controls: In extreme cases, governments may impose price controls or caps on essential goods and services. However, these measures are usually temporary and can lead to shortages or reduced supply if not carefully managed.

Ensure Supply Chain Stability: Addressing issues in supply chains that contribute to rising commodity prices can help control inflation. This can involve improving logistics, reducing trade barriers, or ensuring competitive markets.

Navy Chief Reaffirms Support for Gaganyaan & Samudrayan Missions in Meeting with Jitendra Singh

(Source – Newsonair.gov.in)

Gaganyaan mission

The primary goal of the Gaganyaan mission is to send Indian astronauts, known as "Vyomanauts," into space and bring them back safely. This mission aims to demonstrate ISRO''s capability to undertake human spaceflight and contribute to the advancement of space technology.

Mission Components

1. Crew Module:

• Design: The crew module is designed to accommodate a crew of two astronauts. It includes life support systems, navigation, and communication equipment to ensure the safety and well-being of the astronauts.
• Landing: The module is equipped with heat shields and parachutes to ensure a safe re-entry and landing on Earth.

2. Launch Vehicle:

• GSLV Mk III: The mission will use the GSLV Mk III rocket, ISRO’s most powerful launch vehicle, capable of lifting heavy payloads. It has been specifically modified to carry the crew module and necessary systems.

3. Spacecraft Systems:

• Life Support: Advanced life support systems will be included to provide oxygen, manage waste, and maintain appropriate pressure and temperature.
• Navigation and Communication: Systems for precise navigation and reliable communication with ground control will be integral to the mission''s success.

Mission Phases

1. Pre-Launch Preparations:

• Astronaut Training: Selected astronauts undergo extensive training, including simulations of spaceflight, survival training, and physical conditioning.
• Test Flights: Uncrewed test flights and simulations will be conducted to validate the spacecraft systems and safety measures before the actual crewed mission.

2. Launch:

• Spacecraft Deployment: The crew module will be launched aboard the GSLV Mk III rocket. The rocket will place the module into a low Earth orbit (LEO) or a similar trajectory.

3. Mission Operations:

• Orbital Operations: The spacecraft will remain in space for a planned duration, during which astronauts will conduct experiments and monitor systems.
• Re-entry and Landing: After the mission, the crew module will re-enter Earth''s atmosphere and land safely, with recovery operations in place.

Significance

1. Technological Advancement:

• Capability Development: The mission will showcase ISRO’s advanced space technologies and its ability to undertake complex human spaceflight missions.
• Technology Demonstration: It will demonstrate various technologies essential for future space missions, including human space exploration.

2. National Pride and International Prestige:

• Milestone Achievement: Successfully sending humans into space would mark a significant milestone for India, enhancing its status in the global space community.
• International Collaboration: The mission may foster opportunities for international collaboration in space exploration and technology development.

Challenges

1. Technical Complexity:
• Safety and Reliability: Ensuring the safety and reliability of all systems is critical, given the complexity and risks associated with human spaceflight.
2. Cost and Resource Management:
• Budget Constraints: Managing the budget and resources effectively to achieve mission goals within financial constraints is a key challenge.

Samudrayan Missions

The mission is aimed at sending three personnel to 6000-metre depth in a vehicle called ‘MATSYA 6000’ for the exploration of deep-sea resources like minerals. ‘MATSYA 6000’ vehicle is being designed and developed by National Institute of Ocean Technology (NIOT), Chennai under Ministry of Earth Sciences. It has an endurance of 12 hours under normal operation and 96 hours in case of emergency for human safety. It is India’s first unique manned ocean mission and is a part of the Rs 6000-crores Deep Ocean Mission.

 Significance

1. Scientific Advancement:

• Understanding Marine Life: Provides valuable information about deep-sea ecosystems and species, contributing to the broader understanding of marine biodiversity.
• Geological Insights: Enhances knowledge of underwater geological processes and formations, which can have implications for natural hazard assessment and resource management.

2. Technological Innovation:

• Advanced Engineering: Develops and tests new technologies for deep-sea exploration, potentially leading to advancements in other fields.

3. Economic and Strategic Value:

• Resource Potential: Identifies and assesses potential underwater resources, which can have economic implications for resource management and extraction.
• National Prestige: Demonstrates India’s capabilities in high-tech exploration and positions the country as a leader in marine research.

Challenges

1. Technical Complexity:

• Extreme Conditions: Designing and building submersibles that can withstand the high pressure, low temperatures, and corrosive environment of deep-sea conditions is a significant technical challenge.

2. Cost and Funding:

• Resource Intensive: Deep-sea exploration requires substantial financial investment, which needs careful management and allocation.

3. Data Management:

• Large Volumes: Handling and analyzing large volumes of data collected from deep-sea missions can be complex and requires sophisticated tools and expertise.

President Murmu Prorogues Parliament After Adjournment Sine Die

Prorogation

Prorogation means the termination of a session of the House by an order made by the President under article 85(2)(a) of the Constitution. Prorogation terminates both the sitting and session of the House. Usually, within a few days after the House is adjourned sine die by the presiding officer, the President issues a notification for the prorogation of the session. However, the President can also prorogue the House while in session.

• The President in exercising the power to prorogue the House acts on the advice of the Prime Minister.
• The time-lag between the adjournment of a House sine die and its prorogation is generally two to four days, although there are instances when a House was prorogued on the same day on which it was adjourned sine die.
• It is not necessary that both the Houses should be prorogued simultaneously.

Effects of prorogation

• Article 107(3) of the Constitution of India expressly provides that a Bill pending in Parliament shall not lapse by reason of the prorogation of the House. This also covers Bills pending before a Select or Joint Committee of the House.
• Notices of intention to move for leave to introduce Bills also do not lapse on prorogation and no fresh notice is necessary in the next session for that purpose except where any sanction or recommendation granted under the Constitution in respect of a Bill has ceased to be operative.
• On the prorogation, all pending notices of Motions and Resolutions except those relating to introduction of Bills as mentioned above, lapse and fresh notices must be given for the next session.
• Any business pending before a committee shall not lapse by reason only of the prorogation of the House and the committee shall continue to function notwithstanding such prorogation.
• On prorogation of either House of Parliament, the President has the power to issue Ordinances under article 123.

Adjournment Sine Die

Adjournment sine die means terminating a sitting of Parliament for an indefinite period. In other words, when the House is adjourned without naming a day for reassembly, it is called adjournment sine die. The power of adjournment sine die lies with the presiding officer of the House.

• It implies that when the House is adjourned without naming a day for reassembly, it is called adjournment sine die.
• The presiding officer can also call a sitting of the House before the date or time to which it has been adjourned or at any time after the House has been adjourned sine die.
• The presiding officer (Speaker or Chairman) declares the House adjourned sine die, when the business of a session is completed.