Welcome to TARUN IAS – Your Daily News Analysis for UPSC/IAS Exam Preparation!

Stay informed with relevant current affairs from trusted sources like The Hindu, Indian Express, PIB, and more. Our daily news analysis includes Prelims Facts and Important Editorials presented in a concise and bulletised format. Get free daily updates at 12 noon (except Sundays). Don\’t miss the Daily Revision Quiz to reinforce your knowledge. Good luck!

Here are the topics covered for 16 September 2023: India-Saudi Arabia, Corporate Governance, Broad Platform, Space Start-Ups, India’s Trade Deficit, Assessing Economic Activity, Millets.

 

Table of Content

GS-2

1. India-Saudi Arabia
2. Corporate Governance
3. Broad Platform

 

GS-3

1. Space Start-Ups
2. India’s Trade Deficit

 

Facts for Prelims

1. Assessing Economic Activity
2. Millets

 

India-Saudi Arabia

Aspect	Details and Highlights
Economic Ties	– Energy cooperation: Saudi Arabia is a key supplier of crude oil to India. <br> – Investments: Saudi Arabia\’s Public Investment Fund (PIF) has expressed interest in investing in India\’s infrastructure and other sectors.
Trade Relations	– Trade volume has been steadily increasing. <br> – Efforts to diversify trade beyond oil into non-oil sectors such as agriculture and pharmaceuticals.
Strategic and Defense Ties	– Cooperation on security and counter-terrorism efforts. <br> – Exploration of defense cooperation, including joint exercises and defense equipment procurement.
Diplomatic Engagements	– High-level visits by leaders, including PM Narendra Modi and Crown Prince Mohammed bin Salman. <br> – Signing of various bilateral agreements and MoUs.
Indian Diaspora	– Significant Indian expatriate community contributing to Saudi Arabia\’s workforce.
Cultural and Educational Exchanges	– Promotion of cultural exchanges and educational cooperation.
Saudi Vision 2030 and India	– India\’s interest in participating in Saudi Arabia\’s Vision 2030 program for economic diversification.
Geopolitical Dynamics	– Shared interests in regional stability and security in the Middle East and the Gulf region. <br> – Cooperation in multilateral forums such as the United Nations and the G20.

 

Corporate Governance

Context

1. The OECD has unveiled the updated G20/OECD Principles of Corporate Governance, a collection of global guidelines designed to enhance corporate sustainability, bolster market trust, and ensure financial stability.

 

About Corporate Governance

1. Corporate governance is fundamentally about striking a balance among the various stakeholders of a company, including shareholders, top executives, customers, suppliers, financiers, the government, and the community.
2. The Indian corporate governance framework focuses on:
   1. protection of minority shareholders;
   2. accountability of the board of directors and management of the company;
   3. timely reporting and adequate disclosures to shareholders; and
   4. corporate social responsibility.
3. The regime emphasizes transparency through disclosures and a mandatory minimum proportion of independent directors on the board of each company.
4. However, as is common in India, the corporate governance regulatory framework is composed of statutes and regulations that require supervision by multiple regulators:
   1. the Securities and Exchange Board of India (SEBI) is the principal regulator for listed companies;
   2. the Ministry of Corporate Affairs (MCA) and the Registrar of Companies (Registrar) administer the Companies Act 2013 and the relevant rules that apply to all companies, including listed companies; and
   3. Additionally, sector-specific regulation also applies, and this can have a significant impact on the governance regime.

 

Broad Platform

Context

1. Chief Justice of IndiaY. Chandrachud highlighted the Supreme Court\’s \”broad platform\” for assessing the top 50 judge candidates for Supreme Court appointments.

 

About the Platform

1. With assistance from the Centre for Research and Planning, they have developed a broad platform to evaluate the top 50 judges in the country for potential appointments to the Supreme Court.
2. This will help to institutionalize the courts and move away from an ad-hoc model of operation.
3. One significant outcome of institutionalizing courts is the enhancement of transparency and accountability.
4. The aim was to bring transparency to the Supreme Court\’s appointment process by establishing clear selection criteria, even though the process itself cannot be made public.
5. Currently, appointments are based on various criteria, including seniority, regional representation, and merit, following a Memorandum of Procedure shaped by the Three Judges Cases.

 

Space Start-Ups

Context

1. Space industry stakeholders in India are urging the government to address funding challenges by establishing soft funds and additional incentives to stimulate sector growth.

 

Private Space Sector in India

1. Emerging private players in India\’s space sector, include Skyroot Aerospace, Pixxel, Bellatrix Aerospace, and Kawa Space.
2. Government initiatives like NSIL and IN-SPACe to promote and regulate private sector participation.
3. Private companies showing interest in satellite launch services.
4. Focus on developing technologies related to satellite manufacturing, propulsion, satellite communication, and Earth observation.
5. The potential for increased innovation and reduced space access costs due to private sector involvement.

 

Growth Potential

1. Growth opportunities in the global space industry, including satellite communication, Earth observation, space tourism, and asteroid mining.
2. Potential for cost reduction and innovation in space technology and launch services by private companies.
3. Private sector participation driving innovation and research in space-related technologies.
4. Job creation in high-skilled fields and economic development.
5. Improved global competitiveness and international partnerships.
6. Government support through policies like IN-SPACe and initiatives like NSIL.
7. Importance of a clear and comprehensive space policy framework.
8. Collaborations with international space agencies and companies.
9. The role of a growing ecosystem of space startups and incubators in fostering entrepreneurship and innovation.

 

Challenges

1. Significant capital requirements for R&D, manufacturing, and launch operations.
2. Extended development cycles lead to delayed returns on investment.
3. Complex technical challenges and regulatory hurdles.
4. Market uncertainty is influenced by geopolitical factors and economic conditions.
5. Limited track record of space startups.
6. Intense competition within the space industry.
7. Inherent risks of mission failure and satellite malfunctions.
8. Illiquidity of investments with extended exit timelines.
9. Challenges in securing access to space infrastructure and launch opportunities.
10. Navigating international collaboration and compliance with space regulations.

 

India’s Trade Deficit

Context

1. India\’s foreign trade in August faced difficulties, including a seventh consecutive month of declining goods exports, a drop in services exports, and a 10-month high in the goods trade deficit.

 

More About News

1. In August, India\’s exports showed a milder decline, down 6.86% to $34.5 billion.
2. Services exports, previously robust, contracted by 0.4% to $26.39 billion in August.
3. Merchandise imports in August decreased by 5.23% YoY to $58.64 billion.
4. The goods trade deficit for August reached $24.16 billion, a 2.8% decline from August 2022 but nearly 17% higher than July\’s deficit.

 

Reason for Decline

1. Approximately 50% of the decline in exports this year is linked to falling petroleum prices.
2. Despite a decline in export values, 13 key commodities, accounting for about 23% of total exports, experienced increased volumes.
3. Export volumes of petroleum products grew by 6% between April and July, while prices dropped by 27% compared to the previous year.

 

Way Ahead

1. The Federation of Indian Exporters’ Organisations (FIEO) reports subdued demand in major global economies, including the EU, U.S., China, Australia, and Asia.
2. Optimism for improved conditions in the coming months, driven by fresh orders expected for the Christmas and New Year
3. FIEO urges support measures such as easy credit access for small businesses, marketing support for Indian products, GST exemptions on export freight, interest equalization support, and an extension of the emergency credit line guarantee scheme for exporters.

 

FACTS FOR PRELIMS

Assessing Economic Activity

Context

1. The Finance Minister in her recent statement has raised concerns about the credibility of Indian GDP data, highlighting that it lacks seasonal adjustment and is finalized after a three-year lag. Relying solely on GDP indicators to gauge underlying economic activity is deemed inappropriate.

 

What could be done?

1. Critics should consider alternative growth indicators like Purchasing Managers\’ Indices, which show growth in manufacturing and services sectors.
2. The Ministry suggested higher-frequency data might provide a more accurate picture of economic activity, and manufacturing growth may be underestimated.

 

Millets

1. Millets are a group of small-seeded grains, grown as cereal and fodder crops.
2. Raised mainly as rain-fed Kharif crops (sowed with the onset of the monsoons)
3. There are 16 significant millet varieties, among them six main types of millets are: Pearl Millet (Bajra), Foxtail Millet (Kangni), Finger Millet (Ragi), Proso Millet (Cheena/Barri), Barnyard Millet (Sanwa), and Little Millet (Kutki).
4. Millets are a rich source of protein, fiber, vitamins, and minerals while being gluten-free, making them a sustainable and climate-resilient food
5. Millets are well-suited for regions with limited water availability and are often grown in areas prone to drought.
6. The United Nations declared 2023 as the International Year of Millets to raise awareness about their nutritional benefits, promote sustainable agriculture, and support the livelihoods of smallholder farmers.