DAILY NEWS ANALYSIS

India’s future growth strategy needs to be calibrated in view of the changing global conditions.

What are the challenges that India faces?

• Deglobalisation- There is a trend of reducing global integration and increasing protectionism among countries due to various factors such as geopolitical conflicts, sanctions, and supply chain disruptions .
• Geopolitical conflicts- The ongoing conflicts such as Russia-Ukraine war and the Israel-Hamas war have escalated in recent years and have caused humanitarian crises, regional instability, and diplomatic tensions.
• Economic sanctions- The geopolitical conflicts have led to sanctions and isolation leading to breaks in supply chains as well as disruptions in international settlements due to non-access to systems such as SWIFT for the sanctioned countries.
• Reduced world real GDP growth- It has fallen, implying that the global economy is slowing down and facing recessionary pressures.
• Reduced global exports- This is due to reduced real GDP of the world as countries including India want to reduce their dependence on imported petroleum due to supply uncertainties and price volatility.
• Increase in household debt- This reflects the decline in household savings, if the trend persists even after the recovery of economy from the pandemic this could pose a risk to India’s growth potential and fiscal sustainability.
• Climate friendly technologies- India’s climate commitments may have negative impact on economic growth as some sectors face higher cost and lower productivity.

How India should frame the future growth strategy?

• Self-reliant model- India should adopt independent and resilient economic model, where it can generate enough domestic demand and supply to support its growth, without relying too much on external sources.
• Domestic growth drivers- India needs to rely more on domestic sources of growth, to achieve and sustain a 7% plus real growth, domestic savings will be critical.
• Low ICOR- Incremental Capital Output Ratio must be low for the higher productivity of capital and a higher potential growth rate of the economy.

Incremental Capital Output Ratio is the ratio of the change in capital stock to the change in output, it measures how much additional capital is needed to produce one unit of additional output

• Demographic dividend-As per UN population projections, the share of India’s working age population is projected to peak at 68.9% in 2030 while its overall dependency ratio would be at its lowest at 31.2%.
• Strategize employment- The non-agricultural growth will have to be high enough to absorb labour released from agriculture which is estimated at 45.8% in 2022-23 by the Periodic Labour Force Survey.
• Adopt new technologies- Absorption of productivity-enhancing technologies including Artificial Intelligence (AI) and Generative AI would add to overall growth.
• Productive investment- India needs to invest in training and skilling its workers to cope with the changing structure of output and to adopt new technologies.
• Focus on service sector- The adverse impact of climate-promoting technological changes can be minimised by emphasising service sector growth which is relatively climate friendly.

The service sector accounts for about 55% of India’s GDP and employs over 30% of its workforce.

• Fiscal responsibility- It is important to ensure that the combined fiscal deficit and debt to GDP ratios are brought down to 6% and 60%, respectively for sustainable growth.

What lies ahead?

• Higher savings and investment rates can boost economic growth by providing more resources for productive activities.
• The need of the hour is to enhance the skills and employability of the young workforce to the labour market.
• India must adopt a technology mix which is employment friendly to create more jobs and reduce inequality.

India have launched its 1^st Indian Food and Wood certification scheme.

• Launched by – MoEFCC
• Aim – To offer voluntary 3^rd party certification to promote sustainable forest management and agroforestry in the country.
• To incentivise entities like State forest departments, individual farmers, or Farmer Producer Organizations, farm forestry and other wood-based industries in the value chain.
• Certification Types
  • Forest management (FM) certification
  • Tree outside forest management certification
  • Chain of custody (CoC) certification

Forest Management certification is based on the Indian Forest Management Standard, an integral part of the National Working Plan Code 2023 which consists of 8 criteria, 69 indicators and 254 verifiers.

• Overseen by – Indian Forest and Wood Certification Council.
• Operating agency – Indian Institute of Forest Management in Bhopal, responsible for overall management.
• The National Accreditation Board for Certification Bodies under the Quality Council of India (QCI) will accredit the certification bodies.
• Certification bodies – It will carry out independent audits and assess entities on their adherence to the prescribed standards.

Forest certification seeks to authenticate the origin, legality, and sustainability of forest-based products.

Chain of custody (CoC) certification is meant to guarantee the traceability of a forest product like timber throughout the supply chain from origin to market.

• It is a strait between Arabia and Africa that connects the Red Sea with the Gulf of Aden and the Indian Ocean.
• The strait is bordered by Yemen on one side and Djibouti and Eritrea on the other.
• It is a strategic route for oil and a chokepoint between the Middle East and the Horn of Africa.
• It's also a vital link in the maritime trade route between the Mediterranean Sea and the Indian Ocean. About 10% of global trade passes through the Bab el-Mandeb Strait.

• Donald Tusk becomes Poland's Prime Minister recently.
• Poland is the 9^th Largest Country in Europe. It's bordered by the Baltic Sea to the north.
• The country is bordering
  • Germany to the west, the Czech Republic and
  • Slovakia to the south,
  • Ukraine and Belarus to the east, and

Lithuania and the Russian enclave of Kaliningrad to the northeast.

• 5 countries in East and southern Africa are in the middle of outbreaks of the anthrax disease recently.
• It is a serious infectious disease caused by gram-positive, rod-shaped bacteria known as Bacillus anthracis.
• It occurs naturally in soil and commonly affects domestic and wild animals around the world.

It is a zoonotic disease that can resulting in severe lung problems, difficulty breathing, and shock in humans, usually been found in India’s southern states.