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Slower consumption growth and challenging external conditions has prompted the World Bank to pare the country’s growth rate for 2023-24 to 6.3 per cent in its latest India Development Update compared with the earlier estimate of 6.6 per cent.
Rising borrowing costs and slower income growth will weigh on private consumption growth, and government consumption is projected to grow at a slower pace due to the withdrawal of pandemic-related fiscal support measures.
Consumer spending by lower-income groups is expected to be hit, weaker than the tepid FY 2022-23 outcomes, due to slower growth in their incomes, the World Bank said in the update.
Domestic demand is also likely to be curtailed by a slower increase in government consumption, which is projected to decline to 9.3 per cent as a share of GDP in 2023-24 from 10 per cent in 2022-23.
For 2022-23, the multilateral agency said growth is expected to be 6.9 per cent as against 7.7 per cent growth during the first three quarters.
According to the second advance estimates released by the National Statistical Office, the economy is estimated to grow 7 per cent in 2022-23. For 2023-24, the Economic Survey released in January-end had pegged India’s baseline growth rate at 6.5 per cent, while the Reserve Bank of India’s growth forecast for the current fiscal is 6.4 per cent.
Despite the external challenges to growth, India was one of the fastest growing economies in the world, the World Bank said. Though there were some signs of moderation in the second half of FY23, growth was underpinned by strong investment activity bolstered by the government’s capex push and buoyant private consumption, particularly among higher income earners.
In close touch with Bhutan on security: India on Doklam issue (Page no. 1)
(GS Paper 2, International Relation)
As the King of Bhutan Jigme Khesar Namgyel Wangchuck and Prime Minister Narendra Modi met in New Delhi, days after Bhutan Prime Minister Lotay Tshering raised eyebrows with his statement on China having an equal say in resolving the border dispute at Doklam, India that it follows all developments which have a bearing on its national interest “very closely” and will take all “necessary measures to safeguard them”.
Underlining that India and Bhutan share ties characterised by “trust, goodwill, mutual understanding,” Foreign Secretary Vinay Mohan Kwatra said, “India and Bhutan remain in close touch relating to our shared interest, including security interest.”
Asked whether the Doklam issue figured in the talks, Kwatra, who was briefing reporters after Prime Minister Modi met the visiting King, said, “India and Bhutan remain in close touch relating to security cooperation.”
Besides this exemplary and unique relationship that India and Bhutan have, we also have a time tested framework of security cooperation.
And as part of that, both countries maintain (a) long-standing tradition of very close consultation on matters relating to their mutual interest and of course, security also. Now, in this context, the intertwined and indivisible nature of our security concerns is self-evident.”
Editorial
Dividing and ruling the west (Page no. 12)
(GS Paper 2, International Relations)
As they deepen their strategic partnership, Russia and China hope that exploiting the divisions within the West will help them transform the global order.
The Sino-Russian dream of building a post-Western order has resonance in many parts of the world, including in Delhi. But the Indian strategic community should not hold its breath. The faultlines within the West are real, but they are by no means fatal.
This is not the first time that Moscow and Beijing have talked of upending the world order. The history of international communism in the 20th century was about building a post-Western order.
But those dreams came to nought as Russia and China got at each other’s throats and made separate compromises with the West.
Might it be different this time? As he bid goodbye to Vladimir Putin in Moscow last month, Xi Jinping talked of “once-in-a-century changes” that the two leaders were jointly heralding. Moscow and Beijing are convinced that by pooling their strengths — the former’s military/nuclear power and vast natural resources and the latter’s growing economic weight — they can put the West on the defensive.
They also bet that with geopolitical coordination of their policies in Europe and Asia, Russia and China can bury 400 years of western hegemony.
The success of this strategy rests on the Moscow-Beijing axis successfully leveraging America’s internal fissures and divisions between the US and Europe.
Ideas Page
Old policy for new trade (Page no. 13)
(GS Paper 3, Economy)
The long-awaited Foreign Trade Policy 2023 (FTP 2023) was unveiled at a time when India’s merchandise export performance is a mixed bag.
While several technology-intensive sectors are showing dynamism over the past year, with the electronics sector leading this group, labour-intensive sectors, especially the textiles and clothing sectors, are downbeat. In general, exports have been affected by a slowing global economy, and this situation could get worse if the projections for the next two years are any indication.
Given the challenges Indian exporters could be up against, FTP 2023 needed to go beyond its standard format, which has remained unchanged since the policy was introduced in 2004.
At the outset, every Foreign Trade Policy informs us that the policy is “notified by [the] Central Government, in the exercise of powers conferred under Section 5 of the Foreign Trade (Development & Regulation) Act, 1992”.
This Act empowered the Centre to “make provision for the development and regulation of foreign trade by facilitating imports and increasing exports” and to “make provision for prohibiting, restricting or otherwise regulating… import or export of goods or services or technology”.
So, the 1992 Act was set in the 20th-century mindset of regulating and restricting trade and had accordingly included trade policy instruments. The framework of trade policy in the 21st century has since moved to development and facilitation of trade, but there is no reflection of this in FTP 2023.
Instead of recasting this vitally important policy, FTP 2023 is a compilation of “Foreign Trade Procedures” in which the words, regulate, prohibit, and restrict find more mentions than “facilitate”.
Explained
With the successful test, ISRO closer to an Indian reusable launch vehicle (Page no. 15)
(GS Paper 3, Space)
On the morning of April 2, 2023, the Indian Space Research Organisation and its partners successfully demonstrated a precise landing experiment for a Reusable Launch Vehicle at the Aeronautical Test Range (ATR), Chitradurga, Karnataka.
The Reusable Launch Vehicle Autonomous Landing Mission (RLV LEX) test was the second of five tests that are a part of ISRO’s efforts to develop RLVs, or space planes/shuttles, which can travel to low earth orbits to deliver payloads and return to earth for use again.
“RLV performed approach and landing maneuvers using the Integrated Navigation, Guidance, and control system and completed an autonomous landing on the ATR airstrip at 7:40 AM IST.
With that, ISRO successfully achieved the autonomous landing of a space vehicle,” ISRO announced on Sunday morning. The experiment was carried out nearly seven years after the technology demonstration of an RLV and the first experiment was conducted successfully by ISRO on May 23, 2016, on the RLV-TD (HEX) mission.
According to ISRO, the series of experiments with the winged RLV-TD are part of efforts at “developing essential technologies for a fully reusable launch vehicle to enable low-cost access to space”.
The RLV-TD will be used to develop technologies like hypersonic flight (HEX), autonomous landing (LEX), return flight experiment (REX), powered cruise flight, and Scramjet Propulsion Experiment (SPEX).