Content:
- India’s real growth rate and the forecast
- The multiple layers of the Gaza ceasefire
- Script reading
India’s Real Growth Rate and The Forecast
Context : First Advance Estimates (FAE) for 2024-25
- Real GDP Growth: Estimated at 6.4%, slightly below the RBI’s revised estimate of 6.6%.
- Nominal GDP Growth: Projected at 9.7%, lower than the Union Budget’s estimate of 10.5%.
- Half-Yearly Growth:
- First half: 6%
- Second half: 6.7%, indicating improvement over Q2 growth of 5.4%.
- Decline from Previous Year: Real GDP growth dropped from 8.2% in 2023-24 to 6.4% in 2024-25, driven largely by slower manufacturing sector growth (5.3% vs. 9.9% in 2023-24).
Relevance : GS 3(Indian Economy)
Practice Question : Evaluate the reasons for the projected decline in India’s GDP growth rate in 2024-25 and discuss the medium- to long-term prospects for the Indian economy. (250 words)
Government Expenditure and Investment
- Capital Expenditure:
- Budgeted Target: ₹11.1 lakh crore
- Achieved in First 8 Months: ₹5.14 lakh crore (46.2%)
- A shortfall in government investment has significantly impacted overall GDP growth.
- Importance for Growth: Sustained and accelerated capital expenditure is critical for:
- Boosting private investment.
- Driving domestic demand in the face of global uncertainties.
Growth Forecast for 2025-26
- Real GDP Growth: Likely to stabilize at 6.5%, assuming:
- Gross Fixed Capital Formation (GFCF) rate remains around 33.4%.
- Incremental Capital Output Ratio (ICOR) at 5.1.
- Global Economic Environment: Uncertainty persists, necessitating reliance on domestic demand.
- Capital Expenditure Growth: Needs to sustain at 20%+ to support private investment and long-term growth.
Medium- to Long-Term Projections
- Real GDP Growth: Steady rate of 6.5% over the next five years.
- Nominal GDP Growth: Estimated at 10.5%-11%, with inflation around 4% (based on the implicit price deflator).
- Developed Country Status: Achievable in 2.5 decades if:
- Growth remains steady.
- Exchange rate depreciation averages 2.5% per annum.
- Challenges: Increasing base effect makes higher growth rates difficult in later years.
Reason for 2024-25 Dip
- Slower government capital expenditure growth.
- Impact of global uncertainties on exports and investments.
- Transition from the high growth rate of 8.2% in 2023-24 (an outlier year).
The Multiple Layers of the Gaza Ceasefire
Context: Announcement of the Ceasefire
- Timing: Declared on January 15, 2025, to take effect from January 19, just before President-elect Donald Trump’s inauguration.
- Central Element: Exchange of Israeli hostages and Palestinian prisoners forms the core of the agreement.
- Mediating Role: Qatar facilitated the negotiations, reflecting its long-standing involvement in regional diplomacy.
Relevance : GS 2(International Relations )
Practice Question : Examine the key factors contributing to the recent Gaza ceasefire agreement and analyze its implications for regional stability and international geopolitics.
(250 words)
Context of the Ceasefire
- Prolonged Conflict: The ceasefire ends over 15 months of intense conflict following the October 7, 2023, Hamas terror attack.
- Civilian Impact: Gaza faced extensive destruction, with significant civilian casualties and humanitarian crises.
- Hamas Statement: Claimed responsibility for securing the ceasefire to stop “Zionist aggression” and end “genocide.”
Role of U.S. Leadership
- Trump-Biden Coordination: Unusual bipartisan effort between outgoing President Joe Biden and incoming President Trump to broker the deal.
- Political Motives:
- Trump: Aimed to showcase American strength and deliver on campaign promises.
- Biden: Attempted to bolster his legacy through a major foreign policy achievement.
Israel’s Strategic Calculations
- Netanyahu’s Position:
- Historically advocated for complete victory over Hamas.
- The deal marks a shift in his approach, potentially seen as a political compromise.
- Political Cost: Netanyahu risks domestic backlash for negotiating with Hamas without achieving total military objectives.
- Message to Trump: Signals cooperation and resolve, likely anticipating future U.S. support under Trump’s leadership.
Hamas and the Broader Palestinian Dynamics
- Diminished Capabilities: Leadership decapitation operations weakened Hamas and Hezbollah.
- Recruitment Trends: U.S. assessments indicate Hamas has recruited militants at a pace matching its losses.
- Political Stagnation:
- Hamas remains the dominant force in Gaza.
- Lack of efforts to integrate Hamas into a broader Palestinian political framework undermines prospects for peace.
Persistent Challenges
- Two-State Solution: Both Hamas and Israel oppose the two-state solution despite global advocacy.
- Fragile Status Quo:
- Ceasefire may be temporary, as Hamas is likely to resume hostilities.
- Netanyahu could leverage future Hamas attacks to justify renewed military action with Trump’s backing.
Humanitarian and Rebuilding Efforts
- Critical Aid: Immediate focus on addressing food and medical shortages in Gaza.
- Rebuilding Gaza:
- Premature without political reforms in Palestinian governance.
- Opportunity for Arab powers to reshape and strengthen the Palestinian Authority.
Role of the International Community
- Sustainability of Ceasefire:
- International actors must ensure the deal remains effective and enforceable.
- Stability in Gaza is pivotal for broader regional prosperity.
- Geopolitical Implications:
- Momentum could impact initiatives like the India-Middle East-Europe Economic Corridor and the Abraham Accords.
- Saudi-Israel normalization prospects hinge on a stable ceasefire.
Strategic Takeaways
- Regional Influence: Arab states and regional powers must lead efforts to stabilize Palestinian politics.
- Long-Term Peace: Lasting peace remains elusive without addressing core issues like sovereignty, governance, and mutual recognition.
- Global Cooperation: The ceasefire underscores the need for a concerted international push toward conflict resolution in West Asia
Script Reading
Context :
- Indus Valley Civilization (IVC): Flourished during 3000–1500 BCE, spread across modern-day India, Pakistan, and Afghanistan.
- Urban Sophistication: Comparable to Mesopotamia, Egypt, and China in complexity and urban planning.
- Discovery Milestone: John Marshall, in 1924, brought global attention to the IVC through his archaeological findings.
Relevance : GS 1(Culture , Heritage)
Practice Question : The decipherment of the Indus Valley script remains one of the greatest puzzles in history. Discuss the challenges faced in decoding the script and its potential implications for understanding the cultural and linguistic history of the region.(250 words)
The Puzzle of the Indus Script
- Unresolved Script: The script on seals and tablets remains undeciphered despite significant archaeological discoveries.
- Western Criticism: Some scholars argue the symbols do not constitute a formal writing system but are instead proto-symbolic notations.
- Conflicting Theories:
- Literate Society: Advocates suggest the IVC was highly literate.
- Proto-Dravidian Roots: A school of thought links the script to non-Aryan and pre-Aryan proto-Dravidian systems.
Tamil Nadu’s Initiative
- Prize Announcement: Tamil Nadu Chief Minister M.K. Stalin announced a $1-million reward for deciphering the script.
- Cultural Significance: The initiative reflects Tamil Nadu’s belief in a possible proto-Dravidian connection to the Indus script.
- State-Supported Research: Studies on Tamil Nadu’s Indus signs, graffiti marks, and Tamili inscriptions aim to shed light on potential linguistic links.
Challenges in Deciphering
Database Accessibility:
- Limited public access to the seals’ complete database hampers collaborative research.
- Need for transparency and open databases with contextual details.
Scholarly Independence:
- Research must remain free from political interference to ensure unbiased findings.
Regional Collaboration:
- South Asiancountries must work together to pool resources and expertise.
- Political tensions may obstruct collaborative efforts, delaying breakthroughs.
Potential Benefits of Decipherment
- Historical Insight: Would offer a deeper understanding of the IVC’s societal structure, governance, and economy.
- Cultural Identity: Clarifying linguistic roots could strengthen historical and cultural identities in South Asia.
- Global Relevance: A successful decipherment would elevate the IVC’s significance in global archaeological studies.
