GS Paper 3

What are Generic Drugs?

Context: The use of quality generic medicines holds plenty of promise to reduce the burden on the common man. However, India needs to ensure people have access to quality generic drugs. 

About Generic Drugs

  • Generic Drugs refer to a medication that is equivalent to a brand-name product in terms of its active ingredient, strength, dosage form, and intended use. 
  • It is marketed either by a salt or brand name. They have the same potency, quality, and implications and work in an identical manner as the branded medicine. 
  • India is the largest producer of generic drugs globally.

Need for generic drugs

Need for generic drugs
  • Reduce Out-of-Pocket Expenditure: In India, around 94 million people are pushed into poverty due to expenditure on healthcare. About two-thirds of the expenditure is incurred on medicines.
  • Accessibility, availability and affordability: It may become available once the patent on the brand-name drug expires. This allows for competition in the pharmaceutical market, which often results in lower prices for consumers. This makes generic medicines price 30% to 70% less than branded medicines.
  • Effectiveness: It works in the same way as their brand-name counterparts. They have the same intended use and are equally effective.
  • Rise in the number of fatal diseases: It has increased over the years and the cost of medicines for such diseases is very high.

Challenges to generic drugs

  • Falsified and counterfeit drugs: Due to lack of transparency in the licensing procedures of Drugs, and lack of quality facility, it has resulted in the increased supply of low-quality, spurious and substandard drugs.
    • In 2018, the Central Drug Standard Control Organization (CDSCO) identified nearly 4.5 per cent of all generic medicines in the domestic market to be substandard due to lack of testing facilities.
    • Counterfeit products have entered the supply chain with severe consequences, as seen in Gambia and Uzbekistan.
  • Absence of appropriate scientific standards: Doctors do not prescribe a generic drug due to their lack of trust in the quality available in the Indian market, which lacks scientific standards in India.
  • Lack of resources and manpower: Drug control procedures in India suffer from a lack of resources and manpower. Widespread corruption within the system makes matters worse.
  • Problem of naming a fixed-dose combination (FDC): Many fixed-dose combinations (FDCs) drugs contain even 8 or 9 Active Pharmaceutical Ingredients. To prescribe a generic name for each of the eight or nine ingredients is a very tedious and impractical task.

Government Initiatives

  • Guidelines by the National Medical Commission (NMC) make it mandatory for doctors to write generic drug names legibly and preferably in capital letters.
  • Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP): To provide quality generic medicines at affordable prices. Prices of medicines sold through these outlets are 50-90% less than that of branded medicine prices in the open market.
  • Free Drugs Service Initiative (FDSI) 2015: It was launched under the National Health Mission (NHM) on procurement of generic essential medicines at low prices, eliminating irrational medicines and unscientific fixed-dose combinations.
  • Drugs Technical Advisory Board (DTAB) has recommended that retailers should maintain a separate rack/shelf solely for the storage of generic medicines sold in the proper name.

Way Forward

  • Utilising anti-counterfeiting technologies for counterfeit drugs: Through imaging technologies, variable data printing of unique numbers or barcodes with speciality inks, including invisible inks, and with RFID.
  • Strong regulatory framework: Strengthen and enforce regulations that ensure the safety, quality, and efficacy of generic medicines. Create a clear approval process for generic drugs to enter the market.
  • Drugs Controller General of India need to work in close association with the pharmaceutical companies and local drug control authorities to combat the menace of counterfeit drugs.
  • Research and Development Support: Provide grants or incentives to pharmaceutical companies to invest in research and development of generic versions of essential medicines.
  • Pharmacy Incentives: Reward pharmacies for promoting and dispensing generic medications.
  • API Sourcing: Ensure the sourcing of APIs from reputable and approved manufacturers, preferably those that adhere to Good Manufacturing Practices (GMP) to ensure the quality of drugs. 

Nuclear option to Energy Security

Context: India is already the third-highest consumer of energy globally. Developmental aspirations of India require a manifold increase in meeting per-capita energy requirements. Further, transition to net-zero GHG emissions necessitates the rapid deployment of new nuclear energy capacity. 

Relevance of the topic:

Prelims: Nuclear Energy Production in India.

Mains: Need for Cleaner Energy Alternatives; Challenges to scaling Nuclear Energy in India.

Need for Cleaner Energy Alternatives: 

  • Increasing Energy Requirement: Total clean energy requirement to support a developed India is estimated to be around 25,000 — 30,000 TWhr/yr. This is more than four times our present energy consumption.
  • Reduce dominance of Thermal Power: Major share of India’s energy mix is thermal power, producing 73% of the electricity of India. However, coal is a non-renewable fossil fuel and leads to massive greenhouse gas emissions. 
  • Limited potential for Hydropower Expansion: India has very limited growth potential for hydropower, as scaling new projects poses concerns like- threat to biodiversity, seismological factors in fragile Himalayas, and high costs of rehabilitation and compensation to land owners.
  • Unreliability of Green Alternatives: Solar and Wind power are fairly good alternatives, but the energy generated is variable. Also, high cost is associated with Solar photovoltaic cells and storage batteries.
  • Meet Environmental Targets: India has the target to cut carbon emissions by 1 billion tonnes by 2030 and achieve net-zero emission status by 2070. India needs to diversify its energy mix and increase the share of renewable clean energy like Nuclear energy. 

Brief background: Nuclear Energy Production in India:

  • Process (Nuclear fission): It involves disintegrating a heavy atom’s nucleus, such as uranium or plutonium, into two or more smaller nuclei. This process releases a substantial amount of energy, which is harnessed and converted into steam to power a turbine that generates electricity.
  • Fuel used: U-235 (low-enriched or reactor-grade uranium)
  • Utility:
    • Addressing burgeoning electricity demand 
    • Reduce carbon dioxide emissions, and help the country transition to a cleaner energy source/fuel.
  • Present Capacity: Presently, India operates 22 nuclear reactors across eight sites, with a total capacity of 6,780 MWe. Among these 18 reactors are Pressurised Heavy Water Reactors (PHWRs) and 4 are Light Water Reactors (LWRs).

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Advantages of Nuclear Energy:

  • Clean Energy: Nuclear Energy does not produce greenhouse gases like carbon dioxide and methane, which contribute to climate change. Therefore, it is a cleaner source of energy compared to fossil fuels. 
  • High Energy Density: Nuclear power plants can produce a large amount of energy from a small amount of fuel.
    • For operating a plant like Kudankulam over a year — 1,000 megawatts at 90% PLF (plant load factor) —the requirement is only 25 tonnes of low-enriched uranium fuel. Low enrichment means below 5% (proportion of fissile uranium). 
    • Compared to a coal plant (of similar capacity) — approximately five million tonnes of coal is required. Furthermore, thermal power plants are polluting and coal produces ash. (Ash contains many heavy metals which are detrimental to the water source). 
  • Firm/Reliable Power: Nuclear power plants can run continuously for months or even years without needing to refuel, providing a reliable source of electricity.

General Concerns regarding Nuclear Energy: 

Resistance to nuclear energy is driven by fears about safety, nuclear proliferation, or some other concerns related to its use, including: 

  • Risk of Nuclear Accidents: Nuclear reactors are capable of catastrophic accidents, as witnessed in Fukushima and Chernobyl. A single nuclear disaster can contaminate large tracts of land with radioactive materials, rendering these areas uninhabitable for decades..
  • High Cost: Nuclear power plants are expensive to build and maintain and thus high cost of nuclear power can make it difficult for some countries to afford.
  • Nuclear Waste: There is no universally agreed-upon solution for the long-term storage and disposal of nuclear waste.
  • Public Perception: Due to concerns about safety and the risk of accidents, public opposition can make it difficult to build new nuclear power plants.
  • Proliferation of Nuclear Weapons: Spent Nuclear fuel can be enriched and Nuclear technology can be used to create nuclear weapons. There is particularly a concern in countries with less-than-transparent governments that can use nuclear power programs as a cover for the development of nuclear weapons.

Challenges to scaling Nuclear Energy in India: 

  • Availability of Fuel: India does not have large reserves of natural Uranium and must import much of its nuclear fuel from other countries. This can make it difficult to plan for and maintain a stable supply of fuel, which in turn can limit the growth of the nuclear energy industry. 
  • Limited contribution to Energy Mix: Presently, India has 22 nuclear reactors in operation at seven plants, as well as eight reactors under construction. Nuclear power is around 2% of India’s installed and generated power.
  • Government Monopoly: One of the major reasons that the growth of nuclear power is hindered is due to the Government monopoly in the nuclear energy sector (all reactors are operated by the Nuclear Power Corporation of India Limited). 
  • Nuclear Liability:
    • India's nuclear liability laws have also been a barrier to the growth of the nuclear energy industry. India’s strict liability laws place the burden of compensation for nuclear accidents on the plant operator, which can deter private companies from investing in nuclear power. 
    • Also, according to the Civil Liability for Nuclear Damage Act, 2010, the liability can be shifted from the operator to the vendor or supplier in case the accident is due to equipment or material. This was the reason nuclear companies pulled out of India, made it difficult to attract foreign investment in the industry and limited the growth of the sector. 

E.g., Nuclear liability continues to be the major issue behind why the deal to install French European Pressurised Reactors at Jaitapur, Maharashtra has not made progress.

  • Regulatory Environment: India's regulatory environment for nuclear power is still evolving, and there is a need for clear and consistent regulations to govern the industry. This includes regulations related to safety, security, and waste management.

Way Forward:

  • Expansion of Indigenous Nuclear Reactors: 
    • Indigenous 700 MW PHWR, the first unit of which is already in commercial operation at the Kakrapar Atomic Power Project in Gujarat, should be the prime workhorse for base load electrical capacity addition. Fifteen more such units are already under construction in fleet mode. 
  • Build indigenous Small Modular Reactors (SMRs) at a large number of sites by retiring old thermal power plants.
  • Speed up Second and Third-stage Nuclear-Power Programme development to unleash thorium energy potential in accordance with the pre-existing plans for long-term sustainable energy supply.
  • Phased induction of other public sector companies like National Thermal Power Corporation (NTPC) to get into the Nuclear Power sector. Amendment of the Atomic Energy Act1962 to allow the private sector to set up SMRs.
    • Given the strategic importance of the sector, the government has kept the private players out of the ambit of operation and fuel management for nuclear power generation.
  • Utilising bilateral co-operation frameworks for extending cooperation in the Civil-Nuclear Energy Sector. (E.g., India-US Nuclear Cooperation Agreement, 2008)

India needs a National Programme guided by bold policy support that provides a level playing field for nuclear energy on par with renewable energy.

What is Rail Gauge?

Rail gauge is a fundamental concept in the railway industry. It refers to the spacing of the rails on a railway track and is measured between the inner faces of the load-bearing rails.

Rail Gauge

The gauge determines the width and stability of the railway track, which in turn impacts the size and design of the rail vehicles that can operate on the track.

Over 60% of the world's railway network uses the standard gauge of 1435 mm.

India has four distinct kinds of railway gauges:

  • Broad gauge
  • Meter gauge
  • Narrow gauge
  • Standard gauge (specifically used for the Delhi Metro)
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Broad gauge:

  • Broad gauge is a railway track configuration where the separation between the two tracks in these railway gauges is 1676 mm.
    • Any gauge above the conventional gauge measurement of 1,435 mm is often referred to as a broad gauge. 
  • The first railway line constructed in India was a wide gauge track from Bore Bunder (now known as Chhatrapati Shivaji Terminus) to Thane in the year 1853. 
  • The use of broad-gauge railway systems is also seen at port facilities for the purpose of accommodating cranes and other related equipment. 
  • Thicker gauges provide enhanced stability and surpass thinner gauges in terms of performance.

Meter gauge:

  • The separation between the two tracks is 1,000 mm. 
  • The installation of meter-gauge lines was undertaken with the objective of minimising expenses. 
  • Under the Unigauge project, it is planned to convert all meter gauge lines in India, except the Nilgiri Mountain Railway (a historical railway operating on a meter gauge) into a wide gauge.

Narrow gauge:

  • The smaller gauge is sometimes referred to as a narrow gauge or little line. 
  • The narrow-gauge railway refers to a kind of railway track characterised by a distance of 762 mm and 610 mm between the two tracks. 
  • The Darjeeling Mountain Railway was officially designated as a UNESCO World Heritage site. 
  • The Kalka Shimla Railway is well recognised and has significant popularity.

Standard gauge:

  • The railway gauge in question exhibits a distance of 1435 mm between its two tracks. 
  • In the context of rail transportation systems in India, it is observed that the standard gauge is only used for urban rail transit systems such as Metro, Monorail, and Tram, the only standard gauge railway line in India was the Kolkata (Calcutta) tram system. 
  • In metropolitan regions, it is preferable to construct metro lines only using the standard gauge due to the greater accessibility of rolling equipment for this gauge, as opposed to the Indian gauge.

Evidence-based Traditional Medicine

Context: Outrightly denying traditional medical systems would be a hasty dismissal of valuable medical experience and a disservice to the scientific attitude. India needs to work on evidence-based traditional medicine. The acceptability of traditional medicines in the scientific community would increase if evaluated by the methods of modern science in a way that does not compromise with the wholeness of Ayurvedic formulations. 

Evidence-based medicine vs traditional medicine

  • Evidence-Based Medicine (EBM): EBM is based on the integration of the best available scientific evidence, clinical expertise, and patient preferences and values. It is based on empirical data rather than anecdotal evidence. 
  • Traditional Medicine: Rooted in tradition and experience, traditional medicine is based on long-standing practices passed down through generations. It may include herbal remedies, cultural rituals, and practices.
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Reasons for non-development of alternate medicine in India

  • Lack of scientific validation: Alternative medicine is often not based on scientific evidence or rigorous testing. Without proper scientific validation, it can be difficult for alternative medicine to gain acceptance in the medical community and among the general public. 
  • Limited government support: While India has a rich tradition of alternative medicine, government support for research and development in this field, in the past has been limited, which has hindered the growth of alternative medicine. E.g., Lack of dedicated funding mechanisms for research and development of alternative medicine. 
  • Competition from conventional medicine: Conventional medicine, including modern pharmaceuticals, is highly developed and widely accepted in India. This has made it difficult for alternative medicine to gain a foothold and compete in the marketplace.
  • Lack of standardisation: Unlike conventional medicine, which is highly standardised and regulated, alternative medicine often lacks standardisation. This can lead to inconsistencies in the quality and efficacy of alternative treatments, which can undermine public confidence in these therapies.
  • Scepticism among medical professionals: Some medical professionals remain sceptical about the efficacy of alternative medicine, particularly when it comes to treating serious or life-threatening conditions. 

Recent developments

  • The government has established the Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homoeopathy (AYUSH) to promote the integration of traditional Indian medicine with modern medicine. 
  • In May 2023, a Memorandum of Agreement was signed between the Indian Council of Medical Research (ICMR) and the Ministry of AYUSH for collaboration and cooperation in health research in the field of Integrated Medicine. 
  • Integrated medicine in India refers to the practice of combining traditional Indian medicine systems, such as Ayurveda, Yoga, Unani, Siddha, and Homeopathy (AYUSH), with modern medicine. 
  • Aim: To provide patients with a holistic approach to healthcare that takes into account physical, mental, emotional, and spiritual aspects of health. By combining different therapies, healthcare providers can tailor treatment plans to individual patients.
  • The Ministry of AYUSH and ICMR have joined hands to undertake quality human clinical trials to generate evidence on the benefits of using Ayurveda along with modern medicine (evidence-based medicine) in treating certain disease conditions of national importance.
    • ICMR will design and conduct these trials as it holds decades of experience in conducting human clinical trials. In the initial phase, the collaboration will be restricted to Ayurveda. 
    • Yoga, Unani, Siddha and Homoeopathy may be included in future and each system will be tested together with modern medicine.

Significance of the fusion of the traditional Indian medicine system with modern medicine: 

The recent COVID-19 Pandemic has underscored the importance of AYUSH thus calling for its revival and fusion with modern medicine to build a holistic health system, which provides: 

  • Comprehensive care: Traditional Indian medicine, such as Ayurveda, focuses on a holistic approach to health and wellness. This means that it considers the individual as a whole, including physical, mental, and emotional factors. By combining this approach with modern medicine, patients can receive more comprehensive and personalized care.
  • Accessibility: Traditional Indian medicine is often more accessible and affordable than modern medicine. By incorporating these therapies into modern healthcare systems, it reduces out-of-pocket expenditure. 
  • Innovation: By combining traditional Indian medicine with modern medicine, new and innovative treatments can be developed, which can lead to better healthcare outcomes for patients and advances in medical research.
  • Overcome the challenge of doctors’ shortage: The existing doctor-patient ratio in India is 1:1700 and the ratio improves to around 1:800 (below the WHO’s mandate of 1:1000) with the integration of the AYUSH practitioners.
  • Help tackle multidrug-resistant diseases such as tuberculosis, lifestyle disorders and long-term diseases. It can reduce the growing burden of non-communicable diseases such as cardiovascular diseases- The WHO Report highlights that non-communicable diseases account for 63% of deaths in India. 
  • Reduces the pollution in the manufacturing and waste management of allopathic medicine. 

Steps to build a holistic health system:

  • Invest in research and development of AYUSH for integration with modern medicine.
  • Update curriculum in medical courses to integrate traditional Indian medicine system with modern medicine.
  • Introduce bridge courses for AYUSH practitioners and health professionals for interdisciplinary learning.
  • Co-locate AYUSH facilities in hospitals and primary health centres.
  • Build awareness in the Public about the benefits and limitations of integrated medicine through public health campaigns, community outreach programs, and partnerships with traditional healers and practitioners. 

Net Interest Margin (NIM)

Context: Banks are likely to see a reduction in their net interest margins (NIM) in the second quarter of the current fiscal due to higher cost of deposits.

Important Terms

  • Bank balance sheet tells us about the assets, liabilities, and bank capital for an individual bank. The balance sheet is identified as: (Assets = Liabilities + Capital)
  • Assets are items that the bank owns. This includes loans, securities, and reserves. 
  • Liabilities are items that the bank owes to someone else, including deposits and bank borrowing from other institutions. 
  • Capital is sometimes referred to as “net worth”, “equity capital”, or “bank equity”. Bank capital are funds that are raised by either selling new equity in the bank, or that come from retained earnings (profits) the bank earns from its assets net of liabilities. 
  • Net Interest Margin (NIM): It is the difference between the interest earned and the interest paid by a bank.

Bima Vahaks launched by IRDAI

Context: The Insurance Regulatory and Development Authority of India (IRDAI) issued guidelines on Bima Vahaks.

Need for Insurance in India

Need for Insurance in India
  • Missing Middle: 30% of the eligible population constitute the ‘missing middle’ are deprived of the facilities of financial aid and insurance.
  • Protection Gaps: There are huge protection gaps that need to be bridged as about 50% of vehicles are uninsured in addition to minuscule coverage of property insurance. Additionally, the MSMEs are also inadequately covered by insurance products.

Bima Trinity will include three components

  • Bima Sugam:
    • Platform to integrate insurers and distributors on to one platform. 
    • It will enable easy access under a single roof for insurance companies, agents, brokers, banks and aggregators. It will further enable individuals to buy life, health, motor or property insurance policies online. 
    • The platform is a centralised database that acts as a one-stop shop for customers, who at a later stage can pursue service requests and settlement of claims through the same portal.
  • Bima Vistar: It aims to provide ‘affordable, accessible and comprehensive cover’ in the form of a bundled risk cover for life, health, property and casualties or accidents. 
  • Bima Vahaks:
    • It is a women-centric, dedicated distribution channel to enhance insurance inclusion with a focus on rural areas. 
    • Each Gram Panchayat would have a ‘Bima Vahak’ who would be tasked to sell and service insurance products. 
    • It aims at identifying and developing resources locally who understand and appreciate local needs and enjoy the trust and confidence of the local population of their village/gram panchayat.  

Type 096: China’s Advanced Nuclear Armed Submarines

Context: According to a US report, China is equipping its nuclear-powered ballistic missile submarines with advanced JL-3 submarine-launched ballistic missiles (SLBMs) along with Type 096, the country’s next-generation ballistic missile submarine, that are capable of targeting the continental United States.

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About Type 096: 

  • Type 096 is a class of nuclear powered ballistic missile submarines.
  • It will be armed with the JL-3 Nuclear capable Submarine Launched Ballistic Missile (SLBM). JL-3 is reported as a solid-fueled missile with ranges of over 9,000 km or 10,000 km .
  • Type 096 is the third-generation Sub-surface ballistic nuclear (SSBN) submarine. 
    • SSBNs perform a specialised mission of strategic nuclear deterrence.
    • To perform this, SSBNs are armed with submarine-launched ballistic missiles (SLBMs), which are large, long-range missiles armed with multiple nuclear warheads.
  • It has a large pressure hull diameter to incorporate more sound isolation.
  • It will complement the existing Type 094 Jin class SSBN. Type 096 are rumoured to be able to carry 24 SLBMs, compared to the 12 of the existing Type 094 Jin class SSBN.

What is multimodal Artificial Intelligence?

Multimodal AI is an advanced form of Artificial Intelligence that can analyse and interpret multiple modes of data simultaneously, allowing it to generate more accurate and human-like reasoning and decision-making.

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Traditional Unimodal AI vs Multimodal AI:

The fundamental difference between multimodal AI and traditional singlemodal/unimodel AI is the use of data. 

  • Unimodal AI is generally designed to work with a single source or type of data. E.g., Unimodal AI system like ChatGPT uses natural language processing (NLP) algorithms to understand and extract meaning from text content, and the only type of output the chatbot can produce is text. That is, the unimodal AI is tailored to a specific task.
  • Multimodal AI processes data from multiple sources, including video, images, speech, sound and text, allowing more detailed and nuanced perceptions of a particular environment or situation. In doing this, multimodal AI more closely simulates human perception and enhances the accuracy of AI systems. 

E.g., SeamlessM4T, launched by Meta, is a multimodal AI translation and transcription model that is capable of performing various tasks including speech-to-text, speech-to-speech, text-to-speech, and text-to-text translations.

Advantages:

  • Improved accuracy: By leveraging information from multiple sources, multimodal AI can achieve higher accuracy compared to singlemodal AI. E.g., Any system that analyses customer feedback for a product, combining text, image, and audio data can provide more comprehensive understanding of customer sentiment.
  • Enhanced user experience: Multimodal AI can enhance user experience by providing multiple ways for users to interact with the system. E.g., Users can interact with a multimodal virtual assistant system using voice, text, or gesture, providing greater convenience and accessibility.
  • Efficient usage of resources: Multimodal AI can help to make more efficient use of computational and data resources by enabling the system to focus on the most relevant information from each modality. This would help reduce the amount of irrelevant data that needs to be processed.
  • Better interpretability: Multimodal AI can help to improve interpretability by providing multiple sources of information that can be used to explain the system's output. E.g., Any system that analyses medical images for the diagnosis, combining images with textual descriptions and other data can help to explain the reasoning behind the system's diagnosis and provide more transparency and accountability.

Applications of Multimodal AI:

  • Healthcare: Multimodal AI can help improve medical imaging analysis, disease diagnosis, personalised treatment planning and better patient outcomes. E.g., By combining medical images with patient records and genetic data, healthcare providers can gain more accurate understanding of patient’s health, enabling them to tailor treatment plans. 
  • Retail: In retail, it can be used to enhance customer experience and increase sales. By utilising user behaviour data, product images, and customer reviews, retailers can provide personalised recommendations and optimise product searches. 
  • Agriculture: Multimodal AI can help monitor crop health, predict yields, and optimise farming practices. By integrating satellite imagery, weather data, and soil sensor data, farmers can gain deep insights into crop health and optimise irrigation and fertilizer application.
  • Manufacturing: Multimodal AI can be leveraged to improve quality control, predictive maintenance, and supply chain optimisation.
  • Robotics: Multimodal AI is central to robotics development using which robots could successfully interact with real-world environments. 
  • Entertainment: Multimodal AI algorithms can be used to extract features about emotions, speech patterns, facial expressions, and actions which can create content targeted for specific demographics. 

Multimodal AI challenges:

  • Data Storage: The data sets needed to operate a multimodal AI, involve a huge variety of data (text, images, audio, video). Such data volumes are expensive to store, and costly to process. 
  • Data integration: Combining and synchronizing different types of data can be challenging because the data from multiple sources will not have the same formats. Ensuring the seamless integration of multiple modalities and maintaining consistent data quality can be difficult and time-consuming.
  • Data bias: Data bias and maintaining data integrity can be a problem in training the AI model. 

Read also: ChatGPT and Open AI

Sri Lanka get chairmanship of Indian Ocean Rim Association

Context: Sri Lanka has taken over the chairmanship of the Indian Ocean Rim Association. 

About Indian Ocean Rim Association (IORA)

  • It is an intergovernmental organisation of states on the rim of the Indian Ocean.
  • It was established in 1997 with an aim to strengthen regional cooperation and sustainable development within the Indian Ocean region.
  • IORA’s apex body is the Council of Foreign Ministers (COM) which meets annually.
  • Council of Ministers has established a ‘Troika’ consisting of the chair, vice-chair and previous chair.
  • Members of IORA: Australia, Bangladesh, Comoros, France, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Maldives, Mauritius, Mozambique, Oman, Seychelles, Singapore, Somalia, South Africa, Sri Lanka, Tanzania, Thailand, United Arab Emirates and Yemen.
  • All sovereign States of the Indian Ocean Rim are eligible for membership of the Association.
  • To become members, States must adhere to the principles and objectives enshrined in the Charter of the Association.
  • The Secretariat of the IORA is hosted by the Government of the Republic of Mauritius, which is based in Cyber City, Ebène, Mauritius.
  • Note: Pakistan is not a member of IORA.

Priority and focus area of IORA

  • Maritime safety & security
  • Trade & investment facilitation
  • Fisheries management
  • Disaster risk management
  • Tourism & Cultural exchanges
  • Academic, science and technology cooperation
  • Blue economy
  • Women’s economic empowerment

Flagship Projects of IORA

  1. Indian Ocean Dialogue (IOD): It is a standalone Track 1.5 discussion encouraging an open and free flowing dialogue by key representatives of IORA Member States such as scholars, experts, analysts and policymakers from governments, think tank and civil societies on a number of crucial strategic issues of the Indian Ocean Region. The first IOD meeting took place in Kerala, India in 2014.
  2. IORA Sustainable Development Program (ISDP): This initiative of IORA aims to assist least developed countries that require assistance and support to conduct projects, with the purpose to promote sharing experiences and best practices among IORA member states.

Bharat NCX 2023

Context: National Security Council Secretariat is going to organise the 2nd edition of National Cyber Security Exercise ‘Bharat NCX’ for Government organisations, Public and Private sector to strengthen India’s cyber posture.

About Bharat NCX 2023

  • Bharat NCX is India’s National Cyber Security Exercise to be conducted over a period of 12 days in October 2023.
  • It aims to train senior management and technical personnel of Government/Critical Sector organisations, Public and Private agencies on contemporary cyber threats and handling cyber incidents and response.
  • Conducted by National Security Council Secretariat (NSCS) in partnership with Rastriya Raksha University (RRU).
  • Participants will be trained in cyber-security areas like Intrusion Detection Techniques, Malware Information Sharing Platform (MISP), Vulnerability Handling & Penetration Testing, Network Protocols & Data Flows, Digital Forensics etc.

Critical cyber security concerns

  • Protection of digital public infrastructure
  • Security of hardware involved in cyber infrastructure
  • Post quantum cryptography and need to become quantum safe
  • Evolving a collective vigilance to protect digital assets
  • Development of workforce adept in cyber-security

Monetary Policy Committee (MPC) Meeting of October 2023

Context: The RBI’s Monetary Policy Committee (MPC) has kept the policy rates unchanged at 6.5% in its recent meeting. 

Decision of MPC

No change in Policy Rate (Repo Rate) 

Policy Stance: Withdrawal of Accommodation

  • An accommodative stance means the central bank is prepared to expand the money supply to boost economic growth. 
  • Withdrawal of accommodation will mean reducing the money supply in the system which will rein in inflation further. 

Reasons for Status Quo

  • Incomplete Monetary Policy Transmission: RBI slashed the Repo rate by 250 basis points since May 2022. However, these policy signals are not adequately reflected by corresponding reduction in interest rates by the banks.
  • Uncertainty Around Inflation: Headline inflation is still above the statutorily mandated rates due to uneven monsoon and its impact on kharif crops, rising consumption demand amid high food inflation and rising crude oil prices.
  • Surplus Liquidity in the Banking System: Improvement in systemic liquidity due to deposit of Rs. 2000 currency notes.

Other Developmental and Regulatory Decisions

  • Extension of Payments Infrastructure Development Fund (PIDF) Scheme:
    • PIDF was operationalised with an objective to incentivise the deployment of payment acceptance infrastructure in less developed areas. 
    • With extending this scheme by two years and expanding the ambit by including beneficiaries of PM Vishwakarma Scheme, the decision will provide fillip to the RBI’s efforts towards promoting digital transactions at the grassroots level. 
  • Introduction of New Channels for Card-on-File Tokenization: 
    • Tokenization has improved transaction security and transaction approval rate and it can only be created through a merchant's application or webpage. 
    • By enabling CoF token creation facilities directly at the issuer bank level, this measure will enhance convenience for cardholders to get tokens created and linked to their existing accounts with various e-commerce applications. 

Services Sector Led Growth: Reasons, Challenges and Strategies

Context: Indian economy has experienced good growth over the last two decades primarily due to the contribution of service sector. The service exports are more than $300 billion forming around 40% of total exports. The service exports have evolved both in terms of their size and composition over the time. In this context, let us discuss how the service sector is contributing to India’s GDP and exports , its significance to the overall economy , the challenges faced by the sector and strategies to be adopted. 

With a share of 55% to GDP and 30% to employment, Services sector remains major driver of Indian Economy. India’s services sector covers a wide variety of activities such as trade, hotel and restaurants, transport, storage and communication, financing, insurance, real estate, professional services, Tourism etc. 

Significance of the service sector

  • Major Driver of Indian Economy as it accounts for 55% of India's GDP.
  • Promotes development of Manufacturing sector by providing services such as logistics, banking, electricity, communication etc.
  • Promotes development of Agricultural sector by providing extension services, marketing services etc.
  • Enhances Total factor productivity of the economy by providing technological services and enhancing efficiency of workers.
  • Promotes Ease of Living by providing services such as Education, Health, Banking, Insurance, Telecommunication, Transportation etc.
  • Promotes Integration of Indian Economy with Global Economy: For example, India is among the Top 10 exporter of services with global share of 4%. Similarly, services account for 40% of exports.

Reasons for growth in service sector

  • Structural Transformation: India has leap frogged from Agriculture to Services sector. Since 1991, the share of manufacturing sector has remained stagnant at 16- 17% of GDP. Hence, decline in share of agriculture sector is accompanied by commensurate increase in share of services sector. 
  • LPG Reforms offered more opportunities for the development of services sector particularly in the field of Banking, Insurance, Telecommunication, Aviation, Transportation etc. For example, sectors that were opened for private sector participation experienced faster growth. 
  • Technological Advancements led to rapid development of IT/ITeS, BPO, Financial services etc. Similarly, Industrial Revolution 4.0 is also based upon adoption of new- age technology such as AI, ML, Big Data etc. 
  • Structural changes in Agriculture and Manufacturing which has led to increased demand for services such as Transport, Storage, Warehousing, Trade, Banking, Insurance etc. 
  • Trade Integration has enabled India to become Top 10 exporter of Services with global share of 4%. Similarly, services account for 40% of exports. 
  • Proactive Government policies such as Services Export from India Scheme, Digital  India Program, PMJDY, Ayushman Bharat, PM Kaushal Vikas , UPI, Open  Network for Digital Commerce etc. 

Challenges

  • Low employment potential of service sector: Despite being the major contributor towards overall economic growth of the country, service sector offers little to the employment. This is primarily because:
    • Increasing service output is predominantly due to increased volume of trade, primarily due to high volume of Indian imports, which has low employment potential. E.g., Imports of goods and services to percentage of GDP in India increased from 13.9% in 2000 to 26.9% in 2022.
    • Although tourism services offer prospects for job creation, the segment is plagued by infrastructural issues and its potential remains untapped.
    • Growth of IT/ITeS is mainly due to increased labour productivity and technological revolution.
    • Even the segments like Real-estate offer low-skilled, low-paid and seasonal employment.
  • Uneven growth of different sub-sectors: Services sector is mainly dominated by IT- BPM and Financial services, while other sub-sectors such as Tourism, Transportation, Communication have registered lower growth.
  • Market access barriers imposed by other countries in the form of lack of market access to India's service exports, restrictions on free movement of Indian professionals, Visa restrictions, withdrawal of GSP benefits etc.
  • Free Trade Agreements (FTAs)/CECAs: As highlighted by Surjit Bhalla Committee on FTAs, India has failed to capitalise on its strengths in services sector to boost exports to FTA partner countries.

Sector specific issues

  • IT-BPM / Software Sector: Tightening of Visa regime, Global slowdown, Higher skill sets, Increased competition from Latin American countries etc.
  • Banking: Dominance of PSBs; Political interference in working of PSBs; High NPAs etc.
  • Real Estate services: Delay in approvals of permits; high land registration costs including stamp duty; rising debt levels and NPAs; lack of skilled workforce.
  • Tourism: Poor Infrastructure and connectivity, Lack of basic amenities, Safety and security etc.

Way Forward

A ‘Services from India” initiative on the lines of ‘Make in India’ is needed to strengthen our services sector. There is also a need to make the Service Export Promotion Council (SEPC) more active.

This council should also network with the Indian missions abroad to boost exports. At the same, India's FTAs need to be renegotiated to its advantage to provide fillip to services sector.