Daily Current Affairs and News Analysis 01-02-2025

Financialization

• Financialisation Defined: Increasing influence of financial motives, markets, and institutions in domestic and international economies. Shift from traditional industrial activities to trading, management, and speculation of financial assets.

• Economic Survey 2024-25 Warning: Excessive financialisation can harm the economy, especially for low-middle-income countries like India.

• Impact on Resource Allocation: “Over-finance” can lead to competition between the financial sector and the real sector for resources, including skilled labor, depriving the real economy.

• Complex Products & Hidden Risks: Excessive financial engineering can create complex products with hidden risks, potentially leading to financial crises like the 2008 crisis.

• Distorted Investment: Favors projects with high collateral but low productivity (e.g., construction), leading to unsustainable financial booms.

• Risks: Distorts economic investment, reduces capital-labor dependence, erodes social contract, increases income inequality and wage stagnation.

• Hyper-financialization: Extreme stage where financial markets dominate, making traditional productive activities secondary.

• Measuring Financialisation: Assessed by proportion of industrial employment, output, and profits.

• Negative Consequences: Excessive private credit growth can reduce productivity.

• Positive Aspects (if well-managed): Reduces transaction costs, facilitates price discovery, channels capital into innovation, reduces poverty/inequality, aids consumption smoothing.

• Tipping Point: Financial development can hinder economic growth if excessive.

Microplastic Pollution

Here are the key news points regarding microplastics:

• Delhi Groundwater Contaminated: A government-commissioned study detected microplastics in groundwater samples across all 11 districts of Delhi. This marks the first such finding in the capital’s groundwater.
• Yamuna River as Source: Microplastics were also found in the Yamuna River and its soil, suggesting the river is a source of contamination leaching into the groundwater.
• Health Concerns: A 2021 UNEP report warns of potential health impacts of microplastics, especially in women, including effects on genetics, brain development, and respiration.
• Existing Treatment Inadequate: Current water treatment systems in Delhi cannot effectively filter out microplastics.
• Toxicity Amplification: Microplastics can adsorb other chemicals, increasing their overall toxicity.
• Multiple Exposure Routes: Humans can be exposed to microplastics through inhalation, ingestion (water and food), and skin absorption.
• Widespread Presence: Microplastics have been found in human organs and even in the placenta of newborns.
• Study Details: The study, awarded to TERI, is ongoing. Results from pre-monsoon samples have been analyzed, and post-monsoon data will be assessed.
• Call for Transparency: Experts urge the Delhi government to release the study findings publicly to aid further research.
• Microplastic Definition: Microplastics are plastic particles or fragments less than 5 mm in diameter, originating from both intentional manufacturing (primary) and the breakdown of larger plastics (secondary).
• Source of Microplastics: Source of Microplastics include Synthetic textiles, city dust, tires, road markings, marine coatings, personal care products and engineered plastic pellets.
• Bans: The Netherlands was the first country to introduce a ban on microbeads in cosmetic products in 2014. Several countries, including Australia, Canada, Italy, Korea, New Zealand, Sweden, the UK and the US have followed suit.
• India: There is currently no regulation of microbeads in India , although the plastic waste management rules are regularly amended and there are some bans on single use plastic.

Ahilya Holkar

• IGNCA Lecture on Ahilyabai Holkar: The Indira Gandhi National Centre for the Arts (IGNCA), in collaboration with the Lokmata Ahilyabai Trishatabdi Samaroh Samiti, held a special lecture on Devi Ahilyabai Holkar, titled ‘Devi Ahilya – Empress Renunciate’.

• Speaker: Prof. Uma Vaidya, former Vice-Chancellor of Kavikulaguru Kalidas Sanskrit University, delivered the lecture, focusing on Ahilyabai’s social, cultural, and administrative contributions.

• Dignitaries Present: The event was chaired by Padma Vibhushan Dr. Sonal Mansingh, with Dr. Sachchidanand Joshi and Prof. ShashiPrabha Kumar also in attendance.

• Ahilyabai as “Empress Renunciate”: Prof. Vaidya highlighted Ahilyabai’s selfless use of power for the welfare of her people.

• Courage and Foresight: Dr. Sonal Mansingh emphasized Ahilyabai’s courage and strategic acumen, particularly during Raghoba’s attempted attack on Indore.

• Tricentenary Celebration: Dr. Sachchidanand Joshi noted the nation’s celebration of Ahilyabai’s 300th birth anniversary.

• Legacy of Devi Ahilyabai Holkar (1725-1795): Holkar Queen of the Maratha Malwa kingdom known for peace, prosperity, and stability during her reign.

• Maheshwar as a Center: Transformed her capital, Maheshwar, into a hub of literary, musical, artistic, and industrial activities. Noted for the Maheshwari sarees.

• Military Leadership: She was military-trained and personally led armies into battle.

• Justice and Fairness: Held daily public audiences and was known for administering impartial justice.

• Landmark Decisions: Removed traditional law confiscating property of childless widows.

• Patron of Arts and Religion: Patronized Marathi poet Moropant, Shahir Ananta Gandhi, and Sanskrit scholar Khushali Ram. Built and renovated hundreds of temples and Dharmashalas throughout India, including the Kashi Vishwanath Temple in 1780.

Geo-Economic Splits

• Geo-economic Fragmentation Defined: A policy-driven reversal of global economic integration, guided by strategic considerations, replacing globalization.

• Drivers: Forming trade/financial partnerships based on geopolitical alignments, not just geography.

• Channels: Impacts trade, capital

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  flows, and migration.

• Rising Trade Restrictions: Sharp increase in trade-restrictive measures globally, with new restrictions covering $887.7 billion in trade (Oct 2023-24), significantly higher than the previous year.

• Impact on Global Trade: Slows global trade growth, potential secular stagnation.

• Economic Costs: Could result in permanent losses to global GDP (0.2% to 7% based on IMF estimates).

• Sources of Losses: Technological decoupling, trade restrictions, reduced capital movements, decline in international cooperation.

• FDI Shifts: Global FDI flows are increasingly concentrated among geopolitically aligned countries, impacting emerging markets. Re-shoring and friend-shoring increase vulnerability of emerging markets.

• China’s Dominance: China’s manufacturing strength and strategic resource control create advantages in global supply chains and energy transition technologies. China accounts for 45% of global manufacturing.

• Internal Focus: The Economic Survey suggests reinvigorating internal engines and domestic levers for sustained growth due to unconducive external conditions.

• “Friend-shoring”: Countries are grouping into blocs, leading to friend-shoring in global policymaking.

Reedtail Damselfly

• Saffron Reedtail Damselfly Spotted in Karnataka for the First Time: Naturalists Tejas Mehande and Ajith Padiyar discovered Indosticta deccanensis (saffron reedtail damselfly) in Madhugundi village along the Netravati River, Chikkamagaluru district.

• Significance of the Discovery: This is the northernmost record of the species in the Western Ghats, expanding its known range beyond Tamil Nadu and Kerala.

• Species Information: The damselfly, known for its saffron-colored body, belongs to the Platystictidae family (shadow damselflies) and is endemic to the Western Ghats.

• Habitat and Environmental Indicator: They inhabit slow-moving forest streams with thick vegetation, requiring pristine water quality, indicating a healthy ecosystem.

• Importance of Conservation: Their presence highlights the need to protect these habitats from deforestation, water pollution, and climate change due to their sensitivity to environmental changes.

• Discovery Context: The sighting occurred during routine research, with the findings published in the journal Entomon.

• Madhugundi’s Recent History: The village, severely affected by floods in 2019, underscores the vulnerability of the region and the importance of biodiversity preservation.

Kurdistan

• India Provides Medical Aid: India recently sent medical supplies to the Kurdistan Region, demonstrating support for its residents.
• Geographic Significance: Kurdistan is a large, mountainous region spanning parts of Turkey, Iraq, Iran, Syria, and Armenia. Its location is strategically important.
• Key Governorates: The Kurdistan Region includes Erbil, Sulaymaniyah, Dohuk, and Halabja.
• Water Sources: The Tigris and Greater Zab Rivers are vital for agriculture and settlements in the region.
• Indian Consulate in Erbil: India established a consulate in Erbil in 2016, aiming to strengthen economic ties. This highlights India’s growing interest in the region.
• Increased Indian Workers: There’s a rising number of Indian workers in Kurdistan, particularly in steel, oil, and construction. This indicates economic opportunities and demand for Indian labor.
• Trade Engagement: Indian businesses have been participating in trade fairs in Erbil and Sulaymaniyah. This shows growing economic interactions between India and the Kurdistan Region.

Processed Peril

• Economic Survey 2024-25 Focus: Calls for stringent front-of-the-pack labelling for Ultra-Processed Foods (UPFs) due to their negative impact on physical and mental health.
• Definition of UPFs: Foods significantly altered from their original form using industrial processes and containing additives like artificial flavors, colors, preservatives, and sweeteners to enhance flavor, texture, and shelf life.
• Health Risks: High consumption of UPFs is linked to chronic diseases like cardiovascular disease, obesity, and colorectal cancer.
• Problematic Ingredients: High levels of added sugar, fat, and salt contribute to health issues. Low nutritional value and extensive use of synthetic additives are also concerns.
• ICMR’s Stance: Identifies common UPFs including commercially produced bread, breakfast cereals, cakes, chips, plant-based meats, refined flours, energy drinks, and processed culinary ingredients.
• Economic Survey Recommendations:
  • FSSAI should regulate UPFs with clear definitions, standards, and stricter labeling.
  • Strengthen consumer protection against aggressive marketing and misleading claims, especially targeting children.
  • Consider higher taxes on UPFs as a “health tax”.
  • Raise awareness through campaigns in schools and colleges.
• Rising Consumption: India’s UPF consumption surged from $900 million in 2006 to over $37.9 billion in 2019 (WHO report).
• CEA Concerns: V Anantha Nageswaran highlights the ₹2,50,000 crore UPF business, misleading ads, and obscure labeling. Links UPFs to adverse health outcomes and emphasizes the long-term impact on India’s demographic dividend.
• Impact on Mental Health: The survey points out growing evidence that UPF consumption adversely affects mental well-being, especially in children and adolescents.

Telecom Dispute Tribunal

• Establishment and Purpose: Telecom Disputes Settlement and Appellate Tribunal (TDSAT) was established in 2000 through an amendment to the TRAI Act of 1997. Its purpose is to adjudicate disputes, dispose of appeals, protect the interests of service providers and consumers, and ensure orderly growth in the telecom sector.

• Composition: TDSAT consists of a Chairperson (who is or has been a Judge of the Supreme Court or Chief Justice of a High Court) and two members appointed by the Central Government. Other members should have held the post of Secretary to the Government of India.

• Jurisdiction: TDSAT has jurisdiction over Telecom, Broadcasting, IT, and Airport tariff matters. It exercises original and appellate jurisdiction in Telecom, Broadcasting, and Airport tariff matters, and appellate jurisdiction in Cyber matters.

• Recent News: TDSAT has stayed TRAI’s financial penalties of over ₹141 crore on Jio, Airtel, and Vodafone Idea for not curbing spam.

• Reasoning for Stay: TDSAT noted delays in implementing anti-spam regulations were beyond the telcos’ control (development of digital consent acquisition (DCA) platform and Covid-19 impacts). TDSAT considered it unfair to impose penalties for factors outside the telcos’ control.

• Next Hearing: The next TDSAT hearing on this matter is scheduled for February 13.

Ocean Coordination

• Ocean Coordination Mechanism (OCM) Launch: UNESCO-IOC announced the OCM to enhance ocean
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  governance in the Wider Caribbean, including the North Brazil Shelf Large Marine Ecosystem, on January 14, 2025.
• Purpose: Collaborative framework for sustainable management of marine resources addressing critical issues like fisheries, ecosystem restoration, pollution control, blue carbon, and marine protected areas.
• Geographic Focus: Specifically targets the Caribbean and North Brazil Shelf, areas rich in biodiversity and economically vital.
• Context: Built on the 10-year CLME+ Strategic Action Program, endorsed in 2014. Learning from the Pacific Islands Regional Ocean Policy (PIROP) initiative.
• Addressing Ocean Threats: Aims to counter pollution, overfishing, climate change, and habitat destruction, recognizing the importance of healthy oceans for biodiversity and coastal communities.
• Collaborative Approach: Fosters collaboration among countries, IGOs, and stakeholders, integrating traditional knowledge with scientific research.
• Financial Backing: Receives $15 million from the Global Environment Facility (GEF) via the UNDP/GEF PROCARIBE+ Project (2024-2028), plus substantial co-financing of $126.02 million from the GEF.
• Blue Economy & Local Communities: Prioritizes sustainable development of the blue economy while addressing the needs of vulnerable communities.
• Ocean-Climate-Biodiversity Nexus: Pivotal in facilitating cross-country and institutional collaboration to address this critical intersection.
• Why It Matters: Oceans face unprecedented threats, and effective coordination is crucial for sustainable resource management, which the OCM seeks to provide.

Rusty-Spotted Cat

• Rare Sighting: The elusive rusty-spotted cat, the world’s smallest wild cat, has been spotted in West Bengal’s Purulia district for the first time. This is significant because it expands the known range of the species.

• Small Size: It weighs less than 1.5 kg, roughly half the size of a domestic cat. Its diminutive size is a defining characteristic and a point of interest.

• Physical Characteristics: The cat is identifiable by its fawn-grey coat with rusty spots, two white streaks near the eyes, and relatively short legs. These features aid in identification and understanding the animal’s adaptations.

• Habitat: It primarily inhabits dry deciduous and semi-deciduous forests in India, Nepal, and Sri Lanka. India holds about 80% of their population. Habitat information is crucial for conservation efforts.

• Near Threatened Status: The IUCN classifies the rusty-spotted cat as Near Threatened. This highlights the need for conservation efforts to protect the species.

• Nocturnal Behavior: Their large eyes suggest that it has adapted to its nocturnal behaviour.