Daily Current Affairs and News Analysis 05-07-2025

Why in News: India’s Finance Minister at the FFD4 conference advocated for reforms in global sovereign credit rating systems and MDBs to promote equity and sustainable development.

What is Sovereign Credit Rating: An independent evaluation of a country’s creditworthiness, influencing investor risk assessment and FDI. The “Big Three” US-based agencies (S&P, Moody’s, Fitch) are dominant.

India’s Concern: India, despite strong economic fundamentals and being the 5th largest economy, is rated BBB-/Baa3 (lowest investment grade), similar to countries with weaker growth and higher debt ratios (e.g., Italy).

Reasons for India’s Push for Reforms:

• Bias Against Developing Economies: Developing nations with strong fundamentals receive lower ratings than some developed countries with weaker metrics.
• Flawed Debt Assessment: Ratings often treat largely domestic debt as foreign currency debt and underweigh high GDP growth, making debt more sustainable.
• Overemphasis on Perception: Subjective and potentially biased factors (like political stability surveys) are overweighted, while tangible reforms and growth are underweighted.
• Pro-Cyclical Downgrades: Agencies tend to downgrade during economic stress, increasing borrowing costs when funds are most needed.
• Conflict of Interest & Lack of Alternatives: Agencies are paid by rated entities, raising credibility concerns. Dominance of Western agencies and lack of Global South alternatives limits balanced perspectives.
• Failure to Predict Crises & Lack of Transparency: Past failures (e.g., 2008 crisis) and opaque methodologies undermine credibility and fairness.

Proposed Reforms for Sovereign Credit Rating System:

• Greater Transparency: Disclose metric weightages, undergo independent audits, incorporate country-specific factors.
• Increased Objectivity: Use hard data and real-time indicators (AI/Big Data) instead of perception-based metrics.
• Alternative Agencies: Foster CRAs from the Global South (India, BRICS, G20) to counter Western dominance.
• Regulatory Oversight: Establish a global supervisory body (IMF/G20) to audit and regulate rating practices.
• Incorporate Non-Economic Indicators: Include climate resilience, digital capacity, and policy reforms for a broader sustainability assessment.
• Peer Comparability: Implement real-time updates and peer comparison dashboards.

Conclusion: India seeks reforms to ensure transparent, data-driven, and equitable credit assessments that reflect the true economic potential of developing nations, countering Western dominance in the current system.

Aluminium and Copper Vision Documents Released: India has launched long-term plans for its aluminium and copper sectors to boost domestic capacity, ensure resource security, and promote green manufacturing. This aligns with the goal of “Viksit Bharat” by 2047.

Ambitious Aluminium Targets: The vision aims for a sixfold increase in aluminium production to 37 MTPA by 2047.

Securing Aluminium Raw Materials: Bauxite production is targeted to reach 150 MTPA.

Sustainable Aluminium Growth: Plans include doubling the aluminium recycling rate and adopting low-carbon technologies for production.

Copper Demand and Capacity Expansion: India anticipates a sixfold increase in domestic copper demand by 2047 and plans to add 5 MTPA refining capacity by 2030.

Reducing Copper Import Dependence: A key strategy is to boost secondary refining and secure overseas mineral assets, including setting up foreign refining facilities.

Strategic Importance for Clean Energy: Both metals are crucial for renewable energy infrastructure (solar panels) and electric vehicles, supporting the clean energy transition.

Economic Growth Drivers: These sectors are vital for construction, transport, and machinery industries, contributing to overall economic expansion.

Emphasis on Responsible Practices: The vision incorporates principles of responsible mining and the “6 R’s” of mine closure for environmental sustainability.

Geographic Distribution: Odisha leads in bauxite reserves and aluminium production (NALCO, Vedanta). Rajasthan is the largest copper ore producer (Khetri-Singhana, HCL).

Renewed Scrutiny of IWT: The Indus Waters Treaty (IWT), signed in 1960, is being re-evaluated due to evolving geopolitical tensions and climate change impacts, despite its historical success in surviving wars.

Treaty Structure & Asymmetry: The IWT allocates western rivers (Indus, Jhelum, Chenab) primarily to Pakistan and eastern rivers (Ravi, Beas, Sutlej) to India. India has limited usage rights on western rivers, creating an asymmetry of obligations favoring Pakistan.

India’s Concerns:

• Asymmetric Obligations: India, as the upper riparian, has restricted usage rights on major rivers compared to Pakistan.
• Diplomatic Misuse by Pakistan: Pakistan has escalated technical water disputes to political and legal forums, undermining the treaty’s spirit.
• Climate Change Ignorance: The treaty does not account for climate variability, altered precipitation, or glacial retreat, impacting water availability.
• “Keeping Treaty in Abeyance”: India’s current stance signals a strategic shift, suggesting potential withdrawal or renegotiation due to these unresolved issues.

Strategic & Environmental Imperatives: India requires enhanced water security for agriculture and energy, particularly in Jammu & Kashmir and Ladakh. The treaty needs modernization to incorporate climate resilience and technological advancements.

Broader Regional Context: China’s upstream activities on rivers like the Brahmaputra necessitate a pan-Himalayan water policy. India must also manage hydro-diplomacy with Bangladesh and Nepal.

Way Forward: India advocates for renegotiating or restructuring the IWT to align with mutual benefit, equitable use, and modern scientific principles, moving beyond its historical rigidity.

India’s New Role: India aims to transition from a passive treaty signatory to an active participant in regional water governance, aligning water diplomacy with national interests and sustainable development.

India hosted CWC Regional Meeting: India recently hosted the 23rd Regional Meeting of National Authorities of States Parties in Asia under the Chemical Weapons Convention (CWC). This highlights India’s active role in promoting the CWC’s objectives in the Asian region.

CWC Bans Chemical Weapons: The Chemical Weapons Convention (CWC) is a treaty that prohibits the development, production, stockpiling, and use of chemical weapons, and mandates their destruction.

OPCW Oversees Implementation: The Organisation for the Prohibition of Chemical Weapons (OPCW), with 193 member states, oversees the implementation of the CWC. The OPCW’s efforts in eliminating chemical weapons were recognized with the Nobel Peace Prize in 2013.

India’s Commitment to CWC: India is an original signatory and implements the CWC through its National Authority Chemical Weapons Convention (NACWC), established under the Chemical Weapons Convention Act, 2000.

Indian Chemical Council Honored: The Indian Chemical Council (ICC), India’s oldest chemical industry association, received the OPCW-The Hague Award 2024, marking the first time an industry body globally has received this award. This recognizes India’s industry’s contribution to CWC compliance.

Definition of Chemical Weapons: The CWC defines chemical weapons as any toxic chemical or device intended to cause harm or death, including delivery systems. It also requires the destruction of old and abandoned chemical weapons and declaration of riot-control agents.

Supreme Court Declines Plea on Bodh Gaya Temple Act, 1949: The Supreme Court refused to hear a petition challenging the Act, which aims for better management of the Mahabodhi Temple.

• Why in News: This decision upholds the existing legal framework governing the management of one of Buddhism’s holiest sites.

Mahabodhi Temple’s Significance: It’s the site where Gautam Buddha attained enlightenment under the Bodhi Tree.

• Why in News: Reinforces the global importance of the temple as a pilgrimage destination and a symbol of Buddhist heritage.

Historical and Architectural Importance: The temple has origins in Emperor Ashoka’s era (3rd century BC) with the current structure dating to the 5th-6th centuries. It showcases early brick temple architecture from the Gupta period.

• Why in News: Highlights the deep historical roots and architectural value of the site, contributing to its UNESCO World Heritage status.

UNESCO World Heritage Site: Recognized for its cultural and historical importance.

• Why in News: Underscores its international recognition and the need for its preservation.

What is RECLAIM Framework?

• An India-specific policy tool for just and sustainable mine closures.
• Developed by the Coal Controller Organisation (Ministry of Coal) with the Heartfulness Institute.
• Aims for inclusive community participation, ecological restoration, and long-term socio-economic recovery.
• Focuses on gender inclusivity, vulnerable groups, and convergence with Panchayati Raj Institutions.

Why in News?

• Launched by the Ministry of Coal to ensure just and sustainable mine closures.

Key Features:

• Promotes community-centric planning with emphasis on gender equity and livelihood diversification.
• Ensures institutional convergence with local governance structures.
• Provides actionable, field-tested tools for Indian mining regions.
• Includes phases for pre-closure, closure, and post-closure activities.

Significance:

• Mitigates socio-economic and environmental impacts of mine closures.
• Supports SDGs and promotes transparency and accountability.
• Serves as a replicable model for other sectors.

Key Challenges RECLAIM Aims to Address:

• Gap Between Policy and Practice: Only a few mines formally closed despite guidelines, leading to abandoned mines, ecological degradation, and risks.
• Lack of Proper Rehabilitation: Unsustainable mining practices reduce community capacity for participation in closure.
• Lack of Land Return Framework: Unclear policies delay land return and just transition efforts.
• Technological & Economic Challenges: Existing plans are technical, neglecting socio-economic justice; high escrow requirements deter closure activities.

• Why in News: This is a significant policy shift by the US impacting global money flows, particularly affecting countries reliant on remittances.

• Why in News: The exemptions mean a potentially smaller impact than initially feared, as formal channels are often preferred.

• Why in News: This reassures that India’s substantial remittance inflows, crucial for its economy, are unlikely to be severely disrupted.

• Why in News: Highlights the immense economic importance of remittances to India, serving as a stable source of foreign exchange and supporting consumption.

• Why in News: Shows the evolving global landscape of Indian migration and its financial impact, with a shift towards developed countries.

Three out of four NMC autonomous boards lack presidents.

• Why in news: This critical leadership vacuum cripples the functioning of the NMC, India’s apex medical education regulator.

Significant vacancies across board posts (11 of 18 full-time, 6 part-time).

• Why in news: Exacerbates the leadership void and hinders specialized regulatory functions.

Ad hoc functioning, stalling inspections, decisions, and curriculum updates.

• Why in news: Directly impacts the quality and progress of medical education and regulation.

Non-technical staff conducting college inspections.

• Why in news: Raises serious concerns about the quality assurance and validity of college assessments.

Delays in new medical college inspections and seat renewals.

• Why in news: Affects the growth and accessibility of medical education seats.

Academic changes stalled, including curriculum updates on sensitive issues.

• Why in news: Prevents essential modernization and addressing contemporary healthcare needs.

No full Commission meeting in nearly a year.

• Why in news: Indicates a severe breakdown in the apex decision-making body’s operations.

Students and colleges affected by regulatory inaction.

• Why in news: Highlights the tangible negative consequences of the NMC’s current paralysis.

Leadership Crisis: Three of the NMC’s four autonomous boards lack presidents, with numerous other vacancies, hindering critical decision-making and operations.

• Why in News: This vacuum has led to ad hoc functioning, delaying essential tasks like medical college inspections and academic governance, impacting regulatory credibility.

Operational Paralysis: The NMC is functioning in an ad hoc manner, with regular activities like college inspections and seat approvals delayed or suspended. General body meetings have ceased since late 2023.

• Why in News: This policy paralysis prevents crucial reforms, curriculum updates, and disciplinary actions, leaving standards and ethics on paper.

Flawed Inspection System: Virtual inspections relying on CCTV and self-declared data lack rigor and are often conducted by non-technical personnel, making them prone to manipulation.

• Why in News: This undermines the goal of transparent, merit-based regulation and creates opportunities for corruption, potentially compromising the quality of medical education.

Impact on Medical Education & Public Health: Delays in approving new colleges/seats affect admissions, while stalled reforms hinder progress on issues like gender sensitivity and medico-legal ethics. This dysfunction threatens India’s goal of increasing doctor density and meeting global health standards.

• Why in News: The NMC’s ineffectiveness directly impacts the supply and quality of doctors, crucial for public health outcomes, especially in underserved areas.

PM Modi Highlights Ramleela’s Transnational Reach: Prime Minister Narendra Modi, during his visit to Trinidad, emphasized Lord Ram as a “divine link beyond oceans,” acknowledging the significant cultural presence of Ramleela among the Indian diaspora in Trinidad and Tobago.

Ramleela: A Symbol of Indian Heritage in Trinidad: The tradition was brought to Trinidad by Indian indentured laborers from Uttar Pradesh and Bihar between 1838 and 1917. They preserved and performed Ramleela, a dramatic retelling of Tulsidas’s Ramcharitmanas, as a vital link to their cultural identity in a new land.

Cultural Continuity and Identity: Despite having few possessions, migrants carried or memorized the Ramcharitmanas, making Ramleela a powerful symbol of cultural continuity and identity for Indo-Trinidadians, reinforcing their “Indianness” within a Caribbean context.

Ramleela: A Traditional Folk Theatre: Ramleela is a traditional dramatic re-enactment of Lord Ram’s life, primarily based on the Ramcharitmanas. It’s a vibrant folk theatre form popular in northern India, often performed during Navratri and culminating in Dussehra with the burning of Ravana’s effigy.

Roots in Bhakti Movement: Originating from the Bhakti movement, Ramleela gained prominence in the 16th century, blending drama, music, and moral education, reinforcing values like dharma, sacrifice, and loyalty.

Folk Theatre’s Role in India: Indian folk theatre, characterized by oral traditions, community participation, religious themes, and local dialects, serves as a vital medium for education, entertainment, and social commentary, preserving local culture and promoting community bonding.