Top News Highlights- 6 December 2024

World Bank’s International Debt Report 2024

Debt Increase: Total external debt of Low and Middle-Income Countries (LMICs) increased by 2.4% in 2023 to $8.8 trillion.
Major Factors: High-interest rates (20-year high), inflation, and global economic uncertainty led to a sharp increase in debt servicing costs, particularly in India and Bangladesh (90% surge in interest payments).
Result: Budgetary pressure on sectors such as health, education, and environment.
Solutions: Proposals include concessional financing, debt restructuring mechanisms, and climate-resilient debt clauses.

Impact of Droughts: Increased by 29% since 2000 due to climate change and unsustainable resource management.
Effects: Water shortages, decline in agricultural output, interruption to hydropower generation and loss of biodiversity.
International Efforts: Examples are Integrated Drought Management Programme under UNCCD’s Resilience Policies.India: National Policy on Disaster Management and Agricultural Drought Monitoring System.

Goal: Encourage sustainable tourism by creating lesser-known destinations through the SASCI scheme.
Financing: Provides interest-free loans of 50 years to the states for iconic tourist projects with a completion time frame of 2 years.
Sustainable Practices: Resonates with declarations such as the Cape Town Declaration (2002) and India’s National Strategy for Sustainable Tourism (2022).

Key Provisions: Establishes the Central Boilers Board. To ensure more transparency third-party inspections are allowed. Ease of Doing Business (EoDB): Converting non-criminal offenses to penalties for ease of Administration Concerns: There is a lack of time frames as this may negatively impact doing business.

Currently: Updating the RBI increased the per-transaction limit to ₹ 1,000 and up to ₹5,000 in total for offline transaction limits.
Objective: Facilitate low-value digital transactions with improved risk mitigation and user experience.Functionality: Facilitates transactions without real-time banking system dependencies through an escrow system.

Objective: Green a 5 km buffer around the Aravalli Hill Range in Haryana, Rajasthan, Gujarat, and Delhi to restore forest lands.
Significance: Conceptualized on the model of Africa’s Great Green Wall, it seeks to combat desertification and bring about ecological balance.
Key Highlights: Aravalli is one of the oldest fold mountain systems in the world and Guru Shikhar is its highest point.

China-Plus-One: India trails Vietnam and Thailand as there has been very little policy reform.
Carbon Border Adjustment Mechanism (CBAM): EU’s carbon tax on exports such as steel and cement threatens India’s trade.
Other Issues: Decreasing agricultural exports, instability in West Asia impacting the price of oil, and share of global labor-intensive sectors.

SASCI Scheme: This scheme offers long-term loans to states to develop infrastructures.
National Agricultural Drought Monitoring System: The system monitors the agricultural droughts for intervention.
UPI Lite: This is the low-value transaction solution for the RBI towards seamless payment.
Aravalli Green Wall Project: A restoration project inspired from Africa’s Green Wall project.
China-Plus-One Strategy: Diversification of supply chains beyond China to mitigate risks.