Death of a President
News Context
- Iran’s 8th President, Ebrahim Raisi, died in a helicopter crash in East Azerbaijan province amid bad weather.
- He was traveling to Tabriz after inaugurating a dam with Azerbaijan’s President Ilham Aliyev.
Raisi’s Background
- Ebrahim Raisi, a conservative cleric, became President in 2021 after Hassan Rouhani.
- Hassan Rouhani, a moderate, signed the 2015 nuclear deal with the U.S. and other world powers.
- Rouhani’s promise of change and prosperity failed due to U.S. President Donald Trump sabotaging the deal in 2018 and reimposing sanctions.
- Raisi quickly rose to power and was seen as a potential successor to Supreme Leader Ali Khamenei.
Death and Concerns
- Economic Impact: The death of President Raisi could exacerbate Iran’s struggling economy, already impacted by U.S. sanctions.
- Geopolitical Tensions: Raisi’s death might fuel conspiracy theories, potentially increasing regional tensions.
- Interim Leadership
- First Vice-President Mohammed Mokhber will assume interim presidential powers.
- A presidential election is expected within 50 days.
India-China consumption comparison
News Context
Population Milestone
- In 2023, India surpassed China to become the world’s most populous country.
- This development occurred amid China’s declining birth rate (6.4 births per 1,000 people) and total fertility rate (~1%).
- China experienced a negative population growth rate for the first time in six decades, a trend expected to continue.
- Conversely, India’s population, despite reaching replacement levels (total fertility rate of 2.1), is projected to grow and peak around 2060.
- The contrasting demographic trends are significant given the differing geopolitical landscapes of the two countries.
Consumer Base and PFCE
Consumer Base Definition: India and China have large consumer bases, defined as individuals spending more than $12 a day (PPP, 2017).
Private Final Consumption Expenditure (PFCE)
- PFCE measures total household expenditure on goods and services.
- It serves as a proxy for consumer spending, reflecting income and consumption concentration within consumer classes.
- Data shows India spends more on consumption than China, with PFCE constituting 68% of India’s GDP and 53% of China’s GDP.
- Currently, PFCE contributes over 58% to India’s GDP, compared to 38% in China, indicating a larger government role in China’s economy.
Data Findings – China vs India
PFCE Comparison
- Despite China’s economy being five times larger than India’s, its PFCE is only about 3.5 times that of India’s.
- China’s PFCE has significantly increased over the past four years, despite negative consumption narratives.
- The expenditure gap between the two countries widened from $3.8 trillion in 2018 to over $4.5 trillion in 2022.
- Consumption includes both value and volume, making PPP comparisons essential.
- In PPP terms, China’s PFCE is about 1.5 times India’s, with China’s GDP (PPP) being approximately 2.5 times India’s.
- China saw a marginal increase of ~$0.7 trillion in PPP terms due to improved yuan-dollar PPP exchange rates.
- India added a trillion dollars to its consumption expenditure (PPP) in 2022 despite a worsening exchange rate.
Expenditure by Categories
India’s Spending Patterns: India spends more on food, clothing, footwear, and transport, but less on education, culture, recreation, and healthcare.
China’s Spending Patterns
- China’s consumption basket reflects a more developed market, with declining expenditure on food and beverages.
- In advanced economies like the U.S., Japan, EU, Germany, and the U.K., food expenditure is not the highest category.
- Despite being a fifth of China’s economy, India spends a similar percentage on food, clothing, and footwear.
- India spends just over 50% of what China spends on transport and communication.
SC agrees to waive telcos’ interest on I-T dues on license fee
News Context
- The Supreme Court provided significant relief to telecom service providers, including Bharti Airtel, Reliance, and Vodafone Idea.
- It waived off interest due on income tax from an October 16, 2023 judgment that declared telecom license fees as entirely “capital in nature”.
Telecom Policy 1999
Clarification on Judgment: The court specified that the October judgment, in light of the Telecom Policy, would not serve as a precedent.
Policy Evolution
- The National Telecom Policy of 1994 was replaced by a new Telecom Policy in 1999.
- This policy required licensees (telecom companies) to pay a one-time entry fee and a license fee based on a percentage of gross revenue.
Judgment Details
- The October 2023 judgment concluded that paying the license fee was essential for holding the license and conducting trade.
- The Supreme Court noted that failure to pay the license fee would result in the licensee being ousted from the trade.
‘Much ado about nothing’, says govt., on spice export worries
News Context
Government and Industry Collaboration
- The government is collaborating with industry players to ensure compliance with varying pesticide residue standards internationally.
- This effort addresses concerns about the safety of India’s spices and food exports, particularly from countries like Hong Kong and Singapore.
In News
Nepal’s Ban on Indian Spices
- Nepal recently banned four spice-mix products from Indian firms due to suspected ethylene oxide (EtO) contamination.
- Different countries have varying maximum residue limits for EtO, a fumigant for food crops.
- If not properly aerated, EtO converts into a metabolite, 2 C-E (Chloroethanol).
Residue Limits by Country
- Hong Kong prohibits EtO in food products.
- Singapore allows EtO residue up to 50 mg per kg.
- The EU allows EtO residue from 0.02 mg to 0.1 mg per kg.
- The U.S. permits EtO residue up to 7 mg per kg and 2 C-E residue up to 940 mg per kg.
- Canada has similar limits as the U.S.
India’s Export and Efforts
Growth in Spice Exports
- India’s spice exports grew by 13.5% in 2023-24, with 99.8% of the 1.4 million tonnes meeting international quality standards.
- In marine products, 99.88% of the 1.76 million tonnes exported met importing nations’ quality norms.
Mandatory Testing and Traceability
- Sampling and testing for EtO have been made mandatory for shipments to Singapore and Hong Kong.
- Efforts are being made to implement a traceability mechanism for spices from farm to export market, similar to systems for peanuts, grapes, and products with Geographical Indication status like Darjeeling Tea.