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Current Affairs 29 August 2025

  1. Industrial growth jumps to four-month high of 3.5%
  2. Lost villages and other costs of coalfields
  3. Should States be compensated for revenue loss from GST reforms?
  4. Which sectors are worst hit by tariffs?
  5. School enrolment in 3-11 age group down by 25 lakh: UDISE+
  6. Centering elderly women: caring for the quiet majority


Understanding the Index of Industrial Production (IIP)

  • Definition: IIP measures the volume of production of different industry groups (manufacturing, mining, electricity).
  • Base year: 2011–12.
  • Weightage:
    • Manufacturing: ~77%
    • Mining: ~14%
    • Electricity: ~8%
  • Importance:
    • Monthly indicator of industrial health.
    • Proxy for economic activity and GDP (particularly industry sector).
    • Guides policy interventions in demand, supply, and infrastructure.

Relevance : GS 3(Indian Economy)

 

Key Data: July 2025

  • Overall industrial growth:
    • 3.5% (July 2025) – four-month high.
    • Lower than 5% (July 2024) → deceleration YoY.
  • Sectoral performance:
    • Manufacturing: +5.4% (six-month high), up from 4.7% in July 2024.
    • Electricity: +0.6% (weak growth vs double-digit levels last year).
    • Mining: -7.2% (fourth straight month of contraction).
  • Use-based classification:
    • Capital goods: +5% → investment revival.
    • Consumer durables: +7.7% (seven-month high).
    • Consumer non-durables: +0.5% (eight-month high, but very low absolute growth).
    • Basic metals, fabricated metals, electrical machinery: strong double-digit growth.
    • Non-metallic minerals: +9.5% → infra and construction push.

Why Growth Picked Up in July 2025

  • Manufacturing rebound:
    • Recovery after two months of contraction.
    • Driven by investment demand (metals, machinery).
    • Consumer durables revival shows festive/pre-festive demand pickup.
  • Electricity slowdown:
    • Monsoon impact → lower power demand from irrigation.
    • High base effect (double-digit growth in 2024).
  • Mining contraction:
    • Seasonal monsoon disruption in coal, iron ore, limestone.
    • Subdued global commodity demand, especially in China.
    • Regulatory and environmental bottlenecks.
  • Consumer goods mixed trend:
    • Durables (+7.7%) → white goods, electronics, appliances supported by urban demand and credit growth.
    • Non-durables (+0.5%) → rural demand still sluggish due to erratic monsoon, food inflation pressures.

Structural Takeaways

  • Investment revival signals: Capital goods + basic/intermediate goods expansion → infra + capex cycle strengthening.
  • Rural–urban divergence: Strong urban discretionary demand, weak rural essentials.
  • Policy sensitivity: RBI likely to watch rural weakness + commodity volatility for growth–inflation trade-off.
  • Mining as a drag: Persistent contraction risks supply-side constraints for core industries (steel, cement, power).
  • Base effect reality: Lower growth vs July 2024 highlights statistical distortion – economy grew on a high base last year.

Implications

  • For GDP growth (Q2 FY26):
    • Industrial sector contribution may be moderate due to mining weakness + slower electricity.
    • Manufacturing strength prevents sharp slowdown.
  • For government policy:
    • Need for rural demand stimulus (via MSP, rural jobs, credit).
    • Mining reforms (ease clearances, monsoon-resilient infra).
    • Support electricity diversification (RE integration, industrial demand).
  • For markets & industry:
    • Metals, machinery, and consumer durables show strong prospects.
    • FMCG (non-durables) growth remains tepid, rural stress may weigh on stock performance.


Coal Mining and Displacement in India

  • Coal in India:
    • India has 389.42 billion tonnes of estimated reserves (2024).
    • Odisha is the largest coal reserve holder: 99.2 billion tonnes (25.5% of India).
    • Coal still supplies ~45.65% of Indias electricity capacity (June 2025).
  • Talcher Coalfields (Angul, Odisha):
    • Largest in India.
    • Angul spans 6.3 lakh hectares, with 32% cultivable land, 43% forests, and 12.26% coal-bearing areas.
    • 66 coal blocks identified; 12 operational, 2 about to start.
    • If all blocks become active → 348 villages to be displaced.
  • Displacement in Odisha:
    • 5,923 families displaced in past 5 years (2019–24), mainly from Angul.
    • Angul accounts for 48% of Odishas coal production (269.71 MT in 2024).

Relevance : GS 3(Environment and Ecology)

Human Cost of Displacement

  • Loss of community & cultural identity:
    • Example: Antaryami Pradhan had to travel 10 km for his brother’s cremation as new village denied him land.
    • Villagers scattered → weakened social cohesion.
  • Disruption of livelihoods:
    • Farmers, cattle rearers, milkmen lose land & traditional professions.
    • Rehabilitation colonies often lack open space for farming.
  • Psychological & social alienation:
    • New villagers don’t accept displaced families socially.
    • Migrants often feel like outsiders even in new houses.
  • Gendered impacts:
    • Pregnant/lactating women lose access to health workers and schemes post-relocation.
    • Women bear additional burden of household and social adjustment.

Compensation & Rehabilitation Issues

  • Compensation discrepancies:
    • Example:
      • SCCL (Telangana) offers ₹70 lakh/acre.
      • Gopiballavpur villagers offered only ₹11 lakh/acre.
    • Within Angul, land valuation varies drastically between adjacent villages (e.g., ₹35 lakh vs ₹17 lakh per acre).
  • R&R (Rehabilitation & Resettlement) packages:
    • Options include:
      • 35 lakh (cash in lieu of employment + self-relocation).
      • 31 lakh + land at R&R colony.
    • Issues:
      • R&R colonies often delayed or on disputed land (e.g., forest land challenged at NGT).
      • Many forced to rent or return to old villages.
  • Failure in implementation:
    • Law requires resettlement colonies before displacement → often violated.
    • Welfare schemes (health, nutrition, education) do not transfer automatically post-relocation.

Larger Structural Concerns

  • Fragmented governance:
    • No centralised displacement database in Angul.
    • Land acquisition handled piecemeal → policies differ across projects.
  • Legal & policy shifts:
    • 2014: SC cancelled 204 coal block allocations (including 8 in Angul).
    • 2015: Coal Mines (Special Provisions) Act allowed auctions.
    • 2020: Commercial coal mining introduced → private & foreign players entered.
    • Outcome → increased pace of land acquisition & displacement.
  • Energy paradox:
    • India pushes renewables but still heavily dependent on coal.
    • Angul remains at the epicenter of India’s coal–development trade-off.

Socio-Economic & Environmental Impact

  • Economic paradox:
    • Some families receive life-changing sums but cannot buy equivalent land in towns.
    • Compensation often erodes quickly without sustainable livelihood alternatives.
  • Environmental stress:
    • Villages, forests, agricultural lands consumed by expanding open-cast mines.
    • Ecological degradation (loss of forest cover, dust pollution, groundwater depletion).
  • Education disruption:
    • Schools demolished → children’s education interrupted.
    • Families caught in limbo delay investments in education due to uncertain future.
  • Rural–urban shift stress:
    • Villagers struggle to adapt to urban costs & lifestyles.
    • Loss of access to affordable vegetables, community services, and collective rural economy.

Implications

  • For displaced communities:
    • Identity erosion, livelihood collapse, weak social absorption → long-term vulnerability.
    • Inter-generational impact as children lose educational continuity and cultural roots.
  • For governance & policy:
    • Need for uniform, transparent, and inflation-adjusted compensation.
    • Collective relocation models (keeping villages intact) rather than atomised dispersal.
    • Transfer of welfare entitlements (PDS, Anganwadi, health services) to new sites.
    • Centralised displacement tracking & accountability mechanism.
  • For Indias energy policy:
    • Rising dependence on Odisha coalfields → concentrated risk.
    • Balancing energy security vs social justice vs environmental sustainability will be a defining challenge.
    • Transition to renewables must consider a just transition” framework for coal-dependent regions.


Basics of GST

  • GST launched: July 1, 2017, as a destination-based, indirect tax subsuming central (excise, service tax, CST) and state taxes (VAT, entry tax, octroi).
  • Current structure: Multiple slabs (0%, 5%, 12%, 18%, 28%) + special rates (gold, precious stones) + cess (luxury/sin goods).
  • Revenue sharing: GST collected is split between Centre and States (CGST + SGST; IGST for inter-state).
  • Compensation principle (2017–2022): Centre guaranteed States 14% annual revenue growth, bridging losses via Compensation Cess on luxury/sin goods (cars, tobacco, aerated drinks).

Relevance : GS 3(Economy – Taxation)

Proposed Reform

  • Move from 4–5 slab system → 2-tier (5% & 18%), with essentials exempt or 0% rated.
  • Higher tax (40%) to continue on luxury/sin goods.
  • Target average GST rate: reduce from ~11.5% (current) to ~10%.
  • Objective:
    • Simplification → compliance ease.
    • Lower rates → boost consumption, formalisation, investment.
    • At par with developed economies (average GST/VAT 10–12%).

Likely Revenue Impact

  • Short-term dip inevitable:
    • Estimated ₹60,000–1,00,000 crore/year loss (~0.2–0.3% of GDP).
    • FY2025–26: ~₹45,000 crore hit (partial year implementation).
  • Medium/long term gains:
    • Wider tax base: More consumption under formal economy.
    • Leakage reduction: Simplified slabs reduce classification disputes.
    • Demand boost: Lower rates on consumer durables/essentials → higher sales volume → more GST.
    • Luxury/sin cess: Higher rates (40%) to partly offset revenue fall.

Impact on States

  • Unequal effect across States:
    • Manufacturing/urban States (Maharashtra, Karnataka, Tamil Nadu): Larger revenue hit as bulk of GST collections come from industrial goods and services.
    • Agrarian/consumption-heavy States (Bihar, UP, NE States): Smaller impact since their GST base is narrower and skewed towards essentials (already exempt/low slab).
  • Past experience: July 2018 GST cuts → Maharashtra/Karnataka collections dipped 3–4%, but NE states unaffected.
  • Revenue distribution remains unequal: Richer States lose more; poorer States less affected.

Compensation Question

  • Legal status: 5-year compensation period (2017–2022) ended; technically Centre has no liability now.
  • Arguments against further compensation:
    • Perpetual transfers unsustainable.
    • States should expand their tax base, plug leakages, attract investment.
    • Alternative: allocate funds for infrastructure or contingency, not continuous GST gap-filling.
  • Arguments for compensation:
    • Asymmetry in GST revenue distribution → small states structurally disadvantaged.
    • Global precedent: Countries like Australia/Canada initially provided both GST-linked compensation + consolidated fund support.
    • Equity demands special packages for less industrialised states.
  • Possible middle ground:
    • Create Contingency/Equalisation Fund from part of GST or Consolidated Fund of India.
    • Use mechanism like Kerala Flood Cess for State-specific needs.
    • Time-bound compensation, not indefinite.

Political & Institutional Dimensions

  • GST Council: Consensus-based so far (except ~2 votes). Likely to approve reform since announced by PM.
  • Potential friction: Product classification disputes (whether certain goods fall in 5% or 18%), timing of implementation, and transitional compensation.
  • Consensus outlook: Strong — reforms likely passed in next Council meeting (may require vote, but government has majority).

Macro Implications

  • Average GST rate falls to ~10% → competitive with OECD economies.
  • Ease of doing business improves: Simple two-rate GST system boosts investor confidence.
  • Formalisation accelerates: lower rates + better compliance → more firms enter GST net.
  • Revenue trajectory: Dip in Year 1–2, stabilisation by Year 3, higher buoyancy thereafter.
  • State fiscal independence: Pushes states to strengthen own tax (property tax, excise, stamp duty) rather than rely on GST transfers.

Summary Judgment:

  • Reform = Simplification + Ease of doing business + Long-term revenue buoyancy.
  • Short-term revenue dip of 45,000–1,00,000 crore inevitable, disproportionately hitting industrialised states.
  • Compensation debate: Centre unlikely to extend blanket GST compensation; instead, targeted equalisation fund or special packages may balance inequities.
  • Net effect = Moderate tax regime (~10% avg), stronger compliance, higher consumption, improved investor sentiment.


Basics of the Tariffs

  • Effective date: August 27, 2025.
  • Tariff level: Flat 50% additional tariff on imports from India (over existing tariffs).
  • Coverage: Broad, covering labour-intensive and manufacturing sectors where U.S. is a major export destination.
  • Earlier tariff structure: Most sectors faced 0–10% tariffs; now in many cases, effective duties are 50–60%.
  • Metrics of severity (impact analysis):
    • Export value to U.S. (absolute terms).
    • Share of U.S. in Indias total exports of that product.
    • Final tariff rate post-hike.

Relevance : GS 3(Economy – Tariff)

Sectors Facing Severe Impact

(a) Shrimp

  • Exports to U.S.: $2.4 billion (2024–25).
  • Share: 32.4% of India’s total shrimp exports.
  • Tariff jump: 10% → 60%.
  • Immediate impact:
    • Sharp fall in demand from U.S. buyers.
    • Reports of exporters in Andhra Pradesh lowering purchase prices.
    • Cancelled contracts and shipment delays.
    • High risk for aquaculture farmers and coastal labour.

(b) Textiles & Apparel (Tiruppur cluster etc.)

  • Exports to U.S.: $2.7 billion.
  • Share: 13.2% of India’s total textile exports.
  • Tariff jump: 4% → 54%.
  • Immediate impact:
    • Exporters rushing existing shipments before duties bite.
    • U.S. buyers cancelling fresh orders.
    • Threat to jobs in Tiruppur, Surat, Panipat (labour-intensive hubs).

(c) Jewellery, Diamonds & Carpets

  • U.S. a top market for India’s gems & jewellery (~$10–12 billion annually, though not all under 50% tariff).
  • Impact:
    • High-value exports like cut diamonds and studded jewellery hit severely.
    • Surat, Jaipur clusters face job & liquidity pressures.
    • Reports of production cuts and downsizing.

Sectors Facing Moderate Impact

(a) Metals (Steel, Aluminium, Copper)

  • Exports to U.S.: $4.7 billion (17% of total Indian metal exports).
  • Impact:
    • U.S. not largest global market, but vital for SMEs in Delhi-NCR engineering belt and eastern foundry hubs.
    • Stainless steel, aluminium casting, and copper semi-finished goods face job disruptions.

(b) Machinery & Mechanical Appliances

  • Exports to U.S.: $6.7 billion (20% of India’s total in this category).
  • Impact:
    • Demand drop expected, but diversified global buyers soften the blow.
    • Still critical for SMEs dependent on U.S. orders.

(c) Organic Chemicals

  • Medium exposure to U.S.
  • Tariff impact is cushioned by wider markets in EU, Japan, ASEAN.
  • Industry body CHEMEXCIL has sought government intervention.

Immediate Economic Impact

  • Severe demand shock: shrimp, textiles, jewellery already seeing cancellations.
  • Price crash: Shrimp prices falling in Andhra Pradesh procurement markets.
  • Employment risk: Labour-intensive sectors (textiles, gems, aquaculture) at risk of layoffs.
  • Exportersreaction: Pre-shipment rush, appeals to government, lobbying through industry bodies.

Government Response (Short-term)

  • Swadeshi” & Vocal for Local” narrative: Reduce export dependency; boost domestic demand.
  • Multi-ministry plan under consideration (Commerce, Finance, External Affairs, MSME):
    • Possible interest subvention / credit support for exporters.
    • Export incentive packages for worst-hit sectors.
    • Marketing support to explore alternative destinations.
  • RBI readiness: Governor stated RBI will provide liquidity or credit easing to impacted sectors.

Medium to Long-term Strategy

  • Diversification of export markets:
    • Leverage FTAs (UAE, Australia, EU in progress).
    • Push into Africa, ASEAN, Latin America.
  • Strengthening domestic value chains: Reduce reliance on U.S. orders.
  • Special packages/funds: For sectors with high labour absorption (textiles, gems, marine exports).
  • Negotiation channels: Possible WTO consultations or bilateral trade talks with U.S.

International Parallels

  • Similar protective tariffs by U.S. in past (e.g., Trump-era steel tariffs, China tariffs) caused:
    • Short-term export pain.
    • Trade diversion to alternate markets.
  • Other countries responded with compensation packages for farmers/exporters or by negotiating bilateral deals.

Summary

  • High-impact sectors: Shrimp, textiles, jewellery/carpets (tariffs up to 60%, immediate order cancellations, production/job cuts).
  • Moderate-impact sectors: Metals, machinery, organic chemicals (tariffs 50%, but diversified export base reduces damage).
  • Government response: Short-term relief plan + credit support + long-term diversification strategy.
  • Outlook: Immediate pain in labour-heavy sectors, with medium-term adjustment possible if markets diversify and domestic demand strengthens.


Basics: What is UDISE+?

  • Unified District Information System for Education Plus (UDISE+): Annual survey by the Ministry of Education.
  • Covers pre-primary to Class 12 in govt., aided, private, and other schools.
  • Provides data on enrolment, dropouts, Gross Enrolment Ratio (GER), infrastructure, teachers, etc.
  • Latest data: 2024-25, compared to 2023-24.

Relevance : GS 2(Education , Social Issues)

 

Key Findings of UDISE+ 2024-25

  • Sharp fall in young student enrolment (ages 3–11; Anganwadi, pre-school, Classes 1–5):
    • 2023-24: 12.09 crore
    • 2024-25: 11.84 crore
    • Decline: 24.93 lakh students
  • Overall enrolment (Classes 1–12):
    • 2023-24: 24.8 crore
    • 2024-25: 24.69 crore
    • Drop: 11 lakh students → lowest since 2018-19.
  • Historical trend:
    • 2012-13: 26.3 crore
    • 2021-22: ~26 crore
    • 2022-23: 25.18 crore
    • 2023-24: 24.8 crore
    • 2024-25: 24.69 crore
    • Net fall in a decade: ~1.6 crore students (~6%).

Causes of Decline in Enrolment

  • Demographic transition:
    • Falling birth rates → shrinking school-age population.
    • India’s TFR = 1.91 (2021) < replacement level (2.1).
    • Except UP, Bihar, Meghalaya, all states below replacement fertility.
  • Shift to standalone pre-primary private institutions → some children outside UDISE+ school count.
  • Methodological changes in 2022-23 and 2023-24 → not fully comparable to older datasets.
  • Urbanization & migration: Possible undercounting of mobile/migrant children.

Positive Indicators Amid Decline

  • Rising GER (Gross Enrolment Ratio):
    • Middle level: 89.5% → 90.3% (2023-24 to 2024-25).
    • Secondary level: 66.5% → 68.5%.
    • Suggests higher share of eligible children are actually enrolled, even if population base shrinks.
  • Dropout rates improving:
    • Preparatory stage: 3.7% → 2.3%.
    • Middle school: 5.2% → 3.5%.
    • Secondary: 10.9% → 8.2%.
    • Indicates better retention, fewer children leaving school midway.
  • Higher enrolment in upper classes:
    • Classes 6–8: +6 lakh students (6.31 → 6.36 crore).
    • Classes 9–12: +8 lakh students (6.39 → 6.48 crore).
    • Suggests progress in transition from primary to secondary education.

Implications of the Decline

  • Demographic dividend challenge: Shrinking base of young students → smaller workforce in future.
  • Education system planning: Govt. must align teacher recruitment, infrastructure, and budgets with falling school-age population.
  • Policy focus shift:
    • From universal access → to quality of learning outcomes.
    • With fewer children, per-child investment can be higher.
  • Regional disparities: States like UP & Bihar (still high fertility) may see continued high demand for schools, while southern & western states face declining enrolment.
  • Long-term social impact: Lower child population → ageing society sooner, with implications for pensions, health care, and dependency ratios.

Way Forward

  • Use of upcoming 2026 Census: To update school-age population base and refine GER/dropout estimates.
  • Policy realignment:
    • Rationalizing school infrastructure in low-population areas.
    • Investing more in teacher training, digital learning, foundational literacy.
  • Focus on early childhood education: Integrate Anganwadis and standalone pre-schools into formal system (NEP 2020 mandate).
  • Address regional imbalance:
    • Northern states → focus on access (school availability).
    • Southern states → focus on retention & higher-order skills.


India’s Ageing Context

  • Demographic transition:
    • India is moving from a young to ageing society due to falling fertility & rising life expectancy.
  • India Ageing Report 2023 (IIPS + UNFPA):
    • By 2050, 20%+ of Indias population will be aged 60+.
    • This equals ~347 million elderly, compared to ~149 million in 2022.
  • Gendered longevity:
    • Women live 2.7 years longer than men on average.
    • Results in a feminisation of ageing (more elderly women than men).

Relevance : GS 1(Society) , GS 2(Social Issues)

Health & Longevity Gap Between Men and Women

  • McKinsey Health Institute:
    • Women spend 25% more years in poor health than men.
    • Much of this burden falls in later years of life.
  • Elderly womens health paradox:
    • Longer life expectancy ≠ better quality of life.
    • Higher prevalence of chronic conditions, cancers, and cognitive decline.

Social Determinants of Elderly Women’s Health

  • Cultural & social conditioning:
    • Women prioritise family health > own health.
    • Gatekeeping of care decisions by husband/adult children.
  • Economic dependency:
    • 60% of elderly women have no personal income (UNFPA 2011).
    • <20% women can pay their own medical bills (vs. 44% men).
    • Very few elderly women have health insurance.
  • Digital divide:
    • Limited access to digital health platforms & insurance enrolment.
    • Reduces access to information & tele-health solutions.
  • Education gap:
    • Education strongly linked to better health-seeking behaviour.
    • Uneducated women face poor awareness about preventive screenings & therapies.

Disease Burden Among Elderly Women

  • Cancer risks:
    • Breast cancer: Elderly women often get less aggressive treatment, lowering survival despite effectiveness of surgery/chemo.
    • Cervical cancer: Vaccination awareness growing in younger women, but elderly women lack access to pap smear screening.
    • Ovarian cancer: Most lethal gynaecological cancer; 5-year survival only 17% if diagnosed late.
  • Neurodegenerative diseases:
    • Higher vulnerability to Alzheimers, dementias (due to oestrogen decline, widowhood, isolation).
    • LASI: Women 70+ report higher cognitive impairment, but are under-diagnosed & under-treated.
  • Mental health:
    • Depression highly under-reported.
    • HelpAge India: Only 1 in 10 elderly women with depressive symptoms seek help.
    • Barriers: stigma, lack of geriatric psychiatry services, family neglect.

Positive Protective Factors

  • Social embeddedness:
    • Elderly women deeply connected to family & community networks.
    • Protective against loneliness & cognitive decline.
  • Active lifestyles:
    • Walking groups, yoga, hobbies (painting, music) improve physical & mental well-being.
  • Education advantage:
    • Educated women are more likely to seek outpatient care, both public & private.

Policy & Systemic Gaps

  • Healthcare spending bias:
    • Across age groups, health expenditure on men > women.
  • Gender-insensitive care:
    • Few healthcare facilities tailor care to elderly womens needs (e.g., cancer screening, mental health).
  • Elderly treated as dependents:
    • Public discourse ignores elderly women’s agency; sees them only as caregivers or passive dependents.
  • Insurance gap:
    • Limited geriatric coverage; most elderly women lack health protection schemes.

Way Forward – Recommendations

  • Policy realignment:
    • Build gender-sensitive geriatric health systems.
    • NEP for ageing: integrate elderly women’s health into Ayushman Bharat & state health missions.
  • Preventive care expansion:
    • Free screening programs for cancers (cervical, breast, ovarian) & cognitive decline.
  • Financial inclusion:
    • Pensions, micro-insurance, and social security nets for widows & single elderly women.
  • Mental health integration:
    • Geriatric psychiatry, community counselling, elderly support helplines.
  • Digital & health literacy:
    • Train elderly women in basic digital health platforms.
    • Expand awareness on vaccinations, screening, and treatment options.
  • Community-driven solutions:
    • Promote elderly women’s groups, SHGs, walking clubs, skill-based learning for social & mental health benefits.

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