21st JANUARY, 2025 A.) Electoral Trusts: Funding Political Parties WHY IN NEWS - After the Supreme Court’s decision to scrap electoral bonds last year, donations to political parties significantly increased through electoral trusts, as shown in the contribution reports released by the Election Commission of India (ECI) for the previous financial year. Background The Prudent Electoral Trust, the largest recipient of contributions, received nearly three-fourths of its funds after the Supreme Court’s decision on February 15, highlighting a shift in political funding trends. Details What are Electoral Trusts? • Definition: Non-profit organizations established to facilitate transparent political funding. • Introduction: Governed by 'The Electoral Trusts Scheme, 2013,' the scheme defines the registration process and operational framework. Key Features 1. Purpose o Collect voluntary contributions from individuals, companies, and institutions. o Distribute funds exclusively to registered political parties. 2. Legal Framework o Governed under Section 25 of the Companies Act, 1956, as non-profits. o Contributions are restricted to eligible entities as per the law. 3. Distribution Requirements o At least 95% of contributions (including previous surpluses) must be distributed to eligible political parties. o A maximum of 5% or ₹3 lakh may be used for operational expenses. o Direct or indirect benefits to members or contributors are prohibited. 4. Eligibility for Donations o Only registered political parties under Section 29A of the Representation of the People Act, 1951, are eligible to receive funds. o Donations cannot be made to independent candidates or unregistered parties. 5. Transparency and Reporting o Annual contribution reports must be submitted to the Election Commission of India (ECI). o Accounts are audited, and details (contributors, recipient parties, and disbursed amounts) are reported to the Income Tax Commissioner. 6. Tax Benefits o Donors: Receive tax benefits under Sections 80GGB and 80GGC of the Income Tax Act, 1961. o Electoral Trusts: Exempt from income tax on their income. Significance • Promotes transparency in political funding. • Ensures accountability by requiring detailed disclosures. • Provides tax incentives, encouraging legal and open contributions to political parties.   B.) India’s Real GDP Growth Slows to Four-Year Low WHY IN NEWS - India’s Real Gross Domestic Product (GDP) is projected to grow at 6.4% in FY2024-25, the slowest growth in four years, according to the National Statistics Office's (NSO) first advance estimates. Background The government attributes the cyclical slowdown partially to the Reserve Bank of India (RBI), citing tight monetary policies and interventions with the rupee’s value, which have hindered export competitiveness. However, the slowdown stems from deeper structural issues that cannot be resolved through interest rate cuts alone. Details Key Economic Trends • Post-Pandemic Growth: The high growth rates seen post-pandemic were largely driven by services exports, particularly the boom in Global Capability Centres (GCCs). However, this growth benefits a small, highly skilled segment of the workforce, limiting broad-based economic impact. • Stagnant Consumption Base: Limited income mobility has prevented the growth of the consumption base. For example, the share of small cars (sub-₹10 lakh segment) in total car sales dropped from 73% in 2014-15 to 46% in 2024-25, reflecting weaker purchasing power among lower-income groups. Labour Market Challenges • Job Creation: The labour market struggles with inadequate productive employment opportunities. Real wages are not growing at a meaningful pace, leading to increased reliance on informal, low-productivity jobs. • Employment Trends: o Formal employment growth, as per EPFO payroll data, is concentrated in low-skill segments like security services and manpower supply. o Informal employment, such as self-employment in household establishments or agriculture, continues to expand due to the lack of alternatives. • Debt Dependency: Household debt rose to 43% of GDP by June 2024, yet the increased borrowing has not significantly boosted overall consumption. Investment and Policy Uncertainty • Investment Slowdown: Limited demand visibility and policy uncertainties have led to subdued investment activity. Data from CMIE shows a slowdown in new project announcements. Significance • Highlights the structural challenges in the Indian economy, including limited job creation, stagnant wages, and declining upward mobility. • Emphasizes the need for comprehensive policy measures to address the labour market, boost consumption, and create a conducive environment for investment.   C.) Dead Olive Ridley Turtles Wash Ashore in Tamil Nadu WHY IN NEWS - In the past two weeks, a significant number of dead olive ridley turtles have been found on the Tamil Nadu coast, particularly in Chennai, raising concerns during the early stages of their nesting season. Background Olive ridley turtles typically arrive near the Tamil Nadu coast around September-October to breed, with their nesting season extending from late November to March. While turtle deaths during nesting are common, the unusually high mortality rate early in the season has alarmed conservationists and authorities. Details About Olive Ridley Sea Turtles • Scientific Name: Lepidochelys olivacea • Physical Characteristics: o Size: 60–70 cm in length, 35–50 kg in weight. o Shell: Olive-colored, heart-shaped, and flattened. • Habitat: o Found in warm waters of the Pacific, Atlantic, and Indian Oceans. o Prefer coastal and shallow marine environments but sometimes venture into open seas. • Diet: Omnivorous, feeding on algae, fish, shrimp, crabs, and jellyfish. • Lifespan: Typically live for 50–60 years. Unique Mass Nesting Behavior • Known for “arribadas,” where thousands of females gather on the same beach to lay eggs. • Major nesting sites include the coasts of India, Mexico, and Costa Rica. • In India, nesting occurs on the east and west coasts, with mass nesting at: o Odisha: Gahirmatha and Rushikulya beaches host lakhs of female turtles annually. o Andhra Pradesh and Tamil Nadu: Significant but smaller nesting sites. Conservation Status • Classified as Vulnerable by the IUCN Red List. Concerns and Conservation Measures • The early deaths may be linked to fishing activities, pollution, or habitat destruction. • Conservation strategies include monitoring beaches, regulating fishing practices, and raising public awareness.   D.) SVAMITVA Scheme and Economic Potential WHY IN NEWS - Prime Minister Narendra Modi highlighted that the nationwide distribution of property cards under the SVAMITVA scheme could unlock economic activity worth over ₹100 lakh crore. He made this statement while distributing over 65 lakh property cards to property owners in more than 50,000 villages through video conferencing. Background The SVAMITVA scheme, launched on National Panchayati Raj Day (April 24, 2020), aims to provide rural households with a record of ownership rights for their properties. This initiative uses advanced technology like drones to map rural properties and create GIS-based maps for each village. Details About SVAMITVA Scheme • Full Form: Survey of Villages and Mapping with Improvised Technology in Village Areas. • Objective: Provide rural residents with property cards as legal proof of ownership and facilitate the use of their property as a financial asset. • Technology: Utilizes drones for property surveys and GIS-based mapping. Benefits of SVAMITVA 1. Financial Empowerment: o Property cards enable rural households to use their land as collateral for loans and other financial services. o Increases liquidity of land parcels and enhances financial credit availability in villages. 2. Revenue Generation: o Helps in the determination and collection of property taxes, benefiting Gram Panchayats directly in states where they are authorized to collect such taxes. 3. Improved Governance: o Facilitates accurate land records for better rural planning and governance. o Aids in taxation, granting construction permits, and eliminating encroachments. 4. Economic Impact: o Unlocks significant economic activity by formalizing land ownership in rural areas.   E.) India-EU Relations: Key Highlights WHY IN NEWS The Minister of Commerce and Industry recently outlined a framework of six broad principles aimed at building a mutually beneficial partnership between India and the European Union (EU). The Six Broad Principles 1. Shared Values: Emphasis on democracy, rule of law, and an independent judiciary. 2. Fair Trade Agenda: Address trade barriers to develop a commercially meaningful, fair, and equitable trade framework. 3. Best Practices: Exchange expertise and harmonize standards to promote zero-defect, zero-effect production. 4. Supply Chain Resilience: Develop advanced technologies, secure critical raw material supply chains, and build resilient trade networks. 5. Sustainability: Collaborate on trade and sustainable development, adhering to the principle of Common But Differentiated Responsibility. 6. Mutual Growth: Foster partnerships that drive mutual growth and development. Significance of EU for India 1. Countering China: o Concerns over China's global expansion (Belt and Road Initiative) and military assertiveness in Asia. o Reducing dependence on China for strategic imports. 2. Economic De-risking: o Addressing India's trade deficit with China by diversifying trade partners. 3. Technological Cooperation: o EU's capabilities in critical and emerging technologies like cybersecurity, space, quantum computing, and synthetic biology. India-EU Relations: Overview Background: • The India-EU Strategic Partnership was formalized in 2004. • Adoption of the EU-India Joint Action Plan in 2005, focusing on political, economic, and developmental cooperation. Economic Relations: • Bilateral trade stood at over $180 billion in 2023-24. • The EU is a major FDI source, with cumulative investments amounting to $117.34 billion. Challenges: • Non-conclusion of the India-EU Free Trade Agreement (FTA). • Disagreements over labor and environmental standards.   F.) Wealth Inequality and Colonial Legacy WHY IN NEWS – A recent report highlights the unprecedented rise in billionaire wealth and persistent global poverty, emphasizing the lasting impacts of colonialism on economic inequality. Background The concentration of wealth among the richest individuals has been growing, exacerbating disparities between the Global North and South. Colonialism historically contributed to these inequalities, and neo-colonial structures continue to sustain them. Details Key Findings of the Report • Rise in Billionaires: In 2024, billionaire wealth grew three times faster than in 2023. • Poverty Levels: Over 3.5 billion people live on less than $6.85 per day, while the richest 1% owns more wealth than 95% of the global population. • Colonial Inheritance: Much of the extreme wealth of the ultra-rich stems from colonial exploitation. For instance, between 1765 and 1900, the UK drained $64.82 trillion from India, of which $33.8 trillion went to the top 10%. Impact of Historical Colonialism on Present-Day Inequality • Economic Exploitation: Colonial economies were structured to benefit colonizers, creating profound inequalities. • Arbitrary Borders: Colonial partitions have led to border conflicts and instability. • Social Divisions: Racism and social hierarchies persist due to colonial policies. • Landholdings: Concentrated land ownership in the Global South hinders equitable development. • Poor Health and Research Indicators: Limited funding and infrastructure in the Global South reflect the lasting impacts of exploitation. Colonial Legacy in Contemporary Times (Neo-Colonialism) • Digital Colonialism: Dominance of digital resources by corporations in the Global North. • Exploitative Corporate Structures: Multinational corporations exploit labor in the Global South for profits. • Global Governance: Institutions are disproportionately influenced by Global North nations, perpetuating inequalities. Wealth Drain from India During Colonial Period • High Taxes: Excessive land revenue drained agricultural incomes. • Trade Exploitation: India supplied raw materials and imported British goods, leading to the collapse of local industries. o Example: India's contribution to global industrial output fell from 25% in 1750 to 2% in 1900. • Other Components: o Home Charges: Indian revenue funded British administration. o Profit Repatriation: British profits were sent back to the UK. o Currency Manipulation: Policies favored British economic interests.