27 September 2023

MAINS DAILY QUESTIONS & MODEL ANSWERS

Q1. After summarizing the key findings of the fifteenth BRICS Summit, discuss the significance of the BRICS expansion for India.

GS II – International Issues

• Approximately 16% of global trade, 24% of global GDP, and 41% of the world’s population are accounted for by the BRICS alliance, which consists of the five largest rising economies in the world. The three pillars of economic and financial, cultural and people-to-people contacts, and political and security have brought the BRICS countries together over time to discuss important issues.
• BRICS membership expansion: Six more countries—Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE)—will be invited to become full members starting on January 1, 2024.
• The declaration made a significant push for UN reforms, expressing BRICS countries’ support for a wide-ranging reform of the UN that would also impact the Security Council for the first time in recent memory. They aim to increase democracy, representation, efficacy, and efficiency in addition to increasing the share of poor countries in the Council.
• The members of the BRICS advocated for BRICS space cooperation, especially when it came to exchanging and utilizing satellite data for remote sensing. For the successful launch of Chandrayaan-3, India received praise from all five of the BRICS countries.
• Systems of payment were discussed. The leaders are attempting to boost intra-BRICS payments done in national currencies as opposed to the US dollar, but not naming a BRICS currency.
• Two of the Bretton Woods financial institutions, the World Bank and the IMF, are also urged to undergo change in the proclamation. This proposal also calls for developing countries and emerging markets to play a bigger role in these institutions, particularly in leadership roles.
• Collaboration on other global issues: The wealthier countries of the BRICS agreed that they should enhance the ways in which climate change is implemented, particularly through increasing capacity, transferring technology for climate projects, and ensuring a sufficient and timely flow of affordable climate money.

Importance of the BRICS growth for India:

The benefits of expansion:

• In creating membership guidelines and establishing strategic alliances with new members, India was a pivotal player. With the backing of the new members, India will be able to expand its coalition and strengthen its position in the geopolitical arena.
• The BRICS expansion signifies a higher level of convergence between geopolitical and economic goals. Prominent global oil producers are situated near important trade routes, such as the Suez Canal, the Strait of Hormuz, and the Bab-al Mandab Strait.
• The inclusion of new members bolsters the group’s impact as a voice for the Global South and emerging nations. At the moment, the BRICS make up over 40% of the world’s population and more than 25% of the global GDP. After the additions, it will represent almost 50% of the world’s population.

Concerns about the BRICS’s expansion from India:

• The BRICS grouping’s swift expansion as a membership could jeopardize its fundamental objectives, especially if China is seen as taking center stage.
• India is concerned that BRICS may turn into an anti-Western bloc because of its tight ties to the US and other Western countries, particularly in the strategic sphere.
• Despite the fact that India has welcomed Iran’s membership, given that both Russia and Iran have exited the SWIFT system, the sanctions Iran is subject to may make it more difficult for intra-BRICS trade to grow.
• The BRICS could become more challenging to govern as a result of Middle Eastern tensions, especially if rifts deepen between Saudi Arabia and the United Arab Emirates or Iran.
• Expanding the BRICS was China’s initiative, supported by Russia and South Africa. While India has solid relations with all six of the new members, China is the group’s most important member and has the largest GDP. How China will be able to shape the agenda and future direction of the BRICS group is a worrying possibility.
• The development of the BRICS+ format and the adoption of guiding principles, standards, and processes for it might make the BRICS an even more attractive organization for establishing agreements and discussions in the developing world. It is imperative for India to stop China from exerting influence over the BRICS alliance and to preserve the alliance’s intrinsic value as a forum for emerging markets.

Q2. Despite India’s ability to provide “Housing for All,” there remains a demand and supply imbalance in the country’s housing market. What are the causes and effects of this imbalance? Also, critically evaluate the effectiveness of the Pradhan Mantri Awas Yojana in this regard.

GS II – Government Policies and Interventions

Introduction:

• In the recent years, there has been an increase in unsold units across the country, with one estimate placing their value at over?4L Crore. On the other hand, according to the Global Homelessness Statistics Report, around 80Lak families still lack a decent living home with a functioning toilet or are homeless. This is because the majority of homes that are built are either middle income section homes or luxury homes. However, the greatest demand in India is from lower income families.
• Unaffordability of Affordable Homes: With a median family income of just 11,000 rupees in India, 50% of the population cannot afford a metro area’s Affordable Home, which would cost more than 10 lakh rupees.
• Real estate investment demand drives up housing prices, pushing them out of reach for average consumers.
• Real estate companies catered more to investment demand than to real demand, which led to a situation where most stalled projects are solvent but are struggling for liquidity. After 2015, when the liquidity for investment demand dried up, real estate prices crashed, which significantly reduced the sector’s appetite to build more.
• Bad Planning: Over time, it has become clear that India’s city plans lack proper consideration for the needs of lower income groups, allotting much less space than necessary for cheap housing, forcing those individuals to live in slums.

The effects of this discrepancy are:

• Development of Slums in Urban Areas: It is estimated that 78 million people, or around 17% of the world’s slum inhabitants, reside in India.
• Homelessness in Rural Areas: People are compelled to live in kutchha huts, which are composed of mud and husk, in rural areas.
• Reduced living standards and lack of access to essential services: People are compelled to live without power, a sewer connection, or tapped water.
• Health Issues: Due to the close proximity of houses and inadequate sanitation, slums are notorious for being the superspreaders of epidemics. For instance, early this year, SARS CoV-2 spread rapidly across Dharavi, the largest slum in the world.
• Against Right to Life: When a person is made homeless and made to live in a pitiful condition, their right to a good environment and their right to live with dignity are infringed.
• In this context, Pradhan Mantri Awas Yojana (PMAY) is a crucial government of India programme that intends to provide ‘Housing for All’ by the year 2022.
• PMAY-G, formerly known as Indira Awaas Yojana (IAY), is the Pradhan Mantri Awaas Yojana for grains.
• The Rajiv Awas Yojana has been replaced with the Pradhan Mantri Awas Yojana- Housing for All (Urban) Mission.
• Success of Pradhan Mantri Awas Yojana (PMAY – G): Under PMAY – Gramin, the government constructs over 3 million homes yearly in rural areas, and as of April 2020, 1.40 million homes have been finished.

It entails:

• 1,20,000 units of assistance per unit in normal areas and 1,3 lakh in hilly states and challenging places;
• A toilet construction grant of?12,000 under the Swachh Bharat Mission
• Support for 95 person days in hilly states and challenging areas under MGNREGS, and 90 person days in plain areas, through convergence.
• A supplemental loan of up to Rs. 70,000

Success of PMAY-U: Its four sub-schemes include:

• Redevelopment of existing slums: with a grant of?1 lakh per dwelling,
• The Credit Linked Subsidy Scheme (CLSS) for Weaker Sections has an interest rate subvention of 6.5% for EWS/LIG categories such that the current interest payable is less than 4%.
• In projects where 35% of the homes are required to be for EWS category, central aid at 1.5 lakh per EWS house is provided;
• ?1.5 lakh per house for EWS category in slums or otherwise if states/cities develop a project is the subsidy for beneficiary-led individual house building or upgrading (BLC).
• This would increase demand for steel and cement, which it depends on, which would increase employment opportunities as well. The construction industry is also the second-largest employer after agriculture.

Conclusion:

• PMAY is a crucial component of achieving Sustainable Development Goal 11, which is to “Make cities and human settlements inclusive, safe, resilient, and sustainable.” India also needs to keep up its efforts in this area because it is predicted that, by 2030, we will need to build 700 to 900Mn square metres of new residential and commercial space annually to accommodate the country’s expanding population.