Daily Current Affairs for UPSC CSE
Topics Covered
- Debt to GDP Ratio
- White cheeked Macaque
- Haryana Prevention of Unlawful Conversion of Religion Bill, 2022
- Facts for Prelims
1 . Debt to GDP Ratio
Context : Taking on global rating agencies for terming India the most indebted emerging market and claiming that the Union Budget lacked clarity on fiscal consolidation plans, Finance Secretary T.V. Somanathan said they appear to adopt “double standards” in their assessments of emerging economies and developed markets. India, in fact, has one of the best debt-to-GDP ratios if compared against higher-rated countries like the U.S. and Japan, and has a natural tendency to grow faster than them even in the worst of times
What Is the Debt-to-GDP Ratio?
- The debt-to-GDP ratio compares a country’s sovereign debt to its total economic output for the year. Its output is measured by gross domestic product (GDP).
- The debt-to-GDP ratio is a simple way of comparing a nation’s economic output (as measured by gross domestic output) to its debt levels.
- In other words, this ratio tells analysts how much money the country earns every year and how that compares to the money that country owes. The debt is expressed as a percentage of GDP.
Formula
- The formula for debt-to-GDP is simple: you divide a nation’s debt by its GDP.
How Does the Debt-to-GDP Ratio Work?
- The debt-to-GDP ratio indicates how strong a country’s economy is and the likelihood of paying off its debt. It’s used to compare debt between countries and determine whether a country is headed for economic turmoil.
- The debt-to-GDP ratio is a useful tool for investors, leaders, and economists. It allows them to gauge a country’s ability to pay off its debt. A high ratio means a country isn’t producing enough to pay off its debt. A low ratio means there is plenty of economic output to make the payments.
- If a country were a household, GDP is like its income. Banks will give you a bigger loan if you make more money. In the same way, investors will be happy to take on a country’s debt if it has a relatively higher level of economic output. Once investors begin to worry about repayment, they will perceive a higher risk of default, which means they will demand a higher interest rate for their investment. That increases the country’s cost of debt. When the cost of debt gets out of hand, it can quickly become a debt crisis.
- In the fourth quarter of 2021, the U.S. debt-to-GDP ratio was 124%. According to the Bureau of Economic Analysis, that’s the $29.6 trillion U.S. debt at the end of the fourth quarter divided by the $23.9 trillion nominal GDP.
Comparison between two Countries
- The debt-to-GDP ratio allows investors in government bonds to compare debt levels between countries. For example, Germany’s public debt is many times larger than that of Greece. But Germany’s 2017 GDP was $4.2 trillion, much more than Greece’s $299 billion. That’s why Germany, the largest country in the EU, decided to help bail out Greece. The debt-to-GDP ratio for Germany was less than 64%, while Greece’s was nearly 193%.
- The debt-to-GDP ratio isn’t always a good predictor of whether a country will default or not.
- Japan’s debt-to-GDP ratio was 257% in 2020. However, Japan is in the unique situation of having most of its debt held domestically, and it holds a large number of foreign assets, and both of these facts could mean that it’s less at risk of default.
- The Greek debt crisis occurred because foreign governments and banks held a lot of Greece’s debt. As Greece’s banknotes became due, its debt was downgraded by rating agencies like Standard & Poor’s, which made interest rates rise. Greece had to find a way to raise more revenue. It agreed to cut spending and raise taxes to do so. This action further slowed its economy, reducing revenue and its ability to pay down its debt.
- As a country’s debt-to-GDP ratio rises, it often signals that a recession is underway. A country’s GDP decreases in a recession. It causes taxes (federal revenue) to decline while the government spends more to stimulate its economy. In an ideal scenario, economic stimulus spending is successful, and the recession lifts. The stimulus creates more economic activity, which increases taxes and federal revenues, which helps put the debt-to-GDP ratio back in balance.
2 . White cheeked Macaque
Context : Scientists from the Zoological Survey of India (ZSI) have found a new mammal species in the country — the White Cheeked Macaque.
About the discovery
- Macaque was first discovered in China in 2015, its existence was not known in India before this — it is only now that Indian scientists have discovered its presence in the remote Anjaw district in central Arunachal Pradesh. That is barely 200 km aerial distance from where it was first spotted in China — in Modog in Southeastern Tibet.
- Scientists were tracking the Red Panda and the Arunachal macaque in the eastern Himalayas. Tracking the Arunachal macaque that they have been studying, collected faecal and skin samples of the macaque and when carried out DNA sequencing at ZSI lab, expecting it to be the Arunachal macaque, it turned out to be White Cheeked Macaque.
- The latest discovery takes India’s mammal count from 437 to 438.
About White Cheeked Macaque
- The White Cheeked Macaque has distinct white cheeks, long and thick hair on the neck and a longer tail than other Macaque species. It is the last mammal to have been discovered in Southeast Asia.
- Both the Arunachal macaque as well as the White Cheeked Macaque exist in the same biodiversity hotspot in the eastern Himalayas.
- “The discovery will also lay the foundation of the species not only being included in the wildlife list but also being covered by the Wildlife Protection Act of India, which presently doesn’t cover it simply because we didn’t know it existed in India, species may be threatened and requires immediate attention and protection.
3 . Haryana Prevention of Unlawful Conversion of Religion Bill, 2022
Context : The Haryana Cabinet on Tuesday approved the draft of the Haryana Prevention of Unlawful Conversion of Religion Bill, 2022, which seeks to prohibit religious conversion effected through misrepresentation, force, undue influence, coercion, allurement or by any fraudulent means or by marriage or for marriage, by making it an offence.
Details of the bill
- The Bill, on the lines of recent anti-conversion laws passed in other States, proposes to make conversion by marriage an offence.
- It also prescribes higher punishment for conversion of minors, women, and members of the Scheduled Castes and the Scheduled Tribes.
- According to the draft Bill, the burden of proof “lies on the accused
- Every individual converting from one religion to another shall submit to the prescribed authority a declaration that the conversion effected through was not misrepresentation, use of force, under threat, undue influence, coercion or by any fraudulent means or by marriage or for marriage and such authority shall make an inquiry in such cases.
- Besides, the draft Bill provides for declaring marriages null and void, which were solemnized by concealment of religion.
4 . Facts for Prelims
Mount Everest
- Mount Everest Mount Everest is Earth’s highest mountain located in the Mahalangur Himal sub-range of the Himalayas.
- It lies on the border between China and Nepal, so mountaineers climb it from both sides. Its most recent elevation of 8,848.86 metres was established in 2020 by the Nepalese and Chinese authorities. In Nepal, Everest is called Sagarmatha, while in China, it is known as Mount Qomolangma, the Tibetan name for the world’s highest peak.
- South Cole Glacier is in the Nepalese side of the Everest at an elevation of 8,020 metre