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Editorial
A new report by the World Bank has highlighted the faltering prospects of the global economy and urged policymakers to act urgently.
According to the Bank’s calculations the global economy’s “potential” growth rate — the maximum rate at which an economy can grow without spiking inflation — is likely to hit a three-decade low of 2.2 per cent a year between now and 2030, down from 2.6 per cent in 2011-21 and 3.5 per cent during the first decade of this century.
A series of overlapping crises in the past few years — such as the Covid-19 pandemic and the war in Ukraine — have weakened almost all the key drivers of long-term economic growth. In the words of David Malpass, President of the World Bank Group, The result could be a lost decade in the making — not just for some countries or regions as has occurred in the past — but for the whole world.
In its report, the Bank has shown how all the fundamental drivers of potential growth have been losing power. Be it capital accumulation (through investment growth), growth in labour force, or the growth of total factor productivity (which is the part of economic growth that results from more efficient use of inputs and which is often the result of technological changes) — all faltered in the past decade and the Bank expects all of them to slow further in the remainder of the current decade.
What’s worse, as the recent bank collapses suggested, these weaknesses “could be even more pronounced if financial crises erupt in major economies and, especially, if they trigger a global recession”.
While slowing growth is bad news for all concerned, it is particularly so for those economies — technically called the emerging market and developing economies (EMDEs) — that are trying to eradicate widespread poverty, tackle climate change and meet other key development objectives.
Explained
Food for thought in climate crisis: a wholly mammoth meatball (Page no. 13)
(GS Paper 3, Environment)
Australian startup Vow, on Tuesday (March 28), lifted the glass cloche on a meatball made of lab-grown cultured meat using the genetic sequence from the long-extinct woolly mammoth. The mammoth meatball, sized slightly smaller than a volleyball, was unveiled at a museum in Amsterdam.
While this will be a one-off creation, perhaps garner publicity for the food-tech company, founder Tim Noakesmith told the AP that through the mammoth meatball, the company hoped to start a conversation around global meat consumption.
Cultivated meat — also called cultured or cell-based meat — is made from animal cells but livestock does not need to be killed in order to produce it. Notably, it is different from plant-based meat substitutes in that it actually uses animal DNA to recreate in a lab the taste and texture of meat. Plant-based substitutes, on the other hand, try and mimic the taste and texture of meat using other plant-based alternatives.
India and the Korean war (Page no. 13)
(GS Paper 2, International Relations)
In its G20 year, India has declared it will represent the voice of the “Global South” for peace. Prime Minister Narendra Modi’s message to Russian President Vladimir Putin that “This is not the era of war” has won him plaudits from the Western alliance that is backing Ukraine.
It has given rise to expectations in some quarters that India, which often casts itself in the role of “Vishwaguru”, could use its good offices with both Kyiv and Moscow to help bring the war to an end.
It has also rekindled interest in the only other diplomatic intervention by India in a distant war seven decades ago — one that revealed both its international heft as well as exposed its limitations.
As the 1950 Korean War pitted Cold War opponents against each other, Prime Minister Jawaharlal Nehru made a huge diplomatic push to prevent an escalation into another world war, and for the parties to arrive at a quick ceasefire.
The efforts were only partially successful. Even so, India is counted among the countries that contributed to bringing the war to a close. New Delhi also discharged an important role in the months after the truce, as chair of a committee to repatriate prisoners of war.
Economy
Govt scraps customs duty on costly drugs for rare diseases (Page no. 15)
(GS Paper 2, Health)
The Union government has said it will provide full exemption from basic customs duty for drugs and ‘food for special medicinal purposes’ that are imported for personal use to treat rare diseases. Among the medicines that will be exempt is Pembrolizumab (Keytruda), used in treating various types of cancer.
In order to avail of this exemption, an individual importer needs to produce a certificate from a central or state director of health services or a district medical officer or civil surgeon.
Drugs and medicines generally attract a basic customs duty of 10 per cent. Some categories of lifesaving drugs and vaccines attract a concessional rate of 5 per cent or nil.
In its meeting in September 2021, the GST Council had reduced tax rates for several life-saving drugs. Life-saving drugs Zolgensma and Viltepso used in treatment of spinal-muscular atrophy were exempted from GST when imported for personal use. At that time, the GST rate for Keytruda was cut to 5 per cent from 12 per cent.
While exemptions have already been provided to specified drugs for treatment of spinal muscular atrophy or duchenne muscular dystrophy, the government has been receiving representations seeking customs duty relief for drugs and medicines used in treatment of other rare diseases.