MLC Daily Current Affairs – 27 January 2025

Today in History ( January 27^th,1921)

On this day, the Bank of Calcutta and the two other Presidency banks, Bank of Bombay and Bank of Madras, were merged to form the Imperial Bank of India, an all-India bank. The new bank performed like a regular commercial bank.

Let’s Revise

Q.1) Select the correct statements regarding the role of the Whip in India:
1. The Whip is responsible for maintaining party discipline and behavior in the legislature.
2. India adopted this concept from the British Parliamentary System.
3. There can be a Chief Whip, who is assisted by additional whips.
4. In presidential elections, whips cannot instruct Members of Parliament (MPs) or Members of Legislative Assembly (MLAs) to vote in a specific manner.
a) 1, 2, 3, 4
b) 1, 2, 3
c) 1, 3
d) 1, 2, 4
Answer: a)
Explanation: The Whip is indeed responsible for maintaining party discipline and behavior in the legislature, ensuring that party members follow party directives during important votes. The concept of the Whip was inherited from the British Parliamentary System during colonial rule, making this statement correct. In India, the Chief Whip is appointed by each political party to issue whips to party members, and additional whips may assist the Chief Whip, confirming the correctness of this statement. Whips do not have the authority to direct MPs or MLAs on how to vote in presidential elections. This is a constitutional provision ensuring the freedom of vote for such elections, so this statement is also correct. Thus, all four statements are accurate, and the correct answer is 1, 2, 3, 4.
Q.2) Consider the following statements regarding whip:
1. The office of whip is not mentioned in the constitution.
2. Every political party, whether ruling or opposition has its own whip in Parliament.
Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Answer: c)
Explanation: The office of ‘whip’, on the other hand, is mentioned neither in the Constitution of India nor in the Rules of the House nor in a Parliamentary Statute. It is based on the conventions of the parliamentary government. Every political party, whether ruling or Opposition has its own whip in Parliament.
Q.3) Which of the following statements about the office of the Whip in India are correct?
1. The office of the Whip is mentioned in the Constitution of India.
2. The office of the Whip is based on the conventions of the parliamentary system, and every political party, whether in power or opposition, has its own Whip in Parliament.
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Answer: b)
Explanation: The office of the Whip is not mentioned in the Constitution of India. It is a position based on parliamentary conventions rather than formal legal provisions. However, every political party, whether in government or opposition, appoints a Whip in Parliament, making statement 2 correct.

Summary of Today’s News

Trade Tariff Threats by the Trump Administration

Context: US President Donald Trump has proposed imposing trade tariffs on BRICS countries, including India, which could have significant consequences for the Indian economy.
Trade Dynamics between the US and India
Current Status of India-US Bilateral Trade
• The United States is India’s largest trading partner.
• In 2023-24, India maintained a trade surplus with the US, marking a key economic relationship.
• Bilateral trade between the two countries reached a record US$ 118.2 billion in FY24, compared to US$ 128.78 billion in FY22.
• India enjoyed a trade surplus of US$ 36.8 billion with the US in FY24.
• The US is the third-largest foreign direct investor in India, with cumulative FDI inflows totaling US$ 65.19 billion from April 2000 to March 2024.
Key Indian Exports to the US
Engineering goods, electronic products, gems and jewelry, pharmaceuticals, light crude oil and petroleum products, electrical equipment, and more.
Key Indian Imports from the US
Mineral fuels and oils, pearls, precious and semi-precious stones, nuclear reactors and machinery, electrical machinery, etc.
Trade and Tariff Issues between India and the US
Challenges in the Trade Relationship:
• Asymmetrical Tariffs: The US accuses India of benefiting from tariff relaxations without offering similar concessions in return.
• Trade Imbalance: The US continues to express concern over India’s persistent trade surplus.
• Lack of Trade Concessions: India does not offer significant trade concessions to the US, partly because both countries have yet to establish a Free Trade Agreement. For example, US motorcycle maker Harley-Davidson pulled out of India due to high tariff rates.
• Service Export Disputes: The delay in finalizing a US-India Free Trade Agreement stems from differences over Mode-4 service exports, which involve temporary movement of people to deliver services in another country.
• Most Favoured Nation (MFN) Clause: The MFN provision of the World Trade Organization mandates India to extend any tariff concessions granted to the US to other WTO members, such as China, which could negatively affect India’s trade balance.
• Agricultural Subsidies: The US has criticized India’s subsidies for its farmers, arguing they distort global trade practices.
As a result of these issues, President Donald Trump has considered imposing tariffs on India to reinforce the principle of reciprocal trade.
Potential Impact on India
Negative Effects on India’s Economy:
• Reduced Competitiveness: Increased tariffs may make Indian goods less competitive in the US market, lowering profits for Indian exporters.
• Worsening Trade Deficit: A drop in exports to the US could lead to a larger trade deficit for India.
• Pressure on Foreign Exchange Reserves: A growing trade imbalance could decrease the inflow of dollars, negatively affecting India’s foreign exchange reserves.
• Sectoral Decline: Key Indian industries, such as pharmaceuticals, IT, textiles, and jewelry, could face significant challenges as their access to the US market shrinks.
• Reduced Investment: Higher tariffs may raise concerns among foreign investors about the stability of trade relations between India and the US, potentially discouraging investment in India.
• Currency Depreciation: A reduction in exports could lead to a weaker Indian rupee, as decreased trade flows negatively impact the currency.
Potential Strategies for India
In response to these challenges, India could consider several structural, diplomatic, and institutional strategies:
• Diversifying Exports: Currently, around 90% of India’s exports are concentrated in just five countries. India should seek to diversify its export markets, focusing on Latin America and Africa.
• Diplomatic Engagement: India should work to fast-track the US-India Free Trade Agreement, offering equal trade benefits to the US in exchange for better terms.
• Improving Product Competitiveness: India can invest in long-term strategies to enhance the competitiveness of its products by:
• Lowering production costs through skill development, automation, and reducing legal compliance burdens.
• Improving logistics efficiency to cut costs, aiming to reduce logistics expenses from 12% to 8% of GDP.
• Enhancing trade facilitation and ease of doing business.
• Strengthening Special Economic Zones by focusing on larger, more efficient zones rather than numerous smaller ones.
US-India trade relations are expected to be volatile due to the Trump administration’s aggressive trade policies. To navigate these uncertainties, India must prioritize boosting domestic competitiveness, increasing consumption, and diversifying trade markets to safeguard against the potential fallout from US tariff hikes.

15th National Voters’ Day

India is celebrating the 15th National Voters’ Day on January 25, 2025, marking 75 years of dedicated service by the Election Commission of India (ECI).
About National Voters’ Day
• Historical Background: The day was established in 2011 to honor the founding of the Election Commission of India on January 25, 1950.
• 15th National Voters’ Day (2025): Theme: “Nothing Like Voting, I Vote for Sure”, highlighting the importance of voting in a democracy.
• Key Activities:
• Presentation of the Best Electoral Practices Awards to exceptional state and district officials.
• Special initiatives to celebrate 75 years of the ECI, including:
• Release of a commemorative postal stamp.
• A nationwide essay competition on “Democracy and India’s Future”.