Why in news?

The latest Economic Survey, led by V Anantha Nageswaran, has reassessed India’s long-term economic prospects and raised the country’s potential growth rate from 6.5% to 7%.

This reassessment comes amid an active debate on India’s current GDP growth trajectory and reflects the Survey’s view of improved structural and medium-term growth capacity of the economy.

What’s in Today’s Article?

• What Is Potential Economic Growth and Why It Matters?
• What Determines a Country’s Potential Growth Rate?
• India’s Declining Potential Growth: The Trend
• Why the Economic Survey Sees Higher Potential Growth?

What Is Potential Economic Growth and Why It Matters?

• A country’s potential growth rate differs from its annual GDP growth.
• While GDP growth measures how fast the economy expands in a given year, potential growth shows the pace at which it can grow without causing high inflation.
• If growth exceeds this level, demand outstrips supply and prices rise; if it falls below, resources remain underused.
• Therefore, to achieve sustainably higher growth, governments must focus on raising the economy’s potential growth rate, not just boosting short-term demand.

What Determines a Country’s Potential Growth Rate

• Capital Stock - Potential growth depends on the size and quality of physical assets—such as roads, bridges, ports, factories, and machinery—that support production and expansion in the economy.
• Labour Input - This includes not just the number of workers, but also their skills, productivity, and capacity, which directly influence how much an economy can produce.
• Total Factor Productivity (TFP) - TFP reflects how efficiently labour and capital are used together. Higher efficiency allows faster growth without inflationary pressure.

India’s Declining Potential Growth: The Trend

• Research by the Reserve Bank of India shows that India’s potential growth rate has declined over time:
  • 2003–2008: around 8%, India’s highest growth phase
  • 2009–2015: fell to 7%
  • Around the Covid-19 period: declined further to 6.5%, as acknowledged by the Chief Economic Adviser.
• This decline underscores the need for sustained reforms to rebuild long-term growth capacity.

Why the Economic Survey Sees Higher Potential Growth?

• Reforms Lifting Medium-Term Growth - The Chief Economic Adviser notes that the cumulative impact of recent policy reforms has raised India’s medium-term potential growth to around 7%, reversing earlier declines.
• Manufacturing and Supply-Side Push - Key reforms over the past three years—PLI schemes, FDI liberalisation, and logistics improvements—have strengthened manufacturing capacity and boosted the economy’s ability to expand supply.
• Labour Market Improvements - Measures such as labour law consolidation, lower regulatory compliance, and state-level reforms, along with investments in education, skilling, and apprenticeships, have reduced labour market frictions and improved employability.
• Conditions for Sustained Gains - The Survey stresses that credible increases in potential growth require persistent reforms and macroeconomic stability—conditions it says India currently meets.
• The Caveat: External Risks - Despite domestic strengths, the Survey cautions that geopolitical conflicts and global disruptions could still constrain India’s ability to fully realise its growth potential.

About NPS Swasthya Pension Scheme (NSPS):

• It is a new initiative launched by the Pension Fund Regulatory and Development Authority (PFRDA) as a Proof of Concept (PoC) under its Regulatory Sandbox Framework.
• The initiative aims to integrate health-related financial benefits with the existing National Pension System (NPS) framework.
• The scheme is designed to provide financial support for out-patient and in-patient medical expenses.
• The scheme will function as a sector-specific contributory pension scheme within the Multiple Scheme Framework (MSF) of NPS and will be offered to Indian citizens on a voluntary basis.
• It will be launched by Pension Funds after obtaining prior approval from PFRDA.
• As it is being implemented as a pilot project, only a restricted number of subscribers will be enrolled during the PoC phase.
• To facilitate the pilot, certain provisions of the PFRDA (Exits and Withdrawals under NPS) Regulations, 2015, have been relaxed.
• Pension Funds may also collaborate with FinTech firms and health service administrators to implement the scheme.

Key Features of the Scheme:

• Any Indian citizen is eligible to join the scheme, but a Common Scheme Account under NPS is mandatory.
• Subscribers can contribute any amount, in line with existing NPS guidelines applicable to the non-government sector.
• Subscribers aged above 40 years (excluding government sector subscribers) may transfer up to 30% of their contributions from the Common Scheme Account to the Swasthya Pension Scheme.
• Partial withdrawals are permitted for medical expenses up to 25% of the subscriber’s own contributions, with no limit on the number of withdrawals, subject to a minimum accumulated corpus of ₹50,000.
• In cases of critical inpatient treatment, where medical expenses exceed 70% of the available corpus, subscribers may opt for 100% premature withdrawal solely to meet such medical costs.

Claim Settlement and Safeguards:

• Amounts withdrawn under the scheme will be paid directly to the Health Benefit Administrator (HBA), Third Party Administrator (TPA), or hospital, based on valid claims and supporting bills.
• Any surplus remaining after settlement of medical expenses will be transferred back to the subscriber’s Common Scheme Account.

About Vishwamitri River:

• It is a small non-perennial river located in Gujarat.
• It drains into the Arabian Sea via the Gulf of Khambhat.
• The highly meandering, sinuous river has a unique ecosystem bearing a plethora of beautiful ravines right from its beginning till its end.
• Porcupines, the common Indian civet, the jungle cat, cobras, pythons, the checkered keelback, and the Bengal monitor are some of the species found in the ravines on the banks of this river.
• Vishwamitri is also where the protected and vulnerable species of the Indian crocodile (Crocodylus palustris), also known as the mugger, resides.

Key Facts about Mugger Crocodiles:

• It is one of the 24 extant species of crocodilians found globally.
• The crocodile’s common name comes from magar, which translates loosely to “water monster” in the Hindi and Urdu languages.
• Distribution:
  • The mugger’s geographic range extends from extreme southeastern Iran eastward to Bangladesh and from Nepal and northern India south to Sri Lanka.
  • In India its largest populations are found in the middle Ganges (Bihar-Jharkhand) and Chambal (Madhya Pradesh, Gujarat and Rajasthan) basins.
• Habitat:
  • It is most commonly found in freshwater environments such as rivers, lakes, hill streams, and village ponds.
  • It can live in fresh water and coastal saltwater lagoons.
  • This species makes burrows on land in a wide variety of habitats.
• Conservation Status:
  • IUCN Red List: Vulnerable

About Tehri Lake:

• It is an artificial dam reservoir located in the Tehri Garhwal town of Uttarakhand.
• It came into existence during the construction of Tehri Dam when the water from the Bhagirathi River was diverted to fill the dam reservoir.

Key Facts about Tehri Dam:

• It is a multipurpose dam built on the Bhagirathi River (one of the source streams of the Ganges River) in the Garhwal district of Uttarakhand.
• It is one of the tallest dams in the world and the tallest dam in India.
• Its primary purpose is to generate hydroelectricity.

About Kyasanur Forest Disease (KFD):

• It is a tick-borne viral haemorrhagic disease mostly found in southern India.
• The disease was first reported from the Kyasanur Forest of Karnataka in India in 1957; hence, it is known as KFD.
• The causal agent, KFD Virus (family Flaviviridae, genus Flavivirus), is a member of the tick-borne encephalitis (TBE) complex.
• It is also known as “monkey disease/monkey fever” because of its association with monkey deaths.
• Transmission:
  • Hard ticks (Hemaphysalis spinigera) spread the KFD virus to people and to animals, like monkeys and rodents.
  • Transmission to humans may occur after a tick bite or contact with an infected animal, most importantly a sick or recently dead monkey.
  • KFD does not spread between people.
• Symptoms:
  • Sudden onset of high-grade fever, prostration, nausea, vomiting, diarrhea, and occasionally neurological and haemorrhagic manifestations.
• Treatment:
  • There is no cure for KFD.
  • Supportive care is crucial, including fluid balance, providing oxygen, managing blood pressure, and treating additional infections.
• Vaccine: A vaccine for KFD is available and recommended in the parts of India where KFD is found.

About Pechora Missile System:

• The Pechora, officially known as the S-125 Neva/Pechora, is a Soviet-origin, medium-range surface-to-air missile (SAM) system designed to intercept low- to medium-altitude targets.
• Features:
  • The system consists of a radar-guided missile launcher and a fire control unit, typically employing the V-600 missile.
  • It uses the 4R90 Yatagan radar, equipped with five parabolic antennas, to detect, track, and lock onto targets.
  • It is particularly effective against slow-moving or low-flying targets, making it well-suited for countering drones and cruise missiles.
  • It can operate independently or as part of a larger, integrated air defence network, and is capable of functioning even in environments with heavy electronic jamming.
  • Range: The Pechora system has an operational firing range of up to 30–35.4 km.
  • Altitude: It can engage targets flying at altitudes from as low as 20 meters up to 20–25 km, making it versatile for both low and medium-altitude threats.
  • Detection: The system’s radar can detect targets up to 100 km away, providing early warning and engagement capability.

About Canada:

• Location: It is located in the northern part of North America.
• It is the second largest country in the world in area (after Russia).
• Bordered by: It shares borders with Alaska, a non-contiguous US state, to the northwest, and other US states to the south.
  • The border of Canada with the US is the longest bi-national land border in the world.
• Maritime Borders: It is bounded by the Arctic Ocean to the north, by the Atlantic Ocean to the east and the Pacific Ocean to the west.
  • It also shares maritime borders with the island of Greenland in the northeast and the French island regions of Saint Pierre and Miquelon in the southeast. 
• Capital City: Ottawa
• Geographical Features of Canada:
  • Climate: It has seven climatic regions namely, the Arctic, Subarctic, Prairie, Great Lakes, Cordilleran, plus the East and West Coasts.
  • Major Mountains: ​Rocky Mountain, the St. Elias Mountains and the Laurentian Mountains.
  • Major Rivers:  Mackenzie River, Yukon River, Saint Lawrence River.
  • Lakes: The five Great Lakes namely Superior, Michigan, Huron, Ontario, and Erie form a natural boundary between Canada and the United States. (Amongst these five, only Lake Michigan lies entirely within the US).
  • Natural Resources: Bauxite, Iron ore, Nickel, Zinc, copper, gold, lead, uranium, rare earth elements, potash, diamonds etc.

About Sunabeda Wildlife Sanctuary:

• Location: It is located in the Nuapada district of Odisha.
• It adjoins the Sitanadi and Udanti sanctuaries of Chhattisgarh.
• Terrain: The sanctuary harbors a great diversity of wildlife habitats, with a vast plateau, canyons, and waterfalls.
• Rivers: It also forms the catchment area of the Jonk River (tributary of the Mahanadi River), over which a dam has been constructed to facilitate irrigation.
• Vegetation: The important vegetation of this sanctuary comprises dry deciduous tropical forests.
• Flora: Bija, Teak, Sisoo, Asan, Dharua, Mahul, Char, Sandalwood, Sidha, etc.
• Fauna: It is an ideal habitat for the Barasingha (swamp deer).
  • Other important animals found are tigers, Leopards, hyenas, Barking Deer, Chital, Gaur, Sambar, Sloth Bear, Hill Myna, etc.

About PAIMANA Portal:

• The Project Assessment, Infrastructure Monitoring & Analytics for Nation-building (PAIMANA) is a flagship initiative of the Ministry of Statistics and Programme Implementation (MoSPI).
• It functions as a centralised national repository of infrastructure projects, enabling web-generated analytical reports and enhancing data accuracy, and operational efficiency.
• It is integrated with DPIIT’s Integrated Project Monitoring Portal (IPMP/IIG-PMG) through APIs.
• Key features of the PAIMANA Portal:
  • Centralized Project Monitoring: It serves as a centralized project monitoring system, providing a single-window interface for ministries, departments, and implementing agencies to upload, track, and review project information.
  • Real-time Dashboards: It features real-time dashboards with drill-down capabilities, enabling users to monitor progress across sectors, states, and timelines.
  • Advanced Data Analytics: It includes advanced data analytics, role-based user access, interactive dashboards.
  • It is mandated to monitoring of Central Sector Infrastructure Projects worth ₹150 crore and above.