The Reserve Bank of India’s (RBI) gold reserves touched 794.64 metric tonnes in fiscal 2023. This is an increase of nearly 5 per cent over fiscal 2022, when it held 760.42 metric tonnes of gold.

The recent purchases have swelled RBI's total gold reserve to just under 800 tonnes, marking a new record for the central bank.

It acquired about 10 tonnes of gold in the March quarter, placing it among the top five gold buyers in that period.

India’s Gold Market -

Ø  The data on gold industry in terms of its’ size, direct contribution to GDP and employment, is not easily available.

However, as per the World Gold Council report(released in January 2023) —

Ø  India is the second largest gold jewellery consumer in the world.

Ø  In 2021, India bought 611 tonnes of gold jewellery, second only to China (673 tonnes).

Ø  The report further highlighted that gold jewellery exports in India have grown from US $7.6 billion in 2015 to US $12.4 billion in 2019.

Ø  This report also highlighted that rural India is the largest consumer of gold jewellery occupying 55-58 per cent of the market share, and the middle class is the primary gold consumer in India.

Impact of Gold on the Economy -

Business/employment opportunities —

Ø  Gold is used as a raw material for jewellery fabrication and making coins. This in turn creates business opportunities, value addition and employment.

Ø  The industry provides employment to a significant number of people in India, including miners, artisans, and retailers.

Current account deficit (CAD) —

Ø  India is the world's second-largest importer of gold, which contributes to the country's current account deficit.

Ø  The import of gold requires foreign currency, which puts pressure on the country's foreign exchange reserves.

Ø  It should be noted that the gold imports are also used for export of gold jewellery, it has the potential to mitigate the adverse impact of imports on CAD.

Inflation —

Ø  Gold is often used as a hedge against inflation, which means that during times of high inflation, demand for gold increases.

Ø  This can lead to an increase in the price of gold.

Ø  Savings and investments — Gold is considered a safe-haven asset and a store of value in India, which means that many people use it as a means of savings and investment.

Financialisation of Gold -

Ø  A report by NITI Aayog estimated that around 23,000-24,000 tons of gold lies unused with the households and religious institutions throughout the nation.

Ø  It is with the view to monetise this unutilised gold that the Government introduced the Gold Monetisation Scheme (GMS) in the Union Budget, 2015.

Ø  The gold accumulated under the GMS was to be used productively and profitably, by banks through the Gold (Metal) Loan (GML).

Ø  GML was introduced as a low interest rate financial product for meeting inventory financing needs of the borrower.

Ø  The Government had launched the Sovereign Gold Bonds Scheme (SGBS) in November, 2015. The main objectives of this scheme were to reduce the demand for physical gold and shift a part of the gold imported every year for investment purpose into financial savings.

How much gold has RBI bought?

Ø  The RBI bought 34.22 tonnes of gold in fiscal 2023; in fiscal 2022, it had accumulated 65.11 tonnes of gold.

Ø  Between the fiscal year ended June 30, 2019 and fiscal 2023, the RBI’s gold reserves swelled by 228.41 tonnes. The RBI used to follow the July-June accounting year in 2019.This was changed to April-March starting 2020-21.

Why is RBI buying so much gold?

As part of the diversification process, the RBI has been adding gold to its reserves.

This change in strategy has been driven by negative interest rates in the past, the weakening of the dollar and growing geopolitical uncertainty.

Recently, a meeting was held in Riyadh between Saudi Crown Prince (MBS) and NSAs of the US, UAE, and India. The meeting highlights the convergence of strategic interests of the US, UAE, Saudi Arabia and India in the Gulf region and new possibilities of strategic alliances for India.

India's traditional approach to the Middle East -

Ø  Nehruvian foreign policy was of the proposition that Delhi must either oppose Washington or keep its distance from it in the Middle East.

Ø  There was a prevalent notion that Delhi cannot be visibly friendly to Israel.

Ø  Any proposition that India would sit down with the US, Israel and the Sunni Kingdoms of the Gulf would have been dismissed as a fantasy just a few years ago.

Result of India’s traditional approach -

Ø  Pakistan became the lynchpin of the Anglo-American strategy to secure the “wells of (oil) power” in the Gulf.

Ø  Pakistan was a key part of the Baghdad Pact created in 1955 along with Britain, Iraq, Iran, and Turkey to counter the Communist threat to the region and became strategically relevant.

Ø  However, Pakistan does not figure in the current strategy to connect the Gulf with the Subcontinent.

Ø  New developments in the Gulf geopolitics -

Decline of Pakistan’s Strategic Relevance —

Ø  Pakistan in the 1950s was widely viewed as a moderate Muslim nation with significant prospects for economic growth.

Ø  Pakistan’s continuing strategic decline makes it a lot less relevant to the changing geopolitics of the Gulf.

Ø  It has now locked itself into a self-made trap of violent religious extremism and its political elite is utterly unprepared to lift the nation economically.

Ø  To make matters more complicated, Pakistan has drifted too close to China.

Ø  As the US-China confrontation sharpens, Islamabad is tempted to align with China (and boost its “all-weather partnership” with Beijing) and Russia in the region.

Strategic Convergence of the US and India in the Gulf —

Ø  Contrary to the widespread perception, the US will not abandon the Middle East. But it certainly is recalibrating its regional strategy.

Ø  In a speech in Washington, US NSA Jake Sullivan highlighted several elements of the new US approach.

Ø  Two of them stand out with respect to India’s interest. One is about building new partnerships, including with Delhi, and the other is about the integration of the Arabian Peninsula into India and the world.

Ø  Also, India’s self-imposed ideological taboo was broken with the formation of a four-nation grouping, unveiled in October 2021; called I2U2 that brought the US, India, Israel, and the UAE together.

Ø  Delhi is also doubling down with a new quadrilateral with the US, UAE, and Saudi Arabia. India’s Current Foreign Policy w.r.t Gulf Region -

Improved relations with Saudi Arabia and the UAE —

Ø  The current dispensation transformed India’s uneasy relations with the two Arabian kingdoms, Saudi Arabia and the UAE, into solid strategic partnerships.

Ø  The Prime Minister has received the highest civilian honour from the UAE and Saudi Arabia for his effort to improve bilateral relations.

Strategic Trilateral Relationship with France and the UAE —

Ø  France has emerged as an important partner in the Gulf and the Western Indian Ocean.

Ø  India now has a trilateral dialogue with Abu Dhabi and Paris.

Ø  The prospect of Delhi and London working together in the Gulf is very likely. Britain enjoys much residual influence in the Gulf.

Can China's influence in the region affect US led Strategic alliances?

Ø  Beijing is now the second most important power in the world, and its diplomatic and political influence in the region will continue to rise.

Ø  However, Beijing is nowhere near displacing Washington as the principal external actor in the Gulf.

Ø  Seen in conjunction with Britain, the Anglo-American connection to the Arabian Peninsula dates to the late 16th century.

Ø  The Anglo-Saxon powers have no desire to roll over and cede the Gulf to Beijing.

The New Arabian Tale -

Ø  Apart from all strategic alliances, China and the US, the story is really about the rising power of the Arabian Peninsula, especially Saudi Arabia and the UAE.

Ø  The Gulf kingdoms have accumulated massive financial capital and embarked on an ambitious economic transformation that will reduce their dependence on oil over the long term.

Ø  They have also begun to diversify their strategic partnerships, develop nationalism rather than religion as the political foundation for their states, promote religious tolerance at home, and initiate social reform.

Significance of India's character in the New Arabian Tale -

The New Arabian Tale will open new possibilities for India’s economic growth and Delhi’s productive involvement in promoting connectivity and security within Arabia and between it and other connected regions; including Africa, the Middle East, Eastern Mediterranean and the Subcontinent.

The engagement should also help India overcome the dangerous forces of violent religious extremism within the Subcontinent.

Conclusion -

The new opportunities in Arabia and the emerging possibilities for partnership with the US and the West position India to rapidly elevate its own standing in the region. However, to seize the opportunity India will have to modernise its strategic discourse on the Gulf and there should be concerted efforts to change the outdated narratives on the Arabian Peninsula.

Raksha Mantri recently approved posting of Women Officers of the Territorial Army along the Line of Control.

 About Territorial Army

Ø  The Territorial Army (TA) was established by the British through the Indian Territorial Act of 1920 and was organized into two wings, ‘The Auxiliary Force’ for Europeans & Anglo-Indians and ‘The Indian Territorial Force’ for Indian Volunteers.

Ø  The Territorial Army Act was passed in 1948 after India’s Independence, and the TA was officially inaugurated on October 9, 1949, by the first Indian Governor General, C Rajagopalachari.

Ø  Motto: The motto of the Territorial Army of India is ‘Savdhani Va Shoorta’ (Vigilance and Valour).

Role:

Ø  The TA’s primary role is to relieve the Regular Army from static duties and support civil administration in dealing with natural disasters and maintenance of essential services in situations where life is affected or national security is threatened.

Ø  The TA also provides units for the Regular Army when required.

Eligibility:

Ø  Any citizen aged between 18-42 is eligible to join the Territorial Army of India.

Ø  The pensionable age for soldiers below officer’s rank is 15 years.

Operations:

Ø  The TA units were actively involved in operations during the 1962, 1965, and 1971 wars.

Ø  Since 2020, the focus is to recalibrate the TA for better operational and intelligence roles, especially in the Andaman Islands.

The 203rd birth anniversary of Florence Nightingale, founder of modern nursing falls on May 12th, 2023.

Who was Florence Nightingale?

Ø  Florence Nightingale, (12 May 1820 – 13 August 1910) was an English social reformer and statistician, and the founder of modern nursing.

Ø  Nightingale came to prominence while serving as a manager of nurses trained by her during the Crimean War, where she organised the tending to wounded soldiers.

Ø  She gave nursing a highly favourable reputation and became an icon of Victorian culture, especially in the persona of "The Lady with the Lamp" making rounds of wounded soldiers at night.

Ø  Nightingale (1820-1910), who had considerable mathematical skills, is credited with being the first healthcare professional to use data to show that infection control improves health outcomes.

Ø  Through her career she stressed a practice that is relevant as ever today — handwashing. The irony is that the pandemic has not only ruined her anniversary but is also threatening part of her legacy.

Ø  International Nurses Day (IND) is an international day observed around the world on 12th May (the anniversary of Florence Nightingale’s birth) of each year, to mark the contribution that nurses make to society.

Ø  The theme for this year’s International Nurses Day is Nurses: Our Nurses, Our Future.