System of National accounts- GDP
- The UN Statistical Commission adopted the System of National Accounts 2025 (SNA 2025).
- This update emphasizes sustainability, inclusiveness, and natural resource accounting, moving beyond traditional GDP which ignores inequality and environmental costs.
Key Changes
- Natural Resources in GDP
- Depletion of subsoil resources (coal, minerals, gas, etc.) will now be treated as a cost of production, not just a decline in asset stock.
- This ensures GDP reflects true wealth creation after deducting environmental degradation.
- Alignment with India’s Roadmap
- India has already built statistical capacity via EnviStats India series (since 2018) covering forests, minerals, energy, water, and piloting ecosystem accounts.
- Next step: integrate these with national accounts to align with SNA 2025.
- Distributional Accounts
- SNA 2025 mandates household distributional accounts, highlighting income inequality and wealth gaps.
- India has partial progress (PLFS 2017, Time Use Surveys, Household Consumer Surveys), but needs integration for a complete picture.
- Gender and Care Work
- Recognises women’s unpaid care work as a critical input.
- India’s Time Use Surveys (2019, 2024) provide data but still require integration into formal GDP statistics.
Key Changes
- Natural Resources in GDP
- Depletion of subsoil resources (coal, minerals, gas, etc.) will now be treated as a cost of production, not just a decline in asset stock.
- This ensures GDP reflects true wealth creation after deducting environmental degradation.
- Alignment with India’s Roadmap
- India has already built statistical capacity via EnviStats India series (since 2018) covering forests, minerals, energy, water, and piloting ecosystem accounts.
- Next step: integrate these with national accounts to align with SNA 2025.
- Distributional Accounts
- SNA 2025 mandates household distributional accounts, highlighting income inequality and wealth gaps.
- India has partial progress (PLFS 2017, Time Use Surveys, Household Consumer Surveys), but needs integration for a complete picture.
- Gender and Care Work
- Recognises women’s unpaid care work as a critical input.
- India’s Time Use Surveys (2019, 2024) provide data but still require integration into formal GDP statistics.
Key Realms of Cooperation
- Defence & Security
- Joint Declaration on Security Cooperation (2008).
- Defence Equipment Cooperation (2015), Acquisition & Cross-Servicing Agreement (ACSA).
- QUAD + Malabar Naval Exercise.
- Economic & Trade
- Bilateral trade (2023–24): $22.5 bn.
- Japan 5th largest investor in India.
- Target: raise bilateral investments from 5 trillion yen (achieved) to 7–10 trillion yen.
- Infrastructure & Development
- Mumbai–Ahmedabad High-Speed Rail (Shinkansen/Bullet Train): flagship project.
- Japan = largest ODA donor; has funded metro, connectivity, and sustainable projects.
- New focus: digital cooperation, semiconductors, AI, clean energy, hydrogen.
- Multilateral & Regional Cooperation
- Shared platforms: QUAD, ASEAN, G7, G20, SCO (observer).
- Shared goals: resilient supply chains, disaster resilient infra, Indo-Pacific stability
Emerging Focus Areas
- Digital & semiconductor cooperation.
- Supply chain resilience (to reduce China dependence).
- Clean energy & hydrogen projects.
- Industrial competitiveness & skill development.
Challenges
- Trade imbalance (India imports more).
- Implementation delays (e.g., Bullet Train project).
- Need to synergize FOIP with IPOI for Indo-Pacific leadership.
UPSC-Oriented Takeaways
- India–Japan ties = model of civilizational linkages + modern strategic convergence.
- Pillars: Security, Infrastructure, Economy, Indo-Pacific cooperation.
- Importance: counterbalance to China, crucial for India’s Act East Policy & strategic autonomy.
- Future: focus on technology (AI, semiconductors, clean energy) & sustainable infrastructure.