India lost 2.33 million hectares of tree cover since 2000: Global Forest Watch

Why in news?

• India has lost 33 million hectares of tree cover since 2000, equivalent to a six percentdecrease in tree coverduring this period, according to the latest data from the Global Forest Watch monitoring project.
  • The Global Forest Watch tracks forest changes in near real-time using satellite data and other sources.

Findings

• Primary Forest Loss: India lost 4,14,000 hectares of humid primary forest(4.1 per cent) from 2002 to 2023, making up 18 percent of its total tree cover loss in the same period.

• Tree Cover Loss:From 2001 to 2023, India lost 2.33 Mha of tree cover, equivalent to a 0% decrease in tree cover since 2000.
  • From 2013 to 2023, 95% of tree cover loss in India occurred within natural forest.
  • Five statesaccounted for 60 percent of all tree cover loss between 2001 and 2023.
  • Assam had the maximum tree cover lossfollowed by Mizoram, Arunachal Pradesh, Nagaland, and Manipur.
• Tree Cover Gain:In India, the top 6 regions were responsible for 54% of all tree cover gain between 2000 and 2020. Karnataka had the most tree cover gain.
  • From 2000 to 2020, India gained4% of the global total.
• All Tree Cover: As of 2010, the top 7 regions represent 55% of all tree cover. 
  • Arunachal Pradeshhad the most tree cover followed by Assam, Chhattisgarh, Kerala and Odisha.
• Loss Due to Forest Fires: India lost 35,900 hectares of tree cover due to fires from 2002 to 2022, with 2008 recording the maximum tree cover loss due to fires.
  • From 2001 to 2022, Odisha had the highest rate of tree cover loss due to fires. Arunachal Pradesh lost 198 hectares, Nagaland 195 hectares, Assam 116 hectares, and Meghalaya 97 hectares.
• Carbon Sink: Between 2001 and 2022, forests in India emitted 51 million tons of carbon dioxide equivalent a year and removed 141 million tons of carbon dioxide equivalent a year.
  • This represents a net carbon sink of 89.9 million tons of carbon dioxide equivalent a year.

Conclusion

• The tree cover loss data featured on the Global Forest Watch represents the best available spatial figures on how forests are changing around the world. 
• The monitoring and alert system is designed to empower people everywhere with the information they need to better manage and conserve forest landscapes. 

Decline in Private Investment

Why in news?

• Private investmentwitnessed a steady decline since 2011-12 and the government has been hoping that large Indian corporations would step in and ramp up investment. 

About

• The failure of private investment, as measured by private Gross Fixed Capital Formation (GFCF)as a percentage of gross domestic product (GDP) at current prices, to pick up pace has been one of the major issues plaguing the Indian economy. 
• In 2019, the Government slashed corporate taxes from 30% to 22%hoping that the move would encourage private investment.

What is the trend seen in private investment in India?

• In India, private investment began to pick up significantly mostly after the economic reforms of the late-1980s and the early-1990s that improved private sector confidence.
• From independence to economic liberalisation, private investment largely remained either slightly below or above 10% of the GDP. 
• The growth in private investment lasted until the global financial crisis of 2007-08.
  • It rose from around 10% of GDP in the 1980s to around 27% in 2007-08.
  • From 2011-12 onwards, however, private investment began to drop and hit a low of 19.6% of the GDP in 2020-21.
• Public investmentas a percentage of GDP steadily rose over the decades from less than 3% of GDP in 1950-51 it, however, began to drop post-liberalisation.

What is GFCF and why does it matter?

• GFCF refers to the growth in the size of fixed capital in an economy. 
• Fixed capitalrefers to things such as buildings and machinery, for instance, which require investment to be created. 
• So private GFCF can serve as a rough indicator of how much the private sector in an economy is willing to invest.
  • GFCF also includes capital formation as a result of investment by the government.
• Significance of GFCF: GFCF matters because fixed capital, by helping workers produce a greater amount of goods and serviceseach year, helps to boost economic growth and improve living standards. 
  • Fixed capital is what largely determines the overall output of an economy and hence what consumers can actually purchase in the market.
  • Developed economies such as the U.S. possess more fixed capital per capita than developing economies such as India.

Why Private Investment is Low in India?

• Low Private Consumption Expenditure: Many economists have blamed low private consumption expenditureas the primary reason behind the failure of private investment to pick up over the last decade.
  • Strong consumption spending is required to give businesses the confidence that there will be sufficient demand for their output. 
• Unfavorable Government Policies:The rise in private investment in the 1990s and the 2000s correlated with the economic reforms programme started in 1991.
  • The drop in private investment, on the other hand, correlated with the slowdown in the pace of reforms in the last two decades.
  • Further, policy uncertainty can discourage private investmentas investors expect stability to carry out risky long-term projects.
• Bureaucratic Hurdles:Cumbersome bureaucratic processes, including complex regulations and administrative delays, discourage private investment.
• Infrastructure Challenges:India faces significant infrastructure gaps, including inadequate transportation networks, and power shortages.
  • Poor infrastructure increases costs and reduces the attractiveness of investment opportunities.
• Access to Finance:Limited access to financing, particularly for small and medium-sized enterprises (SMEs) hinder investment.
• Skill Shortages:India faces shortages of skilled labor in certain sectors, which hinder investment in industries requiring specialized expertise.

Way Ahead

• Improving access to creditand developing robust financial markets can stimulate private investment.
• Investing in educationand vocational training programs can help address skill gaps and support investment.
• Streamlining proceduresand reducing bureaucratic hurdles can improve the investment climate.