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GS Paper: GS3-13.Infrastructure: Energy, Ports, Roads, Airports, Railways etc:

  • [pib] Approval of Major Port at Vadhavan, Maharashtra

    Why in the News?

    The Ministry of Ports, Shipping and Waterways has approved the project proposal for setting up a Major Port at Vadhavan, Palghar District of Maharashtra.

    About Vadhavan Port Project 

    • The project involves the development of core infrastructure, terminals, and other commercial infrastructure through a public-private partnership (PPP) mode.
    • The shareholding for the project is divided between the Jawaharlal Nehru Port Authority (74%) and the Maharashtra Maritime Board (26%).
      • The project aims to create a total capacity of 298 million metric tonnes per annum (MMTPA).
    • Trade routes facilitated:

    Existing Major Ports in India

    • India has 12 Major Ports: Chennai, Cochin, Deendayal (Kandla), Jawaharlal Nehru (Nhava Sheva), Kolkata, Mormugao, Mumbai, New Mangalore, Paradip, V.O. Chidambaranar (Tuticorin), Visakhapatnam, and Kamarajar Port Limited.
    • Private Sector participation is allowed in Major Ports for specific projects/berths/terminals through concession agreements for a specific period via open competitive bidding on revenue share/royalty between the Concessionaire and the Major Port Authority.
    • After the expiry of the concession period, the asset is handed over to the Port Authority.

    Significance of Major Ports

    • Major ports play a critical role in facilitating international trade and commerce.
    • They serve as gateways for the import and export of goods, significantly contributing to the country’s economy.
    • Ports generate substantial revenue for the government through customs duties, port fees, and other related charges.
    • Ports facilitate international collaboration and partnerships, enhancing diplomatic and trade relations with other countries.

    PYQ:

    [2016] Recently, which of the following States has explored the possibility of constructing an artificial inland port to be connected to sea by a long navigational channel?

    (a) Andhra Pradesh

    (b) Chhattisgarh

    (c) Karnataka

    (d) Rajasthan

  • India’s illegal coal mining problem      

    Why in the News?

    On July 13, three workers died of asphyxiation inside an illegal coal mine in Gujarat’s Surendranagar district.

    How Prevalent is Illegal Coal Mining in India?

    • Illegal coal mining has led to multiple fatalities, including recent incidents in Gujarat, Jharkhand, and West Bengal, highlighting its prevalence and dangers.
    • There are 10 workers who have died in illegal mining incidents in Gujarat alone this year, showcasing the ongoing risks associated with this activity.
    • Illegal mining is often conducted in abandoned mines or shallow coal seams, particularly in remote areas, where monitoring and enforcement of regulations are weak.

    What are the Legal Frameworks Governing Coal Mining in India?

    • Coal Mines (Nationalisation) Act, 1973: This act nationalized coal mining in India, regulating who can mine coal and under what conditions.
    • Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act): This central legislation governs the mining sector, detailing processes for acquiring mining licenses and regulating mining activities. It empowers state governments to frame rules to prevent illegal mining.
      • While the MMDR Act provides a framework, the enforcement and regulation of illegal mining fall under state jurisdiction.

    Why is the Responsibility for Addressing Illegal Mining Placed on State Governments?

    • Law and Order Issue: Illegal mining is categorized as a law and order problem, which is a subject under the State List of the Constitution, making it the responsibility of state governments to address.
    • Limited Central Authority: The Union government often shifts the responsibility to state authorities, citing the decentralized nature of governance in matters of local enforcement and regulation.

    What Factors Contribute to the Persistence of Illegal Coal Mining?

    • High Demand for Coal: With coal accounting for 55% of India’s energy needs, the high demand often exceeds legal supply leading to illegal mining activities.
    • Poverty and Unemployment: Many coal-rich areas are home to impoverished populations who resort to illegal mining as a source of livelihood due to limited job opportunities.
    • Weak Regulatory Enforcement: Inadequate monitoring and enforcement of mining regulations in remote areas allow illegal mining operations to flourish.
    • Political Patronage: Allegations of political leaders’ involvement in illegal mining operations complicate efforts to curb these activities, as seen in various states.

    What Safety Risks Do Workers Face?

    • Lack of Safety Equipment: Workers often operate without helmets, masks, or other protective gear, significantly increasing their risk of injury or death.
    • Hazardous Working Conditions: Illegal mines are typically unregulated, lacking proper structural support, making them vulnerable to cave-ins, landslides, and explosions.
    • Toxic Gas Exposure: Miners are at risk of asphyxiation from inhaling toxic gases like carbon monoxide, as evidenced by recent fatalities in Gujarat.
      • Continuous exposure to coal dust and hazardous substances can lead to respiratory issues and chronic health conditions, further endangering workers’ health.

    Conclusion: Need to implement advanced surveillance technologies, such as drones and satellite imaging, to monitor and detect illegal mining activities in real-time. This can improve the efficiency of enforcement agencies in identifying and responding to illegal operations swiftly.

  • India to host 2nd Asia Pacific Ministerial Conference on Civil Aviation

    Why in the News?

    • India will host the second Asia Pacific Ministerial Conference on Civil Aviation on September 11 and 12.
      • The conference will be jointly organised by the Indian government and the International Civil Aviation Organization (ICAO) APAC.

    About the International Civil Aviation Organization (ICAO)

    Details
    Establishment and Background
    • Founded on December 7, 1944, by the Chicago Convention on International Civil Aviation
    • Became a specialized agency of the United Nations in 1947
    • HQ: Montreal, Canada
    Objectives and Mission
    • Develop international standards and regulations for aviation safety, security, efficiency, and environmental protection
    • Promote safe and orderly growth of international air transport
    Structure and Governance
    • Assembly: Meets every three years, includes all member states
    • Council: Governing body with 36 elected member states
    • Secretariat: Led by the Secretary General, manages daily operations
    Membership
    • 193 member states as of 2024
    • Open to all states subscribing to Chicago Convention principles
    • India: Founding member, joined in 1944
    Functions and Responsibilities
    • Establish international standards and recommended practices (SARPs)
    • Conduct audits and monitor SARPs compliance
    • Provide technical assistance and capacity-building
    • Facilitate aviation data and statistics collection
    Key Areas of Focus
    • Safety: Enhance global aviation safety
    • Security: Strengthen aviation security measures
    • Efficiency: Promote efficient air navigation services
    • Environmental Protection: Address aviation’s environmental impact
    Significant Programs and Initiatives
    • Universal Safety Oversight Audit Programme (USOAP): Monitors safety oversight capabilities
    • Universal Security Audit Programme (USAP): Evaluates aviation security measures
    • Next Generation Aviation Professionals (NGAP): Addresses anticipated aviation professionals shortage
    • No Country Left Behind (NCLB): Assists states in implementing ICAO standards and policies
    Publications and Resources
    • Annexes to the Chicago Convention: SARPs across civil aviation domains
    • ICAO Journal: Quarterly publication
    • Global Aviation Safety Plan (GASP) and  Global Air Navigation Plan (GANP): Strategic documents for aviation safety and navigation improvements.
    Regional Offices Seven offices in Bangkok, Cairo, Dakar, Lima, Mexico City, Nairobi, and Paris
    Standards
    • Annex 1: Personnel Licensing
    • Annex 6: Operation of Aircraft
    • Annex 8: Airworthiness of Aircraft
    • Annex 17: Security
    • Annex 19: Safety Management
    Global Impact
    • Harmonizes international aviation policies and procedures
    • Contributes to safe, secure, and sustainable growth of global air transport

    About Asia Pacific Ministerial Conference on Civil Aviation

    • The conference aims to strengthen regional collaboration and develop a future-focused vision for the region, emphasizing innovation and safety.
    • The inaugural conference took place in February 2018 in Beijing.
    • 39 member states of the UN aviation safety body, the International Civil Aviation Organisation (ICAO), from the Asia Pacific region are expected to attend.
    • The conference focuses on making aviation travel sustainable, resilient, and adaptive to the changing needs of a globally interconnected community.
      • This region accounts for 33.41% of global flight departures, the highest of any region worldwide.
      • Passenger numbers are expected to increase from 4.5 billion this year to 11.5 billion by 2050.

    PYQ:

    [2014] International civil aviation laws provide all countries with complete and exclusive sovereignty over the airspace above their territory. What do you understand by ‘airspace’ What are the implications of these laws on the space above this airspace? Discuss the challenges which this poses and suggest ways to contain the threat.

  • Uniform IGST Rate of 5% on Aircraft and Aircraft Engine Parts

    Why in the News?

    The government has implemented a uniform Integrated Goods and Services Tax (IGST) rate of 5% on all aircraft and aircraft engine parts.

    Background: 

    • Prior to the implementation of GST in 2017, the taxation of aircraft and aircraft parts was complex, with different central and state taxes being levied.
    • Under the pre-GST regime, aircraft parts attracted a range of taxes, including excise duty, VAT, and additional customs duties, leading to a cascading effect and higher costs for the aviation industry.

    IGST Harmonization for MRO Boost:

    • This move is aimed at boosting Maintenance, Repair, and Overhaul (MRO) activities in India.
    • Previously, GST rates on aircraft components varied between 5%, 12%, 18%, and 28%, causing several issues.

    MRO Industry in India

    • The Indian MRO industry is projected to become a $4 billion industry by 2030.
    • Currently, India represents only 1% of the global MRO market, which is worth US$45 billion.
    • The industry is divided into airframe maintenance, engine maintenance (50-55% of work value), components maintenance, and line maintenance (weekly checks).
    • Commercial airlines spend 13-15% of their revenues on maintenance, primarily outsourcing heavy maintenance.

    What is Integrated Goods and Services Tax (IGST)?

    • The IGST is a component of the GST system in India.
    • It is levied by the central government on:
    1. Inter-state /UT supply of goods and services;
    2. Imports of goods and services;
    3. Supply of goods and services to/by SEZ units;
    4. Deemed exports (certain transactions where goods supplied do not leave the country but are treated as exports under GST law).
    • IGST is calculated by adding the applicable Central GST (CGST) and State GST (SGST) rates.
    • One thing to remember in IGST is that the importing state gets the accrued benefit of taxes.

    Rationale for the Uniform 5% IGST Rate

    • Simplification of Tax Structure: A uniform 5% IGST rate on aircraft and engine parts simplifies tax compliance and eliminates classification complexities.
    • Cost Efficiency: A lower IGST rate reduces overall tax burden on aviation industry, enhancing affordability of aircraft acquisition and maintenance.
    • Global Alignment: Aligns India’s tax policy with global standards, fostering competitiveness and attractiveness for international aviation investments.
    • Promotion of Aviation Services: Encourages aircraft leasing and MRO activities, supporting India’s aspiration to become a hub for these services.

    PYQ:

    [2017] What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’?

    1.  It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
    2. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves.
    3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.

    Select the correct answer using the code given below:

    (a) 1 only
    (b) 2 and 3 only
    (c) 1 and 3 only
    (d) 1, 2 and 3

  • Future investments in India’s EV space  

    Why in the news? 

    The government plans to expand its EV policy to include retrospective benefits, incentivizing entities that have already invested, with a formal announcement expected in August.

    Why is the government considering extending the EV policy?

    • Retrospective Effect: To include a retrospective effect, extending benefits to entities that have already made investments, aiming to reward and encourage early movers in the EV sector.
    • Encouraging Global Players: The policy seeks to prompt global players to localize production and invest in the domestic ecosystem.
    • Inclusive Incentives: Earlier, entities were eligible for incentives only if they set up local facilities within three years of receiving approval. The extension aims to make these incentives more inclusive.

    EV Policy of India: 

    • FAME Scheme: The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme is India’s flagship program to incentivize EV adoption. FAME-II, the current phase, provides incentives of:
      • ₹15,000 per kWh for 2-wheelers, up to 40% of the vehicle cost
      • ₹10,000 per kWh for 3-wheelers and 4-wheelers
      • ₹20,000 per kWh for electric buses
    • Phased Manufacturing Program (PMP): To boost local manufacturing, the government has implemented a Phased Manufacturing Program that gradually increases import duties on EV components over time, incentivizing domestic production.

    About the New EV Policy 2024:

    The key highlights of the new EV policy announced in 2024 include:

    • Reduced customs duty of 15% on imported EVs with a minimum CIF value of $35,000
    • A cap of 8,000 imported EVs per year
    • Requirement for manufacturers to invest at least ₹4,150 crore (~$500 million) and achieve 25% domestic value addition within 3 years, escalating to 50% in 5 years
    • Duty waiver capped at the investment made or ₹6,484 crore (equal to the PLI scheme incentive), whichever is lower.

    How does the revised policy align with India’s goals of enhancing local manufacturing and technology adoption in the EV industry?

    • Domestic Value Addition: The policy mandates that half of the value addition in manufacturing be done domestically within five years, boosting local manufacturing.
    • Import Duty Reduction: Reducing import duty on EVs with a minimum CIF value of $35,000 from 70%-100% to 15% to make the transition commercially viable.
    • Strengthening EV Ecosystem: By encouraging local production and investment, the policy aims to strengthen the entire EV ecosystem in India.
    • Global Leadership: Positioning India as a leader in the global transition from internal combustion engines to electric vehicles by fostering a sustainable and technologically advanced manufacturing environment.

    In what ways can the policy’s focus on localization and production volume increase competition and lower costs?

    • Economies of Scale: Higher volumes of production can lead to economies of scale, reducing the per-unit cost of EVs.
    • Healthy Competition: Encouraging competition among EV players to innovate and improve efficiency, thereby lowering production costs and prices for consumers.
    • Cost Reduction: Achieving higher production volumes and localized manufacturing will contribute to a significant decline in production costs, making EVs more affordable for Indian consumers.
    • Comprehensive Ecosystem: The focus on localization ensures the development of a robust supply chain and after-sales service network, further enhancing the viability and attractiveness of EVs in India.

    Way forward: 

    • Support Local Manufacturers: Provide incentives and support for domestic manufacturers to produce critical EV components such as batteries, motors, and controllers. This will reduce dependency on imports and enhance self-reliance.
    • R&D Investment: Increase investment in research and development to drive innovation in EV technology, ensuring that India remains at the forefront of advancements in the industry.

    Mains PYQ: 

    Q ‘Clean energy is the order of the day.’ Describe briefly India’s changing policy towards climate change in various international fora in the context of geopolitics. (UPSC IAS/2022)

  • Prolonged exposure to coal mining causes respiratory, skin diseases in workers: study  

    Why in the News?

    A new study by the National Foundation of India (NFI) reveals that 75% of focus group participants have chronic respiratory and skin ailments due to prolonged exposure to coal mining pollutants.

    • The study report titled, “At the Crossroads: Marginalised Communities and the Just Transition Dilemma”, is a sequel to the 2021 study by NFI on the socio-economic impact of coal transitions in India.
    Key Highlights of the reports by the National Foundation for India:

      • The study covered two districts each from three central Indian states—Chhattisgarh, Jharkhand, and Odisha surveying 1209 households and conducting 20 Focused Group Discussions (FDGs).
    • Other key findings of the study are: 
      • Health Concerns: Prolonged exposure to coal mining pollutants has resulted in widespread respiratory and skin diseases among the local populations. At least 75% of participants in Focus Group Discussions (FGDs) reported issues such as chronic bronchitis, asthma, and various skin conditions.
      • Economic Impact/ Economic Dependency on Coal: The phasing down of coal is expected to result in significant job losses and economic downturns in coal-dependent regions. This will not only impact the coal miners and workers directly but also the broader local economy.
      • Caste-Based Inequities: Access to resources and opportunities is significantly skewed, with marginalized communities such as Scheduled Castes (SCs), Scheduled Tribes (STs), and Other Backward Classes (OBCs) being disproportionately affected.
    • The report identifies several challenges in achieving a just transition, including the need to upskill a largely under-educated workforce and the lack of alternative livelihoods. 
    • It underscores the importance of community-specific policies, robust institutional mechanisms, and coordinated efforts between government bodies.
    • The study offers a potential framework for safeguarding the interests of these communities through:
      • Alternative Livelihoods: Emphasizing the development of new economic opportunities beyond coal.
      • Ecological Restoration: Promoting environmental recovery to mitigate the health impacts of coal mining.
      • Inclusive Policies: Ensuring that the transition policies are inclusive and consider the needs of marginalized communities.

     

    Present Challenges of Medical Expenses and Shift from Coal:

    • Health Concerns: People living closer to coal mines face higher medical expenses due to increased incidence of lung and breathing-related diseases and skin infections.
    • Economic concerns: The global shift away from coal is expected to result in job losses and economic downturns in coal-dependent regions, affecting both coal miners and the broader local economy.
      • Economic disparities exist with varying income levels and irregular wage receipt patterns in coal-dependent districts.
      • Dhanbad and Koriya, solely reliant on coal production, reported lower incomes compared to diversified industrial districts.

    Way Forward:

    • Diversification of Local Economies: Develop alternative industries and economic activities in coal-dependent regions to reduce reliance on coal mining. Promote skill development programs to help coal workers transition to new employment opportunities in emerging sectors such as renewable energy, manufacturing, and services.
    • Investment in Health Infrastructure: Enhance healthcare facilities in coal mining regions to address the higher incidence of lung, and breathing-related diseases, and skin infections. Implement comprehensive health monitoring and support programs for communities living near coal mines.
    • Promotion of Renewable Energy: Accelerate the shift towards renewable energy sources, building on the recent trend of increased capacity addition in renewable energy. Invest in renewable energy infrastructure and create job opportunities in the renewable sector to offset job losses in coal mining.
    • Government and Policy Support: Implement policies and provide financial support for a ‘just transition’ to ensure that workers and communities dependent on coal mining are not left behind.
    • Community Engagement and Participation: Involve local communities in planning and decision-making processes related to the transition from coal.

    Mains question for practice : 

    Q Analyse the health and socioeconomic impacts of prolonged coal mining in India, as highlighted by the National Foundation for India’s survey. 10M

    Mains PYQ: 

    Q In spite of adverse environmental impact, coal mining is still inevitable for Development”. Discuss. (UPSC IAS/2017)

  • Why India needs to build disaster resilience in its critical infrastructure?

    Why in the News?
    The unprecedented surge in electricity demand offers a glimpse into the kind of stress that critical infrastructure endures during extreme weather events and resulting disasters.

    Present Challenges in India -> High Temperatures and Electricity Demand:

    • Record-breaking Electricity Demand: Delhi experienced record-breaking electricity demand due to persistently high temperatures.
    • Frequent Power Cuts: The high demand led to frequent power cuts in Delhi and neighbouring areas.
    • Worsening Conditions: Other regions in central and eastern India faced similar or worse situations, with high night temperatures exacerbating the situation.
    • Heat-related Deaths: The lack of electricity and high temperatures likely contributed to several heat-related deaths.

    Mounting Losses:

    • Increased Economic Losses: Despite early warnings and quick responses reducing human casualties, economic and other losses from extreme weather events and disasters have been rising due to their increasing frequency and intensity.
    • Government Expenditure: States spent over Rs 1.5 lakh crore between 2018 and 2023 on disaster and natural calamity aftermaths.
    • Long-term Costs: Long-term costs include livelihood losses and reduced agricultural land fertility, which are projected to worsen over time.
    • Job Losses: A 2022 World Bank report projected that heat-related stress could result in a loss of around 34 million jobs in India by 2030.
    • Food Wastage: Food wastage due to non-air-conditioned transportation is estimated at about $9 billion annually.
    • Uncounted Infrastructure Damage: Damage to critical infrastructure like transportation, telecommunications, and power supply is often uncounted in government figures, particularly for privately owned services, causing massive disruptions.

    Incorporating Resilience:

    • Disaster Management Plans: Infrastructure sectors have disaster management plans to prepare and respond to events, such as backup power supplies for hospitals, waterlogging prevention for airports and railways, and underground telecommunication lines.
    • Slow Progress: Despite plans, much of India’s infrastructure remains extremely vulnerable to disasters.
    • Future Infrastructure: India is still developing much of its infrastructure, and it is more cost-effective to incorporate disaster resilience during construction than to retrofit later. Upcoming projects need to be climate-smart, sustainable, energy-efficient, and disaster-resilient.
    A case study of Odisha:

    The Coalition for Disaster Resilient Infrastructure (CDRI) studied Odisha’s electricity transmission and distribution infrastructure, revealing its extreme fragility. Over 30% of distribution substations are within 20 km of the coastline; 80% of electricity poles are susceptible to high wind speeds; over 75% of distribution lines are over 30 years old and not cyclone-resistant.

     

    Note: CDRI’s Created in 2019, CDRI aims to make critical infrastructure resilient to natural disasters. It serves as a knowledge hub and collaborates with over 30 countries, but only a few Indian states have engaged with CDRI.

    Way Forward:

    • Proactive Infrastructure Planning and Investment: Future infrastructure projects in India must integrate disaster resilience at the planning and construction stages. This approach ensures that new developments are sustainable, energy-efficient, and capable of withstanding extreme weather events, reducing the need for costly retrofits later.  
    • Collaboration with Expert Bodies and Adoption of Best Practices: States and infrastructure sectors should actively seek expertise and collaboration from organisations like the Coalition for Disaster Resilient Infrastructure (CDRI).  

    Mains question for practice: 

    Q Discuss the implications of extreme weather events on critical infrastructure in India, citing recent examples. What measures can be taken to enhance the resilience of infrastructure against such events? 15M

    Mains PYQ:

    Q Describe the benefits of deriving electric energy from sunlight in contrast to conventional energy generation. What are the initiatives offered by our government for this purpose? (UPSC IAS/2020)

     

  • What is in Great Nicobar, site of NITI Aayog’s mega Island Project?

    Why in the News?

    • The opposition party has demanded the immediate suspension of all clearances granted to NITI Aayog’s Great Nicobar Island (GNI) Project.
    • It alleged violations of due process, legal and constitutional provisions protecting tribal communities.

    Great Nicobar Island: An Overview

    • Geography and Ecology: Southernmost tip of India, part of the Andaman and Nicobar archipelago comprising 600-odd islands.
    • Environment: Hilly, covered with lush rainforests, annual rainfall of around 3,500 mm.
    • Biodiversity: Hosts numerous endangered and endemic species including the giant leatherback turtle, Nicobar megapode, Great Nicobar crake, Nicobar crab-eating macaque, and Nicobar tree shrew.
    • Area: 910 sq km with mangroves and Pandan forests along the coast.
    • Indigenous Communities:
      • Shompen Tribe: Approximately 250 people live in interior forests, predominantly hunter-gatherers, classified as a Particularly Vulnerable Tribal Group.
      • Nicobarese Community: Two groups – Great Nicobarese and Little Nicobarese, practice farming and fishing.
      • Resettlement: The Great Nicobarese were resettled in Campbell Bay after the 2004 tsunami.
    • Administrative Hub: Campbell Bay serves as the administrative hub, housing local offices of the Andaman and Nicobar administration and the panchayat.

    Back2Basics: “Nicobar Triangle”

    It is named after the Nicobar Islands, which are located at the northern apex of this triangular area.

    The islands within the Nicobar Triangle include:

    1. Nicobar Islands: This group of islands belongs to India and is situated to the south of the Andaman Islands. They are known for their diverse flora and fauna and are inhabited by indigenous tribes.
    2. Andaman Islands: Located to the north of the Nicobar Islands, the Andaman Islands are also part of India. They are well-known for their lush forests, coral reefs, and indigenous tribes.
    3. Indonesian Archipelago: To the south and southeast of the Nicobar Islands lies the Indonesian archipelago, which includes thousands of islands spanning a vast area between the Indian and Pacific Oceans.

    What is GNI Project?

    The GNI Project refers to the “Holistic Development of Great Nicobar Island,” a proposed mega project being piloted by NITI Aayog.

    • Implementing Agency: The project is to be implemented by the Andaman and Nicobar Islands Integrated Development Corporation (ANIIDCO).
    • Historical Context: Development plans for a port in Great Nicobar date back to the 1970s, aimed at leveraging its strategic location near the Malacca Strait.
    • The project aims to develop the southern end of the Andaman and Nicobar group of Islands in the Bay of Bengal by constructing –
    1. Transshipment port
    2. Dual-use military-civil international airport
    3. Power plant (450 MVA gas and solar-based) and
    4. A township over a span of 30 years on more than 160 sq. km of land, of which 130 sq. km is primary forest

    Features of the Project

    • Transshipment hub of the East: The proposed port will allow Great Nicobar to participate in the regional and global maritime economy by becoming a major player in cargo transshipment.
    • Naval control: The port will be controlled by the Indian Navy, while the airport will have dual military-civilian functions and will cater to tourism as well.
    • Urban amenities: Roads, public transport, water supply and waste management facilities, and several hotels have been planned to cater to tourists.

    Significance of the project

    • Economic significance: The proposed port would allow GNI to become a significant player in cargo transhipment, as it is positioned equidistant from Colombo, Port Klang (Malaysia), and Singapore.
    • Strategic significance: The proposal to develop GNI has been on the table since the 1970s, and it has been highlighted repeatedly as a crucial element for national security and consolidation of the Indian Ocean Region.
      • In recent years, the escalating Chinese presence in the Indian Ocean has added greater urgency to this imperative.

    Issues with the Project

    • The project entails the deforestation of 130 sq km, and felling 10 lakh trees, threatens biodiversity at Galathea Bay, displaces indigenous tribes, lacks thorough impact assessments, and poses seismic risks to vulnerable communities.

    Due-process Violations highlighted by the ‘Opposition’

    (1) Did not recognise the grant ownership: The island administration did not recognise or grant ownership of any forest land to local tribespeople as per FRA, a requisite step under the Forest Conservation Rules, 2017, before Stage-I clearance is granted.

    • This is despite the fact that Rule 6(3)(e) of Forest Conservation Rules-2017 (FCR) requires that any diversion of forest land first requires the District Collector to recognise and vest rights to locals under the FRA.
    • The legislation allows forest communities the right to control and manage the use of the forest land over which they hold titles, and their consent is mandatory for diverting it.

    (2) Inconsistencies with Stage-I Clearance: The Stage-I clearance for the project was granted in October 2022, two years after the application was received. Monthly progress reports show that the district administration did not process any claims over forest land under the FRA in the 26 months since project sanction.

    (3) Withdrawal of Consent: Weeks after the Stage-I clearance was granted, the Tribal Council at Campbell Bay withdrew the consent granted by the Gram Sabha.

  • Power markets in India: their working, advantages, and the road ahead

    Why in the news?

    Amid rising summer demand, the government has permitted the trading of excess electricity produced from “linkage coal” within the nation’s power markets.

    What is the Power Market?

    • A power market is a platform where electricity is bought and sold, enabling generators and consumers to trade electricity based on market-driven prices and conditions.

    Types of Markets related to Power exchanges in India include:

    • Spot Markets: These include real-time markets (RTM) and day-ahead markets (DAM). RTM allows for immediate buying and selling of electricity, while DAM involves bidding for electricity to be delivered the next day.
    • Term-Ahead Markets: These markets facilitate trades for longer durations, ranging from hours to several days in advance, providing more certainty and planning for market participants.

    Their working and Power exchanges in India

    • Market Operation: Power exchanges in India operate as platforms where electricity generators (sellers) and consumers (buyers) participate in trading electricity. Generators submit offers indicating the quantity of electricity they can supply at various prices, while buyers submit bids indicating the quantity they wish to purchase at various prices.
    • Renewable Energy Certificates (REC): Power exchanges also manage the trading of Renewable Energy Certificates (RECs). RECs represent the environmental attributes of renewable electricity generated and can be sold to utilities to meet their renewable purchase obligations (RPOs).
    • Regulation: Power exchanges are regulated by the Central Electricity Regulatory Commission (CERC) in India. The regulatory framework ensures fair and transparent trading practices, oversees market operations and sets rules to promote market integrity.
    • Market Dominance: The Indian Energy Exchange (IEX) is the dominant power exchange in India, handling the majority of electricity trading volume. Other exchanges include Power Exchange India Limited (PXIL) and Hindustan Power Exchange Ltd (HPX), though IEX holds more than 90% of the market share.

    Their advantages 

    • Flexibility: Enables generators to respond swiftly to fluctuating electricity demand by selling surplus power at market-driven prices, enhancing grid stability.
    • Efficiency: Optimizes utilization of coal-based power generation assets, minimizing wastage and maximizing revenue through market-based transactions.
    • Transparency: Promotes transparent pricing mechanisms in the electricity sector, fostering competitive market dynamics and benefiting consumers with potentially lower electricity costs.

    The Road Ahead for Power Exchanges:

    • Market Coupling: It matches bids from different power exchanges to discover a uniform market clearing price, promoting efficiency and reducing price disparities across regions.It enhances price discovery, market stability, and regional grid integration by providing a reliable reference price for policymakers.
    • Capacity Markets: It compensates generators for maintaining available capacity, incentivizing investment in reliable generation infrastructure. They ensure long-term grid reliability, especially during peak demand periods, aligning India’s power market with international standards and attracting investment.
    • International Alignment and Competitiveness: India’s adoption of advanced market structures (like market coupling and capacity markets) aims to align with mature international markets.These developments can foster greater competition, attract investment, and enhance overall sector efficiency and reliability.

    Mains PYQ: 

    Q Write a note on India’s green energy corridor to alleviate the problem of conventional energy. (UPSC IAS/2013)

  • [pib] Viability Gap Funding (VGF) Scheme for Offshore Wind Energy Projects

     

    Why in the News?

    • The Union Cabinet, chaired by the PM, approved the Viability Gap Funding (VGF) scheme for offshore wind energy projects.

    Note: Offshore wind energy projects refer to developing and operating wind farms located offshore, typically in coastal waters or oceans.

    Back2Basics: Viability Gap Funding (VGF) Scheme

    • The VGF scheme is a financial tool to support infrastructure projects that are economically justified but face financial viability challenges.
    • It was launched in 2004 to address the gap between economically viable infrastructure projects and their financial feasibility under traditional financing models.
      • Administration: Administered by the Ministry of Finance, Government of India, the scheme operates as a Plan Scheme with annual budget allocations.

    Features:

    1. Capital Subsidy: VGF provides a grant (capital subsidy) to infrastructure projects to make them financially attractive for private sector participation. This subsidy helps cover part of the cost that private investors would find economically unviable.
    2. Project Eligibility: Projects eligible for VGF are typically selected through competitive bidding processes. They must demonstrate economic justification but face challenges in attracting private investment solely on commercial terms.
    3. Disbursement Timing: The VGF grant is disbursed during the construction phase of the project. However, disbursement is conditional upon the private sector developer making the required equity contribution to the project.
    4. Budgetary Allocation: Funds for VGF are allocated from the government’s budget. Sometimes, contributions may also come from the statutory authority that owns the project asset.
    5. Limitations: Additional financial assistance beyond the VGF amount is capped at 20% of the total project cost. This additional support can be provided by the sponsoring Ministry, State Government, or the statutory entity involved.

    Benefits:

    • Encouraging Investment: By reducing the financial risks associated with infrastructure projects, VGF encourages private sector participation, leading to faster project implementation and improved service delivery.
    • Infrastructure Development: The scheme supports the development of critical infrastructure such as transportation (roads, railways, airports), energy (power generation, transmission), and public utilities.

    About VGF Scheme for Offshore Wind Energy Projects

      • The VGF scheme aligns with the National Offshore Wind Energy Policy (2015) to harness India’s offshore wind potential.
      • It aims to reduce power costs from offshore wind projects, making them viable for DISCOMs through government support.
      • It seeks installation and commissioning of 1 GW of offshore wind energy projects (500 MW each off the coast of Gujarat and Tamil Nadu).
    • Functionaries: 
      • Private Developers will execute projects via transparent bidding.
      • Power Grid Corporation of India Ltd (PGCIL) will build power evacuation infrastructure.
    • Total outlay: Rs. 7453 crore, including Rs. 6853 crore for installing and commissioning 1 GW of projects in Gujarat and Tamil Nadu.

    Advantages of Offshore Wind Energy:

    • Offshore wind offers higher reliability, lower storage requirements, and greater employment potential than onshore wind and solar.
    • The development will attract investments, build indigenous manufacturing capabilities, and foster technology advancements.

    Environmental and Economic implications:

    • 1 GW projects will generate 3.72 billion units annually, reducing CO2 emissions by 2.98 million tons per year for 25 years.
    • Expected to kickstart India’s offshore wind sector, supporting initial development of 37 GW capacity with an investment of Rs. 4,50,000 crore.
    • Creates an ecosystem for ocean-based economic activities, contributing to India’s energy transition goals.

    PYQ:

    [2018] With reference to solar power production in India, consider the following statements:

    1. India is the third largest in the world in the manufacture of silicon wafers used in photovoltaic units.
    2. The solar power tariffs are determined by the Solar Energy Corporation of India.

    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

    [2016] Give an account of the current status and the targets to be achieved pertaining to renewable energy sources in the country. Discuss in brief the importance of National Programme on Light Emitting Diodes (LEDs).