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

  • Centre raises credit limit under ECLGS

    The Ministry of Finance has raised the credit limit for airlines under the Emergency Credit Line Guarantee Scheme (ECLGS), making them eligible for a sum equivalent to 100% of their outstanding debt, up to a maximum of ₹1,500 crore.

    Boost for Aviation sector

    • Earlier, airlines were eligible to borrow up to 50% of their credit outstanding up to ₹400 crore.
    • This is the second time the government has liberalized the scheme for the aviation sector.
    • The scheme introduced for medium and small enterprises during the outbreak of the COVID-19 pandemic was extended till March 2023 and its guarantee cover expanded by ₹50,000 crore to ₹5 lakh crore.

    What is ECLGS?

    • Under the Scheme, 100% guarantee coverage to be provided by National Credit Guarantee Trustee Company Limited (NCGTC) for additional funding of up to Rs. 3 lakh crore to eligible MSMEs and interested MUDRA borrowers.
    • The credit will be provided in the form of a Guaranteed Emergency Credit Line (GECL) facility.
    • The Scheme would be applicable to all loans sanctioned under GECL Facility during the period from the date of announcement of the Scheme to 31.10.2020.

    Aims and objectives

    • The Scheme aims at mitigating the economic distress faced by MSMEs by providing them additional funding in the form of a fully guaranteed emergency credit line.
    • The main objective is to provide an incentive to Member Lending Institutions (MLIs), i.e., Banks, Financial Institutions (FIs) and NBFCs to increase access to, and enable the availability of additional funding facility to MSME borrowers.
    • It aims to provide a 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers.

    Salient features of ECGLS

    • The entire funding provided under GECL shall be provided with a 100% credit guarantee by NCGTC to MLIs under ECLGS.
    • Tenor of the loan under Scheme shall be four years with a moratorium period of one year on the principal amount.
    • No Guarantee Fee shall be charged by NCGTC from the Member Lending Institutions (MLIs) under the Scheme.
    • Interest rates under the Scheme shall be capped at 9.25% for banks and FIs, and at 14% for NBFCs.

     

     

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  • Natural Gas: The energy future of India

    Natural GasContext

    • The announcement at the end of August by the ministry of petroleum that they had constituted a committee, headed by energy expert Kirit Parikh, to review the domestic natural gas pricing regime.

    Background

    • Prime Minister Narendra Modi wants to raise the share of gas in India’s energy mix to 15% by 2030 from 6.2%, helping it progress towards meeting a 2070 net zero carbon-emission goal.

    What is Natural Gas?

    • Natural gas is a fossil fuel source consisting primarily of methane. It is the cleanest fossil fuels among the available fossil fuels.
    • It is used as a feedstock in the manufacture of fertilizers, plastics and other commercially important organic chemicals as well as used as a fuel for electricity generation, heating purpose in industrial and commercial units.
    • Natural gas is also used for cooking in domestic households and a transportation fuel for vehicles.

    Natural GasWhy Natural gas is Important?

    • Energy Efficient:Natural gas produces more energy than any of the fossil fuels in terms of calorific value.
    • Cleaner fuel: Natural gas is a superior fuel as compared with coal and other liquid fuels being an environment-friendly, safer and cheaper fuel.
    • Economy of use: Natural Gas (as CNG) is much cheaper compared with petrol or Diesel.
    • Emission commitments: India made a commitment to COP-21 Paris Convention in December 2015 that by 2030, it would reduce carbon emission by 33%-35% of 2005 levels.
    • Diverse applications: Natural gas can be used as domestic kitchen fuel, fuel for the transport sector as well as a fuel for fertilizer industries and commercial units.
    • Supply chain convenience: Natural Gas is supplied through pipelines just like we get water from the tap. There is no need to store cylinders in the kitchen and thus save space.
    • Pacing up the progress line: On the global front,switching to natural gas is bringing commendable results.The latest report released by IEA shows that the electricity produced by natural gas worldwide was more than that of coal for the first time ever.

    Natural gas scenario in India

    • Domestic Gas Sources: The domestic gas in the country is being supplied from the oil & gas fields located at western and southeastern areas viz. Hazira basin, Mumbai offshore & KG basin as well as North East Region (Assam & Tripura).
    • Import of Liquefied Natural Gas (LNG): In order to meet the gas demand, LNG is imported through the Open General License (OGL) in the country.  At present, India is having six operational LNG regasification terminals at Dahej, Kochi, Mundra, Ennore etc.
    • Gas Pipelines :
    • Gas Pipeline infrastructure is an economical and safe mode of transporting natural gas by connecting gas sources to gas-consuming markets.
    • An interconnected National Gas Grid has been envisaged to ensure the adequate availability and equitable distribution of natural gas in all parts of the country.
    • Pricing:
    • To incentivise gas producers and boost local output, since 2014 India has linked local gas prices to a formula tied to global benchmarks, including Henry Hub, Alberta gas, NBP and Russian gas.
    • In 2016, the country began fixing the ceiling prices of gas produced from ultra-deep water and challenging fields and allowed marketing freedom to the operators of these fields.

    Natural asStatistics of Natural gas in India

    • Current consumption: India’s natural gas consumption is expected to grow by eight per cent year-on-year to around 34,949 million standard cubic meters (MSCM) in the current calendar year aided by expanding infrastructure, strong GDP growth projections, and supportive government policy.
    • 2021 Consumption: In the 2021 calendar year (CY), the country’s natural gas demand stood at 32,360 MSCM. The share of domestic gas and imported RLNG was about 48% & 52% respectively. The City Gas Distribution (CGD) accounts for the largest consumption of natural gas followed by fertilizers, power and other industrial sectors
    • High prices: The state-set local gas prices and ceiling rates are at a record high and are expected to rise further due to a surge in global gas prices triggered by the Ukraine-Russia conflict.

    Kirit Parikh Committee

    • Objective: Ensuring fair prices to end consumers, and to suggest a market oriented, transparent and reliable pricing regime for India’s long term vision for ensuring a gas based economy.
    • Members: The committee,headed by energy expert Kirit Parikh, will include members from the fertiliser ministry, as well as gas producers and buyers.Four of the six members are from the public sector.

    Natural GasWhat are the problems facing India’s natural gas reserves?

    • Harsh topography: IHS CERA has estimated India has undiscovered gas resources of approximately 64 TCF The bulk of this is, however, in harsh topography and complex geology. These reserves are difficult to locate.
    • Distant from the market:Even if located,they are difficult to bring to market on economically viable terms. This is because the cost of creating the development and production infrastructure is massive.
    • Heavy Budget: The reality is India is a high-risk exploration play. There are inherent geologic, technical, and economic obstacles to achieving commercial success.
    • Administered Pricing: Constraint of administered pricing petroleum companies have reduced their exploration budgets under pressure to shift away from fossil fuels.

    What can be done?

    • Pricing freedom: It should clear up the existing complexity and, other than for producers of gas from nomination blocks, permit all producers of gas to determine prices through arms length,direct and transparent negotiations with different consumer segments.
    • Subsidies: There are no liquefaction facilities for the export of LNG in India. Subsidies may have to be provided but if so,they should be given directly by the government,through the exchequer. The gas producers must not be asked to bear that brunt.

    Conclusion

    • In the wake of the Ukraine crisis, the international energy market has undergone a profound transformation.India has made impressive progress towards clean energy. It has,however, a long way to go before it can fully wean itself off fossil fuels.

    Mains Question

    Q. It is evident that clean energy transitions are underway and it’s also a signal that we have the opportunity to meaningfully move the needle on emissions through more ambitious policies and investments in natural gas regime. Comment

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  • Sustainable port development promises blue economy to bloom

    Context

    • It is politically hard, but developmentally critical, to run port development projects with coastal management sustainably.

    portWhat is a port?

    • A port is a maritime facility comprising one or more wharves or loading areas, where ships load and discharge cargo and passengers. Although usually situated on a sea coast or estuary, ports can also be found far inland, such as Hamburg, Manchester and Duluth; these access the sea via rivers or canals.

    What is meant by port management?

    • A port management analysis involves an understanding of the port conditions, including intra-port distribution, and routes and hinterland connections outside the port.

    Why ports are important?

    • Ports infrastructure is key to the development of any nation. India has a coastline spanning about 7,500 km. around 90 percent of India’s external trade by volume and 70 percent by value are handled by ports.

    portWhat are concerns with port projects?

    • Displacement: Some 350 families that have lost homes to coastal erosion last year, and those living in makeshift schools and camps are just a foretaste of things to come if coastal erosion and extreme cyclones continue unabated.
    • Ecological impact: A further danger is an irreversibly destroyed ecology, triggering deadlier hazards of nature. Ports without adequate safeguards in a highly delicate ecology unleash destruction on marine life and the livelihoods of the local population.
    • Coastal erosion: Visakhapatnam and Chennai show how siltation, coastal erosion and accretion can be exacerbated by deepening of harbour channels in ecologically sensitive areas.
    • Oil spills: During the operation of ports, spillage or leakages from the loading and unloading of cargo and pollution from oil spills are common due to poor adherence to environmental laws and standards.
    • Ecosystem threat: The water discharged during the cleaning of a ship and the discharge of ballast water is a threat to marine ecosystems
    • Impact on fisheries: Dredging cause’s environmental problems (increased sedimentation) affecting local productivity of the local waters and its fisheries

    Value addition example

    A just published study shows that during 2006-20, the sea gobbled some 2.62 square kilometres or close to 650 acres from the Thiruvananthapuram coast alone.

    portSteps to take

    • Compensation: The first order of business, as in infrastructure projects worldwide, is that the project provides compensation to the displaced people and restores their rights.
    • Reversing marine damage: Second, the gross neglect of the damage to invaluable marine biodiversity must be redressed with an acceptable EIA, including inputs from experts in biology, ecology, and oceanography.
    • Safeguard to place: Third, there needs to be an independent assessment of safeguards that port authorities must put in place as a precondition for any further construction.
    • Blue Economy:Blue Economy as a concept includes all the economic activities related to oceans, seas, and coastal areas and emerges from a need for integrated conservation and sustainability in the management of the maritime domain.

    Way forward

    • Master plan: Countries should adopt a National Long-term Mater plan addressing the aspects of smarter, greener, safer sustainable port development and productivity improvement.
    • Planning: Port development and investment should be driven by setting specific and realistic goals, such as building a stable infrastructure focused on reducing trade costs and contribute to achieving sustainable transport.
    • Cooperation of multiple sectors: In order to establish a comprehensive port development master plan, cooperation with financial, environmental, technical, energy, transportation and urban development authorities is essential and must reflect the needs of users, including shippers and shipping lines.

    Conclusion

    • To address existing challenges, we should provide research, analysis and technical assistance to help ports and the maritime transport sector especially in developing countries to improve operations and become more sustainable and resilient to crises, including climate change.

    Mains question

    Q. What do you understand by sustainable port development and port productivity? Discuss the challenges in achieving the same along with way forward.

     

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  • Asian Palm Oil Alliance (APOA) formed by 5 South Asian Countries

    Edible oil trade associations from five palm oil importing countries in South Asia – India, Pakistan, Sri Lanka, Bangladesh and Nepal – on Thursday announced the setting up of Asian Palm Oil Alliance (APOA).

    What is Oil Palm?

    • Palm oil is an edible vegetable oil derived from the mesocarp of the fruit of the oil palms.
    • The oil is used in food manufacturing, in beauty products, and as biofuel.

    What is APOA?

    • Through APOA, the countries aim at safeguarding the economic and business interests of the palm oil consuming countries and will work towards increasing the consumption of palm oil in member countries.
    • The idea is to gain collecting bargaining power and make imports sustainable.
    • APOA held its first general body meeting on the side-lines of the Globoil Summit.
    • The industry associations of Asian palm oil importing countries, unlike their counterparts in Europe, are not involved in shaping the global discourse on sustainable palm oil in a collective way.
    • The alliance would work towards ensuring that palm oil is recognised as a high-quality, economical, and healthy vegetable oil and to change the negative image of palm oil.

    Why such move?

    • India’s annual imports of edible oil is around 13-14 million tonne (MT).
    • Around 8 MT of palm oil is imported from Indonesia and Malaysia, while other oils, such as soya and sunflower, come from Argentina, Brazil, Ukraine and Russia.
    • Asia accounts for around 40% of the global palm oil consumption while Europe accounts for 12% of palm oil trade.
    • Indonesia and Malaysia are the biggest palm oil exporters in the world.
    • India is the largest importer of palm oil in Asia, accounting for 15% of global imports, followed by China (9%), Pakistan (4%) and Bangladesh (2%).

    Try this PYQ:

    Q.Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?

    (a) Spices

    (b) Fresh fruits

    (c) Pulses

    (d) Vegetable oils

     

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  • Electricity Amendment Bill 2022 – Addressing the transition and equity

    electricityContext

    • Concerns of states on some provisions of the new Electricity Bill are justified. But the legislation proposes welcome correctives to longstanding problems of the power sector.

    Important provisions of the bill

    • Payment security: The Bill provides that electricity will not be scheduled or despatched if adequate payment security is not provided by the discom.   The central government may prescribe rules regarding payment security.
    • Contract enforcement: The Bill empowers the CERC and SERCs to adjudicate disputes related to the performance of contracts.  These refer to contracts related to the sale, purchase, or transmission of electricity.  Further, the Commissions will have powers of a Civil Court.
    • Renewable purchase obligation: The Act empowers SERCs to specify renewable purchase obligations (RPO) for discoms.  RPO refers to the mandate to procure a certain percentage of electricity from renewable sources.  The Bill adds that RPO should not be below a minimum percentage prescribed by the central government.  Failure to meet RPO will be punishable with a penalty between 25 paise and 50 paise per kilowatt of the shortfall.
    • Selection committee for SERCs: Under the Act, the Chairperson of the Central Electricity Authority or the Chairperson of the CERC is one of the members of the selection committee to recommend appointments to the SERCs.  Under the Bill, instead of this person, the central government will nominate a member to the selection committee.  The nominee should not be below the rank of Additional Secretary to the central government.
    • Composition of Commissions and APTEL: The Bill increases the number of members (including the chairperson) in SERCs from three to four.  Further, at least one member in both the CERC and SERCs must be from law background.  Under the Act, Appellate Tribunal for Electricity (APTEL) consists of a chairperson and three other members.  The Bill instead provides that the APTEL will have three or more members, as may be prescribed by the central government.

    State apprehensions of the bill

    • Multi state license: The clause pertaining to applicants seeking a distribution licence in more than one state. It states that the Central Electricity Regulatory Commission (CERC), and not the SERC, will grant the licence. This is problematic because a SERC is likely to be more aware of the field-level conditions in a state than its central counterpart.
    • Centre can bypass state: The Bill has a provision empowering the Centre to give directions directly to the SERCs. Till now, the CERC received instructions from the Centre and the SERCs were under the state. The new Bill enables the Centre to bypass state governments. It’s not surprising that this is a matter of concern for the states.
    • Direct appointment by centre: The Bill states that the SERC chairperson will now be a nominee of the central government and will be an additional secretary-level official. This gives the impression that the Centre is trying to control the appointments to the SERCs.

    electricity

    Why the bill is important?

    • Compensation clause: The Bill states that if power purchase agreement PPAs are renegotiated, the affected party has to be compensated within 90 days from the date of submission of the petition.
    • Uniformity in tariffs revision: New tariffs have to be made applicable from the beginning of the financial year. New tariffs often come into force in the middle of the financial year (due to delays in the issuing of orders by SERCs). This means that discoms do not earn their full revenues leading to cash flow problems.
    • Easy tariff petition processing now: The Bill has proposed a reduction in the time for processing tariff petitions from 120 days to 90 days.
    • Suo moto jurisdiction: Regulatory commissions have been given suo motu jurisdiction if tariff petitions are not filed within 30 days of the stipulated time. This too is a step in the right direction.
    • More teeth to load dispatcher: the Bill proposes to give more teeth to the national load dispatcher. We need to strengthen the load dispatcher for the smooth functioning of the grid, especially with a huge renewable capacity where intermittency of generation is a major issue in the offing.

    Conclusion

    • The rollout of the proposed amendments through a consensus-based approach would go a long way in overhauling the weakest link in the nation’s power supply chain.

    Mains question

    Q. Electricity Bill 2022 is a remedy worse than the disease afflicting India’s power sector. Critically analyse.

     

     

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  • Adani’s global footprint and India’s infrastructure diplomacy  

    infrastructure diplomacyContext

    • From mines to ports and logistics, the Adani conglomerate has been expanding across sectors, regions. This has gone hand in hand with India’s diplomatic and strategic outreach towards infrastructure diplomacy.

    What is infrastructure?

    • Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function.

    What are the features of infrastructure?

    • Power and the source of its production such as coal and oil;
    • Roads and road transport;
    • Railways;
    • Communication, especially telecommunication;
    • Ports and airports; and.
    • For agriculture, irrigation constitutes the important infrastructure.

    infrastructure diplomacyWhat is infrastructure diplomacy?

    • Infrastructure diplomacy is to promote infrastructure cooperation and economic ties overseas through political means and to enhance political trust between countries via collaboration in infrastructure development.

    Why in news?

    • “Several foreign governments are now approaching us to work in their geographies and help build their infrastructure. Therefore, in 2022, we also laid the foundation to seek a broader expansion beyond India’s boundaries,” chairman and founder of the Adani group Gautam Adani,now the world’s third-richest person.

    infrastructure diplomacyBackground

    • Foreign presence much earlier: In fact, the Adani group had been scouting abroad much earlier. Since 2010, the Adani group has been in Australia, developing the Carmichael coal mine in Queensland.
    • A greenfield multi-purpose port: In 2017, Adani Ports and Special Economic Zones (Ltd) signed an MoU for a greenfield multi-purpose port for handling containers at Carey Island in Selangor state, about 50 km southwest of Kuala Lumpur.

    What is situation now?

    • Company pursue international infrastructure projects aggressively: The last two years, however, have seen the company pursue international infrastructure projects aggressively. In May 2022, APSEZ made a winning bid of $1.18 billion for Israeli state-owned Haifa Port, jointly with Israeli chemicals and logistics firm Gadot.
    • Strategic joint investments: In August this year, APSEZ and Abu Dhabi’s AD Ports Group signed MoU for “strategic joint investments” in Tanzania. The new ASEZ-AD MoU will look at a bouquet of infrastructure projects besides Bagamoyo in the East African Indian Ocean nation — rail, maritime services, digital services and industrial zones.
    • India’s strategic objectives than has been possible so far: Is it just a coincidence that Adani’s global expansion closely shadows the Chinese footprint along its Belt and Road Initiative? Or is it that as Delhicompetes with China for influence in the neighbourhood and beyond, the Adani group’s size, resources and capacity are seen as a key element in achieving India’s strategic objectives than has been possible so far.
    • India’s infrastructure diplomacy: Is now becoming identified the world over with one company.
    • Public and private investment to bridge gaps: For the Adani group, described as India’s biggest ports and logistics company, there couldn’t be a better time. As the Quad grouping of Australia, India, Japan, and the US, competes with China in the Indo-Pacific, it has committed “to catalyse infrastructure delivery” by putting more than $50 billion on the table for “assistance and investment” in the Indo-Pacific over the next five years and “drive public and private investment to bridge gaps”.

    infrastructure diplomacyImplications of infrastructure diplomacy

    • Win-Win deal: Adani’s new “no-hands” model of doing business with neighbours a power plant in Jharkhand, exporting all its output to Bangladesh has been seen as a “win-win” deal.
    • Economic interests lie at the heart of geopolitics: The link between diplomacy and commercial interests has generated its share of debate, especially in the US, where its diplomats, intelligence agencies and military interventions abroad have actively pushed the interests of big business first the hunt for cheaper raw materials, then for markets abroad, then to shift industry where manpower was cheaper. As seen in the new age trading blocs the US-led IPEF, and the Chinese dominated RCEP economic interests lie at the heart of geopolitics.

    Conclusion

    • At a time when global rivalries are growing sharper in the shadow of the war in Europe, and as India looks out for its own interests, pushing powerful corporates to the centre-stage of its diplomacy, whether it is to build ports, buy or sell weapons or make chips, is inevitable.

    Mains question 

    Q. Economic interests lie at the heart of geopolitics. Analyse this statement in context of India’s active push for infrastructure diplomacy by including private conglomerates like Adani in it.

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  • Draft Telecom Bill 2022

    telecom

    In a bid to do away with British-era laws governing the telecom sector, the Department of Telecommunications (DoT) issued the draft Indian Telecommunication Bill, 2022.

    Indian Telecommunication Bill, 2022

    • The proposed Bill aims to bring in sweeping changes to how the telecom sector is governed, primarily by giving the Centre more powers in several areas to do so.
    • The draft Bill consolidates three separate acts that govern the telecommunications sector:
    1. Indian Telegraph Act 1885
    2. Indian Wireless Telegraphy Act 1933, and
    3. The Telegraph Wires, (Unlawful Protection) Act 1950

    Why has the government issued a draft Telecommunication Bill?

    • Through the bill, the Centre aims to consolidate and amend the existing laws governing the provision, development, expansion and operation of telecom services, networks and infrastructure.

    Key amendments introduced

    • Inclusion of messengers: One of the key changes is inclusion of new-age over-the-top communication services like WhatsApp, Signal and Telegram in the definition of telecommunication services.
    • Licensing of telecom services: As per the draft law, providers of telecom services will be covered under the licensing regime, and will be subjected to similar rules as other telecom operators.
    • Covering OTT services: This issue has been under contention for several years now with telecom service providers seeking a level-playing field with OTT apps over communication services such as voice calls, messages, etc. Operators had to incur high costs of licences and spectrum, while OTT players rode on their infrastructure to offer free services.

    Other focus areas

    • The Centre is also looking to amend the Telecom Regulatory Authority of India Act (TRAI Act) to dilute the sectoral watchdog’s function of being a recommendatory body.
    • The current TRAI Act mandates the telecom department to seek the regulator’s views before issuing a new licence to a service provider.
    • The proposed Bill does away with this provision.
    • It has also removed the provision that empowered TRAI to request the government to furnish information or documents necessary to make this recommendation.
    • Additionally, the new Bill also proposes to remove the provision where if the DoT cannot accept TRAI’s recommendations or needs modification, it had to refer back the recommendation for reconsideration by TRAI.

    Addressing the concerns of telecom industry

    (1) Insolvency of Telecoms

    • The DoT has also proposed that if a telecom entity in possession of spectrum goes through bankruptcy or insolvency, the assigned spectrum will revert to the control of the Centre.
    • So far, in insolvency proceedings, there has been a lack of clarity on whether the spectrum owned by a defaulting operator belongs to the Centre, or whether banks can take control of it.

    (2) Granting relief

    • The draft Bill also accords the Centre powers to defer, convert into equity, write off or grant relief to any licensee under extraordinary circumstances, including financial stress, consumer interest, and maintaining competition, among other things.

    (3) Replacing USOF

    • It also proposes to replace the Universal Service Obligation Fund (USOF) with the Telecommunication Development Fund (TDF).
    • USOF is the pool of funds generated by the 5 per cent Universal Service Levy that is charged upon all telecom fund operators on their Adjusted Gross Revenue.
    • The USOF has largely been used to aid rural connectivity.
    • However, with the TDF, the objective is also to boost connectivity in underserved urban areas, R&D, skill development, etc.

    Back2Basics: Universal Service Obligation Fund (USOF)

    • The Universal Service Obligation Fund (USOF) was formed by an Act of Parliament, was established in April 2002 under the Indian Telegraph (Amendment) Act 2003.
    • It aims to provide financial support for the provision of telecom services in commercially unviable rural and remote areas of the country.
    • It is an attached office of the Department of Telecom, and is headed by the administrator, who is appointed by the central government.

     

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  • National Logistics Policy

    logistics

    The government will announce the National Logistics Policy (NLP) this week, aiming to bring down logistics costs and address challenges plaguing importers and exporters.

    What is Logistics?

    • Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination.
    • It involves identifying prospective distributors and suppliers and determining their effectiveness and accessibility.

    Why need a logistics policy?

    logistics

    • Organizing and consolidating the sector: India’s logistics sector is largely unorganized and fragmented.
    • Reducing logistics cost: This is why the country’s logistics costs are as high as 14-15% of the GDP, against 7-8% in developed nations such as the Singapore and the US, who leverage it to boost exports. The NLP aims to bring down India’s logistics cost to 8% in the next five years.
    • Preventing waste of perishable items: As per some estimates in India, about 16% of agri-production is wasted at different stages of the supply chain.
    • Warehousing development: Moreover, due to factors such as limited capacity and availability of warehouses, the cost of transaction increases.
    • Multi-modal integration: The new policy is going about simplification, technology and will have a multimodal approach that will combine rail, water, and air — all modes of transport.

    What role will technology play?

    • Advanced analytics: The NLP will aim to harness technologies such as AI and blockchain. It aims to create a data analytics centre for driving greater transparency and continuous monitoring of key logistics metrics.
    • Single window portal: Under NLP, a portal will be created, where service providers such as warehousing providers, shipping experts, transporters, customs brokers, and various governmental agencies will be unified.

    Will it boost cooperation between ministries?

    • Unifying multiple departments: Currently, the logistics value chain is managed by several ministries—road transport and highways, shipping, railways, and civil aviation.
    • Single-point clearances: Agencies like the Central Drug Standard Control Organization and the Food Safety and Standard Authority of India provide clearances.
    • Nationwide integration: The NLP could enhance their integration at the central level.

    What about reducing the carbon footprint?

    • Energy-efficient transportation: The draft logistics policy lays emphasis on the shift to more energy-efficient means of transportation, as well as the use of greener fuels which could reduce the supply chain’s carbon footprint.
    • Vehicular emission reduction: Moreover, the draft policy, released earlier, emphasized creating regulations for controlling vehicular noise, emissions, and wastage.
    • Green warehousing principles: The new logistics policy also aims to incorporate green principles in the functioning of warehouses which contribute to nearly 10% of the logistics costs.

    Will it change India’s commodity transport?

    • Transport of crucial commodities: The proposed policy aims to focus on the transport of crucial commodities such as coal, steel, iron ore, food grains, steel, cement, fruits and vegetables.
    • Creating nationwide clusters: The current logistical network for transporting them is mainly confined to regional clusters.
    • Integrating national supply-chains: The NLP could help establish a link between the place of origin, and destination place and integrate the supply on a national level.
    • Optimum logistics identification: The draft also proposes identification of the right mode of transport for each of these commodities to minimise losses during transport.

     

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  • What it will take to fulfill India’s Solar Power Dream?

    From less than 10 MW in 2010, India has added significant PV capacity over the past decade, achieving over 50 GW by 2022.

    Solar energy in India

    • Solar photovoltaics (PV) has driven India’s push towards the adoption of cleaner energy generation technologies.
    • India is targeting about 500 GW by 2030, of renewable energy deployment, out of which ~280 GW is expected from solar PV.
    • This necessitates the deployment of nearly 30 GW of solar capacity every year until 2030.

    Key components

    • A typical solar PV value chain consists of first fabricating polysilicon ingots which need to be transformed into thin Silicon wafers that are needed to manufacture the PV mini-modules.
    • The mini-modules are then assembled into market-ready and field-deployable modules.

    Various challenges

    There are challenges that need to be overcome for the sustainability of the PV economy.

    (1) PV Modules

    • Indian solar deployment or installation companies depend heavily on imports.
    • It currently imports 100% of silicon wafers and around 80% of cells even at the current deployment levels.
    • India currently does not have enough module and cell manufacturing capacity.
    • India’s current solar module manufacturing capacity is limited to ~15 GW per year.
    • The demand-supply gap widens as we move up the value chain — for example, India only produces ~3.5 GW of cells currently.
    • India has no manufacturing capacity for solar wafers and polysilicon ingots.

    (2) Field deployment

    • Also, out of the 15 GW of module manufacturing capacity, only 3-4 GW of modules are technologically competitive and worthy of deployment in grid-based projects.
    • India remains dependent on the import of solar modules for field deployment.

    (3) Size and technology

    • Most of the Indian industry is currently tuned to handling M2 wafer size, which is roughly 156 x 156 mm2, while the global industry is already moving towards M10 and M12 sizes, which are 182 x 182 mm2 and 210 x 210 mm2 respectively.
    • The bigger size has an advantage in terms of silicon cost per wafer, as this effectively means lower loss of silicon during ingot to wafer processing.
    • In terms of cell technology, most of the manufacturing still uses Al-BSF technology, which can typically give efficiencies of ~18-19% at the cell level and ~16-17% at the module level.
    • By contrast, cell manufacturing worldwide has moved to PERC (22-23%), HJT(~24%), TOPCON (23-24%) and other newer technologies, yielding module efficiency of >21%.

    (4) Land issue

    • Producing more solar power for the same module size means more solar power from the same land area.
    • Land, the most expensive part of solar projects, is scarce in India — and Indian industry has no choice but to move towards newer and superior technologies as part of expansion plans.

    (5) Raw materials supply

    • There is a huge gap on the raw material supply chain side as well.
    • Silicon wafer, the most expensive raw material, is not manufactured in India.
    • India will have to work on technology tie-ups to make the right grade of silicon for solar cell manufacturing — and since >90% of the world’s solar wafer manufacturing currently happens in China.
    • It is not clear how and where India will get the technology.
    • Other key raw materials such as metallic pastes of silver and aluminium to form the electrical contacts too, are almost 100% imported.
    • Thus, India is more of an assembly hub than a manufacturing

    (6) Lack of investment

    • India has hardly invested in this sector which can help the industry to try and test the technologies in a cost-effective manner.

    Current govt policy

    • The government has identified this gap, and is rolling out various policy initiatives to push and motivate the industry to work towards self-reliance in solar manufacturing, both for cells and modules.
    • Key initiatives include:
    1. 40% duty on the import of modules and
    2. 25% duty on the import of cells, and
    3. Production Linked Incentive (PLI) scheme to support manufacturing capex
    4. Compulsion to procure modules only from an approved list of manufacturers (ALMM) for projects that are connected to state/ central government grids
    5. Only India-based manufacturers have been approved

    Way forward

    • India’s path to become a manufacturing hub for the same requires more than just putting some tax barriers and commercial incentives in the form of PLI schemes, etc.
    • It will warrant strong industry-academia collaboration in an innovative manner to start developing home-grown technologies which could, in the short-term.
    • It needs to work with the industry to provide them with trained human resource, process learnings, root-cause analysis through right testing and, in the long term, develop India’s own technologies.
    • High-end technology development requires substantial investment in several clusters which operate in industry-like working and management conditions, appropriate emoluments, and clear deliverables.

     

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  • GPS-based toll system to replace FASTag

    The government plans to start a GPS-based toll system in place of FASTag to ensure seamless payment and vehicle movement on national highways.

    Why in news?

    • The move would end the role of toll plazas across the country.

    How will a GPS-based tolling system work?

    • Vehicles will be fitted with an electronic device that can track their movement.
    • Highways will be geo-fenced, creating virtual boundaries. The system will use GPS or radio frequency identification technologies.
    • The software will recognize when a mobile device enters or leaves a particular area, and toll will be charged based on the distance travelled at the highway’s exit point.
    • As the system is based on sensors, there will be no need to stop at toll plazas.
    • Vehicles and users must be registered with the GPS toll system, linked to bank accounts that will be used to transfer toll payments.

    What are FASTags?

    • FASTags are stickers that are affixed to the windscreen of vehicles and use Radio Frequency Identification (RFID) technology to enable digital, contactless payment of tolls without having to stop at toll gates.
    • RFID uses electromagnetic fields to automatically identify and track tags attached to objects.
    • The tags are linked to bank accounts and other payment methods.
    • As a car crosses a toll plaza, the amount is automatically deducted, and a notification is sent to the registered mobile phone number.

    Issues with FASTags

    • Since the card is affixed to the windscreen, it can be easily misplaced, damaged or stolen.
    • The existing FASTag system, though faster than cash payments, still requires vehicles to stop at toll booths to enable reading of tags.
    • Also, the vehicle must wait till the gate is opened.
    • It has been observed that sometimes the toll fee is deducted twice from user account. Mostly, this happens due to a technical glitch.
    • Some card readers take longer time to read and register. Hence the purpose of saving time is itself defied.
    • Still, the wait time at toll booths is much more than the 30 seconds that was promised earlier.
    • Also, it has not helped reduce the number of toll booths.

    Hence the benefits of using FASTag far outweigh the challenges.

    Is FASTags a total failure?

    • Usage has increased since FASTag was made mandatory in 2021 after its launch in 2015.
    • Penetration has grown from nearly 16% in FY18 to 96.3% in FY22.
    • Total toll collection in FY18 was ₹21,948 crore, including ₹3,532 crore collected through FASTags.
    • In FY22, toll collection through FASTags increased sharply to ₹33,274 crore out of total toll collection of ₹34,535 crore.

    How will GPS benefit highway users?

    • GPS tolling uses satellite-based navigation and requires no halting.
    • Also, vehicles can be charged only for their actual travel on a highway stretch.
    • Currently, toll is paid at toll booths which is fixed between two points of tolling and a user does not get any concession even if he/she exits before completing the full run between two toll plazas.
    • The new system should reduce the toll amount charged for travel on highways.

    What is the progress so far on GPS tolling?

    • The Union road ministry has amended the National Highways Fee (Determination of Rates and Collection) Rules, 2008, allowing for the collection of toll based on distance travelled on national highways.
    • This will facilitate the introduction of GPS tolling.
    • First trials may be done on the under-construction Mumbai-Delhi expressway which will be geo-fenced.
    • Also the cost of GPS devices needs to be considered at very beginning.

    Way forward

    • The system needs a proper legislative framework, and a full launch is still years away. The government intends to introduce it in phases.
    • The road ministry is expected to amend the Motor Vehicles Act and create rules to facilitate GPS tolling as well as to penalize offenders.
    • Moreover, GPS will come with its own set of complications on calculating differential tolls.
    • Regulations and framework for these need to be developed first.

     

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