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  • What is Angel Tax that was scrapped in Budget 2024?

    Why in the News?

    Finance Minister announced the abolition of the angel tax, aiming to strengthen the startup ecosystem and support innovation in India.

    What is Angel Investment?

    • An angel investor is an individual who provides financial backing to early-stage startups or entrepreneurs, typically in exchange for equity in the company.
    • Angel investors are typically high-net-worth individuals who invest their own personal funds, rather than investing on behalf of a firm or institution.
    • Features of Angel Investing: Early-stage funding, equity investment, high-risk, high-reward, active involvement,personal investment,f lexible terms and shorter investment horizon.

    What is Angel Tax? 

    • Referred to as Angel Tax, this rule is described in Section 56(2)(vii)(b) of the Income Tax Act, 1961.
    • Essentially it’s a tax on capital receipts, unique to India in the global context.
    • This clause was inserted by the Finance Act in 2012 to prevent laundering of black money, round-tripping via investments with a large premium into unlisted companies.
    • The tax covers investment in any private business entity, but only in 2016 was it applied to startups.

    Why was angel tax introduced?

    • The complicated nature of VC fundraising with offshore entities, multiple limited partners and blind pools is contentious.
    • There has been some element of money laundering or round-tripping under guise.

    Details of its levy

    • The Angel Tax is being levied on startups at 9% on net investments in excess of the fair market value.
    • For angel investors, the amount of investment that exceeds the fair market value can be claimed for a 100% tax exemption.
    • However, the investor must have a net worth of ₹2 crores or an income of more than ₹25 Lakh in the past 3 fiscal years.

    Key Issues with Angel Tax

    • Share Valuation: The tax impacted the valuation of shares, causing complications for startups in raising funds.
    • Discounted Cash Flow (DCF) Method: Issues arose with the treatment of estimated figures in the DCF method, leading to disputes.
    • Scrutiny of Funding Sources: The scrutiny of funding sources and investor credibility added another layer of complexity for startups.
    • Retrospective Application: The retrospective application of the tax and its effect on the conversion of convertible instruments into equity were also significant points of dispute.

    Significance for the Startup Community

    • Startups has long advocated for a more supportive and less restrictive environment for fundraising.
    • With this change, the government aims to create a more favourable atmosphere for innovation and investment in India.
    PYQ:

    [2014] What does venture capital mean?

    (a) A short-term capital provided to industries.

    (b) A long-term start-up capital provided to new entrepreneurs.

    (c) Funds provided to industries at times of incurring losses.

    (d) Funds provided for replacement and renovation of industries.

  • How children win with U-WIN, govt’s new online vaccine portal?

    Why in the News?

    • The government plans to roll out U-WIN, an online vaccine management portal for childhood vaccination, across the country.
      • Similar to CoWIN used during the Covid-19 pandemic, U-WIN aims to digitize and individualize immunization records from birth.

    What is U-WIN? 

    • Children up to 6 years old and pregnant mothers are registered on U-WIN using government IDs like Aadhaar and their mobile phone numbers.
    • Records of all 25 shots given to a child and the two given to pregnant mothers are added to the platform.
    • It’s Working:
    • The platform generates a color-coded vaccination certificate.
      • The digital vaccine certificate can be downloaded by parents using their registered mobile numbers, eliminating the need for a physical vaccination booklet.
    • After each shot is administered and recorded, the date is added to the card, which also shows the due date for the next set of vaccines.
      • U-WIN sends SMS reminders to parents before their children are due for the next dose.
      • U-WIN helps locate the nearest vaccination center and book available slots.

    Significance:

    1) For providing Immunization:
    • U-WIN’s reminders to parents are likely to improve compliance with vaccination schedules.
    • The platform ensures portability, allowing children to receive their doses anywhere in the country, particularly benefiting children of migrant workers.
    • Registration at birth may help reduce the number of “zero dose” children, those who have not received any vaccinations.
    2) For Health Workers:
    • The platform can automatically generate a due list of children in specific areas for health workers.
    • These data points can be utilized by other government programs and eventually connected through the ABHA (Ayushman Bharat Health Account) ID.

    Integration with Existing Systems

    • U-WIN will link to the government’s existing eVIN platform for inventory management.
    • eVIN tracks all vaccine vials, from central stores to each vaccination site, monitoring doses used, wasted, and returned, and tracks real-time temperature and humidity using sensors.
    • U-WIN runs on the same principles and digital infrastructure as CoWIN, making adoption straightforward.
    • Most vaccinators are familiar with similar platforms, ensuring a smooth transition.

    Zero Dose Children

    • In India, the coverage of the first dose of diphtheria, pertussis, and tetanus (DPT)-containing vaccine is taken as the proxy for zero dose children.
    • Data from WHO and UNICEF showed that while 93% of children received their first vaccine dose, there were still 1.6 million zero dose children in India in 2023.
    • The data also showed that 1.6 million children missed their first measles-containing vaccine in 2023, up from 1.1 million the previous year.
    • This is concerning as in 2022, five states — Bihar, Gujarat, Haryana, Jharkhand, and Maharashtra — reported a rise in the incidence of measles.

     

    PYQ:

    [2016] ‘Mission Indradhanush’ launched by the Government of India pertains to:

    (a) Immunization of children and pregnant women

    (b) Construction of smart cities across the country

    (c) India’s own search for the Earth-like planets in outer space

    (d) New Educational Policy

  • What are Rogue Waves and how can AI help predict them?

    Why in the News?

    • Rogue waves, unusually large waves compared to those before and after them, pose significant threats to ships, coastal and offshore infrastructure, and human lives.
      • Until now, there has been no method to forecast rogue waves.

    What Are Rogue Waves?

    • Rogue waves are unusually large and unpredictable waves that are much larger than the surrounding waves.
    • They are often defined as waves that are at least twice the height of the surrounding waves.
    • Formation:
      • Rogue waves can form when swells from distant weather systems converge to create a single, amplified wave.
      • They may also form when ocean currents compress swells, creating strong, high waves.
    • Features:
      • Traditionally, rogue waves have been difficult to predict due to their sudden appearance and rare occurrence.
      • The lack of real-time forecasting methods has made it challenging to mitigate their impact effectively.

    What is Sea State?

    • In oceanography, sea state refers to the condition of the surface of a large body of water at a specific location and time.
    • The World Meteorological Organization (WMO) sea state code characterizes sea state based on wave height on a scale of 0 (no waves) to 9 (waves over 14 meters).

    Characteristics:

    • Unlike typical waves, rogue waves can appear suddenly and without warning.
    • They defy the average sea state, making them exceptionally dangerous.

    Threats Posed by Rogue Waves:

    (1) Shipping

    • For Ships and Vessels: Rogue waves pose a significant threat to ships and other vessels at sea. Their unexpected and massive size can lead to capsizing or severe damage.
    • For Offshore Infrastructure: Oil rigs, wind turbines, and other offshore structures can be heavily damaged or destroyed by rogue waves.

    (2) Coastal Threats

    • Coastal Erosion: The sheer force of rogue waves can lead to accelerated coastal erosion, affecting beaches and shorelines.
    • Flooding: Rogue waves can cause sudden and severe coastal flooding, posing risks to coastal communities and ecosystems.

    (3) Human Safety

    • Loss of Life: Rogue waves have been responsible for numerous fatalities. Between 2011 and 2018, rogue waves killed at least 386 people.
    • Property Damage: The impact of rogue waves on ships, coastal areas, and offshore structures can result in significant financial losses.

    Advancements in Forecasting

    • University of Maryland mathematicians Thomas Breunung and Balakumar Balachandran have developed an artificial intelligence program capable of forecasting rogue waves.
    • The AI program was trained using billions of data points collected by a network of 172 ocean buoys.
    • The researchers analyzed 20-minute long samples recorded by ocean buoys.

     

    PYQ:

    [2017] At one of the places in India, if you stand on the seashore and watch the sea, you will find that the sea water recedes from the shore line a few kilometres and comes back to the shore, twice a day, and you can actually walk on the sea floor when the water recedes. This unique phenomenon is seen at:

    (a) Bhavnagar

    (b) Bheemunipatnam

    (c) Chandipur

    (d) Nagapattinam

  • India’s economy projected to grow at 6.5% to 7% in FY ending March 2025.

    Why in the News?

    • India’s economy is projected to grow at 6.5% to 7% in the fiscal year ending March 2025.
      • The Economic Survey for 2023-24 highlights the need to address inequality and unemployment as policy priorities.

    Policy Recommendations by Chief Economic Adviser (CEA)

    • Regulatory Burdens: CEA V. Anantha Nageswaran advocates for Central and State governments to reduce regulatory burdens on businesses.
    • Corporate Responsibility: He urges the corporate sector to create productive jobs, emphasizing their responsibility in generating employment.

    Various Challenges discussed

    (1) Challenges in the IT Sector:

    • Slowdown in Hiring: The CEA notes a significant slowdown in IT sector hiring over the last two years.
    • AI and Labor: He encourages the industry to use AI to augment labor rather than replace workers.

    (2) Skilling Initiatives

    • Addressing Inequality: The Economic Survey suggests steps to tackle inequality, improve health, and bridge the education-employment gap.
    • Skilling Reboot: A reboot of India’s skilling initiatives is proposed to provide the industry with people having the right attitude and skills.

    (3) Corporate Sector and Economic Growth

    • Demand and Employment: The Survey emphasizes the benefits for corporates from higher demand generated by employment and income growth.
    • Warning against Short-Termism: It warns against “short-termism” which can weaken economic linkages.

    (4) State Capacity and Consensus Building:

    • Enhancing State Capacity: Enhancing state capacity is critical for the strategy to work.
    • Need for Consensus: The CEA stresses the need for consensus between governments, businesses, and the social sectors for effective transformation.

    (5) Land Acquisition and Investment Concerns:

    • Land Use Norms: While the Survey does not mention land acquisition reform, it highlights the need to deregulate land use norms and consolidate farmland holdings.
    • Investment Cautions: The Survey cautions about private capital formation being cautious due to fears of cheaper imports, indirectly referencing China.

    (6) Foreign Direct Investment (FDI) Challenges:

    • Attracting FDI: Attracting FDI will be challenging due to higher interest rates and developed countries encouraging domestic investments through subsidies.
    • Addressing Uncertainties: Despite progress, uncertainties related to transfer pricing, taxes, and import duties need to be addressed.

    Structural Reforms

    • Existing Reforms: Structural reforms such as GST and the Insolvency and Bankruptcy Code are delivering expected results.
    • Next-Gen Reforms: The Survey calls for “next-gen reforms” that are bottom-up in nature to achieve sustainable, balanced, and inclusive growth.

    Strategic Directions for Growth

    • Six-Pronged Strategy: The Survey outlines a six-pronged strategy for growth, emphasizing private sector investments and a fair share of income for workers.
    • Focus Areas: Other focus areas include financing the green transition, removing barriers for MSMEs, and implementing intelligent farmer-friendly policies.

    Conclusion

    • Sustained Growth Potential: The economy can grow at over 7% on a sustained basis in the medium term by building on past reforms.
    • Tripartite Compact: Achieving this growth requires a tripartite compact between the Centre, States, and the private sector.

    PYQ:

    [2013] Economic growth in country X will necessarily have to occur if:

    (a) There is technical progress in the world economy.

    (b) There is population growth in X.

    (c) There is capital formation in X.

    (d) The volume of trade grows in the world economy.

  • What is the Dyson Sphere?

    Why in the News?

    Recently, astronomers have made progress in finding possible candidates as Dyson Sphere, sparking new excitement and debate about extraterrestrial life.

    What is a Dyson Sphere? 

    • Imagine you are an astronomer looking for extraterrestrial life and you find a star covered by solar panels. This structure, collecting massive amounts of solar energy, is known as a Dyson sphere.
    • The concept is named after Freeman Dyson, a theoretical physicist who lived from 1923 to 2020.
    • Dyson proposed that advanced civilizations would need to harness a star’s energy, constructing a spherical array of solar collectors around it.
    • He suggested that the heat emitted as infrared radiation could indicate the presence of these massive structures and thus intelligent life.

    Who was Freeman Dyson (1923-2020)?

    • Dyson was a renowned British-American theoretical physicist and mathematician known for his work in quantum electrodynamics, solid-state physics, and astronomy.
    • Born on December 15, 1923, in England, he made significant contributions to science and technology, including the Dyson Sphere concept—a hypothetical structure that could encompass a star to capture its power output.
    • He was also a prominent futurist and author, exploring ideas on space travel, extraterrestrial life, and the future of humanity.
    • Dyson spent much of his career at the Institute for Advanced Study in Princeton and was known for his interdisciplinary approach to science.

     

    PYQ:

    [2015] The term ‘Goldilocks Zone’ is often seen in the news in the context of

    (a) The limits of habitable zone above the surface of the Earth

    (b) Regions inside the Earth-like planets in outer space

    (c) Search for the Earth-like planets in outer space

    (d) Search for meteorites containing precious metals

  • New Asset Class proposed by SEBI

    Why in the News?

    • The markets regulator, SEBI, has proposed a new asset class designed to offer investment products positioned between mutual funds (MFs) and portfolio management services (PMS).
      • This new category aims to fill an opportunity gap for investors and offer greater flexibility in portfolio construction.

    Note:

    • PMS provides customized investment solutions to high net-worth individuals (HNIs) with a minimum investment limit of Rs 50 lakh.
    • MFs, on the other hand, have a much lower minimum investment limit of just Rs 100, managed by a professional fund manager.

    About the New Asset Class

    • The new asset class aims to provide an intermediate option with more flexibility in portfolio construction, helping investors avoid unregistered and unauthorized schemes.
    • It will have a risk-return profile between MFs and PMS, targeting investors with higher risk tolerance and larger investment amounts than those typical of MFs but lower than PMS.
    • The current range of investment products includes:
    1. MF schemes: Focused on retail investors,
    2. PMS: For HNIs, and
    3. Alternative investment funds (AIF): For sophisticated investors.

    How will investments in the new asset class work?

    • The new asset class will be introduced under the MF structure with necessary relaxations in prudential norms.
    • The minimum investment amount is proposed to be Rs 10 lakh per investor within the asset management company (AMC)/MF.
    • This high threshold is intended to deter retail investors while attracting those with investible funds between Rs 10 lakh and Rs 50 lakh.

    Significance of the New Asset Class:

    • SEBI noted that the gap between investment opportunities in MFs and PMS has led some investors towards unauthorized investment avenues.
    • The new asset class will help curb the proliferation of unregistered investment products and provide a structured and regulated option for investors.
    • SEBI emphasized that the new asset class would offer a regulated and structured investment suited to investors looking for opportunities between MFs and PMS.

    Investment Strategies:

    • Like MF schemes, the new asset class will provide options for Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP), and Systematic Transfer Plan (STP).
    • AMCs can offer ‘investment strategies’ under a pooled fund structure with tailored redemption frequencies (daily, weekly, monthly, etc.).

    PYQ:

    [2021] Indian Government Bond Yields are influenced by which of the following?

    1. Actions of the United States Federal Reserve
    2. Actions of the Reserve Bank of India
    3. Inflation and short-term interest rates

    Select the correct answer using the code given below.

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

  • CPCB plans to check violations in Plastic Waste Trading Regime 

    Why in the News?

    • The Central Pollution Control Board (CPCB) has started a national audit of about 800 plastic-waste recyclers across India.
      • This action follows the discovery that four firms in Karnataka, Maharashtra, and Gujarat issued nearly 600,000 fake certificates under the Extended Producer Responsibility (EPR) programme.

    About Central Pollution Control Board (CPCB): Overview

    • The Central Pollution Control Board (CPCB) is a statutory organization established in September 1974.
    • It was constituted under the Water (Prevention and Control of Pollution) Act, 1974.
    • CPCB is also entrusted with powers and functions under the Air (Prevention and Control of Pollution) Act, 1981.
    • It serves as a technical arm of the Ministry of Environment, Forests, and Climate Change, implementing the provisions of the Environment (Protection) Act, 1986.

    Principal Functions:

    • Water Pollution Control:
      • Promote the cleanliness of streams and wells in different states by preventing, controlling, and abating water pollution.
      • Oversee the National Water Quality Monitoring Program to collect, collate, and disseminate technical and statistical data relating to water pollution.
    • Air Pollution Control:
      • Improve the quality of air and prevent, control, or abate air pollution in the country.
      • Conduct air quality monitoring as part of air quality management.
      • Implement the National Air Monitoring Programme (NAMP) to determine current air quality status and trends, regulate pollution from industries, and provide background air quality data for industrial siting and town planning.

    Key Initiatives and Programs:

    • National Air Monitoring Programme (NAMP): Established to monitor air quality status and trends, and to control and regulate industrial pollution to meet air quality standards.
    • National Air Quality Index (NAQI): Provides real-time air quality data and trends.
    • Graded Response Action Plan (GRAP): A set of measures to be taken based on the severity of air pollution levels.
    • Clean Air Campaign: Initiatives aimed at reducing air pollution through public awareness and actionable measures.

    Role in Data Management:

    • CPCB collects, collates, and disseminates technical and statistical data related to water and air pollution.
    • Provides necessary data for regulatory and planning purposes, including industrial siting and urban planning.

    What is Extended Producer Responsibility (EPR) Programme?

    • Extended Producer Responsibility (EPR) means the responsibility of a producer for the environmentally sound management of the product until the end of its life.
    • India had first introduced EPR in 2011 under the:
    1. Plastic Waste (Management and Handling) Rules, 2011
    2. E-Waste Management and Handling Rules, 2011.
    • The EPR scheme requires businesses using plastic packaging to recycle a certain percentage of the plastic used in the previous two years.

    Implementation of EPR:

    • Registration: Producers must register with the Central Pollution Control Board (CPCB) and submit an EPR plan.
    • Collection Mechanisms: Producers set up collection centers, return schemes, or partner with authorized recyclers to manage waste.
    • Documentation: Producers are required to maintain detailed records of waste collected and processed and submit regular reports to the CPCB.
    • Compliance Audits: The CPCB conducts audits to ensure that producers comply with EPR requirements.

    Function of EPR Certificates:

    • Registered plastic waste recyclers generate EPR certificates by recycling plastic waste.
    • Every tonne of plastic recycled generates a certificate.
      • According to a CPCB report in May, nearly 3.7 million tonnes of recycled plastic generated certificates.
    • In 2022-23, about 18,000 companies using plastic packaging were registered with the CPCB, aiming to recycle about 3.3 million tonnes.

    Compliance and Targets:

    • Companies must recycle 70% of the packaging used in the previous two financial years for 2022-23 and 100% for 2023-24. Non-compliance with these targets can result in fines.
    • EPR certificates are uploaded on a dedicated portal maintained by the CPCB, allowing recyclers and buyers to trade online.

    PYQ:

    [2019] In India, ‘extended producer responsibility’ was introduced as an important feature in which of the following?

    (a) The Bio-medical Waste (Management and Handling) Rules, 1998

    (b) The Recycled Plastic (Manufacturing and Usage) Rules, 1999

    (c) The e-Waste (Management and Handling) Rules, 2011

    (d) The Food Safety and Standard Regulations, 2011
  • [20th July 2024] The Hindu Op-ed: Living in denial about unemployment

    [20th July 2024] The Hindu Op-ed: Living in denial about unemployment

    PYQ Relevance:

    Q Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of society. Discuss. (UPSC IAS/2022)

    Q “While we flaunt India’s demographic dividend, we ignore the dropping rates of employability.” What are we missing while doing so? Where will the jobs that India desperately needs come from? Explain (UPSC IAS/2014)

    Mentor comment: Conflicting reports on unemployment in India highlight significant issues. While the Reserve Bank of India reported the creation of 8 crore jobs over the past few years, the Centre for Monitoring Indian Economy noted a rise in the unemployment rate to 9.2%. The disparity arises from reliance on outdated data, particularly from the unorganised sector, which employs 94% of the workforce. Additionally, economic shocks like demonetisation and the COVID-19 pandemic have altered employment dynamics, complicating accurate assessments and leading to public confusion over the true state of employment.

    Let’s learn!

    __

    Why in the news? 

    Recently, Prime Minister Modi cited an RBI report claiming 8 crore jobs created in the last 3-4 years, accusing the Opposition of spreading false unemployment narratives.

    Conflicting reports and statements related to employment

    • KLEMS Database
      • According to the RBI, India added 4.7 crore jobs in FY24, raising total employment to 64.33 crore. This represents a 6% growth in employment compared to the previous year, which was significantly higher than the 3.2% growth reported for FY23.
      • The period from 2016 to 2024 was marked by several economic shocks, including demonetization, the introduction of the Goods and Services Tax, the Non-Banking Financial Companies crisis, and the COVID-19 pandemic.  
    • SBI’s Counter Report
      • The State Bank of India (SBI) released a report stating that even when excluding agriculture, 8.9 crore jobs were created in manufacturing and services from FY14 to FY23, and 6.6 crore jobs from FY04 to FY14. 
      • It emphasized that the total labour force in India is approximately 59.7 crore, closely aligning with the 56.8 crore reported in the recent Annual Survey of Unincorporated Sector Enterprises (ASUSE) survey.
    • CMIE’s Unemployment Data
      • The Centre for Monitoring the Indian Economy (CMIE) reported a rise in the unemployment rate to 9.2% in June 2024, marking an increase from 7% the previous month. 
      • This contrasts sharply with the optimistic employment figures presented by the RBI and SBI, suggesting a disconnect between reported job creation and actual employment conditions.
    • Public Sentiment and Ground Reports
      • Ground reports and public sentiment indicate that unemployment remains a significant issue, particularly for educated youth. High competition for limited job openings is evident, as seen in the 47 lakh applicants for 60,000 constable positions in Uttar Pradesh and 1.25 crore aspirants for railway recruitment exams in 2022. Protests related to employment schemes further highlight the frustrations of job seekers

    About KLEMS Database

    • The Reserve Bank of India (RBI) released the India KLEMS Database on July 7, 2024, which outlines methodologies for measuring productivity and employment across 27 industries in the Indian economy.
    • It does not independently estimate employment but relies on official data sources, including the Employment and Unemployment Surveys (EUS) by the NSSO and the Periodic Labour Force Survey (PLFS).
    • The KLEMS data incorporates various economic measures, including Gross Value Added and Labour Quality, covering 27 industries across the Indian economy.

    Challenges in KLEMS Database

    • The Indian labor market is characterized by a significant unorganized sector, which employs approximately 94% of the labor force. This sector is difficult to survey regularly, leading to gaps and outdated data. 
    • The last Census was conducted in 2011, and the Urban Frame Survey (UFS) data is from 2012-2017, resulting in reliance on older data that may not accurately reflect current employment conditions.
    • The conflicting narratives from various sources, including the Prime Minister’s references to KLEMS data, have led to public confusion regarding the true state of employment in India.

    Way forward: 

    • Clear Communication of Data Sources: Government agencies and institutions should clarify how figures from different surveys (e.g., KLEMS, PLFS, ASUSE) relate to one another, and the implications of using outdated data in light of recent economic shocks.
    • Regular and Comprehensive Surveys: The government should prioritize conducting more frequent and comprehensive surveys, particularly focusing on the unorganized sector, which employs a significant portion of the workforce. 

  • The promise of parametric insurance

    Why in the news? 

    In 2023, natural disaster losses hit $280 billion, with only $100 billion insured, highlighting a need for innovative insurance solutions amid rising extreme weather events.

    Present Method of Disaster Risk Reduction

    • Indemnity-based Insurance Products: Indemnity-based insurance products require a physical assessment of damage after a disaster to determine the payout amount. For example Health Insurance, Motor Insurance and Travel Insurance.

    Challenges:

    • Verification Issues: When large-scale calamities strike, especially in economically disadvantaged areas, it is difficult to verify losses due to the lack of records and widespread destruction.
    • Delays in Payouts: The need for physical assessment can cause delays in providing financial assistance to the affected individuals and communities.
    • Insurance Gap: There is a significant gap in insurance coverage between developed and developing economies, leaving many vulnerable populations without adequate protection.

    Changing course and the associated limitations:

    • Parametric insurance: Payments are made based on predefined parameters of weather events (e.g., rainfall exceeding 100 mm per day for two consecutive days, specific flood levels, wind speed).The payouts are made without the need for physical assessment of losses, enabling quicker disbursements.

    Examples:

    • Disaster-prone Island Countries: Many have adopted parametric insurance for climate adaptation, moving away from risk retention models. For example, Fiji launched its first parametric insurance product in 2021
    • Morocco received $275 million in parametric insurance after a 6.8 magnitude earthquake, arranged with the help of the World Bank.
    • India has initiated crop insurance (e.g., Pradhan Mantri Fasal Bima Yojana and the Restructured Weather Based Crop Insurance Scheme).

    Associated Limitations

    • Current Focus: Primarily used for low-frequency, high-impact disasters like earthquakes, cyclones, and hurricanes.
    • Data and Infrastructure Requirements: There is challenges related to developing and maintaining the necessary infrastructure for data collection and monitoring can be challenging, especially in developing regions.
    • Affordability and Accessibility issues: It demands high premiums can still be a barrier for economically disadvantaged communities.

    Case Study of Nagaland:

    • Nagaland was the first state in India to buy parametric cover for extreme precipitation in 2021.
    • Based on lessons learned, it improved the product by fixing an absolute annual premium, duration, and rate online, allowing bidders to compete over lower threshold limits and maximized payouts.

    What can be done to ensure effectiveness? (Way Forward)

    • Precise Thresholds and Robust Monitoring: Establish clear, accurate parameters for insurance triggers and implement reliable monitoring systems to track these parameters effectively.
    • Transparent Bidding and Experience Sharing: Follow a transparent bidding process for price discovery and facilitate the exchange of best practices and lessons learned between governments.
    • Widespread Payout Systems and Household Premium Support: Develop comprehensive systems for distributing payouts and promote long-term premium payment by households, leveraging tools like Aadhaar-based payment dissemination.

    Mains PYQ: 

    Q Describe various measures taken in India for Disaster Risk Reduction (DRR) before and after signing ‘Sendai Framework for DRR (2015-2030)’. How is this framework different from ‘Hyogo Framework for Action, 2005’? (UPSC IAS/2018)

  • The Green Revolution in Maize

    Why in the news? 

    Over the past two decades, India’s maize production has more than tripled, emerging as a private sector-driven green revolution success story. Maize has transitioned from being primarily a feed crop to also serving as a fuel crop.

    What was the Green Revolution?

    • Began in 1968 with the introduction of high-yielding variety (HYV) seeds, especially for wheat and rice, developed by agronomist Norman Borlaug
    • Institutions like CIMMYT (International Maize and Wheat Improvement Center) and IARI (Indian Agricultural Research Institute), led by scientists like Norman Borlaug and M S Swaminathan, played a crucial role.
    • The Green Revolution is credited to M.S. Swaminathan, known as the “Father of the Indian Green Revolution”, who introduced Borlaug’s wheat varieties and other technologies.
    • The initiative focused on increasing agricultural productivity through advanced breeding techniques, fertilizers, and irrigation methods.
    • Wheat production increased from 12 million tons in 1964-65 to 20 million tons in 1970-71.India became self-sufficient in food grain production and a major exporter

    Present India’s Maize Production called as a Green Revolution in Maize

    • Significant Production Increase: Over the last two decades, India’s maize production has surged from 11.5 million tonnes in 1999-2000 to over 35 million tonnes in 2023-24, showcasing a remarkable increase in both yield and output.
    • Private Sector Leadership: This growth has been largely driven by the private sector, with more than 80% of the maize area planted with high-yielding hybrids developed by private seed companies, indicating a successful private sector-led green revolution.
    • Diverse Utilization: Maize in India has evolved from being primarily a feed crop for poultry and livestock to also being a vital industrial crop used for starch and ethanol production, reflecting its expanded role in the economy.

    On Starch and Ethanol Production

    • Maize contains 68-72% starch, with significant industrial applications in textiles, paper, pharmaceuticals, food, and beverages.
    • Maize is emerging as a key feedstock for ethanol production, especially for blending with petrol.
    • IARI has developed a waxy maize hybrid with high amylopectin content, enhancing its suitability for ethanol production.
    • The new Pusa Waxy Maize Hybrid-1 has 71-72% starch with 68-70% recoverable, increasing ethanol yield per tonne.

    Can India adopt new strategies? (Way forward)

    • India can adopt new strategies through innovative breeding techniques like the doubled haploid (DH) technology used by CIMMYT.
    • The DH facility in Karnataka speeds up the development of genetically pure inbred lines, enhancing the efficiency of maize breeding.
    • IARI’s waxy maize hybrid is ready for field trials and commercial release, potentially boosting ethanol production.
    • Collaboration between public sector institutions and private seed companies can drive the adoption of high-yielding, disease-resistant maize varieties.
    • Private sector-bred hybrids account for over 80% of India’s maize area, indicating strong potential for further growth and innovation in maize production.

    Mains PYQ: 

    Q Explain various types of revolutions, that took place in Agriculture after Independence in India. How these revolutions have helped in poverty alleviation and food security in India? (UPSC IAS/2017)