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GS Paper: GS3

  • RBI’s latest recommendations to regulate payment aggregators in offline spaces | Explained

    Why in the news?

    The Reserve Bank of India (RBI) has floated two consultation papers seeking enhanced regulation of payment aggregators carrying out face-to-face transactions. It also seeks to strengthen the ecosystem’s safety.

    What is Payment Aggregators?

    • A payment aggregator is a payment solution or a platform provider that aggregates various payment modes such cards, UPI, net-banking, wallets and alternate credit products by partnering with various processing entities such as acquiring banks, direct banks (in case of net banking) and issuers of wallets and alt credit products on to a single platform.

    What exactly are the norms about?  

    • Extension to Offline Transactions: The existing guidelines for payment aggregators cover their activities in e-commerce and online platforms. The latest draft proposes extending these regulations to offline spaces, including proximity or face-to-face transactions.
    • Convergence on Standards: The proposed norms aim to achieve convergence on standards of data collection and storage across online and offline transactions handled by payment aggregators.
    • Elaborate Guidelines: The proposed norms are detailed and comprehensive, reflecting lessons learned from incidents such as the Paytm Payments Bank crisis.
    • Strengthening Ecosystem: RBI’s objective seems to be strengthening the payment aggregator ecosystem against opacity and ensuring compliance with regulatory standards.
    • Penalties for Non-Compliance: The Financial Intelligence Unit (FIU-IND) imposed penalties on Paytm Payments Bank for engaging in illegal activities and failing to adhere to regulatory requirements, indicating strict consequences for non-compliance with the proposed norms.

    Is registration with the RBI being made compulsory?  

    The primary focus of this guidlines is on non-bank PAs and within them, the offline extensions.

    • PA based on Bank: Banks providing physical PA services as part of their normal banking relationship would not require any separate authorisation from the RBI. They are only expected to comply with the revised instructions within three months after they are issued.
    • PA without Banking: Non-banking entities providing PA services at the point of sale (PoS), that is, offline, would have to inform RBI within 60 days (after the circular is issued), about their intent to seek authorisation.

    Does it talk about provisions for sustainability?  

    • Minimum net worth aims to ensure the sustainability of non-banking entities: While the proposed norms primarily focus on regulatory compliance and financial stability, the requirement for a minimum net worth aims to ensure the sustainability of non-banking entities providing proximity/face-to-face transaction services. This is because entities with a stronger financial base are better positioned to weather economic challenges and uncertainties, thus promoting sustainability in the long run.
    • Risk-Based Payments: Payment aggregators are required to assign risk-based payments to merchants, focusing on sustainability. This involves assessing the risk associated with each merchant and adjusting payment terms accordingly.

    What about KYC requirements?  

    • Extended Scope of KYC: The proposed regulations aim to extend the scope of Know Your Customer (KYC) requirements for merchants onboarded by payment aggregators. While KYC is already mandatory, the regulations seek to make the provisions more nuanced.
    • Document Verification for Medium Merchants: Medium merchants, with a higher annual turnover threshold, must undergo additional document verification. Payment aggregators are expected to verify one official document each of the proprietor, beneficial owner or attorney holder, and the stated business.
    • Ongoing Compliance Monitoring: Payment aggregators must ensure that transactions undertaken by their merchants are in line with their business profiles. This involves ongoing monitoring to ensure compliance with KYC requirements and business activities.

    Conclusion: 

    The proposed norms aim to achieve convergence on standards of data collection and storage across both online and offline transactions handled by payment aggregators. This helps in streamlining regulatory requirements and ensuring consistency in data management practices.

    Mains PYQ 

    Q  How can the Digital India program help farmers to improve farm productivity and income? What step has the government taken in this regard? (UPSC IAS/2015)

    With Inputs from:

    https://www.thehindu.com/business/rbi-clampdown-on-lenders-could-moderate-credit-growth-in-2024-25/article67994838.ece

    https://www.thehindu.com/business/Industry/rbi-to-introduce-offline-erupee-transactions-soon-shaktikanta-das/article67824286.ece

  • Icequakes on Ross Ice Shelf

    Why in the news?

    • Scientists found out that the huge Ross Ice Shelf, almost as big as France, moves forward a few centimetres daily.
    • This happens because of the Whillans Ice Stream, a fast-moving river of ice that sometimes gets stuck and then suddenly moves forward.

    About Ross Ice Shelf

    • Ross Ice Shelf is the largest ice shelf of Antarctica roughly the size of France.
    • It was discovered by Sir James Clark Ross on 28 January 1841.
    • The shelf spans an area of roughly 500,809 square kilometers, about the size of France or the Yukon Territory in Canada.
    • It is several hundred meters thick. In the shelf’s southern reaches, nearest the True South Pole, the ice can be as thick as 750m.
    • The nearly vertical ice front to the open sea is more than 600 km long, and between 15 and 50 meters high above the water surface. However, 90% of the floating ice is below the water surface.
    • It is fed primarily by giant glaciers, or ice streams, that transport ice down to it from the high polar ice sheet of East and West Antarctica.
    • Most of Ross Ice Shelf is in the Ross Dependency claimed by New Zealand.
    • It floats in, and covers, a large southern portion of the Ross Sea and the entire Roosevelt Island located in the east of the Ross Sea.

    Spotlight: Icequakes on Ross Ice Shelf

    • Influence of Ice Stream: Most glaciers move slowly, but the Whillans Ice Stream stops and starts suddenly. This might happen because there isn’t enough water below to help it move smoothly.
    • Sudden Movements: These sudden movements, like tiny earthquakes, push against the Ross Ice Shelf.
    • Threat to Stability: Even though these daily shifts aren’t caused by humans, they could make the Ross Ice Shelf weaker over time. Ice shelves slow down the flow of ice into the ocean.
    • Retreat of Glacier: If the Ross Ice Shelf gets weaker or breaks, it could speed up melting and raise sea levels.

    PYQ:

    [2013] On the planet earth, most of the freshwater exists as ice caps and glaciers. Out of the remaining freshwater, the largest proportion

    (a) Is found in the atmosphere as moisture and clouds

    (b) Is found in freshwater lakes and rivers

    (c) Exists as groundwater

    (d) Exists as soil moisture

  • In the news: Pulicat Wetland

    Why in the news?

    • Settlement of claims for local communities within Pulicat Wetland and Birds Sanctuary boundary raises concerns.
    • State government plans to denotify a significant portion of the sanctuary and Eco-Sensitive Zone (ESZ) for industrial park development.

    About Pulicat Wetland and Birds Sanctuary

    • Pulicat Lake Bird Sanctuary is the second-largest bird sanctuary in India.
    • It cuts across Nellore district of Andhra Pradesh and Thiruvallur district of Tamil Nadu.
    • The sanctuary is situated along the coast of the Bay of Bengal covering an area of 759 square kilometers.
    • The sanctuary is bordered by the Arani River at its southern tip, the Kalangi River from the Northwest, and the Swarnamukhi River at the northern end.
    • Pulicat Lake runs parallel to the Bay of Bengal and has a sand bar, making it a lagoon of its own kind.
    • Sriharikota, renowned as India’s rocket launch pad and home to the Satish Dhawan Space Centre, separates the lake from the Bay of Bengal.
    • The sanctuary includes 16 island villages and 30 villages adjoining the lake, whose inhabitants depend on the lake for their livelihood.
    • Pulicat Lake Bird Sanctuary hosts a large number of migratory birds during winter, including gulls, terns, plovers, shanks, curlews, and storks.
    • It is a habitat for a variety of bird species such as flamingos, pelicans, storks, herons, and ducks.

    What are the Eco-sensitive Zones (ESZs)?

    •  Eco-Sensitive Zones (ESZs) or Ecologically Fragile Areas (EFAs) are areas notified by the MoEFCC around Protected Areas, National Parks and Wildlife Sanctuaries.
    • The purpose of declaring ESZs is to create some kind of “shock absorbers” to the protected areas by regulating and managing the activities around such areas.
    • They also act as a transition zone from areas of high protection to areas involving lesser protection.

     How are they demarcated?

    • The Environment (Protection) Act, 1986 does NOT mention the word “Eco-Sensitive Zones”.
    • However, Section 3(2)(v) of the Act, says that Central Government can restrict areas in which any industries, operations or processes or class of industries, operations or processes shall be carried out or shall not, subject to certain safeguards.
    • Besides Rule 5(1) of the Environment (Protection) Rules, 1986 states that central government can prohibit or restrict the location of industries and carrying on certain operations or processes on the basis of certain considerations.
    • The same criteria have been used by the government to declare No Development Zones (NDZs).

    Defining its boundaries

    • An ESZ could go up to 10 kilometres around a protected area as provided in the Wildlife Conservation Strategy, 2002.
    • Moreover, in the case where sensitive corridors, connectivity and ecologically important patches, crucial for landscape linkage, are beyond 10 km width, these should be included in the ESZs.
    • Further, even in the context of a particular Protected Area, the distribution of an area of ESZ and the extent of regulation may not be uniform all around and it could be of variable width and extent.

     

    PYQ:

     [2017] Consider the following statements:

    1. In India, the Himalayas are spread over five States only.

    2. Western Ghats are spread over five States only.

    3. Pulicat Lake is spread over two States only.

    Which of the statements given above is/are correct?

    (a) 1 and 2 only

    (b) 3 only

    (c) 2 and 3 only

    (d) 1 and 3 only

  • Intergovernmental Negotiating Committee (INC-4) Meeting in Ottawa

    Why in the news?

    • The fourth session of the Intergovernmental Negotiating Committee (INC-4) is happening in Ottawa, Canada.
    • The goal is to finalize a global agreement on plastic pollution by November this year.

    What is the Intergovernmental Negotiating Committee (INC)?

    • INC is a committee that aims to develop a legally binding international instrument to end plastic pollution by 2025, as mandated by United Nations Environment Assembly (UNEA) Resolution 5/14.
    • It began working in November 2022 at Punta del Este, Uruguay (INC-1).
      • The second meeting (INC-2) took place in May-June, 2023 at Paris, France.
      • The INC-3 met in Nairobi in December 2023.
    • INC is scheduled to complete its work by the end of 2024.

    Key Points from INC-4:

    • Previous meetings (INC-1, INC-2, INC-3) paved the way for this one.
    • They’re focusing on cutting out unnecessary plastic use while still using it for important things like renewable energy.

    Future Prospects:

    • INC-5 will happen in Busan, South Korea, and it’s meant to finalize everything.
    • After that, leaders from different countries will sign the agreement.

     

    PYQ:

    [2014] With reference to ‘Global Environment Facility’, which of the following statements is/are correct?

    (a) It serves as financial mechanism for ‘Convention on Biological Diversity’ and ‘United Nations Framework Convention on Climate Change’

    (b) It undertakes scientific research on environmental issues at global level

    (c) It is an agency under OECD to facilitate the transfer of technology and funds to underdeveloped countries with specific aim to protect their environment.

    (d) Both A and B

  • [pib]  Role of the Coal Controller’s Organisation (CCO)

    Why in the news?

    The Coal Controller’s Organisation (CCO) recently held inspections of Coal Mines to ensure the accuracy of Coal class and grade declarations.

    Coal Sector in Indian Economy:

    • The Indian coal sector is one of the 8 core sectors contributing heavily to the economic development of India.
    • In India, there are 4 grades of coal available: Lignite, Bituminous, Sub-Bituminous, and Anthracite, and out of which Anthracite is the highest grade of coal.
    • More than 70% of Coal reserves in India are mainly found in the South-Central region i.e. in Orissa, Chhattisgarh, and Jharkhand.
    • India is the second-largest producer of Anthracite globally after China.
    • The mining sector accounts for more than 2% contribution to the total GDP of India.
    • India, had a global share of Coal production nearly 9%.
    • India’s share of coal in major imports in FY 2023 was estimated at 8%.
    • India exports coking coal to neighboring countries, including Nepal, Bangladesh, and Bhutan.

    About Coal Controller’s Organisation (CCO)

    • The CCO was established in 1975 under the Coal Mines (Conservation and Development) Act, 1974.
    • It operates under the Ministry of Coal.
    • It is headquartered in Kolkata and field offices at Dhanbad, Ranchi, Bilaspur, Nagpur, Sambalpur, Kothagudem, and Asansol.

    Functions of CCO

    • Regulatory Oversight: Regulates coal industry activities, ensuring compliance with laws and policies.
    • Inspections: It conducts inspections of collieries to ensure the accuracy of coal class and grade declarations under the Colliery Control Rules, 2004 (Amended in 2021).
    • Quality Control: Establishes and enforces standards for coal quality through testing and inspection.
    • Grading and Classification: Categorizes coal into grades based on quality and intended use.
    • Licensing and Permissions: Issues licenses and permits to coal producers, traders, and consumers.
    • Data Collection and Analysis: Collects and analyzes data on coal production, consumption, and market trends.
    • Research and Development: Conducts or sponsors R&D to improve mining techniques and coal quality.
    • Conservation and Sustainability: Formulates policies for coal resource conservation and sustainable development.
    • Enforcement and Compliance: Ensures compliance with coal-related regulations through inspections and enforcement actions.

    Grades of Coal in India

    The gradation of coal is based on-

    1. Non-Coking Coal: Based on Gross Calorific Value (GCV).
    2. Coking Coal: Ash Content
    3. Semi Coking /Weakly Coking Coal: Ash plus Moisture Content

    What is Coke?

    • Coke is a solid carbonaceous material derived from heating coal in the absence of air.
    • It is a porous, hard, black substance with a high carbon content and few impurities.
    • Coke is primarily used as a fuel and as a reducing agent in the process of smelting iron ore to produce steel in a blast furnace.

    Types of Coal based on Coking ability

    1. Non-Coking Coal: Non-coking coal, also known as thermal coal, is coal that does not have the ability to undergo conversion into coke when heated in the absence of air. It is primarily used for power generation in thermal power plants, as well as for other industrial applications such as cement production and heating.
    2. Coking Coal: Coking coal, also known as metallurgical coal, is a type of coal that possesses the necessary properties to undergo conversion into coke when heated in the absence of air. Coking coal is characterized by its high carbon content, low ash content, and ability to form a strong, porous coke when heated.
    3. Semi Coking / Weakly Coking Coal: Semi-coking or weakly coking coal is a coal type that falls between non-coking coal and coking coal in terms of its properties. While it does not fully qualify as coking coal due to certain limitations in its coking properties, it exhibits some degree of coking ability when heated.

     

    PYQ:

    [2022] In India, what is the role of the Coal Controller’s Organization (CCO)?

    1. CCO is the major source of Coal Statistics in Government of India.
    2. It monitors progress of development of Captive Coal/Lignite blocks.
    3. It hears any objection to the Government’s notification relating to acquisition of coal-bearing areas.
    4. It ensures that coal mining companies deliver the coal to end users in the prescribed time.

    Select the correct answer using the code given below:

    (a) 1, 2 and 3

    (b) 3 and 4 only

    (c) 1 and 2 only

    (d) 1, 2 and 4

  • On the National Clean Air Programme | Explained

    Why in the news? 

    When the Indian government launched the National Clean Air Programme (NCAP) in 2019, it’s target was to cut the concentration of atmospheric Particulate Matter (PM) by 20-30% by 2024, from 2017 levels. This was later revised to 40% by 2026.

    What is the NCAP?

    • The National Clean Air Programme (NCAP) was launched in India in January 2019 by the Ministry of Environment, Forest and Climate Change (MoEFCC)
    • The NCAP aims to achieve reductions in PM10 levels through various measures.

    What is PM10? 

    • PM 10, also known as particulate matter with an aerodynamic diameter of less than 10 micrometers.
    • PM 10 particles can irritate the eyes, nose, and throat, and prolonged exposure to high levels of PM 10 can lead to serious health problems, including respiratory issues, cardiovascular disease, and even premature death.

    Key features of NCAP (Note: asked in UPSC 2020 mains)

    • Target: Achieving 20% to 30% reduction target in Particulate Matter (PM10 and PM2.5) concentrations by 2024, where 2017 is kept as the base year for the comparison of concentration. But it has been revised to 40% by 2026.
    • Cities based on air quality:Identification of 122 non-attainment cities across the country based on the 2014-2018 Air Quality data.
    • City specific plans: Preparation of city-specific action plans, including measures to strengthen the monitoring network, reduce vehicular/industrial emissions, and increase public awareness.
    • Coordination between centre, state and local: Facilitating collaborative, multi-scale, and cross-sectoral coordination between the relevant central ministries, state governments, and local bodies.
    • Right mix with exixting policies: Establishing a right mix with the existing policies and programs, including the National Action Plan on Climate Change (NAPCC) and other government initiatives related to climate change.
    • Changes as per additional scientific information: Constant change, activity, and progress to get evolved based on the additional scientific and technical information as they emerge.
    • Monitoring station: Increasing the number of monitoring stations in the country, including rural monitoring stations, technology support, and data analysis.
    • Awareness and capicity building: Emphasis on awareness and capacity building initiatives, including public awareness campaigns, training programs, and research and development activities.

     Challenges related to NCAP 

    • Lack of fund Utilization: On average, only 60% of the allocated funds have been utilized so far, with 27% of cities spending less than 30% of their designated budgets. Notably, Visakhapatnam and Bengaluru have spent 0% and 1% of their NCAP funds, respectively.
    • Implementation Delays: Delays in implementing CAAPs are attributed to various factors, including bureaucratic hurdles such as delays in approvals from competent authorities and the absence of standard operating procedures.
    • Technical Challenges: Technical challenges, such as defining technical specifications for tendering processes and procuring necessary equipment like mechanical sweepers and electric buses, contribute to implementation delays.

    How scientific tool can help?

    • Emissions Inventory (EI): EIs provide crucial insights into local pollution sources and their contributions, aiding in forecasting future emissions and shaping targeted pollution control strategies. 
    • Source Apportionment (SA) Studies: SA studies offer detailed analyses of contributions from various pollution sources, including distant ones.
    • Role of Air Quality (AQ) Modelling: AQ modelling helps in understanding pollution dispersion, including from distant sources.
    • Role of EI, SA and AQ: Combining EI, SA studies, and AQ modelling allows for a comprehensive understanding of pollution sources, their contributions, and dispersion patterns.

    Conclusion: 

    Implement stricter monitoring mechanisms to ensure timely and efficient fund utilization. Regular audits and reviews can help identify underutilization and take corrective actions promptly.

    Mains PYQ

    Q What are the key features of the National Clean Air Programme (NCAP) initiated by the government of India? (UPSC IAS/2020)

  • 95Mat5 Antibody: Revolutionizing Snakebite Treatment

    Why in the news?

    After multiple rounds of screening, researchers have identified an antibody, 95Mat5 that showed promising results in making a potent antidote against various snake venoms.

    What is 95Mat5?

    • 95Mat5 is a universal antivenom developed to neutralize the toxins present in snake venoms.
    • Development Process:
    1. The scientists first synthesized variants of a toxin called long-chain 3FTxs (3FTx-L), which are found in the venoms of various snakes, including cobras, kraits, mambas, and monocled cobras.
    2. They then screened billions of human antibodies expressed on the surface of yeast cells to find antibodies that bound best to the synthesized toxins.
    3. After multiple rounds of screening, they identified a shortlist of antibodies that broadly reacted with most of the 3FTx variants used in the study.
    4. The selected antibodies were further tested in vitro in human cells to determine which ones could best neutralize the toxins.

    Mechanism of Action

    • 95Mat5 specifically targets α-neurotoxins, which are a specific class of 3FTxs that prevent nerve and muscle cells from responding to acetylcholine, a neurotransmitter involved in carrying messages from neurons to muscles.
    • By binding to the toxins, 95Mat5 prevents toxins from interacting with the receptors in human nerve and muscle cells, thereby blocking their ability to induce paralysis and other deadly effects.
    • In animal experiments, 95Mat5 demonstrated efficacy in neutralizing the toxins present in the venoms of various snake species, protecting the animals from death.

    Global Impact of Snakebites

    • Venomous snakebites claim over 100,000 lives annually, with around 400,000 individuals suffering permanent disability.
    • Low and middle-income countries, especially India and Africa, bear the brunt of this burden.
      • India alone witnessing an average of 58,000 deaths each year.
    • In 2017, the World Health Organisation (WHO) declared snakebite envenoming as a highest priority Neglected Tropical Disease, shedding light on a long-hidden health crisis.

     

    PYQ:

    [2020] With reference to carbon nanotubes, consider the following statements:

    1. They can be used as carriers of drugs and antigens in the human body.
    2. They can be made into artificial blood capillaries for an injured part of human body.
    3. They can be used in biochemical sensors.
    4. Carbon nanotubes are biodegradable.

    Which of the statements given above are correct?

    (a) 1 and 2 only

    (b) 2, 3 and 4 only

    (c) 1, 3 and 4 only

    (d) 1, 2, 3 and 4

  • PREMIUM – Subsidies – Good or Bad for India?

    Why in the News? 

    Issues have been raised by the World Trade Organization (WTO) concerning Agricultural Subsidies in India. Major subsidies in India are on fertilizer, power, credit, output, seed, and export products.

    What is Subsidy?

    • The term subsidy refers to financial assistance in the form of discounts or monetary grants by the Central government to public entities or private institutions. 
    • The objective is to make the products offered by these institutions affordable for public consumption. 
    • The subsidized products are necessary for the larger public good and are a means of supporting the community’s welfare.

     

    Historical Background

    • Post-Independence Era (1947 onwards): The government introduced various subsidies to promote industrialization, agriculture, and social welfare, aiming to reduce poverty and achieve self-sufficiency in key sectors.
    • Green Revolution (1960s): During the 1960s and 1970s, Subsidies on fertilizers, seeds, and credit were provided to farmers to encourage the adoption of new agricultural technologies and boost food production.
    • Liberalization Reforms (1991):  While liberalization led to a reduction in some subsidies and a shift towards market-oriented policies, the government continued to provide support to sectors deemed crucial for social welfare and economic development.

    Types of Subsidies:

    • Food subsidy: The food subsidy’s main objective is to provide essential eatables to a large section of the population living below the poverty line in India. 
      • The major food items supplied to the BPL families (by PDS system) vary as per the region, it includes – Wheat, Rice, Sugar, Milk, Cooking oil, and more.
    • Education subsidy: The Central government extends the education subsidy to eligible students to pursue higher technical and professional education.
    • Export subsidy: To make exports attractive and lend support to the companies, the government offers export subsidies. 
    • Fertilizer subsidy: The fertilizer is provided at a fixed MRP that is below the actual price; the government pays the difference between the actual coat and the MRP.

    (Note: There are various types of subsidies but UPSC usually asks for Agriculture subsidies) 

    Subsidies in Agriculture:

    Direct Subsidies: 

    • Credit Subsidies: Subsidized credit programs offer farmers loans at lower interest rates or with relaxed repayment terms to finance agricultural activities, such as purchasing inputs, machinery, or land.
      • Ex-The Government of India provides interest subvention of 2% and Prompt Repayment Incentive of 3% to the farmers, thus making the credit available at a very subsidized rate of 4% per annum as per Kisan Credit Card.
    • Direct Income Transfers: Governments provide direct cash transfers or income support schemes to farmers to supplement their incomes, improve their financial stability, and alleviate rural poverty. Ex-PM Kisan Samman Nidhi Scheme under which support of Rs.6000/- per year 

    Indirect Subsidies 

    • Fertilizer Subsidies: Governments often provide subsidies on fertilizers to reduce the cost burden on farmers and promote fertilizer use, which enhances crop productivity. Ex- the Union Budget for the fiscal year 2024-25 (FY25) allocated ₹1.64 trillion for fertilizer subsidy.
    • Seed Subsidies: Subsidies on quality seeds help farmers access improved varieties that are disease-resistant, drought-tolerant or have higher yields. Ex- the government provides a subsidy of Rs. 1000/- per quintal or 50% of the cost.
    • Water Subsidies: Subsidized irrigation infrastructure and water supply schemes aim to improve water availability for agricultural purposes, especially in regions facing water scarcity. Ex- Pradhan Mantri Krishi Sinchai Yojana.
    • Minimum Support Prices (MSP): Governments guarantee a minimum price for certain crops to protect farmers from market price fluctuations and ensure stable income. Procurement agencies purchase crops from farmers at MSP, often for staples like wheat, rice, and pulses. Ex- the government of India sets the MSP twice a year for 24 commodities (23 crops + 1 sugarcane).
    • Crop Insurance Subsidies: Subsidies are offered on crop insurance premiums to encourage farmers to enroll in crop insurance schemes, which protect them against yield or revenue losses due to adverse weather, pests, or other risks. Ex- Pradhan Mantri Fasal Bima Yojana (PMFBY)
    • Subsidized Agricultural Machinery: Governments may subsidize the purchase of farm machinery, equipment, and tools to mechanize agricultural operations, increase efficiency, and reduce labor costs. Ex- Sub-mission On Agriculture Mechanization (SMAM scheme)

    Present issues raised by the WTO:

    • Market Distortion: The WTO contends that agricultural subsidies have the potential to disrupt global markets. For instance, subsidies like India’s Minimum Support Price (MSP) may result in the undervaluation of Indian agricultural goods on the international stage. 
    • Trade Barriers: Subsidies can create challenges for foreign producers without subsidies to compete effectively in markets where subsidized goods are sold.
    • Overproduction of certain crops: Subsidies can lead to overproduction of certain crops, which can further distort the market and lead to wastage.
    • Negative Environmental Impact: Overuse of fertilizers and water for irrigation, encouraged by subsidies, can lead to environmental degradation.
    • Inequity: The benefits of subsidies often go to larger farmers rather than small-scale farmers who need them the most.

    Limitations Faced by Indian Agriculture:

    • Subsidies on few crops: Subsidies like MSP, which are applicable for only a few crops, have led to cereal-centric agriculture with distorted cropping patterns, as farmers tend to grow only those crops for which they are given subsidies.
    • Benefiting only wealthy Farmers: As per the Economic Survey 2018, wealthy farmers benefited over small farmers from the farm subsidies. Thus the objective of giving subsidies is not fulfilled. This is the case frequently witnessed in Punjab and Haryana, where affluent farmers enjoy taxpayer money.
    • Fiscal deficit: Also, the subsidies lead to a substantial financial deficit and burden on the financial exchequer.
    • Cause of pollution: Subsidies for agriculture can foster the overloading of croplands, which leads to erosion and compaction of topsoil, pollution from synthetic fertilizers and pesticides, and release of greenhouse gases, among other adverse effects.

    Way Forward:

    • Diversification of Subsidies: Expand subsidy programs to cover a wider range of crops, including fruits, vegetables, pulses, and other diversified agricultural products, to promote crop diversification and mitigate the cereal-centric focus.
    • Targeted Subsidy Programs: Implement targeted subsidy schemes that prioritize support for small and marginalized farmers, ensuring that subsidies reach those who need them most and reducing the disproportionate benefit to wealthy farmers.
    • Price Stabilization Mechanisms: Develop price stabilization mechanisms beyond MSP, such as futures markets, crop insurance, and warehouse receipt systems, to mitigate price volatility and provide income security to farmers without distorting cropping patterns.

    Prelims PYQ

    In India, markets in agricultural products are regulated under the (UPSC IAS/2015)

    a) Essential Commodities Act, 1955

    b) Agricultural Produce Market Committee Act enacted by States

    c) Agricultural Produce (Grading and Marking) Act, 1937

    d) Food Products Order, 1956 and Meat and Food Products Order, 1973

    Mains PYQ 

    Q How do subsidies affect the cropping pattern, crop diversity and economy of farmers? What is the significance of crop insurance, minimum support price and food processing for small and marginal farmers? (UPSC IAS/2017) 

    Q What are the different types of agriculture subsidies given to farmers at the national and at state levels? Critically analyse the agricultural subsidy regime with reference to the distortions created by it (UPSC IAS/2013)

  • How is India planning to boost EV production?

    Why in the News? 

    The Union government approved a policy to promote India as a manufacturing hub for Electric Vehicles (EVs).

    Features of the Electric Vehicles policy:

    • Reduction of Import Duty: Import duty on electric vehicles (EVs) imported as Completely Built Units (CBUs) with a minimum CIF value of $35,000 is reduced from 70%-100% to 15% for five years.  
    • Waiver of Duty: A maximum of 40,000 EV imports in five years, with a duty waiver of ₹6,484 crore or proportional to investment (whichever is lower), requires a minimum $800 million investment.
    • Localization Targets: Manufacturers are required to set up manufacturing facilities in India within three years. They must achieve 25% localization by the third year and 50% localization by the fifth year of incentivized operation.
    • Incentives for Setting Up Manufacturing Facilities: The policy incentivizes manufacturers to establish manufacturing facilities in India by offering reduced import duties and waivers, provided they meet certain investment and localization targets.
    • Encouragement of Global EV Makers: The policy aims to encourage global EV makers like Tesla and Chinese EV maker BYD to enter the Indian market by providing favorable conditions for setting up manufacturing facilities and importing EVs.

    Present concerns raised by Private Players in the Market:

    • Impact on Domestic Industry: Tata Motors opposed the reduction of import duties, fearing it would negatively affect the domestic industry. They argued that lowering duties could harm the investment climate.
    • Competitive Disadvantage: Domestic players are concerned that the policy benefits mainly higher-end Original Equipment Manufacturers (OEMs), potentially placing them at a competitive disadvantage in segments below ₹29 lakh.
    • Favoring Global Players: The policy appears to favor global EV players and Indian joint ventures with such players, potentially making it more challenging for purely domestic players to compete effectively.

    Conclusion: The government should engage in dialogue with stakeholders, including domestic players like Tata Motors, to address their concerns and seek their input in shaping the policy framework. Need to implement measures to support domestic players, including providing incentives and support for technology development, innovation, and capacity building.

    Mains question for practice 

    Q Indian Government has recently approved a policy aimed at promoting the country as a manufacturing hub for Electric Vehicles (EVs). Discuss the key features of this policy. Highlight the concerns raised by private players.

    Mains PYQ 

    Q How is efficient and affordable urban mass transport key to the rapid economic development in India? (UPSC IAS/2019)

  • ISRO’s Findings on Glacial Lake Dynamics in Himalaya

     

    Why in the News?

    • The Satellite images by ISRO show an increase in the size of Gepang Gath Lake amidst rising concerns about Climate Change.
    • Gepang Gath Lake (one of the biggest Glacial lakes in the Chandra basin) is located in the Western Indian Himalaya at the terminus of the Gepan Gath glacier.

    ISRO’s Findings on Glacial Lakes in Himalayas 

    Expansion of Glacial Lakes

    • During 2016-17, total of 2,431 lakes larger than 10 hectares were identified, among which 676 were identified as glacial lakes. Notably, these 676 glacial lakes have shown significant expansion since 1984. A staggering 89% (601 lakes) of the expanding lakes have more than doubled in size since 1984.
    • Regional Distribution: Out of these expanding glacial lakes, 130 are situated within India. Among these, 65 lakes are located in the Indus River basin, seven in the Ganga River basin, and 58 in the Brahmaputra River basin.
    • The derived analysis from the Satellite provides valuable insights for understanding glacial lake dynamics.
    • It is essential for assessing environmental impacts and developing strategies for Glacial Lake Outburst Floods (GLOF) risk management and climate change adaptation in glacial environments.

     

    What are Glacial Lakes?

     

      • Glacial lakes are bodies of water formed in depressions on the surface of glaciers or in moraines left behind by retreating glaciers.
      • Glacial lakes were categorized based on their formation process into four broad categories: 
        • Moraine-dammed, 
        • Ice-dammed, 
        • Erosion, and 
        • Other glacial lakes.
      • Among the expanding lakes, the majority are Moraine-dammed (307), followed by Erosion (265), other (96), and Ice-dammed (8) glacial lakes.
      • Formation Process: Glacial lakes form through the accumulation of meltwater from the melting ice of glaciers. As glaciers move, they carve out depressions in the landscape, which may fill with water to form lakes.
        • When glaciers retreat, they leave behind moraines, which can act as natural dams, trapping meltwater and forming lakes.
      • Characteristics:
        • Vary in size, depending on the size and activity of the glacier.
        • Found in mountainous regions and polar areas where glaciers are present.
        • The primary source of water is melting glacial ice, precipitation and runoff.
    • Significance of Glacial Lakes:
      • Glacial lakes play a crucial role in regulating water flow in glacier-fed rivers, particularly during the dry season.
      • Provides habitat for unique aquatic species adapted to cold, high-altitude environments.
      • Contributes to landscape evolution and the formation of landforms such as cirques and tarns.
    • Present Ecological Challenges:
      • Glacial Outburst Floods: The sudden release of water from glacial lakes, known as glacial lake outburst floods (GLOFs), can pose significant hazards to downstream communities and infrastructure. Ex. Chamoli Disaster.
      • Rapid Expansion: Glacial lakes can rapidly expand due to the increased melting of glaciers, leading to the risk of flooding and landslides in surrounding areas.

    Important Glacial Lakes in India:

    • Deosai National Park (Jammu and Kashmir): Known for its numerous glacial lakes.
    • Gangbal Lake (Jammu and Kashmir): At the base of Mount Haramukh.
    • Zanskar Valley Lakes (Jammu and Kashmir): Includes Tsomoriri Lake, Tsokar Lake, and many others.
    • Roopkund Lake (Uttarakhand): Known for the human skeletons found at its bottom.
    • Sarson Patal Lake (Uttarakhand): Within the Nanda Devi Biosphere Reserve.
    • Deoria Tal (Uttarakhand): Offering stunning views of the surrounding peaks.
    • Hemkund Lake (Uttarakhand): Near the Hemkund Sahib Gurudwara.
    • Kedar Tal (Uttarakhand): At the foot of the Thalay Sagar peak.
    • Nanda Devi East Base Lake (Uttarakhand): Offering views of the Nanda Devi peaks.
    • Vasuki Tal (Uttarakhand): Near the Chaturangi Glacier.
    • Chandratal Lake (Himachal Pradesh): Known for its crescent shape.
    • Suraj Tal (Himachal Pradesh): Close to the Baralacha La pass.
    • Rupin Lake (Himachal Pradesh): Near the Rupin Pass.
    • Gurudongmar Lake (Sikkim): One of the highest lakes in the world.

     

    PYQ:

    [2020] Siachen Glacier is situated to the

    (a) East of Aksai Chin

    (b) East of Leh

    (c) North of Gilgit

    (d) North of Nubra Valley