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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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  • New Account Settlement System for Stock Trading

    Beginning October 1, the new account settlement system for the stock broking industry will kick in under the new guidelines issued by the Securities and Exchange Board of India (SEBI).

    What is Settlement of Accounts?

    • The SEBI mandates stockbrokers to settle i.e., transfer the available credit balance from trading account to bank account, at least once in a quarter (90 days) or 30 days.
    • The process of transferring the unutilised funds back into the bank account is called ‘Running Account Settlement’ or ‘Quarterly Settlement of Funds’.
    • The funds are transferred back to the primary bank account of the customer that is linked to the trading account.
    • As per the latest guidelines, the settlement will now be done on the first Friday of the quarter or the month depending upon the option selected by the customer.

    What are SEBI’s new settlement guidelines?

    • On July 27, SEBI issued new guidelines on running accounts of client funds and securities lying with the broker.
    • As per the new guidelines, with effect from October 1, 2022, the settlement of running account of clients’ funds will be done by the trading members after considering the end of the day (EOD) obligation of funds.
    • In cases where the client has opted for a monthly settlement process, then the running account shall be settled on the first Friday of every month.

    How will it impact investors and traders?

    • Changes in settlement brought in by SEBI over the last few years have had the aim of protecting the investor and preventing the misuse as money lying in trading accounts of investors for long periods.
    • SEBI’s move will give certainty to investors and trading members.
    • It will help brokers develop a system just like banks, which credit interest in the accounts of their customers at the end of the quarter.
    • Another advantage would be that if a customer has more than one demat account with different brokers, having one settlement date for the entire industry will make it easier for her to keep track of her funds.

    Back2Basics: Securities and Exchange Board of India (SEBI)

    • The SEBI is the regulatory body for securities and commodity market in India under the jurisdiction of Ministry of Finance Government of India.
    • It was established on 12 April 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992.

    Jurisdiction of SEBI

    • SEBI has to be responsive to the needs of three groups, which constitute the market:
    1. Issuers of securities
    2. Investors
    3. Market intermediaries

    SEBI has three powers rolled into one body: quasi-legislative, quasi-judicial and quasi-executive.

    • It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity.
    • Though this makes it very powerful, there is an appeal process to create accountability.
    • There is a Securities Appellate Tribunal which is a three-member tribunal and is currently headed by Justice Tarun Agarwala, former Chief Justice of the Meghalaya High Court.
    • A second appeal lies directly to the Supreme Court.

     

    Also read:

    SEBI introduces T+1 Settlement System

     

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  • NASA’s DART mission prepares for an asteroid Dimorphos collision

    dart

    In the first-of-its kind NASA’s DART Mission is about to hit a small, harmless asteroid millions of miles away.

    What is DART Mission?

    • The main aim of the mission is to test the newly developed technology that would allow a spacecraft to crash into an asteroid and change its course.
    • It is a suicide mission and the spacecraft will be completely destroyed.
    • The target of the spacecraft is a small moonlet called Dimorphos (Greek for “two forms”).
    • It is about 160-metre in diameter and the spacecraft is expected to collide when it is 11 million kilometres away from Earth.
    • Dimorphos orbits a larger asteroid named Didymos (Greek for “twin”) which has a diameter of 780 metres.

    Why Dimorphos?

    • Didymos is a perfect system for the test mission because it is an eclipsing binary which means it has a moonlet that regularly orbits the asteroid.
    • It is observable when it passes in front of the main asteroid.
    • Earth-based telescopes can study this variation in brightness to understand how long it takes Dimorphos to orbit Didymos.

    Collision course

    • At the time of impact, Didymos and Dimorphos will be relatively close to Earth – within 6.8 million miles (11 million kilometers).
    • The spacecraft will accelerate at about 24,140 kilometers per hour when it collides with Dimorphos.
    • It aims to crash into Dimorphos to change the asteroid’s motion in space.
    • This collision will be recorded by LICIACube, or Light Italian CubeSat for Imaging of Asteroids, a companion cube satellite provided by the Italian Space Agency.
    • Three minutes after impact, the CubeSat will fly by Dimorphos to capture images and video.

    Why such mission?

    • Dimorphos was chosen for this mission because its size is relative to asteroids that could pose a threat to Earth.
    • The spacecraft is about 100 times smaller than Dimorphos, so it won’t obliterate the asteroid.
    • The fast impact will only change Dimorphos’ speed as it orbits Didymos by 1%, which doesn’t sound like a lot — but it will change the moon’s orbital period.

     

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  • Dvorak Technique of Weather Forecasting

    Recently, the American meteorologist Vernon Dvorak passed away at the age of 100 who pioneered the widely used Dvorak Technique.

    Who was Vernon Dvorak?

    • Dvorak was an American meteorologist best credited for developing the Dvorak (read as Do-rak) technique in the early 1970s.
    • The technique helps forecast the tropical storm.
    • His technique has saved the lives of millions of people across the world and will continue to do so.

    What is the Dvorak technique?

    • The Dvorak technique was first developed in 1969 and tested for observing storms in the northwest Pacific Ocean.
    • Forecasters used the available satellite images obtained from polar orbiting satellites to examine the features of the developing tropical storms (hurricanes, cyclones and typhoons).
    • During day time, images in the visible spectrum were used while at night, the ocean would be observed using infrared images.
    • It was a cloud pattern recognition technique based on a concept model of the development and decay of the tropical cyclone.

    Why is technique still widely in use?

    • Unlike land, ocean observations in the 1970s were sparse.
    • Today, there continues to be an improved network of land-based meteorological observations, either in the form of taking manual observations, installing automatic weather stations or automatic rain gauges.
    • On the other hand, ocean observations still remain limited.
    • There are many vast regions across the four oceans that have not been fully examined with meteorological instruments.
    • Ocean observations are mostly taken by deploying buoys or dedicated ships, but the number of observations from the seas is still not sufficient across the world.
    • That is why meteorologists have had to depend more on satellite-based imageries, and combine it with the available ocean-data at the time of forecasting the intensity and wind speed of the tropical cyclones.

     

     

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  • Fly ash generation and Disposal

    fly ashContext

    • India depends heavily on coal for power generation. This creates the problem of fly-ash generation and its proper disposal, usage.
    • The National Green Tribunal (NGT) noted September 19, 2022 that there was an urgent need to augment the utilisation and disposal of fly ash in Chhattisgarh.

    What is fly ash?

    • Fly ash is a by-product of coal combustion. It contains Aluminium Silicate, SiO2, CaO, oxides of iron, magnesium and toxic metals like lead, arsenic, cobalt, and copper.
    • It can travel to far places. India is growing to double its power generation in the next decade and with coal being the biggest source of fuel for power generation, the problem of fly ash is going to increase too.

    fly ash Environmental Problems with fly ash

    • A large quantity of fly ash dumped into poorly designed and maintained ash ponds. About a billion tonnes of this toxic ash lie dumped in these ponds, polluting land, air, and water.
    • All the heavy metals found in fly ash—nickel, cadmium, arsenic, chromium, lead, etc—are toxic in nature. They leech into the surrounding soil and can enter food-chains.
    • Fly ash gets easily ingested through respiration, which causes many diseases such as asthma, neurological disorders.
    • Suspended fly ash in the air acts as a global warming agent and heats the earth’s surface.
    • Fly ash settles on leaves and crops and reduces crop productivity.
    • It pollutes the groundwater.
    • There is a reduction in recharging of groundwater due to fly ash filled mine voids.
    • Reduces visibility by creating dense fog in the winter season.

    fly ashIssues with fly ash management

    • The government mandates that all coal power plants (CPPs) reach 100% utilization of fly ash.
    • Along with it, CPPs should give a certain amount of fly ash free of cost for MSMEs to manufacture bricks, tiles and rest of the fly ash should be sold to other industries.
    • CPPs will have to maintain fly ash ponds to reduce its suspension in air.
    • But all these steps for utilization areas are problematic as they do little to mitigate these risks.
    • The pricing of fly ash is increasingly becoming a contentious issue that is hampering its gainful utilization.
    • The current approaches to evaluating risks with fly ash disposal are very limited, and they may underestimate the true risks
    • In spite of initiatives taken by the government, several nongovernmental and research and development organizations for fly ash utilization, the level of fly ash utilization in the country is quite low at only 38% which is less than the global standards.
    • Hence, rather than being utilized, fly ash is being stored despite warnings from regulators.
    • Deposition in storage places has negative influences on water and soil because of their mineral composition as well as morphology and filtration properties.
    • Ash-handling units are the biggest consumers of water in CPPs. The government advocates the designed ash-to-water ratios as approximately 1:5 for fly ash, but the observed ratios have been around 1:20.
    • Certain states have discouraged the use of blended cement and fly ash bricks in public works.

    fly ashThe above issues can be addressed by

    • Greater regulatory oversight and price control,
    • Revision of cement blending standards,
    • Research in improving fly ash quality,
    • Reducing the cost of transportation,
    • Provisions for overcoming information asymmetries,
    • Incentivising use in brick kilns for producing fly ash bricks,
    • Overall sensitization of key decision-makers on the matter.
    • Instead of dumping it on ash ponds, can be used for construction due to its reuse as pozzolan, and replacement of portland cement by hydraulic cement
    • Due to its grain size distribution, enhanced strength permeability, it can be used to construct embankments at road construction, concrete dams like GHATGHAR DAM
    • Strong penalties for those production units who do not use proper filtration devices
    • Moving to renewable energy production away from coal-based thermal production.

    Conclusion

    • Utilization of Fly Ash is not only possible but also essential. In this context “Fly Ash Mission of Government of India” is a slow but steady start, the pace of which needs to be ramped up. An honest effort is required by the concerned stakeholders to improve the perceptions of fly ash-based cement or concrete; increase its use, particularly for government works; and impart scientific knowledge about fly ash, its uses, and possible impacts.

    Mains question

    Q. What is fly ash? Discuss the environmental challenges it poses. Suggest how to address the situation.

     

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  • Government approves 50% incentive of project cost for setting up Semiconductor Units

    The Union Cabinet has approved a uniform incentive of 50% of the project cost for setting up semiconductor, display and compound semiconductor fabrication units.

    Why in news?

    incentive

    • Maharashtra is witnessing a political firestorm.
    • The Vedanta Limited shifted its decision to set up a $20 billion Vedanta-Foxconn semiconductor manufacturing facility in neighbouring Gujarat, despite finalising its location near Pune (Mh).
    • Foxconn is a major chip supplier to Apple. It has suspended its operations in the Chinese tech hub of Shenzhen and is now shifting to India.
    • Bigger companies, such as Intel, TSMC, Samsung, etc., have announced such plans.

    Spats between states over the location of critical industries display the grim picture of competitive bidding in India. This portrays India’s negative image as against ease of doing business.

    About the Incentive Scheme

    • The scheme has been named the “Programme for Development of Semiconductors and Display Manufacturing Ecosystem.”
    • Previously, the three schemes had an incentive range of 30-50%.
    • While incentives for setting up semiconductor fabrication were based on the size of the chip, for display fabrication and compound semiconductor fabs, the incentives were largely 30% of the total cost of the project.
    • This scheme aims to project India’s position as global hub for electronics manufacturing with semiconductors as the foundational building block.

    Why need such an incentive?

    • Huge Investments involved: Semiconductor Fabrication facility requires many expensive devices to function. Complex tools and equipment are required to test quality and move silicon from location to location within the ultra-clean confines of the plant.
    • Economy of scale:   In semiconductor fabrication, a high volume production is required to be maintain so as to meet the increasing demand of the marketplace, at the same time, a strong financial backing as Indian market is very much uncertain about financial fluctuations.
    • Requirement highly skilled labour:   Semiconductor fabrication is a multiple-step sequence of photolithographic and chemical processing steps during which electronic circuits are gradually created on a wafer made of pure semiconducting material. This actually requires high skills.
    • Scarcity of raw materials: From a value-chain perspective, it needs silicon, Germanium & Gallium arsenide and Silicon carbide which are not available in India and needs to be imported.
    • Uncertain Indian market: A semiconductor fabrication facility in India cannot independently rely on Indian customers for their entire sales structure. They have to maintain overseas customer base to balance inflections from Indian market due to market trends, government policies etc.
    • Disposal of hazardous waste: Many toxic materials are used in the fabrication process such as arsenic, antimony, and phosphorus. Hazardous impact on the environment by the industry may act as an impediment to India’s commitment to mitigate climate change.

    Other supportive initiatives in India

    • India Semiconductor Mission (ISM): It was announced with the aim to attract large-scale investments for manufacturing facilities in the midst of a global chip crisis.
    • Make in India: This aims to transform India into a global hub for Electronic System Design and Manufacturing (ESDM).
    • PLI scheme: In December 2021 the Centre sanctioned â‚č76,000 crore under the production-linked incentive (PLI) scheme to encourage the manufacturing of various semiconductor goods within India.
    • DLI scheme: It offers financial incentives, design infrastructure support across various stages of development and deployment of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design.
    • Digital RISC-V (DIR-V) program: It intends to enable the production of microprocessors in India in the upcoming days achieving industry-grade silicon and design wins by December 2023.
    • India Semiconductor Mission (ISM): The vision is to build a vibrant semiconductor and display design and innovation ecosystem to enable India’s emergence as a global hub for electronics manufacturing and design

    Way forward

    • Policy framework: As foundry setup is highly Capital intensive, it must be supported with a solid long term plan and financial backing. This backing is required from the entrepreneur & the government both.
    • Fiscal sustenance: In text of Indian Government as tax holiday, subsidy, zero duty, financial investment etc. will play an important role in promoting the Fab along with the semiconductor industry in India; this will put further pressure on already large Fiscal Deficit.
    • Support Infrastructure: World class, sustainable infrastructure, as required by a modern Fab be provided, with swift transportation, large quantity of pure water, uninterrupted electricity, communication, pollutant free environment etc.

     

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  • Pre-Pack IBC resolution

    pre-pack

    India introduced the pre-packaged insolvency resolution process (PPIRP) in April 2021, as an alternative resolution process for micro, small and medium enterprises (MSMEs). However, it has only two cases admitted under it so far.

    What is the Insolvency and Bankruptcy Code (IBC)?

    • The IBC was enacted in 2016 to simplify insolvency and bankruptcy proceedings, safeguard interests of all stakeholders (the firm, employees, debtors and especially creditors), and resolve non-performing assets.
    • From a ‘debtor in possession’ regime, it was a shift to a ‘creditor in control’ one.
    • IBC provides for a time-bound process for resolving insolvencies.
    • The Insolvency and Bankruptcy Board of India (IBBI) is the regulator implementing the code and overseeing the functioning of stakeholders.
    • The IBBI last week allowed payment of performance-linked incentives to resolution professionals.

    What are Pre-packs?

    • A pre-pack is the resolution of the debt of a distressed company through an agreement between secured creditors and investors instead of a public bidding process.
    • This system of insolvency proceedings has become an increasingly popular mechanism for insolvency resolution in the UK and Europe over the past decade.
    • Under the pre-pack system, financial creditors will agree to terms with a potential investor and seek approval of the resolution plan from the National Company Law Tribunal (NCLT).
    • The approval of a minimum of 66 percent of financial creditors that are unrelated to the corporate debtor would be required before a resolution plan is submitted to the NCLT.
    • Further NCLTs are also required to either accept or reject any application for a pre-pack insolvency proceeding before considering a petition for a corporate insolvency resolution process (CIRP).

    How does it work?

    • Unlike the CIRP, an informal understanding is reached with creditors before the application is filed.
    • PPIRP begins only after 66% of financial creditors approve the proposal and the name of resolution professional.
    • Debt resolution agreement between financial creditor and a potential investor is arrived at in consultation with the corporate debtor for which subsequent approval of the resolution plan is sought from the NCLT.

    What were the objectives behind introducing PPIRP?

    • MSMEs greatly contribute to the economy, and employ a wide section of the population.
    • The pandemic severely impacted their operations.
    • This alternative insolvency resolution process was designed to ensure quicker, cost-effective and value-maximizing outcomes for all.

    What is the progress in PPIRP so far?

    • Only two insolvency cases have been initiated under PPIRP since it was introduced.
    • The poor response has been attributed to the hesitancy on the part of financial institutions.
    • In the case of CIRP, the haircut involved is a last resort, against a voluntary one in case of PPIRP.
    • Data shows that between December 2016 and June 2022, a total of 5,636 CIRPs commenced, of which 3,637 have been closed.

    Does PPIRP defeat the purpose of IBC?

    • The IBC’s objective is to facilitate exit from failed units so that capital can be reallocated to better ones.
    • However, banks are not comfortable initiating PPIRP due to voluntary haircuts.
    • There is a fear that such a decision might be scrutinized later.
    • This means capital will remain locked up in failed units, defeating the purpose of IBC.
    • Voluntary haircuts mean fewer resources from the winding-up process and greater scope for corrupt practices.

     

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  • Explained: Lumpy Skin Disease in India

    lumpy

    The Mumbai Police have ordered the prohibition of cattle transportation in the city to prevent the spread of the lumpy skin disease (LSD).

    What is the Lumpy Skin Disease?

    • Lumpy skin disease is caused by the lumpy skin disease virus (LSDV), which belongs to the genus capripoxvirus, a part of the poxviridae family.
    • Smallpox and monkeypox viruses are also a part of the same family.
    • The LSDV shares antigenic similarities with the sheeppox virus (SPPV) and the goatpox virus (GTPV) or is similar in the immune response to those viruses.

    How does it spread?

    • It is not a zoonotic virus, meaning the disease cannot spread to humans.
    • It is a contagious vector-borne disease spread by vectors like mosquitoes, some biting flies, and ticks and usually affects host animals like cows and water buffaloes.
    • Infected animals shed the virus through oral and nasal secretions which may contaminate common feeding and water troughs.
    • Thus, the disease can either spread through direct contact with the vectors or through contaminated fodder and water.
    • Studies have also shown that it can spread through animal semen during artificial insemination.

    How does it affect the animal?

    • LSD affects the lymph nodes of the infected animal, causing the nodes to enlarge and appear like lumps on the skin, which is where it derives its name from.
    • The cutaneous nodules, 2–5 cm in diameter, appear on the infected cattle’s head, neck, limbs, udder, genitalia, and perineum.
    • The nodules may later turn into ulcers and eventually develop scabs over the skin.
    • The other symptoms include high fever, sharp drop in milk yield, discharge from the eyes and nose, salivation, loss of appetite, depression, damaged hides, wasting of animals, infertility and abortions.

    Do it kills the animal?

    • The incubation period or the time between infection and symptoms is about 28 days according to the FAO, and 4 to 14 days according to some other estimates.
    • The morbidity of the disease varies between two to 45% and mortality or rate of date is less than 10%.
    • However, the reported mortality of the current outbreak in India is up to 15%, particularly in cases being reported in the western part (Rajasthan) of the country.

    What is the geographical distribution and how did it spread to India?

    • The disease was first observed in Zambia in 1929.
    • Subsequently it got spread to most African countries, followed by West Asia, Southeastern Europe, and Central Asia, and more recently spreading to South Asia and China in 2019.
    • As per the FAO, the LSD disease is currently endemic in several countries across Africa, parts of the West Asia (Iraq, Saudi Arabia, Syrian Arab Republic), and Turkey.

    Lumpy in India

    • The spread in South Asia first affected Bangladesh in July 2019 and then reached India in August that year, with initial cases being detected in Odisha and West Bengal.
    • The long porous borders between India, Nepal and Bangladesh allow for a significant amount of bilateral and informal animal trade, including cattle and buffaloes.
    • This may have contributed to the spread of LSD in July-August 2019 between Bangladesh and India.
    • While the 2019 outbreak later subsided, the recent spread in India began in June this year.

    Is it safe to consume the milk of affected cattle?

    • Studies say that it has not been possible to ascertain the presence of viable and infectious LSDV virus in milk derived from the infected animal.
    • However, that a large portion of the milk in Asia is processed after collection and is either pasteurised or boiled or dried in order to make milk powder.
    • This process ensures that the virus is inactivated or destroyed.

    Economic implications of Lumpy on Dairy Sector

    • Milk reduction: Lumpy leads to reduced milk production as the animal becomes weak and also loses appetite due to mouth ulceration.
    • Animal wasting: The income losses can also be due to poor growth, reduced draught power capacity and reproductive problems associated with abortions, infertility and lack of semen for artificial insemination.
    • Impact of trade ban: Movement and trade bans after infection also put an economic strain on the whole value chain.

    Why India is at higher risk?

    • India is the world’s largest milk producer at about 210 million tonnes annually.
    • India also has the largest headcount of bovines
    • In Rajasthan, which is witnessing the worst impact of LSD, it has led to reduced milk production, which lessened by about three to six lakh litres a day.
    • Reports indicate that milk production has also gone down in Punjab owing to the spread of the disease.
    • According to FAO, the disease threatens the livelihoods of smaller poultry farmers significantly.
    • Notably, farmers in Uttar Pradesh and Punjab have incurred losses due to cattle deaths and are seeking compensation from their State governments.

    How bad is the current spread in India?

    • Lumpy has infected over 16 lakh cattle in 197 districts as of September 11.
    • Of the nearly 75,000 cattle that the disease has killed, more than 50,000 deaths, mostly cows, have been reported from Rajasthan.

    Remedies available in India

    • The Union Ministry of Fisheries, Animal Husbandry and Dairying informed that the ‘Goat Pox Vaccine’ is very effective against LSD.
    • It is being used across affected States to contain the spread.

    Way forward

    The FAO has suggested a set of spread-control measures for LSD, which involves:

    • Vaccination of susceptible populations with more than 80% coverage
    • Movement control of bovine animals and quarantining
    • Implementing biosecurity through vector control by sanitising sheds and spraying insecticides
    • Strengthening active and passive surveillance
    • Spreading awareness on risk mitigation among all stakeholders involved, and
    • Creating large protection and surveillance zones and vaccination zones

     

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  • What is the PM PRANAM Scheme?

    In order to reduce the use of chemical fertilisers by incentivising states, the Union government plans to introduce a new scheme – PM PRANAM, which stands for PM Promotion of Alternate Nutrients for Agriculture Management Yojana.

    What is the PM PRANAM scheme?

    • The proposed scheme intends to reduce the subsidy burden on chemical fertilisers.
    • This burden if uneased, is expected to increase to Rs 2.25 lakh crore in 2022-2023, which is 39% higher than the previous year’s figure of Rs 1.62 lakh crore.
    • The scheme will not have a separate budget and will be financed by the “savings of existing fertiliser subsidy” under schemes run by the Department of fertilisers.

    Subsidies under the PRANAM

    • Further, 50% subsidy savings will be passed on as a grant to the state that saves the money and that 70% of the grant provided under the scheme can be used for asset creation related to technological adoption of alternate fertilisers.
    • It would create alternate fertiliser production units at village, block and district levels.
    • The remaining 30% grant money can be used for incentivising farmers, panchayats, farmer producer organisations and self-help groups that are involved in the reduction of fertiliser use and awareness generation.
    • The government will compare a state’s increase or reduction in urea in a year, to its average consumption of urea during the last three years.

    How much fertiliser does India require?

    • The kharif season (June-October) is critical for India’s food security, accounting for nearly half the year’s production of foodgrains, one-third of pulses and approximately two-thirds of oilseeds.
    • A sizable amount of fertiliser is required for this season.
    • The Department of Agriculture and Farmers Welfare assesses the requirement of fertilisers each year before the start of the cropping season, and informs the Ministry of Chemical and fertilisers to ensure the supply.
    • The amount of fertiliser required varies each month according to demand, which is based on the time of crop sowing, which also varies from region to region.
    • For example, the demand for urea peaks during June-August period, but is relatively low in March and April, and the government uses these two months to prepare for an adequate amount of fertiliser for the kharif season.

    Why is the scheme being introduced?

    • Due to increased demand for fertiliser in the country over the past 5 years, the overall expenditure by the government on subsidy has also increased.
    • The final figure of fertiliser subsidy touched Rs 1.62 lakh crore in 2021-22.
    • The total requirement of four fertilisers — Urea, DAP (Di-ammonium Phosphate), MOP (Muriate of potash), NPKS (Nitrogen, Phosphorus and Potassium) — increased by 21% between 2017-2018 and 2021-2022, from 528.86 lakh metric tonnes (LMT) to 640.27 LMT.
    • PM PRANAM, which seeks to reduce the use of chemical fertiliser, will likely reduce the burden on the exchequer.
    • The proposed scheme is also in line with the government’s focus on promoting the balanced use of fertilisers or alternative fertilisers in the last few years.

    Try this PYQ:

    Q.What are the advantages of fertigation in agriculture? (CSP 2020)

    1.Controlling the alkalinity of irrigation water is possible.
    2.Efficient application of Rock Phosphate and all other phosphatic fertilizers is possible.
    3.Increased availability of nutrients to plants is possible.
    4.Reduction in the leaching of chemical nutrients is possible.

    Select the correct answer using the code given below:
    (a) 1, 2 and 3 only

    (b) 1,2 and 4 only

    (c) 1,3 and 4 only

    (d) 2, 3 and 4 only

     

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  • High Inflation in India

    inflation Context

    • It seems that inflation may hover around 7 per cent despite RBI’s tightening of monetary policy in the months to come.

    What is a simple definition for inflation?

    • Inflation is an increase in the level of prices of the goods and services that households buy. It is measured as the rate of change of those prices. Typically, prices rise over time, but prices can also fall (a situation called deflation).

    Inflation Rate

    • Inflation Rate is the percentage change in the price level from the previous period. If a normal basket of goods was priced at Rupee 100 last year and the same basket of goods now cost Rupee 120, then the rate of inflation this year is 20%.
    • Inflation Rate= {(Price in year 2 – Price in year 1)/ Price in year 1} *100

    inflationTypes of Inflation

    Creeping Inflation

    • Creeping or mild inflation is when prices rise 3% a year or less. This kind of mild inflation makes consumers expect that prices will keep going up. That boosts demand. Consumers buy now to beat higher future prices. That’s how mild inflation drives economic expansion.

    Walking Inflation

    • This type of strong, or pernicious, inflation is between 3-10% a year. It is harmful to the economy because it heats up economic growth too fast. People start to buy more than they need, just to avoid tomorrow’s much higher prices. This drives demand even further so that suppliers can’t keep up. More important, neither can wages. As a result, common goods and services are priced out of the reach of most people.

    Galloping Inflation

    • When inflation rises to 10% or more, it wreaks absolute havoc on the economy. Money loses value so fast that business and employee income can’t keep up with costs and prices. Foreign investors avoid the country, depriving it of needed capital. The economy becomes unstable, and government leaders lose credibility. Galloping inflation must be prevented at all costs.

    Hyperinflation

    • Hyperinflation is when prices skyrocket more than 50% a month. It is very rare. In fact, most examples of hyperinflation have occurred only when governments printed money to pay for wars. Examples of hyperinflation include Germanyin the 1920s, Zimbabwe in the 2000s, and Venezuela in the 2010s. The last time America experienced hyperinflation was during its civil war.

    Core Inflation

    • The core inflation rate measures rising prices in everything except food and energy. That’s because gas prices tend to escalate now and then. Higher gas costs increase the price of food and anything else that has large transportation costs.

     

    Consumer Price Index

    • CPI is used to monitor changes in the cost of living over time. When the CPI rises, the average Indian family has to spend more on goods and services to maintain the same standard of living. The economic term used to define such a rising prices of goods and services is Inflation.

    Whole sale Price Index

    • WPI is used to monitor the cost of goods and services bought by producer and firms rather than final consumers. The WPI inflation captures price changes at the factory/wholesale level.

    GDP Deflator

    • Another important measure of calculating standard of living of people is GDP Deflator. GDP Deflator is the ratio of nominal GDP to real GDP. The nominal GDP is measured at the current prices whereas the real GDP is measured at the base year prices. Therefore, GDP Deflator reflects the current level of prices relative to prices in a base year. Example, In India the base year of calculating deflator is 2011-12.

    inflationFactors fuelling inflation in India

    • Falling rupee: Inflation is here to stay because it has much to do with the decline in value of the rupee that has fallen to its lowest, which makes imports of oil and gas more expensive.
    • Ukraine crisis: The war in Ukraine has the same effect and pushes the price of some food items upward.
    • Poor inflation management: With inflation, as measured by the consumer price index, in August going back to 7 per cent, and the wholesale price index coming in at 12.4 per cent, one thing is clear India is not out of the woods on inflation management.

    Rising inflation have these implications

    • Impact on the poor: This upsurge of inflation is affecting the poor more because some of the commodities whose prices are increasing the most represent a larger fraction of the budget of the most vulnerable sections of society.
    • Rising inequality: As a result, inequalities which were already on the rise are increasing further. Recently, the State of Inequality in India report showed that an Indian making Rs 3 lakh a year belonged to the top 10 per cent of the country’s wage earners. 
    • Inequality in healthcare: India’s spending on healthcare is among the lowest in the world. Decent level of healthcare is available only to the ones who can afford it because of increasing out-of-pocket expenditure the payment made directly by individuals for the health service, not covered under any financial protection scheme. Overall, these out-of-pocket expenses on healthcare are 60 per cent of the total expenditure on public health in India, which is one of the highest in the world.

     

    inflationNeed for bold steps on three fronts to tackle inflation

    • Unless bold and innovative steps are taken at least on three fronts, GDP growth and inflation both are likely to be in the range of 6.5 to 7.5 per cent in 2022-23.

    1] Tightening of loose monetary policy: The Reserve Bank of India (RBI) is mandated to keep inflation at 4 per cent, plus-minus 2 per cent.

    • The RBI has already started the process of tightening monetary policy by raising the repo rate, albeit a bit late.
    • It is expected that by the end of 2022-3, the repo rate will be at least 5.5 per cent, if not more.
    • It will still stay below the likely inflation rate and therefore depositors will still lose the real value of their money in banks with negative real interest rates.
    • That only reflects an inbuilt bias in the system — in favour of entrepreneurs in the name of growth and against depositors, which ultimately results in increasing inequality in the system.

    2] Prudent fiscal policy: Fiscal policy has been running loose in the wake of Covid-19 that saw the fiscal deficit of the Union government soar to more than 9 per cent in 2020-21 and 6.7 per cent in 2021-22, but now needs to be tightened.

    • Government needs to reduce its fiscal deficit to less than 5 per cent, never mind the FRMB Act’s advice to bring it to 3 per cent of GDP.
    • However, it is difficult to achieve when enhanced food and fertiliser subsidies, and cuts in duties of petrol and diesel will cost the government at least Rs 3 trillion more than what was provisioned in the budget.

    3] Rational trade policy: Export restrictions/bans go beyond agri-commodities, even to iron ore and steel, etc. in the name of taming inflation.

    • But abrupt export bans are poor trade policy and reflect only the panic-stricken face of the government.
    • A more mature approach to filter exports would be through a gradual process of minimum export prices and transparent export duties for short periods of time, rather than abrupt bans, if at all these are desperately needed to favour consumers.

    Conclusion

    • Though the government is opting for market-based economics, currently, India needs a mixed solution that comprises price stability via government channels and subsidies.

    Mains question

    Q.What are the fuelling factors for inflation? Discuss what steps should be taken to tackle inflation.

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