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GS Paper: GS3

  • India’s banking sector shows progress

    Context

    The RBI’s latest Financial Stability Report (FSR) has given the banking system a reasonably clean bill of health. It’s a significant achievement, considering the stress of the previous decade, the shock of the pandemic and the associated slowdown of the economy.

    Two indicators of banking system’s progress

    • 1] Reduced NPAs: Successive waves of recapitalisation have given banks enough resources to write off most of their bad loans.
    • As a result, they have been able to bring down their gross NPAs (non-performing loans) from 11 per cent of total advances in 2017-18 to 5.9 per cent in 2021-22.
    • Even after these large write-offs, most banks retain comfortable levels of capital.
    • 2] Credit growth doubled: During the decade when banks were under stress, non-food bank credit growth had been declining, reaching just 6 per cent in 2020, its lowest point in six decades.
    • Since then, credit growth has nearly doubled.

    Concerns

    • Role of credit in supporting GDP growth: The problem is that very little of this credit is going to large-scale industry or for financing investment.
    • Reluctance of banks to provide credit to industry: Over the last decade, banks have increasingly shifted away from providing credit to industry, favouring instead lending to consumers.
    • This trend is continuing — in the year ending March 2022, consumer loans grew at 13 per cent, whereas loans to industry grew at just 8 per cent.
    • Banks favoring MSMEs in industry loans: Bulk of the industry loans has been extended to the smaller firms (MSMEs), which benefitted from the credit guarantee scheme offered by the government in the wake of the pandemic.
    • Reduced lending to private sector investment: A related problem is that there has been little lending for private sector investment.
    • Over the last one year, bank lending to infrastructure has grown by 9 per cent, up from 3 per cent in 2020, but this was fuelled mainly by public sector capital expenditure.

    Why is there so little lending for investment by large firms?

    • Demand side reason: On the demand side, private sector investment has been sluggish for nearly a decade.
    • The boom-and-bust of the mid-2000s had saddled firms with excess capacity, giving them little reason to expand their production facilities.
    • In addition, the global financial crisis had shown the dangers of ambitious expansion supported by excessive borrowing, leading firms to conclude that it would be prudent to scale back their plans and instead focus on reducing their debts.
    • Supply side reason: On the supply side, banks have learned similar lessons.
    • During the period 2004-2009, rapid GDP growth in the Indian economy was fuelled by an unprecedented lending boom.
    •  Subsequently, many of those loans turned bad, leading to high levels of NPAs on bank balance sheets.
    •  As a result of these financial problems, banks for a decade were unable to extend much in the way of credit.

    Challenges

    • On the positive side, firms seem to have finally used up much of their spare capacity.
    • Fundamental problems not resolved: But on the negative side, the fundamental problems that led to the difficulties of the past decade still have not been resolved.
    • No framework for risk reduction: There is still no framework that will reduce the risk of private sector investment in infrastructure, certainly not in the critical and highly troubled power sector.
    • Nor is there any reassurance for the banks that if problems do develop, they can be resolved expeditiously, since the Insolvency and Bankruptcy Code has been plagued by delays and other problems.

    Way forward

    • We need deep structural reforms — to the infrastructure framework, the resolution process, and indeed, in the risk management processes at the banks themselves.
    • In the event that these reforms do not materialise, there may continue to be shortfalls in credit, investment, and ultimately in economic recovery and growth.

    Conclusion

    A healthy balance sheet of the banking sector is a necessary but not a sufficient condition for economic growth. The important question is whether banks and firms will once again be willing to take on the risk of investment in industry and infrastructure.

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  • Ocean Thermal Energy Conversion Plant in Lakshadweep

    The National Institute of Ocean Technology is establishing an Ocean Thermal Energy Conversion (OTEC) plant with a capacity of 65 kilowatts (kW) in Kavaratti, the capital of Lakshadweep.

    What is OTEC Plant?

    • Ocean thermal energy conversion (OTEC) is a process or technology for producing energy by harnessing the temperature differences (thermal gradients) between ocean surface waters and deep ocean waters.
    • Energy from the sun heats the surface water of the ocean.
    • In tropical regions, surface water can be much warmer than deep water.
    • This temperature difference can be used to produce electricity and to desalinate ocean water.

    How do they work?

    • The OTEC technology uses the temperature difference between the cold water in the deep sea (5°C) and the warm surface seawater (25°C) to generate clean, renewable electricity.
    • The technology requires a minimum of 20°C difference between the surface and deep ocean temperatures.
    • Warm surface water is pumped through an evaporator containing a working fluid. The vaporized fluid drives a turbine/generator.
    • The vaporized fluid is turned back to a liquid in a condenser cooled with cold ocean water pumped from deeper in the ocean.
    • OTEC systems using seawater as the working fluid can use the condensed water to produce desalinated water.

     

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  • Demographic dividend

    Context

    The UN report, World Population Prospects 2022, forecasts that the world’s population will touch eight billion this year and rise to 9.8 billion in 2050. What is of immediate interest to India is that its population will surpass China’s by 2023 and continue to surge.

    India’s potential workforce and growth as projected by consulting firms

    •  Deloitte’s Deloitte Insights (September 2017) expects “India’s potential workforce to rise from 885 million to “1.08 billion people over the next two decades from today”, and “remain above a billion people for half a century,” betting that “these new workers will be much better trained and educated,” than their existing counterparts.
    • McKinsey & Company’s report, ‘India at Turning Point’ (August 2020), believes the “trends such as digitisation and automation, shifting supply chains, urbanisation, rising incomes and demographic shifts, and a greater focus on sustainability, health, and safety are accelerating” to “create $2.5 trillion of economic value in 2030 and support 112 million jobs, or about 30% of the non-farm workforce in 2030.”
    • Four pillarsIn its May 14, 2022 issue, The Economist had this to say about India, “As the pandemic recedes, four pillars are clearly visible that will support growth in the next decade. The four pillars are:
    • 1) The forging of a single national market.
    • 2) An expansion of industry owing to the renewable-energy shift and a move in supply chains away from China,
    • 3) Continued pre-eminence in IT.
    •  4) High-tech welfare safety-net for the hundreds of millions left behind by all this.
    • The Financial Times in an article, ‘Demographics: Indian workers are not ready to seize the baton’, believes that India’s bad infrastructure and poorly skilled workforce will impede its growth.

    Comparing India’s preparedness with China’s in 1970s

    • China is enduring an ongoing population implosion, which by 2050, will leave it with only 1.3 billion people, of whom 500 million will be past the age of 60.
    • India’s population, by contrast, would have peaked at 1.7 billion, of whom only 330 million will be 60 years or older.
    • Simply put, India is getting a demographic dividend that will last nearly 30 years.
    • There is so much going on for India today compared to China, the only country it can be reasonably compared to.
    • It is still a young country and in a much better position to transform itself compared to China of the 1970s.
    • It is still an open society where mass protest matters and produces results.
    • Indians have not been traumatised as Chinese were at the time of Mao Zedong’s death.
    • IT backbone: The IT technologies now available in India, and most importantly the Internet they run on have matured exponentially.
    • Many things right from video conferencing to instantaneous payments and satellite imaging are getting better and cheaper by the day.
    • Better administrative system: Creaky and inadequate as they are, India’s administrative systems manage to deliver and its infrastructure is in far better shape today than it was for China at the start of its reforms.
    • No rural urban divide: India does not have a Hukou system which in China tethers rural folk to rural parts creating a deep divide between a small and prosperous urban China and a much larger, very deprived rural China.

    Way forward for India

    • To wring the best out of its demographic dividend, India needs to invest massively in quality school and higher education as well as healthcare across India on an unprecedented scale, literally in trillions of rupees between now and 2050 when it would have reached the apogee of its population growth.

    Conclusion

    India must seize the moment and not be incremental in its approach. Given the will it can initiate and see through a transformation that will stun the world, even more than China’s has so far.

  • Centre raises Fair Prices for Sugarcane Harvest

    The Cabinet Committee on Economic Affairs has approved Fair and Remunerative Price (FRP) of sugarcane for sugar season 2022-23 (October – September) at ₹305 per quintal.

    What is FRP?

    • FRP is fixed under a sugarcane control order, 1966.
    • It is the minimum price that sugar mills are supposed to pay to the farmers.
    • However, states determine their own State Agreed Price (SAP) which is generally higher than the FRP.

    Factors considered for FRP:

    • The amended provisions of the Sugarcane (Control) Order, 1966 provides for fixation of FRP of sugarcane having regard to the following factors:
    1. a) cost of production of sugarcane;
    2. b) return to the growers from alternative crops and the general trend of prices of agricultural commodities;
    3. c) availability of sugar to consumers at a fair price;
    4. d) price at which sugar produced from sugarcane is sold by sugar producers;
    5. e) recovery of sugar from sugarcane;
    6. f) the realization made from the sale of by-products viz. molasses, bagasse, and press mud or their imputed value;
    7. g) reasonable margins for the growers of sugarcane on account of risk and profits.

    Who determines Sugarcane prices?

    Sugarcane prices are determined by the Centre as well as States.

    1. The Centre announces Fair and Remunerative Prices which are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP) and are announced by the Cabinet Committee on Economic Affairs, which is chaired by Prime Minister.
    2. The State Advised Prices (SAP) are announced by key sugarcane producing states which are generally higher than FRP.

    Minimum Selling Price (MSP) for Sugar

    • The price of sugar is market-driven & depends on the demand & supply of sugar.
    • However, with a view to protecting the interests of farmers, the concept of MSP of sugar has been introduced since 2018.
    • MSP of sugar has been fixed taking into account the components of Fair & Remunerative Price (FRP) of sugarcane and minimum conversion cost of the most efficient mills.

    Basis of price determination

    • With the amendment of the Sugarcane (Control) Order, 1966, the concept of Statutory Minimum Price (SMP) of sugarcane was replaced with the Fair and Remunerative Price (FRP)’ of sugarcane in 2009-10.
    • The cane price announced by the Central Government is decided on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
    • This is done in consultation with the State Governments and after taking feedback from associations of the sugar industry.

    Try this PYQ:

     

    Q.The Fair and Remunerative Price (FRP) of sugarcane is approved by the:

    (a) Cabinet Committee on Economic Affairs

    (b) Commission for Agricultural Costs and Prices

    (c) Directorate of Marketing and Inspection, Ministry of Agriculture

    (d) Agricultural Produce Market Committee

     

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  • World Dairy Summit 2022 to be held in India after 48 years

    At a time when several milk-producing centers are battling Lumpy Skin Disease (LSD), India will host the International Dairy Federation’s World Dairy Summit 2022 in Greater Noida.

    World Dairy Summit

    • The World Dairy Summit is an annual meeting of the global dairy sector, bringing together approximately 1500 participants from all over the world.
    • The participant profile includes CEOs and employees of dairy processing companies, dairy farmers, suppliers to the dairy industry, academicians, government representatives, etc.
    • The summit is composed of a series of scientific and technical conferences and social events including a welcome reception, farmers’ dinner, gala dinner as well as technical and social tours.
    • The last World Dairy Summit was organised in 1974 in New Delhi.

    Significance of the event

    • It is a prestigious event for us as India is now the largest milk producer in the world and we have the highest number of cattle.
    • The last time this event was held, India was import-dependent and now we are self-sufficient.

    Back2Basics: India’s dairy sector

    • Initiated in 1970, Operation Floodtransformed India into one of the largest milk producers.
    • The per capita availability of milk in 2018-19 was 394 grams per day as against the world average of 302 grams.
    • Today with an annual production of 187.75 million tonnes India accounts for about 22% of the world’s milk production.
    • However, India is yet to join the ranks of major milk exporting nations, as much of what we produce is directed towards meeting domestic demands.

     

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  • Wildlife Protection Bill gets LS nod

    The Lok Sabha passed the Wildlife (Protection), Amendment Bill, with no significant modifications to the version of the Bill presented in the House for discussion.

    What is the Wildlife (Protection) Act, 1972?

    • WPA provides for the protection of the country’s wild animals, birds and plant species, in order to ensure environmental and ecological security.
    • It provides for the protection of a listed species of animals, birds and plants, and also for the establishment of a network of ecologically-important protected areas in the country.
    • It provides for various types of protected areas such as Wildlife Sanctuaries, National Parks etc.
    • The act is also against Taxidermy, which is the preservation of a dead wild animal as a trophy, or in the form of rugs, preserved skins, antlers, horns, eggs, teeth, and nails.
    • In the case of wild birds and reptiles, the act also forbids disturbing or damaging their eggs.
    • The act was amended in the year 2006 and its purpose is to strengthen the conservation of tigers and other endangered species by combating crimes against them through the special Crime Control Bureau.

    There are six schedules provided in the WPA for protection of wildlife species which can be concisely summarized as under:

    Schedule I: These species need rigorous protection and therefore, the harshest penalties for violation of the law are for species under this Schedule.
    Schedule II: Animals under this list are accorded high protection. They cannot be hunted except under threat to human life.
    Schedule III & IV: This list is for species that are not endangered. This includes protected species but the penalty for any violation is less compared to the first two schedules.
    Schedule V: This schedule contains animals which can be hunted.
    Schedule VI: This list contains plants that are forbidden from cultivation.

    Wildlife (Protection) Amendment Bill: Key Features

    (1) CITES

    • CITES is an international agreement between governments to ensure that international trade in specimens of wild animals and plants does not threaten the survival of the species.
    • Under CITES, plant and animal specimens are classified into three categories (Appendices) based on the threat to their extinction.
    • The Convention requires countries to regulate the trade of all listed specimens through permits.
    • It also seeks to regulate the possession of live animal specimens. The Bill seeks to implement these provisions of CITES.

    (2) Obligations under CITES:  

    • The Bill provides for the central government to designate a: (i) Management Authority, which grants export or import permits for trade of specimens, and (iii) Scientific Authority, which gives advice on aspects related to impact on the survival of the specimens being traded.
    • Every person engaging in trade of a scheduled specimen must report the details of the transaction to the Management Authority.
    • As per CITES, the Management Authority may use an identification mark for a specimen.
    • The Bill prohibits any person from modifying or removing the identification mark of the specimen.
    • Additionally, every person possessing live specimens of scheduled animals must obtain a registration certificate from the Management Authority.

    (3) Rationalising schedules

    • Currently, the Act has six schedules for specially protected plants (one), specially protected animals (four), and vermin species (one).
    • Vermin refers to small animals that carry disease and destroy food.
    • The Bill reduces the total number of schedules to four by:
    1. Reducing the number of schedules for specially protected animals to two (one for greater protection level)
    2. Removes the schedule for vermin species
    3. Inserts a new schedule for specimens listed in the Appendices under CITES (scheduled specimens)

    (4) Invasive alien species

    • The Bills empowers the central government to regulate or prohibit the import, trade, possession or proliferation of invasive alien species.
    • Invasive alien species refers to plant or animal species which are not native to India and whose introduction may adversely impact wild life or its habitat.
    • The central government may authorise an officer to seize and dispose the invasive species.

    (5) Control of sanctuaries

    • The Act entrusts the Chief Wild Life Warden to control, manage and maintain all sanctuaries in a state.
    • The Chief Wild Life Warden is appointed by the state government.
    • The Bill specifies that actions of the Chief Warden must be in accordance with the management plans for the sanctuary.
    • These plans will be prepared as per guidelines of the central government, and as approved by the Chief Warden.
    • For sanctuaries falling under special areas, the management plan must be prepared after due consultation with the concerned Gram Sabha.
    • Special areas include a Scheduled Area or areas where the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 is applicable.
    • Scheduled Areas are economically backward areas with a predominantly tribal population, notified under the Fifth Schedule to the Constitution.

    (6) Conservation reserves

    • Under the Act, state governments may declare areas adjacent to national parks and sanctuaries as a conservation reserve, for protecting flora and fauna, and their habitat.
    • The Bill empowers the central government to also notify a conservation reserve.

    (7) Surrender of captive animals

    • The Bill provides for any person to voluntarily surrender any captive animals or animal products to the Chief Wild Life Warden.
    • No compensation will be paid to the person for surrendering such items.
    • The surrendered items become property of the state government.

    Back2Basics: CITES

    • CITES stands for the Convention on International Trade in Endangered Species of Wild Fauna and Flora.
    • It is as an international agreement aimed at ensuring “that international trade in specimens of wild animals and plants does not threaten their survival”.
    • It was drafted after a resolution was adopted at a meeting of the members of the International Union for Conservation of Nature (IUCN) in 1963.
    • It entered into force on July 1, 1975, and now has 183 parties.
    • The Convention is legally binding on the Parties in the sense that they are committed to implementing it; however, it does not take the place of national laws.
    • India is a signatory to and has also ratified CITES convention in 1976.

    CITES Appendices

    • CITES works by subjecting international trade in specimens of selected species to certain controls.
    • All import, export, re-exports and introduction from the sea of species covered by the convention has to be authorized through a licensing system.

    It has three appendices:

    • Appendix I includes species threatened with extinction. Trade-in specimens of these species are permitted only in exceptional circumstances.
    • Appendix II provides a lower level of protection.
    • Appendix III contains species that are protected in at least one country, which has asked other CITES Parties for assistance in controlling trade.

    Try this PYQ from CSP 2022:

    Q. With reference to Indian laws about wildlife protection, consider the following statements:

    1. Wild animals are the sole property of the government.
    2. When a wild animal is declared protected, such animal is entitled for equal protection whether it is found in protected areas or outside.
    3. Apprehension of a protected wild animal becoming a danger to human life is sufficient ground for its capture or killing.

    Which of the statements given above is/are correct?

    (a) 1 and 2 only

    (b) 2 only

    (c) 1 and 3 only

    (d) 3 only

     

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  • Hellfire R9X missile: The mystery weapon

    The US military used its ‘secret weapon’ — the Hellfire R9X missile – to kill Al Qaeda chief Ayman al-Zawahiri on the balcony of a safehouse in Kabul.

    What is the Hellfire R9X missile?

    • Better known in military circles as the AGM-114 R9X, the Hellfire R9X is a US-origin missile known to cause minimum collateral damage while engaging individual targets.
    • Also known as the ‘Ninja Missile’, this weapon does not carry a warhead and instead deploys razor-sharp blades at the terminal stage of its attack trajectory.
    • This helps it to break through even thick steel sheets and cut down the target using the kinetic energy of its propulsion without causing any damage to the persons in the general vicinity or to the structure of the building.
    • The blades pop out of the missile and cut down the intended target without causing the massive damage to the surroundings which would be the case with a missile carrying an explosive warhead.

    When did the Hellfire missile enter active service?

    • The Hellfire 9RX missile is known to have been in active service since 2017.
    • However, its existence became public knowledge two years later in 2019.
    • It is a variant of the original Hellfire missile family which is used in conventional form with warheads and is traditionally used from helicopters, ground-based vehicles, and sometimes small ships and fast moving vessels.
    • For several years now, the Hellfire family of missiles, including the ‘Ninja Missile’, are armed on Combat Unmanned Aerial Vehicles or drones.

    What is known about the other Hellfire missile variants?

    • Hellfire is actually an acronym for Heliborne, Laser, Fire and Forget Missile and it was developed in the US initially to target tanks from the Apache AH-64 attack helicopters.
    • Later, the usage of these missiles spread to several other variants of helicopters and also ground and sea-based systems and drones.
    • Developed by Lockheed Martin and Northrop Grumman, the Hellfire missile has other variants such as ‘Longbow’ and ‘Romeo’ apart from the ‘Ninja’.

     

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  • Drugs, Medical Devices and Cosmetics Bill 2022

    Context

    A draft law to replace the 1940 Drugs and Cosmetics Act with a Drugs, Medical Devices and Cosmetics Bill 2022 was uploaded by the Union health ministry in early July, seeking public comments and objections.

    Major provisions of the Bill

     1] E-commerce for medical drugs

    • Presently, online sales of medicines account for a fraction of the total pharma sales in India but are forecast to grow exponentially.
    • The first major feature in the new Bill that affects consumers relates to e-commerce.
    • Like all online shopping, the consumer gets the advantage of discounts and the comfort of shopping from home.
    • In normal times, e-commerce can surmount three uniquely Indian disadvantages.
    • Storage condition: The first relates to climatic conditions, which require medicines to be stored at below 30 degrees Celsius and 70 per cent relative humidity — unattainable in most of India.
    •  It can mandate establishing a back-end brick and mortar store for drug supply having good storage conditions.
    • Compliance with regal provision: The second advantage of e-commerce could be fulfilling a legal requirement — providing a bill to the consumer and retaining one copy bearing the batch numbers and expiry dates of the drugs.
    • In addition, the practice of accessing prescription drugs over-the-counter would reduce.
    • In the case of e-commerce, registration of a pharmacy can require enrollment with the central and state drug control organisations and the practice of uploading a prescription from a registered medical practitioner can be enforced.
    • Concern: Shopping for medical drugs on the internet could encourage overuse or incomplete use of drugs, increase dependency on habit-forming medicine — for example, sleep-inducing drugs or self-medication with products for weight loss, male enhancement, even treating mental illness — which is fraught with dangerous consequences.
    •  A greater focus on medical devices: The draft law also proposes according a greater focus on medical devices, which include thousands of engineered apparatuses like stents, joint implants, pacemakers, catheters, etc, which require quality regulation.
    • Provision for advisory board: Rules for medical devices were notified in 2017 but now it is proposed to establish a statutory Medical Device Technical Advisory Board, with experts from the fields of atomic energy, science and technology, electronics, and related fields like biomedical technology to guide the process.
    • This is a welcome move that will bring in the required expertise.

    Issues not addressed in the Bill

    • Mismanagement of trade: What the Bill does not address is the need to stop the continued mismanagement of the wholesale and retail drugs trade in India.
    • Requirements for drug license not changed: Rule 64 (2) of the Drugs and Cosmetics Rules 1945 lays down that a wholesale drug licence can be given to a qualified pharmacist or one who has passed the matriculation examination or its equivalent or a graduate with one year’s experience in dealing with drug sale.
    • This is a relic from 80 years ago.
    • When the country is reported to have over 7,00,000 pharmacists, this anachronism must be discarded.
    •  It is essential to introduce a binding and enabling provision to only licence qualified pharmacists and put the safety of millions of citizens before the self-preservation of a few thousand wholesalers and stockists.

    Way forward

    • There is need for ensuring digitisation of procurement, inventory control and accountability for dispensing drugs into a digital trail.

    Conclusion

    The debate should not be between e-commerce and retail sale. It should be between being compliant and non-compliant.

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  • MC12 over, it’s ‘gains’ for the developed world

    Context

    The 12th Ministerial Conference (MC12) of the World Trade Organization (WTO) was concluded recently. A cursory examination of the outcomes of the meeting leaves us in no doubt that the European Union (EU) and some other developed countries are the overwhelming winners, while India finds itself on the losing side.

    Background of TRIPS waiver for Covid related  treatment

    • On October 2020, India and South Africa put forth a proposal seeking to temporarily suspend the protection of intellectual property rights such as patents, copyrights, industrial designs and trade secrets, so that the production of vaccines, therapeutics and diagnostics could be ramped up to help overcome the crisis and fight the COVID-19 pandemic.
    • The opponents of the proposal, i.e,. Germany, the United Kingdom, Japan, Switzerland and the United States, found themselves on the wrong side of the global opinion on this issue.
    • In June-July 2021, the U.S. gave its support to the proposal, but limited it to vaccines.
    • Pushed into a corner, the European Union (EU) made a counter-proposal to undermine the proposal made by India and South Africa.
    • This counter proposal provided a cosmetic simplification in certain procedural aspects of compulsory licensing in patent rules.
    • By March 2022, India and South Africa were corralled into accepting the EU’s proposal.
    • This formed the basis of the final outcome at the MC12.

    Gain for EU at MC12

    • The ministerial outcome on the so-called TRIPS waiver represents the biggest gain for the EU.
    • The ministerial outcome adds very little to what already exists in the WTO rulebook.
    • The final outcome is almost unworkable; a big public relations victory for the EU.
    • Change in institutional architecture: In the name of WTO reform, the EU sought to make fundamental changes to the institutional architecture of the WTO.
    • It also sought to give a formal role to the private sector in WTO.
    • Environmental issues: The EU has also managed to create a window to pursue negotiations on issues related to trade and environment at the WTO, an issue of concern for many developing countries.

    Disappointments for India

    • No solution to public stockholding issue: India, the issue of a permanent solution to public stockholding was identified by the Indian Minister of Commerce and Industry as being its top most priority.
    • Despite having the support of more than 80 developing countries, this issue has not found mention anywhere in the ministerial outcome.
    •  Instead, the WTO members have succeeded in diverting attention from India’s interest by agreeing that food security is multi-dimensional, requiring a comprehensive solution.
    • No taxing electronic transmission: India has also failed in many of its other objectives, such as securing the right to raise revenues by taxing electronic transmissions.
    • In the area of fisheries subsidies, it gets two years to have suitable regulatory mechanisms in place to monitor fish catch and reporting.
    •  Although it has secured a temporary reprieve to provide subsidies for enhancing its fishing fleets, it will have to fight an uphill battle on this issue in future negotiations.

    Conclusion

    Overall, the path ahead for India at the WTO is difficult. India’s negotiators need to undertake soul searching to learn lessons from the dynamics at the MC12, and make course corrections.

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    Back2Basics: Public stockholding issue

    • Under the WTO’s Agreement on Agriculture, government procurement for public stockholding programs is exempt from discipline if stocks are procured at current market prices.
    • If procured at pre-announced administered prices, however, those outlays would potentially be counted toward a country’s overall limits on trade-distorting support.
    • Some developing countries are concerned that their procurement of food at fixed prices under these programs may push outlays to exceed allowed limits, thus depriving them of the necessary policy space to meet domestic food security requirements.
    • In this context, India and other members of the G33 developing country coalition have called for WTO members to agree to a “permanent solution,” following the 2013 Bali decision to exempt these programs from legal challenge under certain conditions.

  • 5G

    The much-awaited auction for telecom spectrum, including for 5G airwaves, will begin tomorrow.

    Spectrums for auctions

    • A total of 72,097.85 MHz (or 72 Ghz) of spectrum with a validity period of 20 years will be put on the block.
    • Airwaves across low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz) and high (26 GHz) frequency bands, valued at ₹4,316 billion ($56 billion) at least, will be put up for bidding.

    What is (Electromagnetic) Spectrum?

    • Devices such as cellphones and wireline telephones require signals to connect from one end to another.
    • These signals are carried on airwaves, which must be sent at designated frequencies to avoid any kind of interference.
    • The Union government owns all the publicly available assets within the geographical boundaries of the country, which also include airwaves.
    • With the expansion in the number of cellphones, wireline telephone and internet users, the need to provide more space for the signals arise from time to time.

    Spectrum allocations

    • Spectrum refers to the invisible radio frequencies that wireless signals travel over. The frequencies we use for wireless are only a portion of what is called the electromagnetic spectrum.
    • To sell these assets to companies willing to set up the required infrastructure to transport these waves from one end to another, the central government through the DoT auctions these airwaves from time to time.
    • These airwaves called spectrum is subdivided into bands which have varying frequencies.
    • All these airwaves are sold for a certain period of time, after which their validity lapses, which is generally set at 20 years.

    What is 5G technology?

    • 5G or fifth generation is the latest upgrade in the long-term evolution (LTE) mobile broadband networks.
    • It mainly works in 3 bands, namely low, mid and high-frequency spectrum — all of which have their own uses as well as limitations.

    Three bands of 5G

    (1) Low band spectrum

    • It has shown great promise in terms of coverage and speed of internet and data exchange, the maximum speed is limited to 100 Mbps (Megabits per second).
    • This means that while telcos can use and install it for commercial cellphones users who may not have specific demands for very high-speed internet, the low band spectrum may not be optimal for the specialized needs of the industry.

    (2) Mid-band spectrum

    • It offers higher speeds compared to the low band but has limitations in terms of coverage area and penetration of signals.
    • Telcos and companies, which have taken the lead on 5G, have indicated that this band may be used by industries and specialized factory units for building captive networks that can be molded into the needs of that particular industry.

    (3) High-band spectrum

    • It offers the highest speed of all the three bands, but has extremely limited coverage and signal penetration strength.
    • Internet speeds in the high-band spectrum of 5G have been tested to be as high as 20 Gbps (gigabits per second), while, in most cases, the maximum internet data speed in 4G has been recorded at 1 Gbps.

    Where does India stand in the 5G technology race?

    • On par with the global players, India had, in 2018, planned to start 5G services as soon as possible, with an aim to capitalize on the better network speeds and strength that the technology promised.
    • Indian private telecom players have been urging the DoT to lay out a clear road map of spectrum allocation and 5G frequency bands so that they would be able to plan the rollout of their services accordingly.
    • One big hurdle, however, is the lack of flow of cash and adequate capital with some companies due to their AGR dues.

    Global progress on 5G

    • More than governments, global telecom companies have started building 5G networks and rolling it out to their customers on a trial basis.
    • In countries like the US, some companies have taken the lead when it comes to rolling out commercial 5G for their users.
    • A South Korean company, which had started researching on 5G technology way back in 2011, has, on the other hand, take the lead when it comes to building the hardware for 5G networks for several companies.

     

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