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  • Kavach: the Indian technology that can prevent collision of Trains

    Kavach, this indigenously developed Automatic Train Protection System is earmarked for aggressive rollout on 2,000 km in 2022-23, according the Budget proposals.

    What is Kavach?

    • It is India’s very own automatic protection system in development since 2012, under the name Train Collision Avoidance System (TCAS), which got rechristened to Kavach or “armour”.
    • Simply put, it is a set of electronic devices and Radio Frequency Identification devices installed in locomotives, in the signalling system as well the tracks.
    • They connect to each other using ultra high radio frequencies to control the brakes of trains and also alert drivers, all based on the logic programmed into them.

    Key features of Kavach

    • One of its features is that by continuously refreshing the movement information of a train, it is able to send out triggers when a loco pilot jumps signal, called Signal Passed at Danger (SPAD).
    • The devices also continuously relay the signals ahead to the locomotive, making it useful for loco pilots in low visibility, especially during dense fog.
    • It includes the key elements from already existing, and tried and tested systems like the European Train Protection and Warning System, and the indigenous Anti Collison Device.
    • It will also carry features of the high-tech European Train Control System Level-2 in future.
    • The current form of Kavach adheres to the highest level of safety and reliability standard called Safety Integrity Level 4.

    What is the upgrade?

    • In the new avatar, India wants to position Kavach as an exportable system, a cheaper alternative to the European systems in vogue across the world.
    • While now Kavach uses Ultra High Frequency, work is on to make it compatible with 4G Long Term Evolution (LTE) technology and make the product for global markets.
    • Work is on to make the system such that it can be compatible with other already installed systems globally.

    How far is the rollout?

    • So far, Kavach has been deployed on over 1,098 km and 65 locomotives in ongoing projects of the South Central Railway.
    • In future it will be implemented on 3000 km of the Delhi-Mumbai and Delhi-Howrah corridors where the tracks and systems are being upgraded to host a top speed of 160 kmph.
    • Further, over 34,000 km on the High Density Network (HDN) and Highly Utilized Network (HUN) of on the Golden Quadrilateral have been included in its sanctioned plans.

     

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  • Hike in crude oil prices and its impact on India

    Context

    The Russia-Ukraine conflict will impact India’s economy through several channels. The first order impact, emanates from the negative terms of trade shock from higher commodity prices, particularly oil.

    • Crude prices have surged well past a $110/barrel and there is a growing expectation that, as the conflict gets more entrenched, crude could remain elevated for much longer and average close to $100/barrel in 2022, vis-a-vis $70/barrel in 2021.

    Why crude oil price is increasing?

    Limited Supply:

    • Major oil-producing countries had cut oil production last year amid a sharp fall in demand due to the Covid-19 pandemic.
    • Saudi Arabia pledged extra supply cuts in February and March 2020 following reductions by other members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
    • In early January 2021, the OPEC and Russia (as OPEC+) agreed to cut back on oil production to increase prices.

    Rising Demand:

    • The production and rollout of vaccines for Covid-19 and the rising consumption post the Covid lockdowns last year have both led to a revival in international crude oil prices.

    Geopolitical reasons

    • Geopolitical tension has risen between Russia, which is the second largest oil producer in the world, and neighbouring Ukraine.
    • In January, there were drone attacks on oil facilities in UAE, another major oil producer.
    • An outage on a major oil pipeline linking Saudi Arabia and Turkey further added to the pressures.

    How it will impact India?

    • Current Account Deficit: The increase in oil prices will increase the country’s import bill, and further disturb its current account deficit (excess of imports of goods and services over exports).
      • According to estimates, a one-dollar increase in crude oil price increases the oil bill by around USD 1.6 billion per year.
    • Inflation: The increase in crude prices could also also further increase inflationary pressures that have been building up over the past few months.
      • This will decrease the space for the monetary policy committee to ease policy rates further.
      • The government had hiked central taxes on petrol and diesel by Rs. 13 per litre and Rs. 11 per litre in 2020 to boost revenues amid lower economic activity.
    • Fiscal Health: If oil prices continue to increase, the government shall be forced to cut taxes on petroleum and diesel which may cause loss of revenue and deteriorate its fiscal balance.
      • The growth slowdown in the last two years has already resulted in a precarious fiscal situation because of tax revenue shortfalls.
      • The revenue lost will erode the government’s ability to spend or meet its fiscal commitments in the form of budgetary transfers to states, payment of dues and compensation for revenue shortfalls to state governments under the goods and services tax (GST) framework.

    Why high growth impact on fiscal space leads to a greater hit to demand and growth?

    • The growth impact will manifest through constraints on fiscal space, household purchasing power being impinged and firm margins coming under pressure.
    • Why does marginal propensity to consume matter? The quantum of the growth impact will depend on how the shock is distributed across the fiscal, households and firms because of the different marginal propensities to consume.
    • For example, the excise duty cuts last November have already absorbed about one-third of the shock from oil (0.4 per cent of GDP).
    • The cost of this, however, is commensurate pressures on fiscal expenditures and growth, agnostically assuming a fiscal multiplier of 1.
    • In contrast, the marginal propensity to consume/invest out of income/earnings is typically lower than 1 for households/firms.
    • So, the greater the fraction of the shock absorbed on the fiscal, the greater the hit to demand and growth. 

    Way forward

    1] Let the rupee reach the new equilibrium

    • The widening of the CAD and associated BoP pressures will create some depreciation pressures on the rupee.
    • More fundamentally, a persistent negative terms of trade shock will argue for a weaker equilibrium real effective exchange rate.
    • Policymakers should let the rupee reach this new equilibrium – albeit in a gradual and non-disruptive manner – and not prevent this adjustment because it will facilitate the necessary “expenditure switching” to reduce imports, boost exports and help narrow an elevated CAD.

    2] Pragmatic fiscal policies

    • Cutting excise duties would buffer the impact on households and protect consumption, but potentially result in a larger hit to demand by shrinking fiscal space to spend.
    • If the government doesn’t cut duties, it has resources that can potentially be used to more directly target affected households at the bottom of the pyramid.
    • But this will mean higher retail prices that can harden inflationary expectations, increasing the challenges for monetary policy.
    • Finally, policymakers could always cut duties, not cut spending and let the deficit widen commensurately — effectively pushing out some of the terms of trade costs to the future — but negative surprises on the fiscal during periods of heightened macro uncertainty can generate significantly risk premia in markets.
    • All told, the fiscal will confront several trade-offs, and should try avoiding corner solutions.
    • What should be clear is that as soon as markets begin to stabilise, authorities must plough ahead with planned asset sales/disinvestment to create more fiscal headroom, without trying to perfectly time the market.

    3) Reduce the dependence

    • India has proposed Oil Buyer’s club. This would be a grouping of India, China, Japan and South Korea. The objective is to reduce the dependence on OPEC, have better bargains, increase the imports of crude oil imports from USA etc
    • It was put forward by Mani Shankar Ayyar in 2005
    • Create a stabilization fund or reserve account – Thailand, UK etc

    Conclusion

    A persistent adverse supply shock is complicated and challenging to respond to, and the new equilibrium will inevitably need some combination of a weaker rupee, higher rates, and judicious fiscal management.

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    Back2Basics: What is a fiscal multiplier?

    • The fiscal multiplier measures the effect that increases in fiscal spending will have on a nation’s economic output, or gross domestic product (GDP).
    • Fiscal multipliers are important because they can help guide a government’s policies during an economic crisis and help set the stage for economic recovery.

    What is Marginal Propensity to Consume?

    • In economics, the marginal propensity to consume (MPC) is defined as the proportion of an aggregate raise in pay that a consumer spends on the consumption of goods and services, as opposed to saving it.
    • Marginal propensity to consume is a component of Keynesian macroeconomic theory and is calculated as the change in consumption divided by the change in income.
    • MPC varies by income level. MPC is typically lower at higher incomes.
  • Egypt hikes Suez Canal transit fees for ship

    Cash-strapped Egypt increased transit fees for ships passing through the Suez Canal, one of the world’s most crucial waterways, with hikes of up to 10%.

    Suez Canal

    • The Suez Canal is an artificial sea-level waterway in Egypt, connecting the Mediterranean Sea to the Red Sea through the Isthmus of Suez; and dividing Africa and Asia.
    • Constructed by the Suez Canal Company between 1859 and 1869, it officially opened on 17 November 1869.
    • The canal was earlier controlled by British and French interests in its initial years but was nationalized in 1956 by Egypt’s then leader Gamal Abdel Nasser.
    • It extends from the northern terminus of Port Said to the southern terminus of Port Tewfik at the city of Suez.
    • Its length is 193.30 km including its northern and southern access channels.

    Its significance

    • The Suez Canal provides a crucial link for oil, natural gas and cargo being shipping from East to West.
    • About 10% of global trade, including 7% of the world’s oil, flows through the Suez Canal.
    • It provides a major shortcut for ships moving between Europe and Asia, who before its construction had to sail around Africa to complete the same journey.
    • As per a report, the canal is a major source of income for Egypt’s economy, with the African country earning $5.61 billion in revenues from it last year.

    Try this PYQ:

    Q.Between India and East Asia, the navigation time and distance can be greatly reduced by which of the following?

    1. Deepening the Malacca straits between Malaysia and Indonesia.
    2. Opening a new canal across the Kra isthmus between the Gulf of Siam and Andaman sea.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

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  • What are Cluster Bombs and Thermobaric Weapons?

    Human rights group Amnesty International has accused Russia of using cluster bombs and vacuum bombs in the ongoing war.

    What are Cluster Munitions?

    • According to the 2008 Convention on Cluster Munitions, a cluster munition means a “conventional munition that is designed to disperse or release explosive submunitions each weighing less than 20 kilograms, and includes those explosive submunitions”.
    • Essentially, cluster munitions are non-precision weapons that are designed to injure or kill human beings indiscriminately over a large area.
    • They are often designed to destroy vehicles and infrastructure such as runways, railway or power transmission lines.
    • They can be dropped from an aircraft or launched in a projectile that spins in flight, scattering many bomblets as it travels.
    • Many of these bomblets end up not exploding, but continue to lie on the ground, often partially or fully hidden and difficult to locate and remove, posing a threat to the civilian population.
    • The Convention on Cluster Munitions specifically identifies “cluster munition remnants”, which include “failed cluster munitions, abandoned cluster munitions, unexploded submunitions and unexploded bomblets”.

    And what is a Thermobaric Weapon?

    • Thermobaric weapons — also known as aerosol bombs, fuel air explosives, or vaccum bombs — use oxygen from the air for a large, high-temperature blast.
    • A thermobaric weapon causes significantly greater devastation than a conventional bomb of comparable size.
    • The weapons, which go off in two separate stages, can be fired as rockets from tank-mounted launchers or dropped from aircraft.
    • As they hit their target, a first explosion splits open the bomb’s fuel container, releasing a cloud of fuel and metal particles that spreads over a large area.
    • A second explosion then occurs, igniting the aerosol cloud into a giant ball of fire and sending out intense blast waves that can destroy even reinforced buildings or equipment and vaporise human beings.

    Is it legal to use these weapons?

    • Countries that have ratified the Convention on Cluster Munitions are prohibited from using cluster bombs.
    • As of date, there are 110 state parties to the convention, and 13 other countries have signed up but are yet to ratify it.
    • Neither Russia nor Ukraine are signatories.
    • These bombs are not prohibited by any international law or agreement, but their use against civilian populations in built-up areas, schools or hospitals, could attract action under the Hague Conventions of 1899 and 1907.
    • International humanitarian law prohibits the use of inherently indiscriminate weapons such as cluster munitions.
    • Launching indiscriminate attacks that kill or injure civilians constitutes a war crime.

     

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  • Why the SilverLine Project makes sense for Kerala

    Context

    The SilverLine Project to be built by the government of Kerala will link Thiruvananthapuram in the south to Kasargode in the north.The project has received its share of criticism, much of it from political quarters, but also some academic sections.

    Need for high-speed rail in Kerala

    • Saturated road network: For Kerala, with its saturated road network, the building of a fast, environmentally-sustainable high-speed rail link must surely be seen as a sound governance response.
    • Indeed, a study of INDC (Intended Nationally Determined Contribution) plans under the Paris Climate Agreement is instructive in this context.
    • Low-cost emission option: The EU study on mobility notes that HSR is the least-cost emission option among all modes of long-distance transportation.

    The arguments against the project

    • Critics have put forward three principal lines of argument, namely, its alleged adverse environmental impact, financial unviability, and technical unsuitability.
    • Environmental impact: The most compelling environmental issue before us is climate change.
    • Building capacities now to achieve a carbon net-neutral world over the next three to four decades is a core aspect of the national strategy of all nations.
    • In this context, the SilverLine project scores high with respect to India’s own climate objective of achieving net-zero emissions by 2070.
    • Let us recall the driving forces behind Japan’s decision to develop the Shinkansen.
    • In the context of the global oil crisis, energy-insecure Japan wanted to develop a public transportation system that was energy-efficient and would also address national concerns with respect to imbalanced regional growth.
    • After the Kyoto Protocol was signed, more efforts were made to increase the speed of the various series of Shinkansen to meet the objectives of energy efficiency and CO2 reductions.
    • Financial viability: Large-scale infrastructure projects are not based on short-term financial viability considerations alone.
    • When the London Underground was conceived, it was not considered financially viable.
    • Today, London’s economic activities are inconceivable without it.
    • Green technologies that we consider cheaper than fossil fuel technologies were not initially financially viable, and were unable to survive without government subsidies.

    Conclusion

    There are abundant international examples of the role played by large capital-intensive infrastructure projects in the transformation of the town and country, regions, and nations.

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  • GST revenues cross 1.3 lakh crore in Feb

    The Gross Goods and Services Tax (GST) revenue in February was 26% higher than the pre-pandemic levels at ₹1,33,026 crore.

    What is GST?

    • GST is an indirect tax that has replaced many indirect taxes in India such as excise duty, VAT, services tax, etc.
    • The Goods and Service Tax Act was passed in Parliament on 29th March 2017 and came into effect on 1st July 2017. It is a single domestic indirect tax law for the entire country.
    • It is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.
    • Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. All the inter-state sales are chargeable to the Integrated GST.

    Answer this PYQ in the comment box:

    Q.All revenues received by the Union. Government by way of taxes and other receipts for the conduct of Government business are credited to the (CSP 2015):

    (a) Contingency Fund of India

    (b) Public Account

    (c) Consolidated Fund of India

    (d) Deposits and Advances Fund

     

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    What are the components of GST?

    There are three taxes applicable under this system:

    1. CGST: It is the tax collected by the Central Government on an intra-state sale (e.g., a transaction happening within Maharashtra)
    2. SGST: It is the tax collected by the state government on an intra-state sale (e.g., a transaction happening within Maharashtra)
    3. IGST: It is a tax collected by the Central Government for an inter-state sale (e.g., Maharashtra to Tamil Nadu)

    Advantages Of GST

    • GST has mainly removed the cascading effect on the sale of goods and services.
    • Removal of the cascading effect has impacted the cost of goods.
    • Since the GST regime eliminates the tax on tax, the cost of goods decreases.
    • Also, GST is mainly technologically driven.
    • All the activities like registration, return filing, application for refund and response to notice needs to be done online on the GST portal, which accelerates the processes.

    Issues with GST

    • High operational cost
    • GST has given rise to complexity for many business owners across the nation.
    • GST has received criticism for being called a ‘Disability Tax’ as it now taxes articles such as braille paper, wheelchairs, hearing aid etc.
    • Petrol is not under GST, which goes against the ideals of the unification of commodities.

    Take a look at the share of GST in government earnings for the previous fiscal:

    UPSC can ask about the majority component of the Revenue Receipts of the govt. See how Corporate tax is nearing the GST revenues.

    Do you think it will surpass GST revenue when the economy is fully recovered?

     

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  • In news: Bhakra Beas Management Board (BBMB)

    Political parties in Punjab are up in arms over the Centre’s decision to amend the rules regarding appointments to two key positions on the Bhakra Beas Management Board (BBMB).

    What is BBMB?

    (a) Origin

    • The genesis of BBMB lies in the Indus Water Treaty signed between India and Pakistan in 1960.
    • Under this, waters of three eastern rivers— Ravi, Beas and Sutlej — were allotted to India for exclusive use while Indus, Chenab and Jhelum rivers were allocated to Pakistan.
    • In India, a master plan was drawn to harness the potential of these rivers for providing assured irrigation, power generation and flood control.
    • Bhakra and Beas projects form a major part of this plan and were established as a joint venture of the then undivided Punjab and Rajasthan.

    (b) Establishment

    • Following the reorganization of Punjab on November 1, 1966, and the creation of the state of Haryana, the BBMB was constituted under Section 79 of the Punjab Reorganisation Act, 1966.
    • The administration, maintenance and operation of Bhakra Nangal Dam project was handed over to Bhakra Management on October 1, 1967.
    • On May 15, 1976, when the Beas Projects Works were completed and handed over, the Bhakra Management Board was renamed as Bhakra Beas Management Board (BBMB).
    • Since then, BBMB regulates supply of water and power to Punjab, Haryana, Rajasthan, Himachal Pradesh, Delhi and Chandigarh.

    What is the constitution of the BBMB management?

    • The BBMB management includes a chairperson and two whole time members who are from the partner states of Punjab and Haryana.
    • They are designated as Member (Power) and Member (Irrigation) from Punjab and Haryana, respectively.
    • There is representation from each member state including Rajasthan and Himachal Pradesh as nominated by the respective state governments.
    • The total strength of BBMB is about 12,000 employees and out of these 696 are Group A officers and are posted from the partner states.

    What changes have been made to the BBMB rules?

    • The GoI issued a notification on February 23, 2022 to amend the BBMB Rules 1974, thereby changing the criteria for the selection of whole-time members of the Board.
    • New rules specify technical qualifications for the appointments and pave for the appointment of the members from across India and NOT ONLY from Punjab and Haryana.

    What has been the objection to the new rules?

    • The opposition to the new rules has come from within the engineers’ fraternity, farmers as well as the political parties of Punjab.
    • It is being labeled as an attack on the federal structure of the country.
    • The engineers have pointed out that hardly any engineer would qualify for appointment as per the new specifications.

     

    Back2Basics: Indus Waters Treaty, 1960

    •  The Indus Waters Treaty is a water-distribution treaty between India and Pakistan, brokered by the World Bank signed in Karachi in 1960.
    • According to this agreement, control over the water flowing in three “eastern” rivers of India — the Beas, the Ravi and the Sutlej was given to India.
    • The control over the water flowing in three “western” rivers of India — the Indus, the Chenab and the Jhelum was given to Pakistan.
    • The treaty allowed India to use western rivers water for limited irrigation use and unrestricted use for power generation, domestic, industrial and non-consumptive uses such as navigation, floating of property, fish culture, etc. while laying down precise regulations for India to build projects.
    • India has also been given the right to generate hydroelectricity through the run of the river (RoR) projects on the Western Rivers which, subject to specific criteria for design and operation is unrestricted.

     

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  • Kuki Insurgency in Manipur

    Just before the first of the two phases of the Assembly Elections went underway in Manipur, all insurgent groups associated with the Kuki tribes in Manipur said they will vote for a particular political party.

    Who are the Kukis?

    • The Kukis are an ethnic group including multiple tribes originally inhabiting the North-Eastern states of India such as Manipur, Mizoram and Assam; parts of Burma (now Myanmar), and Sylhet district and Chittagong hill tracts of Bangladesh.
    • While Kuki is not a term coined by the ethnic group itself, the tribes associated with it came to be generically called Kuki under colonial rule.
    • In Manipur, the various Kuki tribes, living mainly in the hills, currently make up 30% of the total 28.5 lakh population of the State.
    • While Churachandpur is their main stronghold, they also have a sizable population in Chandel, Kangpokpi, Tengnoupal and Senapati districts.

    Their ethnicity

    • The rest of the population of Manipur is made up mainly of two other ethnic groups — the Meiteis or non-tribal, Vaishnavite Hindus who live in the valley region of Manipur, and the Naga tribes, historically at loggerheads with the Kukis, also living in the hilly areas of the State.
    • Of the 60 seats in the Manipur Assembly, 40 are held by Meiteis and the rest 20 seats are held by Kukis and Nagas.

    What led to the Kuki insurgencies in Manipur?

    • The Kuki insurgent groups have been under Suspension of Operation (SoO) since 2005, when they signed an agreement for the same with the Indian Army.
    • Later, in 2008, the groups entered a tripartite agreement with the State government and the UPA led Central government to temporarily suspend their operations and give political dialogue a chance.
    • Manipur, formerly a princely state including parts of Burma, made the accession into India after Independence, but was only made a full-fledged State in 1972.
    • The resentment over the “forceful” inclusion into India and delay in granting statehood led to the rise of various insurgent movements.

    Roots of the insurgency

    • The roots of Kuki militancy lie in conflicts of ethnic identity.
    • First was the demand for self-determination solely for groups belonging to their ethnic fabric, meaning the dream to form a Kukiland.
    • The second reason for insurgency lies in the inter-community conflicts between the Kukis and the Nagas in Manipur.
    • The Kuki-Naga conflict was started over securing identity and land as some Kuki inhabited areas coincided with Naga inhabited areas.
    • Wanting to dominate trade and cultural activities in those areas the two communities often engaged in violent standoffs, with villages being torched, civilians killed and so on.

     

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  • Land protests over Deocha Pachami Coal Block

    The West Bengal government’s ambitious Deocha Pachami coal block mining project in Birbhum district has run into hurdles over land acquisition and other issues.

    Deocha Pachami Coal Block

    • The State government is planning to start mining at the Deocha Pachami coal block, considered to be the largest coal block in the country with reserves of around 1,198 million tonnes of coal.
    • It is spread over an area of 12.31 sq. km, which is around 3,400 acres.
    • There are around 12 villages in the project area with a population of over 21,000, comprising Scheduled Castes and Scheduled Tribes.

    Why are locals upset?

    • The project is facing protests over land acquisition of which a significant part is forest land.
    • Locals, mostly Santhal tribals, have close affinity with the land, with forests and waterways, and rely on it for their needs.
    • The tribals were harassed and had been arrested under false and serious charges for protesting.
    • Also, the project details have not yet been made public; and the environment clearance is awaited.

    Back2Basics:

    Coal

    • This is the most abundantly found fossil fuel. It is used as a domestic fuel, in industries such as iron and steel, steam engines and to generate electricity. Electricity from coal is called thermal power.
    • The coal which we are using today was formed millions of years ago when giant ferns and swamps got buried under the layers of earth. Coal is therefore referred to as Buried Sunshine.
    • The leading coal producers of the world include China, US, Australia, Indonesia, India.
    • The coal-producing areas of India include Raniganj, Jharia, Dhanbad and Bokaro in Jharkhand.
    • Coal is also classified into four ranks: anthracite, bituminous, sub-bituminous, and lignite. The ranking depends on the types and amounts of carbon the coal contains and on the amount of heat energy the coal can produce.

     

  • [pib] Unified Logistics Interface Platform (ULIP)

    National Logistics Portal (NLP) is set to be integrated with Unified Logistics Interface Platform (ULIP) to make the multi-modal logistics ecosystem more efficient.

    Unified Logistics Interface Platform (ULIP)

    • ULIP is designed to enhance efficiency and reduce the cost of logistics in India by creating a transparent, one window platform that can provide real-time information to all stakeholders.
    • It was also emphasized that the solution should have the visibility of multi-modal transport, and all the existing systems of various ministries, governing bodies, and private stakeholders should be integrated with the ULIP system.
    • This will create a National Single Window Logistics Portal which will help in reducing the logistics cost.
    • ULIP will provide real-time monitoring of cargo movement while ensuring data confidentiality with end-to-end encryption, comprehensive reduction in logistic cost resulting in competitive costing.

    There are three key components which are defining the ULIP platform:

    • Integration with existing data sources of ministries: As authorization, compliance and clearance are some of the critical activities of Logistics; the integration with data points of ministries shall enable a holistic view and interlink the handshaking points.
    • Data exchange with private players: To enable the private players, logistics service providers, and industries to utilize the data available with ULIP and at the same time share their data (transportation, dispatch, delivery, etc.) with ULIP, thereby streamlining the processes to bring better efficiency through data exchange.
    • Unified document reference in the supply chain: To enable a single digitized document reference number for all the documentation processes in a single platform.

     

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