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GS Paper: GS3

  • Experts raise concerns over mandatory food fortification

    In a pushback against the Centre’s plan to mandatorily fortify rice and edible oils with vitamins and minerals, a group of scientists and activists have warned of the adverse impacts on health and livelihoods.

    Food Fortification

    • Food fortification is defined as the practice of adding vitamins and minerals to commonly consumed foods during processing to increase their nutritional value.
    • It is a proven, safe and cost-effective strategy for improving diets and for the prevention and control of micronutrient deficiencies.

    Types of food fortification

    Food fortification can also be categorized according to the stage of addition:

    1. Commercial and industrial fortification (wheat flour, cornmeal, cooking oils)
    2. Biofortification (breeding crops to increase their nutritional value, which can include both conventional selective breeding, and genetic engineering)
    3. Home fortification (example: vitamin D drops)

    Advantages offered

    • Health: Fortified staple foods will contain natural or near-natural levels of micro-nutrients, which may not necessarily be the case with supplements.
    • Taste: It provides nutrition without any change in the characteristics of food or the course of our meals.
    • Nutrition: If consumed on a regular and frequent basis, fortified foods will maintain body stores of nutrients more efficiently and more effectively than will intermittently supplement.
    • Economy: The overall costs of fortification are extremely low; the price increase is approximately 1 to 2 percent of the total food value.
    • Society: It upholds everyone’s right to have access to safe and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger

    Issues with fortified food

    • Against nature: Fortification and enrichment upset nature’s packaging. Our body does not absorb individual nutrients added to processed foods as efficiently compared to nutrients naturally occurring.
    • Bioavailability: Supplements added to foods are less bioavailable. Bioavailability refers to the proportion of a nutrient your body is able to absorb and use.
    • Immunity issues: They lack immune-boosting substances.
    • Over-nutrition: Fortified foods and supplements can pose specific risks for people who are taking prescription medications, including decreased absorption of other micro-nutrients, treatment failure, and increased mortality risk.

  • [pib] Haldibari- Chilahati Rail Link

    The freight trains have started commuting via the restored Haldibari (India) – Chilahati (Bangladesh) rail link.

    Haldibari- Chilahati Rail Link

    • The Haldibari – Chilahati rail link between India and then East Pakistan was operational till 1965.
    • The distance between Haldibari Railway Station till the international border is 4.5 km, while that of Chilahati is around 7.5 km till the ‘zero points’.
    • This was part of the Broad-Gauge main route from Kolkata to Siliguri during the partition.
    • Trains traveling to Assam and North Bengal continued to travel through the then East Pakistan territory even after partition.
    • However, the war of 1965 effectively cut off all the railway links between India and then East Pakistan.
    • The link was reopened in 2020 for the movement of passenger and goods traffic.

    Other railway links between India and Bangladesh

    As of now, five links connecting India with Bangladesh have been made operational which include:

    • Petrapole (India) – Benapole (Bangladesh)
    • Gede (India) – Darshana (Bangladesh)
    • Singhabad (India) – Rohanpur (Bangladesh)
    • Radhikapur (India) – Birol (Bangladesh)
    • Haldibari (India) – Chilahati (Bangladesh)

  • [pib] Kuthiran Tunnel

    The Union Minister for Road Transport and Highways has inaugurated the Kuthiran Tunnel in Kerala

    Kuthiran Tunnel

    • Kuthiran Tunnel is a Twin-tube tunnel at Kuthiran in Thrissur District of Kerala.
    • It is located on National Highway 544, owned and operated by the National Highways Authority of India.
    • It is Kerala’s first-ever tunnel for road transport and South India’s Longest 6-lane road tunnel.
    • Kuthiran gradient is situated in the Kuthiran Hills, situated in the western part of Anaimalai Hills. The hills are a notified Peechi- Vazahani wildlife sanctuary.
    • It will drastically improve connectivity to Tamil Nadu and Karnataka.
    • The road will improve connectivity to important ports and towns in North-South Corridor without endangering wildlife.

  • The future of nuclear energy

    Context

    Bill Gates recently announced the decision to launch his own nuclear reactor with an eye on the possibility of exporting fast breeder reactors to power-hungry nations.

    About the Gates plan

    • TerraPower, the nuclear company founded by Mr. Gates, has just announced an agreement with private funders, including Warren Buffett, and the State of Wyoming, U.S. to site its Natrium fast reactor demonstration project there.
    • Moreover, since it falls within the “advanced” small modular reactor project of the U.S. Department of Energy (DOE), the Department will subsidise the project to the extent of $80 million this year.
    •  Mr. Gates believes that the fast breeder reactors will replace the current reactors.
    • The DOE and other nuclear enthusiasts also believe that small, factory-built, modular reactors will be cheaper and safer, and will be so attractive to foreign buyers.

    The impact of Fukushima Daiichi accident on nuclear power situation

    • The Fukushima Daiichi accident in Japan on March 11, 2011 completely transformed the nuclear power situation.
    • Countries phased out nuclear power: As the global community turned its attention to strengthening nuclear safety, several countries opted to phase out nuclear power. 
    • The nuclear industry was at a standstill except in Russia, China and India.
    • Liability clause in India: Even in India, the expected installation of imported reactors did not materialise because of our liability law and the anti-nuclear protests in proposed locations.
    • India had to go in for more indigenous reactors to increase the nuclear component of its energy mix.

    Regaining place as a climate-friendly energy option

    • Two factors have contributed to the emergence of nuclear power as a climate-friendly energy option once again after the Fukushima Daiichi accident:-
    • 1) Intensive efforts to strengthen nuclear safety, and
    • 2) Threat of global warming is becoming ever more apparent.
    • Countries such as Japan and Germany reopened their reactors to produce energy.
    • Organisations such as the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) recognise the ability of nuclear power to address major global challenges.

    Challenges ahead

    • Delay in adoption: Even as IPCC and IEA recognise the importance of nuclear power, it remains uncertain whether the value of this clean, reliable and sustainable source of energy will achieve its full potential any time soon.
    • Policy and financing framework issue: In some major markets, nuclear power lacks a favourable policy and financing framework that recognise its contributions to climate change mitigation and sustainable development.
    • Without such a framework, nuclear power will struggle to deliver on its full potential, even as the world remains as dependent on fossil fuels.

    Concerns with Gates plan

    • Proliferation risk: TerraPower announced in March that Natrium would be fuelled with uranium enriched to 20% U-235 rather than explosive plutonium.
    • The critics believe that there will be a rush to make 20% enriched uranium world wide.
    • The main objection to nuclear enrichment beyond a point in Iran arises from the fact that it would lead to weapon-grade uranium being available for them.
    • Facilitates the production of material used as nuclear explosives: The other objection being raised against is that the principal reason for preferring fast reactors is to gain the ability to breed plutonium.
    • That is surely what foreign customers will want.
    • The way it is configured, the reactor would make and reuse massive quantities of material that could also be used as nuclear explosives in warheads.
    • Focus on India and China: The opponents of TerraPower believe that India and China will be encouraged in their efforts to develop fast breeder reactors and may even want to buy them from Mr. Gates.
    • India’s fast breeder reactor, which is not subject to international inspections, is seen as capable of feeding the nuclear weapons capability of India.

    Conclusion

    With the threat of global warming due to climate change amplifying with each coming day, the world needs to take a serious relook at the adoption of nuclear technology.

    Back2Basics: What is a fast breeder reactor?

    • This special type of reactor is designed to extend the nuclear fuel supply for electric power generation.
    • Whereas a conventional nuclear reactor can use only the readily fissionable but more scarce isotope uranium-235 for fuel, a breeder reactor employs either uranium-238 or thorium, of which sizable quantities are available.
    • Uranium-238, for example, accounts for more than 99 percent of all naturally occurring uranium.
    • In breeders, approximately 70 percent of this isotope can be utilized for power production.
    • Conventional reactors, in contrast, can extract less than one percent of its energy.

    Natrium fast reactor demonstration project

    • Natrium nuclear power plants represent a significant advance over the light water reactor plants in use today.
    • The Natrium plant uses a sodium-cooled fast reactor as a heat source.
    • This heat from the reactor is carried by molten salt from inside the nuclear island to heat storage tanks outside the reactor building, where it is utilized as needed for generating electricity or industrial processes.
    • The net effect is that the overall plant can load follow, thus increasing the revenue and value of the plant while maintaining the optimum constant reactor power.
    • At the same time the cost of the overall plant is reduced since many of the systems outside of the nuclear island need not be nuclear safety grade.
    • The Natrium reactor enables these abilities because it operates in much higher temperature regimes than the light water reactor, thus pairing well to the temperature requirements of the molten salt heat transfer medium.

  • A cycle of low growth, higher inflation

    Context

    In recent times, several economists have been arguing that the Government does not need to do anything with the economy. They argue that like after the Great Depression, the economy rebounded worldwide, and so will it with us. The argument is fallacious on four accounts:

    Four factors that make recovery different from the recovery after the Great Depression

    1) Demand destruction

    • In the case of the Great Depression, demand was created by the Second World War effort, especially in the United States.
    • Demand destruction: In the current scenario, the COVID-19 pandemic has resulted in demand destruction.
    • This is because many jobs have been lost, and even where jobs were retained, there have been pay cuts.
    • Both of these trends were confirmed in the Centre for Monitoring Indian Economy and other surveys.

    Bright spot on export front

    • The only bright spot in this dismal scenario is that the western world has spent a lot of money stimulating the economy.
    • However, the Indian exporter face the challenge of rising freight costs and structural issues such as a strong rupee relative to major competitors.
    • Only the Indian IT sector is placed well to capitalise on rising demand in the world markets.

    2) Inflation and factors driving it

    • India is suffering from stagnant growth to low growth in the last two quarters.
    • As in the low initial base set by last year, almost any growth this year is seen as a significant growth percentage.
    • Commodity prices and monetary policy: Inflation in India is being imported through a combination of high commodity prices and high asset price inflation caused by ultra-loose monetary policy followed across the globe.
    • Liquidity infusion: RBI is infusing massive liquidity into the system by following an expansionary monetary policy through the G-SAP, or Government Securities Acquisition Programme.
    • Foreign portfolio investors have directed a portion of the liquidity towards our markets.
    • India has a relatively low market capitalisation, therefore, India cannot absorb the enormous capital inflow without asset prices inflating.
    • Supply chain issues: Additionally, supply chain bottlenecks have contributed to the inflation we see in India today.
    • Rising fuel prices: India’s usurious taxation policy on fuel has made things worse.
    • Rising fuel prices percolate into the economy by increasing costs for transport.

    Impact of inflation

    • The middle and lower-middle-class get destitute due to regressive indirect taxes and high inflation, with their wealth eroding due to said inflation.
    • Especially in the case of the lower middle class, inflation is lethal as they do not have access to any hard assets, including the most fundamental hard asset, gold.
    • The increase in fuel prices will also lead to a rise in wages demanded as the monthly expense of the general public increases.
    • This leads to the dangerous cycle of inflation and depleting growth.

    3) Interest Rate

    • The only solution for any central banker once he realises that inflation is entrenched is tightening liquidity and further pushing the cost of money.
    • If this does not dampen inflation, repo rates will need to go up later this year or early next year.
    • Tightening the money supply is a painful act that will threaten to decimate what is left of our economy.
    • Rising interest rates lead to a decrease in aggregate demand in a country, which affects the GDP.
    • There is less spending by consumers and investments by corporates.

    4) Rising NPA and its impact on credit growth

    • Rising interest rates, lack of liquidity, and offering credit to leveraged companies instead of direct subsidies to support small and medium-sized enterprises (SMEs) and micro, small and medium enterprises (MSMEs) to counter the COVID-19 pandemic and its effects will result in NPAs of public sector banks climbing faster.
    • Our small and medium scale sector is facing a Minsky moment. 
    • The Minsky moment marks the decline of asset prices, causing mass panic and the inability of debtors to pay their interest and principal.
    • India has reached its Minsky moment.
    • This means that the public sector unit and several other banks will need capital in copious amounts to make up for bad debt.
    • The Union government’s Budget is in no position to infuse large amounts of capital.
    • As a result of the above causes, credit growth is at a multi-year low of 5.6%.

    Way forward

    • Indian economy is in a vicious cycle of low growth and higher inflation unless policy action ensures higher demand and growth.

    Conclusion

    In the absence of policy interventions, India will continue on the path of a K-shaped recovery where large corporates with low debt will prosper at the cost of small and medium sectors. This means lower employment as most of the jobs are created by the latter.

  • Strategic Petroleum Reserves

    Under Phase II of the petroleum reserve program, the Government has approved two additional commercial-cum-strategic facilities at Chandikhol (Odisha) and Padur (TN) on Public-Private Partnership (PPP) model.

    Strategic Petroleum Reserves Programme

    • To ensure energy security, the govt had decided to set up 5 million metric tons (MMT) of strategic crude oil storage at three locations namely, Visakhapatnam, Mangalore, and Padur (near Udupi).
    • These strategic storages would be in addition to the existing storage of crude oil and petroleum products with the oil companies and would serve as a cushion during any supply disruptions.
    • The petroleum reserves established are strategic, and the crude oil stored in these reserves will be used during an oil shortage event, as and when declared so by the Government of India.
    • The construction of the Strategic Crude Oil Storage facilities is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a Special Purpose Vehicle.

    Why need SPR?

    • The Gulf War in 1990 caused a sharp rise in oil prices and a massive increase to India’s imports.
    • During the subsequent 1991 Indian economic crisis, foreign exchange reserves could barely finance three weeks’ worth of imports while the government came close to defaulting on its financial obligations.
    • India was able to resolve the crisis through policies that liberalized the economy. However, India continued to be impacted by the volatility of oil prices.
    • In 1998, the AB Vajpayee administration proposed building petroleum reserves as a long-term solution to managing the oil market.
    • Three storage facilities were built in underground locations in Mangalore, Visakhapatnam and Padur.

    Construction of ISPR

    • The crude oil storages are constructed in underground rock caverns and are located on the East and West coasts of India.
    • Crude oil from these caverns can be supplied to the Indian Refineries either through pipelines or through a combination of pipelines and coastal movement.
    • Underground rock caverns are considered the safest means of storing hydrocarbons.

  • NASA-ISRO Synthetic Aperture Radar

    The NASA-ISRO Synthetic Aperture Radar satellite, aimed at making global measurement of land surface changes using advanced radar imaging, is proposed to be launched in early 2023, informed Earth Sciences Minister.

    Note the key features of the Mission. Every statement has a unique information.

    NASA-ISRO SAR

    • NISAR is a joint collaboration for a dual-frequency L and S-band SAR for earth observation.
    • NASA and Bengaluru-headquartered ISRO signed a partnership on September 30, 2014, to collaborate on and launch NISAR.
    • The mission is targeted to launch in early 2022 from ISRO’s Sriharikota spaceport in Andhra Pradesh’s Nellore district, about 100km north of Chennai.
    • It is capable of producing extremely high-resolution images for a joint earth observation satellite mission with NASA.
    • It will be the first satellite mission to use two different radar frequencies (L-band and S-band) to measure changes in our planet’s surface less than a centimeter across.

    Objectives of the NISAR

    • NISAR will observe Earth’s land and ice-covered surfaces globally with 12-day regularity on ascending and descending passes, sampling Earth on average every six days for a baseline three-year mission.
    • It will measure Earth’s changing ecosystems, dynamic surfaces, and ice masses, providing information about biomass, natural hazards, sea-level rise, and groundwater, and will support a host of other applications.
    • It would also provide data on natural hazards including earthquakes, tsunamis, volcanoes, and landslides.

    What are L and S Bands?

    • L band waves are used for GPS units because they are able to penetrate clouds, fog, rain, storms, and vegetation.
    • The S-band is used by airport surveillance radar for air traffic control, weather radar, surface ship radar, and some communications satellites, especially those used by NASA to communicate with the Space Shuttle and the International Space Station.
    • NISAR uses a sophisticated information-processing technique known as SAR to produce extremely high-resolution images.
    • Radar penetrates clouds and darkness, enabling NISAR to collect data day and night in any weather.

    What is collaboration?

    • NASA is providing the mission’s L-band SAR, a high-rate communication subsystem for science data, GPS receivers, a solid-state recorder, and payload data subsystem.
    • ISRO is providing the spacecraft bus, the S-band radar, the launch vehicle, and associated launch services for the mission, whose goal is to make global measurements of the causes and consequences of land surface changes using advanced radar imaging.

  • Stellar Mid-life Crisis: What ails the middle-aged Sun?

    Stars like our Sun can go through a mid-life crisis, according to new research carried out by scientists from IISER Kolkata.

    Stellar Middle Age

    • At about 4.6 billion years of age, the sun is middle-aged, that is, it will continue to live for roughly the same period.
    • There are accurate methods for estimating the age of the Sun, such as by using radioactive dating of very old meteorites that have fallen on the Earth.
    • However, for more distant stars which are similar in mass and age to the Sun, such methods are not possible.
    • One of the methods used is called gyrochronology.
    • There is a relationship between rotation rate and age, that is the rotation rate of a star slows down with age.

    How does it occur?

    • When the stellar wind escapes from the star, it carries away with it a part of the angular momentum of the star, which results in its slowing down.
    • The stellar wind has two drivers: one is the high temperature of the outer atmosphere of stars – the corona – which results in an outward expansion and hence plasma winds that emanate out.
    • The other is the magnetic field.
    • The magnetic field actually heats the corona and so when magnetic activity is strong the winds are strong and since wind carries away the internal (rotational) angular momentum of the star, it slows down its rotation.
    • This is called magnetic braking.
    • As the star ages, due to this mechanism, its rotation slows down and this relationship is used in gyrochronology to estimate the age of the star.

    Impact

    • This can lead to dramatic changes in their activity and rotation rates.
    • The study also provides an explanation for the breakdown of the long-established relation between rotation rate and age in middle-aged sunlike stars.
    • However, there is a breakdown of the gyrochronology relationship, because, after midlife, a star’s rate of spin does not slow down with age as fast as it was slowing down earlier.
    • Another intriguing fact is that the Sun’s activity level has been observed to be much lower than other stars of similar age.

  • [pib] Digital Payment Solution: e-RUPI

    The Prime Minister has launched e-RUPI, a person and purpose-specific digital payment solution.

    What is e-RUPI?

    • e-RUPI is a cashless and contactless instrument for digital payment.
    • It is a QR code or SMS string-based e-Voucher, which is delivered to the mobile of the beneficiaries.
    • The users of this seamless one-time payment mechanism will be able to redeem the voucher without a card, digital payments app, or internet banking access, at the service provider.
    • It has been developed by the National Payments Corporation of India on its UPI platform, in collaboration with the Department of Financial Services, Ministry of Health & Family Welfare, and National Health Authority.

    How does it work?

    • e-RUPI connects the sponsors of the services with the beneficiaries and service providers in a digital manner without any physical interface.
    • It also ensures that the payment to the service provider is made only after the transaction is completed.
    • Being pre-paid in nature, it assures timely payment to the service provider without the involvement of any intermediary.

    Benefits offered

    • It is expected to be a revolutionary initiative in the direction of ensuring a leak-proof delivery of welfare services.
    • Even the private sector can leverage these digital vouchers as part of their employee welfare and corporate social responsibility programs.

    Answer this PYQ in the comment box:

    Q.Which of the following is the most likely consequence of implementing the ‘Unified Payments Interface (UPI)’?

    (a) Mobile wallets will not be necessary for online payments.

    (b) Digital currency will totally replace physical currency in about two decades.

    (c) FDI inflows will drastically increase.

    (d) Direct transfer of subsidies to poor people will become very effective

  • First group insolvency proceeding points to larger weakness in IBC

    Context

    National Company Law Appellate Tribunal (NCLAT) stayed the approval granted by the Mumbai bench of the National Company Law Tribunal (NCLT) to the resolution plan for the Videocon Group.

    Concerns with resolution plan

    • Resolution plan submitted by Twinstar Technologies, provided for payment of Rs 2,962 crore — a mere 4.15 per cent of Videocon’s total admitted debt of Rs 64,838 crore.
    • Payment of debt not in fair and equitable manner:  Under the IBC (Section 30(2)(b)), the resolution plan must provide for payment of debts amongst creditors in a “fair and equitable” manner.
    • However, in the plan submitted by Twinstar, unsecured assenting financial creditors and operational creditors are getting a paltry 0.62 per cent and 0.72 per cent of their admitted dues.
    • Even the secured assenting and dissenting financial creditors had to settle for only 4.9 per cent and 4.56 per cent of their respective dues.
    • Confidentiality obligation concerns: Twinstar’s bid of Rs 2,962 crore is close to the liquidation value of the Videocon Group estimated at Rs 2,568 crore, thereby raising legitimate suspicion and concern over the confidentiality of the resolution process.
    • The I&B Regulations, 2016 state that the resolution professional must maintain the confidentiality of the fair market value and liquidation value of the corporate debtor and can only disclose the same to the CoC members after the resolutions plan have been submitted.
    • Time delay: Status-quo ante has been restored until the next date of hearing by which time more than three years would have passed since the Videocon group was admitted into insolvency proceedings.
    • This is way beyond the statutory timeline of 330 days.

    Confidentiality rules need to be revised

    • The CoC members must, on receipt of the information, issue an undertaking of confidentiality.
    • But no such obligation falls on the resolution professional.
    • Further, Section 29(2) of the code provides that the resolution professional must disclose all “relevant information” to the resolution applicant and it is for the resolution applicant to ensure compliance with confidentiality obligations.
    • Again, there is no such duty imposed on the resolution professional.
    • Even under Section 25 of the code, titled “Duties of resolution professional”, the specific duty to maintain confidentiality of sensitive information is absent.
    • Clearly, the current regime does not have much deterrence value so as to ensure solemn adherence to confidentiality.

    Conclusion

    Videocon was one of the first test cases to examine the prospects of insolvency jurisprudence in India and the first one, for group insolvency proceedings.  However, almost four years and a 95 per cent haircut later, the call for an immediate course correction couldn’t be louder.

    Back2Basics: Operational creditor and financial creditors

    • When a corporate defaulter is brought under the resolution process (Corporate Insolvency Resolution Process or CIRP), there can be two types of creditors to whom the corporate should give back money –
    • (1) the entities who gave loans or funds to the corporate.
    • (2) the entities from whom the corporate bought inputs and other services.
    • The financial creditors are basically entities (lenders like banks) that have provided funds to the corporate.
    • Their relationship with the entity is a pure financial contract, such as a loan or debt security.
    • On the other hand, business and other entities that have provided inputs and other materials and services and to whom the defaulted corporate owes a debt are called as operational creditors.
    • Both have claims on the defaulted corporate or the defaulted corporate owe payments to both these categories.
    • Rights for these categories under the resolution process are also different.
    • The IBC gives a clear preference to the claims of the financial creditors over the operational creditors through several procedures.

    Haircut

    • A haircut is the difference between the loan amount and the actual value of the asset used as collateral.
    • It reflects the lender’s perception of the risk of fall in the value of assets.
    • But in the context of loan recoveries, it is the difference between the actual dues from a borrower and the amount he settles with the bank.