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  • Legalizing Bitcoin in El Salvador and takeaways for India

    El Salvador, a small coastal country in Central America, on became the first in the world to make Bitcoin, a digital currency, legal.

    Lessons for India

    While there are many precedents El Salvador sets for a global debate on cryptocurrency, we explore what this means in the Indian context.

    (1) Not a precedent for monetary policy

    • The development in El Salvador changes little in terms of Indian monetary calculations around cryptocurrencies.
    • The dynamic underpinning the whole move is that El Salvador has no monetary policy of its own and hence, no local currency to protect.
    • The country was officially ‘dollarized’ in 2001 and runs on the monetary policy of the US Federal Reserve.
    • The move is in part motivated by loose and expansionary Federal Reserve policy.

    (2) Coexistence with USD

    • The dollar will continue to remain the dominant currency in the country and Bitcoin would exist side by side.
    • Indeed, some analysts have pointed out how bitcoinization might change nothing on the ground if “legal tender” is to be considered by its strict legal definition.
    • However, as a result of this development, El Salvador becomes a most interesting case study of how the dollar and bitcoin would coexist side by side, and how that would play out for Bitcoin adoption.

    (3) Not merely currency but technology

    • The overall use of Bitcoin appears less motivated by its use as a currency and much more by the image and investment boost this could give the country towards innovation.
    • El Salvador believes that this move will be good for luring “technology, talent, and new ideas” into the country.
    • The move into Bitcoin ties in with larger efforts to revive a stalling economy and bring back growth into the country post-Covid.

    (4) Potential shift in remittances

    • The impact Bitcoin has on these remittance inflows would be worth monitoring for India, which is home to the largest remittance market in the world.
    • Remittances make up close to 20% of El Salvador’s GDP with flows approximating $6 billion annually.
    • Many citizens lack a bank account and digital banking has low penetration.
    • In this scenario, there are multiple intermediaries in the remittance chain who take cuts of as high as 20%.

    (5) Impact on money laundering

    • The implication of this move for money laundering is unclear at the moment.
    • Currently, El Salvador is not considered deficient under the FATF money laundering requirements.
    • However, with large scale cryptocurrency inflows and outflows, it would be expected that El Salvador would comply with the 2019 FATF guidance on Virtual Currencies.

    Conclusion

    • The overall takeaway for India from the El Salvador case is not in the monetary sense at all.
    • This is the wealth that India has in spades and has barely protected with policy.
    • While deliberations continue in India on the monetary and financial regulations around cryptocurrency.
    • It is important that attention be paid to incentives for India’s developers working on key innovations in the space.

    Back2Basics: Bitcoin

    • Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.
    • Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
    • The cryptocurrency was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto.
    • The currency began to use in 2009 when its implementation was released as open-source software.

  • India’s ethanol roadmap: The targets and challenges

    The government of India has advanced the target for 20 per cent ethanol blending in petrol (also called E20) to 2025 from 2030. E20 will be rolled out from April 2023.

    What is the move?

    • A government-appointed panel has recommended to the Centre to keep the price of ethanol-blended petrol lower than normal petrol in view of lower calorific value as also to incentivize people to go for the clean fuel.
    • This measure is aimed at reducing the country’s oil import bill and carbon dioxide pollution. This new initiative is also part of measures to improve energy security and self-sufficiency measures.

    Roadmap for Ethanol Blending

    • The central government has released an expert committee report on the Roadmap for Ethanol Blending in India by 2025.
    • The roadmap proposes a gradual rollout of ethanol-blended fuel to achieve E10 fuel supply by April 2022 and phased rollout of E20 from April 2023 to April 2025.
    • Currently, 8.5 per cent of ethanol is blended with petrol in India.
    • In order to introduce vehicles that are compatible the committee recommends roll out of E20 material-compliant and E10 engine-tuned vehicles from April 2023 and production of E20-tuned engine vehicles from April 2025.

    What is included in the roadmap?

    (1) Energy security

    • The Union government has emphasized that increased use of ethanol can help reduce the oil import bill.
    • India’s net import cost stands at $551 billion in 2020-21. It is estimated that the E20 program can save the country $4 billion (Rs 30,000 crore) per annum.
    • Last year, oil companies procured ethanol worth about Rs 21,000 crore.
    • Hence it is benefitting the sugarcane farmers.
    • Further, the government plans to encourage the use of water-sparing crops, such as maize, to produce ethanol, and the production of ethanol from the non-food feedstock.

    (2) Fuel efficiency

    • There is an estimated loss of six-seven per cent fuel efficiency for four-wheelers and three-four per cent for two-wheelers when using E20, the committee report noted.
    • These vehicles are originally designed for E0 and calibrated for E10.
    • The Society of Indian Automobile Manufacturers informed the expert committee that with modifications in engines (hardware and tuning), the loss in efficiency due to blended fuel can be reduced.

    (3) Recalibrating engines

    • The use of E20 will require new engine specifications and changes to the fuel lines, as well as some plastic and rubber parts due to the fuel’s corrosive nature.
    • The engines, moreover, will need to be recalibrated to achieve the required power-, efficiency- and emission-level balance due to the lower energy density of the fuel.
    • This can be taken care of by producing compatible vehicles.

    (4) Vehicles rollout

    • E20 material compliant and E10 compliant vehicles may be rolled out across the country from April 2023, the committee noted.
    • These vehicles can tolerate 10 to 20 per cent of ethanol-blended petrol and also deliver optimal performance with E10 fuel.
    • Vehicles with E20-tuned engines can be rolled out all across the country from April 2025.
    • These vehicles would run on E20 only and will provide high performance.

    (5) Flex-fuel

    • A flexible-fuel vehicle (FFV) is an alternative fuel vehicle with an internal combustion engine designed to run on more than one fuel and both fuels are stored in the same common tank.
    • The Union ministry of road transport and highways issued a gazette notification March 2021 mandating stickers on vehicles mentioning their E20, E85 or E100 compatibility.
    • This will pave the way for flex fuel vehicles.

    Why such a move?

    (1) Fuel efficiency

    • Considering just the end use also indicates that CO2 emissions from blended fuel are lower than that for petrol since ethanol contains less carbon than petrol and produces less CO2.
    • The blended fuel burns more efficiently with a more homogenous mixture, which leads to a decrease in CO2 emissions compared with pure petrol.
    • The carbon dioxide released by a vehicle when ethanol is burned is offset by the carbon dioxide captured when the feedstock crops are grown to produce ethanol.
    • Comparatively, no emissions are offset when these petroleum products are burned.

    (2) Emission reduction

    • Use of ethanol-blended petrol decreases emissions such as carbon monoxide (CO), hydrocarbons (HC) and nitrogen oxides (NOx), the expert committee noted.
    • Higher reductions in CO emissions were observed with E20 fuel — 50 per cent lower in two-wheelers and 30 per cent lower in four-wheelers.
    • HC emissions reduced by 20 per cent with ethanol blends compared to normal petrol.
    • Nitrous oxide emissions, however, did not show a significant trend as it depended on the vehicle / engine type and engine operating conditions.
    • The unregulated carbonyl emissions, such as acetaldehyde emission were, however, higher with E10 and E20 compared to normal petrol.
    • However, these emissions were relatively lower. Evaporative emission test results with E20 fuel were similar to E0.

    Global shreds of evidence

    • An increase in the ethanol content in fuels reduced the emissions of some regulated pollutants such as CO, HC and CO2.
    • However, no such change in emissions was observed for nitrogen oxides emissions.
    • The addition of ethanol, with a high blending octane number, however, allowed a reduction in aromatics in petrol.
    • Such blends also burn cleaner as they have higher octane levels than pure petrol but have higher evaporative emissions from fuel tanks and dispensing equipment.

    Challenges ahead

    • Petrol requires extra processing to reduce evaporative emissions before blending with ethanol.
    • It is crucial to study the emissions from flexible fuel vehicles not only for the regulated gases but also the unregulated ones.
    • But producing and burning ethanol results in CO2 emissions.
    • Hence, net CO2 emission benefit depends on how ethanol is made and whether or not indirect impacts on land use are included in the calculations.
    • In summary, as we progress towards higher blending of ethanol, careful monitoring and assessment of emissions changes will be needed to make sure that emission reduction potential can be enhanced.

    Back2Basics: EBP Programme

    • Ethanol Blended Petrol (EBP) programme was launched in January, 2003 for supply of 5% ethanol blended petrol.
    • The programme sought to promote the use of alternative and environment-friendly fuels and to reduce import dependency for energy requirements.
    • OMCs are advised to continue according to priority of ethanol from 1) sugarcane juice/sugar/sugar syrup, 2) B-heavy molasses 3) C-heavy molasses and 4) damaged food grains/other sources.
    • At present, this programme has been extended to the whole of India except UTs of Andaman Nicobar and Lakshadweep islands with effect from 01st April 2019 wherein OMCs sell petrol blended with ethanol up to 10%.

  • Places in news: Sardar Sarovar Dam

    The Sardar Sarovar Dam is providing irrigation water in summer for the first time in history.

    Sardar Sarovar Dam

    • The Sardar Sarovar Narmada Dam is a terminal dam built on the Narmada river at Kevadia in Gujarat’s Narmada district.
    • Four Indian states, Gujarat, Madhya Pradesh, Maharashtra and Rajasthan, receive water and electricity supply from the dam.
    • The foundation stone of the project was laid out by Prime Minister Jawaharlal Nehru on 5 April 1961.
    • The project took form in 1979 as part of a development scheme funded by the World Bank through their International Bank for Reconstruction and Development, to increase irrigation and produce hydroelectricity
    • Called the ‘lifeline of Gujarat’, it usually has no water for irrigation during summers.

    Answer this PYQ in the comment box:

    Q.Which one of the following pairs is not correctly matched?

     

    Dam/Lake River

    (a) Govind Sagar: Satluj

    (b) Kolleru Lake: Krishna

    (c) Ukai Reservoir: Tapi

    (d) Wular Lake: Jhelum

    A successful model of river water sharing

    • River Narmada is a classic case of Integrated River Basin Planning, Development, and Management, with water storage available in all major, medium, and minor dams on the main river and its tributaries.
    • Its water is shared amongst four party states – Gujarat, Rajasthan, Madhya Pradesh and Maharashtra — in the ratio stipulated by the 1979 award of the Narmada Water Dispute Tribunal.

    How has it saved water for summers?

    • During the monsoon from July to October, the reservoir operation is well synchronized with the rain forecast in the catchment area.
    • The strategic operation of River Bed Power House (RPBH) ensures that minimum water flows downstream into the sea and maximum water is used during the dam overflow period, which is not calculated in the annual water share.
    • These measures help in maximizing the annual allocation of water share.
    • Similarly, in non-monsoon months, the measures for efficient use of the allocated share typically include minimizing the conventional and operational losses.
    • It includes: avoiding water wastage, restricting water-intensive perennial crops, adopting of Underground Pipelines (UGPL); proper maintenance and operation of canals on a rotational basis.

  • Dihing Patkai is Assam’s 7th National Park

    The Assam government has notified Dihing Patkai as a National Park, four days after creating the 422-sq. km Raimona National Park in western Assam’s Kokrajhar district.

    Dihing Patkai NP

    • Dihing Patkai, in focus a year ago for illegal coal mining in the vicinity, encompasses the erstwhile Dehing Patkai Wildlife Sanctuary, the Jeypore Reserve Forest and the western block of the Upper Dihing Reserve Forest.
    • The 234.26-sq. km Dihing Patkai straddling eastern Assam’s Dibrugarh and Tinsukia districts is a major elephant habitat and 310 species of butterflies have been recorded there.
    • The park has 47 species each of reptiles and mammals, including the tiger and clouded leopard.

    Answer this PYQ in the comment box:

    Q.Which one of the following National Parks has a climate that varies from tropical to subtropical, temperate and arctic?

    (a) Khangchendzonga National Park

    (b) Nandadevi National Park

    (c) Neora Valley National Park

    (d) Namdapha National Park

    NPs in Assam

    • Assam now has the third most National Parks after the 12 in Madhya Pradesh and nine in the Andaman and Nicobar Islands.
    • The five older National Parks in the State are Kaziranga, Manas, Nameri, Orang and Dibru-Saikhowa.
    • Kaziranga and Manas are UNESCO World Heritage Sites.
    • They are also tiger reserves along with Nameri and Orang.

  • Bring genomic sequencing into the pandemic fight

    The article highlights the importance of genomic sequencing in dealing effectively with the pandemic and suggest the scaling up of genomic sequencing.

    Why genomic sequencing is important

    • An effective COVID-19 pandemic response requires, inter alia, keeping track of emerging variants and then conducting further studies about their transmissibility, immune escape and potential to cause severe disease.
    • The success of the United States and the United Kingdom in containing the virus also goes to scaled-up genomic sequencing, tracking the emerging variants and using that evidence for timely actions.
    • The data from genomic sequencing has both policy and operational implications.
    • Our scientific knowledge and understanding about emerging strains is going to be the key to deploy public health interventions (vaccines included) to fight the pandemic.
    • The emerging variants — with early evidence of higher transmissibility, immune escape and breakthrough infections — demand continuous re-thinking and re-strategising of the pandemic response by every country.

    Insufficient genomic sequencing in India

    • Though the procedural steps such as setting up the Indian SARS-CoV2 Genomic Consortia, or INSACOG have been taken, the sequencing has remained at a very low level of a few thousand cases only.
    • The challenge of insufficient genomic sequencing is further compounded by slow pace of data sharing.

    Steps need to be taken

    • 1) Scale-up genomic sequencing: India needs to scale up genomic sequencing, across all States.
    •  More genomic sequencing is needed from large urban agglomerations.
    • A national-level analysis of collated genomic sequencing data should be done on a regular basis and findings shared publicly.
    • 2) Research on vaccine effectiveness: The Indian government needs to invest and support more scientific and operational research on vaccine effectiveness.
    • Rethink vaccine policy: There are early indications of immune escape and reduced vaccine effectiveness against the Delta variant (especially after one-shot).
    • These are the questions that experts need to deliberate and come up with the answers.

    Consider the question “What is genomic sequencing and how it could help in dealing with the Covid-19 pandemic? Suggest the steps India need to take to use genomic sequencing in curbing the pandemic.”

    Conclusion

    As India prepares for the third wave, increasing genomic sequencing and use of scientific evidence for decision making are not a choice but an absolute essential.

  • Consumer Confidence Survey (CCS) by the RBI

    The highlights of the Consumer Confidence Survey (CCS) were recently released by the RBI pointing to some all-time lows.

    Consumer Confidence Survey (CCS)

    • The RBI conducts this survey every couple of months by asking households in 13 major cities — such as Ahmedabad, Bhopal, Guwahati, Patna, Thiruvananthapuram — about their current perceptions and future expectations on a variety of economic variables.
    • These variables include the general economic situation, employment scenario, overall price situation, own income and spending levels.
    • Based on these specific responses, the RBI constructs two indices: the Current Situation Index (CSI) and the Future Expectations Index (FEI).
    • The main variables of the survey are- Economic situation, Employment, Price Level, Income and Spending.
    • The CSI maps how people view their current situation (on income, employment etc.) vis a vis a year ago. The FEI maps how people expect the situation to be (on the same variables) a year from now.
    • By looking at the two variables as well as their past performance, one can learn a lot about how Indians have seen themselves fairing over the years.

    Why does it matter?

    • The CCS is a survey that indicates how optimistic or pessimistic consumers are regarding their expected financial situation.
    • If the consumers are optimistic, spending will be more, whereas if they are not so confident, then their poor consumption pattern may lead to recession.

    What was the main finding?

    • As Chart 1 shows, the CSI has fallen to an all-time low of 48.5 in May.
    • An index value of 100 is crucial here, as it distinguishes between positive and negative sentiment.
    • At 48.5, the current consumer sentiment is more than 50 points adrift from being neutral — the farthest it has ever been. It is important to note that even a year ago, the CSI had hit an all-time low.
    • The FEI moved to the pessimistic territory for the second time since the onset of the pandemic.

    What are the factors responsible for pulling down the CSI and FEI respectively?

    • The RBI states that CSI is being pulled down because of falling consumer sentiments on the “general economic situation” and “employment” scenario.
    • So, on the “general economic situation”, RBI finds that there has been a largely secular decline in both current consumer sentiment and future expectations since PM Modi’s re-election in 2019.
    • What is equally worse is that more people expect the employment situation to worsen a year from now — that is why the one year ahead expectation line is below the zero marks.

    Big takeaways

    • These data layout the tricky challenge facing the Indian economy.
    • If the government’s strategy for fast economic growth — expecting the private sector to lead India out of this trough by investing in new capacities — is to succeed, then consumer spending (especially on non-essentials) has to go up sharply.
    • But for that to happen, household incomes have to go up; and for that to happen, the employment prospects have to brighten; and for that to happen, again, companies have to invest in new capacities.

  • Degradation of Aravalis

    The Supreme Court has ordered the Haryana government to take “all essential measures” to remove encroachments, including some residential constructions, in the ecologically fragile Aravali forest land near a village.

    Aravali Range

    • The Aravali is a mountain range in Northwestern India, running approximately 670 km in a southwest direction, starting near Delhi, passing through southern Haryana and Rajasthan, and ending in Gujarat.
    • The highest peak is Guru Shikhar at 1,722 meters.
    • The Aravalli Range, an eroded stub of ancient mountains, is the oldest range of fold mountains in India.
    • The natural history of the Aravalli Range dates back to times when the Indian Plate was separated from the Eurasian Plate by an ocean.
    • Three major rivers and their tributaries flow from the Aravalli, namely Banas and Sahibi rivers which are tributaries of Yamuna, as well as Luni River which flows into the Rann of Kutch.
    • The Sariska-Delhi leopard wildlife corridor is a 200 km long important biodiversity and wildlife corridor which runs from the Sariska Tiger Reserve in Rajasthan to Delhi Ridge.

    Threats to its existence

    • Ecological degradation in the Aravalli region is in an alarming situation.
    • This is due to the increasing population of humans and cattle, injudicious use of natural resources, unscientific mining, uncontrolled grazing, and felling of trees.

    Answer this PYQ in the comment box:

    Q.With reference to the river Luni, which one of the following statements is correct?

    (a) It fl ows into Gulf of Khambhat

    (b) It fl ows into Gulf of Kuchchh

    (c) It fl ows into Pakistan and merges with a tributary of Indus

    (d) It is lost in the marshy land of the Rann of Kuchchh

  • [pib] Sustainable Public Procurement (SPP)

    On the occasion of World Environment Day, a new product category of Green Room Air Conditioners was launched on the Government e-Marketplace (GeM) under the Sustainable Public Procurement (SPP) program.

    What is Sustainable Public Procurement (SPP)?

    • SPP is a process by which public authorities seek to achieve the appropriate balance between the three pillars of sustainable development – economic, social and environmental – when procuring goods, services or works at all stages of the project.
    • These three pillars are called Triple Bottom Line.
    • The UN Environment Programme (UNEP) has been active in the promotion of Sustainable Public Procurement at national, regional and global levels since 2005.

    Why need SPP?

    • Public procurement spend in India is nearly 15-20% of its GDP.
    • Introducing SPP to this huge quantum of government procurement will further complement the country’s climate policy objectives.
    • This innovation can provide financial savings for government buyers and will meet evolving environmental challenges by moving towards a circular economy.

    Back2Basics: Government E-Marketplace

    • The GeM is a one-stop National Public Procurement Portal to facilitate online procurement of common use Goods & Services required by various Government Departments / Organizations / PSUs.
    • It was launched in 2016 to bring transparency and efficiency in the government buying process.
    • GEM aims to enhance transparency, efficiency and speed in public procurement.
    • It is a completely paperless, cashless and system driven e-marketplace that enables procurement of common use goods and services with minimal human interface.
    • It provides the tools of e-bidding, reverse e-auction and demand aggregation to facilitate the government users to achieve the best value for their money.
    • The purchases through GeM by Government users have been authorized and made mandatory by the Ministry of Finance by adding a new Rule No. 149 in the General Financial Rules, 2017.
    • It has been developed by Directorate General of Supplies and Disposals (Ministry of Commerce and Industry) with technical support of National e-governance Division (MEITy).

  • Supersonic flying: benefits and concerns

    The United Airlines of USA has announced it was ordering 15 Overture planes with the ability to travel at Mach 1.7, faster than the speed of sound, from the Denver-based startup Boom.

    What is a Supersonic Plane?

    • Supersonic aircraft are planes that can fly faster than the speed of sound.
    • The technology for supersonic flights is actually over 70 years old, but only recently has been used for commercial flying.
    • Before 1976, when the first commercial supersonic flight took off, the planes were used entirely for military purposes.
    • Usually, supersonic planes can travel at the speed of around 900 kmph, twice the speed of normal aircraft.

    What about the Overture supersonic plane?

    • The Overture aircraft would travel at the speed of Mach 1.7 or 1,805 kmph with a range of 4,250 nautical miles. In a single flight, it could carry 65 to 88 passengers and reach an altitude of 60,000 ft.
    • The company has expressed confidence in getting an “experimental” jet ready by 2022, start rolling out aircraft by 2025 and eventually open them for passengers by 2029.
    • It claims to build on Concorde’s legacy through faster, more efficient and sustainable technology.

    Challenges with supersonic planes

    Flying passengers at a supersonic speed is accompanied by a whole set of challenges.

    • Firstly, the costs of making “sustainable” supersonic planes are extremely high.
    • The very nature of its flying — using excessive amounts of fuel and energy — is likely to have high environmental costs.
    • Despite the use of sustainable fuels, greenhouse gas emissions are not nullified.
    • Secondly, the very speed of the planes results in producing excessive amounts of noise pollution in the environment.
    • The “Sonic Boom” created by these planes feels like an explosion to the human ear.
    • This, thus, limits where and when the supersonic planes can fly. They can only reach their actual speed until they are far enough from people and completely over the ocean.
    • Lastly, it would not be economically feasible for everyone. Only the very rich can afford supersonic planes, as a ticket is likely to be way costlier than a first-class ticket of a regular plane.

  • Kinnaur Hydroelectric Project

    The people of Kinnaur, Himachal Pradesh have been protesting against the proposed 804-megawatt Jangi Thopan Powari hydroelectricity project (JTP HEP) over the Satluj since April 2021.

    Kinnaur Hydroelectric Project

    • The run-of-the-river (ROR) project envisages the construction of a concrete gravity dam of ±88 metres high above the deepest foundation level across river Satluj near Jangi village.
    • The diversion of water will involve the construction of a 12-km-long tunnel.
    • The tentative land requirement for the project is 295.93 hectares, out of which 270.43 ha is forest land and 25.5 ha is private.
    • Construction of the dam will result in the submergence of about 156.2917 ha of land, out of which 143.2093 ha is forest land and 13.0824 ha is private.

    Answer this PYQ in the comment box:

    Q.What is common to the places known as Aliyar, Isapur and Kangsabati? (CSP 2017)

    (a) Recently discovered uranium deposits

    (b) Tropical rain forests

    (c) Underground cave systems

    (d) Water reservoirs

    Why are people protesting?

    • Kinnaur district is mainly marked by its cold desert, tribal population, fragile topography, rich and diverse culture, apple orchards, off-season vegetables and the Satluj river.
    • The river has been dammed at multiple places along the valley to create an additional feature to Kinnaur’s identity as Himachal’s hydropower hub, which locals believe is a malediction.
    • An integral part of the old Hindustan-Tibetan Route, Jangram Valley, lies on the right bank of the Satluj river in the district.
    • This is not the first time that the cold desert has witnessed such a contestation.

    Sutlej is oveloaded

    • The Satluj has taken the biggest load of state hydropower ambition since the early 90s. Out of the total installed capacity, 56 per cent (5720MW) is done in the Satluj basin.
    • According to the State of the Rivers of Himachal Pradesh Report 2017:
    • In other words, 92 per cent of the river will either be flowing through tunnels or will be part of reservoirs.
    • Such a cumulative scale of disturbance with the river’s natural state drastically impacted the life, livelihood and ecology in the Satluj basin.

    Why need hydroelectric projects?

    • Hydropower is a necessary choice for the nation’s clean energy transition.
    • In purely technological terms, hydropower projects are an engineering marvel and generate clean, reliable electricity.
    • HEPs are not viable just from the local livelihood and environmental point of view but they have also failed on the financial viability side.