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GS Paper: GS3

  • DRDO tests Akash Prime Missile

    The Defence Research and Development Organisation (DRDO) has successfully tested a new version of Akash Surface to Air missile Akash Prime from the Integrated Test Range at Chandipur, Odisha.

    About Akash Missile System

    • Akash is a medium-range mobile surface-to-air missile (SAM) system.
    • It is developed by the Defence Research and Development Organisation (DRDO) and produced by Bharat Dynamics Limited (BDL).
    • It can target aircraft up to 50–80 km away, at altitudes up to 18,000 m.
    • It has the capability to neutralise aerial targets like fighter jets, cruise missiles and air-to-surface missiles as well as ballistic missiles.
    • It is in operational service with the Indian Army and the Indian Air Force.

    Upgrade in Akash Prime

    • In comparison to the existing Akash System, Akash Prime is equipped with an indigenous active Radio Frequency (RF) seeker for improved accuracy.
    • Other improvements also ensure more reliable performance under low temperature environment at higher altitudes.

     

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  • MSP is not the way to increase farmers’ income

    Context

    The recently released data for 2018-19 Situation Assessment Survey (SAS) of agricultural households paints a bleak picture for doubling farmers’ income.

    Background

    • Prime Minister Narendra Modi set out an ambitious target to double farmers’ incomes by 2022-23.
    • The Ashok Dalwai Committee made it clear that the target of doubling farmers’ incomes was in real terms.
    •  Required rate: The committee clearly stated that a growth rate of 10.4 per cent per annum would be required to double farmers’ real income by 2022-23.
    • The goal was to be achieved over seven years with the base year of 2015-16.
    • According to an estimate of farmers’ income for 2015-16 by NABARD in 2016-17, the average monthly income of farmers for 2015-16 was Rs 8,931.
    • However, unless a similar survey is conducted in 2022-23, we won’t really know what happened to the target of doubling farmers’ real income.

    Determining the growth rate of farmers income

    • As per Situation Assessment Survey (SAS) of agricultural households for 2018-19, an average agricultural household earned a monthly income of Rs 10,218 in 2018-19 (July-June) in nominal terms.
    • We have a similar SAS for 2012-13, when the nominal income was Rs 6,426.
    • In nominal terms, the compound annual growth rate (CAGR) turns out to be 8 per cent between 2012-13 to 2018-19.
    • Choice of deflator: If one deflates nominal incomes by using CPI-AL (consumer price index for agricultural labour), which should be the logical choice, then the CAGR turns out to be just 3 per cent.
    • If one uses WPI (wholesale price index of all commodities), the CAGR in real incomes turns out to be 6.1 per cent.
    • This vast difference is just due to the choice of deflator.
    •  However, there is another SAS that the NSO conducted for 2002-03.
    • When one compares CAGR in farmers’ real income (deflated by CPI-AL) over 2002-03 to 2018-19, it turns out to be 3.4 per cent (and 5.3 per cent if deflated by WPI).
    • A better method would have been to look at average annual growth rates (AAGR), if yearly data was available.
    • The AAGR for agri-GDP is available and at an all-India level, between 2002-03 to 2018-19, it turns out to be 3.3 per cent.

    Policy message about farmers income from SASs

    • One, the share of income from rearing animals (this includes fish) has gone up dramatically from 4.3 per cent in 2002-03 to 15.7 per cent.
    • Two, the share of income from the cultivation of crops has decreased from 45.8 per cent to 37.7 per cent.
    • Three, the share of wages and salaries has gone up from 38.7 per cent to 40.3 per cent.
    • Four, the share of income coming from non-farm business has come down from 11.2 per cent to 6.4 per cent.

    Way forward

    • Survey results indicates that the scope for augmenting farmers’ incomes is going to be more and from rearing animals (including fisheries).
    • There is no minimum support price (MSP) for products of animal husbandry or fisheries and no procurement by the government.
    •  It is demand-driven, and much of its marketing takes place outside APMC mandis.
    • This is the trend that will get reinforced in the years to come as incomes rise and diets diversify.
    • Those who advocate raising the MSP of grains and government procurement, irrespective of increasing grain stocks to more than double the buffer stocking norms, are living in the past — and advocating a very expensive food system.
    • That will fail sooner or later.
    • Wisdom lies in investing more in animal husbandry (including fisheries) and fruits and vegetables, which are more nutritious.
    • The best way to invest is to incentivise the private sector to build efficient value chains based on a cluster approach.

    Consider the question “Why the role of MSP in increasing the farmers’ income has been repeatedly questioned? What are the alternatives to achieve the doubling of farmers’ income?”

    Conclusion

    Too much focus on increasing MSP to increase farmers’ income is not helping the cause. What we need is an investment in animal husbandry (including fisheries) and fruits and vegetables.

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  • What is a Cartel?

    Last week, the Competition Commission of India (CCI) has slapped a penalty on a cartel of beer companies for hiking the prices.

    What is a Cartel?

    • According to CCI, a “Cartel includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services”.
    • The International Competition Network, which is a global body dedicated to enforcing competition law, has a simpler definition.
    • The three common components of a cartel are:
    1. an agreement
    2. between competitors
    3. to restrict competition

    What is Cartelization?

    • Cartelization is when enterprises collude to fix prices, indulge in bid rigging, or share customers, etc.
    • But when prices are controlled by the government under a law, that is not cartelization.
    • The Competition Act contains strong provisions against cartels.
    • It also has the leniency provision to incentivise a party to a cartel to break away and report to the Commission, and thereby expect total or partial leniency.
    • This has proved a highly effective tool against cartels worldwide.
    • Cartels almost invariably involve secret conspiracies.

    How do they work?

    • According to ICN, four categories of conduct are commonly identified across jurisdictions (countries). These are:
    1. price-fixing
    2. output restrictions
    3. market allocation and
    4. bid-rigging
    • In sum, participants in hard-core cartels agree to insulate themselves from the rigours of a competitive marketplace, substituting cooperation for competition.

    How do cartels hurt?

    • While it may be difficult to accurately quantify the ill-effects of cartels, they not only directly hurt the consumers but also, indirectly, undermine overall economic efficiency and innovations.
    • A successful cartel raises the price above the competitive level and reduces output.
    • Consumers choose either not to pay the higher price for some or all of the cartelised product that they desire, thus forgoing the product, or they pay the cartel price and thereby unknowingly transfer wealth to the cartel operators.

    In other words, by artificially holding back the supply or raising prices in a coordinated manner, companies either force some consumers out of the market by making the commodity (say, beer) more scarce or by earning profits that free competition would not have allowed.

    Are there provisions in the Competition Act against monopolistic prices?

    • There are provisions in the Competition Act against abuse of dominance.
    • One of the abuses is when a dominant enterprise “directly or indirectly imposes unfair or discriminatory prices” in purchase or sale of goods or services.
    • Thus, excessive pricing by a dominant enterprise could, in certain conditions, be regarded as an abuse and, therefore, subject to investigation by the Competition Commission if it were fully functional.
    • However, it should be understood that where pricing is a result of normal supply and demand, the Competition Commission may have no role.

    How might cartels be worse than monopolies?

    • It is generally well understood that monopolies are bad for both individual consumer interest as well as the society at large.
    • That’s because a monopolist completely dominates the concerned market and, more often than not, abuses this dominance either in the form of charging higher than warranted prices or by providing lower than the warranted quality of the good or service in question.

    How to stop the spread of cartelisation?

    • Cartels are not easy to detect and identify.
    • As such, experts often suggest providing a strong deterrence to those cartels that are found guilty of being one.
    • Typically this takes the form of a monetary penalty that exceeds the gains amassed by the cartel.
    • However, it must also be pointed out that it is not always easy to ascertain the exact gains from cartelisation.
    • In fact, the threat of stringent penalties can be used in conjunction with providing leniency — as was done in the beer case.

    Try this PYQ:

    One of the implications of equality in society is the absence of:

    (a) Privileges

    (b) Restraints

    (c) Competition

    (d) Ideology

     

    [wpdiscuz-feedback id=”9yl0ox4504″ question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

    Back2Basics: Competition Commission of India (CCI)

    • The CCI is the chief national competition regulator in India.
    • It is a statutory body within the Ministry of Corporate Affairs.
    • It is responsible for enforcing The Competition Act, 2002 in order to promote competition and prevent activities that have an appreciable adverse effect on competition in India.

     

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  • What is Dark Energy?

    Last week, an international team of researchers has made the first direct detection of dark energy.

    About the Project

    • The XENON1T experiment is the world’s most sensitive dark matter experiment and was operated deep underground at the INFN Laboratori Nazionali del Gran Sasso in Italy.
    • The finding also suggests that experiments like XENON1T, which are designed to detect dark matter, could also be used to detect dark energy.

    What is Dark Energy?

    • Dark energy is an unknown form of energy that affects the universe on the largest scales.
    • The first observational evidence for its existence came from measurements of supernovae, which showed that the universe does not expand at a constant rate; rather, the expansion of the universe is accelerating.
    • Prior to these observations, it was thought that all forms of matter and energy in the universe would only cause the expansion to slow down over time.
    • Measurements of the cosmic microwave background suggest the universe began in a hot Big Bang, from which general relativity explains its evolution and the subsequent large-scale motion.
    • Without introducing a new form of energy, there was no way to explain how an accelerating universe could be measured.

    Does it exist?

    • Since the 1990s, dark energy has been the most accepted premise to account for the accelerated expansion.
    • As of 2021, there are active areas of cosmology research aimed at understanding the fundamental nature of dark energy.

    Dark energy Vs Dark matter

    • Everything we see – the planets, moons, massive galaxies, you, me, this website – makes up less than 5% of the universe.
    • About 27% is dark matter and 68% is dark energy.
    • While dark matter attracts and holds galaxies together, dark energy repels and causes the expansion of our universe.

     

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  • GI in news: Goa Cashew Feni

    The Goa government’s Feni Policy 2021 has paved the way to take the state’s ‘heritage drink’ forward.

    Sounds strange but an alcoholic beverage has been GI tagged!

    Goa Cashew Feni

    • Feni is a spirit produced in Goa, India.
    • The two most popular types of feni are cashew feni and toddy palm feni, depending on the original ingredient; however, many other varieties are sold.
    • Feni distilleries are usually family-run affairs, and the history of the drink goes back to at least 1585.
    • The feni consumed in South Goa is generally of higher alcohol content (43-45% abv) as compared to the feni produced in North Goa.
    • Commercially packaged feni is available at 42.8% abv.
    • Cashew feni was awarded Geographical Indication registration in 2009 as a speciality alcoholic beverage from Goa.
    • It has been described as a colourless, clear liquid that when matured in wooden barrels develops golden brown tint.

    Must read

    GI Tags in News

     

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  • IIT-B develops One-time Programmable Memory

    IIT Bombay researchers have developed a “memory technology” that can, in principle, revolutionise Indian industry and the many applications that need semiconductor chips, such as in the defence sector, automobiles and future aspirations in cell phone manufacturing.

    One-time Programmable Memory

    • Hard disks, flash memory, etc, are examples of memory technology.
    • There is also another form of memory called the one-time programmable memory (OTP) where the memory is written once, stored for a lifetime, and retrieved and used many times.
    • This finds varied uses, one of which is in correcting faulty chips that have been mass produced for specific applications.

    Its utility

    • For instance, think of a chip that helps read off the temperature.
    • Due to a manufacturing defect, the chip may read 100 degree Celsius as 101 degree Celsius.
    • This “offset” of 1 degree may be corrected by storing the error correction parameter in the OTP memory.
    • This is done uniquely for each chip and once stored, the memory corrects the chip’s output for its lifetime.
    • OTP memories are also used for other purposes, mainly three: chip identity, secure information storage and chip calibration for error correction.

    How does it work?

    • To store the correction value, the researchers used eight memory cells, each of which would store one “bit” (that is a value of zero or one).
    • Each of the memory cells consist of an ultrathin silicon dioxide layer which is 10-15 atomic layers thick.
    • This is deposited uniformly over a dinner plate–sized eight-inch silicon wafer to form millions of nanoscale capacitors.
    • The pristine silicon dioxide layer is insulating, passing a very low current [which in digital electronics is read as a “0”].
    • A nanoscale lightning is generated of 3.3 volts to blow the capacitor, leading to a short circuit that produced high current [this is a “1”].
    • Thus, the OTP memory remembers either the “0” state or “1” state through its lifetime.

    Benefits offered

    • The group has successfully demonstrated CMOS 180-nanometre–based, production-ready, eight-bit memory technology.
    • These include successful operation between minus 40 degrees C to 125 degrees C and reliability to ensure excess of 95% yield on eight-bit memories.

    Significance

    • A large fraction of manufactured chips may need to be discarded for faults that can be corrected using this technology.
    • This technology is the first indigenous semiconductor memory technology adoption to manufacturing at 180-nanometre node.
    • Thus, this is a major national milestone for semiconductor innovation.

     

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  • Risks involved in Indian tech unicorns gaining at China’s expense

    Context

    Investment firms with a reputation for tracking and hunting unicorns — startups with billion-dollar-plus valuations are shifting their attention to India from China. While this cannot be good for China, the question remains over whether or not it is good for India either.

    China’s crackdown on tech industry

    • Beijing has decided to crack down on the tech industry, wiping out $1.5 trillion in market value.
    •  The crackdown began with the abrupt suspension of the much-anticipated initial public offering (IPO) of Ant Group last November.
    •  China’s regulators stopped the ride-hailing company, Didi Chuxing, from accepting new users, as soon as it went public on the New York Stock Exchange.
    • There have been sweeping industry-wide changes, from anti-monopoly legislation to new rules governing data collection and use.
    • All of this has investors spooked.

    How India can benefit from China’s crackdown on the tech industry?

    • Due to China’s crackdown, for the first time since 2013, the value of venture deals in India surpassed that of China.
    • Converging factors in India: If this keeps up, India will experience a veritable blessing of unicorns, thanks not only to the fact that the money fleeing China needs refuge, but to many converging forces within India itself.
    • India is the world’s second largest digital market.
    • The use of the United Payment Interface has made digital payments easier in a society that was — and still is — so tied to cash.
    • The pandemic lockdowns have driven an unusually large proportion of that digital population to spend an unusually large amount of time and spend money online.
    • This means that in a very short time, the need to serve this digital population has exploded.
    • The Chinese crackdown could not have come at a more opportune time.
    • Many startups are in a hurry to capitalise on the boom with many investors looking to capitalise them.

    Concern: the risk of tech-bubble

    • When investors rush in to seek refuge because they are fleeing risk elsewhere, even if the refuge looks promising, they can contribute to a self-reinforcing cycle that ends up destroying the refuge.
    • Eager to get a piece of the action, each investor may over-value a company, far exceeding what is justifiable based on market fundamentals.
    • The stampede builds and soon you have the makings of a tech bubble.

    Way forward for investors

    • Instead of reflexively chasing the next shiny startup in India, investors ought to ask a few questions.
    • Do the startups and the markets they serve have the capacity to scale up and do they justify sticking with them for a long period?
    • Has the Indian initial public offerings market really proven itself?
    • Are there enough large corporations that might buy these startups?
    • Can the under-investment in essentials, such as education, health and job market readiness, clog the talent pipeline?
    • Can the Indian government be trusted not to borrow a page from the government it would like to emulate — the Chinese state — and attempt a crackdown of its own?

    Consider the question “Indian tech start-ups are dealing with the gush of capital owing to the convergence of certain factors. Examine these factors and also the concerns with such influx of capital.”

    Conclusion

    India desperately needs patient capital, skilled talent and appropriate technology to solve the country’s numerous fundamental problems laid bare by the pandemic. The last thing India can afford is a bubble that bursts and for all three to take flight and seek refuge in yet another country because no one wants to pick up the pieces of a popped bubble.

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    Back2Basics: IPO

    • An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance.
    • An IPO allows a company to raise capital from public investors.
    • The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes a share premium for current private investors.
    • Meanwhile, it also allows public investors to participate in the offering.

  • Chang’e-5 Lunar Mission

    The Europlanet Society has released details from the samples brought back by China’s Chang’e-5 Lunar Mission in December 2020.

    Chang’e-5 Lunar Mission

    • The Chang’e-5 lunar mission delivered to Earth nearly 2 kg of rocky fragments and dust from the Moon.
    • It had landed on an area of the Moon (the ‘far side’) not sampled by the American or Soviet missions nearly 50 years ago.
    • It thus retrieved fragments of the youngest lunar rocks ever brought back for analysis in laboratories on Earth.
    • The rocks are also different from those returned decades ago.

    Key findings

    • 90% of the materials collected by Chang’e-5 likely derive from the landing site and its immediate surroundings, which are of a type termed ‘mare basalts’.
    • These volcanic rocks are visible to us as the darker grey areas that spilled over much of the nearside of the Moon as ancient eruptions of lava.
    • Yet 10% percent of the fragments have distinctly different, ‘exotic’ chemical compositions.

    What are the exotic compositions?

    • The distinct 10% fragments may preserve records of other parts of the lunar surface as well as hints of the types of space rocks that have impacted the Moon’s surface.
    • Researchers have looked at the potential sources of beads of rapidly cooled glassy material.
    • They have traced these glassy droplets to extinct volcanic vents known as ‘Rima Mairan’ and ‘Rima Sharp’.
    • These fragments could give insights into past episodes of energetic, fountain-like volcanic activity on the Moon.

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  • Service Exports from India Scheme (SEIS)

    The Directorate General of Foreign Trade has imposed a cap on the total entitlement under the Services Exports from India Scheme (SEIS) at Rs 5 crore per exporter for shipments done in 2019-20 (FY20). The move is expected to benefit small businesses in the services sector.

    About SEIS

    • Service Exports from India Scheme (SEIS) aims to promote export of services from India by providing duty scrip credit for eligible exports.
    • Under the scheme, service providers, located in India, would be rewarded under the SEIS scheme, for all eligible export of services from India.
    • SEIS was earlier termed as Served from India Scheme (SFIS).

    Eligibility

    • Service Providers of notified services, located in India are eligible for the Service Exports from India Scheme.
    • To be eligible, a service provider (Company / LLP / Partnership Firm) should have a minimum net free foreign exchange earnings of USD 15000 in the preceding financial year to be eligible for duty credit scrips.
    • For proprietorships or individual service providers, minimum net foreign exchange earnings of USD10,000 in the preceding financial year is required to be eligible for the scheme.
    • Also, in order to claim reward under the SEIS scheme, the service provider shall have to have an active Import Export Code (IE Code) at the time of rendering such services for which rewards are claimed.

    Back2Basics: Merchandise Exports from India Scheme (MEIS)

    • MEIS was launched with an objective to enhance the export of notified goods manufactured in a country.
    • This scheme came into effect on 1 April 2015 through the Foreign Trade Policy and was in existence till 2020.
    • It intended to incentivize exports of goods manufactured in India or produced in India.
    • The incentives were for goods widely exported from India, industries producing or manufacturing such goods with a view to making Indian exports competitive.
    • The MEIS covered almost 5000 goods notified for the purpose of the scheme.

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  • [pib] International Hydropower Association (IHA)

    NHPC’s 510 MW Teesta-V Power Station located in the Himalayan State of Sikkim has been conferred with the prestigious Blue Planet Prize by International Hydropower Association (IHA).

    Teesta-V Power Station

    • The power station has been built, owned and being operated by NHPC.
    • The award has been conferred for its sustainability assessment undertaken by Hydropower Sustainability Assessment Protocol (HSAP) of IHA.

    About IHA

    • IHA is a London based non-profit membership association operating in 120 countries.
    • The IHA membership includes leading hydropower owners and operators, developers, designers, suppliers and consultants.
    • The IHA Blue Planet Prize is awarded to hydropower projects that demonstrate excellence in sustainable development.
    • The Hydropower Sustainability Assessment Protocol (HSAP) is the leading international tool for measuring the sustainability of hydropower projects.
    • It offers a way to benchmark the performance of a hydropower project against a comprehensive range of environmental, social, technical and governance criteria.

    Back2Basics: Teesta River

    • Teesta River is a 414 km long river that rises in the Pauhunri Mountain of eastern Himalayas, flows through the Indian states of Sikkim and West Bengal through Bangladesh and enters the Bay of Bengal.
    • It drains an area of 12,540 sq km.
    • In India, it flows through North Sikkim, East Sikkim, Pakyong District, Kalimpong district, Darjeeling District, Jalpaiguri District, Cooch Behar districts and the cities of Rangpo, Jalpaiguri and Mekhliganj.
    • It joins River Brahmaputra at Fulchhari in Bangladesh. 315 km portion of the river lies in India and rest in Bangladesh.
    • Teesta is the largest river of Sikkim and the second largest river of West Bengal after Ganges.

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