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GS Paper: GS3

  • Corporates need commitment to sustainability and community alongside pursuit of profit

    The article calls the corporates to adopt new capitalism in the aftermath of the pandemic which involves alongside the profit motives the commitment to giving back.

    Capitalism in the aftermath of Covid-19

    • The 2008 crisis was caused by the excesses of global finance, whereas the 2020 economic crisis was caused by a pandemic that spilled over to the economy.
    • While the current pandemic is the first of its kind in nine decades, the dire economic consequences are very similar to that global financial crisis just a decade ago.
    • What is also similar is the policy response that has followed both the 2008 and 2020 crises — the Keynesian prescription of the government stimulating a depressed economy by using monetary and fiscal instruments.
    • Cheap liquidity preserves the wealth of the asset-owning classes even as the real economy stalls.
    •  However, over-stretched governments head towards a debt/fiscal crisis which eventually forces austerity, hitting those dependent on government handouts.
    • It is this inequality in outcomes that is unlikely to happen this time.
    • Already, the G-7 has pledged to maintain a minimum level of corporation tax.
    • There have also been calls for additional taxation, particularly on the assets of the wealthy.

    What corporates can do

    • Instead of waiting for governments to react under popular pressure, corporates must themselves set out on a different path.
    • Covid-19 has brought home the fragility of human life and the deeply interconnected fate of humanity.
    • Outside of the pandemic, there is no better example of this than climate change which, if left uncontrolled, could devastate the world.
    • While governments negotiate, corporates must respond with voluntary commitments to mitigate climate change.
    • Climate change mitigation should be at the core of all business models going forward.
    • In addition, promoters need to come forward to pledge more of their wealth towards philanthropy.
    •  India implemented the concept of corporate social responsibility as part of its legal framework a decade ago.

    Investor pressure for action towards environment

    • The ability of the private sector to work for the greater good seems implausible.
    • But it is already happening — not because of government regulation, but because of investor pressure.
    • Progressive actions towards the environment and society are being rewarded by investors.
    • The absence of such progressive actions is being penalised.
    • Market forces are, after all, embedded in society.
    • They are perfectly capable of moving beyond profit.

    Threat of new-age tech capitalism

    • The real challenge for society, government and capitalists comes from the new-age tech capitalists.
    • They are the new monopolists or oligopolists who don’t exercise their power over society by charging a supernormal price.
    • In fact, a lot of them provide goods and services at hefty discounts.
    • Instead, what they seek is to control information and influence choices.
    • Many of the promoters of such enterprises are philanthropists but society and governments have a different set of concerns on how they exercise power.

    Conclusion

    An imperfect world is passing through a perfect storm. There will be big changes on the other side. Capitalism will survive. It could thrive by choosing its own pathway or it could stumble along under the hammer of big government fuelled by populist backlash.

  • How green are India’s agri-exports?

    The article highlights the unsustainability of agri-exports owing to their water-intensive nature and subsidies provided in their production.

    India’s agri-exports

    • Agri-exports touched $41.8 billion in FY 2020-21, registering a growth of 18 per cent over the previous year.
    • Amongst the various agri-commodity exports, rice ranks first with 17.7 million tonnes valued at $8.8 billion, roughly 21 per cent of the total value of agri-exports.
    • It is followed by marine products ($6 billion), spices ($4 billion), bovine (buffalo) meat ($3.2 billion) and sugar ($2.8 billion).

    Trend analysis of agri-exports

    • During the last seven years, agri-exports have remained lower than the level reached in FY2013-14 ($43.3 billion).
    • That was when the highest agri-trade surplus (exports minus imports) was generated ($27.8 billion).
    • That was also when Indian agriculture was most globally integrated, with agri-trade (exports plus imports) touching 20 per cent of the agri-GDP.
    • It has slid to 13.5 per cent by FY2020-21, indicating India is becoming less globally competitive in exports and more protectionist in imports, presumably in the name of Atmanirbhar Bharat.
    • It is high time to review current agri-trade policies and accompanying tariff structures.

    Why sustainability of agri-exports is a concern?

    • From a strategic point of view, however, one must ask whether this growth rate can be sustained over a longer period, and the implications it has for Indian agriculture.
    • Water consumption: India is a water-stressed country with per capita water availability of 1,544 cubic metres in 2011, down from 5,178 cubic metres in 1951.
    • It is well known that a kg of sugar has a virtual water intake of about 2,000 litres.
    • In 2020-21, India exported 7.5 million tonnes of sugar, implying that at least 15 billion cubic metres of water was exported through sugar alone.
    • Rice, needs around 3,000 to 5,000 litres of water for irrigating a kg, depending upon topography.
    • Also, rice cultivation contributes to more than 18 per cent of the GHG emission generated from agriculture.
    • Subsidies: Power and fertiliser subsidies account for about 15 per cent of its value in states like Punjab and Haryana.
    • If these subsidies are withdrawn, rice will not be as preferred a crop with farmers as it is today.

    Way forward

    •  Farming practices such as alternate wetting drying (AWD), direct-seeded rice (DSR) and micro-irrigation will have to be taken up on a war footing.
    • Farmers may be incentivised and rewarded to save water, switch from paddy and sugar to other less water guzzler crops, and reduce the carbon footprint.
    • It is high time that policymakers revisit the entire gamut of rice and sugar systems from their MSP/FRP to their production in an environmentally sustainable manner.
    • At least in the case of rice, procurement will have to be limited to the needs of PDS, and within PDS, it is high time to introduce the option of direct cash transfers.

    Consider the question “Rice and sugar forms the part of India’s agri-basket. However, there are concerns over their sustainability. What are the reasons for concerns and suggest the measure to deal with these concerns” 

    Conclusion

    To maintain the sustainability of the agri-exports, crops must be produced efficiently and with minimal subsidies. The government needs to take steps to ensure that with rice and sugar.

  • What is Gain-of-Function Research?

    With the re-emergence of the Wuhan lab-leak origin theory, questions are also being raised on what gain-of-function research is, and whether the benefits of conducting such research outweigh the risks of pathogens escaping from labs.

    What is gain-of-function research?

    • In virology, gain-of-function research involves deliberately altering an organism in the lab, altering a gene, or introducing a mutation in a pathogen to study its transmissibility, virulence and immunogenicity.
    • It is believed that this allows researchers to study potential therapies, vaccine possibilities and ways to control the disease better in future.
    • Gain-of-function research involves manipulations that make certain pathogenic microbes more deadly or more transmissible.
    • This is done by genetically engineering the virus and by allowing them to grow in different growth mediums, a technique called as serial passage.

    Antithesis to this theory

    • There is also ‘loss-of-function’ research, which involves inactivating mutations, resulting in a significant loss of original function, or no function to the pathogen.
    • When mutations occur, they alter the structure of the virus that is being studied, resulting in altered functions. Some of these significant mutations might weaken the virus or enhance its function.

    Associated risks

    • Some forms of gain-of-function research reportedly carry inherent biosafety and biosecurity risks and are thus referred to as ‘dual-use research of concern’ (DURC).
    • This indicates that while the research may result in benefits for humanity, there is also the potential to cause harm — accidental or deliberate escape of these altered pathogens from labs may cause even pandemics.

    Essential component of vaccine development

    • The current medical countermeasures are often insufficient largely because of resistance mechanisms that lead to ‘escape mutants’, i.e., drug-resistant strains.
    • There is, hence, a continual need to develop new antiviral drugs and additional options, such as immunotherapy, based on neutralizing monoclonal antibodies.
    • Ultimately, gain-of-function studies, which enhance viral yield and immunogenicity, are required for vaccine development.

    What is the situation in India?

    • In India, all activities related to genetically engineered organisms or cells and hazardous microorganisms and products are regulated as per the “Manufacture, Use, Import, Export and Storage of Hazardous Microorganisms/Genetically Engineered Organisms or Cells Rules, 1989”.
    • Last year, the Department of Biotechnology issued guidelines for the establishment of containment facilities, called ‘Biosafety labs’, at levels two and three.
    • The notification provides operational guidance on the containment of biohazards and levels of biosafety that all institutions involved in research, development and handling of these microorganisms must comply with.

    Should research continue?

    • Scientists have differing opinions on the issue, particularly since the emergence of the COVID-19 pandemic.
    • While those on the side of gain-of-function research say that it makes science and governments battle-ready for future pandemics, there have been a rising number of calls to suspend such research.
    • Proponents of gain-of-function research believe that “nature is the ultimate bioterrorist and we need to do all we can to stay one step ahead”.
    • Some researchers thinks it is time to stop such research.
    • Science policymakers “must wrestle with defining the rare instances in which the benefits of experiments that enhance a virus’s capacity to survive and flourish in human hosts outweigh any risks.

  • Species in news: Rare Black Softshell Turtle (Nilssonia nigricans)

    A major temple in Assam has signed a MoU with NGOs, the Assam State Zoo-cum-Botanical Garden and the Kamrup district administration for the long-term conservation of the rare freshwater black softshell turtle or the Nilssonia nigricans.

    Two years back, one species from our newscard: Species in news: Hump-backed Mahseer made it into the CSP 2019.  The ‘Puntius Sanctus’ fish in the newscard creates such a vibe yet again.

    A stand-alone species being mentioned in the news for the first time (and that too from Southern India) find their way into the prelims. Make special note here.

     

    Q.Consider the following pairs

    Wildlife Naturally found in
    1. Blue-finned Mahseer Cauvery River
    2. Irrawaddy Dolphin Chambal River
    3. Rusty-spotted Cat Eastern Ghats

    Which of the pairs given correctly matched? (CSP 2019)

    (a) 1 and 2 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

     

    Nilssonia nigricans

    • Until sightings along the Brahmaputra’s drainage in Assam, the black softshell turtle was thought to be “extinct in the wild”.
    • It was confined only to ponds of temples in northeastern India and Bangladesh.
    • The International Union for Conservation of Nature had in 2021 listed the turtle as “critically endangered”.
    • But it does not enjoy legal protection under the Indian Wildlife (Protection) Act of 1972, although it has traditionally been hunted for its meat and cartilage, traded in regional and international markets.

  • Green Hydrogen

    India is all set to host a two-day summit on Green Hydrogen initiatives involving the BRICS nations.

    What is Green Hydrogen?

    • Hydrogen, when produced by electrolysis using renewable energy is known as Green Hydrogen which has no carbon footprint.
    • This gives hydrogen the edge over other fuels to unlock various avenues of green usage.
    • However, challenges lie in terms of technology, efficiency, financial viability, and scaling up which the summit will aim to address.

    Answer this PYQ in the comment box:

    Q.With reference to ‘fuel cells’ in which hydrogen-rich fuel and oxygen are used to generate electricity, consider the following statements:

    1. If pure hydrogen is used as a fuel, the fuel cell emits heat and water as by products.
    2. Fuel cells can be used for powering buildings and not for small devices like laptop computers.
    3. Fuel cells produce electricity in the form of Alternating Current (AC).

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

    Applications of green hydrogen

    • Green hydrogen has innumerable applications.
    • Green Chemicals like ammonia and methanol can directly be utilized in existing applications like fertilizers, mobility, power, chemicals, shipping among others.
    • Green Hydrogen blending up to 10 percent may be adopted in CGD networks to gain widespread acceptance.
    • Further scaling up with greening of hard to abate sectors like steel and cement through hydrogen is to be explored.
    • Many countries have brought out their strategies and defined targets and roadmaps based on their resources and strengths.

    Back2Basics: BRICS Countries

    • BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa.
    • To be clear, BRICS was not invented by any of its members.
    • In 2001, Goldman Sachs’ Jim O’Neill authored a paper called “Building Better Global Economic BRICs”, pointing out that future GDP growth in the world would come from China, India, Russia and Brazil.
    • Significantly, the paper didn’t recommend a separate grouping for them, but made the case that the G-7 grouping, made up of the world’s most industrialized, and essentially Western countries, should include them.
    • O’Neill also suggested that the G-7 group needed revamping after the introduction of a common currency for Europe, the euro, in 1999.
    • In 2003, Goldman Sachs wrote another paper, “Dreaming with BRICs: Path to 2050”, predicting that the global map would significantly change due to these four emerging economies.
    • In 2006, leaders of the BRIC countries met on the margins of a G-8 (now called G-7) summit in St. Petersburg, Russia, and BRIC was formalized that year.

  • What the G7 message on net-zero emissions means for India

    The article highlights G-7 countries’ emphasis on adoption of net-zero emission target and its implications for India.

    Shifting responsibility to developing countries

    • The Cornwall G7 summit sought to re-establish a common purpose among the richest democracies of the world.
    • The G7 agreed “collectively” to net-zero GHG emissions by 2050 and called on “all countries, in particular, major emitting economies” to join as part of global efforts.
    • And, ODA (official development assistance) has been made contingent on net-zero emissions by 2050 and deep cuts in emissions in the 2020s.
    • G7 made an equal effort to shift the responsibility to the large developing countries.
    • However, “common and differentiated responsibilities” is the agreed guiding principle for tackling climate change.
    • Differentiation underscores the responsibility of the industrialised countries to lead.

    India’s climate actions

    • India has been a leading stakeholder in climate action and is among the few in the G20 in line to meet their commitments under the Paris Accord.
    • It has also taken on a most ambitious target of 450 GW of renewable power by 2030.
    • India has shown the world the way forward on solar power with producers now offering ultra-competitive tariffs.

    India’s concerns

    • Coal was particularly in the eye of the G7 which stressed “that international investments in unabated coal must stop now” .
    •  India, that continues to rely on coal, could face a crunch in assistance in thermal power.
    • BASIC, comprising India, China, Brazil and South Africa, has so far led the efforts of large developing countries in climate negotiations.
    • But with possible differences of opinion on net zero, BASIC’s clout in future global negotiations is questionable.

    Way forward

    • Finance and technology are the key areas where the industrialised West can and must lead.
    • The collective developed countries’ commitment of $ 100 billion per year was made in Copenhagen in 2009 and is nowhere near being reached.
    • A smallish sum of $2 billion was committed by G7 to accelerating the transition from coal.
    • For India, with its huge developmental needs and global high-table aspirations that require carbon and policy spaces, the imperative is strong diplomatic partnerships with large developing economies that have an inherent interest in GREEN-Growth with Renewable Energy, Entrepreneurship and Nature.

    Conclusion

    India, which has huge developmental needs and global high-table aspirations that require carbon and policy spaces, must protect its interests.

  • Issues faced by Discoms in India

    The article highlights the need for frequent financial aids to the discoms by the Centre and discusses the factors responsible for this.

    Frequent rescue packages for discoms

    • Recently, there was a sharp decline in the dues owed by power distribution companies, discoms, to power generating companies.
    • Discoms have paid off their dues in part by drawing down a liquidity facility arranged by the Centre last year.
    • This rescue package was arranged to prevent the entire power sector chain from suffering because of the discoms’ inability to meet their obligations. 
    • In the initial years after the introduction of UDAY some states did, in fact, witness an improvement in their financial and operational indicators.
    • But it wasn’t sustained, There has been a sharp deterioration in several parameters.

    Low performance of Discoms

    1) On the basis of AT&C losses

    • A key metric to measure the performance of discoms is AT&C losses.
    • The UDAY scheme had envisaged bringing down these losses to 15 per cent by 2019.
    • However, as per data on the UDAY dashboard, the AT&C losses currently stand at 21.7 per cent at the all-India level.
    • In the case of the low-income north and central-eastern states — Uttar Pradesh, Bihar, Jharkhand and Chhattisgarh — the losses are considerably higher.

    2) On the basis of cost and revenue per unit

    • On another metric — the gap between discoms’ costs and revenues — the difference, supposed to have been eliminated by now, stands at Rs 0.49 per unit in the absence of regular and commensurate tariff hikes.
    • For the high-income southern states of Tamil Nadu, Andhra Pradesh, and Telangana, this gap between costs and revenues is significantly higher.

    What are the factors responsible for inefficiencies?

    1) Electrification push without cost restructuring

    • The government’s push for ensuring electrification of all have contributed to greater inefficiency.
    •  To support higher levels of electrification, cost structures need to be reworked, and the distribution network would need to be augmented — in the absence of all this, losses are bound to rise.

    2) Economic fallout of the pandemic

    • With demand from industrial and commercial users falling, revenue from this stream, which is used to cross-subsidise other consumers, has declined, exacerbating the stress on discom finances.
    • A turnaround in the economy will provide some relief, but will not form the basis of a sustained improvement in finances.

    3) Lack of consumer data and metering

    •  Even six years after UDAY was launched, various levels in the distribution chain — the feeder, the distribution transformer (DT) and the consumer — have not been fully metered.
    • As a result, it is difficult to ascertain the level in the chain where losses are occurring.
    • Other than discoms in metros like Delhi and Mumbai, there is also limited data on which consumer is attached to which DT.
    • This lack of data makes it difficult to isolate and identify loss-making areas and take corrective action.

    4) No tariff hike

    • The continuing absence of political consensus at the state level to raise tariffs or to bring down AT&C losses signal a lack of resolve to tackle the issues plaguing the sector.

    Way forward

    • One of the solution centres around a national power distribution company.
    • Another option is to deduct discom dues, owed to both public and private power generating companies, from state balances with the RBI forcing states to take the necessary steps to fix discom finances.
    • The Centre has linked additional state borrowings to the completion of distribution reforms to incentivise states to act.

    Consider the question “Despite several efforts by the Centre to improve the efficiency, discoms continue to perform dismally requiring frequent financial aids. What are the factors responsible for this? Suggest the way forward.” 

    Conclusion

    Short of radical measures — privatisation remains a chimera — it is difficult to see how a sustainable turnaround in the financial and operational position of discoms can be engineered. As the amounts involved rise, minor tinkering isn’t likely to produce the desired results.

    Back2Basics: AT&C losses

    • Distribution loss consists of two parts:
    • a. Technical loss
    • b. Commercial loss.
    • It is also called AT&C loss.
    • AT&C loss is nothing but the sum total of technical and commercial losses and shortage due to non-realization of billed amount.
    • AT&C Loss = (Energy input – Energy billed) * 100 / Energy input.

  • World Competitiveness Ranking 2021

    India’s position has remained unchanged at 43 for the third year in a row in the World Competitiveness Ranking by Switzerland-based Institute for Management Development (IMD).

    World Competitiveness Ranking

    • The IMD World Competitiveness Ranking ranks 64 economies and assesses the extent to which a country promotes the prosperity of its people by measuring economic well-being through hard data and survey responses from executives.
    • The ranking examines four factors — economic performance, government efficiency, business efficiency, and infrastructure.
    • The top-performing economies are characterized by varying degrees of investment in innovation, diversified economic activities, and supportive public policy.

    India’s performance

    • Among the BRICS nations, India is ranked second after China (16), followed by Russia (45th), Brazil (57th) and South Africa (62th).
    • Among the four indices used, India’s ranking in government efficiency increased to 46 from 50 a year ago, while its ranking in other parameters such as economic performance (37), business efficiency (32) and infrastructure (49) remained the same.
    • India has maintained its position for the past three years but this year, it had significant improvements in government efficiency.

  • [pib] Indian Certification of Medical Devices (ICMED) Plus Scheme

    The Quality Council of India (QCI), and the Association of Indian Manufacturers of Medical Devices (AiMeD) have added further features to the ICMED Scheme for Certification of Medical Devices.

     ICMED 13485 PLUS

    • The ICMED 13485 PLUS, as the new scheme has been christened, will undertake verification of the quality, safety and efficacy of medical devices.
    • It was first launched in 2016.
    • It has been designed to integrate the Quality Management System components and product-related quality validation processes through witness testing of products with reference to the defined product standards and specifications.
    • This is the first scheme around the world in which quality management systems along with product certification standards are integrated with regulatory requirements.
    • This scheme will be an end-to-end quality assurance scheme for the medical devices sector in India.

    Details of the scheme

    • This scheme provides the much-needed institutional mechanism for assuring product quality and safety.
    • It will go a long way in assisting the procurement agencies to tackle the challenges relating to the menace of counterfeit products and fake certification.
    • This will also help in eliminating the circulation and use of sub-standard medical products or devices of doubtful origin that could prove to be serious health hazards.

  • [pib] Exercise EUNAVFOR

    Indian Navy is participating in the maiden IN – EUNAVFOR Joint Naval Exercise in the Gulf of Aden.

    Exercise EUNAVFOR

    • EUNAVFOR is a multilateral naval exercise comprising of Italian Navy, Spanish Navy, and French Navy.
    • Ships of the four navies will endeavor to enhance and hone their war-fighting skills and their ability as an integrated force to promote, peace, security, and stability in the maritime domain.
    • EUNAVFOR and the Indian Navy converge on multiple issues including counter-piracy operations and protection of vessels deployed under the charter of the World Food Programme (UN WFP).
    • Indian Navy and EUNAVFOR also have regular interaction through SHADE (Shared Awareness and De-confliction) meetings held annually in Bahrain.
    • This engagement showcases increased levels of synergy, coordination, and inter-operability between India and EUNAVFOR.
    • It also underscores the shared values as partner navies, in ensuring freedom of seas and commitment to an open, inclusive and rules-based international order.

    Mark the nations along the Gulf of Aden: