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GS Paper: GS3

  • Hyderabad wins Global ‘Tree City’ Status

    Hyderabad city has received another feather in its cap by being chosen as one among the ‘Tree Cities of the World’.

    Tree Cities of the World

    • The Tree Cities of the World programme is an international effort to recognize cities and towns committed to ensuring that their urban forests and trees are properly maintained, sustainably managed, and duly celebrated.
    • This status is accorded by the Arbor Day Foundation jointly with the Food and Agriculture Organisation of the UN.
    • To receive recognition, a town or city must meet five core standards:
    1. Establish Responsibility
    2. Set the Rules
    3. Know What You Have
    4. Allocate the Resources and
    5. Celebrate the Achievements

    Try this question:

    Q.The Miyawaki Forests technique has to potential to revolutionize the concept of urban afforestation in India. Discuss.

    Why it is a great achievement?

    • Hyderabad is the only city in the country to have been selected for this recognition in response to its commitment to growing and maintaining urban forestry.
    • The recognition stands Hyderabad alongside 120 cities from 23 countries, including developed nations such as USA, UK, Canada, Australia and others.

  • [pib] Draft Blue Economy Policy of India

    The Ministry of Earth Sciences (MoES) has rolled out the Draft Blue Economy policy for India in the public domain inviting suggestions and inputs from various stakeholders.

    Blue Economy Policy

    • India’s draft blue economy policy is envisaged as a crucial framework towards unlocking country’s potential for economic growth and welfare.
    • The draft policy outlines the vision and strategy that can be adopted by the govt to utilize the plethora of oceanic resources available in the country.

    Objectives:

    The policy aims to-

    • Enhance the contribution of the blue economy to India’s GDP
    • Improve the lives of coastal communities
    • Preserve marine biodiversity and
    • Maintain the national security of marine areas and resources

    What comprises India’s blue economy?

    • India’s blue economy is understood as a subset of the national economy.
    • It comprises an entire ocean resources system and human-made economic infrastructure in marine, maritime, and onshore coastal zones within the country’s legal jurisdiction.
    • It aids the production of goods and services that have clear linkages with economic growth, environmental sustainability, and national security.
    • The blue economy is a vast socio-economic opportunity for coastal nations like India to utilize ocean resources for societal benefit responsibly.

    Need for such policy

    • With a coastline of nearly 7.5 thousand kilometres, India has a unique maritime position.
    • Nine of its 29 states are coastal, and the nation’s geography includes 1,382 islands.
    • There are nearly 199 ports, including 12 major ports that handle approximately 1,400 million tons of cargo each year.
    • Moreover, India’s Exclusive Economic Zone of over 2 million square kilometres has a bounty of living and non-living resources with significant recoverable resources such as crude oil and natural gas.
    • Also, the coastal economy sustains over 4 million fisherfolk and coastal communities.

    Key areas

    The policy recognizes the following seven thematic areas.

    1. National accounting framework for the blue economy and ocean governance.
    2. Coastal marine spatial planning and tourism.
    3. Marine fisheries, aquaculture, and fish processing.
    4. Manufacturing, emerging industries, trade, technology, services, and skill development.
    5. Logistics, infrastructure and shipping, including trans-shipments.
    6. Coastal and deep-sea mining and offshore energy.
    7. Security, strategic dimensions, and international engagement.

  • Drafting labour code keeping in mind the realities of informal sector workers

    The article highlights the vulnerabilities of workers in the informal sector and also highlights the issues in the draft rules in the labour codes.

    Context

    • The budget referred to the implementation of the four labour codes.
    • There is also a provision of Rs 15,700 crore for MSMEs, more than double of this year’s budget estimate.

    Impact of pandemic on informal workers

    • India’s estimated 450 million informal workers comprise 90 per cent of its total workforce, with 5-10 million workers added annually.
    • Nearly 40 per cent of these employed with MSMEs.
    • According to Oxfam’s latest global report, out of the total 122 million who lost their jobs in 2020, 75 per cent were lost in the informal sector.
    • The National Human Rights Commission recorded over 2,582 cases of human rights violation as early as April 2020.

    Issues with the draft rules in labour code

    • The rush to clear the labour codes and form the draft rules shows little to no intent on part of the government to safeguard workers.
    • The draft rules envisage wider coverage through the inclusion of informal sector and gig workers, at present the draft rules apply to manufacturing firms with over 299 workers.
    • This leaves 71 per cent of manufacturing companies out of its purview.
    • The draft rules mandate the registration of all workers (with Aadhaar cards) on the Shram Suvidha Portal to be able to receive any form of social security benefit.
    • This would lead to Aadhaar-driven exclusion and workers will be unable to register on their own due to lack of information on the Aadhaar registration processes.
    • A foreseeable challenge is updating information on the online portal at regular intervals, especially by the migrant or seasonal labour force.
    • It is also unclear as to how these benefits will be applicable in the larger scheme of things.

    Neglect of informal sector

    • The draft rules fail to cater to the growing informal workforce in India.
    • The growing informal nature of the workforce and the lack of the state’s accountability makes it a breeding ground for rising inequality.
    • The workers face the risk of violations of their human and labour rights, dignity of livelihood, unsafe and unregulated working conditions and lower wages.

    Consider the question “Assess the impact of covid pandemic on workers in the informal sector. Also examine the issues with the draft rules in the labour code.”

    Conclusion

    The Code on Social Security was envisaged as a legal protective measure for a large number of informal workers in India but unless the labour codes are made and implemented keeping in mind the realities of the informal sector workers, it will become impossible to bridge the inequality gap.

  • Explained: National Hydrogen Energy Mission (NHEM)

    Recently, the Finance Minister in her budget speech formally announced the National Hydrogen Energy Mission which aims for generation of hydrogen from green power resources.

    Background

    • With this announcement, India has made an uncharacteristically early entry in the race to tap the energy potential of the most abundant element in the universe, hydrogen.
    • The proposal in the Budget will be followed up with a mission draft over the next couple of months — a roadmap for using hydrogen as an energy source.
    • The mission would have a specific focus on green hydrogen, dovetailing India’s growing renewable capacity with the hydrogen economy.

    Hydrogen as an element

    • The most common element in nature is not found freely.
    • Hydrogen exists only combined with other elements and has to be extracted from naturally occurring compounds like water (which is a combination of two hydrogen atoms and one oxygen atom).
    • Although hydrogen is a clean molecule, the process of extracting it is energy-intensive.
    • The sources and processes, by which hydrogen is derived, are categorised by colour tabs.

    Its types as fuel

    • Hydrogen produced from fossil fuels is called grey hydrogen; this constitutes the bulk of the hydrogen produced today.
    • Hydrogen generated from fossil fuels with carbon capture and storage options is called blue hydrogen; hydrogen generated entirely from renewable power sources is called green hydrogen.
    • In the last process, electricity generated from renewable energy is used to split water into hydrogen and oxygen.

    Hydrogen for mobility

    • While proposed end-use sectors include steel and chemicals, the major industry that hydrogen has the potential of transforming is transportation.
    • This sector contributes a third of all greenhouse gas emissions, and where hydrogen is being seen as a direct replacement of fossil fuels, with specific advantages over traditional EVs.
    • Hydrogen fuel cell cars have a near-zero carbon footprint.
    • Hydrogen is about two to three times as efficient as burning petrol because an electric chemical reaction is much more efficient than combustion.

    We already had H-CNG!

    • In October 2020, Delhi became the first Indian city to operate buses running on hydrogen spiked compressed natural gas (H-CNG) in a six-month pilot project.
    • The buses will run on a new technology patented by Indian Oil Corp for producing H-CNG — 18 per cent hydrogen in CNG — directly from natural gas, without resorting to conventional blending.

    Try this PYQ from CSP 2019:

    In the context of proposals to the use of hydrogen-enriched CNG (H-CNG) as fuel for buses in public transport, consider the following statements :
    1. The main advantage of the use of H-CNG is the elimination of carbon monoxide emissions.
    2. H-CNG as a fuel reduces carbon dioxide and hydrocarbon emissions.
    3. Hydrogen up to one-fifth by volume can be blended with CNG as fuel for buses.
    4. H-CNG makes the fuel less expensive than CNG.
    Which of the statements given above is/are correct?
    (a) 1 only
    (b) 2 and 3 only
    (c) 4 only
    (d) 1, 2, 3 and 4

    Green hydrogen has specific advantages

    1. One, it is a clean-burning molecule, which can decarbonize a range of sectors including iron and steel, chemicals, and transportation.
    2. Two, renewable energy that cannot be stored or used by the grid can be channelled to produce hydrogen.
    • This is what the government’s Hydrogen Energy Mission, to be launched in 2021-22, aims for.

    Philosophy behind NHEM

    • India’s electricity grid is predominantly coal-based and will continue to be so.
    • In several countries that have gone in for an EV push, much of the electricity is generated from renewables — in Norway for example, it is 99 per cent from hydroelectric power.
    • Experts believe hydrogen vehicles can be especially effective in long-haul trucking and other hard-to-electrify sectors such as shipping and long-haul air travel.
    • Using heavy batteries in these applications would be counterproductive, especially for countries such as India, where the electricity grid is predominantly coal-fired.

    Back2Basics: How hydrogen fuel cells work?

    • Hydrogen is an energy carrier, not a source of energy.
    • Hydrogen fuel must be transformed into electricity by a device called a fuel cell stack before it can be used to power a car or truck.
    • A fuel cell converts chemical energy into electrical energy using oxidizing agents through an oxidation-reduction reaction.
    • Inside each individual fuel cell, hydrogen is drawn from an onboard pressurized tank and made to react with a catalyst, usually made from platinum.
    • As the hydrogen passes through the catalyst, it is stripped of its electrons, which are forced to move along an external circuit, producing an electrical current.
    • This current is used by the electric motor to power the vehicle, with the only byproduct being water vapour.

      Issues with H-Fuel cells

    • A big barrier to the adoption of hydrogen fuel cell vehicles has been a lack of fuelling station infrastructure.
    • There are fewer than 500 operational hydrogen stations in the world today, mostly in Europe, followed by Japan and South Korea.
    • Safety is seen as a concern. Hydrogen is pressurized and stored in a cryogenic tank, from there it is fed to a lower-pressure cell and put through an electrochemical reaction to generate electricity.
    • Scaling up the technology and achieving critical mass remains the big challenge.
    • More vehicles on the road and more supporting infrastructure can lower costs. India’s proposed mission is seen as a step in that direction.

  • Cabinet approves PLI Scheme for telecom

    The Union Cabinet has approved the production-linked incentive scheme for the telecom sector with an outlay of ₹12,195 crores over five years.

    Why such a scheme?

    • The scheme aims to make India a global hub for manufacturing telecom equipment.
    • The sector is expected to lead to an incremental production of about ₹2.4 lakh crore, with exports of about ₹2 lakh crore over five years and bring in investments of more than ₹3,000 crores.

    PLI Scheme

    • The PLI scheme aims to boost domestic manufacturing and cut down on imports by providing cash incentives on incremental sales from products manufactured in the country.
    • Besides inviting foreign companies to set shop in India, the scheme aims to encourage local companies to set up or expand, existing manufacturing units.

    UPSC can directly as the sectors included in the PLI scheme. Earlier it was only meant for Electronics manufacturing (particularly mobile phones).

    Benefits for MSMEs

    • For inclusion of MSMEs in the scheme, the minimum investment threshold has been kept at ₹10 crores, while for others it is ₹100 crore.
    • For MSMEs, a 1% higher incentive is also proposed in the first three years.

    Employment generation

    • The scheme was also likely to generate 40,000 direct and indirect employment opportunities and generate tax revenue of ₹17,000 crores from telecom equipment manufacturing.

    Which equipments?

    • The telecom manufacturing would include core transmission equipment, 4G/5G Radio Access Network and wireless equipment, access and Customer Premises Equipment (CPE), IoT access devices, other wireless equipment.

  • Farm laws must reflect regional and crop diversities

    The article argues for consideration of the regional variation in the conditions of farmers and their concerns in the context of recently introduced farm laws.

    Argument against diversification

    • In Punjab, Haryana and western UP, minimum support price (MSP)-based agriculture has a logic.
    • Not all regions must diversify.
    • The region has great alluvial soil, good irrigation and almost a century-long tradition of the application of science to agriculture.
    • In south Punjab, with less irrigation, and parts of Haryana not covered by the Indira Gandhi Canal, some diversification to pulses, cotton etc. could work but the solid specialisation in this region remains.

    Issue of middlemen

    • Arhtiyas (middlemen) are important in Indian agricultural markets.
    • They are a part of the supply chain in north-west India.
    • Here they are not like the middlemen elsewhere.
    • They function simply as agents of the procurement agencies.
    • This was done by the past government to reduce overhead costs of procurement.

    Steps need to be taken

    • The e-markets, forwards and farmer-managed companies are not the dominant mode of rural organisations.
    • Agriculture is the one good sector in otherwise dismal year.
    • So, we need to strengthen it, not feed off on its glory, even outside north-west India.
    • We have the largest spread of agricultural markets in the world according to spatial maps.
    • But they are not APMCs.
    • With weak markets (outside of grains) and without first-stage processing and other infrastructure, the farmer knows he is at the mercy of the trader and comes out on the streets when that is not understood.

    Evolution of MSP

    • The MSP played a crucial role in the days of compulsory procurement and zonal restrictions.
    • Each crop had its own report then.
    • Later separate reports were replaced by two reports, one for kharif and another one for rabi, apart from one for sugarcane (an annual crop).
    • The 1982 rabi report stated that relative prices and, in that context, MSP had the role of an intervention mechanism when markets failed, outside the compulsory procurement area.
    • Later, the concept of transport costs and managerial costs became important.

    Way forward

    • The Essential Commodities Act should be ditched.
    • Good laws are good because progress starts with them, but not all laws are good everywhere.
    • A modified version of the laws with a roadmap can be on the agenda — not everywhere, but most places outside the lands of the five rivers.

    Conclusion

    The amended laws should be considered in the context of regional variation in the country and necessary changes should be made to address the concerns of the farmers.

  • Arjun: Main Battle Tank MK-1A

    PM has recently handed over the indigenously developed Arjun Main Battle Tank (MK-1A) to the Indian Army.

    Q.Discuss India’s preparedness for high-altitude warfare.

    Arjun Main Battle Tank

    • The Arjun Main Battle Tank project was initiated by DRDO in 1972 with the Combat Vehicles Research and Development Establishment (CVRDE) as its lead laboratory.
    • The objective was to create a “state-of-the-art tank with superior firepower, high mobility, and excellent protection”.
    • During the development, the CVRDE achieved breakthroughs in the engine, transmission, hydro-pneumatic suspension, hull and turret as well as the gun control system.
    • Mass production began in 1996 at the Indian Ordnance Factory’s production facility in Avadi, Tamil Nadu.

    Features of the Arjun tank

    • The Arjun tanks stand out for their ‘Fin Stabilised Armour Piercing Discarding Sabot (FSAPDS)’ ammunition and 120-mm calibre rifled gun.
    • It also has a computer-controlled integrated fire control system with a stabilised sighting that works in all lighting conditions.
    • The secondary weapons include a co-axial 7.62-mm machine gun for anti-personnel and a 12.7-mm machine gun for anti-aircraft and ground targets.

    How is Mk-1A different?

    • The Mk-1A version has 14 major upgrades on the earlier version.
    • It is also supposed to have missile firing capability as per the design, but this feature will be added later as final testing of the capability is still on.
    • However, the biggest achievement with the latest version is 54.3 per cent indigenous content against the 41 per cent in the earlier model.

  • [pib] Mahabahu-Brahmaputra

    PM will launch the ‘Mahabahu-Brahmaputra’, lay the foundation stone of Dhubri Phulbari Bridge and perform Bhumi Pujan for construction of Majuli Bridge Assam.

    Click here to read all North-East related news.

    Mahabahu-Brahmaputra

    • The program is aimed at providing seamless connectivity to the Eastern parts of India and includes various development activities for the people living around River Brahmaputra and River Barak.
    • It will consist of the Ro-Pax vessel operations between Neamati-Majuli Island, North Guwahati-South Guwahati and Dhubri-Hatsingimari.
    • The Ro-Pax services will help in reducing the travel time by providing connectivity between banks and thus reducing the distance to be travelled by road.
    • PANI (Portal for Asset and Navigation Information) will act as a one-stop solution for providing information about river navigation and infrastructure.

    Dhubri Phulbari Bridge

    • PMwill lay the foundation stone for the four-lane bridge over the Brahmaputra between Dhubri (on North Bank) and Phulbari (on South Bank).
    • The proposed Bridge will be located on NH-127B, originating from Srirampur on NH-27 (East-West Corridor), and terminating at Nongstoin on NH-106 in the State of Meghalaya.
    • It will connect Dhubri in Assam to Phulbari, Tura, Rongram and Rongjeng in Meghalaya.
    • It will reduce the distance of 205 Km to be travelled by Road to 19 Km, which is the total length of the bridge.

    Majuli Bridge

    • PM will perform Bhumi Pujan for the two-lane Bridge on the Brahmaputra between Majuli (North Bank) and Jorhat (South Bank).
    • The bridge will be located on NH-715K and will connect Neematighat (on Jorhat side) and Kamalabari (on Majuli side).
    • The Construction of the bridge has been a long demand of the people of Majuli who for generations have been dependent on the ferry services to connect with the mainland of Assam.

  • Indian investments and BITs

    The article examine the termination of agreement for the development of East Container Terminal by Sri Lanka in the context of unilateral termination of bilateral investment treaties by India.

    Context

    • Recently, Sri Lanka terminated 2019 agreement with India and Japan that aimed to jointly develop the strategic East Container Terminal (ECT) at the Colombo port.
    • Apart from analysing the diplomatic fallout of this problematic decision for India-Sri Lanka ties, the issue also needs to be looked at through the prism of the India-Sri Lanka bilateral investment treaty (BIT).

    India-Sri Lanka  BIT and its termination

    • In 1997, India and Sri Lanka signed a BIT to promote and protect foreign investment in each other’s territories.
    • It empowers individual foreign investors to directly sue the host state before an international tribunal if the investor believes that the host state has breached its treaty obligations.
    • This is known as investor-state dispute settlement (ISDS).
    • Article 3(2) of this treaty provides that investments and returns of investors of each country shall, at all times, be accorded fair and equitable treatment (FET) in the other country’s territory.
    • The normative content of the FET provision has been fleshed out by scores of ISDS tribunals in the last two decades.
    • The tribunals have persistently held that an important component of the FET provision is that the host state should protect the legitimate expectations of foreign investors. 
    •  In a case known as International Thunderbird Gaming Corporation v Mexico, it was held that the concept of legitimate expectations relates to a situation where the host state’s conduct creates reasonable and justifiable expectations on the part of an investor (or investment) to act in reliance on said conduct, such that a failure to honour those expectations could cause the investor (or investment) to suffer damages.
    • Sri Lanka, by signing the agreement to jointly develop the ECT at the Colombo port, created such expectations on the part of Indian investors.
    • However, the twist in the tale is that India unilaterally terminated the India-Sri Lanka BIT on March 22, 2017.
    • This termination was part of the mass repudiation of BITs that India undertook in 2017 as a result of several ISDS claims being brought against it.
    •  In cases of such unilateral termination, survival clauses in BITs assume significance because they ensure that foreign investment continues to receive protection during the survival period.
    • But, in the case of the investment in developing the ECT at the Colombo port, this survival clause will be inconsequential, since the agreement was signed in 2019, i.e., after India unilaterally terminated the BIT.

    Important lessons

    • As a consequence of the onslaught of ISDS claims in the last few years, India has developed a protectionist approach towards BITs.
    • However, an important attribute that perhaps has not received much attention is that BITs are reciprocal.
    •  BITs do not empower merely foreign investors to sue India, but also authorise Indian investors to make use of BITs to safeguard their investment in turbulent foreign markets.
    • Accordingly, given India’s emergence as an exporter, and not just an importer of capital, the government should revisit its stand on BITs.

    Consider the question “Examine the implications of unilateral termination of bilateral investment treaties(BITs) by India.”

    Conlcusion

    India needs to adopt a balanced approach towards BITs with an effective ISDS provision. This will facilitate Indian investors in defending their investment under international law should a country, like Sri Lanka, renege on an agreement.

  • Tax regime change

    Article explains the measures adopted in the Budget 2021-22 for increasing compliance and transparency.

    Maintaining the status quo

    • COVID-19 has upset fiscal maths around the world.
    • It is in this context that the Union budget assumed significance this year.
    • The expectations of tax breaks were rife on the presumption that this could boost economic activity.
    • Whereas others called for a tax on stock market gains.
    • Unyielding to such requests, the budget was based on a pragmatic approach to maintain the status quo.

    Why higher tax rates would not help much

    • Nearly 60 per cent of corporate taxes are paid by the 0.06 per cent of the companies belonging to the top income bracket.
    • On the other hand, among individual taxpayers, only 0.17 per cent report taxable incomes above Rs 25 lakh.
    • Therefore, higher taxes would either yield little revenue or adversely affect economic activity.

    Need to shift focus to compliance and greater transparency

    •  For increasing compliance and transparency, significant proposals have been made:
    • 1) Limited the window for reopening the case to 3 years.
    • 2) The introduction of the requirement for an assessment officer to provide facts on the basis of which he/she re-assesses.
    •  3) The faceless Income Tax Appellate Tribunal (ITAT).
    • By making the process of assessment faceless the major causes for litigation are addressed.
    • The limited window of re-opening cases for small taxpayers and due consideration of risk management strategy and the CAG’s observations in carrying out such assessments marks an improvement in the process.

    Dispute resolution mechanism with better interface

    • The Vivad se Vishwas scheme was launched in 2020 to address piling litigation and it is reported that collections under this scheme have been Rs 85,000 crore for 1,10,000 taxpayers.
    • This is a small fraction as compared to the Rs 4.34 lakh crore in corporate taxes and Rs 4.49 lakh crore in income taxes that are locked in dispute.
    • Therefore, a dispute resolution mechanism that allows for better interface between the taxpayer and the department may, in fact, be relatively beneficial.

    Consider the question “Examine the reasons for small tax base in India. Examine the measures adopted in the Budget 2021-22 for increasing compliance and transparency.”

    Conclusion

    The budget estimates suggest that corporate tax and income tax collections are expected to increase by 22 per cent. With an expected growth rate of 14 per cent in nominal GDP, the remaining gains in taxes are presumably expected from higher compliance or realisation of taxes due. Whether this will pan out remains to be seen.