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GS Paper: GS3

  • India’s Deep Ocean Mission

    India will soon launch an ambitious ‘Deep Ocean Mission’ that envisages exploration of minerals, energy and marine diversity of the underwater world, a vast part of which still remains unexplored.

    Deep Ocean Mission (DOM)

    Nodal Agency: Ministry of Earth Sciences (MoES)

    • The mission proposes to explore the deep ocean similar to the space exploration started by ISRO.
    • Underwater robotics and ‘manned’ submersibles are key components of the Mission which will help India harness various living and non-living (water, mineral and energy) resources from the seabed and deep water.
    • The tasks that will be undertaken over this period include deep-sea mining, survey, energy exploration and the offshore-based desalination.
    • These technological developments are funded under an umbrella scheme of the government – called Ocean Services, Technology, Observations, Resources Modelling and Science (O-SMART).

     Mining PMN

    • One of the main aims of the mission is to explore and extract polymetallic nodules (PMN).
    • These are small potato-like rounded accretions composed of minerals such as manganese, nickel, cobalt, copper and iron hydroxide.
    • They lie scattered on the Indian Ocean floor at depths of about 6,000 m and the size can vary from a few millimetres to centimetres.
    • These metals can be extracted and used in electronic devices, smartphones, batteries and even for solar panels.

    Where will the team mine?

    • The International Seabed Authority (ISA), an autonomous international organisation established under the 1982 United Nations Convention on the Law of the Sea, allots the ‘area’ for deep-sea mining.
    • India was the first country to receive the status of a ‘Pioneer Investor ‘ in 1987 and was given an area of about 1.5 lakh sq km in the Central Indian Ocean Basin (CIOB) for nodule exploration.
    • In 2002, India signed a contract with the ISA and after complete resource analysis of the seabed 50% was surrendered and the country retained an area of 75,000 sq km.

    Which are the other countries that are in the race to mine the deep sea?

    • Apart from the CIOB, polymetallic nodules have been identified from the central Pacific Ocean. It is known as the Clarion-Clipperton Zone.
    • According to the ISA’s website, it has entered into 15-year contracts for exploration for polymetallic nodules, polymetallic sulphides and cobalt-rich ferromanganese crusts in the deep seabed with 29 contractors.
    • Later it was extended for five more years till 2022.
    • China, France, Germany, Japan, South Korea, Russia and also some small islands such as the Cook Islands, Kiribati have joined the race for deep-sea mining.
    • Most of the countries have tested their technologies in shallow waters and are yet to start deep-sea extraction.

    India’s preparedness

    • India’s mining site is at about a depth of 5,500 metres, where there is a high pressure and extremely low temperature.
    • We have also deployed Remotely Operated Vehicle and In-situ Soil Tester in the depth of 6,000 metres and have a thorough understanding of the mining area at the Central Indian Ocean Basin.
    • The mining machine newly developed for 6000 metres depth was able to move about 900 metres and will be deployed soon at 5,500 metres.
    • Weather conditions and the availability of ships also play a role.
    • More tests are being conducted to understand how to bring the nodules up to the surface. A riser system comprising an umbilical cable or electromechanical cable and a hose is being developed.

    What will be the environmental impact?

    • According to the IUCN, these deep remote locations can be home to unique species that have adapted themselves to conditions such as poor oxygen and sunlight, high pressure and extremely low temperatures.
    • Such mining expeditions can make them go extinct even before they are known to science.
    • The deep sea’s biodiversity and ecology remain poorly understood, making it difficult to assess the environmental impact and frame adequate guidelines.
    • Though strict guidelines have been framed, they are only exploration guidelines. A new set of exploitation guidelines are being worked out and discussions are on with the ISA.
    • Environmentalists are also worried about the sediment plumes that will be generated as the suspended particles can rise to the surface harming the filter feeders in the upper ocean layers.
    • Additional concerns have been raised about the noise and light pollution from the mining vehicles and oil spills from the operating vessels.

    Is deep-sea mining economically viable?

    • The latest estimate from the ISA says it will be commercially viable only if about three million tonnes are mined per year.
    • More studies are being carried out to understand how the technology can be scaled up and used efficiently.

  • Species in news: Meghalaya’s Glowing Mushrooms

    A mushroom documentation project in the forests of Northeast India has discovered a bioluminescent — or light-emitting — variety of mushroom.

    Try this PYQ:

    Q.Lichens, which are capable of initiating ecological succession even on a bare rock, are actually a symbiotic association of:

    (a) Algae and bacteria

    (b) Algae and fungi

    (c) Bacteria and fungi

    (d) Fungi and mosses

    Roridomyces phyllostachydis

    • The new species was first sighted near a stream in Meghalaya’s Mawlynnong in East Khasi Hills district and later at Krang Shuri in West Jaintia Hills district.
    • It is now one among the 97 known species of bioluminescent fungi in the world.

    Bioluminescence in fungi

    • Bioluminescence is the property of a living organism to produce and emit light.
    • Bioluminescent organisms are usually found in ocean environments, but they are also found in terrestrial environments.
    • The colour of the light emitted by the organism depends on its chemical properties.
    • In the case of fungi, the luminescence comes from the enzyme, luciferase.
    • The green light emits when luciferans is catalysed by the enzyme luciferase, in the presence of oxygen.

  • Sentinel-6 Satellite

    The Copernicus Sentinel-6 Michael Freilich satellite, designed to monitor oceans, was launched from the in California.

    Try this MCQ:

    The Jason Continuity of Service (Jason-CS) Mission recently seen in news is aimed at observing:

    (a)Microgravity changes

    (b)Sea level rise

    (c)Cosmic radiation

    (d)Space debris

    Sentinel-6 Satellite

    • This is a part of the next mission dedicated to measuring changes in the global sea level.
    • It has been named after Dr Michael Freilich, who was the Director of NASA’s Earth Science Division from 2006-2019 and passed away in August this year.

    What is the mission?

    • The mission, called the Jason Continuity of Service (Jason-CS) mission, is designed to measure the height of the ocean, which is a key component in understanding how the Earth’s climate is changing.
    • The spacecraft consists of two satellites, the other, called Sentinel-6B, to be launched in 2025.
    • It has been developed jointly by the European Space Agency (ESA), NASA, and France’s National Centre for Space Studies (CNES).

    What will the satellite do?

    • The satellite will ensure the continuity of sea-level observations into the fourth decade and will provide measurements of global sea-level rise.
    • Since 1992, high-precision satellite altimeters have helped scientists understand how the ocean stores and distributes heat, water and carbon in the climate system.
    • Essentially, the satellite will send pulses to the Earth’s surface and measure how long they take to return to it, which will help scientists measure the sea surface height.
    • It will also measure water vapour along this path and find its position using GPS and ground-based lasers.

    Significance of the mission

    • As per NASA, it is possible to observe the height of the oceans on a global scale and monitor critical changes in ocean currents and heat storage only from space.
    • Data from satellites such as Sentinel-6 help scientists foresee the effects of the changing oceans on the climate.
    • Further, in order to measure and track changes in the oceanic heat budget, scientists need to know the ocean currents and heat storage of the oceans, which can be determined from the height of the sea surface.

  • Exercise SITMEX-20

    The second edition of the India, Thailand and Singapore trilateral naval exercise SITMEX-20 has concluded in the Andaman Sea.

    Exercise SITMEX-20

    • The SITMEX series of exercises are conducted to enhance mutual inter-operability and imbibing best practices between IN, Republic of Singapore Navy (RSN) and Royal Thai Navy (RTN).
    • The first edition of SITMEX, hosted by Indian Navy, was conducted off Port Blair in September 2019.
    • The 2020 edition of the exercise is being hosted by RSN.
    • The maritime drill witnessed a variety of exercises including naval manoeuvres, surface warfare exercises and weapon firings.
    • Besides improving inter-operability, SITMEX series of exercise also aims to strengthen mutual confidence and develop common understanding and procedures towards enhancing the overall maritime security in the region.

  • Sustaining India’s Growth Momentum

    The article highlights the factors that explain that India’s economic recovery is broad-based and sustainable in nature.

    Revising India’s GDP forecast

    • With major banks, investor advisory groups, and credit rating agencies revising their GDP forecasts for the next financial year while lowering estimates of economic contraction for this fiscal, surely the bounce back is well on track.
    • Some of the earlier assessments were too pessimistic and assumed a gradual pace of economic normalisation.
    • Thus, a reassessment was given but nevertheless welcome.

    Many continue to challenge conventional belief regarding India’s economic recovery being broad-based and sustainable in nature. It is important that we look at underlying data and relate it with steps undertaken by the government with the sole objective of reviving India’s economy.

    1) Employment figures

    •  Economic activity will see a faster revival than employment figures as labour markets tend to lag.
    • This is because most firms face costs associated with hiring and firing and they prefer to adjust the working hours before adjusting employment numbers.
    • Trends labour market does indicate prospects of a cyclical recovery which will lead to jobs being added at a faster pace than what was originally estimated.
    • Critically, the new scheme subsiding part of the EPFO contribution for the unskilled workers will benefit enormously which will then have spill-over effects.

    2) Normalisation driven by rural economy

    • The bulk of the normalisation of economic activity was driven by the rural economy which eventually benefited the rest of the economy.
    • Rural growth has gained momentum and definitely augurs well for the Indian economy as it gets one of the engines firing.
    • The strong push by the government towards financing construction of assets has a significant impact.

    3) Avoiding excessive and inefficient use of public funds

    • The design of the aid by the government is similar in terms of its size to programmes announced by other emerging markets.
    • However, the choice of instruments is along the lines those deployed by developed countries.
    • The government has refrained from excessive and inefficient use of public funds by restricting expenditures to temporary fiscal commitments.
    • This is important as our 2008 response had a lot of permanent fiscal expenditures which led to a systematic deterioration of our macroeconomic fundamentals.
    • The government has taken undertaken a sizable fiscal expansion combining automatic stabilizers, cash transfers, bank guarantees, expansion of expenditure under various programs such as MGNREGA, Food Security Act and Urban Affordable Housing Measures.
    • The fiscal component under each of these policies can be easily reversed making it possible for India to revert to its fiscal consolidation path a lot sooner.

    4) Structural reforms as a part of its economic response package

    • These reforms are geared at unshackling the productivity potential in areas such as APMCs,  labour markets, other reforms that allow for greater private role within the economy in critical areas such as coal, space technology etc.
    • These moves and their productivity gains will help India improve its potential growth rate.
    • This means that India should be better equipped at sustaining a high-growth rate of above 7 per cent due to the productivity gains that will be an outcome of the proposed reforms.
    • This will further help a faster reduction in fiscal deficit as a percentage of GDP and our public debt to GDP figures.

    Conclusion

    Strong macroeconomic fundamentals are necessary for sustained economic growth and the government has focused on a response package which prioritises sustainability of growth rather than having a fast yet unsustainable economic recovery from the crisis.

  • Analysing India’s economic growth

    The article analyses India’s economic trajectory after independence and divides it into five phases. India’s progress is also compared with Pakistan’s as both countries have had much in common.

    What drives economic growth

    • Examining the experiences of different countries to analysing the growth may seem a promising approach.
    • However, generalising from specific experiences can be misleading since ground conditions vary hugely across countries.
    • There are two ways to avoid the pitfalls of generalising from specific cases.
    • 1) The first is to examine the same country over time to look for changes in outcomes at specific points in time.
    • 2) A second approach is to compare countries with shared history, culture and geography.
    • If there are stark differences in outcomes between them, then there may be some policy lessons to be drawn.

    The Indian subcontinent provides lessons from both approaches. The 73 years of post-Independence India has generated a lot of evidence across different political-economic regimes. This period has also provided us with the contrasting experiences of India and Pakistan, two countries that share history, geography and socio-cultural mores.

    5 phases of India’s economic progress in 73 years: first approach

    • 1) The first phase was the period 1950-65. This was the Nehruvian period of state-led industrialisation.
    • Starting in 1950 annual per person GDP growth averaged 2 per cent during this period.
    • This translated to aggregate annual GDP growth of around 4 per cent since the population was growing at close to 2 per cent.
    • 2) The second phase of post-Independence India was during 1965-84.
    • This period was an unmitigated economic disaster with negative per capita growth.
    • The phase was marked with increasing state control of the economy, nationalisation of industry, closing of the economy to trade and a systematic weakening of institutions.
    • 3) The third phase is 1984-91 when the government ushered in the first round of economic reforms by liberalising capital goods imports as well as starting industrial de-licensing.
    • These reforms were rewarded by a growth take-off. India’s annual per capita GDP growth averaged 3.1 per cent while aggregate GDP grew at 5.2 per cent during 1984-91.
    • 4) The period 1991-2004 is typically classified as the liberalisation phase.
    • The reform effort was reflected in the 4.9 per cent annual per capita GDP growth during 1991-2004.
    • 5) India embarked on a distinctive phase of faster growth post-2004 on the back of large investments in infrastructure.
    • Per person GDP growth in the period 2004-2015 averaged 7.7 per cent.
    • The corresponding aggregate GDP growth averaged 9 per cent.
    • This came at a cost, as a number of these infrastructure projects later caused problems in the banking sector on account of burgeoning NPAs, a problem that continues till today.

    Comparison with Pakistan

    • In 1950, Pakistan’s per person GDP was almost 50 per cent greater than India that year.
    • Due to political uncertainty, Pakistan stagnated throughout the 1950s while a politically stable India grew.
    • As a result, by 1960, India had almost caught up with Pakistan in per capita GDP terms.
    • Unfortunately, from 1964, India went into two decades of economic stagnation while Pakistan opened up to foreign capital.
    • By 1984, Pakistan’s per capita income was more than double that of India’s.
    • Pakistan’s slowdown began in the 1980s.
    • This period coincided with the reforms in India.
    • Nevertheless, it wasn’t till as recently as 2010 that India’s per capita GDP finally overtook Pakistan.

    4 takeaways

    •  First, openness to trade and private enterprise usually has positive effects on growth.
    • Second, rapacious and exploitative democratic systems do not necessarily promote growth. Pakistan in the 1950s, 1990 and post-2010 is a good example.
    • Third, the socio-economic environment surrounding religious fundamentalism may be inimical to growth.
    • Fourth, degradation of institutions that regulate, arbitrate and enforce laws can be costly.

    Conclusion

    India’s growth when analysed from both the perspective offers valuable lessons for India and these lessons must guide India’s future economic trajectory.

  • India’s no to RCEP could still be a no

    The article examines the significance of the RCEP and India’s concerns over its provision. 

    Significance of RCEP

    • Last week, 15 East Asian countries signed the Regional Comprehensive Economic Partnership (RCEP), the largest free trade agreement (FTA) ever.
    • In 2019, RCEP members accounted for about 30% of world output.
    • More importantly, about 44% of their total trade was intra-RCEP, which is a major incentive for the members of this agreement.
    • The deal could contribute to the strengthening of the regional value chains.

    Comparing RCEP with Trans-Pacific Partnership (TPP)

    • The TPP included several regulatory issues including labour and environmental standards and “anti-corruption”.
    • All of these issues could raise regulatory barriers and severely impede trade flows.
    • In contrast, RCEP includes traditional market access issues, following the template provided by the World Trade Organization (WTO).
    • RCEP also includes issues like electronic commerce, investment facilitation that are currently being discussed by WTO members to “reform the multilateral trading system”.

    Would RCEP be able to realise trade and investment liberalisation?

    • In case of trade in goods, RCEP members have taken big strides towards lowering their tariffs.
    • However, commitments made by RCEP members for services trade liberalisation do look shallow in terms of the coverage of the sectors.
    • Movement of natural persons, an area in which India had had considerable interest, is considerably restricted.
    • The areas of investment and electronic commerce, in both of which India had expressed its reservations on the template adopted during RCEP negotiations, the outcomes are varied.
    • The text on investment rules shows that it is a work-in-progress.
    • The rules on dispute settlement procedures are yet to be written in.

    Will India’s concerns get addressed in near future?

    • The answer seems to be unambiguously in the negative on two counts.
    • 1) Two of the concerns India had raised, namely,  the deep cuts in tariffs on imports from China, and provisions relating to the investment chapter, have become even more significant over the past several months.
    • 2) India’s Atmanirbhar Bharat Abhiyan is primarily focused on strengthening domestic value chains, while RCEP, like any other FTA is solely focused on promoting regional value chains.

    Consider the question “What were India’s concerns about RCEP that resulted in India not signing it? ” 

    Conclusion

    This suggests that the prospects of India joining the RCEP in the near future appears bleak.

  • [pib] IRNSS now part of World Wide Radio Navigation System

    The Indian Regional Navigation Satellite System (IRNSS) has been accepted as a component of the World Wide Radio Navigation System (WWRNS) for operation in the Indian Ocean Region by the International Maritime Organization (IMO).

    Try this PYQ:

    With reference to the Indian Regional Navigation Satellite System (IRNSS), consider the following statements:

    1. IRNSS has three Satellites in geostationary and four satellites the geosynchronous orbits.
    2. IRNSS covers entire India and about 5500 sq. km beyond its borders.
    3. India will have its own satellite navigation system with full global coverage by the middle of 2019.

    Which of the statements given above is/are correct?

    (a) 1 only            

    (b) 1 and 2 only

    (c) 2 and 3 only

    (d) None

    What is IRNSS?

    • The IRNSS, with an operational name of NavIC (acronym for Navigation with Indian Constellation) is an Indian regional satellite navigation system that provides accurate real-time positioning and timing services.
    • It covers India and a region extending 1,500 km around it, with plans for further extension.
    • The system currently consists of a constellation of seven satellites, with two additional satellites on ground as stand-by.
    • The constellation is in orbit as of 2018, and the system was expected to be operational from early 2018 after a system check.
    • It will provide two levels of service, the “standard positioning service”, which will be open for civilian use, and a “restricted service” (an encrypted one) for authorised users (including the military).

    Benefits of the move

    • This move will enable merchant vessels to use IRNSS for obtaining position information similar to GPS and GLONASS.
    • This will assist in the navigation of ships in Indian ocean waters within the area covered by 50°N latitude, 55°E longitude, 5°S latitude and 110°E longitude (approximately up to 1500 km from Indian boundary).

    Back2Basics: International Maritime Organisation (IMO)

    • IMO is the UN specialized agency with responsibility for the safety and security of shipping and the prevention of marine pollution by ships.
    • Its primary purpose is to develop and maintain a comprehensive regulatory framework for shipping and its remit today includes safety, environmental concerns, legal matters, technical co-operation, maritime security and the efficiency of shipping.
    • IMO is governed by an assembly of members and is financially administered by a council of members elected from the assembly.

  • The MSME sector holds the key to an Indian economic recovery

    The article highlights the importance of MSMEs for the economy and issues faced by the sector.

    Context

    • The economy may have recovered from the trough of April but is yet to show signs of a sustained recovery on an annual basis.
    • The number of establishments registered with the Employees’ Provident Fund Organisation declined by more than 30,800 in October, compared to September.

    Incentives for MSMEs

    • The above-cited numbers are indicator of the vulnerability of the employment situation, but also as a performance indicator of micro, small and medium enterprises (MSMEs).
    • The MSME sector is vital for employment generation, as also for an economic recovery to sustain.
    • Under Atmanirbhar Rozgar Yojana the government will bear the entire provident fund contributions for two years of all new employees hired.
    • However, similar announcements earlier failed to enthuse the MSME sector.
    • Along with the employment incentive, the MSME sector has also been provided collateral free credit.
    • But the offtake from the scheme has not been impressive, pointing to deeper issues.

    Why the incentives failed

    • Part of the reason these incentives failed lies in the very nature of the MSME sector and its heterogeneity, which is inherent in its definition as a residual sector once large enterprises are excluded.
    • A 2015-16 survey of the National Statistical Office shows that almost 94% of these enterprises are tiny, with less than four workers.
    • Only 31% are registered under various acts, but these face regulatory hurdles, some of them related to compliance with the goods and service tax (GST).

    Problems faced by MSMEs

    • In 2015-16 survey of the National Statistical Office two most important problems mentioned were a lack of demand and unpaid dues.
    • On both, the situation after 2015-16 has worsened, with the economy slowing down and the government responsible for the largest unpaid dues.
    • With the finances of state governments also strained due to pandemic, the fiscal situation has added to the problem of unpaid dues.
    • The sector is also affected by the political economy of state intervention, which seems biased in favour of large corporations.
    • Unlike the ₹1.5 trillion tax bonanza that large companies received as part of a pre-pandemic stimulus, there was no such bounty for the MSME sector.
    • With most state governments relaxing labour regulations for large companies, even the low-wage advantage that this sector enjoyed has got diminished.
    • Policy changes have not only reduced the compliance burden of labour laws, but have also helped large enterprises reduce wage costs.
    • Consequently, the MSME sector has to now compete with a corporate sector that has easy access to capital, cheap and unregulated labour and a lower tax burden than before.

    Way forward

    • Apart from the fiscal stimulus, the sector requires a political-economy approach that prioritizes MSME interests.
    • India needs to ease the regulatory burden of small units and aid their survival through fiscal support.
    • Above all, they need a level-playing field vis-à-vis big businesses.

    Consider the question “Despite several incentives by the government MSME sector fails to play the role expected of it. What are the issues faced by the sector and suggest the measure to deal with the issues.” 

    Conclusion

    Given the important role played by the sector in the economy, issues faced by it must be addressed on ani urgent basis to revive the economy battered by the pandemic.

  • Faultlines in India’s economic liberalism

    The article counters the argument made by External Affairs Minister S. Jaishankar about the impact of economic liberalisation on India’s economy.

    Impact of liberalism on India

    • India’s External Affairs Minister S. Jaishankar recently disapproved of free trade and globalisation.
    • About FTA’s he said that “the effect of past trade agreements has been to de-industrialise some sectors.”
    • These observations were made days after countries of the Asia-Pacific region signed the Regional Comprehensive Economic Partnership (RCEP) agreement.
    • He said that , “in the name of openness, we have allowed subsidi[s]ed products and unfair production advantages from abroad to prevail”

    Flaws in the argument

    •  There are several flaws in Mr. Jaishankar’s arguments.

    1) India cannot be the part of global value chain

    • India is now truly at the margins of the regional and global economy.
    • With trade multilateralism at the World Trade Organisation (WTO) remaining sluggish, FTAs are the gateways for international trade.
    • By not being part of any major FTA, India cannot be part of the global value chains.
    • India’s competitors such as the East Asian nations, by virtue of they being part of mega-FTAs, are in an advantageous position to be part of global value chains and attract foreign investment.

    2) Indian economy has bee relatively closed economy

    • India is surely a much more open economy than it was three decades ago, globally, India continues to remain relatively closed when compared to other major economies.
    • According to the WTO, India’s applied most favoured nation import tariffs are 13.8%, which is the highest for any major economy.
    • Likewise, according to the United Nations Conference on Trade and Development, on the import restrictiveness index, India figures in the ‘very restrictive’ category.
    • From 1995-2019, India has initiated anti-dumping measures 972 times (the highest in the world) trying to protect domestic industry.

    3) Economic survey accepts the benefits of FTAs

    • The External Affairs Minister is contradicting government’s economic survey presented earlier this year.
    • The survey concluded that India has benefitted overall from FTAs signed so far.
    • Blaming FTAs for deindustrialisation means ignoring real problem of the Indian industry — which is the lack of competitiveness and absence of structural reforms.

    4) India has been a major beneficiary of economic globalisation

    • It cannot be ignored that India has been one of the major beneficiaries of economic globalisation — a fact attested by the International Monetary Fund (IMF).
    • Post-1991, the Indian economy grew at a faster pace, ushering in an era of economic prosperity.
    • According to the economist Arvind Panagariya, poverty in rural and urban India, which stood at close to 40% in 2004-05, almost halved to about 20% by 2011-12.
    • This was due to India clocking an average economic growth rate of almost 8%.

    Conclusion

    Desire to make India a global destination for foreign investment is a pipe dream because it is naive to expect foreign investors to be gung-ho about investing in India if trade protectionism is the government’s official policy.