Note4Students
From UPSC perspective, the following things are important :
Prelims level: Open access charges
Mains level: Paper 3- Power sector
Let us discuss renewable energy. Recently, state governments increased the standard charges on open access renewable projects and incentives were cut back. So, what can be implications of such steps? Read to know…
What open access power user mean?
- Open access allows large users of power – typically those who consume more than 1 MW – to buy power from the open market.
- These open access buyers don’t have to depend on a more expensive grid.
- Through incentives given by state governments, these non-grid avenues of power purchase have been encouraged in renewable energy projects.
Now, state governments increased standard charges on open access renewable energy projects or are cutting back on incentives.
Reason given by state: Tariff competitiveness of wind and solar power has shown a significant improvement.
Implications:
- Credit rating agency ICRA said that with the changes in policy, the viability of open access – against grid-connected energy – is no longer as attractive.
- The open-access charges applicable in case of third party sale of power have also increased highlights the rising regulatory risk for such independent power producers (IPPs).
- Earlier, concessions were available from levy of cross-subsidy surcharge, transmission and wheeling charges as well as favourable banking facilities to promote the renewable sector.
- Now, the power policies in many states have either completely withdrawn or reduced incentives given to open access customers.
Issues for group captive projects
- A group captive scheme is where someone develops a power plant for collective usage of many commercial consumers.
- At present, a power project is considered ‘captive’ if consuming entity or entities consume at least 51% of the power generated and owns at least 26% of the equity.
- The State Electricity Regulatory Commission (SERC) in Maharashtra has recently approved the levy of additional surcharge on group captive projects in renewable sector.
- Group captive consumers were earlier exempt from such levy in Maharashtra.
- Risk of other state following holds.
Challenges
- The viability of power procured under the open access route depends on discount offered by the power producer as compared to the grid tariffs.
- The applicable open access charges across the key states are estimated to vary quite widely from Rs.2.5 per unit to Rs. 5 per unit.
- Open access projects have tenure (5-10 years) of the power purchase agreements (PPAs) under the third-party sale route as against the 25 year-tenure for PPA in case of utility scale projects.
- Net tariff realised for such projects remains exposed to regulatory risk given the likelihood of revision in open access charges by the regulators.
- It is also subject to tightening of energy banking norms being observed by SERCs across the states.
Consider the question “Examine the implications of policy changes adopted by the state with regard to open access charges and phasing out of other incentives to Independent Power Producers (IPPs)”
Conclusion
Move by states could jeopardise many projects and also threaten the progress made towards the adoption of clean energy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Acts related to workers
Mains level: Paper 3- Migrant workers
Issue of migrant workers caught attention of the nation amid lockdown. This issue has wider implications for the economy. This article highlights need for formulating a program to deal with the migrant labourers’ issue in its entirety.
Issue with many implications: Migrant labour
- Out of the total labour force of 465 million workers, around 91 per cent (422 million) were informal workers in 2017-18.
- The Economic Survey (2017) estimated 139 million seasonal or circular migrants.
- Circular urban migrants perform essential labour and provide services.
- Hence, this issue has implications for livelihoods, agriculture, food security, and safety net policy as well as programme responses.
Existing and proposed legal provision
- There exists The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act of 1979.
- Despite this act, there is no central registry of migrant workers.
- The Occupational Safety, Health and Working Conditions Code of 2019 has been introduced in Parliament.
- This code seeks to promote the welfare of migrant workers and legal protection for their rights.
- The code seeks to merge 13 labour laws, including the Inter-state Migrant Workmen Act, 1979 into a single law.
One nation, one ration card
- “One nation one ration card” addresses the problem of ration-card portability.
- The move would benefit nearly 670 million people and will be completed by March 2021.
Provisions in the package for migrant workers, small farmers, street vendors
- There is a provision of Rs 30,000 crore through NABARD, in addition to the already existing Rs 90,000 crore allocation, for the rabi harvest and post-harvest rabi-related work for small and marginal farmers.
- Further, Rs 2 lakh crore concessional credit will be provided to two crore farmers across the country.
- About Rs 11,000 crore was allocated for the urban poor, which includes the migrant workers, for building shelter homes for the homeless.
- Several government-funded housing projects in major cities would be developed into affordable rental housing complexes on a PPP mode.
Free grains for two months
- The Centre will transfer 8 lakh metric tonnes of grain and 50,000 metric tonnes of chana to state governments.
- Form this stave will provide 5 kg of grain (wheat or rice) per labourer and 1kg of chana per family per month for two months free.
- This is expected to benefit up to eight crore migrant workers.
Program for growth and structural transformation
- Devicing such a program requires a review of national legal, regulatory and institutional concerns in resettlement and rehabilitation of migrant labourers.
- There is a need to adopt a human rights approach to address the socio-legal issues.
- The resolution of contradictions in trade, fiscal, monetary and other policies would also require.
- Following 3 policy changes are urgently required.
- 1)The implementation of the report of the task force on migration (2017).
- 2)Expansion of the outreach of the Integrated Child Development Services– to include migrant women and children.
- 3) Inclusion of migrant children in the annual work plans of Sarva Shiksha Abhiyan.
- Given the environment of uncertain livelihoods it is necessary to strengthen the resilience of the financial system and skill workers.
- The issues and challenges of migrant workers require leveraging information and communication technologies and the JAM trinity.
Consider the question “Migrant workers issue is an issue with many implications. This issue needs to be considered in its entirety to formulate a speedy and effective response. In light of this suggest the required policy changes.”
Conclusion
The debilitating physical effects of the coronavirus necessitate coordinated and concerted efforts by all stakeholders to meet the challenges of the present and the expectations of the future. We shall overcome.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Gig economy
Mains level: Paper 3- Gig economy and issue it faces
3 min
The shockwave that pandemic sent through the economy has been reshaping the global job market. Gig economy would have to accommodate the new entrants. This article underlines the changes in the gig economy after the pandemic. Four areas that need attention are also discussed here.
What constitutes gig economy?
- The word “gig” includes in its current parlance all freelancers, disconnected from the workplace.
- Example: drivers of Uber, delivery boys of Zomato, plumbers and electricians of Urban Clap.
- The gig economy is not confined to low-skilled jobs. Skilled professionals are also part of it.
How pandemic is reshaping the gig economy
- Aviation, hospitality, automobile entertainment and retail are some of the hardest hit sectors.
- The classic gig anchors- Uber and AirBnB, have laid off thousands of people.
- In contrast to this, highly skilled professionals —laid off by employers — are joining the gig bandwagon.
- Surely, job demand will far outstrip supply, at least in the short-term.
What does the future hold?
- A Deloitte report from April notes that Indian organisations are considering to expand the share of gig workers.
- Declining full-time jobs will lead to increased assignment-based hiring.
- For instance, a graphic designer working from home could be in demand with a media house or Netflix may hire AI designer paid by an hour to personalize streaming.
- But, what is missing in picture? The national database is missing.
4 focus areas of gig economy
1. National database: A missing link
- National database of job seekers and job creators can connect firms with qualified candidates.
- A prospective employee would need access to a job database, sorted by skill, geography, duration and emoluments.
- Companies should be able to dip into the data pool of talent, experience, location, qualification and expectation.
- Currently, both data sets are fragmented and stored in silos.
- The government could play the role of a facilitator, in partnership with the private sector.
2. Regulatory protection to gig workforce
- The gig economy increases employee vulnerability.
- This segment of the economy so far has been outside the ambit of regulatory labour policies.
- Social protection like wage protection, health benefits and safety assurance should be made available to gig workers.
- The Karnataka government has considered introducing a new labour legislation focused on the gig economy.
3. Prepare college students for freelancing
- Apart from regular campus placements, the placement cells need to reorient and focus on preparing students for freelancing opportunities.
- For the educated youth, this could be the first step towards entrepreneurship.
4. Gender equality
- Gender is another crucial dimension of the digital labour markets.
- The low enrolment of girls for higher education in science, technology, engineering and math would constrict their opportunity in the gig world.
- Going ahead, this would need greater policy attention to ensure gender parity.
Consider the question “What is the gig economy? Suggest the policy measures to make it more resilient in the present economic context disrupted by the pandemic.”
Conclusion
The government and the private sector would need to collaborate along with academia to build adequate safeguards in the unfolding eco-system.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: India-China trade relations
After the Galwan Valley skirmish, the popular idea resonating in Indian streets is that Indians should boycott Chinese goods and thus “teach China a lesson”.
Practice question for mains:
Q. India’s quest for self-reliance is still a distant dream. Critically comment in light of the popular sentiment against the Chinese imports in India.
There are several reasons why the #Boycott_China is an ill-advised move:
A. Trade deficits are not necessarily bad
- Trade deficits/surpluses are just accounting exercises and having a trade deficit against a country doesn’t make the domestic economy weaker or worse off.
- Example: If one looks at the top 25 countries with whom India trades, it has a trade surplus with the US, the UK and the Netherlands. But this does not make Indian economy better than them.
What does this deficit indicate?
- Both Indian consumers and Chinese producers are gainer through trading.
- One gets the market other cheap price. Thus, both are better off than what they would have been without trade.
So, having a trade deficit is good?
- Of course, running persistent trade deficits across all countries raises two main issues.
- One, availability of foreign exchange reserves to “buy” the imports.
- Today, India has more than $500 billion of forex — good enough to cover imports for 12 months.
- Two, lack of domestic capacity to produce in the most efficient manner.
B. Will hurt the Indian poor the most
- This is because poor are more price-sensitive.
- For instance, if Chinese TVs were replaced by either costlier Indian TVs or less efficient ones, unlike poor, richer Indians may buy the costlier option.
- Similarly, the Chinese products that are in India are already paid for. By banning their sale or avoiding them, Indians will be hurting fellow Indian retailers.
- Again, this would hit poorest retailers more due to inability to cope with the unexpected losses.
C. Will punish Indian producers and exporters
- Several businesses in India import intermediate goods and raw materials, which, in turn, are used to create final goods — both for the domestic Indian market as well as the global market (as Indian exports).
- An overwhelming proportion of Chinese imports are in the form of intermediate goods such as electrical machinery, nuclear reactors, fertilizers, optical and photographic measuring equipment organic chemicals etc.
- Such imports are used to produce final goods which are then either sold in India or exported.
- A blanket ban on Chinese imports will hurt all these businesses at a time when they are already struggling to survive, apart from hitting India’s ability to produce finished goods.
D. Will barely hurt China
- While China accounts for 5% of India’s exports and 14% of India’s imports — in US$ value terms — India’s imports from China are just 3% of China’s total exports.
- More importantly, China’s imports from India are less than 1% of its total imports.
- The point is that if India and China stop trading then — on the face of it — China would lose only 3% of its exports and less than 1% of its imports.
- However, India will lose 5% of its exports and 14% of its imports.
Issues
- On the whole, it is much easier for China to replace India than for India to replace China.
- Ban can also seize Chinese funding to many Indian businesses (the start-ups with billion-dollar valuations).
- In short term, replacing Chinese products with Japan or Germany, will only increase our total trade deficit.
- If on the other hand, we decide to use Indian products, that too would cost us more — albeit just internally.
E. India will lose policy credibility
- It has also been suggested that India should renege on existing contracts with China.
- This can be detrimental for India’s effort to attract foreign investment.
- As one of the first things an investor — especially foreign — tracks is the policy credibility and certainty.
- If policies can be changed overnight or if the government itself reneges on contracts, investor will either not invest or demand higher returns for the increased risk.
F. Raising tariffs is mutually assured destruction
- Many argue that India should just slap higher import duties on Chinese goods or apply prohibitive tariffs on final goods.
- By doing this, firstly India would be violating rules of the World Trade Organization.
- Secondly, it would make China and many others to reciprocate in the same way.
Equating border dispute with trade is no panacea
- The first thing to understand is that turning a border dispute into a trade war is unlikely to solve the border dispute.
- Worse, given India and China’s position in both global trade as well as relative to each other, this trade war will hurt India far more than China.
- Thirdly, these measures will be most poorly timed since the Indian economy is already at its weakest point ever — facing a sharp GDP contraction.
Way forward
- In long term, under the banner of self reliance, India must develop its domestic capabilities and acquire a higher share of global trade by raising its competitiveness.
- But no country is completely self-sufficient and that is why trade is such a fantastic idea.
- It allows countries to specialize in what they can do most efficiently and export that good while importing whatever some other country does more efficiently.
- Need of hour is well thought and balanced approach.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Parliamentary committees and its types
Mains level: Parliamentary committees
Amid the on-going India-China border tension, a Parliamentary Standing Committee report on Sino-India relations post the Doklam standoff has been released. It assumes significance as it is the only detailed report on the border issue that has been made available to the public.
Try this question from our AWE initiative:
Q.2) What are parliamentary committees? How do they ensure legislature’s and executive’s efficiency and accountability? (250 Words)
Report on Sino-Indian relations post Doklam
- Submitted by the Shashi Tharoor-led Standing Committee on External Affairs, the report on Sino-India relations including Doklam throws light on border situation and cooperation in international organisations,
- This Standing Committee report – a bipartisan one as the committee has members from ruling and opposition parties – is one of the very few documents available in which the defence and foreign secretaries.
- It clarified the government’s official position on India-China border issues including the reported transgressions by the Chinese in the region.
- It had cautioned the government that it needed to have “healthy scepticism” while dealing with China.
- The Committee has urged the Government not to let its vigil down in order to prevent any untoward incident in future.
What are the Parliamentary Committees?
- A good deal of Parliamentary business is transacted in the committees. Both Houses of Parliament have a similar committee structure, with a few exceptions.
- Their appointment, terms of office, functions and procedure of conducting business are also more or less similar and are regulated as per rules made by the two Houses under Article 118(1) of the Constitution.
- Broadly, Parliamentary Committees are of two kinds – Standing Committees and ad hoc Committees.
- The former are elected or appointed every year or periodically and their work goes on, more or less, on a continuous basis.
- The latter are appointed on an ad hoc basis as the need arises and they cease to exist as soon as they complete the task assigned to them.
Their significances
- Apart from debates on bills and issues discussed and debated on the floor of the House, more detailed and in-depth discussions take place on issues as well as legislation in the parliamentary standing committees.
- Here, MPs belonging to all major parties put forward their views without much consideration to the political differences they have.
- A considerable amount of legislative work gets done in these smaller units of MPs from both Houses, across political parties.
- Their reports are tabled in both Rajya Sabha and Lok Sabha. The Houses do not hold a specific debate on the report, but it is often referred to during the discussions on the bills and the key issues.
- Committee meetings also provide a forum where members can engage with domain experts as well as senior-most officials of the concerned ministries.
Additional readings: https://knowindia.gov.in/profile/the-union/parliamentary-committees.php
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FATF
Mains level: Money laundering and terror financing
Indian officials attended the virtual 32nd special Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG) plenary meeting, under the aegis of the FATF.
Practice question for mains:
Q. What is FATF? Discuss its role in combating global financial crimes and terror financing.
What is the FATF?
- FATF is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering.
- The FATF Secretariat is housed at the OECD headquarters in Paris.
- It holds three Plenary meetings in the course of each of its 12-month rotating presidencies.
- As of 2019, FATF consisted of 37 member jurisdictions.
- India became an Observer at FATF in 2006. Since then, it had been working towards full-fledged membership. On June 25, 2010, India was taken in as the 34th country member of FATF.
EAG of FATF
- The EAG is a regional body comprising nine countries: India, Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and Belarus.
- It is an associate member of the FATF.
What is the role of FATF?
- The rise of the global economy and international trade has given rise to financial crimes such as money laundering.
- The FATF makes recommendations for combating financial crime, reviews members’ policies and procedures, and seeks to increase acceptance of anti-money laundering regulations across the globe.
- Because money launderers and others alter their techniques to avoid apprehension, the FATF updates its recommendations every few years.
What is the Black List and the Grey List?
- Black List: The blacklist, now called the “Call for action” was the common shorthand description for the FATF list of “Non-Cooperative Countries or Territories” (NCCTs).
- Grey List: Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.
Consequences of being in the FATF grey list:
- Economic sanctions from IMF, World Bank, ADB
- Problem in getting loans from IMF, World Bank, ADB and other countries
- Reduction in international trade
- International boycott
Pakistan and FATF
- Pakistan, which continues to remain on the “grey list” of FATF, had earlier been given the deadline till the June to ensure compliance with the 27-point action plan against terror funding networks.
- It has been under the FATF’s scanner since June 2018, when it was put on the Grey List for terror financing and money laundering risks.
- FATF and its partners such as the Asia Pacific Group (APG) are reviewing Pakistan’s processes, systems, and weaknesses on the basis of a standard matrix for anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: AIIB, ADB
Mains level: Not Much
The Government of India and the Asian Infrastructure Investment Bank (AIIB) has signed a $750 million agreement for “COVID-19 Active Response and Expenditure Support Programme”.
Try this question from CSP 2019
Q.With reference to Asian Infrastructure Investment Bank (AIIB), consider the following statements
- AIIB has more than 80 member nations.
- India is the largest shareholder in AIIB.
- AIIB does not have any members from outside Asia.
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
What’s so special about this assistance?
- This is the first-ever budgetary support programme from the AIIB to India.
- The project is being financed by the AIIB and Asian Development Bank (ADB) in the amount of $2.250 billion, of which $750 million will be provided by AIIB and $1.5 billion will be provided by ADB.
- The package aims to assist India to strengthen its response to the adverse impacts of the COVID-19 pandemic on poor and vulnerable households.
- The current loan will be the second to India from AIIB under its COVID-19 crisis recovery facility apart from the earlier approved $500 million loans.
- The primary beneficiaries would be families below the poverty line, farmers, healthcare workers, women, women’s SHGs, widows, PWDs, senior citizens, low wage earners etc.
About AIIB
- The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia, began operations in January 2016.
- AIIB has now grown to 102 approved members worldwide.
- AIIB is a brainchild of China. The prime aim of the AIIB is infrastructure development.
- By establishing interconnectivity across Asia through advancement in the construction of infrastructure and other productive services, the AIIB can stimulate growth and economic development in the Asian Region.
Must read:
International Economic Institution’s: ADB, BRICS Bank, AIIB
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Solar Eclipse and related terms, Summer Solstice
Mains level: Not Much
A rare celestial event, an annular solar eclipse popularly called as the ‘ring of fire’ eclipse, will be visible on June 21, 2020 from some parts of Northern India. The first solar eclipse of this year takes place on the summer solstice, which is the longest day in the Northern Hemisphere.
Try this question from CSP 2019:
Q. On 21st June, the Sun
(a) Does not set below the horizon at the Arctic Circle
(b) Does not set below the horizon at Antarctic Circle
(c) Shines vertically overhead at noon on the Equator
(d) Shines vertically overhead at the Tropic of Capricorn
What is the Solar Eclipse?
- A Solar Eclipse happens when the moon while orbiting the Earth comes in between the sun and the Earth, due to which the moon blocks the sun’s light from reaching the Earth, causing an eclipse of the sun or a solar eclipse.
- According to NASA, people who are able to view the total solar eclipse are in the centre of the moon’s shadow as and when it hits the Earth.
- There are three types of eclipses: one is a total solar eclipse, which is visible only from a small area on Earth. A total solar eclipse happens when the sun, moon and Earth are in a direct line.
- The second type of a solar eclipse is a partial solar, in which the shadow of the moon appears on a small part of the sun.
Annular Solar Eclipse
- The third kind is an annular solar eclipse, which happens when the moon is farthest from the Earth, which is why it seems smaller.
- In this type of an eclipse, the moon does not block the sun completely, but looks like a “dark disk on top of a larger sun-coloured disk” forming a “ring of fire”.
- Furthermore, during a solar eclipse, the moon casts two shadows on the Earth; the first one is called the umbra, which gets smaller as it reaches the Earth.
- The second one is called the penumbra, which gets larger as it reaches the Earth.
- According to NASA, people standing in the umbra see a total eclipse and those standing in the penumbra see a partial eclipse.
Why the study of solar eclipse is crucial?
- One of the reasons that NASA studies solar eclipses is to study the top layer of the sun called the corona.
- During an annular eclipse, NASA uses ground and space instruments to view this top layer when the sun’s glare is blocked by the moon.
Back2Basics: Summer Solstice
- The summer solstice occurs when one of the Earth’s poles has its maximum tilt toward the Sun.
- It happens twice yearly, once in each hemisphere (Northern and Southern).
- For that hemisphere, the summer solstice is when the Sun reaches its highest position in the sky and is the day with the longest period of daylight.
- Within the Arctic circle (for the northern hemisphere) or Antarctic circle (for the southern hemisphere), there is continuous daylight around the summer solstice.
- On the summer solstice, Earth’s maximum axial tilt toward the Sun is 23.44°. Likewise, the Sun’s declination from the celestial equator is 23.44°.
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From UPSC perspective, the following things are important :
Prelims level: Horseshoe Crab
Mains level: NA
Horseshoe crabs face an uncertain future in Odisha, their largest habitat in India, even as the world gets ready to celebrate the first-ever ‘International Horseshoe Crab Day’ on June 20, 2020.
Try this question from CSP 2012:
Q. Which one of the following groups of animals belongs to the category of endangered species?
(a) Great Indian Bustard, Musk Deer, Red Panda and Asiatic Wild Ass
(b) Kashmir Stag, Cheetal, Blue Bull and Great Indian Bustard
(c) Snow Leopard, Swamp Deer, Rhesus Monkey and Saras (Crane)
(d) Lion-tailed Macaque, Blue Bull, Hanuman Langur and Cheetal
Horseshoe Crabs
IUCN status: (Data insufficient for the Indian variant)
- Horseshoe crabs are marine and brackish water arthropods. They are not true crabs, which are crustaceans.
- The crabs are represented by four extant species in the world. Out of the four, two species are distributed along the northeast coast of India.
- Only T gigas species of the horseshoe crab is found along Balasore coast of Odisha.
- The crab was included on September 9, 2009, in the Schedule IV of the Wild (Life) Protection Act, 1972, under which, the catching and killing of a horseshoe crab is an offence.
Their significance
- The horseshoe crab is one of the oldest marine living fossils whose origin date back to 445 million years before the dinosaurs existed.
- One of their ecological functions is to lay millions of eggs on beaches to feed shorebirds, fish and other wildlife.
Threats
- Poachers kill them for their meat that is popularly believed to have aphrodisiac qualities.
- The blood of horseshoe crabs, which is blue in colour, is used for detection of bacterial endotoxins in medical applications.
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