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  • Coal and Mining Sector

    Critical Minerals and India

    | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    critical

    Central idea

    • A recent working paper from Centre for Social and Economic Progress (CSEP) extends the earlier minerals assessment for 23 minerals by assessing the criticality levels of 43 select minerals for India.
    • This is based on their economic importance (demand-side factors) and supply risks (supply-side factors) which are determined through the evaluation of specific indicators.

    What are Critical Minerals?

    • Critical minerals are elements that are crucial to modern-day technologies and are at risk of supply chain disruptions.
    • These minerals are used in making mobile phones, computers, batteries, electric vehicles, and green technologies like solar panels and wind turbines.
    • Minerals such as antimony, cobalt, gallium, graphite, lithium, nickel, niobium, and strontium are among the 22 assessed to be critical for India.
    • Many of these are required to meet the manufacturing needs of green technologies, high-tech equipment, aviation, and national defence.

    Why are these resources critical?

    • Clean energy transition: Critical minerals are essential to the ecosystem that fuels the world’s transition towards clean energy and digital economy.
    • Strategic nature: Any supply shock can severely imperil the economy and strategic autonomy of a country that is over-dependent on others to procure critical minerals.
    • Rare availability: Supply risks exist due to rare availability, growing demand, and complex processing value chain.

    What is the China ‘threat’?

    • Dominant role: China is the world’s largest producer of 16 critical minerals, including cobalt and rare earth elements.
    • Monopoly in processing: The country has a strong presence across the board in processing operations, with a share of refining around 35% for nickel, 50-70% for lithium and cobalt, and nearly 90% for rare earth elements.
    • Control over offshore mines: China also controls cobalt mines in the Democratic Republic of Congo, from where 70% of this mineral is sourced.
    • Supply chain dominance: The country’s dominance in critical minerals production and processing raises concerns of a supply disruption in case of a geopolitical conflict.

    Challenges in ensuring resilient critical minerals supply

    • Limited availability of critical minerals: The rare availability of critical minerals poses a challenge in meeting the growing demand for these minerals.
    • Geopolitical risks: Complex supply chains can be disrupted by hostile regimes or politically unstable regions, leading to supply chain disruptions.
    • Dominance of certain countries: A few countries, such as China, are the dominant producers of critical minerals, leading to concerns over supply disruptions in case of a geopolitical conflict.
    • Increasing demand for critical minerals: With the shift towards renewable energy technologies and electric vehicles, the demand for critical minerals such as copper, lithium, and rare earth elements is increasing rapidly.
    • Reliance on foreign partners: Countries with limited reserves and higher requirements for critical minerals may have to rely on foreign partners to meet their domestic needs, leading to supply chain vulnerabilities.
    • Environmental and social concerns: The extraction and processing of critical minerals can have negative environmental and social impacts, leading to challenges in meeting sustainability goals.

    What are countries around the world doing about it?

    Several countries are taking measures to ensure a consistent supply of critical minerals to their domestic markets.

    • India: It has set up Khanij Bidesh India Ltd. (KABIL), a joint venture of three public sector companies, to ensure a consistent supply of critical and strategic minerals to the Indian domestic market.
    • US: It has ordered a review of vulnerabilities in its critical minerals supply chains and shifted its focus on expanding domestic mining, production, processing, and recycling of critical minerals and materials.
    • Australia: Its Critical Minerals Facilitation Office (CMFO) and KABIL had recently signed an MoU aimed at ensuring reliable supply of critical minerals to India.
    • UK: It has unveiled its new Critical Minerals Intelligence Centre to study the future demand for and supply of these minerals, and its critical mineral strategy will be unveiled later this year.

    What should India do to ensure resilient supply?

    • Developing domestic sources of critical minerals: This can be achieved by promoting exploration and mining activities, both by public and private sector entities.
    • Encouraging responsible mining practices: The Indian government should encourage responsible mining practices that minimize negative environmental and social impacts of mining activities.
    • Developing recycling capabilities: This can be achieved by promoting research and development in recycling technologies and incentivizing the adoption of recycling practices.
    • Promoting transparency in the supply chain: India should promote transparency in the critical minerals supply chain by ensuring the traceability of minerals from the point of extraction to the point of end-use.
    • Investing in research and development: India should invest in research and development to develop new technologies and processes for efficient extraction, processing, and recycling of critical minerals.
    • Developing a national critical minerals strategy: India should develop a national critical minerals strategy that identifies priority minerals, promotes domestic exploration and mining, and promotes sustainable and responsible mining practices.

    Conclusion

    • India has a significant mineral geological potential, many minerals are not readily available domestically.
    • Hence, India needs to develop a national strategy to ensure resilient critical minerals supply chains, which focuses on minerals found to be critical in this study.

     

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  • ISRO Missions and Discoveries

    The Indian Space Policy 2023 and The Role of Private Sector

    op-ed snap | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    Space Policy

    Central Idea

    • The Indian Space Policy 2023 has been approved by the Indian Cabinet Committee on Security. The policy has opened up the Indian space sector, facilitating an enhanced role for the private sector to augment the development and competitiveness of the Indian space program.

    All you need to know about Indian Space Policy 2023

    • Clear roles and responsibilities: The Indian Space Policy 2023 policy clarifies the roles and responsibilities of the Indian Space Research Organization (ISRO), NewSpace India Limited (NSIL), and the Indian National Space Promotion and Authorization Center (IN-SPACe), as well as that of the private players in the Indian space sector.
    • Opportunities for private sector players: One of the key aspects of the new policy is to open up the Indian space sector to provide opportunities for private sector players to play an active role in augmenting the development and competitiveness of the Indian space program. This will allow ISRO to focus on non-commercial missions, such as research and development of advanced space technologies and space exploration.
    • Enhance overall ISRO missions: The policy is expected to enhance overall ISRO missions with greater participation of non-government entities, including academia, the research community, startups, and industry.
    • Institutional setups: Strategic activities within the space sector will be handled by NSIL, an institutional set up within the Department of Space that will address these activities in a demand-driven mode. The other recent institutional set up that will be critical in coordination between the public sector and the private players is IN-SPACe.
    • Framework for use of ISRO facilities: The policy outlines a framework under which the private sector can use ISRO facilities for a small fee.
    • Making Indian space programme competitive: The private players are also expected to create new infrastructure in the space sector. This will be critical in ensuring that the Indian space program becomes more competitive and developed.
    • ISRO will focus on research and development: In a significant move, ISRO has stated that it will not do any operational and production work for the space sector and will instead focus its energies on developing new technologies, new systems, and research and development. This essentially means that the routine production and launches that the ISRO was involved in until now will be handled by the private sector completely.

    What is mean by Open Space Policy?

    • An Open Space Policy refers to a policy that allows for open and transparent participation in space activities.
    • It involves the collaboration between public and private entities in the exploration and use of space.
    • The goal of an open space policy is to promote innovation, competition, and the growth of the space industry while ensuring the safety and security of space activities.
    • This policy allows for the development of new technologies, research and development, and increased cooperation and collaboration between different countries and organizations.

    Space Policy

    Facts for prelims: Private space sector startups in India

    Company Name

    		 Area of Specialization

    Recent Developments
    Skyroot Aerospace, Hyderabad Launch Vehicles for Small Satellites Successfully launched their first indigenously designed and developed launch vehicle, Vikram I. Vikram S (Mission Prarambh) rocket recently launched as first privately built Indian rocket to make it to space
    Agnikul Cosmos, Chennai Launch Vehicles for Small Satellites Successfully tested their fully 3D printed rocket engine, the Agnilet, in January 2021.
    Bellatrix Aerospace, Bangalore Electric Propulsion Systems Signed an agreement with Skyroot Aerospace for the use of electric propulsion technology in their launch vehicles.
    Pixxel, Bangalore Earth Observation Satellites Launched their first satellite, Anand, in February 2021, and plans to launch a constellation of 30 satellites by 2023.
    Kawa Space, Mumbai Space-Related Technologies Developed a ground station in collaboration with the Indian Institute of Technology, Bombay, to track and receive data from satellites.
    Skylo, Bangalore Low-Cost Satellite-Connected Devices for IoT Raised $103 million in Series B funding round led by SoftBank Group Corp in August 2021.
    SatSure, Bangalore Data Analytics Services for Agriculture Industry Launched their new product, SatSure Agri, in May 2021 to provide crop yield forecasting services to farmers.
    Dhruva Space, Bangalore Satellite-Based Communication Solutions Signed a Memorandum of Understanding with Ananth Technologies in October 2021 to provide satellite-based communication services to the aviation industry.

    Benefits of having an open space policy

    • Messaging tool: An open space policy can be used as a messaging tool, both for friends and potential foes. It can demonstrate India’s commitment to the peaceful use of outer space and build confidence among other nations.
    • Moderating fears and concerns: An open space policy can help to moderate fears and concerns about India’s space activities, by providing greater clarity on India’s space objectives and priorities.
    • Rebuilding confidence: An open space policy can help to rebuild confidence among other nations that India is committed to the peaceful use of outer space.
    • Outlining objectives: An open space policy can provide a clear outline of India’s short-term and long-term space objectives and priorities.
    • Better resource allocation: An open space policy can help to ensure better resource allocation for India’s space program, by providing a clear framework for decision-making and prioritization.

    Potential drawbacks of open space policy

    • Increased competition: An open space policy could lead to increased competition among countries and private entities to gain access to space and its resources. This could lead to a potential arms race in space and increased tensions between countries.
    • Security concerns: Open access to space could also create security concerns, as countries may develop space weapons or use space to conduct surveillance on other countries.
    • Environmental impact: An open space policy could also have environmental consequences, as increased space activity could lead to more space debris and pollution, potentially harming the Earth’s orbit and its environment.
    • Lack of regulation: Without proper regulation, an open space policy could lead to the exploitation of space resources, such as minerals and water, which could negatively impact the environment and lead to unfair distribution of resources.
    • Cost: Increased space activity and access could also lead to higher costs for countries and private entities, which may not be sustainable in the long run.

    Space Policy

    Conclusion

    • The new policy is expected to bring about significant changes in the Indian space ecosystem, including greater private sector participation, better resource allocation, and institutional clarity. This is an important step towards an open space policy that integrates both commercial and national security requirements in a balanced fashion.

    Mains Question

    Q. The Indian Space Policy 2023 has been approved by the Indian Cabinet Committee on Security. Note down some of its key aspects. What do you understand by mean open space policy? Discuss its advantages and potential drawbacks.

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  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    Indian Economic Growth Prospects: A Comprehensive Analysis

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    Growth

    Central Idea

    • India has had an established track record of high growth, with an average annual GDP growth of 6.6% in the decade leading up to the Covid-19 pandemic. In fiscal 2023, India is seen growing at 7%, making it the fastest-growing large economy. But with an imminent global slowdown and the full manifestation of the lagged impact of interest rate hikes since May 2022, the economy is expected to decelerate and grow at 6% in fiscal 2024.

    Indian economic growth prospects

    • Growth accounting: Growth accounting provides a useful framework to analyse medium-term prospects by decomposing their drivers into the contribution of capital, labour and efficiency.
    • Economic growth next five years: Indian economy expected to grow at 6.8 per cent per year for the next five years with 52 per cent of it from capital, 38 per cent from efficiency and 10 per cent from labour.
    • Changing growth model: The growth model is changing to an infrastructure and manufacturing-driven one.
    • Capital spending: The Union Budget has raised capital spending by almost a third in high-multiplier infrastructure segments. But such support to capex will moderate in the years to come, given fiscal consolidation pressures.
    • Investment ratio: Investment as a percentage of GDP has already touched a decadal high of 34 per cent in fiscal 2023. So far, the onus to lift the investment ratio has been shouldered by the government. The contribution of the private sector to investments is set to improve, primed as it is with healthier balance sheets, cash reserves and low leverage.
    • Contribution of productivity to growth: The creation of physical and digital infrastructure in conjunction with efficiency-enhancing reforms will raise the contribution of productivity to growth. The economy is expected to continue seeing efficiency gains from reforms such as GST and Insolvency and Bankruptcy Code (IBC).

    What is holding back a swift and broad-based lift in private investments?

    • Economic uncertainty, primarily, and geopolitical events to a lesser extent.
    • Sustainability challenge looms for the manufacturing sector as manufacturing and infrastructure growth are carbon-intensive.
    • Low-quality skilling of the workforce is holding back its contribution to growth.
    • Quality and the skilling of the workforce
    • Falling labour force participation of women

    What is holding back in Labour’s contribution to growth?

    • Labour’s contribution to growth is likely to be low not because India does not have sufficient people in the working-age group, this cohort is 67 per cent of the population and is set to expand by 100 million over the next decade. It is the quality and skilling of the workforce that is holding it back.

    Why private investment is essential for Indian economic growth?

    • Capital formation: Private investment helps in creating capital formation, which is essential for economic growth. It helps in building infrastructure, creating jobs, and generating income, which in turn drives consumer spending and boosts economic growth.
    • Innovation: Private investment is often associated with innovation and technological advancements. Companies that invest in research and development (R&D) can develop new products and processes that can boost productivity and create new markets. This, in turn, can lead to increased profits and more investment in R&D, creating a virtuous cycle of innovation and growth.
    • Employment: Private investment creates jobs, which is critical for economic growth and development. When companies invest in new projects or expand their operations, they often need to hire additional workers, which reduces unemployment and boosts consumer spending.
    • Foreign investment: Private investment is also an important driver of foreign investment. When companies invest in India, they often bring new technology, skills, and expertise that can help boost local industries and drive economic growth.
    • Tax revenue: Private investment can also help increase tax revenues, which can be used by the government to fund public goods and services such as education, healthcare, and infrastructure.

    Steps taken by the government to encourage private investment

    • Investment-Friendly Policies: The Indian government has launched several investment-friendly policies, such as Make in India, Start-up India, and Digital India, to encourage private investment in the country.
    • Infrastructure Development: The government is investing heavily in infrastructure development, including roads, railways, airports, and ports, to create a conducive environment for private investment.
    • Tax Reforms: The Indian government has implemented several tax reforms, such as the Goods and Services Tax (GST), to simplify the tax structure and make it more investor-friendly.
    • FDI Liberalization: The government has liberalized foreign direct investment (FDI) norms in several sectors, including defense, insurance, and retail, to attract more foreign investment.
    • Insolvency and Bankruptcy Code (IBC): The government has implemented the Insolvency and Bankruptcy Code (IBC), which has made it easier for businesses to exit, and has increased investor confidence in the Indian economy.
    • Production Linked Incentives (PLI): The government has launched the Production Linked Incentives (PLI) scheme to encourage manufacturing in India and make it more competitive globally.
    • Easing of Business Regulations: The Indian government has eased several business regulations to improve the ease of doing business in the country and attract more private investment.
    • Skill Development: The government has launched several initiatives, such as Skill India and Pradhan Mantri Kaushal Vikas Yojana, to develop the skills of the Indian workforce and make it more attractive to investors.

    Facts for prelims: Steps taken by the government to encourage labour force participation of women

    Initiatives

    Description
    Maternity Benefit Programme A scheme to provide financial assistance to pregnant women and lactating mothers for their health and nutrition needs.
    Pradhan Mantri Ujjwala Yojana A scheme to provide LPG connections to women from Below Poverty Line households.
    National Urban Livelihood Mission A programme to provide self-employment opportunities and skill development training to urban poor women.
    National Rural Livelihood Mission A scheme to provide self-employment opportunities and skill development training to rural women.
    Mahila E-Haat A digital platform to provide a market for women entrepreneurs to sell their products online.
    Beti Bachao Beti Padhao A campaign to address the declining child sex ratio and to promote education among girls.
    Sukanya Samriddhi Yojana A savings scheme for the girl child to ensure their education and marriage expenses are taken care of.

     Way ahead

    • Focus on green transition: As the manufacturing and infrastructure growth are carbon-intensive, so it’s important to have a significant and simultaneous focus on green transition. Having a high sustainability quotient can only embellish India’s credentials as a production destination.
    • For instance: Research suggests that between fiscals 2023 and 2027, over 15 per cent of India’s capex could be towards green initiatives involving renewable energy, transportation, altering the fuel mix, and green hydrogen. In the fragmented geopolitical milieu, which is shifting towards supply-chain diversification and friend shoring, India can attract foreign investments.
    • Enhancing labour force participation of women: The labour force participation of women is falling. This will have to be reversed through employment policies and investing in the health and education of women.
    • For instance: According to a World Bank report in 2018, India could add 1.5 percentage points to its GDP growth by improving the participation of women in its workforce.

    Growth

    Conclusion

    • India is going to become a $5 trillion economy by fiscal 2029, given the current growth dynamics. However, the impact of climate risk mitigation will be felt across revenue, commodity prices, export markets, and capital spending. To win the growth marathon, India’s focus must be sharp on the drivers of pace.

    Mains Question

    Q. Highlight India’s growth prospects in the next five years? Discuss the significance of private investment for economic growth and enlist factors that holding back the private investment.

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  • Promoting Science and Technology – Missions,Policies & Schemes

    Centre gives nod for National Quantum Mission (NQM)

    | Science Tech | Mains Paper 3: S&T – Applications In Everyday Life

    quantum

    Central idea: The Union Cabinet has approved the National Quantum Mission (NQM) with a budget of ₹6,003 crore. The mission aims to fund research and development in quantum computing technology and associated applications.

    What is Quantum Computing?

    Explanation
    What is it? A type of computing that uses quantum-mechanical phenomena to perform operations on data.
    Qubits Quantum bits, which can be 0, 1, or both simultaneously (a superposition of 0 and 1).
    Computational speed It can perform certain calculations much faster than traditional computing, especially for complex algorithms and large amounts of data.
    Entanglement The use of entanglement allows quantum computing to process multiple pieces of data simultaneously, further increasing computational power.
    Research Governments, universities, and private companies around the world are researching quantum computing.
    Challenges Building practical quantum computers is a major challenge due to the fragility of qubits and the difficulty of controlling and measuring them accurately.
    Development stage Quantum computing is still in its early stages of development.

     

    National Quantum Mission (NQM)

    Mission duration 2023-2031
    Total cost Rs. 6,003.65 crore
    Leading Department Department of Science and Technology (DST)
    Supporting departments Other government departments
    Focus Development of physical qubit-based quantum computers
    Applications Healthcare and diagnostics, defense, energy, and data security
    India’s positioning Among the top six nations involved in quantum research and development

     

    Key focus areas

    (1) Thematic Hubs

    • The mission will be structured around four broad themes:
    1. Quantum Computing,
    2. Quantum Communication,
    3. Quantum Sensing and Metrology, and
    4. Quantum Material and Devices.
    • Thematic hubs will be established at research institutes and R&D centres already working in the field.
    • The effort is to create an ecosystem that favours quantum technology development in the country.

    (2) Satellite-based Communication

    • One of the key areas of focus for the NQM will be the development of satellite-based secure communication between ground stations and receivers located within a 3,000 km range over the first three years.
    • NQM will lay communication lines using Quantum Key Distribution over 2,000 km for satellite-based communication within Indian cities.
    • Tests will be conducted in the coming years for long-distance quantum communication, especially with other countries.

    (3) Quantum Computing

    • The mission will focus on developing quantum computers (qubit) with physical qubit capacities ranging between 50 – 1000 qubits, developed over the next eight years.
    • The development of computers up to 50 physical qubits will take three years.
    • 50 – 100 physical qubits will be developed in five years, and computers up to 1000 physical qubits will be developed in eight years.

    Applications

    • The mission would have a wide range of applications, including in healthcare and diagnostics, defense, energy, and data security.
    • Quantum technologies are expected to be far more powerful than traditional computing systems and capable of performing the most complex problems in a highly secure manner.

    Various challenges

    • Sub-zero temperatures: Current prototype systems require extremely cold (close to -273 C) conditions to work, along with developing the materials capable of such computations.
    • Still evolving: Quantum computers are still a work in progress globally, and no one has built a practical computer that can actually work and solve meaningful problems.
    • No global breakthrough: IBM, D-Wave of Canada or China’s Zuchongzhi 2.1, all of whom have prototype systems, have not built a quantum computer that can solve a problem that anybody cares about.

    Conclusion

    • The NQM represents a significant step forward for India’s research and development efforts in the quantum technology sector.
    • By focusing on the development of quantum computers and related technologies, the country is positioning itself as a key player in this field, with wide-ranging applications across multiple sectors.

     

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  • Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

    India’s population to edge ahead of China’s by mid-2023: UN

    IOCR | Indian Society | Mains Paper 1: Population & Associated Issues

    population

    Central idea: India is set to overtake China as the world’s most populous country by mid-2023, according to data released by the United Nations.

    State of World Population Report

    • The report is an annual report published by the United Nations Population Fund (UNFPA), which provides a global overview of population trends and issues.
    • The report covers a wide range of topics related to the population, such as fertility, mortality, migration, family planning, and gender equality.
    • It also includes analysis and recommendations for policymakers and governments to address population challenges and promote sustainable development.
    • The report is widely regarded as a key reference for researchers, policymakers, and international organizations working on population and development issues.

    population

    Highlights of the 2023 report

    Facts

    Data
    World Population (2022) 8 billion
    Most populous regions Eastern and Southeastern Asia, Central and Southern Asia
    World Population Growth Rate (since 2020) Less than 1%
    Fertility Rate (replacement level) 2.1 children per woman
    Population aged 65 years or above (2050) 16%
    Persons aged 65 years and above (2050) More than double that of 5-year-olds and same as 12-year-olds
    Regions with fertility rate at or below 2.1 60%
    Top countries accounting for global population increase by 2050 DR Congo, Egypt, Ethiopia, India, Nigeria, Pakistan, Philippines, Tanzania

     

    Population anxieties in India

    Facts
    India’s population India is now the most populous country in the world, having overtaken China in population, with 1,428.6 million people.
    Age distribution 68% of India’s population belongs to the 15-64 years category, and 26% in the 10-24 years group, making India one of the youngest countries in the world.
    Fertility rate National Family Health 5 Survey (2019-21) found that India attained a Total Fertility Rate of 2.0 for the first time, less than the replacement level of 2.1, falling from 2.2 in NFHS 4 (2015-16).
    Life expectancy Life expectancy for men in India is 71 years, the same as the global life expectancy, while it is marginally lower for women at 74 years.
    Population growth India’s population growth rate has decreased from 2.3% in 1972 to less than 1% now.
    Demographic dividend With 68% of its population as youth, and working population, India could have one of the largest workforces in the world, giving it a global advantage.

     

    Way forward

    The UNFPA report strongly recommended that governments introduce policies with gender equality and rights at their heart to address changing demographics. These recommendations include:

    • Parental leave programs: Introducing parental leave programs that provide paid leave to both mothers and fathers after the birth or adoption of a child. This can help promote gender equality in the workplace and support families in raising children.
    • Child tax credits: Providing tax credits or financial support to families with children to help them meet the costs of raising children. This can help address child poverty and support families in providing for their children’s basic needs.
    • Policies to promote gender equality at workplace: Implementing policies and practices that promote gender equality in the workplace, such as equal pay for equal work, flexible work arrangements, and anti-discrimination policies.
    • Universal access to sexual and reproductive health and rights: Ensuring that all people have access to comprehensive sexual and reproductive health services, including family planning, maternal health services, etc. This can help prevent unintended pregnancies, reduce maternal mortality, and promote the health and well-being of individuals and families.

     

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  • Oil and Gas Sector – HELP, Open Acreage Policy, etc.

    Windfall Tax back on local crude oil

    Prelims Only | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    windfall

    The government has revised a windfall tax on domestically-produced crude oil. According to an official notification, the windfall tax rate of Rs 6,400 per tonne.

    What is a Windfall Tax?

    • Windfall taxes are designed to tax the profits a company derives from an external, sometimes unprecedented event — for instance, the energy price-rise as a result of the Russia-Ukraine conflict.
    • These are profits that cannot be attributed to something the firm actively did, like an investment strategy or an expansion of business.
    • The US Congressional Research Service (CRS) defines a windfall as an “unearned, unanticipated gain in income through no additional effort or expense”.
    • One area where such taxes have routinely been discussed is oil markets, where price fluctuation leads to volatile or erratic profits for the industry.

    Features of Windfall Tax

    • Imposed on unanticipated and unearned gains: Windfall tax is imposed on the profits or gains that a company earns from external events or factors beyond their control, which they did not actively seek or pursue.
    • One-time tax: It is typically imposed as a one-time tax retrospectively, over and above the normal rates of tax, and is not a regular or ongoing tax.
    • Imposed on specific sectors or industries: Windfall taxes are usually imposed on specific sectors or industries where there is a significant increase in profits due to external factors such as price fluctuations, supply disruptions, or changes in regulations.
    • Rationale for imposition: The imposition of windfall taxes is based on the rationale of redistributing unexpected gains, funding social welfare schemes, and creating a supplementary revenue stream for the government.
    • Design problems: Introducing windfall taxes may suffer from design problems, given their expedient and political nature.
    • Potential impact on investment: Windfall taxes may lead to uncertainty in the market and negatively impact future investment, as companies may feel uncertain about investing in a sector with an unstable tax regime.

    When did India introduce this?

    • In July 2022, India announced a windfall tax on domestic crude oil producers who it believed were reaping the benefits of the high oil prices.
    • It also imposed an additional excise levy on diesel, petrol and air turbine fuel (ATF) exports.
    • Also, India’s case was different from other countries, as it was still importing discounted Russian oil.

    How is it levied?

    • Governments typically levy this as a one-off tax retrospectively over and above the normal rates of tax.
    • The Central government has introduced a windfall profit tax of ₹23,250 per tonne on domestic crude oil production, which was subsequently revised fortnightly four times so far.
    • The latest revision was on August 31, when it was hiked to ₹13,300 per tonne from ₹13,000.

    Reasons for re-introduction

    • There have been varying rationales for governments worldwide to introduce windfall taxes like:
    1. Redistribution of unexpected gains when high prices benefit producers at the expense of consumers,
    2. Funding social welfare schemes, and
    3. Supplementary revenue stream for the government

    Issues with imposing such taxes

    • Design problems: Windfall taxes may suffer from design problems, given their expedient and political nature. There is also the issue of determining what constitutes true windfall profits and who should be taxed, which raises questions about the threshold for exemption of smaller companies.
    • Potential impact on investment: Windfall taxes may lead to uncertainty in the market and negatively impact future investment, as companies may feel uncertain about investing in a sector with an unstable tax regime.
    • Internalization of potential taxes: Introducing a temporary windfall profit tax may reduce future investment since prospective investors may internalize the likelihood of potential taxes when making investment decisions.
    • Threshold for exemption of smaller companies: Determining the threshold for exemption of smaller companies raises questions about which companies should be taxed and what level of profit is normal or excessive.
    • Difficulty in determining true windfall profits: There is also the issue of determining what constitutes true windfall profits, as it may be challenging to differentiate between profits attributable to external events versus those attributable to a company’s active investment strategy or business expansion.

     

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  • Blockchain Technology: Prospects and Challenges

    How Web3 differs from Web2?

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    web

    Central idea: The article discusses the key features of Web3, including its decentralized nature, peer-to-peer transactions, and greater control over data and digital assets for users.

    What is Web3?

    • Web3, also known as Web 3.0, is the next generation of the World Wide Web that emphasizes decentralization, security, and user privacy.
    • It is essentially a vision of the internet where users have more control over their data, identities, and online interactions.
    • It is built on blockchain technology, which enables peer-to-peer transactions without the need for intermediaries such as banks, governments, or other third parties.
    • This decentralized approach to the web allows for greater transparency and trust, as well as more secure and private transactions.
    • Web3 technologies include blockchain platforms like Ethereum, IPFS (InterPlanetary File System) for distributed file storage, decentralized identity systems like uPort, and decentralized marketplaces like OpenBazaar.

    Features of Web 3

    Feature

    Web3

    Web2

    Centralisation

    		 Decentralised Centralised

    Intermediaries

    		 Peer-to-peer Rely on intermediaries

    Data ownership and control

    		 Users have control Large corporations have control

     

    Challenges for Web3:

    Challenge

    Scalability

    		 Current blockchain infrastructure can only handle a limited number of transactions per second.

    User Adoption

    		 Despite being around for over a decade, blockchain technology is still relatively unknown to the general public.

    Interoperability

    		 Web3 is being developed by different organisations, each with their own unique vision for the technology, leading to challenges in integration.

    Complexity

    		 Technical expertise is required to use and understand Web3, which may be a barrier for some users.

     

    Examples of Web3 use:

    Use

    Cryptocurrencies

    		 Built on blockchain technology, cryptocurrencies enable secure, decentralised transactions without the need for intermediaries.

    Decentralised Finance

    		 Aims to build a new financial system on top of blockchain technology. DeFi applications enable users to borrow, lend, and trade crypto.

    Decentralised storage

    		 Used to create decentralised social networks and develop decentralised identity verification systems.

     

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  • International Space Agencies – Missions and Discoveries

    Repeating radio signal detected from nearby Exoplanet YZ Ceti b

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    ceti

    Central idea: Astronomers have detected a repeating radio signal from the YZ Ceti exoplanet that suggests the presence of a magnetic field around it.

    What is YZ Ceti b?

    • YZ Ceti b is an earth-sized exoplanet (a planet that orbits a star other than our sun).
    • It is located barely 12 light-years from Earth, and it rotates around a small red dwarf star called YZ Ceti.

    How was the discovery made?

    • The researchers had to make multiple rounds of observations before they could detect the radio signals from the star YZ Ceti, which seemed to match the orbital period of the planet YZ Ceti b.
    • From this, they deduced that the signals were a result of the interaction between the planet’s magnetic field and the star.

    Why does the magnetic field matter?

    • Intense bursts of energy from the YZ Ceti star-exoplanet exchange produce spectacular auroral lights, similar to the energy surges from the sun that disrupt telecommunications on earth.
    • The radio waves confirmed the existence of an exoplanetary magnetic field.
    • This can only be produced if the exoplanet orbits very close to its parent star and has its own magnetic field to influence the stellar wind and generate the signals.

    What’s the implication for YZ Ceti b?

    • The small orbit of YZ Ceti b indicates that the planet takes just a couple of earth days to circle its star.
    • Nearly half of all the stars visible in the sky could potentially harbor rocky, earth-sized planets in habitable orbits around them.
    • Astronomers indicated that the possibility of the existence of a magnetic field on the Earth-like exoplanet, called YZ Ceti b, probably hints at the habitability of life on that planet.

    How common are such magnetic fields?

    • Planetary scientists have never been able to identify magnetic fields on smaller, rocky exoplanets until now.
    • The survival of a planet’s atmosphere may depend on its having, or not having, a strong magnetic field, since the field protects its atmosphere from being eroded by the charged particles blowing in from its star.

     

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  • Higher Education – RUSA, NIRF, HEFA, etc.

    Importance of Science of Empathy and Inclusivity in IITs

    op-ed snap | Ethics | Mains Paper 4: Ethics

    Empathy

    Central Idea

    • The recent spate of suicides among IIT students and the subsequent media attention, which has brought to the fore the social behavior and anxieties within the IIT student community. It emphasizes that studying at the IITs can be highly stressful, especially for students from socially marginalized backgrounds.

    For instance: JEE Exam and Social Inequality

    • There are disparities among students from different social strata in the JEE Advanced entrance exam, with lower cut-offs for SC/ST students compared to general category students.
    • This disparity in scores can be attributed to cultural and material inequalities faced by SC students, such as lack of basic amenities like water, sanitation, and transportation.

    What is mean by material inequality?

    • Unequal distribution of resources and basic amenities: Material inequality refers to the unequal distribution of resources and basic amenities such as food, water, shelter, healthcare, education, and access to opportunities, among individuals or groups in a society.
    • Factors responsible: It is a result of various factors such as income, social class, gender, race, ethnicity, and geographical location.
    • Negative effects: Material inequality can have negative effects on the well-being and opportunities of individuals and communities, leading to disparities in access to resources and basic needs.

    How IITs can engage with local communities?

    • Conduct Field and Community Studies: Students from all disciplines can conduct field and community studies to understand the causes of material inequality in the surrounding areas. This will provide them with insights into the problems that exist and help them design effective solutions.
    • Interdisciplinary Field Work: IITs can adopt an interdisciplinary fieldwork pedagogy where professors from different disciplines work together to design solutions for societal challenges. This will help students to develop mutual respect, empathy, and a collective understanding of how the state and the market work.
    • Local Problem Areas: IITs can identify and work on concrete problems of all sizes and difficulty levels, such as cooking energy, public transport, small enterprises, and pollution, in the surrounding districts. Faculty members can work with district administrations to address these and involve both IIT and local college students.
    • Collaboration and Teamwork: Engaging with local communities will reduce competitive stress and increase collaboration and teamwork within the student body. Students will appreciate the diversity of backgrounds and understand the adversities many among them have had to face.
    • Democratic Science: Students should demand training in a science of empathy and diversity that probes and explores all nooks and crannies of knowledge and society. Only when Indian science turns more democratic will the university become more empathetic and the society more equal and prosperous.

    Value addition box

    IIT Bombay as an example:

    • IIT Bombay can use the communities in surrounding districts as problem areas for research and academics. From cooking energy to public transport, there are concrete problems of all sizes for students and faculty members to grapple with.
    • Faculty members can work with district administrations to involve both IIT and local college students, thereby creating an ecosystem of higher education that satisfies its institutional and cultural roles.

     What is empathy?

    • Empathy is the ability to understand and share the feelings of another person. It involves being able to put oneself in another person’s shoes and perceive things from their perspective.
    • Empathy allows individuals to connect with others emotionally, recognize their needs and respond with sensitivity and compassion.
    • It is an important aspect of emotional intelligence and plays a crucial role in building strong relationships, effective communication, and social cohesion.

    What do you understand by mean science of empathy?

    • Science of empathy refers to the study and application of empathy as a scientific concept, including understanding its mechanisms, impact, and potential applications in various fields such as healthcare, education, and social justice.
    • It involves using scientific methods to study empathy, including neuroscience, psychology, and social science research.
    • The goal is to deepen our understanding of empathy and how it can be applied to improve social and emotional outcomes for individuals and communities.

    Why Empathy is important in IITs?

    • Addressing social inequalities: IITs are known for their rigorous academic curriculum and high-achieving students, but they also have a responsibility to address social inequalities that exist in society. Empathy can help students and faculty understand the challenges faced by underprivileged communities and develop solutions that address these challenges.
    • Fostering collaboration: Empathy can help IIT students and faculty work together more effectively by understanding each other’s perspectives and experiences. This can lead to better collaboration and teamwork, which is essential for tackling complex problems.
    • Developing socially responsible professionals: IITs aim to produce professionals who can make a positive impact on society. Empathy is an important quality for professionals who want to understand the needs and concerns of their clients or users, and develop solutions that meet those needs.
    • Enhancing research: Empathy can also enhance research by promoting interdisciplinary collaborations that consider a wide range of perspectives and experiences. This can lead to more innovative and effective solutions to complex problems.

    Why Empathy is important along with science in higher education?

    • Social Responsibility: Higher education institutions have a social responsibility to produce graduates who understand the societal impacts of their work and who are capable of creating solutions that benefit all members of society. Empathy helps students to understand the perspectives of those who may be affected by their work and to create solutions that are more inclusive and equitable.
    • Collaborative Work: In higher education, collaborative work is increasingly common across disciplines, cultures, and even national borders. Empathy enables students to understand the needs and motivations of their collaborators and to work effectively as part of a team.
    • Diversity and Inclusion: Diversity and inclusion are key principles of higher education, and empathy plays a crucial role in achieving these goals. Empathy helps students to understand and appreciate the experiences and perspectives of others who come from different backgrounds, leading to a more inclusive and welcoming learning environment.
    • Ethical Considerations: Science and technology can have ethical implications, and empathy is necessary to understand the impact of scientific and technological advancements on different groups of people. Empathy can help students to identify potential ethical dilemmas and to create solutions that align with ethical principles.

    Conclusion

    • The issues of social inequality and stress among students in the Indian Institutes of Technology (IITs) suggests the need for an empathetic and inclusive approach towards higher education. Interdisciplinary fieldwork and community engagement can create a diverse and inclusive ecosystem of higher education, preparing students to become better professionals and citizens.

    Mains Question

    Q. Empathy along with science is an essential ingredient in higher education in India. In light of this statement discuss how IITs can play a critical role in promoting empathy and reducing social inequalities in India.

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  • Foreign Policy Watch: India – EU

    Macron’s Statement On China and India’s Own Possibilities In Europe

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Macron

    Central idea

    • French President Emmanuel Macron’s recent declaration that France is an ally but not a vassal of the United States and his comments that Paris does not share Washington’s hostility towards China have generated significant reactions in the US and Europe. Beijing’s official media has praised Macron’s strategic autonomy approach towards China, and Russia hopes that France and other European countries will be less politically tied to the US.

    Macron’s comments on China and Taiwan and reactions

    • Outrage in the US and Europe: Macron’s comments that France does not share the US’s hostility towards China and does not see the Taiwan crisis as a threat to Europe have generated outrage in the US and Europe.
    • China praised: Beijing sees Macron’s model of strategic autonomy as a positive example for other nations to follow regarding China.
    • India criticized: India has criticized the remarks, noting that the principle and power are at stake in both Ukraine and Taiwan.

    What is mean by Vassalisation?

    • The term vassalisation refers to a state or country that is in a subordinate or dependent relationship with another, usually more powerful, state or country.
    • It suggests a lack of independence and autonomy in decision-making and an obligation to follow the policies and interests of the more powerful state.

    Important trends highlighted by the debate on the vassalisation of Europe and Russia

    1. Different perspectives on Taiwan and Ukraine
    • Macron’s claim on Taiwan not being a concern to Europe reinforces India’s External Affairs Minister S Jaishankar’s criticism of Europe’s mindset that their problems are the world’s problems.
    • The Ukraine conflict has debilitating consequences for the world, and a shooting war between the US and China over Taiwan could be more devastating and costly to the international system.
    • Macron’s contradictory approach to the Indo-Pacific is disappointing, and his wavering resolve on China may lead Asian countries to think less of French resolve.
    1. Macron does not represent all of Europe
    • President of the European Commission, Ursula von der Leyen, has a different take on China than Macron.
    • Central Europeans trust the US more than France or Germany to defend their security interests.
    • Europe is deeply divided on how to address contemporary security challenges, undermining Macron’s ambition to turn Europe into the world’s third superpower.
    • The only common belief in Europe today is the political faith in Beijing’s capacity to end Russia’s war in Ukraine.
    1. A weaker and divided Europe enhances the prospects for a bipolar world
    • Multipolarity has been an important objective of India’s foreign policy for over three decades.
    • The talk of multipolarity could become academic as the US and China pull way ahead of other powers, get deeper into confrontation, and shape the choices of the rest of the world.
    • The belief that Europe and Russia can act as elements of a multipolar world is becoming increasingly untenable.
    1. India’s possibilities in Europe and Russia
    • Delhi should not turn its back on Europe despite its current predicament with China.
    • Macron’s China push underlines India’s own possibilities in Europe.
    • Western Europe that follows the money in China could do the same in India, providing much strategic benefit to India in its partnerships with Brussels and individual European actors.
    • India is stepping up its engagement with Russia on the calculation that Moscow’s current dependence on Beijing is temporary.
    1. India needs to work more closely with the US and its Asian allies
    • The inability or unwillingness of both Russia and Western Europe to balance China means India needs to work much more closely with the US and its Asian allies to secure a more favourable balance of power in its Indo-Pacific neighbourhood.
    • India’s strategic value will only go up for the US amidst the European reluctance to stand up to China’s hegemonic ambitions.
    • Few countries in Asia face more urgent and daunting challenges from China than India, and few Asian capitals have more political will to stand up to Beijing than Delhi.
    • The reduced standing of Europe and Russia in great power relations is accompanied by Asia’s rise, with emerging strategic opportunities for Japan, India, and South Korea.

    Europe-China relations

    • Europe-China relations have been complex and multi-faceted over the years: On the one hand, China is Europe’s second-largest trading partner, and there is a lot of economic interdependence between the two. On the other hand, there are concerns about human rights violations, lack of market access for European companies in China, and China’s increasing assertiveness in the Asia-Pacific region.
    • Some important developments include
    • The EU-China Comprehensive Agreement on Investment (CAI): Negotiated in December 2020, the CAI is a landmark investment deal between the EU and China aimed at improving market access for European companies in China and increasing investment flows between the two regions. However, the agreement has been met with criticism from some EU member states and civil society groups, who argue that it does not do enough to address human rights abuses in China.
    • Increasing concern over Chinese human rights abuses: Europe has been increasingly critical of China’s human rights record, particularly in the wake of the crackdown on pro-democracy protesters in Hong Kong and the treatment of Uighur Muslims in Xinjiang. The EU has imposed sanctions on Chinese officials involved in human rights abuses, and there is growing support for a boycott of the 2022 Winter Olympics in Beijing.
    • Growing competition in the Indo-Pacific region: Europe is becoming more engaged in the Indo-Pacific region, which is seen as a key area of strategic competition between China and the US. Some EU member states, such as France and Germany, have developed their own Indo-Pacific strategies and are seeking to deepen security partnerships with countries in the region.
    • Belt and Road Initiative (BRI): China’s massive infrastructure project, the BRI, has raised concerns in Europe about China’s growing influence in the region. Some EU member states, such as Italy and Greece, have signed on to the initiative, while others have been more cautious.

    Facts for prelims

    Category

    Information
    Location East Asia
    Capital Taipei
    Population 23.58 million (2021)
    Official language Mandarin Chinese, Hokkien, Hakka, and indigenous languages
    Currency New Taiwan dollar
    Form of government Unitary semi-presidential constitutional republic
    Topography Mountainous with fertile plains in the west
    Climate Subtropical

    Conclusion

    • Macron’s comments on China have sparked debates about Europe and Russia’s relationship with China and the US. A weaker and divided Europe enhances the prospects for a bipolar world dominated by the US and China, which makes it important for India needs greater engagement with European geopolitics and to work closely with the US and its Asian allies to secure a more favorable balance of power in the Indo-Pacific region.

    Mains Question

    Q. What do you understand by mean vassalisation in terms of international politics? Discuss the latest trends that have emerged from the debate on the vassalisation of Europe derived from French president Macron’s recent comments on China.

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