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  • Capital Markets: Challenges and Developments

    India’s first Global Bullion Exchange unveiled

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

    Prime Minister has launched India’s first International Bullion Exchange (IIBX) at the Gujarat International Finance Tec-City (GIFT City) near Gandhinagar.

    What is Bullion?

    • Bullion refers to physical gold and silver of high purity that is often kept in the form of bars, ingots, or coins.
    • It can sometimes be considered legal tender and is often held as reserves by central banks or held by institutional investors.

    When was the IIBX announced?

    • During her 2020 budget speech, Finance Minister announced the setting up of India International Bullion Exchange (IIBX) at International Financial Services Center (IFSC) at GIFT City in Gandhinagar.
    • The International Financial Services Centres Authority (Bullion Exchange) Regulations, 2020, was notified in December 2020 for trading of precious metals, including gold and silver.
    • These regulations also cover bullion exchange, clearing corporation, depository and vaults.

    What is the IIBX?

    • India for the first time had liberalised gold imports through nominated banks and agencies in the 1990s.
    • Now, the eligible qualified jewellers in India have been allowed to directly import gold through IIBX.
    • For this, jewellers will have to become a trading partner or a client of an existing trading member.
    • In addition, the exchange has set up necessary infrastructure to store physical gold and silver.
    • The exchange will sell physical gold and silver and aims to be set up on the lines of the Shanghai Gold Exchange and Borsa Istanbul in order to make India a key regional hub for bullion flows.

    How will it work?

    • The thought process behind setting this up is to enable the trading of commodities on an exchange.
    • Since this is international exchange, trading can take place in US dollars as well.
    • India has positioned itself as one of the biggest trading hubs in Asia.
    • Because of the competitive pricing on IIBX, international players will be happy to use our vaulting services.
    • Moreover, with this being a free trade zone, no duty will be paid.

    What was the practice up until now?

    • Currently, gold in India is imported on a consignment model into different cities by nominated banks and agencies approved by the RBI and then supplied to traders/jewellers.
    • The banks and other agencies get a fee from the gold exporter for handling, storage, etc, and also add a premium to the gold while transacting with domestic buyers.
    • The buyer passes this charge on to the value chain until it reaches the end customer.

    What change did IIBX bring?

    • With the IIBX becoming operational today, qualified domestic buyers can, through a branch in Gift City, purchase the bars and coins.
    • This purchase can be done from an international supplier who is a member of the IIBX.

    What is the advantage of an exchange?

    • Through the dis-intermediation by facilitating transactions through an anonymously traded exchange platform, bullion is made available across special economic zones (SEZs) at International Financial Services Centres Authority (IFSCA)-approved vaults.
    • This means the growth of IIBX is not just limited to GIFT City but across jewellery manufacturing hubs nationwide.
    • The qualified jeweller allowed to import gold through IIBX, or a jeweller who is a client of an IIBX member, can view the available stock and place the order.
    • This shall nudge jewellers towards just-in-time inventory management.
    • It will also result in greater transparency in pricing, and order sequencing, thereby removing any room for unfair preference by supplier, importing or logistics agency.

    Which jewellers have come on board?

    • So far, 64 big jewellers have come onboard and more applications are in the pipelines.
    • Some of the big names include Malabar Gold Pvt Ltd, Titan Company Ltd, Bangalore Refinery Pvt Ltd, RBZ Jewellers Pvt Ltd, Zaveri and Company Pvt Ltd.

    What are the new RBI guidelines for importing gold?

    • Banks may now allow qualified Jewellers to remit advance payments for 11 days for import of gold through IIBX in compliance to the extant Foreign Trade Policy and regulations issued under IFSC Act.
    • According to the RBI, all payments by qualified jewellers for imports of gold through IIBX shall be made through the exchange mechanism as approved by IFSCA.

    Who can enrol on the exchange?

    1. Non-Resident Individual / Proprietorship Firm
    2. Registered Partnership Firm
    3. Private Limited Company
    4. Public Limited Company
    5. Qualified Jewellers
    6. Branches of IBU at GIFT City
    7. Foreign Bullion Suppliers who follow OECD guideline
    • In order to become a qualified jeweller, entities require a minimum net worth of Rs 25 crore.
    • And 90 per cent of the average annual turnover in the last three financial years through deals in goods categorised as precious metals.
    • NRIs and institutes will also be eligible to participate in the exchange after registering with the International Financial Services Centre Association (IFSCA).
    • Jewellers will be able to transact on IIBX only as trading members or as clients of a trading member.
    • If one wants to become a trader, a qualified jeweller will have to establish a branch or a subsidiary in IFSC (international financial services centre) and apply to the IFSCA.

    What products does IIBX offer?

    • IIBX offers a diversified portfolio of products and technology services at a cost which is far more competitive than the Indian exchanges as well as other global exchanges in Hong Kong Singapore, Dubai, London and New York.
    • Gold 1 kg 995 purity and gold 100 gm 999 purity with a T+0 settlement (100% upfront margin) are expected to trade at IIBX initially.
    • All contracts will be listed, traded and settled in US Dollar
    • The exchange will have three vaults – one operated by Sequel Global (ready and approved), the second one to be operated by Brinks India is ready and awaiting final approval and the third is under construction.
    • Once the gold is imported by the authorised entities it will be deposited at one of the vaults which will issue bullion depository receipts.
    • These receipts will then be traded in dollars on the exchange.

    Significance of IIBX

    • The IIBX shall be the “Gateway for Bullion Imports into India”, wherein all the bullion imports for domestic consumption shall be channelized through the exchange.
    • The exchange ecosystem is expected to bring all the market participants to a common transparent platform for bullion trading.
    • It would provide efficient price discovery, assurance in the quality of gold, and enable greater integration with other segments of financial markets.

     

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  • Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

    Core Sector output expands by 12.7%

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

    India’s eight core sectors’ output growth moderated to 12.7% in June, from 18.1% in May, with all sectors except crude oil registering an uptick in production.

    What are the Core Industries in India?

    • The main or the key industries constitute the core sectors of an economy.
    • In India, there are eight sectors that are considered the core sectors.
    • They are electricity, steel, refinery products, crude oil, coal, cement, natural gas and fertilizers.

    Index of Eight Core Industries (ICI) vs Index of Industrial Production (IIP)

    [A] Index of Eight Core Industries

    • The monthly Index of Eight Core Industries (ICI) is a production volume index.
    • ICI measures collective and individual performance of production in selected eight core industries viz. Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity.
    • Prior to the 2004-05 series six core industries namely Coal, Cement, Finished Steel, Electricity, Crude petroleum and Refinery products constituted the index basket.
    • Two more industries i.e. Fertilizer and Natural Gas were added to the index basket in 2004-05 series. The ICI series with base 2011-12 will continue to have eight core industries.

    Components covered in these eight industries for the purpose of compilation of index are as follows:

    • Coal – Coal Production excluding Coking coal.
    • Crude Oil – Total Crude Oil Production.
    • Natural Gas – Total Natural Gas Production.
    • Refinery Products – Total Refinery Production (in terms of Crude Throughput).
    • Fertilizer – Urea, Ammonium Sulphate (A/S), Calcium Ammonium Nitrate (CAN), Ammonium chloride (A/C), Diammonium Phosphate (DAP), Complex Grade Fertilizer and Single superphosphate (SSP).
    • Steel – Production of Alloy and Non-Alloy Steel only.
    • Cement – Production of Large Plants and Mini Plants.
    • Electricity – Actual Electricity Generation of Thermal, Nuclear, Hydro, imports from Bhutan.

    [B] Index of Industrial Production

    • The Index of Industrial Production (IIP) is an index for India which details out the growth of various sectors in an economy such as mineral mining, electricity and manufacturing.
    • The all India IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period.

    Difference between the two

    • IIP is compiled and published monthly by the National Statistics Office (NSO), Ministry of Statistics and Programme Implementation six weeks after the reference month ends.
    • However, ICI is compiled and released by Office of the Economic Adviser (OEA), Department of Industrial Policy & Promotion (DIPP), and Ministry of Commerce & Industry.
    • The Eight Core Industries comprise nearly 40.27% of the weight of items included in the Index of Industrial Production (IIP).
    • These are Electricity, steel, refinery products, crude oil, coal, cement, natural gas and fertilisers.

    Importance of Core Industries

    • The core sectors have a major impact on the Indian economy and significantly affect most other industries as well.
    • Their measures help account for the physical volume of production in India.
    • Their analysis offers a clearer and more realistic assessment of what’s happening in the economy
    • Their progress is used by government agencies for policy-making purposes.
    • They remain extremely relevant for the calculation of the quarterly and advanced Gross Domestic Product (GDP) estimates.
    • The core sector is also known as Infrastructure output as they represent the basic industries that form the base of the economy.

    Do you know about the Strategic Sectors?

    The government has identified four strategic sectors where the presence of state-run companies will be reduced to a minimum.

    1. Atomic energy, space and defence
    2. Transport and telecommunications
    3. Power, petroleum, coal and other minerals and
    4. Banking, insurance and financial services

     

    Try this PYQ:

    Q.In the ‘Index of Eight Core Industries’, which one of the following is given the highest weight?

    (a) Coal production

    (b) Electricity generation

    (c) Fertilizer production

    (d) Steel production

     

    Post your answers here.

     

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  • Climate Change Negotiations – UNFCCC, COP, Other Conventions and Protocols

    UN declares Access to Clean, Healthy Environment as Universal Human Right

    IOCR | Enviro & Biodiversity | Mains Paper 1: Important Geophysical Phenomena

    Every person on the planet has the right to live in a clean, healthy environment, as declared United Nations (UN) in a historic resolution.

    Access to Clean, Healthy Environment

    • The resolution recognizes the right to a clean, healthy and sustainable environment as a human right essential for the full enjoyment of all human rights and, among others.
    • It calls upon States and international organizations to adopt policies and scale up efforts to ensure a clean, healthy and sustainable environment for all.
    • The landmark development demonstrates that the member states can unite in the collective fight against the triple planetary crisis of climate change, biodiversity loss and pollution.
    • The declaration sheds light on almost all the rights connected to the health of our environment.
    • The declaration adopted by over 160 UN member nations, including India, is not legally binding.

    Why such move?

    • This right was not included in the Universal Declaration of Human Rights, 1948.
    • So, this is a historic resolution that will change the very nature of international human rights law.
    • The resolution will help to reduce environmental injustices and protection gaps.
    • It can empower people, especially those in vulnerable situations, including environmental human rights defenders, children, youth, women and indigenous people.

    Landmark resolution after 50 years

    • Some 50 years ago, the United Nations Conference on the Environment in Stockholm concluded with a resolution placing environmental issues at the global forefront.
    • Today, over 176 countries have adopted environmental framework laws on the basis of it.
    • From a foothold in the 1972 Stockholm Declaration, these rights have been integrated into constitutions, national laws and regional agreements.
    • In October 2021, it was recognised by the UN Human Rights Council.

    What were other such developments?

    • July 28, 2010, the UN general assembly recognised the right to water and sanitation through its resolution.
    • It stated that clean drinking water and sanitation “are essential to the realisation of all human rights”.
    • In response to this, governments across the world have changed their laws and regulations related to water and sanitation.

    Issues over this declaration

    • The words’ ‘clean’, ‘healthy’ and ‘sustainable’ lack an internationally agreed definition.
    • The text fails to refer to the foundational principle of equity in international environmental law.
    • Nevertheless, this has given more power in the hands of environmental activists to question environmentally destructive actions and policies.

    Back2Basics: Right to Clean Environment in India

    • The right to life has been used in a diversified manner in India.
    • It includes, inter alia, the right to survive as a species, quality of life, the right to live with dignity and the right to livelihood.
    • In India, this has been expressly recognised as a constitutional right under Article 21.
    • It states: ‘No person shall be deprived of his life or personal liberty except according to procedures established by law.’
    • The Supreme Court expanded this negative right in two ways.
    1. Firstly, any law affecting personal liberty should be reasonable, fair and just.
    2. Secondly, the Court recognized several unarticulated liberties that were implied by article 21.
    • It is by this second method that the Supreme Court interpreted the right to life and personal liberty to include the right to a clean environment.

     

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  • Parliament – Sessions, Procedures, Motions, Committees etc

    Kerala tops in holding Assembly sittings in 2021

    Prelims Only | Polity | Mains Paper 2: Parliament & State Legislatures

    Kerala, which slipped to the eighth slot in holding Assembly sittings during the first wave of the COVID-19 pandemic in 2020, returned to the top spot in 2021, with its House sitting for 61 days, the highest in the country.

    State Assemblies for 2021 Report

    • The report on the functioning of State Assemblies for 2021 is published by the PRS Legislative Research (PRS), a New Delhi-based think tank.

    How did other states fare?

    • Odisha followed Kerala with 43 sitting days; Karnataka 40, and Tamil Nadu 34 days.
    • But for the top three States, the average number of sittings of State legislatures would have been far lower than the present figure of 21 days.
    • Of the 28 State Assemblies and one Union Territory’s legislature, 17 met for less than 20 days.
    • Of them, five — Andhra Pradesh, Nagaland, Sikkim, Tripura and Delhi — met for less than 10 days.
    • The figures for Uttar Pradesh, Manipur and Punjab were 17, 16 and 11, respectively.
    • Andhra Pradesh with 20 ordinances and Maharashtra with 15 followed Kerala.

    Why is this ranking significant?

    • The National Commission to Review the Working of the Constitution (2000-02), headed by former Chief Justice of India M.N. Venkatachaliah, had prescribed the standards for working of legislatures.
    • The Houses of State (/Union Territory) legislatures with less than 70 members, for example, Puducherry, should meet for at least 50 days a year and other Houses (Tamil Nadu), at least 90 days.
    • The Presiding Officers’ conference, held in Gandhinagar in January 2016, suggested State legislatures hold a minimum of 60 days of sittings in a year.
    • Between 2016 and 2021, the PRS points out, 23 State Assemblies met for an average of 25 days.
    • As for the ordinance route, which should be, according to the Supreme Court, used under exceptional circumstances, 21 out of 28 States promulgated ordinances last year.

     

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  • Important Judgements In News

    PMLA has SC’s approaval

    op-ed snap | Polity | Mains Paper 2: Executive & Judiciary

    Context

    The Supreme Court has upheld the constitutional validity of the provisions of the Prevention of Money Laundering Act (PMLA), calling it a “unique and special legislation” and underlining the powers of the Directorate of Enforcement (ED) to hold inquiries, arrest people and attach property.

    Prevention of Money Laundering Act (PMLA)

    • PMLA, 2002 is an Act of the Parliament of India enacted by the NDA government to prevent money laundering and to provide for confiscation of property derived from money laundering.
    • It was enacted in response to India’s global commitment (including the Vienna Convention) to combat the menace of money laundering.
    • PMLA and the Rules notified there under came into force with effect from July 1, 2005.
    • The act was amended in the year 2005, 2009 and 2012.

    Objectives of PMLA

    The PMLA seeks to combat money laundering in India and has three main objectives:

    • To prevent and control money laundering.
    • To confiscate and seize the property obtained from the laundered money; and
    • To deal with any other issue connected with money laundering in India.

    Issues with the PMLA

    • Opacity: The Enforcement Case Report (the analogue of an FIR) is not shared with the accused.
    • Nor are the full grounds of arrest shared with you.
    • Bail cannot be granted without hearing the prosecution and you are required to prove your innocence to get bail.
    • Lack of clarity in definition: The definition of crime under this Act is elastic.
    • The sovereign has immense latitude to define what counts as the relevant crime.
    • It can also in a classic instance of rule by law change the presumption of innocence.
    • Lack of safeguard: The list of crimes included overrides similar crimes in other parts of the law.
    • The code has an exceptional procedure of its own that can trump the safeguards of the Criminal Code of Procedure.
    • In theory, the law provides safeguards against attaching properties, but those safeguards are weak and do not allow for even reasonable exceptions that might be necessary for your dignity or continuing with your business or livelihood.
    • Mere possession of the proceeds of a crime, without any surrounding consideration of how one came to be in possession of the proceeds, makes it an offence.
    • That the state officials are not classed as police. But they, in some respects, have even more power than the police.
    • Use of Money Bill route: The law itself has been enacted by using the controversial Money Bill route.
    • Low conviction rate: The conviction rate under this law is very low, less than 0.5 per cent.
    • Misuse of law: The stringent provisions and vagueness in definitions in the law make it susceptible to misuse against a political opponenet.
    • International context: Post 9/11, there was concern with terrorist financing and arguably many international treaties actually weakened, rather than strengthened, individual rights protections.
    • The goal of international treaties is laudable.
    • But the rhetoric of international treaties is often used to override domestic rights safeguards.

    Conclusion

    There is a need for a review of the various provision and definitions in the law and their utility.

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  • Prime Minister’s Office : Important Updates

    Better time for Sports in India: PM

    | Governance | Mains Paper 2: Health & Education

    Noting that the most prestigious FIDE 44th Chess Olympiad had for the first time come to India — the home of chess — during the 75th year of freedom from colonial rule, PM Modi said there had never been a better time for sports in India.

    Sports in India

    • Physical activity is fundamental to human beings:  The report states that having a fundamental right to literacy would mean identifying the intrinsic value of physical activity to human living.
    • Part of elementary education: It would mean not seeing physical activity as an end in itself, and the establishment of physical activity/ physical education as a core component of the education curriculum.
    • Supportive to other FRs: A fundamental right to physical literacy would actualise and enhance the enjoyment of other fundamental rights. It would go a long way in enhancing the opportunities and freedom to express oneself.
    • Enhancing life quality: A physically literate individual would have a more fulfilling life of higher quality than one who is not.  Physical literacy, as a building block, would go a long way in the promotion and realisation of the right to health and the right to education.
    • Religion as a barriers: Some sports like swimming and athletics require attire that does not fully cover a woman’s body and are against the laws of some religions. They are often debated in light of modesty of the sportspersons beings violated.
    • Associated social reforms: Many women perceive sports as an opportunity to escape the confines of a highly regulated life. They use it as a tool to show their potential and tackle the patriarchal mindset. Further success of sportspersons like Mary Kom, Saina Nehwal, etc. have played a pivotal role in curbing the problems of child marriage and son meta preference.

    Issues with Sports in India

    • Poor performance in competitions: India has the worst population to medals ratio at the Olympics. We find our medal tally at the Olympics to be hopelessly out of sync with our 1.3 billion population.
    • Regressive attitude towards sports: Our attitude towards sport and physical well-being is another debilitating factor. Traditionally, India has not been a sports nation where many deserving candidates are discouraged right at the starting level.
    • Economic divide: It hard reality which we consistently refuse to acknowledge. Athletes are not generated from the comfortable classes, they invariably come often from the middle and lower economic strata.
    • Incentivization: There is more focus on post-success incentivization rather than pre-success support in India. For instance, the Haryana Government announced a 6 crore reward after Neeraj Chopra won the gold medal in Tokyo Olympics 2020.

    Significance of physical education and sports

    • Physical development: Fitness, Health
    • Mental development: It improves decision-making and collective action. It also acts as stress buster.
    • Character/ personality development: It instils confidence, team spirit, team coordination, group work)

    Benefits of augmenting sports career

    • Alternative career development: For those for whom opportunities are few, and jobs are scarce, sport becomes a powerful mobility device. A strong sports sector encourages an average/ poor academic student to make a career in sports.
    • Reaping demographic dividend: India is having a very young population and is soon going to become the world’s youngest country. In such a scenario, a robust sports sector can help in reaping the potential demographic dividend.
    • Revenue generation: Developing robust sports infrastructure in the country will allow India to host a greater number of international events. Such hosting boosts tourism in the country and results in enhancing the revenue and employment in the region. Ex. IPL
    • Promotes the spirit of Unity in Diversity: People cheer for the Indian athletes and Indian teams at international events. An improvement in sports automatically fosters the spirit of brotherhood amongst the people of diverse nations. For instance, the Pan India support enjoyed by Indian cricket team enhances belongingness between India’s north and south.

    Reasons for India’s poor performance

    India’s below-par performance in sports can be attributed to the combination of all the factors discussed below:

    • Lack of facilities: We have thousands of education centres all over the country, but there are very few schools and colleges which have adequate facilities for any sport.
    • Regional discrepancies: The spending of money is concentrated in major cities where facilities do exist, but the broad-based structure to tap and develop talent is missing. The facilities wherever they are created are confined to a few popular games like cricket, hockey, football, tennis, etc.
    • Burden of ill-health: Mother and child health is an all-time contested issue in India. This may well be attributed to weather conditions, poor economic condition generally-due to which nutrition is not available to most of our children.
    • Narrow perception: The parents are keen that their kids should do well studies to get a degree and ultimately fetch a good job. Playing for long hours regularly is considered a waste of time.
    • Lesser academia for physical education: There are few Sports Colleges which are genuinely making efforts to produce national-level sportsmen, but their number is so small that no perceptible impact is seen due to their existence.
    • Lack of training: Another reason for our poor performance in sports is the lack of required number of trainers, coaches and psychotherapists. There is also a dearth of quality coaching or the qualified coaches.
    • Non-interest: The west often accuse that Indians lack the killer’s instinct. The zest and enthusiasm necessary to win over the opponent is naturally absent in the Indian psyche.
    • Obsession for few sports: There is no doubt that cricket and hockey plays a major unifying role in India. However, other sports and sportsperson are often discouraged due to such obsessions.
    • Performance anxiety: A high degree of pressure is inflicted upon a sportsperson to perform or else be prepared to live a vulnerable life. This sometimes creates excessive mental stress in them or induces them to resort to unethical means like doping.

    Various initiatives for sports promotion

    The Ministry of Youth Affairs & Sports has formulated the following schemes to promote sports in the country, including in rural, tribal and backward areas:

    1. Khelo India Scheme
    2. Assistance to National Sports Federations
    3. Special Awards to Winners in International sports events and their Coaches
    4. National Sports Awards, Pension to Meritorious Sports Persons
    5. Pandit Deendayal Upadhyay National Sports Welfare Fund
    6. National Sports Development Fund; and
    7. Running Sports Training Centres through Sports Authority of India

    Way forward

    • Sports is a state subject and therefore uniformity in sports-specific activities of various states in India is extremely important for providing equal sporting opportunities to all the citizens of the country.
    • We have to take collective action to create a system and a proper environment whereby the young talent is spotted and developed in right earnest.
    • Integration of sports with education to introduce sports culture in India is the need of the hour.
    • The allocation of funds to sport, as a percentage of budget, can be increased for broad-basing sports in this country.
    • There is also a need to develop a culture in whole country by spreading awareness in society by telling benefit of sports in life.

     

     

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  • Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

    Why the govt plans to scrap the decades-old Coffee Act?

    Bills/Act/Laws | Agriculture | Mains Paper 3: Major Crops & Cropping Patterns

    The Ministry of Commerce and Industry is planning to replace the 80-year-old Coffee Act with the new Coffee (Promotion and Development Bill), 2022, which has been listed for the Monsoon Session of Parliament.

    What is the Coffee Act?

    • The Coffee Act, 1942 was first introduced during World War II, in order to protect the struggling Indian coffee industry from the economic downturn caused by the war.
    • In the 1930s, the Indian coffee industry was facing significant problems, such as large-scale damage by pests and diseases, and the global economic downturn caused by the Great Depression.
    • With coffee planters making significant losses, the government passed the Coffee Cess Act (XIV of 1935) and established the first Indian Cess Committee in November 1935.
    • This aimed to promote the sale of coffee and increase consumption of Indian coffee at home and abroad.
    • These problems from the 1930s were compounded with the outbreak of World War II, as low demands and a loss of foreign markets led to a sharp decline in coffee prices.
    • Since the Cess Committee was not able to deal with the crisis faced by the industry, the government formed the Coffee Board, through the introduction of the Coffee Act, 1942.

    Purpose of the Act

    • The purpose of the Act was to provide for the development of the coffee industry.
    • The Board was tasked with supporting the industry in marketing, promotion of consumption, finance and research and development.

    Why scrap the old law?

    • The government is now trying to scrap the law because it claims that many of the provisions have become redundant and are too restrictive.
    • It has also proposed to repeal the decades old laws on tea, spices and rubber, and introduce new legislations in order to increase the ease of doing business and promote the development of these sectors.
    • These are very old laws and the idea is only to simplify them, make it easier to do business.
    • It aims to ensure that the small people in the different areas like coffee growing, tea growing do not have to suffer from high levels of compliance burden.

    Major contentious factor: Pooling System

    • Before India liberalised its economy in 1991, the Coffee Board controlled the marketing of the commodity in its entirety, both in India and abroad.
    • The Act introduced a pooling system, where each planter was required to distribute their entire crop to a surplus pool managed by the Board, apart from the small quantities that were allowed for domestic use and seed production.
    • The Board marketed 70% of the total pool for export and 30% for domestic markets, and sold them in separate auctions, according to Takamasa Akiyama, an economist affiliated with the World Bank.
    • In order to spur domestic consumption, the price of domestic coffee was kept artificially low.

    The changes since liberalization

    • While the Coffee Board no longer maintains its monopolistic control over the marketing of Indian coffee.
    • Through a series of amendments, the Board’s authority was reduced, and in 1996, the pooling system was abolished and growers were allowed to directly sell to processing firms.
    • The coffee market was entirely deregulated and the growers exposed to the free market.
    • Since liberalization, the Coffee Board plays more of an advisory role, and aims at increasing production, promoting further export and supporting the development of the domestic market.

    What are the proposed changes?

    • In order to facilitate growth and ease of doing business, the government would remove the restrictive and redundant provisions.
    • The centre wants to introduce a simplified version of the Act to suit the present needs of the industry.
    • The government would not close the Coffee Board, but would rather shift it from the Ministry of Commerce to the Ministry of Agriculture.
    • Here it aims to ensure that the benefits of all agricultural schemes are extended to coffee growers.
    • The new legislation is now primarily concerned with promoting the sale and consumption of Indian coffee including through e-commerce platforms, with fewer government restrictions.
    • It also aims at encouraging further economic, scientific and technical research in order to align the Indian coffee industry with “global best practices.”

    Back2Basics: Coffee Production in India

    • India is the third-largest producer and exporter of coffee in Asia and the sixth-largest producer and fifth-largest exporter of coffee in the world.
    • The country accounts for 3.14% (2019-20) of the global coffee production.
    • Coffee production in India is dominated in the hill tracts of South Indian states, with Karnataka accounting for 71%, followed by Kerala with 21% and Tamil Nadu (5%).
    • Indian coffee is said to be the finest coffee grown in the shade rather than in direct sunlight anywhere in the world.
    • Almost 80% of Indian coffee is exported.
    • The two well-known species of coffee grown are the Arabica and Robusta. The first variety was introduced in the Baba Budan Giri hill ranges of Karnataka in the 17th century.
    • Brazil is, the largest coffee producer in the world.

     

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  • River Interlinking

    Supreme Court orders status quo on Kaleshwaram Project expansion

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

     

    The Supreme Court has ordered status quo on the Kaleshwaram Lift Irrigation Project (KLIP) after it was told the Telangana government was increasing the capacity of the project without any environmental clearances.

    Kaleshwaram Lift Irrigation Project (KLIP)

    • The KLIP is a multi-purpose irrigation project on the Godavari River in Kaleshwaram, Bhupalpally in Telangana.
    • Currently the world’s largest multi-stage lift irrigation project, its farthest upstream influence is at the confluence of the Pranhita and Godavari rivers.
    • The Pranahita River is itself a confluence of various smaller tributaries including the Wardha, Painganga, and Wainganga rivers which combine to form the seventh-largest drainage basin on the subcontinent.
    • It remains untapped as its course is principally through dense forests and other ecologically sensitive zones such as wildlife sanctuaries.

    Grandeur of the project

    • Till date, the biggest lift schemes in the world were the Colorado lift scheme in America and the Great Manmade River in Egypt.
    • The capacities of these schemes are in horsepower and they took over three decades for completion.
    • Now, the Kaleshwaram lift irrigation project, an Indian lift scheme has become the worlds biggest in terms of capacities.

    Key facts associated

    • Built across Godavari river, KLIP will lift the water to a height of half-a-kilometre.
    • It is designed to irrigate 45 lakh acres for two crops in a year, meet the drinking water requirement of 70 percent of the state and also cater to the needs of the industry.
    • The foundation stone for the Rs 80,500 crore project was laid in 2016 and claimed to be the world’s biggest project of its kind, completed in the shortest time.
    • The government is planning to lift two thousand million cubic (TMC) feet of Godavari water per day from Medigadda barrage.
    • Claimed to be an engineering marvel, the project comprises 1,832 km water supply route, 1,531 km gravity canal, 203 km tunnel routes, 20 lifts, 19 pump houses and 19 reservoirs with a storage capacity of 141 TMCs.
    • It requires nearly 4,992 MW of electricity to pump 2 TMC of water every day in the first phase. The requirement will go up to 7,152 MW for lifting 3 TMC from next year.

    How important is KLIP to Telangana?

    • The project will enable farmers in Telangana to reap multiple crops with a year-round supply of water wherein earlier they were dependent on rains resulting in frequent crop failures.
    • This year, Telangana farmers have already delivered bumper rabi crops of paddy and maize due to better irrigation facilities and an extended monsoon.
    • KLIS covers several districts which used to face rainfall deficit and the groundwater is fluoride-contaminated.
    • Apart from irrigation, a main component of the project is the supply of drinking water to several towns and villages and also to twin cities of Hyderabad and Secunderabad.
    • Mission Bhagiratha, to supply drinking water to every household in villages, draws a large quantity of water from the KLIS and some quantity from projects on River Krishna.
    • There is a burgeoning freshwater fishing industry in the state.

    Issues with the Project

    • The NGT has observed that the Telangana government subsequently changed the design of the project to increase its capacity.
    • By increasing its capacity to pump 3 TMC water from 2 TMC, large tracts of forest land and other land were taken over and massive infrastructure was built causing an adverse impact on the environment.
    • Extraction of more water certainly requires more storage capacity and also affects hydrology and riverine ecology of Godavari River.
    • Such issues have to be examined by the statutory authorities concerned.

    Back2Basics: National Green Tribunal

    • It is a specialized body set up under the National Green Tribunal Act (2010) for effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources.
    • With the establishment of the NGT, India became the third country in the world to set up a specialized environmental tribunal, only after Australia and New Zealand, and the first developing country to do so.
    • NGT is mandated to make disposal of applications or appeals finally within 6 months of filing of the same.
    • The NGT has five places of sittings, New Delhi is the Principal place of sitting and Bhopal, Pune, Kolkata and Chennai are the other four.

    Structure of NGT

    • The Tribunal comprises of the Chairperson, the Judicial Members and Expert Members. They shall hold office for a term of five years and are not eligible for reappointment.
    • The Chairperson is appointed by the Central Government in consultation with the Chief Justice of India (CJI).
    • A Selection Committee shall be formed by the central government to appoint the Judicial Members and Expert Members.
    • There are to be at least 10 and a maximum 20 full-time judicial members and Expert Members in the tribunal.

     

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  • Tiger Conservation Efforts – Project Tiger, etc.

    Celebrating World Tiger Day

    Prelims Only | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    As the world celebrates yet another World Tiger Day July 29, 2022, there is sobering news.

    Why in news?

    • The International Union for the Conservation of Nature (IUCN) recently confirmed that the tiger has gone extinct in Cambodia, Laos and Vietnam.

    Tigers in India

    • India is home to a third of the global tiger population and the country’s success in saving the big cat is crucial to global efforts to protect their numbers.
    • India was the first country in the world to champion the cause of conservation of the tiger and its natural habitats.
    • The aesthetic, ethical and cultural value of tigers have also proved to be critical factors for saving tigers, which has also ensured the success of tiger conservation in India.

    Why is it necessary to conserve Tigers?

    The tiger is a unique animal that plays a pivotal role in the health and diversity of an ecosystem.

    • Predation balance: It is a top predator which is at the apex of the food chain.
    • Regulation of herbivores: It keeps the population of wild ungulates in check, thereby maintaining the balance between prey herbivores and the vegetation upon which they feed.
    • Ecosystem balance: Therefore, the presence of tigers in the forest is an indicator of the well being of the ecosystem.
    • Tourism: Apart from the ecological services provided by the animal, the tiger also offers direct use such as attracting tourists, which provide incomes for local communities.

    Various efforts to save Tigers

    India is home to 70 percent of the global tiger population. Therefore, the country has an important role to play in tiger conservation.

    [1] Project Tiger

    • The Government of India started ‘Project Tiger’ in 1972 with a view to conserving the animal.
    • As part of this project nine core buffer areas for maintaining tiger population were notified. Now, this has >expanded to 48 tiger reserves.

    [2] CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora)

    • Besides protecting tiger territory, other measures being taken to save the tiger include: curbing wildlife trade through international agreements.
    • CITES is an international agreement between governments aimed at ensuring that international trade in specimens of wild animals and plants, including tigers, does not threaten their survival. India ratified this treaty in 1976.

    [3] Global Tiger Forum and Tiger Range Countries

    • Established in 1994, the Global Tiger Forum is the only inter-governmental body for tiger conservation.
    • Its membership includes seven tiger range countries: Bangladesh, Bhutan, India, Cambodia, Myanmar, Nepal and Vietnam.

    [4] CA|TS

    • 14 tiger reserves have been accredited under CA|TS (Conservation Assured | Tiger Standards) categories.
    • The CA|TS is a set of criteria that examines the management of tiger sites to gauge the success rates of tiger conservation.

    [5] St. Petersburg Declaration

    • This resolution was adopted In November 2010, by the leaders of 13 tiger range countries (TRCs) assembled at an International Tiger Forum in St. Petersburg, Russia
    • It aimed at promoting a global system to protect the natural habitat of tigers and raise awareness among people on white tiger conservation.

    [6] Various NGOs

    • International NGO members consist of World Wildlife Fund, International Fund for Animal Welfare (IFAW), and TRAFFIC.
    • Several national NGOs from India and Nepal are also members.

    Success of these efforts

    The four-year tiger census report, Status of Tigers in India, 2018 shows the number of the big cat has increased across all landscapes.

    The total count has risen to 2,967 from 2,226 in 2014 — an increase of 741 individuals (aged more than one year), or 33%, in four years.

    • At present, India has around 75% of tiger population and its source areas amongst the 13 tiger range countries in the world.
    • 2.24% of country’s geographical area is spread out in 51 tiger reserves in 18 States.

    Various threats to Tigers

    • Despite measures being initiated to protect wild tigers, habitat loss and poaching continue to pose a threat to the animal’s survival.
    • Tiger parts are used in traditional Chinese medicines, tiger skin is used for decorative and medicinal purposes and tiger bones are again used for medicinal purposes for curing body pain, et al.
    • Between 2000 and 2014, TRAFFIC’s research found that parts of a minimum of 1,590 Tigers were seized in Tiger range States, an average of two Tigers per week.

    Other existential threats to tigers

    • Man-Animal conflict: This largely seems a normal phenomenon in India. We broadly remember the case of Tigress Avni which was finally shot dead by the forest officials in Maharashtra.
    • Shrinking habitat: This often leads to territorial conflicts among the Tigers.
    • Issues with Tourism: Excess of tourist activities is problematic for animals. Frequent visits in reserved forests areas disrupt them to move freely for their prey.
    • Climate Change: The effects of climate change and floods are a major problem.  The latest study by WWF shows that Sundarban which is one of the biggest home of tigers in India would sink entirely in 2070.

    Way forward

    • The process of tiger conservation should be more dynamic and compatible with the future possibilities of climatic changes as well.
    • The Forest Department and the Central government can collaborate to protect the natural corridors to ensure the free movement of the tigers for better food resources.
    • Campaigns such as ‘Save the Tiger’ are recommended as effective measures to make people across the country and globe aware of the significance of conserving tiger species.
    • Sensitization of local communities against poaching is also a crucial measure in this regard.
    • We have to make the environment and development co-exist and go hand in hand by planning our future developmental goals in such a manner that our environmental goals are not compromised.

     

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  • Indian Navy Updates

    INS Vikrant inducted into Indian Navy

    Prelims Only | Security Issues | Mains Paper 3: Various Security Forces, Agencies & Their Mandates

    The Indian Navy took delivery of IAC-1 the ‘Vikrant’, the nation’s first indigenously built aircraft carrier from its manufacturer, Cochin Shipyard Ltd.

    Vikrant

    • INS Vikrant also known as Indigenous Aircraft Carrier 1 (IAC-1), is an aircraft carrier constructed by the Cochin Shipyard Limited (CSL) for the Indian Navy.
    • It is the first aircraft carrier to be built in India.
    • It is named ‘Vikrant’ as a tribute to India’s first aircraft carrier, Vikrant (R11).
    • The name Vikrant means “courageous” in Sanskrit.
    • Work on the ship’s design began in 1999, and the keel was laid in February 2009.
    • The carrier was floated out of its dry dock on 29 December 2011 and was launched on 12 August 2013.

    Why is it important for India to have an aircraft carrier?

    • An aircraft carrier is one of the most potent marine assets for any nation, which enhances a Navy’s capability to travel far from its home shores to carry out air domination operations.
    • Many experts consider having an aircraft carrier as essential to be considered a “blue water” navy — that is, a navy that has the capacity to project a nation’s strength and power across the high seas.
    • An aircraft carrier generally leads as the capital ship of a carrier strike/ battle group.
    • As the aircraft carrier is a prized and sometimes vulnerable target, it is usually escorted in the group by destroyers, missile cruisers, frigates, submarines, and supply ships.

    And why is it a big deal that this warship has been Made in India?

    • Only five or six nations currently have the capability of manufacturing an aircraft carrier, and India has joined this prestigious club now.
    • Experts and Navy officials said India has demonstrated the capacity and self-reliance to build what is considered to be one of the most advanced and complex battleships in the world.
    • India’s has had aircraft carriers earlier too — but those were built either by the British or the Russians.
    • The ‘INS Vikramaditya’, which was commissioned in 2013 and which is currently the Navy’s only aircraft carrier, started out as the Soviet-Russian warship ‘Admiral Gorshkov’.
    • India’s two earlier carriers, the ‘INS Vikrant’ and the ‘INS Viraat’, were originally the British-built ‘HMS Hercules’ and ‘HMS Hermes’.
    • These two warships were commissioned into the Navy in 1961 and 1987 respectively.

    Why will this new warship be named ‘INS Vikrant’?

    • IAC-1 — as the carrier is currently codenamed — has been designed by the Indian Navy’s Directorate of Naval Design (DND), and built at Cochin Shipyard Limited (CSL).
    • Once commissioned, it will be called ‘INS Vikrant’, the name that originally belonged to India’s much-loved first aircraft carrier.
    • It was a source of immense national pride over several decades of service before it was decommissioned in 1997.
    • The original ‘Vikrant’, a Majestic-class 19,500-tonne warship, which was acquired from the UK in 1961, played a stellar role in the 1971 War with Pakistan.

    What weapons and equipment will the new ‘Vikrant’ have?

    • The new warship is comparable to India’s existing carrier ‘INS Vikramaditya’, which is a 44,500-tonne vessel and can carry up to 34 aircraft, including both fighter jets and helicopters.
    • The Navy had earlier said that once commissioned, IAC-1 will be “the most potent sea-based asset”, which will operate the Russian-made MiG-29K fighter aircraft and Kamov-31 Air Early Warning Helicopters.
    • The new ‘Vikrant’ will also operate the soon-to-be-inducted MH-60R Seahawk multirole helicopter manufactured by the American aerospace and defence company Lockheed Martin.
    • It will also take onboard the Advanced Light Helicopter (ALH) built by Bengaluru-based Hindustan Aeronautics Ltd.

     

     

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