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  • Russian Invasion of Ukraine: Global Implications

    Ukraine crisis is shaping future world order, India needs balanced outlook to its strategic policy

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

    Context

    Three back-to-back summits in the past fortnight have helped settle the dust on who stands where on the Russian invasion of Ukraine.

    Background of the summits

    • The BRICS summit took place on June 23-24, followed by the G-7 summit (June 26 and 27), and then the North Atlantic Treaty Organization (NATO) Summit in Madrid (June 29).
    • In order to understand what they portend for the future global world order, it is necessary to study the messages sent out by each of these groupings against the backdrop of the situation in Ukraine.
    • Most importantly, how can India, that has hitherto managed a careful balancing act between all the groupings, build a movement out of this moment of deep polarisation in the world?

    Why outcomes of BRICS Summit throws some challenges for the West

    • The fact that India agreed to join the summit showed India’s commitment to BRICS as an alternate grouping of economies spotlighted India’s refusal to shun Russia, and agreement to set aside the two-year stand-off with China in favour of multilateral meetings such as BRICS and the Shanghai Cooperation Organisation (SCO).
    • The BRICS Beijing Declaration was a consensus document, as each member cited differing “National Positions” on the Ukraine issue.
    • Economic initiatives: BRICS’s New Development Bank (NDB), has approved about 17 loans totalling $5 billion for Russian energy and infrastructure projects, the “Contingent Reserve Arrangement” (CRA).
    • A BRICS Payments Task Force (BPTF) for coordination between their central banks for an alternative to the SWIFT payments system, was proposed.
    • Mr. Putin also proposed building a global reserve currency based on a “basket of currencies” and trading in local currencies.
    • Challenges to western sanctions: The BRICS economic initiatives contain several challenges to the western-led sanctions regime against Russia
    • Russia also committed to providing more oil and coal supplies to BRICS countries, which will no doubt raise red flags in the West.
    • The possible admission of countries such as Argentina and Iran that have applied to the BRICS mechanism will also sound alarm in the West.

    G7 Summit and India’s flexibility

    • A day after BRICS, Mr. Modi left for the G-7 Summit in Germany, proof of India’s flexibility in dealing with both sides of the conflict.
    • In a number of statements, the G-7 targetted Russia’s war in Ukraine and China’s economic aggression.
    • Its outreach documents — on “Resilient Democracies” and “Clean and Just Transitions towards Climate Neutrality” — the only ones that India and other invitees signed on to, were devoid of any mentions of either.

    Key takeaways from NATO Summit

    • Reference to China: NATO for the first time, made a reference to “systemic competition” from China as a challenge to NATO “interests, security and values”.
    • Presence of US allies: The presence of the U.S.’s trans-Atlantic and trans-Pacific military allies at one conference sent out a clear message against a perceived Russia-China alliance.
    • US’s growing focus: The launch of another Indo-Pacific coalition — of “Partners in the Blue Pacific” (PBP), i.e., the U.S., the U.K., Australia, New Zealand and Japan, in addition to last year’s Australia-U.K.-U.S. (AUKUS), is another signal of the U.S.’s growing focus on countries that it has military alliances with, against its adversaries.
    • No consideration of Russian sensitivities: Apart from the Indo-Pacific partners at the summit, there were leaders of the five countries that have applied to join NATO.
    • The direct message was that NATO would no longer consider Russian sensitivities on the subject of NATO expansion.

    What is the strategy adopted by India?

    • The outcome of all three summits points to a growing polarisation, even battle lines being drawn, between the Western Atlantic-Pacific axis and the Russia-China combine.
    • Neutral stand on Ukraine crisis: India has adopted a singular strategy, albeit a defensive one, that does not condone Russia for its attacks on Ukraine, but one that does not criticise it either.
    • India has joined China as global economies that have most increased their intake of Russian oil, and where India continues to source fertilizer, cement and other commodities from Russia.
    • Strategic tilt towards the U.S. India is working to diversify its defence purchases from Russia, hostilities with China are high, and a strategic tilt towards the U.S. and Quad partners in the Indo-Pacific is growing.
    • Balancing Act: On the multilateral stage, too, India remains a balancing voice in the room: along with Brazil and South Africa, India ensured that the BRICS Beijing declaration did not carry the Russian position on the Ukraine war or any criticism of the West.
    • While making certain with other partners of the global South that the G-7 outreach documents carried no criticism of Russia and China.

    Way forward for India

    • It is time for New Delhi to seize the moment for leadership in a world that is becoming increasingly uncomfortable with the growing polarisation and the disruption due to the Ukraine war.
    • India is not alone.
    • At the United Nations General Assembly, for example, a majority of 141 countries voted to castigate Russia for its invasion of Ukraine, but much fewer, only 93, voted to oust Russia from the Human Rights Council.
    • This represents a large pool of independently-minded countries that do not see it in their own national interest to blandly choose one side over another.
    • India’s national interests would be better served by building a community of those like-minded countries (from South America to Africa, the Gulf to South Asia and to the Association of Southeast Asian Nations), who cannot afford the hostilities, and want to avoid the possibility of a global war at all costs.
    • In 1955, it was in such a similar moment that India took leadership along with countries such as Indonesia and Egypt at the Asian-African Conference of 29 newly independent nations, at Bandung that eventually led to the Non-Aligned Movement (NAM).

    Conclusion

    This is the time to rethink India’s role in reducing the polarisation and bringing the objective and balanced outlook Nehru spoke of, to the forefront of India’s strategic policy.

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

    Draft Development of Enterprise and Service Hubs (DESH) Bill

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

    The Centre plans to table the Development of Enterprise and Service Hubs (DESH) Bill in the monsoon session of the Parliament, which will overhaul the special economic zones (SEZ) legislation.

    What are SEZs?

    • A Special Economic Zone (SEZ) is an area in which the business and trade laws are different from the rest of the country.
    • SEZs are located within a country’s national borders, and their aims include increasing trade balance, employment, increased investment, job creation, and effective administration.
    • Additionally, companies may be offered tax holidays, where upon establishing themselves in a zone, they are granted a period of lower taxation.

    SEZs in India

    • The SEZ policy in India first came into inception on April 1, 2000.
    • The prime objective was to enhance foreign investment and provide an internationally competitive and hassle-free environment for exports.
    • The idea was to promote exports from the country and realize the need for a level playing field must be made available to the domestic enterprises and manufacturers to be competitive globally.
    • Subsequently, the SEZ Act 2005, was enacted to provide the umbrella legal framework, covering all important legal and regulatory aspects of SEZ development as well as for units operating in SEZs.
    • SEZ units used to enjoy 100% income tax exemption on export income for the first five years, 50% for the next five years, and 50% of the ploughed back export profit for another five years

    Why replace the existing SEZ Act?

    • The World Trade Organization’s dispute settlement panel has ruled that India’s export-related schemes, including the SEZ Scheme, were inconsistent with WTO rules.
    • India has been accused of giving tax benefits to exports through SEZs.
    • Countries aren’t allowed to directly subsidize exports as it can distort market prices.
    • SEZs also started losing their allure after the introduction of minimum alternate tax and a sunset clause to remove tax sops.

    How is the DESH legislation different?

    • The DESH legislation goes beyond promoting exports.
    • It has a much wider objective of boosting domestic manufacturing and job creation through ‘development hubs’.
    • These hubs will no longer be required to be net foreign exchange positive cumulatively in five years (i.e, export more than they import) as mandated in the SEZ regime.
    • They will be allowed to sell in the domestic area more easily. The hubs will, therefore, be WTO-compliant.
    • DESH legislation also provides for an online single-window portal for the grant of time-bound approvals for establishing and operating the hubs.

    Will there be any tax benefits at these hubs?

    • It’s not clear yet.
    • However, the draft Bill does state that states and the Centre will be allowed to give further incentives in the form of tax rebates, incentives, exemptions, and duty drawbacks.
    • Subsidy schemes may be offered for goods and services at these hubs.
    • States and the Centre may take fresh measures to speed up clearances and simplify compliance.

    Will it be easier to sell in the domestic market?

    • Companies can sell in the domestic market with duties only to be paid on the imported inputs and raw materials instead of the final product.
    • In the current SEZ regime, duty is paid on the final product when a product is sold in the domestic market.
    • Besides, there is no mandatory payment requirement in forex, unlike in the case of SEZs.
    • However, the government may impose an equalization levy on goods or services supplied to the domestic market to bring taxes at par with those provided by units outside

    What role will states play in DESH?

    • DESH is expected to play a larger role, definitely.
    • In the SEZ regime, most decisions were made by the commerce department at the Centre.
    • Now, states will be able to participate and even directly send recommendations for development hubs to a central board for approval.
    • Besides, state boards would be set up to oversee the functioning of the hubs.
    • They would have the powers to approve imports or procurement of goods, and monitor the utilization of goods or services, warehousing, and trading in the development hub.

    Way forward

    • If indeed India needs the special hubs, the govt must address the critical gaps in existing SEZ law through the DESH bill and it must be thought through before bringing it to the Parliament.
    • Effective implementation of the law could act as a lever to India’s growth.

     

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  • Parliament – Sessions, Procedures, Motions, Committees etc

    Nominated Members in Rajya Sabha

    Prelims Only | Polity | Mains Paper 2: Indian Constitution – historical underpinnings, evolution, features, amendments, significant provisions and basic structure

    Olympic sprinter PT Usha and music composer Ilaiyaraaja among others have been nominated to the Rajya Sabha in the category of eminent persons nominated by the President.

    Nominated Members in RS

    • Twelve members are nominated to the RS by the President of India for six-year term.
    • This is for their contributions towards arts, literature, sciences, and social services.
    • This right has been bestowed upon the President according to the Fourth Schedule under Articles 4(1) and 80(2) of the Constitution of India.

    Normal composition

    • The present strength is 245 members of whom 233 are representatives of the states and UTs and 12 are nominated by the President.
    • The Rajya Sabha is not subject to dissolution; one-third of its members retire every second year.

    Constitutional provisions for nominated members

    • 80(1)(a) of Constitution of India makes provision for the nomination of 12 members to the Rajya Sabha by the President of India in accordance with provisions of Arts.80(3).
    • 80(3) says that the persons to be nominated as members must be possessing special knowledge or practical experience in respect of such matters as the following namely: Literature, science, art and social service.

    Powers and privileges of such members

    • A nominated member enjoys all the powers and privileges and immunities available to an elected Member of Parliament.
    • They take part in the proceedings of the House as any other member.
    • Nominated members are however not entitled to vote in an election of the President of India.
    • They however have rights to vote in the vice presidential election.
    • As per Article 99 of the Constitution, a nominated member is allowed six months’ time should he join a political party.

    Try this PYQ:

    Consider the following statements:

    1. The Chairman and the Deputy Chairman of the Rajya Sabha are not the members of that House.
    2. While the nominated members of the two Houses of the Parliament have no voting right in the presidential election, they have the right to vote in the election of the Vice President.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

    Post your answers here.

     

    Also read:

    [Sansad TV] Perspective – Rajya Sabha: The Upper House

     

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

    What is the EU’s Sustainable Finance Taxonomy?

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

    Activists have been widely criticizing the EU’s sustainable finance taxonomy as a “greenwashing” exercise that puts the European Union’s climate change targets at risk.

    What is the EU Taxonomy?

    • The EU taxonomy is a complex system to classify which parts of the economy may be marketed as sustainable investments.
    • It includes economic activities, as well as detailed environmental criteria that each economic activity must meet to earn a green label.

    Why in news now?

    • Rules for most sectors came into effect this year, covering investments including steel plants, electric cars and building renovations.
    • The rules for gas and nuclear energy, however, have been long delayed amid intense lobbying from governments who disagree on whether the fuels help fight climate change.

    What does it say about gas and nuclear energy?

    • The European Parliament supported that proposal in a vote paving the way for it to become law and apply from 2023.
    • Under the proposal, for a gas-fuelled power plant to be deemed green, it must emit no more than 270 grams of CO2 equivalent per kilowatt hour, or have average emissions of 550g CO2e/kW over 20 years.
    • It must also commit to switch to low-carbon gases by 2035.
    • Gas and nuclear power plants are classed as transitional activities.

    What’s the taxonomy for?

    • The taxonomy does not ban investments in activities not labelled “green”, but it limits which ones companies and investors can claim are climate-friendly.
    • The EU’s goal to eliminate its net emissions by 2050 will require huge investments, much of it private funding.
    • The rules also aim to stamp out green-washing, where organisations exaggerate their environmental credentials, among so-called eco-friendly investment products.

    Who does it apply to?

    • Providers of financial products – including pension providers – in the EU must disclose which investments comply with the taxonomy’s climate criteria.
    • For each investment, fund or portfolio, they must disclose what share of underlying investments comply with the rules.
    • Large companies and listed firms must also disclose what share of their turnover and capital expenditure complies.
    • That means polluting companies can get recognition for making green investments.
    • For example, if an oil company invested in a wind farm, it could label that expenditure as green.

    What makes a “green” investment?

    The rules classify three types of green investments.

    • First, those that substantially contribute to green goals, for example, wind power farms.
    • Second, those that enable other green activities, for example, facilities that can store renewable electricity or hydrogen.
    • Third, transitional activities that cannot be made fully sustainable, but which have emissions below industry average and do not lock in polluting assets or crowd out greener alternatives.

     

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  • New Rules to keep Advertisements in Check

    | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

    The Central Consumer Protection Authority (CCPA) recently issued guidelines to prevent false or misleading advertisements.

    Guidelines on Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022: Key takeaways

    (1) Conditions for non-misleading and valid advertisement

    An advertisement shall be considered to be valid and not misleading:

    • If it contains truthful and honest representation;
    • Does not mislead consumers by exaggerating the accuracy,
    • Scientific validity or practical usefulness or capability or performance or service of the goods or product;
    • Does not present rights conferred on consumers by any law as a distinctive feature of advertiser’s offer.

     (2) Bait Advertisement

    • A bait advertisement shall not seek to entice consumers to purchase goods, products or services without a reasonable prospect of selling such advertised goods, products or services at the price offered.
    • The advertiser shall ensure that there is an adequate supply of goods, products or services to meet foreseeable demand generated by such advertisement.

    (3) Prohibition of surrogate advertising

    • No surrogate advertisement or indirect advertisement shall be made for goods or services whose advertising is otherwise prohibited or restricted by law.
    • No circumventing of such prohibition or restriction and portraying it to be an advertisement for other goods or services shall be allowed.

    (4) Free claims advertisements

    • A free claims advertisement shall not describe any goods, product or service to be ‘free’, ‘without charge’ or use such other terms if the consumer has to pay anything other than the unavoidable costs.
    • Seller must make clear the extent of commitment that a consumer shall make to take advantage of a free offer.

    (5) Children targeted advertisements

    • An advertisement that addresses or targets or uses children shall not condone, encourage, inspire or unreasonably emulate behaviour that could be dangerous for children or take advantage of children’s inexperience, credulity or sense of loyalty.

    (6) Limitations on Celebrity Endorsers

    • The government has tightened norms for endorsers, including celebrities and sportspersons.
    • They are now required to make material connection disclosures and undertake due diligence while doing advertisements.
    • Endorsements must reflect the honest opinions, belief or experience of the endorsers.
    • The endorsers have to make material connection disclosures and failing to do so will attract penalty under the Consumer Protection Act (CPA).
    • Material disclosures mean any relationship that materially affects the weight or credibility of any endorsement which a reasonable consumer would not expect.
    • Violation of these guidelines will attract a penalty of ₹10 lakh for the first offence and ₹50 lakh for the subsequent offence, under the CPA.

    (7) ASCI rules

    • The latest guidelines will also apply to government advertisements.
    • Moreover, the advertising guidelines for self-regulation issued by the Advertising Standards Council of India (ASCI) will also be in place in a parallel manner.

    Back2Basics:

    Explained: Central Consumer Protection Authority (CCPA)

     

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  • Food Procurement and Distribution – PDS & NFSA, Shanta Kumar Committee, FCI restructuring, Buffer stock, etc.

    Odisha tops first-ever NFSA State Ranking Index

    DOMR | Governance | Mains Paper 2: Government Scheme/Policies

    Odisha has topped the list of 34 states and Union territories (UTs) in the first-ever NFSA State Ranking Index. Ladakh was ranked last on the index.

    NFSA State Ranking Index

    • The GoI has come up with a first-ever state ranking index to capture the implementation of the Targeted Public Distribution System (TPDS) under the National Food Security Act (NFSA).
    • The states and UTs were ranked for 2022 on the basis of three parameters:
    1. NFSA coverage, rightful targeting and implementation of all provisions under the Act
    2. The delivery platform while considering the allocation of food grains, their movement and last-mile delivery to fair price shops
    3. Nutrition initiatives of the department

    Why need such index?

    • NFSA is a crucial policy instrument to ensure food security. It covers nearly 800 million people.
    • However, NFSA’s implementation through TPDS has not been uniform in the country.
    • While some states and Union territories lead, others are yet to pick up in terms of coverage, beneficiary satisfaction, digitisation and overall system efficiency.
    • The index has been developed to create an environment of competition, cooperation and learning among states while addressing matters of food security and hunger.

    Back2Basics: National Food Security (NFS) Act

    • The NFS Act, 2013 aims to provide subsidized food grains to approximately two-thirds of India’s 1.2 billion people.
    • It converts into legal entitlements for existing food security programs of the GoI.
    • It includes the Midday Meal Scheme, Integrated Child Development Services (ICDS) scheme and the Public Distribution System (PDS).
    • Further, the NFSA 2013 recognizes maternity entitlements.
    • The Midday Meal Scheme and the ICDS are universal in nature whereas the PDS will reach about two-thirds of the population (75% in rural areas and 50% in urban areas).
    • Pregnant women, lactating mothers, and certain categories of children are eligible for daily free cereals.

    Key provisions of NFSA

    • The NFSA provides a legal right to persons belonging to “eligible households” to receive foodgrains at a subsidised price.
    • It includes rice at Rs 3/kg, wheat at Rs 2/kg and coarse grain at Rs 1/kg — under the Targeted Public Distribution System (TPDS). These are called central issue prices (CIPs).

     

     

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    https://www.downtoearth.org.in/news/governance/odisha-tops-first-ever-nfsa-state-ranking-index-83549

     

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  • Urban Floods

    Making sense of Assam floods

    op-ed snap | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    Context

    This year’s floods in Assam have been merciless. In many parts of the state, both rural and urban, shoals of water drove people from their homes and forced many of them to seek shelter for their livestock.

    Understanding the reasons for massive flood in Assam this year

    • The Bay has a major influence on the monsoon in Northeast India.
    • Two coupled ocean-atmosphere phenomena, one from the distant Pacific, La Niña and another in the tropical Indian Ocean, a negative dipole condition, combined to create high rainfall in the Bay of Bengal.
    • To add to that, a warmer atmosphere because of climate change can hold more moisture leading to intense bouts of rain.
    • Apart from embankment failures, a number of unofficial and media reports suggest that the devastation in the floodplains is also a consequence of the way the dams and reservoirs are operated.
    • This indicates that environmental factors unique to each locality are responsible for the floods.
    • The flooding pattern is usually repeated year-to-year. However, at times, this pattern is disturbed — this year for example.
    • The incidence of such megafloods depends on several variables like unusually high rainfall and the failure of critical embankments.

    Role of floods in the making of the floodplain environment and ecology

    • Rejuvenation of ecosystem: Floods cause disruption and damage but they also generate a bounty of fish and rejuvenate flood-plain ecosystems all along the Brahmaputra, including in the Kaziranga.
    • Landscape: This landscape has been shaped over millions of years with the help of an active monsoonal environment and mighty rivers that carry sediments weathered from the still-rising Himalaya.
    • Every year, the Brahmaputra and its tributaries — which are at the centre of Assam’s environment — transport billions of tonnes of sediment, mainly from the Eastern Himalaya, making the landscape volatile.
    • Flooding helps release waters to surrounding land and distribute sediments and nutrients across the floodplains and wetlands.

    How human presence has influenced floodplains

    • As the human footprint intensified on the floodplains, the landscape was increasingly “developed and engineered”.
    • The engineered and planned landscape has affected the floodplains in two ways: It has undermined their ability to store and absorb water and reduced their capacity to transport sediment.
    • Urban floods: This year’s floods took an especially worrying proportion in several urban areas.
    • Guwahati has historically been a lowland and the city has been uniquely shaped by three hills that accumulate water during the monsoon.
    • Its northern side faces one of the most turbulent rivers in the world.
    • However, extensive swamps, channels and their tributaries worked in tandem to make the place habitable.
    • A transformation, however, took place in the 20th century, especially in the later decades, when these natural features were forced to disappear.
    • From an estimated 11,000 people in 1901, the city now is home to close to 1.1 million people.
    • Such a population increase is bound to have several footfalls and not all of them could have been prevented.
    • What has hit the city hardest is the disappearance of some of its critical environmental features.

    Way forward

    • Human interventions such as dams to “tame” rivers and “stabilise” hydrologically dynamic landscapes and riverscapes should be based on guidelines that account for the environmental conditions in Northeast India, especially the fragile geology, changing rainfall patterns, high seismicity and the risk of landslides.
    • Resilience of people: The rapid transformation in rainfall characteristics and flooding patterns demand building people’s resilience.
    • Reconsider projects: Construction projects that impede the movement of water and sediment across the floodplain must be reconsidered.
    • Use of technology: At the same time, climate-imposed exigencies demand new paradigms of early-warning and response systems and securing livelihoods and economies.

    Conclusion

    Floods have played a key role in Assam’s ecology. But increasing human footprint has affected the ability of flood plains to absorb water and transport sediment.

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  • Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

    Aviation sector in India: Issue and Challenges

    op-ed snap | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    What is the issue?

    Policymakers ought to recognise the country’s untapped potential and work towards dismantling the many hurdles.

    What is the significance of aviation sector?

    India is the world’s third-largest market in aviation sector.

    • Aviation is integral to equitable economic growth, for a country to be globally competitive and to change the situation of poverty and unemployment.
    • Passenger airlines and air cargo overcome geography and connect remote areas that are alienated from the mainstream.
    • They can drive investment deep into the country, giving people access to markets.
    • They also boost tourism, which is the largest employment generator in the unorganised sector.

    What is the status of aviation sector in India?

    • Pre-economic reform period– India had only two airlines – Air India and Indian Airlines.
    • Post 1991 reforms– The reforms that opened up the aviation sector in 1991 and ended the licence raj and the monopoly of Indian Airlines and Air India changed the sector.
    • Numerous private sector airlines were given the licence to fly, but Jet Airways and Sahara, survived, resulting in cartelisation.
    • The concept of low cost airlines in India took shape in 2003 which overcame the cost barrier.
    • Sadly, Indian aviation has become ‘the sick man of India’.

    What are the barriers in Indian aviation sector?

    • Per capita consumption of air tickets – The number of Indians who buy air tickets in 2019 is 140 million of which 35 million to 40 million frequent flyers form the bulk of ticket buyers.
    • It translates to less than 4% of the population who can afford air travel, placing India just alongside some poorer African countries, in terms of the per capita consumption of air tickets.
    • Factors affecting the growth of aviation sector– The growth of aviation has been affected by
      • Choking regulations
      • Tough entry barriers for new entrants
      • High fuel prices on account of sky high taxes
      • Inefficient public sector airports that pave the way for monopoly airports
    • Frequent and knee-jerk changes point to the absence of a long-term visionary strategic policy for the entire gamut of sectors in aviation.

    How efficient are government schemes in the development of the airline sector?

    • Boosting entrepreneurship- Start-up India initiative was started with the objective of supporting entrepreneurs, building a robust startup ecosystem and transforming India into a country of job creators.
    • Regional connectivity– Ude Desh Ka Aam Naagrik (UDAN) scheme aims to connect small and medium cities with big cities through air service.
    • Low cost airlines– UDAN plans to connect the underserved airports to key airports through flights that will cost Rs 2,500 for per hour flight.
    • Comprehensive development– The National Civil Aviation Policy 2016 aims to take flying to the masses and covers 22 areas of the Civil Aviation sector.

    What reforms are needed?

    • Reforms in all sectors– It is critical to understand that for passenger airlines to grow, there have to be reforms in all areas of aviation – air cargo, airports, aviation fuel taxes and Maintenance, Repair and Overhaul (MRO).
    • Updated laws– India’s Aircraft Act, 1934 and Aircraft Rules, 1937 need to be updated to keep pace with modern technology in aerospace, increasing costs to the industry and ultimately affecting passenger growth.
    • Overhaul DGCA – India’s statutory regulatory authority, the Directorate General of Civil Aviation (DGCA), needs to be modernised, well-staffed, motivated and incentivized.
    • Need for aviation professionals– There need to be aviation professionals in charge rather than the ubiquitous bureaucrat from the Indian Administrative Service.

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  • OBOR Initiative

    Status of China’s Belt and Road Initiative in South Asia

    IOCR | International Relations | Mains Paper 2: India & Its Neighborhood – Relations

    China has felt a need to re-visit the various projects under the BRI in different South Asian countries.

    Why in news?

    • At the recently concluded summit of G-7 leaders in Germany, US and his allies unveiled their $600 billion plan called the Partnership for Global Infrastructure and Intelligence.
    • This is being seen as a counter to China’s Belt and Road Initiative (BRI), valued at a trillion U.S. dollars by some experts.

    What is China’s Belt and Road Initiative?

    • In 2013, Chinese President Xi Jinping, during his visits to Kazakhstan and Indonesia, expressed his vision to build a Silk Road Economic Belt and a 21st Century Maritime Silk Road.
    • He then aimed to break the “bottleneck” in Asian connectivity. This vision led to the birth of the BRI.
    • The initiative envisioned a Chinese-led investment of over $1 trillion in partner countries by 2025.
    • More than 60 countries have now joined BRI agreements with China, with infrastructure projects under the initiative being planned or under construction in Asia, Africa, Europe, and Latin America.

    How does BRI work?

    • To finance BRI projects, China offers huge loans at commercial interest rates that countries have to pay within a fixed number of years.
    • The west has accused China of debt-trapping by extending “predatory loans” that force countries to cede key assets to China.
    • However, research indicates that low and middle-income countries are often the ones to approach China after not being able to secure loans from elsewhere.
    • In recent years, the BRI seems to have experienced a slowing down as annual Chinese lending to countries slimmed from its peak of $125 billion in 2015 to around $50 to 55 billion in 2021.

    What have been the BRI’s investments in Pakistan?

    • On his 2015 visit to Pakistan, Xi unveiled the BRI’s flagship project and its biggest one in a single country — the China Pakistan Economic Corridor (CPEC).
    • The CPEC envisioned multiple projects involving energy, transport and communication systems.
    • At the centre of the CPEC was the $700 million development of the city of Gwadar into a smart port city that would become the “Singapore of Pakistan”.
    • Other major projects are the orange line metro, coal power plants to tackle energy shortages and the Main Line 1 rail project from Peshawar to Karachi.

    Pace of progress in Pakistan

    • Multiple reports have shown that shipping activities at the Gwadar Port is almost negligible so far, with only some trade to Afghanistan.
    • Gwadar residents have also protested against the large security force deployed to protect Chinese nationals involved in projects.
    • Chinese nations has also became the target of multiple deadly attacks by Baloch freedom fighters.
    • Coal plants were set up and managed by Chinese firms to improve the power situation in Pakistan.
    • Chinese power firms closing down their operations as the latter did not pay dues worth 300 billion in Pakistani rupees (approximately $1.5 billion).

    What about Sri Lanka?

    • In Sri Lanka, multiple infrastructure projects that were being financed by China came under the fold of the BRI after it was launched in 2013.
    • In 2021, Colombo ejected India and Japan out of a deal to develop the East Container Terminal at the Colombo port and got China to take up the project.
    • Some BRI projects in Sri Lanka have been described as white elephants — such as the Hambantota port.
    • The port had always been secondary to the busy Colombo port until the latter ran out of capacity.
    • Other key projects under BRI include the development of the Colombo International Container Terminal, the Central Expressway and the Hambantota International Airport among others.

    Projects in Afghanistan

    • Afghanistan has not comprehensively been brought into the BRI, despite a MoU being signed with China in 2016.
    • China had promised investments worth $100 million in Afghanistan which is small in comparison to what it shelled out in other South Asian countries.
    • The projects have not materialised so far and uncertainties have deepened after the Taliban takeover last year.

    Projects in Maldives

    • Situated in the middle of the Indian Ocean, Maldives comprises two hundred islands, and both India and China have strategic interests there.
    • One of the most prominent BRI projects undertaken in the Maldives is the two km long China-Maldives Friendship Bridge — a $200 million four lane bridge.
    • Most of China’s investment in the Maldives happened under former President Abdullah Yameen, seen as pro-China.

    Projects in Bangladesh

    • Bangladesh, which joined the BRI in 2016, has been promised the second-highest investment (about $40 billion) in South Asia after Pakistan.
    • It has been able to benefit from the BRI while maintaining diplomatic and strategic ties with both India and China.
    • It has managed to not upset India by getting India to build infrastructure projects similar to BRI in the country.
    • BRI projects include Friendship Bridges, special economic zones, the $689.35 million-Karnaphuli River tunnel project, upgradation of the Chittagong port, and a rail line between the port and China’s Yunnan province.
    • However, multiple projects have been delayed owing to the slow release of funds by China.

     

     

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  • Foreign Policy Watch: India-Australia

    What are Critical Minerals?

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

    India and Australia have decided to strengthen their partnership in the field of projects and supply chains for critical minerals.

    What is the news?

    • Australia has confirmed that it would commit A$5.8 million to the three-year India-Australia Critical Minerals Investment Partnership”.

    What are Critical Minerals?

    • Critical minerals are elements that are the building blocks of essential modern-day technologies, and are at risk of supply chain disruptions.
    • These minerals are now used everywhere from making mobile phones, computers to batteries, electric vehicles and green technologies like solar panels and wind turbines.
    • Based on their individual needs and strategic considerations, different countries create their own lists.
    • However, such lists mostly include graphite, lithium, cobalt, rare earths and silicon which is a key mineral for making computer chips, solar panels and batteries.
    • Aerospace, communications and defence industries also rely on several such minerals as they are used in manufacturing fighter jets, drones, radio sets and other critical equipment.

    Why is this resource critical?

    • As countries around the world scale up their transition towards clean energy and digital economy, these critical resources are key to the ecosystem that fuels this change.
    • Any supply shock can severely imperil the economy and strategic autonomy of a country over-dependent on others to procure critical minerals.
    • But these supply risks exist due to rare availability, growing demand and complex processing value chain.
    • Many times the complex supply chain can be disrupted by hostile regimes, or due to politically unstable regions.
    • They are critical as the world is fast shifting from a fossil fuel-intensive to a mineral-intensive energy system.

    What is China ‘threat’?

    • China is the world’s largest producer of 16 critical minerals.
    • China alone is responsible for some 70% and 60% of global production of cobalt and rare earth elements, respectively, in 2019.
    • The level of concentration is even higher for processing operations, where China has a strong presence across the board.
    • China’s share of refining is around 35% for nickel, 50-70% for lithium and cobalt, and nearly 90% for rare earth elements.
    • It also controls cobalt mines in the Democratic Republic of Congo, from where 70% of this mineral is sourced.
    • In 2010, China suspended rare earth exports to Japan for two months over a territorial dispute.

    What are countries around the world doing about it?

    • US has shifted its focus on expanding domestic mining, production, processing, and recycling of critical minerals and materials.
    • India has set up KABIL or the Khanij Bidesh India Limited to ensure mineral security of the nation.
    • Australia’s Critical Minerals Facilitation Office (CMFO) and KABIL had recently signed an MoU aimed at ensuring reliable supply of critical minerals to India.
    • The UK has unveiled its new Critical Minerals Intelligence Centre to study the future demand for and supply of these minerals.

     

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