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  • What are Foreign Currency Non-Resident (FCNR) deposits?

    The RBI’s 2013 FCNR scheme to buffer the rupee against steep declines and rebuild foreign exchange reserves is unlikely to prove fruitful in the current crisis as economic fundamentals are different.

    What are FCNR deposits?

    • Back in 2013, the RBI had offered to swap the U.S. dollars banks had raised via foreign currency non-resident (FCNR) deposits or foreign currency funding for rupees at concessional rates.
    • A FCNR is a bank account for NRIs to maintain a Fixed Deposit account in India.
    • This account allows one as an NRI to save money earned in the currency form of the country you’ve originally earned the money from.
    • FCNR deposits can hold currencies like US Dollars, Pounds Sterling, Euro, Japanese Yen, Australian Dollars and Canadian Dollars.
    • Interest on such deposits is exempt for income tax.

    How do they operate?

    • These deposit accounts are a term deposit account, not savings.
    • Once can withdraw your money before the date of maturity, and there will be no charges, but the interest will not be paid until after a year is complete.

    Benefits offered

    • FCNRs are just like what FDs are for resident Indians, except in foreign currency.
    • They work as great investment options for NRIs to invest in the country for a start, before looking for other avenues in investments on the stock market.
    • Because the money is being held in those currencies, the risk of exchange rate fluctuations is eliminated.

    Why in news?

    • Forex reserves have tumbled about $110 billion from a peak of $642 billion in September last year.
    • A significant reason behind this is RBI’s currency market intervention.

     

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  • The illusion of being faster than light: how a star problem was solved

    light

    Scientists have spotted something that appeared to be moving 7 times faster than the Speed of Light in a supernova like event.

    What is the news?

    • In 2017, astrophysicists observed an unusual feat among the stars.
    • The Laser Interferometer Gravitational-Wave (LIGO) observatories recorded a signal which indicated that two massive and dense stellar bodies had merged to form a third body, likely a black hole.
    • An unusual jet of matter was observed that gave an illusion of travelling faster than light.

    Can matter move faster than Light?

    • From the data, it appeared the jets of matter were moving seven times faster than light.
    • The researchers explain the reason behind the discrepancy is due to something called superluminal motion.
    • Since the jet of matter reaches Earth at the speed of light, the light it emits at later points has a relatively shorter distance, making it appear faster than it actually is.
    • After more calculations, astronomers found the real speed to be at least 99.7 percent of the speed of light (3 × 10^8 m / s).

    Crossing the speed of light: An illusion

    • The data of same incident has been recorded by the Global Astrometric Interferometer for Astrophysics (GAIA) spacecraft and Hubble (James Web) Space Telescope
    • Using it, scientists confirmed that the above picture is correct.

    How to assess it?

    • Scientists have also measured more accurately a factor called the Lorenz factor which scales with the actual speed of the particles in the jet.
    • Unlike earlier estimates which placed this factor at about 4, the present paper estimates this factor to be over 40.
    • This is because they measure the speed of the relativistic jet to be close to 9997c, where “c” is the speed of light.

    How are they observed?

    • Source is clearly as massive neutron stars merging to give a black hole and throwing off relativistic jets of particles in the process.

    Merging neutron stars: Faking to cross speed of light

    • Neutron stars are stellar corpses, left behind after a star has undergone a supernova explosion and reached the end of its lifetime.
    • They are extremely dense, containing more mass than the sun in a sphere that is a few tens of kilometre wide.
    • The observation of particles moving at seven times the speed of light is an illusion.
    • This happens in cases where a source moves (towards us) with a velocity that is very close to light’s velocity.
    • This has been seen in many active galactic nuclei — galaxy centres that harbour black holes — and binary star systems within our galaxy, where one of the stars is a black hole.
    • Mostly, black holes are responsible for producing such fast-moving material.

    How is this illusion created?

    • Normally, if one were making these measurements from earth-based telescopes, it would require data from radio telescopes spaced apart by intercontinental distances.
    • This technique is called Very Long Baseline Interferometry (VLBI) and was used in the earlier papers.

    Significance of this study

    • The significance of the paper is that now, we have learnt that neutron star mergers can result in material moving with speeds as high as 0.9997c.
    • Earlier results using Very Long Baseline Interferometry had pegged this value at about 0.938c.
    • And with the new results this lower limit has been improved.
    • Even earlier, with VLBI, it was understood that it was a neutron-star merger that produced such ultra-relativistic material.

     

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  • Japan seeks GI tag for Nihonshu, an alcoholic beverage

    nihonshu

    The Embassy of Japan, New Delhi, has filed an application seeking Geographical Indication (GI) tag for nihonshu/Japanese sake, an alcoholic beverage.

    Why in news?

    • It is learnt that this is the first time a product from Japan has filed for a tag at the Geographical Indication Registry in Chennai.

    What is Nihonshu?

    • Nihonshu is regarded as a special and valuable beverage made from fermenting rice.
    • People traditionally drink nihonshu on special occasions, such as festivals, weddings or funerals, but it is also consumed on a daily basis.
    • Thus, it is an integral part of the lifestyle and culture in Japan.
    • The sake market (almost all are nihonshu) is the second largest brewed liquor (such as beer) market in Japan.

    How is it made?

    • For making nihonshu three main raw materials – rice, koji-kin (a type of fungal spore) and water – are required.
    • Its production follows an alcoholic fermentation method called parallel multiple fermentation and involves raw material treatment, koji making, starter culture making, mash making, pressing, heat sterilisation and bottling.
    • The rice and koji used should originate in Japan.

    Try this PYQ:

    Q.Which of the following has/have been accorded ‘Geographical Indication’ status?

    1. Banaras Brocades and Sarees
    2. Rajasthani Daal-Bati-Churma
    3. Tirupathi Laddu

    Select the correct answer using the code given below:

    (a) 1 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

     

    Post your answers here.

     

    Back2Basics:  Geographical Indication

    • A GI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
    • Nodal Agency: Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
    • India, as a member of the World Trade Organization (WTO), enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 w.e.f. September 2003.
    • GIs have been defined under Article 22 (1) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
    • GI is granted for a term of 10 years in India. As of today, more than 300 GI tags has been allocated so far in India (*Wikipedia).
    • The tag stands valid for 10 years.

     

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  • Now Daily Answer Writing Enhancement (AWE) Program comes with 24*7 doubt clearing | Enrollments are open for Nov-Dec batch, timetable inside

    Now Daily Answer Writing Enhancement (AWE) Program comes with 24*7 doubt clearing | Enrollments are open for Nov-Dec batch, timetable inside

    Click here for the timetable

    CLICK & JOIN AWE PROGRAM
    FREE 1-1 answer writing discussion

    Table of Content

    The competition in the UPSC examination is fierce. Guys, after UPSC Prelims 2023, you will have very limited time on your hand BUT you have to cross the higher bar.

    Thousands of aspirants are very much familiar with the butterflies in their stomachs at this point. Knowing the unpredictability of this journey, many believe that only hard work can make them luckier. But shockingly, even after working with all their might, 90% of them remain very much clueless about their “strategy” being right or wrong. 

    And this is high time to make sure that the foundation for your Answer writing skills is vital. Our AWE (Answer Writing Enhancement Program) is back again with new features (details below) to sharpen your Answer writing skills.

    Given the available time till Mains and UPSC 2023-24 aspirants, Daily AWE Program is back for a new batch. We have got you covered with all the conceptual clarity on important topics. CD’s Exam Prep program has curated an exclusive series to help you strengthen the basics for UPSC Mains answer writing. 

    Also, you will get a lot of pointers to polish your writing skills for UPSC-CSE 2022-23. At the end of each session, you get a LIVE 24*7 Doubt-Clearing session with our faculty to get all your doubts cleared.

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    Let’s keep the momentum going.

    Answer writing practices through Civilsdaily’s Daily AWE program can reduce test anxiety and helps you ace the GS Mains answer writing. And what could be a better way to practice for UPSC Mains Examinations than attempting Questions which are the closest to the demands of the UPSC Civil Services Mains Examination? 

    The more you are accustomed to sitting for a period of time, answering questions, and pacing yourself, the more comfortable you will feel when you actually sit down to take the real UPSC Mains examinations yourself.

    We are working hard to make the program more effective and loaded with features, highlight the best answers, and show the competency levels of students.

    CLICK & JOIN AWE PROGRAM
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    What does the Program include?

    Weekly 20 Questions + Doubt Clearing Session (Newly Added)

    • Daily 4 questions from General studies 1, 2, 3, and 4 will be provided to you. A sample 2-week schedule is available below.
    • Doubt clearing 24*7 via WhatsApp. You can also mail at staff@civilsdaily.com for doubt clearing
    • On Day 1 we post the questions with the mentor’s comments and on the next day, we provide the model answers for the previous day.
    • A Mentor’s Comment will be available for all answers. This can be used as a guidance tool but we encourage you to write original answers.
    • You can write your answer on the same day and attach a scanned copy. Within 72 hours, a review of your answer will be provided.
    • Also, write the Razor payment ID, when you attach your answer.
    • If you are writing answers late, then please tag the mentor, to let him know about your submission. These answers will be evaluated as per the mentor’s schedule.
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    SCHEDULE:

    Here is the schedule till December to give you an idea about how we will follow the Syllabus:

    AWE Nov-Dec 2022Download

    NOTE: For GS2 and GS3, we take questions from recent current affairs. This ensures coverage of both static and current affairs.

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  • 18th October 2022 | Prelims Daily with Previous Year Questions

    18th October 2022 | Prelims Daily with Previous Year Questions

    [WpProQuiz 1140]

    [WpProQuiz_toplist 1140]

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  • 18th October 2022| Daily Answer Writing Enhancement

    Topics for Today’s questions:

    GS-1          Effects of globalization on Indian society.

    GS-2          Issues relating to poverty and hunger.

    GS-3         Food processing and related industries in India- scope’ and significance, location, upstream and downstream requirements, supply chain management.

    GS-4        Aptitude and foundational values for Civil Service, integrity, impartiality and non-partisanship, objectivity, dedication to public service, empathy, tolerance and compassion towards the weaker sections.

    Question 1)

     

    Q.1 Globalisation has been the main culprit in aggravating the challenges faced by India’s poor. Comment. (15 Marks)

     

    Question 2)

    Q.2 Explaining the concept of multi-dimensional poverty, state the measures which have been taken to address this problem in India. (10 Marks)

    Question 3)

    Q.3 Explain the significance of backward and forward linkages in the Food Processing Industry. Also, discuss the challenges in establishing robust linkages in India. (10 Marks)

    Question 4)  

    Q.4 Explain the meaning of self-efficacy, along with its key determinants. Also, discuss the significance of high self-efficacy for a civil servant. (10 Marks)

     

    HOW TO ATTEMPT ANSWERS IN DAILY ANSWER WRITING ENHANCEMENT(AWE)?

    1. Daily 4 questions from General studies 1, 2, 3, and 4 will be provided to you.

    2. A Mentor’s Comment will be available for all answers. This can be used as a guidance tool but we encourage you to write original answers.

    3. You can write your answer on an A4 sheet and scan/click pictures of the same.

    4.  Upload the scanned answer in the comment section of the same question.

    5. Along with the scanned answer, please share your Razor payment ID, so that paid members are given priority.

    6. If you upload the answer on the same day like the answer of 11th  February is uploaded on 11th February then your answer will be checked within 72 hours. Also, reviews will be in the order of submission- First come first serve basis

    7. If you are writing answers late, for example, 11th February is uploaded on 13th February , then these answers will be evaluated as per the mentor’s schedule.

    8. We encourage you to write answers on the same day. However, if you are uploading an answer late then tag the mentor like @Staff so that the mentor is notified about your answer.

    *In case your answer is not reviewed, reply to your answer saying *NOT CHECKED*. 

    1. For the philosophy of AWE and payment: 
    CLICK HERE To join Daily AWE

  • Arihant SLBM launch: Enhancing India’s underwater capability

    SLBM

    Context

    • On October 14, India joined a select group of nations when it announced the successful launch of an SLBM (submarine-launched ballistic missile). The other six nations that have demonstrated similar underwater capability include the five permanent members of the UN Security Council Russia, the UK, France and China. In August 2016, North Korea claimed a successful launch of an SLBM.

    Features of K-15 SLBM

    • The code names K-15 or B-05, is an Indian submarine-launched ballistic missile (SLBM) with a range of 750 kilometres (466 mi) that was designed for retaliatory nuclear strikes. It belongs to the K Missile family and forms a part of India’s nuclear triad.
    • The K-15 is a two-stage submarine-launched ballistic missile which uses a gas booster to eject out of its launch platform and rise up to the surface of water. A solid rocket motor is fired after the missile reaches a fixed altitude. The missile has a range of around 750 kilometres (466 mi).

    SLBM

    About INS Arihant

    • Launched in 2009 and Commissioned in 2016, INS Arihant is India’s first indigenous nuclear powered ballistic missile.
    • It is capable submarine built under the secretive Advanced Technology Vessel (ATV) project, which was initiated in the 1990s.
    • INS Arihant and its class of submarines are classified as ‘SSBN’, which is the hull classification symbol for nuclear powered ballistic missile carrying submarines.
    • While the Navy operates the vessel, the operations of the SLBMs from the SSBN are under the purview of India’s Strategic Forces Command, which is part of India’s Nuclear Command Authority.

    SLBM

    What is the Significance of SLBM for India?

    • Making India’s strategic profile strong: This achievement is significant in the context of India’s strategic profile. The navy, DRDO and other agencies who have enabled this success should be commended.
    • Enhancing Underwater deterrence: A credible underwater deterrent is perceived as being invulnerable to detection and hence nations with the capacity can deliver a retaliatory second strike this enhances their deterrence capabilities.
    • Showcasing the precision and high accuracy: While the press release is sparse in providing technical details or confirming the range of the SLBM, its assertion that the missile impacted the target area “with very high accuracy” is, nevertheless, instructive.
    • Familiarity and capability with SLMB : The crew of the INS Arihant and the entire HR (human resource) comprising the pyramid from the SFC (strategic forces command) going right up to the national command authority with the Prime Minister at the apex have acquired the necessary proficiency to launch an SLBM should the exigency arise.
    • Demonstration of competence: India can be justifiably proud of having acquired and demonstrated this level of competence, but this achievement needs to be located objectively. An SSBN (a nuclear-propelled submarine armed with a nuclear-tipped ballistic missile) is deemed to be the ultimate deterrent and this profile of macro-lethality and zero error credibility is predicated on the robustness of the “boat” and the efficacy of the missile.
    • Validates SSBN programme: The successful user training launch of the SLBM by INS Arihant is significant to prove crew competency and validate the SSBN programme, a key element of India’s nuclear deterrence capability. A robust, survivable and assured retaliatory capability is in keeping with India’s policy to have ‘Credible Minimum Deterrence that underpins its ‘No First Use’ commitment.

    SLBM

    What is the deterrence?

    • Deterrence, military strategy under which one power uses the threat of reprisal effectively to preclude an attack from an adversary power. With the advent of nuclear weapons, the term deterrence largely has been applied to the basic strategy of the nuclear powers and of the major alliance systems.

    How the SLBM will secure deterrence against the enemy?

    • Tackling to rising Chinese capability: It merits recall that China became nuclear weapon capable in 1964 and carried out its first SLBM test (the J-1 with a range of 1700 km) in 1982. Over the years, the PLA Navy had its own techno-strategic challenges with nuclear-propelled submarines and was able to test a 9,000 km missile only in 2018. It is understood that a fully armed Chinese SSBN that would be deemed to be operational to undertake a credible deterrence patrol is scheduled for mid-2025.
    • Nuclear deterrence is necessary: Acquiring the optimum degree of nuclear deterrence is imperative for India, given its distinctive spectrum of security and strategic challenges. India has made slow but steady progress in its missile programme, nuclear weapon capability, the nuclear submarine and more recently the building of an aircraft carrier

    Conclusion

    • India’s restraint in relation to announcements and claims about strategic capability burnishes deterrence in a quiet but effective manner. Walking softly, while wielding a big stick is desirable as a national trait.

    Mains Question

    Q. How the launch of K-15 SLBM will enhance the security dynamics of India? Discuss the India’s underwater capability to maintain deterrence and security at the same time?

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  • About 41.5 crore Indians out of multi-dimensional poverty since 2005-06

    poverty

    About 41.5 crore people exited poverty in India during the 15-year period between 2005-06 and 2019-21, out of which two-thirds exited in the first 10 years, and one-third in the next five years, according to the global Multidimensional Poverty Index (MPI).

    What is global MPI?

    • The global Multidimensional Poverty Index (MPI) is an international measure of acute poverty covering over 100 developing countries.
    • It complements traditional income-based poverty measures by capturing the severe deprivations that each person faces at the same time with respect to education, health and living standards.
    • The global MPI was developed by OPHI with the UN Development Programme (UNDP) for inclusion in UNDP’s flagship Human Development Report in 2010.
    • It has been published in the HDR ever since.

    poverty

    Multidimensional poverty in India: Major improvements

    poverty

    • The report shows that the incidence of poverty fell from 55.1% in 2005-06 to 16.4% in 2019-21 in India.
    • Deprivations in all 10 MPI indicators saw significant reductions as a result of which the MPI value and incidence of poverty more than halved.
    • Improvement in MPI for India has significantly contributed to the decline in poverty in South Asia.
    • It is for the first time that it is not the region with the highest number of poor people, at 38.5 crore, compared with 57.9 crore in Sub-Saharan Africa.
    • Bihar, the poorest State in 2015-2016, saw the fastest reduction in MPI value in absolute terms.

    Long way towards alleviation

    • Despite the strides made, the report notes that the ongoing task of ending poverty remains daunting.
    • India has by far the largest number of poor people worldwide at 22.8 crore, followed by Nigeria at 9.6 crore.
    • Two-third of these people live in a household in which at least one person is deprived in nutrition.
    • There were also 9.7 crore poor children in India in 2019-2021 — more than the total number of poor people, children and adults combined, in any other country covered by the global MPI.

    Why multi-dimensional poverty does persist in India?

    Poverty is not just the absence of income, money and/or money-like resources required to meet needs.

    • Multiple disadvantages: A person who is poor can suffer multiple disadvantages at the same time – for example they may simultaneously have:
    1. Poor health or malnutrition
    2. Lack of clean water or electricity
    3. Poor quality of livelihood options
    4. Little/No schooling
    5. Disempowerment
    6. Threats of violence
    7. Climate change vulnerability etc.

    Other factors include:

    1. Limited financial resources
    2. Material deprivation
    3. Social isolation
    4. Exclusion and powerlessness
    5. Physical and psychological ill-being
    • Multiple dimensions: Focusing on one factor alone, such as income, is not enough to capture the true reality of poverty. National MPI ensures a holistic approach towards defining poverty at the national level.
    • More comprehensive: MP measures can be used to create a more comprehensive picture. They reveal who is poor and how they are poor – the range of different disadvantages they experience.
    • Better targeting: As well as providing a headline measure of poverty, multidimensional measures can be broken down to reveal the poverty level in different areas of a country and among different sub-groups of people.
    • Priority definition for target groups: It offers statistics that determine the national priorities by using a set of dimensions, indicators with respect to the urban and rural areas of India along with an indicator-wise deconstruction and breakdown.

    Various govt. interventions to for poverty alleviation

    (I) Food Security

    • National Food Security Act 2013 (also ‘Right to Food Act’): It aims to provide subsidized food grains to approximately two thirds of the country’s 1.2 billion people.

    (II) Employment and Skilling

    • National Rural Livelihood Mission (NRLM) – Ministry of Rural Development started NRLM 2011 to evolve out the need to diversify the needs of the rural poor and provide them jobs with regular income on a monthly basis.
    • Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) – In 2005 Ministry of Rural Development initiated MGNEREGA to provide 100 days of assured employment every year to every rural household. One-third of the proposed jobs would be reserved for women.

    (III) Income Support

    • PM Jan Dhan Yojana (PMJDY): The Ministry of Finance in 2014 initiated PMJDY that aimed at direct benefit transfer of subsidy, pension, insurance, etc., and attained the target of opening 1.5 crore bank accounts. The scheme particularly targets the unbanked poor.
    • PM Kisan Samman Nidhi (PM KISAN): PM KISAN is an initiative by the government of India in which all farmers will get up to ₹6,000 per year as minimum income support.

    Various challenges

    • Pauperization: Every year a huge number is added to the population pool of the country. To exemplify, this pandemic has led to severe pauperization of migrant workers.
    • Regional divide: Incidence of extreme poverty continues to be much higher in rural areas than in urban areas.
    • Jobless growth: Despite rapid growth and development, an unacceptably high proportion of our population continues to suffer from severe and multidimensional deprivation.
    • Inadequate resources: The resources allocated to anti-poverty programmes are inadequate and there is a tacit understanding that targets will be curtailed according to fund availability.
    • Implementation bottlenecks: Lack of proper implementation and right targeting has been legacy issues in India. There has been a lot of overlapping of schemes.

     

     

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  • Will electoral bonds reveal the source of funds, SC asks Centre

    The Supreme Court has asked the government whether the electoral bonds system reveals the source of money pumped in to fund political parties even as the Centre maintained that the scheme is “absolutely transparent”.

    What are Electoral Bonds?

    • Electoral bonds are banking instruments that can be purchased by any citizen or company to make donations to political parties, without the donor’s identity being disclosed.
    • It is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India.
    • The citizen or corporate can then donate the same to any eligible political party of his/her choice.
    • An individual or party will be allowed to purchase these bonds digitally or through cheque.

    About the scheme

    • A citizen of India or a body incorporated in India will be eligible to purchase the bond
    • Such bonds can be purchased for any value in multiples of ₹1,000, ₹10,000, ₹10 lakh, and ₹1 crore from any of the specified branches of the State Bank of India
    • The purchaser will be allowed to buy electoral bonds only on due fulfillment of all the extant KYC norms and by making payment from a bank account
    • The bonds will have a life of 15 days (15 days time has been prescribed for the bonds to ensure that they do not become a parallel currency).
    • Donors who contribute less than ₹20,000 to political parties through purchase of electoral bonds need not provide their identity details, such as Permanent Account Number (PAN).

    Objective of the scheme

    • Transparency in political funding: To ensure that the funds being collected by the political parties is accounted money or clean money.

    Who can redeem such bonds?

    • The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.
    • Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent of the votes polled in the last General Election to the Lok Sabha or the State Legislative Assembly, shall be eligible to receive the Electoral Bonds.

    Restrictions that are done away

    • Earlier, no foreign company could donate to any political party under the Companies Act
    • A firm could donate a maximum of 7.5 per cent of its average three year net profit as political donations according to Section 182 of the Companies Act.
    • As per the same section of the Act, companies had to disclose details of their political donations in their annual statement of accounts.
    • The government moved an amendment in the Finance Bill to ensure that this proviso would not be applicable to companies in case of electoral bonds.
    • Thus, Indian, foreign and even shell companies can now donate to political parties without having to inform anyone of the contribution.

    Issues with the Scheme

    • Opaque funding: While the identity of the donor is captured, it is not revealed to the party or public. So transparency is not enhanced for the voter.
    • No IT break: Also income tax breaks may not be available for donations through electoral bonds. This pushes the donor to choose between remaining anonymous and saving on taxes.
    • No anonymity for donors: The privacy of the donor is compromised as the bank will know their identity.
    • Differential benefits: These bonds will help any party that is in power because the government can know who donated what money and to whom.
    • Unlimited donations: The electoral bonds scheme and amendments in the Finance Act of 2017 allows for “unlimited donations from individuals and foreign companies to political parties without any record of the sources of funding”.

    Way ahead

    • The worries over the electoral bond scheme, however, go beyond its patent unconstitutionality.
    • The concern about the possibility of misuse of funds is very pertinent.
    • The EC has been demanding that a law be passed to make political parties liable to get their accounts audited by an auditor from a panel suggested by the CAG or EC. This should get prominence.
    • Another feasible option is to establish a National Election Fund to which all donations could be directed.
    • This would take care of the imaginary fear of political reprisal of the donors.

     

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  • PM inaugurates ‘One Nation, One Fertilizer’ Scheme

    Prime Minister has inaugurated 600 Kisan Samridhi Kendras and ‘One Nation, One Fertilizer’ scheme and said that these steps were being taken to modernise agriculture.

    One Nation One Fertilizer (ONOF)

    • The single brand name for UREA, DAP, MOP and NPK etc. would be BHARAT UREA, BHARAT DAP, BHARAT MOP and BHARAT NPK etc. respectively for all Fertilizer Companies, State Trading Entities (STEs) and Fertilizer Marketing Entities (FMEs).
    • Also a logo indicating Fertilizer subsidy scheme namely Pradhanmantri Bhartiya Janurvarak Pariyojna will be used on said Fertilizer bags.
    • Under the scheme, companies are allowed to display their name, brand, logo and other relevant product information only on one-third space of their bags.
    • On the remaining two-thirds space, the “Bharat” brand and Pradhanmantri Bharatiya Jan Urvarak Pariyojana logo will have to be shown.

    What is the government’s argument for introducing this scheme?

    The government’s logic for introducing a single ‘Bharat’ brand for all subsidised Fertilizers being marketed by companies is as follows:

    (1) Subsidies normalization

    • The maximum retail price of urea is currently fixed by the government, which compensates companies for the higher cost of manufacturing or imports incurred by them.
    • The MRPs of non-urea Fertilizers are, on paper, decontrolled.
    • But companies cannot avail of subsidy if they sell at MRPs higher than that informally indicated by the government.
    • Simply put, there are some 26 Fertilizers (inclusive of urea), on which government bears subsidy and also effectively decides the MRPs;

    (2) Harmonizing markets

    • Apart from subsidising and deciding at what price companies can sell, the government also decides where they can sell.
    • This is done through the Fertilizer (Movement) Control Order, 1973.
    • Under this, the department of Fertilizers draws an agreed monthly supply plan on all subsidised Fertilizers in consultation with manufacturers and importers.
    • This supply plan is issued before the 25th of each month for the following month, with the department also regularly monitoring movement to ensure Fertilizer availability as per requirement, including remote areas.

    (3) Farmers welfare

    • The government is spending vast sums of money on Fertilizer subsidy (the bill is likely to cross Rs 200,000 crore in 2022-23).
    • By deciding where and at what price companies can sell, it would obviously want to take credit and send that message to farmers.

    What can be the drawbacks of the scheme?

    • It may disincentivize Fertilizer companies from undertaking marketing and brand promotion activities.
    • They will now be reduced to contract manufacturers and importers for the government. Any company’s strength ultimately is its brands and farmer trust built over decades.
    • Currently, in case of any bag or batch of Fertilizers not meeting the required standards, the blame is put on the company. But now, that may be passed on fully to the government.
    • Politically, the scheme might well boomerang rather than benefit the ruling party.

    Challenges in the fertilizer sector

    • Distortion in use due to price difference: In 2019-20, fertilizer use per hectare of cultivated area varied from 70 kg of NPK in Rajasthan to 250 kg in Telangana
    • Shift in the composition of fertilizer used:The high price differences among fertilizers (Nitrogen is much cheaper than Potassium and Phosphorus) have disturbed the relative prices of various fertilizers and resulted in a big shift in the composition of fertilizers used in the country in favor of urea and thus Nitrogen.
    • Increasing fertilizer subsidy: Fertilizer subsidy has doubled in a short period of three years. For 2021-22, the Union Budget has estimated fertilizer subsidy at ₹79,530 crores (from ₹66,468 crores in 2017-18).
    • Burden on exchequer: Taxpayers bear 78% of the cost of urea and farmers pay only 22%. This is expected to increase and is not sustainable.
    • Sensitive to Global impacts: The subsidy is likely to reach a much higher level due to the recent upsurge in the prices of energy,the international prices of urea and other fertilizers, and India’s dependence on imports.
    • Import dependence: The total demand for urea in the country is about 34-35 million tonnes whereas the domestic production is about 25 million tonnes.

    Other issues

    • Lesser expansion of Irrigation facilities and consequent low fertilizer consumption leads to low demand and therefore, restricts the growth of the industry.
    • Use of Obsolete Technology: Most of the fertilizer industry operates under PSUs that are using decade-old technology and thus making huge losses and also the competitive edge.

    Way forward

    • India should pay attention to improving fertilizer efficiency through need-based use rather than broadcasting fertilizer in the field.
    • The use of bio-fertilizers is necessary to maintain soil health as more and more use of chemical fertilizers kills all the microorganisms available in the soil, which are so essential for maintaining soil health.

     

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