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  • [Sansad TV] Perspective: Gambia Death Menace

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    Context

    • The death of 66 children in the Gambia, linked to cough syrups manufactured by an Indian firm, has spurred the government to launch an urgent probe into the matter.
    • Samples of the cough syrups, being blamed for the deaths, have been sent for testing.

    Kids poisoned by cough syrup in Gambia

    gambia
    • The cough syrups contained unacceptable amounts of diethylene glycol and ethylene glycol, considered to be poisonous compounds.
    • After this, the WHO raised an alert, linking the deaths in the Gambia to the four cough syrups, made by Haryana-based Maiden Pharmaceuticals.

    While the probe is on, the incident has certainly put the spotlight once again on quality monitoring and due diligence by companies and the need for stricter regulations.

    India’s drug export to Africa

    gambia
    • India is a significant player in the pharmaceutical market in Africa.
    • A recent report revealed that 20% of India’s exports of pharmaceuticals of about $17 billion go to Africa.
    • The Gambia received 3.6 lakh doses of the Indian vaccine in March 2021, showing the importance that India attaches to this nation.
    • Africa is, therefore, a major partner in India’s pharmaceutical industry.

    What is Diethylene Glycol (DEG)?

    • WHO said that Diethylene Glycol (DEG) or ethylene glycol is toxic to humans when consumed and can prove fatal.
    • It can cause kidney and neurological toxicity and has been associated with several cases of mass poisoning when consumed via drugs.
    • The chemical tastes sweet and is water-insoluble.
    • The toxic effects of the chemical include abdominal pain, vomiting, diarrhea, inability to pass urine, headache, altered mental state, and acute kidney injury.

    Are the syrups sold in India?

    • A drug regulatory expert who was part of the investigation into the 2020 J&K deaths said India has phased out syrups in favour of suspensions.
    • The chemical is used as a solvent for Active Pharma Ingredients (API).
    • To save on costs, some companies use industrial propylene glycol that may contain diethylene glycol and ethylene glycol as contaminants.

    India’s response to Gambia deaths

    • It is certainly the responsibility of the importing country to test medicines before releasing them in their market.
    • After being informed about the incident, India’s apex regulatory body, Central Drugs Standard Control Organisation (CDSCO) opened investigations and lifted control samples.

    Issue: India’s credibility at stake

    • India is one of the leading exporters of medicines.
    • PM Modi recently stressed that Indian drugs had earned the world’s trust and that India could be called the ‘pharmacy to the world’.
    • However, such negative reports on the quality and safety of our medicines will be a massive blow to the country’s image as a source of cheap generic drugs to the world.

    Issues highlighted by the incident

    • Smuggling of cheap drugs: Inquiry reveals that these were imported from an Indian manufacturer, not under public tender but privately.
    • Ignorance by authorities: The drug which is banned for domestic consumption has got exported and led to fatalities. This is a huge blissful mistake by Indian Authorities.
    • Lack of inspection: There are not enough drug inspectors in the country to conduct as many inspections as is ideally required in such as vast set-up.
    • Inadequacies in quality-check: Despite huge production units, there are not an adequate number of laboratories to test the samples in time if all the samples that should be lifted for testing are picked up.
    • Blot on credibility: The matter, if not properly handled, can damage the perception that Indian medicines are trustworthy for African countries and the global South.

    Health cooperation between India and Africa

    • Health cooperation is an important part of the India-Africa engagement.
    • The India-Africa Health Sciences platform, Pan-African e-Network project, e-Arogya Bharti, and training programs under the Indian Technical and Economic Cooperation (ITEC) program are part of inter-governmental action.
    • There is a growing pharmaceutical trade, medical tourism and hospital management between India and Africa.
    • This is because of the confidence that India is a cost-effective but efficient partner in the health sector.
    • Indian companies have established a reputation as partners of choice — particularly of international healthcare NGOs and aid agencies — over the past decades.
    • They have followed WHO standards in the main and their budget-friendly medicines have been a boon to many African countries for their public health programs.

    Possible factors behind this tragedy

    • There are rackets of counterfeit Indian medicines turning up in many African countries.
    • Some of these were coming from unregistered producers in India, who would produce medicine depending on what cost was paid to them without concern for quality.
    • In some cases, competitors from other countries were known to make counterfeit medicines with Indian markings and dump them in markets where Indian pharmaceuticals were well regarded.

    Way forward

    • The pharmaceutical trade is vital and must be protected from predatory practices and violations of regulatory norms.
    • Regulatory mechanism on both sides should be strengthened.
    • African importers should be given lists of recognised Indian manufacturers.
    • Training should be provided to drug controllers to curtail the menace of counterfeit and poor-quality medicine entering Africa from India.

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  • (LIVE Now) Masterclass webinar by Purnima ma’am – Integrated UPSC Current Affairs strategy for Prelims and Mains 2023: Align your current affairs with GS static| Ace UPSC in just One Attempt

    (LIVE Now) Masterclass webinar by Purnima ma’am – Integrated UPSC Current Affairs strategy for Prelims and Mains 2023: Align your current affairs with GS static| Ace UPSC in just One Attempt

    10th October, 7:30 PM | Book your slot now!

    click and register for the special masterclass by purnima ma’am | Aligning Current Affairs for UPSC Prelims and Mains 2023

    Current Affairs for UPSC is such a necessary evil that terrifies many aspirants for good reason. Aspirants feel that there is no single source to help them navigate this section & it all feels like one big haze. In such, confusion 90% of aspirants start to plan their own and start a separate current affairs preparation/strategy for UPSC Prelims and Mains. But current affairs is not a subject that we can filter out for objective types and for descriptive types separately. 

    They should be dealt with in an integrated manner rather than in a silos approach (covering CA for prelims and mains separately).

    Following an integrated approach is an important UPSC skill that is lacking in many relatively fresher/beginner aspirants, and even veteran aspirants. Covering current affairs in such a balanced manner makes preparation effective, outcome-oriented, and simple.

    Purnima ma’am will be taking up a special Masterclass to help you impart this skill and teach how to cover current affairs in an Integrated manner for UPSC 2023.

    You will get an opportunity to talk and discuss 1-1 with Purnima ma’am. Register now.
    click and register for the special masterclass by purnima ma’am | Aligning Current Affairs for UPSC Prelims and Mains 2023

    Live Masterclass details: 10th October, 7:30 pm

    1. Balancing Prelims and Mains wrt Current Affairs.

    Approaching Current Affairs in an Integrated manner for UPSC pre+mains. Instead of covering current affairs in a silos approach, there should be a high level of interlinking and alignment towards both stages. Else it would be a wasteful approach.

    2. Balancing Dynamic-Static part.

    Linking Current Affairs with the Static part of the syllabus.

    UPSC expects a candidate to be well aware of the implications and impact of a particular issue, that is currently in news, on various aspects of life, the state, society, etc. For this, we need to link it with the GS subjects and topics that explain the static part.

    3. Following a selective and effective approach

    Reading everything under the sun is a bad approach to dealing with Current Affairs. Following a selective and effective approach to cover CA is essential for success in UPSC in just one attempt.

    4. Making notes, collecting info like case studies, examples, etc.

    You have to cover a lot of things in Current Affairs for UPSC over the course of around 1 year. Organizing the information, facts, and data to be used in answers and solving MCQs or revision is a crucial skill one must have. We’ll discuss this in the masterclass.

    5. Writing Daily mains answers and attempting prelims MCQs. (Best resources for this)

    Reading and Organising current affairs is not of any use until and unless you know how to use that fodder. Thus writing daily mains answers based on current affairs and solving MCQs is really important. We will also discuss the best resources, freely available, in this masterclass.

    6. LIVE doubt resolution and interaction with Purnima ma’am

    A 1-to-1 Q&A session will follow the masterclass because you have questions and doubts that need resolution on a personal level. List down all your questions. We will tackle them in the masterclass/webinar

    click and register for the special masterclass by purnima ma’am | Aligning Current Affairs for UPSC Prelims and Mains 2023

    What The Hindu mentioned about Civilsdaily Mentorship

    click and register for the special masterclass by purnima ma’am | Aligning Current Affairs for UPSC Prelims and Mains 2023

  • Boosting India’s Cotton Production

    IndiaContext

    • Cotton, one of the most important crops, has a strategic role in India’s international agriculture play. India is the world’s third-largest exporter of cotton and the second-largest exporter of textiles, therefore, also contributing significantly to the country’s economy.

    All you need to know about the Cotton crop

    • Rainfall and Temperature: Sensitive to timing of rainfall and rainfall during harvest might lead to crop failure. Temperature required is around 20-30 degree c., while rainfall is about 75-100cm.
    • Soil: Black soil ideally suited for cotton cultivation as it is rich in lime.cotton is vulnerable to pest attack.
    • Humidity: Cotton cultivation requires more than 200 frost free days. Humidity during harvest is harmful.
    • Oilcake: The cotton seeds are crushed for oil and the oilcake is an important animal fodder and also used as farm manure.

    India

    What is the Present status of cotton in India?

    • India holds a 4% share of the U.S.$840 billion global textile and apparel market
    • India has been successful in developing backward links, with the aid of the Technical Upgradation Fund Scheme (TUFS), in the cotton and technical textiles industry.
    • However, India is yet to move into man-made fibres as factories still operate in a seasonal fashion.
    • Areas of cotton cultivation are Gujrat, Maharashtra, Telangana, Punjab, etc.

    Do you know?

    The latest archaeological discovery in Mehrgarh puts the dating of early cotton cultivation and the use of cotton to 5000 BCE. The Indus Valley civilization started cultivating cotton by 3000 BCE. Cotton was mentioned in Hindu hymns in 1500 BCE.

    IndiaWhat are the voluntary sustainable standards (VSS) in cotton?

    • Voluntary Sustainability Standards (VSS):  Voluntary Sustainability Standards (VSS), which encapsulate certification schemes, labelling programmes, and private standards. The major VSS that are dominant in the sustainable cotton value chain today include Better Cotton Initiative (BCI), Organic Cotton, Fair trade Cotton, and Cotton Made in Africa.
    • To achieve sustainable Goal: The global textile supply chain is undergoing a paradigm shift; it is pursuing environmental and social upgradation to meet the sustainability requirements imposed by global textile and home furnishing retailers, so as to mitigate the adverse impacts of climate change on cotton farmers and cotton cultivation.

    What are the benefits of VSS for India?

    • Enhance position in global cotton supply: Adapting to VSS is clearly beneficial for India. On the one hand, it will help it remain globally competitive in the cotton supply chain and strengthen its position in the export market, while on the other, it will help meet India’s SDG commitments.
    • Takes India a step closer towards sustainable farming: India has made considerable progress in its transition towards a more sustainable cotton farming ecosystem. The total cotton area under VSS has reached 1.5 million hectares, contributing to 24 percent of the global VSS cotton area.
    • Increases organic production of cotton: With approximately 0.2 million hectares of area for production, it is the largest producer of organic cotton, accounting for 50 percent of global organic cotton production, and the second-largest producer of ‘Better Cotton’, accounting for 16.5 percent of total Better Cotton production covering an area of 1.5 million hectares.
    • Higher yeild: According to the BCI’s 2020 Impact Report for India, Better Cotton farmers have 9 percent higher yields and 18 percent higher profit than conventional farmers.
    • Eco friendly production:The Thinkstep report 2018 on the Life Cycle Assessment of VSS Cotton conducted in Madhya Pradesh revealed a reduction of 50 percent in climate change impact, 59 percent in blue water consumption, 84 percent in ecotoxicity, and 100 percent eutrophication in organic over conventional cotton.
    • To achieve SDG Targets: The VSS cotton growth story in India has already demonstrated its contribution towards the achievement of SDG targets for Zero Hunger (Goal 2), Clean Water and Sanitation (Goal 6), Responsible Consumption and Production (Goal 12), Life on Land (Goal 15), and Climate Action (Goal 16).
    • NITI Aayog’s Assessment: VSS cotton delivers real, measurable outcomes according to priority indicators as outlined by NITI Aayog which maps India’s SDG goals. These indicators include changes in the extent of water bodies, improving groundwater withdrawal against availability, and rationalising nitrogen fertiliser.

    IndiaConclusion

    • India must scale up the VSS while aligning it with its SDG commitments since VSS in cotton ensures a better production system, sourcing methods, and consumption patterns while also influencing the lives of hundreds of millions.

    Mains Question

    Q. What are the Voluntary Sustainable Standards (VSS)? Cotton production can be boosted in India using VSS method. Elaborate.

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  • India’s Dark Sky Reserve

    Dark Sky ReserveContext

    • The union territory of Ladakh will host India’s first Dark Sky Reserve which will be set up in Hanle area in the next three months. The Dark Sky Reserve is being built as part of Ladakh’s high-altitude Changthang Wildlife Sanctuary.

    What is Dark Sky Reserve (DSR)?

    • Definition of Dark Sky Reserve: The International Dark Sky Association (IDSA) defines an international dark sky reserve (IDSR) as “a public or private land of substantial size (at least 700 km², or about 173,000 acres) possessing an exceptional or distinguished quality of starry nights and nocturnal environment, and that is specifically protected for its scientific, natural, educational, cultural heritage, and/or public enjoyment.

    What is Core Area of Dark Sky Reserve?

    • A dark sky reserve requires a “core” area that has clear sky without any light pollution, which can enable telescopes to see the sky in its natural darkness.

    Dark Sky Reserve

    Why Ladakh is chosen as ideal location for DSR?

    • Ladakh is ideal for long-term observatories and dark-sky sites because of its large arid area, high elevation, and sparse population, extreme cold and minimum temperature drops to minus 40 degree celcius.
    • The Changthang wildlife Sanctuary, the DSR site is situated around 4,500 metres above sea level, which makes it a perfect host for telescopes.

    Who is managing India’s DSR?

    • The Department of Science and Technology and Indian Institute of Astrophysics (IIA) in Bengaluru are providing support for the facility. The IIA already manages the Indian Astronomical Observatory (IAO) complex in Hanle, Ladakh.

    What are the International standards for DSR?

    • International Dark Sky Association’s Recognition: The IDSA recognizes and accredits dark-sky areas worldwide, in three categories. The Mont Mégantic Observatory in Quebec is the first such site to be recognized (in 2007) as an International Dark Sky Reserve.
    • Categorical Certification: Individuals or groups can nominate a site for certification to the International Dark Sky Association (IDSA). There are five designated categories, namely International Dark Sky parks, communities, reserves, sanctuaries and Urban Night Sky Places.
    • Global Recognition: The certification process is similar to that of a site being awarded the UNESCO World Heritage Site tag or getting recognised as a Biosphere Reserve. Between 2001 and January 2022, there have been 195 sites recognised as International Dark Sky Places globally, the IDSA said.
    • Dark Sky Park: IDSA recognized Natural Bridges National Monument in Utah as the world’s first International Dark Sky Park.
    • Dark Sky Sanctuary: In 2015, the IDSA introduced the term “Dark Sky Sanctuary” and designated the Elqui Valley of northern Chile as the world’s first International Dark Sky Sanctuary. The Gabriela Mistral Dark Sky Sanctuary is named after a Chilean poet.

    Dark Sky ReserveWhat is India’s objective with DSR?

    • To promote AstroTourism: The primary objective of the proposed Dark Sky Reserve is to promote astronomy tourism in a sustainable and environment-friendly manner. Scientific methods will be used here to preserve the night sky from ever-increasing light pollution.
    • To offer clear skies for observations: With metros, cities and peripheral areas experiencing light pollution and remaining constantly lit up, there are diminishing areas that offer a view of clear skies on cloudless nights.
    • For training purpose: In the pilot phase, the Indian Institute of Astrophysics (IIA),has procured ten small and easy-to-handle telescopes and light-reflecting shields. IIA’s scientists and outreach experts will identify locals and train them to use these telescopes.
    • Sky gazing and a boost for village economy: This will include basic sky gazing, identification of constellations, and locating the pole star, among others. These telescopes will be installed at the homestays, which is a popular option for tourist accommodation in Ladakh.

    Dark Sky ReserveConclusion

    • The Dark Sky Reserve is likely to boost Astro tourism in India where there has been no such reserve. Once set up, the reserve will be the highest-located site in the country for infrared, gamma-ray, and optical telescopes.

    Mains Question

    Q. What are the Dark Sky Reserves? How DRS will help in astronomical research and observations in India?

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  • Classifying Merit and Non merit Freebies

    FreebieContext

    • The debate that began with an RBI 2022 report on state finances followed by Prime Minister Narendra Modi’s comment on revdi culture aka freebies, has garnered substantial attention so much so that the Supreme Court is hearing on this issue. Freebies have now assumed more importance than ever.

    What are freebies?

    • Freebies could be defined as non-merit subsidies. The term Freebies is not new; rather it is a prevalent culture in Indian politics (in the name of socialism).
    • The political parties are always trying to outdo each other in luring the Indian voters with freebies.

    What are Subsidies?

    • Subsidies are money transfers (implicit or explicit) by the government in an attempt to drive prices artificially below market prices.
    • As a National Institute of Public Finance and Policy (NIPFP) study by Sudipto Mundle and Satadru Sirkar puts it, budget subsidies, in particular, are defined as the unrecovered cost of economic and social services.
    • However, all subsidies cannot be easily classified into merit or non-merit.

    FreebieWhat are the objectives behind providing freebies?

    • Welfare state: It could be said that providing freebies empowers the state to, first, deliver welfare as a welfare state should, by providing subsidised merit goods like health and education;
    • Combating poverty: To help households combat poverty (especially in economically stressed times characterised by fewer job opportunities, lower incomes, high inflation, etc.) by providing subsidised public goods like food, electricity, etc.
    • Populist spending: To appeal to the electorate through outright populist spending.

    Question of classification between a merit and a non-merit freebies?

    • Blur Boundary: The boundaries between the aforementioned objectives begin to blur when it comes to classifying one form of freebie as a merit or a non-merit subsidy.
    • Few examples: Are corporate tax cuts non-merit subsidies or a measure to boost investment? 2. Is making bus rides free for women in the national capital a non-merit subsidy or a way to boost women’s mobility and labour-force participation? 3. Are free laptops to students in Tamil Nadu not a way to bridge the digital divide in education?
    • Varying definition: The existing arguments develop an understanding that freebies cannot be defined in a finite context, and that the definition varies across space and economic conditions.

    FreebieHow freebies impact revenue of the state?

    • Adverse impact on revenues: Regardless of which one gets classified as good or bad, freebies are simply expenditures or foregone revenues. Any freebie-induced debt burden could have an adverse effect on the state finances if, one, it hasn’t been properly accounted for through transparent budgeting procedures (including off-budget borrowings in debt calculations)
    • Increase in Fiscal deficit: Either way, they lead to an increase in fiscal deficit whose financing could necessitate taking on debt. It threatens fiscal sustainability, i e, it limits the state’s ability to service its debt-related commitments without making an unrealistic fiscal adjustment.
    • Lack of data leading to leakages: The targeting of beneficiaries to ease the burden on the exchequer is one way to check these expenditures but lack of data has forced a situation wherein leakages and duplication of beneficiaries is commonplace.
    • Jeopardises long-term growth and development: In the absence of adequate avenues of revenue mobilisation, any fiscal adjustment achieved by contracting critical expenditures on the social sector and capital formation further jeopardises long-term growth and development. The emanating risk of fiscal sustainability means a “revdi” today would take a toll on tomorrow’s generation.

    What could be the solution?

    • Setting up an independent fiscal council: Setting up an independent fiscal council that has been recommended by the FRBM Review Committee (2017), and recently constituted Finance Commissions too, including the 15th Finance Commission.
    • Providing information and advisory: FRBM report says, the council will serve both an ex-ante role providing independent forecasts on key macro variables like real and nominal GDP growth, tax buoyancy, commodity prices as well as an ex-post monitoring role, and also serve as the institution to advise on triggering the escape clause and also specify a path of return.
    • Monitoring finance: Such a council should work for the union as well as the states. Monitoring of finances and fiscal rules could also help ensure that states comply with a medium-term fiscal policy framework, which has been long argued for by economists.

    FreebieConclusion

    • Freebies cannot be defined easily, and constitutionally, any state government should be empowered to spend the way it wants, provided the fiscal policy is sustainable. The message from the freebies debate is to make informed economic decisions whilst attending to key development objectives.

    Mains Question

    Q. There is nothing wrong in having social security programme that aims to lift the poor get out of poverty and empower the vulnerable sections of the society. In this context, where do you see the goal of sustainable economic development? Comment.

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  • Stubble burning in Punjab at 3-year low

    stubble

    Though early days, the number of crop fires reported out of Punjab are at a three-year low, suggest data from the Indian Agricultural Research Institute (IARI) that tracks such fires via satellite.

    What is Stubble Burning?

    • Stubble (parali) burning is a method of removing paddy crop residues from the field to sow wheat from the last week of September to November.
    • It is usually required in areas that use the combined harvesting method which leaves crop residue behind.
    • This practice mostly carried out in Punjab, Haryana and UP contributes solely to the grave winter pollution in the national capital.

    Emissions from stubble burning

    • The process of burning farm residue is one of the major causes of air pollution in parts of north India, deteriorating the air quality.
    • Stubble burning is a significant source of carbon dioxide (CO2), volatile organic compounds (VOCs), nitrogen oxides (NOx) and hydrocarbons (HC).

    Despite emissions, why do farmers burn stubble?

    • Crop residue burning is practised by the farmers to prepare the land for the next cultivation.
    • The major reason behind the stubble burning is the short time available between rice harvesting and sowing of wheat as delay in sowing wheat affects the wheat crop.
    • Between the harvesting of the paddy crop and the sowing of the next crop, there is only a two to three weeks’ time window is left.
    • Even though farmers are aware that the burning of straw is harmful to health, they do not have alternatives for utilizing them effectively.
    • The farmers are ill-equipped to deal with waste because they cannot afford the new technology that is available to handle the waste material.
    • Therefore, stubble burning is considered one of the cheapest methods to clean the field after the harvesting season.

    Impact of stubble burning

    • Air Pollution: Stubble burning emits toxic pollutants in the atmosphere containing harmful gases like Carbon Monoxide (CO), methane (CH4), carcinogenic polycyclic aromatic hydrocarbons, volatile organic compounds (VOC). These pollutants disperse in the surroundings and eventually affect air quality and people’s health by forming a thick blanket of smog. Along with vehicular emissions, it affects the Air Quality Index (AQI) in the national capital and NCR.
    • Soil degradation: Soil becomes less fertile and its nutrients are destroyed when the husk is burned on the ground. Organic content of soil is completely destroyed. Stubble burning generates heat that penetrates into the soil, causing an increase in erosion, loss of useful microbes and moisture.

    Alternative solutions

    • Power generation: The available paddy straw can be effectively used for power generation, which will go a long way towards overcoming the problem of disposal of crop residues and power deficit in the region.
    • In-situ decomposition: Suitable machinery for collection, chopping and in situ incorporation of straw is required. We can use Pusa Biodecomposer, Biomethanation etc.
    • Organic manuring: Convert the removed residues into enriched organic manure through composting.

    Conclusion

    • Unless financial assistance is to be provided by the Centre for boosting farm mechanization, it is difficult to completely stop stubble burning.
    • States need to make alternative arrangements for the consumption of paddy straw into the soil as per the directions of the NGT.

     

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  • [Burning Issue] Global fuel dynamics and India’s Energy Security

    oil

    Context

    • Despite the global decline in crude oil prices over the last month and buying of cheap Russian crude oil, the retail prices of Petrol and Diesel in India have remained high. These increased prices have also caused high inflation in India, leading to an increase in key policy rates by RBI.
    • In this context, in this edition of the burning issue, we will study Global fuel dynamics and how it impacts India’s energy security.

    Global fuel dynamics

    • Global production of oil- averaged 95.6 million barrels per day in 2021. The top producing country group was OPEC (31.7 million b/d) followed by OECD (31.0 million b/d). The top three producing countries were the United States (18.9 million b/d), Saudi Arabia (10.8 million b/d), and Russia (10.8 million b/d).
    • Price of oil- The average Brent crude oil spot price declined to USD100/bbl in August from USD112/bbl in July. Brent crude oil prices have sunk by over USD20/bbl after peaking in June, pressured by tightening monetary policies and demand concerns in China
    • Demand of crude oil- Global liquids demand saw a slight increase in August to 99.4 MMb/d, but remained below June’s 100 MMb/d.
    • Factors impacting prices- Oilgenerates revenue for countries with enough oil reserves to produce more oil than they consume. Not surprisingly, events such as unrest in oil-producing regions, new oil field discoveries, and advances in extraction technology profoundly affect the oil industry.
    • Recent decline in prices- Benchmark Brent crude oil prices dipped to USD100/bbl in August – the lowest in the past six months. Elevated inflation levels, rate hikes by major central banks, and concerns about a slowdown in the Chinese economy have impacted oil and fuel demand, leading to a price decline.
    • Natural gas- accounts for 32% of primary energy consumption in the United States, the world’s largest producer. Russia is the second biggest producer, and also has at least 37 trillion cubic meters of natural gas reserves, the most in the world. Also, there was a steep rise in the international prices of natural gas triggered by the Russia-Ukraine war disrupting global supplies

    Why crude oil prices were high till last month?

    (A) Limited Supply:

    • Major oil-producing countries had cut oil production amid a sharp fall in demand due to the Covid-19 pandemic.
    • The Russian-Ukraine war has disrupted the supply chains. Also, sanctions on Russia, Iran and Venezuela by the US have reduced supplies of crude in international markets leading to price rises.
    • In early October 2022, OPEC agreed to cut back on oil production to increase prices.

    (B) Revival of Demand:

    • Theproduction and rollout of vaccines for Covid-19 and the rising consumption post the COVID lockdowns last year have both led to a revival in international crude oil prices.

    (C) Geopolitical reasons:

    • Geopolitical tension has risen between Russia, which is the second largest oil producer in the world, and neighbouring Ukraine.
    • In January, there were drone attacks on oil facilities in UAE, another major oil producer.
    • An outage on a major oil pipeline linking Saudi Arabia and Turkey further added to the pressures.

    Impacts of Global fuel dynamics on the Energy Security of India

    • Energy security of India is threatened– Sanctions on Iran & Russia and the reduction of oil production by OPEC have caused prices of Crude oil to sour to record high levels, making it unbearable for the economy and common man, thus negatively impacting the energy security of India.
    • Current Account Deficit: The increase in oil prices will increase the country’s import bill, and further disturb its current account deficit (excess of imports of goods and services over exports). According to estimates, a one-dollar increase in crude oil price increases the oil bill by around USD 1.6 billion per year.
    • Inflation: The increase in crude prices could also further increase inflationary pressures that have been building up over the past few months. This will decrease the space for the monetary policy committee to ease policy rates further.
    • Fiscal Health: If oil prices continue to increase, the government shall be forced to cut taxes on petroleum and diesel which may cause a loss of revenue and deteriorate its fiscal balance.The revenue lost will erode the government’s ability to spend or meet its fiscal commitments in the form of budgetary transfers to states, payment of dues and compensation for revenue shortfalls to state governments under the goods and services tax (GST) framework.

    Reasons for recent fall in crude oil prices

    • Strengthening of US Dollar: For the first time since early February, international crude benchmark Brent went below $90 a barrel last week. This level was last seen before Russia invaded Ukraine. The recent decline came amid expectations of further US dollar rise due to Fed rate hikes.
    • Reducing global demand: Global energy demand is softening, especially in China, where crude oil imports fell 9.4% last month compared to a year ago, as the country’s zero-Covid policy has led to full or partial lockdowns in more than 70 cities since late August.
    • Fear of global recession: US Fed has been increasing the policy rate aggressively causing the Dollar to appreciate vis-à-vis other currencies and outflow of capital thus generating fears of a global recession and thus reducing the demand for oil in the future.
    • Increasing Russian oil supplies: India is buying Russian crude in defiance of Western, especially US pressure, to isolate the country economically and financially. India is buying Russia’s flagship Urals grade at discounts of as much as $35 a barrel on prices before the war

    But why fuel prices are still high in India?

    • Non-passing of savings: Indian refiners are not passing on the cost savings derived from declining crude oil prices since last month.
    • No government support to companies: Petrol was deregulated in June 2010 and diesel in November 2014. Since then, the government does not pay oil firms any subsidy to compensate them for losses they might incur on selling fuel at rates below cost.
    • High losses: The three biggest oil retailers in India posted a combined net loss of Rs 18,480 crore in the June quarter.
    • Recover past losses: No revision of fuel prices by oil marketing companies is to recover the losses that state-owned fuel retailers incurred in keeping the fuel prices unchanged when international oil prices surged to multi-year highs.

    Current Energy scenario in India

    • Aim: Indian Government aims to increase energy in India and reduce energy poverty, with more focus on developing alternative sources of energy, particularly nuclear, solar and wind energy.  India attained 63% overall energy self-sufficiency in 2017.
    • 3rd biggest energy consumer: The primary energy consumption in India grew by 10.4% in CY2021 and is the third biggest with a 6% global share after China and USA.
    • The energy basket: The total primary energy consumption from coal (452.2 Mtoe; 45.88%), crude oil (239.1 Mtoe; 29.55%), natural gas (49.9 Mtoe; 6.17%), nuclear energy (8.8 Mtoe; 1.09%), hydro-electricity (31.6 Mtoe; 3.91%) and renewable power (27.5 Mtoe; 3.40%) is 809.2 Mtoe (excluding traditional biomass use) in the calendar year 2018.
    • Import dependency: In 2018, India’s net imports are nearly 205.3 million tons of crude oil and its products, 26.3 Mtoe of LNG and 141.7 Mtoe coal totalling 373.3 Mtoe of primary energy which is equal to 46.13% of total primary energy consumption. India is largely dependent on fossil fuel imports to meet its energy demands – by 2030.

    Challenges to Energy security in India

    • Low domestic resources: India, with 17% of the world’s population, has just 0.8% of the world’s known oil and natural gas resources.
    • High domestic demand: India’s domestic production is not sufficient to meet its demand. As a result, India already imports 80% of its crude oil needs. Without new and substantial domestic discoveries, imports will continue to increase.
    • Volatile energy supply regions: Problems of diversification of energy sources for India arise from the political volatility, and geopolitics of the regions from where India imports its energy products like the Persian Gulf region, and countries like Russia, Iran, etc.
    • Low share of natural gas usage in India: Natural gas currently provides only 8% of India’s primary energy supply despite the fact that 50% of that gas comes from domestic sources, onshore and offshore. Today, oil accounts for 36% of the country’s primary energy use. This figure is set to rise both in absolute and in percentage terms.
    • Low Private sector participation: Private sector’s Cold response to Government initiatives and policies such as HELP and mine auctions.
    • Lack of holistic policy: India currently does not have a holistic National energy policy but is divided into a national electricity policy, renewable energy policy, etc. leading to a lack of coherency in all energy sectors and ministries.

    Energy policy in India

    • In this context, in 2017, NITI Aayog published a draft National energy policy (NEP) with four key objectives of Access at affordable prices, Improved security and Independence, Greater Sustainability and Economic Growth.
    • The draft NEP proposes actions to meet the objectives in such a way that India’s economy is ‘energy ready’ in the year 2040.

    Some Draft NEP proposals for the Energy Sector

    • India has nearly 3.17 million square km of sedimentary area, out of which only 19% has been moderate to well-explored. To quickly appraise the entire sedimentary area, there is a need to offer geological data to prospective Exploration and Production (E&P) companies.
    • Setting up of 90-day consumption requirement of strategic and commercial storage, both for crude and petroleum products through innovative private investment strategies is needed.
    • To increase the penetration of natural gas, a National Gas Grid would have to be rolled out throughout the country.
    • There is a need to migrate the existing hydrocarbon regime (both Nomination and PSCs) to the emerging framework of market-determined prices and marketing freedom. However, this cannot be done overnight and needs to be achieved in gradual phases.
    • OMCs have done a commendable job in maintaining petroleum supplies throughout the country. The next step in this direction is to encourage competition through the entry of the private sector in a big way, to raise efficiency and consumer satisfaction levels.

    India’s Quest for Energy Security: The Steps Taken

    • Exploring domestic energy reserves: To promote oil and gas production at the domestic level, the Indian Government has been taking several steps which range from encouraging Indian companies to increase their domestic activities and widening its engagement with multinational companies, broadening opportunities for them to participate in oil and gas exploration in India.
    • HELP policy: Government has launched an Open licensing and acreage policy under the Hydrocarbon exploration and licensing policy (HELP) in 2017. The HELP marked an important transition from regulation to liberalization of India’s E&P sector; it is a very significant upstream reform of the fiscal regime.
    • Policy and operational changes: to stimulate the investments and development in the exploration of hydrocarbon sources of energy, some of the steps have focussed on regulatory changes, a transparent gas pricing policy and redevelopment of uneconomical assets.
    • Exploring alternative sources: The domestic efforts have also seen a concerted focus on exploring various alternative sources of energy that are infinite, renewable and environment-friendly. The government has given a massive push in this regard in energy production through solar energy, wind power, hydroelectricity power, and biomass, and nuclear energy.
    • Diversifying energy sourcing regions: Two-thirds of India’s oil imports come from Gulf region. India is following in the footsteps of other major oil-importing economies and making significant efforts to obtain supplies from sources outside the Gulf such as regions of Latin America, Africa, the Caspian Basin, Russia and the waters of the Indo-Pacific region.
    • Launch of NDR: In support of the OALP, the government launched the National Data Repository in June 2017. It is a comprehensive archive of geo-scientific data for E&P activities. By allowing companies to access the data through an e-platform and consult relevant information, the government helped the interested parties in making bidding decisions.
    • Small field policy launched: Discovered Small Field Policy was launched in 2016 to tap unmonetized small oil/gas discoveries in India, Discovered Small Field provides an easy and low-risk investment option for interested parties to encourage E&P activities.

    Way forward

    • Reinforce its oil emergency response policy- to adapt it to the expected strong growth in oil consumption, with increased dedicated emergency stocks and procedures, including demand restraint measures and a proper analysis of risks by using oil disruption scenarios.
    • Strengthen the regulatory oversight- of the sector. Non-discriminatory access to oil transport and the level-playing field in the mid-and downstream oil sector.
    • Promote the diversification- of oil sources and reduce India’s high oil import dependence by enhancing exploration and production activities and the development of alternative sources, such as biofuels.
    • Foster the creation of a liquid market- for natural gas in India, gradually moving from gas allocation and multiple pricing regimes to the creation of a gas hub, so that domestic gas and LNG imports can be used most efficiently and competition can flourish.
    • Strengthen and clarify the roles and responsibilities- of the regulatory supervision of natural gas market activities (upstream, midstream and downstream) to ensure a non-discriminatory access regime to pipeline capacity so that both LNG imports and new gas discoveries can find their way to markets and investment in gas transport and storage is encouraged.
    • Ensure gas is treated on a level playing field- with other fuels for taxation and is included under the GST, as the country strives to increase the share of gas in the total energy supply.
    • Enhance international engagement- by India on global oil security issues.

    Conclusion

    • Nation has achieved a lot in the energy sector in recent years which has propelled it to become one of the largest economies in the world.
    • But to continue on this growth path, India’s energy policy needs to be pursued more inclusively in its domestic and international settings to address its fast-growing energy demand in a competitive geo-political environment.

  • Aatmanirbhar in defence production: Where does India stand?

    India ranks fourth among 12 Indo-Pacific nations in self-reliant arms production capabilities, according to a study released this month by the Stockholm International Peace Research Institute (SIPRI).

    Study on Defence production

    • China tops the list, Japan is second, South Korea is in third place, and Pakistan is at number 8.
    • The study, which measures self-reliance until 2020, is based on three indicators of self-reliance in each country:
    1. Arms procurement — imports, licensed and domestic production as a proportion of the government’s total procurement of major conventional arms;
    2. Arms industry — the study presents the five largest arms companies in each country, where data are available, ranked by sales of arms and military services in 2020 to both domestic and export customers;
    3. Uncrewed maritime vehicles, the sea equivalent of drones — covering both uncrewed surface vehicles (USVs) and uncrewed underwater vehicles (UUVs), meant to provide a qualitative understanding of how countries are engaging domestic research institutes and firms to produce such cutting edge systems.

    How has China progressed?

    • China was the world’s fifth largest arms importer in 2016-20.
    • Its self-reliance policies, and its high economic growth in that period meant that the Chinese arms industry now increasingly fulfils the requirements of the People’s Liberation Army (PLA).
    • Its high volume of imports in absolute terms accounts for only 8 per cent of total procurement for the period, the lowest share for any of the 12 governments studied in this report.

    Why is India still lagging behind?

    • India is ranked as the second-largest importer of arms for its armed forces in 2016-20.
    • India is highly dependent on imports of complete foreign major arms, including many produced under licence or as components for its domestic production.
    • Of India’s total volume of procurement in 2016–20, 84 per cent was of foreign origin.
    • Domestic arms companies provide only 16 per cent of its total procurement.

    Steps taken by the Centre to boost defence production

    • Licensing relaxation: Measures announced to boost exports since 2014 include simplified defence industrial licensing, relaxation of export controls and grant of no-objection certificates.
    • Lines of Credit: Specific incentives were introduced under the foreign trade policy and the Ministry of External Affairs has facilitated Lines of Credit for countries to import defence product.
    • Policy boost: The Defence Ministry has also issued a draft Defence Production & Export Promotion Policy 2020.
    • Budgetary allocation: In addition, a percentage of the capital outlay of the defence budget has been reserved for procurement from domestic industry.
    • Defence Industrial Corridors: The government has also announced 2 dedicated Corridors in the States of TN and UP to act as clusters of defence manufacturing that leverage existing infrastructure, and human capital.
    • Long-term vision: The vision of the government is to achieve a turnover of $25 bn including export of $5 bn in Aerospace and Defence goods and services by 2025.
    • Push for self-reliance: The govt has identified the Defence and Aerospace sector as a focus area for the ‘Aatmanirbhar Bharat’ or Self-Reliant India initiative.

    Issues retarding defence indigenization

    • Excess reliance on Public Sector: India has four companies (Indian ordnance factories, Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL) and Bharat Dynamics Limited (BDL)) among the top 100 biggest arms producers of the world.
    • Policy delays: In the past few years, the government has approved over 200 defence acquisition worth Rs 4 trillion, but most are still in relatively early stages of processing.
    • Lack of Critical Technologies: Poor design capability in critical technologies, inadequate investment in R&D and the inability to manufacture major subsystems and components hamper the indigenous manufacturing.
    • Long gestation: The creation of a manufacturing base is capital and technology-intensive and has a long gestation period. By that time newer technologies make products outdated.
    • ‘Unease’ in doing business: An issue related to stringent labour laws, compliance burden and lack of skills, affects the development of indigenous manufacturing in defence.
    • Multiple jurisdictions: Overlapping jurisdiction of the Ministry of Defence and Ministry of Industrial Promotion impair India’s capability of defence manufacturing.
    • Lack of quality: The higher indigenization in few cases is largely attributed to the low-end technology.
    • FDI Policy: The earlier FDI limit of 49% was not enough to enthuse global manufacturing houses to set up bases in India.
    • R&D Lacunae: A lip service to technology funding by making token allocations is an adequate commentary on our lack of seriousness in the area of Research and Development.
    • Lack of skills: There is a lack of engineering and research capability in our institutions. It again leads us back to the need for a stronger industry-academia interface.

    Way forward

    • Reducing import dependence: India was the world’s second-largest arms importer from 2014-18, ceding the long-held tag as the largest importer to Saudi Arabia, says 2019 SIPRI report.
    • Security Imperative: Indigenization in defence is critical to national security also. It keeps intact the technological expertise and encourages spin-off technologies and innovation that often stem from it.
    • Economic boost: Indigenization in defence can help create a large industry which also includes small manufacturers.
    • Employment generation: Defence manufacturing will lead to the generation of satellite industries that in turn will pave the way for a generation of employment opportunities.

     

     

     

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  • Places in news: Solomon Islands

    solomon

    Solomon Islands PM has assured Australia that his nation will not allow a Chinese military presence in its territory.

    Where is the Solomon Islands located?

    • The Solomon Islands is a sovereign country consisting of six major islands and over 900 smaller islands in Oceania, to the east of Papua New Guinea and northwest of Vanuatu.
    • Its capital, Honiara, is located on the largest island, Guadalcanal.
    • It is part of the ethnically Melanesian group of islands in the Pacific and lies between Papua New Guinea and Vanuatu.
    • The country takes its name from the Solomon Islands archipelago, which is a collection of Melanesian islands that also includes the North Solomon Islands (a part of Papua New Guinea).
    • It excludes outlying islands, such as the Santa Cruz Islands and Rennell and Bellona.

    Quick recap of its past

    • The islands, which were initially controlled by the British Empire during the colonial era, went through the hands of Germany and Japan.
    • It then went back to the UK after the Americans took over the islands from the Japanese during World War II.
    • The islands became independent in 1978 to become a constitutional monarchy under the British Crown, with a parliamentary system of government.
    • Nevertheless, its inability to manage domestic ethnic conflicts led to close security relations with Australia, which is the traditional first responder to any crisis in the South Pacific.

    How did China enter the picture?

    • Earlier this year, the Solomon Islands established a security agreement with China, saying it needed Beijing’s assistance with its domestic security situation.
    • But the announcement had rattled the west, esp. the US, Australia and others in the Indo-Pacific region.
    • The concerns were that the agreement could potentially lead to a Chinese military base on the island nation and a gain in power-projection capabilities.
    • At that time, following intense scrutiny, the Solomon Islands had denied that the agreement would allow China to establish a naval base.
    • The Island insisted that the agreement was only to assist the Solomon Islands with what he called “hard internal threats”.

    What is the Solomon Islands’ stance?

    • The government has asked all partner countries with plans to conduct naval visits or patrols to put them on hold until a revised national mechanism is in place.
    • The revised national mechanism applied to all foreign vessels seeking access to the country’s ports.
    • The nation wanted to build up its own naval capacity.
    • It has some unfortunate experiences of foreign naval vessels entering its waters without any diplomatic clearance.

    What is behind China’s growing influence in the region?

    • There is no dispute that China has been rapidly increasing its presence and influence in the region for over three decades, particularly in the South Pacific.
    • Certainly Beijing views the Pacific Island region as an important component of its Belt and Road Initiative (BRI).
    • Specifically, it sees the region as a critical air freight hub in its so-called Air Silk Road, which connects Asia with Central and South America.

    Concerns of the West

    • The United States and its regional allies, such as Australia and New Zealand, are concerned that the China-Solomon Islands security pact allows Chinese naval vessels to replenish there.
    • That could open the door to a Chinese naval base, which would significantly extend China’s military reach in the South Pacific.”
    • It is likely that this security agreement between China and the Solomon Islands has been driven by, what the CFR calls, Beijing’s “sense of vulnerability” in the region.

    What is the rationale for the Solomon Islands’ increasing proximity to China?

    • The Solomon Islands had cultivated strong ties with Taiwan, which ended with the emergence of the current government in Honiara.
    • In 2019, the regime change switched Taiwan for China.
    • This was supposedly after Beijing offered half a billion US dollars in financial aid, roughly five times what Taiwan spent on the islands in the past two decades.
    • It has been alleged by the pro-Taiwan Opposition that the incumbent government has been bribed by China.

    Why is China interested in the Solomon Islands?

    • Isolating Taiwan: The Solomon Islands was one among the six Pacific island states which had official bilateral relations with Taiwan.
    • Supporter in UN: The small Pacific island states act as potential vote banks for mobilising support for the great powers in international fora like the United Nations.
    • Larger EEZ: These states have disproportionately large maritime Exclusive Economic Zones when compared to their small sizes.
    • Natural resources: Solomon Islands, in particular, have significant reserves of timber and mineral resources, along with fisheries.
    • Countering US: But more importantly, they are strategically located for China to insert itself between America’s military bases in the Pacific islands and Australia.

    What does this mean for the established geopolitical configuration in the region?

    • Diminishing western influence: The Pacific islands, in the post-World War II scenario, were exclusively under the spheres of influence of the Western powers, in particular, the US, UK, France and Australia and New Zealand.
    • Inserting into western hegemony: All of them have territorial possessions in the region, with the three nuclear powers among them having used the region as a nuclear weapons testing ground.
    • Shifting of dependencies: The smaller island nations of the region are heavily dependent on them, especially Australia as it is a resident power.

     

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  • Amendments to Bharat Series Rules

    bharat

    The Ministry of Road Transport and Highway has issued a draft notification proposing new rules to further increase the scope of implementation of the BH series vehicle registrations.

    Bharat series (BH-series)

    • There was a procedure of re-registration of a vehicle while moving to another state.
    • A vehicle bearing BH registration mark shall not require assignment of a new registration mark when the owner of the vehicle shifts from one State to another.
    • Format of Bharat series (BH-series) Registration Mark –

    Registration Mark Format:

    1. YY BH #### XX
    2. YY – Year of first registration
    3. BH- Code for Bharat Series
    4. ####- 0000 to 9999 (randomized)
    5. XX- Alphabets (AA to ZZ)

    Why such move?

    • Station relocation occurs with both Government and private sector employees.
    • Such movements create a sense of unease in the minds of such employees with regard to transfer of registration from the parent state to another state.
    • Under section 47 of the Motor Vehicles Act, 1988, a person is allowed to keep the vehicle for not more than 12 months in any state other than the state where the vehicle is registered.

    Who can get this BH series?

    • BH-series will be available on voluntary basis to Defense personnel, employees of Central Government/ State Government/ Central/ State PSUs and private sector companies/organizations.
    • The motor vehicle tax will be levied for two years or in multiple of two.
    • This scheme will facilitate free movement of personal vehicles across States/UTs of India upon relocation to a new State/UT.
    • After the completion of the fourteenth year, the motor vehicle tax shall be levied annually which shall be half of the amount which was charged earlier for that vehicle.

     

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