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  • Ensuring the take off of aviation industry

    Primarily the major driver of connectivity, the aviation industry is one of the worst affected industries in the corona crisis. It is in the need of relief package from the government. The article discusses the contribution of the industry in the economy. Finer details of the operation of the industry are also explained. In the end, details of the measures expected from the government relief package are discussed.

    Significance of aviation industry in Indian economy

    • The air transport industry, including airlines and its supply chain, is estimated to contribute directly or indirectly $72 billion of GDP to India.
    • India being the fastest-growing domestic market in the world at 18.6 per cent per annum, followed by China at 11.6 per cent. (IATA report)

    Impact of Covid-19 crisis

    • The same IATA report says that in India, 29.32 lakh jobs in the aviation sector are at risk.
    • Airlines in the Asia Pacific region may see the largest revenue drop.
    • The air transport business along with its supply chain may see a near wipeout of approximately 40 per cent of business volume in the current financial year.
    •  The two-month-long shutdown has eroded the capital of most airlines.
    • The cost of maintaining Aircraft on Ground (AoG) is extremely high, and with nil revenues, this is a sure-shot recipe for disaster.

    Economics of running airlines profitably

    • You should be flying your entire fleet, with no Aircraft on Ground. (Airbus A-320 or similar)
    • Every plane must fly for 11 hours a day.
    • Which will be possible only if you have a turnaround time of 30-45 minutes.
    • And you have an average Passenger Load Factor (PLF) of around 65 to 67 per cent.

    Now, consider this:

    • Forty per cent of your fleet is grounded.
    • Due to social distancing and other hygiene protocols, an aircraft can fly only eight hours because of the elongated turnaround time.
    • One-third seats are to be kept vacant.
    • And finally, you are flying with a reduced 50 per cent PLF.
    • The break-even ticket price in such a scenario would be astronomical.

    Demand for  financial relief package

    • The Asia Pacific division of the IATA has corresponded with the Indian government, citing the case of some of the other nations which have announced financial relief packages for the sector.
    • As per reports, countries like Australia, New Zealand and Singapore, have announced relief packages for airlines.
    • FICCI has urged the government to immediately provide direct cash support to Indian carriers whereby the airlines can meet their fixed costs.

    What relief measures could be provided?

    • First, a moratorium for the next 12 months on all interest on the principal amount of loans without limitations of size or turnover through a direction to all financial institutions.
    • Second, VAT on ATF by state governments, which ranges from 0-30 per cent, should be rationalised with immediate effect to a maximum of 4 per cent across all states for the next six months.
    • Third, aviation turbine fuel needs to be brought under the ambit of 12 per cent GST, with full input tax credit on all goods and services.
    • Fourth, a waiver for private airport operators space rentals and AAI, royalty, landing, parking, route navigation and route terminal changes for the next one year.
    • This should be done not only for the airlines but all aviation-related businesses.
    • Fifth, all airlines and aviation-related business must be treated as priority sector lending.
    • Sixth, no loans to airlines and other aviation-related business should be classified as NPAs and no collateral enforced or enhanced during this moratorium.
    • Finally, support the airlines and other-aviation related companies by paying or taking care of salaries of the employees for a period of six months.
    • This will allow employee retention and is being done in a lot of countries.

    A question was asked by the UPSC in 2017 related to the development of Airports in India under PPP model. This shows the importance of the aviation sector from UPSC point of view. Consider the question asked by the UPSC “Examine the development of Airports in India through joint ventures under PPP model. What are the challenges faced by the authorities in this regard?”

    Conclusion

    Recovery from this crisis is going to be a long and uphill task. It will take effort, planning and, most importantly, coordination between the aviation industry and the government.

    Back2Basic: IATA-International Air Transport Association

    • IATA was founded in Havana, Cuba, on 19 April 1945.
    • It is the prime vehicle for inter-airline cooperation in promoting safe, reliable, secure and economical air services – for the benefit of the world’s consumers.
    • The international scheduled air transport industry is more than 100 times larger than it was in 1945.
    • Few industries can match the dynamism of that growth, which would have been much less spectacular without the standards, practices and procedures developed within IATA.

     

     

     

  • Economic stimulus package for Agriculture

    FM has announced plans to enact a central law to permit barrier-free inter-State trade of farm commodities and ensure a legal framework to facilitate contract farming under the third tranche of the Atmanirbhar Bharat Abhiyan economic stimulus package.

    Try this question:

    ‘Doubling Farmer’s Income’ and ‘USD 5 trillion economy’  seems more like slogans today in wake of COVID pandemic. Comment on the statement with keeping in view the Atmanirbhar Bharat Abhiyan of the government.

    Details of the package

    • The third tranche included plans to invest ₹1.5 lakh crore to build farm-gate infrastructure and support logistics needs for fishworkers, livestock farmers, vegetable growers, beekeepers and related activities.
    • The Centre will deregulate the sale of six types of agricultural produce, including cereals, edible oils, oilseeds, pulses, onions and potatoes, by amending the Essential Commodities Act, 1955.
    • Stock limits will not be imposed on these commodities except in case of national calamity or famine or an extraordinary surge in prices.
    • The Centre is considering introducing a law on contract farming under the Contract Act of 1872 to enable farmers to directly engage with processors, aggregators, large retailers and exporters in a fair and transparent manner.
    • It would allow private players to invest in inputs and technology in the agricultural sector.

    Must read:

    [pib] Atmanirbhar Bharat Abhiyan (Self-reliant India Mission)

  • Diamer-Bhasha Dam in Pak-occupied Kashmir (PoK)

    Pakistan government has signed a contract with a joint venture of a Chinese state-run firm for the construction of the Diamer-Bhasha dam in the PoK.

    Make a note of major dams in India along with the rivers, terrain, major Wildlife sanctuaries and national parks incident to these rivers.

    Diamer-Bhasha Dam

    • Diamer-Bhasha Dam is a concreted-filled gravity dam, in the preliminary stages of construction, on the River Indus between Kohistan district in Khyber Pakhtunkhwa and Diamer district in Gilgit Baltistan region of PoK.
    • The dam will have a gross storage capacity of 8.1 Million Acre Feet (MAF) and power generation capacity of 4500 MW.
    • The eight Million Acre Feet (MAF) reservoir with 272-metre height will be the tallest roller compact concrete (RCC) dam in the world.
    • It will have a spillway, 14 gates and five outlets for flushing out silt.
    • The diversion system involves two tunnels and a diversion canal — all three having 1 km length each.
    • The bridge — a box girder structure — under the contract will be constructed downstream of the dam structure while the 21MW power plant will be built to meet the energy requirements of the project during construction.

    Why is this dam being built?

    • The project is designed to serve as the main storage dam of the country, besides Mangla and Tarbela dams, and its storage would be helpful for alleviating flood losses.
    • The project is estimated to help alleviate acute irrigation shortage in the Indus basin irrigation system caused by progressive siltation of the existing reservoirs.
    • It aims to reduce the intensity, quantum and duration of floods and reduce the magnitude and frequency of floods in the River Indus downstream.

    Issues with the Dam

    • The dam is located in the Gilgit-Baltistan region which is an Indian territory illegally occupied by Pakistan.
    • India has consistently conveyed her protest and shared concerns with both China and Pakistan on all such projects in the Indian territories under Pakistan’s illegal occupation.
    • In the past too, India has opposed projects jointly taken up by Pakistan and China in PoK as part of the China-Pakistan Economic Corridor.

  • Species in news: 40 Gharials released into Ghaghara River in UP

    Forty gharials (Gavialis gangeticus) were released in the Ghaghara River by the Bahraich forest division of Uttar Pradesh.

    This year, we have seen many news focusing on species reintroduction into the wild. Can you recall them?? If not, Click Here.

    And one may often get confused between the Mugger, Gharial and the Saltwater Crocodile. Note the differences about their IUCN status, habitat (freshwater/saltwater) etc..

    Gharials

    • The Gharial is a fish-eating crocodile is native to the Indian subcontinent. They are a crucial indicator of clean river water.
    • Small released populations are present and increasing in the rivers of the National Chambal Sanctuary, Katarniaghat Wildlife Sanctuary, Son River Sanctuary.
    • It is also found at the rainforest biome of Mahanadi in Satkosia Gorge Sanctuary, Orissa.
    • Gharials are ‘Critically Endangered’ in the IUCN Red List of Species.
    • The species is also listed under Schedule I of the Wild Life (Protection) Act, 1972.

    Into the wild

    • A major chunk of gharials in India is found in the Chambal River, which has about 1,000 adults.
    • The Ghaghara acts as an important aquatic corridor for gharials in Uttar Pradesh. The river is a major left-bank tributary of the Ganges.
    • About 250 gharials have been released in the Ghaghara since 2014.
    • However, there are satellite populations of less than 100 adults in the Girwa River (Katarniaghat Wildlife Sanctuary in Uttar Pradesh, the Ramganga River in Jim Corbett National Park and the Son River).
    • Like Uttar Pradesh, Bihar too is releasing gharials in the Valmiki Tiger Reserve as part of restocking the wild population. Unlike crocodiles, gharials do not pose any danger to humans.

    Back2Basics

    Mugger

    • The mugger is a marsh crocodile which is found throughout the Indian subcontinent.
    • It is a freshwater species and found in lakes, rivers and marshes.
    • IUCN Status: Vulnerable

    Saltwater Crocodile

    • It is the largest of all living reptiles.
    • It is found along the eastern coast of India.
    • IUCN Status: Least Concerned

  • Species in news: Quinine Nongladew

    Quinine, the most primitive antimalarial avatar of Hydroxychloroquine (HCQ), has made a village in Meghalaya latch on to its past for a curative future.

    Relate Quinine Nongladew with the following question. Such peculiar names are very important.

    Q. Recently, there was a growing awareness in our country about the importance of Himalayan nettle (Girardinia diversifolia) because it is found to be a sustainable source of (CSP 2019)

    (a) anti-malarial drug

    (b) bio-diesel

    (c) pulp for paper industry

    (d) textile fibre

    Quinine Nongladew

    • The herb Quinine Nongladew is the alkaloid quinine extracted from the bark of cinchona, a plant belonging to the Rubiaceae family and classified as either a large shrub or a small tree
    • The tree is named after a village about 70 km south of Guwahati, on the highway to Meghalaya capital Shillong.
    • The cinchona nursery was raised in the 19th century, probably around 1874, when Shillong became the British administrative headquarters for Assam Province.
    • Large swathes of Meghalaya used to be, and still are, malaria-prone.
    • The British had the foresight to start the plantation to combat malaria and other diseases caused by mosquitoes.

    Back2Basics: Hydroxychloroquine (HCQ)

    • HCQ is an oral tablet used as an anti-malarial drug. It is used to treat malaria, lupus erythematosus, and rheumatoid arthritis.
    • It may be used as part of a combination therapy where it is taken with other drugs.

  • [pib] Defence Testing Infrastructure Scheme (DTIS)

    In order to give a boost to domestic defence and aerospace manufacturing, Raksha Mantri has approved the launch of the Defence Testing Infrastructure Scheme (DTIS).

     

    Practice question for mains:

    Q. Self-reliance in defence manufacturing is one of the key objectives of ‘Make in India’. Discuss.

     

    Defence Testing Infrastructure Scheme (DTIS)

    • The DTIS would run for the duration of five years and envisages set up six to eight new test facilities in partnership with private industry.
    • The scheme has been allocated with an outlay of Rs 400 crore for creating a state of the art testing infrastructure for this sector.
    • This will facilitate indigenous defence production, consequently, reduce imports of military equipment and help make the country self-reliant.
    • While the majority of test facilities are expected to come up in the two Defence Industrial Corridors (DICs), the Scheme is not limited to setting up Test Facilities in the DICs only.

    Funding pattern

    • The projects under the Scheme will be provided with up to 75 per cent government funding in the form of ‘Grant-in-Aid’.
    • The remaining 25 per cent of the project cost will have to be borne by the Special Purpose Vehicle (SPV) whose constituents will be Indian private entities and State Governments.
    • The SPVs under the Scheme will be registered under Companies Act 2013 and shall also operate and maintain all assets under the Scheme, in a self-sustainable manner by collecting user charges.

  • [Burning Issue] Vizag Gas Leak

    • The Vizag Gas Leak was an industrial accident that occurred at a chemical plant in R. R. Venkatapuram village near Gopalapatnam on the outskirts of Visakhapatnam, Andhra Pradesh on the early morning of 7 May 2020.
    • The source of the leak was a styrene plant owned by South Korean electronics giant LG.
    • The leaked gas spread over a radius of about 3 kilometres affecting the nearby areas and villages. The incident had a death toll was of 12 and more than 1,000 people were affected.

    What is Styrene?

    • It is a flammable liquid that is used in the manufacturing of polystyrene plastics, fibre glass, rubber, and latex.
    • Styrene is also found in vehicle exhaust, cigarette smoke, and in natural foods like fruits and vegetables.
    • According to The Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989, styrene is classified as a toxic and hazardous chemical.

    What happens when exposed to styrene?

    • A short-term exposure to the substance can result in respiratory problems, irritation in the eyes, irritation in the mucous membrane, and gastrointestinal issues.
    • And long-term exposure could drastically affect the central nervous system and lead to other related problems like peripheral neuropathy.
    • It is, likely, a carcinogenic substance that can react with oxygen in the air to mutate into styrene dioxide, a substance that is more lethal.
    • However, there is no sufficient evidence despite several epidemiology studies indicating there may be an association between styrene exposure and an increased risk of leukaemia and lymphoma.

    What are the symptoms?

    • Symptoms include headache, hearing loss, fatigue, weakness, difficulty in concentrating etc.
    • Animal studies have reported effects on the nervous system, liver, kidney, and eye and nasal irritation from inhalation exposure to styrene.

    How bad is the situation in Visakhapatnam?

    • It is yet unclear whether the deaths are due to direct exposure to styrene gas or one of its byproducts.
    • However, hundreds of people including many children were admitted to hospitals.
    • The cases are high as the gas leak was only detected at 3 am in the morning, meaning several crucial hours have been lost till safety precautions were taken.
    • More fatally, the gas was leaked while people were fast asleep.

    What caused the leak?

    • Styrene monomer was used at the manufacturing plant to produce expandable plastics.
    • The storage requirement of styrene monomer strictly mentions that it has to be below 17 degrees Celsius.
    • There was a temporary and partial shutdown of the plant because of the nationwide lockdown.
    • The leak occurred as a result of styrene gas not being kept at the appropriate temperature.
    • This caused a pressure build-up in the storage chamber that contained styrene and caused the valve to break, resulting in the gas leakage.

    Is it under control?

    • The leak has been plugged and NDRF teams moved into the five affected villages and have started opening the houses to find out if anyone was stranded inside.
    • The Covid-19 preparedness helped a lot as dozens of ambulances with oxygen cylinders and ventilators were readily available.
    • The spread of the gas depends on wind speeds. So far it is estimated that areas within a five-kilometre radius have been affected.

    What are the safeguards against chemical disasters in India?

    The law in India provides protection to victims of such chemical disasters. Here’s a look at some of these provisions:

    Scars from the Bhopal Gas Tragedy

    • At the time of the Bhopal gas tragedy, the Indian Penal Code (IPC) was the only relevant law specifying criminal liability for such incidents.
    • The CBI had initially charged the accused in the case under Section 304 (culpable homicide not amounting to murder) of the Indian Penal Code (IPC).
    • Soon after the tragedy, which had killed 2,000 people, the government passed a series of laws regulating the environment and prescribing and specifying safeguards and penalties.

    Some of these laws were:

    1) Bhopal Gas Leak (Processing of Claims) Act, 1985, which gives powers to the central government to secure the claims arising out of or connected with the Bhopal gas tragedy. Under the provisions of this Act, such claims are dealt with speedily and equitably.

    2) The Environment Protection Act, 1986, which gives powers to the central government to undertake measures for improving the environment and set standards and inspect industrial units.

    3) The Public Liability Insurance Act, 1991, which is insurance meant to provide relief to persons affected by accidents that occur while handling hazardous substances.

    4) The National Environment Appellate Authority Act, 1997, under which the National Environment Appellate Authority can hear appeals regarding the restriction of areas in which any industries, operations or processes or class of industries, operations or processes shall not be carried out or shall be carried out subject to certain safeguards under the Environment (Protection) Act, 1986.

    5) National Green Tribunal, 2010, provides for the establishment of a tribunal for effective and expeditious disposal of cases related to environmental protection and conservation of forests.

    Trial of such cases

    • The legal gains made during the Bhopal Gas Leak, and subsequently with the Delhi Oleum Leakage case, held the principle of absolute enterprise liability for hazardous substances.
    • That is, any manufacturer of hazardous or inherently injurious substance was to be held liable.
    • Any incident similar to the Bhopal gas tragedy will be tried in the National Green Tribunal and most likely under the provisions of the Environment (Protection) Act, 1986.
    • If an offence is committed by a company, every person directly in charge and responsible will be deemed guilty, unless he proves that the offence was committed without his/her knowledge or that he had exercised all due diligence to prevent the commission of such an offence.

    India’s handling of industrial disasters suffers from systemic apathy. To respond to the currently unfolding Visakhapatnam Gas Leak effectively and sensitively, it must reflect on and learn from its inadequate handling of the Bhopal Gas Tragedy. 

    Why the gas leak should set off alarm bells?

    Gruesome pictures and videos emerged, showing people having collapsed by the wayside.  It was reminiscent of the Bhopal gas tragedy of 1984, considered one of the world’s worst industrial disasters.

    1) No lessons learnt from Bhopal

    • The judicial processing of the Bhopal Gas Tragedy took approximately 26 years to yield a penalty that was not only disproportionate but was in itself a result of a great systemic disservice to those involved.
    • The present regulation imposes no-fault liability on the owner of hazardous substance and requires the owner to compensate victims of accident irrespective of any neglect or default.
    • For this, the owner is required to take out an insurance policy covering potential liability from any accident.
    • The government’s failure in protecting the legal rights of the gas victims is evident from the fact that years after the disaster, the registration of claimants is far from complete.
    • This, however, hindered the ability of survivors to negotiate their own settlements on their own terms.
    • Additionally, by the time the final judgement had been passed, most of the claimants had died.

    2) Invisibility of victims

    • As a result of the disorganized response on part of the state machinery, a mass evacuation programme, referred to as “Operation Faith,” was launched in Bhopal.
    • This meant that a significant proportion of the affected population was moved away from the city, making it difficult and almost impossible for following up on health repercussions of the disaster.
    • This invisibilisation of the survivors has become a strategy consistently employed by the state to sweep the enormity of the systemic failure that resulted in the Bhopal disaster, as well as that which succeeded it.
    • Instead of working through the problem of providing medicare, both the state and city governments instead redirected their efforts towards wiping the problem away from the space.

    3) Lax regulation continues

    • Usually, in times of crises, governments tighten safety rules and regulations.
    • But as panic over the economy mounts, governments could end up travelling in the opposite direction.
    • The environment ministry has been giving clearances to industrial proposals through video conference for “seamless economic growth” during Covid-19.
    • Lax regimes could become a haven for hazardous industries and sweatshops.

    4) Operational security neglected

    • Industries have failed to overhaul its working system urgently, especially that is tasked with safety practices.
    • There are no regulatory measures to ensure safety at two ends—on-site and off-site.
    • The on-site one involves all the safety of the in-house personnel and workers, and the off-site deals with ensuring the safety and well being of the habitats in the surrounding areas as well as the surrounding environment.

    5) Multiple Laws with no enforcing agencies

    • One of the most basic and overlooked aspects in the current time is the proper regulatory oversight.
    • The regulators, like SPCBs, are limited in number.
    • Add to it their inability to mount comprehensive and stringent oversight due to budgetary constraints.

    6) Poor checks and monitoring

    • Improper inspection and inspection report and show cause notices are not released in the public domain by state pollution control boards.
    • The MoEF&CC gives the authorisation for the hazardous chemical storage, but inspection is done by factory inspector and by SPCB in case of isolated storage i.e. outside the industry.
    • This is very absurd for safety considerations. Inspections are not done properly and are more of “having a look” rather than being a proper verification as per inspection checklist.
    • This overtime perpetuates negligence by the safety personnel leading to accidents.

    7) Low or no awareness

    • Having a robust disaster management plan (DMP) is a pre-requisite for every industry. However, the availability of DMP does not suffice the purpose.
    • What is needed most is to communicate the same with the local stakeholders. In the case of the Bhopal gas tragedy, we experienced how such miscommunication can lead to higher human casualties.
    • The plant did have the DMP but it never informed the residents around the plant on the measures to be taken in case of any accident.
    • However, looking at the current accident at Vizag, it seems that no lesson has been learnt from past accidents.

    8) Judiciary has failed to relieve

    • The gas leak is just yet another in the long list of such accidents that have happened until now and will happen in the future.
    • So far, the NGT has issued notices to the Centre, LG Polymers India Pvt, Central Pollution Control Board and others in addition to directing LG Polymers India Pvt to pay Rs 50 crore an interim amount for damage to life.
    • There are many other tragedies in the past, where the owners were not held accountable for the damage to life and were let out on bail.

    9) Yet no fixation of accountability

    • Fixing accountability for an accident or negligent actions is another aspect of the legal system that we often ignore.
    • A suit is usually against a company involved in an accident. But, in such a situation, we let free the company employed individuals – responsible for negligent behaviour.
    • In some cases, the industry does suspend or terminate their employment but that’s the maximum that it goes to.

    Possible solutions

    Regulatory: We do not have a strong regulatory body to ensure proper enforcement of laws and regulations related to industrial accidents. The regulators, like SPCBs,  needs to be given a revamp.

    Monitoring and Reporting: Improving monitoring both inside and outside the industry and designing a proper protocol for reporting should be undertaken. Relevance must also be given to monitoring and prompt reporting of sudden events that can lead to industrial accidents.

    Operational safety: In order to avert the rising number of industrial accidents, a more rational approach is required in terms of implementing the existing policies and practices properly. There are many guidelines and protocols for industrial safety that have been designed based on the outlines given in various acts and rules.

    Ensuring thorough capacity building of the employees and management staff – Continually cultivate a safety standard among employees and management staff. Training employees about the importance of following safety measures as often as possible is very crucial. Supplemental training in body mechanics can reduce strain injuries, and keep employees safe during lifting and moving.

    Ensuring a strict code and oversight on not taking shortcuts – Accidents happen when employees skip steps to complete a job ahead of schedule. Make sure all instructions are clear and organized to prevent undue mishaps in the workplace.

    Employing the use of Failure Mode Effects Analysis (FMEA) – FMEA is a structured approach to discovering potential failures that may exist within the design of a product or process. There are various modes by which a process can fail and are called Failure modes that result in undesirable effects. However, FMEA is designed to identify, prioritize and limit these failure modes.

    Installation of a proper alert system – This is one of the most essential components of the immediate response protocol and can really help prevent higher rates of fatalities and/or damage.

    NDMA guidelines for Industrial chemical disasters

    National chemical disaster management guidelines drawn up by the National Disaster Management Authority (NDMA) are as follows:

    • The NDMA guidelines for chemical safety call for harmonization of regulations like land use policy, standardization of national codes and practices and stringent enforcement of safety practices through audits and an inspection system.
    • Industrial units using hazardous chemicals as raw materials will be required to have onsite and offsite emergency plans in place and put them to test by organizing regular mock drills.
    • Given that coordination between the individual units and the local administration is crucial to the management of chemical disasters, the guidelines spell out a key role for the latter.
    • This includes strengthening of state and district mechanisms for accurate and timely dissemination of warning of potentially hazardous gas leaks and chemical spills, GIS-based technologies, and ensuring testing of emergency plans through mock exercises, besides creating awareness and education.
    • The guidelines call upon the industries handling hazardous chemicals to share resources and enter into mutual aid agreements.
    • According to the NDMA, medical preparedness including creation of trained medical first responders, facilities for fast detection and decontamination, mobile hospitals/mobile teams and hospital disaster management plans need to be amalgamated with the preventive strategies to safeguard industrial processes and procedures.

    Way Forward

    Ensuring public safety, a comprehensive safety audit of all the industries should be taken up and a Standard Operating Procedure should be enforced.

    • Preventing these tragedies is not a one man’s act. It will take the combined effort of competent authorities, the private sector, and society to prevent tragic environmental events from happening.
    • Apart from the regular inspections, one must maintain safety processes internally to help prevent and/or reduce the frequency of natural gas leaks.
    • Most of all, it is important to adhere to environmental norms. Taking environmental safety and public health risks seriously and promoting do-no-harm industrial development can make a big difference.
    • There is a clear need to promote clean development that innovatively addresses potential negative impacts on the environment.
    • To prevent future environmental disasters, all sectors could also do more to integrate environmental emergency preparedness and response activities into strategies and sustainable development programs.
    • Some measures include: Developing policies to ensure that industries operate in accordance with technical and safety standards and allocating resources for risk assessment and monitoring.
    • These measures could make a big difference in people’s health and wellbeing and avoid future tragedies.

     

    References

    https://www.civilsdaily.com/news/vizag-gas-leak-what-is-styrene-gas/

    https://economictimes.indiatimes.com/news/politics-and-nation/how-visakhapatnam-gas-leak-sets-off-alarm-bells-in-more-ways-than-one/articleshow/75648391.cms

    https://www.epw.in/engage/article/gas-leaks-industrial-disasters-reflecting-indias

    Back2Basics: The Bhopal Gas Tragedy

    • It occurred on the cold wintry night in the early hours of 3 December, 1984.
    • At around midnight, the chemical reaction started in the Union Carbide (India) Limited factory that culminated in the leakage of deadly Methyl Isocyanate (MIC) gas from one of the tanks of the factory.
    • As a result, a cloud of gas gradually started descending and enveloping the city in its lethal folds. And the city and lakes turned into a gas chamber.
    • In the tragedy around 3000 lives of innocent people were lost and thousands and thousands of people were physically impaired or affected in several forms.

    What is Methyl Isocyanate?

    • Methyl Isocyanate (MIC) is a chemical that is used in the manufacture of polyurethane foam, pesticides, and plastics.
    • It is handled in liquid form which can be easily burned and explosive. It evaporates quickly in the air and has a strong odour.
    • Its molecular formula is CH3NCO or C2H3NO and its molecular weight is approx. 57.05 g/mol.
    • It is used in the production of pesticides, polyurethane foam, and plastics.

  • How the economic package will play out for MSMEs?

    Recently, a stimulus package worth 20 lakh crore was announced by the government. How effective will these measures prove for the MSMEs? How the liquidity issue plaguing the NBFCs is sought to be solved? Finally, what are the issues with the package? All such question are dwelled upon here!

    Why ensuring flow of credit is important?

    • While assessing policy measures during the lockdown there are two over-arching principles one must keep in mind
    • One, the flow of funds will slow down with economic activity.
    • Two, firms do not go bankrupt because of insolvency, but because of lack of access to funds also called liquidity.
    • World over policymakers are pulling out all stops to make sure that the flow of credit continues.
    • Of the Rs 20-lakh-crore economic support announced by the Prime Minister on May 12, we have details for about Rs 16 lakh crore.
    • Monetary and financial interventions taken by the government and the RBI to provide credit to those who need it make up more than 90 per cent of it.

    Limited impact of RBI’s measures

    • Most of the measures announced by the RBI earlier have not had the desired effect.
    • The quantum of cheap funds being made available being more or less the same as the increase in the amount being deposited in the RBI every night by banks.
    •  Just reducing the cost of funds (i.e. lower Repo rate and LTRO) had no impact on the volume and cost of the credit they provided.
    • This happened due to the heightened risk aversion in banks.

    So, how government sought to address this problem?

    • The series of measures announced to provide credit support to the micro, small and medium enterprises (MSMEs) attempts to address this gap.
    • For MSMEs that have been servicing their loans so far new loans up to 20 per cent of the current outstanding credit will be fully backstopped by the government.
    • That is, if there is a default, the government will pay the bank.(i.e. act as a backstop).
    • So, how backstop by the government could help?
    • The move could lead to immediate credit creation, as guarantees are available only for loans extended in the next six months.
    • Also, the lenders have zero risk, and the borrowers are most likely stressed and would want these funds.
    • It is possible if not likely that firms will use these loans to just pay interest and cover losses.
    • But if so, that in a way is the purpose of this scheme — the government absorbing losses upfront rather than the likely larger lost taxes and potential bank bailouts if there is a bankruptcy.
    • For the government, the costs of this guarantee would be spread over several years, with at most 10 per cent incurred in this fiscal year.

    Move to provide liquidity to NBFCs

    • The two schemes together, targeting to provide Rs 75,000 crore of liquidity to non-banking finance companies (NBFCs), may be a bit less successful.
    • The special purpose vehicle that is to provide liquidity to NBFCs provides funds for three months at a time, may succeed in addressing problems like an NBFC defaulting due to lack of liquidity.
    • But it may not suffice to get them to grow.
    • The partial credit guarantee given to banks’ loans to NBFCs may be more effective for a subset of NBFCs.
    • But as it is only available to public sector banks, it would depend on their willingness and ability to extend new loans.

    Fund to provide equity for MSMEs

    • The Rs 50,000 crore fund to provide equity for MSMEs, with a corpus of Rs 10,000 crore being provided by the government, which would then be leveraged, is an interesting initiative.
    • Losses incurred in the current lockdown are depleting risk capital.
    • Replenishing if not growing that is paramount to restoring India’s growth potential.
    • While global as well as local private equity and venture capital funds would continue to explore and invest in smaller firms, such a fund can scale up the funds availability significantly.

    Issues with the package

    • The natural limitation of the policy interventions thus far is that they only affect enterprises in the formal sector and in agriculture.
    • The problems in informal non-agricultural enterprises may stay unaddressed, and remain an impediment on growth.
    • While less than 10 per cent of the announcements thus far has been the fiscal cost.
    • One senses a fiscal caution in government measures that is overdone, and could hurt more than it helps. (avoiding direct expenditure)

    Stability: of bond market and value of rupee

    • Two things minimised the volatility in the bond market: 1) pre-announcing the additional bond issuance for the year 2) giving an implicit assurance that additional deficits would be financed separately.
    • Even though that potentially means the RBI purchasing government bonds, the rupee has been remarkably stable.
    • There was fear that fiscal spending financed by the central bank would be frowned upon and drive currency weakness.

    Consider the question-“MSME sector forms the backbone of Indian economy. List challenges it faces in present times. Critically analyse whether the current stimulus package is suitable to boost growth in this sector.”

    Conclusion

    The road ahead remains unclear, but it is likely that the economic damage is already much larger than the measures undertaken so far. A continued focus on reforms and on sustaining India’s growth potential will be critical in preventing macroeconomic instability.

    Back2Basics: The two schemes announced for NBFCs

    • The FM announced a Rs 30,000-crore liquidity scheme for NBFCs.
    • The government will buy debt papers by NBCs, MFIs and HFCs.
    • The buying of papers will be fully guaranteed by the government of India.
    • Under this scheme investment will be made in both primary and secondary market transactions in investment-grade debt paper ofNBFCs/HFCs/MFIs.
    • The move is seen providing liquidity support for NBFCs and mutual funds and create confidence in the market.
    • The FM also announced Rs 45,000 crore partial credit guarantee scheme (PCGS) 2.0 for NBFCs.
    • Existing PCGS scheme will be extended to cover borrowings such as primary issuance of bonds/ CPs of such entities.
    • The first 20 per cent of loss will be borne by the government of India.

    50000 Crore fund for MSMEs

    • Finance Minister Nirmala Sitharaman announced Rs 50,000-crore equity infusion through Fund of Funds for MSMEs.
    •  The Fund of Funds will be set up with a corpus of Rs 10,000 crore.
    • The Fund of Funds will be operated through a mother fund and a few daughter funds.
    • The fund structure will help leverage Rs 50,000 crore at daughter-fund levels.
    • This will help MSMEs expand size as well as capacity.
    • It will encourage MSMEs to get listed on the main board of stock exchanges, the government said.
    • Based on the recommendations of UK Sinha Committee, the Fund of Funds was first announced in the Union Budget on February 1, 2020.
    • An investment of Rs. 10,000 crore was proposed in the Budget for the scheme.

     

  • Role of ESCAP in the Asia-Pacific

    The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) is one of the five regional commissions under the jurisdiction of the United Nations Economic and Social Council. This article examines the common challenges that ESCAP region faces- such as danger of pollution to the marine ecosystem, lack of data about ocean, connectivity issue faces by small island nations etc. Scope for the collaboration between ESCAP nations is explored.

    Strain on marine ecosystem and its implications

    • The Asia-Pacific seas provide food, livelihoods and a sense of identity, especially for coastal communities in the Pacific island states.
    • Escalating strains on the marine environment is threatening our growth and way of life.
    • In less than a century, climate change and unsustainable resource management have degraded ecosystems and diminished biodiversity.
    • Over-fishing has exponentially increased, leaving fish stocks and food systems vulnerable.
    • Marine plastic pollution originating from region’s rivers has contributed to most of the debris flooding the ocean.

    Lack of data for SDG 14: Life below water

    • Insights from ‘Changing Sails: Accelerating Regional Actions for Sustainable Oceans in Asia and the Pacific’, the theme study of this year’s Economic and Social Commission for Asia and the Pacific (ESCAP), focuses a lot on the need of data collection in the region.
    • At present, data are available for only two out of ten targets for the Sustainable Development Goal 14, ‘Life Below Water’.
    • Due to limitations in methodology and national statistical systems, information gaps have persisted at uneven levels across countries.

    Challenges facing the region

    1. Plastic Pollution

    • Asia and the Pacific produces nearly half of global plastic by volume, of which it consumes 38%.
    • Plastics represent a double burden for the ocean:  1) their production generates CO2 absorbed by the ocean, 2) as a final product enters the ocean as pollution.
    • Need of the hour is effective national policies and re-thinking production cycles i.e. promoting a circular economy approach.
    • Economic incentives and disincentives are necessary for the adoption of these policies as well as for minimizing resource use.

    2. Decline in fish stocks

    • Region’s position as the world’s largest producer of fish has come at the cost of over-exploitation.
    • The percentage of stocks fished at unsustainable levels has increased threefold from 10% in 1974 to 33% in 2015.
    • Generating complete data on fish stocks, fighting illicit fishing activity and conserving marine areas must remain a priority.

    3. Connectivity of island nations

    • While the most connected shipping economies are in Asia, the small island developing States of the Pacific experience much lower levels of connectivity.
    • This leaves them relatively isolated from the global economy.
    • Closing the maritime connectivity gap must be placed at the centre of regional transport cooperation efforts.
    • We must also work with the shipping community to navigate toward green shipping. Enforcing sustainable shipping policies is essential.

    Areas of cooperation

    • Trans-boundary ocean management and linking ocean data in the region can be the starting step.
    • Harnessing ocean statistics through strong national statistical systems will serve as a compass guiding countries to monitor trends, devise timely responses and clear blind spots.
    • ESCAP by using Ocean Accounts Partnership can help to harmonise ocean data and provide a space for regular dialogue among nations.
    • Translating international agreements and standards into national action is the key here. Also ensuring capacity building among nations to do so.
    • ESCAP is working with member states to implement International Maritime Organization (IMO) requirements.

    Consider the question-“What are the challenges facing the nations of Asia-Pacific amid growing levels of pollution and climate change. How cooperation among the countries of the region mitigate the risks? “

    Conclusion

    Our oceans keep our economy and our lives above the waves. We must use the years ahead to steer our collective fleets toward sustainable oceans.

    Back2Basics: ESCAP- United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)

    • India has been the founding member of ESCAP.
    • UNESCAP is the regional development arm of the United Nations in Asia and the Pacific, with a membership of 62 Governments, including 58 from the region.
    • Established in 1947 with its headquarters in Bangkok, Thailand.
    • UNESCAP serves as the highest intergovernmental regional platform to promote cooperation among member States for creating a more interconnected region working to achieve inclusive and sustainable economic and social development.
    • It carries out work in the areas of macroeconomic policy, poverty reduction and financing for development; trade and investment; transport; environment and sustainable development; information and communications technology and disaster risk reduction; social development; statistics, sub-regional activities for development; and energy.
    • UNESCAP also focuses on sub-regional activities to provide in-depth technical assistance to address specific key priorities, including poverty reduction and sustainable development, in the respective sub-regions.

    IMO- International Maritime Organisation

    • The IMO was established following agreement at a UN conference held in Geneva in 1948.
    • And the IMO came into existence ten years later, meeting for the first time in 1959.
    • As a specialized agency of the United Nations, IMO is the global standard-setting authority for the safety, security and environmental performance of international shipping.
    • Its main role is to create a regulatory framework for the shipping industry that is fair and effective, universally adopted and universally implemented.
    • IMO measures cover all aspects of international shipping – including ship design, construction, equipment, manning, operation and disposal – to ensure that this vital sector for remains safe, environmentally sound, energy-efficient and secure.

     

  • Is the suspension of labour laws a silver bullet?

    In keeping with the exigencies caused by the pandemic, some State governments have suspended several provision of labour laws. This article analyses the implications of such suspensions. And also emphasises the lack of legal basis in the State governments actions. Evolution of the labour laws in India is also discussed here. So, what are these legal issues? Read to know more…

    Some labour laws suspended by the UP government

    • The Uttar Pradesh government has issued an ordinance keeping in abeyance almost all labour statutes.
    • Which includes laws on maternity benefits and gratuity.
    • The Factories Act, 1948.
    • The Minimum Wages Act, 1948.
    • The Industrial Establishments (Standing Orders) Act, 1946.
    • The Trade Unions Act, 1926.
    • This will take away the protection conferred on organised labour by Parliament.

    Some repressive labour laws in colonial era

    • Bengal Regulations VII, 1819 was enacted for the British planters in Assam tea estates.
    • Workers had to work under a five-year contract and desertion was made punishable.
    • Later, the Transport of Native Labourers’ Act, 1863 was passed in Bengal.
    • The Act strengthened control of the employers and even enabled them to detain labourers in the district of employment and imprison them for six months.
    • Bengal Act VI of 1865 was later passed to deploy Special Emigration Police to prevent labourers from leaving and return them to the plantation after detention.

    Workers’ struggle in British India

    • The labour laws in India have emerged out of workers’ struggles, which were very much part of the freedom movement against oppressive colonial industrialists.
    • Since the 1920s there were a series of strikes and agitations for better working conditions.
    • Several trade unionists were arrested under the Defence of India Rules.
    • The workers’ demands were supported by our political leaders.
    • Britain was forced to appoint the Royal Commission on Labour, which gave a report in 1935.
    • The Government of India Act, 1935 enabled greater representation of Indians in law-making.
    • This resulted in reforms, which are forerunners to the present labour enactments.
    • The indentured plantation labour saw relief in the form of the Plantations Labour Act, 1951.

    Acts passed in India to protect workers’ rights

    • The Factories Act lays down eight-hour work shifts, with overtime wages, weekly offs, leave with wages and measures for health, hygiene and safety.
    • The Industrial Disputes Act provides for workers participation to resolve wage and other disputes through negotiations so that strikes/lockouts, unjust retrenchments and dismissals are avoided.
    • The Minimum Wages Act ensures wages below which it is not possible to subsist.

    Constitutional basis of the labour laws

    • These enactments further the Directive Principles of State Policy.
    • These laws also protect the right to life and the right against exploitation under Articles 21 and 23.
    • Trade unions have played critical roles in transforming the life of a worker from that of servitude to one of dignity.
    • In the scheme of socio-economic justice the labour unions cannot be dispensed with.

    Is the suspension of labour laws legally sound?

    • The Supreme Court, in Glaxo Laboratories v. The Presiding Officer, Labour (1983) said about contract between employer and employee “the contract being not left to be negotiated by two unequal persons but statutorily imposed.”
    • The ‘two unequal’ here refers to the inequality between employee and employer.
    • In Life Insurance Corporation v. D. J. Bahadur & Ors (1980), the Supreme Court highlighted that any changes in the conditions of service can be only through a democratic process of negotiations or legislation.
    • Moreover, Parliament did not delegate to the executive any blanket powers of exemption. 
    • Section 5 of the Factories Act empowers the State governments to exempt only in case of a “public emergency”.
    • Which is explained as a “grave emergency whereby the security of India or any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance”.
    • There is no such threat to the security of India now.
    •  Labour is a concurrent subject in the Constitution and most pieces of labour legislation are Central enactments.
    • The U.P. government by Ordinance has said that labour laws will not apply for the next three years.
    •  How can a State government, in one fell swoop, nullify Central enactments?
    • The Constitution does not envisage approval by the President of a State Ordinance which makes a whole slew of laws enacted by Parliament inoperable in the absence of corresponding legislations on the same subject.
    • The orders of the State governments therefore lack statutory support. 

    Consider the question, “Several State governments have resorted to the suspension of labour laws in the aftermath of corona crisis. Examine the implications of the suspension of the laws for the rights of the labours.”

    Conclusion

    Governments have a constitutional duty to ensure just, humane conditions of work and maternity benefits. The health and strength of the workers cannot be abused by force of economic necessity. Labour laws are thus civilisational goals and cannot be trumped on the excuse of a pandemic.

     

     

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