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Subject: Economics

  • [28th October 2024] The Hindu Op-ed: The private sector holds the key to India’s e-bus push

    PYQ Relevance:

    Q) Why is Public Private Partnership (PPP) required in infrastructural projects? Examine the role of PPP model in the redevelopment of Railway Stations in India. (UPSC CSE 2022)

    Q) Examine the development of Airports in India through joint ventures under Public – Private Partnership (PPP) model. What are the challenges faced by the authorities in this regard. (UPSC CSE 2017)

    Q) Adoption of PPP model for infrastructure development of the country has not been free of criticism. Critically discuss the pros and cons of the model. (UPSC CSE 2013)

    Mentor’s Comment: The Indian government, through NITI Aayog, is developing an incentive scheme tailored for private bus operators, who currently account for about 90% of the bus fleet in India. This move is crucial for achieving the target of 40% e-bus penetration by 2030 and reaching carbon neutrality by 2070.

    Despite existing support under the FAME-II scheme, which primarily benefits state transport undertakings (STUs), the high costs associated with e-buses deter private operators from making the switch. The forthcoming incentive scheme is seen as a potential game-changer that could facilitate the broader adoption of electric buses in public transportation.

    Today’s editorial discusses the role of the private sector in India’s electric bus (e-bus) initiative. Today’s discussions will focus more on creating a supportive environment for e-bus deployment beyond state-run services.

    _

    Let’s learn!

    Why in the News?

    Despite the government’s push through schemes like FAME II and PM e-Bus Sewa, which have incentivized electric vehicles for public transport, private bus operators have seen little benefit.

    • Presently, the government is planning to introduce a new incentive scheme specifically aimed at encouraging private operators to invest in e-buses.
    Challenges Faced by Private Operators:

    • Lack of Financial Incentives: Current government schemes do not extend to private operators, making it difficult for them to invest in e-buses.
    • High Initial Costs: The substantial upfront investment required for electric buses is prohibitive for many small operators.
    • Charging Infrastructure: Limited access to charging stations and facilities further complicates the adoption of e-buses. Most charging infrastructure is designed for state-run units, leaving private operators without adequate support.
    • Operational Inefficiencies: Restrictions on parking and charging at government depots create logistical challenges for private bus operations.

    How can the private sector be incentivized to participate in the e-bus market?

    1) Financial Incentives: The incentivized schemes and subsidies could significantly lower the upfront costs associated with e-bus acquisition, which can be up to five times that of diesel buses.

    • Offering viability gap funding for charging infrastructure and land leases could attract private investment.
    • Implementing a payment security mechanism can protect private operators against payment delays from state transport undertakings (STUs).

    2) Infrastructure Development: Establishing a robust network of charging stations is crucial. Under the Gross Cost Contract (GCC) Model, STUs pay a fixed cost per kilometer, ensuring steady income for operators while minimizing their risk exposure without bearing the full financial burden upfront.

    • This Flexible Leasing model enables operators to access capital without high initial investments, as maintenance and operational responsibilities can be shared.

    What role does financing play in the adoption of electric buses?

    • High Initial Costs: The upfront costs of e-buses are significantly higher than those of traditional diesel buses, often up to five times more expensive, operators may find it challenging to justify the investment in e-buses despite their long-term operational savings.
    • Need for Dedicated Financing Facilities: Establishing a dedicated e-bus financing facility could provide concessional loans and grants, helping shield manufacturers and operators from the payment security risks posed by financially struggling state road transport undertakings (SRTUs). 
    • Interest Rate Subventions: To encourage private operators to invest in e-buses, interest rate subventions of 4-6% on loans can be implemented. Lower interest rates can significantly ease the financial burden during the repayment period, making financing more accessible.
    • Leasing Models: Financing institutions can offer leasing options that include maintenance and battery replacement, thus sharing operational risks with bus operators. This approach not only lowers upfront costs but also allows operators to manage cash flow more effectively.

    What infrastructure improvements are necessary for successful e-bus deployment?

    • Installation of Charging Stations: Establishing charging points within bus depots is crucial. A widespread infrastructure network will alleviate concerns about range and downtime, making e-buses a more viable option for operators.
    • Depot Charging Facilities: Private operators currently face restrictions in accessing government bus depots for parking and charging. Granting them access would streamline operations and improve efficiency by reducing the distance drivers must travel to pick up their buses.
    • Power Supply Management: The increased demand for electricity from charging e-buses can strain local power grids. Therefore, collaboration between bus operators and electricity distribution companies (DISCOMs) is vital for planning and managing this demand effectively. 
    • Pilot Projects: Implementing pilot projects in tier-2 and tier-3 cities can help assess infrastructure requirements and operational challenges before scaling up to larger urban areas.
      • For example, electrifying a specific route, such as Delhi-Mumbai, could provide valuable insights into the necessary specifications for e-bus deployment.

    Conclusion: The future of India’s e-bus initiative depends on a united effort between government bodies and private stakeholders to create an inclusive framework that fosters growth and innovation in the electric mobility sector.

  • Sustainability science for FMCGs

    Why in the News?

    India’s Anusandhan National Research Foundation and the BioE3 policy promote academia-industry collaboration, driving the bioeconomy for economic growth, sustainability, and climate action commitment.

    What is BioE3 policy? 

    The BioE3 policy aims to transform chemical industries into sustainable bio-based models, promoting biotechnology to drive economic growth, protect the environment, and create jobs, supporting India’s sustainable development and climate goals.

    Primary Environmental impacts associated with FMCG production and consumption:

    • Resource Depletion: The production of FMCGs often requires significant natural resources, such as water, energy, and raw materials. For example, palm oil, widely used in food and personal care products, leads to deforestation when forests are cleared for plantations.
    • Greenhouse Gas Emissions: The manufacturing and distribution of FMCGs contribute to greenhouse gas emissions at multiple stages, from sourcing raw materials to production processes and transportation.
    • Waste Generation: FMCGs, especially those with single-use packaging (e.g., plastics), generate a considerable amount of waste, which ends up in landfills or the ocean, causing environmental pollution.
    • Water Pollution: The production and use of FMCGs, such as soaps, detergents, and other chemicals, can lead to water pollution through the discharge of untreated wastewater containing harmful substances.
    • Loss of Biodiversity: The agricultural practices used to source raw materials like palm oil can lead to habitat destruction, thereby threatening biodiversity. Monoculture farming and deforestation disrupt ecosystems and endanger wildlife.

    How can FMCG companies implement sustainable practices across their supply chains?

    • Companies should adopt responsible sourcing policies, such as using certified sustainable palm oil and other raw materials that adhere to ‘No Deforestation, No Peat’ policies.
    • Implementing energy-efficient processes, switching to renewable energy sources, and optimizing logistics to reduce emissions can minimize the carbon footprint across the supply chain.
    • Emphasizing recycling, reusing materials, and developing biodegradable or compostable packaging can help reduce waste and resource depletion.
    • The integration of bio-based or synthetic alternatives to traditional materials can also be beneficial.
    • Companies should implement measures to reduce water usage in manufacturing and treat wastewater to prevent water pollution.
    • Working with smallholder farmers to implement regenerative agricultural practices can help restore soil health, improve biodiversity, and support sustainable livelihoods.

    What metrics should be used to measure the effectiveness of sustainability initiatives in FMCGs?

    • Carbon Footprint Reduction: Tracking greenhouse gas emissions across the supply chain and setting targets for reducing Scope 1, 2, and 3 emissions.
    • Sustainable Sourcing Percentage: Measuring the proportion of raw materials sourced sustainably, such as certified palm oil or recycled materials.
    • Waste Reduction and Recycling Rates: Monitoring the volume of waste generated, the amount sent to landfills, and the recycling rate of packaging materials.
    • Water Usage and Pollution Levels: Tracking water consumption in production and measuring the quality of wastewater discharged to ensure compliance with environmental standards.
    • Biodiversity Impact: Assessing the effect of sourcing practices on ecosystems and tracking initiatives to protect or restore biodiversity.
    • Product Sustainability Index: Developing a sustainability index for products that takes into account their entire life cycle, from raw material extraction to end-of-life disposal.

    Way forward: 

    • Strengthen Collaboration and Innovation: Foster partnerships between academia, industry, and government to drive research and development of sustainable alternatives to traditional materials, such as palm oil, and implement innovative practices throughout the FMCG supply chain.
    • Implement Comprehensive Sustainability Frameworks: Establish regulatory frameworks that incentivize sustainable practices, including mandatory reporting on sustainability metrics, eco-labelling for products, and support for circular economy initiatives to minimize waste and resource depletion.

  • Fair Trade 

    Why in the News?

    In preparation for the 29th edition of the COP in Baku, Azerbaijan, next month, there is renewed momentum within government circles to expedite the transition of Indian industry to carbon markets.

    What is meant by the Carbon Trade Policy?

    • It is a market-based approach to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants.
    • It sets a quantitative limit on emissions, by allowing member countries with lower emissions to sell rights to emit carbon to higher-emitting entities, promoting cost-effective carbon reduction.

    Why India must develop a transparent Carbon Trade Policy?

    • A clear and transparent policy will boost investor confidence, attracting both domestic and foreign investments in green technologies and carbon-reduction projects.
    • Establishing robust verification and reporting mechanisms will enhance the integrity of carbon credits, preventing issues like double counting and greenwashing, and fostering trust among stakeholders.
    • A transparent policy will help align India’s efforts with global climate commitments, enabling effective tracking of emissions reductions and promoting sustainable economic growth.

    How effective is ‘Fair Trade’ in achieving its Goals?

    • Promotion of Sustainable Practices: Just as Fair Trade supports environmentally sustainable agriculture practices, carbon markets incentivize companies to adopt greener technologies and reduce emissions. Both aim to create a more sustainable future.
    • Empowerment of Stakeholders: Fair Trade empowers marginalized producers by providing fair prices and market access, similar to how carbon markets can benefit developing countries like India by enabling them to sell carbon credits generated from emissions reductions.
    • Economic Benefits: Fair Trade aims to create economic stability for producers, while carbon markets can generate revenue for countries that invest in carbon-reduction projects, creating a financial incentive for participating in emissions trading.
    • Global Impact Awareness: Both Fair Trade and carbon markets raise awareness about global issues—Fair Trade regarding trade equity and carbon markets regarding climate change, fostering a sense of responsibility among consumers and companies.

    What are the limitations and challenges facing Fair Trade certification?

    • Certification Costs: The financial burden of obtaining Fair Trade certification can be a significant barrier for small producers. Similarly, transitioning to carbon markets may involve high initial costs for companies to implement the necessary technologies and processes.
    • Market Accessibility: Fair Trade products may not have guaranteed market access, mirroring potential challenges in carbon markets where the demand for carbon credits may fluctuate based on regulations and market conditions.
    • Complex Standards: Just as Fair Trade certification has varying standards, the guidelines under Article 6 of the Paris Agreement can also lead to confusion about which carbon-reduction activities are eligible for trading.

    How can consumers effectively support Fair Trade initiatives?

    • Support Certified Products: Consumers can choose Fair Trade products, which, like carbon credits, require a conscious decision to support ethical and sustainable practices.
    • Educate and Advocate: Just as consumers can promote Fair Trade awareness, they can also advocate for transparent carbon markets and support policies that foster sustainable practices.
    • Engagement with Companies: Consumers can encourage businesses to participate in Fair Trade and carbon markets by demanding accountability and sustainability in their supply chains.
    • Community Participation: Involvement in local Fair Trade events can parallel participation in climate action initiatives, such as local carbon offset programs or sustainability projects, thereby supporting both movements.
    • Utilizing Social Media: Consumers can leverage social media to share information about Fair Trade and carbon markets, helping to amplify their importance and drive consumer engagement.

    Way forward: 

    • Strengthen Certification Accessibility: Lower the cost and simplify the certification process to make Fair Trade more accessible for small-scale producers, boosting their participation and benefits.
    • Enhance Consumer Education: Increase awareness campaigns about the impact of Fair Trade, encouraging more people to support certified products and promoting ethical consumption habits.

  • 21st National Livestock Census 2024, begins

    Why in the News?

    The Centre has launched the 21st National Livestock Census (LC), the five-yearly exercise of counting the country’s livestock.

    Innovations in the 21st Livestock Census:

    • For the first time, data collection is being done via a mobile app, enhancing accuracy and timeliness.
    • The census will cover 15 species of animals (excluding poultry) such as cattle, buffalo, mithun, yak, sheep, goat, pig, camel, horse, donkey, and elephant.
    • Information on 219 Indigenous breeds and livestock holdings by pastoralists will also be recorded, along with data on the gender of individuals involved in livestock rearing.

    About Livestock Census (LC)

    • The Livestock Census (LC) is a nationwide survey conducted every 5 years to count all domesticated animals across households, enterprises, and institutions in rural and urban areas.
      • The National Livestock Census provides detailed data on the population, breeds, and distribution of livestock like cattle, buffalo, goats, sheep, pigs, and others.
    • Conducted by the Ministry of Animal Husbandry and Dairying in collaboration with State/UT governments since 1919.
    • The 21st Livestock Census (2024) is the latest in the series and includes data collected using a dedicated mobile app for improved accuracy and real-time monitoring.

    Significance of the Livestock Census:

    • Policy Formulation: Helps the government develop policies for livestock sector growth, covering aspects like breed improvement, disease control, and feed management.
    • Rural Economy Support: Provides insights into the role of livestock in enhancing rural incomes, nutrition, and employment.
    • Livestock Development Programs: Data supports initiatives like the National Livestock Mission (NLM), which focuses on breed development, feed and fodder improvement, and innovation in livestock practices.
    • Indigenous Breed Conservation: Tracks indigenous livestock breeds to support breed-specific conservation and sustainable practices.

    Previous Census Observations in India:

    [1] 20th Livestock Census (2019):

    • Total Livestock Population: Recorded at 535.78 million, marking a 4.6% increase from the previous census in 2012.
    • Bovine Population: Counted at 302.79 million (includes cattle, buffalo, mithun, and yak).
    • Indigenous vs. Exotic Breeds:
      • Indigenous cattle population declined by 6%, indicating a shift toward crossbred and exotic breeds.
      • Exotic and crossbred cattle increased by 29.3%, driven by rising demand for high milk-yielding breeds.
    • Buffalo Population: Increased by 1% to 109.85 million, contributing significantly to India’s milk production.
    • Sheep and Goat Populations:
      • Sheep population rose by 14.1%, reaching 74.26 million.
      • Goat population grew by 10.1%, totaling 148.88 million.
    • Poultry Population: Experienced a substantial growth of 16.8%, with a total of 851.81 million birds, reflecting the expansion of commercial poultry farming.
    • Female Livestock Population: Increase in female cattle (18%) and female buffaloes (8%), underscoring the focus on dairy production.

    [2] 19th Livestock Census (2012):

    • Highlighted an increase in buffalo populations and decline in indigenous cattle.
    • Marked significant growth in poultry numbers, reflecting changing agricultural and economic patterns.

    PYQ:

    [2015] Livestock rearing has a big potential for providing non-farm employment and income in rural areas. Discuss suggesting suitable measures to promote this sector in India.

    [2012] Which of the following is the chief characteristic of ‘mixed farming’?
    (a) Cultivation of both cash crops and food crops
    (b) Cultivation of two or more crops in the same field
    (c) Rearing of animals and cultivation of crops together
    (d) None of the above

  • Bihar gets its first Dry Port in Bihta

    Why in the News?

    • Bihar has inaugurated the state’s first dry port in Bihta, a town near Patna to boost the export of goods produced in Bihar.
      • The first export consignment from the Bihta ICD was leather shoes sent to Russia.

    What is it?

    • A dry port, also known as an inland container depot (ICD), is a logistics facility located away from a seaport or airport.
    • It provides facilities for cargo handling, storage, and transportation of goods, making it easier to manage exports and imports.
    • The first dry port in India was opened in Varanasi in 2018.
    • The dry port also acts as a bridge between the inland regions and international shipping routes through major gateway ports.

    About Bihta ICD

    • The Bihta Inland Container Depot (ICD), also known as Bihta dry port, is located in Bihta, a town near Patna, the capital of Bihar.
    • It operates under a Public-Private Partnership (PPP).
    • It is fully commissioned and approved by the Department of Revenue, under the Union Ministry of Finance.
    • It is managed by Pristine Magadh Infrastructure Private Limited in collaboration with the Bihar state industry department.
    • The Bihta ICD is well connected by railways to gateway ports across India, including:
      • Kolkata and Haldia in West Bengal.
      • Visakhapatnam in Andhra Pradesh.
      • Nhava Sheva in Maharashtra.
      • Mundra in Gujarat.
    • It supports transportation of goods to and from eastern India, benefitting not just Bihar but also neighboring states like Jharkhand, Uttar Pradesh, and Odisha.

    PYQ:

    [2023] Consider the following pairs:

    Port Well known as
    1. Kamarajar Port: First major port in India registered as a company
    2. Mundra Port: Largest privately owned port in India
    3. Visakhapatnam Port: Largest container port in India

    How many of the above pairs are correctly matched?

    (a) Only one pair
    (b) Only two pairs
    (c) All three pairs
    (d) None of the pairs

  • Z-Morh Tunnel Project

    Why in the News?

    Some militants attacked workers building the Z-Morh tunnel on the Srinagar-Sonamarg highway, killing seven people.

    What is the Z-Morh Tunnel?

    • The Z-Morh tunnel is a 6.4-kilometer tunnel located near Gagangir village, connecting the Sonamarg health resort to Kangan town in the Ganderbal district of central Kashmir.
      • It is part of the larger Zojila tunnel project, which aims to provide year-round road connectivity between Srinagar and Ladakh.
    • It is part of the Srinagar-Sonamarg-Leh highway.
    • It is being constructed at an altitude of over 8,500 feet.
    • It derives its name from the Z-shaped road stretch where it is being built.
    • The project was originally conceived by the Border Roads Organisation (BRO) in 2012.
    • A soft opening of the tunnel was held in February 2024, although the full inauguration has been delayed.

    Significance of the Z-Morh Tunnel

    • The tunnel provides all-weather road connectivity to the Sonamarg health resort, ensuring that the popular tourist destination remains accessible year-round.
    • It is essential for maintaining all-weather connectivity to Ladakh, a region of strategic importance for India, particularly due to the military presence along the border with Pakistan and China.
    • The tunnel is strategically important for the Indian Army, as it provides quick and safe access to forward areas in Ladakh, reducing the dependence on air transport for the movement of troops and supplies.
    • It will also reduce expenditure on air maintenance of forward locations, thereby increasing the lifespan of Indian Air Force aircraft.
    • The tunnel will boost economic growth by improving accessibility to Sonamarg, thereby supporting tourism in the region.

    PYQ:

    [2016] Border management is a complex task due to difficult terrain and hostile relations with some countries. Elucidate the challenges and strategies for effective border management.

  • [pib] Government extends SAMARTH Scheme till March 2026

    Why in the News?

    The Samarth Scheme (Scheme for Capacity Building in Textiles Sector), which aims to teach 300,000 people in textile-related skills, has been extended for two years (FY 2024–25 and 2025–26).

    Achievements of the SAMARTH Scheme:

    • So far, 3.27 lakh candidates have been trained under the Samarth Scheme, with 2.6 lakh (79.5%) of them gaining employment.
    • There is a strong focus on women’s employment, with 2.89 lakh (88.3%) women trained so far.

    What is ‘SAMARTH’ Scheme?

    Details
    Name Samarth (Scheme for Capacity Building in Textile Sector)
    Nodal Ministry Ministry of Textiles
    Approval Approved by the Cabinet Committee of Economic Affairs as a continuation of the Integrated Skill Development Scheme for the 12th Five Year Plan (FYP)
    Implementing Agency Office of the Development Commissioner (Handicrafts)
    Objectives • Provide demand-driven, placement-oriented skilling programs
    • Incentivize industry efforts to create jobs in organized textile and related sectors
    • Promote skilling and skill upgradation in traditional sectors
    Scope Covers the entire textile value chain, excluding spinning and weaving
    Special Provisions Includes upskilling and reskilling programs to improve productivity of existing workers in the apparel and garmenting segments
    Target Beneficiaries Handicraft artisans and individuals seeking employment in the textile sector
    Implementing Agencies • Textile Industry
    • Institutions/Organizations of the Ministry of Textiles/State Governments with training infrastructure
    • Reputed training institutions/NGOs/Trusts/Companies with placement tie-ups

     

    PYQ:

    [2020] Consider the following statements:

    1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.
    2. “Textile and textile articles” constitute an important item of trade between India and Bangladesh.
    3. In the last five years, Nepal has been the largest trading partner of India in South Asia.

    Which of the statements given above is/are correct?

    (a) 1 and 2 only
    (b) 2 only
    (c) 3 only
    (d) 1, 2 and 3

  • Spotlighting the work of the Economics Nobel winners

    Why in the News?

    • This year’s Nobel Prize in Economics, officially known as the Sveriges Riksbank Prize in Economic Sciences, was awarded to Daron Acemoglu, Simon Johnson, and James Robinson (AJR).  
    • AJR have highlighted the importance of institutions in development, but critics argue that this approach tends to favour Western liberal models over other institutional frameworks.

    Why Do Some Nations Succeed While Others Fail?

    • Role of Institutions: The economic success or failure of nations can often be traced back to the nature of their institutions. 
      • Inclusive institutions encourage economic activity by providing secure property rights, legal frameworks, and political systems that incentivize growth. 
      • In contrast, extractive institutions concentrate wealth and power in the hands of a few, leading to economic stagnation and social inequality.
    • Historical Path Dependence: Countries that experienced inclusive economic institutions early in their development tend to be more prosperous, while those with a history of extractive institutions face significant barriers to growth. Historical events shape the trajectory of institutional development and influence current outcomes.

    What Is the Impact of Historical Institutions on Current Economic Outcomes?

    • Colonial Legacy: Institutions established during colonialism, especially extractive ones, have long-lasting impacts. Areas with landlord-based land tenure systems or direct colonial rule have struggled with lower agricultural productivity, fewer social services, and weaker infrastructure.
    • Natural Experiment Evidence: AJR’s research used historical data, such as differences in settler mortality, to show that regions colonized by Europeans with high mortality rates ended up with extractive institutions that still negatively affect growth today.
    • Long-Term Development Patterns: The effects of historical institutions persist, shaping economic development, social structures, and governance even after countries gain independence or transition to new political systems.

    Why do critics argue that this approach tends to favour Western liberal models over other institutional frameworks?

    • Historical Bias: Critics argue that AJR’s approach overlooks the diverse paths of development, favoring Western institutions while underestimating non-Western experiences and historical complexities.
    • Western Norms as Universal: The framework tends to present Western liberal institutions as ideal models, disregarding how other systems might effectively function in different cultural and socio-political contexts.

    Why Are Inclusive Institutions Not More Widely Adopted?

    • Conflict of Interests: Powerful groups with control over resources have incentives to maintain extractive institutions to protect their wealth and power, resisting changes that would lead to a fairer distribution of economic benefits.
    • Collective Action Challenges: Reforming extractive institutions requires solving collective action problems where diverse groups must agree on new rules that may threaten the established elite’s interests.
    • Path Dependency: Historical conditions can create institutional inertia, making it challenging to shift from extractive to inclusive frameworks due to deep-rooted social, political, and economic norms.

    Way forward: 

    • Strengthen Inclusive Institutions: Focus on legal and policy reforms that secure property rights, ensure fair governance, and promote transparent decision-making, encouraging broad-based economic participation and growth.
    • Empower Marginalized Groups: Implement policies that reduce power concentration by supporting grassroots movements, enhancing education access, and providing economic opportunities to disadvantaged communities to overcome historical inequalities.

  • HAL becomes 14th Maharatna Company in India

    Why in the News?

    The Centre has upgraded the status of PSU Hindustan Aeronautics Ltd (HAL) as Maharatna Company (from earlier Navratna Status).

    About Hindustan Aeronautics Limited (HAL): Key Facts

    • HAL was founded in 1940 in Bangalore as Hindustan Aircraft Limited, merging with Aeronautics India Limited in 1964 to become HAL.
    • It is a state-owned company under the Ministry of Defence.
    • Headquarters are in Bengaluru, Karnataka.
    • Operates 20 production and R&D centers across India, including Bangalore, Nashik, Koraput, and Lucknow.
    • Focuses on design, development, manufacture, and maintenance of aircraft, helicopters, engines, avionics, and aerospace equipment.
    • Produces fighter aircraft like Tejas LCA, Sukhoi Su-30MKI, Jaguar, and Hawk.
      • Manufactures helicopters including Dhruv ALH, Rudra, Cheetah, Chetak, and LCH.
    • Collaborates with Boeing, Airbus, Rosoboronexport, and Safran on aircraft production and tech transfer.
    • Listed on BSE and NSE in 2018, allowing public investment.
    • Expanded exports, supplying aircraft and helicopter parts to countries like Vietnam, Mauritius, and Ecuador.
      • Recent projects include AMCA, IMRH, and Tejas Mk2, boosting India’s indigenous defense capabilities.

    About Maharatna Companies 

    Details
    What is it? • Recognition granted to select Public Sector Undertakings (PSUs) in India.
    • Provides greater financial and operational autonomy compared to Navratna and Miniratna PSUs.
    Eligibility • Annual Turnover: Over ₹25,000 crore in the last three years.
    • Net Worth: More than ₹15,000 crore over the last three years.
    • Net Profit: Minimum of ₹5,000 crore for three consecutive years.
    • Must have significant global operations or international presence.
    Autonomy • Can invest up to ₹5,000 crore or 15% of their net worth in a single project without government approval.
    • Authorized to make equity investments for strategic resources or collaborations in India and abroad.
    Purpose • Aims to foster more flexibility in operations and encourage expansion, especially in international markets.
    • Helps companies to become global players.
    Examples • Indian Oil Corporation (IOC)
    • Bharat Petroleum Corporation Limited (BPCL)
    • Steel Authority of India Limited (SAIL)
    • Oil and Natural Gas Corporation (ONGC)
    Significance • Enhances the ability of PSUs to compete globally.
    • Allows quicker decision-making and reduces bureaucratic hurdles.
    • Promotes growth and competitiveness in the international arena.

    Benefits of Maharatna Status for HAL

    • HAL can now invest up to ₹5,000 crore (from earlier ₹1000 cr) or 15% of its net worth (whichever is applicable) in a single project without needing government approval.
    • As a Maharatna company, HAL has the freedom to engage in mergers, acquisitions, and strategic investments, both domestically and internationally.

    PYQ:

    [2011] Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)?

    1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt.

    2. The Government no longer intends to retain the management control of the CPSEs.

    Which of the statements given above is/ are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

  • ‘Yield’ can’t be the sole indicator for agriculture

    Why in the News?

    Government must embrace a new approach where the success of agriculture is defined by its capacity to nourish people, support livelihoods, and safeguard our planet for future generations.

    What are the limitations of using yield as the sole indicator of agricultural success?

    • Nutritional Quality Neglect as per ICAR (Indian Council for Agricultural Research): Focusing on yield has led to a decline in the nutritional profile of crops. High-yielding varieties often have lower micronutrient densities, as seen in reduced zinc and iron levels in rice and wheat.
    • Increased Input Costs: Higher yield does not always correlate with increased farmer income. The cost of achieving additional yield may be high, especially as the response to fertilizers has declined significantly since the 1970s.
    • Biodiversity Loss: The emphasis on a few high-yielding varieties leads to the loss of diverse, local crop varieties. For example, India has lost around 104,000 rice varieties since the Green Revolution.
    • Environmental Impact: Intensive farming to maximize yield can degrade soil health, reduce water availability, and harm the ecosystem, making agriculture less sustainable.
    • Reduced Resilience: The prioritization of yield over other factors makes crops less resilient to extreme weather events such as floods, droughts, and heatwaves.

    How do other indicators complement yield in assessing agricultural sustainability?

    • Nutritional Output Per Hectare: This indicator measures not just the quantity but the quality of the food produced, addressing nutritional security.
    • Soil Health Metrics: Including soil biological activity and soil organic carbon in evaluations helps ensure long-term soil fertility and productivity.
    • Water-Use Efficiency: Metrics like water-use efficiency track the amount of water required to produce crops, promoting conservation.
    • Farm Biodiversity: Assessing crop diversity at the farm and regional levels (Landscape Diversity Score) improves resilience to pests, diseases, and climate variability.
    • Economic Resilience Metrics: Indicators such as income diversification (through intercropping, livestock rearing, etc.) can help measure farmers’ economic stability.
    • Environmental Impact Measures: Tracking parameters like carbon footprint and ecosystem services evaluates the broader impact of agricultural practices.

    What practices can farmers adopt to improve sustainability beyond just increasing yield? (Way forward)

    • Intercropping: Growing multiple crops together (e.g., sugarcane with vegetables) can provide year-round income and enhance soil health.
    • Agroecological Approaches: Practices such as crop rotation, organic farming, and reduced pesticide use help maintain biodiversity and soil fertility.
    • Water Management Techniques: Using methods like drip irrigation and AI-powered tools for optimal irrigation ensures better water use.
    • Integrated Pest Management (IPM): Combining biological, mechanical, and chemical control methods reduces reliance on harmful pesticides.
    • Conservation Agriculture: Techniques such as no-till farming and mulching help improve soil structure and retain moisture.
    • Adopting Climate-Resilient Varieties: Growing drought-tolerant or flood-resistant crop varieties helps mitigate the impacts of climate change.

    Mains PYQ:

    Q Discuss the various economic and socio-cultural forces that are driving increasing feminization of agriculture in India. (UPSC IAS/2014)