💥Join UPSC 2027,2028 Mentorship (July Batch) + XFactor Notes & Microthemes PDF
Talk to Mentor

Civilsdaily

Login

Subject: Economics

  • What is Golden Rice?

    Why in the News?

    • The Court of Appeals in the Philippines revoked biosafety permits for GM Golden Rice and BT eggplant, citing safety violations and ordering a halt until issues are resolved.

    Golden Rice and Bt Eggplant in the Philippines 

    What is Golden Rice? 

    • Golden Rice is a variety of rice (Oryza sativa) developed through genetic engineering to produce beta-carotene, a precursor of vitamin A, in the edible parts of the rice.
    • This modification aims to address vitamin A deficiency, particularly in areas where it’s prevalent.
    • The Philippines approved its commercial production in 2021.
    • The Philippines became the first country to officially issue a biosafety permit for commercially propagating golden rice in July 2021.

    Bt Eggplant: Developed by the University of the Philippines Los Banos (UPLB), Bt eggplant is engineered to resist pests, aiming to enhance farmer productivity and reduce environmental impact.

     

    Development of Golden Rice:

    • Research for golden rice began as a Rockefeller Foundation initiative in 1982.
    • Peter Bramley discovered in the 1990s that a single phytoene desaturase gene (bacterial CrtI) could be used to produce lycopene from phytoene in genetically modified tomato.
    • Ingo Potrykus of the Swiss Federal Institute of Technology and Peter Beyer of the University of Freiburg published the scientific details of golden rice in 2000 after an eight-year project.

    Genetics:

    • Golden rice incorporates Psy and CrtI genes from daffodils and a soil bacterium into the rice genome to enhance beta-carotene production in the endosperm.

    Field Trials and Approvals:

    • The first field trials of golden rice cultivars were conducted by Louisiana State University Agricultural Center in 2004.
    • Additional trials were conducted in the Philippines, Taiwan, and Bangladesh.
    • In 2018, Canada and the United States approved golden rice as safe for consumption.
    • In 2019, the Philippines approved golden rice for use as human food, animal feed, or for processing.

    In the context of India 

    • Currently, there is no cultivation or commercialization of Golden Rice in India. Growing and selling GM brinjal remains banned in India.
    • Recently, the Supreme Court has also intervened on the issue of stubble burning and paddy cultivation in India esp, Punjab and Haryana states.
      • India has approved commercial cultivation of only one GM crop, Bt cotton. No GM food crop has ever been approved for commercial cultivation in the country.
      • We can have some lessons from the Philippines.

    Controversy over its Use

    • Legal challenges emerged in the Philippines in 2023 and 2024, leading to a halt in commercial propagation.
    • Critics have raised concerns about its safety, environmental impact, and efficacy compared to other interventions like supplements and dietary diversification.
    • Greenpeace opposes the use of genetically modified organisms in agriculture and opposes the cultivation of golden rice.
    • Vandana Shiva, an Indian anti-GMO activist, has argued against golden rice, citing potential issues with loss of biodiversity and availability of diverse and nutritionally adequate food.

    Golden Rice 2:

    • In 2005, researchers at Syngenta developed Golden Rice 2, which contains the phytoene synthase (psy) gene from maise combined with the crtl gene from the original golden rice.
    • Golden Rice 2 produces significantly higher levels of carotenoids, particularly beta-carotene, compared to the original golden rice.

     

    PYQ:

    [2018] With reference to the Genetically Modified mustard (GM mustard) developed in India, consider the following statements:

    1. GM mustard has the genes of a soil bacterium that give the plant the property of pest resistance to a wide variety of pests.
    2. GM mustard has the genes that allow the plant cross-pollination and hybridisation.
    3. GM mustard has been developed jointly by the IARI and Punjab Agricultural University.

    Which of the statements given above is/are correct?

    (a) 1 and 3 only

    (b) 2 only

    (c) 2 and 3 only

    (d) 1, 2 and 3

    [2021] What are the research and developmental achievements in applied biotechnology? How will these achievements help to uplift the poorer sections of the society?

  • RBI launches PRAVAAH, Retail Direct mobile app and FinTech Repository

    Why in the News?

    • The Reserve Bank of India (RBI) recently introduced three significant initiatives: the PRAVAAH portal, the RBI Retail Direct mobile application, and the FinTech Repository.
      • These initiatives aim to streamline regulatory processes, empower retail investors, and provide insights into the fintech sector.

    1. PRAVAAH Portal:

    • The PRAVAAH portal (Platform for Regulatory Application, VAlidation, and AutHorisation) serves as a centralised web-based platform for individuals and entities to seek regulatory approvals from the RBI.
    • Offering features like online application submission and status tracking, the portal covers 60 different application forms across various regulatory departments, ensuring efficiency and transparency in the authorisation process.

    2. RBI Retail Direct Mobile App:

    • The RBI Retail Direct Mobile App provides retail investors with convenient access to government securities (G-Secs) trading directly from their smartphones.
    • Accessible on both Android and iOS platforms, the app simplifies transactions in both primary and secondary markets, empowering retail investors to participate more actively in the securities market.

    3. FinTech Repository:

    The FinTech Repository aims to provide comprehensive data on Indian fintech firms, facilitating better regulatory understanding and policy formulation in the rapidly evolving fintech landscape.

    Other initiatives launched:

    • EmTech Repository: It focuses on RBI-regulated entities’ adoption of emerging technologies like AI, ML, Cloud Computing, and Quantum, providing valuable insights for policymakers and industry stakeholders.
    • Reserve Bank Innovation Hub (RBIH): Both repositories are managed by the RBIH, underscoring the central bank’s commitment to fostering innovation and collaboration in the financial sector.

     

    PYQ:

    [2013] In the context of the Indian economy, ‘Open Market Operations’ refers to:

    (a) borrowing by scheduled banks from the RBI

    (b) lending by commercial banks to industry and trade

    (c) purchase and sale of government securities by the RBI

    (d) None of the above

  • Why dal imports have hit a seven-year high?

    Why in the News?

    Due to food inflation during an El Niño year and an election year, the country has lost the self-sufficiency it had achieved in pulses.

    Pulse Production in India:

    • India is the largest producer (25% of global production), consumer (27% of world consumption), and importer (14%) of pulses in the world.
    • They account for 20% of India’s total area under cultivation and provide 7-10% of the total food grains in the country.
    • India’s production has increased by 50% (from 18 million tonnes to 27 million tonnes) up till 2022. However, it has not increased in step with the population growth, per capita availability of pulses has declined from 22.1 kg per person in 1951 to 16.4 kg per person in 2022.
    • Though there is surplus production of Chana, the imperfect substitution among pulses and limited international availability put pressure on the prices of some pulses.

    Recent Decline in Domestic Production:

    • Total Production: Decreased from 27.30 million tonnes (mt) in 2021-22 to 23.44 mt in 2023-24.
    • Chana (Chickpea): Production fell from 13.54 mt in 2021-22 to an estimated 12.16 mt in 2023-24.
    • Arhar/Tur (Pigeon Pea): Output decreased from 4.22 mt in 2021-22 to an estimated 3.34 mt in 2023-24.

    Significance of Pulse Production:

    • Suitable for Drought Areas: Drought-resistant and deep-rooting species of pulses can supply groundwater to companion crops when planted in the intercropping pattern. Locally adapted pulse varieties can enhance production systems in dry environments.
    • Enhances Fertility of Land: The leguminous plants of pulse also help in nitrogen fixation, thus ensuring higher soil fertility.
    • High Nutritional Value: In a country like India, where many people are poor and vegetarian, pulses are an important and affordable source of protein.
    • Low food wastage footprints: Pulses can be stored longer without losing their nutritional value and minimizing loss.

    Imports have hit a seven-year high

    Cause of the Inflation in Pulses

    • Impact of EL Nino: El Niño-induced patchy monsoon and winter rain led to a decline in domestic pulse production from 27.30 million tonnes (mt) in 2021-22 to 23.44 mt in 2023-24, as per the Agriculture Ministry’s estimates.
    • Sharp Output Falls: Both chana and Arhar/tur, the pulses with the highest inflation experienced sharp output falls. Chana production decreased from 13.54 mt in 2021-22 to 12.16 mt in 2023-24, while Arhar/tur production dropped from 4.22 mt to 3.34 mt over the same period.
    • Impact of Irregular Rainfall: Poor crops in regions like Karnataka, Maharashtra, Andhra Pradesh, and Telangana were attributed to irregular and deficient rainfall, leading to reduced planting area and lower yields.

    Effects of Inflation :

    • Increased Retail Prices: Significant annual retail inflation, particularly for pulses like Arhar/tur and chana.
    • Higher Import Costs: Surge in imports to meet domestic demand, leading to increased expenditure on foreign pulses.
    • Economic Burden: Higher prices in the open market strain household budgets, especially for low-income families who cannot rely on subsidized distribution for pulses.

    Challenges Ahead :

    • Monsoon Uncertainty: Future prices largely depend on the upcoming southwest monsoon; continued irregular weather patterns could sustain high inflation.
    • Import Dependency: Increased reliance on imports due to insufficient domestic production, especially for yellow/white peas and masoor.
    • Supply Position: Precarious domestic supply with minimal government procurement from recent crops, necessitating higher imports.

    Government initiatives as relief measures: The government has removed tariffs and quantitative restrictions by liberalizing imports on most pulses to boost supply and reduce prices like an extension of duty-free imports of Arhar/tur, urad, masoor, and desi chana till March 31, 2025.

    Conclusion: While the government has taken significant steps to mitigate the impact of high dal prices through import liberalization and policy adjustments, the actual relief to consumers will hinge on the performance of the upcoming monsoon and the global pulse market dynamics.

    Mains PYQ: 

    Q Mention the advantages of Cultivation of pulses because of which year 2016 was declared as the International year of Pulses By the United Nations. (UPSC IAS/2017)

     

    Q Food Security Bill is expected to eliminate hunger and malnutrition in India. Critically discuss various apprehensions in its effective implementation along with the concerns it has generated in WTO. (UPSC IAS/2013)

    Prelims PYQs:

    With reference to pulse production in India, consider the following statements:

    1) Black gram can be cultivated as both kharif and rahi crop.

    2) Green gram alone accounts for nearly half of pulse production.

    3) In the last three decades, while the production of Kharif pulses has increased, the production of rabi pulses has decreased.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 and 3 only

    (c) 2 only

    (d) 1, 2 and 3

  • Explained: The challenges in curbing cultivation of a banned rice variety in Punjab

    Why in the News?

    Punjab’s paddy farmers have begun sowing seeds for this year’s kharif season, despite the ban on variety PUSA-44 that was implemented last year.

    About the Cultivation of Paddy Varieties like PUSA-44:

    • Pusa-44 is a long-duration paddy variety bred by the Indian Agricultural Research Institute (IARI) and has been a key contributor to stubble burning.
    • Its growth cycle of 155-160 days, from nursery sowing to harvesting, leads to late October maturity, leaving a short window for field preparation for the next crop.

    The Impact on Groundwater in Punjab as per “CGWA’s Groundwater Estimation Report 2020″

    • Severe over-extraction: 119 out of 138 blocks are over-exploited.Central and southern parts of Punjab (Patiala, Sangrur, Barnala, Mansa, Bathinda, Moga, Ludhiana, and Jalandhar) are most affected.
    • Water Table Depth: The average groundwater depth has crossed 70 meters (200 feet). In some southern areas, groundwater is unavailable even at 150-200 meters (450-600 feet).
    • Groundwater depletion vs. Demand: Punjab over-extracts 14 billion cubic meters (BCM) annually. Annual recharge is 20 BCM, but usage is 34 BCM.
    • Future Projections: Groundwater could drop below 300 meters in 18-20 years, making water highly contaminated and extraction costly. If the trend continues, Punjab may run out of groundwater for irrigation.

    Why are Farmers in several districts unwilling to stop their Cultivation?

    • Higher Income: Farmers receive a higher yield and guaranteed Minimum Support Price (MSP), leading to increased incomes.
    • Seed Availability: Farmers retain seeds from previous seasons, and many stores have already sold seeds to farmers.
    • Resistance to Change: Despite awareness of the adverse effects, many farmers continue to cultivate PUSA-44. Significant cultivation areas in districts like Barnala, Sangrur, and Moga rely heavily on PUSA-44, making immediate change difficult.
    • Time Required for Transition: Changing entrenched agricultural practices and mindsets in heavily reliant districts cannot be achieved quickly.

    Judicial Stand on the Cultivation of Paddy Varieties like PUSA-44:

    • The Supreme Court has emphasized the need to cease stubble burning in states like Punjab, Haryana, Uttar Pradesh, and Rajasthan, the discussion surrounding Pusa-2090 rice variety from its ability to provide an alternative to the problematic long-duration Pusa-44 variety.
      • Pusa-2090 rice matures in a shorter duration of 120-125 days while maintaining comparable yields, addressing the core issue of stubble burning.
    • Happy Seeder (Tractor) is also a solution that offers an eco-friendly alternative to stubble burning.

    Way Forward:

    • Public Awareness and Guidance: Educate farmers on the benefits of short-duration varieties, which are more water-efficient and better for stubble management.
    • Supportive Policies: Government and agricultural experts need to provide support and incentives for transitioning to sustainable paddy varieties.
    • Gradual Implementation: Acknowledge the need for time and a phased approach to change farming practices in heavily reliant districts.

    Mains PYQ:

    Q The ideal solution of depleting groundwater resources in India is a water harvesting system.” How can it be made effective in urban areas? (15) (UPSC IAS/2018)

  • [28 May 2024] The Hindu Op-ed: Playing to the gallery can be injurious to Rail safety

    [28 May 2024] The Hindu Op-ed: Playing to the gallery can be injurious to Rail safety

    PYQ Relevance:
    Mains: 
    Q) The setting up of a Rail Tariff Authority to regulate fares will subject the cash-strapped Indian Railways to demand subsidy for obligation to operate non-profitable routes and services. Taking into account the experience in the power sector, discuss if the proposed reform is expected to benefit the consumers, the Indian Railways or the private container operators. (UPSC CSE 2014)
    Q) One of the intended objectives of Union-Budget 15-18 is to ‘transform, energize and clean India’. Analyze the measures proposed in the Budget 15-18 to achieve the objective. (UPSC CSE 2017)

    Prelims:

    With reference to bio-toilets used by the Indian Railways, consider the following statements:
    1) The decomposition of human waste in the bio-toilets is initiated by a fungal inoculum.
    2) Ammonia and water vapour are the only end products in this decomposition which are released into the atmosphere.
    Which of the statements given above is/are correct?  (UPSC CSE 2015)
    (a) 1 only
    (b) 2 only
    (c) Both 1 and 2
    (d) Neither 1 nor 2

    Note4Students: 

    Prelims: Government Initiatives for Indian Railways;

    Mains: Indian Railways;

    Mentor comment: More than 160 years ago, railways were introduced in the Indian subcontinent and were first initiated in 1853. The British Governor-General Lord Dalhousie played the most important part in introducing railways in India. Today, India has the 4th largest railway system in the world (after the US, Russia, and China). The railways operate 13,523 passenger trains and 9,146 freight trains daily. As of Feb 2024, 61,813 km length of the Broad-Gauge network has been electrified. With this, Indian Railways is rapidly progressing towards its target of 100% electrification and becoming the largest green railway network in the world. Indian Railways (IR) is rapidly progressing to accomplish its Mission. However, India during recent times due to the increase in population demand, is unable to cope with priority clauses of maintaining safety and standards.

    Let’s learn.

    –

    Why in the News?

    A railway pilot (driver) faced disciplinary action for following safety rules and not speeding to minimize delays to passenger trains after his locomotive failed, highlighting an attitude of prioritizing punctuality over safety in the Indian Railways.

    According to the Performance Audit on Derailment in Indian Railways, nearly 3/4th of 217 consequential train accidents across the country between 2017-18 and 2020-21 were caused by derailments.

    Major challenges of Indian Railway Runways:

    • Unmanned level crossings (UMLCs): UMLCs are places where railway tracks are crossed without any barriers or signals to regulate traffic.
      • UMLCs accounted for 16% of all train accidents in India (2018-19). Although Indian Railways have eliminated all the UMLCs on broad gauge routes, there are still many Manned Level Crossings (MLCs) that pose a risk of accidents.
      • In February 2024, a train consisting of two diesel locomotives (both unmanned), and 53 wagons, with no brakes, rolled out of Kathua station. 
    • Signal Failures:  Signaling failures can lead to trains running on the wrong track, colliding with other trains or stationary objects, or overshooting stations.
      • The recent Visakhapatnam-Rayagada train accident was reportedly caused by non-communication and the lack of audio recording of conversations between station masters and loco pilots.
      • The media analyzed the accident and highlighted the broader issues with railway safety, such as inadequate signaling and telecommunications infrastructure, and the need for accountability and technological improvements. (In fact, the Right to Information (RTI) Act 2005 denies giving this information)
    • Human Errors: According to the Final Report of the CRS (Minister for Railways), railway staff are prone to human errors due to fatigue, negligence, corruption, or disregard for safety rules and procedures.
      • It can result in wrong signaling, miscommunication, distraction, overspeeding, or overlooking defects or hazards that affect their performance and coordination.

    What are other troubling questions?

    • Lack of Professionalism in Railway Accident Investigations: Railway authorities are majorly exposed for unprofessional handling of serious accident investigations. Blaming reckless crew diverts attention from the administration’s role in improper training and ineffective monitoring.
    • Issues Concerning Loco Pilots: Nearly 10% of vacancies in the loco pilot cadre, are leading to regular breach of duty hour rules. Continuous night shifts, and inadequate rest, point to the need for focused attention on loco pilots’ issues.

    What did the CAG Recommended? (Way Forward)

    • Develop a strong monitoring mechanism to ensure timely implementation of maintenance activities, adopting fully mechanized methods and improved technologies.
    • Railway administration must follow the guiding principles for the deployment of RRSK (Rashtriya Rail Sanraksha Kosh) funds.
    • Indian Railways should prepare a Detailed Outcome Framework for each item of safety work.
    • Ensure strict adherence to scheduled timelines for conducting and finalizing accident inquiries.

    Reference:

    https://www.thehindu.com/opinion/lead/playing-to-the-gallery-can-be-injurious-to-rail-safety/article68222396.ece

  • China’s share in India’s industrial goods imports jump to 30% from 21% in last 15 years: GTRI

    Why in the News?

    India’s imports from China crossed $101 billion in 2023-24 from about $70 billion in 2018-19, and the country’s share of India’s industrial goods imports has risen from 21% to 30% over 15 years, according to a report by the Global Trade Research Initiative (GTRI).

    • The data shows, it’s resulting in a cumulative trade deficit exceeding $387 Billion in the last 5 years, which is an alarming situation for the Indian government.

    What is meant by Trade Deficit?

    • A trade deficit refers to a situation where the country’s imports exceed the receipts from its exports. A trade deficit arises in the course of international trade when the payments for imports exceed the receipts from export trade.
    • A trade deficit is also referred to as a negative balance of trade.
    • The concerns arising due to this deficit include pressure on external payments and on the currency value of a country. Countries often alter import and export policies, curbing imports or increasing import duties on certain goods due to this.
    • They also encourage exports and consumption of indigenous goods.

    India’s Industrial Imports from China:

    • Electronics and Telecom Sector: During April-January 2023-24, India’s import value for electronics, telecom, and electrical products was $67.8 billion, with China contributing $26.1 billion. (38.4% of the total imports)
    • Machinery Sector: China contributed 39.6% of India’s imports in this category. This highlights China’s essential role as a supplier of machinery to India.
    • Chemical and Pharmaceutical Sector: India’s chemical and pharmaceutical imports were $54.1 billion, with $15.8 billion coming from China (29.2% of the total).
    • MSMEs sector: Products like mobiles and data processing units, are imported by Indian MSMEs. These imports could potentially be produced domestically, highlighting gaps in India’s industrial capabilities.

    Current Trade Observations concerning China and other countries:

    • Rising Trade Deficit with China: India’s exports to China have stagnated at around $16 billion annually (from 2019 to 2024), while imports from China surged from $70.3 billion in 2018-19 to over $101 billion in 2023-24.
    • Growth Rate of Imports: China’s share in India’s industrial product imports increased from 21% to 30% over the last 15 years. China’s exports to India grew 2.3 times faster than India’s total imports from all other countries.
    • Diverse Product Imports: Chinese firms are increasingly entering the Indian market, which is expected to accelerate the import of industrial products from China. India’s imports span high to low-technology items, like smartphones, electronics, electric vehicles, and solar energy.
    • Strategic Concerns: The growing trade deficit and dependence on China have profound strategic implications, affecting both economic and national security dimensions.

    Way Forward:

    • Supply chain diversification: India must focus on diversifying its supply chains and reducing dependency on single-country imports, especially from geopolitical competitors like China.
    • Boosting R&D: Increase investment in research and development for electronics, semiconductors, and machinery to foster innovation and improve domestic production capabilities.
    • Incentivizing Production: Provide tax incentives, subsidies, and grants to local manufacturers of electronics, data processing units, and semiconductor devices to encourage production and reduce import dependency.

    Mains PYQ:

    Q China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia’, In the light of this statement, discuss its impact on India as her neighbor. (UPSC IAS/2017)

  • GAIL inaugurates 10 MW Green Hydrogen Plant in Madhya Pradesh

    Why in the news?

    GAIL (India) Ltd has commissioned its first green hydrogen plant at Vijaipur in Madhya Pradesh, marking a significant step for the nation’s largest natural gas transmission and distribution firm into new and alternate energy sources.

    About Vijaipur Green Hydrogen Plant

    • The plant aligns with the National Green Hydrogen Mission‘s objective of achieving 5 million tons of annual green hydrogen production capacity by 2030.
    • The plant features a 10-megawatt proton exchange membrane electrolyser imported from Canada.
    • It will produce approximately 4.3 tonnes of green hydrogen per day with a purity of about 99.999% by volume.
    • The production process utilises electricity from renewable sources, such as solar energy, to split water and produce green hydrogen.

    Major Objective: Hydrogen Blending

    • GAIL is currently conducting experimental blending of hydrogen with natural gas.
    • Current regulations permit blending up to 5% hydrogen with natural gas, with ongoing studies to explore higher blending ratios.

    What is Green Hydrogen?

    • Green hydrogen is produced through electrolysis, where electricity derived from renewable sources, such as solar or wind power, is used to split water molecules into hydrogen and oxygen.
    • Since it relies on renewable energy, green hydrogen production has no direct emissions of CO2 or other greenhouse gases.

    What is the Green Hydrogen Standard?

    • Definition of Green Hydrogen: It has defined green hydrogen as having a well-to-gate emission – including water treatment, electrolysis, gas purification, drying and compression of hydrogen – of not more than 2 kg CO2 equivalent per kg of hydrogen produced.
    • Nodal Agency:  The Bureau of Energy Efficiency, Ministry of Power, will be the nodal authority for green hydrogen production projects.

    Back2Basics: National Green Hydrogen Mission, 2023

    Details
    Ministry Ministry of New and Renewable Energy
    Purpose To incentivise the commercial production of green hydrogen and make India a net exporter of the fuel.
    Key Activities Facilitates demand creation, production, utilisation, and export of green hydrogen.
    Sub-Schemes
    1. Strategic Interventions for the Green Hydrogen Transition Programme (SIGHT): To fund the domestic manufacturing of electrolysers and the production of green hydrogen.
    2. Green Hydrogen Hubs: Identify and develop states and regions capable of supporting large-scale production and/or utilisation of hydrogen as Green Hydrogen Hubs.
    Green Hydrogen Hubs Details Identifies and develops regions capable of large-scale hydrogen production and utilisation as Green Hydrogen Hubs.
    Objectives
    • Develop 5 MMT per annum of green hydrogen production by 2030.
    • Add 125 GW of renewable energy capacity by 2030.
    • Entail over Rs 8 lakh crore investments and generate six lakh jobs.
    • Reduce fossil fuel imports by over Rs 1 lakh crore and abate 50 MT of greenhouse gases annually.

    Significance of Hydrogen Energy 

    • Hydrogen is an important source of energy since it has zero carbon content and is a non-polluting source of energy in contrast to hydrocarbons that have net carbon content in the range of 75–85 per cent.
    • Hydrogen energy is expected to reduce carbon emissions that are set to jump by 1.5 billion tons in 2021.
    • It has the highest energy content by weight and lowest energy content by volume.
    • As per the International Renewable Energy Agency (IRENA), Hydrogen shall make up 6 per cent of total energy consumption by 2050.
    • Hydrogen energy is currently at a nascent stage of development but has considerable potential for aiding the process of energy transition from hydrocarbons to renewable.

    Types of Hydrogen

    Hydrogen extraction methods are classified into three types based on their processes: Grey, Blue, and Green etc.

    1. Green Hydrogen:  Discussed above.
    2. Grey Hydrogen: This type of hydrogen is obtained through coal or lignite gasification (black or brown), or by steam methane reformation (SMR) of natural gas or methane (grey). These processes are typically carbon-intensive.
    3. Blue Hydrogen: It is derived from natural gas or coal gasification, coupled with carbon capture storage (CCS) or carbon capture use (CCU) technologies to mitigate carbon emissions.
    4. Turquoise hydrogen: It refers to hydrogen produced from methane pyrolysis, while yellow hydrogen is produced from biomass.

     

    PYQ:

    [2023] Consider the following heavy industries:

    1. Fertilizer plants
    2. Oil refineries
    3. Steel plants

    Green hydrogen is expected to play a significant role in decarbonizing how many of the above industries?

    (a) Only one
    (b) Only two
    (c) All three
    (d) None

    [2023]  With reference to green hydrogen, consider the following statements:

    1. It can be used directly as a fuel for internal combustion.
    2. It can be blended with natural gas and used as fuel for heat or power generation.
    3. It can be used in the hydrogen fuel cell to run vehicles.

    How many of the above statements are correct?

    (a) Only one
    (b) Only two
    (c) All three
    (d) None

  • Cost Inflation Index (CII) for FY25 to compute Capital Gains

    Why in the News?

    • The Income Tax Department has notified the cost inflation index (CII) for the current fiscal to calculate long-term capital gains arising from the sale of immovable property, securities and jewellery.
      • The CII is used by a taxpayer to compute gains arising out of the sale of capital assets after adjusting for inflation.

    CII Values:

    • For FY 2024-25, the CII is set at 363.
    • Previous years’ CII values were 348 for FY 2023-24 and 331 for FY 2022-23.

    What is Cost Inflation Index (CII)?

    • CII is a measure used by the Income Tax Department of India to account for inflation when calculating the capital gains on the sale of long-term capital assets.
    • It helps to adjust the purchase price of assets to reflect the effect of inflation.
      • CII adjusts the cost of acquisition of assets to the price level inflation at the time of sale.
      • This ensures that taxpayers pay taxes on the real gains rather than on the inflationary component of the price rise.
    • It is defined under Section 48 of the Income-tax Act, 1961.
    • The index is revised annually to keep up with inflation, with the base year being periodically reset (currently the base year is 2001-02 in India).

    Application of CII

    • CII is used to compute the indexed cost of acquisition of a capital asset that has been held for more than 36 months (considered as long-term capital assets).
    • Different holding periods apply for certain types of assets like immovable property and listed securities.

    Tax Calculation:

    • The formula used is:

    • This formula helps determine the adjusted cost basis from which any sale proceeds are subtracted to calculate capital gains.

    Back2Basics: Long Term Capital Gains

    • In India, long-term capital gains (LTCG) refer to the profit earned from the sale of a capital asset held for a specific period, qualifying it as “long-term” based on the duration of holding.
    • The tax implications and treatment of these gains are distinct from those of short-term capital gains.

    Definition of Long-Term Capital Assets

    • Equity or Preference Shares, Listed Securities, Units of UTI, etc.: These are considered long-term if held for more than 12 months before sale.
    • Immovable Property (e.g., Land, Building): Considered long-term if held for more than 24 months.
    • Other Assets (e.g., Jewellery, Debt-oriented Mutual Funds, etc.): These need to be held for more than 36 months to be considered long-term.

    Taxation of Long-Term Capital Gains

    • Equity Investments:
      • LTCG from the sale of listed shares or equity-oriented mutual funds over ₹1 lakh is taxed at 10% without the benefit of indexation, provided the securities transaction tax (STT) was paid at the time of sale.
    • Non-Equity Investments:
      • LTCG from assets like debt mutual funds, real estate, gold, etc., is taxed at 20% with the benefit of indexation.
    • Indexation Benefit:
      • For non-equity assets, the Cost Inflation Index (CII) is used to adjust the purchase price of the asset to reflect inflation. This reduces the taxable gain by increasing the acquisition cost.

    Calculation of Long-Term Capital Gains

    The general formula for calculating LTCG is:


    Where:

    Full Value of Consideration is the sale price of the asset.

    Indexed Cost of Acquisition is the purchase price adjusted by the CII.

    Indexed Cost of Improvement refers to the cost of any improvements made to the asset, adjusted by the CII.

    Cost of Transfer includes expenses directly related to the sale or transfer of the asset.

    Exemptions and Deductions

    • Section 54: Exemption on LTCG from the sale of a residential property if the proceeds are reinvested in another residential property in India.
    • Section 54EC: Exemption by investing LTCG in bonds issued by NHAI or REC within 6 months of the asset sale, subject to a cap of ₹50 lakhs.

     

    PYQ:

    [2015]  Which reference to inflation in India, which of the following statements is correct?

    (a) Controlling the inflation in India is the responsibility of the Government of India only

    (b) The Reserve Bank of India has no role in controlling the inflation

    (c) Decreased money circulation helps in controlling the inflation

    (d) Increased money circulation helps in controlling the inflation

  • India rises to 39th position in WEF Index for travel, tourism development

    Why in the News? 

    • India has moved up to the 39th position in the World Economic Forum’s latest “Travel & Tourism Development Index (TTDI) 2024, a significant climb from 54th in 2021.
      • The United States tops the index, followed by Spain, Japan, France, and Australia.
      • Pakistan is ranked 101st.

    India’s Performance and Ranking

    • Price Competitiveness: India is ranked 18th in terms of price competitiveness.
    • Transport Infrastructure: It stands at 26th for air transport and 25th for ground and port infrastructure.
    • Resource Ranking: India is 6th in natural resources, 9th in cultural resources, and 9th in non-leisure resources.
    • TTDI Score Change: India’s overall TTDI score decreased by 2.1% compared to its 2019 level.
    • Decline in Sustainability Performance: India has seen a decline in sustainability performance relative to 2019 but still performs well due to the prevalence of sustainable long stays among inbound visitors.

    About Travel & Tourism Development Index (TTDI)

    • The TTDI was compiled in collaboration with the World Economic Forum (WEF) and the University of Surrey in the United Kingdom (UK).
    • TTDI 2024 is the second edition, evolved from the Travel & Tourism Competitiveness Index (TTCI) series, a flagship index of WEF that has been in production since 2007.
    • TTDI 2024 covered 119 countries’ travel and tourism sectors across various factors and policies.

    Back2Basics: World Economic Forum (WEF)

    Description
    Establishment Founded in 1971 by Swiss-German economist Klaus Schwab in Geneva, Switzerland.
    Purpose To bring together public and private sector leaders to address global political, social, and economic issues.
    Membership Introduced in 1975, membership includes the world’s top 1,000 companies.
    Scope Expansion Initially focused on European firms catching up with US management practices, expanded to encompass broader economic and social issues.
    Birth of the G20 The concept of the G20, focusing on global finance and comprising 20 countries, emerged from discussions at the WEF in 1998.
    Key Reports Published
    • Global Competitiveness Report
    • Global Risks Report
    • Global Gender Gap Report
    • Global Human Capital Report
    • Global Information Technology Report
    • Future of Jobs Report
    • Global Enabling Trade Report

    Trick: Reports beginning with the name ‘Global’.

    World level recovery in travel and tourism:

    • Sector Recovery: International tourist arrivals and the sector’s contribution to global GDP are expected to return to pre-pandemic levels in 2024.
    • Regional Recovery: West Asia exceeded its 2019 tourist arrival levels by 20%, while Europe, Africa, and the Americas are recovering robustly, each reaching about 90% of their 2019 levels.

    PYQ:

    [2019] The Global Competitiveness Report is published by the:

    (a) International Monetary Fund

    (b) United Nations Conference on Trade and Development

    (c) World Economic Forum

    (d) World Bank

    Practice MCQ:

    The Travel & Tourism Development Index (TTDI) is released by:

    1. International Air Transport Association (IATA)
    2. World Tourism Foundation (WTF)
    3. World Economic Forum
    4. World Bank

  • A vegetable triumvirate, inflation, and the takeaway

    Why in the News?

    The price fluctuations and Inflation trends in recent market underscore the necessity for Targeted Policy Interventions and a comprehensive grasp of Agricultural Supply Chains.

    The Significance of Vegetable Triumvirate (trio):

    • Tomato, Onion, and Potato (TOP) aren’t just statistical entities but essential ingredients in Indian cuisine, forming the backbone of many dishes.
    • These vegetables represent more than just a portion of the CPI basket; they embody cultural and dietary preferences deeply ingrained in Indian culinary traditions.

    Volatility and its role in shaping Inflation trends by TOP vegetables:

    Vegetable prices in India rose by approximately 15% year-on-year, indicating significant inflation in this category.

    • Highly Volatile: There was notable volatility in vegetable prices, with a sharp decrease of 0.7% in June followed by a substantial increase of 37.4% in July.
    • High Contribution to Inflation: Despite vegetables weighing only 6% in the total CPI basket, their contribution to inflation was about 30% in Feb/March 2024.
      • For example, Tomatoes having a weight of only 0.6% in the CPI basket, prices soared by 202% in July 2023, contributing to 18.1% of the total headline inflation.
      • The contribution of vegetables to headline inflation was 31.9%, with TOP (tomato, onion, and potato) contributing 17.2%, further highlighting their substantial impact on inflation trends.

    Navigating Culinary and Economic Realities (Challenges):

    • Policy Challenges: The volatility in TOP prices underscores the need for effective policy interventions, including agricultural value chain reforms and improved storage facilities to stabilize prices and support farmers.
    • Farmers’ Plight: Farmers, who are often net buyers of these crops, bear the brunt of price fluctuations, necessitating measures like Minimum Support Prices to ensure their livelihoods are protected.
    • Government Response: Despite protests and demands from farmers, policy responses have been inconsistent, relying on short-term measures like export bans rather than addressing underlying structural issues in the agricultural sector.

    Way forward:

    • Need for Value Chain Reforms: Implement reforms aimed at improving the efficiency and resilience of agricultural value chains for TOP vegetables.
    • Need Price Stabilization Mechanisms: Introduce mechanisms to stabilize prices of TOP vegetables, such as market interventions, buffer stocks, or price ceilings during periods of extreme volatility. This can help mitigate the impact of price fluctuations on consumers and farmers alike.
    • Minimum Support Prices (MSPs): Establish MSPs for TOP vegetables to provide farmers with a guaranteed floor price for their produce.

    Mains PYQ:

    Q Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments.(UPSC IAS/2019)