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Subject: Economics

  • Income Tax Dept. surveys BBC over Transfer Pricing allegations

    tax

    Central idea: The Income Tax Department has conducted surveys at the premises of the British Broadcasting Corporation (BBC) in Delhi and Mumbai. The BBC has been deliberately violative of transfer pricing rules.

    Transfer Pricing: A Tax Evasion Technique

    • Transfer pricing refers to the practice of determining the price at which goods, services or intangible property are sold between related entities within an enterprise across international borders.
    • It is a practice of multinational companies transferring profits to low-tax jurisdictions to reduce their tax liabilities.

    How does Transfer Pricing work?

    • The I-T Department gives the following example: “Suppose a company A purchases goods for 100 rupees and sells it to its associated company B in another country for 200 rupees, who in turn sells in theopen market for 400 rupees.
    • Had A sold it (the good) direct, it would have made a profit of 300 rupees.
    • But by routing it through B, it (A) restricted it (profit) to 100 rupees, permitting B to appropriate the balance.
    • The transaction between A and B is arranged and not governed by market forces.
    • The profit of 200 rupees is, thereby, shifted to the country of B. The goods is transferred on a price (transfer price) which is arbitrary or dictated (200 hundred rupees), but not on the market price (400 rupees).

     

    What is a ‘Survey’ under the I-T Act?

    • Section 133A of the Income Tax Act, 1961 empowers the Income Tax Department to conduct surveys to collect hidden information.
    • I-T authority can enter any place of business or profession within their jurisdiction, verify books of account, and impound documents if needed.

    What is an I-T search?

    • Section 132 of the Income Tax Act, which I-T Department to conduct searches when it has reasons to believe that someone is in possession of undisclosed income or property.

    Differences between a survey and a search

    • A survey is a less serious proceeding than a search and can only be conducted during working hours on business days within the limits of the area assigned to the officer.
    • In contrast, a search can happen on any day after sunrise, and the entire premises can be inspected to unravel undisclosed assets, with the help of police.
    • While the scope of a survey is limited to the inspection of books and verification of cash and inventory, in a search, the entire premises can be inspected to unravel undisclosed assets, with the help of police.

    Powers of the I-T authority during a search

    • The provisions for impounding or seizing the goods were introduced only by the Finance Act, 2002.
    • The Act says that during a search, an authorized officer can:
    1. Enter and search any building or place where he has reason to suspect that such books of account, other documents, money, bullion, jewellery, or other valuable article or thing are kept;
    2. Break/open the lock of any door, box, locker, safe, almirah, or other receptacles for exercising the powers conferred by clause (i) where the keys thereof are not available;
    3. Seize any such books of account, other documents, money, bullion, jewellery, or other valuable article or thing found as a result of such search;
    4. Place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom;
    5. Make a note or an inventory of any such money, bullion, jewellery, or other valuable article or thing.

    What are Transfer pricing rules?

    • By setting transfer pricing rules, countries can ensure that companies pay taxes on profits generated within their jurisdiction.
    • Transfer pricing rules are used to determine the “arm’s length price” at which transactions between related entities should take place.
    • The arm’s length price is the price that would have been charged between unrelated entities in similar circumstances.
    • The rules aim to ensure that related entities do not shift profits to low-tax jurisdictions, and that the tax authorities of different countries get their fair share of taxes.

    What is the role of tax authorities in curbing transfer pricing?

    • Audit: The tax authorities can carry out transfer pricing audits to determine whether the prices used in transactions between related entities are in accordance with the arm’s length principle.
    • Compliance of Arm’s length principle: If the tax authorities find that the prices are not in accordance with the arm’s length principle, they can make adjustments to the prices and levy taxes accordingly.

    What is the “Arm’s Length Arrangement” that the BBC has allegedly violated?

    • Section 92F(ii) of the Income Tax Act, 1961 defines arm’s length price as “a price which is applied or proposed to be applied in a transaction between persons other than associated enterprises, in uncontrolled conditions”.
    • Section 92C(1) says arm’s length shall be determined by the “most appropriate” among the following methods:
    • comparable uncontrolled price method;
    • resale price method;
    • cost plus method;
    • profit split method;
    • transactional net margin method;
    • such other method as may be prescribed by the I-T Board.

    What lies ahead for BBC?

    • BBC will have to comply with transfer pricing rules in each country in which they operate.
    • Failure to comply with transfer pricing rules can lead to tax liabilities and penalties.
    • Compliance with transfer pricing rules can be complex and require the assistance of tax experts.

    Try this MCQ:

    Q. Which government agency regulates transfer pricing rules in India?

    A) Reserve Bank of India

    B) Securities and Exchange Board of India

    C) Income Tax Department

    D) Ministry of Corporate Affairs

     

    [wpdiscuz-feedback id=”cutdmjvs4c” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

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  • Big Lithium find: Risks and Rewards

    lithium

    Central idea: The discovery of 5.9 million tonnes of lithium in Jammu & Kashmir is a major boost for India’s electrification plans but mining is a high-risk, high-reward game in the ecologically sensitive Himalayas.

    India’s lithium treasure

    • Huge deposits: Authorities have found 5.9 million tonnes of lithium reserves in Reasi district of Jammu & Kashmir.
    • One of the largest mines: This may be the seventh largest deposit of the rare element, accounting for roughly 5.7% of all the reserves in the world.
    • High grade quality: They are also said to be of a higher grade—550 parts per million (ppm) against the average 220 ppm—making it highly lucrative, given how lithium prices have soared in the last few years.

    Game-changing prospects for India

    • White gold: Due to its ability to pack energy, it has utility across a range of sectors and has gained the moniker ‘white gold’.
    • Soaring prices: According to the International Energy Agency, lithium prices went up more than seven-fold between the start of 2021 and May 2022.
    • Battery economy: It is now primarily used to build the batteries that power modern appliances.
    • EV push: They also power electric vehicles, a segment that will corner most of the global lithium production in future.
    • Import cut: Currently, India does not have its own lithium resources and like crude oil, it is dependent on imports. In fiscal 2022, India imported lithium and lithium ion worth almost ₹14,000 crore.

    Will batteries be made of lithium from India now?

    • There is still some way to go before miners can extract lithium for industrial use.
    • The discovery is ‘inferred’ or preliminary, the lowest of the three levels of estimations of a mineral deposit and the second of the four stages of exploration, as per the UN Framework Classification of mineral resources.
    • There is much analysis to be done before its true value is confirmed.

    Pitfalls of lithium mining

    • Pollution in the valley: Open-pit-mining, refining, and waste disposal from these processes substantially degrades the environment, including depletes and contaminates waterways and groundwater, diminishes biodiversity, and releases considerable air pollution.
    • Water intensity: Extracting lithium from its ore is highly water-intensive, taking about 2.2 million litres of water for one tonne of lithium.
    • Seismicity threats: The Himalayas are a highly fragile and eco-sensitive region and as the recent Joshimath subsidence shows, it is vulnerable to long-term adverse consequences of unplanned development works.
    • Displacement issues: Mining in the region could displace local communities and have significant social impacts. The region is home to a number of indigenous communities who could be negatively impacted by mining in the region.
    • Undue activism over Kashmir: Mining in the region can attract opposition from environmentalists and so-called separatists disguised as national leaders.

    Geostrategic considerations

    • Sensitive location: The new lithium discovery in J&K has significant geostrategic implications due to the geopolitical sensitivity of its location.
    • Neighborhood hostility: The Union territory of J&K has a history of cross-border tensions, domestic insurgency, and terrorism.
    • Resentment of local population: Lack of meaningful engagement with the local populace in the Li extraction project could introduce new frontiers of socio-environmental conflict.

    China factor

    • China currently dominates the global lithium-ion battery manufacturing industry.
    • Dependence on China for Li and other crucial metals and their derivatives is a source of energy security risks.
    • Major economies such as the E.U., the U.S., Canada, and India are seeking alternative supplies to challenge China’s geopolitical dominance.

    Indian initiatives in this regard

    • Undeterred trade with China: India’s security considerations are more immediate due to the growing geopolitical rivalry with China and longstanding territorial disputes.
    • Rare Earths Mission: The Indian government and industry are pushing for a ‘Rare Earths Mission’ to reduce dependence on China and exploit the country’s critical mineral reserves.

    Conclusion

    • In effect, the proliferation of EVs could mean India becoming dependent on China, just like it is reliant on the Middle East for crude oil today.
    • J&K’s reserves, however, provide a major opening for India to be self-reliant.

     

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  • ‘BIMARU’ Tag: What does this term mean?

    Central idea: While addressing a summit in UP, PM recalled the tag of ‘BIMARU’, once used to describe the state.

    What are BIMARU states?

    • The term “BIMARU” is an acronym formed from the first letters of five states – Bihar, MP, Rajasthan, and UP – that were believed to be economically and socially backward in the 1980s and 1990s.
    • The term was popularized by economist Ashish Bose in the 1980s to describe the poor economic and social indicators of these states.
    • He coined this term in a paper presented to then-PM Rajiv Gandhi.
    • These states were characterized by low literacy rates, poor infrastructure, high poverty rates, and low levels of industrialization.
    • The term “BIMARU” itself is an amalgamation of the Hindi words “bimar” (sick) and “ru” (a suffix meaning “land of”).

    Behind the slang name ‘BIMAR’

    The BIMARU states of Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh are characterized by several economic and social features that distinguish them from other states in India. Some of these features include:

    • Low per capita income: These have traditionally had low per capita income levels compared to other states in India, with Bihar having the lowest per capita income among Indian states.
    • High poverty rates: They have a high percentage of people living in poverty, with Bihar and Uttar Pradesh having some of the highest poverty rates in the country.
    • Low literacy rates: They have lower literacy rates than the national average, with Bihar having the lowest literacy rate among Indian states.
    • Poor healthcare indicators: They have traditionally had poor healthcare indicators, with high infant and maternal mortality rates.
    • Agriculture-based economy: These states are primarily agricultural states, with a significant percentage of the population engaged in agriculture and related activities.
    • Significant population: They are among the most populous states in India, with Uttar Pradesh being the most populous state in the country.

    Overall, the BIMARU states have traditionally lagged behind other states in India in terms of economic and social development, although in recent years, there has been progress in improving development indicators.

    Persisting challenges

    These states still face significant challenges, including high levels of poverty and unemployment.

    • Still a national laggard: There is still a significant development gap between these states and the more developed regions of the country. For example, in 2019-20, per capita income in Bihar was only about a third of the national average, and in UP, only about half of the population has access to basic sanitation facilities.
    • High Population: The share of BIMARU states in the absolute increase in India’s population during 2001-26 will be of the order of 50.4 per cent while the share of the south will be only 12.6 per cent.

    How are these states faring now?

    • In recent years, some of these states, such as Rajasthan and Madhya Pradesh, have shown significant improvement.
    • In terms of economic growth, several of these states have experienced high growth rates in recent years, with Madhya Pradesh and Bihar recording growth rates of over 10% in 2019-20.
    • Uttar Pradesh and Rajasthan have also recorded growth rates of over 7% in recent years.
    • There has also been progress in improving social indicators such as literacy rates and healthcare infrastructure.
    • For example, Bihar has seen a significant increase in literacy rates, with the state’s literacy rate increasing from 47% in 2001 to 63% in 2011.

    Alternatives to ‘BIMARU’ terms

    • PM has urged to refrain the use of such terms as they only serves to reinforce negative stereotypes and inhibit progress towards more equitable development across the country.
    • He coined the term such as ‘Aspirational Districts/Blocks’ as alternative to such negative word.

    Way forward

    This involves several key strategies to address the economic and social challenges that these states face. Some of these strategies include:

    • Enhancing economic growth: The BIMARU states need to focus on enhancing economic growth through policies that encourage investment, job creation, and entrepreneurship. This can include measures such as improving the ease of doing business, providing infrastructure, and investing in sectors with high growth potential.
    • Improving social indicators: They need to focus on improving social indicators such as literacy rates, healthcare, and sanitation. This can involve investing in education and healthcare infrastructure, and implementing programs that target poverty reduction and social inclusion.
    • Enhancing agricultural productivity: Given that agriculture is a major contributor to the economy of BIMARU states, efforts should be made to enhance agricultural productivity and efficiency. This can include investments in irrigation and modern agricultural techniques, and support for small and marginal farmers.
    • Encouraging inclusive development: In order to reduce disparities and ensure inclusive development, policies and programs should be targeted towards the most vulnerable and marginalized sections of society. This can include measures to promote gender equality, social inclusion, and address issues such as caste-based discrimination.
    • Leveraging technology: The BIMARU states can leverage technology to enhance economic and social development. This can involve the use of digital technologies to improve access to education and healthcare and promote entrepreneurship and innovation.

    Conclusion

    • Overall, while the BIMARU states have made progress in recent years, there is still a long way to go in terms of achieving more equitable development across the country.

     

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  • MIIRA: India readies plan to popularise millets on world stage

    On the premises of G20, India is planning to propose the launch of a global initiative ‘MIIRA’ to encourage the consumption and production of millets.

    What are Millets?

    millet

    • Millets are a group of small-seeded grasses that are commonly cultivated and consumed as staple foods in many parts of the world, including Africa and Asia.
    • Millets are highly nutritious, gluten-free, and have a low glycemic index, making them an ideal food for people with various dietary requirements and health conditions.
    • They are cereals such as sorghum (jowar), pearl millet (bajra), foxtail millet (kangni/ Italian millet), little millet (kutki), kodo millet, finger millet (ragi/ mandua), proso millet (cheena/ common millet), barnyard millet (sawa/ sanwa/ jhangora), and brown top millet (korale).

    What is MIIRA?

    • “MIIRA” or Millet International Initiative for Research and Awareness will be aimed at coordinating millet research programmes at the international level.
    • For MIIRA to take off, India will contribute the “seed money” while each G20 member will later have to contribute to its budget in the form of a membership fee.
    • The secretariat will be in Delhi, the sources said, adding that this will, with India being a major producer of millets, ensure a flow of investment from the country’s industry and research bodies.
    • It is in line with the UN declaring 2023 as the International Year of Millets and the Centre’s plan to make India a global hub for millets.
    • It is launched keeping in mind the nutritional value and the climate-resilient nature of millets.

    Key objectives

    • MIIRA will aim to connect millet research organisations across the world while also supporting research on millet crops.
    • Besides setting up a web platform to connect researchers and holding international research conferences, the plan is also to promote millet consumption by raising awareness.

    Ecological significance of millets

    • Drought resistance: Millets are drought-resistant crops, which means that they can grow in areas with low rainfall and are less susceptible to the effects of drought. This makes them an ideal crop for farmers in regions that are prone to drought and other climate-related risks.
    • Soil health: Millets have shallow roots and can grow in poor soil, which means that they can be cultivated in marginal lands that are unsuitable for other crops. Millets also improve soil health by enhancing soil organic matter, reducing soil erosion, and improving soil structure and fertility.
    • Low carbon footprint: Millets have a low carbon footprint compared to other crops because they require less water, fertilizer, and pesticides. They are also less energy-intensive to produce and transport.
    • Resilience to climate change: Millets are known for their resilience to climate change and extreme weather events, such as floods and droughts. By promoting the cultivation and consumption of millets, countries can build resilience to the impacts of climate change and ensure food security in the face of these challenges.
    • Biodiversity conservation: Millets are often grown in mixed cropping systems, which promote biodiversity and can help conserve natural resources. The cultivation of millets also supports the conservation of traditional knowledge and local agricultural practices, which can be important for the resilience of rural communities in the face of climate change.

    Recent initiatives to promote Millets

    • Finance Minister described various types of millets as ‘Shree Anna’ in her budget speech.
    • To make India a global hub for Shree Anna, the Indian Institute of Millet Research, Hyderabad will be supported as the Centre of Excellence.
    • In 2018, the Agriculture Ministry declared some millets as ‘Nutri Cereals’ for their “high nutritive value”.

    How popular are millets globally?

    • Now grown in more than 130 countries, millets are the traditional food for more than half a billion people in Asia and Africa.
    • Gobally, jowar is the most widely grown millet crop; its major producers are the US, China, Australia, India, Argentina, Nigeria, and Sudan.
    • Bajra, another major millet crop, is mainly grown in some African countries and India, where millets are mainly a kharif crop.

     

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  • Role of regulators in the Stock Market

    regulator

    Context

    • On 25 January, US-based Hindenburg Research put out a tweet, talking about a negative report on the Adani Group that it had published. The report made many allegations against the group which triggered a fall in the price of their listed stocks.

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    Just think of this situation

    • A research report is released by a global firm that is also a short seller (that is, one who sells shares that it does not own, but buys them back at a lower price once the price falls).
    • The report outlines areas of concern in a company that is listed in another jurisdiction. The issues raised could relate to the firm’s accounting or market practices.
    • The report is released, quite curiously, before the company is going in for an equity issuance.

    What happens after the news?

    • Panic sale: As equity markets run on sentiments, such news leads to a panic sale and the share price of the company comes down sharply.
    • Widespread uncertainty: The market sees investor wealth eroding sharply, leading to widespread uncertainty, as this is how contagions progress.
    • Outrage: Denials are issued by the concerned company while the short seller stands firm on its views. However, shareholders have seen an erosion in their wealth and there is outrage everywhere.

    In such a situation, what can the regulator do?

    • Policies and system in place to put verified facts in public domain: It is for regulators in other jurisdictions to have policies/systems in place for verified facts to be put in the public domain.
    • In the current context: The Securities and Exchange Commission of the US would matter and if the broker complied with its rules, then there is nothing to stop their views from being aired in a globalised world. This is why it is said that if any company opts for listing in overseas markets, there is more reason to ensure that its accounts are in place and there are no deviations from best practices.

    What can regulators do to protect investors?

    • It is necessary to understand that when share prices tumble: Only when someone sells the shares that have declined in value will a loss be actually incurred. This is the first point that ordinary investors need to keep in mind. While the media will talk of the loss of value and wealth, it is notional for those shareholders who don’t sell. And stock prices will return to their equilibrium once the storm passes.
    • There is a need to have a wide market intelligence network: A special division that continuously analyses the messaging about Indian companies across the world. Given that such reports do not come up without signals being sent along the way, monitoring of views on companies listed overseas would be essential.
    • While citing financial accounting irregularities need to be looked into: the accounting and auditing firms need to take on more responsibility to ensure that the Generally Accepted Accounting Practices (GAAP) are followed for overseas-listed firms. They will have to be made partners in any such crisis in terms of taking ownership and clarifying the same.
    • Detecting price manipulation: Price manipulation, for instance, is one practice that has always been a concern for regulators. And it takes a lot of experience to detect it. Thus exchanges need to ensure that their market watch and surveillance practices are robust. This is where trading patterns can show if there has been market manipulation.
    • Restoring assurance and sanity in the market: It is necessary that investors have some assurance from the regulator, which may be needed to restore sanity in the markets. However, this should be an immediate and time-bound investigation which looks at the allegations or the shortcomings of the report.
    • Investing derivative segments too: As a corollary, the regulator needs to investigate the derivative segment too and probably talk to other regulators to analyse how the short positions have been created and whether they were in order. This will mean being in touch with other regulators, especially the SEC which regulates the jurisdiction for most overseas listings.
    • Audit firms can be employed to flag off the concerns: The regulator should insist that all overseas listed companies have regular investor calls with stakeholders where meetings are recorded and transmitted back home for special teams to examine so that there is a sense of how potential investors feel about the companies.

    Conclusion

    • In the cases of overseas reports, investors must have some assurance from the regulator, which can restore sanity in the markets. But investors also need to be proactive when investing. Those who are more active investors would perhaps need to be aware of developments in the companies that they have invested in.

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  • India’s Agricultural Farm Exports data expected to reach a new high

    export

    India’s agricultural exports are poised to scale a new peak in the financial year ending March 31, 2023. But so are imports, bringing down the overall farm trade surplus.

    Agriculture trade in a nutshell

    • India’s agricultural exports are expected to reach a new high in FY 2022-23.
    • The value of farm exports from April-December 2022 was 7.9% higher than the same period of the previous year, totalling $39 billion.
    • Imports of agricultural produce have also grown 15.4% from $24.1 billion in April-December 2021 to $27.8 billion in April-December 2022, resulting in a shrinking of the overall farm trade surplus.
    • As a result, there has been a further shrinking of the surplus on the farm trade account.

    Note: This newscard provides useful insights regarding agricultural exports-import balance. Aspirants are not advised to memorize the numbers but imbibe the trend.

    Drivers of Exports

    The two big contributors to India’s agri-export growth have been rice and sugar.

    (1) Rice

    • India in 2021-22 shipped out an all-time-high 21.21 million tonnes (mt) of rice valued at $9.66 billion.
    • That included 17.26 mt of non-basmati (worth $6.12 billion) and 3.95 mt ($3.54 billion) of basmati rice.
    • In the current fiscal, the growth has been primarily led by basmati rice.
    • Its exports have gone up by 40.3% in value (from $2.38 billion in April-December 2021 to $3.34 billion in April-December 2022).
    • The corresponding increases have been less for non-basmati exports: 3.3% in value ($4.51 billion to $4.66 billion) and 4.6% in quantity (12.60 mt to 13.17 mt).

    (2) Sugars

    • Sugar exports hit a record value of $4.60 billion in 2021-22, as against $2.79 billion, $1.97 billion, $1.36 billion, and $810.90 million in the preceding four fiscals.
    • This fiscal has seen a further surge of 43.6%, from $2.78 billion in April-December 2021 to $3.99 billion in April-December 2022.
    • India exports of rice and sugar are well on course to touch, if not top, $11 billion and $6 billion respectively in 2022-23.

    Key imports

    More than a general export slowdown, it’s the growth in imports that should be cause for concern.  This has come mainly from three commodities-

    (1) Edible oils

    • The first is vegetable oils, whose imports shot up from $11.09 bn in 2020-21 to $18.99 bn in 2021-22.
    • Imports now account for over 60% of the country’s estimated 22.5-23 mt annual oil consumption.

    (2) Cotton

    • India has turned from a net exporter to a net importer of cotton.
    • India’s cotton exports reached an all-time-high of $4.33 bn back in 2011-12.
    • It remained at reasonably high levels until 2013-14 ($3.64 bn), before plunging to $1.62 bn by 2016-17 and $1.06 bn in 2019-20.
    • There was a recovery thereafter to $1.90 bn in 2020-21 and $2.82 bn in 2021-22.
    • But during this fiscal, imports have also soared from $414.59 million to $1.32 billion for the same period.

    Policy implications

    export

    • It can be seen how closely India’s farm performance is linked to international commodity prices.
    • The UN Food and Agriculture Organization’s (FAO) Food Price Index — having a base value of 100 for the 2014-16 period — averaged 122.5 points in 2012-13 and 119.1 points in 2013-14.
    • Those were the years when India’s agri-exports were at $42-43 billion. As the index crashed to 90-95 points in 2015-16 and 2016-17, so did exports to $33-34 billion.
    • The exports recovery in 2020-21 and 2021-22 happened along with — rather, on the back of — rising global prices and the FAO index averaging 102.5 points and 133 points in the two years.

    Inferences from this trend

    Ans. India’s farm exports will slow down in the months ahead.

    • Moreover, this could be accompanied by increased imports, as was the case from 2014-15 to 2017-18.
    • In the event, the focus of policymakers too, may have to shift from being pro-consumer (to the extent of banning/ restricting exports) to pro-producer (providing tariff protection against unbridled imports).

    Way forward

    • The government needs to do something about cotton and edible oils.
    • India’s cotton production has declined from the high of 398 lakh bales in 2013-14 to a 12-year low of 307.05 lakh bales in 2021-22.
    • Clearly, the effects of not allowing new genetic modification (GM) technologies after the first-generation Bt cotton are showing, and impacting exports as well.
    • A proactive approach is required in edible oils as well, where planting of GM hybrid mustard has been permitted with great reluctance — and which is now a matter before the Supreme Court.

     

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  • Eastern Rajasthan Canal Project (ERCP)

    canal

    Rajasthan has brought up the issue of the Eastern Rajasthan Canal Project or ERCP before the Prime Minister.

    Why in news?

    • The Chief Minister has said that it is not possible for the state government to bear the estimated project cost of around Rs 40,000 crore by itself.
    • The state wants the Centre to declare this as a national project so that the cost-sharing ratio between the Centre and the state becomes 90:10.

    Eastern Rajasthan Canal Project (ERCP)

    • ERCP was incepted with the aim of providing water to the drought-prone areas of the state.
    • It aims to harvest surplus water available during the rainy season in rivers in southern Rajasthan, such as the Chambal and its tributaries Kunnu, Parvati, and Kalisindh.
    • The project consists of the construction of two canals:
    1. Chambal Canal (which originates from the Chambal River)
    2. East Rajasthan Canal (which originates from the Mahi River)
    • The ERCP is expected to irrigate about 3.4 million hectares of agricultural land in Rajasthan and Madhya Pradesh states.
    • It is estimated to cost about Rs 51,000 crore and was expected to be completed by 2021.
    • The project was expected to benefit about 2.6 million farmers in Rajasthan and an additional 2.4 million in Madhya Pradesh.

    When was the ERCP conceived?

    • In the state Budget for 2017-18, then Rajasthan government had said that the ERCP will help fulfil the long-term irrigation and drinking water needs of 13 districts: Jhalawar, Baran, Kota, Bundi, Sawai Madhopur, Ajmer, Tonk, Jaipur, Karauli, Alwar, Bharatpur, Dausa, and Dholpur.
    • The project was approved by the Central Water Commission in 2017.
    • The state government had sent a proposal to the central government to declare ERCP as a project having national importance.

     

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    https://indianexpress.com/article/explained/ercp-rajasthan-rivers-project-ashok-gehlot-narendra-modi-8440734/

  • Discovery of Lithium Deposits in J&K

    lithium

    The Geological Survey of India found “inferred resources” of 5.9 million tonnes of lithium in the Salal-Haimana area of Reasi district in Jammu and Kashmir.

    What is Lithium?

    • Lithium is a chemical element with the symbol Li and atomic number 3.
    • It is a soft, silvery-white alkali metal and is the lightest metal on the periodic table.
    • It is used in a variety of applications, including batteries, lubricants, pharmaceuticals, and nuclear weapons.

    What are Inferred Resources?

    • According to the mines and minerals act, the exploration for any mineral deposit involves four stages: reconnaissance survey (G4), preliminary exploration (G3), general exploration (G2) and detailed exploration (G1).
    • Resources identified after G4 are called ‘reconnaissance mineral resource”, those identified after G3 are “inferred mineral resource”, G2 leads to “indicated mineral resource” and G4 precedes “measured mineral resource.”

    Applications of Lithium

    • Lithium-ion batteries: Lithium-ion batteries are widely used in consumer electronics such as laptops, cellphones, and portable music players due to their high energy density and low self-discharge rate.
    • Pharmaceuticals: Lithium is used in the treatment of bipolar disorder and other mental health disorders. It can be used to treat symptoms such as depression, anxiety, and aggression.
    • Heat transfer fluids: Lithium is used as a heat transfer fluid in nuclear power plants, as it can absorb and store large amounts of heat.
    • Air conditioning: Lithium-based compounds are used in air conditioning systems to absorb and store heat, which helps to cool air.
    • Alloy production: Lithium is used to produce lightweight alloys for aircraft and spacecraft, as well as components for other vehicles.
    • Grease lubricants: Lithium-based grease lubricants are used in automotive and industrial applications due to their high temperature and pressure tolerance.

    Significance of this discovery

    • Clean energy goals: This has raised hopes of India possibly developing its own source of a metal key to its clean energy goals.
    • Import cuts: It would reduce the need for imports. The government was taking several measures to secure minerals, including lithium, from Australia and Argentina.
    • Enhance battery production: The find is a major boost to the manufacture of rechargeable batteries for smartphones, laptops and electric cars.

    Back2Basics: Mines and Minerals (Development and Regulation) Act, 1957

    • It is an Act of the Parliament enacted to regulate the mining sector in India.
    • It regulates all activities related to the prospecting for, extraction and disposal of minerals in India.
    • The Act was amended in 2015 to incorporate the changes brought about by the Mines and Minerals (Development and Regulation) Amendment Act, 2015.
    • The amendment Act has been enacted to ensure that the mining sector is developed in a sustainable and efficient manner, taking into account the interests of stakeholders including the local communities.
    • The Act also provides for the sharing of revenues between the Union and the States.

    Types of Minerals Covered

    • Metallic Minerals: Iron ore, manganese ore, chrome ore, bauxite, copper ore, gold ore, lead ore, zinc ore, etc.
    • Non-Metallic Minerals: Mica, limestone, dolomite, gypsum, phosphorite, graphite, quartz, sandstone, etc.
    • Atomic Minerals: Uranium, thorium, and other radioactive minerals.
    • Fossil Fuels: Oil, natural gas, coal, etc.
    • Minor Minerals: Building stones, gravel, ordinary clay, ordinary sand, etc.

     

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  • In news: Delhi-Mumbai Expressway

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    Photos of the soon-to-be-inaugurated Delhi-Mumbai Expressway have gone viral, receiving widespread appreciation online.

    Delhi-Mumbai Expressway

    • The Delhi-Mumbai Expressway is a proposed 1380 km expressway that will link the capital city of Delhi to Mumbai, India.
    • The expressway is being planned as a six-lane expressway and will pass through the states of Uttar Pradesh, Rajasthan, Madhya Pradesh and Maharashtra.
    • Started in 2018, the project is set to be completed by the end of 2023.
    • The expressway is expected to reduce the travel time between Delhi and Mumbai by up to 12 hours.
    • The expressway will also have several rest stops and will be equipped with advanced technology such as electronic toll collection, smart traffic management and surveillance systems.
    • The expressway will be built in a Public-Private Partnership (PPP) model.

    Some basic details

    • The expressway is being constructed with an initial budget of INR 98,000 crore.
    • According to claims by the Ministry of Road Transport and Highways, it will reduce the distance between Delhi and Mumbai by 180 km (from 1424 km to 1242 km).
    • Depending on the volume of traffic the expressway sees, there are plans in place to expand it to a 12-lane expressway in the future.
    • The reduction in distance and travel time is set to result in annual fuel savings of more than 320 million litres and reduce CO2 emissions by 850 million kg.

    Some unique features

    • Importantly, the Delhi-Mumbai Expressway is set to introduce certain features seldom seen in road construction in India.
    • According to claims from the Ministry of Road Transport and Highways, the expressway will boast of a state-of-art traffic management system.
    • There will also be a dedicated three metre wide corridor for laying utility lines including fibre optic cables, pipelines as well as solar power generation.
    • The expressway will also have provisions for rain water harvesting at intervals of 500 m, with over 2000+ water recharge points.

    Provisions for wildlife conservation

    • A crucial feature of the project will be its provisions for “wildlife conservation”.
    • The expressway is the first in Asia and only the second in the world to feature animal overpasses and underpasses to facilitate unrestricted movement of wildlife.
    • Furthermore, the expressway has been aligned in a way to minimize the destruction of protected forests.
    • Two iconic 8-lane tunnels will also be built, one through Mukundra sanctuary without disturbing the endangered fauna in the region and the second through the Matheran eco-sensitive zone.
    • A 3 ft tall boundary wall and sound barriers will also be constructed in sections prone to wildlife.

     

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  • Pulses: The sustainable crops

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    Context

    • The United Nations General Assembly endorsed the request made by the Government of Burkina Faso regarding the annual observance of World Pulses Day on 10 February at its 73rd session in December 2018, building on the success of the 2016 International Year of Pulses, with Food and Agriculture Organisation (FAO) playing a leading role in the campaign.

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    Theme for World pulses day 2023

    • The 2023 World Pulses Day’s theme is Pulses for a Sustainable Future, which underlines the significance of pulses in fostering equity and generating chances for livelihood, both of which are essential elements of sustainable agrifood systems.

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    In short: All you need to know about Pulses

    • Major pulses that are grown in India: Tur, urad, moong, masur, peas and gram.
    • Chief Characteristics:
    • Pulses are the major sources of protein in a vegetarian diet.
    • Being leguminous crops, all the above-mentioned pulses (except tur) help in restoring soil fertility by fixing nitrogen from the air.
    • These crops are mostly grown in rotation with other crops.
    • Pulses need less moisture and survive even in dry conditions.
    • Important Producing Areas: The major pulse producing areas are Madhya Pradesh, Uttar Pradesh, Rajasthan, Maharashtra and Karnataka. It is grown on about 11% of the total sown area in India.
    • India is largest producer and consumer: India is the largest producer as well as consumer of pulses in the world. About 25% of the pulses of the world are produced here.

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    In Depth: Why pulses are important?

    • Pulses withstand drought: Pulses have a lower water footprint than other food crops and are better able to withstand drought and climate-related calamities making them a crucial tool for adjusting to and reducing climate change.
    • Help farmers in water scarce region: They also help farmers in water-scarce regions have a better quality of lives.
    • Can help to increase productivity and livelihood: In a number of farming systems, including agroforestry, intercropping, and integrated farming systems, pulses can help to increase productivity and improve the resilience of agricultural livelihoods.
    • Pulses ensures wholesome food and sustainable use of natural resources: The global pulses industry which deals with the production and trade of pulses also demonstrates to be a beneficial force in ensuring the stability of regional and global supply chains, enabling consumers to access wholesome foods, and promoting the sustainable use of natural resources.
    • Most Valuable Player for Health: Pulse grains have been acknowledged as being a “Most Valuable Player” in preventing obesity, lowering chronic diseases such as diabetes and heart disease, and fostering a varied microbiome in children who are at risk of stunting during the first 1,000 days of their life.
    • Two to three times as much protein as cereals: Pulses are a great choice for populations with diets low in protein because they contain two to three times as much protein as cereals.
    • Pulses provide a number of other assets to the climate change battle: They lessen the requirement for fertiliser throughout the entire crop cycle and reduce greenhouse gas emissions by fixing atmospheric nitrogen.
    • Help to achieve SDG’s: A significant advantage in a changing climate is that many pulse crops are evolved to grow in arid circumstances and can withstand drought stress better than most other crops. Thus, achieving Sustainable Development Goals 2, 3, and 13 which call for improved human health, sustainable agriculture, food security, and climate action.

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    Pulse consumption in India

    • Imports are necessary because of insufficient production: India is currently the world’s largest producer and consumer of pulses, but because production is insufficient to meet demand, imports are necessary.
    • India’s demand for pulses has steadily increased: In keeping with the government’s measures to expand pulse production to meet domestic demand, the volume of imports has consistently decreased since 2014-15.
    • National Food Security Mission-Pulses programme: To increase the production of pulses, the Government of India is implementing National Food Security Mission-Pulses programme across 644 districts of 28 States and Union Territories (UTs) of Jammu & Kashmir and Ladakh.
    • In Indian diets, pulses are a crucial source of protein: Children, adolescent girls, and pregnant and lactating women receive half of the recommended dietary requirement of protein through the Government of India’s food security programmes.

    Way ahead

    • Pulses to combat malnutrition: Pulses can be included to cereal-based meals to help combat malnutrition. There is evidence to support the fact that people who eat pulses more frequently are more nutrient-secure.
    • For example: During the pandemic, 5 kg of rice/wheat and 1 kg of selected pulses were provided to the poor under the Pradhan Mantri Garib Kalyan Yojana.
    • PDS can be utilised for better accessibility and affordability: As a matter of policy, the PDS should offer pulses at discounted prices to increase their accessibility and affordability to vulnerable population.
    • For instance: Some states, including Andhra Pradesh, Telangana, Haryana, and Himachal Pradesh, have been successful in distributing pulses under the Public Distribution System (PDS).

    Conclusion

    • India is moving closer to Aatmnirbharta on pulses with consistent efforts by the government. It is vital to raise awareness about the benefits of eating pulses that are high in macronutrients for both sustainability and dietary needs.

    Mains question

    Q. India is expanding its pulse production to meet domestic demand. In this light discuss what makes pulses a significant crop?

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