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Subject: Economics

India leaps in to ICAO Aviation Safety Rankings
In the rankings by the International Civil Aviation Organisation (ICAO), India is now at the 48th position, a “quantum leap” from the 102nd rank it had in 2018.

ICAO Assessment
- Under the ICAO standards, the Effective Implementation (EI) of six areas were assessed. They are LEG, ORG, PEL, OPS, AIR and AGA.
1. LEG is Primary Aviation Legislation and Specific Operating Regulations;
2. ORG is Civil Aviation Organisation;
3. PEL is Personnel Licensing and Training;
4. OPS is Aircraft Operations;
5. AIR is Airworthiness of Aircraft; and
6. AGA is Aerodrome and Ground Aid.
How has India fared in ICAO ranking?
- With a score of 85.49 per cent each, India and Georgia are at the 48th position.
- Neighbouring Pakistan is at the 100th spot with a score of 70.39 per cent.
Global scenario
- The rankings are topped by Singapore with a score of 99.69 per cent.
- It is followed by the UAE at the second position with a score of 98.8 per cent and the Republic of Korea is at the third place (98.24 per cent).
- Others in the top ten are France (4th; 96.42 per cent), Iceland (5th; 95.73 per cent), Australia (6th; 95.04 per cent), Canada (7th; 94.95 per cent), Brazil (8th; 94.72 per cent), Ireland (9th; 94.6 per cent) and Chile (10th; 93.9 per cent).
What is ICAO?
- The ICAO is a specialized agency of the UN that coordinates the principles and techniques of international air navigation.
- It fosters the planning and development of international air transport to ensure safe and orderly growth.
- ICAO headquarters are located in the Quartier International of Montreal, Quebec, Canada.
Functions of ICAO
- Standardization: The ICAO Council adopts standards and recommended practices concerning air navigation, its infrastructure, flight inspection, prevention of unlawful interference, and facilitation of border-crossing procedures etc.
- Investigation standards: ICAO defines the protocols for air accident investigation that are followed by transport safety authorities in countries signatory to the Chicago Convention on International Civil Aviation.
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December 5, 2022
India’s Central bank digital currency (CBDC) in detail
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Context
- The Reserve Bank of India (RBI) has launched the first pilot of the retail digital rupee, also known as e₹-R, on December 1, 2022. The digital token that represents legal tender will be issued in the same denominations as paper currency and coins. The RBI’s pilot on the digital rupee will test the robustness of the new system. Let’s understand it in detail.
The first pilot project of retail digital rupee
- Allowed banks: Initially, only four banks- State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities have been allowed to offer e₹-R. The scope of the pilot will be increased gradually to include more banks, users and locations.
- Transaction: People will get e₹-R from banks and will be able to make transactions via their digital wallets. The digital rupee can be stored on mobile phones or devices.
What is a Central bank digital currency (CBDC)?
- Like fiat currency in digital form: CBDC is a legal tender issued by the central bank in digital form. Like rupee notes or coins, which are in physical form. Like fiat currency, it can also be exchanged between people. Simply, put it’s just like rupee (₹) notes but in digital form (e₹). You can also exchange e₹ for physical currency notes.
- Unlike fiat currency no need to have account: However, unlike fiat currency that’s usually stored in banks and hence their liability, CBDC is a liability on the RBI’s balance sheet. That’s why you don’t necessarily need to have a bank account to own a digital rupee.
Why do we need CBDC?
- Cost efficient management: CBDC will cut the cost related to physical cash management. India spent ₹4,984.80 crore on printing money in FY22 and ₹4,012.10 crore a year before that. These expenses are borne by people, businesses, banks and the RBI. e₹ cuts all kinds of printing, storage, transportation and replacement and settlement costs. Though the RBI will invest a significant amount in building CBDC infrastructure, subsequent marginal operating costs will be very low.
- Boost to digital economy and financial inclusion: It’ll fulfil the higher cash requirement of the country. The government will be able to make money available in areas where it’s a challenge to provide physical cash. Also, it’ll boost India’s digital economy, enhance financial inclusion, and make the financial system efficient.
- People will have money in uncertain times: Since e₹ is the central bank money, in any uncertain situation like COVID-19, it’ll save people’s savings. Banks only insure deposits up to Rs 5 lakh. In case of defaults, people could lose their savings.
- Multiple saving and transaction options: e₹ will provide you with other options like e-wallets, mobile banking, and UPI to make payments.
- Much safer payment option: e₹ is a safe central bank instrument, with direct access to the RBI money for payment and settlement. It is an electronic version of cash, whose main use case is retail
Will CBDC replace UPI?
- Not expected to substitute but supplement payment option: The CBDC-based payment system is not expected to substitute other modes of existing payment options. It will supplement by providing another payment avenue to people.
- India already has a sound payment system: UPI uses your money deposited with banks but with CBDC, the money becomes the liability of RBI India already has a sound payment system, with payment products like RTGS, NEFT and UPI, etc., coupled with an exponential increase in digital transactions.
No interest on e₹? but why?
- No interest on digital money: According to the RBI, if it starts paying interest on digital money, it could lead to a massive disintermediation in the financial system, in which banks will lose deposits, and thus hurt their credit creation capacity in the economy.
- Rationale behind No interest on digital rupee: Banks may be compelled to increase deposit rates, which will increase their costs of funding and decrease net interest income. Ultimately, the cost will be passed on to borrowers.
- CBDC will be attractive payment option without interest: If there is no interest, CBDC can still be attractive as a medium of payment, even while its attractiveness as a savings instrument diminishes. Also, banks would restrain themselves from distributing CBDCs if they find it as a threat to bank deposits, which can hamper credit flows and the adoption of CBDCs.
How will CBDC be different from crypto?
- CBDC is Algorithm based unlike crypto mining: The central bank will be issuing CBDCs based on algorithm-driven processes, rather than mining through competitive reward methods. These algorithms will have energy efficiency and environmental friendliness as their core principles, unlike private crypto mining.
- Less energy consumption unlike crypto: Therefore, issuance and management of CBDCs are expected to have much lesser energy consumption vis-à-vis more energy-intensive processes normally associated with the mining and distribution of private cryptocurrencies.
- Legal consumer protection: Unlike private cryptos wherein any individual can compete to mine and create the cryptocurrency, only the central bank can issue the CBDC and can simply opt for conversion of the bank’s existing balances to CBDC balances. So, CBDCs will provide the public with the benefits of virtual currencies, while ensuring consumer protection by avoiding the damaging social and economic consequences of private virtual currencies.
Why India needs a digital rupee?
- Online transactions: India is a leader in digital payments, but cash remains dominant for small-value transactions.
- High currency in circulation: India has a fairly high currency-to-GDP ratio.
- Cost of currency management: An official digital currency would reduce the cost of currency management while enabling real-time payments without any inter-bank settlement.
Conclusion
- e₹-R is a digital token that has real value like rupee notes or coins. CBDC will make transactions and currency exchange smoother, and it’ll boost financial inclusion. The RBI’s pilot on the digital rupee will test the robustness of the new system.
Mains question

Q. What is central bank digital currency? Why do we need CBDC? It is said that digital rupee is different from crypto currency. Discuss.

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December 3, 2022
Remittances to India set to cross record $100-billion mark in 2022
India is expected to receive a record $100 billion in remittance in 2022, the top recipient this year, the World Bank has said.

What are Remittances?
- A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland.
- The World Bank defines it as “the sum of worker’s remittances, compensation of employees, and migrants’ transfers as recorded in the IMF Balance of Payments.
- Workers remittances are current transfers by migrant who are considered residents in the source.
- Remittances are a vital source of household income for low- and middle-income countries.
India’s total remittances to grow
- Remittances to India are money transfers from non-resident Indians (NRIs) employed outside the country to family, friends or relatives residing in India.
- In its Migration and Development Brief, the World Bank has said India’s remittance will grow 12 per cent from 7.5 per cent last year, resulting in $100 billion flow as compared to $89.4 billion in 2021.
- It attributed the feat to the large share of Indian migrants earning relatively high salaries in the US, UK and East Asia.
Key points from the report by World Bank
- Highly-skilled Indian migrants living in wealthy nations such as the US, UK, and Singapore were sending more money home.
- Remittances to low and middle-income countries have grown by 5% in 2022 to around $626 billion – around half the rate of growth seen in 2021.
- The amount of money sent back home by migrants around the world has grown by 5% in 2022.
- Other top recipient countries for remittances include Mexico, China, Egypt and the Philippines.
- Domestic and International shocks have affected countries like Pakistan, Bangladesh, and Sri Lanka for whom remittances earned by migrants are expected to drop this year
- Barring India and Nepal, other south Asian countries saw a decline of more than 10% in their remittances from 2021, due to the end of government incentives introduced during the pandemic
Why is remittance to India so high this year?
- Upskilling: There has been a gradual shift in destinations for Indian migrants aided by a structural shift in qualifications.
- Work from home: Indian migrants in high-income countries benefited from work-from-home and large fiscal stimulus packages.
- Easing of pandemic: As the pandemic eased, the wage hikes and “record-high employment conditions” helped migrants send money home despite high global inflation.
- Inflation control in India: The price support policies kept inflation at bay in India.
- Crude oil dynamics: Demand for labour increased with higher oil prices, which in turn increased remittances for Indian labourers.
Significance of remittances
- Stable source of funds: Remittance flows tend to remain relatively stable through the business cycle, thereby having the potential to support households in the face of economic adversity.
- Economic lifeline: In countries affected by political conflict, they are often an economic lifeline to the poor.
- Labour contribution: While migrant remittances contribute to the development of their home country, and also to the host country by filling the gap between labour demand and supply and making a positive net fiscal contribution.
- Globalization: In this way, remittances represent globalization with a human face, contributing to the spread of global interdependence at all levels – social, economic and political.
Issues with Remittances
- Fear of currency depreciation: It causes the rupee to weaken against the dollar, which in return impacts the businesses exposed to foreign exchange, and the economy overall.
- Accuracy of data: A key challenge for policymakers, researchers and investors interested in remittance flows concerns the accuracy and consistency of available data.
- Accounting inconsistencies: The varied nature of remittance transactions makes the compilation process complex, resulting in a systemic problem of under-reporting of flows and data asymmetries between host and recipient countries.
- No formal registration in India: The main source of data on remittances is the World Bank, which combines national balance of payments data compiled by the IMF with country information.
- Ignoring informal flows: A large share of remittances is believed to flow through informal channels, which are often more convenient and cheaper than formal ones.
- Hawala transactions: In addition, Hawala (an international network of money brokers) and Hundi (a form of credit instrument) systems operate in parallel to formal remittance channels.
Way forward
- Promoting labour mobility: India should aim to increase remittances to say 10% of GDP. The Philippines’ model of promoting labour mobility should be replicated in India.
- Reducing the costs involved: Both the cost of recruitment of such workers and the cost of sending remittances back to India should come down.
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December 3, 2022
Current status of India’s economic growth
Context
- India’s economic growth slowed to 6.5 percent during the July-September quarter because of a fading low-base effect. For the full year, the economy is expected to grow at 7 percent, with risks tilted to the downside. This implies that the second half of the year (October–March) will see growth slow down to 4.6 percent, again largely due to the base effect and slowing global growth.
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Background: The COVID Pandemic, geopolitical tensions and the Prospects
- This was the second consecutive quarter with no functional disruption of economic activity caused by the COVID-19 pandemic.
- Since October, Google, too, has stopped reporting mobility indicators, which had become one of the most tracked data points for analysts and policymakers since the pandemic struck.
- This suggests that COVID-19 is unlikely to come in the way of growth for most parts of the world, with China, which is following a zero-COVID policy, being the key exception.
Performance of Indian economy amidst the current global slowdown
- Spill over effect in India: In an interconnected world, Geopolitical tensions, high and broad-based inflation in many parts of the world and sharp increases in policy rates in developed countries amid a looming recession will continue to confront the global economy. These effects will spill over to India as well, despite its structural strengths.
- Slow growth of contact- intensive service sector: Growing at 14.7 per cent, contact-intensive services such as trade, hotels and transport continued to be key drivers of the growth momentum in the second quarter. This segment had borne the brunt of the pandemic because of recurrent lockdowns, and is showing a strong rebound because of pent-up demand, a trend that is likely to continue this year.
- Strong private consumption: Private consumption was quite strong in the second quarter, growing by 9.7 per cent, and now 11.2 per cent above the pre-pandemic level.
- Rising domestic demand, good for the economy: The resilience of domestic demand will shape the contours of GDP growth in coming quarters as the global growth momentum is anticipated to lose steam. Advanced economies, whose growth is expected to slow sharply next year, account for almost 45 per cent of India’s merchandise exports.
- Strong and firm Agriculture sector: Despite climate-related disturbances, agriculture surprisingly held its ground in the second quarter.
- Healthy tax revenue: So far, healthy tax revenue collections have allowed the government to finance its bloated subsidy bill and investments without much pressure on the fiscal deficit. Led by government capex, investments grew 10.4 per cent in the second quarter.
- Good corporate balance sheets: strong corporate balance sheets not only cushion them against global headwinds but also provide an opportunity to kick-start the investment cycle once uncertainty subsides.
The current status of India’s manufacturing growth
- Slowed growth: Manufacturing GDP growth slowed rather sharply due to the base effect and margin pressure on manufacturing companies. This is somewhat contradictory to the relatively strong signals from the Purchasing Managers’ Index (PMI) which, at 55.9, was in the expansion zone during the July-September quarter, while also being slower than the IIP growth of 1.4 per cent in the same quarter.
- Support from the government: Currently, manufacturing is finding some support from government spending on infrastructure, particularly in sectors such as steel and cement. The production-linked incentive scheme has incentivised private investment and fast-forwarded manufacturing investments in electronics and pharmaceuticals.
- Overall demand is low except few high value segments: The festive season-related production and the continued strong demand in the automobile sector (especially in high-value segments), was not enough to prevent an overall slide in manufacturing.
The current status of Agriculture sector
- Strong and firm Agriculture sector: Despite climate-related disturbances, agriculture surprisingly held its ground in the second quarter. Although rains were 6 per cent above normal this year, they were quite lopsided and led to a drop in rice acreage in some of the rice-growing regions on account of rainfall deficiency and some damage to crops from excess unseasonal rains in October.
- Inconsistency in rainfall may affect kharif: In fact, October rains were 47 per cent above the long-period average. Rain shortfall in some regions, excess in others, and unseasonal excess rains point towards some hit to kharif production.
- Rabi crops look in good swing: That said, the prospects for the winter crop (rabi crop), which is largely irrigated, look good owing to favourable soil moisture conditions and healthy reservoir levels. While rabi sowing was initially delayed on account of unseasonal October rains, it is now progressing well, with sown area until November 18 about 7 per cent higher than during the same period last year.
- Overall agriculture growth prospects: This trend, if sustained, should offset the hit to kharif production to some extent. Overall, we expect agriculture to grow at 3 per cent this year, lower than the decadal average of 3.8 per cent.
- Food inflation: Abnormal weather has also triggered food inflation, particularly in cereals, which will cool off only when the prospects for rabi crop become clear. While fall in inflation in October was largely due to a high base effect, core inflation continues to be sticky and food inflation risks persists.
Conclusion
- India’s growth cycle has become well-synchronized with those of advanced economies. So, a sharp slowdown in these countries will spill over to India and the maximum impact of domestic interest rate hikes on growth will play out next fiscal given that monetary policy impacts growth with a lag. The key policy challenge for India will be to manage a soft landing amid the possibility of a hard landing in advanced countries.
Mains question

Q. COVID pandemic disrupted the global economy, moreover the geopolitical tensions are adding to the existing slow growth. In this context, discuss the current status of Indian economy.

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December 2, 2022
What are Personality Rights?
The Delhi High Court recently passed an interim order to prevent the unlawful use of a megastar’s name, image and voice.

What did the HC say?
- The court, through its order, restrained persons at large from infringing the personality rights of the actor.
Why are we discussing this?
- Celebrities are protected from commercial misuse of their name and personality.
- However, there have been instances where the consumers are misled owing to false advertisements or endorsements by such personalities.
- Due to such cases, the Ministry of Consumer Affairs has made a notification in 2022 to keep a check on misleading adverts and endorsements of consumer products by imposing a penalty on the endorser.
What are Personality Rights?
- Personality rights refer to the right of a person to protect his/her personality under the right to privacy or property.
- These rights are important to celebrities as their names, photographs or even voices can easily be misused in various advertisements by different companies to boost their sales.
- Therefore, it is necessary for renowned personalities/celebrities to register their names to save their personality rights.
- A large list of unique personal attributes contribute to the making of a celebrity.
- All of these attributes need to be protected, such as name, nickname, stage name, picture, likeness, image and any identifiable personal property, such as a distinctive race car.
Correlation with publicity rights
- Personality rights are different from publicity rights.
- Publicity rights are governed by statutes like the Trade marks Act 1999 and the Copyright Act 1957.
Types of personality rights
- Personality rights consist of two types of rights-
1. Right of publicity: It is the right to keep one’s image and likeness from being commercially exploited without permission or contractual compensation, which is similar (but not identical) to the use of a trademark;
2. Right to privacy: It is the right to not have one’s personality represented publicly without permission.
- However, under common law jurisdictions, publicity rights fall into the realm of the ‘tort of passing off’.
- Passing off takes place when someone intentionally or unintentionally passes off their goods or services as those belonging to another party.
- Often, this type of misrepresentation damages the goodwill of a person or business, resulting in financial or reputational damage.
Does the use of a name on the internet affect personality rights?
- The Delhi High Court in 2011 made an observation in the case of Arun Jaitley vs Network Solutions Private Limited and Ors.
- In this case, former finance minister filed a suit seeking permanent injunction against the defendants from misuse and immediate transfer of the domain name www.arunjaitley.com.
- The Court stated that the popularity or fame of individual will be no different on the internet than in reality.
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December 2, 2022
Protests against Vizhinjam Port
Kerala’s ambitious Vizhinjam port project for a transshipment container terminal is caught in protests and violence.

Vizhinjam Port Project
- In 2015, the Adani Group signed a concession agreement with the Kerala government to build India’s first mega transshipment container terminal at Vizhinjam near Thiruvananthapuram.
- The ₹7,525 crore project — an all-weather deep-sea port with a depth of 24 meters — can service large megamax-sized container ships.
- This natural port has no littoral sedimentation, obviating the need for periodic dredging and lowers maintenance costs.
- The port, which is well-connected to the hinterland, will handle 1 million twenty-foot equivalent units in Phase-I and another 6.2 million TEUs when completed.
Significance of the project for India?
- Transshipment hub: The Vizhinjam Port holds the potential to attract a large share of container transshipment traffic that is now handled by Colombo, Singapore or Dubai.
- Important shipping lane: It located just off the International Shipping Lane and close to the East-West Shipping Axis.
- Cargo handling: A large share of India’s exports and imports that are now transshipped through these international ports can be handled at Vizhinjam.
- Reducing logistic costs: It would mean a sharp reduction in shipping costs and lead time. This will go a long way in reducing overall logistics costs and making manufacturing competitive.
- Employment generation: It will also create thousands of jobs – directly and otherwise.
Reasons for protests
- Local fishermen fear displacement and loss of livelihood. They blame higher tides and increasing coastal erosion on the project.
- Protests has some leftist leaning inherently opposing every development project.
- A Latin Catholic Church has been at the forefront of the protests.
- Many right-wing outfits have thrown their weight behind the project and want its quick completion.
- They blame foreign funding for what they call ‘anti-development’ protests.
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December 1, 2022
What is SHAKTI Policy?
Ministry of Power has launched a scheme for procurement of aggregate power of 4500 MW for 5 years under SHAKTI Policy to help states that are facing power shortages and help generation plants to increase their capacities.

SHAKTI Policy
- SHAKTI is an acronym for Scheme for Harnessing and Allocating Koyala Transparently in India.
- It was launched in 2018 to provide coal to stressed power units which lack coal supply.
- It seeks to provide coal linkages to power plants which lack fuel supply agreements (FSAs) through coal auctions.
Need for such policy
- SHAKTI is a policy designated by the government for the allocation of coal among thermal power plants in a transparent and objective manner.
- It aims to transfer the benefits of linkage coal to the end consumers.
- The scheme is supposed to be beneficial not just for the infrastructure sector, but also for the public sector banks which have huge loans unpaid at the end of the power companies.
- The companies, which did not have coal linkages before the introduction of the Shakti Scheme, would benefit when they would get domestic fuel supplies through auction at competitive rates.
- The scheme also aims to reduce the dependence on imported coal and promote domestic industries.
- With this policy, the government also aims to reduce dependence on imported coal.
Coal linkage scenario in India
- Coal linkage to the power sector is governed by provisions of the New Coal Distribution Policy (NCDP), 2007.
- Under the NCDP, a system of issuance of Letter of Assurance (LoA) was introduced.
- The requests for Linkage/LoA are forwarded to the Ministry of Power for its recommendations.
- The coal availability scenario has, now, emerged from scarcity to adequacy.
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December 1, 2022
Launching of the Digital Rupee Pilot Project
The Reserve Bank of India (RBI) has announced that the first pilot for the retail version of the digital Rupee (e₹-R) would be introduced on December 1, 2022.

Where would be the pilot project launched?
- The pilot will initially cover the four cities of Mumbai, New Delhi, Bengaluru, and Bhubaneswar, where customers and merchants will be able to use the digital rupee (e₹-R), or e-rupee.
- Four banks will be involved in the controlled launch of the digital currency in these four cities: State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank.
- The service will be subsequently extended to the cities of Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.
- Four more banks — Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank — will join the pilot.
What is Central Bank Digital Currency (CBDC)?
- CBDC / Digital Rupee is a RBI bank-issued digital currency which is backed by some kind of assets in the form of either gold, currency reserves, bonds and other assets, recognised by the central banks as a monetary asset.
- The present concept of CBDCs was directly inspired by Bitcoin, but a CBDC is different from virtual currency and cryptocurrency.
- Cryptocurrencies are not issued by a state and lack the legal tender status declared by the government.
What are the types of Digital Rupee?
- Based on the usage and the functions performed by the digital rupee and considering the different levels of accessibility, CBDC can be demarcated into two broad categories:
1. General purpose (retail) (CBDC-R): It is an electronic version of cash primarily meant for retail transactions. It will be potentially available for use by all — private sector, non-financial consumers and businesses — and can provide access to safe money for payment and settlement as it is a direct liability of the central bank.
2. Wholesale (CBDC-W): It is designed for restricted access to select financial institutions. It has the potential to transform the settlement systems for financial transactions undertaken by banks in the government securities (G-Sec) segment, inter-bank market and capital market more efficiently and securely in terms of operational costs, use of collateral and liquidity management.
What are the forms of CBDC?

The central bank says e-rupee, or CBDC, can be structured as token-based or account-based.
1. Token-based CBDC: It would be a bearer instrument like banknotes, meaning whosoever holds the tokens at a given point in time would be presumed to own them. In this, the person receiving a token will verify that his ownership of the token is genuine. It is viewed as a preferred mode for CBDC-R as it would be closer to physical cash.
2. Account-based CBDC: It would require maintenance of record of balances and transactions of all holders of the CBDC and indicate the ownership of the monetary balances. In this case, an intermediary will verify the identity of an account holder. This system can be considered for CBDC-W.
What’s the model for issuance?
- There are two models for issuance and management of CBDCs under the RBI’s consideration — direct model (single tier model) and indirect model (two-tier model).
- Direct model: Here the central bank will be responsible for managing all aspects of the digital rupee system such as issuance, account-keeping and transaction verification.
- Indirect model: It would be one where the central bank and other intermediaries (banks and any other service providers), each play their respective role. In this model, the central bank will issue CBDC to consumer’s indirectly through intermediaries and any claim by consumers will be managed by the intermediary.
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November 30, 2022
Analyzing the approval of DMH-11
Context
- Concerns regarding the recent recommendation for approval for the environmental release of genetically engineered (GE) mustard (“DMH-11 hybrid”) in India. The recommendation was made by the Genetic Engineering Appraisal Committee (GEAC).
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What is Dhara Mustard hybrid (DMH-11)?
- DMH-11 is a hybrid variant of mustard developed by researchers at The Centre for Genetic Manipulation of Crop Plants, at the University of Delhi.
- It is a hybrid variant that was developed without transgenic technology.
- DMH-11 is a result of a cross between two varieties: Varuna and Early Heera-2. Such a cross wouldn’t have happened naturally and was done after introducing genes from two soil bacterium called barnase and barstar.
- The result is DMH-11 (where 11 refers to the number of generations after which desirable traits manifest) that not only has better yield but is also fertile. DMH-11 is a transgenic crop because it uses foreign genes from a different species.
What are the concerns?
- Not sufficient consideration: The potentially harmful long-term ecological and economic consequences of releasing DMH-11 have not received sufficient consideration.
- Details of trials not made public: Details of the mandatory trials to ensure food and environmental safety which is a prerequisite before environmental release have not been made public.
- A long-term assessment is yet to be done: a detailed long-term assessment of the potential social and economic benefits of using DMH-11, vis-à-vis its potential drawbacks, remains to be made. Without minimizing the importance of the last two aspects, the present note is restricted to highlighting the first aspect.
Examining the central Feature of DMH-11
- Gene for herbicide resistance (HT): A central feature of DMH-11 is that it carries a gene for herbicide resistance (also termed herbicide tolerance or HT). This fact has not received appropriate consideration.
- Negatives outcomes: The deployment of herbicide-resistant or HT crops has been accompanied by deleterious outcomes in several places including the US, Australia, and Canada (so-called developed countries) as well as Argentina (a developing country).
- Consequences of herbicide resistant weeds: The most well-established harmful consequence has been the spread of herbicide-resistant weeds across large tracts of agricultural land, which can spell disaster for the normal crop.
Critical and technical analysis of DMH-11
- On the use of Basta herbicide: The developers of DMH-11 have stated in their food and environmental safety assessment submission of 2016 that “Although GE mustard hybrid DMH-11 contains the bar gene conferring resistance to the herbicide Basta (phosphinothricin), Basta herbicide is required to be used only by seed producer for hybrid seed production (and) farmers are not required to spray Basta in the hybrid GE DMH-11 for weed control”.
- Certain conditions placed by GEAC for environmental release of DMH-11:
- The GEAC in its recommendation made on October 18 for environmental release of DMH-11 has accepted this position and also placed certain conditions for environmental release.
1. Usage only under control: Usage of any formulation of herbicide is recommended only under controlled and specified conditions exclusively for hybrid seed production.
2. Requires necessary permission: Usage of any formulation of herbicide is not permitted for cultivation in the farmer’s field under any situation and such use would require the necessary permission as per procedures and protocols of safety assessment of insecticides/herbicides by CIB&RC (Central Insecticide Board and Registration Committee).”
- Knowing the facts GEAC ignoring the reports: In other words, GEAC assumes that farmers will use DMH-11 without adding herbicideeven though they know that it carries a gene for herbicide resistance. It ignores the known fact that there have been numerous recent reports in the Indian media of the illegal use of unapproved herbicide-resistant crops, which has been brought to the notice of the government.
- Registers usage on a crop-wise basis is not enough: GEAC has considered the possible use of herbicide with DMH-11 merely as a matter of herbicide usage and referred its approval to the CIB&RC, which registers usage of herbicides on a crop-wise basis. It is not enough for GEAC to merely refer it for chemical registration since the CIB&RC is not the competent body for recommending approval of GM crops.
- HT technology is different from conventional herbicides:
1. On multiple counts, HT technology is qualitatively different from the conventional use of herbicides.
2. They include the levels of herbicide used, which is much higher than in conventional use; its effect on the crop which is engineered to be resistant to the herbicide and thereby to tolerate much higher levels of herbicide and its agro-ecological impact including on agricultural biodiversity and insect populations.
3. The scope of issues connected to use of herbicide with a herbicide-resistant crop places it squarely within the purview of GM regulation (that is, GEAC).
Remarks: Developers Intent may not define how it is likely to be used
- Notwithstanding the statement of the developers and its implicit acceptance by GEAC, DMH-11 does meet the definition of an HT crop.
- The answers to two questions show this. Is DMH-11 herbicide tolerant? Yes. Is it a crop? Yes.
- The intent of the developer on how it is meant to be used does not determine how it is actually likely to be used, especially if that usage appears to confer obvious advantages.
- HT technology involves the use of a herbicide in far higher amounts than conventional herbicide treatments, high enough to kill all weeds in the field, leaving only the engineered crop to grow. Thereby, it replaces all other weed control measures.
Conclusion
- HT may be effective for a few years. But basic evolutionary considerations, as well as experience in other countries, shows that it imposes strong selective pressure for resistant weeds to emerge. They invariably do so in the course of time and spread rapidly. HT offers short-term benefits at the cost of long-term sustainability. Long term assessment is necessary before clearing its way.
Mains Question

Q. GM mustard is often in the news recently. Discuss the advantages and raised concerns over the usage of this new hybrid variety.

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November 29, 2022
Multi-Dimensional Poverty (MPI) Estimation
Context
- There is debate going on over Multi-dimensional Poverty (MPI) estimation and Covid impact on poverty. Various experts are arguing that poverty decline faster during NDA years than UPA years.
How MPI is estimated as per oxford poverty and human development initiative (OPHD)?
- Two set of estimates: There are two sets of poverty estimates provided by the Oxford Poverty and Human Development Initiative (OPHI) that compile these data across countries, primarily from Demographic and Health Surveys (DHS).
- Uncensored estimate: The first are uncensored estimates for individual indicators, which correspond to a simple question regarding whether a household is deprived (poor) in a given indicator for example, nutrition.
- Censored estimate: Alternatively, one can obtain an indicator-specific censored poverty estimate via a two-stage process. Censored data helps shift the focus onto those who have been (multidimensionally) identified as poor. A higher MPI suggests greater intensity of deprivation while a higher censored poverty rate is an important signal to policymakers to redirect policy focus.
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Two stage process under censored estimates?
- Multidimensionally poor: The first stage estimates the population that is multidimensionally poor.
- Poor on each indicator: The second stage estimates the population that is poor in each indicator for the multi-dimensionally (MP) poor. For example, in 2005-06, the MP poor were 55.1 per cent; uncensored nutritionally poor were 57.3 per cent; and 44.3 per cent were censored nutritionally poor.
- Poor in both categories: In other words, close to 80 per cent of the nutritionally deprived are also multidimensionally poor. For the DHS India survey years, censored estimates are used.
Advantage of using censored estimates
- No mismatch in absolute and indicator specific poor: For some individual indicators such as assets, some households may be considered as deprived (poor) even as they are relatively better off in other areas such as nutrition, sanitation, etc.
- Interlinkages between poverty indicators: Other advantage of a censored approach is that it allows the capture of interlinkages between several poverty indicators. For example, environmental enteropathy is known to have a key role in nutrition absorption in children. Therefore, investments made towards providing sanitation facilities and piped water connections will have an impact on nutritional absorption.
What latest data on MPI says?
- Annual improvement in health and education: Annual pace of improvement in the health, education and living standards indicators during 2005-15: 7.3, 10.0 and 9.6 per cent respectively. In the NDA years: 11, 8.4 and an outsized 17.2 per cent annual gain in living standards.
- Efficient redistribution of resources: An efficient redistribution combined with direct fiscal resources targeted specifically to reduce deprivation across individual indicators.
- Inclusive growth: The inclusive growth belief was that period I would show a greater improvement because the dominant component of poverty decline, growth in per capita consumption, was about 0.8 percentage point higher in period I (annual 3.8 per cent increase vs. 3 per cent in period II).
- Faster poverty decline: The pace of MPI index decline was almost twice the pace in period II relative to period I! This result is strongly indicative of considerably more inclusive (and more efficient and less corrupt) growth in period II compared to period I.
- Poor performance on some indicators: For only four indicators is the rate of uncensored poverty decline lower in period II. Assets and school attendance are lower in period II for both uncensored and censored poverty. Incidentally, school attendance improvement is expected to be lower as one approaches 100 per cent enrolment, the pace of change from 20 to 25 per cent enrolment is 25 per cent versus a pace of only 1 per cent when enrolment increases from 95 to 96 per cent.
Conclusion
- Poverty estimation debate will continue among the experts. Government should solely focus on poverty reduction policies. Present priority should be reducing the Covid induced poverty.
Mains Question

Q. What is the censored and uncensored poverty estimates? Analyse the recent data on multi-dimensional poverty index (MPI) in India?

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November 29, 2022