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Subject: Economics

  • Cabinet nods for Ken-Betwa Interlinking Project

    The Union Cabinet has approved the funding and implementation of the Ken-Betwa river interlinking project at the 2020-21 price level.

    Ken-Betwa Interlinking Project

    • The Ken-Betwa Link Project is the first project under the National Perspective Plan for the interlinking of rivers.
    • Under this project, water from the Ken River will be transferred to the Betwa River. Both these rivers are tributaries of the river Yamuna.
    • The project is being managed by India’s National Water Development Agency (NWDA), under the Ministry of Jal Shakti.
    • Implementation of the project
    1. Phase-I: Daudhan dam complex and its appurtenances like Low Level Tunnel, High Level Tunnel, Ken-Betwa link canal and Power houses
    2. Phase-II: Lower Orr dam, Bina complex project and Kotha Barrage

    Utility of the Project

    • Irrigation: The project is slated to irrigate 10.62 lakh hectares annually, provide drinking water supply to 62 lakh people and generate 103 MW of hydropower and 27 MW of solar power.
    • Water supply: The project will be of immense benefit to the water-starved Bundelkhand region, spread across Madhya Pradesh and Uttar Pradesh.
    • Agricultural boost: The project is expected to boost socio-economic prosperity in the backward Bundelkhand region on account of increased agricultural activities and employment generation.
    • Addressing Rural Distress: It would also help in arresting distress migration from this region.

    Many hurdles

    • Submergence of critical wildlife habitat: The project will partly submerge the Panna Tiger Reserve in Madhya Pradesh and affect the habitat of vultures and jackals.
    • Clearance: After years of protests, it was finally cleared by the apex wildlife regulator, the National Board for Wildlife, in 2016.
    • Water sharing disputes: Then UP and MP could not agree on how water would be shared, particularly in the non-monsoonal months.

    Back2Basics: River Interlinking in India

    History

    • The idea of interlinking of rivers in the Indian subcontinent is atleast 150 years old.
    • During the British Raj in India, Sir Arthur Cotton, a British general and irrigation engineer, first suggested linking the Ganga and the Cauvery for navigational purposes.
    • K.L. Rao’s Proposal (1972), which had 2640 km long Ganga – Cauvery link as its main component involved large scale pumping over a head of 550 m.
    • The Central Water Commission, which examined the proposal, found it to be grossly under estimated and economically prohibitive.

    Capt. Dastur Proposal (1977)

    It envisaged the construction of two canals:

    1. 4200 km Himalayan Canal at the foot of Himalayan slopes running from the Ravi in the West to the Brahmaputra and beyond in the east
    2. 9300 km Garland Canal covering the central and southern parts

    Beginning of implementation

    • The Indian Rivers Inter-link aims to link India’s rivers by a network of reservoirs and canals and so reduce persistent floods in some parts and water shortages in other parts of India.
    • The idea to link rivers got a shot in the arm with the establishment of the National Water Development Agency in 1982 by then PM Indira Gandhi.
    • The Inter-link project was split into three parts:
    1. Northern Himalayan rivers inter-link component
    2. Southern Peninsular component
    3. Intrastate rivers linking component

    Objectives of inter-linking

    • Connect the Himalayan and peninsular rivers via a network of canals so that
    • Excess water from one channel can be diverted to another which has an inadequate flow
    • Flood moderation in the Ganga-Brahmaputra system
    • Hydropower generation through excess water

    Prospects of River inter-linking

    • Engineering challenges: This is one of the most daring feats of engineering attempted in the history of mankind.
    • Ecosystem challenges: It is a reimagining of the entire aquatic ecosystem of a country as large and diverse as India.

    Advantages offered by river inter-linking

    • Flood control and mitigation: Problems related to flood control, irrigation, limiting droughts and boosting farm output—can be sorted out by linking the country’s rivers.
    • Economic boost: Potential benefits to transport infrastructure through navigation, as well as to broadening income sources in rural areas through fish farming.

    Issues with such projects

    • Migration: It will lead to massive displacement of people
    • Topography change: Since the Ganga basin topography is flat, building dams would not substantially add to river flows.
    • Inundation: The transfer of such enormous amounts of water will inundate forests and land for reservoirs.
    • Seismic hazards: The weight of billions of liters of water can have seismic implications in the Himalayan region.
    • Financial expense: River inter-linking is an expensive business from building the link canals to the monitoring and maintenance infrastructure.
    • Political will: Implementation of the project not only needs a huge financial capital but also political support both is scarce commodities as of now.
    • Consensus building for land acquisition: Another important issue is building consensus among states and Land acquisition.
    • Ecological feasibility: Once the project is implemented it would lead to large-scale displacement of people and animals.

    Criticisms of such projects

    • Bad Science: Such projects are built on bad science and an outdated understanding of water systems and water management.
    • Human determinism: Such projects go in contravention with natural process thereby generating more scope for threat than any opportunity.

     

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  • World Inequality Report, 2022

    As per the ‘World Inequality Report 2022’, India is among the most unequal countries in the world, with rising poverty and an ‘affluent elite.’

    World Inequality Report

    • This report is published by Mr. Lucas Chancel, the co-director of the World Inequality Lab of the Paris School of Economics.
    • It was coordinated by famed French economist Thomas Piketty.

    Key highlights of the report

    (1) Income divide

    • The report highlights that the top 10% and top 1% in India hold 57% and 22% of the total national income respectively while the bottom 50% share has gone down to 13%.
    • The average national income of the Indian adult population is Rs 2,04,200.
    • The bottom 50% earns 20 times more than the top 10%.

     (2) Decline in public wealth

    • The report notes that the share of public wealth across countries has been on a decline for decades now.
    • Public assets typically include public buildings housing administrations, schools, universities, hospitals, and other public services.

    (3) Inequality during Colonial India

    • Going back in time, the report shows that the income inequality in India under the British colonial rule (1858-1947) was very high, with a top 10% income share around 50%.
    • After independence, due to socialist-inspired five-year plans, this share was reduced to 35-40%.
    • Owing to poor post-Independence economic conditions, India embarked upon deregulation and loosening controls in the form of liberalization policies.

    (4) Wealth inequality

    • The average household wealth in India is around Rs 9,83,010.
    • The bottom 50% of the nation can be seen to own almost nothing, with an average wealth of Rs 66,280 or 6% of the total pie.
    • The middle class is relatively poor with an average wealth of Rs 7,23,930 or 29.5% of the total.
    • The top 10% owns 65% of the total wealth, averaging Rs 63,54,070 and the top 1% owns 33%, averaging Rs 3,24,49,360.

    (5) Gender Inequality

    • Gender inequality in India is also considered on the higher end of the spectrum.
    • The share of female labor income share in India is equal to 18% which is significantly lower than the average in Asia (21%, excluding China) & is among the lowest in the world.
    • Although, the number is slightly higher than the average share in the Middle East (15%).
    • However, a significant increase has been observed since 1990 (+8 p.p.) but it has been insufficient to lift women’s labor income share to the regional average.

    (6) Poor States, wealthy population

    • Countries across the world have become richer over the past 40 years, but their governments have become significantly poorer.
    • The report shows that the share of wealth held by public actors is close to zero or negative in rich countries, meaning that the totality of wealth is in private hands.
    • Following the pandemic, governments borrowed the equivalent of 10-20% of GDP, essentially from the private sector.

    (7) Issue over data availability

    • The report goes on to say that over the past three years, the quality of inequality data released by the government has seriously deteriorated.
    • This has made it particularly difficult to assess recent inequality changes.

    Conclusions from the report

    (1) Wealth is mostly inherited and has a snowball effect

    • People accumulate wealth across generations through inheritance.
    • It has a snowball effect, wherein successive generations will gain more, but in their concentrated section.
    • More capital incentivizes banks to lend. This is why the rich section’s wealth grows faster.

    (2) Wealth management is necessary

    • Public wealth has been declining for two reasons:
    1. First, governments have been privatizing assets and natural resources at low costs.
    2. Second, governments contract debt to the private sector, making it richer.
    • Without assets, governments have low resources to invest and to mitigate climate change impacts, particularly in the energy sector.
    • Currently, governments have more debts than assets. This calls for strategic management of the economy.

     

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  • The brush with crypto offers some lessons for regulation

    Context

    The fact that crypto exchanges successfully managed to signal legitimacy for their services and offer these tokens to a mostly-uninformed public for over a year provides lessons on how the government and sectoral regulators may need to act before the game gets out of hand.

    Regulating the technology innovation

    • Technology innovation typically remains a step ahead of regulatory frameworks, which are designed with current practices in mind.
    • Problems occur when these innovations push the envelope beyond accepted codes of social and ethical behaviour.
    • Digital lending apps: The joint parliamentary committee (JPC) on a proposed data privacy law that recently released its controversial report has pointed to dubious “digital” lending apps proliferating on the Android platform.
    • Blockchain technology, of which cryptos are a part, is an innovation that can facilitate transactions across assorted functions.

    Issues with unregulated cryptocurrencies in India

    • Some estimates show that over 15 million Indians have invested in cryptos, many of whom live in Tier-II or Tier-III towns.
    • But crypto exchanges in India have pushed the boundaries of this invention.
    • Important disclaimer not communicated properly: They have been advertising aggressively across media platforms often announcing important disclaimers at warp speed.
    • These provisos were supposed to communicate that cryptos are neither currencies nor strictly “assets”, and that these trading platforms are not truly “exchanges”, that crypto values are not determined by the usual dynamics governing other income-yielding assets, and that investing in cryptos was an exceedingly risky proposition.
    •  In the meantime, with advertising overload stimulating viewer interest, many scam crypto issuers and exchanges have sprung up in attempts to separate the gullible from their savings.

    Regulation challenges and how government is tackling it

    • The government has now stepped in, seized with the political perils of speculative investments turning sour.
    •  Unfortunately, sectoral regulators, such as the Reserve Bank of India (RBI) and Securities Exchange Board of India (Sebi), were unable to step in and act earlier because they are governed by specific Acts which do not mention cryptos as a category that needs regulation.
    • Need for enabling clauses: This episode provides a valuable lesson on how these Acts should perhaps include some enabling clauses that allow financial sector regulators to intervene whenever any intermediary tries to sell a financial service or any new innovative financial service poses the risk of disrupting financial stability.
    • Two important documents have recently been released which discuss entry norms into formal banking, both further strengthening RBI’s hands.
    • Think-tank Niti Aayog’s paper on licensing digital banks recommends an evolutionary path for digital banks that’s RBI-regulated at all stages: first a restricted licence, then a regulatory sandbox offering some relaxations, and finally a “full-stack” digital banking licence.
    • Simultaneously, RBI has accepted some of the suggestions of its internal working group and modified a few to make entry norms stricter, but has maintained silence on the entry of private sector corporate houses into banking.
    • The JPC’s concerns over unregulated digital lending have also focused attention on an RBI-appointed committee’s report on digital lending, given that multiple fintech-based online lenders have mushroomed during the pandemic.

    Conclusion

    This highlights the need for principle-based regulations, rather than rule-based regulations, to allow for flexibility and adaptability in a fast-changing technology environment.

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  • Fertilizer Subsidy to cost 62% more on input costs

    An unprecedented spike in natural gas prices and other raw materials is set to inflate the fertilizer subsidy bill by a whopping 62% or â‚č50,000 crores to â‚č1,30,000 crore this fiscal.

    Fertilizer Subsidy in India

    • Fertilizer subsidy is purchasing by the farmer at a price below MRP (Maximum Retail Price), that is, below the usual demand-and-supply-rate, or regular production and import cost.
    • Subsidy as a concept originated during the Green Revolution of the 1970s-80s.

    How does it work?

    • Fertilizer subsidy ultimately goes to the fertilizer company, even though it is the farmer that benefits.
    • Before 2018, companies were reimbursed after the material was dispatched and received by the district railhead or designated godown.
    • 2018 saw the beginning of DBT (Direct Benefit Transfer), which would transfer money directly to the retailer’s account.
    • However, the companies will be paid only after the actual sale to the farmer.
    • With the DBT system, each retailer — there is over 2.3 lakh of them across India — now has a point-of-sale (PoS) machine linked to the Department of Fertilizers’ e-Urvarak DBT portal.

    What about non-urea fertilizers?

    • Decontrolled system: The non-urea fertilizer is decontrolled or fixed by the companies.
    • The non- urea fertilizers are further divided into two parts, DAP (Diammonium Phosphate) and MOP (Muriate of Phosphate).

    Issues with such subsidies

    • Flawed subsidy policy: This is harmful not just to the farmer, but to the environment as well.
    • No permanent remedy: Indian soil has low Nitrogen use efficiency, which is the main constituent of Urea.
    • Excessive use: Consequently, excess usage contaminates groundwater.
    • Emission: The bulk of urea applied to the soil is lost as NH3 (Ammonia) and Nitrogen Oxides causing emissions.
    • Health hazards: For human beings, “blue baby syndrome” is a common side ailment caused by Nitrate contaminated water.

    Post your answers in the comment box for this PYQ:

    Q.What are the advantages of fertigation in agriculture? (CSP 2020)

    1. Controlling the alkalinity of irrigation water is possible.
    2. Efficient application of Rock Phosphate and all other phosphatic fertilizers is possible.
    3. Increased availability of nutrients to plants is possible.
    4. Reduction in the leaching of chemical nutrients is possible.

    Select the correct answer using the code given below:
    (a) 1, 2 and 3 only

    (b) 1,2 and 4 only

    (c) 1,3 and 4 only

    (d) 2, 3 and 4 only

     

    [wpdiscuz-feedback id=”o1qmt4t9o8″ question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

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  • Challenges facing cooperative sector in India

    Context

    The article delved into the past of the cooperative movement and give some suggestions to resolve the issues facing cooperatives in India.

    Background of cooperatives

    • Friedrich Raiffeisen, who along with compatriot Schulze-Delitzsch in Germany, and Luzzatti of Italy, pioneered cooperatives in Europe.
    • Cooperatives in India: The Governor of the Madras Presidency, Lord Wenlock, was the first to seriously attempt replicating European cooperatives in India.
    • Principles: Raiffeisen based them on the principles of self-help, self-governance, and self-responsibility.
    • Nicholson wrote that the ‘future of rural credit lies with those who being of the people, live among the people, and yet by their intelligence, prescience and energy, are above the people’.
    •  Plunkett, in his foreword to Eleanor Hough’s The Cooperative Movement in India (1932), commented that what India had was not a movement, but a policy.
    • It was ‘created by ‘resolutions of the Central Government’ unlike Europe.
    • Increasing government control: John Matthai wrote in 1925 that the challenge was to loosen government grip on cooperation over the years.
    • But, government control has only increased, violating a core cooperative principle of political neutrality.
    • This reflects a collective failure of the political class.

    Challenges facing cooperatives

    • After Independence, cooperative institutions became an instrument of planning and state action.
    • Not surprisingly, successful Indian cooperatives such as the Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF)/Amul, Indian Farmers Fertiliser Cooperative Limited (IFFCO) and Krishak Bharati Cooperative Limited (KRIBHCO), are outside government control.
    • Globally, seven of the top 10 cooperatives by asset size are from the financial sector.
    • The Indian financial sector is nowhere in the picture going by asset size.
    •  Cooperatives have also become avenues for regulatory arbitrage, circumventing lending and anti-money laundering regulations.
    •  The committees which examined cooperative banking suffered from the top-down quality that Plunkett and others frowned upon.
    • Recent initiatives such as an umbrella organisation for urban cooperatives and a new Ministry of Cooperation at the Centre threaten to further this approach in the absence of safeguards.

    Suggestions

    • First, the powers of the RCS need to be scaled back.
    •  In almost all States, the RCS has become an instrument of inspection and domination, one which imposes uniform by-laws, and amends them when individual societies do not fall in line.
    •  There is a need to transfer work from the RCS to cooperative federations — as in Singapore.
    • Second, the rural-urban dichotomy in the regulatory treatment of cooperatives is specious and outdated.
    • Such differences are immaterial when regulation is to be based on the cooperative nature of organisations.
    • Third, the regulation and the supervision of cooperative banks should move to a new body from the Reserve Bank of India (RBI) for urban banks and the National Bank for Agriculture and Rural Development (NABARD) for rural banks.
    • Fourth, lessons from the Netherlands, where cooperative banks owe their success to a segmented market, are pertinent.
    • In India, adopting a multi-agency approach, especially after bank nationalisation, has affected the efficiency of both commercial and cooperative banks.
    • Commercial bank-cooperative sector linkages at various levels could alternatively provide better synergies.

    Conclusion

    The cooperative sector in India faces challenges on various fronts. There is a need for implementing the changes suggested above to play an important role expected from it in the economy.

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  • How is Gold Hallmarking being implemented?

    The Government has made it mandatory for the introduction of a Hallmark Unique Identification (HUID) number in every piece of jewellery.

    What is HUID?

    • HUID is a six-digit alphanumeric code, or one that consists of numbers and letters. It is given to every piece of jewellery at the time of hallmarking and is unique for each piece.
    • It is being implemented by the Bureau of Indian Standards (BIS) in a phased manner.
    • Hallmarking & HUID are mandatory for 14-, 18- and 22-carat gold jewellery and artefacts.
    • Before buying any piece of gold jewellery, the buyer should check all these three symbols.

    Implementation of HUID

    • Symbols: The hallmark consists of three symbols which give some information about the jewellery piece. The first symbol is the BIS logo; the second indicates purity and fineness; and the third symbol is the HUID.
    • A&H centre: Jewellery is stamped with the unique number manually at the Assaying & Hallmarking centre.

    Why is it being introduced?

    • Authentication: HUID gives a distinct identity to each piece of jewellery enabling traceability.
    • Credibility: It is critical to the credibility of hallmarking and to help address complaints against adulteration.
    • Registration: In HUID-based hallmarking, registration of jewellers is an automatic process with no human interference.
    • Prevents malpractice: It also helps check malpractice by members of the trade.
    • Data privacy: It is a secure system and poses no risk to data privacy and security.
    • Financial tracking: HUID provides traceability and financial tracking of purchases.

    Issues with HUID

    • Time-consuming: It is cumbersome to number each piece of jewellery
    • Intricate jewellery: HUID cannot be engraved in tiny pieces.
    • Unnecessary expense: Also it will increase cost for consumers.
    • Infrastructural issues: there needs to be ample AH Centres.

    What does this mean for the consumer?

    • Consumer protection: Given that gold plays a big role in the lives of Indians, mandating gold hallmarking is aimed at protecting consumer interests.
    • Assurance of quality: It provides ‘third-party assurance’ to consumers on the purity of gold jewellery.

    Conclusion

    • HUID concept is innovative, out-of-the-box thinking and more than makes up for stepping in late with mandatory hallmarking.
    • It is the sort of global leadership India has and needs to show in gold-related reforms.

     

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  • A white touch to a refreshed green revolution

    Context

    November 26, 2021 was celebrated in Anand, Gujarat as the 100th birth anniversary of Verghese Kurien, the leader of India’s ‘white revolution’.

    Analysing the Green revolution

    • Purpose of green revolution: The purpose of the green revolution was to increase the output of agriculture to prevent shortages of food.
    • Technocratic enterprise: The green revolution was largely a technocratic enterprise driven by science and the principles of efficiency.
    • It required inputs, like chemical fertilizers, to be produced on scale and at low cost.
    • Therefore, large fertilizer factories were set up for the green revolution. And large dams and irrigation systems were also required to feed water on a large scale.
    • Monocropping on fields was necessary to apply all appropriate inputs — seeds, fertilizer, water, etc., on scale.
    •  Monocropping increased the efficiency in application of inputs.
    • Thus, farms became like large, dedicated engineering factories designed to produce large volumes efficiently.
    •  Diversity in the products and processes of large factories creates complexity.
    • Therefore, diversity is weeded out to keep the factories well-focused on the outputs they are designed for.

    The contrast between White and Green revolution

    • The contrast between the two revolutions provides valuable insights. Their purposes were different.
    • Purpose of white revolution: The purpose of the white revolution was to increase the incomes of small farmers in Gujarat, not the output of milk.
    • The white revolution was a socio-economic enterprise driven by political leaders and principles of equity.

    Understanding the success of Amul

    • Amul has become one of India’s most loved brands, and is respected internationally too for the quality of its products and the efficiency of its management.
    • The fledgling, farmer-owned, Indian enterprise had many technological problems to solve.
    • That is why they enrolled Kurien, who had studied engineering in the United States.
    • Indigenous solutions: Kurien and his engineering compatriots in the organisation were compelled to develop solutions indigenously when Indian policy makers, influenced by foreign experts, said Indians could not make it.
    • The enterprise achieved its outcome of empowering farmers because the governance of the enterprise to achieve equity was always kept in the foreground, with the efficiency of its production processes in the background as a means to the outcome.

    Increasing productivity and issues with it

    • ‘Productivity’, when defined as output per worker, can be increased by eliminating workers.
    • This may be an acceptable way to measure and increase productivity when the purpose of the enterprise is to increase profits of investors in the enterprise.
    • It is a wrong approach to productivity when the purpose of the enterprise is to enable more workers to increase their incomes, which must be the aim of any policy to increase small farmers’ incomes.
    • The need for new solutions to increase farmers’ incomes has become imperative.
    • Moreover, fundamental changes in economics and management sciences are necessary to reverse the degradation of the planet’s natural environment that has taken place with the application of modern technological solutions and management methods for the pursuit of economic growth.

    Suggestions to increase inclusion and improve environmental sustainability

    • Ensure inclusion and equity: Increase in the incomes and wealth of the workers and small asset owners in the enterprise must be the purpose of the enterprise, rather than production of better returns for investors.
    • Social side: The ‘social’ side of the enterprise is as important as its ‘business’ side.
    • Therefore, new metrics of performance must be used, and many ‘non-corporate’ methods of management learned and applied to strengthen its social fabric.
    • Local solution: Solutions must be ‘local systems’ solutions, rather than ‘global (or national) scale’ solutions.
    • The resources in the local environment (including local workers) must be the principal resources of the enterprise.
    • Practical use of science: Science must be practical and useable by the people on the ground rather than a science developed by experts to convince other experts.
    • Moreover, people on the ground are often better scientists from whom scientists in universities can learn useful science.
    • Sustainable solution through evolution: Sustainable transformations are brought about by a steady process of evolution, not by drastic revolution.
    • Large-scale transformations imposed from the top can have strong side-effects.

    Consider the question “Contrast the differences between the White Revolution and Green Revolution in India. What lessons can be applied to Indian agriculture from the success of the White Revolution in India?”

    Conclusion

    The essence of democratic economic governance is that an enterprise must be of the people, for the people, and governed by the people too.

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  • India’s electric vehicle push will lead to brighter, greener future

    Context

    The transition to electric mobility is a promising global strategy for decarbonising the transport sector.

    Electricity mobility revolution

    • The global electric mobility revolution is today defined by the rapid growth in electric vehicle (EV) uptake.
    • This phenomenon is today defined by the rapid growth in EV uptake, with EV sales for the year 2020, reaching 2.1 million.
    • Falling battery costs and rising performance efficiencies are fueling the demand for EVs globally.

    Significance of India’s transition to electric mobility

    • India is the fifth largest car market in the world and has the potential to become one of the top three in the near future.
    • India is among a handful of countries that supports the global EV30@30 campaign, which aims for at least 30 per cent new vehicle sales to be electric by 2030.
    • Part of global climate agenda: The push for EVs is driven by the global climate agenda established under the Paris Agreement to reduce carbon emissions in order to limit global warming.
    • Ensuring energy security: It is also projected to contribute in improving the overall energy security situation as the country imports over 80 per cent of its overall crude oil requirements, amounting to approximately $100 billion.
    • Job creation: The push is also expected to play an important role in the local EV manufacturing industry for job creation.
    • Strengthen grid operation: Through several grid support services, EVs are expected to strengthen the grid and help accommodate higher renewable energy penetration while maintaining secure and stable grid operation.

    Battery storage: Opportunities and challenges

    • Promoting sustainable development: With recent technology disruptions, battery storage has great opportunity in promoting sustainable development in the country, considering government initiatives to promote e-mobility and renewable power (450 GW energy capacity target by 2030).
    • Economic opportunity: With rising levels of per capita income, there has been a tremendous demand for consumer electronics in the areas of mobile phones, UPS, laptops, power banks etc. that require advanced chemistry batteries.
    • This makes manufacturing of advanced batteries one of the largest economic opportunities of the 21st century.
    • Concern of absence of manufacturing base: It is estimated that by 2020-30 India’s cumulative demand for batteries would be approximately 900-1100 GWh, but there is concern over the absence of a manufacturing base for batteries in India, leading to sole reliance on imports to meet rising demand.

    Government schemes to promote EV ecosystem

    • To develop and promote the EV ecosystem in the country, government has remodeled Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme (Rs 10,000 crore) for the consumer side.
    • It has also launched production-linked incentive (PLI) scheme for Advanced Chemistry Cell (ACC) ( Rs 18,100 crore) for the supplier side.
    • Finally the recently launched PLI scheme for Auto and Automotive Components (Rs 25,938 crore) for manufacturers of electric vehicles was launched.
    • All these forward and backward integration mechanisms in the economy are expected to achieve robust growth in the coming years and will enable India to leapfrog to the environmentally cleaner electric vehicles and hydrogen fuel cell vehicles.

    Benefits of EV ecosystem

    • This will not only help the nation conserve foreign exchange but also make India a global leader in manufacturing of EVs and better comply with the Paris Climate Change Agreement..
    • Battery demand creation: All three schemes cumulatively expect an investment of about Rs 1,00,000 crore which will boost domestic manufacturing and also facilitate EVs and battery demand creation along with the development of a complete domestic supply chain and foreign direct investment in the country.
    • Reduction of oil import bill: The programme envisages an oil import bill reduction of about Rs 2 lakh crore and import bill substitution of about Rs 1.5 lakh crore.

    Conclusion

    India’s push for EV ecosystem is in line with the country’s climate change commitments, will help boost manufacturing sector and also help ensure energy security.

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  • Government-owned Contractor-operated (GOCO) Model

    The Army’s ambitious plan for modernization of the Army Base Workshops (ABWs) and implementation of the ‘Government-owned, contractor-operated (GOCO)’ model is delayed, the Comptroller and Auditor General (CAG) said in its report.

    What is GOCO Model?

    • The GOCO model was one of the recommendations of the Lt. Gen. DB Shekatkar (Retd.) committee to enhance combat capability and re-balancing defence expenditure.
    • In GOCO model, the assets owned by the government will be operated by the private industries.
    • Under the GOCO model, the private companies need not make investments on land, machinery and other support systems.

    What is the current system?

    • Maintenance, repair and overhaul (MRO): The Army follows the traditional ‘womb to tomb’ life cycle support management for maintenance, repair and overhaul (MRO) of its costly equipment.
    • Corps of Electronics and Mechanical Engineers (EME): It is responsible for the MRO system.

    Need for GOCO Model

    • High end technologies: In the last three decades, there has been a quantum jump in military technology and the MRO of military equipment has become very complex.
    • Lack of infrastructure: However, some repairs and overhauls have run into problems on account of lack of infrastructure, spares and expertise.
    • Poor performance of Corps: The infrastructure, expertise and work culture has not kept pace with time, leading to below par and inefficient performance.

     Benefits offered by the GOCO Model

    • Time savings: The main advantage of the model is that the targets are achieved in lesser time frame.
    • Competitiveness: Also, it will boost competitiveness among the private entities paving way to newer technologies.
    • Efficiency: The GOCO model will bring in corporate culture, leading to efficiency and accountability.
    • Expertise: Private operators can easily go into partnership with Original Equipment Manufacturer (OEM), both for expertise and spares.
    • Manpower saving: The government can save on manpower — 12,500 personnel workforce of the ABWs.
    • Technical training: This model also opens avenues for absorbing trained retired personnel, which can be built into the contract.

    Major issues with GOCO

    • Costly affair: The corporate world is driven by market forces, which means the GOCO model will be more costly. In most cases, private operators will want better infrastructure, which would have to be upgraded or replaced at government cost.
    • Corporate management: Private operators may not have the expertise to deal with military equipment; they are also unlikely to absorb the existing manpower and will want a younger and better-trained workforce.

     

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  • [pib] Soil Health Card Scheme

    National Productivity Council (NPC) has carried out a study on ‘Soil Testing Infrastructure for Faster Delivery of Soil Health Card in India’ in 2017.

    What did the study find?

    • In the study it was found that application of fertilizer and micronutrients based on Soil Health Card (SHC) recommendations resulted in 8-10% of savings.
    • It has led to an overall increase in the yield of crops to the tune of 5-6% reported by adopting the SHC recommendations.

     About Soil Health Card Scheme

    • Soil Health Card (SHC) scheme is promoted by the Department of Agriculture & Co-operation under the Ministry of Agriculture and Farmers’ Welfare.
    • An SHC is meant to give each farmer soil nutrient status of his/her holding and advice him/her on the dosage of fertilizers and also the needed soil amendments, that s/he should apply to maintain soil health in the long run.
    • SHC is a printed report that a farmer will be handed over for each of his holdings.
    • It will be made available once in a cycle of 2 years, which will indicate the status of soil health of a farmer’s holding for that particular period.
    • The SHC given in the next cycle of 2 years will be able to record the changes in the soil health for that subsequent period.

    Parameters of SHC:

    • N, P, K (Macro-nutrients)
    • Sulfur (S) (Secondary- nutrient)
    • Zn, Fe, Cu, Mn, Bo (Micronutrients)
    • pH, EC (Electrical conductivity) , OC (Organic content)

    Try this PYQ:

    Q. The nation-wide ‘Soil Health Card Scheme’ aims at:

    1. expanding the cultivable area under irrigation.
    2. enabling the banks to assess the quantum of loans to be granted to farmers on the basis of soil quality.
    3. checking the overuse of fertilizers in farmlands.

    Which of the above statements is/are correct?

    (a) 1 and 2 only

    (b) 3 only

    (c) 2 and 3 only

    (d) 1, 2 and 3

     

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