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Subject: Economics

  • Government Owned Contractor Operated (GOCO) Model 

    Indian Army has initiated the process of identifying potential industry partners to implement the Government Owned Contractor Operated (GOCO) model for its base workshops and ordnance depots intended to improve operational efficiency.

    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 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.
    • The missions are set by government and the private sectors are given full independence in implementing the missions using their best practices.
    • The main advantage of the model is that the targets are achieved in lesser time frame. Also, it will boost competitiveness among the private entities paving way to newer technologies.

    Who will be eligible under the mode?

    • The service provider should be an Indian registered company with at least 10 years of working experience in related domains and have an average annual turnover of ₹50 crore for each of the last three financial years.

  • Operation Twist

    Reserve Bank of India Governor has informed that the market’s reaction to Operation Twist was on expected lines.

    Operation Twist

    • The simultaneous buy-sell of government bonds, known as Operation Twist, was conducted to bring down long-term interest rate while allowing short term rates to inch up.
    • The move was aimed at addressing liquidity, which is assymetric — abundant at the shorter end but not on the longer end. The move will help in monetary transmission.
    • The central bank has so far carried out three rounds of simultaneous bond buy-and-sell via open market operations.

    For more reading, navigate to the page:

    https://www.civilsdaily.com/news/operation-twist/

  • [pib] New Energy Performance Standards for Air Conditioners

    The Central Government in consultation with the Bureau of Energy Efficiency (BEE) has notified new energy performance standards for Room Air Conditioner (RACs).

    240C default setting

    • The 240C default setting has been made mandatory from Jan 1, 2020 for all room air conditioners covered under the ambit of BEE star-labelling program vide this notification.
    • Additionally, the Indian Seasonal Energy Efficiency Ratio (ISEER) as per the new standards will range from (3.30 – 5.00) for split and (2.70 – 3.50) for window air conditioners, which will be applicable from 1st January 2021 onwards.
    • ISEER is the energy performance index used for Room Air Conditioners (RACs) and its assessment is based on the bin hours defined in ISO 16358.

    Voluntary star labelling program

    • BEE launched the voluntary star labelling program for fixed-speed room air conditioners (RACs) in 2006, and this program became mandatory on 12th January 2009.
    • Thereafter, in 2015, voluntary star labelling program for inverter room air conditioners was launched and which was made mandatory with effect from 1st January 2018.
    • The BEE star labelling program for Room Air Conditioners now covers both fixed and inverter RAC up to a cooling capacity of 10,465 watts (2.97 TR).
    • Continual enhancement in performance levels has resulted in substantial energy efficiency improvement of about 43% in the minimum energy performance standards (MEPS) for split units, which are the most popular RACs sold in the market.

    About BEE

    • BEE is a statutory body under the Ministry of Power, Government of India.
    • It is assisted in developing policies and strategies with the primary objective of reducing the energy intensity of the Indian economy.
    • BEE coordinates with designated consumers, designated agencies, and other organization to identify and utilize the existing resources and infrastructure, in performing the functions assigned to it under the energy conservation act.

  • [pib] Network for Scientific Co-operation for Food Safety and Applied Nutrition (NetSCoFAN)

    Union Health Minister has launched NetSCoFAN, a network of research & academic institutions working in the area of food & nutrition.

    NetSCoFAN

    • The NetSCoFAN would comprise of eight groups of institutions working in different areas viz. biological, chemical, nutrition & labelling, food of animal origin, food of plant origin, water & beverages, food testing, and safer & sustainable packaging.
    • FSSAI has identified eight Nodal Institutions who would develop a ‘Ready Reckoner’ that will have inventory of all research work, experts and institutions and would carry out and facilitate research, survey and related activities.
    • It would identify research gaps in respective areas and collect, collate and develop database on food safety issues for risk assessment activities.
    • The need for identify research gaps in respective areas and collect, collate and develop database on food safety issues for risk assessment activities, will be addressed by NetSCoFAN.
    • The NetSCoFAN directory would be covering detailed information of various heads/Directors and lead scientists of lead and associated partnering institutions.

  • [op-ed snap]Lifting growth, containing inflation

    Context

    There is a large scope for  the improvement in the efficiency of grain management system under the National Food Security Act (NFSA).

    Declining Agri-sector growth rate

    • India’s growth rate plummeted to 4.5 per cent in the second quarter of this fiscal.
    • The quarterly growth in GDPA (agri-GDP) is hovering at around 2 percent, it is a cause for great concern.
    • Agriculture still engages about 44 per cent of India’s workforce, which has serious consequences for the overall economy of the country.

    The bleak picture of the economy

    • Recently inflation has started to surge after a long time.
    • Inflation is led by the different components of the food segment- cereals, pulses, and vegetables.
    • There is a challenge of containing inflation and increasing the demand at the same time.
    • At the same time, there is also the challenge of maintaining the fiscal deficit by 3.3 %.
    • Recently Finance minister has launched an investment package of 102 lakh crores.
    • So, there is a need to take a look at the inefficiencies in food grain management.

    Inefficiencies in NFSA

    • It supplies a certain quantity of wheat and rice to 67 percent population.
    • It gives wheat at Rs. 2/kg and rice at Rs. 3/kg.
    • While the cost of these grains to FCI is at Rs. 25/kg and Rs. 35/kg respectively.
    • This led to the provision of Rs 1.84 lakh crores for food subsidy.
    • The buffer stocks with the FCI is far more than double the buffer stock norms as on January 1 every year.
    • This excess stock is the result of an inefficient strategy for food management.
    • The strategy where the procurement of these grains is open-ended while the disbursement is restricted.
    • The money locked in these excess stock is about 1 lakh crores.
    • If the rabi season procurement is good FCI may run out of storage space to accommodate.

    Suggestions for improvement

    • The open market operation should be increased.
    • Even if the government liquidate half of the excess stock it would fetch Rs.50,000 crores.
    • The Shanta Kumar panel had submitted the blueprint for the improvement in the grain management system.
    • Only three reiterations are needed.
    • First-while the Antyodaya category should keep getting the maximum food subsidy, the issue price should be fixed at 50% of the procurement for the rest.
    • Second- restrict the percentage of population covered under the scheme to 40 % from the present 67%
    • Third-stop the procurement of rice in the north-western states of Punjab and Haryana where the water table is depleting.

    Conclusion

    • If the government implements these three points it can save the country another Rs. 50,000 crores annually. On top of this, it will help the government to reduce its fiscal deficit.

  • [pib] UJALA & Street Lighting National Programme

    The Unnat Jyoti by Affordable LEDs for All (UJALA) and LED Street Lighting National Programme (SLNP) has completed five years of successful implementation.

    UJALA and SLNP

    • SLNP is the world’s largest streetlight replacement programme and UJALA is the world’s largest domestic lighting project.
    • Both have been spearheaded and implemented by Energy Efficiency Services Limited (EESL), a joint venture of PSUs under the Ministry of Power.

    Major accomplishments

    UJALA

    • UJALA project brought the market transformation in energy efficiency sector.
    • Prices of LED bulbs being distributed under UJALA programme have fallen to one-tenth of their rates in 2015 from INR. 310 to INR 38 in 2018.
    • The switch from inefficient incandescent bulbs to LEDs is helping families reduce their electricity bills while also enabling them to access better brightness in homes.
    • Through the UJALA over 36.13 crore LED bulbs have been distributed across India.
    • This has resulted in estimated energy savings of 46.92 billion kWh per year, avoided peak demand of 9,394 MW, and an estimated GHG emission reduction of 38 million t CO2 annually.

    SLNP

    • Under the SLNP programme, over 1.03 crore smart LED streetlights have been installed till date, enabling an estimated energy savings of 6.97 billion kWh per year with an avoided peak demand of 1,161 MW and an estimated GHG emission reduction of 4.80 million tonnes CO2 annually.
    • LED streetlights have been installed in various states across the country, helping generate approximately 13,000 jobs to support Make in India initiative.
    • This has enabled citizens to increase productivity at night and made roads safer for pedestrians and motorists due to enhanced brightness and reduced dark spots.
    • As these lights are automated, they switch on and off at sunrise and sunset thereby reducing wastage.
    • In the last five years, the LED streetlights installed have illuminated 3,00,000 km of roads in India, enabling public safety and energy efficient lighting.

  • [pib] Patola Saree

    In a historic initiative taken by Khadi and Village Industries Commission (KVIC), a first Silk Processing Plant was inaugurated at Surendranagar in Gujarat.

    It would help cut down the cost of production of silk yarn drastically and increase the sale and availability of raw material for Gujarati Patola Sarees.

    Patola Sarees

    • Patola is a double ikat (dying technique) woven sari, usually made from silk made in Patan, Gujarat.
    • They are very expensive, once worn only by those belonging to royal and aristocratic families. These saris are popular among those who can afford the high prices.
    • Reason being the raw material silk yarn is purchased from Karnataka or West Bengal, where silk processing units are situated, thus increasing the cost of the fabric manifolds.
    • Patola-weaving is a closely guarded family tradition. There are three families in Patan that weave these highly prized double ikat saris.
    • It can take six months to one year to make one sari due to the long process of dying each strand separately before weaving them together.

  • NCRB Report on Farmers Suicide

    In 2017, 10,655 people involved in agriculture committed suicide in India, according to data released January 2, 2020 by the National Crime Record Bureau (NCRB).

    NCRB had released the 2017 crime data last October 2019, but held back information on suicides.

    Highlights of the report

    • NCRB highlighted that the toll was the lowest since 2013.
    • Among those who took their lives, 5,955 were farmers / cultivators and 4,700 agricultural labourers — both lower than in 2016.
    • They comprised 8.2 per cent of all suicide cases in the country in 2017.
    • In 2016, 6270 farmers killed themselves, down from 8,007 in 2015, while 5,109 farm hands committed suicide, up from 4,595.
    • The number of women farmers committing suicide, however, jumped to 480 in 2017 from 275 in ’16.

    Farm suicides over half a decade

    Years No. of farm sector suicides No. of farmers
    2017 10,655 5,955
    2016 11,379 6270
    2015 12,602 8007
    2014 12,360 5650

    Statewise data

    • In 2017, the most number of farm suicides were reportedly in Maharashtra (34.7 per cent), followed by Karnataka (20.3 per cent), Madhya Pradesh (9 per cent), Telangana (8 per cent) and Andhra Pradesh (7.7 per cent).
    • The trend was quite similar to previous year: In 2016, Maharashtra accounted for 32.2 per cent, Karnataka 18.3 per cent, MP 11.6 per cent, Andhra 7.1 per cent and Chhattisgarh 6 per cent.
    • In 2015 too Maharashtra tops in farmers suicides followed by Karnataka, Madhya Pradesh in 2016.
    • West Bengal, Odisha, Nagaland, Manipur, Mizoram, Uttarakhand, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Delhi, Lakshadweep and Puducherry reported zero suicides by farmers or agricultural labourers.

    Causes of Farmers Suicide

    • Major causes of farm suicides were reportedly bankruptcy / indebtedness, problems in the families, crop failure, illness and alcohol / substance abuse.

    Assist this newscard with:

    [Burning Issue] Annual Crime in India Report-2017

  • Arabica Coffee

    India’s Arabica production has hit an all-time low this coffee-picking season.

    Coffee Production in India

    • Coffee is grown in three regions of India with Karnataka, Kerala and Tamil Nadu forming the traditional coffee growing region.
    • It is followed by the new areas developed in the non-traditional areas of Andhra Pradesh and Orissa in the eastern coast of the country and with a third region comprising the NE states.
    • Indian coffee, grown mostly in southern states under monsoon rainfall conditions, is also termed as “Indian monsooned coffee”.
    • The two well known species of coffee grown are the Arabica and Robusta.

    History of Coffee in India

    • In the Indian context, coffee growing started with a saint, Baba Budan who, while returning from a pilgrimage to Mecca, smuggled seven coffee beans from Yemen to Mysore in India.
    • He planted them on the Chandragiri Hills now named after the saint as Baba Budan Giri in Chikkamagaluru district of Karnataka.

  • National Infrastructure Pipeline (NIP)

    Union Finance Minister has unveiled Rs 102 lakh crore of infrastructure projects, under National Infrastructure Pipeline. It will be implemented in the next five years as part of the government’s spending push in the infrastructure sector.

    What is the National Infrastructure Pipeline (NIP)?

    • NIP includes economic and social infrastructure projects.
    • During the fiscals 2020 to 2025, sectors such as Energy (24%), Roads (19%), Urban (16%), and Railways (13%) amount to around 70% of the projected capital expenditure in infrastructure in India.
    • It has outlined plans to invest more than ₹102 lakh crore on infrastructure projects by 2024-25, with the Centre, States and the private sector to share the capital expenditure in a 39:39:22 formula.

    Key benefits of NIP

    • Economic: Well-planned NIP will enable more infra projects, grow businesses, create jobs, improve ease of living, and provide equitable access to infrastructure for all, making growth more inclusive.
    • Government: Well-developed infrastructure enhances the level of economic activity, creates additional fiscal space by improving the revenue base of the government, and ensures the quality of expenditure focused in productive areas.
    • Developers: Provides a better view of project supply, provides time to be better prepared for project bidding, reduces aggressive bids/ failure in project delivery, ensures enhanced access to sources of finance as a result of increased investor confidence.
    • Banks/financial institutions (F1s)/investors: Builds investor confidence as identified projects are likely to be better prepared, exposures less likely to suffer stress given active project monitoring, thereby less likelihood of NPAs.

    Is NIP a road to $5 trillion economy?

    • Finance minister said that the Rs 102 lakh crore National Infrastructure Projects will help make India a $5 trillion economy by 2025.
    • These projects are on top of Rs 51 lakh crore spent by the Centre and the states during the last six years.
    • The new pipeline consists of 39 per cent projects each by the Centre and states and the balance by 22 per cent by private sector.