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Subject: Economics

  • Share of Clean Energy in Electricity still below 30%

    Why in the News?

    Recently, India has achieved 50% of its installed power capacity from non-fossil sources, five years ahead of its Paris Agreement target. However, clean energy contributes under 30% of actual electricity supply due to low capacity utilisation rates.

    Why is clean energy generation lower than installed capacity?

    • Low Capacity Utilisation Factor (CUF): Clean energy sources operate at lower efficiency. For example, solar power has a CUF of ~20% and wind ~25–30%, while coal operates at ~60% CUF and nuclear at ~80%. Eg: As of June 2025, India’s installed non-fossil fuel capacity was 50% of 484 GW, but the actual electricity supplied from clean sources was only 28% of the total.
    • Intermittent Generation and Time Dependence: Renewable energy depends on natural conditions — solar is only available during daylight hours, and wind is seasonal. Eg: In 2014-15, clean energy contributed 17% to total generation; despite reaching 50% installed capacity by 2025, generation rose only to 28%, reflecting the limitations of time-bound output.
    • Lack of Energy Storage and Grid Flexibility: India lacks sufficient battery storage and smart grid infrastructure to store and distribute excess renewable energy. Eg: During daytime in summer, solar plants reduce coal dependence, but in the evening, coal still supplies 75% of the energy mix, due to the absence of stored solar power.

    How does coal still dominate India’s energy mix?

    • High Reliability and Base Load Supply: Coal provides consistent, round-the-clock electricity, making it ideal for base load demand that must be met continuously. Eg: Thermal power plants in Chhattisgarh and Jharkhand run 24/7 to supply power to industrial zones in eastern India.
    • Established Infrastructure: India has a vast network of coal-based plants, railways for coal transport, and supply chains, making coal a readily usable resource. Eg: The Singrauli region in Madhya Pradesh has integrated coal mines and thermal plants that supply electricity to multiple states.
    • Lower Initial Costs for Generation: Coal-based plants are already built and operational, allowing them to generate electricity at a lower short-term marginal cost than new renewable setups. Eg: NTPC’s older thermal plants continue operating profitably with sunk capital costs.
    • Policy and Economic Dependence: Coal is a major contributor to government revenue and employment, especially in coal-rich states like Odisha and Jharkhand. Eg: The Mahanadi Coalfields Limited (MCL) contributes significantly to Odisha’s economy and supports thousands of livelihoods.

    What can improve renewable energy reliability?

    • Expansion of Renewable Energy Targets: India set a target of achieving 500 GW of non-fossil fuel capacity by 2030, in line with its Nationally Determined Contributions (NDCs) under the Paris Agreement.
    • Promotion of Solar Energy (PM-KUSUM & Rooftop Solar): Schemes like PM-KUSUM promote solar pumps for agriculture, while the Rooftop Solar Programme aims to increase solar adoption in residential and commercial sectors.
    • Green Energy Corridor Development: The government is investing in Green Energy Corridors to enable the smooth transmission of renewable power from generation points to demand centres. Eg Under Green Energy Corridor Phase-I, over 9700 circuit km of transmission lines and 220 substations were planned.
    • Production-Linked Incentive (PLI) Scheme for Solar Manufacturing: Under the PLI scheme, the government provides financial incentives to boost domestic manufacturing of solar PV modules, reducing import dependence.
    • Push for Energy Storage and Hybrid Projects: Promotion of battery storage, pumped hydro projects, and hybrid renewable energy parks (solar + wind + storage) to ensure round-the-clock clean energy supply.

    Case studies: 

    • Germany – Battery Storage and Smart Grids: Germany has invested heavily in battery storage systems and smart grid technology under its Energiewende (energy transition) policy. This enables better integration of solar and wind energy, helping maintain grid stability even during peak renewable generation hours.
    • Australia – Hybrid and Community-Based Renewable Projects: Australia has developed hybrid power plants that combine solar, wind, and battery storage (e.g., the Hornsdale Power Reserve in South Australia). It also supports community-led microgrids, improving reliability in remote areas with limited access to conventional grids.

    What can improve renewable energy reliability?

    • Energy Storage Systems: Deploying large-scale battery storage and pumped hydro storage can store surplus energy from solar and wind sources and release it during periods of high demand or low generation.
    • Smart Grid Infrastructure: Implementing smart grids enables real-time demand-supply balancing, better integration of variable renewables, and supports differential pricing to shift demand to renewable-rich hours.
    • Hybrid Renewable Projects: Promoting hybrid systems that combine solar, wind, and storage ensures more consistent power output by compensating for the variability of individual sources.

    Mains PYQ:

    [UPSC 2022] How much of India’s energy requirements are met by renewable energy by 2030 ? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain.

    Linkage: The article talks about the India has achieved a significant milestone with 50% of its total electric power capacity sourced from non-fossil fuels (solar, wind, biomass, hydro, and nuclear power), the actual share of clean energy in the electricity supplied is below 30%. This question directly related to the India’s energy requirements are met by renewable energy.

  • [15th July 2025] The Hindu Op-ed: Why is corporate investment lagging behind?

    PYQ Relevance:

    [UPSC 2022] “Economic growth in the recent past has been led by increase in labour productivity.” Explain this statement. Suggest the growth pattern that will lead to creation of more jobs without compromising labour productivity.

    Linkage: The article talks about the corporate investment in India has been lagging, with industrial production slowing down. This question touches on the nature of economic growth and job creation, which is directly linked to investment patterns and their ability to generate sufficient employment. 

     

    Mentor’s Comment:  India’s Index of Industrial Production (IIP) growth slowed to a nine-month low of 1.2%, raising concerns over sluggish corporate investment despite tax cuts, public capital expenditure, and monetary easing. This has reignited debate on the causes of low investment, drawing from Marxist economic theories by Luxemburg and Baranovsky, and highlighting the need for demand revival and effective government stimulus to reboot the economy.

    Today’s editorial analyses the slow corporate investment in India. This topic is important for  GS Paper III (Indian Economy) in the UPSC mains exam.

    _

    Let’s learn!

    Why in the News?

    Recently, India’s industrial output growth dropped to a nine-month low of 1.2%, raising worries about slow corporate investment.

    Why has corporate investment remained low despite tax cuts, capex, and rate cuts?

    • Weak Consumer Demand: Despite tax cuts and improved corporate profits, investment remains low due to insufficient consumer demand in the economy. Eg: Even after the 2019 corporate tax cut (from 30% to 22%), private sector investment in machinery and intellectual property grew only 35% over four years (FY20–FY23), as noted in the 2024-25 Economic Survey.
    • Excess Industrial Capacity: Many industries are operating at suboptimal capacity, making firms hesitant to invest in new production facilities. Eg: With underutilised factories post-COVID, private players see no incentive to expand despite low interest rates and high liquidity.
    • Misreading of Profit-Investment Link: The assumption that higher profits lead to more investment is flawed. As per Michał Kalecki, investment determines profits, not the other way around. Eg: Without a revival in demand, businesses avoid investment regardless of profitability, due to uncertainty about returns.

    About Rosa Luxemburg and Mikhail Tugan-Baranovsky:

    • Rosa Luxemburg (1871–1919): A Polish-German Marxist economist and revolutionary, Luxemburg was known for her critique of capitalist accumulation.
    • Mikhail Tugan-Baranovsky (1865–1919): A Russian economist and early Marxist thinker, Baranovsky challenged traditional Marxist views with his theories on industrial cycles.

    What do Luxembourg and Baranovsky argue about investment in capitalism?

    • Baranovsky’s View – Investment Generates Its Own Market: He argued that in capitalism, investment can sustain itself as long as there is a balanced ratio between the consumption and investment sectors. He believed that machines can produce more machines, and investment can occur even without final consumption demand.
    • Luxemburg’s Counter–Investment Depends on Demand: Luxembourg disagreed, stating that individual capitalists base investment decisions on anticipated demand. If demand is weak and existing capacity underused, capitalists avoid new investments, making demand revival essential for capital accumulation.

    What limits the effectiveness of government capex in crowding in private investment?

    Note: Government capex refers to the expenditure on creating long-term assets such as infrastructure (roads, railways, ports), schools, hospitals, and defence equipment.

    • Gestation lags of infrastructure projects: Large public investments in infrastructure (like ports, highways, railways) take years to become operational. Until completed, they do not immediately enhance productivity or reduce logistics costs, thus delaying private sector response.
    • High import content in capex: A significant portion of government capex may be spent on imported machinery or inputs, which leaks demandout of the domestic economy. This reduces the multiplier effect and fails to generate sufficient local demand for private sector goods and services.
    • Low employment intensity of capex projects: Many infrastructure projects are capital-intensive but not labour-intensive, meaning they create few jobs. This limits income generation and consumer demand, reducing the incentive for private firms to expand production capacity.

    Why is demand revival essential for boosting investment?

    • Drives Capacity Utilisation: When consumer demand rises, existing production units approach their full capacity. This encourages private firms to invest in expanding their capacity to meet growing market needs.
    • Reduces Investment Risk: Strong and predictable demand provides confidence to investors that they will earn returns on capital. Without sufficient demand, firms fear underutilisation of new assets and avoid fresh investments.
    • Stimulates a Virtuous Economic Cycle: Higher demand leads to higher sales, which increases profits, employment, and further consumer spending. This self-reinforcing cycle sustains investment momentum and boosts overall economic growth.

    What is the state’s role?

    • Stimulating Demand through Public Spending: The state plays a counter-cyclical role by increasing government expenditure, especially during economic slowdowns. Eg: Large-scale infrastructure investments in roads, railways, and housing under PM Gati Shakti generate demand, jobs, and confidence in the private sector.
    • Providing Exogenous Stimuli for Investment: The state acts as a catalyst by injecting external demand and resources into the economy when private demand is weak. Eg: PLI (Production-Linked Incentive) schemes offer incentives for capital expenditure in key sectors like electronics and pharma, attracting private investment.
    • Ensuring Access to Affordable Finance: The state, through monetary and fiscal institutions, helps ensure easy credit availability and interest rate stability. Eg: The Reserve Bank of India’s rate cuts and liquidity measures during COVID-19 were aimed at making credit cheaper for industries to invest.

    Way forward: 

    • Focus on Demand Revival: The government must prioritize income support, especially for lower-income households, through targeted welfare schemes and employment guarantees. This will boost consumption, which is essential for stimulating private sector investment.
    • Enhance the Multiplier Effect of Capex: Public capital expenditure should be labour-intensive, locally sourced, and designed to reduce import leakages. This will maximize domestic demand generation and strengthen the crowd-in effect on private investment.

  • Why some PLI schemes are in the slow lane?

    Why in the News?

    Six out of the 14 Production-Linked Incentive (PLI) schemes, including textiles, solar modules, IT hardware, automobiles, advanced chemical cells (ACC), and speciality steel, are progressing at a relatively slower pace.

    What are the primary reasons for the slow implementation of PLI schemes?

    • Stringent Eligibility Norms: Many industries have reported that the eligibility criteria for participation in PLI schemes are too stringent, which limits the number of companies that can benefit from the incentives.
    • Initial Setup Challenges: Establishing a domestic manufacturing base from scratch is a monumental task. Industries such as solar modules and advanced chemistry cells (ACC) require substantial time—ranging from one-and-a-half to three years—to set up manufacturing operations, delaying employment generation.
    • Access to Resources: Companies face difficulties in accessing critical resources, including Chinese machinery and skilled technicians, which can hinder their ability to ramp up production quickly.
    • Market Dependency: Some sectors remain heavily reliant on imports and have not yet transitioned to a self-sufficient manufacturing model, impacting their growth under the PLI framework.
    • Slow Disbursement of Funds: The initial years of the scheme saw minimal disbursement of funds, with only a small percentage of the total incentive outlay being paid out in the first two years.

    Which sectors are experiencing the most significant slowdowns, and why?

    • Textiles: This sector is struggling due to high competition and stringent norms that have slowed down participation and growth.
    • Solar Modules: Despite being a strategic sector for renewable energy, delays in establishing manufacturing capabilities have led to slow progress.
      • As of June 2024, India’s solar module manufacturing capacity reached 77.2 GW, but the solar cell capacity was only 7.6 GW, leading to supply shortages that delayed projects.
    • Automobiles: While some companies are making progress, the automobile sector overall is hindered by initial setup challenges and fluctuating market conditions. 
      • Factors such as rising raw material costs and shifts in consumer preferences towards electric vehicles are creating a complex environment for traditional automakers.
    • Advanced Chemical Cells (ACC): Similar to solar modules, this sector faces long commissioning periods that delay employment outcomes. Because of the lengthy development timelines for manufacturing facilities and the need for substantial investment in technology are contributing to slower growth in this strategic area.
    • IT Hardware: Although recently upgraded with increased funding, it still lags behind in implementation compared to more successful sectors like mobile manufacturing.

    What measures can be taken to enhance the effectiveness of PLI schemes? (Way forward)

    • Revising Eligibility Criteria: Simplifying the eligibility requirements could encourage more companies, especially smaller firms, to participate in the schemes and benefit from incentives.
    • Increasing Support for Supply Chains: Establishing robust supply chains is crucial. The government could provide additional support to smaller suppliers who are essential for scaling up production across sectors.
    • Streamlining Resource Access: Facilitating easier access to necessary machinery and skilled labor can help companies ramp up production more effectively and reduce dependency on imports.
    • Regular Reviews and Adjustments: Continuous monitoring and adjustments based on sector performance can help identify bottlenecks early and allow for timely interventions.
    • Encouraging Ancillary Industries: Promoting the establishment of ancillary industries around larger beneficiaries could create additional jobs and enhance local manufacturing capabilities.

    Mains question for practice:

    Q Evaluate the challenges in the implementation of the Production-Linked Incentive (PLI) schemes in India. Highlight the sectors experiencing significant slowdowns and suggest measures to enhance the effectiveness of these schemes. (250 words) 15M

    Mains PYQ:

    Q  Can the strategy of regional-resource based manufacturing help in promoting employment in India?. (UPSC IAS/2019)

  • Inflation Hits 77-Month Low

    Why in the News?

    India’s inflation indicators have shown a significant downward trend, with the Consumer Price Index (CPI) dropping to a 77-month low of 2.1% in June 2025, and the Wholesale Price Index (WPI) contracting by -0.13%, marking its first decline in 20 months.

    Key Highlights on Inflation (June 2025):

    • Consumer Price Index (CPI) inflation dropped to 2.1%, the lowest in 77 months (since January 2019).
    • Wholesale Price Index (WPI) contracted by -0.13%, marking its first decline in 20 months.
    • Food and Beverages (CPI component) registered deflation of 0.2%, after being at 8.4% in June 2024.
    • WPI Food Articles saw a sharp fall of 3.75%, compared to 11.1% inflation in June 2024.
    • Crude Petroleum and Natural Gas (WPI) prices contracted by 12.3%, the 10th straight month of decline.
    • Inflation in Fuel and Light (CPI) eased to 2.55% (from 2.8% in May 2025).
    • Housing inflation increased marginally to 3.24%, while Pan, Tobacco and Intoxicants stayed stable at 2.4%.

    Back2Basics: Consumer Price Index (CPI) vs. Wholesale Price Index (WPI)

    Consumer Price Index (CPI) Wholesale Price Index (WPI)
    Definition Measures the change in retail prices of goods and services consumed by households Measures the change in wholesale prices of goods traded between businesses
    Compiled By National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) Office of Economic Adviser, Ministry of Commerce and Industry
    Base Year 2012 (CPI-Industrial Workers has 2016 as base year) 2011–12
    Coverage Goods and Services Only Goods
    Data Collection Prices from 1,181 villages & 1,114 urban markets across India Prices collected from wholesale markets, factories, and mandis
    Purpose/Use Measures retail inflation, used for the RBI’s inflation targeting and monetary policy decisions Measures producer-level inflation, used as a GDP deflator
    Users Consumers, RBI, Government (for social welfare schemes like DA/DR) Policymakers, manufacturers, and financial markets
    Publication Frequency Monthly Monthly
    Number of Items 299 items 697 items
    Components – Food & Beverages (45%)
    – Housing (10%)
    – Fuel & Light (6.8%)
    – Miscellaneous (services, etc.) (28.3%)
    – Clothing & Footwear (6.5%)
    – Pan, Tobacco & Intoxicants (2.4%)    		 – Primary Articles (22.6%)
    – Fuel & Power (13.2%)
    – Manufactured Products (64.2%)
    Weight of Food Items High (~45%) Lower (~24.4%)
    Impact on Economy Direct impact on consumer purchasing power and cost of living Indicates trends in production costs and supply chain
    Volatility More volatile due to food and fuel price changes Less volatile due to base price considerations
    Use in Policy Directly used by RBI for inflation targeting (e.g., 4% CPI target) Used for GDP deflation, price policy formation
    Criticism May not reflect production-side price pressures Does not capture consumer-level inflation or services
    Inflation Indicator Preferred indicator for common people More relevant to manufacturers and wholesale traders

     

    [UPSC 2021] With reference to the Indian economy, demand-pull inflation can be caused or increased by which of the following:

    1. Expansionary policies 2.Fiscal stimulus 3.Inflation-indexing of wages 4.Higher purchasing power 5.Rising interest rates

    Select the correct answer using the code given below:

    Options: (a) 1, 2, and 4 only* (b) 3, 4, and 5 only (c) 1, 2, 3, and 5 only (d) 1, 2, 3, 4, and 5

     

  • ADEETIE Scheme

    Why in the News?

    The Union Ministry of Power has launched a new national scheme — Assistance in Deploying Energy Efficient Technologies in Industries & Establishments (ADEETIE).

    About ADEETIE Scheme:

    • Launch: It was launched by the Ministry of Power through the Bureau of Energy Efficiency (BEE).
    • Objective: It aims to promote energy efficiency in Micro, Small, and Medium Enterprises (MSMEs) to cut energy consumption, reduce emissions, and enhance competitiveness.
    • Background: It builds upon successful state-level pilots, such as decarbonisation projects in Andhra Pradesh’s MSME clusters.
    • Climate Alignment: It supports India’s climate goals, including 45% emission intensity reduction by 2030 and achieving Net Zero by 2070.
    • Budget Allocation: The scheme has a dedicated budget of ₹1,000 crore, with a focus on MSMEs, EXCLUDING large enterprises.

    Key Features of ADEETIE Scheme:

    • Interest Subsidy Support: MSMEs adopting energy-efficient tech will receive interest subsidies on loans:
      • 5% for small enterprises
      • 3% for medium enterprises
    • Digital Portal Utility: The platform acts as a one-stop portal for financing, project development, and knowledge sharing on energy-efficient solutions.
    • Supported Technologies: It promotes adoption of cutting-edge clean technologies, including:
      • Automation and digital control systems
      • Combustion control systems for boilers
      • Methane capture technology
      • Air-dyeing in textiles
    • Collaboration: It fosters industry partnerships through MoUs with major MSME associations.
    • Legal Backing: It aligns with the Energy Conservation (Amendment) Act, 2022, which enables carbon markets and mandates clean energy usage.
    [UPSC 2016] On which of the following can you find the Bureau of Energy Efficiency Star Label?

    1. Ceiling fans

    2. Electric geysers

    3. Tubular fluorescent lamps

    Select the correct answer using the code given below.

    Options: (a) 1 and 2 only (b) 3 only (c) 2 and 3 only (d) 1, 2 and 3*

     

  • Dedicated Freight Corridor (DFC) Project  

    Why in the News?

    India’s flagship freight rail infrastructure project — the Dedicated Freight Corridor (DFC) — is nearing full commissioning.

    About the Dedicated Freight Corridor (DFC) Project:

    • Overview: It is a flagship railway initiative by the Ministry of Railways to modernise and streamline freight movement in India.
    • Launch: The foundation stone was laid in 2006 by PM Dr. Manmohan Singh.
    • Implementing Agency: It is implemented by the Dedicated Freight Corridor Corporation of India Ltd. (DFCCIL), a Special Purpose Vehicle established in October 2006.
    • Objective: The main aim is to develop high-capacity, high-speed freight-only rail corridors to decongest passenger routes and improve logistics efficiency.
    • Investment Size: With a total estimated cost of ₹1.25 lakh crore, the DFC is among India’s largest rail infrastructure investments.
    • Corridor Coverage:
      1. Eastern DFC (EDFC): Spans 1,337 km from Sonnagar (Bihar) to Sahnewal (Punjab) — fully operational.
      2. Western DFC (WDFC): Stretches 1,506 km from JNPT (Mumbai) to Dadri (UP) — 93% complete, to be commissioned by Dec 2025.
    • Need for DFCs: The project was necessitated by overuse of the Golden Quadrilateral, which carries over 50% of freight on just 16% of India’s rail routes.
    • Freight Transport Target: The goal is to increase the rail share of freight to 45% by 2030 as part of the National Rail Plan.

    Key Features of the DFC:

    • Dedicated Infrastructure: The DFCs feature electrified double-line tracks, exclusively for freight, separating them from passenger traffic.
    • Load and Speed Capacity: Built to handle 32.5-tonne axle loads and support freight train speeds of up to 100 km/h.
    • Cargo Type by Corridor:
      1. Eastern DFC: Focused on coal and raw materials.
      2. Western DFC: Transports containers, cement, fertilisers, and other industrial goods.
    • Train Speed: Trains currently operate at 50–60 km/h, with further speed gains expected through modern rolling stock.
    • Capacity Utilization: Already operating at over 85% capacity, with projections of 480 daily trains (240 each direction) by mid-2026.
    • Future Expansion Plans:
      1. East Coast Corridor: Paradip to Vijayawada
      2. East–West Corridor: Kharagpur to Mumbai
      3. North–South Corridor: Delhi to Chennai
    • Estimated Expansion Cost: The combined cost of these three new corridors is around ₹4 lakh crore, with the East Coast Corridor prioritized first.
    [UPSC 2000] Which one of the following ports of India handles the highest tonnage of import cargo?

    Options: (a) Calcutta (b) Kandla (c) Mumbai* (d) Visakhapatnam

     

  • [pib] Sanchar Mitra Scheme

    Why in the News?

    The Department of Telecommunications (DoT) has launched an expanded Sanchar Mitra Scheme to engage engineering students as digital ambassadors for promoting telecom literacy, digital safety, and citizen engagement.

    What is the Sanchar Mitra Scheme?

    • Launching Body: An initiative by the Department of Telecommunications (DoT), Government of India.
    • Primary Aim: To engage student volunteers as “Sanchar Mitras” or digital ambassadors to spread awareness about telecom-related issues.
    • Purpose:
      • Bridge the communication gap between citizens and the telecom ecosystem.
      • Promote safe and informed use of telecom services.
      • Encourage public participation in India’s digital transformation.
    • Implementation Status:
      • Piloted in select institutions.
      • Now being scaled up for nationwide rollout.

    Key Features and Highlights:

    • Target Audience: It primarily targets students from engineering and technical backgrounds such as telecommunications, computer science, electronics, and cybersecurity.
    • Selection of Volunteers: Students will be nominated as Sanchar Mitras in consultation with DoT field units and educational institutions.
    • Training Modules: Volunteers will be trained to conduct grassroots campaigns on cyber fraud prevention, EMF radiation concerns, and responsible digital behavior.
    • Training Institutions: Training will be delivered by the National Communications Academy–Technology (NCA-T) and the Media Wing of the DoT.
    • Core Pillars: The scheme is structured around three key pillars: Connect, Educate, and Innovate.
    • Tech Awareness Promotion: Sanchar Mitras will promote awareness on emerging telecom technologies like 5G, 6G, AI, and cybersecurity.
    • Community Outreach: Students will engage with communities, NGOs, and schools to foster a culture of informed digital citizenship.
    • Strategic Alignment: It aligns with India’s strength in the “Four Ds”: Democracy, Demography, Digitisation, and Delivery.
    [UPSC 2010] Which among the following do/does not belong/belongs to the GSM family of wireless technologies?

    Options: (a) EDGE (b) LTE (c) DSL* (d) Both EDGE and LTE

     

  • [pib] E-Truck Incentive Scheme

    Why in the News?

    The Ministry of Heavy Industries (MHI) has launched E-Truck Incentive Scheme to provide financial incentives for electric trucks (e-trucks) under the PM E-DRIVE initiative.

    What is E-Truck Incentive Scheme?

    • Overview: It is a dedicated scheme to provide financial incentives for electric trucks under the broader PM E-DRIVE initiative.
    • First-of-its-Kind Support: This is the first direct government support specifically for electric trucks to promote clean, efficient, and sustainable freight mobility.
    • Target Vehicle Categories: It targets N2 and N3 category trucks, as per Central Motor Vehicle Rules (CMVR):
      • N2: GVW above 3.5 tonnes up to 12 tonnes
      • N3: GVW above 12 tonnes up to 55 tonnes
    • Incentive for Articulated Vehicles: For articulated vehicles, the incentive applies only to the puller tractor of the N3 category, not the trailer.
    • Warranty Requirements:
      • Battery: 5 years or 5 lakh km, whichever comes first
      • Motor & Vehicle: 5 years or 2.5 lakh km
    • Incentive Details:
      • Based on Gross Vehicle Weight (GVW)
      • Maximum support capped at ₹9.6 lakh per e-truck
      • Incentives are given as upfront discounts, reimbursed to Original Equipment Manufacturers (OEMs) through the PM E-DRIVE portal
    • Deployment Goal: It aims to support the deployment of 5,600 electric trucks across India.
      • 1,100 trucks reserved for Delhi, with ₹100 crore allocated due to high pollution levels
    • Mandatory Scrappage Clause: To qualify, applicants must scrap an old diesel truck via scrappage centres approved by the Ministry of Road Transport and Highways (MoRTH).
    • Sectoral Impact: It is expected to benefit sectors like steel, ports, cement, and logistics by reducing fuel costs and improving air quality.

    About PM E-DRIVE Scheme:

    • Overview: It stands for Prime Minister’s Electric Drive Revolution in Innovative Vehicle Enhancement, launched by the Ministry of Heavy Industries in September 2024.
    • Long-Term Goal: To to foster an EV ecosystem, reduce carbon emissions, and help India achieve Net Zero emissions by 2070.
    • Budget Allocation: It has a total outlay of ₹10,900 crore for two years, aimed at accelerating India’s electric mobility transition.
    • Scope and Coverage: It supports multiple vehicle categories: Two-wheelers; Three-wheelers; Electric trucks; Electric buses and Electric ambulances.
    • Demand Incentive: It provides direct demand incentives to buyers through OEMs, lowering the upfront cost of EVs.
    • Category-wise Allocation:
      • ₹3,679 crore: For two-wheelers, three-wheelers, ambulances, and trucks
      • ₹500 crore: Specifically for electric ambulance procurement
      • ₹4,391 crore: To procure 14,028 electric buses in 9 major cities (Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Surat, Bangalore, Pune, Hyderabad)
    • Charging Infrastructure: ₹2,000 crore allocated to build 72,300 public charging stations nationwide, including:
      • Fast chargers for four-wheelers, buses, two-wheelers, and three-wheelers
    • Digital E-Voucher System:
      • Incentives claimed through Aadhaar-authenticated e-vouchers
      • Signed digitally by both buyer and dealer for transparency
    • Vehicle Scrappage Mandate: Scrapping of old vehicles is mandatory to claim certain incentives, especially for electric trucks, promoting fleet modernization.

     

    [UPSC 2025] Consider the following types of vehicles:

    I. Full battery electric vehicles II. Hydrogen fuel cell vehicles III. Fuel cell electric hybrid vehicles

    How many of the above are considered as alternative (powertrain) vehicles?

    Options: (a) Only one (b) Only two (c) All the three* (d) None

     

  • Bridge too far: A regular audit of all major infrastructure projects is a must

    Why in the News?

    Recently, a span of a 40-year-old bridge collapsed in Vadodara, Gujarat, on July 9, sending multiple vehicles into the Mahisagar river and resulting in the death of 18 people.

    What causes recurring public infrastructure failures in India?

    • Ageing and outdated infrastructure: Many structures like the Morbi suspension bridge (2022) in Gujarat had exceeded their intended lifespan, yet continued to be in use without adequate upgrades.
    • Overuse and overload beyond design capacity: Bridges and roads originally designed for lower traffic volumes now face high urban and industrial load, as seen in the Indrayani pedestrian bridge collapse in Pune (2024) due to overloading.
    • Neglect and poor maintenance: Lack of routine inspections and maintenance led to incidents like the Vadodara bridge collapse (2024), where locals had raised concerns that were ignored by authorities.
    • Institutional inefficiency and under-resourcing: Municipal and local bodies often remain understaffed and underfunded, unable to monitor and maintain growing infrastructure needs, especially in peri-urban areas.
    • Lack of accountability and transparency: Even after fatal accidents like the Mizoram railway bridge girder collapse (2023), failure analysis reports are rarely made public, limiting systemic learning and corrective action.

    What is Peri-urban infrastructure? 

    Peri-urban infrastructure refers to the basic facilities and services (like roads, bridges, water supply, drainage, electricity, etc.) found in the transitional zones between urban and rural areas.

    Why is peri-urban infrastructure more prone to collapse?

    • Unregulated and informal urban expansion: Peri-urban areas often develop without proper zoning laws, building codes, or infrastructure planning. This results in substandard construction, making infrastructure vulnerable to collapse. In many Indian outskirts, flyovers and water systems are built around unplanned colonies, lacking load assessment.
    • Jurisdictional ambiguity and poor coordination: Peri-urban regions often fall between urban and rural governance structures, leading to confusion in responsibility for maintenance and oversight. In Delhi NCR’s fringes, conflicts between municipal bodies and panchayats delay repair and auditing of key infrastructure.
    • Low visibility and weak political prioritization: These areas lack media attention and political pressure seen in core urban centres, resulting in deferred maintenance. In Hyderabad’s outer zones, repeated complaints about weakening culverts were ignored until seasonal floodingcaused failure.

    How can AMRUT and UIDF improve asset upkeep?

    • Focused maintenance and retrofitting: AMRUT 2.0 prioritizes the retrofitting of old urban infrastructure such as pipelines, water supply, and sewerage systems. Eg: In cities like Agra and Pune, AMRUT funding has helped upgrade outdated drainage systems to prevent floodingand infrastructure degradation.
    • Targeted financial support for smaller cities: UIDF provides low-cost loans to Tier-2 and Tier-3 cities that often lack budgetary resources for upkeep. Eg: In peri-urban areas of Madhya Pradesh, UIDF enabled the repair of worn-out roads and bridges strained by rapid population growth.
    • Promotion of digital monitoring and audits: Both schemes encourage the use of geo-tagging and digital tracking tools to monitor asset health and schedule timely repairs. Eg: Cities like Bhubaneswar and Surat use AMRUT-linked dashboards to track infrastructure health and flag issues before failures occur.

    What gaps delay audits and accountability post-collapse?

    • Jurisdictional overlap between agencies: Multiple departments—urban development, public works, and local bodies—often share responsibility for infrastructure. This leads to confusion over which authority must initiate audits after a collapse. Eg: After a flyover collapse in Hyderabad, delays occurred as both the GHMC and state PWD passed the responsibility to each other.
    • Political interference and blame-shifting: In high-profile accidents, inquiries are sometimes delayed or diluted due to political pressures or attempts to shield influential contractors. Eg: In the Kolkata Vivekananda flyover collapse (2016), early accusations were politicized, stalling a clear and prompt audit process.

    Way forward: 

    • Establish a unified statutory audit authority: Create a dedicated, independent body responsible for conducting post-collapse audits across all public infrastructure, ensuring timely investigations, clear jurisdiction, and mandatory public disclosure of findings.
    • Implement real-time digital monitoring systems: Use GIS mapping, IoT sensors, and AI-based predictive maintenance tools to track structural health and alert authorities proactively, minimizing risks and improving accountability.

    Mains PYQ:

    [UPSC 2014] Explain how Private Public Partnership arrangements, in long gestation infrastructure projects, can transfer unsustainable liabilities to the future. What arrangements need to be put in place to ensure that successive generations’capacities are not compromised?

    Linkage: The article highlights several incidents of catastrophic public infrastructure failures in India, such as a 40-year-old bridge collapse in Vadodara, a pedestrian bridge collapse in Pune, and a metro pillar collapse in Bengaluru. This PYQ is highly relevant as it directly addresses the critical themes of long-term infrastructure management, potential liabilities, and ensuring future capacity.

  • Death by negligence: The Railways must ensure interlocked gates at all manned level crossings

    Why in the News?

    Recently, three schoolchildren lost their lives on Tuesday (July 8, 2025) when a fast-moving passenger train hit their school van at a manned railway crossing in Semmankuppam, Cuddalore district, Tamil Nadu, and dragged it for about 50 metres. The Railways should make sure that all manned level crossings have interlocked gates for better safety.

    What makes non-interlocked crossings more dangerous than interlocked ones?

    • Non-interlocked crossings rely solely on the gatekeeper’s alertness and manual judgment.
    • Interlocked gates are linked to train signals, which only turn green if the gate is securely closed, ensuring safety.
    • Human error is more likely at non-interlocked gates, leading to higher risk of accidents.

    Why are non-interlocked gates still in use despite safety concerns?

    • Delayed Infrastructure Projects: Projects to replace non-interlocked gates with overbridges or interlocked systems often face delays due to land acquisition and administrative hurdles. Eg: In Cuddalore, an underpass project funded by Indian Railways remained pending for over a year due to lack of clearance by local authorities.
    • Resource and Budget Constraints: The cost of upgrading thousands of level crossings requires significant investment, which may be postponed due to competing budgetary priorities.
    • Dependence on Manual Operation: Gatekeepers often face pressure from impatient motorists to open gates quickly, leading to protocol violations. Without automation, safety depends solely on their discretion and alertness.

    How do delays in land acquisition hinder safety infrastructure projects?

    • Stalls Construction of Critical Structures: Projects like railway overbridges (ROBs) and underpasses cannot begin without legal possession of land, leading to prolonged delays. Eg: In Bihar, the construction of a railway overbridge in Araria district was delayed by over 3 years due to disputes over land ownership and compensation, leaving an accident-prone level crossing operational.
    • Escalates Project Costs Over Time: Delays increase material and labour costs, making projects financially unviable or deprioritised later. ROBs planned years earlier often need revised budgets due to inflation and changing land prices.
    • Keeps High-Risk Crossings Operational: Until new infrastructure is built, dangerous level crossings remain in use, putting lives at risk. Eg: Many non-interlocked gates in Southern Railway zone remain active due to delayed land acquisition for safer alternatives.

    What are the steps taken by the Indian Government to improve railway crossing safety?

    • Phasing Out Unmanned Level Crossings (UMLCs): The Indian Railways eliminated all UMLCs on broad gauge lines by January 2020 to reduce accidents. Eg: Over 5,900 UMLCs were removed between 2014 and 2020 across Indian Railways.
    • Construction of Road Overbridges (ROBs) and Underpasses: Railway and State Governments jointly fund ROBs and underpasses to eliminate level crossings altogether. Eg: The Setu Bharatam Project aims to build 208 ROBs across India to improve safety.
    • Awareness and Training Programmes: Regular safety awareness drives and training for gatekeepers and the public are being undertaken. Eg: Campaigns like “Mission Zero Accident” educate local communities and railway staff about level crossing safety protocols.

    Why must Indian Railways urgently upgrade level crossings?

    • Prevent Fatal Accidents Due to Human Error: Non-interlocked crossings rely on manual judgment, making them prone to errors and tragic mishaps.
    • Enhance Operational Efficiency and Safety: Interlocked and automated systems ensure smoother train operations and reduce delays caused by manual gate coordination. Eg: Northern Railway’s use of interlocked gates near busy junctions like Ghaziabad has improved train punctuality and road traffic flow.
    • Reduce Pressure and Risk on Gatekeepers: Manual crossings burden gatekeepers with high responsibility and risk of protocol violations under pressure from motorists.

    Way forward: 

    • Accelerate Conversion to Interlocked Crossings: Prioritise high-risk and high-traffic areas for upgrading non-interlocked gates to fully interlocked systems with automated signalling to eliminate human error.
    • Fast-Track Land Acquisition for Infrastructure Projects: Implement time-bound clearances and simplified procedures for land acquisition to ensure timely construction of overbridges and underpasses, replacing hazardous level crossings.

    Mains PYQ:

    [UPSC 2024] What is the technology being employed for electronic toll collection on highways? What are its advantages and limitations? What are the proposed changes that will make this process seamless? Would this transition carry any potential hazards?

    Linkage: The PYQ asks about technology making a process “seamless”. The article explicitly states that interlocked gates, unlike non-interlocked systems, ensure that “train signals turn green only when gates are securely locked”. This technology-driven interlocking mechanism is presented as a “foolproof solution to prevent such fatal incidents”, as it removes the sole reliance on a gatekeeper’s alertness.