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Type: Explained

  • Russian Invasion of Ukraine: Global Implications

    At 75, NATO sees reasons to rejoice, facts suggest otherwise

    Explained | International Relations | Mains Paper 2: Important International Institutions

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: International Organisation; NATO;

    Mains level: Concerns about NATO;

    Why in the News? 

    NATO grandly commemorates its 75th anniversary on April 4, 2024.

    Present Concerns about NATO:

    • Changed Objective: NATO was established to defend its member states from aggression but has engaged in offensive military actions.
    • Cause of Military conflicts worldwide: Over the last seven decades, NATO has initiated or participated in more than 200 military conflicts worldwide, including major ones. Examples of NATO’s military interventions include the bombing of Yugoslavia, invasion of Iraq, disruption of statehood in Libya, military interference in Syria, and combating terrorism in Afghanistan.
    • Role in the creation of ISIS: Critics argue that instead of bringing peace and stability, NATO’s actions have led to damage, casualties, destruction, and alienation. There is a perception that the US, NATO’s leader, played a role in the creation of ISIS.
    • Provoking Russia-Ukraine War: Its expansion since 1991, despite assurances to the contrary, and its actions in Ukraine are seen as provocative moves against Russia. Russia has shown restraint in response to NATO’s actions, but NATO’s behavior remains unchanged.
    • Maintaining Western Hegemony: In stark contrast to its professed peaceful ideals, NATO engages in warfare or issues threats of attack against any state that rejects the established liberal “rules-based order.” for example invasion of Iraq and execution of Saddam Hussein
    • Increase presence in  Indo-Pacific: The US has been actively establishing smaller multilateral arrangements, like AUKUS, the US-Japan-South Korea trio, and the Tokyo-Seoul-Canberra-Wellington quartet, to involve them in practical collaboration with NATO.

    BACK2BASICS

    What is NATO?

    NATO, founded in 1949, is an intergovernmental military alliance initially aimed at collective defense against potential aggression, notably from the Soviet Union during the Cold War. However, its role has expanded over time to address various security challenges beyond its original purpose.

    Membership:

    • Starting Members: In starting only 12 founding members of NATO were Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the United Kingdom, and the United States.
    • Expansion: NATO has expanded since its founding, with new member countries joining in multiple rounds. The alliance currently consists of 32 member countries.

    Objectives:

    • Core mission: NATO’s core mission is collective defense, as articulated in Article 5 of the North Atlantic Treaty. This article specifies that an attack on any member nation will be regarded as an attack on all, triggering a collective response from the members.
    • Role in crisis management: Besides its core function of collective defense, NATO also participates in crisis management activities. These include conflict prevention, peacekeeping, and stabilization efforts in diverse regions globally.

     

    Conclusion: NATO, founded in 1949 for collective defense, faces criticisms for engaging in offensive actions, causing global conflicts, and perceived roles in creating ISIS and provoking tensions with Russia. It has expanded and diversified its roles beyond its original purpose.

    Mains Question for practice 

    Q Examine the key concerns raised about NATO’s actions and their implications for global security. 

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  • Pharma Sector – Drug Pricing, NPPA, FDC, Generics, etc.

    Govt. body hikes prices of essential medicines again, says ‘it’s minuscule’

    Explained | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: National Pharmaceutical Pricing Authority (NPPA)

    Mains level: Achievement of India's Pharmaceutical Industry and challenges

    Why in the News? 

    Recently, the National Pharmaceutical Pricing Authority (NPPA) implemented a 0.00551% increase in the Maximum Retail Price (MRP) for scheduled formulations of drugs starting from the commencement of the fiscal year 2024–25.

    Context:

    • The Department of Pharmaceuticals has released its yearly update of revised ceiling prices for 923 scheduled drug formulations and adjusted retail prices for 65 formulations.
    • These revised ceiling rates took effect on April 1. The Central Government attributes the price adjustments to fluctuations in the Wholesale Price Index (WPI).

    What is the National List of Essential Medicines? 

    • As per the World Health Organisation (WHO), Essential Medicines are those that satisfy the priority healthcare needs of the population.
    • Ministry of Health and Family Welfare hence prepared and released the first National List of Essential Medicines of India in 1996 consisting of 279 medicines.
      • Currently, India has approximately 400 molecules and 960 formulations covered under the National List of Essential Medicines.
    • The prices of non-essential drugs are also monitored by the government to ensure that the manufacturers of these drugs don’t increase MRP by more than 10% annually.

    The issue of the present Current Price Increase:

    • Manufacturers are allowed to increase the Maximum Retail Price (MRP) of scheduled formulations based on the Wholesale Price Index (WPI) without prior government approval.
    • Pharmaceutical companies argue that a rational increase in the cost of drugs is necessary for quality control.
    • Government’s Stance on Current Hike: Despite the recent increase, the government suggests that it will only marginally impact the cost of essential drugs such as antibiotics and painkillers.
      • The National Pharmaceutical Pricing Authority (NPPA) follows the Drug Price Control Order (DPCO) of 2013, allowing price hikes in line with changes in the WPI index.
      • Medicine prices were raised by 12% last year and 10% in 2022.

    BACK2BASICS:

    1. National Pharmaceutical Pricing Authority (NPPA):

    The National Pharmaceutical Pricing Authority was set up as an attached office of the Department of Chemicals and Petrochemicals (now Department of Pharmaceuticals since July 2008) on 29th August 1997. It has been entrusted inter-alia, with the following functions

    • Enforce the provision: To implement and enforce the provisions of the Drugs Price Control Order (DPCO), 1995/2013 under the powers delegated to it and to undertake and/or sponsor relevant studies concerning the pricing of drugs/formulations.
    • Monitor Demand and supply: To monitor the availability of drugs, identify shortages, if any, and take remedial steps. To collect/maintain data on production, exports and imports, market share of individual companies, profitability of companies, etc. for bulk drugs and formulations.
    • Manage legal matters: To deal with all legal matters arising out of the decisions of the Authority. To render advice to the Central Government on changes/revisions in the drug policy.
    • Assist Government: To help the Central Government in the parliamentary matters relating to drug pricing.
    1. Drugs (Prices Control) Order (DPCO):
    • The Drugs Prices Control Order, issued by the Government of India under Section 3 of the Essential Commodities Act, 1955, aims to govern and regulate drug prices.
    • Provides the list of price-controlled drugs: The Order interalia provides the list of price-controlled drugs, procedures for fixation of prices of drugs, method of implementation of prices fixed by Govt., penalties for contravention of provisions, etc.
    • Regulate only listed drugs: According to the regulations outlined in DPCO 2013, the National Pharmaceutical Pricing Authority oversees and regulates only the prices of drugs listed in the National List of Essential Medicines (NLEM).

     

    Achievements of India’s Pharmaceutical Industry:

    • Advanced Industries: India boasts one of the most advanced pharmaceutical industries among developing nations, ranking third globally in terms of volume and 13th in terms of value.
    • Export Destinations: The United States serves as the largest export destination for bulk drugs from India. This is noteworthy considering the stringent regulatory standards in the US.
      • Other significant export destinations include Brazil, Bangladesh, Turkey, China, the Netherlands, Nigeria, Vietnam, and Egypt.
    • India’s Role as a Supplier for Global South (developing countries): India ranks among the top five suppliers of bulk drugs to several developing countries, including Bangladesh, Nigeria, Vietnam, Egypt, Iran, and Pakistan.
      • Despite China’s dominance as a larger supplier, India remains a substantial exporter in this regard.

    The challenge is Dependency on China: Despite India’s robust pharmaceutical sector, it heavily relies on China for the supply of bulk drugs and drug intermediates. Approximately two-thirds of India’s total imports in this category originate from China.

    Conclusion: The recent price increase by the NPPA aligns with fluctuations in the Wholesale Price Index, aiming to regulate drug costs. India’s pharmaceutical industry faces challenges of import dependency on China, despite its global presence.

    Mains PYQ

    Q What do you understand by Fixed Dose Drug Combinations (FDCs)? Discuss their merits and demerits. (UPSC IAS/2013)

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  • Finance Commission – Issues related to devolution of resources

    Should State Governments borrow more? | Explained

    Explained | Economics | Mains Paper 3: Government Budgeting,Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Finance Commission; State Government; FRBM Act;

    Mains level: Fiscal Federalism and its challenges

    Why in the News? 

    Recently, the SC rejected Kerala’s plea for immediate relief in its case urging the Union government to ease borrowing constraints, allowing the state to secure extra funds in the ongoing fiscal year.

    State governments receive funds from three sources:

    • Own revenues (tax and non-tax)
    • Transfers from the Union government as shares of taxes and as grants 
    • Market borrowings

    Fiscal Demands for Extra Funds: 

    • Increased Expenditure: In 2020-21, the Kerala government sharply increased its spending to 18% of its GSDP, to provide economic relief in the wake of the COVID-19 pandemic, aided by the relaxation in borrowing norms then
    • Central Gov transfers to Kerala declined: As ratios of GSDP, the Union government’s transfers to Kerala declined to 2.8% in 2023-24, significantly lower than previous years, even as the State’s revenues remained at around 8.0%. 
    • This meant that, in 2023-24, the State government could meet its modest budget expenditure, equivalent to 14.2% of GSDP, only by raising the borrowing to 3.4% of the GSDP

    Socio-Economic for Extra Funds: 

    • Aging Population: Kerala, like many other states, faces the challenge of an aging population, which puts pressure on pension funds and healthcare systems, necessitating long-term financial planning and investment.
    • Pension Liabilities: The substantial outgo for pensions poses a financial burden on the state’s budget, requiring strategies for sustainable pension management to ensure fiscal stability.
    • Youth Outmigration: Kerala experiences significant outmigration of its youth, leading to a loss of productive workforce and potential tax revenues, highlighting the need for policies to retain skilled workers and stimulate economic growth

    About Net Borrowing Ceiling (NBC):

    • The net borrowing ceiling for states in India denotes the maximum threshold set on the funds that state governments can borrow within a fiscal year.
    • Significance: Ensuring fiscal discipline and preventing states from accumulating excessive debt, the net borrowing ceiling plays a pivotal role. 
    • Factors: The criteria for setting these limits are shaped by various factors such as inputs from the Finance Commission, the Fiscal Responsibility and Budget Management (FRBM) Act, and specific directives from the central government, notably the Ministry of Finance.

     

    Basis of the Net Borrowing Ceiling:

    • Fiscal Responsibility Legislation: Both the central and state governments in India adhere to the FRBM Act, which establishes fiscal deficit goals to uphold fiscal discipline. Under the FRBM, states are required to maintain a fiscal deficit limit of 3% of the Gross State Domestic Product (GSDP).
    • Central Government Guidelines: The central government, through the Department of Expenditure in the Ministry of Finance, sets the annual borrowing limits for each state based on a formula that considers the state’s GSDP, existing debt levels, fiscal discipline, and other relevant factors. These limits can be revised in response to special circumstances, such as natural disasters or significant economic downturns.
    • Finance Commission Recommendations: The Finance Commission, which is constituted every five years, recommends how the central taxes are to be divided between the centre and the states and suggests measures to maintain fiscal stability. It also provides recommendations regarding the borrowing limits of states.

    Conclusion: States need to put in place an effective forecasting and monitoring mechanism for cash inflows and outflows so that a need-based approach is followed for market borrowings and the interest cost of cash surpluses is minimized.

     

    Mains PYQ

    Q What were the reasons for the introduction of Fiscal Responsibility and Budget Management (FRBM) Act, 2013? Discuss critically its salient features and their effectiveness. (UPSC IAS/2013)

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  • Nuclear Energy

    Nuclear power is key to development, says study

    Explained | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Nuclear Energy;

    Mains level: Sustainable Development; Energy Sector;

    Why in the news? 

    A recent report published by  IIM-A suggested that India must prioritize investment in Nuclear energy sector and expand related infrastructure.

    Why India must prioritize investment in the Nuclear energy sector?

    India aims to be a developed country by 2047 and is on track to achieve net zero — or effectively zero-carbon dioxide emissions by 2070. 

    Key findings of the Report: 

    • Current Energy Mix: Solar energy constitutes 16% of India’s installed generation capacity, while coal comprises 49%. Nuclear energy currently comprises only 1.6% of India’s energy mix
    • Significant increase in nuclear power: The best-case scenario shows emissions falling to 0.55 billion tonnes of carbon dioxide by 2070, achieving ‘net zero’. This scenario entails a significant increase in nuclear power capacity, reaching 30 GW by 2030 and 265 GW by 2050.
    • Investment Requirements for Nuclear Energy: Achieving the proposed figures for nuclear energy would necessitate a doubling of investments. India would require an estimated ₹150-200 lakh crore between 2020-2070 to finance the necessary transitions in the energy sector
    • Need technology-based solution: The authors emphasize that achieving net zero emissions requires a combination of technologies rather than a single solution.
    • Transitioning away from coal: Coal is expected to remain a significant component of India’s energy system, serving as the “backbone”. However, transitioning away from coal would require substantial investment  

    What are the Challenges for India’s Goal of Net-Zero Emissions?

    • Uranium Factor: Data by the Central Electricity Authority say solar energy accounts for 16% of India’s installed generation capacity. To achieve these idealistic figures for nuclear energy would require a doubling of investments as well as the assumption that uranium, a critical fuel but restricted by international embargo, is available in necessary quantities.
    • Coal Factor: Coal accounts for 49% of India’s capacity. Coal would likely be the “backbone” of the Indian energy system and if the country has to phase down coal in the next three decades, it would need to build adequate infrastructure for alternative sources such as nuclear power, in addition to flexible grid infrastructure and storage to support the integration of renewable energy.

    Suggested measures by the Report are:

    • Research and Development: Invest in research and development to improve efficiency and reduce costs of renewable energy technologies, as well as advancements in nuclear energy technology.
    • Policy Support: Implement supportive policies and regulations to encourage private sector investment in the energy sector, including streamlined approval processes, tax incentives, and renewable energy mandates.
    • International Cooperation: Engage in diplomatic efforts to secure access to nuclear fuel and address international embargoes, while also collaborating with other countries on research and development in the energy sector.

    Conclusion: India’s path to development by 2047 hinges on prioritizing energy sector investment, as per an IIM-A report. Achieving net zero emissions by 2070, India would need close to ₹150-200 lakh crore between 2020-2070 to finance these transitions.

    Mains PYQ

    Q With growing energy needs should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy. (UPSC IAS/2018)

     

     

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  • Right To Privacy

    Living wills implementation lags in India

    Explained | Governance | Mains Paper 2: Executive & Judiciary

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Article 21; Right to die with dignity; Right to will;

    Mains level: Supreme Court;

    Why in the news? 

    In early March this year, 30 people in Thrissur in Kerala executed living wills.

    Context:

    • The Supreme Court’s 2018 order on Passive Euthanasia, wherein it recognized the ‘Right to die with dignity’ as a fundamental right and an aspect of Article 21 (right to life) of the Constitution.
    • However, the people wanting to get a “living will” registered were facing problems due to cumbersome guidelines, prompting a reconsideration by the apex court.
    • A Constitution Bench, led by Chief Justice of India Dipak Misra, in three concurring opinions, upheld that the fundamental right to life and dignity includes the ‘Right to Refuse Treatment and Die with dignity’.

    What is a Living Will? 

    A Living Will is a healthcare directive, in which people can state their wishes for their end-of-life care, in case they are not in a position to make that decision.

    The Court’s procedure:

    • Pre-2023: Initially, the process of creating living wills was deemed overly complex by the Court, with elaborate bureaucratic procedures in place to prevent abuse by unscrupulous individuals seeking to exploit the patient’s assets.
    • Post-2023: Recognizing the impracticality of requiring judicial magistrate countersignatures on living wills, the Court streamlined the process in January 2023. Now, living will require signatures in the presence of witnesses, attestation by a notary or gazetted officer, and submission to a designated government officer acting as a custodian.

    Challenges in Implementation :

    • Decision-Making Process: Even if a living will is created, its implementation is not automatic. Decisions on withholding or withdrawing treatment require certification by primary and secondary medical boards, posing logistical challenges, especially in hospitals without designated boards.
    • Ambiguities and Discomfort: Ambiguities in guidelines, discomfort with end-of-life care topics, and unclear legal definitions contribute to the hesitancy among officials to implement the Court’s directives without clear instructions from higher authorities.
    • Legal Ambiguity: Indian law lacks a clear definition of ‘next of kin’, leading to potential disputes among family members about medical decisions for terminally ill patients.
    • Barriers to End-of-Life Decisions: A survey of intensive care doctors reveals a general belief that end-of-life decisions are fraught with legal implications, serving as a significant barrier to making such decisions in the ICU.
    • Regional Disparities in India:
    • Haryana: While some states like Haryana have issued directions to follow the judgment, they have not provided essential guidance or protocols for implementation.
    • Odisha: In contrast, Odisha has taken a more thorough approach by forming a committee of experts to develop detailed draft orders for implementing the judgment, setting a potential example for other states.

    Conclusion: The central government could help bridge the gap in expertise by developing and publishing model orders and protocols to provide states with confidence and guidance in effectively implementing the judgment.

    Mains question for practice 

    Q Discuss the challenges surrounding the implementation of living wills in India, as established by the Supreme Court’s landmark judgment in 2018.

     

     

     

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  • ISRO Missions and Discoveries

    India among countries mulling telescopes on, around the moon

    Explained | Science Tech | Mains Paper 3: Achievements Of Indians In S&T,Awareness in various sc and tech fields

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: PRATUSH;

    Mains level: Lunar Missions;

    Why in the news? 

    Astronomers are looking forward to opening a new window on the universe by posting high-resolution telescopes on the moon and in orbit around it.

    Why Astronomers are looking forward to opening telescopes on the moon?

    • Radio telescopes launched into orbit around Earth exacerbated the problem of receiving radio noise from the entire planet, along with signals from outer space.
    • The moon’s far side offers pristine, airless conditions ideal for optical telescopes, providing crystal-clear seeing conditions during the two-week lunar night.

    Global Initiatives to Install Telescope on the Moon:

    • NASA’s LuSEE Night Project: LuSEE Night, a joint NASA-Berkeley Lab project scheduled for launch in December 2025, aims to study the Dark Ages period by landing on the far side of the moon, shielded from radio frequency noise from Earth.
    • ESA’s Projects: ESA is preparing to launch a radio telescope to the moon’s far side aboard its lunar lander, ‘Argonaut’, by 2030, along with other projects focused on gravitational wave detection and infrared observations.
    • China’s Initiatives: China is also actively involved in lunar exploration, with plans to launch a moon-orbiting radio telescope in 2026 and deploy the Queqiao-2 satellite, which includes a radio telescope payload, to serve as a communications relay between Earth and future missions.

    Indian Initiative 

    • PRATUSH: Indian scientists plan to deploy the radio telescope PRATUSH on the moon’s far side, built by the Raman Research Institute (RRI) in collaboration with the Indian Space Research Organisation (ISRO).
    • Deployment Process: Initially, ISRO will place PRATUSH into orbit around the Earth, then fine-tune it before launching it towards the moon. Operating in Earth orbit will offer advantages such as free space operation and reduced ionosphere impact compared to ground-based experiments.
    • Observational Advantages: PRATUSH in lunar orbit will have ideal observing conditions, operating in free space with minimal radio frequency interference (RFI) and no ionosphere, essential for studying the signal from the Dark Ages.
    • Instrument Features: PRATUSH will carry a wideband frequency-independent antenna, a self-calibrating analog receiver, and a digital correlator to capture radio noise in the signal from the Dark Ages.

    Conclusion: The global initiative to deploy telescopes on and around the moon aims to overcome Earth’s radio noise and capitalize on the lunar far side’s pristine conditions for groundbreaking astronomical observations, including studying the universe’s early Dark Ages.

    Mains question for practice 

    Q Discuss the global initiatives to deploy telescopes on the moon.

     

     

     

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  • Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

    South Asia, India risk squandering demographic dividend: World Bank

    Explained | Economics | Mains Paper 3: Issues relating growth and development, employment

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Job for Resilience Report

    Mains level: Main findings in this report

    Why in the News? 

    Recently, the ‘Job for Resilience Report’ was published by the World Bank. The Report talks about how the South Asia region including India is not making use of its demographic dividend.

    • The pace of job creation in the region fell well short of the growth in the working-age population, even as it projected a strong 6.0-6.1% growth for 2024-25 for the region in its South Asia region.’

    Main findings in this report:

    The South Asia’s labor markets as Emerging markets and developing economies: 

    • Declining employment ratio: South Asia’s employment weakened from 2000–23, despite a 6% post-pandemic surge. While most EMDEs remained stable, South Asia declined by 2%, with varied changes within.
    • Low employment ratios: Except for Nepal, South Asian countries have employment ratios significantly lower than other EMDEs, with South Asia’s ratio at 59%, notably lower than the 70% average elsewhere in 2023.
    • Employment weakness for men and women: In South Asia, men’s employment ratios declined over two decades, compared with other EMDEs. Women’s ratios, persistently low and half those elsewhere, primarily contribute to South Asia’s lower overall employment rates.
    • A missing engine of growth: In the 2010s, South Asia experienced a surge in labor productivity growth, which later declined below the EMDE average from 2020–23. Unlike other EMDEs, South Asia’s output growth relied heavily on labor productivity growth and working-age population expansion. However, declining employment ratios hampered output growth.

    Report on Indian Scenario:

    • Trends in employment and labor productivity: India’s employment growth in the 2010s was weak but rebounded post-pandemic. The employment ratio declined significantly until 2022 but partially recovered by 3 percentage points in 2023.
    • Migrant workers:  In India, Migrant workers returned to rural areas, and emigration from rural areas slowed, during the pandemic.5 India has the region’s second-largest share of workers in agriculture (44 per cent) after Nepal.
    • Employment composition: India’s industrial employment grows with public investments, eased labor regulations, and contract labor. The services sector, led by IT, BPO, and healthcare, thrives on a skilled workforce and digital infrastructure, limiting opportunities for unskilled labor.

    Measures to address the challenges highlighted in the Report: 

    • Skill Development Programs: Implementing extensive skill development programs to equip the workforce with the necessary skills demanded by the evolving job market, focusing on both technical and soft skills.
    • Labour Market Reforms: Continuously reviewing and refining labor regulations to strike a balance between protecting workers’ rights and fostering a conducive environment for job creation and investment.
    • Promotion of Inclusive Growth: Implementing policies aimed at promoting inclusive growth, particularly focusing on increasing women’s participation in the workforce through measures like affordable childcare, flexible work arrangements, and addressing cultural barriers.
    • Investment in Infrastructure: Continued investment in infrastructure development to facilitate the growth of industries and services, creating more employment opportunities, particularly in rural areas.
    • Enhancing Productivity: Implementing measures to enhance productivity across sectors through technological advancements, innovation, and efficient resource allocation.

    Conclusion: World Bank warns South Asia, including India, risks wasting demographic dividend due to declining employment ratios and low productivity growth. Urgent measures needed: skill development, labor reforms, inclusive growth promotion, infrastructure investment, and productivity enhancement.

    With inputs from:

    https://openknowledge.worldbank.org/server/api/core/bitstreams/4ec19c2d-65fd-4523-8020-338f0cb98523/content

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  • RBI Notifications

    Let’s make ₹ a global currency: PM to RBI

    Explained | Economics | Mains Paper 3: Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Global Currency

    Mains level: Indian Trades;

    Why in the news? 

    PM Modi asked the RBI to prepare a 10-year strategy to make the Indian rupee a globally “accessible and acceptable” currency and to meet the credit needs of every segment of the country

    What is Global Currency?

    A global currency refers to a single currency that is used by every country in the world. This concept involves all nations adopting the same currency for international trade and transactions

    What are the major challenges for India to make Rupeea a Global Currency?

    • Economic Stability: The Indian economy would need to demonstrate consistent stability and growth to inspire confidence among international investors and users of the currency.  
    • Liquidity in Financial Market Development:  These markets need to be deep and liquid to accommodate large volumes of international transactions denominated in INR.
    • Capital Controls: India currently has restrictions on capital flows in and out of the country. These would need to be eased to facilitate international trade and investment denominated in INR.
    • Legal and Regulatory Framework: There would need to be robust legal and regulatory frameworks in place to govern the use of the INR in international transactions, including clearing and settlement systems, as well as dispute resolution mechanisms.
    • International/ Investors Acceptance: Convincing other countries, businesses, and individuals to adopt the INR as a global currency would require concerted diplomatic efforts, as well as initiatives to promote its use in international trade and finance.
    • Currency Convertibility: Full convertibility of the INR would be necessary for it to become a global currency.

    Indian Efforts to Make Rupee a Global Currency:

    • RBI’s Roadmap for Rupee Internationalization: The RBI has published a report outlining a roadmap for the internationalization of the Rupee. This roadmap recommends actions such as including the Rupee in the Special Drawing Rights (SDR) basket, promoting its use in trade invoicing and settlement, facilitating its use in offshore markets, and developing financial products denominated in Rupees.
    • Promoting Use of Local Currencies for Cross-Border Transactions: India has been engaging in agreements with countries like the UAE to promote the use of local currencies, including the Rupee, for cross-border transactions.

    Way Forward:

    • Need for Transactions in Rupee: To be an accepted International Currency, the Indian rupee is to be freely used in transactions by residents and non-residents and as a reserve currency for global trade.
    • Need to increase the Exports: Indian Trades need to be promoted beyond the Asian region.  All export and import transactions need to be invoiced in Indian rupees.
    • Reducing the Constraints: Legal and Regulatory frameworks need to be freed to attract investors for their business profits without hampering security concerns.

    https://www.hindustantimes.com/india-news/lets-make-a-global-currency-pm-to-rbi-101711996093588.html

    https://theprint.in/opinion/indian-rupee-can-become-global-reserve-currency-but-modi-govt-must-bring-reforms-for-that/1738000/

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  • Roads, Highways, Cargo, Air-Cargo and Logistics infrastructure – Bharatmala, LEEP, SetuBharatam, etc.

    Why Supreme Court bar unregulated soil extraction for linear projects?

    Explained | Polity | Mains Paper 2: Executive & Judiciary

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Environment Protection Act,1986; National Green Tribunal (NGT);

    Mains level: Judiciary; National Green Tribunal (NGT);

    Why in the News?

    Recently, the SC revoked the notification given by the Environment Ministry to exempt the extraction of ordinary earth for linear projects, such as road and railway construction.

    • It was challenged before the National Green Tribunal (NGT), which asked the Ministry to review it within three months. However, the Ministry did not take any action, leading the matter to reach the SC.

    What are the linear projects? 

    Linear projects refer to Construction or Development Projects. It includes the construction of linear structures like utility lines, pipelines, railroad tracks, highways, stormwater channels, and stream restoration activities.

    What was the 2020 exemption?

    • September 2006: The Environment Ministry issued a notification under the Environment (Protection) Act, 1986, on activities that would require prior Environmental Clearance.
    • January 2016: A second notification was issued, exempting certain categories of projects from this requirement.
    • March 2020: It added “Extraction or sourcing or borrowing of ordinary earth for the linear projects such as roads, pipelines, etc” to the list of exempted activities.
      • The general purpose of the 2020 notification was to conform to the amendments made to the Mines and Minerals (Development and Regulation) Act, 1957, in March 2020, allowing new lessees to continue mining for two years with the statutory clearances and licenses issued to their predecessors.

    Nexus between the Judiciary and the Union Government (Ground for Challenges)

      • Judicial stand: The SC invalidated the broad and random exception, highlighting that the announcement was rushed during the COVID-19 lockdown without seeking feedback or objections through prior notification.
    • The exemption granted without incorporating safeguards was deemed arbitrary and violative of Article 14 of the Constitution.
    • The court emphasized that the absence of safeguards defeats the purpose of the Environment Protection Act (EP Act).
    • An argument by the center: The Center contended that the exemption was essential “to benefit the general public” and would support “the kumhars (potters), farmers, gram panchayats, banjaras, roads of Gujarat,” and all non-mining activities recognized by the states.
      • However, the Apex court stated that the Centre had failed to provide reasons for concluding that the notification was issued in the public interest.

    Similar Judicial Scrutiny in the Past:

    • January 2018: The NGT quashed an exemption offered by the Ministry’s 2016 notification from the requirement of prior EC for building and construction activities having built-up areas of more than 20,000 sq m. According to the Tribunal, there was nothing to suggest an improvement in the quality of the environment to justify the exemption.
    • July 2015: Underlining that the EP Act mandates prior approval, the NGT struck down two Office Memorandums issued by the Ministry in December 2012 and June 2013 for granting ex-post facto EC to projects under the 2006 notification.
    • July 2021: Another notification of the Ministry that sought to perpetuate an amnesty window opened for just six months in March 2017 to clear projects under the “violation category” and issued ex-post facto approval to more than 100 projects, until the SC stayed it in January this year.
    • March 2024: The Kerala HC quashed a 2014 notification that exempted educational institutions and industrial sheds with built-up areas of more than 20,000 sq m from obtaining EC.

     

    Conclusion: The Supreme Court invalidated the Environment Ministry’s exemption for earth extraction in linear projects due to a lack of justification and safeguards, emphasizing compliance with Environmental Clearance to minimize environmental harm, safeguarding the Environment Protection Act’s purpose.

    Mains PYQ

    Q How does the draft EnvironmentImpact Assessment(EIA)Notification, 2020 differ from the existing EIA Notification, 2006? (UPSC IAS/2020)

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  • Solar Energy – JNNSM, Solar Cities, Solar Pumps, etc.

    Solar surge: Moving away from imported solar panels

    Explained | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Environment; Solar Photovoltaic cells;

    Mains level: Environment; Solar Energy;

    Why in the news? 

    The government is finally bringing into effect the policy of an Approved list of Models and Manufacturers (ALMM) that will discourage solar power project developers from relying on imported panels. 

    About Approved Models and Manufacturers of Solar Photovoltaic Modules Order, 2019:

    • Aim: To boost domestic manufacturing of solar panels by registering only those made with domestically manufactured cells, wafers, and polysilicon.
    • Compulsory Registration: The order mandates compulsory registration for solar PV module and cell manufacturers, ensuring they meet certain quality and production standards.
    • Lists: LIST-I for solar PV modules and LIST-II for solar PV cells.
      • Only listed models and manufacturers in these lists are considered approved for use in various government projects and schemes.
    • Eligibility Criteria: To be included in the lists, manufacturers must undergo inspections and meet specific criteria set by the National Institute of Solar Energy (NISE) to ensure the products are genuinely manufactured and not imported.
    • This order ensures the reliability of solar PV products used in installations, promotes domestic manufacturing, and aligns with the government’s initiatives for renewable energy adoption and energy security.

    Efforts made by the Government to promote domestic Solar Manufacturing:

    • Import Restrictions: The creation of the Approved Models and Manufacturers list was aimed at restricting imports from China, which dominates a significant portion of the global solar supply market.
    • Ambitious Renewable Energy Targets: India aims to source about 500 GW of its electricity from non-fossil fuel sources by 2030, with at least 280 GW coming from solar power. This necessitates adding at least 40 GW of solar capacity annually until 2030. So there is need to focus on indegenous solar project

    Challenges ahead:

    • Unrealistic Targets: Despite ambitious targets, India’s solar capacity additions have been relatively low in recent years, attributed in part to the COVID-19 pandemic. The country aims to ramp up installations to between 25 GW and 40 GW annually.
    • Reliance on Imports: A significant fraction of India’s solar installations is met by imports, which affects domestic panel manufacturers who must pay for government certification but lose orders to cheaper Chinese panels. For example surge in Solar panel import in  FY 24 around $1,136.28 million  from FY23 imports $943.53 million

    Conclusion: India’s ALMM policy aims to boost domestic solar manufacturing, aligning with ambitious renewable energy targets. Address challenges like meeting targets and reducing reliance on imports through strategic planning and support.

    Mains PYQ 

    Q Describe the benefits of deriving electric energy from sunlight in contrast to conventional energy generation. What are the initiatives offered by our government for this purpose? (UPSC IAS/2020)

    https://economictimes.indiatimes.com/industry/renewables/how-india-became-a-frontrunner-in-the-global-renewable-energy-market/articleshow/100271905.cms?from=mdr

    https://mnre.gov.in/approved-list-of-models-and-manufacturers-almm/

    https://pib.gov.in/PressReleasePage.aspx?PRID=1944075

    https://energy.economictimes.indiatimes.com/news/renewable/indias-solar-panel-imports-set-to-remain-higher-in-fy24/106217488#:~:text=During%20the%20initial%20six%20months,million%2C%20according%20to%20Eninrac%20Consulting

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