Note4Students
From UPSC perspective, the following things are important :
Prelims level: Pandora papers
Mains level: Paper 3- Tax evasion and tax avoidance
Context
The Pandora Papers, published on October 3, once again expose the illegal activities of the rich and the mighty across the world.
About the Pandora Papers investigation
- It is “the world’s largest-ever journalistic collaboration, involving more than 600 journalists from 150 media outlets in 117 countries”.
- The International Consortium of Investigative Journalists (ICIJ) has researched and analysed the approximately 12 million documents in order to unravel the functioning of the global financial architecture.
- The Pandora Papers, unlike the previous cases, are not from any one tax haven; they are leaked records from 14 offshore services firms. The data pertains to an estimated 29,000 beneficiaries.
- The 2.94 terabytes of data have exposed the financial secrets of over 330 politicians and public officials, from more than 90 countries and territories.
- These include 35 current and former country leaders.
Role of financial centres and banks
- A large extent of the illicit financial flows have a link to New York City and London, the biggest financial centres in the world that allow financial institutions such as big banks to operate with ease.
- The big financial entities operating from these cities have been prosecuted for committing illegalities.
- In 2012, an investigation into the London Interbank Offered Rate or LIBOR — crucial in calculating interest rates — led to the fining of leading banks such as Barclays, UBS, Rabobank and the Royal Bank of Scotland for manipulation.
- These banks also operate a large number of subsidiaries in tax havens to help illicit financial flows.
Modus operandi
- Tax havens enable the rich to hide the true ownership of assets by using: trusts, shell companies and the process of ‘layering’.
- Financial firms offer their services to work this out for the rich.
- They provide ready-made shell companies with directors, create trusts and ‘layer’ the movement of funds.
- The process of layering involves moving funds from one shell-company in one tax haven to another in another tax haven and liquidating the previous company.
- This way, money is moved through several tax havens to the ultimate destination.
- Since the trail is erased at each step, it becomes difficult for authorities to track the flow of funds.
- It appears that most of the rich in the world use such manipulations to lower their tax liability even if their income is legally earned.
Why funds are moved to the tax havens?
- Even citizens of countries with low tax rates use tax havens.
- Over the three decades, tax havens have enabled capital to become highly mobile, forcing nations to lower tax rates to attract capital.
- This has led to the ‘race to the bottom’, resulting in a shortage of resources with governments to provide public goods, etc., in turn adversely impacting the poor.
- Lowering tax liability: It appears that most of the rich in the world use such manipulations to lower their tax liability even if their income is legally earned.
- Moving funds out of reach of creditors: Revelations suggest that funds are moved out of national jurisdiction to spirit them away from the reach of creditors and not just governments.
- Many fraudsters are in jail but have not paid their creditors even though they have funds abroad.
Challenges in checking the illicit financial flows
- The very powerful who need to be onboard to curb illicit financial flows (as the Organisation for Economic Co-operation and Development, or the OECD is trying) are the beneficiaries of the system and would not want a foolproof system to be put in place to check it.
- Strictly speaking, not all the activity being exposed by the Pandora Papers may be illegal due to tax evasion or the hiding of proceeds of crime.
- The authorities will have to prove if the law of the land has been violated.
- Operators outside the purview of tax authorities: Many Indians have become non-resident Indians or have made some relative into an NRI who can operate shell companies and trusts outside the purview of Indian tax authorities.
- That is why prosecution has been difficult in the earlier cases of data leakage from tax havens.
- The Supreme Court of India-monitored Special Investigation Team (SIT) set up in 2014 has not been able to make a dent.
- Role of organised sector: The Government’s focus on the unorganised sector as the source of black income generation is also misplaced since data indicate that it is the organised sector that has been the real culprit and also spirits out a part of its black incomes.
Way forward
- Global minimum tax: Recent development has been the agreement among almost 140 countries to levy a 15% minimum tax rate on corporates.
- Though it is a long shot, this may dent the international financial architecture.
- Ending banking secrecy: Other steps needed to tackle the curse of illicit financial flows are ending banking secrecy and a Tobin tax on transactions; neither of which the OECD countries are likely to agree to.
Consider the question “How illicits financial flows affect the economies of the nations? What are the challenges in curbing it?”
Conclusion
To curb the illicit financial flows, the global community needs to reach a consensus on several issues and tackle the challege collectively.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 312
Mains level: Paper 2- Reforms in bureaucracy
Context
The bureaucracy that took India through the last 75 years can’t be the one to take it through the next 75 — we need a proactive, imaginative, technology-savvy, enabling bureaucracy.
Role of bureaucracy and challenges it faces
- The civil services, and the Indian Administrative Service (IAS) in particular played important role in holding India together post-Independence.
- Much of the impressive nation-building across sectors happened because of their dedication and commitment.
- It is also forgotten that the bureaucracy, unlike the private sector, is a creature of the Constitution and is bound by multiple rules, laws, and procedures.
- Understaffed: As per estimates compiled by the Institute of Conflict Management, the government of India (GOI) has about 364 government servants for every 1,00,000 residents, with 45 per cent in the railways alone.
- About 60 per cent and 30 per cent are in Groups C and D, respectively, leaving a skeletal skilled staff of just about 7 per cent to man critical positions.
- We are grossly understaffed.
- Inaction: Further, faced with extensive judicial overreach reporting to an often rapacious, short-sighted political executive, and a media ever ready to play the role of judge, jury and executioner, the bureaucracy has in large part found comfort in inaction and ensuring audit-proof file work.
Suggestions
- Get out of business: That we need not be in many sectors is well-recognised — leave them to the markets — and politicians must get bureaucrats out of business, in more ways than one.
- Prevent punitive actions: To increase the officers’ willingness to take decisions, one possible solution is to legally prevent enforcement agencies from taking punitive action, like arrest for purely economic decisions without any direct evidence of kickbacks.
- Lateral entry: The toughest challenge is to change an inactive bureaucracy to one that feels safe in taking genuine risks.
- Lateral entry needs to expand to up to 15 per cent of Joint/Additional and Secretary-level positions in GOI.
- Recruitment process: Changes in recruitment procedures, like the interview group spending considerable time with the candidates, along with psychometric tests, will improve the incoming pool of civil servants.
- Evaluation: Most importantly, after 15 years of service, all officers must undergo a thorough evaluation to enable them to move further, and those who do not make it should be put out to pasture.
- Adoption of technology: Every modern bureaucracy in the world works on technology-enabled productivity and collaboration tools.
- India procures about $600 billion worth of goods and services annually — can’t all payments be done electronically?
Consider this question ” The civil services held India together after Independence, but if the country’s potential is to be realised, existing problems of inefficiency and inaction must be fixed. In light of this, examine the factors reasponsible for inefficiency and suggest the reforms.”
Conclusion
India cannot hope to get to a $5-trillion economy without a modern, progressive, results-oriented bureaucracy, one which says “why not?” instead of “why?” when confronted with problems.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Adaptation Gap Report
Mains level: Paper 3- Climate finance
Context
In the run-up to the 26th UNFCCC media reports have claimed that developed countries are inching closer to the target of providing $100 billion annually. This view has been bolstered by the Organisation for Economic Co-operation and Development (OECD), which claimed that climate finance provided by developed countries had reached $78.9 billion in 2018.
Issue of climate financing and claim of reaching the target of $100 billion
- These claims reaching the target of $100 billion annually is erroneous.
- First, the OECD figure includes private finance and export credits.
- Public finance: Developing countries have insisted that developed country climate finance should be from public sources and should be provided as grants or as concessional loans.
- However, the OECD report makes it clear that the public finance component amounted to only $62.2 billion in 2018, with bilateral funding of about $32.7 billion and $29.2 billion through multilateral institutions.
- Nature of finance: Significantly, the final figure comes by adding loans and grants. Of the public finance component, loans comprise 74%, while grants make up only 20%.
- The report does not say how much of the total loan component of $46.3 billion is concessional.
- Non-concessional loans: From 2016 to 2018, 20% of bilateral loans, 76% of loans provided by multilateral development banks and 46% of loans provided by multilateral climate funds were non-concessional.
- Between 2013 and 2018, the share of loans has continued to rise, while the share of grants decreased.
- The OECD reports on climate finance have long been criticised for inflating climate finance figures.
- In contrast to the OECD report, Oxfam estimates that in 2017-18, out of an average of $59.5 billion of public climate finance reported by developed countries, the climate-specific net assistance ranged only between $19 and $22.5 billion per year.
- The 2018 Biennial Assessment of UNFCCC’s Standing Committee on Finance reports that on average, developed countries provided only $26 billion per year as climate-specific finance between 2011-2016.
Broken commitments from the US on climate financing
- U.S. President Joe Biden recently said that the U.S. will double its climate finance by $11.4 billion annually by 2024.
- It is Congress that will decide on the quantum after all.
- The U.S. also has a history of broken commitments, having promised $3 billion to the Green Climate Fund (GCF) under President Barack Obama, but delivering only $1 billion.
- The future focus of U.S. climate finance is the mobilisation of private sector investment.
- The bulk of the money coming in would be through private funds, directed to those projects judged “bankable” and not selected based on developing countries’ priorities and needs.
Finance skews toward mitigation
- Climate finance has also remained skewed towards mitigation, despite the repeated calls for maintaining a balance between adaptation and mitigation.
- The 2016 Adaptation Gap Report of the UN Environment Programme had noted that the annual costs of adaptation in developing countries could range from $140 to $300 billion annually by 2030 and rise to $500 billion by 2050.
- Currently available adaptation finance is significantly lower than the needs expressed in the Nationally Determined Contributions submitted by developing countries.
Conclusion
Delivering on climate finance is fundamental to trust in the multilateral process. Regrettably, while developing countries will continue to pressure developed countries to live up to their promises, the history of climate negotiations is not in their favour.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FAO
Mains level: Paper 3- Reorienting agri-food systems
Context
There is an urgent need for reorientation of the long-term direction of agri-food systems to not only enhance farm incomes but also ensure better access to safe and nutritious foods.
Challenge of malnutrition in India
- The findings from the first round of the Fifth National Family Health Survey suggest that nutrition-related indicators have worsened in most States.
- In addition, findings from the Comprehensive National Nutrition Survey (2016-18) have highlighted the role of micro-nutrient malnutrition.
- Pathways for nutritional security consist of improving dietary diversity, kitchen gardens, reducing post-harvest losses, making safety net programmes more nutrition-sensitive, women’s empowerment, enforcement of standards and regulations, improving Water, Sanitation and Hygiene, nutrition education, and effective use of digital technology.
Agri-food system: Significance and challenges it faces
- The agri-food systems are the most important part of the Indian economy.
- India produces sufficient food, feed and fibre to sustain about 18% of the world’s population (as of 2020). Agriculture contributes about 16.5% to India’s GDP and employs 42.3% of the workforce (2019-20).
- A sustainable agri-food system is one in which a variety of sufficient, nutritious and safe foods are made available at an affordable price to everyone, and nobody goes hungry or suffers from any form of malnutrition.
- However, the country’s agri-food systems are facing new and unprecedented challenges, especially related to economic and ecological sustainability, nutrition and the adoption of new agricultural technologies.
- The edifice of India’s biosecurity remains vulnerable to disasters and extreme events.
Way forward: Reorienting agri-food systems
- There is an urgent need for reorientation of the long-term direction of agri-food systems to not only enhance farm incomes but also ensure better access to safe and nutritious foods.
- Additionally, the agri-food systems need to be reoriented to minimise cost on the environment and the climate.
- This need is recognised by the theme of World Food Day 2021: ‘Our actions are our future. Better production, better nutrition, a better environment and a better life’.
- FAO’s support for the transformation of agri-food systems is rooted in agro-ecology.
- The more diverse an agricultural system, the greater its ability to adapt to shocks.
- Different combinations of integrated crop-livestock-forestry-fishery systems can help farmers produce a variety of products in the same area, at the same time or in rotation.
- In January this year, FAO in collaboration with NITI Aayog and the Ministry of Agriculture convened a National Dialogue to evolve a framework for the transition to a more sustainable agri-food systems by 2030 and identify pathways for enhancing farmers’ income and achieving nutritional security.
Consider the question “What are the challenges facing agri-food systems in India? Suggest the pathways to transform the agri-food system to enhance farm income and ensure food and nutrition security.”
Conclusion
Food systems can help combat environmental degradation or climate change. Sustainable agri-food systems can deliver food security and nutrition for all, without compromising the economic, social and environmental bases.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CAATSA
Mains level: Paper 2- Implications of CAATSA on India-US ties
Context
The delivery of the S-400 Triumf air defence systems from Russia is expected according to schedule. In response, U.S. Deputy Secretary of State Wendy Sherman hoped that both the U.S. and India could resolve the issue.
Background of the CAATSA
- The Countering America’s Adversaries through Sanctions Act (CAATSA) was passed when the U.S. sought to discourage trade in the defence and intelligence sectors of Russia.
- The Act mandates the President to impose at least five of the 12 sanctions on persons engaged in a “significant transaction” with Russian defence and intelligence sectors.
- These sanctions include suspending export licence, banning American equity/debt investments in entities, prohibiting loans from U.S. financial institutions and opposing loans from international finance institutions.
- The Act also built in a safety valve in the form of a presidential waiver.
- The “modified waiver authority” allows the President to waive sanctions in certain circumstances.
- There are a few more provisions including one that allows for sanctions waivers for 180 days, provided the administration certifies that the country in question is scaling back its ties with Russia.
Implications of CAATSA sanctions against India and scope for waiver
- Impact on bilateral relationship: Sanctions have the tremendous potential of pulling down the upward trajectory of the bilateral relationship between the U.S. and India, which now spans 50 sectors, especially in the field of defence.
- India turned sullen over the manner in which the U.S. negotiated the exit deal with the Taliban.
- Quad engagement: Yet, on the strategic plane, India remained on course by agreeing to the upgrading of the Quadrilateral Security Dialogue and sharing the same vision as the U.S. on the Indo-Pacific construct.
- The U.S.’s apprehension is that bringing India under a sanctions regime could push New Delhi towards its traditional military hardware supplier, Russia.
- The U.S. Sanctions can stir up the latent belief in India that Washington cannot be relied upon as a partner.
- While the administration will have to do the heavy lifting, the role of Indian-Americans should be significant just as they rallied around to support the Civil Nuclear Deal in the face of stiff resistance from Democrats opposed to nuclear proliferation.
- Decrease in imports from Russia: India’s import of arms decreased by 33% between 2011-15 and 2016-20 and Russia was the most affected supplier, according to a report by the Stockholm-based defence think-tank SIPRI.
- In recent years, though, there have been some big deals worth $15 billion including S400, Ka-226-T utility helicopters, BrahMos missiles and production of AK-203 assault rifles.
- Increase in defence import from US: On the other hand, over the past decade, government-to-government deals with the U.S. touched $20 billion and deals worth nearly $10 billion are under negotiation.
Conclusion
The CAATSA test will determine the course of the India-U.S. strategic partnership. Whether the Biden administration sail through opposition within his party remains to be seen.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: UDAY scheme
Mains level: Paper 3- Scheme for discoms
Context
In its budget 2021-22, the Union government had announced the launch of a “reforms-based and results-linked” scheme for the distribution sector.
Precarious financial condition of discoms
- Their overall debt burden, despite the implementation of the UDAY scheme, is estimated to increase to around Rs 6 lakh crore in the ongoing financial year.
- Moreover, their annual cash losses are estimated to be about Rs 45,000-50,000 crore (excluding UDAY grants and regulatory income).
- Due to highly subsidised nature of power tariffs towards agriculture and certain sections of residential consumers, the overall subsidy dependence is likely to be roughly Rs 1.30 lakh crore this year at the all-India level.
Revamped Distribution Sector Scheme
- In its budget 2021-22, the Union government had announced the launch of a “reforms-based and results-linked” scheme for the distribution sector.
- Subsequently, the Revamped Distribution Sector Scheme was notified in July with an overall outlay of Rs 3.03 lakh crore.
- Under the scheme, AT&C losses are sought to be brought down to 12-15 per cent by 2025-26, from 21-22 per cent currently.
- Operational efficiencies of discoms are to be improved through smart metering and upgradation of the distribution infrastructure, including the segregation of agriculture feeders and strengthening the system.
- The scheme has two parts — Part A with an outlay of Rs 3.02 lakh crore, pertains to the upgradation of the distribution infrastructure and metering related works.
- Part B, with an outlay of Rs 1,430 crore, is for training and capacity building, besides other enabling and support activities.
- Discoms and their state governments will have to sign a tripartite agreement with the central government in order to avail benefits under the scheme.
- Only those discoms that meet all the pre-qualifying criteria will be eligible for the release of funds.
- A loss-making discom will not be eligible unless it draws up plans to reduce its losses, approved by the state government and filed with the central government.
- As far as the agricultural sector is concerned, the use of solar power projects to supply electricity to these consumers through the agriculture feeder route is likely to result in savings.
- This is because of a combination of high tariff competitiveness offered by solar power, lower technical losses due to proximity to load centres, and the ability to meet demand during the day when sunlight is available.
- In addition, the delicencing initiative proposed by the central government can effect significant changes in the distribution segment, facilitating competition and placing emphasis on the quality and reliability of power supply and consumer services.
Issue of tariff determination
- A continuing area of concern affecting discom finances is the significant delay in the process of tariff determination in many states.
- As of now, only 19 out of 28 states have issued tariff orders for 2021-22, indicating sluggish progress.
- Further, there is upward pressure on the cost of power supply for distribution utilities, considering the dominant share (around 70 per cent) of coal in the fuel mix for energy generation, the strengthening of imported coal prices and the possibility of domestic coal price revisions by Coal India.
- As a consequence, a cost-reflective tariff determination process, coupled with the timely pass-through of power purchase costs, remains critical for the utilities.
Consider the question “Examine the factor that explains the continuing financial woes of state-owned discoms despite implementing several schemes. How Revamped Distribution Sector Scheme seeks to address the issue?”
Conclusion
On the whole, while the focus on improving the operational efficiency, and ensuring the financial sustainability of discoms is indeed welcome, timely implementation of the reforms is critical to achieving the milestones.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Taper tantrum
Mains level: Paper 3- MPC decision on interest rates
Context
The Monetary Policy Committee of the RBI kept the benchmark policy rates unchanged, and retained the accommodative stance in its October review.
Factors playing part in monetary policy decisions
- It’s important to remember that monetary policy these days is influenced by both local macroeconomic developments and the global monetary policy direction, with the former playing a dominant role.
- Locally, after the second wave of the pandemic, a variety of indicators such as the Purchasing Managers Index (manufacturing and services), mobility indicators, government tax collections, exports and imports are pointing at an improvement in economic activity.
- Then there is the good news on the monsoon front. With a late pick-up in rains, the cumulative deficiency in this monsoon season has come down to just 1 per cent of the long-period average (LPA).
- Since the MPC’s August 2021 policy review, Covid-19 cases have trended down and there has been admirable progress on the vaccination front.
- Also, despite high year-on-year growth numbers, the level of economic activity this fiscal will only be 1.5 per cent above 2019-2020.
Trends emerging from the economic recovery
- Role of government: Capital expenditure of both the Centre and states is on track to meet the budgetary commitment, supported by healthy tax collections.
- Large companies on recovery path: Large companies in industrial sectors such as steel, cement, non-ferrous metals are operating at healthy utilisation levels, and have deleveraged their balance sheets.
- Policy support for smaller companies: The going is not so good for the smaller ones.
- Clearly, smaller companies need policy support. The extension of the Emergency Credit Line Guarantee Scheme is a recognition of that.
- Private consumption is not broad-based either.
- Even in goods consumption, which is faring better than services, the nature of demand seems skewed towards relatively higher-value items such as cars and utility vehicles.
- This probably reflects the income dichotomy spawned by the pandemic.
- Inflation: Its fall to 5.3 per cent in August offers only limited comfort for two reasons.
- One, core and fuel inflation, which have 54 per cent weightage in CPI, remain stubbornly high.
- Second, food prices have nudged down overall inflation.
- Domestic growth-inflation dynamics suggest that the RBI has little option but to remain more tolerant of persistent price pressures, and hope that these will eventually prove transitory because they have been primarily driven by supply shocks caused by the pandemic.
Global monetary policy environment
- Globally, the monetary policy environment is veering towards normalisation/tapering/interest-rate rise largely due to an upward surprise in inflation, or because some central banks feel the objectives of quantitative easing have been met.
- Central banks in advanced economies such as Norway, Korea and New Zealand have recently raised rates.
- The two systemically important central banks — the US Federal Reserve (Fed) and the European Central Bank (ECB) — view the current spike in inflation as fleeting and have communicated greater tolerance for it for a longer period.
Conclusion
The process of mopping up excess liquidity will slowly gain pace over the next few months, followed by a policy rate hike sometime around early 2022. By then, there should be enough clarity on the third wave and the stance of the Fed and the ECB.
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From UPSC perspective, the following things are important :
Prelims level: AUKUS
Mains level: Paper 2-Relations with EU
Context
Last week’s in-person summit in Delhi was with the Danish prime minister, Mette Frederiksen.
Europe as a valuable partner
- Few Asian countries view Europe with strategic suspicion. Many in Asia see Europe as a valuable partner.
- As the deepening confrontation between the US and China begins to squeeze South East Asia, Europe is widely seen as widening the strategic options for the region.
- The perspective is similar in Delhi, which now sees Brussels as a critical element in the construction of a multipolar world.
- Cultivate Europe: As External Affairs Minister Subrahmanyam Jaishankar puts it, India’s strategy is to “engage America, manage China, cultivate Europe, reassure Russia, bring Japan into play”.
- EU’s Strategy for India: The EU outlined a strategy for India in 2018 to focus on four themes — sustainable economic modernisation, promotion of a rules-based order, foreign policy coordination, and security cooperation.
- At the summit in Portugal in May this year, the EU and India agreed to resume free trade talks and develop a new connectivity partnership that would widen options for the world beyond the Belt and Road Initiative.
- Rebalancing the international system: Above all, there is a recognition in both Delhi and Brussels that the India-EU strategic partnership is crucial for the rebalancing of the international system amidst the current global flux.
Possibilities with smaller European countries
- Europe looms so large in the Indian diplomatic agenda today and smaller European states draw unprecedented political attention from Delhi.
- That Denmark, a country of barely six million people, can establish a significant green partnership with India, is a reminder that smaller countries of Europe have much to offer in India’s economic, technological, and social transformation.
- Luxembourg brings great financial clout, Norway offers impressive maritime technologies, Estonia is a cyber power, Czechia has deep strengths in optoelectronics, Portugal is a window to the Lusophone world, and Slovenia offers commercial access to the heart of Europe through its Adriatic sea port at Koper.
- As India begins to realise this untapped potential, there are new openings with the 27-nation EU headquartered in Brussels.
EU’s important role in Indo-Pacific
- The EU’s Indo-Pacific strategy is likely to have a much greater impact on the region more immediately and on a wider range of areas than military security.
- Area’s of impact range from trade and investment to green partnerships, the construction of quality infrastructure to digital partnerships, and from strengthening ocean governance to promoting research and innovation.
- Defence and security are important elements of the EU’s Indo-Pacific strategy that “seeks to promote an open and rules-based regional security architecture, including secure sea lines of communication, capacity-building and enhanced naval presence in the Indo-Pacific.
- Whatever the specific circumstances of the AUKUS deal and its impact on France, the US wants all its partners, especially Europe, to contribute actively to the reconstitution of the Asian balance of power.
- Working with Quad: The EU strategy, in turn, sees room for working with the Quad in the Indo-Pacific, while stepping up security cooperation with a number of Asian partners, including India, Indonesia, Japan, the Republic of Korea, Singapore and Vietnam.
- India is conscious that Europe can’t match America’s military heft in the Indo-Pacific.
- But it could help strengthen the military balance and contribute to regional security in multiple other ways.
Consider the question “Delhi knows that Europe could significantly boost India’s capacity to influence future outcomes in the Indo-Pacific. It would also be a valuable complement to India’s Quad coalition”. Comment.
Conclusion
It was Russia that defined India’s discourse on the multipolar world after the Cold War. Today, it is Europe — with its much greater economic weight, technological strength, and normative power — that promises to boost India’s own quest for a multipolar world and a rebalanced Indo-Pacific.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Taiwan issue and implications for the Indo-Pacific region
Context
If the rising confrontation between the United States and China erupts into a clash of arms, the likely arena may well be the Taiwan Strait.
Historical background of the Taiwan issue
- The Guomindang (KMT) forces under Chiang Kai-shek lost the 1945-49 civil war to the Chinese Communist Party (CCP) in 1949. forces under Mao Zedong.
- Chiang retreated to the island of Taiwan and set up a regime that claimed authority over the whole of China and pledged to recover the mainland eventually.
- The CCP in turn pledged to reclaim what it regarded as a “renegade” province and achieve the final reunification of China.
- Role of the U.S.: Taiwan could not be occupied militarily by the newly established People’s Republic of China (PRC) as it became a military ally of the United States during the Korean War of 1950-53.
- This phase came to an end with the U.S. recognising the PRC as the legitimate government of China in 1979, ending its official relationship with Taiwan and abrogating its mutual defence treaty with the island.
- Strategic ambiguity policy of the US: Nevertheless, the U.S. has declared that it will “maintain the ability to come to Taiwan’s defence” while not committing itself to do so.
- This is the policy of “strategic ambiguity”.
- The PRC has pursued a typical carrot and stick policy to achieve the reunification of Taiwan with the mainland.
- It has held out the prospect, indeed preference for peaceful reunification, through promising a high degree of autonomy to the island under the “one country two systems”.
- The “one country two systems” formula first applied to Hong Kong after its reversion to Chinese sovereignty in 1997.
China-Taiwan economic links
- Taiwan business entities have invested heavily in mainland China and the two economies have become increasingly integrated.
- Between 1991 and 2020, the stock of Taiwanese capital invested in China reached U.S. $188.5 billion and bilateral trade in 2019 was U.S. $150 billion, about 15% of Taiwan’s GDP.
- By the same token, China is capable of inflicting acute economic pain on Taiwan through coercive policies if the island is seen to drift towards an independent status.
Prospects for peaceful reunification
- Taiwan has two major political parties.
- The KMT, dominated by the descendants of the mainlanders remains committed to a one-China policy.
- The Democratic Progressive Party (DPP), on the other hand, is more representative of the indigenous population of the island, and favours independence.
- Faced with aggressive threats from China and lack of international support, the demand for independence has been muted.
- Ever since the DPP under Tsai Ing-wen won the presidential elections in 2016, China has resorted to a series of hostile actions against the island, which include economic pressures and military threats.
- One important implication of this development is that prospects for peaceful unification have diminished.
- Sentiment in Taiwan in favour of independent status has increased.
Role of the US
- While the U.S. does not support a declaration of independence by Taiwan, it has gradually reversed the policy of avoiding official-level engagements with the Taiwan government
- The first breach occurred during the Donald Trump presidency.
- The Joe Biden officials have continued this policy.
- The Taiwanese representative in Washington was invited to attend the presidential inauguration ceremony (Biden), again a first since 1979.
- Reports have now emerged that U.S. defence personnel have been, unannounced, training with their Taiwanese counterparts for sometime.
Implications for Quad and India
- The recent crystallisation of the Quad, of which India is a part, and the announcement of the AUKUS, with Australia being graduated to a power with nuclear-powered submarines, may act as a deterrent against Chinese moves on Taiwan.
- But they may equally propel China to advance the unification agenda before the balance changes against it in the Indo-Pacific.
- For these reasons, Taiwan is emerging as a potential trigger point for a clash of arms between the U.S. and China.
Consider the question “What are the implications of Taiwan issue and the US involvement in it for India?”
Conclusion
In pursuing its Indo-Pacific strategy, India would do well to keep these possible scenarios in mind.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Fertigation
Mains level: Paper 3- Emissions from agriculture and related issues
Context
The UK is set to host the 26th UN Climate Change Conference of the Parties (CoP26) in Glasgow from October 31 to November 12 with a view to accelerate action towards the Paris Agreement’s goals. The focus should be on climate finance and transfer of green technologies at low cost.
Cause of concern for India
- According to the Global Carbon Atlas, India ranks third in total greenhouse gas emissions by emitting annually around 2.6 billion tonnes (Bt) CO2eq, preceded by China (10 Bt CO2eq) and the United States (5.4 Bt CO2eq), and followed by Russia (1.7Bt) and Japan (1.2 Bt).
- India ranked seventh on the list of countries most affected due to extreme weather events, incurring losses of $69 billion (in PPP) in 2019 (Germanwatch, 2021).
- The fact that 22 of the 30 most polluted cities in the world are in India is a major cause of concern.
- Delhi is the world’s most polluted capital as per the World Air Quality Report, 2020.
Issues raised in global negotiation on climate change
- Nations are still quibbling about historical global emitters and who should take the blame and fix it.
- Global negotiations on climate change often talk about emissions on a per capita basis and the emission intensity of GDP.
- Per capita emission: Of the top five absolute emitters, the US has the highest per capita emissions (15.24 tonnes), followed by Russia (11.12 tonnes).
- India’s per capita emissions is just 1.8 tonnes, significantly lower than the world average of 4.4 tonnes per capita.
- If one takes emissions per unit of GDP, of the top five absolute emitters, China ranks first with 0.486 kg per 2017 PPP $ of GDP, which is very close to Russia at 0.411 kg per 2017 PPP $ of GDP.
- India is slightly above the world average of 0.26 (kg per 2017 PPP $ of GDP) at 0.27 kg, while the USA is at 0.25, and Japan at 0.21.
- In our Nationally Determined Contributions (NDCs) submitted in 2016, India committed to “reduce emission intensity of its GDP by 33 to 35 per cent by 2030 from 2005 level.”
Sector-wise emission and share of agriculture in it
- Global emissions show that electricity and heat production and agriculture, forestry and other land use make up 50 per cent of the emissions.
- But the emissions pie in India owes its largest chunk (44 per cent) to the energy sector, followed by the manufacturing and construction sector (18 per cent), and agriculture, forestry and land use sectors (14 per cent), with the remaining being shared by the transport, industrial processes and waste sectors.
- The share of agriculture in total emissions has gradually declined from 28 per cent in 1994 to 14 per cent in 2016.
- However, in absolute terms, emissions from agriculture have increased to about 650 Mt CO2 in 2018, which is similar to China’s emissions from agriculture.
- Agricultural emissions in India are primarily from the livestock sector (54.6 per cent) in the form of methane emissions due to enteric fermentation and the use of nitrogenous fertilisers in agricultural soils (19 per cent) which emit nitrous oxides; rice cultivation (17.5 per cent) in anaerobic conditions accounts for a major portion of agricultural emissions followed by livestock management (6.9 per cent) and burning of crop residues (2.1 per cent).
Way forward: Carbon policy for agriculture
- Reward farmers through carbon credit: A carbon policy for agriculture must aim not only to reduce its emissions but also reward farmers through carbon credits which should be globally tradable.
- Focus on livestock: With the world’s largest livestock population (537 million), India needs better feeding practices with smaller numbers of cattle by raising their productivity.
- Switch areas from rice to maize: While direct-seeded rice and alternative wet and dry practices can reduce the carbon footprint in rice fields, the real solution lies in switching areas from rice to maize or other less water-guzzling crops.
- Efficient fertiliser use: Agricultural soils are the largest single source of nitrous oxide (N2O) emissions in the national inventory.
- Nitrous oxide emissions from use of nitrogen-fertiliser increased by approximately 358 per cent during 1980-81 to 2014-15.
- An alternative for better and efficient fertiliser use would be to promote fertigation and subsidise soluble fertilisers.
- Incentives and subsidies: The government should incentivise and give subsidies on drips for fertigation, switching away from rice to corn or less water-intensive crops, and promoting soluble fertilisers at the same rate of subsidy as granular urea.
Consider the question “Agriculture sector is one of the significant contributors to the greenhouse gas emissions. This underscores the importance of carbon policy for agriculture in India. In this context, suggest the steps needed to be taken under the policy.”
Conclusion
Carbon policy for agriculture in India would help it meet its goals in reducing emissions while making agriculture climate-resilient.
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Back2Basics: Anaerobic conditions
- An anaerobic process in which organic food is converted into simpler compounds, and chemical energy (ATP) is produced. Certain types use the electron transport chain system to pass the electrons to the final electron acceptor, which may be an inorganic or an organic compound, but not oxygen.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Digitization of Agriculture
In June this year, two significant documents relating to the Indian agriculture sector were released.
What are the reports about?
- The first is a consultation paper on the India Digital Ecosystem of Agriculture (IDEA) and the second on Indian Agriculture: Ripe for Disruption from a private organisation, Bain and Company.
- Through their work, these reports have depicted the agriculture reforms announced by the union government as a game-changer in the agriculture sector.
Challenges highlighted
The major challenges of the agriculture sector are:
- Food Sufficiency but Nutrition Deficiency
- High import of edible oil and oilseeds
- Yield plateaus
- Degrading soil, Water stress
- Inadequate market infra/linkages
- Unpredictable, volatile prices
- Post-harvest losses, wastages
- Lack of crop planning due to information asymmetry
Key takeaway: Way for doubling farmers income
- These reports in short argues that benefiting from the huge investments into the agri-ecosystem, doubling farmers’ income targets can be achieved in near future.
- The Indian agriculture sector in future will encompass farm to fork and pave the way for a single national market with a national platform with better connection between producer and consumers.
The forecast
- The Bain report is a data-based prediction on agri-business scenarios, anchored to the agricultural set-up at present and predicting its future trajectories in another 20 years.
- It includes targeting the production of alternative proteins, and food cell-based food/ingredients and initiating ocean farming, etc.
- The report has a ‘today forward– future back approach’ and predicts a drastic investment opportunity development by 2025.
- The agriculture sector (currently worth $370 billion), is estimated to receive an additional $35 billion investment.
The two enabling conditions for such investment opportunities are:
- Changes in the regulatory framework, especially recent changes in the Farm Acts and
- Digital disruption
The IDEA of integration
- Digital disruption: The blueprint of “digital agriculture” is similar to the digital disruption mentioned in the Bain report.
- Integration: Eventually, the farmer and the improvement of farmers’ livelihood is the aim of the IDEA concept and it is proposed to happen through tight integration of agri-tech innovation and the agriculture industry.
- Enabling conditions: To be precise, the IDEA concept profounds the creation of second enabling conditions (which is described in the Bain report).
- Openness of data: The IDEA principles explicitly talk about openness of data, which means open to businesses and farmers, indicating the kind of integration it aims at.
- Value-added innovative services: by agri-tech industries and start-ups are an integral part of the IDEA architecture.
- Data architecture: The services listed in the document (to be available on the platform) are equally important data for farmers and businesses.
A thread of digital disruption
- The IT industry has opposition to IDEA mainly due to the ethics of creating a Unique Farmer ID based on one’s Aadhaar number and also the potential for data misuse.
- Beyond the news coverage about the prospects of achieving the goal of Doubling Farmers Income on which the present government has almost lost its hope.
Issues with these reports
- The Bain report has not been widely discussed — at least in the public domain.
- The assumptions used by authors especially for its ‘future back approach’, need more or less focusing on widespread food production in controlled environments.
- The emission, energy, and other resource footprints and sustainability issues around these techniques are not adequately studied.
Yet these reports are important
- The report has convincingly demonstrated the business opportunity available in supply chains between farm to APMC mandi and mandi to the customer.
- This can be realised with the support of digital disruption and the latest agriculture reforms.
- Both these reports heavily rely on digital disruption to improve farmers’ livelihoods, without discussing how much farmers will be prepared to benefit from the emerging business.
An unconvincing ‘how’
- Digital divide: The fact is that a majority of small and marginal farmers are not technology-savvy.
- No capacity building: That most of them are under-educated for capacity building is ignored amidst these ambitious developments.
- Unrealistic assumptions: The Bain report relies on the general assumption that more investments into the agriculture sector will benefit farmers; ‘but how’ has not been convincingly answered.
- Overemphasis on technology: Similarly, how the technology fix will help resolve all the issues of Indian agriculture listed at the beginning of the report is unclear in the IDEA concept.
- Reluctance by farmers: These reports ignore the protest of farmers against the reforms without considering it as a barrier or risk factor resulting in a repealing of these new farm laws.
Way ahead: Focus on the farmer
- A data revolution is inevitable in the agriculture sector, given its socio-political complexities.
- However, we cannot just count on technology fixes and agri-business investments for improving farmers’ livelihoods.
- There need to be immense efforts to improve the capacities of the farmers in India – at least until the educated young farmers replace the existing under-educated small and medium farmers.
- This capacity building can be done through a mixed approach through FPOs and other farmers’ associations where technical support is available for farmers.
Conclusion
- Considering the size of the agriculture sector of the country this is not going to be an easy task but would need a separate program across the country with considerable investment.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Distortions in the Global Order
This article discusses new situations prompted by the tectonic shifts in India’s internal and external environment to take another look at India’s path to power in a world between orders.
New global order: No Order
- Multipolarity: The world is today adrift. We are neither in a bipolar Cold War nor in a multipolar world, though perhaps tending towards a world of several power centres.
- Lack of cohesion: The lack of a coherent international response to the COVID-19 pandemic is proof of an absence of international order and of the ineffectiveness of multilateral institutions.
- Climate ignorance: So is the ineffective international response to climate change and other transnational threats.
What are the major shifts in global order?
- Secular stagnation
- Retreat from globalisation
- Regionalisation of trade
- Shifting balance of power
- Rise of China and others
- Structural China-United States strategic rivalry
All above factors have shifted the geopolitical and economic centres of gravity from the Atlantic to Asia.
Major Concerns
- Chauvinism: Inequality between and within states has bred a narrow nationalism and parochialism.
- Existential threats: We are entering a new polarised information age, and face ecological crises of the Anthropocene, making climate change an existential threat.
Asia as the nucleus: With focus on China
- Shift of focus by the US: Over the next decade we expect Asia to remain the cockpit of geopolitical rivalries, and that the US remains the most formidable power, though its relative power is declining.
- China at the centre: China sees a window of opportunity but acts in a hurry, suggesting that she believes that window may close or is already closing due to push back from the West and others.
China’s expansionism
- China’s crowded geography constrains her both on land and at sea.
- Hence it expects her profile and power to continue expanding, particularly in our periphery.
- The result is likely continued friction, some cooperation, and quasi-adversarial relations between India and China, which others will take advantage of.
- Overall, we do not expect conventional conflict between the great powers in Asia, though other forms and levels of violence and contention in the international system will rise, with Taiwan a special case.
Opportunities in disguise for India
- The uncertainty and changing geopolitical environment clearly pose considerable challenges to Indian policy.
- However, it also throws up certain opportunities, enhancing our strategic options and diplomatic space, if we adjust policies internally and externally, particularly in the subcontinent.
How can India reap the benefits?
- Enhancing ties with the US: Increasing security congruence with the US could enable growing cooperation in fields significant for India’s transformation: energy, trade, investment, education and health.
- Climate cooperation: Other areas in which India and the U.S. could increase cooperation are: climate change and energy, tech solutions for renewable energy, and on digital cooperation.
- Neighbourhood first: Several middle powers like Sri Lanka, Bangladesh, Indonesia in the neighbourhood are now India’s natural partners.
- Digital space: This time of transition between orders is also when new standards and norms are being developed, particularly in the digital space. India can and must be present at the creation.
- Maritime cooperation: At sea, the balance is today more favourable to us than before, possibly more so than on the continent. India must bat for the creation of a Maritime Commission in IOR.
Bottlenecks in India’s neighbourhood policy
- Over securitisation of policy: towards our neighbours has driven trade underground, criminalised our borders.
- Conducive environment for entry of China: This has enabled the large-scale entry of Chinese goods destroying local industry in the northeast.
- Lack of self-strengthening: While lessening dependence on China, and seeking external balancing, our primary effort has to concentrate on self-strengthening.
- Lack of socio-political enterprise: If there is one country which in terms of its size, population, economic potential, scientific and technological capabilities can match or even surpass China, it is India.
Way forward for India
(A) Bringing multipolarity in Asia.
- The way forward should be based on the core strategic principles in Non-Alignment 2.0 which are still relevant: independent judgement, developing our capacities, and creating an equitable and enabling international order for India’s transformation.
- Today’s situation makes India’s strategic autonomy all the more essential.
(B) Making an issue-based coalition
- India must adjust to changing circumstances. We have no choice but to engage with this uncertain and more volatile world.
- One productive way to do so would be through issue-based coalitions including different actors, depending on who has an interest and capability.
(C) Reviving SAARC
- India must craft and reinvigorate regional institutions and processes in the neighbourhood, reviving the South Asian Association for Regional Cooperation (SAARC) for instance.
- India could be the primary source of both prosperity and security in the neighbourhood — the subcontinent and the Indian Ocean Region.
Conclusion
- Economic policy must match political and strategic engagement.
- Globalisation has been central to India’s growth.
- A more active regional and international role for India is incompatible with a position on the margins of the global economy.
- Self-reliance in today’s world and technologies can only be realised as part of the global economy.
- We should not imitate China’s claims to being a civilisational state and its adoption of victimhood.
- Instead, we should affirm our own strength and historic national identity.
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From UPSC perspective, the following things are important :
Prelims level: DHID
Mains level: Issues with ABDM
Much recently, the Prime Minister had launched the Digital Health ID project (DHID), generating debate on issues related to the use of technology in a broken health system.
Explained: Digital Health ID
Good intents of the DHID
- The key objective of DHID is to improve the quality, access and affordability of health services by making the service delivery “quicker, less expensive and more robust”.
- The ambition is undoubtedly high. Given that health systems are highly complex, the DHID would hardly be able to address some of the issues plaguing it.
Why need DHID?
(a) Record maintenance
- The use of technology for record maintenance is not just inevitable but necessary. Its time has certainly come.
- A decade ago, the process to shift towards electronic medical records was initiated in the private sector.
- It met with limited success, despite the strong positives.
- With DHID, the burden of storing and carrying health records for every visit to the doctor is minimised.
(b) Better tracking of medical history
- The doctor has instant access to the patient’s case history –the treatment undertaken, where and with what outcomes — enabling more accurate diagnosis and treatment.
- As the DHID enables portability across geography and healthcare providers, it also helps reduce re-testing or repeating problems every time a patient consults a new doctor.
- That’s a huge gain, impacting the quality of care and enhancing patient satisfaction and confidence.
(c) Better Diagnosis
- DHID can have a transformative impact in promoting ecosystems that function as paperless facilities.
- Paperless hospitals can promote early diagnosis before the patient reaches the doctor after spending long hours in queue.
- The doctor can already go through the patient’s record and the pharmacist can make the drugs available by the time the patient reached its counter.
(d) Promoting medical research
- Digitisation of medical records is another important positive, given the problems related to space and retrieving huge databases.
- Well organised repositories that enable easy access to records can stimulate much-needed research on medical devices and drugs.
- This storehouse of patient data can be valuable for clinical and operational research.
Given our population, would this be an idealistic expectation?
- We need to conduct pilot studies to assess the use of technology for streamlining patient flows and medical records and thereby increase efficiencies across different typologies of hospitals and facilities.
- While technology helps smoothen processes and enhance patient experience, there is a cost attached.
- Investments have to be made upfront and results should not be expected overnight.
Issues with DHID
(a) A costly affair
- In the immediate short run, DHID will increase administrative costs by about 20 per cent, due to the capital investment in data infrastructure.
- Over the long run, the additional cost to healthcare is expected to be about 2 per cent.
- Any scaling up of this reform would require extensive fiscal subsidies and more importantly providing techno-logistical support to both government and private hospitals.
(b) Privacy concerns
- Most important is the issue of privacy, the high possibility of hacking and breach of confidentiality.
- The possibility of privacy being violated increases with the centralisation of all information.
- Though it is said that the patient is the owner of the information, how many of us deny access, as a matter of routine, when we download apps or programmes that seek access to all our records?
- How far is this “consent” practical for an illiterate, vulnerable patient desperate to get well?
- So, taking refuge behind a technical statement that access is contingent on patient consent is unconvincing.
Ground situation in India
- Inherently unaffordable healthcare: The costs in the Indian context can be high and that should lead to a careful assessment of the project.
- Digital divide: Such a scenario is not inconceivable and in the case of health, may cause immense hardship to the most marginalised sections of our population.
- Infrastructure gap: A large majority of facilities do not have the required physical infrastructure — electricity, accommodation, trained personnel.
- Usual nature of technical glitches: Cards getting corrupted, servers being down, computers crashing or hanging, and power outages are common in India.
- Conformity over data synchronization: The inability to synchronise biometric data with ID cards has resulted in large-scale exclusions of the poor from welfare projects.
- Accuracy of records: Besides, the efficacy of the DHID hinges on the assumption that every visit and every drug consumed by the patient is faithfully and accurately recorded.
- Increased workload on Medical Professionals: Moreover, while electronic mapping of providers may enable patients to spot a less busy doctor near their location, it is simplistic to assume that the patient will go there.
Plugging the existing gaps
- Patient preference for a doctor is dependent upon perception and trust. Likewise, teleconsultations need a huge backend infrastructure and organisation.
- Teleconsulting has certainly helped patients access medical advice for managing minor ailments, getting prescriptions on the phone and even getting drugs delivered home.
- But in handling chronic diseases that necessitate continuity of care, teleconsultations have been problematic and cannot be substituted for actual physical examination.
- Continuity of care is central to good outcomes in inpatient management of chronic diseases.
- The one serious shortcoming of using teleconsultation for such management is the high attrition rate of doctors within the context of an overall shortage of doctors.
- Technology can be of little use in the absence of doctors and basic infrastructure.
Way forward
- What is needed is building very robust firewalls and trust.
- Seeing the frequency with which Aadhaar cards have been breached, it is not unreasonable to be concerned with this issue and the implications it has at the family and societal levels.
- For this reason, instead of a big bang approach, it is better to go slow and steady.
- That’s the only way to ensure that a good policy does not die along the way due to poor implementation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Bonn Challenge
Mains level: Forest resources management
This op-ed tries to establish a fair link between forest cover and population dependency on it.
A decline in Forest Cover
- The State of the World’s Forests report 2020, says that since 1990, around 420 million hectares of forest have been lost through deforestation, conversion and land degradation.
- Nearly 178 million hectares have decreased globally due to deforestation (1990-2020).
- India lost 4.69 MHA of its forests for various land uses between 1951 to 1995.
Various reasons
- Despite various international conventions and national policies in place to improve green cover, there is a decline in global forest cover.
- Dependence on forests by nearly 18% of the global human population has put immense pressure on ecosystems; in India, this has resulted in the degradation of 41% of its forests.
Why conserve forests?
- Covering nearly 30% land surface of the earth, forests around the globe provide a wide variety of ecosystem services and support countless and diverse species.
- They also stabilise the climate, sequester carbon and regulate the water regime.
Need for restoration
- Restoration in laymen’s terms is bringing back the degraded or deforested landscape to its original state by various interventions to enable them to deliver all the benefits.
- Building and maintaining activities help to improve ecological functions, productivity and create resilient forests with multifarious capabilities.
- India’s varied edaphic, climatic and topographic conditions are spread over 10 bio-geographical regions and four biodiversity hotspots, sheltering 8% of the world’s known flora and fauna.
India’s dependency on forest resources
- Out of its 21.9% population living under the poverty line, nearly 275 million people including local tribals depend on the forest for subsistence.
- The intricate link between poverty and environmental degradation was first highlighted by India at the first UN global conference on the human environment in Stockholm.
- Though India’s increasing economic growth is helping to eliminate poverty, there is continued degradation and a growing scarcity of natural resources.
- Further, encroachment of nearly 1.48 MHA of forest and grazing in nearly 75% of forest area is also linked to the livelihood of local communities.
- The participation of local communities with finances for incentives and rewards is essential to redress this complex riddle.
Strategies adopted by India
Ans. Bonn Challenge
- To combat this, India joined the Bonn Challenge with a pledge to restore 21 MHA of degraded and deforested land which was later revised to 26 MHA to be restored by 2030.
- The first-ever country progress report under the Bonn Challenge submitted by India by bringing 9.8 million hectares since 2011 under restoration is an achievement.
- However, continued degradation and deforestation need to be tackled effectively to achieve the remaining target of restoration by addressing various challenges.
Key challenges
- Local ecology with a research base: forest restoration and tree planting are leading strategies to fight global warming by way of carbon sequestration.
- However, planting without considering the local ecology can result in more damage.
- Similarly, planting a forest in the wrong places such as savannah grasslands could be disastrous for local biodiversity.
Best strategy: Natural Forest Restoration
- Luckily recent research has shown that naturally regenerated forests tend to have more secure carbon storage.
- Being less tech-sensitive, cost-effective and conserving more biodiversity, natural forest restoration is becoming more widely accepted.
Limitations to India
- Nearly 5.03% of Indian forests are under protection area (PA) management needing specific restoration strategies.
- The remaining areas witness a range of disturbances including grazing, encroachment, fire, and climate change impacts that need area-specific considerations.
- Further, much of the research done so far on restoration is not fully compatible with India’s diverse ecological habitats hence warranting due consideration of local factors.
- The involvement of multiple stakeholders in forest restoration is bound to cause a conflict of interests among different stakeholders; along with low priority and insufficient funding, it becomes even more challenging.
Policy measures
- There have been remarkable initiatives to involve local people in the protection and development of forests by forming joint forest management committees (JFMC).
- However, a review of their functionality and performance is essential to make them more dynamic and effective to scale up their involvement.
- Therefore, negotiations with a wide range of stakeholders including these committees for resolving conflicts and fulfilling restoration objectives are a must and a challenging feat to reach a suitable trade-off.
Way forward
- Adequate financing is one of the major concerns for the success of any interventions including restoration.
- The active approach of restoration which includes tree planting and the involvement of communities seeks incentives and rewards and make the whole affair quite cost-intensive.
- The contribution of corporates in restoration efforts so far has been limited to 2% of the total achievement.
- Hence, alternate ways of financing such as involving corporates and dovetailing restoration activities with ongoing land-based programmes of various departments can help to make it easy for operation.
- Apart from these specific challenges, the common barriers to restoration as identified globally also need critical review before placing the required methodologies and area-specific strategies in place.
Conclusion
- Active engagement of stakeholders including non-governmental organizations, awareness and capacity building of stakeholders with enabling policy interventions and finance can help a lot to achieve restoration objectives for India.
- The need of the hour is an inclusive approach encompassing these concerns with the required wherewithal.
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From UPSC perspective, the following things are important :
Prelims level: Read the attached story
Mains level: Outer Spaces and its utility
In opening new pathways for outer space cooperation in the recent US visit, PM Modi has positioned India to engage more productively with a rapidly evolving domain that is seeing more commerce and contestation.
Outer Space Cooperation: A backgrounder
- International cooperation is the new normal in space exploration, but it’s not a new concept.
- One example of this cooperation is the International Space Station (ISS).
- Another advance in international cooperation in the peaceful exploration of outer space came with the Artemis Accords.
- Introduced in October 2020, the Artemis Accords establish a set of principles to guide space cooperation among countries participating in NASA’s Artemis program.
There are five treaties that deal with issues related to outer space
- Moon Treaty: Non-appropriation of outer space by any one country, arms control, the freedom of exploration
- Liability Convention: Liability for damage caused by space objects
- Rescue Agreement: Safety and rescue of spacecraft and astronauts
- Outer Space Treaty: Prevention of harmful interference with space activities and the environment
- Registration Convention: Notification and registration of space activities, scientific investigation and exploitation of natural resources in outer space and the settlement of disputes
Why does Outer Spaces matter?
- Space situational awareness (SSA) involves monitoring the movement of all objects — natural (meteors) and man-made (satellites) — and tracking space weather.
- Today, space is integral to our lives and disruption of space-based communications and earth observation will have serious consequences.
India’s strategic interest in Outer Space
Delhi’s new strategic interest in outer space is based on a recognition of two important trends.
- Centrality of emerging technologies in shaping the 21st-century global order
- Urgency of writing new rules for the road to peace and stability in outer space
Why need US for this?
- Technology cooperation has always been an important part of India-US relations.
- But it has been a boutique discourse between the relevant agencies of the two governments.
- The US has traditionally dominated outer space in the commercial domain.
- As emerging technologies overhaul global economic and security structures, Delhi and Washington now have to widen the interface of technology.
Why need a comprehensive outer space treaty?
- Although human forays into space began in the middle of the 20th century, the intensity of that activity as well as its commercial and security implications have dramatically increased in recent decades.
- Outer space has become a location for lucrative business as well as a site of military competition between states.
- Until recently, outer space has been the sole preserve of states. But private entities are now major players in space commerce.
- At the same time, as space becomes a critical factor in shaping the military balance of power on the earth, there is growing competition among states.
Expanding QUAD in this term
- Until now, the maritime domain has dominated the strategic cooperation bilaterally between Delhi and Washington as well as within the Quad.
- The annual Malabar naval exercise, for example, began nearly three decades ago as a bilateral venture in 1992 and became a quadrilateral one in 2020 with the participation of Australia.
Why does US need India in OST?
- India, which has developed significant space capabilities over the decades, is a deeply invested party.
- The US recognises that it can’t unilaterally define the space order anymore and is looking for partners.
- International cooperation on space situational awareness is similar to the agreements on maritime domain awareness — that facilitate sharing of information on a range of ocean metrics.
- India has been strengthening its maritime domain awareness through bilateral agreements as well as the Information Fusion Centre for the Indian Ocean Region (IFC-IOR) at Gurugram.
- India has also taken tentative steps to cope with the unfolding military challenges in outer space.
- It has also initiated space security dialogue with close partners like the US, Japan, and France.
Making a first global move
- When signed, the agreement with the US on SSA will be the first of its kind for India.
- Washington has agreements with more than two dozen countries on SSA.
- The US and Indian delegations have also discussed a US initiative called the Artemis Accords — that seek to develop norms for activity in the Moon and other planetary objects.
Way forward
- As commercial and military activity in outer space grows, the 20th-century agreements like Outer Space Treaty and the Moon Treaty (1979) need reinforcement and renewal.
- The growing strategic salience of outer space demands substantive national policy action in India.
- That can only be mandated by the highest political level. Back in 2015, PM Modi’s speech on the Indian Ocean focused national attention on maritime affairs.
- India could do with a similar intervention on outer space today.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: SAAH report
Mains level: Paper 3- India's farmer population and related issues
Context
Depending on the source, there is a wide variation in the number of farmers in India.
What is the extent of variation?
- The last Agriculture Census for 2015-16 placed the total “operational holdings” in India at 146.45 million.
- The Pradhan Mantri-Kisan Samman Nidhi (PM-Kisan) scheme has 110.94 million beneficiaries.
- National Statistical Office’s Situation Assessment of Agricultural Households (SAAH) report for 2018-19 pegs the country’s “agricultural households” at 93.09 million.
What explains the variation?
- This wide variation has largely to do with methodology.
- The Agriculture Census looks at any land used even partly for agricultural production, the land does not have to be owned by that person (“cultivator”), who needn’t also belong to an “agricultural household”.
- The SAAH report, on the other hand, considers only the operational holdings of agricultural households.
- Members of a household may farm different lands.
- The SAAH takes all these lands as a single production unit.
- It does not count multiple holdings if operated by individuals living together and sharing a common kitchen.
- Accounting for only “agricultural households”, while not distinguishing multiple operating holdings within them, brings down India’s official farmer numbers to just over 93 million.
- Expansive definition: SAAH’s definition of “agricultural households” is expansive.
- It covers households having at least one member self-employed in agriculture and whose annual value of produce exceeds Rs 4,000.
- Such self-employment needs to be for only 30 days or more during the survey reference period of six months.
So, what is the actual number of farmers?
- The estimate of actual number is based on the following methodology.
- The SAAH report gives data on agricultural household income from farm and non-farm sources, both state-wise and across different land-possessed/operational holding size classes.
- From the above data, we can categorise “full-time/regular” farmers as those households whose net receipts from farming are at least 50 per cent of their total income from all sources.
- The SAAH report also has state-wise estimates of agricultural households for each land-possessed size class.
- By taking only those size classes in which the dependence ratios are higher than (or close to) 50 per cent, and adding up the corresponding estimated number of agricultural households, we are able to arrive at the total “full-time/regular” farmers for each state.
- Following the above methodology, India’s “serious” farmer population, in turn, adds up to 36.1 million, which is hardly 39 per cent of the SAAH estimate.
Policy implications of having actual numbers of farmers significantly lower than estimated
- If the actual number of farmers deriving a significant share of their income from agriculture per se is only 40 million a host of policy implications follow.
- Targeted policy: One must recognise that farming is a specialised profession like any other.
- “Agriculture policy” should, then, target those who can and genuinely depend on farming as a means of livelihood.
- Minimum support prices, government procurement, agricultural market reforms, fertiliser and other input subsidies, Kisan Credit Card loans, crop insurance or export-import policy on farm commodities will matter mainly to “full-time/regular” farmers.
- Land size matters: The SAAH report reveals that the 50 per cent farm income dependence threshold is crossed at an all-India level only when the holding size exceeds one hectare or 2.5 acres.
- This is clearly the minimum land required for farming to be viable, which about 70 per cent of agricultural households in the country do not possess.
- Policy for labourers: What should be done for this 70 per cent, who are effectively labourers and not farmers?
- Their problems cannot be addressed through “agriculture policy”.
- The scope for value-addition and employment can be more outside than on the farm — be it in aggregation, grading, packaging, transporting, processing, warehousing and retailing of produce or supply of inputs and services to farmers.
Consider the question “What explains the wide variation in the estimates of the number of farmers in India? What are the implications of such variations for agriculture policy?”
Conclusion
Agriculture policy should aim not only at increasing farm incomes but also adding value to produce outside and closer to the farms. A more sustainable solution lies in reimagining agriculture beyond the farm.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Geographical Indication, WTO, TRIPS
Mains level: Economic potential of GI Tagged products
This editorial discusses various economic and socio-cultural benefits offered by the Geographical Indication (GI) Tagging.
What is Geographical Indication?
- A GI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
- India, as a member of the World Trade Organization (WTO), enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 w.e.f. September 2003.
- GIs have been defined under Article 22 (1) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
- GI is granted for a term of 10 years in India. As of today, more than 300 GI tags has been allocated so far in India (*Wikipedia).
Why must we promote GI?
Several studies show that the patents and copyright protection of products under GIs result in higher economic gains, fostering quality production and better distribution of profits.
- Lost in history: Most GI are either assigned to the dusty pages of history books or left to rural artisans to propagate and preserve.
- Source of income: Today, with the emphasis on climate change and sustainability, these products can be ready revenue generators.
- Demand in e-com market: A modern distribution system exists in India’s robust global e-commerce backbone which will propel the nascent GI industry onto the national and world stage.
Need for govt support
- GI products need the support of governments.
- The Europeans are masters at it, as seen by products such as Brie cheese and sparkling wine from Champagne. The EU has an $87 billion GI economy.
- China has also done very well by GI, strengthening e-commerce in rural areas and actively promoting agricultural special product brands in lesser developed areas.
Role of GI in China’s rise
- A 2017 UNCTAD report on inclusive growth and e-commerce deems China’s e-commerce-driven growth as inclusive.
- That means China has successfully empowered micro, small and medium enterprises (MSMEs) to compete with large companies on the same stage, with no geographic boundaries.
- Likewise, despite a globally depressed market for wines, the produce from the Ningxia region of China saw exports surge 46.4 per cent in 2020, benefitting 211 wineries in Ningxia.
- The output value of GI producers in China totalled $92.771 billion as of 2020.
Socio-cultural benefits offered by GI
- GI protection has wider positive benefits, especially for local communities.
- In particular, it encourages the preservation of biodiversity, local know-how and natural resources. And this is where India can do well.
- Multiple benefits flows from a strong GI ecosystem, which can be a wellspring of economic and soft power.
- It will automatically resolve the three fraught India issues of poor pay for talent, low female participation in the labour force, and urban migration.
How can GI induce economic transformation?
(1) Promotes Entrepreneurship and ‘Passion Economy’
- It will convert talent into entrepreneurship with gig workers, and create a “passion” economy, that is, a new way for individuals to monetise their skills and scale their businesses exponentially.
- It removes the hurdles associated with freelance work to earn a regular income from a source other than an employer.
(2) Employment generation
- The labour-intensive nature of GI offers the best solution to boosting the employment-to-population ratio in India.
- India presently has an abysmal 43 per cent compared with the 55 per cent global average.
(3) Women Empowerment
- GI production mostly involves artisanal work-from-home culture.
- Monetising this artisanal work done at home will increase India’s low female labour force participation rate, which at 21 per cent in 2019 was half the 47 per cent global average.
(4) Prevents migration
- The hyper-localised nature of GI offers solutions to reverse urban migration and conserve India’s ancient crafts, culture and food.
(5) MSME Promotion
- A rejuvenation of MSMEs, which account for 31 per cent of India’s GDP and 45 per cent of exports, will follow.
- An estimated 55.80 million MSMEs employ close to 130 million people; of this, 14 per cent are women-led enterprises and 59.5 per cent are rural.
(6) GI Tourism
- Another revenue-earner, GI tourism, is typically a by-product of a strong GI ecosystem.
Hurdles in GIs progress
(1) Credit Facilities and Capacity Building
- Since GI businesses are micro, it is necessary to address the challenges of capacity-building, formal or easy access to credit.
- There is a need for forming marketing linkages, research and development, product innovation and competitiveness in both domestic and international markets.
(2) Issue of Intermediaries
- With the shift to digital platforms, the distribution margins of these gate keepers or mandi agents must be competitive.
- They often act as countervailing agents by getting into similar businesses or product lines which will erode GI producer incomes.
(3) Ensuring smoother transition
- As seen from the experience of the new farm laws, this will be a task for the central and state governments; they must ensure the transition without breaking down too many existing linkages.
Way forward
- Control: Guardrails like regular audits and consultations with the GI producers must be mandated.
- Cooperative management: Pulling it together will be local GI cooperative bodies or associations which can be nationally managed by a GI board.
- Ministerial support: The Department for the Promotion of Industry and Internal Trade (DPIIT) and the Ministry of Commerce department should be tasked with developing this new sector.
- Digital literacy: Finally, a required skill for GI producers is digital literacy. This should be a priority agenda item for NGOs and stakeholders like the DPIIT.
Conclusion
- It is an opportunity for India to redefine the future of work using automation, technology and artificial intelligence while simultaneously enhancing and adorning the country’s talented local work force.
- The Indian GI economy can be a platform for India to showcase to the world a model for ethical capitalism, social entrepreneurship, de-urbanisation, and bringing women to the workforce, on the back of a robust digital system.
- It recalls and attributes of multi-cultural ethos, authenticity, and ethnic diversity are potential turbochargers for the country’s economy.
- It encompasses the concept of trusteeship, as advocated by Mahatma Gandhi and more recently, by our PM at the UN. It is truly Made in India.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Various funds mentioned in the newscard
Mains level: Right to Information Act and its limitations
We all know that the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund doesn’t come under the ambit of Right to Information (RTI). This oped seeks to discuss certain aspects of this issue.
Present context
- In a recent affidavit, the Delhi High Court was informed that the PM CARES Fund is not a Government of India fund and that the amount collected by it does not go to the Consolidated Fund of India is strange.
- This petition is seeking the PM-CARES fund to be declared as the “State” under Article 12 of the Constitution.
Intriguing facts about PM-CARES fund
- PM CARES has been created not by law, not by notification, but by the mere creation of a webpage, and set up last year in March to raise funds for those affected by the COVID-19 pandemic.
- The page lists its structure, functions and duties in an arbitrary manner. The official appeals for funds are made under the national emblem.
- The most significant lie of this sworn statement is that the Government has no control over the Fund.
What is the case?
- The PM-CARES Fund was not subject to CAG audit since the Supreme Court regarded it as a public charitable trust.
- It is not under public scrutiny. Also contributions to it were 100% tax-free.
- It is accused that there was statutory fund already in existence under the Disaster Management Act of 2005 to receive contributions to finance the fight against a calamity.
What is RTI?
- RTI is an act of the parliament which sets out the rules and procedures regarding citizens’ right to information.
- It replaced the former Freedom of Information Act, 2002.
- Under the provisions of RTI Act, any citizen of India may request information from a “public authority” (a body of Government or “instrumentality of State”) which is required to reply expeditiously or within 30.
- In case of the matter involving a petitioner’s life and liberty, the information has to be provided within 48 hours.
About PM CARES Fund
- The PM CARES Fund was created on 28 March 2020 following the COVID-19 pandemic in India.
- The fund will be used for combat, containment and relief efforts against the coronavirus outbreak and similar pandemic like situations in the future.
- The PM is the chairman of the trust. Members will include the defence, home and finance ministers.
- The fund will also enable micro-donations. The minimum donation accepted is ₹10 (14¢ US).
The other funds
(1) National Disaster Response Fund (NDRF)
- The statutorily constituted NDRF was established under the Disaster Management (DM) Act of 2005.
- The NDRF is mandated to be accountable, and answerable under the RTI Act, being a public authority, and auditable by the Comptroller and Auditor General of India.
(2) Disaster Response Fund
- The DM Act also provided for a Disaster Response Fund — state and district level funds (besides the national level).
- It also collects and uses the donations at the local level, with mandatory transparency and audit provisions.
(3) Prime Minister’s National Relief Fund
- There is the PMNRF operative since the days of Jawaharlal Nehru. It was established with public contributions to assist displaced persons from Pakistan.
- The resources are now utilised primarily to render immediate relief to families of those killed in natural calamities and to the victims of the major accidents and riots.
- However, it has the President of India and the Leader of Opposition also as trustees.
Issues over PM-CARES Fund
- No defined purpose: It is deliberately ignored while a new, controversial, unanswerable, and ‘non-accountable vehicle is created; its character is not spelt out till today.
- Non-accountable: The government seems to consider statutory provisions for enquiry and information seeking to be embarrassing obstacles.
- Centralization of donations: It centralises the collection of donations and its utility, which is not only against the federal character but also practically inconvenient. The issue is seeming, the trusteeship of the fund.
Questions and gaps
- Law/statute: The PM CARES Fund was neither created by the Constitution of India nor by any statute.
- Authority: If that is the case, under what authority does it use the designation of the Prime Minister, designated symbols of the nation, the tricolour and the official (gov.in) website of the PMO, and grant tax concessions through an ordinance.
- Collection and dispensation: The amount received by the Fund does not go to the Consolidated Fund of India. If it goes to the CFI, it could have been audited by the CAG.
- Uncontrolled: The This Trust is neither intended to be or is in fact owned, controlled or substantially financed by any instrumentality of the any govt even being chaired by the PM.
Issue over tax benefits
- Income tax: An ordinance was promulgated to amend Income Tax Act, 1961 and declare that the donations to the PM CARES Fund “would qualify for 80G benefits for 100% exemption”.
- CSR Funds: It will also qualify to be counted as Corporate Social Responsibility (CSR) expenditure under the Companies Act, 2013.
- Foreign donations: It has also got exemption under the FCRA [Foreign Contribution Regulation Act] and a separate account for receiving foreign donations has been opened.
What can be inferred from all these?
- The Centre now considers it as another obstacle and has created a new trust with the Prime Minister and his Ministers only.
- The manner in which the PM CARES Fund was set up — with its acronym created to publicise the point that the PM cares for people — shows a bypassing of the statutory obligations of a public authority.
Query and response: Again ironical
- After initial denials, the Government has conceded it to be a public charitable trust, but still maintains that it is not a ‘public authority’.
- The point is that the PMO operates the Fund, but says it cannot supply any information about the PM CARES Fund because it is not a public authority.
Severe interpretations: Is it an Office of Profit?
- If the PM CARES Fund is unconnected with the Government, then the Fund could become an office of profit.
- And that could disqualify him and the three Ministers from holding those constitutional offices.
Conclusion
- In order to uphold transparency, the PM CARES Fund should be declared as a Public Authority under the RTI Act, and all RTI queries answered truthfully.
- The fund should be designated as a “public authority” under Section 2(h) of the RTI Act.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Read the attached story
A number of important developments has taken place over the past several weeks. They may appear disconnected but in fact add up to a significant shift in regional and global geopolitics.
Four major recent developments
- Withdrawal of US and NATO forces from Afghanistan: The complete takeover of the country by the Taliban
- Significant domestic political changes in China: The ideological and regulatory assault against its dynamic private high-tech companies and now its real estate companies
- Announcement of the Australia-UK and US (AUKUS): It represents a major departure in US strategy by its commitment to enable Australia to join a handful of countries with nuclear submarines
- Convening of the Quad physical summit in Washington: A major step towards its formalisation as an influential grouping in the Indo-Pacific going beyond security
Risks and opportunity for India
These four developments, taken together, present India with both risks but also with opportunities. In affirmation, one can conclude that the opportunities outweigh the risks.
[A] Risks in Afghanistan
- The Afghan situation is a setback for India in the short run.
- The political capital and economic presence it had built up in the country over the past two decades has been substantially eroded.
- The Taliban government is dominated by more hard-line and pro-Pakistani elements.
- They will help deliver on the Pakistani agenda of preventing a revival of Indian diplomatic presence and developmental activity in Afghanistan.
Future of Taliban
- In the longer run, it seems unlikely that the Taliban will give up its obscurantist and extremist agenda.
- This may lead to domestic inter-ethnic and sectarian conflict.
- The unwillingness of the Taliban to cut its links with various jihadi groups, including those targeting Afghanistan’s neighbours, may revive regional and international fears over cross-border terrorism.
How should India defer the Taliban?
- India’s response should be to bide its time, strengthen its defences against an uptick in cross-border terrorism.
- India can keep its faith with the ordinary people of Afghanistan, provide shelter to those who have sought refuge.
- It can join in any international effort to deliver humanitarian assistance to the people of Afghanistan.
[B] Domestic political change in China
- This is taking an ideological and populist direction.
- The country’s vibrant private sector is being reined in while the State-Owned Enterprises (SOE) are back in a central role.
- After the tech sector, it is the large real estate sector that is facing regulatory assault.
Concerns for investors
- This is leading to deepening concern among foreign investors, including those who have long been champions of long-term engagement with China.
Opportunities for India
- It is not coincidental that while in NYC, our PM had meetings with the CEOs of Blackstone and Qualcomm, both of which are heavily invested in China but are reconsidering their exposure there.
- If India plays its cards well, this time round there could be significant capital and technology flows from the US, Japan and Europe diverted towards India because it offers scale comparable to China.
- Since India has benign partnerships with the US, Japan and Europe, there are no political constraints on such flows.
[C] AUKUS and QUAD
- The AUKUS and progress made by the Quad serve to raise the level of deterrence against China.
- It is useful since it has now become the core of the US’s Indo-Pacific strategy. China will be more focused on its activities.
- The Quad now represents, from the Chinese perspective, a second order threat.
Underlying opportunities
- This offensive against China suits us since we are not ready to embrace a full-fledged military alliance which will constrain our room for manoeuvre.
Why should India gauge these opportunities?
- China has given up the expectation that it could unify Taiwan through peaceful and political means, including through closer economic integration.
- It has lost its credibility after the recent crackdown on civil liberties in Hong Kong.
- China may advance its forcible takeover of Taiwan before the AUKUS gets consolidated.
- The nuclear submarines for Australia may not be built and deployed for several years.
- We may, therefore, be entering a period of enhanced uncertainty and danger in the Indo-Pacific.
India’s area for introspection
- The constraints are policy unpredictability, regulatory rigidities and bureaucratic red tape in India.
- Some of these issues are being addressed, such as dropping of retrospective taxation.
- But there is still a long way to go.
Way forward
All these developments has heightened risk perception among international business and industry who have hitherto seen China as a huge commercial opportunity.
- For India, some bold initiatives are required to take advantage of the window of opportunity that has opened.
- It is a narrow window with a very short shelf life.
- If grasped with both hands, then it could deliver double-digit growth for India for the next two or three decades.
- This will shrink the asymmetry of power with China and expand India’s diplomatic options.
Conclusion
- India should not be caught off guard. Failure of deterrence in the Indo-Pacific will have consequences beyond the region and change the geopolitical context for India.
- For now, let us focus on what we can do to advance India’s economic prospects, for which the times are unexpectedly more propitious.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: PM-KUSUM
Mains level: Paper 3- Revitalising PM-KUSUM
Context
The Union Minister of Power, New and Renewable Energy recently reviewed the progress of the PM-KUSUM scheme and reaffirmed the government’s commitment to accelerating solar pump adoption.
Background
- It was launched in 2019.
- PM-KUSUM aims to help farmers access reliable day-time solar power for irrigation, reduce power subsidies, and decarbonise agriculture.
- PM-KUSUM provides farmers with incentives to install solar power pumps and plants in their fields.
- Three deployment models: Pumps come in three models: off-grid solar pumps solarised agricultural feeders, or grid-connected pumps.
- Off-grid pumps have been the most popular, but the nearly 2,80,000 systems deployed fall far short of the scheme’s target of two million by 2022.
- The other two models are also worth scaling up for they allow farmers to earn additional income by selling solar power to discoms, and discoms to procure cheap power close to centres of consumption.
Challenges
- Awareness challenge: Barriers to adoption include limited awareness about solar pumps.
- Upfront contribution: The other barrier includes farmers’ inability to pay their upfront contribution.
- Limited progress on two models: Progress on the other two models has been rather poor due to regulatory, financial, operational and technical challenges.
Suggestions
- Extend the scheme’s timelines: Most Indian discoms have a surplus of contracted generation capacity and are wary of procuring more power in the short term.
- Extending PM-KUSUM’s timelines beyond 2022 would allow discoms to align the scheme with their power purchase planning.
- Level playing field: Discoms often find utility-scale solar cheaper than distributed solar (under the scheme) due to the latter’s higher costs and the loss of locational advantage due to waived inter-State transmission system (ISTS) charges.
- To tackle the bias against distributed solar, we need to address counter-party risks and grid-unavailability risks at distribution substations, standardise tariff determination to reflect the higher costs of distributed power plants, and do away with the waiver of ISTS charges for solar plants.
- Streamline regulation: We need to streamline land regulations through inter-departmental coordination.
- States should constitute steering committees comprising members from all relevant departments for this purpose.
- Financing farmers contribution: There is a need to support innovative solutions for financing farmers’ contributions.
- Many farmers struggle to pay 30-40% of upfront costs in compliance with scheme requirements.
- To ease the financial burden on farmers, we need out-of-the-box solutions.
- Grid-connected solar pumps: Current obstacles to their adoption include concerns about their economic viability in the presence of high farm subsidies and farmers’ potential unwillingness to feed in surplus power when selling water or irrigating extra land are more attractive prospects.
- Further, the grid-connected model requires pumps to be metered and billed for accounting purposes but suffers from a lack of trust between farmers and discoms.
- Adopting solutions like smart meters and smart transformers and engaging with farmers can build trust and address some operational challenges.
Conclusion
These measures, combined with other agriculture schemes and complemented by intensive awareness campaigns, could give a much-needed boost to PM-KUSUM.
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