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Type: Prelims Only

  • Urban Transformation – Smart Cities, AMRUT, etc.

    Nation First Transit Card for digital fare payments

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Nation First Transit Card

    Mains level: Not Much

    nation first transit card

    Central Idea

    • State Bank of India (SBI) unveiled the ‘Nation First Transit Card’ for seamless and convenient digital fare payments.
    • The card is designed to enhance the commuting experience by facilitating digital ticketing across various modes of transport and parking, all within one card.

    Nation First Transit Card

    • Aims to streamline customer commuting and digital fare payments for metro, buses, water ferries, and parking through a single card.
    • Provides versatility by enabling retail and e-commerce payments.
    • Powered by RuPay and National Common Mobility Card (NCMC) technology.

    Key Facts about the National Common Mobility Card (NCMC)

    • Launched on March 4, 2019.
    • Enables SBI customers to use their Debit Cards as travel cards for metro rail and buses in enabled locations.
    • The concept originated from the Nandan Nilekani committee, established by the Reserve Bank of India (RBI).
    • An initiative by the Ministry of Housing and Urban Affairs in India, promoting cashless transactions and a unified payment platform for commuters.
    • Offers a unified contactless transport solution via the RuPay platform, developed by the National Payments Corporation of India (NPCI).
    • Functions as an automatic fare collection system, transforming smartphones into interoperable transport cards for metro, bus, and suburban railway services.

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  • RBI Notifications

    RBI to discontinue Incremental Cash Reserve Ratio (I-CRR)

    Prelims Only | Economics | Mains Paper 3: Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Incremental Cash Reserve Ratio (I-CRR)

    Mains level: Not Much

    Central Idea

    • The Reserve Bank of India (RBI) announced the phased discontinuation of the Incremental Cash Reserve Ratio (I-CRR) on September 8, 2023.
    • This measure aimed to absorb surplus liquidity created by factors such as the return of Rs 2,000 notes to the banking system.

    RBI’s Decision

    • RBI conducted a review and decided to discontinue I-CRR in stages.
    • The central bank aims to release the impounded amounts gradually to avoid sudden shocks to the system’s liquidity, ensuring orderly money market functioning.

    Understanding Cash Reserve Ratio (CRR)

    • CRR is a fundamental concept before delving into Incremental Cash Reserve Ratio (ICRR).
    • Banks are mandated to maintain a certain portion of their deposits and specific liabilities in liquid cash with the RBI.
    • CRR serves as a crucial tool in the RBI’s arsenal for managing liquidity in the economy and acts as a safety net during times of banking stress.
    • Currently, banks are required to uphold 4.5% of their Net Demand and Time Liabilities as CRR with the RBI.

    Introduction to ICRR

    • I-CRR was introduced on August 10, 2023, as a temporary measure by RBI to absorb surplus liquidity.
    • Banks were required to maintain an I-CRR of 10% on the increase in their Net Demand and Time Liabilities (NDTL) between May 19, 2023, and July 28, 2023.
    • It came into effect from the fortnight starting August 12, 2023.
    • The RBI has the authority to implement an additional measure called Incremental Cash Reserve Ratio (ICRR), in addition to the standard CRR.
    • ICRR is employed during periods characterized by excess liquidity in the financial system.
    • Essentially, ICRR mandates that banks park even more liquid cash with the RBI than what is required under CRR.
    • This serves as a means to further manage and control liquidity in the banking system.

    Reason for I-CRR

    • Excessive liquidity emerged due to factors like the return of Rs 2,000 banknotes, RBI’s surplus transfer to the government, increased government spending, and capital inflows.
    • The daily liquidity absorption by RBI in July reached Rs 1.8 lakh crore.
    • Managing surplus liquidity was necessary to maintain price and financial stability.

    Impact on Liquidity Conditions

    • I-CRR was expected to absorb over Rs 1 lakh crore of excess liquidity from the banking system.
    • It temporarily shifted the banking system’s liquidity from surplus to deficit on August 21.
    • Factors like GST outflows and central bank selling of dollars contributed to tight liquidity.
    • However, liquidity conditions reverted to surplus from August 24.
    • On September 8, RBI absorbed Rs 76,047 crore of surplus liquidity from the system.

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  • Historical and Archaeological Findings in News

    Magnificent Nataraja Statue: A Tribute to Chola Artistry

    Prelims Only | History | Mains Paper 1: Arts & Culture

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Natraja

    Mains level: Not Much

    nataraja

    Central Idea

    • In New Delhi’s Pragati Maidan, a grand 27-foot Nataraja statue, the world’s tallest depiction of Lord Shiva in his dancing form, awaits the arrival of G20 leaders.
    • Craftsmen behind the statue trace their lineage 34 generations back to the Cholas.

    The Nataraja Masterpiece

    • Crafted from an eight-metal alloy (ashtadhatu) by skilled artisans from Swamimalai, Tamil Nadu.
    • Weighing approximately 18 tonnes, it was transported across the country on a 36-wheel trailer.
    • The statue’s design draws inspiration from three revered Nataraja idols:
      1. Thillai Nataraja Temple in Chidambaram.
      2. Uma Maheswarar Temple in Konerirajapuram.
      3. Brihadeeswara (Big) Temple in Thanjavur (a UNESCO World Heritage Site).

    The Cholas and Nataraja

    • All three temples that inspired the Bharat Mandapam Nataraja statue were originally constructed by the Cholas.
    • During the 9th-11th centuries AD, the Cholas ruled much of peninsular India and were known for their patronage of art and culture.
    • Chola art and architecture flourished during their territorial expansion.

    Significance: Shiva as the Lord of Dance

    • Lord Shiva’s portrayal as Nataraja evolved from the Vedic deity Rudra.
    • Shiva is a complex deity, embodying both destructive and protective aspects.
    • Nataraja, the Lord of Dance, symbolizes Shiva’s role as both the destroyer and protector.
    • He is known to have invented numerous dances, ranging from calm to fierce and orgiastic.

    Iconography of Nataraja

    • Nataraja is often depicted within a flaming aureole or halo, representing the circle of the world.
    • He has long dreadlocks, signifying the energy of his dance, and four arms.
    • In his upper right hand, he holds a damru (hand drum), in the upper left, agni (fire).
    • A dwarf-like figure beneath his foot symbolizes illusion.
    • Nataraja’s front right hand makes the ‘abhayamudra’ (gesture to allay fear), and he points to his raised feet with his front left hand.
    • Despite its complex symbolism, Nataraja typically wears a serene smile, signifying the duality of life and death.

    The Lost Wax Method

    • The 27-foot Bharat Mandapam Nataraja statue was created using the traditional ‘lost-wax’ casting method, indigenous to the Chola era.
    • This method dates back at least 6,000 years.
    • It involves creating a wax model, covering it with a special soil paste, heating it to remove the wax, leaving behind a hollow mould, which is then filled with molten metal.
    • This technique was mastered by the Cholas and is considered a pinnacle of metallurgical artistry.

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  • Innovations in Biotechnology and Medical Sciences

    Lab-Grown Human Embryos: A Breakthrough in Science

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Lab-Grown Human Embryos

    Mains level: Not Much

    embryo

    Central Idea

    • Scientists have successfully developed a “human embryo” in a laboratory without using traditional egg or sperm cells.
    • The model was constructed using a combination of stem cells, which possess the ability to differentiate into various cell types, resulting in a structure resembling an early human embryo.

    Creating Human Embryo artificially

    • This model is considered one of the most comprehensive representations of a 14-day-old human embryo.
    • Multiple research teams worldwide have been working on similar embryo-like models, with approximately six such models published in the current year.
    • While none fully replicate early embryo development processes, they collectively contribute to scientific understanding.

    Challenges in Creating the Model

    • Researchers in Israel utilized stem cells and chemical components, but only a small fraction spontaneously assembled into different cell types.
    • Approximately 1% of the mixture exhibited this spontaneous assembly, making the process inefficient.

    Importance of Embryo Models and Research

    • Ethical constraints prevent direct research on early embryo development after implantation in the uterus.
    • Understanding early stages of embryo development is crucial as most miscarriages and birth defects occur during this period.
    • Such research aids in the comprehension of genetic and hereditary diseases.
    • Insights into why some embryos develop normally and implant successfully can enhance in vitro fertilization success rates.

    Potential of Embryo-Like Models

    • These models enable the study of genetic, epigenetic, and environmental influences on embryo development.
    • They facilitate the investigation of genetic defects and the development of potential genetic therapies.

    Limits of Lab-Grown Embryos

    • Lab-grown embryos are solely for studying the early stages of foetal development.
    • Implantation attempts are prohibited, and these models are typically destroyed after 14 days.
    • Originating from a UK committee proposal in 1979, the 14-day limit aligns with natural embryo implantation completion.
    • Beyond this point, embryos begin exhibiting characteristics of individuality and cannot split into twins.
    • The ethical considerations shift as embryos progress from a clump of cells to entities with individual potential, often marked by the Primitive Streak.

    Insights from Embryo Models

    • Models like the one developed in Israel shed light on DNA duplication errors and chromosome imbalances.
    • These errors are now understood to occur earlier in the development process, during ongoing DNA duplication.
    • Such models aid in identifying the roles of various genes in fetal development, enabling gene manipulation for research purposes.

    Conclusion

    • Lab-grown human embryo models represent a significant scientific achievement.
    • They provide a unique window into early embryo development and the understanding of genetic and developmental processes.
    • While not suitable for reproduction, these models hold promise for advancing genetic and medical research.

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  • Corruption Challenges – Lokpal, POCA, etc

    $1.8 billion recovered under Fugitive Economic Offenders Act

    Prelims Only | Economics | Mains Paper 3: Money-Laundering & Its Prevention

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Fugitive Economic Offenders Act, 2018

    Mains level: Not Much

    Central Idea

    • Assets worth over $12 billion have been attached since 2014 under the Prevention of Money Laundering Act (PMLA).
    • Additionally, assets exceeding $1.8 billion have been recovered in the past four years under the Fugitive Economic Offenders Act (FEOA), 2018.

    About the Fugitive Economic Offenders Act, 2018

    • The FEOA is a significant legal instrument designed to address the issue of economic offenders who flee the country to evade criminal prosecution or refuse to return to face charges.
    • This act empowers authorities to confiscate the ill-gotten gains of these individuals and bar them from filing or defending civil claims, among other provisions.

    Key Provisions of the Fugitive Economic Offenders Act:

    (1) Definition of Fugitive Economic Offender:

    • A “fugitive economic offender” is an individual against whom an arrest warrant has been issued for committing an offense listed in the Act, and the value of the offense is at least Rs. 100 crore.
    • Offenses listed in the act include counterfeiting government stamps or currency, cheque dishonor, money laundering, and transactions defrauding creditors.

    (2) Declaration of a FEO:

    • After considering an application, a special court (designated under the Prevention of Money Laundering Act, 2002) may declare an individual as a fugitive economic offender.
    • The court may confiscate properties that are proceeds of crime, benami properties, or any other property, whether in India or abroad.
    • Upon confiscation, all rights and titles of the property vest in the central government, free from encumbrances.
    • The central government may appoint an administrator to manage and dispose of these properties.

    (3) Bar on Filing or Defending Civil Claims:

    • The Act allows any civil court or tribunal to prohibit a declared fugitive economic offender from filing or defending any civil claim.
    • Furthermore, any company or limited liability partnership where such an individual is a majority shareholder, promoter, or a key managerial person may also be barred from filing or defending civil claims.
    • Authorities may provisionally attach properties of an accused while the application is pending before the Special Court.

    (4) Powers:

    • The authorities under the Prevention of Money Laundering Act, 2002, will exercise powers conferred upon them by the Fugitive Economic Offenders Act.
    • These powers are akin to those of a civil court and include the search of persons in possession of records or proceeds of crime, the search of premises upon belief that a person is a fugitive economic offender, and the seizure of documents.

    Other laws related to FEOs

    • The existing laws under which such fugitive economic offenders are tried include:
    1. Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI),
    2. Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (SARFESI) and
    3. Insolvency and Bankruptcy Code (IBC).

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  • Banking Sector Reforms

    Self-Regulatory Organizations (SROs) in the Fintech Sector

    Prelims Only | Economics | Mains Paper 3: Indian Economy

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Self-Regulatory Organizations (SROs)

    Mains level: Not Much

    sro

    Central Idea

    • In the rapidly evolving landscape of the fintech sector, the Reserve Bank of India (RBI) Governor has called upon fintech entities to establish Self-Regulatory Organizations (SROs).

    What is an SRO (Self-Regulatory Organization)?

    • An SRO is a non-governmental entity entrusted with the task of formulating and enforcing rules and standards governing the behaviour of participants within a specific industry.
    • The primary objective of an SRO is to safeguard consumer interests, uphold ethical practices, promote equality, and nurture professionalism within the industry.
    • Typically, SROs collaborate with all industry stakeholders to establish and administer regulations.

    Key Characteristics of an SRO

    • Impartial Governance: SROs maintain impartial mechanisms to oversee self-regulatory processes, ensuring that industry members operate within a disciplined framework and accept penalties when necessary.
    • Beyond Industry Interests: SROs extend their concerns beyond the narrow interests of the industry itself. They aim to protect not only industry players but also workers, customers, and other participants in the ecosystem.
    • Supplement to Existing Regulations: While SROs formulate regulations, standards, and mechanisms for dispute resolution and enforcement, they do not replace applicable laws or government regulations. Instead, they complement existing legal frameworks.

    Functions of an SRO

    • Communication Channel: SROs serve as intermediaries between their members and regulatory authorities like the RBI, facilitating two-way communication.
    • Establishment of Standards: SROs work to establish minimum benchmarks and industry standards, fostering professionalism and healthy market behavior among their members.
    • Training and Awareness: SROs provide training to their members’ staff and conduct awareness programs to promote industry best practices.
    • Grievance Redressal: They establish uniform grievance redressal and dispute management frameworks to resolve issues within the industry.

    Why is an SRO Necessary?

    • As the fintech sector continues to evolve, SROs can play a pivotal role in ensuring the industry’s responsible growth and maintaining ethical standards.
    • They address critical issues such as market integrity, conduct, data privacy, cybersecurity, and risk management.
    • SROs contribute to building trust among consumers, investors, and regulators.

    RBI’s Expectations from Fintech Players

    • The Reserve Bank of India expects fintech companies to:
    1. Evolve industry best practices and privacy/data protection norms in compliance with local laws.
    2. Set standards to prevent mis-selling and promote ethical business practices.
    3. Ensure transparency in pricing.
    • RBI Governor has encouraged fintechs to establish an SRO voluntarily.

    Benefits of an SRO

    • Industry Expertise: SROs possess deep industry knowledge, making them valuable contributors to industry discussions and educational initiatives.
    • Standardized Conduct: SROs promote a standardized code of conduct that encourages ethical business practices, ultimately boosting confidence in the industry.
    • Watchdog Role: SROs act as watchdogs, preventing unprofessional and unethical practices within the industry.

    Conclusion

    • In the dynamic fintech sector, Self-Regulatory Organizations (SROs) emerge as indispensable entities.
    • Their role in shaping industry behaviour, promoting ethical conduct, and safeguarding consumer interests cannot be overstated.

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  • International Space Agencies – Missions and Discoveries

    Japan discovers Earth-like Planet in Kuiper Belt

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Kuiper Belt

    Mains level: Not Much

    kuiper belt

    Central Idea

    • Two Japanese astronomers have uncovered potential evidence of an “Earth-like planet” within our solar system.
    • This mysterious planet is believed to have resided in the Kuiper Belt, a circumstellar disk beyond Neptune’s orbit that consists of outer solar system objects.
    • The Kuiper Belt, like the planets, orbits the Sun.

    What is the Kuiper Belt?

    • The Kuiper Belt, also known as the Edgeworth-Kuiper belt, is a flat ring of small icy bodies orbiting the Sun beyond Neptune’s orbit.
    • Gerard Kuiper, a Dutch-American astronomer, first hypothesized its existence in the 1950s.
    • This belt contains millions of icy objects, collectively referred to as Kuiper Belt objects (KBOs) or trans-Neptunian objects (TNOs).
    • It is considered a remnant from the early history of our solar system.
    • The Kuiper Belt is thought to be the source of many short-period comets that orbit the Sun in less than 20 years.
    • It primarily consists of small icy bodies, including dwarf planets, asteroids, and comets.
    • Pluto, once classified as the ninth planet, is one of the most well-known objects in the Kuiper Belt but was reclassified as a dwarf planet by the International Astronomical Union (IAU) in 2006, partly due to its location within this belt.

    The Astronomers’ Findings

    • The Japanese researchers suggest that if this new planet exists, it would be 1.5 to 3 times the size of Earth.
    • The discovery challenges previous theories of a distant “Planet Nine” and posits the possibility of a planet closer to us, within the Kuiper Belt.
    • The astronomers predict the existence of an Earth-like planet and several trans-Neptunian objects (TNOs) on unique orbits that could serve as observational signatures of this potential planet’s perturbations.
    • They estimate that this planet could be situated between 200 and 500 astronomical units (AU) from the Sun, tilted about 30 degrees. For reference, Pluto is 39 AU from Earth.

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  • Digital India Initiatives

    NPCI Unveils Innovative UPI Features

    Prelims Only | Economics | Mains Paper 3: Inclusive Growth & Issues

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Unified Payments Interface (UPI)

    Mains level: Read the attached story

    upi

    Central Idea

    • The National Payments Corporation of India (NPCI) has introduced a range of groundbreaking features on the popular Unified Payments Interface (UPI) platform.

    Hello! UPI: Voice-Enabled UPI Payments

    • Hello! UPI, a remarkable addition, facilitates voice-enabled UPI payments in Hindi and English.
    • Users can make UPI payments through voice commands via apps, telecom calls, and IoT devices.
    • Future plans include expanding this feature to support several regional languages, further enhancing accessibility.

    Credit Line on UPI:  Streamlined Access to Credit

    • The RBI Governor introduced Credit Line on UPI, an initiative aimed at promoting financial inclusion and innovation.
    • This offering allows users to access pre-sanctioned credit from banks via UPI, simplifying the credit acquisition process.
    • Features include interest-free credit periods, defined charges, and seamless customer engagement channels.
    • The goal is to expedite the credit access process, driving economic growth and digital banking efficiency.

    UPI LITE X:  Offline Money Transfers

    • UPI LITE X introduces offline money transfers, enabling users to send and receive funds even without internet connectivity.
    • This feature empowers transactions in areas with poor network coverage.
    • UPI LITE payments are known for their speed and efficiency, making them a preferred choice for users.

    UPI Tap & Pay:  Convenience Redefined

    • UPI Tap & Pay offers a new way to complete payments at merchant locations.
    • In addition to traditional scan-and-pay, users can now tap Near Field Communication (NFC)-enabled QR codes.
    • This feature enhances convenience, making transactions swift and effortless.

    Conversational Payments:  AI-Enabled Transactions

    • Conversational UPI Payments and Conversational Bill Payments represent a paradigm shift in human-machine interaction.
    • These AI-enabled transactions aim to deepen the adoption of digital payments across India.
    • Users can make voice-enabled UPI payments through UPI Apps, telecom calls, and IoT devices in Hindi, English, and regional languages.
    • NPCI has collaborated with AI4Bharat at IIT Madras to develop language models for Hindi and English payments.

    BillPay Connect:  Simplified Bill Payments

    • BillPay Connect introduces a nationalized number for bill payments across India.
    • Customers can conveniently fetch and pay bills through messaging apps with a simple ‘Hi.’
    • Even users without smartphones or immediate data access can pay bills via a missed call, followed by a verification call.
    • Voice Assisted Bill Payments via smart home devices offer added convenience and instant confirmation.
    • This innovation enhances security and reassurance for both customers and collection centers.

    Conclusion

    • These pioneering features unveiled by NPCI mark a significant leap in India’s digital payment landscape.
    • They not only enhance accessibility but also redefine convenience, making digital transactions more user-friendly.
    • With innovative offerings like voice-enabled payments and streamlined credit access, NPCI continues to play a pivotal role in India’s technological advancement.
    • The journey towards a digitally empowered India takes a giant stride forward with these game-changing UPI features.

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  • Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

    Deciphering Atomic Nuclei: Exploring Unstable Nuclei via Electron Scattering

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Electron Scattering Experiment

    Mains level: NA

    Central Idea

    • In the world of atomic and nuclear physics, the quest to understand the inner workings of matter has been a constant journey of discovery.
    • Scientists have long sought ways to unravel the mysteries hidden within atomic nuclei, and recent breakthroughs in experimental techniques have taken us one step closer to achieving this goal.

    Historical Milestones

    • 150 years ago, scientists like Ernest Rutherford, Hans Geiger, and Ernest Marsden conducted experiments exposing a thin gold foil to radiation.
    • These experiments revealed that every atom has a dense central nucleus where mass and positive charge are concentrated.
    • Seven decades ago, physicist Robert Hofstadter led a team that bombarded thin foils with high-energy electrons, allowing scientists to probe atomic nuclei’s inner structure.

    Recent advancements

    • Researchers at the RIKEN Nishina Center for Accelerator-Based Science in Japan have demonstrated a setup using electron scattering to investigate unstable nuclei.
    • This advancement opens new avenues for understanding the fundamental building blocks of matter.
    • The SCRIT (Self-Confining Radioactive-isotope Ion Target) setup is more sophisticated than previous experiments using thin foils.
    • SCRIT can hold caesium-137 atom nuclei in place and facilitate electron interactions, a critical innovation.

    The Experimental Process

    • Electrons are accelerated in a particle accelerator to energize them.
    • These energized electrons are directed at a block of uranium carbide, resulting in a stream of caesium-137 ions (atoms stripped of electrons).
    • The ions are transported to the SCRIT system, which traps target ions along the electron beam path using electric attractive forces.
    • This “overlap” ensures a high probability of electron-ion collisions.

    Probing Nuclear Structure

    • Understanding the experimental setup’s probe into nuclear structure requires exploring interference patterns.
    • When light passes through a small hole, it creates concentric circles of light and dark patches due to interference.
    • Similarly, when an electron scatters off an atomic nucleus, it behaves like a wave during the interaction, resulting in interference patterns.
    • A magnetic spectrometer is used to record these interference patterns, offering advantages in clean and fine-tuned interactions.

    Results and Implications

    • The experimental results confirm the internal structure of the caesium-137 nucleus, aligning with previous studies and theoretical calculations.
    • The real significance lies in the development of the “femtoscope,” which can probe the femtometer scale (10^-15 meters) of atomic nuclei, unlocking new possibilities in nuclear physics.

    Unresolved Nuclear Structure

    • The challenge in nuclear physics is the absence of a unified theory explaining atomic nuclei’s structure, despite various existing models.
    • Scientists encounter intriguing properties, such as the “island of stability,” where heavier nuclei of unstable elements defy the trend of faster decay via radioactivity.
    • This phenomenon raises questions about nuclear structure and the existence of stable clusters.

    Future Prospects

    • Researchers aim to use femtoscopes to explore nuclei with irregular shapes, bridging the gap between expected and unexpected nuclear structures.
    • This promises to illuminate the fundamental nature of atomic nuclei and advance our understanding of the universe at its most basic level.

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  • Electric and Hybrid Cars – FAME, National Electric Mobility Mission, etc.

    VGF Scheme for Battery Infrastructure

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

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: VGF

    Mains level: EV infrastructure promotion

    Central Idea

    Viability Gap Funding (VGF) Scheme

    • VGF means a grant to support projects that are economically justified but not financially viable.
    • The VGF scheme was launched in 2004 to support projects that come under Public-Private Partnerships.
    • The scheme is designed as a Plan Scheme to be administered by the Ministry of Finance and amount in the budget are made on a year-to-year basis.
    • Such a grant under VGF is provided as a capital subsidy to attract the private sector players to participate in PPP projects that are otherwise financially unviable.
    • Projects may not be commercially viable because of the long gestation period and small revenue flows in future.

    VGF for Battery Infrastructure

    • This scheme aims to create 4,000 megawatt hours (MWh) of BESS projects by 2030-31, offering financial support of up to 40% of the capital cost in the form of VGF.
    • It is expected to lower battery storage costs, enhancing their practicality.
    • Designed to leverage renewable energy sources like solar and wind power, the scheme aims to provide clean, dependable, and cost-effective electricity to the public.

    How would it work?

    • By offering VGF support, the scheme targets achieving a levelised cost of storage (LCoS) ranging from ₹5.50-6.60 per kilowatt-hour (kWh).
    • It would thus make stored renewable energy a viable option for managing peak power demand across the country.
    • The VGF disbursement will occur in five stages linked to BESS project implementation milestones.

    Benefits to Consumers and Infrastructure

    • To ensure consumer benefits, a minimum of 85% of BESS project capacity will be allocated to distribution companies (Discoms).
    • This strategy enhances renewable energy integration into the electricity grid, minimizes wastage, and optimizes transmission network usage, reducing the need for costly infrastructure upgrades.
    • This approach stimulates healthy competition and encourages BESS ecosystem growth, drawing substantial investments and generating opportunities for related industries.

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