9 PM Daily Current Affairs Brief – August 11th, 2021

Dear Friends,

Mains Oriented Articles 

GS Paper 2

• Proposed amendments to Coal Bearing Areas Act will change land acquisition for mining: Experts
• Towards a new compact (On centre-state relations)
• Undermining Justice
• Choppy Waters

GS Paper 3

• ISRO-SAC instrument finds presence of hydroxyl and water molecules on Moon
• Why India’s military leaders must have a free and frank discussion on demarcation of air power roles and missions?
• Our Harmed Forces: ‘Merit’ Principle Is Dangerous: Don’t let politics enter that domain
• Transition from fossil fuels in India is a matter of politics, communities, federalism & jobs
• Fighting the climate change – India’s way ahead (On IPCC report)
• Revisit the idea of ‘aging out’ India’s coal plants
• Expiry of safeguard duty: Boon for solar developers, bane for manufacturers
• The silent rise of Small Finance Banks (SFBs)
• Indian startups deserve an easier shot at success
• The repeal of the retrospective tax shows Modi government means business on reforms
• Connecting India by inland waterways

Prelims Oriented Articles (Factly)

• ‘29% of students exposed to second-hand smoke’
• PM launches Ujjwala 2.0 Scheme
• Union Home Minister chaired the 36th meeting of the Parliamentary Committee on Official Language
• Steps taken by the Government for awareness about the Pusa Decomposer
• Sultanpur, Bhindawas wetlands near Delhi get Ramsar tag
• West Africa records 1st death from ‘highly infectious’ Marburg virus
• Lok Sabha passes Constitution amendment Bill to restore states’ powers on OBC list
• Scientists develop soft robotic actuators using porous carbon nanoparticles from waste onion peels
• What happened during NASA’s first attempt to collect Mars samples with the Perseverance rover?
• Expand food basket under PDS, says WHO scientist

Mains Oriented Articles

GS Paper 2

Proposed amendments to Coal Bearing Areas Act will change land acquisition for mining: Experts

Synopsis: The proposed amendments to the CBA Act are likely to grant more control to private corporations, make tribal land acquisition easy. An analysis.

What is the CBA Act?

The Coal Bearing Areas (Acquisition and Development) Act, 1957 provides for the acquisition of land containing, or likely to contain, coal deposits and for matters connected therewith. Under the provisions of this Act, the land is acquired for government companies only for coal mining and activities strictly incidental to mining.

The law was primarily meant to facilitate the acquisition of coal reserves for Coal India Limited, a public undertaking with a significant role in India’s energy production.

Proposed amendments

The new amendment bill will bring three important changes:

1. Changes in federal structure of coal sector: The new amendments are likely to change the federal structure of the coal sector. The central government, after the bill is passed, would be responsible for the acquired land. However, once the acquisition is done, the land and mining rights would be delegated to the states which can lease the acquired land or coal deposits to an eligible company.
2. Use of acquired land: The second big change would be regarding the use of acquired land. It could be used for constructing coal-related infrastructure, allied activities or other public purposes. The 1957 Act did not allow this. In fact, it clearly stated that the land acquired for the mining of coal could only be used for the extraction of coal. Apart from this, under the MMDR (Mines and Minerals Development and Regulation) Act, the miners are obligated to restore the land to its former condition after the completion of mining.
3. Lignite (low-grade coal minerals) could now be mined along with coal. To this end, appropriate changes will also be made in the Colliery Control Rules, 2004 and Coal Blocks Allocation Rules, 2017.

Implications

1. Land acquisition for coal mining: More than 80% of the country’s coal reserves are in tribal areas. Most of them come under the Fifth Schedule of the Constitution. Both PESA and Forest Rights Act are applicable over this land, making prior consent of the local Gram Sabhas a constitutional provision. The process of land acquisition in these areas will become easier via these amendments.
2. Land-use: The acquired land would be allowed to be used for other purposes. The 1957 Act restricted land use for only coal mining. Coal India Ltd has acquired a lot of lands for coal mining. But now it could be used for building infrastructure and ‘public purpose’ projects.
3. Control beyond lease period: Through these proposed amendments, once the lease is granted, private companies would continue to have control over the acquired land even after mining activities are completed and will be able to continue ancillary activities.

Towards a new compact (On centre-state relations)

Synopsis:  Without a collaborative arrangement between the Centre and the states, second generation reforms (Reforms in health, education, land, labour, electricity and agriculture) would become more contentious.

Background

• The reach of economic reforms in the last 30 years remained limited to a few sectors of the economy.
• Further, much-needed reforms in the social sector like health, education, land, labour, electricity and agriculture have either been slow or non-existent.
• Without cooperative federalism, the progress of second-generation reforms could remain fraught with problems, agitations and delays.

Implementation of 2^nd generation reforms & challenges faced

1. Reforms in Agriculture:

• After decades of wait and deliberations, the present government introduced reforms in three agriculture-related laws.
• Their broad intent and objectives were unexceptionable, and the reforms to be achieved through them were long overdue.
• Yet, faced with the continuing long-drawn agitation by farmers and the Supreme Court’s intervention, those agriculture reforms remain suspended.

2. Labour Reforms

• The new Labour Codes, ushering in the much-awaited flexibilities in labour laws, were passed a little more than a year ago and even gazetted.
• But the rules for these four Labour Codes are yet to be framed and notified, due to the lack of unanimity among the states.

3. Power sector reforms

• The present government had recently proposed the next phase of electricity sector reforms via draft electricity amendment bill 2021, by delicensing power distribution.
• But some states have already opposed the move, as they fear it could adversely affect the financial viability of the state-owned power distribution companies.
• The proposal on delicensing power distribution, potentially a big reform, now awaits how the political movement gathers momentum in the states.

4. Land Reforms

• Early in the first term of the present government, the proposal on relaxing the land acquisition laws had met with strong political resistance.
• That move was dropped in deference to the collective lobbying of states and the Opposition political parties.

What needs to be done?

1. A new compact: The Indian Constitution does not give the Centre complete authority in framing laws pertaining to areas like and, labour, agriculture and electricity. So, the reform must take place in the governance framework, creating a new compact between the Centre and the states. The new compact must recognise and accept the need for a collaborative and consultative procedure to be followed for such policy changes.
2. The states must be taken on board while the Centre plans to bring about reforms in land, labour, agriculture, electricity as also in health and education.
3. Learnings from GST: The learning from the way the GST was introduced needs to be studied. It was the consultative process that helped in persuading the states to give up their rights to independently fix tax rates for goods and services.

Conclusion

A new governance framework should be devised to determine the relations between the Centre and the states. Till such time, the progress of reforms in health, education, land, labour, electricity and agriculture could remain fraught with problems, agitations and delays.

Undermining Justice

Synopsis: Indian judiciary has come a long way from the decade of ’70s where politics began to influence the Judiciary. With the arrival of tribunals, further Judicial reforms were expected. However, Judiciary is facing numerous problems.

Judicial appointments and collegium system:

• Initially, the judiciary was free and without much political interference. However, this changed in the ’70s when politics influenced the appointments of Judges. This came to be tested in the ADM Jabalpur case.
• Though Art 124(2) and 217 provided for the executive role in appointment, it was felt that the executive breached separation of powers by interfering in appointments.
• In 1982, S P Gupta case, SC gave its approval for supremacy of Government in judicial appointments. This 5 Judge Bench decision was overturned by 9 Judge Bench, which interpreted that consultation with CJI accorded primacy to Judiciary in judicial appointments.
• This was resented by Governments and in 2014 NJAC Act was introduced to strike a balance. But, this was struck down by the judiciary for violation of the Separation of powers.

Click here to read about Collegium System 

Issues with the collegium system:

• There have been instances of Nepotism with person links to Judges appointed as Judges in high courts.
• There are instances where the inferior persons against the All India Seniority of High court judges were appointed to SC.

Tribunals

• Tribunals, a quasi-judicial body, are aimed at quicker resolution of disputes following the process of natural justice. Many domain-specific tribunals were set following LPG reforms after HCs faced difficulty in the disposal of specialized matters.

Issues with tribunals:

• Tribunals are now facing governance problems because of issues and deadlock between SC and GOI. For instance, The SC judges who head statutory selection committees for tribunal vacancies have decided to stop working until 100 recommendations made since 2017 are appointed.
• The jurisdiction of high courts is being exercised by tribunals. Failures to adjudicate or dispose of cases amount to the denial of justice.
• Recent moves give greater control to the executive over tenure, emoluments and conditions of service, and the functioning of tribunals.
• The Memorandum of Procedure,  which was meant to guide the post-NJAC collegium in judicial appointments remains in limbo.
• Pandemic further impacted High Courts. As their disposals crashed by 53% and pendency swelled by 4 Lakh cases.
• The government has further made them dysfunctional through a large number of vacancies.
• The government has been reluctant to appoint a national body for overseeing the appointments to tribunals.

Way forward:

• The ease of doing business experience depends on the speed of disposal of litigation and the quality of justice. So the government and the Judiciary has to function together for the welfare of the public.

Choppy Waters

Synopsis: India recently hosted the UNSC summit on maritime security. With such importance being given to the topic, understanding UNCLOS also becomes important.

Problems with UNCLOS: There is friction among many countries because of abuse of maritime rights & disrespect of territorial rights of nations by leading powers like the USA, China, and Russia.

India’s vision of Maritime security

1. To remove barriers to legitimize maritime trade through cooperation
2. Peaceful resolution of the maritime dispute based on international law
3. Collaboration in handling natural disasters and maritime threats created by non-state actors
4. Preserving maritime environment and resources
5. Encourage responsible maritime connectivity

India five point framework for Maritime Security

Problems

1. Illegitimate maritime claims by various actions like the entrance of vessels in other state waters.
2. Unlawful access to maritime resources.

Way Forward

As UNCLOS is the only international convention that provides a framework for state jurisdiction in maritime spaces, India should advocate for ratification of UNCLOS by all major maritime powers like the USA

GS Paper 3

ISRO-SAC instrument finds presence of hydroxyl and water molecules on Moon

Synopsis:

The discovery of hydroxyl and water molecules on the moon would help in studying its mineralogy.  

Background:

• Chandrayaan-2 has detected the unambiguous presence of hydroxyl and water molecules on the Moon.
• The findings were confirmed by a paper published in the latest issue of the fortnightly journal Current Science. The paper was authored by scientists from the Indian Institute of Remote Sensing (IIRS) in Dehradun, SAC in Ahmedabad, UR Rao Satellite Centre in Bengaluru, and ISRO.

About the Chandrayaan-2 mission:

• It was aimed to widen the scientific objectives of Chandrayaan-1 by way of soft landing on the Moon and deploying a rover to study the lunar surface. 
• However, due to a failed soft landing, the lander, rover, and the associated five payloads were destroyed.
• Nonetheless, the orbiter for mapping the lunar surface and studying the outer atmosphere of the Moon is continuously sending back crucial scientific data. 
• The mission life of the Orbiter was planned to be of one year, but has exceeded expectations and is expected to serve for seven years.

Findings of the paper:

Imaging infrared spectrometer (IIRS) onboard Chandrayaan 2 has detected the unambiguous presence of hydroxyl and water molecules on the Moon.

• IIRS is an imaging instrument that collects information from the electromagnetic spectrum for understanding the mineral composition of the lunar surface. Under this, each element possesses a ‘spectral signature’ unique to itself.
• It was developed by the Ahmedabad-based unit of Space Applications Centre (SAC) of ISRO.
• It is capable of operating in the wavelength of 0.8 to 5 micrometres, which is greater than Moon Mineralogy Mapper (M3). M3 was used in Chandrayaan 1 for detecting water and operates in the range of 0.4 to 3 micrometres. It was developed by NASA.

The formation of water and hydroxyl occurs due to interaction of solar winds with the lunar surface, a process termed as ‘space weathering’.

• Space weathering along with the impact from small meteorites often lead to chemical changes on the surface of the moon. 
• This ultimately leads to formation of either the reactive hydroxyl molecules or the more stable form of water molecules.

Significance of Discovery:

• It will provide clues to understand the various sources and water production mechanisms.
• It will also provide important inputs regarding geology and geophysics of the mantle (of the moon) in terms of their mineralogy, chemical composition, rheology and solar–wind interaction.
• The discovery is being hailed as critical for future planetary exploration and resource utilisation.

Why India’s military leaders must have a free and frank discussion on demarcation of air power roles and missions?

Synopsis: Indian Air Force is marred by a deep sense of insecurity over tri-service integration and the concept of jointness of armed forces. A historical perspective and a way forward.

Background

In India, there is no mutually agreed upon or government-mandated demarcation of aviation roles and missions. This has left Indian Air Force with a deep sense of insecurity.

Historical context

• Debate b/w IAF & IN: The 1970s witnessed a bitter debate between the Indian Air Force (IAF) and the Indian Navy (IN) about the discharge of the maritime reconnaissance (MR) role, which the air force had inherited at independence. After the penetration in 1971 of our waters by Pakistani submarines, the government decided to hand over the MR role and aircraft to the Indian Navy in 1976.
• Demands by Army for an integral air arm: The Indian Army, too, had been demanding the creation of an integral air arm, citing unsatisfactory aviation support by the IAF in forward areas. The inter-services issue was resolved after the government intervened in 1986 and sanctioned the transfer of assets from the IAF to the newly formed Army Aviation Corps. The controversy did not end here, as control of attack helicopters remained an issue of inter-service contention.

IAF’s issues with jointness

The fear IAF has of tri-service integration can be seen in above context. The IAF, having seen sister services appropriate its roles and assets, remained cautious about jointness. Concepts of Chief of Defence Staff (CDS) and integrated theatre commands, which would require air assets being placed under non-IAF control, ring alarm bells in Air HQs.

There are misperceptions on both sides of the air-power divide, and the need is for the tri-service leadership to sit around a table and provide mutual reassurance regarding service roles and missions.

Why air-power gained importance over years?

Air-power, in the post-Cold War era, acquired importance. Based on the lethality and speed of modern air power, it is claimed that once “air dominance” has been achieved, the war is virtually won. In this paradigm, close support of surface forces receives low priority because quick military victories can be won from the air at minimal cost.

However, such assumptions were based on recent conflicts where modern air forces using advanced technology had encountered irregular forces.

Can India rely on air-dominance?

India, on the other hand, is faced with well-equipped, motivated and competent adversaries. The Pakistan Air Force, although numerically inferior, has the assurance of Chinese support. The PLA Air Force not only outnumbers the IAF, but has the advantage of an advanced technological base.

Hence, in our calculations, we cannot afford to rely on any specific advantage, establishing “air dominance” over Pakistan or Tibet.

Potent questions

Questions that military leaders will need to address, jointly, are:

• Should attainment of air dominance be an end in itself, superseding military and maritime strategies
• Should air power be seen as merely an instrumentality to gain operational objectives on land, sea and air?
• Is there a via-media which will maximize the synergy and combat effectiveness of all three services, perhaps by modifying the IAF’s 2012 doctrine?

Suggestions/Measures

There should be a free and frank discussion on the demarcation of air power roles and missions.

On joint commands

• First, it must be ensured that allocation of air power is not made piece-meal, but flows from an integrated, tri-service plan.
• Second, operational deployment of the command’s aviation resources must be managed on behalf of the C-in-C, by his 2/3-star IAF component commander.
• Third, the government must clarify that most high-level posts will, eventually, be tenable by officers of all three services.

Our Harmed Forces: ‘Merit’ Principle Is Dangerous: Don’t let politics enter that domain

Synopsis: The Current system of promotion and advancement employed by the military is fair and based on merit. An analysis of the current system and potential implications of changing it.

Background

• Read here: For top military posts, MoD weighs merits vs seniority

Significance of a fair promotion system

It is vital for services to ensure that the system of promotions and advancement is as just, fair and transparent as possible, so that the rank and file remain confident that the leaders they unquestioningly follow deserve the position they have attained.

Existing methodology

• The military has a very fair methodology for selection of officers for promotion from the rank of Colonel to General (and equivalents in other services). There’s a fierce competition and stringent selection criteria, resulting in 60-70% of officers not making the cut.
• Promotion boards, convened periodically for placing officers on a ‘select list’ for promotion to ranks of Colonel and above, examine only annual confidential reports rendered periodically on candidates.
  • ACRs contain numerical gradings for a number of attributes, as well as a ‘pen picture’ that describes the individual’s qualities for the board and substantiates the grading.

‘Merit’, therefore, remains the sole criterion for the selection process by which a batch of 100 officers may be reduced to 10-12 by the time they reach 3-star rank.

Current system is fair

The current system of promotion to higher military ranks is based on the principle of seniority-cum-merit. As pointed out above, it consists of repeated screening of officers on the basis of merit alone. Therefore, the handful who remain and survive to reach top echelons are of uniformly high caliber.

Choosing the senior-most, by date of promotion to his present rank (not by date of birth or date of commission), has, therefore, proved a ‘safe bet’ for decades.

Issues

Areas that need reform:

• Written remarks for changing gradings: An issue of unhappiness arises from the fact that the service chiefs are entitled to have the last say as far as ACRs of 2- and 3-star rank officers are concerned. This is quite appropriate, but they too, must provide full justification, via written remarks, for changing earlier gradings.
• There’s also a need to bring uniformity in personnel policies of the three services.

Implications of a changed methodology

A deep-selection methodology, overlooking seniority and based on some other definition of ‘merit’, must be weighed against these drawbacks:

1. The selected would consider himself obligated to the politico-bureaucratic establishment, undermining his own credibility within the service
2. Political polarization: high-level military decisions may be biased to please politicians. Political polarization, if allowed to take place in the military, would create deep fissures within the officer corps – eventually infecting the rank and file.

Conclusion

The public respects the military for its apolitical and non-partisan conduct. But if the citizens perceive it as just another interest-group seeking to promote itself, that respect will soon vanish.

Transition from fossil fuels in India is a matter of politics, communities, federalism & jobs

Synopsis: In light of the recently released IPCC report, it is clear that India needs an energy transition towards cleaner energy sources from the current coal-based scenario, but it must be done in a way which secures an equitable outcome for the vulnerable sections of the society.

Issues involved

1. Asymmetry in energy distribution: While 85% of coal production is concentrated in relatively poor eastern and central states of Jharkhand, Odisha, Chhattisgarh, West Bengal and Madhya Pradesh, over 60% of renewable energy potential (and 80% of current capacity) is concentrated in relatively wealthy southern and western states – Gujarat, Maharashtra, Rajasthan, Andhra Pradesh, Karnataka, Tamil Nadu and Telangana.
2. Implications on govt revenue: The fossil fuel industries contribute significantly to the exchequer. Taxes on coal, oil and gas contributed 18.8% of the total revenue receipts of the central government and about 8.3% of the state governments in 2019-20. Thus, these taxes are essential for the government’s revenue and spending.
3. Large scale of employment: The industry employs a large number of people, with at least 20 million people working in mines and factories. Automobile, iron and steel, and coal mining are the biggest employers. To put things in perspective, the coal-mining sector in the United States employed 54,000 people in 2019; in India, the figure is over 2.0 million.
4. Lack of job security: In addition, the informal workforce is approximately four times the formal employees. As a result, a vast majority of workers don’t have employment security.

Therefore, the energy transition is more than technological fixes and investments; it is also about workers and communities who will be affected. To get this transition right, we will have to start developing policies and plans for a Just Transition and not merely an energy transition.

Measures

A Just Transition in India will need policy and planning for five key elements (the five R’s):

• Restructuring of the economy and industries in fossil fuel-dependent districts/ states;
• Repurposing of land and infrastructure, as these industries hold vast land and assets. For example, coal mines and thermal power plants alone have 0.3 million hectares of land, which can be repurposed to build a new green economy;
• Reskilling existing and skilling new workforce to avoid job loss and create a new workforce for the green industries;
• Revenue substitution and investments in Just Transition. This will require progressively moving taxes away from fossils and using fossil taxes like GST compensation cess (formerly coal cess) and District Mineral Foundation funds for Just Transition; and,
• Responsible social and environmental practices during the transition process to create a better world than today.

Way forward

Phase-out of fossil fuels is imminent; we have no choice.

Fighting the climate change – India’s way ahead (On IPCC report)

Synopsis: India is already taking many steps to combat climate change, but it needs to do more to ensure climate-adaptation and mitigation are at the heart of every government policy.

Steps taken by India

• INDC Targets: India is well on its way to meet its INDC targets (see the pic below)
• PM KUSUM: India has already commenced one of the largest programmes for greening the agriculture power supply through the PM-KUSUM scheme.
• Green hydrogen: India is also giving an aggressive push to green hydrogen as a fuel. NTPC Renewable Energy Ltd recently signed a MoU with the Union Territory of Ladakh to set up India’s First Green Hydrogen Mobility Project in Ladakh Region.
• India has an energy revolution underway: This ranges from household electrification to smart meters, scaling up solar and wind to new ambitions in biofuels and hydrogen, energy efficiency to clean cooking for millions, electrification of railways to electric vehicles, first country with a cooling action plan to skilling thousands in green jobs.

Why India has not declared net-negative emission targets?

India’s stand is that it is the industrialized world, not developing countries, who should have Net Negative (more saving than emission) targets and moreover they should finance the green energy targets of India and other developing countries.

Measures India must take

1. India must adopt a more climate-friendly development pathway to deliver high rates of economic growth within a shrinking carbon budget.
2. Policy support to new low-carbon sectors: India must tap into sunrise sectors (green hydrogen), new business models (distributed and digitalised services, for distributed energy, EV charging, cold chains), new construction materials (low-carbon cement, recycled plastic), new opportunities in the circular economy of minerals, municipal waste and agricultural residue, and new practices for sustainable agriculture and food systems. Many of these technologies and business models are proven, but need policy and regulatory support.
3. A clear data on warming effects: The number of days with temperatures over 40^oC will increase proportionately with the average temperature. This presents a threat to life to the large proportion of India’s workforce which still conducts manual. India chronically under-reports heat deaths; this must change going forward if the government is to build up a true picture of the effect of warming on public health.
4. International cooperation: It’s imperative to remove greenhouse gases from the atmosphere and repair the climate in critical regions, such as the poles. This will require new levels of international cooperation.
5. Climate-smart agriculture: Current cropping patterns and agricultural practices also contribute greatly to India’s carbon footprint, and over the next decade they will have to be addressed, alongside greater reforestation to serve as traps for carbon. Climate-smart agriculture is already being trialled across the country, but the changing weather patterns warned of by the IPCC report mean farmers will need access to the latest advice and methods.
6. The government must stop subsidizing coal-fired thermal power plants
7. Agricultural extension system: The revival of the agricultural extension system is overdue, and is the only weapon in India’s arsenal when it comes to adaptation in the primary sector.
8. Urban planning will also have to shift. For residents of Indian cities, walking in the sun must be de-emphasised going forward in the planning. Metro and electrified bus systems will have to be put in place that have a denser network of stops than are currently common in India.

Conclusion

Climate change has to be at the heart of planning and policy across multiple domains going forward.

Revisit the idea of ‘aging out’ India’s coal plants

Synopsis:

It is right to let old coal capacity fade away in due course, but age shouldn’t be used as the sole criteria for it. The focus should be on doing detailed analysis and weeding out the needless capacity in the pipeline, to derive long-term economic and environmental benefits.

Background:

The government is showing a willingness to retire old coal-based plants (25 years or more) as testified in the recent budget speech by the finance minister. However, some experts believe that the government should revisit the idea of aging out old coal plants.

Why should the old coal plants retire?

Firstly, there is the availability of under-utilized newer and presumably more efficient coal-based capacity. Hence, shutting down older inefficient plants would lead to improved efficiencies, reduced coal usage, and cost savings.

Secondly, they are major contributors to carbon emissions. Their closure will aid in achieving India’s Nationally Determined Contributions, as per the Paris Agreement.

Third, it would be uneconomical for old plants to install pollution control equipment required to meet the emission standards announced by the Environment Ministry.

• This argument was reflected in a recent order from the Central Electricity Regulatory Commission (CERC).
• The CERC allowed Delhi’s BSES distribution company to exit its concluded 25-year-old power purchase agreement with the National Thermal Power Corporation Limited’s Dadri-I generating station.

Arguments against the retirement of old coal plants:

Plants older than 25 years consist of around 20% of the total installed thermal capacity and play a significant role in the country’s power supply. 

There are also several old plants, which operate at lower costs. For instance, plants such as Rihand (U.P) and Vidhyanchal (Madhya Pradesh) are over 30 years old and have very low generation costs of around Rs. 1.7/kWh. The cost is lower than the national average.

Many studies suggest that the total savings from shutting older plants would be less than 5,000 crores annually. It is just 2% of the total power generation cost. 

• These savings may not be sufficient to even pay for the fixed costs that would have to be paid anyway, even if the plants are prematurely retired.
• Similarly, savings in coal consumption by replacing generation from plants older than 25 years with newer coal plants are also likely to be only in the 1%-2% range.

There are some old plants that may continue to be economically viable even if they install pollution control equipment as their current fixed costs are very low. 

• Indeed, about half the coal capacity older than 25 years has already issued tenders for pollution control equipment installation.

Old thermal capacity is required, to support the growing intermittent renewable generation until other technologies (such as storage) can replace them at scale. 

Way Forward:

• Age should not be used as a sole criterion to retire a coal-based plant. A detailed analysis should be done, considering the various technical, economic, and operating characteristics of individual plants and units before taking the retirement decision.
• Further, an emphasis should be placed on accounting for aspects such as intermittency of renewables, growing demand, and the need to meet emission norms.

Expiry of safeguard duty: Boon for solar developers, bane for manufacturers

Synopsis:

The decision of the center to impose a basic customs duty from April 2022 and the expiration of the existing safeguard guard duty will result in higher solar imports. This move will benefit solar plant developers, but create more problems for domestic manufactures.  

Background:

Indian solar cell and module makers may see difficult times ahead with no protection from imports till April next year. Safeguard Duty (SGD) was imposed on solar cells and module imports for the past two years, which expired last month. 

Moreover, the Basic Customs Duty (BCD), announced by the Centre, will kick in only after 9 months. For solar project developers, it’s a boon as they would be able to import before the BCD is enforced.

About India’s Solar Sector:

• According to industry data, India has 3,100 Mw of cell manufacturing capacity and 9,000 Mw of module manufacturing capacity. India’s installed capacity of solar power stands at 39.08 Gw (including ground-mounted and rooftop).
• The country aims to have 100 Gw of solar power capacity by next year.
• There is a price difference of about 10-20 percent between Indian and Chinese solar cells and modules. 
• India imports close to 90 percent of its solar cells and modules and nearly 80% of this is from China. 

Benefits for Solar project developers:

1. The 9-month duty-free period gives a much-deserved breathing space to Indian solar developers. They would be able to import cheaper modules from China. 
2. This will cause a reduction of close to 15% in solar tariffs. Further, more projects and new players would enter the business.

Issues for Manufacturers:

1. The manufacturers are already unable to compete with cheap imports. Many of them have complained against the dumping of solar imports from China, Vietnam, and Taiwan.
2. At present, domestic manufacturers lack orders and are running below optimal capacity.
3. In such a scenario, a duty-free period of 9 months will make sustenance for local manufacturers extremely difficult, as they will be left with almost nil orders to continue production.
4. Further, they will have to continue paying hefty duties on imported raw materials, thereby being unable to compete with internationally-produced modules.

Conclusion:

The Centre can impose an anti-dumping duty to create a level-playing field for domestic module manufacturers. This will provide the much-needed relief to the material injury caused to the domestic sector and also help in protecting over 300,000 jobs.

The silent rise of Small Finance Banks (SFBs)

Synopsis: Challenges faced by SFBs and Criticism against them

Background

• SFBs have grown rapidly since RBI first carved out this category half a decade ago in Indian financial system. In Financial Year (FY) 2018 – 2020, SFBs registered a phenomenal growth by doubling the advances and tripling deposit accumulation over the same period.
• At latest, five small finance banks or SFBs are expected to launch an Initial Public offering (IPO) over the next 2 months.
• More, Five years after the experiment on SFBs began, the RBI is now gearing up to issue another set of SFB licences to new players.

Evolution of Small Finance banks

• The idea behind SFBs can be traced back to 2013. An internal group of the RBI recommended that much like microfinance institutions (MFIs), banks should begin viewing the poor as profitable customers.
• The proposal, however, became a reality when Raghuram Rajan became the governor of the RBI, and the term ‘small finance’ was introduced.

Idea behind SFBs

Although share of Indians with bank accounts has swiftly expanded over the past decade, most of these accounts are rarely used. A majority of Indians still remain outside the reach of formal financial institutions. Without assured access to credit, small entrepreneurs can’t flourish, and innovation cannot take root.

This is exactly the problem that these new banks were meant to solve.

Criticism of SFBs

Non-inclusive:

• Most of the branches have been opened in the relatively well-banked regions or states.
• Most of the new small banks operate in urban and semi-urban areas and a large part of their deposit portfolio consists of large borrowers.
• They are only catering to the missing middle-income market.
• For instance, as of March 2020, about 39% of all SFB branches were in semi-urban areas and 26% in urban centres.

High cost for borrowers:

• The lending rate continues to be fairly high despite their transition into a bank.
• According to RBI data, loans had been given at an interest rate of 13% and above. This goes against their very purpose of such institutions, that is to enable enhanced financial inclusion.
• High lending rates also affects SFBs growth negatively. According to RBI data, SFBs have outstanding loans of ₹83,441 crore as of March 2021.

Diversification:

• Many SFBs have diversified into other segments, such as MSME lending.
• In fact, SFBs have been lowering their exposure to microfinance customers to reduce the risk from income shocks, and political and operational risks inherent in the microfinance business.

Challenges faced by SFBs

Weak Deposits:

• The share of current and savings accounts (CASA) in total deposits for SFBs stood at 15% in March 2020, as compared to 41% for banks. This is despite SFBs offering a higher interest rate to attract depositors. Weak Deposits limit their lending capacity and finally a banks’ growth.

Market Risk:

• Over the past four years, SFBs have also had to face two big risk events demonetization and the covid-19 pandemic. These events have resulted in liquidity stress.
• The NPA (non-performing asset) ratio for the sector touched a high of 5% compared to the sub 1% mark earlier.
• A lot of regulations are liberal for universal banks. Becoming a universal bank is less capital intensive. That’s why most of them want to become a universal bank.”

Nomenclature:

• One of the initial challenges that SFBs faced was with the “small finance” byname. Brand acknowledgment among customers was a worry initially. Some people thought SFBs are similar to cooperative banks

Conclusion

As more players enter the SFB space, a stiff competition is expected to break out in the segment alongside a rise in innovation and digitalization. However, the hurriedness shown by Indian SFBs to grow is threatening the financial future of India’s unbanked millions.

Indian startups deserve an easier shot at success

Synopsis:  Recently, the Limited Liability Partnership (Amendment) Bill, 2021, got the approval of Lok Sabha. Need for it and the changes introduced.

Background

An enactment of law in 2008 allowed the emergence of large joint-stock companies as LLPs, with the liability of all investors limited to the extent of their investment. Thousands of limited liability partnerships (LLPs) sprang up. These could take loans and expand without anyone’s personal assets put at stake.

However, financial risk is not the only kind there exists. In a rule-dense country, entrepreneurs also need to worry about the hazards of compliance failure.

Changes proposed

• To qualify as a small LLP, the country’s cap on business turnover will be raised sharply to ₹50 crore from ₹40 lakh and the limit on partner contribution to ₹5 crore from ₹25 lakh.
• Fraud penalties will be hardened, with prison sentences going up to 5 years and fines up to ₹5 lakh.
  • However, the likelihood of a partner being dragged up for relatively trivial offences is to be reduced for ease of doing business.
• The revised LLP law will have fewer penal provisions, cut to 22 from 24, and 12 of these violations will no longer be deemed criminal.
• The Bill also proposes special LLP courts for speedy trials and dispute resolution.

Issues 

1]. Many of LLPs deal in intangibles and have few hard assets for lenders to claim. For them to be credit-worthy as a class, they must comply with stiffer regulations than they’d need to without a liability limit. It’s not just a long check-list of structure-specific dos and don’ts that daunts many budding startups in India.

2]. Compliance burden: Most small businesses struggle to comply with rules and filing requirements that can range from enforcement at the municipal level all the way up to central diktats. Energy spent on these often gets in the way of productive pursuits.

Conclusion

Our startups have been a bright spot in an otherwise weakening economy. They deserve an easier shot at success.

The repeal of the retrospective tax shows Modi government means business on reforms

Synopsis:

Along with the taxation Laws (Amendment) Bill, India has taken many steps to boost investor confidence.

Introduction:

The government has recently introduced the Taxation Laws (Amendment) Bill, 2021, in Parliament. The bill seeks to nullify the contentious retrospective tax law by amending the Income Tax (IT) Act of 1961 and the Finance Act of 2012. 

This move will boost investor confidence.

The other moves of government to boost investor confidence:

India is enjoying one of the best years of foreign direct investment and foreign portfolio investment.

• For many decades, India had one of the highest effective corporate taxes (at 27%) in the world. But recently, the government brought the effective corporate taxes to near world competitive levels.
  • An effective tax is simply the ratio of the tax paid to income earned. The difference between the stated nominal and the actual effective arises because of legal tax deductions.
• After having one of the highest real policy rates in the world, the RBI has introduced a trend of having a competitive real policy rate.
• The Taxation Laws (Amendment) Bill will directly influence Indian sovereign (and corporate) bonds to become part of global bond indices. This will result in reducing the cost of borrowing for governments and corporates.

The Commerce Department’s High Level Advisory Group committee report  was published in September 2019. That report had argued for several reforms, including some major reforms in the capital market. It is time for government to implement that and increase further investor confidence.

All this will result in more capital and more investment — both of this will result in higher growth.

Connecting India by inland waterways

Synopsis: Recently, Parliament passed a new law to bring uniformity in the rules and regulations governing inland waterways and navigation on them. The Inland Vessels Bill, 2021 replaces the century-old Inland Vessels Act, 1917.

Background

• Read here: Indian Vessels Bill 2021

Issues with the 1917 Act

• The 1917 Act was seen as a purely consolidating legislation with limited applicability and purposes. 
• It had undergone several amendments, the last major ones in 1977 and 2007.  
• It had provisions for restrictive movement of mechanically propelled vessels within the jurisdiction of the state government. 
• Non-uniform standards and regulations that varied from one State to another. 

The government wants to promote inland waterways as a supplement to freight movement across India.  

Aim and objective of the bill

• It seeks to bring all inland waterways in India and movement of vessels on them for any purpose under a central regulatory regime. 
• It is aimed at developing India’s inland waterways as a viable, thriving mode of transport, especially for cargo. The inland waterways network spans close to 15,000 km across rivers, channels, backwaters, creeks etc. 

Key features of the Inland Vessels Bill, 2021

Registration: To operate in inland waters, vessels must have a certificate of survey, and registration.  

• Those with Indian ownership must be registered with the Registrar of Inland Vessels. 
• It will be valid across India.  
• While the state government will issue the certificate, the form will be prescribed by the Centre like in the case of motor vehicles.  
• The Bill defines mechanically propelled vessels as ships, boats, sailing vessels, container vessels, and ferries.  

Functions of the central government: 

• It empowers the Centre to prescribe what kind of pollutants and sewage vessels and can discharge, and how much. 
• It envisages maintaining a fund, which will be used for emergency preparedness, checking pollution and boosting navigation.  
• The Centre will frame classification, standards of design, construction, and crew accommodation.  
• Construction or modification will require approval of a designated authority.  
• All such vessels are to be registered with respective states or Union Territories. Their movement and identities will be logged in a central database. 
• The new law mandates that if any distress or SOS signal is sent out by the master of a vessel, any other vessel nearby must respond like maritime custom and rules on sea.  
• In case of accidents, the nearest police station is to be involved for inquiry and action.  
• Non-compliance will attract a penalty of up to Rs 10,000 for the first offence, and Rs 25,000 for subsequent offences. 

However, the Bill has been criticized on the ground that it takes away a lot of rights of the states and vests them with the Centre. 

Prelims Oriented Articles (Factly)

‘29% of students exposed to second-hand smoke’

Source: The Hindu

What is the News?

Union Minister for Health and Family Welfare has presided over the release of the Fourth Global Youth Tobacco Survey (GYTS-4), India, 2019.

About Global Youth Tobacco Survey (GYTS-4), India, 2019:

• The fourth round of the Global Youth Tobacco Survey (GYTS-4) was conducted in 2019 by the International Institute for Population Sciences (IIPS) under the Ministry of Health and Family Welfare (MoHFW).
  • The first three rounds of GYTS were conducted in 2003, 2006 and 2009.
• Purpose: The survey was designed to produce national estimates of tobacco use among school-going children aged 13-15 years at the state level and Union Territory (UT) by sex, location of school (rural-urban), and management of a school (public-private). 

Key Findings of the Survey:

• Use of Tobacco: Nearly one-fifth of the students aged 13-15 used any form of tobacco product (smoking, smokeless, and any other form) in their life. However, there has been a 42% decline in tobacco use in the past decade.
• Gender wise: The use of any form of tobacco was higher among boys than girls. 
• State-wise: The current use of tobacco among students across the States/ UTs ranged from the highest in Arunachal Pradesh and Mizoram (58% each) to the lowest in Himachal Pradesh (1.1%) and Karnataka (1.2%).
• Age of Initiation of Tobacco: 38% of cigarettes, 47% of bidi smokers and 52% of smokeless tobacco users initiated the use before their 10th birthday.
• Second-hand smoke: 29.5% of the students were exposed to second-hand smoke (11.2% at home, 21.2% inside enclosed public places, 23.4% at outdoor public places.
• Use of E-Cigarettes: The use of e-cigarette among the students was 2.8%.

PM launches Ujjwala 2.0 Scheme

Source: PIB

What is the News?

The Prime Minister of India has launched Ujjwala 2.0 (Pradhan Mantri Ujjwala Yojana – PMUY) by handing over LPG connections at Mahoba, Uttar Pradesh.

About Pradhan Mantri Ujjwala Yojana(PMUY):

• Pradhan Mantri Ujjwala Yojana was launched by the Ministry of Petroleum and Natural Gas in 2018.
• Aim: To replace the unclean cooking fuels mostly used in rural India with the clean and more efficient LPG(Liquefied Petroleum Gas).
• Under the scheme, an adult woman member of a below poverty line family identified through the Socio-Economic Caste Census (SECC) was given a deposit-free LPG connection with the financial assistance of Rs 1,600 per connection by the Centre.
• Target: Initially the target was the installation of 5 crores LPG connections by 2019. But the target was revised to 8 crores which was achieved in August 2019.

About Pradhan Mantri Ujjwala Yojana(PMUY) 2.0:

• In the Union Budget for 2021-22, the Government has announced the target of an additional one crore LPG connection. These additional connections will be provided under Ujjwala 2.0.
• Hence, Ujjwala 2.0 aims to provide deposit-free LPG connections to those low-income families who could not be covered under the earlier phase of PMUY.
• Along with a deposit-free LPG connection, Ujjwala 2.0 will also provide the first refill and hotplate free of cost to the beneficiaries.
• Moreover, the migrants would only be required to submit a self-declaration of their residential address to get the gas connection.

Union Home Minister chaired the 36th meeting of the Parliamentary Committee on Official Language

Source: PIB

What is the News?

The Union Home Minister has chaired the 36th meeting of the Parliamentary Committee on Official Language.

About Parliamentary Committee on Official Language:

• The Parliamentary Committee on Official Language was set up in 1976 under section 4 of the Official Languages Act,1963.
• Mandate: The Committee shall review the progress made in the use of Hindi for the Official purposes of the Union and submit a report to the President making recommendations. The President shall then lay the report before each House of Parliament and send it to all the State Governments.
• Composition: The Committee comprises 30 members of Parliament, 20 from Lok Sabha and 10 from Rajya Sabha.
• Chairman: The Chairman of the Committee is elected by the members of the Committee.  As a convention, the Union Home Minister has been elected as Chairman of the Committee from time to time.

Steps taken by the Government for awareness about the Pusa Decomposer

Source: PIB

What is the News?

The Government of India has taken several steps to spread awareness about the Pusa Decomposer.

About Pusa Decomposer:

• Pusa Decomposer is a low-cost capsule that can convert paddy stubble into bio-manure.
• The capsule consists of a fungi-based liquid solution that can soften hard stubble to the extent that it can be easily mixed with soil in the field to act as compost.
• Developed by: Pusa Decomposer Technology has been developed by ICAR – Indian Agriculture Research Institute (IARI), New Delhi.

Benefits:

• This method rules out the need to burn the stubble. It also helps in retaining the essential microbes and nutrients in the soil that is otherwise damaged when the residue is burned.

Concerns:

• The window of time required for the Pusa Decomposer solution to work is around 20 to 25 days. Farmers argue that this window is too long for them.

Sultanpur, Bhindawas wetlands near Delhi get Ramsar tag

Source: TOI

What is the News?

Two wetlands of Haryana — Sultanpur National Park and Bhindawas Wildlife Sanctuary — have been included in the Ramsar list. With this, the number of protected Ramsar sites in India has now gone up to 46.

About Sultanpur National Park:

• Sultanpur National Park is situated in the Gurgaon district of Haryana. The park is spread across 353 acres.
• The park is an important wetland that harbours rich plant and animal life. It supports more than 220 species of resident, winter migratory and local migratory waterbirds at critical stages of their life cycles. 
• More than ten of these are globally threatened, including the critically endangered sociable lapwing.

About Bhindawas Wildlife Sanctuary:

• Bhindawas Wildlife Sanctuary is located in the Jhajjar district of Haryana. In 2009, it was declared as a bird sanctuary by the Indian Government.
• The sanctuary is an important part of the ecological corridor along the route of Sahibi River which traverses from Aravalli hills in Rajasthan to the Yamuna. The sanctuary is located just 1.5 km from Khaparwas Wildlife Sanctuary.
• The sanctuary is an important wetland that provides a safe habitat to numerous animals and plants.
• A total of 265 species of birds have been reported from the site. More than 30,000 migratory birds belonging to over 250 species visit Bhindawas throughout the year.

West Africa records 1st death from ‘highly infectious’ Marburg virus

Source: Down To Earth

What is the News?

West Africa’s first case of the extremely contagious and deadly Marburg virus was confirmed in Guinea.

About Marburg Virus:

• Marburg virus disease(MVD) was formerly known as Marburg hemorrhagic fever.
• The virus causes hemorrhagic fever and belongs to the same family (Filoviridae family) as the Ebola virus.
• First Case: The virus was initially detected in 1967 after simultaneous outbreaks in Marburg and Frankfurt in Germany; and in Belgrade, Serbia.
• Symptoms: The common symptoms of a virus are fever, headache, fatigue, abdominal pain and gingival haemorrhage.
• Transmission: Marburg is transmitted to people from fruit bats. The virus spreads among humans through direct contact with the bodily fluids of the patient, surfaces and materials
• Fatality Rate: The case fatality rate is around 50%. Case fatality rates have varied from 24% to 88% in past outbreaks, depending on virus strain and case management.
• Treatment: There are no approved vaccines or antiviral treatments for the virus yet. Early supportive care with rehydration and symptomatic treatment improves survival.

Lok Sabha passes Constitution amendment Bill to restore states’ powers on OBC list

Source: Indian Express

What is the News?

Lok Sabha has unanimously passed the Constitution (127th Amendment) Bill, 2021.

About Constitution (127th Amendment) Bill, 2021:

Main Purpose of the Bill:

• The Bill amends the Constitution to allow states and union territories to prepare their own list of socially and educationally backward classes. 

Key Provisions of the Bill:

List of socially and educationally backward classes: 

• The National Commission for Backward Classes(NCBC) was established under the National Commission for Backward Classes Act, 1993.  
• The Constitution (One Hundred and Second Amendment) Act, 2018 gave constitutional status to the NCBC, and empowered the President to notify the list of socially and educationally backward classes for any state or union territory for all purposes. 
• The 2021 Bill amends this to provide that the President may notify the list of socially and educationally backward classes only for purposes of the central government. This central list will be prepared and maintained by the central government.  
• Further, the Bill enables states and union territories to prepare their own list of socially and educationally backward classes.  This list must be made by law and may differ from the central list.

Consultation with the NCBC:

• Article 338B of the Constitution mandates the central and state governments to consult the NCBC on all major policy matters affecting the socially and educationally backward classes.  
• The Bill exempts states and union territories from this requirement for matters related to the preparation of their list of socially and educationally backward classes.

Scientists develop soft robotic actuators using porous carbon nanoparticles from waste onion peels

Source: PIB

What is the News?

A team of Indian Scientists have developed soft robotic actuators using porous carbon nanoparticles from waste onion peels.

What are Soft Robots or Actuators?

• Soft robots or actuators is the specific subfield of robotics dealing with constructing robots from highly compliant materials similar to those found in living organisms.
• Soft robotics draws heavily from the way in which living organisms move and adapt to their surroundings. 
• In contrast to robots built from rigid materials, soft robots allow for increased flexibility and adaptability for accomplishing tasks, as well as improved safety when working around humans.
• These characteristics allow for the potential use of soft robotics in the fields of medicine and manufacturing.

What scientists have developed?

• Scientists have developed soft robotic actuators with enhanced photomechanical capacity. It was developed using porous carbon nanoparticles from waste onion peels.
• These soft robots can act as efficient traps for the illuminating low-power near-infrared (NIR) light. They can also convert a control signal into mechanical motion with bioengineering applications such as drug delivery, wearable and assistive devices, prostheses, and even artificial organs.

What happened during NASA’s first attempt to collect Mars samples with the Perseverance rover?

Source: Indian Express

What is the News?

NASA’s Perseverance rover is exploring the Jezero Crater on Mars and attempting to collect its first rock samples. However, no rock samples were collected during the first attempt. 

About Perseverance rover:

• The perseverance rover mission is a part of NASA’s Mars Exploration Program, a long-term effort of robotic exploration of the Red Planet.
• Aim: The rover is designed to study signs of ancient life, collect samples that might be sent back to Earth during future missions, and test new technology that might benefit future robotic and human missions to the planet.

Objectives of the Mission:

• Explore a geologically diverse landing site
• Assess ancient habitability
• Seek signs of ancient life, particularly in special rocks known to preserve signs of life over time
• Gather rock and soil samples that could be returned to Earth by a future NASA mission
• Demonstrate technology for future robotic and human exploration.

Landing Site of the Rover:

• Jezero Crater (an ancient river delta that has rocks and minerals that could only form in water).

Duration of the Mission:

• Perseverance Rover will spend one Mars year (two years on Earth).

Instruments of the Mission:

• The rover is carrying with it seven instruments, which include an advanced camera system with the ability to zoom, a SuperCam, which is an instrument that will provide imaging and chemical composition analysis, and a spectrometer.
• One of the most interesting instruments aboard the rover is called MOXIE. It will produce oxygen from Martian atmospheric carbon dioxide. If this instrument is successful, then future astronauts (as of now, no human being has kept the foot on Mars) can use it to burn rocket fuel for returning to Earth.
• The rover is also carrying Ingenuity, the first helicopter to fly on Mars that will help collect samples from the surface from locations where the rover cannot reach.

Expand food basket under PDS, says WHO scientist

Source: The Hindu

What is the News?

The World Health Organisation(WHO) chief scientist has attended a seminar titled “Ensuring food and nutrition security in the context of climate change and the COVID-19 pandemic”.

Key Highlights from the Seminar:

Expand Public Distribution System(PDS):

• Currently, the Public Distribution System(PDS) in India is taking care of food insecurity by providing only cereals.
• The Government of India should expand the food basket of the PDS by including Millets, pulses, fruits, vegetables and animal proteins.
• This will ensure that sufficient nutrition is available to people in lower socio-economic groups.

Optimum Nutrition to Children:

• The governments should organize campaigns to bring a behavioural change of families towards providing optimum nutrition to children.
• The optimum nutrition to babies can be provided by intensive breastfeeding, kangaroo mother care and providing diverse nutritious complementary food to babies. 

About Kangaroo Mother Care:

• Kangaroo mother care is a method of care for preterm infants. The method involves infants being carried, usually by the mother, with skin-to-skin contact.