9 PM Daily Current Affairs Brief – May 4th, 2023

Mains Oriented Articles

GS PAPER - 1

India’s CAG writes: Blueprint for a blue economy

Source– The post is based on the article “India’s CAG writes: Blueprint for a blue economy” published in “The Indian Express” on 4th May 2023.

Syllabus: GS3- Economy. GS1- Geography

Relevance: Blue economy

News- The Comptroller & Auditor General of India will chair SAI20, the Engagement Group for Supreme Audit Institutions (SAls) of G20 countries in Goa in June. Two priority areas have been selected for SAI20 deliberations — blue economy and responsible Artificial Intelligence.

What is the recent contribution of the UN for the blue economy?

In 2018, the United Nations Environment Programme (UNEP) had for the first time laid out the Sustainable Blue Economy Finance Principles. It is a framework that investors can use to fund ocean-based industries.

Financiers can use it as a reference point to see how marine investment can impact livelihood and poverty eradication.

What are issues with measurement of the blue economy?

The blue economy encompasses an array of coastal activities, including fishing and tourism. The measurement of the blue economy is challenging due to conflicting definitions and issues related to classifying different sectors and sub-sectors.

Existing international economic classifications are unable to properly differentiate between land-based and ocean-based activities. Even the System of National Accounts (NAS) does not provide a clear understanding of the blue economy.

A new accounting framework is needed that can objectively identify production, trade, and services related to the various segments of the blue economy.

What are the contributions of CAG towards the blue economy?

Last year, the CAG released the first-ever country-wide Compendium of Asset Accounts of Natural Resources. It is prepared in line with the UN system of Environmental and Economic Accounts.

Setting compliance standards and a national accounting framework for the blue economy is a long-term priority for the CAG.

In August last year, the CAG tabled its Conservation of Coastal Ecosystem report in Parliament. It contained its observations on how the Coastal Regulation Zone notification for 2011 and 2019 have been implemented between 2015 and 2019.

It looked at the underlining efficiency of development drivers such as project clearances, construction activity, institutional capacity to curb land and forest violations, community livelihood support mechanisms, and mitigation management plans to conserve biodiversity such as mangroves.

What are challenges for the coastal ecosystem in India?

Sea-level rise, water temperature, storm surges and wave conditions are some of the signs of climate change. Unbridled land use changes, sand mining and deforestation has impacted the coastal ecosystem.

Studies indicate that hazards of cyclones and sea-level rise are likely to be higher in the coastal regions.

GIS maps from the European Space Agency indicate that 15% of India’s coastal areas have witnessed changes between 1992 and 2018 due to agriculture, depleting forest cover and urbanisation.

Besides that, the population living along the country’s coastal areas is expected to rise from 64 million in 2000 to 216 million by 2060.

What is the importance of the blue economy for India?

Blue economy has been marked by the government as one of the 10 core sectors for national growth. The National Blue Economy Policy aims to harness maritime resources while preserving the country’s rich marine biodiversity.

What is the way forward for proper management of coastal areas for disasters?

Disaster-resilient infrastructure along coasts that can withstand the impacts of hurricanes, typhoons, and tsunamis is the need of the hour. This is particularly important for coastal communities.

There is a need for adequate infrastructure, especially ICT hubs for early warning systems.

GS PAPER - 2

Tariffs on electricity, water and gas: The cost of inefficient pricing

Source– The post is based on the article “Tariffs on electricity, water and gas: The cost of inefficient pricing” published in “The Indian Express” on 4th May 2023.

Syllabus: GS2- Government policies and interventions. GS3- Economy

Relevance– Pricing of essential goods and services

News– The article explain the issues of tariff on utilities

What are the issues with tariffs on utilities in India?

The pricing of utilities like electricity, water and gas is a complicated exercise in India. Prices are largely administered. They are not market driven. They seldom cover the costs of provision.

They are a deeply political decision.

Take the example of electricity. Tariffs levied by power distribution companies across states do not reflect the cost of supplying power. In 2020-21, the average cost of supplying power was pegged at Rs 6.19 per unit. In comparison, the revenue from discoms operations worked out to only Rs 4.21 per unit.

In the case of water, the recovery is even lower. According to some estimates, water boards across the country are able to recover only around a third of their operation and maintenance costs.

In the case of the Delhi Jal Board, in 2021-22, its projected income was insufficient to cover its operating costs and its interest liability.

The distribution of tariffs among different consumers is another issue . In most states, power and water tariffs paid by agricultural consumers are a fraction of those paid by industrial and commercial users.

For instance, in 2020-21, power tariffs for commercial users were nine times more than those for agricultural consumers, and industrial tariffs were seven times higher.

In comparison, in developed countries, tariffs for industrial consumers tend to be lower than those for households.

There are multiple pricing regimes. Chhattisgarh’s tariff order is an example of this. Industrial consumers are further divided into six slabs and each slab is charged a different fixed and energy cost. Domestic consumers are divided into five slabs.

In the case of gas too, there are multiple pricing regimes — from the administered pricing mechanism (APM) framework to the non-APM and imported LNG regimes.

What is the way forward for tariffs on utilities in India?

Consumers should get the full benefits of lower gas prices during a down cycle, and producers get the full upside when prices rise.

The imposition of the floor and ceiling is arbitrary but so is the proposed increase in gas prices every year.

Prices tend to act as signals for both producers and consumers. Market based pricing tends to lead to optimal usage, increased efficiency and better outcomes.

For instance, higher prices that reflect the true costs of electricity and water would perhaps encourage farmers to shift away from water-guzzling crops. But their low cost encourages inefficient usage.

What are the impacts of lower tariffs?

Costs are more than revenues. So, the supplying entities have little funds for repairs and maintenance or invest in capacity enhancement.

As per a CAG report, of the 1,797 unauthorised colonies in Delhi, 1,573 colonies had not been provided with sewerage facilities as of March 2018. Moreover, 567 unauthorised colonies were still dependent on tube-wells/hand-pumps.

Higher tariffs would have allowed for greater investments by the Delhi Jal Board to ramp up water supply in these areas.

The provision of free or heavily subsidised utilities is not a governance model.

Staying Married To China – ON tackling threats from China

Source: The post is based on an article “Staying Married To China – Whether US, EU or India, decoupling from the world’s second biggest economy is near impossible. De-risking is the new buzzword. But even that’s not easy” published in The Times of India on 4^th May 2023.

Syllabus: GS 2 – International Relations

Relevance: concerns with economic dependence on China.

News: The US and the EU countries have changed their mind towards their strategy of decoupling from China. This could be seen from their speeches.

What are some of the speeches from the US for China?

The US secretary recently said that the US will speak out when its interest is at stake. However, this does not mean that it wants to decouple its economy from China’s. 

This is because a full separation of our economies would be disastrous for both countries. It would also be destabilising for the rest of the world.

A similar kind of message was given by the US national security adviser. He said that the US thinks of de-risking and diversifying, not decoupling from China.

What is the new de-risk strategy of the US and how does it differ from the previous decoupling strategy?

The new ‘de-risk’ strategy is a departure from the ‘decouple’ plan. It also intends to change the perspective of the US from the fact of geo-economic containment of China is not easy.

The decouple plan stated that the geo-economic containment of China would preserve the world’s equilibrium without involving any form of conflict.

It was suggested that the US should restrict trade with China; deny China access to key raw materials; and stop technology transfers that China would need. These all would slow China’s economic growth.

This advice was accepted by both Biden and Trump which aimed at starting New Cold War. However, it is different from the Old Cold War with the Soviet Union.

What are the differences between New Cold War and the Old Cold War?

The Old Cold War sought the Soviet Union to be geopolitically contained while the New Cold War aims at geo-economic containment of China.

However, it is not easy to sustain the New Cold War because China is the world’s biggest manufacturing and trading nation with almost every country around the world having economic relations with it.

Hence, the US and the EU have discovered that it is not easy to achieve the geo-economic containment of China in the long run because they remain dependent on China in many ways and reducing these dependencies will take time.

They have also realised that countries and industries around the world are deeply integrated into China’s economy, and vice versa. Hence, due to the complex global supply and value chains, decoupling is not easy.

What steps have been taken by India to reduce its dependence on China and what are the associated concerns?

In 2019, the Indian government opted out of the Regional Comprehensive Economic Partnership agreement to reduce India’s trade dependence on China.

However, four years later India’s trade deficit with China reached an all-time high of over $85 billion.

Indian businesses urged GoI that while decoupling is tough, even de-risking would require investments and policy changes that are not easily forthcoming.

Hence, it is not easy to substitute the dependence on China for India as well as the rest of the world.

India’s Evacuation Missions and challenges – Explained, pointwise

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Introduction

India’s Evacuation Missions have become increasingly vital for safeguarding its citizens during global crises, as exemplified by the recent Sudan conflict in 2023. In this mission, India demonstrated its unwavering commitment to ensuring the safety and well-being of thousands of its nationals trapped in the African nation. However, these missions also present a myriad of challenges, including geopolitical complexities, operational difficulties, and resource constraints.  

About India’s present Evacuation Mission – Operation Kaveri 

Read here: India launches Operation Kaveri to evacuate stranded citizens from war-hit Sudan

About India’s Evacuation Missions in the Past

Read here: Evacuation operations of India in various countries

Why there is a rising complexity in India’s Evacuation Missions?

Unstable Regions: India’s evacuation missions often involve unstable regions where the security situation can change rapidly, making it difficult to plan and execute safe evacuations. The recent rescue of Indians from Sudan highlights this complexity, as the IAF faced intelligence challenges and a rough landing environment.  

Global Crises: Global crises like the COVID-19 pandemic and the recent conflict in Afghanistan have led to an increased need for evacuation missions in challenging circumstances. In the Kabul mission of August 2021, the pilots faced chaotic and uncontrolled airspace, emphasizing the complexity of such operations.  

Diverse Nationalities: India’s evacuation missions often involve not only Indian citizens but also foreign nationals, adding to the logistical challenges of coordinating with other governments and international organizations. During “Operation Raahat” in 2015, India evacuated over 4,600 Indians and 950 nationals from 41 countries amid the Yemen crisis.  

Coordination Challenges: India’s evacuation missions require close coordination between various government agencies, the armed forces, and international partners. This increases the complexity of such operations, as demonstrated by India’s efforts to evacuate its citizens from Ukraine during the COVID-19 pandemic or from Iraq and Syria.  

Evolving Security Threats: India’s evacuation missions are becoming more complex due to evolving security threats, such as terrorism and cyberattacks. These threats can directly impact the safety and security of evacuees and the personnel involved in the missions, requiring robust planning and countermeasures to mitigate risks.  

Climate-Related Disasters: Natural disasters caused by climate change, such as cyclones and floods, can hamper evacuation missions.  

Growing Indian Diaspora: With an increasing number of Indians living, working, and studying abroad, the potential for India’s evacuation missions to involve a more diverse group of people is growing. This can create additional complexities in terms of communication, cultural understanding, and logistical coordination during evacuation operations.  

What is the policy support provided by the government for India’s Evacuation Missions?

Strong Political Commitment and Continuous Assessment: India’s Prime Minister’s directive to prepare evacuation plans for Indian citizens in Sudan in 2023 and his emphasis on regular monitoring and assessment of their safety demonstrate the government’s unwavering dedication to protect its nationals abroad.  

Interagency Coordination: The high-level meeting chaired by India’s PM to discuss the situation of Indians trapped, this was attended by officials from the Ministry of External Affairs, the Indian ambassador to Sudan, the Foreign Secretary, and high-level officials from the air force and navy, highlighting the importance of interagency coordination in evacuation missions.  

Diplomatic Efforts: India’s External Affairs Minister meeting with UN Secretary-General Antonio Guterres to discuss the situation, emphasizing the role of diplomacy in facilitating evacuation missions.  

Resource Allocation: The Indian government’s allocation of resources, such as the deployment of Indian Air Force C-130J Super Hercules aircraft for evacuation missions like the one in Sudan in 2023, demonstrates support for the missions.  

Public Communication: The Ministry of External Affairs’ cautionary statement to Indians in Sudan about active fighting near the Indian mission in Khartoum, emphasizing the role of effective public communication in ensuring the safety of citizens during evacuation missions.  

Specialized Training: The specialized training provided to the IAF’s special operations crew, like the C-130J squadrons, which helped in successful evacuation missions such as the ones in Afghanistan and Sudan.  

Coordination with Host Countries: During the Vande Bharat Mission in 2020, India worked closely with host countries to ensure the safe repatriation of Indian citizens from various nations, emphasizing the importance of coordination with host countries for successful evacuation missions.  

Read more: Rescue service – The Sudan evacuation highlights challenges India faces in conflict

What are the operational challenges faced in India’s Evacuation Missions?

Limited Intelligence: Evacuation missions can face challenges due to insufficient information about local conditions, hindering effective planning and execution.  

Logistical Hurdles: Coordinating transportation, navigating difficult terrain, and providing basic necessities like food and water can be challenging during evacuation missions. For instance, Indian citizens trapped in Sudan in 2023 faced difficulties due to a lack of electricity, food, and water, highlighting the logistical challenges in evacuation missions.  

Communication Barriers: Language differences, poor communication infrastructure, and limited access to local authorities can complicate coordination and rescue efforts.  

Time Constraints: In many evacuation scenarios, the situation on the ground can change rapidly, requiring flexibility and adaptability from the mission planners and the personnel involved. This adds another layer of complexity to India’s evacuation missions, as decision-makers must quickly respond to new information and adjust their plans accordingly.  

Uncertainty in Evacuee Numbers: Estimating the exact number of citizens who require evacuation can be difficult, leading to challenges in planning and executing evacuation missions.  

Navigating Political Sensitivities: Evacuation missions may involve coordinating with foreign governments or navigating complex political situations, such as India maintaining contact with the U.S., Saudi Arabia, the U.K., and the UAE during the Sudan evacuation in 2023.  

What are the advantages associated with the success of India’s Evacuation Missions?

Enhanced National Reputation: Successful evacuation missions, like the 2023 Sudan evacuation, demonstrate India’s commitment to its citizens abroad and bolster the country’s international standing.  

Improved Military Capabilities: Complex operations help strengthen India’s military expertise, particularly in the areas of special operations and logistics.  

Strong Diplomatic Relations: Coordinating with multiple nations during evacuation missions, as India did with the U.S., Saudi Arabia, the U.K., and the UAE in the Sudan case, fosters international cooperation and strengthens diplomatic ties.  

Greater Public Confidence: Successfully executing evacuation missions instils confidence in Indian citizens, both at home and abroad, that their government is committed to their safety and wellbeing.  

Showcase of Technological Advancements: Successful evacuations, such as the Wadi Seidna mission, highlight the capabilities of advanced aircraft like the C-130J Super Hercules. This shows India’s technological progress in the defence sector.  

Read more: India’s evacuation diplomacy – Express View on Sudan crisis: Indian government’s efforts to evacuate nationals are commendable

What should be done?

Enhance Intelligence Gathering: Collaborate with regional and global partners to improve intelligence collection and sharing for better situational awareness, like during the Yemen evacuation mission, which involved coordination with several countries.  

Strengthen Coordination Mechanisms: Establish joint task forces with friendly countries to streamline coordination between different government agencies, foreign governments, and international organizations, similar to the collaboration during the Nepal earthquake relief operations. Invest in  

Advanced Technology: Continue investing in cutting-edge technology, such as the C-130J Super Hercules and C-17 Globemaster aircraft, to enhance evacuation capabilities and ensure mission success, as seen in the Sudan evacuation.  

Train and Equip Special Forces: Strengthen the training and capabilities of special forces like the Garud commandos, who participated in the Herat embassy evacuation mission, to guarantee the safety of Indian citizens abroad.  

Develop Contingency Plans: Conduct regular simulations and exercises with regional partners to prepare comprehensive contingency plans for different scenarios, ensuring timely and effective responses in real-life situations.  

Maintain Diplomatic Engagement: Actively participate in regional forums and establish joint mechanisms with countries in the region, as well as those with significant citizens in crisis zones. This will ensure smooth cooperation during evacuation missions. 

Sources: The Hindu (Article 1 and Article 2), India Today, Carnegie and Indian Express 

Syllabus: GS – 2: International Relations: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

Reversal of OPS: Guaranteed pension is not bad economics

Source: The post is based on the article “Guaranteed pension is not bad economics” published in the Business Standard on 4th May 2023.

Syllabus: GS 2 – mechanisms, laws, institutions and Bodies constituted for the protection and betterment of vulnerable sections.

Relevance: About the reversal of OPS.

News: Many State governments are announcing reversion to the old pension scheme (OPS) and some are speculating to do the same. Many economists have said that this is a bad economics. But that is not correct.

About the National Pension Scheme and OPS

Must read: Comparison of National Pension Scheme with Old Pension System – Explained, pointwise

Why do many economists think the reversal of OPS is bad economics?

This is because a) the State has to bear the full burden of pensions, b) the scheme will become fiscally unsustainable in the medium to long run, and c) the unsustainable rise in pension allocation can only come at the cost of essential welfare expenditures allocated to the poor and marginalised sections.

Read more: Schemes like OPS will only exacerbate the gap between richer and poorer states

What are the concerns associated with continuing NPS?

Those who defend the NPS say that a) The returns in the market do not stay the same, and it may actually be higher and better than the OPS, b) NPS is inflation-covered because, under normal circumstances, the returns are higher than the inflation.

But they failed to understand that the NPS puts the entire burden of uncertainty on employees alone and not on the employers.

What can be done to provide OPS without any fiscal constraints?

The government should rationalise taxes as these are either negligible or non-existent in India. This can be done by implementing inheritance and wealth taxes.

Instead of OPS, the government can implement a contributory guaranteed pension scheme (CGPS).

How a CGPS can be implemented without any fiscal constraints?

Let’s assume that the employee contribution of CGPS is 10% like NPS and the return is 50% of the last drawn salary like OPS.

The State pays an additional balance of the difference between the 50% guaranteed pension and the market-determined pension amount. If the market returns are higher, then the State governments might get revenue.

Based on the chart, one can derive that, a) When the market return is 9%, the State ends up paying the gap, i.e. 28, but when the return is 12%, it gets to pocket the extra 58%, b) Under the CGPS, the burden is only the employer’s contribution part.

So, it is safe to assume that the CGPS gives guaranteed pensions to the employees without putting the exchequer under additional burden necessarily.

Read more: Select Central staff can opt for Old Pension Scheme

 

USCIRF’s International Religious Freedom Report: Present imperfect – Irrespective of what the USCIRF says, India must review its rights record

Source: The post is based on the article “Present imperfect – Irrespective of what the USCIRF says, India must review its rights record” published in The Hindu on 4th May 2023.

Syllabus: GS 2 – Effect of policies and politics of developed and developing countries on India’s interests.

Relevance: About USCIRF’s International Religious Freedom Report.

News: For the fourth consecutive year, the government rejected the recommendations of the U.S. Commission on International Religious Freedom’s (USCIRF) latest report, calling it “biased and motivated”.

What is the USCIRF’s International Religious Freedom Report?

Read here: International Religious Freedom Report

About the latest USCIRF’s International Religious Freedom Report 2023

Like the previous one, this one also designated India as a “Country of Particular Concern” (CPC) for its “worsening” record on religious freedoms.

The report has said that the Indian government is “promoting and enforcing religiously discriminatory policies”, naming laws that deal with conversion, interfaith relationships, wearing the hijab and cow slaughter, as well as the CAA and the NRC.

According to the report, all of these have impacted minorities including Muslims, Christians, Sikhs, Dalits, and Adivasis (indigenous peoples and Scheduled Tribes) negatively.

The report has criticised the U.S. State Department for not having designated India as a CPC, and has called for sanctions on Indian government agencies and officials.

Note: The U.S. State Department imposed sanctions only once in 2005 in the aftermath of the 2002 Gujarat riots.

What are the concerns associated with the USCIRF’s International Religious Freedom Report?

a) The process the USCIRF follows is non-inclusive, b) The organisation does not study the state of religious freedoms inside the U.S. This suggests a double standard and c) Its recommendations hold no influence within India. Instead, the reports are meant only for the U.S. government to deliberate on, and accept or dismiss.

India is a secular, inclusive and pluralistic democracy. The Centre may well consider an internal review of its conduct and the direction it hopes to lead India on issues such as religious freedoms and rights.

GS PAPER - 3

India’s CAG writes: Blueprint for a blue economy

Source– The post is based on the article “India’s CAG writes: Blueprint for a blue economy” published in “The Indian Express” on 4th May 2023.

Syllabus: GS3- Economy. GS1- Geography

Relevance: Blue economy

News- The Comptroller & Auditor General of India will chair SAI20, the Engagement Group for Supreme Audit Institutions (SAls) of G20 countries in Goa in June. Two priority areas have been selected for SAI20 deliberations — blue economy and responsible Artificial Intelligence.

What is the recent contribution of the UN for the blue economy?

In 2018, the United Nations Environment Programme (UNEP) had for the first time laid out the Sustainable Blue Economy Finance Principles. It is a framework that investors can use to fund ocean-based industries.

Financiers can use it as a reference point to see how marine investment can impact livelihood and poverty eradication.

What are issues with measurement of the blue economy?

The blue economy encompasses an array of coastal activities, including fishing and tourism. The measurement of the blue economy is challenging due to conflicting definitions and issues related to classifying different sectors and sub-sectors.

Existing international economic classifications are unable to properly differentiate between land-based and ocean-based activities. Even the System of National Accounts (NAS) does not provide a clear understanding of the blue economy.

A new accounting framework is needed that can objectively identify production, trade, and services related to the various segments of the blue economy.

What are the contributions of CAG towards the blue economy?

Last year, the CAG released the first-ever country-wide Compendium of Asset Accounts of Natural Resources. It is prepared in line with the UN system of Environmental and Economic Accounts.

Setting compliance standards and a national accounting framework for the blue economy is a long-term priority for the CAG.

In August last year, the CAG tabled its Conservation of Coastal Ecosystem report in Parliament. It contained its observations on how the Coastal Regulation Zone notification for 2011 and 2019 have been implemented between 2015 and 2019.

It looked at the underlining efficiency of development drivers such as project clearances, construction activity, institutional capacity to curb land and forest violations, community livelihood support mechanisms, and mitigation management plans to conserve biodiversity such as mangroves.

What are challenges for the coastal ecosystem in India?

Sea-level rise, water temperature, storm surges and wave conditions are some of the signs of climate change. Unbridled land use changes, sand mining and deforestation has impacted the coastal ecosystem.

Studies indicate that hazards of cyclones and sea-level rise are likely to be higher in the coastal regions.

GIS maps from the European Space Agency indicate that 15% of India’s coastal areas have witnessed changes between 1992 and 2018 due to agriculture, depleting forest cover and urbanisation.

Besides that, the population living along the country’s coastal areas is expected to rise from 64 million in 2000 to 216 million by 2060.

What is the importance of the blue economy for India?

Blue economy has been marked by the government as one of the 10 core sectors for national growth. The National Blue Economy Policy aims to harness maritime resources while preserving the country’s rich marine biodiversity.

What is the way forward for proper management of coastal areas for disasters?

Disaster-resilient infrastructure along coasts that can withstand the impacts of hurricanes, typhoons, and tsunamis is the need of the hour. This is particularly important for coastal communities.

There is a need for adequate infrastructure, especially ICT hubs for early warning systems.

Maoist challenge needs political understanding, not over reliance on security

Source– The post is based on the article “Maoist challenge needs political understanding, not over reliance on security” published in “The Indian Express” on 3rd May 2023.

Syllabus: GS3- Security

Relevance– Maoism

News– The article is a critical review of the editorial ‘Maoist reminder’ in Indian Express. The article talks about the use of more security forces and development in areas impacted by Maoism to tackle Maoism.

Is the use of more force enough to tackle the challenge of Maoism?

State forces claim that Maoist presence is declining and the use of more force will finish its influence. This includes specially-trained forces such as the Greyhounds and extra-judicial experiments involving civilians such as the Salwa Judum,

The use of more force only helped the Maoists recruit from the local tribal population. The Maoist movement moved from the leadership of outsiders to that of local tribals. It often led to local support among the tribals in Chhattisgarh and Jharkhand.

The efficacy of the movement needs to be gauged in terms of its declining social base, not based on how many violent incidents occur. The wrong assessment could also lead to lapses on the part of the security forces.

Is the narrative of development to tackle Maoism a right strategy?

Some people advocate the role of state reach, governance, welfare and development to make the Maoists irrelevant. It borrows from the dominant narrative of development.

The D Bandyopadhyay Committee, set up by the Planning Commission in 2006, stated in its report that land alienation and poverty among Scheduled Tribes and Dalits, and lack of access to basic forest resources contributed to the growth of Naxalism.

The state’s model of development has resulted in the displacement of tribals. The adverse impact of “development” also led to peaceful protests such as the Pathalgarhi movement in Jharkhand, where the tribals proclaimed sovereignty over resources.

Most governments, irrespective of the political party in power, have a similar approach of imposing a certain idea of development that may not be liked by tribals.

The problem gets further complicated because the Maoists do not have solutions to the new aspirations and generational shifts. Sections of tribals desire modern development, including access to modern infrastructure, roads, transport, schools and hospitals.

Development being seen as a zero-sum game by either side leads to a stalemate.

What should be the strategy for managing the threat of Maoism?

The social question of exclusion cannot be understood either through the securitisation paradigm or through a singular focus on violence and overthrow of state power.

There is a need to address multiple and sometimes contradictory demands of subaltern groups that cannot be brought together under a single idea of development or even welfare.

Go First files for voluntary insolvency: What led to the crisis?

Source– The post is based on the article “Go First files for voluntary insolvency: What led to the crisis?” published in “The Indian Express” on 4th May 2023.

Syllabus: GS3- Economy

News– Go Airlines (India) Ltd (Go First), is filing for voluntary insolvency proceedings with the National Company Law Tribunal.

What has Go First said?

The airline said it was forced to apply to the NCLT after the increasing number of failing engines supplied by Pratt & Whitney’s International Aero Engines. It led to the grounding of 25 aircraft, and major financial stress.

Go First said P&W had failed to meet contractual obligations and refused to comply with an arbitration award from the Singapore International Arbitration Centre (SIAC).

According to the airline, SIAC had directed P&W to dispatch spare leased engines per month. But it did not comply.

How has Pratt & Whitney responded?

P&W denied Go First’s allegations. It said that the airline has a lengthy history of missing its financial obligations to P&W. It denied Go First’s allegation that it was not complying with SIAC’s directions.

Which creditors have exposure to Go First, and how much?

Go First has told NCLT that it owes Rs 6,521 crore to financial creditors. It has informed the NCLT that given its current financial position, defaults are imminent.

It has already defaulted on payments to operational creditors, including Rs 1,202 crore to vendors and Rs 2,660 crore to aircraft lessors.

According to the Reuters report, the NCLT filing lists public sector lenders Central Bank of India, Bank of Baroda, and IDBI Bank, and private sector players Axis Bank and Deutsche Bank among Go First’s financial creditors.

Go First had also borrowed Rs 1,292 crore under the government’s Emergency Credit Scheme. Its total liabilities to all creditors are Rs 11,463 crore.

How will this episode impact the creditors and lessors?

Operational creditors will likely be affected more by Go First’s bankruptcy than financial creditors. Financial creditors are accorded a higher priority than operational creditors under the IBC.

It would have extreme ramifications for lessors and financiers whose aircraft are currently in the possession of the Go First.

Upon admission of an application for the corporate insolvency resolution process, a complete moratorium comes into play. It prohibits recovery of any property by an owner or lessor where such property is  in the possession of the corporate debtor.

Any lease agreements on the date of admission of the application may also be impacted by the moratorium.

What does this mean for Go First’s competitors?

Go First absence from the skies could create an opportunity for other domestic carriers.

In March, Go First’s domestic market share by passengers carried for the Jan-Mar quarter was 7.8%. For Jan-Mar, Go First was the third largest domestic airline by market share. It carried almost 9 lakh fliers in March.

If Go First does not return to the skies soon, its passenger load and market share will be available for other players in the civil aviation market.

How will passengers be impacted?

Fares are already high due to resurgent air travel. Go First’s insolvency will likely raise them further, at least in the immediate-to-near term. Other carriers are unlikely to be able to immediately deploy additional capacity to completely fill the demand.

Some additional capacity deployment and network adjustments by other carriers is expected almost immediately. But, these are unlikely to fully offset the impact of Go First’s absence.

India Has Lithium. But Who’ll End Up Benefiting From It?

Source: The post is based on the article “India Has Lithium. But Who’ll End Up Benefiting From It?” published in The Times of India on 4^th May 2023.

Syllabus: GS 3 – Issues Related to Mobilization of Resources

Relevance: concerns associated with inferred lithium.

News: The Geological Survey of India has inferred lithium resources of 5.9 million tonnes in Reasi, Jammu and Kashmir.

This might help in establishing domestic manufacturing industry of lithium batteries in India. However, there are also concerns associated with it.

What are the concerns with the finding of inferred lithium?

Overall global demand for minerals which help in green transition has increased. This includes minerals like lithium, nickel, cobalt including Rare Earth Elements.

Today, developed countries are looking for various routes including certain provisions in their trade agreements in order to secure the supplies of these scarce minerals.

Therefore, India should also expect to face such demands in the FTA negotiation with the EU and the US-led Indo-Pacific Economic Partnership Framework for Prosperity (IPEF).

Why are developed countries looking to secure the supplies of scarce minerals?

First, developed countries want to ensure that resource-rich developing countries remain exporters of primary commodities and they do not get involved themselves into downstream processing activities. This would eliminate competition from developing countries.

Second, trade agreements also make natural resources available to the developed countries at relatively lower prices.

These two objectives are achieved through FTA commitments by prohibiting FTA partner countries from imposing export restrictions.

Why do developed nations forbid FTA partners from putting export restrictions, and what are the concerns with certain FTA provisions?

Export restrictions: Export restrictions allow developing nations to increase domestic availability of natural resources for downstream processing rather than exporting them to the developed countries.

Therefore, if trade agreements forbid developing nations from imposing export restrictions, such as export taxes, then they would be forced to stay at the end of the value chain and only export raw materials.

Foreign Trade Agreements (FTA): One set of provisions commits FTA partners to open up their mining sector and treat foreign companies from other FTA partners on par with their domestic companies.

Further, environment-related provisions in EU’s FTAs require FTA partners to establish high standards of environmental protection for mining operations, promote the values of responsible sourcing and mining, etc.

Hence, such kinds of provision in FTAs would benefit developed countries to get access to minerals of the developing countries.

This is because mining firms based in developed countries have access to the latest technology and would be able to comply with high standards of environmental protection than mining firms of the developing countries.

Thus, environmental conditionalities contained in FTAs could give advantages for firms from developed countries to explore and exploit the natural resources in developing countries.

What can be the way ahead?

Resources led the way for colonization in the past. This means that the rich countries today, instead of fighting, might adopt other means of controlling the developed countries.

It also presents concerns over acquiring data and digital sequencing information (DSI) of genetic material in the arena of biotechnology.

Hence, India as the voice of the Global South, should take up this issue forcefully and prevent a tragic repeat of history.

Real risk of AI – Goes beyond adapting to evolving technologies

Source: The post is based on the article “Real risk of AI – Goes beyond adapting to evolving technologies” published in the Business Standard on 4th May 2023.

Syllabus: GS 3 – Science and Technology- developments and their applications and effects in everyday life.

Relevance: About the concerns of AI.

News: Within months of ChatGPT‘s launch, besides its mass adoption, there is intense documentation of its superhuman uses. On the other hand, Geoffrey Hinton, nicknamed “the Godfather of AI”, recently ended his decadelong stint at Google, citing concern over the future of generative AIs. He said that he was worried that generative AI services would lead to the dissemination of fake information, photos, and videos across the internet.

What is Artificial Intelligence and Generative AI?

Must Read: Generative AI (Artificial Intelligence): Benefits and Challenges – Explained, pointwise and [Yojana June Summary] Artificial Intelligence and Machine Learning – Explained, pointwise

What will be the potential concerns of AI’s rapid development?

Language is the very foundation of human culture and history. Most jobs are rooted in the use of language. In the case of TV and film writers, they try to translate an entire time-space (recreate the speaking patterns, language usage, and mannerisms of personalities from the era they want) on to the screen.

Generative AIs work with human language — verbal, visual, and auditory. Generative AIs have shown a remarkable capability to replicate not just the form but these textual layers as well.

As the code for these AIs becomes more accurate and proficient in learning the very core of human culture, they would absorb biases, phobias, and layers of cultural history. They first categorise and then deploy these with mathematical precision. So, the world needs to beware of the non-human writer of human histories.

Read here: How should humans respond to advancing artificial intelligence?

 

India’s growth rate: Aiming for the high road

Source: The post is based on the article “Aiming for the high road” published in the Business Standard on 4th May 2023.

Syllabus: GS – 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Relevance: About India’s growth rate.

News: The investors who put substantial capital into China in its early growth phase are finding similar patterns mirrored in India that encourage their investment. These investors are looking to limit or reduce new investments in China and invest such funds in emerging markets such as India.

What are the challenges affecting India’s growth rate?

The issue with government spending: India has lost opportunities and made misplaced choices with growth coming from government spending. Instead of focusing on structural changes to provide lower-cost infrastructure and efficient governance, the government chose corporate tax cuts.

This has led to a) a constrained, uncompetitive private sector hindered by disabling regulations, b) inadequate and unreliable infrastructure, c) limited capital access, d) tariff barriers, e) an inappropriate and ineffective educational approach for employability and improving skills, and f) impoverishment among much of the population.

Project delays and rapid deterioration of roads: Infrastructure project delays as of March 2023 were reportedly the highest since 2004. These include nearly 57% of projects over ~150 crores. Thus resulting in a cost escalation of over 20%, amounting to half this year’s capital expenditure budget.

Heavy rains aggravate the problem of the deterioration of roads. Countries with equally severe weather variations build and maintain better roads.

What should be done to improve India’s growth rate?

India’s policy towards logistics and digital transformation has started yielding results. Despite the drawbacks, India is still in a sweet spot because of its economic resilience, momentum, favourable demographics and improving productivity. India should utilise these better. Such as,

-India should begin with policies that a) provide a reliable infrastructure that is affordable, b) improve capital access, and c) eliminate “tax terrorism”.

-India should enable more people, including more women and young people, to participate and contribute to the economy.

-The government should also assure a sense of security with law and order for private firms, enhance access to meaningful education and skill building, make deep changes to make “extensive” agriculture into an intensive, informed approach.

-Facilitate productivity revolution: If people got access to fast, reliable 4G-level connectivity countrywide, then, there would likely be a productivity revolution. Widespread fibre-to-the-home is unrealistic because of the cost. So, India needs enabling policies for these.  India should also build shared neutral host networks (NHNs), which are the most efficient, and reduces active sharing by operators costs 70% less per user.

Does nuclear power have a role in our climate change strategy

Source: The post is based on the article “Does nuclear power have a role in our climate change strategy?” published in the Livemint on 4th May 2023.

Syllabus: GS – 3: Energy.

Relevance: About developing nuclear energy.

News: The threat of climate change has prompted much-needed action to expand capacity in renewable energy (RE) generation. This includes not only wind and solar but also from nuclear.

What is Nuclear Energy, and What is the scenario of Nuclear Energy in India?

Must Read: Nuclear Energy: Status, Advantages and Concerns – Explained, pointwise

What are the advantages of nuclear power?

a) It neither emits CO2 nor creates air pollution, b) Unlike other RE which is intermittent, presenting challenges for grid management, nuclear power provides a steady supply.

What are the challenges in developing nuclear energy?

Firstly, safety and high costs are one of the big concerns. For instance,

-The Central Electricity Authority recently estimated the capital cost of nuclear power plants at 2.5 times that of coal-based plants.

Note: Coal-based power appears relatively cheaper if one disregards its high social costs on account of CO2 emissions and also air pollution. The International Monetary Fund recommends a minimum of $25 per tonne CO2 tax. This would raise the costs of coal-based power in India by at least 50%.

–Introducing storage batteries at grid scale would at least double the cost of RE in the foreseeable future. The storage costs will decline as grid-scale batteries get cheaper.

Secondly, nuclear power stations in India can only be run by public sector undertakings (PSUs). This gives Nuclear Power Corp of India Ltd (NPCIL) a monopoly and its record on meeting targets is poor.

Read more: Should India consider phasing out nuclear power?

What should be done to develop nuclear energy?

Increase the target: The UK, South Korea and even Japan—the site of the 2011 Fukushima accident—are planning to increase the share of nuclear power in their electricity mix. China is targeting a 10% share of nuclear power in its energy mix by 2035. So, India should scale up nuclear power beyond its current 3% share (6.8GW today) of total electricity in India. India’s current target is only to have 22.5GW capacity by 2031, this should be expanded to at least 10%.

Allow competition: India should end the monopoly of NPCIL and allow new entrants, with new capabilities and management cultures. This could help reduce implementation times and thereby also lower costs.

Recently, the government announced that National Thermal Power Corp (NTPC) and NPCIL will set up 4.2GW of combined nuclear power capacity at two sites in India by 2035. This is a welcome move. This should be expanded to private players also along with strong institutional arrangements and the establishment of independent regulatory authority.

Private participation depends largely on policy stability and regulatory transparency. Initially, the government might allow both NPCIL and NTPC to form Joint Ventures with private companies including foreign companies. This will allow us to explore the possible involvement of French and Japanese firms like South Korea partnered with US firms and commercialized small modular reactors (SMRs).

Increase access to credit and loans: Increasing nuclear capacity will require substantial additional financing from a combination of bilateral official credit and loans from sovereign wealth funds. This can be done through classifying nuclear power as “green”, or at least zero-carbon.

Amend the Civil Liability for Nuclear Damage Act, 2010: The Act is not in line with the current international practice where the liability is strictly limited to the operator and can be covered by insurance (or a public backstop). A review of this legislation is highly desirable before permitting the private players in the nuclear energy sector.

India needs a comprehensive rethink of domestic policy constraints that prevent India from participating fully in nuclear energy sector.

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