Answers: Mains Marathon – UPSC Mains Current Affairs Questions – February 16, 2018

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Q.1)India targets to achieve an all-electric-fleet of vehicles by 2030. How important is it for the nation to shift to an all-electric-fleet of vehicles by 2030? Do you think this absolute shift is feasible in the context of a developing country as India? Discuss (GS–3)

Context:

• India wants only electric vehicles to run on its roads by 2030, but it’s a path riddled with challenges.

How important is it for the nation to shift to an all-electric-fleet of vehicles by 2030?

There is an array of benefits if the nation shifts from petrol and diesel fuelled vehicles. Some of them are as follows:

Reduce India’s oil dependency:

• The shift from petrol and diesel fuelled vehicles will reduce India’s dependence on oil and the cost of import.

Strengthen the rupee:

• It will strengthen the rupee and the current account deficit would disappear.

Address the issues of climate change:

• The air will be cleaner and will be an end-to-end solution to address the issues of climate change.

Job creation:

• The Government will help establish charging stations to start with and later through franchisee model, create jobs for lakhs of entrepreneurs to establish charging stations across the country.

Cheaper in price:

• The electric vehicles will be cheaper and the operating costs will also reduce, which will be an economic incentive for the public to buy the same.

What are the challenges in achieving the all-electric-fleet of vehicles by 2030 mission?

The challenges in achieving the all-electric fleet of vehicles by 2030 mission are as follows:

Very few global carmakers:

• A very few global carmakers have brought their electric variants into India.

Distinction between Electric vehicles (EVs) and hybrid vehicles’ tax regime:

• The fact that the government has also made a distinction between EVs and hybrid vehicles under the GST regime is seen as a problem.

People are still skeptical about charge duration:

• The view among carmakers is that people are still skeptical about the shift to all-electric vehicles since they fear the charge duration of the batteries.

Battery technology:

• Battery technology is yet another aspect that needs to be looked into.

Capacity of battery cells has not changed:

• While the cost of batteries has fallen over the years — a Bank of America Merill Lynch report found the cost of battery cells fell 48% between 2011 and 2015 but their capacity has not changed as drastically.

Sheer shift is not efficient address the impact on the environment:

• Yet another issue is that simply shifting the fleet to electric will not address the impact on the environment.
• This has to be accompanied with an even swifter change in the energy mix to renewable sources.

Q.2) What do you mean by contract farming? Do you think that the provisions of contract farming are appropriate for an agrarian country like India.(GS-3)

What is Contract farming?

• The contract farming allows buyers and sellers to transact without routing through mandis.
• Under contract farming, farmers can be given seeds, credit, fertilizers, machinery and technical advice so that their produce is tailor made for the requirements of the companies.
• There would be no middlemen involved and farmers would get a predetermined sale price from the companies.

Are the provisions of contract farming appropriate for an agrarian country like India?

Though there are some loopholes, the provisions of contract farming are appropriate for an agrarian country like India. The advantages and disadvantages of contract farming are as follows:

Advantages of Contract farming:

The advantages of Contract farming are as follows:

• The farmers get the high remunerative price for their farm product.
• The farm grower benefit from the agro extension program of the agro processor.
• The wastage of the farm produces now between 35 and 40 percent largely eliminated as the farm processing factory situated next to cluster of farms.
• It promotes best agri practices from different parts of the worlds.
• It will free farmer from middlemen and money lenders.
• Farmers income security through guaranteed price and access to quality inputs.
• Encourages new generation to take farming as new business venture instead of migrating to cities for search of jobs.

Problems related with Contract farming in India:

• Very small and marginal farmers may not be roped in for this form of farming because companies may want a particular size of the crop which small farmers with their small parcels of land may not be able to produce.
• The medium size farmer may not be literate enough to understand the nitty gritty of the contract and all the clauses.
• The farmer may be forced to produce only tomatoes or onions year after year which will lead to monoculture.
• Predetermined prices do not take care of food inflation.
• In case if there is a price rise of the product, the farmer cannot take advantage and make a windfall profit because he is under contract to sell at the price agreed upon beforehand.
• The average farmer being poor and semi-literate has little bargaining power vis-à-vis big corporations and hence there is little chance of his getting a fair price for his produce.
• The corporate sector takes over our agricultural operations which may affect the food security of the country.
• Contract farming is best suited to special types of crops and not all farming activities.

Q.3)Write short notes on the following:

a) Lucky latitudes in Geography (GS-1)

• Lucky latitudes refers to the geographical regions where the practice of domestication of wild plants and animals began to happen for the first time in human history.
• It includes land that lies between the latitudes of 20 and 35 degrees north in the Old World, and 15 degrees south and 20 degrees north in the Americas.
• These regions became more favourable to the rise of civilisation when the rise in earth’s temperature ended the last Ice Age around 12,000 years ago.
• Consequently, people located in these geographic regions gained a headstart over the rest of the world.
• The term was coined by Ian Morris in his book Why the West Rules — For Now.

b) Cobweb cycle in economics (GS-3)

• Cobweb cycle refers to a phenomenon where the prices of certain goods witness fluctuations that are cyclical in nature.
• It happens due to faulty producer expectations.
• The producers of agricultural goods, for instance, might decide to increase their output one year because their product commanded a very high price the previous year.
• This, however, might lead to overproduction and cause prices to slump that year, thus leading to losses.
• Such cyclical price fluctuations are more severe in markets where speculators are banned from hoarding goods to sell them later at a higher price.
• The idea was proposed by Hungarian economist Nicholas Kaldor.

c) ‘Dutch sandwich’ in economics (GS-3)

• Dutch sandwich refers to a form of tax avoidance used by companies that have their operations across the world to minimise the amount of taxes that they pay on their profits.
• The technique involves the transfer of a company’s profits through a subsidiary in the Netherlands, where the tax on the transfer of corporate profits is low compared to other countries.
• Tech giants like Google, Facebook and Apple are the most notable companies that manage to pay low taxes on their profits by using the various intricacies of tax laws across countries.