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ForumIAS Programs

Update: New Initiatives and revamped plan, less initiatives till 10th June


For the next 10 days, we will be posting only the following 3 initiatives: Must Read News, Mains Marathon and Daily Quiz. Sorry for the inconvenience.

We will be coming up with a revamped plan soon.

For those appearing CSP-2017, all the very best. Revision + Practice is the key. Good luck and make us proud.

Remember“Never forget what you are. The rest of the world will not. Wear it like armor, and it can never be used to hurt you.”


Do give suggestions in the comment section section

(We will take them seriously)


 

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ForumIAS Programs Results

ForumIAS Open Mock – 15/02/17 – Result Declaration



Thank You for writing ForumIAS Open Mock.


We thank you for the overwhelming response. 9431 aspirants have completed the test 🙂

Anybody scoring 95+ in open mock stands a real chance in UPSC CSP 2017. For others, you still have time to improve.

Please find the result Here: ForumIAS Open Mock 2017 – 15/02/17 – Ranklist


Do share your Scores with us 🙂 in the comment section below.


 

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Events ForumIAS Programs

FREE Open Mock Test by ForumIAS for Prelims 2017 : February 15th at 11:00 AM – Registration Open!



Dear Aspirants,

We all are waiting for the UPSC Mains Results. Meanwhile, we thought that a meaningful – study related initiative is due, apart from the Daily Mains Marathon, and Prelims Marathon 🙂

We invite you to register for an Open Mock with us. Kindly register at this link.


The Open Test is toughly contested with usually 3000-4000 and upto 6000 candidates, so you do get a good ranking to measure your performance.


The questions will be general in nature and should be answerable by you if you have read the basic books and have been reading the newspaper.



Good Luck 🙂


 

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Mains 2016 Initiative

Mains 2016: Paris Climate Change Agreement – India


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Paris climate change agreement and India


Context:


India recently ratified the Paris Agreement, ratification by at least 55 countries and accounting for at least 55% of global greenhouse gas (GHG) emissions was required for the agreement to come into force.Sixty-two countries have ratified the agreement so far, hence the agreement will soon come into force.


Paris Agreement


This is an agreement within the United Nations Framework Convention on Climate Change (UNFCCC) dealing with greenhouse gases emissions mitigation, adaptation and finance starting in the year 2020.


Important features


Climate action will also be taken forward in the period before 2020. Holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to put efforts to limit the temperature increase to 1.5 °C above pre-industrial levels.


It also contains binding obligations like:-


· To pursue domestic measures to achieve them.
· States have autonomy in the form and stringency of their contributions. Obligations to communicate nationally determined contributions every five years.
· But States are expected to ensure that their successive national contributions represent a progression from their previous ones


An oversight system consisting of three components: 


A transparency system which ensures countries are doing what they agreed to do.
-A global stock take process that periodically assesses collective progress towards the agreement’s long term goals A compliance system that facilitates compliance with the Agreement.
-Aim to reach global peaking of greenhouse gas emissions as soon as possible.It has no reference to “Annex 1”. There is now more flexible sharing of responsibilities, “in the
light of different national circumstances”.
-Different responsibilities for developed, developing and other are still there in the Agreement, but not as a fixed list of countries as was provided by Kyoto Protocol.


Implications of the Paris Agreement


Developed countries agreed to continue their commitment to provide $100 billion a year from 2020 until 2025, after which financing will increase. It presents a new model of international cooperation, where developed and developing countries are united and engaged in a common goal.


Limitations in the implementation of the Agreement


· The $100 billion figure does not appear in the legally binding part of the agreement
· Developing countries, especially in Africa, are still left out or stuck with lowtech options, these nascent markets are too disaggregated and high risk for investors.
· The past record of climate policies around the world suggests that governments tend to express lofty aspirations but avoid tough decisions.
· While climate change mitigation requires considerable investment in the short run, the benefits of stabilizing the global climate will materialize only in the medium to long run. This makes
it difficult for governments to justify significant expenditure, particularly given the brevity of electoral cycles.
· Climate change does not affect all countries equally and hence no surety of equal action or concern shown by all participating nations.
E.g.- Low-lying island states face an existential threat from rising sea levels while others, especially countries near the Arctic Circle, may experience greater agricultural output and easier access to natural resources because of the thawing of permafrost.


India’s INDCs


India submitted its Intended Nationally Determined Contribution on 1 October 2015, prior to the UN climate conference in Paris.
Targets: To reduce the emissions intensity of its GDP by 33 to 35 percent by 2030 from 2005 level.
· To achieve about 40 percent cumulative electric power installed capacity from non-fossil fuel based energy resources by 2030.
· To create an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030.
Like many countries, India too has put conditions in its ratification instrument, clearly mentioning
that climate action will be in the context of India’s developmental goals, existing national laws and available means of implementation.


Why India was reluctant to ratify the treaty


· India’s emissions are relatively low compared to those of other major economies.
· India accounts for only 4 percent of global cumulative energy-related emissions since 1850, compared to 16 percent and 15 percent for the United States and China.
· India produces about 2 tons of CO2e per capita, versus 20 tons and 8 tons, respectively, in the United States and China.
· India is working to meet growing energy demand by securing affordable supplies and attracting infrastructure investment.


Some Initiatives taken by India to deal with Climate Change


India launched an International Solar Alliance (ISA) at the CoP21 Climate Conference. ISA’s vision and mission is to take solar from the lab (or rich world markets) to (developing country) streets

· Increasing the excise duty on petrol and diesel, increasing coal cess from Rs.50 per ton to Rs.200 per ton.
· In this fiscal year, $1.27 billion was transferred to the National Clean Energy Fund (NCEF) through collection of coal cess.
· Unveiling an ambitious plan to ramp up the production of solar energy from 20 GW currently to 100 GW by 2022.
· India has pledged towards a commitment to derive 40% of its electricity from renewable sources of energy (solar and wind) and other low-carbon-emitting sources by 2030.
· The World Bank have committed to raise $1 billion in 2017 for promoting India’s solar mission.
· To create an additional carbon sink of 2.5 to 3 billion tonnes of carbon-dioxide through extra forest and tree cover by 2030.
· India has surely played a leading role in the climate change negotiations in Paris.


Concerns in India regarding implementation of Paris Agreement 


· Need to pay special attention to include a transparent GHG emissions accounting and monitoring, review and verification framework. As per 2012-13 figures, 60% of electricity generated in India is from coal based power plants.
· Have there been sufficient consultations with state governments and other stakeholders?
· Most state action plans lack clearly defined targets and timelines. Also, different states have given varying importance to different sectors, there is no standard at national level to decide
these priorities of the states.
· To implement its INDCs, India would need $2.5 trillion up to 2030.


Way forward 


Both national and state plans need to be reassessed and reviewed to build the necessary capabilities for states to implement climate plans.
· Building state-level profiles of GHG emissions from different sectors can help inform us about different focus areas for each state.
· To fulfill financial needs, India must strategically seek other sources such as the Green Climate Fund and leverage the International Solar Alliance.
· India will also have to look at state capacities towards mitigation action and thus work out inter-state financial and technology transfers to assist the socioeconomically backward states.
· India need to enable a transparency regime with the cooperation of state governments with data being generated at the state level.
· As India continues to strengthen international cooperation, the same needs to be done at the domestic level, with better centre-state and inter-state coordination.


Categories
Mains 2016 Initiative

Mains 2016: All about India’s Solar Policy


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All about India’s Solar Policy


Introduction


About 70% of India’s electricity generation capacity is from fossil fuels. India is largely dependent on fossil fuel imports to meet its energy demands.
By 2030, India’s dependence on energy imports is expected to exceed 53% of the country’s total energy consumption. Greater import dependence is a a threat to India’s energy security as it introduces global market volatility into the mix.


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It also adds to a huge import bill leading to a loss of valuable foreign capital. We need to shift our focus towards the renewable energy sources. After the recently concluded Paris talks, wherein countries agreed to limit their emissions so as to contain the global temperature rise to Co2, the need to develop renewable energy sector gains even more importance. There are various sources of renewable energy like wind, nuclear, solar, tidal, geothermal etc. But, in this article, we shall mainly talk about the solar energy and various policy initiatives of India in this sector.


Solar Energy


As per World Energy Outlook Report 2015, India has substantial solar potential around 750 gigawatts (GW) (based on the assumption that 3% of wasteland in each state can be used for solar power projects, plus an assessment of the potential for rooftop solar). This represents almost three times India’s total installed power capacity today.
Solar capacity region wise
The solar resource is strongest in the north and northwest of the country (Rajasthan, Jammu and Kashmir), but the potential is also considerably high in several other states, including
Maharashtra, Madhya Pradesh, and Andhra Pradesh.


India’s renewable energy target


  • Target: 17GW from renewable energy sources by 2022 · Break up:100 GW from solar, 60 GW from the wind, 10 GW from biomass and 5 GW from small hydroelectric projects.
    · 100GW = 60 GW of utility-scale projects (both solar PV and CSP) like solar parks + 40 GW of rooftop solar applications for commercial users and households, together with some small-scale schemes and off-grid capacity
    PV: Photo Voltaic CSP: Concentrated Solar Power

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Note: World’s total installed solar power capacity was 181 GW in 2014. If India achieves this target, it would make it a global leader in renewable energy.
National Solar Mission or Jawaharlal Nehru National Solar Mission (JNNSM)
· It was launched on 11th January 2010 Apex ministry: Ministry of New and
Renewable Energy (MNRE).
· India’s Solar capacity in 2010: 17.8MW

· Grid connected solar power in 2016: 8GW


Objectives of JNNSM


1. To establish India as a global leader in solar energy
2. To promote ecologically sustainable  growth while addressing India’s energy  security challenges
3. Short term: To create enabling environment for penetration of solar technology throughout the country Mission’s target was revised in 2015,
Initial Target: 20GW
Revised Target: 100GW
Target is to be achieved in 3 phases,
· 1st Phase: 2010-13
· 2nd Phase: 2013–17
· 3rd Phase: 2017–22
At each stage, progress will be reviewed and roadmap for future targets will be adopted.
Note: We are currently in 2nd phase of the mission


Domestic content controversy


· Guidelines for the solar mission mandated cells and modules for solar PV projects based on crystalline silicon to be manufactured in India.
· This accounts for over 60% of total system costs.
· For solar thermal, guidelines mandated 30% project to have domestic content.
· A vigorous controversy emerged between power project developers and solar PV equipment manufacturers.
· The former camp prefers to source modules by accessing highly competitive global market to attain flexible pricing, better quality, predictable delivery and use of latest technologies.
· The latter camp prefers a controlled/planned environment to force developers to purchase modules from a small, albeit growing, group of module manufacturers in India.
· Manufacturers want to avoid competition with global players and are lobbying the government to incentivize growth of local industry.
· US Trade Representative has filed a complaint at World Trade Organization challenging India’s domestic content requirements citing discrimination against US exports.
· WTO ruled in favor of USA.


Road towards solar superiority


· The State of Gujarat has commissioned Asia’s largest solar park at Charanka village.
· The French group AREVA Solar is  currently engaged in constructing a 250 MW concentrated solar power (CSP) installation in Rajashtan, which will become the largest CSP installation in Asia.
· The International Finance Corporation (IFC), the World Bank Group’s private sector arm, is supporting the Indian state of Madhya Pradesh set up the 750-MW ultra-mega solar power project in Rewa. This will be the largest single-site solar power project in the world
· World’s largest single rooftop solar power plant of 11.5 Mw capacity was inaugurated in Beas near Amritsar in Punjab
· Cost dropped but more research needed: The cost of solar per kilowatt hour dropped from a 2012 Planning Commission estimate of Rs. 10.4 – 12.5 to Rs. 4.3 in the latest round of “reverse auctions” (low bid wins) but still many coal based power plants are rivaling it at around Rs 3KW per hour. Thus more research is needed to bring the cost further down.


Advantages of switching to solar


· Environment-friendly: Solar energy is environment-friendly. When in use, it does not release CO2 and other gases which pollute the air. Hence it is very suitable for India, India being one of the most polluted countries of the world.
· Varied use: Solar energy can be used for a variety of purposes like as heating, drying, cooking or electricity, which is suitable for the rural areas in India. It can also be used in cars, planes, large power boats, satellites, calculators and much more such items, just apt for the urban population.
· Abundant & Secure: Solar power is inexhaustible. In an energy deficient country like India, where power generation is costly, solar energy is the best alternative means of power generation.
· Grid independent: You don’t need a power or gas grid to get solar energy. A solar energy system can be installed anywhere. Solar panels can be easily placed in houses. Hence, it is quite  inexpensive compared to other sources of energy
· Reduced dependence on fossil fuels Disadvantages
· Not available during night time
· Weather dependent: During daytime, the weather may be cloudy or rainy, with little or no sun radiation. Hence, this makes solar energy panels less reliable as a solution.
· Sunny area required: Only those areas that receive agood amount of sunlight are suitable for producing solar energy.
· High upfront cost: Solar panels also require inverts and storage batteries to convert direct electricity to alternating electricity so as to generate electricity. While installing a solar panel is quite cheap, installing other equipment becomes expensive.
· High surface area required: The land space required to install a solar plant with solar panel is quite large and that land space remains occupied for many years altogether and cannot be used for other purposes. India is already a highly populous and land starved country.
· Energy production is quite low compared to other forms of energy.
· Maintenance: Solar panels require considerable maintenance as they are fragile and can be easily damaged. So extra expenses are incurred as additional insurance costs.


Conclusion


There can be no better conclusion for this article than what Onno Ruhl, World Bank’s Country Director in India said “With around 300 days of sunshine every year, India has among the best conditions in the world to harness solar energy. The rapid expansion of solar power can improve the quality of life for millions of Indians, especially for its poorest citizens. It can also create thousands of jobs in the solar industry and underpin progress in all areas of development, helping the country fulfill its dream of becoming the ‘India of the future’.


Categories
Mains 2016 Initiative

Mains 2016: Net Neutrality and Free Basics


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Net Neutrality and Free Basics


Issue


· A TRAI consultation paper proposed models that would get Free Basics-like services back in a slightly altered form — by making a distinction between telecom and Internet services.


Background


· Over the last one year, Indians have engaged in a passionate debate on the concept of Net neutrality, whereby all content should be treated equally on the Internet. The problem of content
discrimination on the Internet got most associated with Free Basics.


What is Net Neutrality?


· Net Neutrality means an Internet that enables and protects free speech. It means that Internet service providers should provide us with open networks — and should not block or discriminate
against any applications or content that ride over those networks.
· Like, phone companies shouldn’t decide who one can call and what one says on that call,
· ISP shouldn’t be concerned with the content one view or post online.


Importance of Net Neutrality


· Net Neutrality is crucial for small business owners, startups and entrepreneurs, who rely on the open Internet to launch their businesses, create a market, advertise their products
and services, and distribute products to customers.
· Net Neutrality lowers the barriers of entry for entrepreneurs, startups and small businesses by ensuring the Web is a fair and level playing field.
· It’s because of Net Neutrality that small businesses and entrepreneurs have could thrive on the Internet. They use the Internet to reach new customers and showcase their goods, applications and services.
· ISPs are the gatekeepers to the Internet, and without Net Neutrality, they would seize every possible opportunity to profit from that gatekeeper control.
· Without Net Neutrality, cable and phone companies could carve the Internet into fast and slow lanes. An ISP could slow down its competitors’ content or block political opinions it disagreed with.
· ISPs could charge extra fees to the few content companies that could afford to pay for preferential treatment – relegating everyone else to a slower tier of service. This would destroy the open Internet.
For instance, one might find YouTube loading swiftly while Wikipedia lags because YouTube
paid your ISP for preferential access.


What is free basics?


· It was an application by Facebook which provided its own content and that of its partners free to consumers, while all other content remained paid for.
· This violated the principle of net Neutrality.
· But the Indian public protested and giving in to popular demand, in February 2016 the regulator banned Free Basics like services based on discriminatory pricing of content.


Criticisms of free basics


· It was said that Internet was first a public good before being a market one.
· In agreeing to ban Free Basics everyone thought that the regulator agreed differential pricing to be an inappropriate practice, for consumers, including poor consumers, as also for the larger society.
· Indeed, the regulatory order eloquently argued that “price-based differentiation would make certain content more attractive to consumers resulting in altering a consumer’s online behavior
(and) the knowledge and outlook of those users would be shaped only by the information made available through those select offerings”.
· It further offered reasons of freedom of expression and plurality of views for banning differential pricing.


Re-emerging issue


· Now the regulator is having second thoughts.
· According to experts a new consultation paper proposes models that will get Free Basics back, though in a slightly altered, and perhaps disingenuous, way.


TRAI’s view (Telecom regulatory Authority of India)


The consultation paper of TRAI is a complete  turnaround from its previous view, suggesting
that these were never the problem.
· It was not at all the issue that Free Basics discriminated regarding the content as received by any consumer. The real problem was that Free Basics had an exclusive agreement with just one telco to do so.
· It would accordingly be fine if Free Basics entered a similar agreement with all telcos.


Alternative models suggested: –


· Reward based Model: Whenever users access a website/application from the ‘TSP agnostic’ platform they will be rewarded in form of data/voice usage.
There is no clarity in the paper on how users who have not yet been connected to mobile internet through smart phones can use such a platform that rewards ‘after’ using a service. Also, this model misses out on the fact that a user would need to pay to be online with sufficient
‘data balance’ to use such a model.
· Toll Free API Model: This is an alternative that would allow users access to all content from the platform but not charge them for ‘access to certain websites and applications’. This seems
like a watered-down version of Facebook’s Free Basics and the paper claims that such models are existing in many developed countries without going into further details.
· Direct Transfer Model: In this model the user will use data normally and the cost of data will be transferred to her bank account, much like the direct benefit transfer prevalent for LPG
cylinders. This model is very like the Reward based model and will also need that the user pays upfront to avail ‘free’usage later.


About the suggested model


· The suggested models will just make Free Basics kind of services more ubiquitous,
as well as a permanent feature, and not merely a promotional one, as earlier touted by its promoters.
· The only significant new feature of the proposed models is that telcos will not be able to benefit from content-based price discrimination. However, they will facilitate ways whereby content providers can pick up the tab for consumers accessing their content (and not other).
· Other suggested models would get the telco entirely out of the picture, with consumers reimbursed directly by content providers for the access of their content.
· At the consumer end, all these models have exactly the same effect as telcocontrolled models — of incentivising accessing some content and services over others, undercutting the key equalising feature of the Internet.


Criticism of the above models


· The regulator seems to be drawing an interesting line — services provided by telcos are under a public goods framework, but those rendered by the Internet companies subject only to freemarket principles.
· It seems not to matter that the actual impact on individuals and societies of non-Net-neutral practices by either is the same.


Internet exceptionalism


(Internet Exceptionalism refers to the internet specific laws that diverge from regulatory precedents in other media.)
· According to experts such an attitude comes from a problematic trend that has been called “Internet exceptionalism”, whereby the Internet is considered to be some kind of uniquely regulation-free zone.


Conclusion


· Having banned Free Basics-like content discrimination services when involving a telco, it is ludicrous to now propose to allow the same by Internet companies directly.
· This attempt to bring back the much detested Free Basics through the backdoor, by making an absurd distinction between telecom and ‘Internet services’, is the right opportunity for us to get out of this wrong binary regulatory mindset.
· We must consider our old and new communication systems as one important social sector requiring close regulatory watch in public interest.



Categories
Mains 2016 Initiative

Mains 2016: 100% FDI for Trading of Food Products


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100% FDI for trading of Food Products


Introduction


Recently government has decided: –


· To permit 100 per cent FDI under government approval route for trading of food products
· Permission has been granted only with respect to food products manufactured or produced in India.
· Announcement has also extended to permission through e-commerce routes.

This change follows the reforms announced in the recent budget by central government to strengthen “Make in India” initiative.


Rationale behind liberalization


1. Economic worth of food lost due to lack of good infrastructure is estimated to be around Rs 92,651 crore in the case of high-value perishable food, particularly, fruits and vegetables, milk, meat, fish, etc.
2. New FDI policy in trade for food would attract big players like Walmart, Tesco, Amazon, Alibaba, etc. for investment in domestic food supply chain.
3. It can help build more competitive and inclusive value chains by investing in procurement, storage and distribution networks.
4. Current FDI policy has bypassed the much controversial FDI policy on multi brand retail trade and may have the similar positive impacts.
5. Announcement of allowing trade through e-commerce platforms is a welcome departure from the current policy stance where differential e-commerce in the B to C space is generally subject to greater restrictions in the retail space as compared to the brick and mortar operators.
6. In China, e-commerce is growing fast and food is a major part of the business – about 45 million people are regularly buying foods online.


Example of Non-vegetarians and lack of retail


Household consumption data of NSSO suggests that non-veggies have increased from 58.2 per cent in 2004-05 to 62.3 per cent in 2011-12. Rise in the populations is mainly comprised of poultry-meat eaters, with an increase of about 68 per cent. Monthly per capita consumption of chicken has grown by a staggering 224 per cent. But the sale of poultry meat has remained confined to wet markets and open roadside slaughter houses. Processed chicken meat accounts for not more than 5-10 per cent of the total poultry meat production in the country. Main reason behind comparatively meager increase in processed chicken production in the total poultry meat production in the countryis, absence of well-developed reliable cold chains.
Partially successful example One recent volatile but successful example of permitting FDI has been, when 100 per cent FDI was allowed through the automatic route in food processing sector. After granting permission, FDI in food processing was $190 million in FY2011 and it jumped to $400 million in FY13. It further increased to almost $4 billion in FY14 before coming down drastically to about $500 million in FY16.


Challenges


Two major roadblocks in the success of current FDI policy are: –
· Agricultural Produce Market Committee (APMC) Act

· And the Essential Commodities Act.


Essential Commodities Act


Essential Commodities Act prohibits stockholding large stocks certain listed items under the act by any one. While both food processing industries and food retail chains need to hold large stocks for their operations. If industries do not hold large stocks with them, rapid price fluctuations can throw them out of business in the long run.


APMC act


APMC act puts restrictions in procuring directly from farmers in most states. This hampers their efficiency and dissuades them from large investments, defeating the very purpose of the FDI policy.


Way ahead


Government should reform the APMC and ECA acts as soon as possible. Initiatives like National Agriculture Market (NAM) are a good beginning in dismantling the woes of APMC.
Government should try to direct foreign investment in ways that help compress the value chain by taking on board small players both at the back-end and front-end.
Best models are domestic cooperatives like AMUL and multinationals like Nestle, who have incorporated even small-holders into their model for procuring milk and local kirana stores for their distribution network. For this there is need of non-restrictive environment for foreign firms to function and scale up their operations many folds. Permitting FDI through the automatic route (rather than through approval) will be a much desired step.


 

Categories
Mains 2016 Initiative

Mains 2016: Forest fire in Uttarakhand: Impacts and mitigation


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Forest fire in Uttarakhand: Impacts and mitigation



Issue



Forest fire in Uttarakhand affected thousands of acres of forest including National parks like Corbett National Park and Rajaji National park.



History of forest fire in Uttarakhand



Since 1984, the forests of the Western Himalayas have burned every summer. There were forest fires before then, too, but when locals extinguished them, they would remain extinguished.
Since 1984, the doused fires spring up as soon as the firefighters return home, fueling a sense of hopelessness. Today, barely anyone attempts to fight a fire, knowing that whatever is  alvaged will soon be set ablaze anyway.


Present scenario



In December 2015, the environment ministry released the India State of Forest Report. According to the report, India’s forest cover is 701,673 sq. km which is about 21.34% of the country. As per the Forest Survey of India data, almost 50% of India’s forest areas are fire prone but this does not mean that fires affect 50% of the country’s area annually. The major forest fire season in the country varies from February to June. Reports have estimated that about 6.17% of Indian forests are subjected to severe fire damage annually.



Various reasons for forest fire this year Natural reasons:



This year, the major cause is the high temperature and the lack of rainfall. High atmospheric temperatures and dryness offer favorable conditions for a fire to start, but in India several forest fires are human-made for new flush of grass and agricultural practices like shifting cultivation.
· In many forest ecosystems, reduced precipitation before and during the dry season can reduce fuel moisture and lower humidity near the surface, allowing fires to more easily escape from human control, and spread more rapidly over the landscape.
· Low fuel moisture levels also make fires hotter, allow them to consume more fuel, and kill more of the trees inside the fire perimeter.
· El Nino might have played a role. The 2015-16 El Nino which is one of the strongest on record, has turned global weather systems upside down. This dry weather was especially problematic because it intensified seasonal fires, which are intentionally lit by farmers to clear land and manage crops.
Man – Made reasons: Forests are being set on fire with the objective of drying up trees, to keep wood contractors in business. · As thousands of trees have been burnt, selling them would bring huge revenue to the corporation and benefit the mafia that would buy them.
· The reason for the sudden spurt in forest fires can very likely be traced to a 1981 governmental ban on the felling of green trees above 1,000 m elevation.
· With permission, impossible to obtain, the next best thing was to dry the trees up by foul means, especially for real estate developers, timber contractors, villagers and sundry others.
· Land cleared can be sold in land transfer cases, which also suits builders.
· Forest are also set on fire to stock up fuel wood for winter.

Chir Pine: Resin is obtained from Chir pine which used in turpentine industry. Thus, pine trees are being grown in this region at the cost of broadleaf forest. Chir pine trees that are prone to catching fire make up 16% of Uttarakhand forests. This aggravates forest fire.



Impacts of forest fires



Forest Fires cause wide ranging adverse ecological, economic and social impacts. In a
nutshell, forest fires cause following adverse impacts- · Loss of valuable timber resources and
depletion of carbon sinks · Degradation of water catchment areas resulting in loss of water
· Loss of biodiversity and extinction of plants and animals
· Loss of wild life habitat and depletion of wild life
· Loss of natural regeneration and reduction in forest cover and production
· Global warming resulting in rising temperature
· Loss of carbon sink resource and increase in percentage of CO2 in the
atmosphere
· Change in micro climate of the area making it unhealthy living conditions
· Soil erosion affecting productivity of soils and production
· Ozone layer depletion
· Health problems leading to diseases
· Indirect effects on agricultural production: Loss of livelihood for the tribal who directly depend upon collection of non-timber forest products from the forest areas for their livelihood.



Effect on biodiversity



· The regular burning of forests has wiped out communities of insects, birds, amphibians and reptiles, besides, of course, most mammals. Broadleaf trees tend to dry up in the wake of regular forest fires.
· These are rapidly replaced by the Chir pine, which has very little to offer in the way of food for wildlife.
· Thus, the only mammals that still survive in any numbers in Uttarakhand are rhesus macaques and wild boar, which are highly adaptable omnivores.
· They now depend almost entirely on humans for their food, relying on raiding crops and even houses to fill their belly.


How to tackle the problem of frequent forest fire?



Prevention and control measures for forest fires in India The Ministry of Environment and Forests, Government of India issued guidelines for prevention and control of forest fires to all states in June 2000. Some of those important guidelines or measures of prevention and control of forestfires in India are-
· Identification and mapping of all fireprone area.
· Compilation and analysis of data-base on the damage due to forest fire.
· Installation of Forest Danger Rating Systems and Fire-Forecasting Systems.
· Items of forest protection to be treated as a Plan Item in order to raise their profile and thereby increase their Budget Allocation.
· All preventive measures are to be taken before the beginning of the fire season like summer season.
· Recruitment of a Nodal Officer to coordinate with various agencies including the Government of India on issues of forest-fire.
· A ‘Crisis Management Group’ should be constituted at the state headquarters, district headquarters, and at block levels to monitor the situations during fire period, coordinate various preventive and control measures, and arrange adequate enforcement of men and materials in case of any eventuality.
· Communication network to be set up for quick flow of information and movement of materials and man-power to the fire site.
· JFM Committees and Forest Protection Committees are to be actively involved in the  revention and control of forest fires. Other people living in and around forest areas and getting benefits from the forest should also be involved actively.
· Regular training of Government Staff and communities as Fire –Fighters should be organized by the government.
· Public awareness should be created against ill effects of forest fires- a Fire – Week should be celebrated to create mass awareness.
· Legal Provisions for fire prevention and control should be implemented forcefully.



Categories
Mains 2016 Initiative

Mains 2016: Insolvency and Bankruptcy Code- Need and Critique


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News


The Parliament has passed the Insolvency and Bankruptcy Code Bill, 2016. The Code which intends to give ease of doing business a push received the assent of the President of India.
 Bankruptcy is a legal status usually imposed by a Court, on a firm or individual unable to meet debt obligations.
 India is a capital-starved country and therefore it is essential that capital isn’t frittered away on weak and unviable businesses. Quick resolution of bankruptcy can ensure this. Moreover, It helps create a sound climate for investment.


Who drafted the bill?


It has been drafted by a specially constituted ‘Bankruptcy Law Reforms Committee’ (BLRC) under the Ministry of Finance.


The need of Bankruptcy law


 According to central bank data, stressed assets rose to 14.5% of banking sector loans at the end of December 2015.
 That’s almost Rs 10 trillion of loans that are stuck. Freeing up this money is crucial for the banking sector to go about its business.
 Failure of businesses impacts employees, shareholders, lenders, and the broader economy.
 Delays in making decisions on the viability of businesses, tactics employed by company promoters to delay reorganization or attempts to sell off assets also create problems.
 Present laws, such as the Sick Industrial Companies Act or SICA, have not worked because of inefficient enforcement and court delays.
 Delaying a decision on whether to shutter a firm or to try to revive it causes the destruction of value for all involved.

 We have many regulations in place which facilitate the setting up of a company, but there is no uniform policy to facilitate a smooth exit.


Present laws that deals with insolvency


There are, in fact, several laws that deal with insolvency for companies, such as: –
 The Sick Industrial Companies Act,
 The Recovery of Debt Due to Banks and Financial Institutions Act, and
 Securitisation and Reconstruction of Financial Assets and
 Enforcement of Security Interest Act, 2002 (SARFAESI)
Then there are a couple of laws dating from the time of the British Raj for dealing with individual debtors.
However, this multiplicity of laws has been a problem in the way of banks failing to recover their loans For example, DRTs (Debt Recovery Tribunal) are dealing with a backlog of Rs 4 trillion worth of cases. For the last three financial years, less than 20% of cases taken up by various channels such as DRTs, Lok Adalats and SARFAESI courts have
been successfully resolved.


Data and Stats


According to central bank data, stressed assets (which include gross bad loans, advances whose terms have been restructured and written-off accounts) rose to 14.5% of banking sector loans at the end of December 2015. That’s almost Rs 10 trillion of loans that are stuck. Freeing up this money is crucial for the banking sector to go about its business. On the parameter of resolving insolvency, India is ranked 136 among 189 countries. At present, it takes more than four years to resolve a case of bankruptcy in India, according to the World Bank.


So, what exactly this new code will do to improve the situation?


Consolidation of laws – The new code will replace existing bankruptcy laws and will cover individuals, companies, limited liability partnerships and partnership firms
 The bill proposes the creation of a new class of insolvency professionals that will specialize in helping sick companies.
 It will also facilitate creation of information utilities that will collect all information about debtors to prevent serial defaulters from misusing the system. The bill proposes to set up the Insolvency and Bankruptcy Board of India to act as a regulator of these utilities and professionals.
 It also proposes to use the existing infrastructure of National Company Law tribunals and debt recovery tribunals to address corporate insolvency and individual insolvency, respectively
 To protect workers’ interests, the code has provisions to ensure that the money due to workers and employees from the provident fund, the pension fund and gratuity fund shouldn’t be included in the estate of the bankrupt company or  individual. Disqualification of person declared bankrupt from holding public office, thereby ensuring that politicians and government officials cannot hold any public office if declared bankrupt.
 The Code creates an Insolvency and Bankruptcy Fund.


Critics of the code


 The Code provides a hard deadline of 180/270 days for completion of corporate insolvency process, failing which, the Code mandates the “Adjudicating Authority” to order liquidation. A hard deadline will push otherwise salvageable
companies into liquidation, disrupting markets and affecting jobs and livelihoods.
 IRP model is costly – IRP model has been borrowed from the UK. Adoption of the IRP model resulted in higher
realizations but it also correspondingly increased costs of bankruptcy. Antitrust (practices restraining trade, malpractices) concerns have also been raised in face of a closed credit or resolution professional nexus.
 Cross-border insolvency – The legislation fails to provide a framework to deal with issues involving cross-border
insolvency. Many global companies have investments in India. In recent years, Indian companies have grown
multinational in character and have made a high profile and high stake acquisitions abroad.
 No effective mechanism – There is no effective mechanism for cooperation between the courts of India and those of other countries, or for the administration of cross-border insolvencies and treatment of stakeholders, if insolvency
proceedings start in any foreign jurisdiction while involving assets or creditors in India.
 View of the government – The position of the government is that cross border cooperation will be achieved by signing bilateral agreements with sovereign countries. This will not only be time-consuming, but will also run the risk of different, and at times conflicting, rules being framed for different jurisdictions
 Biased – The code tilts heavily in favor of creditors, depriving debtors of fair participation and a level playing field. The Committee of Creditors has been made the sole, all-powerful authority that can either accept or reject the revival plan of the debtor company. All other creditors and stakeholders have been kept out of the decision-making processes.
 Personal insolvency – Filing bankruptcy is considered a stigma in many societies within India, as it impacts the social standing of individuals as well as their family members. The stakeholders, principles, approaches and outcomes of personal insolvency are different from those of corporations. A one-size-fits-all approach to the entire population may not be suitable.
 NPA crisis will linger on – As it will take more than a year for the new law to be implemented. The resolution of NPAs cannot wait that long.
 Overburdened DRTs – Vesting debt recovery tribunals (DRTs) with jurisdiction to deal with personal insolvency resolutions is also a step in wrong direction.
 Most DRTs are in state headquarters. Farmers situated in faraway places find it difficult to access the law, as traveling long distances from a village or small town to file or participate in an insolvency proceeding involving small amounts is time consuming and costly.
 DRTs are already overburdened with work and suffering from a backlog of cases. To add this massive jurisdiction to their existing load will impact the quality of their work in another key area – the recovery of debt and unlocking key assets trapped in litigation to be reallocated back into economy.


Conclusion


Effective implementation will be the key again if the insolvency code is to succeed. Government should ensure that it keeps working on improving the code coupled by efforts to setup institutional framework mentioned in code itself, in a time-bound fashion. It would be ironical if the proper implementation of the code itself is mired in delays.


 

Categories
Mains 2016 Initiative

Mains 2016: Globalization and impact on Indian startups


impact-globalisation-indian-startups


What is Globalization?


Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.


What is a startup?


A startup is a young company that is just beginning to develop. Startups are usually small and initially financed and operated by a handful of founders or one individual. These companies offer a product or service that is not currently
being offered elsewhere in the market, or that the founders believe is being offered in an inferior manner.

As per the notification dated February 17, 2016, Ministry of Commerce and Industry has described an entity as a ‘startup’:
1. Up to five years from the date of its incorporation/registration,
2. If its turnover for any of the financial years has not exceeded Rupees 25 crore, and
3. It is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.


Startup ecosystem in India


Startup ecosystem is developing rapidly in India.
As per Economic Survey 2016,
 India has more than 19,000 technology enabled startups, led by consumer Internet and financial services startups
 Indian startups raised $3.5 billion in funding in the first half of 2015, and the number of active investors in India
increased from 220 in 2014 to 490 in 2015. As of December 2015, eight Indian startups belonged to the ‘Unicorn’ club(ventures that are valued at $1 billion and upwards).

Schemes like Startup India aimed to promote entrepreneurship have been launched.


How can Globalization impact Indian startup industry?


It can help in the following ways: –
 Cross-border collaborations: Indian startups now have the opportunity to collaborate with their foreign counterparts and explore new markets without having to compromise on processes.
 A bigger talent pool and more money to spare: For an Indian startup looking to go global, the costs of setting up a
business could be prohibitive, but by collaborating with their counterparts (and, thus, opening up the Indian market
for them), it could turn into a win-win situation. Moreover, with barriers of culture becoming irrelevant, startups have the opportunity to hire from a much bigger talent pool.
 Increasing investment options: According to a 2014 Forbes article, America was India’s largest Investor and the global confidence in Indian economy is on the rise. Startups now have the opportunity to pitch their ideas to many
more investors and gain funding. Many expatriates, too, choose to invest in Indian businesses. More and more
seasoned venture capitalists are thinking of markets beyond their home turf.
 Platform to expand globally: Companies like Infosys and Zomato have been successful in crossing national
boundaries to establish thriving businesses abroad, giving hope to startups looking to go global. Amazon is trying to take products made in India to the rest of the world by tying up with local manufacturers. Indeed, an innovative
idea backed by the right team would have no trouble expanding globally in today’s times.


Government Initiative to promote start-ups: –


Start-up India, Stand up India
 Government launched a new campaign “Start-up India, Stand up India” to promote bank financing for start-ups and offer incentives to boost entrepreneurship and job creation.
 This initiative would encourage entrepreneurship among the youth of India.
 PM says that each of the 1.25 lakh bank branches should encourage at least one Dalit or Adivasi entrepreneur and at least one woman entrepreneur
 It will include hand-holding for all things related to them, which includes mentoring, linking companies with
universities and institutions, giving marketing support, consultancy on intellectual property rights
 And providing easy regulatory mechanism for them so that they do not have to run from one door to another.
 It would also offer direction in terms of how they can access funds and scale up capacity.
Setting up incubators
 Government intends to create a policy and framework for setting up incubators across the country in PPP mode.
 The plan envisages setting up 35 new incubators in existing institutions, where 40 per cent of funding shall come from the Centre.
 Incubators are set up to provide startups with office space and basic services.
 Setting up of incubators will free up funds and allow them to focus on core business functions.