Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sagarmala
Mains level: Paper 3- India's shipping industry and challenges
The article deals with the problems faced by India’s shipping sector and suggests the measures to improve the shipping sector.
Importance of shipping for economic growth
- The major economies of the world have always realized the potential of shipping as a contributor to economic growth.
- For instance, control of the seas is a key component of China’s Belt and Road Initiative (BRI).
- However, geographically, China is not as blessed as India, yet, seven of the top 10 container ports in the world are in China, according to the World Shipping Council.
- What aided China’s growth are strong merchant marine and infrastructure to carry and handle merchandise all over the world.
Lack of carrying capacity
- All the shipping infrastructure in peninsular India only helps foreign shipping liners.
- India has concentrated only on short-term solutions.
- Foreign ship owners carry our inbound and outbound cargo. This is the case in container shipping too.
- As a country, we have still not optimized our carrying capacity.
- Much of foreign currency is drained as transshipment and handling costs every day.
- Due to this, members of our maritime business community have also preferred to be agents for foreign ship owners or container liners rather than becoming ship owners or container liners themselves.
- As a result, there is a wide gap between carrying capacity and multi-folded cargo growth in the country.
Way forward
1) Regional cargo-specific ports
- Instead of creating regional cargo-specific ports in peninsular India, we allowed similar infrastructural developments in multiple cargo-handling ports.
- As a result, Indian ports compete for the same cargo.
- We need to make our major ports cargo-specific, develop infrastructure on a par with global standards, and connect them with the hinterlands as well as international sea routes, they will automatically become transshipment hubs.
- We need to only concentrate on developing the contributing ports to serve the regional transshipment hubs for which improving small-ship coastal operations is mandatory.
2) Sagarmala
- Sagarmala aims are port-led industrialization, development of world-class logistics institutions, and coastal community development.
- Sagarmala will help in increasing domestic carrying capacity.
- Shipbuilding, repair, and ownership are not preferred businesses in India and the small ship-owning community in India also prefer foreign registry instead of domestic registration.
- If this has to change, there needs to be a change in the mindset of the authorities and the maritime business community.
- ‘Make in India’ will result in multi-folded cargo growth in the country, we need ships to cater to domestic and international trade.
- Short sea and river voyages should be encouraged.
- Shipbuilding and owning should be encouraged by the Ministry.
- The National Shipping Board is an independent advisory body for the Ministry of Shipping, where the Directorate General of Shipping (DGS) is a member.
- The NSB should be able to question the functioning of the DGS, which is responsible for promoting carrying capacity in the country.
- Coastal communities should be made ship owners.
- This will initiate the carriage of cargo by shallow drafted small ships through coast and inland waterways.
- Sagarmala should concentrate on consolidating the strength of the coastal youth and make them contribute to the nation’s economy with pride.
Consider the question “How shipping contributes to the economic prosperity of a country? Suggest the steps need to be taken to develop its shipping sector.”
Conclusion
Shipping plays an important role in the economic development of a country. India needs to focus on developing it to achieve the economic prosperity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Monetary policy measures
Mains level: Paper 3- Dealing with the excess liquidity
The article highlights the challenge in dealing with the excess liquidity in the economy after the central banks injected liquidity by persuing unorthodox policies.
Overview of policies adopted during 2008 financial crisis
- Days after the crash of Lehman Brothers, the United States Congress approved an emergency bailout package of $700 billion in September 2008.
- The amount was used to buy off mortgage-backed securities from banks, hedge funds and pension funds to avert further Lehman-type bankruptcies.
- As a result, fresh money was injected into the banking system for it to resume normal credit operations and clean up balance sheets.
- Subsequent actions of the US government and Federal Reserve blurred the distinction between fiscal and monetary policy.
- ‘Quantitative easing’ was a term coined to describe unorthodox measures like a central bank buying off mortgages and loans, and thus taking credit risk onto its balance sheet.
- So, quantitative easing was pursued by all the major central banks of the developed world.
- Central banks embarked upon an aggressive money-printing spree. Assets on their books ballooned.
Monetary response during pandemic subsequent liquidity glut
- During the pandemic year more than a decade after the 2008 crisis, the West’s monetary spigots have been opened even more.
- A liquidity glut has ensued.
- While the rate of monetary expansion over this period has been healthy, neither employment nor economic output grew by even a fraction of that rate.
- Central bank finds itself in the maze.
RBI in a similar situation
- The Reserve Bank of India (RBI) too finds itself in a similar predicament, where the way out of its liquidity glut is hazy.
- Due to purchases of foreign exchange externally and of government bonds domestically, RBI’s balance sheet has ballooned by more 30% by August last year.
- RBI has injected liquidity through long-term repo operations, which essentially provide long-term money at low overnight rates.
- The Indian central bank has also provided implicit liquidity support to mutual funds.
- However, the RBI has not quite ventured into taking credit risk onto its books, nor has it signalled a readiness to buy toxic assets.
Liquidity glut and challenges associated with it
- As a result of India’s liquidity glut, money is flowing in and out of the central bank to the tune of ₹7 trillion on a daily basis.
- This has resulted in an anomaly: market lending rates have gone below RBI’s reverse repo rate, which is supposed to be the de facto floor.
- Cheap money encourages to do foolish and risky things, which, if done widely and voluminously enough, can spell disaster for financial stability.
- But, any hint of reducing the rate of money expansion threatens to cause panic and burst the bubble it blew.
- So, when RBI tentatively tried to move market rates higher by announcing a reverse repo auction,the market reaction was one of panic all the same, and there was a spike in interest rates.
- This caused the central bank to rethink its strategy.
- To calm nervous bond traders, the governor has categorically said that liquidity support will continue as long as necessary.
Way forward
- We need to plan an exit from the current glut.
- One way out could be loan ₹5 trillion to the central government against shares of public sector undertakings, at a low rate of 3% for a period of five years to fund its huge deficit.
- That will bypass markets and not cause any disruption to interest rates.
Consider the question “Why the challenges posed by liquidity glut caused by the unorthodox policies adopted by the central bank in the aftermath of the pandemic? What are the challenges in reducing the liquidity?”
Conclusion
Whatever the way out of this whirlpool of liquidity, it’s not going to be easy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Agriculture Census
Mains level: Paper 3- Exclusion of small and marginal farmers from agri-credit
India’s agriculture credit increased by 500% in the last decade, however, this increase in the credit has not been reflected in the condition of the farmers. The article deals with the issues with the agri-credit in India.
Impact of credit on agriculture
- Providing credit to small farmers at a reasonable rate has been the agenda of the Centre, the States, and the Reserve Bank of India (RBI) for decades.
- However, the volume of credit has improved over the decades, its quality and impact on agriculture have only deteriorated.
- In 2011-12, the target was ₹4.75-lakh crore; now, agri-credit has reached the target of ₹15-lakh crore in 2020-21 with an allocated subsidy of ₹21,175 crores.
- Agricultural credit has become less efficient in delivering agricultural growth.
Issues with agri-credit: small farmers left-out
- In the last 10 years, agriculture credit increased by 500% but has not reached even 20% of the 12.56 crore small and marginal farmers.
- 95% of tractors and other agri-implements sold in the country are being financed by non-banking financial companies, or NBFCs, at an 18% rate of interest.
- The RBI has also questioned agricultural households with up to two hectares getting only about 15% of the subsidized outstanding loan from institutional sources (bank, co-operative society).
- As per the Agriculture Census, 2015-16, the total number of small and marginal farmers’ households in the country stood at 12.56 crore which makes up 86.1% of the total holdings.
- As in the Situation Assessment Survey of Agricultural Households by the National Sample Survey Office (NSSO), the share of institutional loans rises with an increase in land possessed.
- This shows that the bulk of subsidized agri-credit is grabbed by big farmers and agri-business companies.
What are the reasons
- A loose definition of agri-credit has led to the leakage of loans at subsidized rates to large companies in agri-business.
- The RBI had set a cap that out of a bank’s overall adjusted net bank credit, 18% must go to the agriculture sector, and within this, 8% must go to small and marginal farmers and 4.5% for indirect loans, bank advances routinely breach the limit.
- A review by the RBI’s internal working group in 2019 found that in some States, credit disbursal to the farm sector was higher than their agriculture gross domestic product (GDP) and the ratio of crop loans disbursed to input requirement was very unevenly distributed.
- This shows the diversion of credit for non-agriculture purposes.
- One reason for this diversion is that subsidized credit disbursed at a 4%-7% rate of interest is being refinanced to small farmers, and in the open market at a rate of interest of up to 36%.
Way forward
- The way forward is to empower small and marginal farmers by ‘giving them direct income support on a per hectare basis rather than hugely subsidizing credit.
- Streamlining the agri-credit system to facilitate higher crop loans to farmer producer organizations, or the FPOs of small farmers against commodity stocks can be a win-win model to spur agriculture growth’.
- With mobile phone penetration among agricultural households in India being as high as 89.1%, efforts to improve institutional credit delivery through technology-driven solutions can reduce the extent of the financial exclusion of agricultural households
- There is a need to reforming the land leasing framework and creating a national-level agency to build consensus among States and the Centre concerning agriculture credit reforms.
Consider the question “Growth in the agriculture sector in India has not been commensurate with the growth in the agriculture credit. What are the reasons for this disparity? Suggest the measures to deal with the challenges in agri-credit delivery.”
Conclusion
Improving the access to credit at a reasonable rate will help in increasing their income but to do that reforms in credit delivery is the need of the hour.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: WEF
Mains level: The Great Reset
This news card is an excerpt from the original article published in The Indian Express and is articulated by C. Raja Mohan.
The Great Reset
- The Great Reset is a proposal by the World Economic Forum (WEF) to rebuild the economy sustainably following the COVID-19 pandemic.
- It was unveiled in May 2020 by the United Kingdom’s Prince Charles and WEF director Klaus Schwab.
The basis for the said reset
- It is based on the assessment that the world economy is in deep trouble.
- Schwab has argued that the situation has been made a lot worse by many factors, including the pandemic’s devastating effects on global society, the un- folding technological revolution, and the consequences of climate change.
- He demands that the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions.
- Every country must participate, and every industry, from oil and gas to tech, must be transformed.
Agenda behind
The agenda of The Great Reset touches on many key issues facing the world a/c to C Raja Mohan. Three of them stand out as:
First is the question of reforming capitalism
- The WEF has been at the forefront of calling for “stakeholder capitalism” that looks beyond the traditional corporate focus on maximizing profit for shareholders.
Second, it is certainly right to focus on the deepening climate crisis
- Climate skeptics have been ousted from Washington and President Biden has rejoined the 2015 Paris accord on mitigating climate change.
The third is the growing difficulty of global cooperation
- The era of great power harmony that accompanied the liberalization of the global economy at the turn of the 1990s has yielded place to intense contestation. The contestation is not just political but increasingly economic and technological.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Green tax
Mains level: Vehicular pollution and its control
The Union Minister for Road Transport and Highways has approved a proposal to levy a ‘green tax’ on old vehicles.
Do read about Green Mobility, India’s FAME-I and II Scheme.
Green Tax
- Personal vehicles will be charged a tax at the time of renewal of Registration Certification after 15 years.
- The policy will come into effect from April 1, 2022.
- The levy may differ depending on fuel (petrol/diesel) and type of vehicle.
- The proposal will now go to the States for consultation before it is formally notified.
- It includes 10-25% of road tax on transport vehicles older than eight years at the time of renewal of fitness certificate.
- The proposal on green tax also includes a steeper penalty of up to 50% of road tax for older vehicles registered in some of the highly polluted cities in the country.
- Revenue collected from this tax will be kept in a separate account and will be used for tackling pollution, and for States to set up state-of-art facilities for emission monitoring.
Why such a move?
- To dissuade people from using vehicles which damage the environment
- To motivate people to switch to newer, less polluting vehicles
- Green tax will reduce the pollution level, and make the polluter pay for pollution
Exemptions to this tax
- Vehicles like strong hybrids, electric vehicles and alternate fuels like CNG, ethanol, LPG etc to be exempted;
- Vehicles used in farming, such as tractor, harvester, tiller etc to be exempted;
Other proposals
- The Ministry also approved a watered-down policy of deregistration and scrapping of vehicles, bringing only those vehicles owned by government departments and PSUs and are older than 15 years under its ambit.
- In 2016, the Centre had floated a draft Voluntary Vehicle Fleet Modernization Programme that aimed to take 28 million decade-old vehicles off the road.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Law Commission
Mains level: Law Commission and its function
The Supreme Court has asked the Home and Law Ministries to explain the nearly three-year-long lapse in making appointments to the Law Commission.
Try this PYQ:
Q.The power to increase the number of judges in the Supreme Court of India is vested in
(a) The President of India
(b) The Parliament
(c) The Chief Justice of India
(d) The Law Commission
What is the news?
- The posts of Chairperson and Members have been vacant ever since the 21st Law Commission under the former Supreme Court judge, Justice B.S. Chauhan completed its tenure in August.
- The government approved the constitution of the 22nd Law Commission on February 19 last.
- However, it has not appointed the Chairperson and Members to date.
What is the Law Commission?
- It is an executive body established by an order of the Government of India. The first law commission of independent India was established post Independence in 1955
- Tenure: 3 Years
- Function: Advisory body to the Ministry of Law and Justice for “Legal Reforms in India”
- Recommendations: NOT binding
- First Law Commission was established during the British Raj in 1834 by the Charter Act of 1833
- Chairman: Macaulay; It recommended for the Codifications of the IPC, CrPC etc.
Composition
The 22nd Law Commission will be constituted for a period of three years from the date of publication of its Order in the Official Gazette. It will consist of:
- a full-time Chairperson;
- four full-time Members (including Member-Secretary)
- Secretary, Department of Legal Affairs as ex-officio Member;
- Secretary, Legislative Department as ex officio Member; and
- not more than five part-time Members.
Terms of reference
- The Law Commission shall, on a reference made to it by the Central Government or suo-motu, undertake research in law and review of existing laws in India for making reforms therein and enacting new legislations.
- It shall also undertake studies and research for bringing reforms in the justice delivery systems for elimination of delay in procedures, speedy disposal of cases, reduction in the cost of litigation, etc.
The Law Commission of India shall, inter-alia: –
- identify laws that are no longer needed or relevant and can be immediately repealed
- examine the existing laws in the light of DPSP and Preamble
- consider and convey to the Government its views on any subject relating to law and judicial administration that may be specifically referred to it by the Government through Ministry of Law and Justice (Department of Legal Affairs);
- Consider the requests for providing research to any foreign countries as may be referred to it by the Government through the Ministry of Law and Justice (Department of Legal Affairs);
- take all such measures as may be necessary to harness law and the legal process in the service of the poor;
- revise the Central Acts of general importance so as to simplify them and remove anomalies, ambiguities, and inequities
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Global Climate Risk Index 2021
Mains level: Climate change vulnerability and the economics behind
India was ranked the seventh worst-hit country in 2019 in the Global Climate Risk Index 2021.
The report holds much significance for prelims as well as mains. Just for the sake of information, we must be aware of India’s performance.
Global Climate Risk Index
- The GCRI is released annually by the environmental think tank and sustainable development lobbyist Germanwatch.
- It analyses to what extent countries have been affected by the impacts of weather-related loss events (storms, floods, heat waves etc.).
- It pushes for the need to support developing countries in coping with the effects of climate change.
Highlights of the 2020 year
Global prospects
- Mozambique, Zimbabwe and The Bahamas were the worst-affected countries in 2019.
- While hurricane Dorian ravaged The Bahamas; Mozambique, Zimbabwe and Malawi were affected by the single extreme weather event of cyclone Idai.
- Japan and Afghanistan were the other countries that fared worse than India on the Index, while South Sudan, Niger and Bolivia fared better in comparison but still made it to the top 10 worst-affected countries.
The burden of development
- Eight of the 10 countries most affected between 2000 and 2019 were developing countries with low or lower middle income per capita.
- Vulnerable people in developing countries suffered most from extreme weather events like storms, floods and heatwaves, whereas the impact of climate change was visible around the globe.
- Poorer countries are hit hardest because they are more vulnerable to the damaging effects of a hazard and have the lower coping capacity.
Data about India
- According to the Index floods caused by heavy rain in 2019 took 1,800 lives across 14 states in India and displaced 1.8 million people.
- Overall, the intense monsoon season affected 11.8 million people, with the economic damage estimated to be $10 billion (Rs.72,900 crore at $1=INR 72.9).
- A total of eight tropical cyclones meant that 2019 was one of the most active Northern Indian Ocean cyclone seasons on record. Six of them intensified to become “very severe”.
- The worst was Cyclone Fani in May 2019 which affected a total of 28 million people, killing nearly 90 people in India and Bangladesh, and causing economic losses of $8.1 billion (Rs.59,066 crore).
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Ayushman Bharat
Mains level: Universal health coverage
Union Home Minister has rolled out the ‘Ayushman CAPF’ scheme, extending the benefit of the central health insurance programme to the personnel of all Central Armed Police Forces (CAPFs) in the country.
Who are the CAPFs?
- The CAPFs refers to uniform nomenclature of five security forces in India under the authority of the Ministry of Home Affairs.
- Their role is to defend the national interest mainly against the internal threats.
- They are the Border Security Force (BSF), Central Reserve Police Force (CRPF), Central Industrial Security Force (CISF), Indo-Tibetan Border Police (ITBP), Sashastra Seema Bal (SSB)
Ayushman CAPF
- Under this scheme, around 28 lakh personnel of CAPF, Assam Rifles and National Security Guard (NSG) and their families will be covered by ‘Ayushman Bharat: PM Jan Arogya Yojana’ (AB PM-JAY).
- For the CAPF, the existing health coverage was not comprehensive as compared to other military forces.
Do you know?
The goal of universal health coverage (UHC) as stated in the UN Sustainable Development Goals (SDGs no. 3) is one of the most significant commitments to equitable quality healthcare for all.
About Ayushman Bharat
- PM-JAY aims to provide free access to healthcare for 40% of people in the country.
- It is a centrally sponsored scheme and is jointly funded by both the union government and the states.
- It was launched in September 2018 by the Ministry of Health and Family Welfare.
- The ministry has later established the National Health Authority as an organization to administer the program.
Key features:
- Providing health coverage for 10 crores households or 50 crores Indians.
- It provides a cover of 5 lakh per family per year for medical treatment in empanelled hospitals, both public and private.
- Offering cashless payment and paperless recordkeeping through the hospital or doctor’s office.
- Using criteria from the Socio-Economic and Caste Census 2011 to determine eligibility for benefits.
- There is no restriction on family size, age or gender.
- All previous medical conditions are covered under the scheme.
- It covers 3 days of pre-hospitalization and 15 days of post-hospitalization, including diagnostic care and expenses on medicines.
- The scheme is portable and a beneficiary can avail medical treatment at any PM-JAY empanelled hospital outside their state and anywhere in the country.
Note these features. They cannot be memorized all of sudden but can be recognized if a tricky MCQ comes in the prelims.
Must read:
[Burning Issue] Ayushmaan Bharat
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sundarban Delta
Mains level: Not Much
Indian Sunderbans, which is part of the largest mangrove forest in the world, is home to 428 species of birds, a recent publication of the Zoological Survey of India (ZSI) States.
Sundarban Biosphere Reserve
- Sundarbans is the largest delta and mangrove forest in the world.
- The Indian Sunderbans, which covers 4,200 sq km, comprises of the Sunderban Tiger Reserve of 2,585 sq km is home to about 96 Royal Bengal Tigers (2020) is also a world heritage site and a Ramsar Site.
- The Indian Sunderbans is bound on the west by river Muriganga and on the east by rivers Harinbhahga and Raimangal.
- Other major rivers flowing through this eco-system are Saptamukhi, Thakuran, Matla and Goasaba.
- Recent studies claim that the Indian Sundarban is home to 2,626 faunal species and 90% of the country’s mangrove varieties.
What is the latest research?
- The scientists have listed 428 birds, some, like the Masked Finfoot and Buffy fish owl, are recorded only from the Sunderbans.
- India has over 1,300 species of birds and if 428 species of birds are from Sunderbans.
- The area is home to nine out of 12 species of kingfishers found in the country as well rare species such as the Goliath heron and Spoon-billed Sandpiper.
Try this PYQ:
With reference to India’s biodiversity, Ceylon frogmouth, Coppersmith barbet, Gray-chinned miniyet and White-throated redstart are–
(a) Birds
(b) Primates
(c) Reptiles
(d) Amphibians
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