Note4Students
From UPSC perspective, the following things are important :
Prelims level: Coal Mines Nationalisation Act (CMNA)
Mains level: Paper 3- Coal crisis
Context
In India, coal-based power plants have witnessed rapid depletion of coal stocks from a comfortable 28 days at the end of March to a precarious level of four days by the end of September. Coal India Ltd (CIL) has been unfairly attacked, even as it gears up to play a crucial role in fighting the power crisis.
Reasons for crisis
- The reasons for the crisis are structural as well as operational.
- The Coal Mines Nationalisation Act (CMNA) in 1993 enabled the government to take away 200 coal blocks of 28 billion tons from CIL and allocate them to end-users for the captive mining of coal.
- These end-users, mostly in the private sector, failed to produce any significant quantity of coal.
- The cancellation of 214 blocks by the Supreme Court added to the problem.
- Commensurate to the captive mines allocated to the end-user industries, the coal production today should have been at least 500 million tonnes per annum (mtpa).
- In reality, this has never exceeded 60 mtpa.
- On the operational side, power plants are required by the Central Electricity Authority (CEA) to maintain a minimum stock of 15 to 30 days of normative coal consumption.
- The compliance with this directive by power plants has been severely lacking.
- This enhances the vulnerability of power plants.
- The persistent non-payment of coal sale dues by power plants to coal companies has created a serious strain on their working capital position.
- A spurt in imported coal prices, mainly due to a major increase in coal imports by China, acted as a brake on imports of coal.
- This escalated the demand for domestic coal.
- The spurt in demand for coal is being linked to the post-Covid economic recovery.
CIL’s role in mitigating the shortage crisis
- Growth in production in short duration: Despite many constraining factors, it is to the credit of CIL that it has achieved a growth of 14 million tonnes (mt) or 5.8 per cent in coal production during the first half of 2021-22.
- Yet, the offtake was higher than the preceding year by 52 mt or 20.6 per cent.
- This was possible by drawing down on the opening inventory of coal from 100 mt to 42 mt during April to September.
- With the monsoons behind us and the onset of a good productive season, CIL has already stepped up coal offtake to more than 1.5 mt per day.
- With efforts on the part of the railways in moving the coal, the crisis should dissipate in the near future, at least for power plants that pay timely for coal supplies.
- Besides meeting the growing coal demand of power plants, CIL has been able to significantly replace the import of highly expensive thermal coal.
- Cheaper coal: Even after bearing the highest tax and transport cost globally, the landed cost of CIL coal continues to be much cheaper than imported coal at almost all destinations.
- Saving of foreign exchange: The resultant benefits are savings of foreign exchange, and generation of power at affordable tariffs.
- The coal price charged by CIL, expressed in energy units, is at a deep discount of 60-70 per cent of imported coal.
Conclusion
In brief, CIL has been unfairly blamed for the coal crisis. It has played a stellar role, standing like a solid rock between light and darkness. It is striving to build comfortable stocks at the power plants, not in default of payment.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Mains level: Paper 3- Issues with removing the interest rate ceiling for NBFC-MFIs
Context
In June 2021, the Reserve Bank of India (RBI) published a “Consultative Document on Regulation of Microfinance”. The likely impact of the recommendations is unfavourable to the poor.
Background of microfinance in India
- Microfinance lending has been in place since the 1990s.
- In the 1990s, microcredit was given by scheduled commercial banks either directly or via non-governmental organisations to women’s self-help groups.
- But given the lack of regulation and scope for high returns, several for-profit financial agencies such as NBFCs and MFIs emerged.
- The microfinance crisis of Andhra Pradesh led the RBI to review the matter, and based on the recommendations of the Malegam Committee, a new regulatory framework for NBFC-MFIs was introduced in December 2011.
- A few years later, the RBI permitted a new type of private lender, Small Finance Banks (SFBs), with the objective of taking banking activities to the “unserved and underserved” sections of the population.
- Today, as the RBI’s consultative document notes, 31% of microfinance is provided by NBFC-MFIs, and another 19% by SFBs and 9% by NBFCs.
- These private financial institutions have grown exponentially over the last few years.
What are the recommendations in the document?
- The consultative document recommends that the current ceiling on rate of interest charged by non-banking finance company-microfinance institutions (NBFC-MFIs) or regulated private microfinance companies needs to be done away with.
- The paper argues that the interest rate ceiling is biased against one lender (NBFC-MFIs) among the many: commercial banks, small finance banks, and NBFCs.
- It proposes that the rate of interest be determined by the governing board of each agency, and assumes that “competitive forces” will bring down interest rates.
Comparison of rate of interest
- According to current guidelines, the ‘maximum rate of the interest rate charged by an NBFC-MFI shall be the lower of the following: the cost of funds plus a margin of 10% for larger MFIs (a loan portfolio of over ₹100 crores) and 12% for others; or the average base rate of the five largest commercial banks multiplied by 2.75’.
- A quick look at the website of some Small Finance Banks (SFBs) and NBFC-MFIs showed that the “official” rate of interest on microfinance was between 22% and 26% — roughly three times the base rate.
- How does this compare with credit from public sector banks and cooperatives?
- Crop loans from Primary Agricultural Credit Societies (PACS) in Tamil Nadu had a nil or zero interest charge if repaid in eight months.
- Kisan credit card loans from banks were charged 4% per annum (9% with an interest subvention of 5%) if paid in 12 months (or a penalty rate of 11%).
- Other types of loans from scheduled commercial banks carried an interest rate of 9%-12% a year.
- As even the RBI now recognises, the rate of interest charged by private agencies on microfinance is the maximum permissible, a rate of interest that is a far cry from any notion of cheap credit.
- The actual cost of microfinance loans is even higher for several reasons.
- An “official” flat rate of interest used to calculate equal monthly instalments actually implies a rising effective rate of interest over time.
- In addition, a processing fee of 1% is added and the insurance premium is deducted from the principal.
Violations of RBI guidelines
- In line with RBI regulations, all borrowers had a repayment card with the monthly repayment schedules.
- This does not mean that borrowers understood the charges.
- Further, contrary to the RBI guideline of “no recovery at the borrower’s residence”, the collection was at the doorstep.
Conclusion
The proposals in the RBI’s consultative document will lead to further privatisation of rural credit, reducing the share of direct and cheap credit from banks and leaving poor borrowers at the mercy of private financial agencies. This is beyond comprehension at a time of widespread post-pandemic distress among the working poor.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: GHI and its components
Mains level: Paper 2- Low ranking of India on GHI
Context
This year’s Global Hunger Index (GHI) ranks India 101 out of 116 countries for which reliable and comparable data exist.
Government’s stand
- Is India’s performance on hunger as dismal as denoted by the index or is it partly a statistical artefact?
- This question assumes immediacy, especially since the government has questioned the methodology and claimed that the ranking does not represent the ground reality.
- This calls for careful scrutiny of the methodology, especially of the GHI’s components.
Understanding the GHI methodology
- The GHI has four components.
- The first — insufficient calorie intake — is applicable for all age groups.
- The data on deficiency in calorie intake, accorded 33% weight, is sourced from the Food and Agriculture Organization’s Suite of Food Security Indicators (2021).
- The remaining three — wasting (low weight for height), stunting (low height for age) and mortality — are confined to children under five years.
- The data on child wasting and stunting (2016-2020), each accounting for 16.6% of weight, are from the World Health Organization, UNICEF and World Bank, complemented with the latest data from the Demographic and Health Surveys.
- Under-five mortality data are for 2019 from the UN Inter-Agency Group for Child Mortality Estimation.
Issues with GHI
- The GHI is largely children-oriented with a higher emphasis on undernutrition than on hunger and its hidden forms, including micronutrient deficiencies.
- The first component — calorie insufficiency — is problematic for many reasons.
- The lower calorie intake, which does not necessarily mean deficiency, may also stem from reduced physical activity, better social infrastructure (road, transport and healthcare) and access to energy-saving appliances at home, among others.
- For a vast and diverse country like India, using a uniform calorie norm to arrive at deficiency prevalence means failing to recognise the huge regional imbalances in factors that may lead to differentiated calorie requirements at the State level.
Understanding the connection between stunting and wasting and ways to tackling them
- India’s wasting prevalence (17.3%) is one among the highest in the world.
- Its performance in stunting, when compared to wasting, is not that dismal, though.
- Child stunting in India declined from 54.2% in 1998–2002 to 34.7% in 2016-2020, whereas child wasting remains around 17% throughout the two decades of the 21st century.
- Stunting is a chronic, long-term measure of undernutrition, while wasting is an acute, short-term measure.
- Quite possibly, several episodes of wasting without much time to recoup can translate into stunting.
- Effectively countering episodes of wasting resulting from such sporadic adversities is key to making sustained and quick progress in child nutrition.
- Way forward: If India can tackle wasting by effectively monitoring regions that are more vulnerable to socioeconomic and environmental crises, it can possibly improve wasting and stunting simultaneously.
Low child mortality
- India’s relatively better performance in the other component of GHI — child mortality — merits a mention.
- Studies suggest that child undernutrition and mortality are usually closely related, as child undernutrition plays an important facilitating role in child mortality.
- However, India appears to be an exception in this regard.
- This implies that though India was not able to ensure better nutritional security for all children under five years, it was able to save many lives due to the availability of and access to better health facilities.
Conclusion
The low ranking does not mean that India fares uniformly poor in every aspect. This ranking should prompt us to look at our policy focus and interventions and ensure that they can effectively address the concerns raised by the GHI, especially against pandemic-induced nutrition insecurity.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: AT and C losses
Mains level: Paper 3- Salient features of Electricity (Amendment) Bill 2020
Context
Most discoms are deep into the red as high aggregate technical and commercial (AT&C) losses are chipping into their revenues. Against this backdrop, the Electricity (Amendment) Bill of 2020 is a game-changing reform.
Why the Electricity (Amendment) Bill of 2020 is a game-changing reform
- De-licensing power distribution: This will provide the consumers with an option of choosing the service provider, switch their power supplier and enable the entry of private companies in distribution, thereby resulting in increased competition.
- In fact, privatisation of discoms in Delhi has reduced AT&C losses significantly from 55% in 2002 to 9% in 2020.
- Open access for purchasing power: Open access for purchasing power from the open market should be implemented across States and barriers in the form of cross-subsidy surcharge, additional surcharge and electricity duty being applied by States should be reviewed.
- Issue of tariff revision: The question of tariffs needs to be revisited if the power sector is to be strengthened.
- Tariffs ought to be reflective of the average cost of supply to begin with and eventually move to customer category-wise cost of supply in a defined time frame.
- This will facilitate a reduction in cross-subsidies.
- Inclusion in GST: Electrical energy should be covered under GST, with a lower rate of GST, as this will make it possible for power generator/transmission/distribution utilities to get a refund of input credit, which in turn will reduce the cost of power.
- Use of smart meters: Technology solutions such as installation of smart meters and smart grids which will reduce AT&C losses and restore financial viability of the sector.
- The impetus to renewable energy: The impetus to renewable energy, which will help us mitigate the impact of climate change, is much needed.
- Despite its inherent benefits, the segment has shown relatively slow progress with an estimated installed capacity of 5-6 GW as on date, well short of the 2022 target.
- The Bill also underpins the importance of green energy by proposing a penalty for non-compliance with the renewable energy purchase obligations which mandate States and power distribution companies to purchase a specified quantity of electricity from renewable and hydro sources
- Strengthening the regulatory architecture: This will be done by appointing a member with a legal background in every electricity regulatory commission and strengthening the Appellate Tribunal for Electricity.
- This will ensure faster resolution of long-pending issues and reduce legal hassles.
- Authority for contractual obligation: Provision in the Bill such as the creation of an Electricity Contract Enforcement Authority to supervise the fulfillment of contractual obligations under power purchase agreement, cost reflective tariffs and provision of subsidy through DBT are commendable.
Conclusion
Early passage of the Bill is critical as it will help unleash a path-breaking reform for bringing efficiency and profitability to the distribution sector.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Bhutan-China Border Agreement
In a step towards resolving their boundary disputes, Bhutan and China signed an agreement on a three-Step roadmap to help speed up talks to “break the deadlock” in negotiations.
Bhutan-China Border Issues
Bhutan shares an over 400-km-long border with China.
- Doklam: China wants to exchange the valleys to the north of Bhutan with the pasture land to the west (including Doklam), totalling 269 square kilometres.
- Jakarlung and Pasamlung valleys: located near Tibet to Bhutan’s North, which measure 495 sq. kms.
- Sakteng Wildlife Sanctuary Project: China claims this area (near to Arunachal Pradesh) in eastern Bhutan as its own.
What is the recent agreement?
- The roadmap “for Expediting the Bhutan-China Boundary Negotiations”, is expected to progress on the boundary talks process that has been delayed for five years.
- It was stalled due to the Doklam standoff in 2017, and then by the Covid Pandemic.
- Although China and Bhutan do not have official diplomatic relations they have engaged in 24 rounds of ministerial-level talks to resolve their border dispute.
Implications for India
The boundary issue between China and Bhutan is special because it not only relates to Bhutan but also has become a negative factor for China-India ties.
- China control much of the Doklam: Since the 2017 stand-off with India, Beijing has already strengthened its de facto control over much of the Doklam plateau, located strategically along the India-China-Bhutan trijunction.
- Bhutan supports it: This agreement has been equally endorsed and appreciated by Bhutan and China.
- Deadlock at LAC talks: Its timing is particularly significant New, given India-China border talks on their 17-month-old standoff at the Line of Actual Control appear to have hit an deadlock.
- India’s strategic risks: This has big implications for India, since the Doklam swap would have given China access to the strategically sensitive “chicken neck” of the Siliguri corridor.
India’s interest
(a) Doklam
- The Doklam plateau remains hugely critical for India due to the Siliguri Corridor that lies to the south of Doklam.
- The corridor, also known as the ‘Chicken’s Neck’, is a 22-km wide major arterial road connecting mainland India with its northeastern states and thus it is a highly sensitive area for China.
(b) Sakteng: the hotspot
- The Sakteng sanctuary adjoins West Kameng district and Tawang disticts in India’s Arunachal Pradesh state.
- Its strategic value lies in its proximity to Arunachal Pradesh, where China claims around 90,000 sq km of Indian territory.
- Tawang, the major bone of contention between India and China in the eastern sector of their border dispute, lies to the northeast of the Sakteng.
Conclusion
- Bhutan has to balance its ties with India as well as China.
- We need to explore channels that India can activate with Bhutan when it comes to the highly sensitive matter of settling the boundary dispute between them and China.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: CoP, UNFCCC
Mains level: Paris Agreement
The UK will host the COP 26 UN Climate Change Conference from October 31 to November 12.
Conference of Parties (CoP): A Backgrounder
- The CoP comes under the United Nations Climate Change Framework Convention (UNFCCC) which was formed in 1994.
- The UNFCCC was established to work towards “stabilisation of greenhouse gas concentrations in the atmosphere.”
- It laid out a list of responsibilities for the member states which included:
- Formulating measures to mitigate climate change
- Cooperating in preparing for adaptation to the impact of climate change
- Promoting education, training and public awareness related to climate change
- The UNFCCC has 198 parties including India, China and the USA. COP members have been meeting every year since 1995.
COP1 to COP25: Key takeaways
COP1: The first conference was held in 1995 in Berlin.
COP3: It was held in Kyoto, Japan, in 1997, the famous Kyoto Protocol (w.e.f. 2005) was adopted. It commits the member states to pursue limitation or reduction of greenhouse gas emissions.
COP8: India hosted the eighth COP in 2002 in New Delhi. It laid out several measures including, ‘strengthening of technology transfer… in all relevant sectors, including energy, transport and R&D, and the strengthening of institutions for sustainable development.
COP21: it is one of the most important that took place in 2015, in Paris, France. Here countries agreed to work together to ‘limit global warming to well below 2, preferably at 1.5 degrees Celsius, compared to pre-industrial levels.’
Significance of COP26
- The event will see leaders from more than 190 countries, thousands of negotiators, researchers and citizens coming together to strengthen a global response to the threat of climate change.
- It is a pivotal movement for the world to come together and accelerate the climate action plan after the COVID pandemic.
COP26 goals
According to the UNFCCC, COP26 will work towards four goals:
- Secure global net-zero by mid-century and keep 1.5 degrees within reach
- The UNFCCC recommends that countries ‘accelerate the phase-out of coal, curtail deforestation, speed up the switch to electric vehicles and encourage investment in renewables’ to meet this goal.
- Adapt to protect communities and natural habitats
- Countries will work together to ‘protect and restore ecosystems and build defences, warning systems and resilient infrastructure and agriculture to avoid loss of homes, livelihoods and even lives.’
- Mobilise finance
- To deliver on first two goals, developed countries must make good on their promise to mobilise at least $100bn in climate finance per year by 2020.
- Work together to deliver
- Another important task at the COP26 is to ‘finalise the Paris Rulebook’. Leaders will work together to frame a list of detailed rules that will help fulfil the Paris Agreement.
What India could do to reach its targets?
- Update NDCs: It is time for India to update its Nationally Determined Contributions or NDCs. (NDCs detail the various efforts taken by each country to reduce the national emissions)
- Effective planning: Sector by sector plans are needed to bring about development. We need to decarbonise the electricity, transport sector and start looking at carbon per passenger mile.
- Energy transition: Aggressively figure out how to transition our coal sector
- Robust legal framework: India also needs to ramp up the legal and institutional framework of climate change.
Try answering this PYQ:
With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct?
- The Agreement was signed by all the member countries of the UN and it will go into effect in 2017.
- The Agreement aims to limit the greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2 degree Centigrade or even 5 degree Centigrade above pre-industrial levels.
- Developed countries acknowledged their historical responsibility in global warming and committed to donate dollar 1000 billion a year from 2020 to help developing countries to cope with climate change.
Select the correct answer using the code given below:
(a) 1 and 3 only
(b) 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
Post your answers here.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Zeolite
Mains level: NA
To meet the demand of oxygen supply in the country during the peak of pandemic, the Defence Research and Development Organisation (DRDO) had chartered the Air India to import ‘Zeolite’ from different countries.
What are Zeolites?
- Zeolites are highly porous, 3-dimensional meshes of silica and alumina.
- In nature, they occur where volcanic outflows have met water.
- Synthetic zeolites have proven to be a big and low-cost boon.
Uses in Oxygen Concentrator
- One biomedical device that has entered our lexicon during the pandemic is the oxygen concentrator.
- This device has brought down the scale of oxygen purification from industrial-size plants to the volumes needed for a single person.
- At the heart of this technology are synthetic frameworks of silica and alumina with nanometer-sized pores that are rigid and inflexible.
- Beads of one such material, zeolite 13X, about a millimeter in diameter, are packed into two cylindrical columns in an oxygen concentrator.
How does it work?
- Zeolite performs the chemistry of separating oxygen from nitrogen in air.
- Being highly porous, zeolite beads have a surface area of about 500 square meters per gram.
- At high pressures in the column, nitrogen is in a tight embrace, chemically speaking, with the zeolite.
- Interaction between the negatively charged zeolite and the asymmetric nucleus (quadrupole moment) of nitrogen causes it to be preferentially adsorbed on the surface of the zeolite.
- Oxygen remains free, and is thus enriched.
- Once nitrogen is captured, what flows out from the column is 90%-plus oxygen.
- After this, lowering the pressure in the column releases the nitrogen, which is flushed out, and the cycle is repeated with fresh air.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Yudh Abhyas 2021
Mains level: India-US defense ties
The 17th edition of the India-U.S. bilateral exercise, Yudh Abhyas 2021, got underway in mountainous terrain and cold climate conditions of Alaska, US.
Yudh Abhyas 2021
- Exercise Yudh Abhyas is the largest running joint military training and defence cooperation endeavour between India and USA.
- The exercise aims at enhancing understanding, cooperation and interoperability between the two armies.
Why it is significant?
- Interestingly, this is the only India-U.S. service exercise continuing in bilateral format.
- The India-U.S. Malabar naval exercise became trilateral with the addition of Japan in 2015 and further brought in all the Quad partners together with the inclusion of Australia in 2020.
- Similarly, Japan joined the India-U.S. bilateral air exercise, Cope India, as an Observer in 2018 and the plan is to make it trilateral in phases.
- Other than the Malabar, Japan had sent observers for the first time during Cope India 2018 as an Observer in 2018. s
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now