Note4Students
From UPSC perspective, the following things are important :
Prelims level: James Webb Space Telescope
Mains level: Dark Ages of the Univers
On Dec 18, 2021, after years of delays, the James Webb Space Telescope is scheduled to launch into orbit and usher in the next era of astronomy.
James Webb Space Telescope
- JWST is a joint NASA–ESA–CSA space telescope that is planned to succeed the Hubble Space Telescope as NASA’s flagship astrophysics mission
- It is the most powerful space telescope ever built.
- It will enable a broad range of investigations across the fields of astronomy and cosmology, including observing some of the most distant events and objects in the universe,
- It would help understand events such as the formation of the first galaxies, and detailed atmospheric characterization of potentially habitable exoplanets.
Its significance
- Some have called JSWT the “telescope that ate astronomy.”
- It is said to look back in time to the Dark Ages of the universe.
What does the ‘Dark Ages’ of the universe mean?
- Evidence shows that the universe started with an event called the Big Bang 13.8 billion years ago, which left it in an ultra-hot, ultra-dense state.
- The universe immediately began expanding and cooling after the Big Bang.
- One second after the Big Bang, the universe was a hundred trillion miles across with an average temperature of an incredible 18 billion F (10 billion C).
- Around 400,000 years after the Big Bang, the universe was 10 million light-years across and the temperature had cooled to 5,500 F (3,000 C).
- Throughout this time, space was filled with a smooth soup of high-energy particles, radiation, hydrogen and helium.
- There was no structure. As the expanding universe became bigger and colder, the soup thinned out and everything faded to black.
This was the start of what astronomers call the Dark Ages of the universe.
How will JWST study this?
Ans. Looking for the first light
- The Dark Ages ended when gravity formed the first stars and galaxies that eventually began to emit the first light.
- Astronomers aim to study this fascinating and important era of the universe, but detecting first light is incredibly challenging.
- Compared to massive, bright galaxies of today, the first objects were very small and due to the constant expansion of the universe, they’re now tens of billions of light years away from Earth.
- Also, the earliest stars were surrounded by gas left over from their formation and this gas acted like fog that absorbed most of the light.
- It took several hundred million years for radiation to blast away the fog. This early light is very faint by the time it gets to Earth.
Try this PYQ:
Consider the following phenomena:
- Light is affected by gravity.
- The Universe is constantly expanding.
- Matter warps its surrounding space-time.
Which of the above is/are the predictions of Albert Einstein’s General Theory of Relativity, often discussed in media?
(a) 1 and 2 only
(b) 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NPK fertilizers, Soil Health Card
Mains level: Nutrient Based Subsidy (NBS) Scheme
The Cabinet Committee on Economic Affairs has approved the proposal of the Department of Fertilizers for fixation of Nutrient Based Subsidy Rates for P&K Fertilizers for the year last quarter of the year 2021-22.
An aspirant from rural agrarian background is quite habitual to hear about NPK 10-26-26, 20-20-0-13 & 12-32-16. They often get to find the plastic gunny bags mentioning this!
Nutrient Based Subsidy (NBS)
- The NBS Scheme for fertilizer was initiated in the year 2010 and is being implemented by the Department of Fertilizers.
- Under the scheme, a fixed amount of subsidy decided on an annual basis is provided on each grade of subsidized P&K fertilizers, except for Urea based on the nutrient content present in them.
- It is largely for secondary nutrients like N, P, S and K and micronutrients which are very important for crop growth and development.
- In India, urea is the only controlled fertilizer and is sold at a statutory notified uniform sale price.
What is NPK?
- So now that you know what the numbers on fertilizer mean, you need to know why NPK is important to your plants.
- All plants need nitrogen, phosphorus, and potassium to grow. Without enough of any one of these nutrients, a plant will fail.
- Nitrogen (N): It is largely responsible for the growth of leaves on the plant.
- Phosphorus (P): It is largely responsible for root growth and flower and fruit development.
- Potassium (K): It is a nutrient that helps the overall functions of the plant perform correctly.
- Knowing the NPK values of fertilizer can help you select one that is appropriate for the type of plant you are growing.
What NBS provides?
- Fixing MRP of NPK fertilizers: The scheme allows the manufacturers, marketers, and importers to fix the MRP of the Phosphatic and Potash fertilizers at reasonable levels.
- Maintaining stock level: The MRP will be decided considering the domestic and international prices of P&K fertilizers, inventory level in the country and the exchange rates.
- Inflation control: The NBS ensures that an adequate quantity of P&K is made available to the farmers at a statutory controlled price.
Issues with NBS
- Leaves urea: Urea which the most widely used, is left-out in the scheme and hence it remains under price control as NBS has been implemented only in other fertilizers.
- Cost on exchequer: Fertilizer subsidy is the second-biggest subsidy after food subsidy.
- Costs on Economy and Environment: The NBS policy is not only damaging the fiscal health of the economy but also proving detrimental to the soil health of the country.
- Black marketing: Subsidised fertilizers is getting diverted to bulk buyers/traders or even non-agricultural users such as plywood and animal feed makers.
Back2Basics: Soil Health Card (SHC)
- Soil Health Card (SHC) scheme is promoted by the Department of Agriculture & Co-operation under the Ministry of Agriculture and Farmers’ Welfare.
- An SHC is meant to give each farmer soil nutrient status of his/her holding and advice him/her on the dosage of fertilizers and also the needed soil amendments, that s/he should apply to maintain soil health in the long run.
- SHC is a printed report that a farmer will be handed over for each of his holdings.
- It will be made available once in a cycle of 2 years, which will indicate the status of soil health of a farmer’s holding for that particular period.
- The SHC given in the next cycle of 2 years will be able to record the changes in the soil health for that subsequent period.
Parameters of SHC:
- N, P, K (Macro-nutrients)
- Sulfur (S) (Secondary- nutrient)
- Zn, Fe, Cu, Mn, Bo (Micronutrients)
- pH, EC (Electrical conductivity) , OC (Organic content)
Try this PYQ:
The nation-wide ‘Soil Health Card Scheme’ aims at:
- expanding the cultivable area under irrigation.
- enabling the banks to assess the quantum of loans to be granted to farmers on the basis of soil quality.
- checking the overuse of fertilizers in farmlands.
Which of the above statements is/are correct?
(a) 1 and 2 only
(b) 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Taper tantrum
Mains level: Paper 3- MPC decision on interest rates
Context
The Monetary Policy Committee of the RBI kept the benchmark policy rates unchanged, and retained the accommodative stance in its October review.
Factors playing part in monetary policy decisions
- It’s important to remember that monetary policy these days is influenced by both local macroeconomic developments and the global monetary policy direction, with the former playing a dominant role.
- Locally, after the second wave of the pandemic, a variety of indicators such as the Purchasing Managers Index (manufacturing and services), mobility indicators, government tax collections, exports and imports are pointing at an improvement in economic activity.
- Then there is the good news on the monsoon front. With a late pick-up in rains, the cumulative deficiency in this monsoon season has come down to just 1 per cent of the long-period average (LPA).
- Since the MPC’s August 2021 policy review, Covid-19 cases have trended down and there has been admirable progress on the vaccination front.
- Also, despite high year-on-year growth numbers, the level of economic activity this fiscal will only be 1.5 per cent above 2019-2020.
Trends emerging from the economic recovery
- Role of government: Capital expenditure of both the Centre and states is on track to meet the budgetary commitment, supported by healthy tax collections.
- Large companies on recovery path: Large companies in industrial sectors such as steel, cement, non-ferrous metals are operating at healthy utilisation levels, and have deleveraged their balance sheets.
- Policy support for smaller companies: The going is not so good for the smaller ones.
- Clearly, smaller companies need policy support. The extension of the Emergency Credit Line Guarantee Scheme is a recognition of that.
- Private consumption is not broad-based either.
- Even in goods consumption, which is faring better than services, the nature of demand seems skewed towards relatively higher-value items such as cars and utility vehicles.
- This probably reflects the income dichotomy spawned by the pandemic.
- Inflation: Its fall to 5.3 per cent in August offers only limited comfort for two reasons.
- One, core and fuel inflation, which have 54 per cent weightage in CPI, remain stubbornly high.
- Second, food prices have nudged down overall inflation.
- Domestic growth-inflation dynamics suggest that the RBI has little option but to remain more tolerant of persistent price pressures, and hope that these will eventually prove transitory because they have been primarily driven by supply shocks caused by the pandemic.
Global monetary policy environment
- Globally, the monetary policy environment is veering towards normalisation/tapering/interest-rate rise largely due to an upward surprise in inflation, or because some central banks feel the objectives of quantitative easing have been met.
- Central banks in advanced economies such as Norway, Korea and New Zealand have recently raised rates.
- The two systemically important central banks — the US Federal Reserve (Fed) and the European Central Bank (ECB) — view the current spike in inflation as fleeting and have communicated greater tolerance for it for a longer period.
Conclusion
The process of mopping up excess liquidity will slowly gain pace over the next few months, followed by a policy rate hike sometime around early 2022. By then, there should be enough clarity on the third wave and the stance of the Fed and the ECB.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: AUKUS
Mains level: Paper 2-Relations with EU
Context
Last week’s in-person summit in Delhi was with the Danish prime minister, Mette Frederiksen.
Europe as a valuable partner
- Few Asian countries view Europe with strategic suspicion. Many in Asia see Europe as a valuable partner.
- As the deepening confrontation between the US and China begins to squeeze South East Asia, Europe is widely seen as widening the strategic options for the region.
- The perspective is similar in Delhi, which now sees Brussels as a critical element in the construction of a multipolar world.
- Cultivate Europe: As External Affairs Minister Subrahmanyam Jaishankar puts it, India’s strategy is to “engage America, manage China, cultivate Europe, reassure Russia, bring Japan into play”.
- EU’s Strategy for India: The EU outlined a strategy for India in 2018 to focus on four themes — sustainable economic modernisation, promotion of a rules-based order, foreign policy coordination, and security cooperation.
- At the summit in Portugal in May this year, the EU and India agreed to resume free trade talks and develop a new connectivity partnership that would widen options for the world beyond the Belt and Road Initiative.
- Rebalancing the international system: Above all, there is a recognition in both Delhi and Brussels that the India-EU strategic partnership is crucial for the rebalancing of the international system amidst the current global flux.
Possibilities with smaller European countries
- Europe looms so large in the Indian diplomatic agenda today and smaller European states draw unprecedented political attention from Delhi.
- That Denmark, a country of barely six million people, can establish a significant green partnership with India, is a reminder that smaller countries of Europe have much to offer in India’s economic, technological, and social transformation.
- Luxembourg brings great financial clout, Norway offers impressive maritime technologies, Estonia is a cyber power, Czechia has deep strengths in optoelectronics, Portugal is a window to the Lusophone world, and Slovenia offers commercial access to the heart of Europe through its Adriatic sea port at Koper.
- As India begins to realise this untapped potential, there are new openings with the 27-nation EU headquartered in Brussels.
EU’s important role in Indo-Pacific
- The EU’s Indo-Pacific strategy is likely to have a much greater impact on the region more immediately and on a wider range of areas than military security.
- Area’s of impact range from trade and investment to green partnerships, the construction of quality infrastructure to digital partnerships, and from strengthening ocean governance to promoting research and innovation.
- Defence and security are important elements of the EU’s Indo-Pacific strategy that “seeks to promote an open and rules-based regional security architecture, including secure sea lines of communication, capacity-building and enhanced naval presence in the Indo-Pacific.
- Whatever the specific circumstances of the AUKUS deal and its impact on France, the US wants all its partners, especially Europe, to contribute actively to the reconstitution of the Asian balance of power.
- Working with Quad: The EU strategy, in turn, sees room for working with the Quad in the Indo-Pacific, while stepping up security cooperation with a number of Asian partners, including India, Indonesia, Japan, the Republic of Korea, Singapore and Vietnam.
- India is conscious that Europe can’t match America’s military heft in the Indo-Pacific.
- But it could help strengthen the military balance and contribute to regional security in multiple other ways.
Consider the question “Delhi knows that Europe could significantly boost India’s capacity to influence future outcomes in the Indo-Pacific. It would also be a valuable complement to India’s Quad coalition”. Comment.
Conclusion
It was Russia that defined India’s discourse on the multipolar world after the Cold War. Today, it is Europe — with its much greater economic weight, technological strength, and normative power — that promises to boost India’s own quest for a multipolar world and a rebalanced Indo-Pacific.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: IEA
Mains level: Read the attached story
International Energy Agency (IEA) has invited India, the world’s third-largest energy consumer, to become its full-time member.
International Energy Agency (IEA)
- The IEA is an autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis.
- Based in Paris, IEA was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market.
- In the decades since, its role has expanded to cover the entire global energy system, encompassing traditional energy sources such as oil, gas, and coal as well as cleaner and faster growing ones such as solar PV, wind power and biofuels.
- It is best known for the publication of its annual World Energy Outlook.
Role and responsibility
- The Agency’s mandate has broadened to focus on providing analysis, data, policy recommendations and solutions to help countries ensure secure, affordable and sustainable energy for all.
- In particular, it has focused on supporting global efforts to accelerate the clean energy transition and mitigate climate change.
- The IEA has a broad role in promoting rational energy policies and multinational energy technology co-operation with a view to reaching net zero emissions.
India and IEA
- India, in March 2017, became an associate member of the Paris-based body which advises industrialised nations on energy policies.
- Today the IEA acts as a policy adviser to its member states, as well as major emerging economies such as Brazil, China, India, Indonesia and South Africa to support energy security and advance the clean energy transition worldwide.
Significance of the invitation
- This proposal if accepted will require New Delhi to raise strategic oil reserves to 90 days requirement.
- India is becoming increasingly influential in global energy trends.
Try this MCQ:
Q.The Global Energy Transition Index recently seen in news is released by:
a) International Energy Agency (IEA)
b) World Economic Forum (WEF)
c) International Renewable Energy Agency (IRENA)
d) International Solar Alliance
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Patrolling Points along LAC
Mains level: LAC issues
The standoffs between Indian and Chinese troops in Ladakh on the Line of Actual Control (LAC), where initial steps towards disengagement have taken place, are around a number of patrolling points or PPs in Galwan, Hot Springs and Gogra areas.
What exactly are Patrolling Points?
- PPs are patrolling points identified and marked on the LAC, which are patrolled with a stipulated frequency by the security forces.
- They serve as a guide to the location of the LAC for the soldiers, acting as indicators of the extent of ‘actual control’ exercised on the territory by India.
- By regularly patrolling up to these PPs, the Indian side is able to establish and assert its physical claim about the LAC.
Are all the Patrolling Points numbered?
- Some of the PPs are prominent and identifiable geographical features, such as a pass, or a nala junction where no numerals are given.
- Only those PPs, where there are no prominent features, are numbered as in the case of PP14 in Galwan Valley.
Are all on the Patrolling Points bang on the LAC?
- Mostly, yes. Except for the Depsang plains in northern Ladakh, where PP10, PP11, PP11A, PP12 and PP13 – from Raki Nala to Jivan Nala – do not fall on the LAC.
- These are short of the LAC, on the Indian side.
Are these Patrolling Points not manned?
- The PPs are not posts and thus not manned.
- Unlike on the Line of Control (LoC) with Pakistan, the border with China is not physically held by the Army all along.
- They are just physical markers on the ground, chosen for their location and have no defensive potential or tactical importance for the Army.
If the Patrolling Points are not manned, how is the claim actually asserted?
- The claim is asserted by the Army or joint Army-ITBP patrols as they show more visible presence in these areas.
- This is done by physically visiting PPs with a higher frequency, as the deployment has moved closer to the LAC and due to improved infrastructure.
- As the Chinese may not see when the Indian patrols visit these PPs, they will leave come cigarette packets or food tins with Indian markings behind.
- That lets the Chinese know that Indian soldiers had visited the place, which indicates that India was in control of these areas.
Who has given these Patrolling Points?
- These PPs have been identified by the high-powered China Study Group, starting from 1975 when patrolling limits for Indian forces were specified.
- It is based on the LAC, after the government accepted the concept in 1993, which is also marked on the maps with the Army in the border areas.
- But the frequency of patrolling to PPs is not specified by the CSG – it is finalised by the Army Headquarters in New Delhi, based on the recommendations made by the Army and ITBP.
What is this frequency?
- The frequency of reaching various PPs are given in the annual patrolling programme.
- Based on the terrain, the ground situation and the location of the LAC, the duration for visiting each PP is specified – it can vary from once a month to twice a year.
Major friction area: Hot Springs
- Hot Springs lies in the Chang Chenmo River valley, close to Kongka La, a pass that marks the Line of Actual Control.
- India’s Patrolling Point 15, it is not a launchpad for any offensive action though the area did see action before and during the 1962 war.
- China’s unwillingness to pull back its platoon-sized unit from Hot Springs is a sign of the difficulties that lie in normalising the situation.
- The PLA has traditionally had a major base east of Kongka La.
- The pass also marks the border between two of China’s most sensitive provinces — Xinjiang to the north and Tibet to the south.
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From UPSC perspective, the following things are important :
Prelims level: Natural Experiments, Nobel Prize
Mains level: Not Much
The 2021 Nobel Prize in Economic Sciences was awarded to three US-based economists.
Do you know?
The Nobel Prize is officially called as Sveriges Riksbank Prize!
Who are the awardees?
- Nobel Committee awarded half the Prize to David Card for his “empirical contributions to labour economics”
- Other half to Guido Imbens and Joshua Angrist “for their methodological contributions to the analysis of causal relationships”
What makes this year’s award special?
- This is the first time the economic prize has been divided in this fashion with one half going to one awardee and other half divided across two awardees.
- In the past, prize money was divided equally between the awardees even if the prize was for different topics as is the case this time around.
- It may appear that the Nobel Prize has been given for two different contributions, but there is a common theme: “natural experiments.”
What are Natural Experiments?
- Economists are often interested in causal questions such as the impact of education on incomes, impact of COVID-19 on poverty and so on.
- They are also interested is understanding the direction of causality.
- Economists have used two kinds of experiments to study these causality and direction of causality questions: random experiments and natural experiments.
(I) Random experiments
- Under randomized experiments, the researchers allocate say medicines to a treatment group and compare the effect of the medicine with the control group which is not given the medicine.
- In 2019, the Nobel Committee gave awards to three scholars for their contribution to the field of randomized experiments.
- However, one cannot randomize experiments to study issues such as why certain people and regions are more unequal or have fewer educational opportunities and so on.
(II) Natural experiments
- In natural experiments, economists study a policy change or a historical event and try to determine the cause and effect relationship to explain these developments.
- The trio used such natural experiments to make some landmark contributions to economic development.
- Natural experiments are more difficult for two reasons. The first is to identify what will serve as a natural experiment.
- Second, in a random experiment, the researcher knows and controls the treatment and control groups which allows them to study the cause and effect of medicine.
- But in natural experiments, such clear differentiation is not possible because people choose their groups on their own and even move between the two groups.
- Despite the limitations, the researchers could use the natural setting to answer some big policy questions.
Natural experiments conducted by David Card
- One question of interest for policymakers is to understand the impact of higher minimum wages on employment.
- Earlier studies showed that increasing minimum wages leads to lower unemployment.
- Economists were also not sure of the direction of causation between minimum wages and employment.
- Say a slowdown in the economy leads to higher unemployment amid lower income groups.
- This could lead to lower income groups demanding higher minimum wages. In such a case, it is higher unemployment which leads higher minimum wages.
Contribution of Angrist and Imbens
- Angrist and Imbens showed how natural experiments can be used to identify cause and effect precisely.
- We have discussed above how natural experiments make it difficult to separate control and treatment groups. This makes it difficult to establish causal relations.
- In the 1990s, the duo developed a methodology – Local Average Treatment Effect (or LATE) – which uses a two-step process to help grapple with these problems of natural experiments.
- Say, one is interested in finding the impact of an additional year of schooling on the incomes of people.
- By using the LATE approach, they showed that effect on income of an additional year of education is around 9%.
- While it may not be possible to determine individuals in the group, one can estimate the size of the impact.
What is the importance of the award today?
- Earlier it was difficult to identify natural experiments and even if one identified them, it was difficult to generate data from these experiments.
- With increased digitalization and dissemination of archival records, it has not just become easier to identify natural experiments but also get data.
- Economists have been using natural experiments to help us understand the impact of past policies.
- As the 2020 pandemic struck, economists used the natural experiments approach extensively to analyse how previous pandemics impacted different regions and tried to draw policy lessons.
India context
- The methodology date back to the early and mid-90s and they have already had a tremendous influence on the research undertaken in several developing countries such as India.
- For instance, in India, too, it is commonly held that higher minimum wages will be counterproductive for workers.
- It is noteworthy that last year, in the wake of the Covid-induced lockdowns, several states, including UP, had summarily suspended several labour laws.
- This included the ones regulating minimum wages, arguing that such a move will boost employment.
- The main learning is that minimum wages can be increased in India without worrying about reducing employment.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Indian Space Association (ISpA)
Mains level: Commercial space exploration in India
The PM has launched the Indian Space Association (ISpA), an industry body consisting of various stakeholders of the Indian space domain.
Indian Space Association (ISpA)
- The ISpA is a premier industry association of space and satellite companies, which aspires to be the collective voice of the Indian space industry.
- It will be headed by retired Lieutenant General AK Bhatt, who will be its Director General.
- It will target to undertake policy advocacy and engage with all stakeholders in the Indian space domain. It will engage with the government and all its agencies.
Why is the formation of ISpA significant?
- Million-dollar industry: Governments across the world have poured millions of dollars to push the envelope in term of exploring the edges of the space.
- Collaborated research: With time, governments and government agencies collaborated to explore newer planets and galaxies in search of life forms that exist outside Earth.
- Private players involvement: In the recent past, private sector companies such as Elon Musk’s SpaceX, Richard Branson’s Virgin Galactic, and Jeff Bezos’ Blue Origin have taken the lead in spaceflight.
- Easing workload on ISRO: Though India too has made significant strides in space exploration over time, state-run ISRO has been at the centre and front of this progress.
What does ISpA aim to achieve?
- Supplementing space research: One of the main goals of the organisation is to supplement the government’s efforts towards making India a global leader in commercial space-based excursions.
- Commercial space exploration: ISpA said it would engage with stakeholders across the ecosystem for the formulation of an enabling policy framework which fulfills the government vision of leading commercial space exploration.
- Establishing global linkages: ISpA will also work towards building global linkages for the Indian space industry to bring in critical technology and investments into the country to create more high skill jobs.
Who are the stakeholders in this organisation? How will they contribute?
- ISpA will be represented by leading domestic and global corporations that have advanced capabilities in space and satellite technologies.
- It has taken off with several Indian and international companies betting on it as the next frontier to provide high-speed and affordable Internet connectivity to inaccessible areas as well.
- This includes SpaceX’s StarLink, Sunil Bharti Mittal’s OneWeb, Amazon’s Project Kuiper, US satellite maker Hughes Communications, etc.
- OneWeb, for example, is building its initial constellation of 648 low-earth orbit satellites and has already put 322 satellites into orbit.
Why is satellite-based Internet important in India?
- The expansion of the Internet in India is crucial to the Modi government’s dream of a digital India where a majority of government services are delivered directly to the customer.
- The government aims to connect all villages and gram panchayats with high-speed Internet over the next 1000 days through BharatNet.
- However, internet connectivity in hilly areas and far-flung places of Northeast India are still a challenge.
- To overcome this, industry experts suggest that satellite Internet will be essential for broadband inclusion in remote areas and sparsely populated locations where terrestrial networks have not reached.
- Satellite communications remain limited to use by corporates and institutions that use it for emergency use, critical trans-continental communications and for connecting to remote areas with no connectivity.
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From UPSC perspective, the following things are important :
Prelims level: Dhole
Mains level: NA
A recent study has identified some priority talukas/tehsils where habitats can be consolidated to enhance population connectivity for the dhole or Asiatic Wild Dog (Cuon alpinus).
About Dhole
Wildlife (Protection) Act, 1972: Schedule II (Absolute protection – offences under these are prescribed the highest penalties.)
IUCN: Endangered
- The dhole is a canid native to Central, South, East Asia, and Southeast Asia.
- India perhaps supports the largest number of dholes, with key populations found in three landscapes — Western Ghats, Central India and Northeast India.
- It is a highly social animal, living in large clans without rigid dominance hierarchies and containing multiple breeding females.
Their significance
- Dholes play an important role as apex predators in forest ecosystems.
- Factors contributing to this decline include habitat loss, loss of prey, competition with other species, persecution due to livestock predation and disease transfer from domestic dogs.
Try answering this PYQ:
Which one of the following groups of animals belongs to the category of endangered species?
(a) Great Indian Bustard, Musk Deer, Red Panda, Asiatic Wild Ass
(b) Kashmir Stag, Cheetah, Blue Bull, Great Indian Bustard.
(c) Snow Leopard, Swamp Deer, Rhesus Monkey, Saras (Crane)
(d) Lion Tailed Macaque, Blue Bull, Hanuman Langur, Cheetah
Post your answers here.
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From UPSC perspective, the following things are important :
Prelims level: Trends in global trade post covid
Mains level: Slowdown in China and opportunities for India
The World Trade Organization (WTO) has upgraded its world merchandise trade growth outlook to nearly 11 percent for this year, higher than 8% estimated in March.
About WTO
- The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade between nations.
- Governments use the organization to establish, revise, and enforce the rules that govern international trade.
- It officially commenced operations on 1 January 1995, pursuant to the 1994 Marrakesh Agreement, thus replacing the General Agreement on Tariffs and Trade (GATT) that had been established in 1948.
- The WTO is the world’s largest international economic organization, with 164 member states representing over 96% of global trade and global GDP.
- The WTO facilitates trade in goods, services and intellectual property among participating countries.
- It prohibits discrimination between trading partners, but provides exceptions for environmental protection, national security, and other important goals.
Report on Global trade
- According to a WTO, global goods trade is expected to grow by 10.8 per cent compared to the forecast of 8 per cent in March, but with varied recovery, depending on the region.
- The report said export volume growth in 2021 will be 8.7 per cent in North America, 7.2 per cent in South America, 9.7 per cent in Europe, 7 per cent in Africa, 5 per cent in West Asia and the highest for Asia at 14.4 per cent.
- On the other hand, imports are expected to grow at a faster pace as compared to exports. Inbound shipments into North America are set to grow by 12.6 per cent.
- It will be 19.9 per cent in South America, 9.1 per cent in Europe, 13.1 per cent in CIS, 11.3 per cent in Africa, 9.3 per cent in West Asia and 10.7 per cent in Asia.
Key highlights for India
- Exports from India have been rising consistently over the last few quarters, after plummeting for a few months as the outbreak of Covid-19 disrupted global trade.
- India’s exports to its top trading partners such as the US, European Union, nations in West Asia, among others, are expected to rise.
- Exports data during the first six months of the current fiscal year is emblematic of the fact that external demand has been robust.
- Besides, supply-side disruptions can also be exacerbated by the rapid and unexpectedly strong recovery of demand in advanced and many emerging economies.
Competing with China
- Experts said with rising global demand, India should be able to compete in various segments vis-a-vis China.
- Currently, China is facing supply-side as well as demand-side issues owing to several internal challenges (energy, debt crisis).
- Therefore, India is in a good position to increase its exports, and can become a substitute for China across various product categories or sectors.
- India can take advantage of the increasing global demand, which can ultimately translate into demand for Indian exports.
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From UPSC perspective, the following things are important :
Prelims level: Global Minimum Tax, BEPS
Mains level: Global Minimum Tax Debate
A global deal to ensure big companies pay a minimum tax rate of 15% and make it harder for them to avoid taxation has been agreed by 136 countries.
What is the news?
- The OECD said four countries – Kenya, Nigeria, Pakistan and Sri Lanka – had not yet joined the agreement.
- However, the countries behind the accord together accounted for over 90% of the global economy.
Why a global minimum tax?
- With budgets strained after the COVID-19 crisis, many governments want more than ever to discourage multinationals from shifting profits – and tax revenues – to low-tax countries.
- Increasingly, income from intangible sources such as drug patents, software and royalties on intellectual property has migrated to these jurisdictions.
- This has allowed companies to avoid paying higher taxes in their traditional home countries.
- The minimum tax and other provisions aim to put an end to decades of tax competition between governments to attract foreign investment.
How would a deal work?
- The global minimum tax rate would apply to overseas profits of multinational firms with 750 million euros ($868 million) in sales globally.
- Govts could still set whatever local corporate tax rate they want.
- However, buif companies pay lower rates in a particular country, their home governments could “top up” their taxes to the 15% minimum, eliminating the advantage of shifting profits.
- A second track of the overhaul would allow countries where revenues are earned to tax 25% of the largest multinationals’ so-called excess profit – defined as profit in excess of 10% of revenue.
What happens next?
- The next step is for finance ministers from the Group of 20 economic powers to formally endorse the deal, paving the way for adoption by G20 leaders at an end October summit.
- Nonetheless, questions remain about the US position which hangs in part on a domestic tax reform the Biden administration wants to push through the US Congress.
- The agreement calls for countries to bring it into law in 2022 so that it can take effect by 2023, an extremely tight timeframe given that previous international tax deals took years to implement.
- Countries that have in recent years created national digital services taxes will have to repeal them.
What will be the economic impact?
- The OECD, which has steered the negotiations, estimates the minimum tax will generate $150 billion in additional global tax revenues annually.
- Taxing rights on more than $125 billion of profit will be additionally shifted to the countries were they are earned from the low tax countries where they are currently booked.
- Economists expect that the deal will encourage multinationals to repatriate capital to their country of headquarters, giving a boost to those economies.
- However, various deductions and exceptions baked into the deal are at the same time designed to limit the impact on low tax countries like Ireland, where many US groups base their European operations.
Back2Basics: Base Erosion and Profit Shifting (BEPS)
- BEPS refers to corporate tax planning strategies used by multinationals to “shift” profits from higher-tax jurisdictions to lower-tax jurisdictions.
- It thus “erodes” the “tax base” of the higher-tax jurisdictions.
- Corporate tax havens offer BEPS tools to “shift” profits to the haven, and additional BEPS tools to avoid paying taxes within the haven.
- It is alleged that BEPS is associated mostly with American technology and life science multinationals.
Try this:
Q.3) What are the factors that led to the demand of global minimum corporate tax? What will be its implications for India? (10 Marks)
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paddy straw as animal fodder
Punjab has now proposed to use the paddy crop residue as fodder for animals, especially cattle.
Why such a move?
- In Punjab, the total availability of paddy straw is about 20 million tones per annum.
- The total value of this straw is Rs 400 crore approx., calculated on an average rate of Rs 200/quintal. Almost all of it is burnt in fields.
- This accounts for economic loss apart from the loss of 77,000 tonnes of nitrogen and 5.6 million tonnes of Total Digestible Nutrients (TDN) which could be used for ruminant production.
- Also nearly 30.4 per cent of rice straw is used for animal feed in Southeast Asia, Mongolia and China.
Economics behind paddy straw
- High silica and lignin content reduces its digestive properties.
- Higher selenium content in paddy straw also limits its use as fodder in animals as compared to wheat straw.
- However, if given in moderate quantities (up to 5 kg per animal per day), selenium poses no health hazard to the animal.
- Paddy straw also contains oxalates (2-2.5%) which leads to calcium deficiency so mineral mixture should always be fed along with the straw.
Treatments for feeding paddy straw to animals
- Paddy Straw cannot be directly fed to animals. It has to undergo some treatments.
- Two of them are: Urea-only treatment and urea plus molasses treatment.
[A] Urea treatment of paddy straw
- 14 kg of urea is dissolved in 200 litres water and spray on chopped paddy straw.
- The fermented straws have soft texture with 6.0-8.0 per cent crude protein, 3.0-4.0 percent DCP and 55-60 per cent TDN.
- This involves a combination of physical, chemical and biological treatments.
- The paddy straw is chaffed and moistened (physical) with urea solution (chemical).
- The breakdown of urea release ammonia gas, a part of which is utilised by microbes (biological) for their proliferation (enriching the straw with microbial protein).
- This in turn results in breakage of lingo-cellulosic bonds making cellulose and hemi-cellulose assessable for utilization by microbes in the rumen.
- The digestibility of cellulose increases from 40-45% in untreated paddy straw to 70-75 per cent in fermented wheat straw.
[B] Urea plus molasses treatment
- Also called “Urea-Molasses impregnated straw”, this method involves treating paddy straw with urea and molasses.
- Urea 1 kg and molasses 3 kg was mixed thoroughly and mixed with water 10 kg. This is mixed with chaffed paddy straw and fed to animals on same day.
- The experts however clarify that for maintenance of body weight in animals, paddy straw alone is not sufficient.
- Minerals and green fodder supplementation is required.
How does the nutritional value of paddy straw increase after urea treatment?
- The TDN values in urea treated paddy straw increased manifold as compared to untreated straw.
- Crude protein (CP) increased from 4.5% to 8%, digestible crude protein (DCP) from 1.5% to 4% and total digestible nutrients (TDN) from 40% to 55%.
- The feeding of urea treated straw (6 kg/day) to lactating buffaloes giving about 10 kg milk/day can result in saving about 60 per cent of oilseed cake in the ration.
- Feeding of paddy straw should be mixed with berseem, cowpea or Lucerne as it forms a maintenance ration.
- The straw should be fed with concentrate mixture and additional DCP or limestone should be given to the animals to reduce the effect of oxalates.
- Oxalates also interfere in carbohydrate metabolism perhaps due to non-availability of calcium as cofactor.
What are the potentially harmful effects?
- The intake of siliceous forages has been associated with urinary siliceous calculi in drier regions where water may be limited.
- There have been no definitive studies in India, but urinary calculi are associated with rice straw consumption.
- It has high selenium (0.5 to 4.5 % ) content which can cause serious health problems in dairy animals.
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From UPSC perspective, the following things are important :
Prelims level: Olivine, Bridgmanite
Mains level: Formation of Earth
The researchers from the Geological Survey of India collected about 30 meteorite fragments with the largest weighing around a kilogram near the town of Katol in Nagpur in 2012.
Significance of meteor study
- Now, by studying the composition of these meteorite fragments, researchers have unraveled the composition expected to be present in the Earth’s lower mantle which is at about 660 km deep.
- Studying the meteorite could also tell us more about how our Earth evolved from being a magma ocean to a rocky planet.
Key component of the Meteor: Olivine
- Initial studies revealed that the host rock was mainly composed of olivine, an olive-green mineral.
- Olivine is the most abundant phase in our Earth’s upper mantle.
- Our Earth is composed of different layers including the outer crust, followed by the mantle and then the inner core.
How to study a meteorite?
- The researchers took a small sample of the meteorite and examined it using special microscopy techniques.
- The mineralogy was determined using a laser micro-Raman spectrometer.
- These techniques helped the team identify, characterise the crystal structure of the meteorite and determine its chemical composition and texture.
What does the new study show?
- The international team of scientists examined a section of this highly-shocked meteorite. It resembles to the first natural occurrence of a mineral called bridgmanite.
- The mineral was named in 2014 after Prof. Percy W. Bridgman, recipient of the 1946 Nobel Prize in Physics.
- Various computational and experimental studies have shown that about 80% of the Earth’s lower mantle is made up of bridgmanite.
- By studying this meteorite sample, scientists can decode how bridgmanite crystallized during the final stages of our Earth’s formation.
Bridgmanite: On Earth vs. on Meteorite
- Katol meteorite is a unique sample and it is a significant discovery.
- The bridgmanite in the meteorite was found to be formed at pressures of about 23 to 25 gigapascals generated by the shock event.
- The high temperature and pressure in our Earth’s interior have changed over billions of years causing crystallisation, melting, remelting of the different minerals before they reached their current state.
- It is important to study these individual minerals to get a thorough idea of how and when the Earth’s layers formed.
How does it help understand evolution of Earth?
- The inner planets or terrestrial planets or rocky planets Mercury, Venus, Earth, and Mars are formed by accretion or by rocky pieces coming together.
- They were formed as a planet by increased pressure and high temperature caused by radioactive elements and gravitational forces.
- Our Earth was an ocean of magma before the elements crystallised and stabilised and the different layers such as core, mantle were formed.
- The heavier elements like iron went to the core while the lighter silicates stayed in the mantle.
- By using the meteorite as an analog for Earth, we can unearth more details about the formation.
Answer this question from our AWE initiative:
What are seismic waves? How have they helped in understanding the structure of the earth? (250 W/ 15 M)
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From UPSC perspective, the following things are important :
Prelims level: Hermann Bacher
Mains level: Watershed development in India
Hermann Bacher, popularly known as the ‘father of community-led watershed development in India’, passed away at the ripe old age of 97 years in Switzerland September 14, 2021.
Hermann Bacher
- Born in 1924, Bacher, came to India in 1948 at the young age of 24 years.
- He was to spend the next 60 years of his life here, most of it in Maharashtra.
- Struck by the poverty he saw in rural Maharashtra, he dedicated his life to the upliftment of the poor, the landless and rural women.
- Bacher was given Germany’s highest civilian award, the Federal Cross of the Order of Merit in 1994, in recognition of his outstanding efforts.
- In 2017, the United Nations Convention to Combat Desertifiucation (UNCCD) awarded WOTR the prestigious ‘Land for Life Award 2017’.
- He is widely regarded and respected as a true ‘man of God’ for whom selfless service of the poor was worship at its most sublime. He is fondly remembered as ‘Bacher Baba’.
Notable works
- The 1972 droughts in Maharashtra led him to re-calibrate his developmental approach.
- This meant that in rain-dependent rural Maharashtra, a shift had to be made from ‘resource exploitation’ to sustainable resource use, or ‘resource mobilisation’, as he described it.
- He helped thousands of landless labourers’ secure title to land under the Land Reforms Act, 1957, beginning in 1965.
- He also organised lakhs of farmers to develop their farms and increase their agricultural productivity by helping them access irrigation, improved and hybrid seeds etc.
Pioneering water harvest
- Since rain fell in the watersheds and landscapes villagers lived in, the only way to harvest and conserve rainwater wherever it fell was to undertake watershed development measures.
- The idea was that “running water must be made to walk; walking water made to stop and sink underground”.
- This meant, planting trees and grasses, conserving forests, undertaking soil and water conservation works such as digging contour trenches, raising farm bunds, etc.
- It also meant building water harvesting structures on the streams (check dams, earthen bunds, etc) in a systematic manner across the entire landscape of the village, beginning from the top.
Establishing the IGWDP
- Through his work, was born the idea which later became the large-scale Indo-German Watershed Development Program (IGWDP) that he conceived and launched in Maharashtra in 1989.
- This was in collaboration with and the support of the Governments of India, Maharashtra and Germany, NABARD and the non-profit sector.
- Its unique and ground-breaking feature was that it put the villagers in the driver’s seat — the community would plan the programme, implement it and maintain the watershed assets.
- Funds, substantial amounts, would be given directly to them and they would have to manage and account
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From UPSC perspective, the following things are important :
Prelims level: LNT Model
Mains level: Not Much
The U.S. Nuclear Regulatory Commission (NRC) decisively upheld the Linear No-Threshold (LNT) model to prescribe radiation safety standards, ending the protracted controversy on the topic.
What is the LNT Model?
- The LNT is a dose-response model used in radiation protection to estimate stochastic health effects such as radiation-induced cancer, genetic mutations etc. on the human body due to exposure to ionizing radiation.
- The LNT model states that biological effects such as cancer and hereditary effects due to exposure to ionising radiation increase as a linear function of dose, without threshold.
- It provides a sound regulatory basis for minimizing the risk of unnecessary radiation exposure to both members of the public and radiation workers.
Why in news?
- LNT model continues to provide a sound basis for a conservative radiation protection regulatory framework that protects both the public and occupational workers.
- The model helps the agencies to regulate radiation exposures to diverse categories of licensees, from commercial nuclear power plants to individual industrial radiographers and nuclear medical practices.
- There are also studies and findings that support the continued use of the LNT model, including those by national and international authoritative scientific advisory bodies.
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From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Taiwan issue and implications for the Indo-Pacific region
Context
If the rising confrontation between the United States and China erupts into a clash of arms, the likely arena may well be the Taiwan Strait.
Historical background of the Taiwan issue
- The Guomindang (KMT) forces under Chiang Kai-shek lost the 1945-49 civil war to the Chinese Communist Party (CCP) in 1949. forces under Mao Zedong.
- Chiang retreated to the island of Taiwan and set up a regime that claimed authority over the whole of China and pledged to recover the mainland eventually.
- The CCP in turn pledged to reclaim what it regarded as a “renegade” province and achieve the final reunification of China.
- Role of the U.S.: Taiwan could not be occupied militarily by the newly established People’s Republic of China (PRC) as it became a military ally of the United States during the Korean War of 1950-53.
- This phase came to an end with the U.S. recognising the PRC as the legitimate government of China in 1979, ending its official relationship with Taiwan and abrogating its mutual defence treaty with the island.
- Strategic ambiguity policy of the US: Nevertheless, the U.S. has declared that it will “maintain the ability to come to Taiwan’s defence” while not committing itself to do so.
- This is the policy of “strategic ambiguity”.
- The PRC has pursued a typical carrot and stick policy to achieve the reunification of Taiwan with the mainland.
- It has held out the prospect, indeed preference for peaceful reunification, through promising a high degree of autonomy to the island under the “one country two systems”.
- The “one country two systems” formula first applied to Hong Kong after its reversion to Chinese sovereignty in 1997.
China-Taiwan economic links
- Taiwan business entities have invested heavily in mainland China and the two economies have become increasingly integrated.
- Between 1991 and 2020, the stock of Taiwanese capital invested in China reached U.S. $188.5 billion and bilateral trade in 2019 was U.S. $150 billion, about 15% of Taiwan’s GDP.
- By the same token, China is capable of inflicting acute economic pain on Taiwan through coercive policies if the island is seen to drift towards an independent status.
Prospects for peaceful reunification
- Taiwan has two major political parties.
- The KMT, dominated by the descendants of the mainlanders remains committed to a one-China policy.
- The Democratic Progressive Party (DPP), on the other hand, is more representative of the indigenous population of the island, and favours independence.
- Faced with aggressive threats from China and lack of international support, the demand for independence has been muted.
- Ever since the DPP under Tsai Ing-wen won the presidential elections in 2016, China has resorted to a series of hostile actions against the island, which include economic pressures and military threats.
- One important implication of this development is that prospects for peaceful unification have diminished.
- Sentiment in Taiwan in favour of independent status has increased.
Role of the US
- While the U.S. does not support a declaration of independence by Taiwan, it has gradually reversed the policy of avoiding official-level engagements with the Taiwan government
- The first breach occurred during the Donald Trump presidency.
- The Joe Biden officials have continued this policy.
- The Taiwanese representative in Washington was invited to attend the presidential inauguration ceremony (Biden), again a first since 1979.
- Reports have now emerged that U.S. defence personnel have been, unannounced, training with their Taiwanese counterparts for sometime.
Implications for Quad and India
- The recent crystallisation of the Quad, of which India is a part, and the announcement of the AUKUS, with Australia being graduated to a power with nuclear-powered submarines, may act as a deterrent against Chinese moves on Taiwan.
- But they may equally propel China to advance the unification agenda before the balance changes against it in the Indo-Pacific.
- For these reasons, Taiwan is emerging as a potential trigger point for a clash of arms between the U.S. and China.
Consider the question “What are the implications of Taiwan issue and the US involvement in it for India?”
Conclusion
In pursuing its Indo-Pacific strategy, India would do well to keep these possible scenarios in mind.
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From UPSC perspective, the following things are important :
Prelims level: Fertigation
Mains level: Paper 3- Emissions from agriculture and related issues
Context
The UK is set to host the 26th UN Climate Change Conference of the Parties (CoP26) in Glasgow from October 31 to November 12 with a view to accelerate action towards the Paris Agreement’s goals. The focus should be on climate finance and transfer of green technologies at low cost.
Cause of concern for India
- According to the Global Carbon Atlas, India ranks third in total greenhouse gas emissions by emitting annually around 2.6 billion tonnes (Bt) CO2eq, preceded by China (10 Bt CO2eq) and the United States (5.4 Bt CO2eq), and followed by Russia (1.7Bt) and Japan (1.2 Bt).
- India ranked seventh on the list of countries most affected due to extreme weather events, incurring losses of $69 billion (in PPP) in 2019 (Germanwatch, 2021).
- The fact that 22 of the 30 most polluted cities in the world are in India is a major cause of concern.
- Delhi is the world’s most polluted capital as per the World Air Quality Report, 2020.
Issues raised in global negotiation on climate change
- Nations are still quibbling about historical global emitters and who should take the blame and fix it.
- Global negotiations on climate change often talk about emissions on a per capita basis and the emission intensity of GDP.
- Per capita emission: Of the top five absolute emitters, the US has the highest per capita emissions (15.24 tonnes), followed by Russia (11.12 tonnes).
- India’s per capita emissions is just 1.8 tonnes, significantly lower than the world average of 4.4 tonnes per capita.
- If one takes emissions per unit of GDP, of the top five absolute emitters, China ranks first with 0.486 kg per 2017 PPP $ of GDP, which is very close to Russia at 0.411 kg per 2017 PPP $ of GDP.
- India is slightly above the world average of 0.26 (kg per 2017 PPP $ of GDP) at 0.27 kg, while the USA is at 0.25, and Japan at 0.21.
- In our Nationally Determined Contributions (NDCs) submitted in 2016, India committed to “reduce emission intensity of its GDP by 33 to 35 per cent by 2030 from 2005 level.”
Sector-wise emission and share of agriculture in it
- Global emissions show that electricity and heat production and agriculture, forestry and other land use make up 50 per cent of the emissions.
- But the emissions pie in India owes its largest chunk (44 per cent) to the energy sector, followed by the manufacturing and construction sector (18 per cent), and agriculture, forestry and land use sectors (14 per cent), with the remaining being shared by the transport, industrial processes and waste sectors.
- The share of agriculture in total emissions has gradually declined from 28 per cent in 1994 to 14 per cent in 2016.
- However, in absolute terms, emissions from agriculture have increased to about 650 Mt CO2 in 2018, which is similar to China’s emissions from agriculture.
- Agricultural emissions in India are primarily from the livestock sector (54.6 per cent) in the form of methane emissions due to enteric fermentation and the use of nitrogenous fertilisers in agricultural soils (19 per cent) which emit nitrous oxides; rice cultivation (17.5 per cent) in anaerobic conditions accounts for a major portion of agricultural emissions followed by livestock management (6.9 per cent) and burning of crop residues (2.1 per cent).
Way forward: Carbon policy for agriculture
- Reward farmers through carbon credit: A carbon policy for agriculture must aim not only to reduce its emissions but also reward farmers through carbon credits which should be globally tradable.
- Focus on livestock: With the world’s largest livestock population (537 million), India needs better feeding practices with smaller numbers of cattle by raising their productivity.
- Switch areas from rice to maize: While direct-seeded rice and alternative wet and dry practices can reduce the carbon footprint in rice fields, the real solution lies in switching areas from rice to maize or other less water-guzzling crops.
- Efficient fertiliser use: Agricultural soils are the largest single source of nitrous oxide (N2O) emissions in the national inventory.
- Nitrous oxide emissions from use of nitrogen-fertiliser increased by approximately 358 per cent during 1980-81 to 2014-15.
- An alternative for better and efficient fertiliser use would be to promote fertigation and subsidise soluble fertilisers.
- Incentives and subsidies: The government should incentivise and give subsidies on drips for fertigation, switching away from rice to corn or less water-intensive crops, and promoting soluble fertilisers at the same rate of subsidy as granular urea.
Consider the question “Agriculture sector is one of the significant contributors to the greenhouse gas emissions. This underscores the importance of carbon policy for agriculture in India. In this context, suggest the steps needed to be taken under the policy.”
Conclusion
Carbon policy for agriculture in India would help it meet its goals in reducing emissions while making agriculture climate-resilient.
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Back2Basics: Anaerobic conditions
- An anaerobic process in which organic food is converted into simpler compounds, and chemical energy (ATP) is produced. Certain types use the electron transport chain system to pass the electrons to the final electron acceptor, which may be an inorganic or an organic compound, but not oxygen.
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From UPSC perspective, the following things are important :
Prelims level: Bretton Wood Twins
Mains level: Transparency issues is International Organizations
This article discusses some inherent issues with the international organizations (IOs) i.e., the World Bank (Bank) and International Monetary Fund (IMF) (aka Bretton Woods Twins). This comes in the backyard of the WB decision to scrap its flagship publication, the ‘Doing Business’ report.
Issue over chair: A monopoly of the West
- Common individuals to head: The individuals which are common to them: Paul Wolfowitz, Jim-Kim, David Malpass, Rodrigo Rato, Dominique-Strauss Kahn, Christine Lagarde, and Kristalina Georgieva.
- Monopoly of US/EU: They have all become heads via a dual monopoly selection procedure: Only an American can head the Bank and only a European can head the IMF.
- Personal integrity: This has been called into question, the most recent being the revelations of malfeasance at the World Bank where data was apparently massaged to make at least two major countries — China and Saudi Arabia— look better than they would otherwise have been.
Issues with these heads: Hypocrisy
- Political accountability: Within countries, we expect reasonable standards of integrity from heads of important institutions, and democratic political accountability mechanisms exist to ensure that.
- Probity: The effectiveness and legitimacy of these individuals and indeed of the international institutions they head require personal qualities of probity.
- Non-virtuous preachers: These heads often go around the developing world, preaching the virtues of good governance, from arguing against the scourge of corruption to improving data integrity.
- Undue parameters: There are even World Bank indices to rank countries on those metrics.
How has this impacted these institutions?
Ans. The credibility of the institutions is lost.
- It is not just the charge of hypocrisy, but also the effect on the morale and motivation of the staff of these institutions.
- Many of them chose to work here because of a commitment to public service.
- The recent letter by more than 300 former World Bank staff, expressing their anguish at the recent revelations on the Doing Business index, captures this sentiment.
Why such issues grapple these institutions?
- Goal definition: International institutions operate in a grey zone of neither clearly being in or outside the realm of formal politics and hence have weaker mechanisms of accountability.
- Selection of heads: The selection procedure for choosing heads of the Bank and the Fund has been a dismal failure. Compromised heads are potentially more biased.
- Indoctrination: Contrast this with the growing alarm and anxiety that characterizes the rise of China and its attempts to place its own nationals in existing IOs as well as creating new ones.
Chinese has intruded even into these
- Countries place their nationals to head these institutions, both for prestige and to pursue their national interests.
- China has its own nationals now head four of the 15 UN specialized agencies (it suffered a rare setback to head the World Intellectual Property Organisation last year).
Conclusion
- The contest between the West (and especially the US) and China to shape the global order is becoming manifest.
- China’s efforts, its success, and more broadly its influence in IOs should certainly raise deep concerns, most notably the suppression of the inquiry into the origins of the coronavirus.
- Looking ahead, if the US and Europe do not hold themselves to the standards they exhort to the rest of the world, their credibility and legitimacy will continue to degrade.
- This will cede ground and soft power to geopolitical rivals.
Way forward
- So, global political leaders convening next week for the annual meetings of the Bank and Fund must act with urgency and conviction to stem the rot.
- They must open the selection of the heads of these institutions to the best candidate, regardless of nationality.
- And to pave the way, they should clear up the current mess over the Doing Business saga.
Back2Basics:
International Org. | Part 7 | Bretton Woods Institutions – World Bank Group
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From UPSC perspective, the following things are important :
Prelims level: Air India
Mains level: Air India disinvestment
After 68 years, Air India is all set to return to the Tata fold.
What is the deal?
- The Tatas will own 100% stake in Air India, as also 100% in its international low-cost arm Air India Express and 50% in the ground handling joint venture, Air India SATS.
- Apart from 141 planes and access to a network of 173 destinations including 55 international ones, Tatas will also have the ownership of iconic brands like Air India, Indian Airlines and the Maharajah.
History of Air India
- Prominent industrialist JRD Tata founded the airline in 1932 and named it Tata Airlines.
- As India gained Independence, the government bought 49% stake in AI.
- In 1946, the aviation division of Tata Sons was listed as Air India, and in 1948, the Air India International was launched with flights to Europe.
- In 1953, Air India was nationalised and for the next over four decades it remained the prized possession for India controlling the majority of the domestic airspace.
Why was Air India sold?
- End of Monopoly: With economic liberalisation and the growing presence of private players, this dominance came under serious threat.
- Govt running an airline: Ideologically too, the government running an airline did not quite gel with the mantra of liberalisation.
- Continuous losses: By 2007, AI (which flew international flights) was merged with the domestic carrier, Indian Airlines, to reduce losses.
- Wastage of taxpayers money: But it is the mark of how poorly the airline was run that it has never made a profit since 2007.
Why wasn’t it sold earlier?
Ans. Fear over Operational Freedom
- The first attempt to reduce the government’s stake — disinvestment — was made in 2001 under the then NDA government.
- But that attempt — to sell 40% stake — failed.
- In 2018, the government made another attempt to sell the government stake — this time, 76%. But it did not elicit even a single response.
- In the latest attempt started in January 2020, the government has been able to finally conclude the sale.
So how was it managed this time?
- Govt gives up stakes: The mere fact that the government retained a partial stake. In other words, as long as the government kept a certain shareholding of AI, private players did not seem interested.
- Operational freedom: That’s because the mere idea of government ownership, even if it was as little as 24%, made private firms wonder if they would have the operational freedom needed.
- Debt sharing: In the past, the government expected the bidders to pick up a certain amount of the debt. This time, the government let the bidders decide the amount of debt they wanted to pick up.
Significance of the deal
[A] From the government’s perspective: A success
- Disinvestment: It underscores govt commitment to reducing the its role in the economy.
- Easing burden on taxpayers: This claims to have saved taxpayers from paying for daily losses of AI.
- Economic reforms: Given the historical difficulties in AI’s disinvestment, or any disinvestment at all this is a significant achievement.
[B] Business perspective: Still a failure
- Missing the target: Purely in terms of money, the deal does not result in as big a step towards achieving the government’s disinvestment target of the current year.
- Unresolved bankruptcy: The assets left with the government, such as buildings, etc., will likely generate Rs 14,718 crore. But that will still leave the government with a debt of Rs 28,844 crore to pay back.
[C] Value perspective: Success for Tatas
- Business success: From the Tatas’ perspective, apart from the emotional aspect of regaining control of an airline that they started, AI’s acquisition is a long-term bet.
- Investment boost: The Tatas are expected to invest far more than what they have paid the government if this bet is to work for them.
Conclusion
- Complete liberalization: The privatisation of Air India is a message from the Government to the markets and global investors that it has the political will to bite the reform bullet.
- Roadmap for economic reforms: The govt had to shed the “over-conservatism” that is typical of bureaucracy.
- Future disinvestments: A transaction as “tough and complex” as Air India’s in an open, transparent and competitive bidding process, will boost future privatisation.
Way forward
- Other loss-making PSUs continue to drain taxpayers’ hard-earned money and get abused and fleeced in the name of social welfare.
- The govt should imbibe this experience gained in future disinvestment biddings.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Free Trade Agreement
Mains level: India-ASEAN Relations
The Commerce and Industry Minister has called for a renegotiation of the India-ASEAN free trade agreement (FTA).
Why such move?
- The MCI aims to prevent its misuse by ‘third parties’ and remove trade restrictions as well as non-tariff barriers that he said had hurt Indian exports disproportionately since the pact was operationalized in 2010.
- The focus needed to be on new rules to eliminate misuse ‘by third parties outside ASEAN’, the minister said, hinting at China.
- India had to deal with several restrictive barriers on exports in the ASEAN region, particularly in the agriculture and auto sectors.
About ASEAN
- Members:
- Officially the Association of Southeast Asian Nations, ASEAN is an economic union comprising 10 member states in Southeast Asia.
- It promotes intergovernmental cooperation and facilitates economic, political, security, military, educational, and sociocultural integration between its members and other countries in Asia.
India-ASEAN Free Trade Agreement
- The initial framework agreement for ASEAN–India Free Trade Area (AIFTA) was signed on 8 October 2003 in Bali, Indonesia.
- The FTA came into effect on 1 January 2010.
- The FTA had emerged from a mutual interest of both parties to expand their economic ties in the Asia-Pacific region.
Background of the AIFTA
- India’s Look East policy was reciprocated by similar interests of many ASEAN countries to expand their interactions westward.
- After India became a sectoral dialogue partner of ASEAN in 1992, India saw its trade with ASEAN increase relative to its trade with the rest of the world.
- Between 1993 and 2003, ASEAN-India bilateral trade grew at an annual rate of 11.2%, from US$2.9 billion in 1993 to US$12.1 billion in 2003.
- Total Indian FDI into ASEAN from 2000 to 2008 was US$1.3 billion.
Acknowledging this trend and recognising the economic potential of closer linkages, both sides recognised the opportunities to pave the way for the establishment of an ASEAN–India Free Trade Area (FTA).
Structure of the AIFTA
- The signing of the ASEAN-India Trade in Goods Agreement paves the way for the creation of one of the world’s largest FTAs – a market of almost 1.8 billion people with a combined GDP of US$2.8 trillion.
- It sees tariff liberalisation of over 90 percent of products traded between the two dynamic regions, including the so-called “special products”.
- The products include palm oil (crude and refined), coffee, black tea and pepper.
Criticism
While there are many benefits to the ASEAN-India FTA, there is concern in India that the agreement will have several negative impacts on the economy.
- Opening-up its market: This FTA will allow them to increase the market access of their products.
- No specific gains: It is criticised, however, that India will not experience as great an increase in market access to ASEAN countries as ASEAN will in India.
- Export driven ASEAN: The economies of the ASEAN countries are largely export-driven. Considering India’s expansive domestic market, the ASEAN countries will look eagerly towards India as a home for its exports.
- Huge trade deficit: Since the early 2000s, India has had an increasing trade deficit with ASEAN. It is feared that a gradual liberalisation of tariffs and a rise in imported goods into India will threaten several sectors of the economy.
- Inaccessible Markets: As a dominant exporter of light manufacturing products, ASEAN has competitive tariff rates that make it difficult for India to gain access to the industry market in ASEAN countries.
- Cheaper imports: The state of Kerala is an important exporter in the national export of plantation products. It fears that cheap imports of oil palm, rubber, coffee, and fish would lower domestic production, adversely affecting farmers and ultimately its economy.
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