Note4Students
From UPSC perspective, the following things are important :
Prelims level: Unicorns
Mains level: Paper 3- Start-ups in India
Context
As per the Economic Survey 2021-22, India has become the third-largest startup ecosystem in the world after the US and China.
Start-up ecosystem in India
- India attracted huge investment in startups in 2021: Private equity investment was $77 billion, of which $42 billion went to early-stage ventures.
- Every startup where salaries are paid by investors rather than customers is breathlessly rethinking business plans.
How do startups benefit society?
1] Innovation, productivity and job creation:
- The high failure rate of startups is not a problem per se — society only needs a few successes to harness the gains of innovation, productivity and job creation.
- A new book, The Power Law makes the case that startup investing is unlike public market investing.
- He suggests public markets follow a “normal” distribution like human height — most people cluster around the average with a few exceptionally low or high.
- But venture investments follow a “power law” of distribution, that is, most go to zero but the tiny number that succeeds more than compensate for the losses or mediocrity of the many.
2] Losses caused by startups are not passed on to society
- Startups don’t socialise their losses, Corporate bank loans expanded from Rs 18 lakh crore in 2008 to Rs 54 lakh crore in 2014.
- Such high corporate bank loans created bad loans that needed many lakh crores of government money to recapitalise nationalised banks.
- This money was diverted from government spending on healthcare, education and defence.
- The current venture capital binge will also create many write-offs but this cost will fall on consenting adults with broad shoulders — foreign institutions, angel investors and entrepreneurs with successful previous exits.
3] Startups will solve real problems for Indians:
- Ending our poverty needs higher productivity regions, cities, sectors, firms and individuals.
- A modern state is a welfare state that does less commercially so it can do more socially.
- It needs allies in reimagining financial inclusion, supply chains, distribution logistics, employability, retail, transport, media, healthcare, agriculture and much else.
- Many of our startups shall redeem their pledge to solve these problems “not wholly or in full measure, but very substantially”.
Three issues related to startups
- 1] Fiscal and monetary policy normalisation: The global capital supply fuelling startup funding faces challenges from fiscal and monetary policy normalisation: The rate-sensitive two-year US government bond recently touched a 1.6 per cent yield after being at 0.4 per cent as recently as November — because the risk-free return cannot be return-free-risk forever.
- Investors are returning to weighing financial sustainability and capital efficiency along with addressable markets.
- 2] Excesses: This explosive startup funding has created excesses.
- 3] A different approach of public markets: Private markets are not only delaying IPOs — Amazon went public within three years of starting with less than half the value of a unicorn — but unicorn IPOs’ underperformance suggests that public markets have a different calibration.
Conclusion
The few startups that survive will raise India’s soft power and prosperity by using improbable ideas to solve impossible problems. What we need is to ensure the policy environment for the startups to boom.
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: Global Environmental Change (GEC) programme
Mains level: Paper 2- Water management
Context
The Global Water System Project, which was launched in 2003 as a joint initiative of the Earth System Science Partnership (ESSP) and Global Environmental Change (GEC) programme, epitomises global concern about the human-induced transformation of fresh water and its impact on the earth system and society.
Valuation of water
- It is globally estimated that the gap between demand for and supply of fresh water may reach up to 40% by 2030 if present practices continue.
- SDG 6: The formation of the 2030 Water Resource Group in 2008, at the instance of the World Economic Forum, and the World Bank’s promotion of the group’s activity since 2018, is in recognition of this problem and to help achieve the Sustainable Development Goal (SDG) on water availability and sanitation for all by 2030 (SDG 6).
- The latest UN World Water Development Report, 2021, titled ‘Valuing Water’, has laid stress on the proper valuation of water by considering five interrelated perspectives: water sources; water infrastructure; water services; water as an input to production and socio-economic development, and socio-cultural values of water.
Need for hydro-social cycle approach
- Designing a comprehensive mix of divergent views about water along with ecological and environmental issues held by stakeholder groups is necessary.
- In this context, a hydro-social cycle approach provides an appropriate framework.
- It repositions the natural hydrological cycle in a human-nature interactive structure and considers water and society as part of a historical and relational-dialectical process.
- The anthropogenic factors directly influencing a freshwater system are the engineering of river channels, irrigation and other consumptive use of water, widespread land use/land cover change, change in an aquatic habitat, and point and non-point source pollution affecting water quality.
The intra- and inter-basin transfer (IBT) of water
- IBT is a major hydrological intervention to rectify the imbalance in water availability due to naturally prevailing unequal distribution of water resources within a given territory.
- There are several IBT initiatives across the world.
- The National River Linking Project of India is one of those under construction.
- Based on a multi-country case study analysis, the World Wildlife Fund/World Wide Fund for Nature (2009) has suggested a cautious approach and the necessity to adhere to sustainability principles set out by the World Commission on Dams while taking up IBT projects.
Issues with assumptions, use and management of freshwater resources in India
1] Contestation on concept of the surplus and deficit basin
- The basic premise of IBT is to export water from the surplus basin to a deficit basin.
- However, there is contestation on the concept of the surplus and deficit basin itself as the exercise is substantially hydrological.
- Besides this, rainfall in many surplus basins has been reported as declining.
- The status of the surplus basin may alter if these issues are considered.
2] Low capacity utilisation
- There is concern about the present capacity utilisation of water resources created in the country.
- By 2016, India created an irrigation potential for 112 million hectares, but the gross irrigated area was 93 million hectares.
- There is a 19% gap, which is more in the case of canal irrigation.
- In 1950-51, canal irrigation used to contribute 40% of net irrigated area, but by 2014-15, the net irrigated area under canal irrigation came down to less than 24%.
- Groundwater irrigation now covers 62.8% of net irrigated area.
- Low efficiency of irrigation projects: The average water use efficiency of irrigation projects in India is only 38% against 50%-60% in the case of developed countries.
- More water consumption for crops: Even at the crop level we consume more water than the global average.
- Rice and wheat, the two principal crops accounting for more than 75% of agricultural production use 2,850 m 3/tonnes and 1,654 m 3/tonnes of water, respectively, against the global average of 2,291m 3/tonnes and 1,334m 3/ tonnes in the same order.
- The agriculture sector uses a little over 90% of total water use in India.
- And in industrial plants, consumption is 2 times to 3.5 times higher per unit of production of similar plants in other countries.
- Similarly, the domestic sector experiences a 30% to 40% loss of water due to leakage.
3] Low use of greywater
- Grey water is hardly used in our country.
- It is estimated that 55% to 75% of domestic water use turns into greywater depending on its nature of use, people’s habits, climatic conditions, etc.
- At present, the average water consumption in the domestic sector in urban areas is 135 litres to 196 litres a head a day.
- If grey water production in the rural areas is considered it will be a huge amount.
- The discharge of untreated grey water and industrial effluents into freshwater bodies is cause for concern.
- The situation will be further complicated if groundwater is affected.
4] Other issues
- Apart from the inefficient use of water in all sectors, there is also a reduction in natural storage capacity and deterioration in catchment efficiency.
Way forward
- The issues are source sustainability, renovation and maintenance of traditional water harvesting structures, grey water management infrastructure, groundwater recharge, increasing water use efficiency, and reuse of water.
- The axiom that today’s water system is co-evolving and the challenges are mainly management and governance has been globally well accepted.
- It is important to include less predictable variables, revise binary ways of thinking of ‘either or’, and involve non-state actors in decision-making processes.
Conclusion
A hybrid water management system is necessary, where along with professionals and policy makers the individual, a community and society have definite roles in the value chain. The challenge is not to be techno-centric but anthropogenic.
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: Inland Waterways
Mains level: Innlad water transit and its significance
- Month after setting sail on the Ganga from Patna, a vessel carrying 200 metric tonnes of food grains for the Food Corporation of India (FCI), docked at Guwahati’s Pandu port on the southern bank of the Brahmaputra.
- The occasion is believed to have taken inland water transport, on two of India’s largest river systems, to the future.
Why is a Ganga-Brahmaputra cargo vessel in focus?
- There is nothing unusual about a cargo vessel setting sail from or docking at any river port.
- This has rekindled hope for the inland water transport system which the landlocked northeast depended on heavily before India’s independence in 1947.
Inland water service: A necessity for the NE
- Seamless cargo transportation has been a necessity for the northeast.
- Around Independence, Assam’s per capita income was the highest in the country.
- This was primarily because of access for its tea, timber, coal and oil industries to seaports on the Bay of Bengal via the Brahmaputra and the Barak River (southern Assam) systems.
- Ferry services continued sporadically after 1947 but stopped after the 1965 war with Pakistan, as Bangladesh used to be East Pakistan then.
- The scenario changed after the river routes were cut off and rail and road through the “Chicken’s Neck”, a narrow strip in West Bengal, became costlier alternatives.
- The start of cargo movement through the Indo-Bangladesh Protocol (IBP) route is going to provide the business community a viable, economic and ecological alternative.
How did the water cargo service through Bangladesh come about?
- The resumption of cargo transport service through the waterways in Bangladesh has come at a cost since the Protocol on Inland Water Transit and Trade was signed between the two countries.
- India has invested 80% of ₹305.84 crore to improve the navigability of the two stretches of the IBP (Indo-Bangladesh Protocol) routes — Sirajganj-Daikhowa and Ashuganj-Zakiganj in Bangladesh.
- The seven-year dredging project on these two stretches till 2026 is expected to yield seamless navigation to the north-eastern region.
- With this, the distance between NW1 and NW2 will reduce by almost 1,000 km once the IBP routes are cleared for navigation.
Policy boosts to IWs
- The Government has undertaken the Jal Marg Vikas project with an investment of ₹4,600-crore to augment the capacity of NW1 for sustainable movement of vessels weighing up to 2,000 tonnes.
- Sailors who made the cargo trips possible have had difficulties steering clear of fishing nets and angry fishermen in Bangladesh.
- These hiccups will get sorted out with time.
Why go for IWT?
- Inland Water Transport (IWT) is a fuel-efficient, environment friendly and cost effective mode of transport having potential to supplement the over-burdened rail and congested roads.
- It is a boon where road transport is least feasible.
Back2Basics: Inland Waterways
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: UPI123Pay
Mains level: UPI payments through feature phones
The Reserve Bank of India has launched a new Unified Payments Interface (UPI) payments solution for feature phone users dubbed ‘UPI123Pay’.
What is UPI?
- UPI is an instant real-time payment system developed by NPCI facilitating inter-bank transactions.
- The interface is regulated by the Reserve Bank of India and works by instantly transferring funds between two bank accounts on a mobile platform.
What is UPI123Pay?
- UPI ‘123PAY’ is a three-step method to initiate and execute services for users which will work on simple phones.
- It will allow customers to use feature phones for almost all transactions except scan and pay.
- It doesn’t need an internet connection for transactions. Customers have to link their bank account with feature phones to use this facility.
- Feature phone users will now be able to undertake a host of transactions based on four technology alternatives.
- They include calling an IVR (interactive voice response) number, app functionality in feature phones, missed call-based approach and also proximity sound-based payments, the RBI said.
- Such users can initiate payments to friends and family, pay utility bills, recharge the FAST Tags of their vehicles, pay mobile bills and also allow users to check account balances.
- Customers will also be able to link bank accounts, set or change UPI PINs.
Others: ‘Digisaathi’
- A 24×7 helpline for digital payments has also been set up by the National Payments Corporation of India (NPCI).
- The helpline christened ‘Digisaathi’ will assist the callers/users with all their queries on digital payments via website and chatbot.
- Users can visit www.digisaathi.info or call on 14431 and 1800 891 3333 from their phones for their queries on digital payments and grievances.
Why UPI123Pay was created?
- UPI, which was introduced in 2016, has become one of the most used digital payments platforms in the country.
- The volume of UPI transactions has already reached ₹76 lakh crore in the current year, compared to ₹41 lakh crore in FY21.
- However, at present, efficient access to UPI is available largely via smartphones.
How will users make payments without internet?
The new UPI payments system offers users four options to make payments without internet connectivity:
- Interactive Voice Response (IVR): Users would be required to initiate a secured call from their feature phones to a predetermined IVR number and complete UPI on-boarding formalities to be able to start making financial transactions like money transfer, mobile recharge, EMI repayment, balance check, among others.
- App-based functionality: One could also install an app on feature phone through which several UPI functions, available on smartphones, will be available on their feature phone, except scan and pay feature which is currently not available.
- Missed call facility: The missed call facility will allow users to access their bank account and perform routine transactions such as receiving, transferring funds, regular purchases, bill payments, etc., by giving a missed call on the number displayed at the merchant outlet. The customer will receive an incoming call to authenticate the transaction by entering UPI PIN.
- Proximity sound-based payments: One could utilise the proximity sound-based payments option, which uses sound waves to enable contactless, offline, and proximity data communication on any device.
How do UPI payments through sound work?
- UPI payments using sound isn’t new. When Google Pay was first launched in 2017 as Tez, the app had a sound-based system of payments built in.
- Google called this ‘Cash Mode’ in which phones would emit ultrasonic sounds that could be used by other Tez users to accept and receive money.
- It’s somewhat like Bluetooth but instead of using radio waves, it uses sound waves to transfer data from one device to the next.
- A company called ToneTag also produces audio-based point-of-sale machines.
Is payment through sound secure?
- Sound wave-based payments are meant to be contactless, but occur within a certain proximity only.
- Ultrasonic waves are outside the usual human hearing range, but such payment systems can also use audible sounds, something that US-based startup Chirp showcased back in 2011.
- Devices using such systems are encrypted, and only the devices involved can recognize the emitted waves.
- The sound waves being emitted are encrypted, meaning the receiving device will need to have decryption codes to complete the transaction.
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: National Land Monetisation Corporation (NLMC)
Mains level: Asset Monetization
The Union Cabinet has approved the setting up of a new government-owned firm National Land Monetisation Corporation (NLMC) for pooling and monetizing sovereign and public sector land assets.
What is NLMC?
- The National Land Monetisation Corporation (NLMC) is being formed with an initial authorised share capital of ₹5,000 crore and paid-up capital of ₹150 crore.
- The government will appoint a chairman to head the NLMC through a “merit-based selection process” and hire private sector professionals with expertise.
- The NLMC will undertake monetization of surplus land and building assets of Central public sector enterprises (CPSEs) as well as government agencies.
How will it function?
- NLMC will own, hold, manage and monetise surplus land and building assets of CPSEs under closure and surplus non-core land assets of Government-owned CPSEs under strategic disinvestment.
- This will speed up the closure process of CPSEs and smoothen the strategic disinvestment process of Government-owned CPSEs, the statement said.
- NLMC will undertake surplus land asset monetisation as an agency function, and assist and provide technical advice to the Centre in this regard.
- The NLMC board will comprise senior Government officers and eminent experts, while its chairman and non-Government directors will be appointed through a merit-based selection process, the statement said.
- The Corporation will have minimal full-time staff, hired directly from the market on a contract basis.
Stipulated tasks
- CPSEs have referred around 3,400 acres of land and other non-core assets to the Department of Investment and Public Asset Management (DIPAM) for monetisation.
- Monetisation of non-core assets of MTNL, BSNL, BPCL, BEML, HMT, is currently at various stages of the transaction, as per latest data in the Economic Survey 2021-22.
Significance of NLMC
- The government would be able to generate substantial revenues by monetizing unused and under-used assets.
- The new corporation will also help carry out monetization of assets belonging to public sector firms that have closed or are lined up for a strategic sale.
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