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Insights Daily Current Events, 11 December 2014

Insights Daily Current Events, 11 December 2014

Amendments to the Electricity Act, 2003

The Union Cabinet, chaired by the Prime Minister, recently approved the various amendments to the Electricity Act, 2003 as per the proposed Electricity (Amendment) Bill, 2014.


  • The amendments will usher in much needed further reforms in the power sector.
  • The amendments will also promote competition, efficiency in operations and improvement in quality of supply of electricity in the country resulting in capacity addition and ultimate benefit to the consumers.

Important provisions of the Bill:

  • The Bill requires the Central Government to prepare and notify a national policy, after consultation with the State Governments, permitting stand alone systems (including those based on renewable sources of energy and other non-conventional sources of energy) for rural areas within six months from the date of coming into force of this Act.
  • The Central Government and the concerned State Governments shall jointly create necessary infrastructure in rural areas to harness solar power and other forms of renewable energy to ensure access to electricity to every rural household by the year 2020.”
  • The Central Government shall, in consultation with the State Governments and the Appropriate Commission, set the target to be achieved by the States regarding use of renewable sources of energy in generation of electricity.”
  • It requires the Central govt. to constitute a fund to:
  • ensure availability of financial resources for the promotion and use of renewable sources of energy;
  • promote research and innovation in the use of renewable sources of energy;
  • provide incentives like subsidies or financial assistance to persons who opt for use of non-renewable energy; and
  • Provide incentives for setting up of small scale industry based on solar energy.

Why are these amendments necessary?

  • As per census 2011 figures, close to 45% of rural India lack access to electricity. Hence, it becomes essential to formulate a time bound dynamic national policy permitting stand along systems for the use of renewable sources of energy.
  • The census further indicates that 43% of India’s rural households continue to depend on kerosene for lighting. The usage of kerosene for domestic heating and lighting leads to respiratory diseases and impaired eyesight. Therefore, in order to harness a clean, cost-effective and safe source of energy, necessary programmes are required to be framed and implemented in rural areas by the State Governments concerned.
  • More than 33% of Indian households are still have no access to electricity. Moreover, even in cities, households suffer on account of shortage of power. Therefore, a time-frame to ensure that 400 million people get access to electricity and the mechanism adopted by the Central and the State Governments to resolve these issues is vital.

Sources: PIB,


Mechanism for procurement of ethanol

The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, has approved a mechanism for procurement of Ethanol by Public Sector Oil Marketing Companies (OMCs) to carry out the Ethanol Blended Petrol (EBP) Program.

The CCEA approved replacing the current procedure on ethanol with the following:

  • The delivered price of Ethanol may be fixed in the range of Rs.48.50 per litre to Rs.49.50 per litre, depending upon the distance of sugar mill from the depot/installation of the OMCs.
  • The rates proposed would be delivered price at depot location and inclusive of all Central and State taxes, transportation costs, etc which would be borne by the Ethanol suppliers.
  • The OMCs will incorporate “Supply or Pay” clause duly backed up with bank guarantee in their supply agreement with Ethanol suppliers.
  • OMCs will sign MOU with the State Governments for a comprehensive system for uninterrupted inter-depot transfer of Ethanol within a State. This may include annual excise permits to OMCs for movement of Ethanol and other relevant measures.

Ethanol Blending Petrol Program:

It was launched in 2003, which was extended to the entire country except NE States, J&K, A&N Islands and Lakshadweep in 2006.

OMCs were directed to sell 5% ethanol blended petrol subject to commercial viability.

A National Policy on Bio-fuels was also notified by the Government in 2009 with the objective to ensure that minimum level of bio-fuels is readily available to meet the demand at any given time.

There are certain advantages of blending Ethanol with Petrol:-

  • Incentivizing the sugar industry and benefiting sugar-cane growers.
  • EBP has higher octane number than petrol resulting in reduced emissions of pollutants.
  • It is a renewable fuel.
  • At 5% blending level, OMCs will have surplus Petrol production of 115 crore litres which can be exported to earn foreign exchange.

In order to give fillip to the EBP program, the Government, inter alia, decided in November 2012 that 5% Ethanol blending with Petrol should be implemented across the country; procurement price of Ethanol will be decided between OMCs and the suppliers of Ethanol.

Constraints in implementing the EBP program:

  • OMCs are not getting enough quantity of ethanol. Offers were received for only 45% of the total requirement of ethanol in 2013.
  • Transportation of Ethanol from sugar mills to OMC depot and its inter-depot transfer is regulated by the State Excise departments. The procedure adopted by States (particularly for inter-state supplies) in issuance of licenses and Import/ Export NOCs is complicated, time consuming and acts as an impediment.
  • OMCs purchase ethanol at benchmark price which is based on average RTP of Petrol for the previous financial year. The price of EBP at times can become unviable if prices of petrol come down. At the same time, in certain cases, prices being quoted by Sugar mills are higher than benchmark price, resulting in actual procurement being less than the offered quantity. This creates uncertainty.


The present mechanism of procurement of Ethanol based on a benchmark price decided by OMCs may be replaced by a new mechanism of uniform price of Ethanol declared for each sugar year.

Sources: PIB.


Implementation of scheme for development of Solar Parks and Ultra Mega Solar Power Projects

The Union Cabinet, chaired by the Prime Minister, has approved the scheme for setting up 25 solar parks each with a capacity of 500 MW and above and Ultra Mega Solar Power Projects in various parts of the country where large chunks of land can be spared for this purpose.

More Details:

  • These parks will be able to accommodate over 20,000 MW of solar power projects.
  • The Solar Parks/ Ultra Mega Solar Power Projects will be set up during five years that is from 2014-15 to 2018-19 and will require Central Government financial support of Rs.4050 crore. Smaller parks in Himalayan and other hilly States where contiguous land may be difficult to acquire in view of the difficult terrain, will also be considered.
  • The solar parks will be developed in collaboration with State Governments and their agencies. The choice of implementing agency for developing and maintaining the park is left to the State Government. The States, applying under the scheme, will have to designate an agency for the development of the solar park.
  • The State Government will first nominate the implementing agency for the solar park and also identify the land for the proposed solar park. It will then send a proposal to the Ministry of New and Renewable Energy (MNRE) for approval along with (or later) the name of the implementing agency. The implementing agency may be sanctioned a grant of upto Rs.25 Lakh for preparing a Detailed Project Report (DPR) of the Solar Park, conducting surveys, etc. The DPR must be prepared in 60 days.
  • Thereafter, application may be made by the implementing agency to SECI for the grant of up to Rs. 20 lakhs/MW or 30% of the project cost including Grid-connectivity cost, whichever is lower. The approved grant will be released by Solar Energy Corporation of India (SECI) as per milestones prescribed in the scheme.
  • All the States and Union Territories are eligible for benefitting under the scheme. Solar parks will enable development of solar power in remote areas where land is inexpensive.
  • As the transmission system will be developed for the entire park, developers will not have to set up their own transmission lines. This will not only save money but will also avoid damaging the landscape of the area as only limited transmission lines would be laid.
  • Developers would be able to set up projects very fast as they will not have to get statutory and other clearances. India will emerge as a major solar power producing country as nowhere in the world are solar parks being developed on such a large scale.

The scheme for development of Solar Parks and Ultra Mega Soiar Power Projects has been conceived on the lines of the “Charanka Solar Park” in Gujarat which is a first-of-its-kind large scale Solar Park in India with contiguous developed land and transmission connectivity.

Sources: PIB.


Unnat Bharat Abhiyan

The Ministry of Human Resource Development (MHRD) has launched a programme called Unnat Bharat Abhiyan.

Aim: to connect institutions of higher education, including Indian Institutes of Technology (IITs), National Institutes of Technology (NITs) and Indian Institutes of Science Education & Research (IISERs) etc. with local communities to address the development challenges through appropriate technologies.

The objectives of Unnat Bharat Abhiyan are broadly two-fold:

  • Building institutional capacity in Institutes of higher education in research & training relevant to the needs of rural India.
  • Provide rural India with professional resource support from institutes of higher education, especially those which have acquired academic excellence in the field of Science, Engineering & Technology and Management

Under this programme, 132 villages have been identified for intervention by 16 institutes of higher education so far.

Sources: PIB.


India last among BRICS in Web index

India ranks behind China and other BRICS nations in a comprehensive index aimed at measuring the Internet’s contribution to social, economic and political progress.

Web Index released by the World Wide Web Foundation says that though China is notorious for its great Internet firewall, the nation is far ahead of India when it comes to translating the power of the Internet into economic potential.

Important observations made by the Report:

  • India’s Internet penetration rate is comparable to Nepal or Namibia’s, and despite promises of a digital revolution, the Web is still inaccessible to a large swathe of the population.
  • Affordability is India’s biggest concern as the cost of broadband access in the country is greater than in countries in the neighbourhood such as Bangladesh. “Making Internet access more affordable is critical for fighting inequality and creating jobs.
  • Yet, in the poorest countries, the relative costs of basic Internet access remain over 80 times higher than in the rich world — a phenomenon that seems to be widening existing inequalities.
  • Currently, the means and freedom to fully utilise the Web are within reach of only one in seven people on the planet. While over four billion people enjoy no rights to the Internet at all, the rights of another two billion Internet users are severely restricted.
  • Such restrictions are also on the rise because of pervasive government censorship and snooping.

India’s low ranking among BRICS countries in the “economic impact” sub-index is especially stinging, coming as it does on the heels of the Delhi government’s decision to ban all app-based taxi services.

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Sources: The Hindu.


Countries lax in violence prevention: study

The Global status report on violence prevention for 2014 reveals that 4,75,000 people were murdered in 2012, and homicide is the third leading cause of death globally for men aged 15-44, highlighting the urgent need for more decisive action to prevent violence.

The report was jointly published by the World Health Organization, the United Nations Development Programme, and the United Nations Office on Drugs and Crime.

Important observations made by the Report:

  • The report indicates that only one-third of the 133 countries surveyed are implementing large-scale initiatives to prevent violence, such as bullying prevention programmes, visits by nurses to families at risk, and support to those who care for older people.
  • Just over half the countries are fully enforcing a set of 12 laws generally acknowledged to prevent violence, although 80 per cent of the countries have enacted them. Only half of all countries have services in place to protect and support victims.
  • The consequences of violence on physical, mental, sexual and reproductive health often last a lifetime. Violence also contributes to leading causes of death such as cancer, heart disease and HIV/AIDS, because victims are at an increased risk of adopting behaviours such as smoking, alcohol and drug misuse, and unsafe sex.

Despite indications that homicide rates decreased by 16% globally, between 2000 and 2012, violence remains widespread.

The report is the first of its kind to assess national efforts to address interpersonal violence, namely child maltreatment, youth violence, intimate partner and sexual violence, and elder abuse. Country profiles reflect the extent to which key violence prevention programmes and laws and selected services for victims of violence are being implemented.

Sources: The Hindu.