SYNOPSIS: Insights Secure Q&A May 21, 2016
This is a new feature. As feedback from our side on your answers is missing, we thought of providing detailed synopsis of important Secure questions on daily basis so that you could revise our synopsis and compare it with your answers. We intend to post synopsis of Secure questions every next day of posting questions on website.
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General Studies – 1;
Topic: Changes in critical geographical features (including waterbodies and ice-caps) and in flora and fauna and the effects of such changes
1) The UN ‘Global Environmental Outlook (GEO-6): Regional Assessments’ report says that the worst impacts of climate change are projected to occur in the Pacific and South and South-East Asia. Examine how will India be impacted. (200 Words)
According to the report ,of the population at risk from sea-level rise by 2050, seven of the 10 most vulnerable countries worldwide are in the Asia Pacific region.
Impact on India:
- Nearly 40 million Indians will be at risk from rising sea levels by 2050, with people in Mumbai and Kolkata having the maximum exposure to coastal flooding in future due to rapid urbanisation and economic growth, according to a UN environment report.
- On coastal areas highly exposed to cyclones and typhoons, the poor tend to be more exposed to natural disasters because they live on land open to hazards.
- Warmer climate, precipitation decline and droughts in most delta regions of India have resulted indrying up of wetlands and severe degradation of ecosystems
- Evidence suggests that climate change and climate variability and sea-level rise will exacerbate multi-dimensional poverty in most developing countries.
- Climate change will slow down economic growth and make poverty reduction more difficult, further erode food security and “prolong existing and create new poverty traps
- India will experience decrease in seasonal mean rainfall and an increase in mean and extreme precipitation during monsoon.
- This will increase both floods and drought.
- Freshwater resources will be affected due a combination of climate change and unsustainable practices.
- A 2°C rise in the world’s average temperatures will make India’s summer monsoon highly unpredictable.
- At 4°C warming, an extremely wet monsoon that currently has a chance of occurring only once in 100 years is projected to occur every 10 years by the end of the century.
- An abrupt change in the monsoon could precipitate a major crisis, triggering more frequent droughts as well as greater flooding in large parts of India.
- India’s northwest coast to the south eastern coastal region could see higher than average rainfall.
- Dry years are expected to be drier and wet years wetter.
- over US $7 billion loss in agriculture in India by 2030
- sorghum yield will reduce by 2-14 per cent by 2020
- there will be large reductions in wheat yield in the Indo-Gangetic plain; and substantial increase in heat stress for rice, affecting yield in the country.
- Alterations in the flows of the Indus, Ganges, and Brahmaputra rivers could significantly impact irrigation, affecting the amount of food that can be produced in their basins as well as the livelihoods of millions of people
- Temperature variations will lead to outbreak of diseases as well and disturb the already poor health indicators of the country. Frequency of hot days and multiple-day heat waves have increased in past century;Increase in deaths due to heat stress in recent years
- Possibly causing a rise in Diarrhoea cases and cholera outbreaks, as the cholera bacterium survives longer in saline water.
- Heat waves are likely to result in a very substantial rise in mortality and death, and injuries from extreme weather events are likely to increase
- Sea-level rise leads to intrusion of saline water into the fresh groundwaterin coastal aquifers and thus adversely affects groundwater resources
- falling water tables can be expected to reduce further on account of increasing demand for water from a growing population, more affluent life styles, as well as from the services sector and industry.
- Unusual and unprecedented spells of hot weather are expected to occur far more frequently and cover much larger areas. With built-up urban areas rapidly becoming “heat-islands”
- Sea level:
- With India close to the equator, the sub-continent would see much higher rises in sea levels than higher latitudes.
- Sea-level rise and storm surges would lead to saltwater intrusion in the coastal areas, impacting agriculture, degrading groundwater quality, contaminating drinking water, a
- Kolkata and Mumbai, both densely populated cities, are particularly vulnerable to the impacts of sea-level rise, tropical cyclones, and riverine flooding.
- Energy security:
- The increasing variability and long-term decreases in river flows can pose a major challenge to hydropower plants and increase the risk of physical damage from landslides, flash floods, glacial lake outbursts, and other climate-related natural disasters.
- Decreases in the availability of water and increases in temperature will pose major risk factors to thermal power generation.
- Water security:
- An increase in variability of monsoon rainfall is expected to increase water shortages in some areas.
- Studies have found that the threat to water security is very high over central India, along the mountain ranges of the Western Ghats, and in India’s northeastern states.
- Climate change impacts on agriculture and livelihoods can increase the number of climate refugees.
What can be done?
- Improvements in hydro-meteorological systems for weather forecasting and the installation of flood warning systems can help people move out of harm’s way before a weather-related disaster strikes.
- Building codes will need to be enforced to ensure that homes and infrastructure are not at risk.
- Investments in R&D for the development of drought-resistant crops can help reduce some of the negative impacts.
- Major investments in water storage capacity would be needed to benefit from increased river flows in spring and compensate for lower flows later on
- Coastal embankments will need to be built where necessary and Coastal Regulation Zone codes enforced strictly.
- Improvements in irrigation systems, water harvesting techniques, and more-efficient agricultural water management can offset some of these risks.
- Regional cooperation on water issues will be needed.
- Crop diversification, more efficient water use, and improved soil management practices, together with the development of drought-resistant crops can help reduce some of the negative impacts.
General Studies – 2
Topic: Issues relating to development and management of Social Sector/Services relating to Health
- overall the doctor–patient ratio in India is 1:1,700 when the World Health Organization calls for a minimum of 1:1,000.
- According to official statistics around 27% of the sanctioned doctors’ posts in primary health centres, 10% of auxiliary nurse midwife posts and 40% of male health worker posts are vacant presently.
- In the case of community health centres, 68% posts for specialist doctors, almost 75% of the sanctioned posts of surgeons, 65% of obstetricians and gynaecologists, 68% of physicians and 63% of paediatricians remain vacant.
- Medical students and well-qualified medical professionals remain reluctant to service rural India.
- In states where the rural posting is made mandatory, most affluent students seek exemption by paying fines which run into lakhs. Even when the fines were hiked considerably, the students preferred to pay up rather than go through the rural stint.
- The findings showed that a majority of the medical students preferred to do postgraduate specialisation instead of opting for practice immediately after MBBS.
- Even the students from a rural background wanted an urban posting. It is attributed to the fact that the medical syllabi is not community-health oriented and is carried out in a tertiary care environment.
- The suggested solution of opening more medical colleges in rural areas with a rural health needs’ orientation has not paid dividends, according to health activists.
- Other reasons are:-
- poor living and working conditions (including security for female doctors/students and nurses)
- poorly equipped centres and lack of opportunities to interact with senior professionals and hone technological skills.
- Many students say that higher salaries, better living conditions, better equipment and facilities, an advantage in terms of admission to postgraduate courses would induce them to consider a rural posting but only if it is not made mandatory.
- government will only be able to fulfil these expectations in an environment that places public health delivery on the priority list. So far, none of the governments have shown such an inclination
- In rural areas, patients without insurance are an added challenge. In an urban setting, physicians in a hospital’s residency program would usually care for patients who are admitted without health insurance coverage. In more isolated facilities, this responsibility falls to the staff physicians, who are already overworked. This makes it difficult for these facilities to keep doctors on staff.
- But instead of making the rural posting compulsory for the MBBS students, it is better to to offer better pay and the chance to access a postgraduate seat stronger in return.
- One significant step being taken is the development of online training programs for nurses, which helps fill much-needed positions at rural healthcare facilities.
- Also, telemedicine technologies can be used to connect rural patients with physicians anywhere in the country. This could be a major solution for improving care in remote areas where in-person treatment is not always readily available.
- Lessons from Chile’s Rural practitioner program:
- bundled set of incentives of the Rural Practitioner Programme in four domains
- (i) monetary compensation (direct and indirect financial incentives);
- (ii) education and regulatory interventions
- (iii) management, environment and social support; and
- (iv) external incentives.
- Strengthening the measures taken by the Central Government to encourage doctors to work in rural and remote areas which include:
- provision of financial support to state/UTs for providing additional incentives and higher remuneration to doctors to serve in rural areas and improved accommodation arrangements in rural areas, so that they find it attractive to join public health facilities in rural areas.
- Amendment of the Post Graduate Medical Education Regulations, 2000 to provide:-
- 50% reservation in Post Graduate Diploma Courses for Medical Officers in the Government service who have served for at least three years in remote and difficult areas; and
- incentive at the rate of 10% of the marks obtained for each year in service in remote or difficult areas up to the maximum of 30% of the marks obtained in the entrance test for admissions in Post Graduate Medical Courses
- bundled set of incentives of the Rural Practitioner Programme in four domains
Topic: Issues and challenges pertaining to the federal structure,
- The link between the Sutlej and the Yamuna is a part of the proposed water distribution from the Bhakra–Nangal Project.
- It became an object of dispute after Haryana was carved out of Punjab in 1966, as the latter state now refused to part with “its waters.”
- During the Emergency, using the subdued political climate, the then government divided the waters equally between Punjab and Haryana, but Punjab did not implement this award.
- Since then the dispute has been litigated, work on building the canal in Punjab has been tardy, while Haryana finished its part of the work long ago. It has been urging the courts and the union government to push Punjab to finish its work.
- Recently Punjab Legislative Assembly had passed the Punjab Sutlej–Yamuna Link Canal (Rehabilitation and Re-vesting of Proprietary Rights) Bill, 2016 -peasants along the canal’s route in Punjab to “reclaim” the land which had been taken from them to build the canal and which this bill promised to return to them.
- The SYL dispute may well epitomise short-sighted electoral politics which dominates Indian democracy
- Its roots go back to the politics of the rich peasantry which emerged out of irrigated capitalist agriculture. It is also a stark warning to all the dystopic plans of river interlinking.
- With Punjab refusing to give Haryana its share of water, Haryana has suffered losses worth Rs 35,020 crore.
- The SYL dispute, and particularly the manner in which the Punjab government has passed legislation against the Supreme Court’s orders, is also a stark warning about the disrepair in India’s federal structure.
- Witness to here is a level of unilateralism by one province against the other,
- After the canal being hurriedly filled up in Punjab, villagers whose land was acquired for building the Sutlej Yamuna Canal Link in Haryana have started demanding that the state government should follow suit.
- Even as the Haryana government is stating that all possible steps would be taken to get its share of water, the high price of the land is an enticing offer for the landowners.
- Its construction and water dispute between Punjab and Haryana was one of the emotive issues which had given rise to the militancy with the radical Sikhs citing it as one of the instances of “discrimination” against Punjab.
- With the Punjab elections less than a year away, this issue has the potential to change the political discourse in the state. .
- The SYL dispute, like all disputes over interstate water sharing, is not just about water stress and the crises of capitalist agriculture, it is also fundamentally about India’s (in)ability to sustain the federal structure bequeathed to itself in the Constitution.
Topic: Structure, organization and functioning of the Executive and the Judiciary
4) Undoubtedly, India is the only country in the world with a written constitution that has been amended so many times in the six and a half decades since its inception in 1950. Do you support such frequent amendments? Discuss the judicial pronouncements that have restricted the power of Parliament for making constitutional amendments. (200 Words)
Yes,the amendments are needed:-
- The Constitution is a living document and must reflect the growing aspirations of the people of India from time to time.
- Hence, it is argued that amendments to the Constitution are not merely reflective of such aspirations but also emphasise and translate the will of the people to carve out their own destiny.
No,frequent amendments is bad:
- derides the constant and unending process by which the Constitution is being mutated and, , mutilated, to suit the needs of the political party in power.
- Such criticism is often made with reference to the controversial 42nd amendment brought in by Indira Gandhi at the height of the Emergency, when her powers were supreme.
- Parliament achieved this purpose by inserting a new article, namely, Article 131A, after Article 131, which removed the powers of the high courts in matters related to validity of constitutional matters and gave exclusive jurisdiction for the same to the Supreme Court.
- In contrast, the Indian Constitution has proven relatively easy to change, and has been amended more than once a year on average. The deception in India has arisen on account of the fact that even though the Indian Supreme Court has the power to strike down or set aside constitutional amendments, it has no power to repeal them, which means that many ineffective provisions of the Constitution remain on the books.
- Some of the amendments have been done in a hurry due to the over enthusiasm of the legislature, offending the basic structure of the constitution
- procedure for such amendment is laid out in Article 368 of the Constitution and indeed can be said to protect the sanctity of the Constitution as well as to check the arbitrary power of Parliament. Nevertheless, it cannot be denied that Parliament, through the 42nd amendment, did try to arrogate to itself supreme unfettered powers to amend the Constitution.
- In time, judicial pronouncements restricted the power of Parliament for making constitutional amendments only in such cases as where the basic structure of the Constitution is not altered.
- In this regard, we may in passing mention three judgments which addressed this contentious issue:
- The Golaknath v State of Punjabwhere it was upheld that constitutional amendments through Article 368 were subject to fundamental rights issue;
- The Keshavananda Bharathi judgment (1973), where the doctrine was espoused that the Constitution has a basic structure of constitutional principles and values and that the judiciary has the power to review and strike down amendments which conflict with, or seek to alter, this basic structure of the Constitution
- The Minerva Mills case that applied and evolved the basic structure doctrine of the Constitution, unanimously ruling that Parliament cannot exercise unlimited power to alter this basic structure or tread upon the fundamental rights of individuals, including the right to liberty and equality.
Topic: Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.
5) It is said that the implementation of the Forest Rights Act, 2006 has been opaque and there is serious lack of awareness about its provisions not only among the beneficiaries but also among the officials in charge of implementing it. Discuss the causes and the way forward. (200 Words)
- Rejection of claims made by the tribals and “other forest dwellers” on the basis of insufficient deposition of documents has often been cited as reason for the poor implementation of the act.
- The implementation of FRA has not been effective or delayed,
- when the claims made by the “other forest dwellers” are numerous
- where the number of claims with the evidence of occupation of land in forest are either recent or after 25 October 1980
- where the demand for claims on the forestland is more than two and half hectares per nuclear family
- if the claims happen to be in the proximity of wildlife sanctuaries or parks .
- Gram sabha:
- The process of documenting communities’ claims under the FRA is intensive ,rough maps of community and individual claims are prepared democratically by Gram Sabhas.
- These are then verified on the ground with annotated evidence. The Gram Sabha is treated as a public authority under the FRA, and if the higher authorities under the law reject its claims, substantive reasons have to be provided for doing so.
- This exhaustive process is why the official order to implement the FRA so quickly lacks any understanding about the extent of the task and labour involved.
- To claim land titles and community forest rights, tribal people have to prove that they have been occupying the land before December 13, 2005. Gram sabhas or village councils have the fi nal authority over these areas but they rarely have the capacity to deal with administrative requirements.
- Forest department’s role:
- The forest department’s idea of whom to grant forest rights and the provisions of the act are not in tandem or are in conflict.
- The main factor inhibiting the FRA’s full implementation is the reluctance of the forest bureaucracy to give up control.
- The forest bureaucracy has misinterpreted the FRA as an instrument to regularise encroachment. This is seen in its emphasis on recognising individual claims while ignoring collective claims Community Forest Resource (CFR) rights as promised under the FRA by tribal communities.
- To date, the total amount of land where rights have been recognised under the FRA is just 3.13 million hectares, mostly under claims for individual occupancy rights.
- This has created a situation where the officials controlling the implementation of the law often have the strongest interest in its non-implementation, especially the community forest rights provisions, which dilute or challenge the powers of the forest department.
- The MoTA’s February 2015 status report indicates that the total area reported to be recognised under CFR is only 73,000 hectares, less than one-five hundredth of the CFR potential in the country
- The department has also been against including protecting areas for land distribution under the FRA. The power of the forest department is formidable despite the FRA, 2006 rules notified on 6 September 2012 curtailing their role in the affairs of the act.
- The forest department perceives FRA as a one-sided legislation that may lead to grave compromises at the cost of the environment. It is also seen as an action of a hurried political action programme of the alliance that was in power then.
- In short, the perception of forest bureaucracy in managing the forest resources seems to be in conflict with the political calculus of competitive democracy.
- India is very big, knowledge of people living in interior forested areas is limited and the state bureaucracy, which is responsible for raising awareness, is very slow.
- In most states, majority of individual claims over dwellings and farms in forestland were rejected. Traditional rights of communities over forest resources like forest produce, waterbodies and pastures were hardly recognised.
- Institutions not constituted as per the law and faulty ways of processing claims are major hurdles.
- The trade of MFPs like tendu leaves, mahua and saal seeds is controlled by state governments. The monopoly curbs competition as well as restricts benefits to collectors and earns high revenue for the government . Civil society groups have long been demanding free flow of MFPs so that communities can earn good prices from them.
- Although counting both individual and community rights, more than 1.5 million titles have been issued covering 3 million hectares, in many places the area settled with the tribals is much less than their occupation; boundaries of the settled area are not demarcated; meetings of the gram sabha are being called at the panchayat level, as in Andhra Pradesh, and not at the hamlet or revenue village level as prescribed in the Act.
- There has been little effort to improve productivity of assigned land by linking it with soil conservation works and with NREGA funds, or to clarify which department will maintain land records, and how succession would take place in case of death of the right holder.
- National forest committee recommends that
- the right to protect and manage forest resources can be transferred from the forest department to gram sabha only if the community’s claim is recognised under the Forest Rights Act.
- In case the gram sabha is not keen to manage community forest or their claim is declined, joint forest management (JFM) committees should work under gram sabha, the main report notes.
- It would be prudent on part of the government to revisit the act. The specific areas that need an urgent examination are:
- identifying gaps in the act with respect to conservation of forest resources;
- review of the public debates around the provisions of the act
- analyse the patterns of its implementation across regions and identify possible conflicts between bureaucratic and political thinking.
- The forest department’s complaint since the act was enforced is that their voice was not heard by the then government; hence sincere efforts need to be carried out to listen to the views, suggestions and recommendations that would be presented by it and other departments in their respective jurisdictions.
- bridge the trust deficiency between the forest department and tribals for future cohesive existence.
- If the government is serious about implementing the FRA, it should confront the forest bureaucracy and make it clear that any obstruction on their part is unacceptable. The little progress that has been made in implementation so far has been due to close coordination between tribal departments, district administrations and civil society.
- There is a clear need to strengthen the nodal tribal departments, provide clear instructions to the State and district administrations, and encourage civil society actors. Without a strong political will, this historical transformation is unlikely to take place.
- Therefore, government should continue to provide technical support to the gram sabhas and monitor its sustainable use through encouraging regeneration of forests and ensuring not only higher production of MFPs but price support as provided to farmers so as to rejuvenate tribal economy.
General Studies – 3
Topic: Resource mobilization; Indian economy
Merits of bank consolidation:
- The need for consolidation is specially felt now, due to the fact that although India is seventh largest economy in the world in terms of nominal GDP, there is no Indian bank in the list of 70 large banks in terms of asset size.
- As large banks reap certain advantages in terms of efficiency, risk diversification and capacity to finance large projects.
- The efficiency gains resulting from lower cost of services and higher quality of services is too attractive to ignore.
- However, in the context of India, it is felt that there is ample room for consolidation in the banking sector, especially among PSBs without creating issues of moral hazard or too big to fail concerns.
- There are 48 domestic banks (excluding RRBs and LABs) out of which there are 27 PSBs having a market share of around 70% in terms of asset size. A comparison of performance of larger PSBs with smaller PSBs does indicate that larger PSBs perform better.
- For example, among all PSBs, larger PSBs like SBI and Bank of Baroda are trading at higher Price to Book Value ratio in comparison to other smaller PSBs.
- SBI has been able to maintain relatively strong capital ratios and appears to be in a better position to withstand shocks to asset-quality. This indicates that under Indian conditions, there is lot of scope for banks to grow in size
- Higher credit:
- The other important aspect which needs to be considered is credit demand of a growing economy. As Indian companies increase their business and become global in nature, their demand for large scale credit will become higher.
- Banks also have to grow in size to meet the higher demand of credit. The banking system will be required to enhance its capacity to lend to larger companies and to larger projects.
- With increase in credit penetration and as credit to GDP ratio increases from present levels of 50 percent, PSBs with a market share of over 70 per cent need to contribute significantly in the process.
- Without strong PSBs which are efficient, competitive and well-capitalised, meeting higher demands of bank credit would be quite challenging in future.
- Recent proposals on Large Exposure norms which limit banks’ exposure to a group by 25% of their common equity will further limit their capacity to fund large credit demands. It is therefore imperative that some consolidation among PSBs do happen to support the growth potential of the economy.
- After the crisis, internationally there has been a significant tightening of regulatory norms.
- G-SIBs are required to maintain higher amount of common equity capital than other banks.
- G-SIBs will be required to meet the Total Loss-Absorbing Capacity (TLAC) requirement alongside the minimum regulatory requirements set out in the Basel III framework.
- Specifically, they will be required to meet a Minimum TLAC of at least 16% of the resolution group’s risk-weighted assets (TLAC RWA Minimum) from 1 January 2019 and at least 18% from 1 January 2022.
- These regulatory requirements have compelled many of these internationally active banks to reframe their business strategies into downsizing, quitting some businesses and some jurisdictions.
- This provides an opportunity for EME banks who have global ambitions, a ready business and market space.If we have good large banks, such banks can tap these opportunities and can become global banks.
- Thus we can see that right now the time is ripe for consolidation in the public sector bank space
- it’s the right thing to do since there is a slight uptake in the economy
- Four of the five biggest global banks in terms of assets are now Chinese. Few see them as paragons of financial stability. Their government has used them as fiscal tools to keep the growth engine running in times of trouble.
- The 2008 Chinese stimulus was a classic example of this. There is good reason to believe that the large Chinese banks are far weaker than what the official numbers say.
- Ireland was perhaps the most extreme example. It encouraged the growth of banks that overwhelmed the entire economy in 2008 after their bets went wrong.
- The US too has seen that large banks are not necessarily efficient banks.
- India right now needs more banking competition rather than more banking consolidation. In other words, it needs more banks rather than fewer banks
- The merged State Bank of India is likely to be five times larger than its nearest competitor in terms of balance sheet size.How the competition regulator will look at this forced merger is the question , given the fact that one bank will now dominate the Indian banking landscape
- India is right now seeing the creation of new banks that could add to variety in the domestic financial system. These new banks should make the Indian loan market more competitive. The decision to merge the large public sector banks does exactly the opposite. It will likely reduce competition—and without any major efficiency gains to the economy as a whole.
- But the enthusiasm to create massive banks through mergers needs to be tempered with scepticism. The global experience since 2008 is especially important in this context.
- current times is not the opportune time for consolidation and that the need of the hour presently is to strengthen the banks by empowering them with operational flexibility be it in the area of recruitment, or in differentiation on core capabilities
- The other area is which should be the criteria for identifying banks for merger is the technology platform.
- Different banks have different technology platform which are developed by IT majors like Infosys and Tata Consultancy Services, to name a few.
- To merge two banks having different platform, could be a challenging task
- In last Gyan Sangam, bankers opposed the idea on ground that the health of their respective banks does not allow to takeover other banks.The situation has not improved in one year, rather it has further deteriorated .
- Many banks, including the likes of Bank of Baroda, IDBI Bank, Bank of India reported record losses.
- Employee unions and the employees who may fear identity loss.The unions have already started opposing the proposed privatization of IDBI Bank
- Today the PSU banks still control over 70 per cent of the deposits and advances in the industry, but the entire pack mirrors each other in terms of performance.
- Take for example, the State Bank of India (SBI) has a balance sheet size of over 3.5 times larger than the sixth-largest HDFC Bank, but the largest bank in the country lags behind in terms of market valuation. HDFC Bank has a market capitalization of Rs 2.56 lakh crore as against SBI’s Rs 1.41 lakh crore.
- merging two weak banks or a weak bank with a strong bank will create or make the merged entity unhealthy
- This is not the right time forbanks merger as the entire banking pack is facing challenges because:
- The operating environment is wobbling
- the corporate sector is over-leveraged
- banks have bare minimum capital
- the NPAs are skyrocketing and
- profitability is at the lowest level.
- There is a complete non-interest of investors in the PSU banks
- The rural strength, not any more:
- The PSU banks have survived so long as they have a good presence in the rural and semi-urban market because of a strong brand and branch network.
- Now the entire rural banking model is itself changing withnew Small Finance banks.
- Merger Pangs:
- The merger challenges are going to be huge as they do not have experience in dealing with people and cultural issues or merging products .
- In the past, even many private sector banks have struggled in such mergers.
- The HR being the top most concern as salary, seniority, postings etc will create a big challenge
- Danger to financial stability:
- Given the track record of PSUs, the new entities, say 5 or 6 large banks, could be a danger to financial stability.
- Any bank failure would create multiple problems for the system as well as for the economy.
Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth
7) The automobile industry is one of the few success stories that India has and perhaps the only one in manufacturing. But in recent years it’s argued that the sector needs proper regulation. Examine why. (200 Words)
- Global NCAP has not only managed to highlight
- that cars made in India are unsafe
- but has also pointed out the casual approach of automakers towards improving the quality standards of vehicles.
- The fact is India’s auto industry has been found wanting on every pertinent issue ranging from recalls, to emissions and safety standards. Automakers react to changes in regulation instead of anticipating and implementing such moves
- Automakers find their ways around such problems as India does not have a clear inspection regime in place yet.
- The mandatory crash testing norms will only come in place in 2017 for new models and in 2019 for existing models
- India will leapfrog to BS VI emission levels only in 2020 and the government has declined to have a mandatory vehicle recall policy in place.
- There is no way automakers could be held guilty in India for over-statement of fuel efficiency like they have been in Japan.
- Clearly, the government has done little on its part to improve the situation.
- Little has happened since the 2013 Tavera recall, where General Motors admitted to fudging emission data and specifications of its Tavera models and the then government was forced to call it a “corporate fraud”.
- The Nitin Gokarn Committee that was set up to investigate the recall found GM and its officials guilty.
- The then government at the Centre directed the Gujarat and Maharashtra governments to form a special investigative team to probe the matter further since the company’s manufacturing facilities were based in these states.
- As of today, it is not clear if an SIT was even formed and whether GM will face the consequences.
- The episode also puts the role of some government-sponsored agencies such as Automotive Research Association of India, Pune, and International Centre for Automotive Testing, Manesar, in question. They sign off Conformation of Production certificate to automakers.
- If the industry has to keep growing it can’t be allowed to be lax on key parameters like quality, standards and safety regulations that developed markets follow.
- The automobile sector in general has not made much effort to establish the impact of fuel quality on emissions.
- Some studies undertaken by companies have shown that there is hardly any consistent trend to show that the fuels are mainly responsible for the poor emissions.
- Role of age factor on the effectiveness of catalytic converters too needs a comprehensive study to establish a relation as it plays a great role in determining the pollution scenario on roads
- Insufficiently informed consumers contribute to 80 per cent of the pollution generated by automobile companies on road.
- Yet the sector in itself or through its dealers has not taken any proactive effort to educate these consumers.
What needs to be done?
- Clearly, the Indian government needs to step up and look at the industry minutely. And a sector regulator will only augur well to realise the sector’s potential as the lynchpin of Indian manufacturing.
- Future strategies of the auto companies will have to focus on increased environmental safety concerns, rising fuel prices and cost-effectiveness in the rising market competition. Innovation has to focus on increasing efficiency and reducing emissions.
- Customer experience will be a key factor to retain the existing ones and reach out to the new ones. After-sales service is an important aspect which will help in winning the loyalty of the consumer. Overall in- vehicle experience needs to be upgraded for the consumer by deploying telematics, embedded software and infotainment in a seamless and user-friendly manner.
Topic: Storage, transport and marketing of agricultural produce and issues and related constraints
8) “The creation of the National Agricultural Market in India is a welcome move against the backdrop of the agricultural produce marketing committee reforms, 2013 and APMC Model Act 2003.” Discuss. (200 Words)
- electronic auction platform to be installed in earmarked APMCs can bring transparency in the price discovery process, and unified market platform might lead to real time, broad-based price dissemination.
- Single licencing system:
- the common market platform can promote a single licensing system across the implementing states, connecting principal and sub-yard APMCs, and effectuate a single point levy of market fee.
- Online portal will enable the buyer to transfer funds to the farmer’s account and concerned APMC’s accounts after the delivery of produce from the farmer to the purchaser is ensured.
- Reduce pricing anomaly:
- creation of NAM could reduce pricing anomaly at the wholesale and primary rural markets through a network of electronic spot regulated markets
- Real-time price information, on the other, can be transmitted and stored into a central database of agricultural marketing research and information system, known “Agmarknet” portal.
- Financial literacy:
- The creation of electronic market could make farmers system and financially literate and exposed them to spot trading mechanics through in-built trading architecture called “CommTrack.”
- By optimising transaction costs and customising the contract, farmers could obtain a better price for their graded produce.
- Forward/futures markets:-
- Organised spot markets can support forward/futures markets for reference pricing and final settlement of the forward/futures contracts.
- Traders will be more informed as they may observe frictionless trading in both the markets.
- Option instrument can also gain ground if the contract design appeals to farmers, trading agencies, and centre-designate procurement agencies.
- Delivery might not be an issue since warehousing and collateral management business would receive a ripple effect of the project.
- Warehouse receipt-based sales can also help in mitigating farm marketing risk.
- Less distortion:-
- Commodity prices tend to be less distorted, and primary stakeholders will be able to compare commodity prices across the secondary and terminal markets that could reduce their information searching costs and improve the bargaining power.
- The provision of a single point levy of the market fee would enable traders reduce the cost of transaction.
- NAM could bring the procurement activities in order:-
- The state-designate procurement agencies, by virtue of a transparent price discovery, can efficiently conduct procurement operation.
- Private trading bodies might also enhance competition in the process if they are allowed. As a consequence, the agricultural market would be more efficient with respect to liquidity and participation.
- The project calls for an orchestration of service providers to attain a unified transaction process integrating product flow, information flow, and payment flow.
- Apparently, the electronic market could replace the ring system of trading or “open outcry” at the market yard.As ring system scores over a screen-based trading on several grounds, the two systems of trading should coexist to infuse efficiency in auctioning and ensure immediacy and liquidity in the trade.
- In general, NAM creation can be a welcome move for introducing a structural reform in India’s traditional agricultural marketing system. The benefits can percolate to various stakeholders in the market through technology adoption and market integration.
- The motivation for a unified market platform can be traced to the Rashtriya e-Market Services (ReMS), but gains from REMS to farmers have remained muted.
- Commission agents fear unification will affect them adversely as farmers can enter details of commodities in the e-platform and sell to the highest bidder without any mediation from the agents. This is a very potent impediment against forward movement of reforms.
- Though assaying facilities were present they remained in disusebecause of apprehensions of loss of income felt by farmers.
- Absence of involvement of all stakeholders, farmers, traders, agents, APMC’s and government the gains are slow and minimal.
- APMC laws –permit the first sale of crops after harvesting by farmers to take place only in regulated market yards/mandis.Restricts farmers universe of buyers to just traders licensed.Most of the farmers are till dependent on these committees.
- Farmers usually sell off to the local produce aggregator even before crops reach mandis.
- NAM would not lead to reduction in various levies imposed by states beside mandi taxes making interstate trade still a problem.
- Fruits and vegetables are kept outside the purview of NAM. So volatility in prices will continue thus depriving farmers from getting better prices.
- High taxes and levies imposed by Punjab ,Haryana and Andhra Pradesh on agricultural commodities trade is still a problem.
- Out of the 23 states and union territories, only eight have initiated major reforms in their respective agricultural market (NIAM 2015). However, with the efforts bringing about some positive change in the erstwhile opaque marketing system in a few states, private investment is yet to be commensurate with the pace of commercialisation and diversification in the sector.
Topic: Infrastructure – energy
9) With drought affecting large parts of the country, there are question marks on an energy policy that stresses thermal power plants. In this regard, what should be India’s energy policy? (200 Words)
While droughts in the past generally hurt poor villagers, in recent times they have affected most sections of the population, including the urban rich. Reduced generation in power plants due to low water levels in the reservoirs is one reason for such widespread impact. In view of the fact that coal power plants need huge quantities of freshwater, the drought scenario in the country should lead to a thorough review of coal-based power policy for the country.
What should be India’s energy policy?
- India has to build a robust and ongoing national process to examine our energy and climate future, to replace India’s current ad hoc, disconnected, process of energy planning and policy.
- This requires a more cogent system of energy information gathering and analysis.
- It also requires exploring actions that bring synergies across development and climate outcomes (such as energy efficiency and public transport) and those that come with direct costs to the economy.
- Also need answers to longer-term questions salient to future pledges, such as: how much additional coal energy do we anticipate needing and, to what extent can we urbanise while limiting high carbon lock-in.
- Solar equipment makers like Jain Irrigation, Schneider ElectricIndia, ABB India, Siemens India can help
- Energy efficiency solutions providers like the Indian arm of ABB, Alstom, Siemens, and L&T may gain from industrial demand
- Renewable energy project companies like Suzlon and other private equity-backed green energy companies like ReNew Power may also help in energy security.
- New national energy policy which focuses on renewable energy and making India energy independent is needed.
- The focus of the new government is finding ways to encourage bio-fuels and have alternate energy sources to fossil fuels.A more conducive policy environment coupled with an effective regulatory regime is, without doubt, the basis for accelerated growth of domestic energy resources. Energy security needs integrated action by all stakeholders.
- More and more countries these days are turning to Natural gas as an alternative source of energy. The reasons for this are: gas is cheaper, cleaner and plentiful, and in an increasingly environmentally conscious world, developed countries see this as an attractive alternative to oil and mineral fuels.
- India also has a large potential for hydroelectric power, estimated at 600 Bkwh (billion kilowatt hour), out of which only a fifth has either been developed or is under development. Another 94,000MW (megawatt) of probable potential also exists if 63 sites which have been identified can be exploited, while 6,789 MW of potential for exploitation through mini/micro hydel schemes also exists.
- Nuclear energy:-
- India also has uranium resources, which are sufficient to meet the life-time requirement of the first stage of the country’s nuclear development programme of 10,000 MW.
- Over and above this, about 363,000 tonnes of thorium oxide deposits are known to exist, which when used through breeder reactors, may produce 900,000 Bkwh of electricity.
- Currently, only 2.6 per cent of India’s power consumption is met by nuclear energy. Although it is relatively expensive in terms of the capital costs, it is free from many of the problems discussed above, and should be given greater consideration as a viable alternative source of energy.
- Some of the strategies that can be adopted by the Asian countries as well as India to meet future challenges to their energy security are building stockpiles, diversification of energy supply sources, increased capacity of fuel switching, demand restraint, and development of renewable energy sources.
- Implementation of building codes along with using CFL,LED lights.
- India, to the greatest degree possible, must liberalize all wholesale and retail prices. As long as energy remains free or cheap, consumers have no incentive to use it wisely, conserve, or buy energy-efficient appliances and vehicles.
- To that point, India should mandate more stringent efficiency standards for appliances, vehicles, and all new commercial, residential, and industrial buildings, with encouragement through fiscal and other promotional polices.
- The country should also enact policies that encourage energy retrofits of existing residential and commercial buildings.
- Similarly, India should move to increase the efficiency of all its power plants to conform to international norms.
- Investment in a more efficient electricity grid would do wonders for both its energy security and the environment. Rather than building new generation facilities, most of them carbon-emitting, India could deliver more electricity to the end consumer. Today, India’s transmission and distribution losses are astounding.
India must accept the conflict that the country will be largely dependent on fossil fuels for the foreseeable future but that the reality of climate change is equally inescapable.To that end, in concert with the United States, India should take the lead in establishing a world-class carbon capture and sequestration research and demonstration program.This will help commercialize a technology that addresses a fundamental reality of the world’s energy consumption: fossil fuels will be a staple for decades to come.
Asian Development Bank’s 2012 report “Climate Risk and Adaptation in the Electric Power Sector” discusses the water–energy nexus in Asian countries. It is well known that the electric power investment decisions have long lead times and long-lasting effects, as power plants and grids often last 40 years or more.
General Studies – 4
Topic: Ethics in private and public relationships.