IASbaba's Daily Current Affairs Analysis

IASbaba’s Daily Current Affairs (Prelims + Mains

Focus)- 2nd January 2018

(PRELIMS+MAINS FOCUS)

Photovoltaic Highway in China

Part of: Mains GS Paper III- Science & Technology

Key pointers:

China successfully tested its first photovoltaic highway based on home-grown technology in the country’s eastern Shandong province.
The road has wireless charging systems for electric vehicles.
The road is constructed using solar panels which have a thin sheet of clear concrete on top of them, protecting the surface.
The panels were built to transfer energy to electric vehicles passing on top of them.
The stretch has three layers. At the bottom is an insulator to prevent moisture from getting to the photovoltaic devices in the middle layer, and on top is the layer of transparent concrete.
The tested segment of highway can generate 817.2 KW of power and is expected to generate 1 million KW hours of electricity each year. The electricity generated will be connected to China’s national power grid.
China has become the second country to construct a photovoltaic highway. France was introduced the world’s first photovoltaic road fitted with solar panels in late 2016.

Article link: Click here

Ujh Multi-purpose Project

Part of: Mains GS Paper III- Infrastructure

Key pointers:

Looking to fast-track utilisation of India’s rights under the Indus Waters Treaty (IWT), the Central Water Commission (CWC) has finalised a detailed report on Ujh multi-purpose project.
The proposal aims to harness water that was flowing untapped across the border.
The project, which is to come up in Kathua district, will store water from Ujh (a tributary of Ravi) to irrigate produce power.

Background:

The government decided to take a relook at the implementation of the Indus treaty. The decision was taken following the attack by Pakistan-backed terrorists on the Army camp at Uri in 2016.
An inter-ministerial task force was formed to examine the IWT with Pakistan.
The Ujh project is a step towards India’s utilisation of waters of the Indus and its tributaries in keeping with its rights under the treaty.
Under the IWT, signed with Pakistan in 1960, waters of Ravi are allocated to India.

Article link: Click here

Cryptocurrencies: Ponzi Scheme

Part of: Mains GS Paper III- Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Key pointers:

The Finance Ministry expressed concern about spurt in the prices of Bitcoin and other cryptocurrencies and likening them to Ponzi schemes.
An official statement said- “VCs don’t have any intrinsic value and are not backed by any kind of assets. The price of bitcoin and other VCs is entirely a matter of speculation resulting in spurt and volatility in their prices.”
The Finance Ministry’s position regarding taxation of gains on cryptocurrency trade is still unclear.

Issues:

The government said VC transactions are encrypted and are likely being used for terror-funding, smuggling, drug trafficking and money laundering.
The Ministry said VCs are not reliable as they are stored in digital/electronic format, making them vulnerable to hacking and malware attack.
VCs are not backed by government fiat” and are not legal tender. VCs are neither currencies nor coins, and the government or the RBI has not authorised them as a medium of exchange

Article link: Click here

(MAINS FOCUS)

NATIONAL

TOPIC: General Studies 3:

Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Inclusive growth and issues arising from it.

Next Wave of Structural Reforms: Democratising benefits

Background:

India has shown itself to be an especially exciting place on the world map in 2017. The last 12-18 months have been a significant period and one which could potentially affect the country several decades going forward. The defining feature of this period has undoubtedly been the string of structural reforms.

String of reforms:

As per the department of industrial policy and promotion (DIPP), we already implemented 122 reforms in India in 2017, with a further 90 on the anvil.
Deep-rooted structural reforms like the goods and services tax (GST), Insolvency and Bankruptcy Code (IBC), Pradhan Mantri Awas Yojana (PMAY), Pradhan Mantri Jan Dhan Yojana (PMJDY) and Real Estate Regulatory Act (RERA) have struck at the core of long-festering problems around taxation, asset quality, financial inclusion and housing for all.
As the benefit of these reforms flows incrementally into the system, they will help resolve the current challenges around these issues and give an overall boost to economic growth.
The striking part of these reforms is their breadth in terms of coverage across industries and the depth to which these have tried to address existing structural challenges plaguing the country.

Welcomed by the global community:

The reforms have also received validation and approval from investors, both domestic and overseas.

The rapid rise in the market is a thumbs up from investors for the reforms-focused agenda.
The ratings upgrade from Moody’s.
The improvement in the ease-of-doing-business ranking.

Time for next wave of reforms: Democratizing the benefits

While a lot has been done on the reforms side, a lot remains to be done. Key reforms in areas like agriculture and labour, specifically for job creation, will help democratize the benefit of reforms to all possible sections of society.

Job creation remains an important issue for the country, despite several efforts in this direction.
While the boost to the manufacturing segments through other initiatives will provide a collateral benefit to job creation, it is important to explicitly chart out a strong policy road map for job creation and adhere to it.
Vocational training, especially, will play an important role in this road map. A lot of effort has gone into making vocational training mainstream, but with limited success. Integrating this into the school curriculum while revitalizing the education imparted in government schools can have a galvanizing effect in the long term.
At the same time, a well-funded cluster development mechanism could align the micro, small and medium enterprises’ growth with the job-creation agenda, particularly in the organized sphere.
The government has drafted an ambitious target of doubling farmer income by 2022.
It has made some notable efforts, including Pradhan Mantri Fasal Bima Yojana (PMFBY), electronic agriculture market (e-NAM) and Pradhan Mantri Krishi Sinchayee Yojana, among others.
While some of these have seen immediate adoption (like PMFBY), some schemes have lagged in execution. Others will only show an impact in the long term.
In this regard, the role of NITI Aayog becomes very important. NITI Aayog is now directly working with states to bring about a transformation in the agriculture sector by initiating a series of reforms, including contract farming, online spot and futures trading, and facilitating and incentivising the private sector to invest in agriculture logistics and cold chains, among other things.
What is important is good execution and a feedback loop to ensure that reforms continues in desired direction and pace.
Labour reforms are a key ingredient of scale-up on the manufacturing side. Long-term growth cannot be sustained solely by the services sector.
With the strong focus on ‘Make in India’, the time is opportune to undertake a variety of labour reforms.
The principal shortcoming currently is around the lack of a holistic labour policy which can contribute towards making a competitive manufacturing and service ecosystem in the country. Any policy which is drafted must aim to substitute rigid controls with transparency, while ensuring that the basic rights of workers are well protected.

Conclusion:

The spate of reforms that have been undertaken have rightly received widespread acclaim. However, it would be erroneous to think that the job is done. The government should recognize the need to keep pushing forward with the reforms agenda.

Connecting the dots:

What are structural reforms brought in by recent government. While reforms undertaken have rightly received widespread acclaim, more reforms are required especially with regards to job creation, doubling farmers’ income and labour reforms. Discuss.

NATIONAL/AGRICULTURE

TOPIC:

General Studies 2:

Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

General studies 3:

Major crops cropping patterns in various parts of the country, different types of irrigation and irrigation systems storage, transport and marketing of agricultural produce and issues and related constraints; e-technology in the aid of farmers.

Bringing agriculture marketing into Union/Concurrent list

Background:

More than ever before, the country’s agricultural marketing sector is garnering attention. NITI Aayog member Ramesh Chand, strongly underlined in an article that it is imperative to bring agriculture marketing into the Concurrent or Union list to benefit farmers. Currently it is under state list as per Schedule 7 of our constitution.
There is opposition to the move.

Moving agriculture marketing into concurrent or union list:

Most States have welcomed the proposal to move agriculture marketing into either the Concurrent or Union list from the State list as this will guarantee remunerative prices to farmers.
Some major States continue to offer stiff resistance saying this will pave the way for the death of agriculture and is against the spirit of cooperative federalism.
The Committee on Doubling Farmers’ Income under the chairmanship of Ashok Dalwai, in its draft report, justifies the recommendation saying marketing has no boundaries; this necessitates a pan-India operation to meet the demand across the country.
The committee has also recommended rolling out the model Agriculture Produce Marketing Committee (APMC) Act 2017 which would facilitate single-point levy of taxes, promote direct interface between farmers and end-users, and give freedom to farmers to sell their produce to whomsoever and wherever they get better prices.

If States continue to oppose the proposed reforms which promise to allow farmers a wider choice of markets beyond the local mandi, the losers will be none other than the farmers themselves.

Why market integration is important?

The country’s food production has increased tremendously from just 51 million tonnes in 1950-51 to about 252 million tonnes in 2014-15. However, farm income did not grow much. This was also highlighted by the National Commission on Farmers (NCF) headed by MS Swaminathan. The income realised from cultivation at current prices worked out to be only about Rs. 101 a day during 2012-13.
The National Commission on Agriculture (1976) as well as the NCF (2006) had categorically emphasised that higher output alone will not provide higher income to farmers unless it is well marketed.
Recent incidents of farmers reportedly dumping their bumper produce of tomatoes and onions and emptying cans of milk into drains is evidence of it. Had the markets been integrated, the surplus produce would have been transferred to deficit regions.
The seasonal spike in prices of perishable commodities that pushes up the food inflation cannot be addressed without market reforms.
Production and marketing should march together in order to benefit farmers and consumers. Farmers need to be empowered to decide when, where, to whom and at what price to sell.

The state of agriculture market:

Farmers’ participation in agriculture markets is worrisome.
The Dalwai Committee on Doubling Farmers’ Income has pointed out that the share of farmers in consumer’s price is very low; it generally varies from 15 to 40 per cent.
Studies conducted by the International Food Policy Research Institute and World Bank have confirmed this.
The dominant role of middlemen is primarily responsible for farmers not realising a reasonable price for their produce, lowering farm income and profitability.
This was recognised by the 12th Plan’s Working Group on Agriculture Marketing (2011).
The agriculture markets are crowded with middlemen and commission agents.
According to Ashok Gulati, commission agents in Delhi charge exorbitant fees ranging from 6 per cent to 15 per cent.
The Committee of State Ministers, in charge of Agricultural Marketing to Promote Reforms (2013) has highlighted that cold storage units exist in less than one-tenth of the markets and grading facilities in less than one-third; electronic weigh-bridges are available only in a few markets, post-harvest losses of various commodities ranged from 6 to 18 per cent.

Challenges:

Almost 40 per cent of all fruits and vegetables are lost annually in India between the grower and the consumer mainly due to lack of storage facilities, a weak transportation system and bad roads.
Climate change is expected to make the situation worse.
States alone cannot revamp the agricultural marketing sector, primarily due to paucity of funds and technology.

Way forward:

Private investment on a massive scale needs to be invited to upgrade and build large storage and warehousing systems that are climate resilient.
The intermediary culture needs to be scrapped completely.
Sweeping reforms will see light only when agricultural marketing is brought under the Concurrent or Union list with the consent of the States.

Conclusion:

The country will achieve food security only when the income of farmers is secured and doubled. And for doubling farmers’ income we need not focus only on increasing production/yield, market reforms as stated above are equally important.

Connecting the dots:

The state of agricultural market in India is still poor. Discuss. Also suggest how bringing agricultural marketing into concurrent or union list would be right step moving forward.