DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 21st January 2021

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(PRELIMS + MAINS FOCUS)

POWERGRID signs agreement with HPSEBL for Optical Ground Wire (OPGW) Telecom network

Part of: GS Prelims and GS-III – Infrastructure

In news 

• To improve telecom connectivity in hilly areas, Power Grid Corporation of India Limited (POWERGRID), has recently signed an agreement with Himachal Pradesh State Electricity Board Ltd. (HPSEBL) in Shimla (H.P.) for utilization of 500 Kms of OPGW Telecom network.

Key takeaways

• Through this OPGW Network, Telecom Service providers will be able to provide uninterrupted mobile/Internet services to the people of the state.
• An optical ground wire is also known as an OPGW or, in the IEEE standard, an optical fiber composite overhead ground wire.
• It is a type of cable that is used in overhead power lines. 
• Such cable combines the functions of grounding and communications.

Construction of OPGW:

• OPGW is optical fiber composite ground wire. 
• This cable contains a tubular structure having one or more optical fiber and surrounded by layers of aluminium and steel wires.
• This layer of aluminium and steel wires serves to connect the tower to the ground.
• The optical fiber within the cable is used for the high speed data telemetry between the utilities or sold to some third parties for high speed fiber interconnection between the cities.

Do you know?

• POWERGRID, a ‘Maharatna’ CPSE under Ministry of Power, Government of India and Central Transmission Utility (CTU) of India, is India’s principal power transmission company and also one of the largest power transmission utilities in the world.
• It is a public limited company.
• It started its commercial operation in the year 1992-93. 

Related artciles:

• Monetisation of assets of POWERGRID: Click here

28 non-official members nominated to the National Startup Advisory Council

Part of: GS Prelims and GS-III – Start-ups; Entrepreneurship; Innovation

In news 

• The Government of India nominated 28 non-official members on the National Startup Advisory Council, including Byju’s CEO Byju Raveendran, Ola Cabs co-founder Bhavish Aggarwal, Kalaari Capital Managing Director Vani Kola and SoftBank India country head Manoj Kohli.

Key takeaways

• The Department for Promotion of Industry and Internal Trade (DPIIT) had constituted the council on January 21, 2020, to advise the government on measures required to build a “strong ecosystem for nurturing innovation and startups in the country.
• The term of the non-official members of this council shall be for two years or until further orders, whichever is earlier.

Important value additions

Composition of the Council

• Chairman: Minister for Commerce & Industry.
• Convener of the Council: Joint Secretary, Department for Promotion of Industry and Internal Trade.
• Ex-officio Members: Nominees of the concerned Ministries/Departments/Organisations not below the rank of Joint Secretary.
• Non-official members, to be nominated by the Central Government.
• These members shall be nominated from various categories like founders of successful startups, veterans who have grown and scaled companies in India, persons capable of representing the interests of investors into startups, etc. 
• The term of the non-official members will be for a period of two years.

Functions

• The Council will suggest measures to foster a culture of innovation amongst citizens and students, in particular, promote innovation in all sectors of the economy across the country.
• It will also suggest measures to facilitate public organisations to assimilate innovation with a view to improving public service delivery, promote creation, protection and commercialization of intellectual property rights.
• Further, it will suggest measures to make it easier to start, operate, grow and exit businesses by reducing regulatory compliances and costs, promote ease of access to capital for startups.

Ratle Hydro Power Project

Part of: GS Prelims and GS-III – Infrastructure

In news 

• The Union Cabinet has given its approval for the investment of Rs.5281.94 crore for 850 MW Ratle Hydro Electric (HE) Project.

Key takeaways

• It will be located on river Chenab, in Kishtwar district of Union Territory of Jammu and Kashmir.
• It will be implemented by a new Joint Venture Company (JVC) to be incorporated between National Hydroelectric Power Corporation (NHPC) and Jammu & Kashmir State Power Development Corporation Ltd (JKSPDC) with equity contribution of 51% and 49% respectively.
• The Ratle Hydro Electric Project shall be commissioned within a span of 60 months.

• The Power generated from the Project will help in providing balancing of Grid and will improve the power supply position.
• Further, Union Territory of J&K will be benefitted by getting free power worth Rs. 5289 crore and through levy of Water Usage Charges worth Rs.9581 crore from Ratle Hydro Electric Project, during project life cycle of 40 years.

5th India – Singapore Defence Ministers’ Dialogue

Part of: GS Prelims and GS-II – International Relations

In news 

• The 5th Defence Ministers’ Dialogue (DMD) between India and Singapore was successfully held recently through a video conference.

Key takeaways

• At this 5th DMD, both Ministers witnessed the signing of the Implementing Agreement on Submarine Rescue Support and Cooperation between the two Navies.
• The Ministers further welcomed the implementing agreement on Humanitarian Assistance and Disaster Relief (HADR) cooperation in August 2020 for the two Armed Forces to have closer operational collaboration in response to disasters.
• Recently, the Indian Navy and Singapore Navy successfully conducted the 27th edition of Singapore-India Maritime Bilateral Exercise (SIMBEX) and also participated in the second edition of the Singapore-India-Thailand Maritime Exercise (SITMEX); both held in November 2020.
• Indian Defence Minister reaffirmed ASEAN centrality in the regional security architecture and pledged India’s support to all endeavours of the ASEAN Defence Ministers’ Meeting (ADMM)-Plus.
• The cyber agencies of both armed forces have also stepped up engagements.

Dragon Fruit

Part of: GS Prelims and GS-III – Ecology; Biodiversity

In news 

• Dragon fruit was recently in news because the Gujarat government has decided to rename it as ‘kamalam’.

Important value additions

• Dragon fruit is the fruit of a species of wild cactus indigenous to South and Central America, where it is called pitaya or pitahaya.
• The fruit’s flesh is usually white or red — although there is a less common yellow pitaya too — and is studded with tiny seeds rather like the kiwifruit.
• Largest Dragon fruit producer and exporter: Vietnam
• The Vietnamese call it thanh long, which translates to “dragon’s eyes”, believed to be the origin of its common English name.
• Dragon fruit is also cultivated in Thailand, Taiwan, China, Australia, Israel, and Sri Lanka.
• It was brought to India in the 1990s, and is grown in Karnataka, Kerala, Tamil Nadu, Maharashtra, Gujarat, Odisha, West Bengal, Andhra Pradesh, and Andaman and Nicobar Islands. 
• It grows in all kinds of soil, and does not require much water.

Second Edition of India Innovation Index

Part of: GS Prelims and GS-III – Start-ups; Entrepreneurship; Innovation

In news 

• NITI Aayog, along with the Institute for Competitiveness released the second edition of the India Innovation Index. 
• The first edition of the index was launched in October 2019.

Key takeaways

• The India Innovation Index 2020 examines the innovation capabilities and performance of the states and union territories.
• Toppers in ‘Major States’ category: (1) Karnataka; (2) Maharashtra; (3) Tamil Nadu 
• Four southern states—Karnataka, Tamil Nadu, Telangana and Kerala—occupied the top five spots under the ‘Major States’ category this year.
• Overall, Delhi retained its first rank, while Chandigarh landed in the second place this year.
• Under the ‘North-Eastern/Hill States’ category: Himachal Pradesh moved up from the second position to emerge as the top ranker this year.

Parameters:

• The innovation inputs were measured through five enabler parameters, and the output through two performance parameters.
• Enabler parameters: ‘Human Capital’, ‘Investment’, ‘Knowledge Workers’, ‘Business Environment’, ‘Safety and Legal Environment’ 
• Performance parameters: ‘Knowledge Output’ and ‘Knowledge Diffusion’

Do you know?

Reason for Karnataka’s rank:

• Karnataka’s rank is attributable to its substantive number of venture capital deals, registered geographical indicators and information and communications technology exports.
• Karnataka’s high FDI inflow has also enhanced the innovation capabilities of the state.

Related article:

• National Innovation Portal (NIP) launched: Click here

(Mains Focus)

GOVERNANCE / ECONOMY

Topic: General Studies 2:

• Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 
• Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

IBC’s Section 32A

Context: The Supreme Court recently held that the successful bidders for a corporate debtor under the Insolvency and Bankruptcy Code (IBC) would be immune from any investigations being conducted either by any investigating agencies such as the Enforcement Directorate (ED) or other statutory bodies such as Securities and Exchange Board of India (SEBI).

Brief Background

• IBC was enacted on May 28, 2016 to effectively deal with insolvency and bankruptcy of corporate persons, partnership firms and individuals, in a time bound manner. 
• It has brought about a paradigm shift in laws relating to insolvency resolution to 
  • Promote entrepreneurship
  • Maximize value of assets
  • Providing a robust insolvency resolution framework 
  • Differentiating between impropriety and business debacle. 
• The predominant object of the Code is resolution of the Corporate Debtor.
• IBC is a transformational piece of legislation and has been amended four times to resolve problems hindering objectives of the Code.
• Prior to insertion of section 32A (introduced by IBC(Second Amendment) Bill, 2019) a successful Resolution Applicant faced the hassle of prosecution and liabilities before courts and tribunals for prior acts of Corporate Debtor
• Section 32A provides that Corporate Debtor shall not be prosecuted for an offence committed prior to commencement of Corporate Insolvency Resolution Process (CIRP) once Resolution Plan has been approved by Adjudicating Authority (AA).

What did the Supreme Court say in its judgment?

• Upheld Section 32A of IBC: In its judgment, the apex court, while upholding the validity of Section 32 A of IBC, said it was important for the IBC to attract bidders who would offer reasonable and fair value for the corporate debtor to ensure the timely completion of corporate insolvency resolution process (CIRP).
• Protection granted: Such bidders, however, must also be granted protection from any misdeeds of the past since they had nothing to do with it.  There is thus extinguishment of criminal liability of corporate debtor.
• Protection extended to assets of debtor: Such protection, the court said, must also extend to the assets of a corporate debtor, which form a crucial attraction for potential bidders and helps them in assessing and placing a fair bid for the company, which, in turn, will help banks clean up their books of bad loans. 
• Conditions for Immunity: The protection to successful bidders and the assets of a corporate debtor are provided by the rules under Section 32A of the IBC. The apex court has, however, also said that such immunity would be applicable only if there is an approved resolution plan, and a change in the management control of the corporate debtor
• “The new management cannot be the disguised avatar of the old management. It cannot even be the related party of the corporate debtor. The new management cannot be the subject matter of an investigation which has resulted in material showing abetment or conspiracy for the commission of the offence and the report or complaint filed thereto,” the apex court held.

Why is the SC upholding Section 32A important?

• Time taken for resolution: Since the IBC came into being in 2016, the implementation of resolution plan of several big ticket cases has been delayed because of various challenges mounted by its own agencies and regulators
• Example of Bhushan Power and Steel: The debt-laden company, admitted into insolvency in 2017, owes more than Rs 47,000 crore to banks and other financial institutions, and another Rs 780 crore to its operational creditors. After a prolonged bidding battle, JSW Steel won the rights to take over Bhushan Power with a bid of Rs 19,700 crore. 
• However, before the Sajjan Jindal-led company could move to take over Bhushan Power, the ED swooped in, and attached assets worth Rs 4,000 crore citing alleged fraud in a bank loan taken by the company’s former owners and other cases under the Prevention of Money Laundering Act (PMLA).

Merits of SC Judgement

• Quick Resolution of Insolvency Cases: The SC judgement bring clarity into Section 32A of IBC and ensures the timely completion of corporate insolvency resolution process. With the Supreme Court upholding the validity of Section 32 A, the cases such as that of Bhushan Power are expected to be completed soon.
• Boosts Confidence in IBC: Experts also said that this will give confidence to other bidders to proceed with confidence while bidding on such disputed companies and their assets
• Helps new management make clean Start: The extinguishment of the criminal liability of the corporate debtor is apparently important to the new management to make a clean break with the past and start on a clean slate. 

GOVERNANCE/ ECONOMY

Topic: General Studies 2,3:

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

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

Power Subsidies

Context: India spends about Rs 2.89 lakh crore (~$39.5 billion) annually to subsidise energy production and consumption, according to a recent CEEW and IISD study. This covers electricity, gas, LPG, kerosene and fertiliser.

Subsidies are needed either to promote goods and services that have greater social/environmental welfare or to underwrite access to basic levels of consumption for those who cannot afford them.

Issues

• Improper Targeting of subsidies: If the target beneficiaries are not assessed properly, subsidies end up being wasted, thereby distorting the very social welfare they were meant to fix.
• Continuation of High tariffs: Poorly targeted electricity subsidies (at Rs 63,778 crore) constituted more than a fifth of all energy subsidies. Yet, India has one of the highest electricity tariffs on a purchasing power parity basis.
• Subsidy structure not aligned with India’s Policies: Government’s programmes indicate that India is, rightly, going through two energy transitions: one towards universal energy access and another a shift toward cleaner energy. But its subsidy structures militate against both objectives, perpetuating distorted prices for dirty fuels and limiting the resources available to target the households needing support.

Way Ahead

• Data based subsidy structure: Improved subsidy distribution data would help identify the groups that benefit, and create the political space to revise electricity tariffs upwards for richer consumers. The Give-It-Up campaign for LPG subsidies followed this principle.
• Use Census for Proper Targeting: The population needs to be better categorised based on wealth/income so as to better target power subsidies. Census can provide necessary data for such purposes. In order to overcome the limitations of self-reporting of incomes, wealth and social indicators would also be needed to categorise households properly.
• DBT alternative to Subsidies: A well-targeted direct income transfer could cover all or a portion of nominal electricity consumption. Such an electricity access safety net, during stressed economic conditions, would cost Rs 3,000 crore for three months, less than 5% of annual power subsidies across all states.
• Proportionate agri-power subsidies: Subsidies for agricultural use of electricity and fertiliser should be linked to farm size. Also, natural farming could save subsidies on fertiliser, and instead cover the costs (within a decade) of shifting farmers to more sustainable farming practices. 
• Inter-departmental Collaboration: A targeted direct benefit transfer scheme for power could be designed in collaboration with departments responsible for providing non-energy social welfare schemes as well.
• Subsidies for infrastructure creation: Subsidies for renewables are needed to invest in grid balancing and energy storage so that the wider electrification of many other sectors (transport, cooking, small industries) becomes feasible.
• Piped Natural Gas in Urban areas: It is estimated that rapid rollout of piped natural gas in urban areas by 2025 could result in LPG subsidy savings of over Rs 1 lakh crore.

• Restructuring Subsidy structure: Substituting subsidy reforms (such as a direct benefit transfer to poor consumers) for poorly designed cross-subsidies could not only reduce money spent on subsidies but will substantially improve industrial competitiveness.
• Holistic approach: Adopt principles consistent with social justice, environmental sustainability and new economic opportunity.

Conclusion

• The difference between good and bad subsidies lies in the balance between social welfare and political patronage.
• The pandemic-induced economic crisis gives one more chance to fix the distortions, increase energy security nets for those who need them, free up resources to invest in clean infrastructure, create more jobs and attract billions more in new investment.

(TEST YOUR KNOWLEDGE)

Model questions: (You can now post your answers in comment section)

Note: 

• Correct answers of today’s questions will be provided in next day’s DNA section. Kindly refer to it and update your answers. 
• Comments Up-voted by IASbaba are also the “correct answers”.

Q.1 Second edition of the India Innovation Index was launched by which of the following?

1. Ministry of Science and Technology
2. NITI Aayog
3. Ministry of Commerce
4. National Innovation Foundation (NIF) – India 

Q.2 Consider the following statements regarding Dragon fruit:

1. It is indigenous to Vietnam only.
2. It grows in all kinds of soil.
3. It requires lots of water.

Which of the above is/are correct?

1. 1 and 3 only
2. 3 only
3. 1 and 2 only
4. 2 only

Q.3 Maritime Exercise SITMEX is held between which of the following countries?

1. Singapore and Thailand
2. Singapore, Thailand and India
3. Singapore and India
4. Thailand and India

ANSWERS FOR 20th January 2021 TEST YOUR KNOWLEDGE (TYK)

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