SYNOPSIS: IASbaba’s TLP – 2017 : UPSC Mains General Studies Questions [14th Aug, 2017]- Day 26

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1. Discuss the significance of regional air connectivity. In this regard, examine the initiatives taken by the government.

Connectivity is the cornerstone for regional economic cooperation and integration and has the potential to unlock and integrate value chains across trade,transport, ICT, people ,energy and technology.

SIGNIFICANCE OF REGIONAL AIR CONNECTIVITY:

The UNESCAP report of 2014 themed “Regional connectivity for shared prosperity” lists air connectivity as a significant source of integrating places inaccessible by road and rail networks

India according to International Air Transport Association (IATA) is set to become the 4^th largest civil aviation market by 2020.

The Deloitte report commissioned by MoCA has underlined the following economic benefits

Multiplier economic benefits: Direct by increase in employment opportunities, indirect by addition of supply chain of fuel suppliers, construction companies, inter modal transport .

Increase in labour market flexibility and spin off effect as factors of production move into hinterland as cities expand

Balanced regional development by increasing connectivity to urbanising centres will check influx of migrants and create more agglomerations.

Faster movement of cargo will prevent wastage of perishable goods and thus benefit the economy

Social cohesion – leading to cultural transmission and respect for other cultures will promote unity in diversity

Increased tourism potential as it is a demand driven sector connectivity will  improve tourism to places such as North east, Sikkim, Leh , Ladakh etc.

Thus the Government designed the regional connectivity scheme as part of its National civil Aviation policy 2016 in order to

• to make flying affordable for the masses
• to promote tourism
• increase employment

• Promote balanced regional growth.
• It also intends to put life into un-served and under – served airports

FEATURES OF THE SCHEME:

UDAN: Ude Desh ke Aam Nagrik to make flying affordable to the masses the DGCA has put a cap of 2500/- on economy seats on certain no. of seats in every flight in all air routes.

• Airfares will be capped in the range of Rs.1,700-Rs.4,070 and will be revised every quarter based on the prevailing inflation rate.
• The Airlines would also be required to maintain a frequency of minimum, three flights per week and maximum seven flights per week.
• Airport Authority of India will be the implementing Agency for the Scheme.
• The RCS route would have to include un-served airports i.e. airports where there is no scheduled commercial flight or under-served airports i.e. airports which have 7 or less scheduled commercial flights per week.
• The RCS routes would cover a length between 200 to 800 km. But this criteria would not apply to hilly areas, islands, North-east region and for helicopter operations.
• A Regional Connectivity Fund would be created to subsidise the operation of the RCS
• Viability Gap funding would be given to the selected airlines. The VGF support for respective routes would be indexed to inflation and ATF prices which would be reviewed periodically. The VGF support would also be linked to the passenger volumes.
• The Exit Mechanism for selected airlines would be made easy after a period of one year
• The selected Airlines will enjoy a period of exclusivity on the awarded routes.
• The Central Government will support the RCS Scheme by levying an excise duty of only 2% on Aviation Turbine Fuel (ATF) purchased at RCS Airports for a period of three years.
• Along with it SAARC open sky policy programme and MoU’s with major aircraft carriers along with creation of small 12 seater air , NM5 planes like SARAS are a help to boost connectivity and also economic growth and integration.
• Criticism:
  • The NITI Aayog had earlier objected to the cross–subsidisation idea i.e. levies on trunk routes to fund connectivity to places where an airline would not otherwise wish to go. Such cross-subsidy, it reportedly felt, was unnecessary and costly, tampering with the way the market worked.

BEST ANSWER : LINCOLN

Connectivity is the key for all round development of a region. For development of various parts of our country and thus the country as a whole, connectivity in terms of roads, rail, air, water ways and digital is crucial.

Air connectivity is an important pillar because:

1) It is the fastest mode of transport.

2) Its speed play a critical role in responding to emergencies like disaster.

3) It creates spill over effect of leading to development of region around the airport.

4) It has huge potential of job creation in both aviation and allied sectors like maintenance.

5) India is poised to be 4th largest aviation market by 2020.

6) Air connectivity to border areas is critical for fast troop mobilization and faster response.

Initiatives taken so far

1) The civil aviation policy 2016 has Regional Connectivity scheme (Ude Desh Ke Aam Nagrik) which aims to connect under served areas and caps the ticket prices to such destination at 2500 / hour of flying.

2) The policy has open skies policy for SAARC nation and countries beyond 5000 Km on reciprocal basis.

3) India has signed bilateral agreements allowing Indian and foreign carriers to operate in either countries.

4) No Frill airport are being constructed which reduces the cost of implementation and maximising benefits.

5) Air Trips and helipad are being constructed. Aviation policy has provision to boost helicopter usage.

6) Advanced Landing Strips have been created in border areas like Daulat Beg Oldi for faster troop movements.

Some challenges exist like:

1) The lack of demand from private sector to connect some regions.

2) The Airport cost. The Hybrid Till model has been criticised and said to increase cost of operations.
3) Indiana airlines lag in using the seats allotted to foreign destinations under bilateral agreement but foreign airlines have fully utilised theirs.

Regional connectivity especially air connectivity is key for growth of our economy and development. Implementation of the existing policies effectively and addressing the mentioned concern will give boost to regional air connectivity.

2. Small and decentralized ports are vital for integrating the economy and boosting trade. Do you agree? Substantiate.

Introduction

India having a long coastline of 7500 km and abundance of rivers , Port development can boost economic growth and integrate the economy. There are 13 major ports and more than 150 small ports. The Sagarmala Project envisages port led development of our coastal regions. This is critical to development of the regions by fully utilizing the benefits of Blue Economy.

Main Body

In this a right mix of small and big ports are needed. Need for small decentralized ports are,

1) Small ports are easier to built with less land requirement and initial investment.

2) They will boost coastal shipping reducing stress on road and rail for freight movement, boosting internal trade.

3) The spillover effect of ports on local community is immense by creating regional jobs.

4) The area around the port can utilise other prospects of blue economy like fishing, tourism etc. with port as the anchor.

5) Smaller ports can be more sustainable environment wise.

6) Decentralization is key for allowing the port to have natural growth.

7) Mundra port a private decentralised port is the most profitable, handles more cargo that many Public sector ports.

8) Easier expansion and widening of facilities is possible due to decentraliastion.

9) Small ports will provide new locations for trade and will give access to new market locations in the country.

10. Small ports integration with Railway corridors, Road projects and hinterland connectivity will provide fillip to logistical movement with ease in the country.

But these are suffering from challenges such as,

1. High siltation in rivers pose challenges for inland water transport.
2. Outdate technology, multiple compliances, trade barriers , red tapism etc

Conclusion

For India to fully utilize its vast coastline for economic development then success of Sagarmala project is critical. Modernization, computerization & mechanization along with this scheme will result in economic development. It will not just boost trade but also be cheaper mode and less harmful for the environment.

Best Answer: Arc59

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3. Do you think national waterways in India must get greater policy attention? Critically examine.

• Water ways require create impetus in policy consideration because:

1. Its is cheapest mode of transport. presently, logistics costs in India are estimated to account for as much as 18 percent of the country’s GDP.
2. Road handle more than 6% 5of the freight today. Rail freight has capacity and cost constraint.it carries 27% of the freight. Thus, water ways will take pressure out of these 2 modes. It currently carries less than 0.25% of the total freight
3. They are environmentally friendly with minimal pollution.
4. It can create development of region around the waterway. It will have the effect of a highway.
5. Development of waterways will also boost tourism activity along these areas.

• Challenges:

1. The rivers in peninsular India are non-perennial and run dry during summers, this is a mojor hurdle which makes it only seasonal.
2. Water way would add burden on water management with an extra dimension. Currently, irrigation, flood management and electricity generation are considered, waterway will add to complexity as certain level of water have to be always maintained.
3. Frequent dredging needs to be done to keep the ways operating, adding to cost.
4. India lacks adequate Human resource to construct and manage such waterways.
5. It will have negative impact on marine life.
6. Water sharing among states is a constant problem. Water ways will need connecting rivers adding to the disputes.

Best Answer: Aritra

India has a vast network of about 14,500 km of navigable and potentially navigable inland waterways which include rivers, lakes and canals. However, share of waterways in India’s transport mix stands abysmally low at 0.6%, while that of US is 8.5 %, China at 8.7%, Bangladesh 32%.
Development of waterways can accrue enormous benefits to our growing economy. Advantages Include:
i. Cost effectiveness: The cost of transporting 1 tonne of freight per kilometer is just Rs. 1.19, while the same is Rs. 2.28 through highways and Rs. 1.41 by railways.
ii. Fuel efficiency: 1 litre of fuel can move 24 tonnes of cargo by road, 85 tonnes by rail while a whopping 105 tonnes by water.
iii. Higher fuel efficiency also reduces the environmental impact of waterways transportation.
iv. Decongestion of roadways and railways: Heavy traffic on these transport routes results in slower movement of cargo therefore increases the cost of trade. Moreover, can definitely reduce the incidents of road accidents in India (2.5 million incidents of road accidents per year).
v. Huge employment generation potential (ship building industry, tourism). Furthermore, it can correct the regional imbalance in trade esp. in the eastern India, which has huge network of inland rivers.
Challenges
i. Environmental Concerns: Could result in aquatic habitat destruction due to dredging, sound and water pollution, oil spillage etc. Development of NW1 (Allahabad-Haldia) in R. Ganga could endanger the Dolphin population.
ii. Commercial inland waterways transportation requires a minimum water depth of 2.5-3 metres. Peninsular rivers of India have seasonal variation of water, many runs through rift valleys, ridges etc. While the Himalayan rivers passes though uneven topography, forms cascades and waterfall at places, prone to course shifting and meandering.
iii.High initial investment, periodic dredging costs etc.
With the passage of National waterways Act, 2016 a total of 111 rivers has been declared as national water ways and are being developed. Environmental challenges can be addressed through a comprehensive regulatory framework by the Inland Waterways Authority of India, like “working with nature” approach (0-discharge standards, noise control etc.). Govt. can adopt the PPP model, opt for financial assistance from World Bank, ADB, provide VFG to private sector etc.
India is estimated to become the second largest economy by 2050, therefore adding to the capacity of our vast multi-modal transport network in the country by developing the national waterways will be a step in the right direction.

4. The death of children in Gorakhpur due to sheer negligence and poor administrative response is a blot for 21st century India and a matter of great concern. Comment.

Introduction:

More than 60 children, a majority of them suffering from Acute encephalitis syndrome, died in one of the government hospital in Gorakhpur, Uttar Pradesh.

What led to such tragedy?

The tragedy was a fallout of sheer negligence and poor administrative response.

Sheer negligence:

• As per the primary reports the primary reason behind the incident was lack of oxygen cylinders on account of unpaid dues.
• The newborns can be easily managed by small cylinders that are easily available in the market. All government hospitals have a contingency fund for such emergencies. The BRD hospital where the incident took place told the government about shortage of funds, however, the government didn’t pay heed to it.

Poor administrative response:

• The state government insists that the deaths are not linked to any oxygen shortage, though they are unable to explain why so many children have died in two days.
• Systemic issue within administration is highlighted as the deaths due to encephalitis in Gorakhpur district has been taking place since 1978, yet no such step has been taken to improve the situation.

A blot for 21^st century India:

• While India on one hand is world-wide known for medical tourism on the other incidents like this shows apathy towards poor people and those located in rural areas.
• Incidents like this have happened in past too including death of about 13 women in a mass- sterilization camp at Bilaspur. But still we see no improvement in public health system of our country.
• Such incidents lead to erosion of public faith while on one hand the government is trying to promotes measures like give up subsidy scheme, pay taxes timely etc. which requires people’s trust on government.
• The incident also shows the lack of ethics and morality on the part of government officials. The termination of electricity and oxygen supply for non-payment of bills shows the utter disregard for human lives. Since electricity is essential for any hospital this act shows absence of values and morals on the part of government officials

Issues:

What has happened in Gorakhpur isn’t merely about oxygen cylinders and unpaid bills—it is a symptom of many deeper problems.

• India’s abysmally low public spending on healthcare with just4% of GDP in 2014.
• Acute manpower shortage– The country has only about one doctor for every 1,700 patients whereas the World Health Organization (WHO) prescribes at least one for every 1,000 patients.
• A vast majority of people do not have health insurance in a country where the public health system has collapsed.
• Poor governance– Weak enforcement of rules on quality and governance.
• Poor social determinants– In the case of U.P., the epidemics have their roots in weak social determinants such as housing and sanitation, coupled with ecological changes.
• India lags behind its neighboring nations as well. The infant mortality rate in India in 2015 was 38, according to the World Bank—far better than the 165 in 1960 but lagging comparable countries such as Bangladesh (31), Indonesia (23) and Sri Lanka (08).

Way forward:

• The Medical Council of India (MCI) must be reformed so that health education in country improves.
• In the meantime, more healthcare providers need to be brought into the system, including nurses, optometrists, anaesthetists and AYUSH (ayurveda, yoga and naturopathy, unani, siddha and homoeopathy) workers.
• Improving hospital infrastructure.
• Increasing public health expenditure.
• Providing universal healthcare on the lines of Mexico and Thailand.

Best answer: Red fang

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Also refer: Gorakhpur Tragedy: Learning lessons

5. Which major sectors contribute the maximum to bad loans or NPAs in India? What is the way out? Analyse.

Introduction: Define NPA.

Non-Performing Assets are credits or loans giving by banks on which principle and interest payment is due over 90 days of time as specified by RBI. NPA’s have turned out to be the biggest hurdle in banks development in India.

Body: consists of two parts.

1^st part: Major sectors which contribute maximum. Always refer to Economic survey for Economy part for authenticity.

Sectors contributing maximum and reasons for lack of revenue generation from these sectors are:

• Corporate sector: During Boom time they borrowed considerably, then global recession couldn’t achieve revenue. To continue operation, they borrowed again but still no return on investments.
• Power sector: Selling at very low rate at 2.4/kwh far below break-even rate of 4/kwh. Also most of the time shortage of coal, inefficient machinery and servicing problem.
• Telecoms: Interest coverage ratio has decreased due to entry of new players which fiercely increased competition and results in price war.
• Mining: Environmental clearance hurdles and licensing issues.
• Other sectors like Metals, textiles, chemicals, engineering etc. are not able to produce enough revenue due to lack of investment in modernization and stand up to competition from foreign entrants.

Way out:

• RBI’s three mechanism: ARC, Strategic Debt restructuring, S4A (Strategic structuring of Stressed Assets.
• 5/25: This scheme offers wide window for revival.
• AQR: resolution of problem requires loss recognition.
• PARA: To buy bad loans from banks and let banks perform their core work.
• Others like stop of ever greening of loans, 4R’s etc.

Conclusion:

Reason for NPA is insufficient revenue generation which lies in hurdles like Environmental clearance, Red tapism and court issues. If this hurdles like this are cleared then NPA problems will get solved in no time.

Best Answer: Cool Monk

Non-performing assets are such stressed assets which are unable to pay the loan amount and on the verge of default. India is gripped with serious NPA problem of worth 11lakh crore. The sectors which have contributed are:

1. Manufacturing: Due to slump in global rates and dumping of cheap products such as steel Indian manufacturing industry collapsed. Having a long gestation period and high funding requirements make it prone to high NPA issue
2. POWER: Indian discoms are famous for their losses due to T&D losses, low tariff etc.
3. Telecom: Due to Cut-Throat competition in telecom sector prices have slumped. And telecom companies are unable to pay the debt
4. Mining: Mining industry is suffering because of coal block cancellations by SC , then environmental concerns such as NiyamGiri Hills , Odisha project cancelled
5. Other sectors are textile, agriculture which are stressed because of lack of modernization , labor reforms etc

WAY OUT

1. Setup of Public sector assest rehabilitation agency as suggested by economic survey
2. Recent banking Regulation amendment bill giving RBI power to tackle the crisis and consequently RBI targeted biggest 12 defaulters
3. P.J. Nayak committe recommendations such as BBB
4. Environmental regulation, Labore reforms, Wages act , LARR act & other leagl reforms
5. Insolvency and bankruptcy code for easy exit mechanism to tackle CHAKRAVYUH challenge

Implementation of these steps will free up the NPA’s and resources can be utilized productively thus enhancing the growth. Revival in world economy will boost further the resolution process.