FLUOROCHEMICALS
1. Context
Researchers at the University of Oxford have achieved a groundbreaking breakthrough by developing a new technique to produce fluorochemicals without using hazardous hydrogen fluoride (HF) gas.
2. Hazards of Hydrogen Fluoride (HF) in Fluorochemical Production
- The current method of producing fluorochemicals relies on using hydrogen fluoride (HF) gas, which is toxic, corrosive, and poses significant safety risks.
- Despite stringent regulations, HF spills have led to fatal accidents and adverse environmental impacts. The need for a safer alternative has been long sought by chemists.
3. Biomineralization-Inspired Process
- The research team at the University of Oxford, in collaboration with FluoRok, University College London, and Colorado State University, drew inspiration from the natural biomineralization process responsible for forming teeth and bones.
- They aimed to develop a method to produce fluorochemicals directly from fluorspar (CaF2) without the need for HF production.
4. Mechanochemical Process for Fluorochemical Synthesis
- In the novel method, the researchers activated solid-state CaF2 using a mechanochemical process, akin to grinding spices with a pestle and mortar.
- By grinding CaF2 with powdered potassium phosphate salt in a ball-mill machine, they created a powdered product called "Fluoromix."
5. High Yield and Diverse Fluorochemical Synthesis
- The Fluoromix product enabled the synthesis of over 50 different fluorochemicals directly from CaF2 with yields of up to 98%.
- This achievement demonstrated the effectiveness of the solid-state process and its potential to revolutionize fluorochemical production globally.
6. Streamlining the Supply Chain and Sustainability
- The new method offers the potential to streamline the current supply chain for fluorochemicals, leading to decreased energy requirements and a lower carbon footprint.
- This aligns with future sustainability targets and aims to make the industry more environmentally friendly.
7. The Creation of FluoRok
- The success of the research has resulted in the creation of FluoRok, a spin-out company focused on commercializing the technology.
- FluoRok aims to further develop safe, sustainable, and cost-effective fluorination processes.
8. Multidisciplinary Collaboration and Societal Benefits
- The study highlights the importance of multidisciplinary collaboration and expertise in finding solutions to complex chemical problems.
- The researchers hope that this breakthrough will encourage scientists worldwide to address challenging chemical issues for societal benefit.
9. Conclusion
- The University of Oxford's research marks a significant milestone in fluorochemical production.
- By eliminating the need for hazardous hydrogen fluoride gas and offering a safer and more sustainable approach, this breakthrough has the potential to transform the fluorochemical industry, minimize environmental impact, and enhance the reliability of global supply chains.
| For Prelims: University of Oxford, fluorochemicals |
Source: PHYS.org
KARGIL WAR
1. Context
Leaders across India’s political spectrum paid their tributes to India’s armed forces and the fallen martyrs on the occasion of the 24th anniversary of the Kargil Vijay Diwas. Speaking at the Kargil War Memorial in Ladakh, Defence Minister Rajnath Singh remembered the sacrifices of India’s soldiers and blamed Pakistan for the Kargil War.
2. The Kargil War: A Tale of Valor and Sacrifice
- The Kargil War fought between May and July 1999, was a defining moment in the history of India and Pakistan.
- The conflict erupted in the icy heights of the Kargil district in the Indian-administered state of Jammu and Kashmir.
- It was a limited war but carried significant geopolitical implications, escalating tensions between the two nuclear-armed neighbors.
3. Background and Trigger:
- The origins of the Kargil War can be traced back to the territorial dispute over the region of Kashmir.
- Both India and Pakistan claimed sovereignty over the area, leading to several conflicts since the partition of British India in 1947.
- The Kargil War, however, was unique as it involved the infiltration of Pakistani troops disguised as militants into the Indian side of the Line of Control (LoC) - the de facto border between the two countries in the region.
- In early 1999, the Indian Army detected the presence of these infiltrators on strategic heights along the LoC.
- The intrusion went unnoticed initially, but as the Indian forces realized the gravity of the situation, they launched Operation Vijay to evict the intruders and regain control of the occupied territory.
4. Challenges in the Kargil War: High Altitude Warfare
- Enemy Infiltrators: The Indian armed forces faced well-armed enemy infiltrators supported by continuous shelling from Pakistani artillery across the border.
- Geographical Conditions: Kargil, located at the northern edge of the Line of Control (LoC), presented challenging geographical conditions.
- Extreme Altitudes: Kargil, Dras, and surrounding peaks ranged from 2,676 m (8,780 ft) to 5,500 m (18,000 ft) in altitude.
- Physiological Effects: High altitudes caused severe physiological effects on soldiers, including altitude sickness, reduced oxygen levels, and physical exhaustion.
5. Challenges Faced in the Initial Stages of the Kargil War:
- Unpreparedness: Indian Army and Air Force were unprepared for high-altitude combat on such a large scale.
- Altitude Sickness: Many soldiers suffered from altitude sickness, leading to casualties.
- Lack of Cold Weather Equipment: Insufficient equipment for fighting in extreme cold weather.
- Logistical Challenges: Pakistan's constant shelling on crucial NH 1A caused major logistical challenges.
6. Adaptations and Overcoming Challenges:
- Acclimatization and Training: Units initiated acclimatization and training programs to better prepare soldiers for high-altitude conditions.
- Improved Cold Weather Equipment: Procurement of better cold weather equipment, though it remained lacking throughout the war.
- Refined High Altitude Assault Techniques: Assaulter groups increasingly used small units scaling near-vertical terrain instead of daytime frontal attacks.
- Coordination of Firepower: Overwhelming artillery fire preceded all attacks, and the Bofors gun played a crucial role in the thin air of Kargil.
7. India's Victory and Ongoing Challenges:
- Timeless High Altitude Challenges: The Kargil War highlighted the enduring and deadly challenges posed by combat at high altitudes.
- Importance of Artillery: Due to altitude and terrain constraints, India relied heavily on artillery support.
- Lessons Learned: The war showcased the importance of adapting tactics, equipment, and training for high-altitude warfare.
- Ensuring Preparedness: India's hard-fought victory emphasized the need to maintain preparedness for future high-altitude conflicts.
- Constant Vigilance: As high-altitude conflicts remain a possibility, India must continue to address the challenges posed by such terrains.
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For Prelims: Kargil War, Line of Control (LoC), India-Pakistan Relations, Kargil Vijay Diwas, and Operation Vijay.
For Mains: 1. The Kargil War of 1999 posed significant challenges for the Indian armed forces, particularly in the high-altitude terrain. Analyze the initial hurdles faced by the Army and Air Force, including altitude sickness and lack of suitable equipment. (250 words).
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Source: The Indian Express
NATIONAL COMMISSION FOR WOMEN
1. Context
Recent cases of molestation and rape in Manipur have brought the efficacy of the commissions into focus. This issue is not limited to women in one state; it concerns all citizens who feel let down. Similar scrutiny of Human Rights Commissions is also warranted.
2. National women commission
- The National Commission for Women (NCW) was established in 1992 under the National Commission for Women Act 1990 to address women's concerns at the national level.
- Additionally, each state has its own commission comprising individuals with experience in various fields relevant to women's development.
- These commissions are expected to investigate and examine matters related to women's safeguards under the Constitution and other laws.
- They are also responsible for handling complaints and addressing non-implementation of laws that protect women's rights.
3. Manipur State Commission for Women (MSCW)
- The MSCW was constituted in September 2006 under the Manipur State Commission for Women Act, 2006.
- The Manipur Women's Commission is a statutory body established by the Government of Manipur in India to safeguard the rights and interests of women in the state.
- It was created to address the specific concerns and challenges faced by women in various spheres of life and to promote gender equality and empowerment.
- The commission plays a crucial role in ensuring that women are treated fairly, with dignity, and without discrimination.
3.1. Key Objectives and Functions
Gender Equality: The primary objective of the Manipur Women's Commission is to promote and safeguard gender equality. It aims to eliminate all forms of discrimination and violence against women and to create a more just and equitable society.
Empowerment: The commission strives to empower women economically, socially, and politically. It works towards enhancing their participation in decision-making processes and providing opportunities for their personal and professional growth.
Legal Support: The commission serves as a legal aid and counseling center for women who have been victims of violence, harassment, or any form of injustice. It offers support and guidance in pursuing legal actions and seeks to ensure justice for the affected women.
Awareness and Education: The commission conducts awareness programs and educational workshops to sensitize the public about women's rights and gender issues. It aims to change societal attitudes and behaviors towards women and foster a culture of respect and gender sensitivity.
Policy Recommendations: The commission actively engages with policymakers and authorities to advocate for policies and laws that protect and promote women's rights. It submits recommendations and suggestions for necessary changes in existing laws or the formulation of new ones to address women's issues effectively.
Research and Data Collection: To understand the evolving challenges faced by women, the commission conducts research and collects relevant data on various aspects of women's lives. This information helps in designing targeted interventions and policies.
Coordination with Stakeholders: The commission collaborates with various government departments, NGOs, and other stakeholders to implement gender-sensitive programs and initiatives effectively. It also works closely with law enforcement agencies to ensure the safety and security of women.
Crisis Intervention: In cases of emergencies or crises involving women, the commission intervenes promptly to provide necessary support and assistance. It can issue directives to authorities for immediate action.
4. Conclusion
- Women's commissions in India, including the Manipur State Commission for Women, need to transcend administrative barriers and become more proactive in addressing women's issues.
- Field visits, impartial appointments, and social audits are essential steps to ensure these commissions fulfill their roles effectively.
- It is time for commission members to step out of their offices, experience the reality faced by citizens, and work towards creating a safer and more equitable society for all.
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For Prelims: Human Rights Commissions, National Commission for Women, National Commission for Women Act 1990, Manipur State Commission for Women,
For Mains:
1. Discuss the role and mandate of the National Commission for Women (NCW) in India. Assess its effectiveness in addressing women's concerns at the national level. (250 words)
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Source: The Indian Express
INDIA AS THE THIRD LARGE ECONOMY
1. Context
Inaugurating the newly built International Exhibition-cum-Convention Centre (IECC), named Bharat Mandapam, in New Delhi recently, Prime Minister Narendra Modi said that when he took charge in 2014, India was the tenth-largest economy in the world. During his second term as PM, he said, India had become the fifth-largest economy. “I want to assure that during the third tenure of our government, India will be among the top three economies of the world,” he said.
2. Basic characteristics of the Indian economy
Market size
- India’s real gross domestic product (GDP) at current prices stood at Rs. 135.13 lakh crore (US$ 1.82 trillion) in FY21, as per the provisional estimates of annual national income for 2020-21.
- India is the fourth-largest unicorn base in the world with over 21 unicorns collectively valued at US$ 73.2 billion, as per the Hurun Global Unicorn List.
- By 2025, India is expected to have 100 unicorns by 2025 and will create 1.1 million direct jobs according to the Nasscom-Zinnov report ‘Indian Tech Start-up’.
- India needs to increase its rate of employment growth and create 90 million non-farm jobs between 2023 and 2030’s, for productivity and economic growth according to McKinsey Global Institute.
- Net employment rate needs to grow by 1.5% per year from 2023 to 2030 to achieve 8-8.5% GDP growth between 2023 and 2030.
- According to data from the RBI, as of the week ended on June 04, 2021, the foreign exchange reserves in India increased by US$ 6.842 billion to reach US$ 605 billion.
Recent Developments
- With an improvement in the economic scenario, there have been investments across various sectors of the economy. Private Equity – Venture Capital (PE-VC) sector recorded investments worth US$ 20 billion in the first five months of 2021, registering a 2x growth in value compared with the same period in 2020. Some of the important recent developments in the Indian economy are as follows:
- Merchandise exports stood at US$ 62.89 billion between April 2021 and May 2021, while imports touched US$ 84.27 billion. The estimated value of service exports and imports Cumulative FDI equity inflows in India stood at US$ 763.58 billion between April 2000 and March 2021. Foreign Direct Investment (FDI) inflows in India stood at US$ 6.24 billion in April 2021, registering an increase of 38% YoY.
- India's Index of Industrial Production(IIP) for April 2021 stood at 126.6 against 143.4 for March 2021.
- Consumer Food Price Index (CFPI) – Combined inflation was 5.01 in May 2021 against 1.96 in April 2021.
- Consumer Price Index (CPI) – Combined inflation was 6.30 in May 2021 against 4.23 in April 2021.
- In June 2021, foreign portfolio investors (FPIs) turned net buyers by investing Rs. 12,714 crores (US$ 1.71 billion) into the Indian markets. According to depositories data, between June 1, 2021, and June 25, 2021, FPIs invested Rs. 15,282 crore (US$ 2.06 billion) in equities.
- between April 2021 and May 2021 stood at US$ 35.39 billion and US$ 19.86 billion, respectively.
- In May 2021, the Manufacturing Purchasing Managers Index (PMI) in India stood at 50.8.
- Gross GST collections stood at Rs. 141,384 crore (US$ 19.41 billion) in April 2021.
3. India's Rise to Third-Largest Economy by 2027
- India's Rapid Overtaking: IMF forecasts show India poised to become the third-largest economy by 2027, surpassing Germany and Japan.
- Growth Comparison: India's GDP growth of 83% between 2014 and 2023 is second only to China's 84%, outpacing stagnant or contracting economies in the top 10.
- Stagnation in Competing Economies: European countries experienced stagnation due to the Global Financial Crisis (GFC) of 2008-09, while India's impact was comparatively milder.
- Continued Growth: Even with a more modest growth rate of 6% per annum, India is expected to overtake Germany and Japan by 2027.
- Slower Growth Momentum: India's growth momentum between 2014 and 2023 has slowed compared to the 2004-2014 period.
- Significant Gap: The gap between India's third rank and the first two economies (China and the US) remains substantial.
- Per Capita GDP Disparity: India's per capita GDP at $2,600 is the lowest among the top 10 countries and considerably lower than the countries it overtakes.
- Prosperity Metrics: While India's aggregate GDP is rising, per capita prosperity remains a challenge, emphasizing the need for inclusive growth and development.
4. Issues that remain
- Unemployment remains a huge challenge, as the youth still scramble for government jobs. The government disclosed in Parliament recently that 220 million Indians had applied for just seven lakh government jobs in the past seven years.
- Labour force participation rate is low, alarmingly so for women. Job creation is priority number one, even as nearly 70% of industrial jobs are vulnerable to becoming extinct, thanks to automation and robotics.
- High level of hunger: Despite PDS, India’s ranking in the world hunger index is abysmal, signifying the lopsided distribution of economic growth.
- Inequality in income, wealth, and access to quality education and health facilities is widening.
- Was late to adopt a free market economy: India was more inward-looking and influenced, by the Soviet planning model of development. One could argue, with hindsight, that it should have been abandoned much earlier than when we actually did.
- But it did pay dividends in terms of infrastructure and green revolution. It just stayed longer than it needed to.
- Late on capitalizing on export-led growth: India also missed the bus, unlike her East Asian neighbors, on capitalizing on labor-intensive export-led growth. But after the shock of 1991, the economy opened up dramatically.
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For Prelims: Gross domestic product (GDP), Consumer Price Index, Consumer Food Price Index(CFPI), Per Capita Income.
For Mains: Discuss India's remarkable economic journey and its potential to become the third-largest economy by 2027, surpassing Germany and Japan. (250 Words).
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Source: The Indian Express
FISHERIES SUBSIDIES AT 'WTO'
1. Context
Trade experts and civil society members are urging India not to ratify the fisheries subsidies agreement recently agreed upon by the World Trade Organization (WTO) members
2. What is Fisheries subsidies Agreement at WTO?
- The Fisheries Subsidies Agreement is an international agreement negotiated within the framework of the World Trade Organization (WTO).
- Its primary objective is to address the issue of harmful fisheries subsidies that contribute to overfishing, depletion of fish stocks, and the degradation of marine ecosystems.
- The negotiations for the agreement began in 2001 as part of the Doha Development Agenda, and it has been a significant topic in subsequent WTO Ministerial Conferences.
- The goal of the agreement is to create disciplines and regulations on fisheries subsidies to promote sustainable fishing practices and support the conservation of marine resources
3.Key features
- The Fisheries Subsidies Agreement at the World Trade Organization (WTO) is a landmark agreement that sets new binding, multilateral rules to curb harmful fisheries subsidies. The agreement was adopted by consensus at the WTO's 12th Ministerial Conference (MC12) on 17 June 2022.
- The agreement prohibits support for illegal, unreported and unregulated (IUU) fishing, bans support for fishing overfished stocks, and ends subsidies for fishing on the unregulated high seas.
- It also establishes a new funding mechanism to provide technical assistance and capacity building to developing country members to help them implement the agreement
Here are some of the key provisions of the Fisheries Subsidies Agreement:
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- Prohibition of harmful subsidies: The agreement prohibits subsidies that contribute to IUU fishing, overfishing, and fishing on the unregulated high seas.
- Establishment of a funding mechanism: The agreement establishes a new funding mechanism to provide technical assistance and capacity building to developing country members to help them implement the agreement.
- Review and improvement: The agreement provides for a review after five years to assess its effectiveness and to consider further improvements.
4. Advantages
- The agreement is a major step forward in the fight to protect the world's oceans and marine resources.
- It is estimated that harmful fisheries subsidies contribute to the overfishing of at least 30% of the world's fish stocks.
- The agreement is expected to help reduce overfishing and improve the sustainability of fisheries around the world
- The agreement is also expected to have a positive impact on the livelihoods of millions of people who depend on fishing for their food and income. It is estimated that the agreement could generate an additional $50 billion in economic benefits for developing countries over the next decade
- The agreement is a significant achievement for the WTO and for the global community. It is a clear demonstration of the power of multilateral cooperation to address global challenges.
- The agreement is expected to play a major role in protecting the world's oceans and marine resources for future generations
5. Way forward
The Fisheries Subsidies Agreement is a major step forward in the fight to protect the world's oceans and marine resources. It is a clear demonstration of the power of multilateral cooperation to address global challenges. The agreement is expected to play a major role in protecting the world's oceans and marine resources for future generations
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For Prelims: WTO, Subsidies, Fisheries Agreements
For Mains: 1.Critically analyze the role of the World Trade Organization (WTO) in promoting global trade and resolving trade disputes. What are the challenges faced by the WTO in the current global economic scenario?
2.Discuss the objectives and functions of the Dispute Settlement Body (DSB) in the World Trade Organization (WTO). How does the dispute settlement mechanism enhance the credibility of the multilateral trading system?
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Previous Yer Questions
1.In the Context of which of the following do you sometimes find the terms 'amber box, blue box and green tax' in the news? (UPSC CSE 2016)
A. WTO Affairs
B. SAARC affairs
C. UNFCC affairs
D. India-EU negotions on FTA
Answer-A
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Source: Economic Times
FISCAL DILEMMA
1. Context
The elevated levels of India’s fiscal deficit and public debt have been a matter of concern for a long time in India. Even before the COVID-19 pandemic, debt levels were among the highest in developing and emerging market economies. The pandemic pushed the envelope further and relative to GDP, the fiscal deficit in 2020-21 increased to 13.3% and the aggregate
public debt to 89.6%. As the economy recovered after the pandemic, the deficit and debt ratios have receded to 8.9% and 85.7%, respectively.
public debt to 89.6%. As the economy recovered after the pandemic, the deficit and debt ratios have receded to 8.9% and 85.7%, respectively.
2. Fiscal Deficit
- A fiscal deficit is a financial situation that occurs when a government's total expenditures exceed its total revenue or income during a specific period, usually a fiscal year.
- In simpler terms, it means that the government is spending more money than it is earning through various sources, such as taxes, fees, and other revenues.
- The fiscal deficit is an essential indicator of a country's financial health and reflects the gap between the money the government spends on public services, infrastructure projects, social welfare programs, defense, and interest payments on existing debts, and the money it collects from various sources.
- When a government faces a fiscal deficit, it needs to finance the shortfall through borrowing.
- Governments typically borrow money by issuing government bonds or taking loans from domestic or international financial institutions. The accumulated borrowing over time leads to the creation of national debt.
3. Causes of Fiscal Deficit
- Economic Downturns: During economic recessions or downturns, government revenues tend to decline as economic activity slows down. At the same time, government spending may increase to provide stimulus and support to the economy. This combination of reduced revenue and increased expenditure can lead to a fiscal deficit.
- Insufficient Tax Revenues: If a country's tax collection system is inefficient or ineffective, it may not generate enough revenue to cover the government's expenses. Low tax compliance rates, tax evasion, or outdated tax policies can contribute to a fiscal deficit.
- High Public Spending: Governments may have high spending commitments, including expenditures on public services, infrastructure development, defense, and social welfare programs. If spending is not matched with adequate revenue generation, it can result in a fiscal deficit.
- Social Welfare Programs: Social welfare initiatives, such as healthcare, education, unemployment benefits, and pension schemes, can be costly for the government. While they are essential for the well-being of citizens, funding these programs without appropriate revenue sources can lead to fiscal deficits.
- Interest Payments on National Debt: If a significant portion of the government's budget is allocated to servicing the interest on the accumulated national debt, it can strain the budget and contribute to a fiscal deficit.
- Infrastructure Investment: Governments often invest in long-term infrastructure projects, such as roads, bridges, and public transportation systems. While these investments can promote economic growth, they require substantial initial funding and can contribute to a temporary fiscal deficit.
4. Public debt
- Public debt, also known as government debt or national debt, refers to the total amount of money that a government owes to external creditors (such as foreign governments, international organizations, and investors) and domestic creditors (like individuals, banks, and institutions) resulting from past borrowing and deficit financing.
- It is a key component of a country's overall debt burden and is a measure of the government's accumulated financial liabilities over time.
- Governments borrow money to finance various activities, including infrastructure development, social welfare programs, defense, and other public services when their expenses exceed their revenues.
- The main sources of public debt include issuing government bonds, treasury bills, notes, and loans from domestic and foreign lenders.
Public debt can be classified into two main categories:
Internal Debt: This refers to the debt owed by the government to its own citizens and domestic institutions. Internal debt is denominated in domestic currency and is typically held in the form of government bonds, savings certificates, and other securities.
External Debt: This refers to the debt owed by the government to foreign lenders and entities. External debt is denominated in foreign currencies and may include loans from international financial institutions, foreign governments, and private investors.
5. Challenges of High Fiscal Deficits and Debt in India
- Debt-Dynamics Equation: When GDP growth surpasses effective interest rates on government bonds and there's no primary deficit, overall debt declines. However, financial repression to keep interest rates low can cause distortions in the economy.
- Costs of High Deficits: Carrying high deficits and debt has significant costs for the economy. Interest payments consume over 5% of GDP and 25% of revenue, hindering investment in education, healthcare, and infrastructure.
- Impact on Fiscal Policy: High debt levels limit the government's ability to implement counter-cyclical fiscal policies and respond to economic shocks effectively.
- Captive Debt Market: The debt market in India is primarily dominated by commercial banks and insurance companies, leading to limited resources for lending to the manufacturing sector and higher borrowing costs.
- Impact on Sovereign Rating: High deficits and debt can lead to lower sovereign ratings, increasing the cost of external commercial borrowing.
- Inter-generational Burden: Large deficits and debt burden future generations as today's borrowing is taxing tomorrow.
- Regional Disparities: States like Punjab, Kerala, Rajasthan, and West Bengal face higher debt-to-GSDP ratios, exacerbating economic challenges.
- Green Transition: High debt levels may impede funding for emerging priorities like transitioning to a green economy.
- Difficulty in Calibration: High debt makes it difficult to calibrate fiscal policies effectively to address economic fluctuations.
- Need for Prudent Fiscal Management: Addressing high deficits and debt requires prudent fiscal management to ensure sustainable economic growth and development.
6. Challenges of Fiscal Consolidation and Policy Interventions
- Achieving the recommended debt-to-GDP ratio of 58.2% (14th Finance Commission) seems unfeasible in the medium term.
- Even before the pandemic, aggregate public debt was at 74.3% in 2019-20, reaching 89.7% in 2020-21 due to the pandemic.
- Despite a nominal GDP recovery of 18.5% in 2021-22, the debt ratio declined only slightly to 85.7%.
- The high primary deficit in 2022-23 (3.7% of GDP) and budgeted deficit in 2023-24 (over 3%) indicate persistently elevated debt levels.
- The stable Goods and Services Tax (GST) platform is expected to improve tax administration and compliance, increasing the tax-GDP ratio by 1.5 to 2 percentage points in the medium term.
- The need to reconsider the state's role and vacate activities better suited for the market rather than competing with it.
- The slow pace of disinvestment at the central level is a concern.
- Enforcing rules on States' borrowing is crucial to impose hard budget constraints and ensure macroeconomic stability.
- Cash transfers are preferred over subsidizing commodities and services for effective redistribution.
- The Union government should lead by example in following and enforcing fiscal responsibility rules effectively in States.
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For Prelims: Fiscal deficit, public debt, fiscal consolidation, 14th finance commission, Tax-GDP ratio.
For Mains: 1. Discuss the concept of public debt and its significance in the context of fiscal sustainability. Examine the key sources of public debt and the reasons why governments resort to borrowing. (250 words).
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REVAMPED DISTRIBUTION SECTOR SCHEME (RDSS)
1. Context
Government of India launched the Revamped Distribution Sector Scheme (RDSS) with an outlay of Rs. 3,03,758 crore and estimated GBS from Central Government of Rs. 97,631 crore for the duration of 5 years i.e. from (FY 2021-22 to FY 2025-26). The Scheme aims to reduce the Aggregate Technical & Commercial (AT&C) losses to pan-India levels of 12-15% and Average Cost of Supply (ACS)-Average Revenue Realised (ARR) gap to zero by 2024-25.
The Kerala government is facing trouble over the Centre’s Revamped Distribution Sector Scheme (RDSS), which envisages pre-paid smart electricity meters in households and revamping the power distribution network in the country.
2.About RDSS Scheme
The Scheme has two major components:
Part ‘A’ – Financial support for Prepaid Smart Metering & System Metering and upgradation of the Distribution Infrastructure
Part ‘B’ – Training & Capacity Building and other Enabling & Supporting Activities
Financial assistance to DISCOMs is provided for upgradation of the Distribution Infrastructure and for Prepaid Smart Consumer Metering & System Metering based on meeting pre-qualifying criteria and achieving basic minimum benchmark in reforms.
3. Objectives of RDSS Scheme
The Revamped Distribution Sector Scheme (RDSS) is a government of India initiative to improve the operational efficiency and financial sustainability of distribution companies (DISCOMS) in the country. The scheme was launched in 2021 with an outlay of Rs. 3,03,758 crore over a period of 5 years.
The main objectives of RDSS are to:
- Reduce aggregate technical and commercial (AT&C) losses to 12-15% by 2024-25
- Eliminate the average cost of supply-average realised revenue (ACS-ARR) gap by 2024-25
- Improve the quality, reliability and affordability of power supply to consumers
4. Key takeaways
- The scheme is being implemented by the Ministry of Power through the Power Finance Corporation (PFC) and Rural Electrification Corporation (REC)
- The scheme has been sanctioned to 28 states and union territories. The states have started implementing the scheme and have achieved some initial success in reducing AT&C losses and improving the quality of power supply
- The RDSS is a major initiative by the government to improve the distribution sector in India. The scheme has the potential to significantly improve the efficiency and financial sustainability of DISCOMS, and to provide better quality and reliable power supply to consumers
Here are some of the key features of the RDSS:
- The scheme is result-linked, meaning that financial assistance is provided to DISCOMS only after they achieve certain pre-defined milestones.
- The scheme focuses on improving the efficiency of the distribution network, including the use of smart meters and other digital technologies.
- The scheme also includes a focus on improving the quality of power supply, including reducing outages and improving voltage levels.
The RDSS is a significant step forward in the government's efforts to improve the distribution sector in India. The scheme has the potential to make a major difference in the lives of millions of consumers by providing them with better quality and reliable power supply.
Source:pib
