SUSTAINABLE HARNESSING AND ADVANCEMENT OF NUCLEAR ENERGY FOR TRANSFORMING INDIA (SHANTI) ACT
1. Context
The Adani Group announced its entry into the nuclear power sector on Thursday, via a regulatory filing. This is the first instance of a major power company in India doing so, following the passage of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act in December
2. Why is SHANTI significant?
- The SHANTI framework seeks to open India’s nuclear energy sector to private participation and may also facilitate the inflow of foreign investment.
- At present, the construction and operation of nuclear power plants are restricted exclusively to public sector entities.
- India aims to scale up its nuclear capacity from the existing 8.8 GW—roughly 1.5% of total installed power capacity—to 100 GW by 2047, thereby raising nuclear energy’s share in electricity generation from around 3%.
- Public sector nuclear utilities estimate that they will contribute nearly 54 GW of this expansion, with the remaining capacity expected to come from private players
3. What are the major differences in SHANTI?
- Because of nuclear energy’s association with atomic weapons, the movement and use of nuclear fuel such as uranium are subjected to rigorous oversight to prevent its diversion for the production of weapons-grade plutonium.
- Past disasters—including the 1979 Three Mile Island accident, the 1986 Chernobyl catastrophe, and the Fukushima core meltdown triggered by the 2011 tsunami—have reinforced a global culture of caution, leading to stringent controls over every stage of nuclear plant functioning.
- Internationally, there is now broad agreement that in the event of a nuclear accident, the operator of the facility bears the primary responsibility for compensating affected individuals in proportion to the harm caused.
- Such compensation must be provided promptly, without waiting for investigations into causation or fault.
- Subsequently, however, the operator may seek reimbursement if it can demonstrate that the accident resulted not from managerial failure but from defective equipment supplied by another party
- Under the earlier Civil Nuclear Liability framework, operators were permitted to pursue recourse against equipment providers in three situations: first, where an explicit contractual provision existed; second, where the incident was attributable to defects in the supplier’s equipment; and third, where the damage was caused by a deliberate act intended to inflict nuclear harm.
- The SHANTI legislation removes the second ground for recourse. Even after the 2008 Indo-US civil nuclear agreement, which reopened India’s access to uranium supplies and advanced nuclear technology following restrictions imposed after the 1974 and 1998 nuclear tests, reactor manufacturers from the United States and France remained reluctant to enter the Indian market due to the potential exposure to massive liability claims.
- By eliminating this clause—and even removing explicit references to “suppliers”—the proposed framework effectively addresses these concerns
4. Will SHANTI spur India’s nuclear vision?
- Homi Bhabha, regarded as the architect of India’s nuclear energy programme, envisaged nuclear power as a cornerstone of the country’s energy security while also overcoming India’s limited uranium reserves through the eventual use of thorium.
- His three-stage plan begins with the construction of pressurised heavy water reactors that utilise natural uranium (U-238) to generate electricity and produce plutonium as a by-product.
- The second stage involves fast breeder reactors, which are designed to generate additional plutonium and uranium-233 while producing power. In the third and final stage, uranium-233 is combined with India’s abundant thorium resources to generate electricity, creating a largely self-reliant thorium-based nuclear system.
- India has yet to transition fully into the second stage, having only a prototype fast breeder reactor so far. This project, delayed by nearly two decades, was earlier scheduled to become operational in 2025 but has now been postponed further, with commissioning expected in September 2026.
- To meet its near-term nuclear energy targets, India is increasingly exploring Small Modular Reactors (SMRs).
- These are scaled-down versions of conventional reactors currently deployed in countries such as the United States and France, and they require enriched uranium-235—a resource that India does not possess in sufficient quantities. Like India’s first-stage reactors, SMRs generate various radioactive by-products, including plutonium and strontium.
- SMRs are expected to be manufactured in modular components across multiple locations and assembled at a central site, much like the global production processes used for aircraft or smartphones.
- However, due to their smaller size, they produce less electricity per unit compared to large reactors. They also do not offer a fundamentally superior solution to nuclear waste management, although some designs incorporate enhanced safety features that allow automatic shutdown during emergencies.
- While SMRs may contribute to electricity generation, they do little to advance India’s long-term objective of transitioning to thorium-based nuclear power
5. Way Forward
Under the previous legal framework, victims of a nuclear incident could seek compensation from the plant operator up to a ceiling of ₹1,500 crore. Any damage beyond this limit was to be covered by the Union government through an insurance mechanism, capped at ₹4,000 crore. The SHANTI legislation introduces a tiered liability structure instead. Operators of facilities with a capacity exceeding 3,600 MW would face a maximum liability of ₹3,000 crore. For plants in the 1,500–3,600 MW range, the liability limit is set at ₹1,500 crore; for capacities between 750 MW and 1,500 MW, it is ₹750 crore; for 150–750 MW plants, the cap is ₹300 crore; and facilities below 150 MW carry a liability limit of ₹100 crore. At present, all nuclear power plants in India have capacities of 3,000 MW or less.
Science Minister Jitendra Singh, who introduced the Bill in Parliament, explained that this differentiated structure was designed to avoid deterring private sector investment. However, during parliamentary discussions, concerns were raised that the actual costs of compensation in major nuclear accidents have historically run into several billions of dollars, far exceeding the proposed liability ceilings
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Previous Year Questions 1. To meet its rapidly growing energy demand, some opine that India should pursue research and development on thorium as the future fuel of nuclear energy. In this on text, what advantage, does thorium hold over uranium? (UPSC 2012)
Which of the statements given above is/are correct? (a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3 2. Which among the following has the world’s largest reserves of Uranium? (UPSC 2009) (a) Australia Answers: 1-D, 2-A |
Source: The Hindu
CONSUMER PRICE INDEX (CPI)
1. Context
The new series of the Consumer Price Index (CPI), released on Thursday, has addressed the many shortcomings of the previous series. The new series has a base year of 2024, and is pegged to consumption patterns from the Household Consumption Expenditure Survey 2023-24
2. Consumer Price Index
- The Consumer Price Index (CPI) is a measure of the change in prices of a basket of goods and services that are commonly purchased by consumers. It is the most commonly used measure of inflation.
- The CPI is calculated by comparing the prices of the goods and services in the basket in a particular period to those of the same in a base period.
- The base period is usually the previous year's corresponding period. The difference in prices is expressed as a percentage, and this is the CPI inflation rate.
- The CPI is calculated for eight different categories of goods and services Food and beverages, Housing, Clothing and footwear, Transport, Health, Education, Communication, Recreation and Miscellaneous goods and services.
- The weights of each category in the CPI are determined by the expenditure patterns of urban households. For example, food and beverages have the highest weight in the CPI, followed by housing and transport.
- The CPI inflation rate is an important indicator of the cost of living.
- It is used by the government to set monetary policy and by businesses to make pricing decisions.
3. Wholesale Price Index
- The Wholesale Price Index (WPI) is a measure of the change in prices of goods and services at the wholesale level.
- It is calculated by comparing the prices of a basket of goods and services in a particular period to those of the same in a base period.
- The base period is usually the previous year's corresponding period. The difference in prices is expressed as a percentage, and this is the WPI inflation rate.
- The WPI is calculated for 67 groups of commodities, which are further divided into 225 subgroups.
- The weights of each group and subgroup in the WPI are determined by the value of the goods and services produced in each group and subgroup.
- The WPI inflation rate is an important indicator of inflation at the wholesale level.
- It is used by businesses to make pricing decisions and by the government to set monetary policy.
4. Findings of the Report
4.1. Food inflation
- Food inflation in India remained high in August, at 9.94%. This was driven by rising prices of essential food items, such as cereals, pulses, vegetables, and oils.
- Eleven of the 12 items on the heavyweight food and beverages group of the CPI logged price increases, with oils and fats, the sole item logging a year-on-year decline in prices, posting its first sequential increase in nine months.
- Vegetables provided some relief, with tomatoes leading an appreciable month-on-month deflation of 5.88% in the 19-member basket.
- However, the cooking staples of potatoes and onions were among the seven items that continued to log sequential inflation (2.3% and 12.3%, respectively).
4.2. Monsoon deficit and rising crude oil prices
- The near-term inflation outlook is also made more uncertain by other factors, including a distinct deficit in monsoon rainfall.
- Besides the overall 10% shortfall, sharp regional and temporal anomalies in rain distribution have impacted either the sowing or the quality of produce of several farm items.
- Kharif's sowing of pulses had, as of September 8, recorded an 8.6% shortfall compared with the year-earlier period.
- Another inflation driver, crude oil, has also seen a steady rise in prices as the output cuts by major oil producers of the OPEC+ grouping start to bite.
- The price of India's crude basket had, as of September 12, climbed 7.2% from the average in August to $92.65/barrel, according to official data.
4.3. RBI measures to control inflation
- For the RBI, the latest inflation data further roils its interest rate calculus.
- Unless CPI inflation decelerates by an incredible 250 basis points in September to a 4.33% pace, price gains are certain to substantially overshoot the monetary authority's 6.2% forecast for the July-September quarter, leaving it with few real options to achieve its medium-term price stability goal of 4% inflation.
- As the RBI has been at pains to stress, failure to anchor inflation expectations risks hurting growth.
5. About the sticky Consumer Price Index (CPI)
- The sticky Consumer Price Index (CPI) is a subset of the CPI that includes goods and services that change prices relatively infrequently.
- These goods and services are thought to incorporate expectations about future inflation to a greater degree than prices that change more frequently.
- Some of the items included in the sticky CPI are Rent, Housing costs, Utilities, Education, Healthcare, Transportation, Household furnishings and appliances, Personal insurance, Recreation, and Miscellaneous goods and services.
- The sticky CPI is often used by economists to measure inflation expectations.
- This is because prices of sticky goods and services are less likely to be affected by short-term changes in supply and demand, and are therefore more likely to reflect changes in inflation expectations.
- The sticky CPI is also used by central banks to set monetary policy.
- This is because the central bank wants to make sure that inflation expectations are anchored at a low level.
- If inflation expectations start to rise, the central bank may raise interest rates to bring them back down.
6. How India’s retail inflation is measured?
- India's retail inflation is measured by the Consumer Price Index (CPI), a basket of goods and services commonly purchased by urban households.
- The CPI is calculated by the National Statistical Office (NSO) every month.
- The CPI is calculated by comparing the prices of the goods and services in the basket in a particular month to those of the same in a base month.
- The base month is usually the previous year's corresponding month. The difference in prices is expressed as a percentage, and this is the CPI inflation rate.
- The CPI is calculated for eight different categories of goods and services, Food and beverages, Housing, Clothing and footwear, Transport, Health, Education, Communication, Recreation and Miscellaneous goods and services.
- The weights of each category in the CPI are determined by the expenditure patterns of urban households. For example, food and beverages have the highest weight in the CPI, followed by housing and transport.
- The CPI inflation rate is an important indicator of the cost of living in India.
- It is used by the government to set monetary policy and by businesses to make pricing decisions.
7. Calculation of Inflation
- Inflation is the rate at which the prices of goods and services increase over time.
- It is calculated by comparing the prices of a basket of goods and services in a particular period to the prices of the same basket of goods and services in a base period.
- The base period is usually the previous year's corresponding period. The difference in prices is expressed as a percentage, and this is the inflation rate.
There are two main ways to calculate inflation
1. Consumer Price Index (CPI): The CPI is a measure of the change in prices of a basket of goods and services that are commonly purchased by consumers. It is the most commonly used measure of inflation.
The CPI is calculated by the following formula:
CPI = (Cost of a basket of goods and services in current period / Cost of a basket of goods and services in base period) * 100
2. Producer Price Index (PPI): The PPI is a measure of the change in prices of goods and services that are produced by businesses. It is used to track inflation at the wholesale level.
The PPI is calculated by the following formula:
PPI = (Cost of a basket of goods and services at the wholesale level in the current period / Cost of a basket of goods and services at the wholesale level in the base period) * 100
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For Prelims: Consumer Price Index, Wholesale Price Index, Inflation, retail inflation, Producer Pirce Index, National Statistical Office, OPEC+, Crude oil, Kharif season, Monsoon,
For Mains:
1. Analyse the factors contributing to high food inflation in India in recent months. Discuss the impact of high food inflation on the Indian economy and suggest measures to mitigate it. (250 words)
2. Explain the concept of sticky inflation. What are the various factors that contribute to sticky inflation? Discuss the implications of sticky inflation for the Indian economy. (250 words)
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Previous Year Questions
1. With reference to inflation in India, which of the following statements is correct? (UPSC 2015)
A. Controlling the inflation in India is the responsibility of the Government of India only
B. The Reserve Bank of India has no role in controlling the inflation
C. Decreased money circulation helps in controlling the inflation
D. Increased money circulation helps in controlling the inflation
Answer: C
2. With reference to India, consider the following statements: (UPSC 2010)
1. The Wholesale Price Index (WPI) in India is available on a monthly basis only.
2. As compared to Consumer Price Index for Industrial Workers (CPI(IW)), the WPI gives less weight to food articles.
Which of the statements given above is/are correct?
A. 1 only B. 2 only C. Both 1 and 2 D. Neither 1 nor 2
Answer: C
3. Consider the following statements: (UPSC 2020)
1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).
2. The WPI does not capture changes in the prices of services, which CPI does.
3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.
Which of the statements given above is/are correct?
A. 1 and 2 only B. 2 only C. 3 only D. 1, 2 and 3
4. India has experienced persistent and high food inflation in the recent past. What could be the reasons? (UPSC 2011)
1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30.
2. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change.
3. The food supply chain has structural constraints.
Which of the statements given above are correct?
A. 1 and 2 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
Answer: B
5. The Public Distribution System, which evolved as a system of management of food and distribution of food grains, was relaunched as _______ Public Distribution System in 1997. (SSC JE EE 2021)
A. Evolved B. Transformed C. Tested D. Targeted
Answer: D
6. Under the Antyodaya Anna Yojana, up to what quantity of rice and wheat can be purchased at a subsidised cost? (FCI AG III 2023)
A. 35 kg B. 40 kg C. 30 kg D. 25 kg E. 50 kg
Answer: A
7. As per the the National Statistical Office (NSO) report released on 7 January 2022, India's Gross domestic product (GDP) is expected to grow at ___________ per cent (in first advance estimates) in the fiscal year 2021-22? (ESIC UDC 2022)
A. 17.6 per cent B. 9.5 per cent C. 11 per cent D. 9.2 per cent E. None of the above
Answer: D
8. The main emphasis of OPEC (Organisation of the Petroleum Exporting Countries) is on which of the following? (UKPSC 2016)
A. The production of petroleum
B. Control over prices of petroleum
C. Both (a) and (b)
D. None of the above
Answer: C
9. In the context of global oil prices, "Brent crude oil" is frequently referred to in the news. What does this term imply? (UPSC 2011)
1. It is a major classification of crude oil.
2. It is sourced from the North Sea.
3. It does not contain sulfur.
Which of the statements given above is/are correct?
A. 2 only B. 1 and 2 only C. 1 and 3 only D. 1, 2 and 3
Answer: B
10. The term 'West Texas Intermediate', sometimes found in news, refers to a grade of (UPSC 2020)
A. Crude oil B. Bullion C. Rare earth elements D. Uranium
Answer: C
11. With reference to the cultivation of Kharif crops in India in the last five years, consider the following statements: (UPSC 2019)
1. Area under rice cultivation is the highest.
2. Area under the cultivation of jowar is more than that of oilseeds.
3. Area of cotton cultivation is more than that of sugarcane.
4. Area under sugarcane cultivation has steadily decreased.
Which of the statements given above are correct?
A. 1 and 3 only B. 2, 3 and 4 only C. 2 and 4 only D. 1, 2, 3 and 4
Answer: A
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Source: The Hindu
NO CONFIDENCE MOTION
1. Context
Hours after the Opposition gave notice for a no-confidence motion against him Tuesday, Speaker Om Birla, sources said, has decided not to chair Lok Sabha proceedings until a decision is taken on the notice.
2. No confidence motion
- A no-confidence motion, also known as a motion of no confidence or a vote of no confidence, is a significant parliamentary mechanism used in democratic systems to express the legislature's lack of confidence in the government or a specific member of the government.
- A no-confidence motion can be moved only in the Lok Sabha and by any member of the House.
- The member has to give a written notice of the motion before 10 am and at least 50 members have to accept the motion. The Speaker will then decide the date for the discussion of the motion.
- It serves as a crucial tool for holding elected officials accountable for their actions and decisions.
3. Initiating a No Confidence Motion
- The process of initiating a no-confidence motion typically begins with the opposition parties.
- They may present a formal proposal in the legislative chamber, backed by a specific number of lawmakers' signatures.
- In some cases, dissatisfied members from the ruling party might also initiate such a motion.
- The primary purpose is to ascertain whether the government or a particular minister still commands the majority support in the legislature.
4. Debate and Voting Process
- Once the no-confidence motion is tabled, a debate follows, during which lawmakers discuss the reasons for their lack of confidence in the government's performance.
- This debate allows the government to present its side and attempt to persuade lawmakers to vote in their favor.
- Following the debate, a vote is held, and if the motion garners a majority of votes against the government or minister, it is considered successful.
5. Impact on Governance
- A successful no-confidence motion carries significant consequences.
- In some parliamentary systems, it leads to the resignation of the government, triggering the dissolution of the parliament and necessitating new elections.
- Alternatively, the opposition parties may be invited to form a new government if they can demonstrate sufficient support.
6. Responsible Use and Political Stability:
- While the no-confidence motion is a powerful democratic tool, its frequent or frivolous use can create political instability and hinder effective governance.
- Therefore, lawmakers must exercise discretion, focusing on critical issues and genuine concerns.
- Responsible use of the no-confidence motion ensures that the government remains accountable to the people and that the country's stability is maintained.
7. Significance of No confidence motion
The no-confidence motion holds significant importance in a democratic system, and its significance lies in the following aspects:
- Government Accountability: The no-confidence motion serves as a powerful mechanism to hold the government accountable for its actions, decisions, and policies. It allows the legislature to express its lack of confidence in the government's performance, ensuring that the executive branch remains answerable to the elected representatives and the public.
- Checks and Balances: In a democratic setup, the separation of powers is vital to prevent the concentration of authority. The no-confidence motion is one of the key instruments that the legislature can employ to check the powers of the government. It helps maintain a system of checks and balances, ensuring that no single branch of government becomes too dominant.
- Democratic Oversight: The no-confidence motion reinforces the principle of democratic oversight. It enables the elected representatives to actively monitor the government's performance and initiate action if they believe the government is not living up to its mandate or is engaged in misconduct.
- Crisis Resolution: In times of political crises or governance failures, the no-confidence motion can be used as a means to address the situation. If the government is unable to provide effective leadership or address pressing issues, the legislature can signal its lack of confidence, prompting necessary changes in the government or leading to new elections.
- Encourages Responsible Governance: The possibility of facing a no-confidence motion encourages the government to govern responsibly and make decisions that are in the best interest of the people. It acts as a motivator for the government to deliver on its promises and avoid policies that may be unpopular with the majority.
- Promotes Public Debate: The no-confidence motion triggers debates and discussions in the legislature, providing a platform for lawmakers to express their views and concerns openly. This fosters a healthy democratic environment where different perspectives are heard and considered.
8. Previous instances of No-confidence motion
- Since Independence, 27 no-confidence motions have been moved in Lok Sabha.
- The first no-confidence motion was moved against Prime Minister Jawaharlal Nehru by Congress leader Acharya Kripalani in August 1963, immediately after losing to China in the 1962 war. The motion, however, was defeated.
- Indira Gandhi as Prime Minister faced the most number of no-confidence motions - 15. She survived each of the 15 floor tests. Former West Bengal CM Jyotirmoy Basu of the CPI(M) has moved four no-confidence motions.
- Narasimha Rao had to face three no-confidence motions, Morarji Desai two, and Jawaharlal Nehru, Rajiv Gandhi, Atal Bihari Vajpayee, and Narendra Modi have all faced one each.
- The last no-confidence motion was in 2003 when the then Congress President Sonia Gandhi moved the motion against Vajpayee.
- The duration of the longest debate on a no-confidence motion was 24.34 hours against Lal Bahadur Shastri, who has had to prove the majority of the House thrice.
- Most no-confidence motions have been defeated except in 1979 when Prime Minister Morarji Desai had to quit and in 1999 when the Vajpayee government lost power after their ally AIADMK pulled out of the coalition.
- In 2018, the Narendra Modi-led NDA government survived the no-confidence motion in the Lok Sabha by 195 votes. While 135 members supported the motion, 330 MPs rejected it.
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For Prelims: No-confidence motion, Lok Sabha, Checks and Balances, Indian National Developmental Inclusive Alliance (INDIA).
For Mains: 1. Discuss the concept of a "No Confidence Motion" in a parliamentary democracy. Explain its purpose and significance in holding the government accountable for its actions and decisions. (250 words).
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Previous year Question1. Consider the following statements regarding a No-Confidence Motion in India: (UPSC 2014)
1. There is no mention of a No-Confidence Motion in the Constitution of India.
2. A Motion of No-Confidence can be introduced in the Lok Sabha only
Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2
Answer: C
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Source: The Hindustan Times
SUB QUOTAS OF SCHEDULED CASTE (SC)
1. Context
The Supreme Court on Tuesday sought a report from the Centre on what action had been taken in pursuance of its Constitution bench judgment, which allowed sub-classification of Scheduled Castes for the purpose of reservation and said that creamy layer principle be extended to the category.
2. 2004 Judgement
- The Andhra Pradesh Scheduled Castes (Rationalisation of Reservation) Ordinance, 1999, and the subsequent Act created four groups—A, B, C, and D—within the Scheduled Castes, each allocated different reservation percentages.
- This sub-classification aimed to address the varying levels of advancement among the communities listed as Scheduled Castes and to ensure representation for the less advanced castes. The Andhra Pradesh High Court upheld the Act against legal challenges.
- However, the Supreme Court's Constitution Bench of five judges declared this sub-classification unconstitutional. In the November 2004 judgment in E.V. Chinnaiah vs State of Andhra Pradesh, the Court emphasized that under Article 341 of the Constitution, the President is responsible for notifying the Scheduled Castes list, which can only be altered by an act of Parliament, not by further notifications.
- The Bench ruled that once listed under Article 341, Scheduled Castes form a single homogeneous class, and state legislatures lack the authority to further classify them into separate groups
3. Latest Judgement
- Six of the seven judges have now determined that the 2004 ruling was incorrect. Chief Justice D.Y. Chandrachud, along with Justice Manoj Mishra, concluded that SC communities should not be considered a homogeneous class as previously judged.
- He contested the notion that listing SCs creates a presumption of uniform status among them. While SCs share a common constitutional identity due to their shared experiences of untouchability and discrimination, this does not negate the diversity within these communities.
- Citing both historical and empirical evidence, Chief Justice Chandrachud demonstrated that significant differences exist among SC communities, with instances where some SC groups have faced discrimination from others within the same category.
- Thus, sub-classification is permissible if it is based on a clear and rational distinction with a valid purpose. This sub-classification is subject to judicial review, and the State must justify it with empirical data.
- Chief Justice Chandrachud also clarified that sub-classification does not alter the Presidential list of SCs and does not breach Article 341, which gives the President exclusive authority to notify Scheduled Castes.
- Article 341 serves to define who falls under the SC category, but states have the autonomy to recognize varying degrees of backwardness and provide special provisions or extend reservation benefits accordingly.
- The new ruling is anticipated to encourage states to allocate sub-quotas for the most marginalized Dalit sections who have not benefited from reservations to date.
- In her dissent, Justice Bela Trivedi upheld the Chinnaiah doctrine, arguing that sub-classification of a homogeneous class is impermissible and constitutes an alteration of the President’s list under Article 341
4.Exclusion of Creamy layer
- The creamy layer concept is currently applicable only to Other Backward Classes (OBCs) and has not been extended to Dalit communities. Justice B. R. Gavai, who concurs with the Chief Justice in a separate opinion, elaborated on the need to identify more advanced members within the Scheduled Castes and exclude them from affirmative action benefits.
- Justice Gavai argued that treating all members of a community equally may not be just, especially when considering differences in social and economic status.
- He questioned whether the children of IAS or IPS officers should be given the same benefits as children from remote villages within the same community, given their differing access to resources and opportunities.
- He emphasized that combining such disparate groups under the same category would undermine the principle of equality. However, he also noted that the criteria for excluding the creamy layer among SCs should differ from those used for OBCs. Three other judges supported his perspective. Despite this, their opinions do not mandate the government to apply the creamy layer concept to SCs, as this issue was not directly addressed in the case at hand
5. Way forward
The ongoing judicial debates and rulings concerning the classification and reservation policies for Scheduled Castes (SCs) and Other Backward Classes (OBCs) reflect a nuanced approach to addressing socio-economic inequalities within these groups. The Supreme Court's recent judgments, which have revisited earlier rulings, highlight the complex interplay between ensuring equitable access to affirmative action benefits and recognizing the diverse needs within these communities
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For Prelims: Current events of national and international importance
For Mains: GS-II: Government policies and intervention
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Previous Year Questions
Prelims 1.Consider the following statements about Particularly Vulnerable Tribal Groups (PVTGs) in India: (UPSC CSE 2019) 1. PVTGs reside in 18 states and one Union Territory. 2. A stagnant or declining population is one of the criteria for determining PVTG status. 3. There are 95 PVTGs officially notified in the country so far. 4. Irular and Konda Reddi tribes are included in the list of PVTGs. Which of the statements given above are correct? (a) 1, 2 and 3 (b) 2, 3 and 4 (c) 1, 2 and 4 (d) 1, 3 and 4 Answer (c)
Given this analysis, the correct statements are 1, 2, and 4 Mains 1.What are the two major legal initiatives by the state since independence addressing discrimination against Scheduled Tribes (STs)? (UPSC CSE 2017) |
Source: The Hindu
DEFENCE ACQUISITION COUNCIL
1. Context
The Defence Acquisition Procedure (DAP) 2026, the draft of which was released recently by the Ministry of Defence to replace the existing 2020 version, has been designed to bolster self-reliance, accelerate acquisition timelines, and empower the Indian defence industrial ecosystem.
2. About the Defence Acquisition Council
The Defence Acquisition Council (DAC) is the apex body for all defence acquisitions in India. It was formed after recommendations made by the Group of Ministers on 'Reforming the National Security System' in 2001, post-Kargil war. The DAC is headed by the Defence Minister and comprises the following members:
- Chief of the Defence Staff (CDS)
- Secretary, Department of Defence Production
- Secretary, Finance
- Secretary, Defence Research and Development
- Controller General of Defence Accounts
- Other senior officers from the Ministry of Defence and the Services
The Role of the Defence Acquisition Council
The DAC's primary role is to:
- Accord approval for AoN (Acceptance of Necessity) for Capital Acquisition Proposals.
- Categorise the acquisition proposals into 'Buy, Buy & Make, & Make'.
- In-principle approval of 15-Year Long-Term Integrated Perspective Plan (LTPP) for Defence Forces.
- Delegate powers to Services/C&AS for the acquisition of items up to a certain value.
- Consider and approve other issues as may be referred to it by the Defence Minister.
Functions of the Defence Acquisition Council
The DAC's primary functions are to:
- Approve capital acquisitions for the Indian Armed Forces.
- Formulate and implement policies and procedures for defence acquisitions.
- Monitor the progress of defence acquisitions.
- Oversee the implementation of the Defence Procurement Procedure (DPP).
Reasons for the creation of the Defence Acquisitions Council
The DAC was created to address the following shortcomings of the previous defence acquisition system:
- Lack of a clear and transparent decision-making process.
- Delays in the procurement of defence equipment.
- Escalation of costs.
- Lack of coordination between different agencies involved in the procurement process.
3. About Defence acquisition
Defence acquisition is the process of acquiring goods and services for the Indian Armed Forces. It is a complex and time-consuming process that involves the identification of requirements, the preparation of specifications, the selection of vendors, the negotiation of contracts, and the delivery of equipment. The Indian defence acquisition process is governed by the Defence Procurement Procedure (DPP), which is a set of guidelines that outlines the process for acquiring defence equipment.
The key stages of the defence acquisition process:
- The first step is to identify the requirements of the Armed Forces. This is done through a detailed assessment of the operational needs of the Armed Forces and the availability of resources.
- Once the requirements have been identified, the next step is to prepare the specifications for the equipment to be acquired. The specifications must be clear, detailed, and unambiguous so that the vendors can understand what is required.
- The next step is to select the vendors who will be invited to participate in the bidding process. The vendors are selected based on their technical ability, financial strength, and experience.
- Once the vendors have been selected, the next step is to negotiate the contracts. The contracts must be fair and reasonable, and they must protect the interests of the government.
- The final step is to deliver the equipment to the Armed Forces. Once the equipment has been delivered, it must be tested and accepted by the Armed Forces.
4. The Defence Procurement Procedure (DPP)
The Defence Procurement Procedure (DPP) is the guideline for defence acquisitions in India. The DPP was first introduced in 2006 and has been revised several times since then. The DPP outlines the process for defence acquisitions, from the identification of a requirement to the final acceptance of a product.
The DPP is designed to ensure that defence acquisitions are conducted in a transparent, efficient, and cost-effective manner. The DPP also seeks to promote indigenous defence production and to maximize the involvement of Indian companies in the defence sector.
Key features of the DPP
- The DPP emphasizes the need for transparency in all stages of the defence acquisition process. This includes publishing all relevant documents online and making them available to the public.
- The DPP aims to streamline the defence acquisition process and reduce delays. This includes simplifying the tendering process and reducing the number of approvals required.
- The DPP seeks to ensure that defence acquisitions are conducted cost-effectively. This includes negotiating the best possible price for goods and services and promoting indigenous defence production.
- The DPP promotes indigenous defence production by giving preference to Indian companies in the tendering process. The DPP also provides incentives for Indian companies to invest in research and development.
- The DPP seeks to maximize the involvement of Indian companies in the defence sector. This includes encouraging Indian companies to form joint ventures with foreign companies.
5. The Way Forward
The DAC and the DPP play a vital role in ensuring that the Indian Armed Forces are equipped with the latest and best possible weapons and equipment. The DAC and the DPP are also important for promoting indigenous defence production and for maximizing the involvement of Indian companies in the defence sector.
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For Prelims: Defence Acquisition Council, Defence Procurement Procedure, Light Combat Aircraft, Tejas Mk 1 A and 156, Light Combat Helicopters, Hindustan Aeronautics Limited, Kargil war
For Mains:
1. Critically analyze the role of the Defence Acquisition Council (DAC) in streamlining and expediting defence acquisitions in India. (250 Words)
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Previous Year Questions
1. The Light Combat Aircraft (LCA) designed and developed by HAL is also known as (MP Police Constable 2017)
A. Suryakiran B. Aryabhatta C. Tejas D. Prakash
2. Which of the following statements is true about the recent procurement of Tejas fighter’s aircraft by IAF? (IB ACIO Grade II 2021)
(1) The IAF has recently purchased 83 Tejas fighters aircraft from HAL
(2) The total deal is Rs. 78,000-crore
A. 1 only B. Neither 1 nor 2 C. Both 1 and 2 D. 2 only
3. What is the name of India's indigenously built Light Combat Helicopter? (OSSC BSSO 2022)
A. Nag B. Trishul C. Prachand D. Agni
4. The headquarters of the Hindustan Aeronautics Limited is located at _______________. (MP Police Constable 2017)
A. Chennai B. Bengaluru C. Dewas D. Koraput
5. What was Kargil war otherwise known as? (MP Patwari 2017)
A. Operation Vijay B. Operation Vishwas C. Operation Shaurya D. Operation Paramveer
Answers:1-C, 2-A, 3-C, 4-B 5-A
Mains
1. Analyze the circumstances that led to the Tashkent Agreement in 1966. Discuss the highlights of the Agreement. (UPSC 2013)
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Source: The Indian Express
PRODUCTION LINKED INCENTIVE (PLI) SCHEME
1. Context
Production Linked Incentive (PLI) Scheme for promotion of domestic manufacturing of critical Key Starting Materials (KSMs) / Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) in India (also known as PLI scheme for Bulk Drugs): The scheme is aimed at avoiding disruption in supply of critical APIs used to make critical drugs for which there are no alternatives by reducing supply disruption risk due to excessive dependence on single source
2. About Production-Linked Incentive (PLI) Scheme
The Production-Linked Incentive (PLI) scheme is an initiative by the Indian government to boost domestic manufacturing in specific sectors. It incentivizes companies, both domestic and foreign, to set up or expand production facilities in India by offering financial rewards based on incremental sales achieved over a set period.
- The government announces a PLI scheme for a particular sector with specific targets for production and sales.
- Companies apply for the scheme and submit their production plans.
- If selected, companies receive a percentage of their incremental sales (over a base year) as an incentive.
- The incentive amount varies depending on the sector and the level of incremental sales achieved.
- The scheme typically runs for several years, providing companies with long-term financial support.
3. Sectors with Current PLI Schemes
- Mobile phone manufacturing and specified electronic components have been successful in attracting major players like Apple and Samsung to set up production in India.
- Large-scale electronics manufacturing to boost domestic production of TVs, laptops, and other electronics products.
- High-efficiency solar PV modules to make India a global leader in solar energy production.
- Automobiles and auto components incentivize the production of electric vehicles, hydrogen fuel cell vehicles, and advanced auto components.
- Man-made fibre (MMF) apparel and textiles to boost domestic production of high-quality MMF textiles.
- White goods (air conditioners, refrigerators, etc.) to make India a global hub for white goods manufacturing.
4. Sectors Likely to See PLI Schemes in the Future
- The pharmaceuticals and medical devices sector is crucial for national health security and has the potential for significant growth.
- Green hydrogen and ammonia fuels are essential for achieving climate goals and could benefit from PLI support.
- Advanced manufacturing technologies include robotics, 3D printing, and artificial intelligence, which are crucial for future industries.
- The food processing sector has vast potential for value creation and job creation, and PLI could help address inefficiencies.
5. Benefits of the PLI Scheme
- PLI attracts investment and encourages companies to manufacture in India, reducing dependence on imports.
- New manufacturing units and increased production lead to job creation in various sectors.
- PLI attracts global companies with advanced technology, leading to knowledge transfer and skill development in India.
- Increased domestic production can lead to higher exports and strengthen the Indian economy.
6. Challenges in the PLI Scheme
- Companies need significant upfront investment to set up new production facilities, which can be a deterrent for some.
- The application and approval process for PLI schemes can be lengthy and complex, discouraging some companies.
- The government needs to ensure the long-term sustainability of PLI schemes to avoid dependence on subsidies.
7. The Way Forward
The PLI scheme is a promising initiative with the potential to transform India's manufacturing landscape. By addressing the challenges and continuously improving its design, the government can further incentivize domestic production and boost India's economic growth.
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For Prelims: Production Linked Incentive scheme, industrial policy
For Mains:
1. Discuss the role of the government in promoting domestic manufacturing. Should the focus be on incentives like the Production Linked Incentive scheme or on creating a conducive business environment? (250 Words)
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Previous Year Questions
1. Consider, the following statements : (UPSC 2023) Statement-I : India accounts for 3.2% of global export of goods. Statement-II : Many local companies and some foreign companies operating in India have taken advantage of India's ‘Production-linked Incentive’ scheme. Which one of the following is correct in respect of the above statements? (a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I (b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I (c) Statement-I is correct but Statement-II is incorrect (d) Statement-I is incorrect but Statement-II is correct Answer: D |
Source: The Indian Express
FREE TRADE AGREEMENT
1. Context
The digital trade chapter of the India–EU Free Trade Agreement (FTA) establishes a facilitative framework to ensure a secure and trustworthy digital environment for electronic transactions, aimed at strengthening the growth of goods and services trade between India and the EU
2. About the Free Trade Agreement
- A Free Trade Agreement (FTA) is an agreement between two or more countries to reduce or eliminate barriers to trade, such as tariffs, quotas, and subsidies.
- FTAs can also include provisions on other issues, such as investment, intellectual property, and labour standards.
- The goal of an FTA is to promote trade and economic growth between the signatory countries.
- By reducing or eliminating trade barriers, FTAs can make it easier for businesses to export their goods and services to other countries, which can lead to increased production, employment, and innovation.
3. Types of Free Trade Agreement
- Bilateral Free Trade Agreement (BFTA) involves two countries, aiming to promote trade and eliminate tariffs on goods and services between them. It establishes a direct trade relationship, allowing for a more focused and tailored agreement between the two nations.
- Multilateral Free Trade Agreement (MFTA) Involving three or more countries, an MFTA seeks to create a comprehensive trade bloc, promoting economic integration on a larger scale. It requires coordination among multiple parties, addressing diverse economic interests and fostering a broader regional economic landscape.
- Regional Free Trade Agreement (RFTA) involves countries within a specific geographic region, aiming to enhance economic cooperation and integration within that particular area. It focuses on addressing regional economic challenges and fostering collaboration among neighbouring nations.
- Preferential Trade Agreement (PTA) involves a reciprocal reduction of tariffs and trade barriers between participating countries, granting preferential treatment to each other's goods and services. It allows countries to enjoy trading advantages with specific partners while maintaining autonomy in their trade policies with non-participating nations.
- Comprehensive Economic Partnership Agreement (CEPA) is a broad and advanced form of FTA that goes beyond traditional trade barriers, encompassing various economic aspects such as investment, intellectual property, and services. It aims for a more comprehensive economic partnership, encouraging deeper integration and collaboration between participating countries.
- Customs Union While not strictly an FTA, a Customs Union involves the elimination of tariffs among member countries and the establishment of a common external tariff against non-member nations. It goes beyond standard FTAs by harmonizing external trade policies, creating a unified approach to trade with the rest of the world.
- Free Trade Area (FTA) with Trade in Goods (TIG) and Trade in Services (TIS): Some FTAs specifically emphasize either trade in goods or trade in services, tailoring the agreement to the specific economic strengths and priorities of the participating countries. This approach allows nations to focus on areas where they have a comparative advantage, fostering specialization and efficiency.
4. India's Free Trade Agreements
India is a member of several free trade agreements (FTAs) and is currently negotiating others. India's FTAs have helped to reduce trade barriers and promote trade and economic growth. They have also helped to attract foreign investment and create jobs.
- The South Asian Free Trade Agreement (SAFTA) was signed in 1995 by the seven countries of the South Asian Association for Regional Cooperation (SAARC). SAFTA aims to reduce or eliminate tariffs on trade between the member countries.
- The India-Bangladesh FTA was signed in 2010 and came into force in 2011. It is a comprehensive FTA that covers goods, services, and investments.
- The India-Sri Lanka FTA was signed in 1999 and came into force in 2000. It is a comprehensive FTA that covers goods, services, and investments.
- The India-ASEAN Free Trade Agreement was signed in 2002 and came into force in 2010. It is a comprehensive FTA that covers goods, services, and investments.
- The India-Korea Comprehensive Economic Partnership Agreement (CEPA) was signed in 2010 and came into force in 2011. It is a comprehensive FTA that covers goods, services, and investments.
- The India-Japan Comprehensive Economic Partnership Agreement(CEPA) was signed in 2022 and came into effect in 2023. It is a comprehensive FTA that covers goods, services, and investments.
- The India-UAE Comprehensive Partnership Agreement (CEPA) was signed in 2022 and came into effect in 2022. It is a comprehensive FTA that covers goods, services, and investments.
- The India-Australia Economic Cooperation and Trade Agreement (ECTA) was signed in 2022 and came into effect in 2022. It is a comprehensive FTA that covers goods, services, and investments.
- The India-Malaysia Comprehensive Economic Cooperation Agreement (CECA) was signed in 2010 and aims to enhance economic ties by addressing trade in goods and services, as well as investment and other areas of economic cooperation.
- The India-Thailand Free Trade Agreement was signed in 2003 and focuses on reducing tariffs and promoting trade in goods and services between India and Thailand.
- The India-Singapore Comprehensive Economic Cooperation Agreement (CECA) has been operational since 2005, this agreement covers trade in goods and services, as well as investment and intellectual property.
- The India-Nepal Trade Treaty While not a comprehensive FTA, India and Nepal have a trade treaty that facilitates the exchange of goods between the two countries.
- The India-Chile Preferential Trade Agreement was signed in 2006 and aims to enhance economic cooperation and reduce tariffs on certain products traded between India and Chile.
5. India - UK Free Trade Agreement
5.1. Background
- Both countries have agreed to avoid sensitive issues in the negotiations.
- The interim (early harvest agreement) aims to achieve up to 65 per cent coverage for goods and up to 40 per cent coverage for services.
- By the time the final agreement is inked, the coverage for goods is expected to go up to "90 plus a percentage" of goods.
- India is also negotiating a similar early harvest agreement with Australia, which is supposed to set the stage for a long-pending Comprehensive Economic Cooperation Agreement that both countries have been pursuing for nearly a decade.
- While the commencement of negotiations does mark a step forward in the otherwise rigid stance adopted and when it comes to trade liberalisation, experts point to impediments and the potential for legal challenges going ahead.
5.2. GATT (General Agreement on Trade and Tariffs)
- The exception to the rule is full-scale FTAs, subject to some conditions.
- One rider, incorporated in Article XXIV.8 (b) of GATT, stipulates that a deal should aim to eliminate customs duties and other trade barriers on "Substantially all the trade" between the WTO member countries that are signatories to an FTA.
- For this Agreement, a free-trade area shall be understood to mean a group of two or more customs territories in which the duties and other restrictive regulations of commerce are eliminated on substantially all the trade between the constituent territories in products originating in such territories.
- It is often beneficial to negotiate the entire deal together, as an early harvest deal may reduce the incentive for one side to work towards a full FTA.
- These agreements are not just about goods and services but also issues like investment.
- If you are trying to weigh the costs and benefits, it is always better to have the larger picture in front of you.
- In the case of the early harvest agreement inked with Thailand, automobile industry associations had complained that relaxations extended to Bangkok in the early harvest had reduced the incentive for Thailand to work towards a full FTA.
- Early harvest agreements may serve the function of keeping trading partners interested as they promise some benefits without long delays, as India becomes known for long-drawn negotiations for FTAs.
- Government emphasis on interim agreements may be tactical so that a deal may be achieved with minimum commitments and would allow for contentious issues to be resolved later.
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For Prelims: Free Trade Agreement, India-U.K, Bilateral Free Trade Agreement, G-20 Summit, Agenda 2030, Covid-19 Pandemic, SAARC, General Agreement on Trade and Tariffs, Comprehensive Economic Partnership Agreement, Multilateral Free Trade Agreement, Regional Free Trade Agreement, Preferential Trade Agreement, Customs Union,
For Mains:
1. Evaluate the potential impact of the India-UK FTA on the Indian economy, considering both positive and negative aspects (250 Words)
2. Critically evaluate the significance of Free Trade Agreements (FTAs) in promoting trade and economic growth, considering their potential benefits and drawbacks. (250 Words)
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Previous Year Questions
1. Consider the following countries:
1. Australia
2. Canada
3. China
4. India
5. Japan
6. USA
Which of the above are among the free-trade partners' of ASEAN? (UPSC 2018)
A. 1, 2, 4 and 5 B. 3, 4, 5 and 6 C. 1, 3, 4 and 5 D. 2, 3, 4 and 6
Answer: C
2. Increase in absolute and per capita real GNP do not connote a higher level of economic development, if (UPSC 2018) (a) Industrial output fails to keep pace with agricultural output. Answer: C 3. The SEZ Act, 2005 which came into effect in February 2006 has certain objectives. In this context, consider the following: (2010)
Which of the above are the objectives of this Act? (a) 1 and 2 only (b) 3 only (c) 2 and 3 only (d) 1, 2 and 3 Answer: A 4. A “closed economy” is an economy in which (UPSC 2011) (a) the money supply is fully controlled Answer: D 5. With reference to the “G20 Common Framework”, consider the following statements: (UPSC 2022)
1. It is an initiative endorsed by the G20 together with the Paris Club. 2. It is an initiative to support Low Income Countries with unsustainable debt. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Answer: C
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Source: The Hindu
