GS II Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Exim Bank’s signed an MoU with New Development Bank
The Union Cabinet has given its nod to Exim Bank of India for entering into a Memorandum of Understanding (MoU) on general cooperation with the New Development Bank (NDB), a multilateral development bank established by the BRICS nations.
- The MoU is a non-binding umbrella agreement aimed at establishing a cooperation framework in accordance with the national laws and regulations, besides skills transfer and knowledge sharing amongst the signatories.
NDB
The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS states (Brazil, Russia, India, China and South Africa). According to the Agreement on the NDB, “the Bank shall support public or private projects through loans, guarantees, equity participation and other financial instruments.”
- The idea for setting up the bank was proposed by India at the 4th BRICS summit in 2012 held in Delhi. The creation of a new development bank was the main theme of the meeting. BRICS leaders agreed to set up a Development bank at the 5th BRICS summit held in Durban, South Africa on 27 March 201
- The bank is headquartered in Shanghai, China.
- The initial authorized capital of the bank is $100 bn.’
- All the members have equal share holding and equal voting rights i.e 20 %.
- The board of governors is represented by the finance minister of the member countries.
Objectives
The bank aims to contribute to development plans established nationally through projects that are socially, environmentally and economically sustainable. Taking this into account, the main objectives of the NDB can be summarized as follows:
- Promote infrastructure and sustainable development projects with a significant development impact in member countries.
- Establish an extensive network of global partnerships with other multilateral development institutions and national development banks.
- Build a balanced project portfolio giving a proper respect to their geographic location, financing requirements and other factors.
About EXIM bank:
Export–Import Bank of India was established in 1982 under the Export-Import Bank of India Act 1981. Since its inception, Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment. Over the period, it has evolved into an institution that plays a major role in partnering Indian industries, particularly the Small and Medium Enterprises, in their globalisation efforts, through a wide range of products and services offered at all stages of the business cycle, starting from import of technology and export product development to export production, export marketing, pre-shipment and post-shipment and overseas investment.
GS III Topic: Conservation, environmental pollution and degradation, environmental impact assessment.
India announced to eliminate use of HFC-23 by 2030 at Kigali summit
The announcement came at a meeting of parties to the Montreal Protocol at Kigali in Rwanda where final negotiations are taking place to substantially reduce the use of HFCs (hydrofluorocarbons) by 2030. The Montreal Protocol, which came into force in 1989, is aimed at reducing the production and consumption of ozone depleting substances in order to protect the earth’s fragile ozone layer.
Reduction stratergies-
- As per Delhi-based think tank Centre for Science and Environment, the move will potentially check emissions of HFC-23 equivalent to 100 million tonnes of CO2 over the next 15 years.
- Companies have been asked to internalize the cost of this environmental externality and create sufficient storage facility to take care of down time and run the incinerators to ensure that HFC-23 is not released in the atmosphere.
- With this domestic legislation to control the emissions of HFC-23, India is also sending a strong signal to the world that it is serious about the climate change issue.
About HFC 23 and global warming potential :
HFC-23 is a potent greenhouse gas with global warming potential of 14,800 times more than that of CO2. It is a by-product of HCFC-22, which is used in industrial refrigeration.
The substances subject to restrictions under the Kyoto protocol either are rapidly increasing their concentrations in Earth’s atmosphere or have a large GWP.
Global warming potential
Global warming potential (GWP) is a relative measure of how much heat a greenhouse gas traps in the atmosphere. GWP is expressed as a factor of carbon dioxide (whose GWP is standardized to 1). It compares the amount of heat trapped by a certain mass of the gas in question to the amount of heat trapped by a similar mass of carbon dioxide. A GWP is calculated over a specific time interval, commonly 20, 100 or 500 years.
The GWP depends on the following factors:
- the absorption of infrared radiation by a given species
- the spectral location of its absorbing wavelengths
- the atmospheric lifetime of the species
Thus, a high GWP correlates with a large infrared absorption and a long atmospheric lifetime. The dependence of GWP on the wavelength of absorption is more complicated.
| Species | Chemical formula | Lifetime (years) | Global Warming Potential (Time Horizon) | ||
| 20 years | 100 years | 500 years | |||
| CO2 | CO2 | variable | 1 | 1 | 1 |
| Methane * | CH4 | 12±3 | 56 | 21 | 6.5 |
| Nitrous oxide | N2O | 120 | 280 | 310 | 170 |
| HFC-23 | CHF3 | 264 | 9100 | 11700 | 9800 |
| Sulphur hexafluoride | SF6 | 3200 | 16300 | 23900 | 34900 |
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GS II Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
India, Russia to set up agro irradiation centers
India and Russia have signed a pact to set up 25 integrated infrastructure centers for irradiation treatment of perishable food items to improve shelf life and cut post-harvest losses.
- At least 7 centers will be set up in Maharashtra, with the first centre near Shirdi to be ready next year.
- Perishable items ranging from flowers to fish will be treated there on a commercial scale.
- The agreement was signed between Russia’s United Innovation Corporation (UIC) — a subsidiary of Rosatom State Atomic Energy Corporation — and Hindustan Agro Co-op Ltd on the sidelines of the BRICS Business Forum.
- As part of the agreement, a JV will be formed for this purpose.
- These irradiation centres will use the technology and technical solution based on gamma-facility and/or electron accelerator.
Irradiation
In irradiation, food products are subjected to a low dosage of radiation to treat them for germs and insects, increasing their longevity and shelf life.
Radiation treatment is carried out in dosage recommended by the International Atomic Energy Agency (IAEA) and it neither reduces the nutritional value of food nor spoils their taste and appearance.
Benefits to India
In India, according to estimates, post-harvest losses in food and food grains are around 40-50%, primarily due to insect infestation, microbiological contamination, physiological changes due to sprouting and ripening, and poor shelf life.
- The wastage of fruits and vegetables alone is about Rs. 60,000 crore annually. Including cereals, meat, pulses and flowers, the annual loss is estimated to be Rs. 2,50,000 crores. Besides, there are a few low level irradiation plants in the country, which are not adequate.
- With the proposed centres, it is possible to reduce these losses.
GS III Topic: Science and Technology- developments and their applications and effects in everyday life Achievements of Indians in science & technology; indigenization of technology and developing new technology.
Indian Institute of Science (IISc), Bangalore, have developed a self-powered UV photodetector
Researchers from the Indian Institute of Science (IISc), Bangalore, have developed a cost-effective, high-performance, self-powered UV photodetector that can use the harvested optical energy for direct self-charging of energy storage devices such as supercapacitor.
The researchers developed the photodetector by integrating semiconducting vanadium doped zinc oxide (VZnO) nanoflakes with a conducting polymer.
- Zinc oxide (ZnO), the base material for UV detection, can be doped with vanadium to produce photodetectors that are self-powered. When doped with vanadium, the microstructure of ZnO changes from nanorods to closely-packed nanoflakes, causing an increase in the surface area to the volume of the material.
- The nanoflakes are 80% more porous than nanorods. The UV light that gets into the pores undergoes multiple reflections and finally gets absorbed.
- The photodetector has superior performance in terms of faster detection of photo signals in the order of milliseconds even when UV light intensity is low.
- It can be used for operating electronic devices in the absence of external power source.
UN got its New Secretary-General :
- The United Nations General Assembly (UNGA) has formally elected Antonio Guterresas the new Secretary-General of the United Nations.
- He will serve for five years starting from January 1, 2017.
- The UN Secretary-General is the head of the United Nations Secretariat and is de facto spokesperson and leader of the UN.
Women of India Festival 2016:
- ‘Women of India Festival 2016’ of organic products by women was recently inaugurated in New Delhi.
- The Festival will offer on sale the biggest selection of organic products ranging from food, fabrics and furniture to wellness, personal care and solar products.
- It is being organised and sponsored by the Union Ministry of Women & Child Development.
- This initiative is a move to benefit women entrepreneurs, and also actively promote organic food and products.
- The Women of India Festival is also intended to highlight the health and environmental advantages of organic goods, provide a platform for women engaged in this economy and encourage the development of sustainable and easily accessible sales outlets for organic producers from remote areas.
Nobel Prize for Literature:
- The American singer songwriter Bob Dylan has won the 2016 Nobel prize for literature.
- He is the first musician to win the award.
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Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.