News Snippet
News 1: Centre raises credit limit under ECLGS – (Important as Government of India has extended this option to organizations which were facing severe stress on account of COVID-19 pandemic)
News 2: WTO warns ‘darkened’ trade outlook – (It talks about trade curbs can further worsen condition and cooling of demand in shipping rates might increase the recessionary fears
News 3: Oil rises as OPEC+ agrees to deep cuts – (All about OPEC+ supply cuts and its implication on energy prices)
News 4: What is the Insolvency and Bankruptcy Code? – (It is crucial as IBC is one of the measures which deals with insolvency resolution or restructuring which has occurred due to NPAs and bad debts)
News 5: Parliament Committees and their role in law-making (It is important as questions from Parliamentary Committee has been asked in UPSC Mains)
News 6: Nobel Prize 2022 for chemistry
Other important news:
- UN Human Rights Council (UNHRC):
News 1: Centre raises credit limit under ECLGS for airlines
Background
The Ministry of Finance has raised the credit limit for airlines under the Emergency Credit Line Guarantee Scheme (ECLGS), making them eligible for a sum equivalent to 100% of their outstanding debt, up to a maximum of ₹1,500 crore.
This is the second time the government has liberalised the scheme for the aviation sector.
The scheme introduced for medium and small enterprises during the outbreak of the COVID-19 pandemic was extended till March 2023 and its guaranteed cover expanded by ₹50,000 crore to ₹5 lakh crore.
ECLGS (Emergency Credit Line Guarantee Scheme)
- Ministry: Ministry of Finance
- Emergency Credit Line Guarantee Scheme (ECLGS) was launched in May 2020 as part of the Aatmanirbhar Bharat Abhiyaan.
- The main objective of the Scheme was to provide an incentive to Member Lending Institutions (MLIs), i.e., Banks, Financial Institutions (FIs) and Non-Banking Financial Companies (NBFCs) to increase access to, and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by providing them 100 per cent guarantee for any losses suffered by them due to non-repayment of the Guaranteed Emergency Credit Line (GECL) funding by borrowers
- The structure of the scheme allows easy access to credit as the lenders offer pre-approved loans based on borrower’s existing credit outstanding and there is no fresh appraisal undertaken by lenders since additional credit is sanctioned over and above the credit facilities already assessed.
- Further, the interest rate is also capped with a view to lower the cost of credit and loans are sanctioned without any processing charges, pre-payment charges and guarantee fee.
- The overall ceiling initially announced for ECLGS was Rs 3 lakh crore which was subsequently enhanced to Rs 5 lakh crore. However, ECLGS being a demand driven scheme, sanctions/disbursements are made by lending institutions based on assessment of borrower’s requirement and their eligibility.
Reason behind launching ECLGS
ECLGS was formulated as a specific response to the unprecedented situation caused by COVID-19 and the consequent lockdown, which had severely impacted manufacturing and other activities in the MSME sector.
The Scheme aimed at mitigating the economic distress being faced by MSMEs by providing them additional funding of up to Rs. 3 lakh crores in the form of a fully guaranteed emergency credit line
NCGTC
- Ministry: Department of Financial Services, Ministry of Finance
- Established: 2014 under Companies Act, 1956
- National Credit Guarantee Trustee Company Ltd (NCGTC) is a private limited company incorporated to act as a common trustee company for multiple credit guarantee funds.
- Credit guarantee programmers are designed to share the lending risk of the lenders and in turn, facilitate access to finance for the prospective borrowers.
- The intent of NCGTC is therefore, to manage multiple guarantee schemes as part of a larger financial inclusion programme of the government covering different cross-sections and segments of the economy like students, micro entrepreneurs, women entrepreneurs, SMEs, skill and vocational training needs, etc.
News 2: WTO warns ‘darkened’ trade outlook
Background
- The World Trade Organization (WTO) forecast a slowdown of global trade growth next year as sharply higher energy and food prices and rising interest rates curb import demand and warned of a possible contraction if the war in Ukraine worsens.
- The WTO said there was high uncertainty over its forecasts. It provided a band of trade growth expansion of 2% to 4.9% for this year and of -2.8% to 4.6% for 2023.
- Weather events hitting food-producing regions or damaging energy export infrastructure could further hit trade, along with weakness in China, where COVID-19 outbreaks have disrupted production.
Warns against curbs
- “These would only deepen inflationary pressures and reduce living standards and would likely make us more rather than less vulnerable to the crisis we are grappling with.”
- The WTO’s forecast does not cover services, but the WTO said tourist arrivals were likely to fall after tripling in the first seven months of 2022.
- Lower shipping rates, the global body said, might have been greeted before as a sign of supply chains improvements, but was probably more the result of cooling demand.
World Trade Organization
- Established: 1995 after the Uruguay Round of Negotiation
- Headquarters: Geneva, Switzerland
- Members: 164 representing 98% of world trade
UPSC 2016 prelims
In the context of which of the following do you sometimes find the terms ‘amber box, blue box and green box’ in the news?
(a) WTO affairs
(b) SAARC affairs
(c) UNFCCC affairs
(d) India –EU negotiations on FTA
Answer – Option a (Official UPSC Answer key)
News 3: Oil rises as OPEC+ agrees to deep cuts
Background
Oil rose about 1% on Wednesday, as OPEC+ members agreed to its deepest cuts to output since the 2020 COVID pandemic, despite a tight market and opposition to cuts from the United States and others.
News 4: What is the Insolvency and Bankruptcy Code?
Background
Speaking at the sixth anniversary of the Insolvency and Bankruptcy Board of India (IBBI) Union Finance Minister Nirmala Sitharaman said that the country could not afford to lose the “sheen” of its insolvency law, the Insolvency and Bankruptcy Code (IBC).
Addressing the issue of haircuts — or the debt that banks forgo — she said it was unacceptable that banks should take a hefty haircut on loans that go through the resolution process.
What is the IBC?
In a growing economy, a healthy credit flow and generation of new capital are essential, and when a company or business turns insolvent or “sick”, it begins to default on its loans.
In order for credit to not get stuck in the system or turn into bad loans, it is important that banks or creditors are able to recover as much as possible from the defaulter, as quickly as they can.
In 2016, at a time when India’s Non-Performing Assets and debt defaults were piling up, and older loan recovery mechanisms were performing badly, the IBC was introduced to overhaul the corporate distress resolution regime in India and consolidate previously available laws to create a time-bound mechanism with a creditor-in-control model as opposed to the debtor-in-possession system.
When insolvency is triggered under the IBC, there can be just two outcomes: resolution or liquidation.
What are the challenges for the IBC?
According to its regulator IBBI, the first objective of the IBC is resolution — finding a way to save a business through restructuring, change in ownership, mergers etc.
The second objective is to maximise the value of assets of the corporate debtor.
The third is to promote entrepreneurship, availability of credit, and balancing of interests.
Keeping this order in mind, when one looks at the IBBI data for the 3,400 cases admitted under the IBC in the last six years, more than 50% of the cases ended in liquidation, and only 14% could find a proper resolution.
Furthermore, the IBC was touted as a time-bound mechanism. Timeliness is key here so that the viability of the business or the value of its assets does not deteriorate further.
The IBC was thus initially given a 180-day deadline to complete the resolution process, with a permitted 90-day extension. It was later amended to make the total timeline for completion 330 days — which is almost a year.
However, in FY22, it took 772 days to resolve cases involving companies that owed more than ₹1,000 crore. The average number of days it took to resolve such cases increased rapidly over the past five years.
Parliamentary Standing Committee on Finance pointed out in 2021, that in the five years of the IBC, creditors on an average had to bear an 80% haircut in more than 70% of the cases.
What are haircuts?
When a bank takes a ‘haircut’, it means it accepts less than what was due in a particular loan account.
For example: If a bank was owed Rs 10,000 by a borrower and it agrees to take back only Rs 8,000, it takes a 20% haircut. Banks do this for accounts where chances of full recovery are bleak. Instead of losing all the money or letting an asset lose value over time, banks sometimes choose to settle for less.
Critics say that with banks agreeing to as much as a 90-95% haircut on a loan amount, India’s bankruptcy laws are proving to be inefficient in terms of loan recovery.
What are experts saying?
In order to address the delays, the Parliamentary Standing Committee suggested that the time taken to admit the insolvency application and transfer control of the company to a resolution process, should not be more than 30 days after filing.
The IBBI has also called for a new yardstick to measure haircuts. It suggested that haircuts not be looked at as the difference between the creditor’s claims and the actual amount realised but as the difference between what the company brings along when it enters IBC and the value realised.
News 5: Parliament Committees and their role in law-making
What are Committees of Parliament, and what do they do?
A Parliamentary Committee is a panel of MPs that is appointed or elected by the House or nominated by the Speaker, and which works under the direction of the Speaker. It presents its report to the House or to the Speaker.
Parliamentary Committees have their origins in the British Parliament.
They draw their authority from Article 105, which deals with the privileges of MPs, and Article 118, which gives Parliament authority to make rules to regulate its procedure and conduct of business.
Legislative business begins when a Bill is introduced in either House of Parliament. But the process of lawmaking is often complex, and Parliament has limited time for detailed discussions.
What are the various Committees of Parliament?
Broadly, Parliamentary Committees can be classified into Financial Committees, Departmentally Related Standing Committees, Other Parliamentary Standing Committees, and Ad hoc Committees.
The Financial Committees include the Estimates Committee, Public Accounts Committee, and the Committee on Public Undertakings. These committees were constituted in 1950.
Seventeen Departmentally Related Standing Committees came into being in 1993, to examine budgetary proposals and crucial government policies. The aim was to increase Parliamentary scrutiny, and to give members more time and a wider role in examining important legislation.
The number of Committees was subsequently increased to 24. Each of these Committees has 31 members — 21 from Lok Sabha and 10 from Rajya Sabha.
Ad hoc Committees are appointed for a specific purpose. They cease to exist after they have completed the task assigned to them and have submitted a report to the House. The principal Ad hoc Committees are the Select and Joint Committees on Bills.
Parliament can also constitute a Joint Parliamentary Committee (JPC) with a special purpose, with members from both Houses, for detailed scrutiny of a subject or Bill.
Also, either of the two Houses can set up a Select Committee with members from that House. JPCs and Select Committees are usually chaired by ruling party MPs and are disbanded after they have submitted their report.
How do discussions/ debates in the Parliamentary Committees differ from those in Parliament?
The time to speak on a Bill is allocated according to the size of the party in the House. MPs often do not get adequate time to put forward their views in Parliament, even if they are experts on the subject.
Committees are small groups with relatively less demands on their time; in these meetings, every MP gets a chance and the time to contribute to the discussion. Parliament has only around 100 sittings a year; Committee meetings are independent of Parliament’s calendar.
Also, because the discussions are confidential and off-camera, party affiliations usually do not come in the way of MPs speaking their minds in ways they are unable to do in Parliament, whose proceedings are telecast live, and members are often constrained to speak to their constituencies.
As a result, many MPs concede that “real discussions” happen inside the Committees — agreeing in principle with the former US President.
Woodrow Wilson who observed that “Congress in session is Congress on public exhibition, whilst Congress in its committee rooms is Congress at work”.
The Committees work closely with multiple Ministries and facilitate inter-ministerial coordination. Bills that are referred to Committees often return to the House with significant value-addition.
How are the Committees constituted, and how are their chairpersons chosen?
There are 16 Departmentally Related Standing Committees for Lok Sabha and eight for Rajya Sabha; however, every Committee has members from both Houses. Lok Sabha and Rajya Sabha panels are headed by members of these respective Houses.
Among the important Lok Sabha panels are: Agriculture; Coal; Defence; External Affairs; Finance; Communications & Information Technology; Labour; Petroleum & Natural Gas; and Railways. The important Rajya Sabha panels include Commerce; Education; Health & Family Welfare; Home Affairs; and Environment.
There are other Standing Committees for each House, such as the Business Advisory Committee and the Privileges Committee. The Presiding Officer of each House nominates members to these panels. A Minister is not eligible for election or nomination to Financial Committees, and certain Departmentally Related Committees.
Presiding Officers use their discretion to refer a matter to a Parliamentary Committee, but this is usually done in consultation with leaders of parties in the House.
The appointment of heads of the Committees is also done in a similar way. By convention, the main Opposition party gets the post of PAC chairman; it is currently with the Congress.
The heads of the panels schedule their meetings. They play a clear role in preparing the agenda and the annual report and can take decisions in the interest of the efficient management of the Committee. The chairperson presides over the meetings and can decide who should be summoned before the panel.
An invitation to appear before a Parliamentary Committee is equivalent to a summons from a court: If one cannot come, he or she has to give reasons, which the panel may or may not accept. However, the chairman should have the support of the majority of the members to summon a witness.
MPs typically have a one-year tenure on Parliamentary Committees. Usually, the composition of a committee remains more or less the same in terms of representation of the various parties.
How important are the recommendations of the Committees?
Reports of Departmentally Related Standing Committees are recommendatory in nature. They are not binding on the government, but they do carry significant weight.
In the past, governments have accepted suggestions given by the Committees and incorporated them into the Bill after it has come back to the House for consideration and passage.
These panels also examine policy issues in their respective Ministries and make suggestions to the government. The government has to report back on whether these recommendations have been accepted.
Based on this, the Committees table Action Taken Reports, detailing the status of the government’s action on each recommendation.
However, suggestions by the Select Committees and JPCs — which have a majority of MPs and heads from the ruling party — are accepted more frequently.
UPSC 2018 Mains
Why do you think the committees are considered to be useful for parliamentary work? Discuss, in this context, the role or the Estimates Committee.
UPSC 2017 Mains
Discuss the role of Public Accounts Committee in establishing accountability of the government to the people.
News 6: Nobel Prize 2022 for chemistry
Background
The Nobel Prize in Chemistry 2022 has gone to Carolyn R Bertozzi, Morten Meldal and K Barry Sharpless, the latter winning the second Nobel of his career.
The three have been awarded for their work in ‘click chemistry ‘, in which molecules snap together fast and firmly, without the need for a long, complicated process and too many unwanted byproducts. Their work has applications in the field of medical science, including the treatment of cancer.
What is click chemistry?
Story of Ammonia
A big part of what chemists do is making new molecules, which is as much an art as it is science. The standard approach is to mimic nature.
In the early 20th century, finding nitrogen in a form usable by plants, despite it being the most abundant element in the atmosphere, was one of the discoveries scientists were striving hard to achieve.
German chemist, Fritz Haber cracked the code for ammonia, which combined nitrogen and hydrogen that plants could synthesise for nitrogen, and Carl Bosch figured out a way to produce it in massive amounts.
The Haber-Bosch process is still the dominant way of producing cheap fertilizer and is at the heart of industrialised agriculture. However, this process is extremely energy intensive and polluting and the modern-day challenge is to therefore produce so-called ‘green ammonia’.
This principle extends to most synthetic chemicals — where scientists try to create a natural substance, in a way that is different from the usual method which is often circuitous and creates several unwanted toxic by-products.
Shortly after winning his first Nobel Prize in 2001, Sharpless began discussing ways to synthesise chemicals that were efficient and not wasteful.
To be able to create new pharmaceuticals, Sharpless argued, chemists ought to be moving away from trying to make ‘natural’ molecules and creating new ones in simpler ways that did the job.
As an example, he said, it was hard to coax carbon atoms — the building blocks of organic molecules — from different molecules to link to each other. Instead, why not take smaller molecules, which already have a complete carbon frame and link them using bridges of nitrogen atoms or oxygen atoms?
Sure, it wouldn’t be as elegantly constructed as the natural stuff but would be efficient, greener and useful. This Lego-block like approach to making new molecules is the essence of ‘click chemistry.’ The ‘click’ is from an analogy he drew from seatbelts clicking snugly into buckles
Other important news
UN Human Rights Council (UNHRC)
- Established: 2006
- Headquarters: Geneva, Switzerland
- Parent Organization: United Nations General Assembly
- The Human Rights Council is an inter-governmental body within the United Nations system responsible for strengthening the promotion and protection of human rights around the globe and for addressing situations of human rights violations and make recommendations on them.
- It has the ability to discuss all thematic human rights issues and situations that require its attention throughout the year.
- It is made up of 47 United Nations Member States which are elected by the UN General Assembly (UNGA).
- Members of the Council serve for a period of three years and are not eligible for immediate re-election after serving two consecutive terms.
Recent Posts
- Items provided through FPS
- The scale of rations
- The price of items distributed through FPS across states.
- Kyoto Protocol of 2001
- Reducing Emissions from Deforestation and Forest Degradation (REDD) as well as REDD+ mechanisms proposed by the United Nations Framework Convention on Climate Change
- United Nations-mandated Sustainable Developmental Goals (SDG)
- Paris Agreement
- Carbon Neutrality
- multistrata agroforestry,
- afforestation,
- tree intercropping,
- biomass production,
- regenerative agriculture,
- conservation agriculture,
- farmland restoration,
- silvopasture,
- tropical-staple tree,
- intercropping,
- bamboo and indigenous tree–based land management.
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.
Globally, around 80% of wastewater flows back into the ecosystem without being treated or reused, according to the United Nations.
This can pose a significant environmental and health threat.
In the absence of cost-effective, sustainable, disruptive water management solutions, about 70% of sewage is discharged untreated into India’s water bodies.
A staggering 21% of diseases are caused by contaminated water in India, according to the World Bank, and one in five children die before their fifth birthday because of poor sanitation and hygiene conditions, according to Startup India.
As we confront these public health challenges emerging out of environmental concerns, expanding the scope of public health/environmental engineering science becomes pivotal.
For India to achieve its sustainable development goals of clean water and sanitation and to address the growing demands for water consumption and preservation of both surface water bodies and groundwater resources, it is essential to find and implement innovative ways of treating wastewater.
It is in this context why the specialised cadre of public health engineers, also known as sanitation engineers or environmental engineers, is best suited to provide the growing urban and rural water supply and to manage solid waste and wastewater.
Traditionally, engineering and public health have been understood as different fields.
Currently in India, civil engineering incorporates a course or two on environmental engineering for students to learn about wastewater management as a part of their pre-service and in-service training.
Most often, civil engineers do not have adequate skills to address public health problems. And public health professionals do not have adequate engineering skills.
India aims to supply 55 litres of water per person per day by 2024 under its Jal Jeevan Mission to install functional household tap connections.
The goal of reaching every rural household with functional tap water can be achieved in a sustainable and resilient manner only if the cadre of public health engineers is expanded and strengthened.
In India, public health engineering is executed by the Public Works Department or by health officials.
This differs from international trends. To manage a wastewater treatment plant in Europe, for example, a candidate must specialise in wastewater engineering.
Furthermore, public health engineering should be developed as an interdisciplinary field. Engineers can significantly contribute to public health in defining what is possible, identifying limitations, and shaping workable solutions with a problem-solving approach.
Similarly, public health professionals can contribute to engineering through well-researched understanding of health issues, measured risks and how course correction can be initiated.
Once both meet, a public health engineer can identify a health risk, work on developing concrete solutions such as new health and safety practices or specialised equipment, in order to correct the safety concern..
There is no doubt that the majority of diseases are water-related, transmitted through consumption of contaminated water, vectors breeding in stagnated water, or lack of adequate quantity of good quality water for proper personal hygiene.
Diseases cannot be contained unless we provide good quality and adequate quantity of water. Most of the world’s diseases can be prevented by considering this.
Training our young minds towards creating sustainable water management systems would be the first step.
Currently, institutions like the Indian Institute of Technology, Madras (IIT-M) are considering initiating public health engineering as a separate discipline.
To leverage this opportunity even further, India needs to scale up in the same direction.
Consider this hypothetical situation: Rajalakshmi, from a remote Karnataka village spots a business opportunity.
She knows that flowers, discarded in the thousands by temples can be handcrafted into incense sticks.
She wants to find a market for the product and hopefully, employ some people to help her. Soon enough though, she discovers that starting a business is a herculean task for a person like her.
There is a laborious process of rules and regulations to go through, bribes to pay on the way and no actual means to transport her product to its market.
After making her first batch of agarbathis and taking it to Bengaluru by bus, she decides the venture is not easy and gives up.
On the flipside of this is a young entrepreneur in Bengaluru. Let’s call him Deepak. He wants to start an internet-based business selling sustainably made agarbathis.
He has no trouble getting investors and to mobilise supply chains. His paperwork is over in a matter of days and his business is set up quickly and ready to grow.
Never mind that the business is built on aggregation of small sellers who will not see half the profit .
Is this scenario really all that hypothetical or emblematic of how we think about entrepreneurship in India?
Between our national obsession with unicorns on one side and glorifying the person running a pakora stall for survival as an example of viable entrepreneurship on the other, is the middle ground in entrepreneurship—a space that should have seen millions of thriving small and medium businesses, but remains so sparsely occupied that you could almost miss it.
If we are to achieve meaningful economic growth in our country, we need to incorporate, in our national conversation on entrepreneurship, ways of addressing the missing middle.
Spread out across India’s small towns and cities, this is a class of entrepreneurs that have been hit by a triple wave over the last five years, buffeted first by the inadvertent fallout of demonetization, being unprepared for GST, and then by the endless pain of the covid-19 pandemic.
As we finally appear to be reaching some level of normality, now is the opportune time to identify the kind of industries that make up this layer, the opportunities they should be afforded, and the best ways to scale up their functioning in the shortest time frame.
But, why pay so much attention to these industries when we should be celebrating, as we do, our booming startup space?
It is indeed true that India has the third largest number of unicorns in the world now, adding 42 in 2021 alone. Braving all the disruptions of the pandemic, it was a year in which Indian startups raised $24.1 billion in equity investments, according to a NASSCOM-Zinnov report last year.
However, this is a story of lopsided growth.
The cities of Bengaluru, Delhi/NCR, and Mumbai together claim three-fourths of these startup deals while emerging hubs like Ahmedabad, Coimbatore, and Jaipur account for the rest.
This leap in the startup space has created 6.6 lakh direct jobs and a few million indirect jobs. Is that good enough for a country that sends 12 million fresh graduates to its workforce every year?
It doesn’t even make a dent on arguably our biggest unemployment in recent history—in April 2020 when the country shutdown to battle covid-19.
Technology-intensive start-ups are constrained in their ability to create jobs—and hybrid work models and artificial intelligence (AI) have further accelerated unemployment.
What we need to focus on, therefore, is the labour-intensive micro, small and medium enterprise (MSME). Here, we begin to get to a definitional notion of what we called the mundane middle and the problems it currently faces.
India has an estimated 63 million enterprises. But, out of 100 companies, 95 are micro enterprises—employing less than five people, four are small to medium and barely one is large.
The questions to ask are: why are Indian MSMEs failing to grow from micro to small and medium and then be spurred on to make the leap into large companies?
At the Global Alliance for Mass Entrepreneurship (GAME), we have advocated for a National Mission for Mass Entrepreneurship, the need for which is more pronounced now than ever before.
Whenever India has worked to achieve a significant economic milestone in a limited span of time, it has worked best in mission mode. Think of the Green Revolution or Operation Flood.
From across various states, there are enough examples of approaches that work to catalyse mass entrepreneurship.
The introduction of entrepreneurship mindset curriculum (EMC) in schools through alliance mode of working by a number of agencies has shown significant improvement in academic and life outcomes.
Through creative teaching methods, students are encouraged to inculcate 21st century skills like creativity, problem solving, critical thinking and leadership which are not only foundational for entrepreneurship but essential to thrive in our complex world.
Udhyam Learning Foundation has been involved with the Government of Delhi since 2018 to help young people across over 1,000 schools to develop an entrepreneurial mindset.
One pilot programme introduced the concept of ‘seed money’ and saw 41 students turn their ideas into profit-making ventures. Other programmes teach qualities like grit and resourcefulness.
If you think these are isolated examples, consider some larger data trends.
The Observer Research Foundation and The World Economic Forum released the Young India and Work: A Survey of Youth Aspirations in 2018.
When asked which type of work arrangement they prefer, 49% of the youth surveyed said they prefer a job in the public sector.
However, 38% selected self-employment as an entrepreneur as their ideal type of job. The spirit of entrepreneurship is latent and waiting to be unleashed.
The same can be said for building networks of successful women entrepreneurs—so crucial when the participation of women in the Indian economy has declined to an abysmal 20%.
The majority of India’s 63 million firms are informal —fewer than 20% are registered for GST.
Research shows that companies that start out as formal enterprises become two-three times more productive than a similar informal business.
So why do firms prefer to be informal? In most cases, it’s because of the sheer cost and difficulty of complying with the different regulations.
We have academia and non-profits working as ecosystem enablers providing insights and evidence-based models for growth. We have large private corporations and philanthropic and funding agencies ready to invest.
It should be in the scope of a National Mass Entrepreneurship Mission to bring all of them together to work in mission mode so that the gap between thought leadership and action can finally be bridged.
Heat wave is a condition of air temperature which becomes fatal to human body when exposed. Often times, it is defined based on the temperature thresholds over a region in terms of actual temperature or its departure from normal.
Heat wave is considered if maximum temperature of a station reaches at least 400C or more for Plains and at least 300C or more for Hilly regions.
a) Based on Departure from Normal
Heat Wave: Departure from normal is 4.50C to 6.40C
Severe Heat Wave: Departure from normal is >6.40C
b) Based on Actual Maximum Temperature
Heat Wave: When actual maximum temperature ≥ 450C
Severe Heat Wave: When actual maximum temperature ≥470C
If above criteria met at least in 2 stations in a Meteorological sub-division for at least two consecutive days and it declared on the second day
It is occurring mainly during March to June and in some rare cases even in July. The peak month of the heat wave over India is May.
Heat wave generally occurs over plains of northwest India, Central, East & north Peninsular India during March to June.
It covers Punjab, Haryana, Delhi, Uttar Pradesh, Bihar, Jharkhand, West Bengal, Odisha, Madhya Pradesh, Rajasthan, Gujarat, parts of Maharashtra & Karnataka, Andhra Pradesh and Telengana.
Sometimes it occurs over Tamilnadu & Kerala also.
Heat waves adversely affect human and animal lives.
However, maximum temperatures more than 45°C observed mainly over Rajasthan and Vidarbha region in month of May.
a. Transportation / Prevalence of hot dry air over a region (There should be a region of warm dry air and appropriate flow pattern for transporting hot air over the region).
b. Absence of moisture in the upper atmosphere (As the presence of moisture restricts the temperature rise).
c. The sky should be practically cloudless (To allow maximum insulation over the region).
d. Large amplitude anti-cyclonic flow over the area.
Heat waves generally develop over Northwest India and spread gradually eastwards & southwards but not westwards (since the prevailing winds during the season are westerly to northwesterly).
The health impacts of Heat Waves typically involve dehydration, heat cramps, heat exhaustion and/or heat stroke. The signs and symptoms are as follows:
1. Heat Cramps: Ederna (swelling) and Syncope (Fainting) generally accompanied by fever below 39*C i.e.102*F.
2. Heat Exhaustion: Fatigue, weakness, dizziness, headache, nausea, vomiting, muscle cramps and sweating.
3. Heat Stoke: Body temperatures of 40*C i.e. 104*F or more along with delirium, seizures or coma. This is a potential fatal condition.
Norman Borlaug and MS Swaminathan in a wheat field in north India in March 1964
Political independence does not have much meaning without economic independence.
One of the important indicators of economic independence is self-sufficiency in food grain production.
The overall food grain scenario in India has undergone a drastic transformation in the last 75 years.
India was a food-deficit country on the eve of Independence. It had to import foodgrains to feed its people.
The situation became more acute during the 1960s. The imported food had to be sent to households within the shortest possible time.
The situation was referred to as ‘ship to mouth’.
Presently, Food Corporation of India (FCI) godowns are overflowing with food grain stocks and the Union government is unable to ensure remunerative price to the farmers for their produce.
This transformation, however, was not smooth.
In the 1960s, it was disgraceful, but unavoidable for the Prime Minister of India to go to foreign countries with a begging bowl.
To avoid such situations, the government motivated agricultural scientists to make India self-sufficient in food grain production.
As a result, high-yield varieties (HYV) were developed. The combination of seeds, water and fertiliser gave a boost to food grain production in the country which is generally referred to as the Green Revolution.
The impact of the Green Revolution, however, was confined to a few areas like Punjab, Haryana, western Uttar Pradesh in the north and (unified) Andhra Pradesh in the south.
Most of the remaining areas were deficit in food grain production.
Therefore the Union government had to procure food grain from surplus states to distribute it among deficit ones.
At the time, farmers in the surplus states viewed procurement as a tax as they were prevented from selling their surplus foodgrains at high prices in the deficit states.
As production of food grains increased, there was decentralisation of procurement. State governments were permitted to procure grain to meet their requirement.
The distribution of food grains was left to the concerned state governments.
Kerala, for instance, was totally a deficit state and had to adopt a distribution policy which was almost universal in nature.
Some states adopted a vigorous public distribution system (PDS) policy.
It is not out of place to narrate an interesting incident regarding food grain distribution in Andhra Pradesh. The Government of Andhra Pradesh in the early 1980s implemented a highly subsidised rice scheme under which poor households were given five kilograms of rice per person per month, subject to a ceiling of 25 kilograms at Rs 2 per kg. The state government required two million tonnes of rice to implement the scheme. But it received only on one million tonne from the Union government.
The state government had to purchase another million tonne of rice from rice millers in the state at a negotiated price, which was higher than the procurement price offered by the Centre, but lower than the open market price.
A large number of studies have revealed that many poor households have been excluded from the PDS network, while many undeserving households have managed to get benefits from it.
Various policy measures have been implemented to streamline PDS. A revamped PDS was introduced in 1992 to make food grain easily accessible to people in tribal and hilly areas, by providing relatively higher subsidies.
Targeted PDS was launched in 1997 to focus on households below the poverty line (BPL).
Antyodaya Anna Yojana (AAY) was introduced to cover the poorest of the poor.
Annapoorna Scheme was introduced in 2001 to distribute 10 kg of food grains free of cost to destitutes above the age of 65 years.
In 2013, the National Food Security Act (NFSA) was passed by Parliament to expand and legalise the entitlement.
Conventionally, a card holder has to go to a particular fair price shop (FPS) and that particular shop has to be open when s/he visits it. Stock must be available in the shop. The card holder should also have sufficient time to stand in the queue to purchase his quota. The card holder has to put with rough treatment at the hands of a FPS dealer.
These problems do not exist once ration cards become smart cards. A card holder can go to any shop which is open and has available stocks. In short, the scheme has become card holder-friendly and curbed the monopoly power of the FPS dealer. Some states other than Chhattisgarh are also trying to introduce such a scheme on an experimental basis.
More recently, the Government of India has introduced a scheme called ‘One Nation One Ration Card’ which enables migrant labourers to purchase rations from the place where they reside. In August 2021, it was operational in 34 states and Union territories.
The intentions of the scheme are good but there are some hurdles in its implementation which need to be addressed. These problems arise on account of variation in:
It is not clear whether a migrant labourer gets items provided in his/her native state or those in the state s/he has migrated to and what prices will s/he be able to purchase them.
The Centre must learn lessons from the experiences of different countries in order to make PDS sustainable in the long-run.
For instance, Sri Lanka recently shifted to organic manure from chemical fertiliser without required planning. Consequently, it had to face an acute food shortage due to a shortage of organic manure.
Some analysts have cautioned against excessive dependence on chemical fertiliser.
Phosphorus is an important input in the production of chemical fertiliser and about 70-80 per cent of known resources of phosphorus are available only in Morocco.
There is possibility that Morocco may manipulate the price of phosphorus.
Providing excessive subsidies and unemployment relief may make people dependent, as in the case of Venezuela and Zimbabwe.
It is better to teach a person how to catch a fish rather than give free fish to him / her.
Hence, the government should give the right amount of subsidy to deserving people.
The government has to increase livestock as in the case of Uruguay to make the food basket broad-based and nutritious. It has to see to it that the organic content in the soil is adequate, in order to make cultivation environmentally-friendly and sustainable in the long-run.
In short, India has transformed from a food-deficit state to a food-surplus one 75 years after independence. However, the government must adopt environmental-friendly measures to sustain this achievement.
Agroforestry is an intentional integration of trees on farmland.
Globally, it is practised by 1.2 billion people on 10 per cent area of total agricultural lands (over 1 billion hectares).
It is widely popular as ‘a low hanging fruit’ due to its multifarious tangible and intangible benefits.
The net carbon sequestered in agroforestry is 11.35 tonnes of carbon per ha
A panacea for global issues such as climate change, land degradation, pollution and food security, agroforestry is highlighted as a key strategy to fulfil several targets:
In 2017, a New York Times bestseller Project Drawdown published by 200 scientists around the world with a goal of reversing climate change, came up with the most plausible 100 solutions to slash–down greenhouse gas (GHG) emissions.
Out of these 100 solutions, 11 strategies were highlighted under the umbrella of agroforestry such as:-
Nowadays, tree-based farming in India is considered a silver bullet to cure all issues.
It was promoted under the Green India mission of 2001, six out of eight missions under the National Action Plan on Climate Change (NAPCC) and National Agroforestry and Bamboo Mission (NABM), 2017 to bring a third of the geographical area under tree cover and offsetting GHG emissions.
These long-term attempts by the Government of India have helped enhance the agroforestry area to 13.75 million hectares.
The net carbon sequestered in agroforestry is 11.35 tonnes of carbon per ha and carbon sequestration potential is 0.35 tonnes of carbon per ha per year at the country level, according to the Central Agroforestry Research Institute, Jhansi.
India will reduce an additional 2.5-3 billion tonnes of CO2 by increasing tree cover. This extra tree cover could be achieved through agroforestry systems because of their ability to withstand minimum inputs under extreme situations.
Here are some examples which portray the role of agroforestry in achieving at least nine out of the 17 SDGs through sustainable food production, ecosystem services and economic benefits:
SDG 1 — No Poverty: Almost 736 million people still live in extreme poverty. Diversification through integrating trees in agriculture unlocks the treasure to provide multifunctional benefits.
Studies carried out in 2003 in the arid regions of India reported a 10-15 per cent increase in crop yield with Prosopis cineraria (khejari). Adoption of agroforestry increases income & production by reducing the cost of input & production.
SDG 2 — Zero hunger: Tree-based systems provide food and monetary returns. Traditional agroforestry systems like Prosopis cineraria and Madhuca longifolia (Mahua) provide edible returns during drought years known as “lifeline to the poor people”.
Studies showed that 26-50 per cent of households involved in tree products collection and selling act as a coping strategy to deal with hunger.
SDG 3 — Good health and well-being: Human wellbeing and health are depicted through the extent of healthy ecosystems and services they provide.
Agroforestry contributes increased access to diverse nutritious food, supply of medicine, clean air and reduces heat stress.
Vegetative buffers can filter airstreams of particulates by removing dust, gas, microbial constituents and heavy metals.
SDG 5 — Gender equality: Throughout the world around 3 billion people depend on firewood for cooking.
In this, women are the main collectors and it brings drudgery and health issues.
A study from India stated that almost 374 hours per year are spent by women for collection of firewood. Growing trees nearby provides easy access to firewood and diverts time to productive purposes.
SDG 6 — Clean Water and Sanitation: Water is probably the most vital resource for our survival. The inherent capacity of trees offers hydrological regulation as evapotranspiration recharges atmospheric moisture for rainfall; enhanced soil infiltration recharges groundwater; obstructs sediment flow; rainwater filtration by accumulation of heavy metals.
An extensive study in 35 nations published in 2017 concluded that 30 per cent of tree cover in watersheds resulted in improved sanitisation and reduced diarrheal disease.
SDG 7 — Affordable & Clean Energy: Wood fuels are the only source of energy to billions of poverty-stricken people.
Though trees are substitutes of natural forests, modern technologies in the form of biofuels, ethanol, electricity generation and dendro-biomass sources are truly affordable and clean.
Ideal agroforestry models possess fast-growing, high coppicing, higher calorific value and short rotation (2-3 years) characteristics and provide biomass of 200-400 tonnes per ha.
SDG 12 — Responsible consumption and production: The production of agricultural and wood-based commodities on a sustainable basis without depleting natural resources and as low as external inputs (chemical fertilisers and pesticides) to reduce the ecological footprints.
SDG 13 — Climate action: Globally, agricultural production accounts for up to 24 per cent of GHG emissions from around 22.2 million square km of agricultural area, according to the Food and Agriculture Organization.
A 2016 study depicted that conversion of agricultural land to agroforestry sequesters about 27.2± 13.5 tonnes CO2 equivalent per ha per year after establishment of systems.
Trees on farmland mitigate 109.34 million tonnes CO2 equivalent annually from 15.31 million ha, according to a 2017 report. This may offset a third of the total GHG emissions from the agriculture sector of India.
SDG 15 — Life on Land: Agroforestry ‘mimics the forest ecosystem’ to contribute conservation of flora and faunas, creating corridors, buffers to existing reserves and multi-functional landscapes.
Delivery of ecosystem services of trees regulates life on land. A one-hectare area of homegardens in Kerala was found to have 992 trees from 66 species belonging to 31 families, a recent study showed.
The report of the World Agroforestry Centre highlighted those 22 countries that have registered agroforestry as a key strategy in achieving their unconditional national contributions.
Recently, the Government of India has allocated significant financial support for promotion of agroforestry at grassroot level to make the Indian economy as carbon neutral. This makes agroforestry a low-hanging fruit to achieve the global goals.