In News:

India is significantly ramping up its efforts to establish a semiconductor manufacturing industry, with plans to invest $15 billion in the second phase of its chipmaking incentive policy. This move aims to bolster the country's position in the global semiconductor supply chain, where it currently has minimal presence.

Key Points:

1. Government Funding and Projects:
   • Increased Investment: The Indian government is boosting its funding for chipmaking incentives to $15 billion, up from the $10 billion committed in the first phase.
   • Approved Projects: Four major semiconductor projects have been approved, totaling over Rs 1.48 lakh crore ($18 billion). This includes:
     • Tata and PSMC Fabrication Plant: India’s first commercial semiconductor fabrication plant, with an investment of more than Rs 91,000 crore ($11 billion), developed in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC).
     • Assembly and Testing Plants (ATMP/OSAT): Three plants:
       • Micron Technology is building the first plant, approved in June 2023.
       • Tata is constructing an assembly plant in Assam.
       • C G Power and Industrial Solutions, in partnership with Japan’s Renesas Electronics, is developing the third plant.

2. Government Subsidies:
   • Capex Subsidies: The central government will provide nearly Rs 59,000 crore ($7 billion) in capital expenditure subsidies for these projects.
   • State Support: State governments are offering incentives such as discounted land and electricity rates.
3. Strategic Importance:
   • Economic and Strategic Impact: Semiconductor chips are critical to a wide range of industries, including defense, automotive, and consumer electronics. Developing domestic chipmaking capabilities is seen as essential for economic growth and strategic independence.
   • Global Competition: India is entering a highly competitive field dominated by Taiwan and the US. The US has a $50 billion chip incentive scheme, while the EU has a similar program. India’s efforts are part of a broader strategy to reduce dependence on global chip supply chains and capitalize on geopolitical shifts.
4. Challenges and Realities:
   • Technology Barriers: The Tata-PSMC plant will not produce cutting-edge chips, as the technology for advanced nodes is currently beyond their reach. Manufacturing chips with smaller node sizes involves significant technological expertise and innovation, areas where leading companies like Taiwan Semiconductor Manufacturing Company (TSMC) excel.
   • High Entry Barriers: The chipmaking industry has high entry barriers, and India’s new plants will face challenges in achieving technological and competitive parity with established global leaders.

India's push into semiconductor manufacturing represents a major step in its economic development and strategic planning, aiming to position itself as a significant player in the global tech landscape while addressing critical supply chain vulnerabilities.

In News:

• Ministry of Electronics and Information Technology (MeitY) launches 2nd Cohort of Startup Accelerators of MeitY for Product Innovation, Development and Growth (SAMRIDH).

About SAMRIDH Scheme:

• SAMRIDH is a flagship programme of MeitY for startups acceleration under National Policy on Software Products – 2019.
• The SAMRIDH programme, launched in August 2021 aims to support 300 software product startups with outlay of ?99 crore over a period of 4 years.
• SAMRIDH is being implemented through potential and established accelerators across India which provide services like making products market fit, business plan, investor connect and international expansion to startups plus matching funding upto ?40 lakh by MeitY.
• The scheme is being implemented by MeitY Start-up Hub (MSH), Digital India Corporation (DIC).
• In the first round of cohort, 22 Accelerators spread across 12 states are supporting 175 startups, selected through a multilevel screening process.
• Major Objective:
  • The SAMRIDH scheme aims to support existing and upcoming Accelerators to select and accelerate potential IT-based startups to scale.
  • Among others, the program focuses on accelerating the startups by providing customer connect, investors connect and connect to international markets
• Eligibility of Accelerator:
  • Should be a registered Section-8/Society, [Not-for-Profit Company (eligible to hold equity)] having operations in India.
  • The Accelerator and the team are recommended to have more than 3 years of startup experience and should have supported more than 50 start-ups of which at least 10 startups should have received investment from external Investors
  • The Accelerator should have an experience of running startup program cohorts with activities listed as desirable under SAMRIDH program.

In News:

The Ministry of Labour & Employment (MoLE) stated in a latest update that in the short span of three years since its launch, eShram has registered more than 30 crore unorganised workers, showcasing its rapid and widespread adoption among the unorganised workers.

Key Highlights:

• The Government envisages to establishing the eShram portal as a "One-Stop-Solution" for Country’s unorganised workers.
• During Budget speech 2024-25 it has been announced that, A comprehensive integration of eShram portal with other portals will facilitate such One-Stop-Solution.
• This initiative aims to facilitate access of various social security schemes being implemented by different Ministries/ Departments to unorganised workers through the eShram portal.
• As part of the eShram - One Stop Solution project, Ministry of Labour and Employment (MoLE) has been working to integrate major schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), Pradhan Mantri Street Vendors Atmanirbhar Nidhi (PM-SVANidhi), Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Pradhan Mantri Awas Yojana Gramin (PMAY-G), Ration Card scheme etc. for the benefit of the unorganised workers.

What is e-Shram and its purpose?

• e-Shram is a comprehensive National Database of Unorganised Workers (NDUW) launched by the Government of India under the Ministry of Labour & Employment.
• Its primary purpose is to facilitate delivery of welfare benefits and social security measures to unorganised sector workers across the country.
• The platform aims to register and provide identity cards to unorganised workers, enabling them to access various government schemes, benefits, and services more efficiently.

Who are unorganised workers?

Any worker who is a home-based worker, self-employed worker or a wage worker working in the unorganised sector and not a member of ESIC or EPFO, is called an unorganised worker.

What is unorganised sector?

Unorganised sector comprises of establishment/ units which are engaged in the production/ sale of goods/ services and employs less than 10 workers. These units are not covered under ESIC & EPFO.

What is UAN?

UAN or Universal Account Number is a 12 digit number uniquely assigned to each unorganised worker after registration on e-Shram portal. UAN is a permanent number i.e., once assigned, it will remain unchanged for any worker.

In the News:

The Prime Minister has announced the adoption of the Delhi Declaration on Civil Aviation.

Overview:

The Delhi Declaration was unanimously accepted following the conclusion of the 2nd Asia Pacific Ministerial Conference held in New Delhi. This Declaration provides a thorough framework designed to boost regional cooperation, tackle emerging challenges, and promote sustainable growth within the civil aviation sector across the Asia-Pacific region. The conference also marks the 80th anniversary of the International Civil Aviation Organization (ICAO).

Key Announcements:

• Prime Minister Narendra Modi highlighted significant achievements in Indian aviation, noting that women make up 15% of Indian pilots, a figure that surpasses the global average.
• A proposal for establishing an International Buddhist Circuit was introduced to enhance regional tourism and connectivity.
• India plans to build between 350 and 400 new airports by 2047, aiming to increase its global aviation presence.
• A Pacific Small Island Developing States Liaison Office will be created to help smaller nations manage aviation-related issues.
• The ‘Ek Ped Ma Ke Naam’ campaign was launched, with a goal to plant 80,000 trees in honor of ICAO’s 80 years, emphasizing green aviation and sustainability in future initiatives.

Significance of the Delhi Declaration:

• It marks a significant advancement in enhancing regional cooperation in civil aviation within the rapidly growing Asia-Pacific region.
• The framework tackles crucial issues such as sustainability, green aviation, and safety, which are vital for the current aviation industry.
• Initiatives like the International Buddhist Circuit are in line with broader regional objectives to improve connectivity, tourism, and economic development throughout Asia.
• India aims to assert itself as a major global aviation player with its ambitious plan to construct 350-400 airports by 2047, thereby becoming a key contributor to aviation infrastructure development.

Civil Aviation Sector in India:

• India ranks as the third-largest domestic aviation market globally and is projected to become the third-largest overall by 2025.
• The sector is expanding through significant government programs such as the UDAN Scheme, Pradhan Mantri Gati Shakti Plan, and NCAP 2016.
• With 136 operational airports and plans for an additional 100, the government is focused on modernizing infrastructure, improving regional connectivity, and promoting public-private partnerships for airport development.

International Civil Aviation Organization (ICAO):

• Established in 1947 by the Chicago Convention (1944).
• Headquarters: Montreal, Canada.
• Functions:
  1. Ensures the safety and efficiency of international air transport.
  2. Sets standards for aviation safety, security, and environmental performance.
  3. Encourages regional and international agreements to liberalize aviation markets.
  4. Promotes cooperation and dialogue among its 193 member states.
  5. Develops legal frameworks for aviation laws and standards.

In News:

Recently, the Open Network for Digital Commerce (ONDC) introduced the Saarthi app in partnership with Bhashini.

About the Saarthi App:

• The Saarthi app is a reference tool designed to help businesses create their own customized buyer-side applications.
• It facilitates network participants in developing buyer apps with multilingual capabilities. Initially, the app supports Hindi, English, Marathi, Bangla, and Tamil, with plans to expand to all 22 languages offered by Bhashini.
• The app features real-time translation, transliteration, and voice recognition, allowing businesses to broaden their market reach and attract customers from new regions.

What is Bhashini?

• Bhashini is India's AI-driven language translation platform. Its goal is to facilitate easy access to the internet and digital services in Indian languages, including through voice-based interactions, and to aid in the creation of content in these languages.
• The platform is designed to provide Artificial Intelligence and Natural Language Processing (NLP) resources to Indian MSMEs, startups, and individual innovators. This support will help developers offer all Indians access to the internet and digital services in their native languages.
• Additionally, Bhashini features a ‘Bhasadaan’ section for crowdsourcing contributions and is available through Android and iOS apps.

Context: 

Celebrating Four Years of Pradhan Mantri Matsya Sampada Yojana (PMMSY)

The Pradhan Mantri Matsya Sampada Yojana (PMMSY) has marked its fourth anniversary since its launch in 2020. This flagship scheme, managed by the Department of Fisheries under the Ministry of Fisheries, Animal Husbandry, and Dairying, aims to transform India’s fisheries sector into a vibrant and sustainable industry.

About PMMSY

The PMMSY is designed to invigorate the fisheries sector through a comprehensive approach that consolidates various existing schemes and initiatives. It operates as an umbrella scheme with two main components:

- Central Sector Scheme (CS)

- Centrally Sponsored Scheme (CSS)

The CSS component is divided into:

Non-Beneficiary Oriented Subcomponents:

   - Enhancement of Production and Productivity

   - Infrastructure and Post-Harvest Management

   - Fisheries Management and Regulatory Framework

Fisheries Sector Overview

India stands as the third-largest fish producer globally and the second-largest in aquaculture production. It is also the fourth-largest exporter of fish and fisheries products, experiencing a notable 26.73% growth in exports from FY 2021-22 to FY 2022-23. Andhra Pradesh leads the country in fish production, followed by West Bengal and Gujarat. The sector supports the livelihoods of over 30 million people.

The Department of Fisheries is spearheading the PMMSY to foster a "Blue Revolution" through sustainable and responsible development of the fisheries sector.

Challenges Facing the Fisheries Sector

1. Overfishing: Excessive fishing pressure threatens fish stocks and disrupts ecosystem balance.

2. Illegal, Unreported, and Unregulated (IUU) Fishing: Practices such as fishing without proper authorization and using banned gear undermine conservation efforts.

3. Lack of Infrastructure and Technology: Outdated technology and inadequate storage and transportation facilities result in post-harvest losses and reduced productivity.

4. Poor Fisheries Management: Inefficient regulation enforcement and lack of comprehensive data exacerbate overfishing and IUU fishing.

5. Pollution and Habitat Destruction: Industrial pollution and habitat destruction from activities like coastal reclamation impact marine and freshwater ecosystems.

6. Climate Change: Altered oceanic and freshwater environments affect fish distribution and reproductive cycles, disrupting fisheries ecosystems.

7. Socio-Economic Issues: Poverty and limited livelihood options increase the vulnerability of fishing communities.

Government Initiatives for Sector Growth

1. National Fisheries Development Board (NFDB): Established in 2006, the NFDB plans and promotes fisheries development, enhancing production and infrastructure.

2. Blue Revolution: Launched in 2015, this initiative focuses on sustainable development, modern technology adoption, and strengthening fisheries governance.

3. Sagarmala Programme: Also launched in 2015, it aims to boost port-led development and includes projects to develop fishing harbors and cold chain infrastructure.

4. National Fisheries Policy: Introduced in 2020, this policy provides a framework for sustainable fisheries development, focusing on responsible management and socio-economic improvements.

5. Fish Farmers Development Agencies (FFDAs): Established at the district level to provide technical guidance and support to fish farmers.

6. Fisheries and Aquaculture Infrastructure Development Fund (FIDF): Created in 2018-19 with a fund of Rs 7,522.48 crore to address infrastructure needs, resulting in 121 approved projects.

7. Coastal Aquaculture Authority (CAA): Regulates coastal aquaculture to ensure sustainability and environmental conservation.

Way Forward

The fisheries sector in India holds immense potential due to its extensive coastline and water resources. Key measures to further enhance the sector include:

- Strengthening Monitoring and Enforcement: Combat IUU fishing with better monitoring and regulatory mechanisms.

- Supporting Sustainable Practices: Provide financial incentives for adopting modern technologies and sustainable practices.

- Protecting Aquatic Habitats: Ensure the conservation and restoration of vital habitats like mangroves and coral reefs.

- Improving Supply Chain Infrastructure: Develop better market linkages to ensure fair pricing and access to markets.

With these strategies, the PMMSY aims to drive the sustainable growth of India’s fisheries sector and bolster its contribution to the economy and livelihoods.

• The World Bank has forecast a growth of 7% for the Indian economy for the current fiscal year, upping its earlier estimate of 6.6%.
• In its report, India Development Update: India’s Trade Opportunities in a Changing Global Context, the World Bank said India’s growth continued to be strong despite a challenging global environment.
• The World Bank growth projection is in line with those of the International Monetary Fund (IMF) and Asian Development Bank (ADB).
  • Both the institutions have raised their forecast to 7% for the financial year ending March 2025.
• The India Development Update [IDU] observes that India remained the fastest-growing major economy and grew at a rapid clip of 8.2% in FY 23/24.
  • Growth was boosted by public infrastructure investment and an upswing in household investments in real estate.
  • On the supply side, it was supported by a buoyant manufacturing sector, which grew by 9.9%, and resilient services activity, which compensated for underperformance in agriculture.
• Reflecting these trends, urban unemployment has improved gradually since the pandemic, especially for female workers. While female urban unemployment fell to 8.5 % in early FY24/25, the urban youth unemployment remained elevated at 17%.
• India’s robust growth prospects, along with declining inflation rate will help to reduce extreme poverty
• India can boost its growth further by harnessing its global trade potential. In addition to IT, business services and pharma where it excels, India can diversify its export basket with increased exports in textiles, apparel, and footwear sectors, as well as electronics and green technology products.
• A recovery in agriculture will partially offset a marginal moderation in industry and all services will remain robust. The rural private consumption will recover, thanks to the expected recovery in agriculture.
• The report also highlights the critical role of trade for boosting growth. The global trade landscape has witnessed increased protectionism in recent years. The post pandemic reconfiguration of global value chains, triggered by the pandemic, has created opportunities for India.
• The IDU recommends a three-pronged approach towards achieving the $1 trillion merchandise export target by reducing trade costs further, lowering trade barriers, and deepening trade integration.

In India, the financial relationship between the Union government and the States is characterized by vertical fiscal imbalance (VFI), where the Union government holds most of the revenue while States shoulder significant expenditure responsibilities. The 16th Finance Commission has a pivotal role in addressing this imbalance. Here's how it should approach the issue:

Understanding Vertical Fiscal Imbalance (VFI)

• Current Situation:
  • States incur 61% of revenue expenditure but collect only 38% of revenue receipts.
  • States rely heavily on transfers from the Union government, leading to a pronounced VFI.
• VFI Definition:
  • VFI arises when the expenditure responsibilities of States exceed their revenue-raising capabilities, necessitating transfers from the Union.

Reasons to Address VFI

• Constitutional Allocation:
  • Revenue duties and expenditure responsibilities are constitutionally divided.
  • Union government collects Personal Income Tax, Corporation Tax, and part of indirect taxes for efficiency.
  • States are better positioned to deliver publicly provided goods and services effectively.
• Historical Context:
  • The 15th Finance Commission highlighted that India has experienced a rising VFI, exacerbated by crises like the COVID-19 pandemic.
• Finance Commission's Role:
  • The Commission addresses VFI by determining how to allocate taxes collected by the Union to the States and how to distribute these among States.

Finance Commission Recommendations

• Tax Devolution:
  • The Commission recommends devolving a portion of Union taxes to States.
  • The 14th and 15th Finance Commissions recommended devolving 42% and 41% of net proceeds, respectively.
  • To eliminate VFI, devolution should be around 48.94%.
• Grants and Transfers:
  • The Commission also suggests grants under Article 275 for specific purposes.
  • Transfers under Article 282, such as centrally sponsored and central sector schemes, are tied and include conditionalities, which are not untied resources.

Calculation and Recommendations for VFI

• Estimating VFI:
  • Ratio = (Own Revenue Receipts + Tax Devolution) / Own Revenue Expenditure.
  • A ratio less than 1 indicates insufficient revenue to meet expenditure, showing the VFI deficit.
• Empirical Findings:
  • To address VFI, the share of net proceeds devolved to States should be around 49%.
  • This increase would ensure that States have more untied resources, enhancing their ability to meet local needs and priorities.

Implications of Increased Tax Devolution

• Enhanced State Capacity:
  • A higher share of tax devolution would empower States with more resources for untied expenditures.
  • It would improve the alignment of State expenditures with local needs and priorities.
• Improved Efficiency:
  • Enhanced devolution would lead to better efficiency in expenditure by allowing States to respond more effectively to jurisdictional requirements.
• Strengthened Fiscal Federalism:
  • Addressing VFI through increased tax devolution contributes to a more balanced and cooperative fiscal federalism.

Conclusion: The 16th Finance Commission should focus on increasing the share of tax devolution to around 50% to address the vertical fiscal imbalance. This adjustment will provide States with the necessary resources to manage their expenditure responsibilities more effectively and ensure a more equitable distribution of fiscal resources in India’s federal structure.

Why is it in the News?

The Central Board of the Reserve Bank of India (RBI) has approved a record surplus transfer of Rs 2.11 lakh crore to the Central government for the fiscal year 2023-24, determined based on the Economic Capital Framework (ECF).

What is the Economic Capital Framework (ECF)?

• The Economic Capital Framework (ECF)  is an objective, rule-based, transparent methodology for determining the appropriate level of risk provisions (fund allocation to capital reserve) that is to be made under Section 47 of the Reserve Bank of India Act.
• The Reserve Bank of India (RBI) developed an Economic Capital Framework (ECF) for determining the allocation of funds to its capital reserves so that any risk contingency can be met as well as to transfer the profit of the RBI to the government.
• There are two clear objectives for the ECF.
  • First, the RBI as a macroeconomic institution has the responsibility to fight any disorder especially a crisis in the financial system. Here, to meet such a crisis, the RBI should have adequate funds attached under the capital reserve.
  • Second, is transferring the remaining part of the net income to the government.
• The process of adding funds to the capital reserve is a yearly one where the RBI allots money out of its net income to the capital reserve.
• How much funds shall be added to the capital reserve each year depends upon the risky situation in the financial system and the economy.
• The process of allocation of funds is technically called as provisioning (risk provisioning etc.,) to the reserves.
• After allotting money to the capital reserve, the remaining net income of the RBI is transferred to the government as profit.
• Since the government is the shareholder of the RBI, the latter’s income (means profit) should be transferred to the Government (Section 47 of the RBI Act).
• Previously, there were several attempts to frame an ECF for the RBI. However, under the changed circumstances, the RBI central board constituted a new committee (under Bimal Jalan) to design an ECF in 2018.

What is a Bimal Jalan Committee?

• The Reserve Bank of India (RBI) in November 2018 had constituted a six-member committee, chaired by former governor Dr Bimal Jalan, to review the current economic capital framework (ECF), after the Ministry of Finance asked the central bank to follow global practices.

What did the Bimal Jalan Committee Recommend?

• According to the Committee, a better distinction between the two components of RBI's economic capital, realised equity and revaluation balances, was needed.
  • The realised equity can be used as a buffer in meeting losses, whereas the revaluation balances will be used only during market risks as they are unrealised valuation gains and cannot be distributed.
• The Committee has recommended the adoption of Expected Shortfall (ES) under stressed conditions for measuring the RBI’s market risk and asked to adopt a target of ES 99.5 per cent confidence level.
• It also asked to maintain a Contingent Risk Buffer (CRB) within 6.5 per cent and 5.5 per cent of RBI's balance sheet.
• The Jalan Committee recommended a surplus distribution policy that follows the realised equity maintained by the RBI.
• The panel also suggested that the RBI’s ECF should be reviewed every five years.
• In August 2019, the Central Board of the RBI, chaired by Governor Shaktikanta Das, finalised the RBI’s accounts for 2018-19 using the revised framework to determine risk provisioning and surplus transfer. According to the reports, the RBI had over Rs 9 trillion of surplus capital with it.

Why is it in the News?

Peter Higgs, the eminent theoretical physicist who first proposed the idea of what we now know as the “Higgs Boson,” died at the age of 94 on April 8.

What is the Higgs Boson?

• Particles make up everything in the universe but they did not have any mass when the universe began.
• They all sped around at the speed of light, according to the European Council for Nuclear Research (CERN).
  • CERN, the European Council for Nuclear Research, is where the Large Hadron Collider (LHC) is located, and it's where the discovery of the Higgs Boson was made in 2012 through experiments conducted at the LHC.
• Everything we see like planets, stars, and life, emerged after particles gained their mass from a fundamental field associated with the particle known as the Higgs boson.
• The particle has a mass of 125 billion electron volts making it 130 times bigger than a proton?, according to CERN.
• Interestingly, the subatomic particles known as bosons are named after Indian Physicist Satyendra Nath Bose.

How does the Higgs Boson Work?

• The Higgs boson is a fundamental component of a theory formulated by Higgs and colleagues in the 1960s to elucidate how particles acquire mass.
• According to this theory, a pervasive Higgs energy field permeates the universe.
• As particles traverse this field, they interact with and draw in Higgs bosons, which congregate around the particles in varying quantities.
• Likewise, envision the universe akin to a party: less prominent guests can swiftly traverse the room without notice, while more popular guests attract clusters of people (the Higgs bosons), thus decelerating their movement through the room.
• Similarly, particles navigating the Higgs field experience a comparable phenomenon.
• Certain particles attract larger assemblies of Higgs bosons, and the more Higgs bosons a particle draws in, the greater its mass becomes.

Why is the Higgs Boson Called the “God Particle?”

• The Higgs boson is popularly known as the "God Particle".
• The name originated from Nobel Prize-winning physicist Leon Lederman's book on the particle which he titled the "Goddamn Particle", owing to frustration over how difficult it was to detect.
• However, his publishers changed the name to "The God Particle", which often draws ire from religious communities.

Who was Peter Higgs?

• Born in UK's Newcastle upon Tyne in 1929, Mr Higgs studied at King's College in London and has taught at the University of Edinburgh since the 1950s.
• Described as a modest man who published only a few scientific papers, he disliked his sudden fame calling it "a bit of a nuisance", even cringing when the term "Higgs boson" was used.
• Even as a lifelong atheist, he disliked the name "God particle".
• In 2013, Higgs and Francois Englert won the Physics Nobel Prize for their work on the particle which was thought to be a key to explaining the universe.

Why is it in the News?

The government has come up with a new platform to disburse subsidies to horticulture farmers under the Cluster Development Programme (CDP) — the Centre’s initiative to promote horticulture crops.

What is the CDP-SURAKSHA?

• The CDP-SURAKSHA is essentially a digital platform.
  • SURAKSHA stands for “System for Unified Resource Allocation, Knowledge, and Secure Horticulture Assistance.”
• The platform will allow an instant disbursal of subsidies to farmers in their bank accounts by utilizing the e-RUPI voucher from the National Payments Corporation of India (NPCI).
• The CDP-SURAKSHA has features such as database integration with PM-KISAN, cloud-based server space from NIC, UIDAI validation, eRUPI integration, local government directory (LGD), content management system, geotagging, and geo-fencing.

How does the CDP-SURAKSHA work?

• The platform allows access to farmers, vendors, implementing agencies (IA), cluster development agencies (CDAs), and officials of the National Horticulture Board (NHB).
• A farmer can log in using their mobile number and place an order for planting materials such as seeds, seedlings, and plants based on their requirement.
• Once the demand has been raised by the farmer, the system will ask them to contribute their share of the cost of planting material.
  • The subsidy amount paid by the government will appear on the screen automatically.
• After the farmer pays their contribution, an e-RUPI voucher will be generated.
  • This voucher will then be received by a vendor, who will provide the required planting material to the farmer.
• Once the ordered planting material is delivered to the farmer, they have to verify the delivery through geo-tagged photos and videos of their field.
  • It is only after the verification that the IA will release the money to the vendor for the e-RUPI voucher.
  • The vendor will be required to upload an invoice for the payment on the portal.
• The IA will collect all the documents and share them with the CDA for subsidy release, then only the subsidy will be released to the IA.
• However, the farmer, who raised the demand for the plant material using the platform, can avail of the subsidy at the first stage only.

What is e-RUPI?

• The CDP-SURAKSHA platform uses e-RUPI vouchers from the NPCI.
• The voucher is a one-time payment mechanism that can be redeemed without a card, digital payments app, or internet banking access, at the merchants accepting e-RUPI.
• According to the NPCI, the e-RUPI can be shared with the beneficiaries for a specific purpose or activity by organizations or government via SMS or QR code.

What is the Cluster Development Program (CDP)?

• The CDP is a component of the central sector scheme of NHB.
• It is aimed at leveraging “the geographical specialization of horticulture clusters and promoting integrated and market-led development of pre-production, production, post-harvest, logistics, branding, and marketing activities.”
• So far, 55 horticulture clusters have been identified, out of which 12 have been selected for the pilot.
• These clusters are in different stages of development.
• Four more clusters:
  • A floriculture cluster in West Bengal
  • Coconut clusters in Kerala and Tamil Nadu, and
  • White onion clusters in Gujarat
• Each cluster will have an implementing agency and a cluster development agency (CDA).
• According to the government, about 9 lakh hectares of area will be covered through all 55 clusters, covering 10 lakh farmers.
• It is estimated that the initiative will attract private investment of Rs 8,250 crore, in addition to the government’s assistance, which is fixed according to the size of the cluster, up to Rs 25 crore for mini cluster (size up to 5,000 ha), up to Rs 50 crore for medium clusters (5,000 to 15,000), and up to Rs 100 crore for mega clusters (more than 15,000 ha).

Why is it in the News?

The Ministry of New and Renewable Energy (MNRE) has announced a Rs-496-crore (until 2025-26) scheme to support pilot projects that either test the viability of green hydrogen as a vehicle fuel or develop secure supporting infrastructure such as refueling stations.

What is Green Hydrogen?

• Green hydrogen is a form of hydrogen gas produced through a process called electrolysis, where water (H2O) is split into hydrogen (H2) and oxygen (O2) using electricity.
  • The electricity used in this process is generated from renewable sources such as solar, wind, or hydroelectric power, hence the term "green" hydrogen.
• Unlike conventional methods of hydrogen production, which often rely on fossil fuels and emit greenhouse gases, green hydrogen production is considered environmentally friendly because it doesn't generate carbon dioxide emissions.
  • It can be used as a clean energy carrier in various sectors, including transportation, industry, and energy storage.
• The production of green hydrogen is still relatively expensive compared to other forms of hydrogen production, but ongoing advancements in renewable energy technologies and electrolysis processes are expected to reduce costs and increase the viability of green hydrogen as a sustainable energy source in the future.

India's Push for Green Hydrogen in the Transportation Sector:

• India is aggressively pushing for the adoption of green hydrogen in its transportation sector:
• Major Indian commercial vehicle manufacturers like Tata Motors, Volvo Eicher, and Ashok Leyland are intensifying their efforts to develop hydrogen-powered trucks and buses.
• Simultaneously, Indian energy companies are ramping up efforts to increase the production of green hydrogen while striving to decrease costs, making it competitive with other fuels.
• Given its vast and expanding market for both vehicles and energy, India stands poised to reap substantial benefits from widespread green hydrogen adoption as a vehicular fuel.
• India anticipates numerous advantages from this transition, including mitigating pollution, achieving climate objectives, and reducing reliance on expensive fossil fuel imports.
• Moreover, India views this shift as a significant business opportunity, aiming to establish itself as a global hub for the production and export of green hydrogen.

Scheme for Use of Green Hydrogen in the Transport Sector:

• The Scheme for Use of Green Hydrogen in the Transport Sector focuses on several key objectives:
  • Validating the technical feasibility and performance of green hydrogen as a transportation fuel.
  • Evaluating the economic viability of vehicles powered by green hydrogen.
  • Demonstrating the safe operation of hydrogen-powered vehicles and refueling stations.
• Under the scheme, the Ministry of Road Transport & Highways will designate a scheme implementation agency responsible for inviting proposals for pilot projects.
• Once selected, the chosen company or consortium will serve as the project's executing agency and must complete the pilot project within a two-year timeframe.
• To support these initiatives, the Ministry of New and Renewable Energy (MNRE) will consider approving viability gap funding (VGF) based on the recommendations of a Project Appraisal Committee.
  • The VGF amount will be determined by assessing the specific needs, merits, and feasibility of each project.

Advantages of Green Hydrogen in the Transportation Sector:

• Hydrogen Internal Combustion Engine (ICE) vehicles utilize hydrogen through combustion, akin to traditional diesel and petrol vehicles, but without emitting carbon.
• Hydrogen Fuel Cell Electric Vehicles (FCEVs) convert hydrogen electrochemically into electricity, leaving water as the sole byproduct, offering a clean and efficient alternative.
• While hydrogen ICE vehicles emit no carbon, studies indicate that converting hydrogen into electricity in a fuel cell is more energy efficient than burning it.
• Unlike Battery Electric Vehicles (BEVs) where the battery is heavy, hydrogen FCEVs are typically lighter due to hydrogen being a lighter element.
• This lightweight characteristic of hydrogen fuel cell technology makes it particularly promising for heavy-duty trucks, providing a viable alternative to EV battery technology.
• Green hydrogen presents a significant opportunity to reduce carbon emissions in the transportation sector without compromising revenue-generating payload capacity, addressing both environmental and economic concerns.

Challenges to the Large-Scale Adoption of Green Hydrogen in the Transportation Sector:

• Cost Prohibitions: The production cost of green hydrogen remains high, posing challenges to its viability as a fuel option.
  • To compete with Battery Electric Vehicles (BEVs), the cost of green hydrogen needs to be reduced to between $3 and $6.5 per kilogram by 2030.
  • Retail green hydrogen prices in California reached as high as $30 per kilogram in 2023, underscoring the current cost disparity.
  • However, ongoing technological innovations and scale-up efforts are expected to drive cost reductions soon.
• Insufficient Infrastructure: Building hydrogen fueling stations for trucks can cost up to 72% more than those for battery electric trucks, according to the California Transportation Commission.
  • Challenges with supply complications and market factors have led to the closure of hydrogen refueling stations, exemplified by Shell's recent decision in California.
• Storage and Transportation Challenges: Hydrogen storage requires high-pressure cylinders, which are costly and pose technical challenges.
  • Existing natural gas pipeline infrastructure is unsuitable for transporting hydrogen.
  • Specialized cylinders capable of safely storing green hydrogen are under discussion, necessitating infrastructure development.
• Handling and Safety Concerns: Hydrogen's flammability necessitates stringent safety protocols and infrastructure at refueling stations.
  • Developing robust safety standards is imperative before widespread adoption can occur.
• Long-Term Viability: Advancements in battery technologies are continuously improving the weight and efficiency of EV batteries, potentially challenging the long-term viability of green hydrogen-powered vehicles, particularly in heavy-duty commercial applications.

Why is it in the News?

As per the Food Waste Index Report for 2024, households worldwide discarded more than one billion meals daily in 2022.

About UNEP Food Waste Index Report 2024:

• The United Nations Environment Programme (UNEP) Food Waste Index Report 2024, co-authored with the Waste and Resources Action Programme (WRAP), offers a comprehensive analysis of the state of global food waste.
• The report reveals alarming trends, including the wastage of over 1 billion meals per day in 2022, highlighting the urgency to address this critical issue.

Key findings from the report include:

• Per Capita Waste: The average annual food waste per person amounts to approximately 79 kilograms (or around 174 pounds).
  • This equates to over a billion meals being wasted daily worldwide, underscoring the significant inefficiencies in current food consumption habits.
• Sources of Waste: Household waste constitutes the majority, around 60%, with food service establishments (such as restaurants) contributing approximately 28%, and retailers making up about 12%.
  • This breakdown suggests that interventions targeting consumer behavior could have a substantial impact on reducing overall waste.
• Environmental Impact: Food loss and waste contribute to 8 to 10% of global greenhouse gas emissions.
  • Comparatively, if food waste were considered a country, it would rank as the third-largest emitter of greenhouse gases globally, trailing only China and the United States.
  • This stark comparison underscores the urgent need to address food waste not only for resource efficiency but also as a crucial aspect of climate action on a global scale.
• Global vs. Local Impact: The report highlights that food waste is a pervasive issue affecting both high-income and lower-income countries alike.
  • This universality implies that solutions must be adaptable and scalable across various socioeconomic contexts.
• Collaborative Solutions: Governments, regional entities, industry stakeholders, and non-profit organizations are increasingly involved in public-private partnerships to combat food waste.
  • Effective strategies, such as food redistribution through initiatives like food banks and charities, are recognized as vital for reducing waste while simultaneously supporting vulnerable communities.

Recommendations:

• The Food Waste Index Report by UNEP emphasizes the urgent need for comprehensive action, both globally and locally, to tackle the issue of food waste.
• By illuminating the extent and origins of waste, as well as its significant environmental and social repercussions, the report advocates for collaborative efforts across all sectors to establish sustainable food systems.
• The target of halving food waste by 2030 is not only in line with environmental goals but also represents a crucial step towards reducing global hunger and promoting a fairer distribution of food resources.
• As nations strive to achieve this objective, the report underscores the interconnectedness of food security, environmental sustainability, and economic viability.
• It presents addressing food waste not only as a moral and environmental imperative but also as a practical opportunity to bolster global food security and combat climate change.

Why is it in the News?

The BSE and NSE introduced trading in the T+0 rolling settlement cycle in the equity segment on an optional basis today.

What is Trade Settlement?

• Trade settlement encompasses the bilateral process of transferring funds and securities on the designated settlement date.
• It signifies the completion of a trade transaction when the purchased securities of a listed company are successfully delivered to the buyer, and the seller receives the agreed-upon payment.
• The evolution of the trade settlement cycle in India has seen notable adjustments over time.
• Initially shortened by SEBI to T+3 from T+5 in 2002 and further to T+2 in 2003, the current cycle in the Indian stock market stands at T+1.
• This migration to the T+1 cycle took effect in January 2023, positioning India as the second country globally, after China, to implement the T+1 settlement cycle for top-listed securities.

What is the T+0 Trading Settlement Cycle?

• In December last year, the capital markets regulator SEBI proposed to introduce a facility for clearing and settlement of funds and securities on T+0 (same day) on an optional basis, in addition to the existing T+1 settlement cycle.
• The regulator has also proposed to introduce optional instant settlement at a later stage.
• Under the T+0 trade cycle, the settlement of trades will happen on the same day after the closure of the T+0 market.
• If investors sell a share, they will get the money credited to their account the same day, and the buyer will also get the shares in their demat account on the very day of the transaction.

What are the Benefits of T+0 Trade Settlement?

• A shortened settlement cycle will bring cost and time efficiency, transparency in charges to investors, and strengthen risk management at clearing corporations and the overall securities market ecosystem.
• The T+0 trade cycle is expected to provide flexibility in terms of faster pay-out of the funds against the securities to the sellers and faster pay-out of securities against the funds to the buyers.
• It will allow better control over funds and securities by the investors.
• For the securities market ecosystem, a shorter settlement cycle will further free up capital in the securities market, thereby enhancing the overall market efficiency.
• It will enhance the overall risk management of Clearing Corporations (CCs) as the trades are backed by upfront funds and securities.

Who can Participate in the T+0 Settlement Cycle?

• All investors are eligible to participate in the segment for the T+0 trade settlement cycle if they are able to meet the timelines, process, and risk requirements as prescribed by the Market Infrastructure Institutions (MIIs).

Why is it in the News?

India’s top 1 percent income and wealth shares have reached historical highs and are among the very highest in the world, according to a paper released by World Inequality Lab.

What is the World Inequality Lab?

• The World Inequality Lab is a global research center that focuses on studying inequality and public policies that promote social, economic, and environmental justice.

The lab's main missions include:

• Expanding the World Inequality Database: The lab gathers and analyzes data on income, wealth, and capital asset distribution across various countries.
• Publishing research: The lab releases working papers, reports, and methodological handbooks to contribute to the understanding of global inequality dynamics.
• Collaborating with international researchers: The lab works with a network of researchers from around the world to compile and analyze data for the World Inequality Database.
• Promoting public debate: The lab aims to raise awareness about inequality by disseminating their findings and engaging in public discourse.
• The World Inequality Lab is known for producing the World Inequality Report, which offers up-to-date and comprehensive data on different aspects of inequality globally, including wealth, income, gender, and ecological inequality.

Key Insights from the Research Paper Released by the WIL:

• A team of four economists, including Nitin Kumar Bharti, Lucas Chancel, Thomas Piketty, and Anmol Somanchi, has compiled comprehensive time series data on income and wealth inequality in India.
• Titled "The Billionaire Raj," the paper asserts that India's current level of inequality surpasses that of the British Raj era.
• In the fiscal year 2022-23, India witnessed its highest recorded levels of income and wealth concentration among the top 1%: 22.6% and 40.1%, respectively.
• India's top 1% income share is noted to be among the highest globally, even surpassing countries like South Africa, Brazil, and the US.
• While India's top 1% holds a significant share of income, the wealth share of this segment is comparatively lower than in South Africa and Brazil.
• The paper accentuates the stark disparities among various income groups in India.
• For instance, the wealthiest 1% possess an average wealth of Rs 5.4 crore, 40 times the national average, whereas the bottom 50% and the middle 40% hold significantly lower amounts: Rs 1.7 lakh (0.1 times the national average) and Rs 9.6 lakh (0.7 times the national average), respectively.
• At the pinnacle of the wealth distribution, approximately 10,000 individuals out of 92 million Indian adults possess an average wealth of Rs 2,260 crore, a staggering 16,763 times the average Indian wealth.

Key Recommendations from the Research Paper:

• The research paper has meticulously compiled data from various sources to construct its estimates on income and wealth inequality.
• Given the absence of official income estimates and wealth statistics based on surveys in India, the paper underscores the necessity for reliable data sources in these domains.
• To tackle the issue of inequality in India, the paper proposes a range of policy interventions.
• These measures encompass a comprehensive overhaul of the tax structure to encompass both income and wealth considerations, alongside substantial public investments in critical areas such as healthcare, education, and nutrition.
• A notable suggestion outlined in the report is the implementation of a "super tax" of 2% on the net wealth of the 167 wealthiest families recorded in 2022-23. This levy is projected to generate revenues equivalent to 0.5% of the national income.
• Furthermore, the imposition of such a tax is envisaged not only to create fiscal leeway for essential investments but also to serve as an effective tool in combatting entrenched inequality within the society.

Why is it in the News?

Payments major Pine Labs and quick commerce firm Zepto are among the startups looking to relocate their headquarters from foreign shores to India, to capitalize on the country's burgeoning tech landscape.

What is Reverse Flipping?

• Reverse flipping is a growing trend where overseas startups relocate their domicile to India and list on Indian stock exchanges.
  • The primary motivation behind this shift is the potential for a higher valuation and more certain exit opportunities in India's thriving economic landscape.

Several factors contribute to the rise of reverse flipping:

• Access to a large, expanding economy: India's significant market size and sustained economic growth offer foreign startups attractive prospects for business expansion and success.
• Abundant venture capital: India's substantial venture capital resources provide a strong financial foundation for startups, fueling innovation and growth.
• Favorable tax policies: The country's tax regulations encourage foreign startups to establish operations in India, helping them maximize profits and minimize costs.
• Enhanced intellectual property protection: India's robust IP protection framework fosters innovation and creativity, safeguarding the unique ideas and technologies of startups.
• Skilled, youthful workforce: The availability of a talented, young, and educated population provides startups with a valuable human resource pool to drive growth and success.
• Supportive government policies: The Indian government actively promotes entrepreneurship and innovation through various initiatives and policies, creating a conducive environment for startups.
• The Economic Survey 2022-23 acknowledged the importance of reverse flipping and suggested measures to expedite the process, including simplifying tax vacation procedures, ESOP taxation, capital movement, and reducing tax layers.
• These efforts aim to further enhance India's appeal as a destination for foreign startups and foster economic growth.

What is Flipping?

• Flipping refers to the process by which an Indian company becomes a 100% subsidiary of a foreign entity after moving its headquarters overseas, involving a transfer of intellectual property (IP) and other assets.
  • This transforms an Indian startup into a fully-owned subsidiary of a foreign entity, with founders and investors maintaining their ownership through the new overseas structure by exchanging their shares.

The process of flipping poses several concerns for India:

• The brain drain of entrepreneurial talent: As Indian startups move their operations overseas, India experiences a loss of innovative and entrepreneurial talent, which could otherwise contribute to the country's economic growth and development.
• Value creation in foreign jurisdictions: Flipping redirects potential value creation to foreign countries, depriving India of the economic benefits that could result from successful startups and innovations.
• Loss of Intellectual Property: When companies relocate and transfer their intellectual property overseas, India loses valuable IP assets, undermining the country's competitive advantage and innovation potential.
• Reduced tax revenue: Flipping also contributes to decreased tax revenue for India as companies shift their operations and profits to other jurisdictions, which may have more favorable tax policies.

Why is it in the News?

Road Transport and Highways Minister Nitin Gadkari said in Parliament in February that the government plans to implement a new highway toll collection system based on the global navigation satellite system before the model code of conduct for the 2024 election kicks in.

What is the Global Navigation Satellite System (GNSS)?

• GNSS refers to a constellation of satellites providing signals from space that transmit positioning and timing data to GNSS receivers.
  • The receivers then use this data to determine location.
• Examples of GNSS include Europe’s Galileo, the USA’s GPS, Russia’s GLONASS and China’s BeiDou

How will the GNSS-Based Toll System work?

• The system will use an automatic number plate recognition (ANPR) system through cameras installed on highways and deduct tolls based on the distance traveled by a vehicle.
• The device monitors the movements while driving, accurately marking the entry and exit points on tolled segments. By analyzing travel distance, it computes the charges accordingly.
• This eliminates the uniformity of fixed tolls at booths, ensuring fairness for drivers traversing shorter distances.

Difference between FASTags and ANPR technology:

• FASTags streamline electronic toll payments at toll plazas equipped with scanners, enabling vehicles to pass through without stopping.
• Conversely, GNSS-based systems utilize ANPR technology to deduct tolls based on distance traveled, rendering traditional toll plazas unnecessary.

What are the Challenges?

• Detection of Non-Compliance: Without physical barriers, detecting non-compliant vehicles, such as those without an On-Board Unit (OBU) or engaging in fraudulent activities, poses a challenge.
• Infrastructure Requirements: Deploying gantry-mounted Automatic Number-Plate Recognition (ANPR) systems along highways is essential for capturing violations and enforcing toll payments.
• License Plate Quality: The effectiveness of ANPR systems relies on the quality of license plates; subpar plates hinder accurate recognition and enforcement efforts.
• Data Privacy and Security: GNSS-based toll systems entail collecting and processing sensitive location data, necessitating robust privacy and security measures.

Why is it in the News?

Union Cooperation Minister Amit Shah Friday said that the Centre has decided to ensure formation of Primary Agricultural Credit Societies (PACS) in every village by 2027.

Context:

• Union Cooperation Minister Amit Shah recently announced the Centre's commitment to establishing Primary Agricultural Credit Societies (PACS) in every village by 2027, introducing 20 new activities to enhance their profitability.
• Emphasizing the significance of computerization in PACS, Shah highlighted its role in fostering development opportunities.
• He also inaugurated the National Cooperative Database and unveiled the 'National Cooperative Database 2023: A Report' to bridge existing gaps through comprehensive analysis.
  • The database initiative progressed through three phases, including mapping approximately 2.64 lakh societies across agriculture, dairy, and fisheries sectors in the first phase.
• Subsequent phases involved data collection from various federations, banks, and mapping of the remaining 8 lakh primary cooperative societies in other sectors.
• The unveiling revealed over 8 lakh registered societies in the country, connecting more than 30 crore citizens.

What are Primary Agricultural Credit Societies (PACS)?

• PACS are grassroots cooperative credit societies, constituting the final tier in a three-tier cooperative credit system led by State Cooperative Banks (SCBs) at the state level.
• SCBs channel credit to District Central Cooperative Banks (DCCBs) operating at the district level, which collaborate with PACS, directly serving farmers.
• PACS operate as cooperative entities, with individual farmers as members and elected office-bearers from within the community. Villages may host multiple PACS.
• These societies extend short-term and medium-term agricultural loans to farmers for various farming activities.

Number of PACS in India:

• Established since 1904, India currently boasts over 1,00,000 PACS nationwide, engaging a significant member base exceeding 13 crore farmers.
• However, operational PACS stand at only 63,000, indicating the need for enhanced functionality and outreach.

Why are PACS Appealing?

• PACS offer crucial last-mile connectivity, ensuring farmers have access to capital at the onset of agricultural activities.
• They streamline credit extension processes, providing farmers with timely financial support with minimal paperwork, unlike traditional banks known for cumbersome procedures.
• PACS simplify paperwork and administrative tasks, offering farmers collective strength and assistance from PACS office-bearers.
• Unlike individual interactions required with commercial banks, PACS enable farmers to navigate loan processes collectively, reducing reliance on intermediaries.

Challenges Faced by PACS:

• Political influences often overshadow financial prudence within PACS, impacting loan recovery.
• Various committees have highlighted systemic issues within the cooperative system, including low member participation, lack of professionalism, inadequate governance, bureaucratic hurdles, and a workforce with aging and disengaged employees.

Why is it in the News?

Moscow, Riyadh, and several other OPEC+ members announced extensions to oil production cuts first announced in 2023 as part of an agreement among oil producers to boost prices following economic uncertainty.

What is the OPEC+ Oil Alliance?

• OPEC+ is a coalition of oil-exporting nations that convenes regularly to determine the quantity of crude oil to offer on the global market.
• Origin: This alliance was established in late 2016 to formalize a framework for collaboration between OPEC and non-OPEC oil-producing nations on a consistent and sustainable basis.
• The primary objective of these nations is to collaborate on regulating crude oil production to stabilize the oil market.
• OPEC+ collectively controls approximately 40% of global oil supplies and holds over 80% of proven oil reserves.
• At its core, OPEC+ consists of OPEC member states, predominantly comprising nations from the Middle East and Africa.
• Membership: It includes OPEC member states along with Azerbaijan, Bahrain, Brunei, Kazakhstan, Russia, Mexico, Malaysia, South Sudan, Sudan, and Oman.

About the Organization of the Petroleum Exporting Countries (OPEC):

• OPEC, short for the Organization of the Petroleum Exporting Countries, is a permanent intergovernmental organization comprised of oil-exporting nations.

Mission:

• To coordinate and harmonize the petroleum policies of its member countries.
• To ensure the stability of oil prices in global oil markets, aiming to eliminate detrimental and unnecessary fluctuations.
• Formation: Founded in 1960 by the five original members - Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
• Presently, it consists of 13 member countries, which include Algeria, Angola, Congo, Equatorial Guinea, Gabon, Libya, Nigeria, and the United Arab Emirates.
• Headquarters: Located in Vienna, Austria.

Why is it in the News?

While acknowledging the importance of the environment and its long-term impact on organizations and the economy as a whole, the Reserve Bank of India (RBI) has now released a draft framework for banks to follow.

What are Climate-led Financial Risks?

• “Climate-related financial risks” means the potential risks that may arise from climate change or from efforts to mitigate climate change, their related impacts, and economic and financial consequences according to RBI.
• These risks manifest through two primary channels: physical risks and transition risks.
• Physical Risks: These entail the economic and financial consequences arising from the escalating frequency and severity of extreme weather events linked to climate change. Such events can exert pressure on the financial sector in various ways:
  • Renewable Energy Sector (REs) Vulnerability: The occurrence of local or regional weather events may strain the anticipated cash flows to REs, impacting their financial stability. Furthermore, chronic flooding or landslides pose risks to the collateral that REs have pledged as security for loans.
  • Infrastructure and Property Damage: Severe weather phenomena can inflict damage on the physical assets and data centres owned or leased by REs, impairing their capacity to deliver financial services effectively.
• Transition Risks: These risks stem from the transition toward a low-carbon economy, influenced by factors such as evolving climate-related policies, technological advancements, and changing consumer behaviours. Key considerations include:
  • Policy and Regulatory Shifts: Changes in climate-related regulations and policies, along with advancements in technologies, can significantly influence the transition process. Moreover, alterations in customer sentiments and behaviour patterns play a pivotal role in shaping this transition.
  • Economic Impact: The transition toward reducing carbon emissions carries substantial implications for the economy at large. It entails a shift toward sustainable practices and investments, which can impact various sectors and industries differently.
• Recognizing and addressing these climate-related financial risks is imperative for ensuring the resilience and stability of the financial sector in the face of evolving environmental challenges.

About the Framework:

• Commencing from the financial year 2025-26, all major financial institutions across India, including top-tier NBFCs and renowned NBFCs, will be mandated to furnish details about governance, strategy, and risk management strategies.
• Additionally, they will be required to initiate disclosure of metrics and targets from the fiscal year 2027-28.

Key highlights of the framework include:

• Enhanced Disclosure Requirements: Banks will be obligated to unveil climate-related risks that could potentially impact their financial stability.
  • This measure aims to facilitate a comprehensive understanding of climate-related financial risks and opportunities, fostering early assessment and proactive management.
• Scope of Coverage: The framework encompasses various financial entities, including scheduled commercial banks (excluding local area banks, payments banks, and regional rural banks), Tier-IV primary urban cooperative banks (UCBs), and top and upper layer non-banking financial companies (NBFCs).
• Disclosure Obligations for Renewable Energy Sector (REs): REs are mandated to disclose crucial information related to climate-related risks and opportunities across short-, medium-, and long-term horizons. Key areas of disclosure include:
• Identification of Climate-Related Risks and Opportunities: REs are required to identify and disclose climate-related risks and opportunities relevant to their operations and financial outlook.
• Assessment of Impact: REs must delineate the impact of climate-related risks and opportunities on their business strategies and financial planning, enabling stakeholders to comprehend the implications on their overall strategy.
• Resilience Evaluation: REs are tasked with evaluating the resilience of their strategies in light of diverse climate scenarios, thereby ensuring robustness in navigating potential challenges and capitalizing on emerging opportunities.

Significance:

• A pressing requirement exists for an improved and standardized disclosure framework for regulated entities to mitigate financial risks.
• Without such a framework, there is a risk of assets being mispriced and capital being misallocated, which could have adverse repercussions on financial stability. Consequently, the imperative for a standardized disclosure framework on climate-related financial risks became evident.

Why is it in the News?

The Reserve Bank recently tweaked guidelines for the Regulatory Sandbox (RS) scheme under which participating entities will have to comply with digital personal data protection norms.

About the Regulatory Sandbox Scheme:

• The Regulatory Sandbox scheme denotes a controlled regulatory environment where new products or services can undergo live testing.
• Functioning as a "safe space" for businesses, regulators may offer certain relaxations for testing purposes within this environment.
• It serves as a structured platform for regulators to engage with the industry and develop regulations that foster innovation and enable the delivery of cost-effective financial products.
• The scheme holds potential as a tool for creating dynamic regulatory environments that adapt to emerging technologies through evidence-based learning.

Objectives:

• Offering innovative technology-led entities an opportunity for limited-scale testing of new products or services, potentially involving regulatory relaxations before broader implementation.
• At its core, the Regulatory Sandbox is a formal program allowing market participants to test new products, services, or business models in live settings, under appropriate oversight.
• Proposed financial services under the scheme should leverage new or emerging technology to address consumer needs or offer benefits.
• The overarching goal is to promote responsible innovation in financial services, enhance efficiency, and deliver consumer benefits.
• The Reserve Bank of India (RBI) introduced the 'Enabling Framework for Regulatory Sandbox' in August 2019 after extensive consultations.
• The updated framework mandates compliance with the Digital Personal Data Protection Act of 2023 for sandbox entities.
• Furthermore, the timeline for various stages of the Regulatory Sandbox process has been extended from seven to nine months.
• Fintech companies, including startups, banks, financial institutions, and other entities providing support to financial services businesses, are among the target applicants for entry into the Regulatory Sandbox.

Why is it in the News?

In a bid to deepen the bond market, the Reserve Bank of India on Wednesday issued guidelines for lending and borrowing in government securities.

What are Government Securities?

• Government securities, also known as G-Secs, refer to the debt instruments issued by the government to finance its fiscal requirements.
• These securities are backed by the government’s guarantee of repayment and are considered risk-free investments.
• They are an integral part of the fixed-income market and are traded on the government securities market.
• Government securities serve as a means for the government to raise funds from the public to meet its expenditure needs, bridge budget deficits, and fund developmental projects.
• Investors who purchase these securities lend money to the government in return for regular interest payments and the principal amount at maturity.
• These securities come in mainly two categories:
  • Short-Term: Often known as “Treasury Bills,” these have initial maturities of less than a year.
  • Long-Term: Typically referred to as Government Bonds or Dated Securities, these have an original maturity of one year or more.
• In India, the Central Government issues both treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called State Development Loans (SDLs).

Treasury Bills (Short-Term G-Secs)

• Treasury Bills, commonly known as T-Bills, are short-term government securities with a maturity period of less than one year.
• They are issued at a discount to their face value and are highly liquid instruments.
• T-Bills serve as a mechanism for the government to efficiently manage its short-term funding requirements.

 Dated Securities (Long-Term G-Secs)

• Dated Securities are long-term government securities with a fixed maturity period, typically 5 to 40 years.
• They pay regular interest to investors, known as coupon payments, and return the principal amount at maturity.
• Dated Securities are vital for financing long-term projects and meeting government borrowing needs.

Why is it in the News?

PM Modi recently inaugurated the Sudarshan Setu, a four-lane cable-stayed bridge connecting Okha to Beyt Dwarka island in Gujarat.

About the Sudarshan Setu:

• 'Sudarshan Setu' is the country's longest cable-stayed bridge 2.32 km on the Arabian Sea connecting Beyt Dwarka island to mainland Okha in Gujarat's Devbhumi Dwarka district.
• It boasts a unique design, featuring a footpath adorned with verses from the Bhagavad Gita and images of Lord Krishna on both sides.
• It also has solar panels installed on the upper portions of the footpath, generating one megawatt of electricity.
• The 2.32 km bridge, including 900 metres of a central double-span cable-stayed portion and a 2.45 km long approach road, has been constructed at a cost of Rs 979 crore.

About Beyt Dwarka:

• Bet/Beyt (pronounced ‘Bait’ Dwarka also known as Shankhodara, is an island located near the shores of Okha which is situated around 30 km from Dwarka, in the Gulf of Kutch.
• It said that Lord Krishna resided here while Dwarka was his constitutional seat.

History:

• Bet Dwarka derived its name from the word ‘bet’ which translates to ‘gift’ and is believed that Lord Krishna received it from his friend Sudama.
• In the ancient epic, Mahabharata, Bet Dwarka is known by the name of ‘Antardvipa’ to which people of the Yadava clan needed to travel by boat.
• Explorations and excavations carried out under the sea have revealed the presence of settlements whose age can be traced back to the era of the Harappan civilisation and that of the Mauryan rule.
• In the later years, the region was under the administration of the Gaekwad clan of the state of Baroda.
• During the revolt of 1857, Vaghers attacked the region and captured it, but had to concede defeat in two years and return the region back to the Gaekwads.

Why is it in the News?

The per capita monthly household expenditure more than doubled in 2022-23 as compared to 2011-12, according to the latest study by the National Sample Survey Office (NSSO).

Context:

• As per the 2022-23 report, rising inequality between the top and bottom of the pyramid.
• Urban and rural households register higher expenditure, spending less on food items.
• New methodology and questionnaire used in Household Consumption Expenditure Survey (HCES) 2022-23.

About the National Sample Survey Office (NSSO):

• The National Sample Survey Office (NSSO) comes under the Ministry of Statistics and Program Implementation headed by a Director General.
• It is responsible for the conduct of large-scale sample surveys in diverse fields on an All-India basis.
• Primarily data are collected through nationwide household surveys on various socio-economic subjects, Annual Survey of Industries (ASI), etc.
• Besides these surveys, NSSO collects data on rural and urban prices and plays a significant role in the improvement of crop statistics through supervision of the area enumeration and crop estimation surveys of the State agencies.
• It also maintains a frame of urban area units for use in sample surveys in urban areas.

The NSSO has four Divisions:

• Survey Design and Research Division (SDRD): This Division, located at Kolkata, is responsible for the technical planning of surveys, formulation of concepts and definitions, sampling design, designing of inquiry schedules, drawing up of tabulation plans, and analysis and presentation of survey results.
• Field Operations Division (FOD): The Division, with its headquarters at Delhi/Faridabad, is responsible for the collection of primary data for the surveys undertaken by NSS.
• Data Processing Division (DPD): The Division, with its headquarters at Kolkata is responsible for sample selection, software development, processing, validation and tabulation of the data collected through surveys.
• Survey Coordination Division (SCD): This Division, located in New Delhi, coordinates all the activities of different Divisions of NSS.
  • It also brings out the bi-annual journal of NSS, titled “Sarvekshana”, and organizes National Seminars on the results of various Socio-economic surveys undertaken by NSS.

Key Insights From the 2022-23 Survey:

• Evolution of Food Expenditure: Over the past two decades, there has been a notable shift in spending patterns on food in India.
  • Between 1999-2000 and 2022-23, both urban and rural households witnessed a gradual decline in the share of expenditure allocated to food.
  • This period marks the first instance where food expenditure has dropped to below 50% in rural India and below 40% in urban India.
• Changing Dietary Preferences: The composition of food consumption has also undergone significant changes.
  • Cereals and pulses have seen a reduction in their share of overall food consumption expenditure, while spending on milk has surged, surpassing that on cereals and pulses combined.
  • In a noteworthy shift, the average Indian now spends more on fruits and vegetables than on food grains.
  • Furthermore, expenditure on animal proteins like eggs, fish, and meat has shown a growing trend, indicating a preference for animal-based proteins over plant-based ones.
• Rise in Processed Food Consumption: There has been an observed increase in the share of expenditure allocated to processed foods, beverages, and purchased cooked meals.
  • This trend aligns with the Engel Curve hypothesis, suggesting that as incomes rise, households allocate a smaller proportion of their spending to food and tend to prefer superior items over inferior ones.
• Closing Rural-Urban Consumption Gap: Consumption growth in rural areas has outpaced that in urban areas, leading to a narrowing of the rural-urban consumption divide.
  • If this trend continues, it could potentially lead to parity in urban and rural incomes and consumption patterns in the future.
• Challenges in Inflation Calculation: The findings of the latest Household Consumption Expenditure (HCE) Survey underscore the need to review the inflation basket.
  • The current Consumer Price Index (CPI)-based inflation calculation, established in 2012, may not accurately reflect contemporary consumption patterns.
  • For instance, the disparity between the weightage assigned to cereals in the CPI basket and actual expenditure on cereals by rural households highlights the need for recalibration.
• Insights on Poverty Reduction: According to NITI Aayog CEO B V R Subrahmanyam, the latest survey indicates a reduction in poverty to five per cent nationwide.
  • Both rural and urban areas are witnessing increased prosperity, as evidenced by rising per capita monthly expenditure.
• Demand for Legal Guarantee to MSP: While there is a demand for a legal guarantee to Minimum Support Price (MSP) for 23 crops, including food grains and sugarcane, the survey data suggests that the growth in the farm sector is being primarily driven by livestock, fisheries, and horticulture crops.
  • This poses a pertinent question regarding the promotion of production: should the focus be on crops outside the MSP purview, such as milk, fish, poultry products, fruits, and vegetables, given their growing consumption trends?

Why is it in the News?

Fresh measures to curb unauthorised online lending apps’ operations could be on the anvil, following deliberations on the issue at the Financial Stability and Development Council (FSDC) chaired by Finance Minister Nirmala Sitharaman recently.

About the Financial Stability and Development Council (FSDC):

• The Financial Stability and Development Council (FSDC) is a high-level body established by the Government of India in 2010 to address macroeconomic and financial stability issues.
• Although not a statutory body, it operates under the Financial Stability Division of the Department of Economic Affairs within the Ministry of Finance.

Background:

• In response to the global financial crisis of 2008, recommendations were made by the Raghuram Rajan Committee for the creation of a centralised regulatory body to oversee India's financial system.
• The establishment of FSDC reflects India's proactive approach to enhance preparedness for future financial challenges.

Composition:

• Chaired by the Union Finance Minister, the council comprises key stakeholders including the Governor of the Reserve Bank of India (RBI), finance and economic affairs officials, regulatory body chairpersons, and other relevant authorities.
• The Secretary of the Department of Economic Affairs serves as the council's secretary.

Responsibilities:

• FSDC is entrusted with the task of promoting financial stability, coordinating policy responses to systemic risks, and fostering the development of India's financial sector.

Concerns and Future Directions:

• Concerns have been raised about potential encroachment on the autonomy of sectoral regulators due to FSDC's leadership by the Union Finance Minister.
• To address this, it's crucial to safeguard the independence of regulatory bodies and establish clear guidelines to ensure effective coordination without undermining regulatory authority.

What is Digital Lending?

• Digital lending refers to the process of accessing credit online, facilitated through web platforms or mobile applications.
• This approach leverages technology across various stages of the lending process, including customer acquisition, credit assessment, approval, fund disbursement, recovery, and customer service.

Key Features:

• Utilises technology for end-to-end lending operations, enhancing efficiency and accessibility.
• Offers flexibility in credit options and facilitates swift transactions, appealing to modern borrowers.
• Prominent examples include Buy Now, Pay Later (BNPL) schemes, which provide short-term financing for purchases, allowing consumers to defer immediate payments.

Drivers of Growth:

• Increased adoption is driven by widespread smartphone usage and the convenience of online transactions.
• Flexibility in credit offerings and simplified application processes contribute to the popularity of digital lending platforms.
• BNPL services, in particular, cater to consumers seeking deferred payment options for purchases and services.

Why is it in the News?

The Cabinet Committee on Economic Affairs recently approved ?340/quintal as the Fair and Remunerative Price (FRP) of sugarcane for the sugar season 2024-25 at a sugar recovery rate of 10.25%.

What is the Fair and Remunerative Price (FRP)?

• FRP was introduced by the government in 2009 by an amendment to the Sugarcane (Control) Order, 1966.
• It replaced the Statutory Minimum Price (SMP) on the Commission for Agricultural Costs and Prices (CACP) consultation.
• The FRP system assured timely payment to farmers, irrespective of the profit and loss to sugar mills.
  • Further, the new system made it mandatory for sugar mills to pay the farmers within 14 days of delivery of sugarcane.
• Additionally, the FRP system introduced grading on the basis of sugar recovery rate from sugarcane wherein a premium was paid to the farmer on higher recovery and a reduction in rates on lower recovery.
• The FRP is based on the Rangarajan Committee report on reorganising the sugarcane industry.

Factors Considered for Announcing FRP:

• • Cost of production of sugarcane
  • Return to the growers from alternative crops and the general trend of prices of agricultural commodities
  • Availability of sugar to consumers at a fair price
  • The price at which sugar produced from sugarcane is sold by sugar producers
  • Recovery of sugar from sugarcane
  • The realisation made from the sale of by-products viz. molasses, bagasse and press mud or their imputed value
  • Reasonable margins for the growers of sugarcane on account of risk and profits

Effect of the New FRP:

• Sugar production in India was hit hard in the October-December 2023 quarter as production fell by 11.21 million metric tonnes;
  • It was 12 million in the same quarter the previous year.
  • The increase in FRP is going to increase the cost for producers.
• The increased FRP will benefit over five crore sugarcane farmers in the country, however, the increase in production cost could affect end-consumers as well.
• Factors such as FRP hikes, akin to MSP, make it attractive to farmers but also increase prices in the local market as mills pass on that cost to consumers