June 30, 2023

Mains Article
30 Jun 2023

India and US-China Chip Wars


  • The new US-India technology partnership forged during recent visit of Indian PM to Washington DC identifies technology as the new geopolitical frontier.
  • A key element of the partnership is the resolve to diversify the global semiconductor supply chain, which is at the centre of the rivalry between the world’s two biggest economic powers, the US and China.

Semiconductor and its Importance

  • Semiconductor: It is usually comprised of silicon, which conducts electricity more than an insulator, such as glass, but less than a pure conductor, such as copper or aluminium. 
  • Importance
    • Also known as semis/chips, semiconductors can be found in thousands of products such as computers, smartphones, appliances, gaming hardware, and medical equipment.
    • They are essential to almost every modern device, from a phone to advanced defence systems, and advanced artificial intelligence-powered machines.
    • But only a few countries are in the business of making chips, among the world’s most advanced technologies, and some specialise only in some aspects of it. 
    • 20th century was dominated by oil. In the 21st century Chips are the new oil.

US-China War on Semiconductors

  • Since 2020, the US has taken several steps aimed at
    • Denying semiconductor technology to China to prevent it from gaining high tech dominance over the world.
    • Pumping up its own domestic capacity for making chips.
  • For example, the Trump Administration listed the Chinese telecom giant Huawei and several ancillaries as a threat to US national security, and the Biden Administration retained restrictions on Huawei.
  • In 2020, China was the biggest market for semiconductor machines. Beijing’s “Made in China 2025” plan, launched in 2019 had prioritised achieving self-sufficiency in semiconductors.
  • But the export controls set in motion by the US and more are in the pipeline have made China’s mission look difficult.
  • In a retaliatory move, China has banned the US chipmaker company Micron from vital infrastructure projects.
  • In 2022, the US Congress passed the CHIPS and Science Act, providing $280 billion in new funding for domestic research and manufacturing of semiconductors in the US.

Current State of Chip Wars

  • Japan has also announced restrictions on semiconductor exports to China. The Japanese restrictions will take effect from July. China has warned of “consequences”.
  • As US works with key partners to restrict Chinese access to chip tech, China’s chip imports from Japan, South Korea and Taiwan, part of the US-led “Chip 4 Alliance”, fell by 20 per cent in the first five months of 2023.
  • US is also lobbying the Netherlands to take similar steps; the Dutch company ASML is the only maker in the world of deep ultraviolet lithography machines that are required to make certain kinds of chips.

Opportunities for India from the Ongoing Chip War

  • India is pushing itself as an alternative to China. India is aspiring for turning the ongoing war into its advantage.
  • India does not have native semiconductors firm but it is trying to attract foreign chipmakers companies by providing them incentives and various other benefits.
  • To realise this plan the government has announced a 10 billion dollars incentive plan which aims to boost manufacturing of semiconductors in India.
  • This is India’s chance to be a global player in the semiconductor sector, but success is not guaranteed.
  • India’s government must provide its homegrown industry with the needed help, both financially and material-wise, and strike the right balance between accepting U.S. partnership while not letting Washington dictate terms.

US-India Cooperation in Semiconductor Field Amidst Global Chip War

  • Quad: The leaders of Australia, Japan, India, and the US committed themselves to building resilient, diverse and secure supply chains of critical and emerging technologies including Semiconductors.
  • India-US iCET (Initiative on Critical and Emerging Technology)
    • It was launched by the US President and Indian Prime Minister on the sidelines of the Quad summit on May 2022.
    • The primary goal is to elevate and expand Indo-U.S. strategic technology partnership and defence industrial cooperation between the governments, businesses, and academic institutions of the two countries. 
    • Resilient Semiconductor Supply Chains is one of the identified six focus areas of co-development and co-production under iCET.
  • Joint Task Force
    • A task force set up jointly by the US Semiconductor Industry Association and India Electronics Semiconductor Association together with the government’s Semiconductor Mission.
    • It will make a “readiness assessment” to identify “near term opportunities and facilitate long-term strategic development of complementary semiconductor ecosystems”.
    • The task force would also flag opportunities and challenges for India’s role in the global semiconductor value chain.
  • MoU on Semiconductor Supply Chain and Innovation Partnership: During the PM’s US state visit, an MoU was signed on Semiconductor Supply Chain and Innovation Partnership to promote commercial opportunities, research, talent, and skill development. 
  • Announcement by US Companies for India’s Semiconductor Field
    • Micron Technology, a leading US semiconductor firm, announced a proposed investment of up to $825 million to build a facility in India, with the Indian government pitching in to take the combined investment value to $2.75 billion.
    • This will create up to 5,000 new direct and 15,000 indirect job opportunities in the next five years.
    • Lam Research announced a proposal to train 60,000 Indian engineers through its Semiverse Solution virtual fabrication platform.
    • Applied Materials announced a proposed investment of $400 million to establish a collaborative engineering centre in India.

India’s Chip Challenges

  • Similar attempts failed earlier: Three companies that applied to set up fabrication plants (Foxconn-Vedanta joint venture, Singapore’s IGSS, etc) failed to get off the ground for separate reasons.
  • Expensive Fab Setup: A semiconductor fabrication facility (or fab) can cost multiples of a billion dollars to set up even on a relatively small scale and lagging by a generation or two behind the latest in technology.
  • Resource Inefficient Sector
    • Chip fabs are also very thirsty units requiring millions of litres of clean water, an extremely stable power supply, a lot of land and a highly skilled workforce.
    • At the moment, there is no place in India that can guarantee 24×7 power or water supply.
  • Lack of Highly Skilled Workforce: Chip manufacturing also requires a highly skilled workforce. Industry experts have repeatedly said that chip making is “not like assembling a phone”.
  • Absence of “Chip Ecosystem”
    • The absence of a “chip ecosystem” is why, despite the political will, no big international chip makers have yet shown interest in India.
    • Taiwan has long been pushing India for a free trade agreement and a bilateral investment agreement to make it more attractive for TSMC, the world’s biggest chip maker, to set up base here, but Delhi has been reluctant.
  • Lack of Fabrication Capacities: India has a decent chip design talent but it never built-up chip fab capacity. India’s only government-owned semiconductor fabrication unit is in Mohali, Punjab.


  • India is at least two decades behind the chip curve. It could take the country 10-20 years to establish itself as a serious player in the semiconductor industry.
  • But for now, India has positioned itself in the global chip war, with a technology partnership that promises to take bilateral ties with the US to the next level.


Editorial Analysis

Mains Article
30 Jun 2023

The open market sale scheme (OMSS) for wheat and rice

Why in News?

  • After the Food Corporation of India (FCI) placed quantity restrictions and refused to permit States to procure the two food grains through its OMSS, the states have been considering alternative methods of obtaining wheat and rice. 

What’s in Today’s Article?

  • What is the Food Corporation of India (FCI)?
  • What is the Open Market Sale Scheme (OMSS)?
  • How has the Centre Revised the OMSS?
  • What is the Bone of Contention?
  • How have States Reacted?
  • The Centre’s Argument

What is the Food Corporation of India (FCI)?

  • It is a statutory body set up in 1965 (under the Food Corporation Act, 1964) under the Ministry of Consumer Affairs, Food and Public Distribution, Government of India.
  • It was set up against the backdrop of a major shortage of grains, especially wheat, in the country.
  • Currently, FCI is mandated with three basic objectives:
    • To provide effective price support to farmers;
    • To procure and supply grains to PDS for distributing subsidised staples to economically vulnerable sections of society; and
    • Keep a strategic reserve to stabilise markets for basic foodgrains.

What is the Open Market Sale Scheme (OMSS)?

  • Under the OMSS, the FCI from time to time sells surplus food grains from the central pool, especially wheat and rice in the open market to traders, bulk consumers, retail chains, etc., at pre­determined prices.
  • The FCI does this through e-­auctions where open market bidders can buy specified quantities.
  • States are also allowed to procure food grains through the OMSS without participating in the auctions, for their needs.
    • This will be beyond what they get from the central pool to distribute to NFSA (National Food Security Act) beneficiaries.
  • The OMSS aims to enhance the supply of food grains (ensuring food security) during the lean season and thereby moderate the open market prices (controlling inflation), especially in the deficit regions.
  • In this year’s OMMS, a total quantity of 33.7 LMT wheat was offloaded and the prices of wheat came down by 19%.

How has the Centre Revised the OMSS?

  • The Centre decided to restrict the quantity that a single bidder can purchase in a single bid under the OMSS.
  • While the maximum quantity allowed earlier was 3,000 metric tonnes (MT) per bid for a buyer, it will now range from 10­-100 metric tonnes.
  • The FCI claims that the quantities have been reduced this time to accommodate more small and marginal buyers and to ensure wider reach of the scheme.
  • The objective behind the move is also to curb retail prices as allowing smaller bids should ideally break monopolies of bulk buyers, allowing more competitive bids by small buyers.

What is the Bone of Contention?

  • Through a new notification, the Centre stopped the sale of rice and wheat from the Central pool under the OMSS to State governments, also disallowing private bidders to sell their OMSS supplies to state governments.

How have States Reacted?

  • States such as Karnataka and Tamil Nadu have criticised the government for engaging in “politics” at the expense of marginalised beneficiaries of State welfare schemes.
  • In Karnataka, the Anna Bhagya scheme to give rice to marginalised families was a part of the Congress government’s poll promise.
    • The leaders have accused Centre of conspiring to “fail” the State government’s poll guarantee by ensuring the State did not receive the required amount of rice to implement the scheme.

The Centre’s Arguments:

  • The reason for restricting supplies per bidder and eventually excluding states from procuring through auctions was to curb inflation and regulate supply.
  • The Centre was already meeting its obligations to distribute grains to 80 crore marginalised beneficiaries under the NFSA.



Mains Article
30 Jun 2023

Tamil Nadu Governor Dismisses Minister V Senhil Balaji From the Council of Ministers

Why in News?

  • Tamil Nadu Governor R N Ravi’s decision dismissing arrested minister V Senthil Balaji tests the constitutional limitations on the role of the Governor and pushes the Raj Bhavan into uncharted political territory.

What’s in Today’s Article?

  • Governor’s Role (Relevant Articles, Power to Remove Minister, Judgements, etc.)
  • News Summary

Governor’s Role in Parliamentary System:

  • The position, role, powers, and conditions of office of the Governor are described in Articles 153-161 of the Constitution.
  • The Governor is the chief executive head of the state. But, like the President, he is a nominal executive head (titular or constitutional head).
  • Being the head of the state’s executive power, he acts on the advice of the council of ministers, barring some matters.
    • The council of ministers, in turn, are responsible to the state legislature.
  • Being appointed by the President, the Governor acts as a vital link between the Union and the state governments.
  • The Governor appoints the Chief Minister and the Council of Ministers.

Does a Governor have the power to remove a Minister?

  • Article 164(1) says state “Ministers shall hold office during the pleasure of the Governor”.
  • However, as per the constitutional experts the Governor cannot remove a minister in their own capacity without obtaining the sanction of the Chief Minister or consulting with the latter.
  • If a Governor removes a minister in their own capacity, that will result in ‘parallel governance’.
  • Only when the Chief Minister allows it, then the Governor is empowered to remove the minister.

Important Judgements w.r.t. appointment/removal of Council of Ministers:

  • Shamsher Singh & Anr vs State Of Punjab (1974) –
    • The Supreme Court held that the President and Governor shall exercise their formal constitutional powers only upon and in accordance with the advice of their Ministers except in a few well known exceptional situations.
    • The Court also added that even in case of the Prime Minister/Chief Minister cease to command majority in the House OR the government loses majority but refuses to quit office OR for “the dissolution of the House where an appeal to the country is necessitous” –
      • The Head of the State (President/Governor) should avoid getting involved in politics and must be advised by his Prime Minister (Chief Minister) who will eventually take the responsibility for the step.
  • Nabam Rebia And Etc. vs Deputy Speaker And Ors (2016) –
    • The Supreme Court cited the observations of B R Ambedkar
      • The Governor under the Constitution has no function which he can discharge by himself; no functions at all. While he has no functions, he has certain duties to perform, and I think the House will do well to bear in mind this distinction.”

Recommendations of Various Commissions:

  • Sarkaria Commission (1983) –
    • The Commission was set-up to look into Centre-state relations.
    • The Commission proposed that the Vice President of India and Speaker of Lok Sabha should be consulted by the Prime Minister in the selection of Governors.
  • National Commission to Review the Working of the Constitution (2000) –
    • The Commission recommended significant changes in the selection of Governors.
    • The Commission suggested that the “Governor of a State should be appointed by the President, after consultation with the Chief Minister of that State”.
  • Punchi Commission (2007) –
    • The Commission proposed that a committee comprising the Prime Minister, Home Minister, Vice President, Speaker, and the concerned Chief Minister should choose the Governor.
    • The Commission recommended deleting the “Doctrine of Pleasure” from the Constitution, but backed the right of the Governor to sanction the prosecution of ministers against the advice of the state government.
    • It also argued for a provision for impeachment of the Governor by the state legislature.

News Summary:

  • Tamil Nadu Governor RN Ravi “dismissed” minister V Senthil Balaji from the council of ministers “with immediate effect”.
    • Hours after dismissing jailed minister, the Governor put a hold to the decision, after Union Home Ministry's advice.
  • Balaji was arrested earlier this month by the Enforcement Directorate for an alleged job scam in 2015. He is currently in a judicial custody.
  • Governor’s Reason for Dismissing the Minister –
    • Continuation V Senthil Balaji in the Council of Ministers will adversely impact the due process of law including fair investigation that may eventually lead to breakdown of the Constitutional machinery in the State.
    • The Raj Bhavan said the minister is facing serious criminal proceedings in a number of cases of corruption including taking cash for jobs and money laundering.
    • Further, the Governor’s office said some more criminal cases against him (Balaji) under Prevention of Corruption Act and the Indian Penal Code are being investigated by the State Police.


Polity & Governance

Mains Article
30 Jun 2023

India’s largest radio telescope plays vital role in detecting universe’s vibrations

Why in news?

  • Recently, an international team of astronomers announced scientific evidence confirming the presence of gravitational waves using pulsar observations.
  • India’s Giant Metrewave Radio Telescope (GMRT) was among the world’s six large telescopes that played a vital role in providing this evidence.

What’s in today’s article?

  • Giant Metrewave Radio Telescope (GMRT)
  • Gravitational waves

Giant Metrewave Radio Telescope (GMRT)

  • GMRT is a low-frequency radio telescope that helps investigate various radio astrophysical problems ranging from nearby solar systems to the edge of the observable universe.
  • Located at Khodad, 80 km north of Pune, the telescope is operated by the National Centre of Radio Astrophysics (NCRA).
    • NCRA is a part of the Tata Institute of Fundamental Research (TIFR), Mumbai.
    • GMRT is a project of the Department of Atomic Energy (DAE), operating under the Tata Institute of Fundamental Research (TIFR).
  • It consists of 30 fully- steerable dish type antennas of 45-meter diameter each, spread over a 25-km region.
    • GMRT is presently the world’s largest radio telescope operating at meter wavelength.

Objectives of GMRT

  • GMRT is a very versatile instrument for investigating a variety of radio astrophysical problems. Two of its most important astrophysical objectives are:
    • to detect the highly redshifted spectral line of neutral Hydrogen expected from proto-clusters or protogalaxies before they condensed to form galaxies in the early phase of the Universe;
      • Redshift represents the signal’s wavelength change depending on the object’s location and movement.
    • to search for and study rapidly-rotating Pulsars in our galaxy.
      • Pulsars are rapidly rotating neutron stars with extremely high densities.
      • A pulsar is like a cosmic lighthouse as it emits radio beams that flashes by the Earth regularly akin to a harbour lighthouse.

Significance of GMRT

  • Highly sought-after telescope
    • GMRT is a unique facility functioning within the frequency bandwidth of 100 Mhz-1,500 MHz.
    • It is a highly sought-after telescope both within India and by scientists from 30-plus countries.
  • Understanding the evolution of galaxies over cosmic time
    • Understanding the evolution of galaxies over cosmic time requires tracing the evolution of neutral gas at different cosmological periods.
      • Atomic hydrogen is the basic fuel required for star formation in a galaxy.
      • When hot ionised gas from the surrounding medium of a galaxy falls onto the universe, the gas cools and forms atomic hydrogen.
      • This then becomes molecular hydrogen and eventually leads to the formation of stars.
      • Atomic hydrogen emits radio waves of 21 cm wavelength, meaning the wavelength is a direct tracer of the atomic gas content in nearby and distant galaxies.
    • However, this radio signal is feeble and nearly impossible to detect the emission from a distant galaxy.
    • Using GMRT data, scientists detect signal that was emitted from a distant galaxy.
  • Galactic and extragalactic radio sources
    • Because of its large collecting area and wide frequency coverage, GMRT is an useful instrument for studying many other problems at the frontiers of astrophysics.
    • These include studies of Solar and planetary radio emissions; relationship between Solar activity and disturbances in the interplanetary medium etc.

Gravitational Waves

  • About
    • Gravitational waves are ripples in space-time caused by some of the most violent and energetic processes in the Universe.
    • Albert Einstein predicted the existence of gravitational waves in 1916 in his general theory of relativity.
    • Einstein's mathematics showed that massive accelerating objects would disrupt space-time in such a way that waves of undulating space-time would propagate in all directions away from the source.
      • These massive objects include things like neutron stars or black holes orbiting each other.
    • These cosmic ripples would travel at the speed of light, carrying with them information about their origins, as well as clues to the nature of gravity itself.
  • Production of gravitational waves
    • The strongest gravitational waves are produced by cataclysmic events such as colliding black holes, supernovae (massive stars exploding at the end of their lifetimes), and colliding neutron stars.
    • Other gravitational waves are predicted to be caused by the rotation of neutron stars that are not perfect spheres, and possibly even the remnants of gravitational radiation created by the Big Bang.
  • Feature
    • Gravitational waves are incredibly weak and difficult to detect because they interact very weakly with matter.
    • However, extremely sensitive instruments called interferometers have been developed to detect these waves.
    • The most famous example is the Laser Interferometer Gravitational-Wave Observatory (LIGO), which made the first direct detection of gravitational waves in 2015.

News Summary: India’s largest radio telescope plays vital role in detecting universe’s vibrations

  • Two different studies were published recently by radio astronomers representing the Indian Pulsar Timing Array (InPTA) and European Pulsar Timing Array (EPTA).
  • These studies shared that a time aberration was observed in the signals emerging from these pulsars.

Analysing the signals from pulsars

  • Why these signals are of great interest among scientists?
    • Nicknamed as cosmic clocks, pulsars are rapidly spinning neutron stars that send out radio signals at regular intervals which are seen as bright flashes from the Earth.
    • As these signals are accurately timed, there is a great interest in studying these pulsars and to unravel the mysteries of the Universe.
  • How analysis is done?
    • In order to detect gravitational wave signals, scientists explore several ultra-stable pulsar clocks randomly distributed across our Milky Way galaxy and create an ‘imaginary’ galactic-scale gravitational wave detector.
    • There are several signals travelling through spacetime of the Universe.
    • But, the presence of gravitational waves influences the arrival of these signals when detected from Earth.
      • It was noticed that some signals arrive early while others, with a slight delay (less than a millionth of a second).
  • What has been detected?
    • Nano-hertz signals were heard as humming from the Universe.
      • It is expected that ultra-low frequency gravitational waves, also known as nano-hertz gravitational waves, emerge from a colliding pair of very large monster black holes, many crores of times heavier than our Sun.
      • The signals or ripples that emerge from within these blackholes are known as nano-hertz gravitational waves.
      • Their wavelengths can be many lakhs of crores of kilometres and oscillate with a periodicity anywhere between a 1 year to 10 years.
      • When there is continuous arrival of these nano-hertz gravitational waves, it creates a consistent humming in our Universe, which gets detected using powerful radio telescopes from the Earth.
    • These were caused due to the presence of gravitational waves and due to signal irregularities emerging from pulsars.


Science & Tech

Mains Article
30 Jun 2023

IMF’s view on cryptocurrency in Latin America

Why in news?

  • The International Monetary Fund (IMF) issued a statement on the use of cryptocurrency in the Latin America and Caribbean market, and about the rising interest in blockchain-based central bank digital currencies (CBDCs).
  • The IMF ended its statement noting that a ban on crypto “may not be effective in the long run” in the region.
  • This has raised eyebrows due to the international organisation’s change in stance on crypto in the Latin American market.
    • Earlier, IMF had said that rapid growth and increasing adoption of crypto assets pose financial stability challenges as these are extremely volatile.
    • This was highlighted in the chapter titled The Crypto Ecosystem and Financial Stability Challenges published in Global Financial Stability Report 2021.

What’s in today’s article?

  • What is cryptocurrency?
  • What is central bank digital currencies (CBDCs)?
  • What is the difference between cryptocurrency and CBDCs?
  • News Summary

What is cryptocurrency?

  • Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds.
  • These currencies operate independently of a central bank.

Growth of crypto ecosystem presents new opportunities

  • Technological innovation is ushering in a new era that makes payments and other financial services cheaper, faster, more accessible.
    • It allows these services to flow across borders swiftly.
  • Bank deposits can be transformed to stable coins that allow instant access to a vast array of financial products and allow instant currency conversion.
  • Decentralised finance could become a platform for more innovative, inclusive, and transparent financial services.

Challenges posed by crypto assets

  • The rapid growth and increasing adoption of crypto assets also pose financial stability challenges as these are extremely volatile.
    • These are much more volatile than equities or commodities or even exchange rates.This volatility is introducing instability in the ecosystem.
  • Challenges posed by the crypto ecosystem include
    • operational and financial integrity risks from crypto asset providers,
    • investor protection risks for crypto-assets,
    • inadequate reserves and disclosure for some stable coins.

What is central bank digital currency (CBDC)?

  • CBDCs are digital currencies issued by central banks. Their value is linked to the issuing country’s official currency.
  • In other words, CBDCs are the legal tender issued by a central bank in a digital form.
    • The digital rupee (e-Rupee) is the digital currency launched by Reserve Bank of India.
  • It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency, only its form is different.
  • CBDCs are similar to—but not the same asstablecoins.
    • Stablecoins are a specific type of private, stabilized cryptocurrency pegged to another currency, commodity, or financial instrument with the goal of maintaining a relatively stable value over time.

What is the difference between cryptocurrency and CBDCs?

  • Role of central bank
    • Cryptocurrencies and CBDCs are both blockchain-based digital currencies.
    • However, cryptocurrencies are generally run by private companies or individuals.
    • On the other hand, a CBDC is controlled and tracked by a country’s central bank and corresponds to that country’s fiat currency.
  • Volatility
    • Bitcoin’s price may vary by hundreds or even thousands of dollars in a short period of time.
    • On the other hand, a CBDC would (ideally) be worth as much as its physical counterpart.
  • Investment vehicles
    • Investors often buy large quantities of Bitcoin or other cryptocurrencies and hold them in the hope of making a profit.
    • This doesn’t make sense in the case of CBDCs as they are not meant to be investment vehicles.

News Summary: IMF’s view on cryptocurrency in Latin America

Why is Latin America’s crypto economy so significant?

  • Countries like Argentina, Chile, and Columbia have experienced devaluation of their currency against the U.S. dollar.
  • To preserve the value of their savings, some residents have explored converting their funds to U.S. dollars. However, there are legal restrictions controlling this.
  • Others have chosen to convert their assets to stablecoins - cryptocurrencies designed to reflect the value of fiat currencies such as the U.S dollar.
  • A number of central banks in the Latin American market are also considering CBDCs, meaning that more people could soon be exposed to blockchain-based infrastructure.

Why does El Salvador stand out among crypto economies?

  • El Salvador is the first country in the world to adopt Bitcoin - the largest cryptocurrency by market capitalisation - as its legal tender.
  • El Salvador uses a digital wallet known as Chivo to regulate users’ crypto transactions.

How did the IMF react to El Salvador’s Bitcoin adoption?

  • The IMF said it was against El Salvador’s move, citing fiscal risks and consumer protection issues.
  • This is why IMF’s latest blog post on crypto and CBDC use in Latin America and the Caribbean came as a surprise to many.
    • The post said that while a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run.
    • It called for regulation of cryptocurrency and recording crypto transactions for transparency.

June 29, 2023

Mains Article
29 Jun 2023

Greedflation: Does India also have it?


  • There is a growing consensus across the world that corporate greed is causing inflation and workers are being doubly penalised by low wage increases and higher interest rates. 
  • It is important to understand the policy implications and whether India is also witnessing ‘Greedflation.’

 What is Inflation?

  • Inflation(or the inflation rate) is the rate at which the general price level rises.
  • For example, when it is reported that the inflation rate was 5% in June 2023 it implies that the general price level of the economy (as measured by a representative basket of goods and services) was 5% more than what it was in June 2022.

 What causes inflation?

  • Either price gets pushed up because input costs have risen — this is called cost-push inflation.
    • For example, if crude oil prices went up by 10% overnight because of a supply disruption then the general price level will be pushed up because energy costs have gone up.
  • Prices are pulled up because there is excess demand — this is called demand-pull inflation.
    • For example, if RBI cuts interest rates sharply and the public finds that buying a house is now quite affordable, since EMIs have fallen, then the sudden surge in demand for new houses will pull up home prices because new houses cannot be made immediately.

 How inflation is controlled?

  • If inflation is because of excess demand, the central banks raise interest rates to bring overall demand in line with overall supply.
  • If inflation is due to cost pressures, even then the central banks raise interest rates.
  • Of course, raising interest rates does nothing to boost supply. Still central banks do what they can: contain demand because that is all they can do.
  • The idea is to prevent something called the wage-price spiral - if prices go up, it is natural that workers will ask for higher wages. But if wages go up, it only fuels the overall demand, while doing nothing to boost the supply.

What is Greedflation?

  • Greedflation simply means (corporate) greed is fuelling inflation.
  • In other words, instead of the wage-price spiral, it is the profit-price spiral that is in play.
  • In essence, greedflation implies that companies exploited the inflation that people were experiencing by putting up their prices way beyond just covering their increased costs and then used that to maximise their profit margins. That, in turn, further fuelled inflation.
  • In Europe and the US there is a growing consensus that greedflation is the real culprit.

Situation in US and Europe

  • In the United States:
    • The corporate profits (as a proportion of the national income) have spiked to the highest level in the past 100 years.
    • The price of almost everything in the U.S. economy can be broken down into the three main components of cost: labour costs, non-labour inputs, and the “mark-up” of profits over the first two components.
    • Since the COVID-19 recession in the second quarter of 2020, overall prices in the NFC (Non-Financial Corporate) sector have risen at an annualized rate of 6.1.
    • Over half of this increase (53.9%) can be attributed to fatter profit margins, with labour costs contributing less than 8% of this increase.
  • In Europe
    • Chief Economist of the European Central Bank, recently stated that while the biggest driver of high inflation that Europe witnessed in 2022 (since the start of the war) was the spike in energy costs but there was very little contribution of higher wages.
    • There was, however, an extra and significant injection of inflation from rising profits of firms.

Policy Implications: Solutions and Trouble with Solutions

  • Solutions suggested by Economists
    • One effective way to prevent corporate power from being channelled into higher prices in the coming year would be a temporary excess profits tax.
    • The idea of windfall profit taxes on companies: A tax imposed on such an unexpected rise in profits is called a windfall tax. They are usually imposed when there is a sudden increase in profits in a particular sector.
  • Trouble with these Solutions
    • The IMF study noted that there is still some doubt that every firm has exploited consumers and fuelled inflation.
    • It is a challenge as to who decides what is justified increase and what is price-gouging.

Is Greedflation happening in India? Only after the study of Net Profits and What is Causing Higher Profits, it can be said whether Greedflation is happening in India or not.

Net Profits

  • According to Centre for Monitoring Indian Economy (CMIE) data the net profits of listed companies is at a record high.
  • The Indian corporate sector has generated superlative profits in the post pandemic period.
  • Profits during recent times have been nearly thrice the profits corporates earned earlier.
  • These Higher profits can come only from: higher sales (with the same profits margins), higher profit margins (with the same level of sales)or a combination of higher sales and higher profit margins.

What is contributing to higher profits?

  • According to CMIE sixty per cent of the growth in net profit can be attributed entirely to the increase in profit margin.
  • The increase in sales contributed an additional 36 per cent and the rest was a bonus from a combination of the two.

Do these higher profits point to the existence of greedflation in India?

  • Data shows the existence of a sharp spike in profits.
  • So, prima facie there is a very good chance that corporate greed also played a role in spiking the inflation rate in India.


  • Since there are mixed notions about ‘Greedflation’ it is important to discuss what can be done to control “greedflation” as firms take advantage of the crisis to raise prices. 
  • Ultimately, it is the common people who suffer.
Editorial Analysis

Mains Article
29 Jun 2023

The National Research Foundation (NRF)

Why in News?

  • The Union Cabinet approved the National Research Foundation (NRF) Bill 2023, which will establish NRF as an apex body to provide high-level strategic direction to scientific research in the country.
  • The Bill was necessary because current laws made it hard for private research organisations to contribute to a funding body such as the NRF.

What’s in Today’s Article?

  • Salient Features of the NRF Bill 2023
  • What is NRF?
  • What is the Objective Behind Creating NRF?
  • Significance of NRF

Salient Features of the NRF Bill 2023:

  • It will pave the way to establish NRF that will seed, grow and promote R&D and foster a culture of research and innovation throughout India’s universities, colleges, research institutions and R&D laboratories.
  • The proposed Bill also repeals the Science and Engineering Research Board (SERB) established by Parliament in 2008 and subsumes it into the NRF.
    • The SERB is the Department of Science and Technology’s (DST) main funding body and is responsible for funding S&T start-ups, setting up incubators and funding science-related projects in central and state universities

What is NRF?

  • As per the recommendations of the National Education Policy (NEP), NRF will be established at a total estimated cost of ₹50,000 crore from 2023-28.
    • The government will contribute ₹10,000 crore over five years and close to ₹36,000 crore is expected to come from the private sector (as investments into research).
  • The DST would be an “administrative” department of NRF that would be governed by a Governing Board.
    • The Prime Minister will be the ex-officio President of the Board and the Union Minister of Science & Technology and Union Minister of Education will be the ex-officio Vice-Presidents.
    • The Governing Board will also consist of eminent researchers and professionals across disciplines.
  • NRF’s functioning will be governed by an Executive Council chaired by the Principal Scientific Adviser to the Government of India.

What is the Objective Behind Creating NRF?

  • To ensure that scientific research was conducted and funded equitably and greater participation from the private sector was forthcoming.
    • Currently, eminent institutions like the IITs and IISc get a bulk of research funding but State universities get very little (~10%) of the research funds.
  • The NRF will prioritise research funding and the Executive Council will decide on what areas need support.
  • NRF will forge collaborations among the industry, academia, and government departments and research institutions.
  • It will create an interface mechanism for participation and contribution of industries and State governments in addition to the scientific and line Ministries.
  • It will focus on creating a policy framework and putting in place regulatory processes that can encourage collaboration and increased spending by the industry on R&D.

 Significance of NRF:

  • Democratisation of science funding: NRF will emphasise the funding of projects in peripheral, rural and semi-urban areas, which are neglected and never receive funding for science projects.
  • Finding solutions to the big problems facing Indian society: The NRF would promote research not just in the natural sciences and engineering, but also in social sciences, arts and humanities.
  • Provides an efficient and integrated management system: For the implementation of the missions such as the supercomputer mission or the quantum mission.
Polity & Governance

Mains Article
29 Jun 2023

After 12 yrs, UN Drops India From its Report on Children & Conflict

Why in News?

  • Recently, the annual report of UN Secretary-General Antonio Guterres on Children and Armed Conflict was published.
  • The report has dropped India’s name from the list in view of measures taken by the Government, specifically in Jammu and Kashmir, to better protect children.

What’s in Today’s Article?

  • About Children and Armed Conflict Report (Purpose, Highlights of 2022 report)
  • News Summary (India’s Name Dropped From the Report, Reasons, Measures Taken by the Government) 

About Children and Armed Conflict Report:

  • The Special Representative of the Secretary-General for Children and Armed Conflict serves as the leading UN advocate for the protection and well-being of children affected by armed conflict.
  • The annual report presents a comprehensive picture of child soldiers, highlights the disproportionate impact of war on children and identifies them as the primary victims of armed conflict.
  • The first Special Representative for Children and Armed Conflict was named in 1997 by the Secretary-General to help enhance the protection of children affected by armed conflict, and foster international cooperation to that end.
  • The Special Representative must also raise awareness about the plight of these children, and promote the monitoring and reporting of abuses.
  • In accordance with the mandate, the Special Representative reports annually to the General Assembly and the Human Rights Council.

Major Highlights of the Children and Armed Conflict Report 2022:

  • The report includes trends regarding the impact of armed conflict on children and information on violations committed.
  • In 2022, children continued to be disproportionately affected by armed conflict, and the number of children verified as affected by grave violations increased compared with 2021.
  • Violations affected 18,890 children (13,469 boys, 4,638 girls, 783 sex unknown) in 24 situations.
  • The highest numbers of violations were the killing (2,985) and maiming (5,655) of 8,631 children, followed by the recruitment and use of 7,622 children and the abduction of 3,985 children.
  • The highest numbers of grave violations were verified in the –
    • Democratic Republic of the Congo, Israel and the State of Palestine, Somalia, the Syria, Ukraine, Afghanistan and Yemen.
  • Hostilities spreading into new areas contributed to an increase in grave violations of 140 per cent in Myanmar.

News Summary:

  • For the first time since 2010, India has not been named in the report alongside countries like Burkina Faso, Cameroon, Lake Chad basin, Nigeria, Pakistan and the Philippines.
  • The report said India has been “removed from the report in 2023” in view of measures taken by the Government, specifically in Jammu and Kashmir, to “better protect children”.
  • Ministry of Women and Child Development said that this became possible due to the introduction of various policies and institutional changes since 2019.
    • Earlier, India was used to be in the list due to the use of boys by armed groups in Jammu and Kashmir and detention of boys by security forces.
  • An official statement said a road map for cooperation and collaboration on child protection issues was developed by the Ministry.
  • Some of the measures taken by the Government –
    • Training of security forces in protection of children;
    • Suspension of use of pellet guns by security forces;
    • Juvenile Justice Act (Care and Protection of Children), 2015;
    • Protection of Children from Sexual Offences Act, 2012.
  • In view of the measures taken by the Government to better protect children, India has been removed from the report in 2023, the Ministry stated.
Defence & Security

Mains Article
29 Jun 2023

American bald eagle

Why in news?

  • The American bald eagle was removed from the United States’ list of endangered species in June 2007.Since then, the population of the bird has steadily risen.
  • A 2021 report by the US Fish and Wildlife Service said that the number of bald eagles in the wild has quadrupled since 2009.
  • Once endangered due to habitat loss, hunting, and the pesticide DDT, bald eagles have made a remarkable recovery in recent decades.

What’s in today’s article?

  • American bald eagle

American bald eagle

  • About
    • Bald eagle, the only eagle solely native to North America.
    • It has been the national emblem of the United States since 1782 and a spiritual symbol for native people for far longer than that.
      • In 1782, it was first placed with outspread wings on the country’s Great Seal as a sign of strength.
  • Features
    • Bald eagles are large, predatory raptors that are recognizable for their brown body and wings, white head and tail, and hooked yellow beak.
    • Their feet, which are also yellow, are equipped with sharp black talons.
    • Juvenile bald eagles look very different from adults—they are almost entirely brown, with occasional white markings on the undersides of their wings and chest.
    • Bald eagles grow to about 2.5 to 3 feet (0.7 to 0.9 meters) in height, and they have an impressive wingspan of 6.5 feet (two meters).
    • Female bald eagles are larger than the males, but share the same coloration.
  • Habitat range
    • Bald eagles are North American birds. Their range extends from the Mexico border through the United States and Canada.
    • The birds are extremely populous in Alaska.
      • They can be seen year-round in Alaska, along the East and West coasts, the Rocky Mountains, and the Mississippi River.
      • The rest of the United States only sees bald eagles during the winter and their migration.
  • Food
    • Bald eagles love fish. These birds are opportunistic predators.
      • When fish are not available, they will eat whatever they can catch, including small birds and rodents.
    • Bald eagles are also scavengers that will feed on carrion. If they see an opportunity, bald eagles may even steal food from other birds such as osprey.
  • Life history
    • Bald eagles are solitary, but monogamous animals. Although they spend winters and migrations alone, bald eagles maintain the same breeding pair year after year.
  • Conservation status
    • The bald eagle was previously listed under the Endangered Species Act, but was delisted in 2007 due to recovery efforts.
    • IUCN Status - Least Concern

News Summary

Population decline since the 1800s

  • Statistics
    • Once upon a time, bald eagles were abundant across the United States.
    • When they were adopted as the country’s national symbol in 1782, there were as many as 100,000 nesting birds in the continental United States (including Alaska).
    • However, their populations began to decline in the early 1800s.
  • Reasons for the decline
    • Hunting
      • Bald eagles began to be seen as a threat to livestock, especially domestic chicken, and started to be hunted.
      • Hunting intensified in the latter half of the century, when feather hats became a fashion staple.
    • Appearance of DDT
      • DDT or dichloro-diphenyl-trichloroethane was first synthesised in 1874.
      • However, in 1939, it was first promoted as an insecticide and began to be used to kill malaria carrying mosquitos and agricultural pests.
      • While extremely effective as an insecticide, DDT had a catastrophic impact on the bald eagle population.

Steps taken to protect the bird

  • Role of Rachel Carson’s book Silent Spring
    • This book, for the first time, documented the detrimental effects of chemical pesticides on the environment.
    • It meticulously described how DDT was the prime cause behind the decline in bald eagle populations.
  • Ban on the use of DDT for agricultural use
    • A nationwide ban on the use of DDT for agricultural use was introduced in 1972.
  • Introduction of Endangered Species Act in 1973
    • This act broadened protections already in place for endangered species, particularly focussing on protection of animal habitats.
    • The bald eagle was one of the original species listed for protection under this act.
  • Captive breeding programmes and strict habitat protections
    • Captive breeding programmes were launched in the 1970s and proved to be crucial in helping the resurgence of bald eagles.
    • A practice known as hacking was commonly used by conservationists.
      • Hacking is a controlled way to raise and release bald eagles into a wild viable environment from artificial nesting towers.
      • This method simulates a wild eagle nesting site and aids in recovery in an area where re-population is desirable.
    • Strict restrictions were brought in with regards to human activity around eagle nests or known nesting areas.
Environment & Ecology

Mains Article
29 Jun 2023

Cabinet approves PM-PRANAM

Why in news?

  • The Centre has approved a new scheme PM-PRANAM to incentivise states to promote alternative fertilisers and reduce the use of chemical fertilisers.
  • It also decided to continue the current urea subsidy scheme for three years ending March 2025, with an outlay of ₹3.68 lakh crore.

What’s in today’s article?

  • News Summary


  • About
    • PM-PRANAM stands for PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth.
    • The scheme aims to reduce the use of chemical fertilisers by incentivising state.
    • Under the scheme, the states, which will adopt alternative fertilisers will be incentivised with the subsidy that is saved by reducing the use of chemical fertilisers.
      • Suppose a state is using 10 lakh tonne of conventional fertiliser.
      • If it reduces its consumption by 3 lakh tonne, then the subsidy saving would be ₹3,000 crore.
      • Out of that subsidy savings, the Centre will give 50% of it — ₹1,500 crore to the state for promoting the use of alternative fertiliser and other development works.
  • Objective
    • To encourage the balanced use of fertilisers in conjunction with bio fertilisers and organic fertilisers.
    • To reduce the subsidy burden on chemical fertilisers,
      • Subsidy burden is around Rs 2.25 lakh crore in 2022-2023.
      • This is 39% higher than the previous year’s figure of Rs 1.62 lakh crore.
  • Features of the scheme
    • The scheme will not have a separate budget.
    • It will be financed by the savings of existing fertiliser subsidy under schemes run by the Department of fertilisers.
    • 50% of subsidy savings will be passed on to the state that saves the money as a grant.
      • 70% of this grant can be used to create assets related to the technological adoption of alternate fertilisers and alternate fertiliser production units at the village block, and district levels.
      • The remaining 30% grant money can be used to reward and encourage farmers, panchayats, and other stakeholders involved in fertiliser reduction and awareness generation.
    • To illustrate the calculation in reducing chemical fertiliser use, a state's increase or decrease in urea consumption in a year will be compared to its average consumption of urea over the previous three years.

News Summary: Cabinet approves PM-PRANAM

  • Cabinet Committee on Economic Affairs (CCEA), chaired by PM Modi, announced a slew of decisions.

Key decisions taken by the cabinet

  • PM-PRANAM scheme for farmers
    • The Cabinet approved PM-PRANAM scheme
      • The programme had initially been announced by Finance Minister as part of the Union Budget 2023-24.
    • A package of ₹3.68 lakh crore has been committed for urea subsidy for the next three years (2022-23 to 2024-25).
    • The outlay also provides for the setting up and revival of 6 urea production units to reduce the current import dependency for urea and make India self-sufficient in this aspect by 2025- 26.
  • Introduction of sulphur-coated urea (Urea Gold)
    • The CCEA also decided to introduce sulphur-coated urea (Urea Gold) in the country for the first time to address sulphur deficiency in the soil.
    • Sulphur-coated urea is more economical and efficient than the other kinds of urea.
    • For instance, the nitrogen absorption in conventional urea is 30%, neem-coated urea is 50%, and nano urea is 80%.
    • Sulphur-coated urea will increase nitrogen absorption efficiency to 78%.
  • Providing assistance to organic manure
    • The Cabinet approved ₹1,451.84 crore for Market Development Assistance (MDA) for promoting organic fertiliser from Gobardhan Plants.
    • Under the scheme, a subsidy of ₹1,500 per tonne will be provided.
    • This subsidy will be provided to support the marketing of organic fertilisers produced as by-products from Biogas Plants/Compressed Biogas (CBG) Plants set up under umbrella GOBARdhan initiative.
      • The initiative aims to augment income of farmers by converting biodegradable waste into compressed biogas.
  • Increased the Fair and Remunerative Price (FRP)
    • The Cabinet increased the FRP by Rs 10 to Rs 315 per quintal for the 2023-24 season starting October.
      • FRP is the minimum price that mills have to pay to sugarcane growers.
      • It is determined by the Government based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).
    • The government has also decided that there shall not be any deduction in case of sugar mills where recovery is below 9.5 percent.
  • National Research Foundation Bill approved
    • The government also decided to table a bill to set up the National Research Foundation (NRF) in Parliament.
    • The NRF will be an apex body to provide high-level strategic direction of scientific research in India.
    • NRF will seed, grow and promote R&D and foster a culture of research and innovation throughout India’s universities, colleges and research institutions.
    • The NRF’s governing board will comprise of eminent researchers and professionals, and will be headed by the PM.
  • Ratification of Headquarters Agreement with CDRI
    • The Union Cabinet also pushed the ratification of the Headquarters Agreement between Government of India (Gol) and Coalition for Disaster Resilient Infrastructure (CDRI).
      • The agreement was signed in August 2022.
      • The ratification of the signed Headquarters Agreement will make it easier to grant special privileges and benefits to CDRI.
      • It will also give CDRI its own legal identity internationally, allowing it to operate more effectively in its global functions.
    • The CDRI was launched by PM Modi during the United Nations Climate Action Summit in September 2019.
    • It is a global partnership of national governments, UN agencies, multilateral development banks, private sector, and academic and knowledge institutions that aims to promote sustainable development.


Polity & Governance

June 28, 2023

Mains Article
28 Jun 2023

Grey to Green: Financing the Green Transition


  • The National Bank for Financing Infrastructure and Development (NaBFID) has recently declared its intent to introduce takeout financing products, invest in Infrastructure Investment Trusts (InvITs) and refinance loans.
  • While many of these plans are welcome, there need to be some cautions.

Takeout Financing, Infrastructure Investment Trusts, and Refinancing Loans

  • Takeout Financing
    • A takeout loan is a method of financing whereby a loan that is procured later is used to replace the initial loan.
    • More specifically, a takeout loan, or takeout financing, is long-term financing that the lender promises to provide at a particular date or when particular criteria for completion of a project are met.
  • InvITs
    • It is a Collective Investment Scheme similar to a mutual fund, which enables direct investment of money from individual and institutional investors in infrastructure projects to earn a small portion of the income as return.
    • The InvIT is designed as a tiered structure with sponsor setting up the InvIT which in turn invests into the eligible infrastructure projects either directly or via special purpose vehicles (SPVs).
    • The InvITs are regulated by the SEBI (Infrastructure Investment Trusts) Regulations, 2014.
  • Refinancing Loans
    • Refinancing a loan is when a borrower replaces their current debt obligation with one that has more favourable terms.
    • Through this process, a borrower takes out a new loan to pay off their existing debt, and the terms of the original loan are replaced with an updated agreement.

The National Bank for Financing Infrastructure and Development (NaBFID)

  • It is a specialised Development Finance Institution(DFI) set up in 2021, by an Act of the Parliament (The National Bank for Financing Infrastructure and Development Act, 2021).
  • NaBFID lifts the heavy burden of implementing the National Monetisation Pipeline (NMP) and financing projects in the National Infrastructure Pipeline (NIP).
  • To finance India’s infrastructure needs, NaBFID has disbursed60 per cent of the Rs 25,000 crore loans that it has sanctioned.

Problems Associated with Integration of Climate Risk in NIP

  • Limited to Building for Acute Physical Risks
    • Integration of climate risk in NIP is largely limited to building for acute physical risks, such as disasters and extreme events.
    • Building resilience against chronic physical risks (like rising temperatures or accelerated loss of biodiversity finds space) in the broad policy recommendations, but not in the sectoral needs identified.
  • Less Focus on Green and Blue Infrastructure
    • NIP’s focus seems to be contrary to the global trend where there is more focus on adoption of nature-based solutions and embracing green and blue infrastructure.
    • NIP continues to focus on traditional grey infrastructure.
    • For instance, it champions the improvement of stormwater drainage infrastructure and avoids integrating green infrastructure like green roofs that global cities are adopting for flood mitigation.

Global Efforts for Climate-Based Infrastructure Financing

  • Under the task force on climate-related financial disclosures for banks and companies the G7 has supported mandating disclosures.
  • These largely remain voluntary, especially in India.

Steps Taken by India to Promote Climate-Based Infrastructure

  • Business Responsibility and Sustainability Reporting(BRSR)
    • It was introduced by SEBI in 2021 and is based on the nine principles of National Guidelines for Responsible Business Conduct (NGRBC) introduced by SEBI.
    • With the BRSR reporting, companies require to highlight sustainability-related challenges faced by them and further delve in their ESG (Environmental, Social and Governance) related targets, while also mapping the probable risks and opportunities.
    • Extending BRSR to the top 1,000 listed companies is an encouraging move. However, efforts to mainstream sustainability and climate resiliency remain a matter of rhetoric, and the subject of a few declarations.
  • Indian regulators have announced a framework for green/blue bonds, and green deposits.
  • They also intend to propose guidelines for climate stress testing.

Challenges in Implementation of Climate-Based Infrastructure Finance Mechanisms

  • Time Consuming and Lack of Expertise
    • Operationalising concepts like BRSR and mainstreaming their implementation is a time-consuming effort and the lack of expertise makes the task complicated.
    • Therefore, ensuring the flow of funds to sustainable projects can prove difficult.
  • Financial Risks
    • There is a growing consensus that climate change poses financial risks.
    • Insurance companies exiting California in the face of wildfires are telling examples of the risks faced by financial institutions in a world plagued by climate disasters.
    • Central banks globally have initiated stress testing measures to gauge how their portfolios would fare in varying climate scenarios.
  • Identifying Relevant Climate Risks
    • Climate Risk identification, correlating them to financial risks and quantifying them is a complex process.
    • The procedure is compounded by the fact that credit risks have also to be accounted for. That is why financial institutions are struggling to accomplish the procedure.

How can NaBFID address these challenges effectively?

  • Focus on Structural Measures: Addressing climate-related financial and infrastructure challenges requires NaBFID to focus on structural measures that improve asset provisioning and quality as well as produce returns on investment.
  • Consider Recommendations to Enable PPP Projects’ Success
    • Engaging private finance in infrastructure projects through public-private partnerships (PPPs) often leads to cost overruns and delays.India’s experience with PPPs has been a mixed bag.
    • NaBFID is well-placed to consider recommendations on investing in pre-planning and site investigation, adopting a collaborative planning process with departments and downstream contractors involved to enable the success of PPPs. 
  • Proper Assessment of Growth and Demand for Credit: NaBFID’s plans to proceed on the takeout financing route need an assessment of how broad-based growth and demand for credit would be.
  • Need to Take Advantage of Innovative Financial Products
    • In a bid to mainstream climate adaptation and mitigation NaBFID needs to take advantage of innovative financial products.
    • Green bonds, sustainability-linked bonds, and transition bonds all seek to divert global financial flows towards projects aimed at climate mitigation and resilience.
    • General purpose and use-of-proceeds bonds can be powerful instruments to generate funds.
    • On the back of the success of India’s sovereign green bond, issuances by NaBFID for private placements could increase green capital flows to infrastructure.
    • This could be in line with its objective of indirect lending and attracting investments from the private sector.
  • Employ Entity-Level and Project-Level Safeguard
    • Employing entity-level and project-level safeguards to direct funds to appropriate projects, through innovative financing structures, would attract a diverse investor base and enable scaling of finance.
    • Most transition bond frameworks, for instance, recommend an entity-level transition plan.
  • Employ Disclosure on the line of G7 Framework: Standards like those framed by global agencies such as the Task Force on Climate Related Financial Disclosures by G7 would be useful to enhance transparency, credibility and avoid potential hazards of greenwashing.


  • Considering the impacts on biodiversity and existing natural infrastructure, applying new emerging standards for infrastructure projects could go a long way in building climate resilience and integrating nature into its decision-making.
  • Moreover, this will help mobilise the funds needed and reinforce government policy to meet our net zero commitments.


Editorial Analysis

Mains Article
28 Jun 2023

India-U.S. technology/digital trade: Why are U.S. tech firms sceptical about digital trade with India?

Why in News?

  • During the Indian PM’s U.S. state visit, cooperation on technology emerged as a prominent talking point and yielded some of the most substantive outcomes.
  • However, digital trade is the area where some of the biggest U.S. tech companies have recently flagged multiple policy hurdles, including “India’s patently protectionist posture”. 

What’s in Today’s Article?

  • What is the Current Status of India-U.S. Technology Trade?
  • What are the Concerns of the U.S. Tech Firms?
  • Discriminatory Regulation and Policies of India
  • Other Policy Barriers to Digital Trade with India
  • Recent Efforts to Ramp up their Tech Partnership

What is the Current Status of India-U.S. Technology Trade?

  • In FY2023, the U.S. emerged as India’s biggest overall trading partner with a 7.65% increase in bilateral trade to $128.55 billion in 2022-23.
  • However, digital or technology services did not emerge as one of the sectors at the forefront of bilateral trade.

What are the Concerns of U.S. Tech Firms?

  • The Computer & Communications Industry Association (CCIA) flagged 20 policy barriers to trading with India in a note titled “Key threats to digital trade 2023”.
  • The CCIA has flagged significant imbalance and misalignment in the US-India economic relationship.
  • For example,
    • The US’s extension of market access, trade and openness to Indian companies has not been reciprocated by the Indian side.
    • The U.S. ran a $27 billion deficit in trade in digital services with India in 2020. This is despite the strength of the U.S. digital services export sector and enormous growth potential of the online services market in India.
  • The Indian government has deployed a range of tools to champion their protectionist industrial policy tilting the playing field away from US digital service providers in favour of domestic players.

Discriminatory Regulation and Policies of India:

  • Guidelines on the sharing of geospatial data, providing preferential treatment to Indian companies.
  • Greater government censorship and control over political speech, which has made it extremely challenging for U.S. companies to operate in India.
  • Equalisation levy that India charges (since 2016) on digital services - a 6% tax on specific services received or receivable by a non-resident not having a permanent establishment in India.
    • Equalisation Levy 2.0 (from 2020) imposes a 2% tax on gross revenues received by a non-resident “e-commerce operator” from the provision of ‘e-commerce supply or service’.
    • The equalisation levy led to double taxation and further complicated the taxation framework.
    • It also raised questions of constitutional validity and compliance with international obligations.
  • The IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021: They place compliance burden on social media intermediaries (SMIs) and platforms with five million registered users or more.
    • Some points of concern raised are the impractical compliance deadlines and content take-down protocols.
    • Recently, the MeitY added another layer of compliance, requiring platforms to prevent the publication of content fact-checked as fake or false by the Press Information Bureau (PIB).
  • The Digital Personal Data Protection Bill, 2022: While there are notable improvements in the government’s new draft (4th iteration), ambiguities about cross-border data flows, compliance timelines, and data localisation still remain.
    • The data localisation requirements tend to significantly increase operating costs of companies and can be seen as discriminatory by foreign companies.
  • The Draft Telecommunications Bill, 2022: It would redefine telecommunication services to include a wide range of internet-enabled services that bear little resemblance to the telephony and broadband services.
    • For example, the Bill puts both Telecom Service Providers (TSPs) and Over-the-top (OTT) communication services under the definition of “telecommunication services”.
    • The industry body contends that the law would impose a first of the kind global authorisation/licensing requirement for any digital firm.

 Other Policy Barriers to Digital Trade with India:

  • Digital Competition Act: The Parliamentary Committee on Finance, in order to address anti-competitive practices by big tech companies, proposed the adoption of the Act in 2022.
  • The Competition Commission of India (CCI): It has imposed two successive fines on Google for “anti-competitive practices” in its Play Store policies.

Recent Efforts to Ramp up their Tech Partnership:

  • Initiative on Critical and Emerging Technology (iCET):
    • Announced by the US President and Indian PM in 2022, India and the U.S. agreed (under the iCET) to cooperate on critical and emerging technologies in areas including
      • Artificial intelligence,
      • Quantum computing,
      • Semiconductors and wireless telecommunication.
    • Additionally, India and the U.S. also established a Strategic Trade Dialogue with a focus on addressing regulatory barriers and aligning export controls for smoother trade and “deeper cooperation” in critical areas.
  • Semiconductor Supply Chain and Innovation Partnership: It includes a combined investment valued at $2.75 billion.
  • On the telecommunications front, two Joint Task Forces to focus on the Open RAN network and R&D in 5G/6G technologies.
  • Quantum Coordination Mechanism (to harness future tech such as AI and Quantum Computing) and a joint fund for the commercialization of Artificial Intelligence.
International Relations

Mains Article
28 Jun 2023

Indian Ocean Dipole and its Potential to Limit EL Nino Effects

Why in News?

  • With the El Nino phenomenon almost certain to affect the Indian monsoon this year, high hopes are pinned on the development of a positive Indian Ocean Dipole (IOD) and its ability to counterbalance the El Nino effect.

What’s in Today’s Article?

  • About ENSO (El Nino, La Nina, Impact, etc.)
  • About IOD (Positive/Negative IOD, Impact on Southwest Monsoon)

What is ENSO (El Nino and Southern Oscillation)?

  • ENSO is one of the most important climate phenomena on earth due to its ability to change the global atmospheric circulation, which in turn, influences temperature and precipitation across the globe.
  • Though ENSO is a single climate phenomenon, it has three states, or phases, it can be in:
    • El Nino:
      • A warming of the ocean surface, or above-average sea surface temperatures (SST), in the central and eastern tropical Pacific Ocean.
      • It is associated with lower than normal monsoon rainfall in India.
    • La Nina:
      • A cooling of the ocean surface, or below-average SSTs, in the central and eastern tropical Pacific Ocean.
      • It is associated with a comparatively better monsoon rainfall in India.
    • Neutral:
      • Neither El Nino nor La Nina.
      • Often tropical Pacific SSTs are generally close to average.

What is Indian Ocean Dipole (IOD)?

  • The Indian Ocean Dipole (IOD) is defined by the difference in sea surface temperature between two areas (or poles, hence a dipole) – a western pole in the Arabian Sea (western Indian Ocean) and an eastern pole in the eastern Indian Ocean south of Indonesia.
  • In scientific terms, the IOD is a coupled ocean and atmosphere phenomenon, similar to ENSO but in the equatorial Indian Ocean.
  • A ‘positive IOD’ — or simply ‘IOD’ — is associated with cooler than normal sea-surface temperatures in the eastern equatorial Indian Ocean and warmer than normal sea-surface temperatures in the western tropical Indian Ocean.
  • The opposite phenomenon is called a ‘negative IOD’, and is characterised by warmer than normal SSTs in the eastern equatorial Indian Ocean and cooler than normal SSTs in the western tropical Indian Ocean.
  • The IOD was identified as an independent system only in 1999.

Does IOD Impact Southwest Monsoon?

  • There is no established correlation between Indian summer monsoon rainfall and IOD.
  • However, studies have shown that a positive IOD year sees more than normal rainfall over central India.

News Summary:

  • With the El Nino phenomenon almost certain to affect the Indian monsoon this year, high hopes are pinned on the development of a positive Indian Ocean Dipole (IOD) and its ability to counterbalance the El Nino effect.
  • A positive IOD has the potential to offset the impacts of El Nino to a small measure in neighbouring areas.
    • It has, at least once in the past (1997), delivered admirably on this potential.
  • While the El Nino is already firmly established in the Pacific Ocean this year, the IOD is still in the neutral phase.
  • All international climate models suggest a positive IOD event may develop in the coming months.
  • The India Meteorological Department (IMD), in its bulletin earlier this month, said there was an 80% chance of a positive IOD in the coming months.

Mains Article
28 Jun 2023

Google Moves Supreme Court Against NCLAT Order

Why in news?

  • Google has filed an appeal in the Supreme Court against a verdict by the National Company Law Appellate Tribunal (NCLAT).
  • In March 2023, NCLAT had partially upheld Competition Commission of India’s (CCI) Android dominance order against Google.
    • CCI is a statutory body established in March 2009 under the Competition Act, 2002 with an aim to eliminate practices having adverse effect on competition.

What’s in today’s article?

  • National Company Law Appellate Tribunal (NCLAT)
  • Background of the present case
  • News Summary

National Company Law Appellate Tribunal (NCLAT)

  • About
    • NCLAT is a quasi-judicial body in India that was established under the Companies Act, 2013 to hear appeals against the orders passed by the National Company Law Tribunal (NCLT).
    • Established in 2016, it is headquartered in New Delhi.
    • It is the second-highest forum for company law cases in India after the Supreme Court.
    • The decisions of the NCLAT are final and binding on the parties involved.
      • The orders passed by the NCLAT can be challenged only in the Supreme Court of India.
  • Functions
    • The NCLAT is empowered to hear appeals against orders passed by the NCLT related to insolvency and bankruptcy, merger and acquisition, and company law matters.
    • It is also the Appellate Tribunal for order passed by the Competition Commission of India (CCI) as well for orders of the National Financial Reporting Authority.
  • Composition
    • The NCLAT is headed by a Chairperson and consists of judicial and technical members who are appointed by the Central Government.

Background of the case

  • In 2018, Android users moved the competition watchdog (CCI) alleging that Google was abusing its dominant position in the mobile operating system-related market.
  • The CCI subsequently ordered an investigation by the director general (DG) of its investigative arm into this matter.
  • In 2019, the CCI expressed a prima facie opinion that current practices followed by Google amounted to the imposition of unfair conditions on device manufacturers.
  • In October 2022, based on the report of DG, the commission imposed a penalty of Rs 1,337.76 crore on Google.
    • This was the second time that the tech giant has been fined by the CCI.
    • In 2018, it had imposed a fine of Rs 136 crore on Google for unfair business practices in the Indian market for online search.
  • This ruling was challenged before the NCLAT, which in turn, partially upheld the the CCI’s order in the case.

Why CCI had fined Google?

  • CCI said that Google used its dominant position to make it mandatory that original equipment manufacturers (OEMs) pre-install its entire Google Mobile Suite on their phones and place them prominently.
    • The Mobile Suite includes Search, Chrome, YouTube, Google Play store, Maps, and Photos, among others.
  • The CCI found that this mandate amounts to imposition of unfair conditions on the device manufacturers.
    • Hence, it was in contravention of the provisions of the Competition Act, 2002.
    • As per the provisions of this act, there shall be an abuse of dominant position if an enterprise directly or indirectly, imposes unfair or discriminatory condition in purchase or sale of goods or services.

How CCI wanted Google to change?

  • Apart from imposing monetary penalty, the commission has issued cease and desist orders against Google from indulging in the found anti-competitive practices.
  • It also says that OEMs should not be mandated to choose Google’s proprietary applications and services to be pre-installed and placed as Google says.
  • It is also told to not restrict uninstalling of its pre-installed apps by the users.
  • The Commission also said that Google will have to allow users to choose their default search engine during the initial device setup.

News Summary: Google Moves Supreme Court Against NCLAT Order

Why has Google appealed the NCLAT order?

  • Google acknowledged that the NCLAT made a correct decision by stating that harm resulting from anti-competitive behavior must be proven.
  • However, Google also pointed out that the NCLAT failed to apply this requirement to some of the directions given by the CCI that were upheld.
  • Hence, Google decided to present its case before the Supreme Court demonstrating how Android has benefitted Indian users, developers, and OEMs, and powered India’s digital transformation.

What did the NCLAT order entail?

  • No confirmation bias in CCI’s order
    • NCLAT held that the CCI's order does not suffer from any confirmation bias.
    • Hence, it upheld the penalty of ₹1,337 crore imposed on Google by the CCI for its anti-competitive conduct in the Android ecosystem.
  • Anti-competitive practices by google
    • Furthermore, NCLAT has held that Google asking the OEMs to pre-install the entire Google Suite of 11 applications amounts to imposition of unfair conditions.
    • Google reduces the incentive of the OEMs to develop their own version of Android (Android forks).
  • Directions by NCLAT that were in Google's favour
    • Google was fair in sending warnings (Side loading) to users when they download applications directly from the website or from an unknown source.
    • Google need not share its proprietary Application Program Interface (API) with third parties.
    • Google was right in not permitting third party application stores on its play stores to avoid malware.
    • Google can restrict uninstallation of Google suite apps on Android phones.

Could the order on Google shape India’s internet regulations?

  • The verdict opens the gate for the government to formulate substantive regulations to ensure that such an abuse of dominance can be curtailed in the future.
  • As per the experts, this judgement sets the stage for dual regulators in the online space for various sectors.
  • One will be a nodal regulator and one will be a sectoral regulator, who will both work together in framing rules for the respective sector and regulate it.


Polity & Governance

Mains Article
28 Jun 2023

Scientist John B Goodenough died

Why in news?

  • John B Goodenough, whose contribution to lithium-ion battery technology in 1980 helped him win the 2019 Nobel Prize in chemistry, died on June 25 at the age of 100.
    • He became the oldest person to receive the Nobel Prize.
    • He had shared his Nobel with two other researchers:
      • Michael Stanley Whittingham, a British-American chemist, and
      • Akira Yoshino, a Japanese chemist - Yoshino invented the first commercially viable lithium-ion battery, which began to be sold in 1991.
  • His work transformed the tech world, sparking the wireless revolution that made portable electronics ubiquitous.

What’s in today’s article?

  • Lithium-ion battery

Lithium-ion battery

  • About
    • A lithium-ion battery is a type of rechargeable battery that uses lithium ions as the primary component in its electrochemical system.
    • It is widely used in portable electronic devices, electric vehicles, and various energy storage applications.
  • Basic structure of a lithium-ion battery
    • A battery is made up of an anode (a negative electrode), cathode (a positive electrode), separator, electrolyte, and two current collectors (positive and negative).
    • The electrodes are typically made of materials that can intercalate lithium ions during charging and discharging cycles.
    • Common cathode materials include lithium cobalt oxide (LiCoO2), lithium manganese oxide (LiMn2O4), and lithium iron phosphate (LiFePO4).
    • Graphite is commonly used as the anode material.
  • Functioning
    • During a discharge cycle, lithium atoms in the anode are ionized and separated from their electrons.
    • The lithium ions move from the anode and pass through the electrolyte until they reach the cathode, where they recombine with their electrons and electrically neutralize.
    • The lithium ions are small enough to be able to move through a micro-permeable separator between the anode and cathode.
    • Because of lithium’s small size (third only to hydrogen and helium), Li-ion batteries are capable of having a very high voltage and charge storage per unit mass and unit volume.
  • Application
    • Li-ion batteries are the market leader in portable electronic devices (such as smart-phones and laptops).
    • Li-ion batteries are also used to power electrical systems for some aerospace applications, notable in the new and more environmentally friendly Boeing 787, where weight is a significant cost factor.
    • From a clean energy perspective, much of the promise of Li-ion technology comes from their potential applications in battery-powered cars.
  • Advantages of Li-ion batteries
    • They have one of the highest energy densities of any battery technology today.
      • This means they can store a significant amount of energy for their size and weight.
    • They also exhibit a relatively low self-discharge rate when compared to other rechargeable batteries, allowing them to hold their charge for extended periods.
    • In addition, Li-ion battery cells can deliver up to 3.6 Volts, 3 times higher than other technologies.
      • This means that they can deliver large amounts of current for high-power applications.
    • Li-ion batteries have no memory effect, a detrimental process where repeated partial discharge/charge cycles can cause a battery to ‘remember’ a lower capacity.
    • These batteries do not contain toxic cadmium, which makes them easier to dispose of than Ni-Cd batteries.
  • Disadvantages
    • Li-ion batteries have a tendency to overheat, and can be damaged at high voltages.
    • In some cases, this can lead to thermal runaway and combustion.
      • This has caused significant problems, notably the grounding of the Boeing 787 fleet after onboard battery fires were reported.
    • Li-ion batteries require safety mechanisms to limit voltage and internal pressures, which can increase weight and limit performance in some cases.
    • Li-ion batteries are also subject to aging, meaning that they can lose capacity and frequently fail after a number of years.
    • Another factor limiting their widespread adoption is their cost, which is around 40% higher than Ni-Cd.
Science & Tech

June 27, 2023

Mains Article
27 Jun 2023

Reforming Multilateral Development Banks, advocating for the Global South


  • In recent years, the restructuring of Multilateral Development Banks (MDBs) has received increasing attention.
  • In his address to the US Congress, the PM of India talked about the relevance of MDBs and the need to reform them.

Multilateralism and The Debate to Reform MDBs

  • In international relations, multilateralism refers to an alliance of multiple countries pursuing a common goal.
  • It is the most transparent and preferred mode of international cooperation that has been undergoing constant evolution in scope, dimension, and outcomes.
  • The current debate on the reforms of MDBs is a subset of the wider debate on the value, content, and scope of multilateralism.
  • The joint statement made by the US President and the Indian PM during the later’s US state visit also underscored the need to strengthen and reform the multilateral system to reflect contemporary realities. 

Emergence of Multilateralism and Creation of IMF and World Bank Group (WBG)

  • Post WWII, delegates from 44 countries met in Bretton Woods (New Hampshire, US)to agree upon a series of new rules for international cooperation and reconstruction.
  • This led to the creation of the IMF and WBG in 1944.
  • WBG was responsible for providing financial assistance for the post-war reconstruction and economic development of the less developed countries. The role evolved over the years.
  • While the WBG is the oldest and the largest MDB, several other MDBs and regional development banks (RDBs) have emergedover the years.
  • Today, there are about 15-16 prominent MDBs and RDBs.

Branches of the WB and Their Functions

  • International Bank for Reconstruction and Development (IBRD) which lends to low-and middle-income (LICs and MICs) countries.
  • The International Development Association (IDA) that lends to LICs.
  • The International Finance Corporation (IFC) that lends to the private sector.
  • The Multilateral Investment Guarantee Agency (MIGA) that encourages private companies to invest in foreign countries.
  • The International Centre for Settlement of Investment Disputes (ICSID) for dispute settlement.

 Why is there a debate to reform MDBs?

  • New Emerging Challenges
    • Over the years, despite far-reaching geopolitical changes, economic crises, and uncertainties, MDBs have remained relevant as credible institutions to support the development of both MICs and LICs.
    • Yet, it is widely believed that these institutions are no longer suited in terms of the resources, cultural ethos, and methods to address the emerging challenges.
    • These new emerging challenges include global public goods, climate change and pandemics.
  • Need To Discover New Roles and Methods
    • MDBs are in a complex situation, trapped in their procedures, approach and methods of work and restrained to structural changes.
    • Given their technical knowledge, experience, and credibility in the financial sphere, they need to rediscover their role and methods.
  • Need to Broaden the Mandate and Vision
    • The two traditional goals shared by all multilateral institutions have been the elimination of poverty and fostering shared prosperity.
    • We must be conscious that poverty elimination and shared prosperity have remained elusive goals. Shared prosperity at intra and inter-country levels has also worsened in recent times.
    • MDBs need to broaden the mandate and vision to address the challenges of transboundary issues and the opportunities connected with climate change.
    • We need a symbiosis of the two visions with these added dimensionsandeach of these requires different modes of financing and methods of work.
  • Need to Change the Current Operating Model
    • There is also a need for creating an incentivestructure and bring changes to the current operating model of the MDBs.
    • MDBs must work in close coordination with each other.
    • Broad and deep changes are required to significantly strengthen performance, such as realistic return targets and risk management.

Broadening the MDBs Mandate and Vision Along with Tradition Priorities

  • The need for matching the ability of MDBs to finance these larger goals without reducing development financing is central to the issue.
  • While broadening the mandate of MDBs is imperative, it should not be at the cost of available funding for traditional priorities – addressing poverty and inequality – as they remain dominant concerns in LICs and even emerging economies, including India. 
  • In this context, the Expert Group of G20 is calibrating different options, to ensure that concessional finance targeted towards LICs, is not compromised. 

How to secure credible sources of finance to meet these enhanced challenges? 

  • The MDBs need to optimise their current balance sheets to create higher leverage from existing funds and to attract private capital.
  • They need to fix annual targets and judge performances by the outcomes secured in this altered framework of accountability.

Need to Mobilise Private Capital and the Role of MDBs

  • The current system has failed to raise sufficient private finance.
  • On the demand side, there are concerns of moral hazards associated with private capital.
  • On the supply side, private capital is not immune to risks such as those associated with foreign exchange. Many projects, therefore, do not move forward because either the risk is too high or the return too low.
  • De-risking approaches such as blended finance and guarantees aimed at tilting the balance do exist. However, they imply a more intensive recourse to public and donor support.
  • Concerns about unlocking private sector investments using public resources inevitably arise.
  • Therefore, financial channels for capital mobilisation need to be strengthened.
  • MDBs have a central role to play in securing the scale and affordability of finance and private capital can meet the largest share of the $1 trillion in external finance needed by 2030.

Importance of Reforming MDBs under India’s G20 Presidency

  • For India, reforming MDBs would mean advocating the voice of the Global South.
  • It is the first attempt to give consistency to a variety of initiatives and efforts aimed at bolstering the MDBs.
  • The Expert Group of G20 is expected to take a holistic approach on a wide range of issues and outline a pragmatic implementable programme.
  • The Expert Group proposes to submit two reports.
    • The first focuses on issues of vision, financial capacity, and modalities of funding the MDBs.
    • The second deals with issues related to harnessing private capital, risk mitigation, optimally using guarantees to leverage private capital and hybrid innovative financing.

Way Forward

  • Deeper integration with multiple stakeholders is crucial for reforming MDBs.
  • They must serve all clients, low-income and middle-income alike.
  • MDBs must play a much more purposive and proactive role in helping countries identify, enable, and foster green investments, moving beyond a project-by-project approach to support system change. 
  • These banks must address the challenges of climate change and developmental aspirations of the Global South.


  • Making MDBs more relevant for addressing 21st-century challenges would contribute towards enhancing human welfare.
  • If MDBs do not respond to these new challenges, they will become increasingly irrelevant and be substituted by other forms of cooperation.
Editorial Analysis

Mains Article
27 Jun 2023

Special Assistance to States for Capital Investment 2023-24 Scheme

Why in News?

  • The Department of Expenditure under the Finance Ministry has approved capital investment proposals of Rs 56,415 crore for 16 states in the current financial year 2023-24 (FY 23-24).
  • The approval has been given under the scheme titled ‘Special Assistance to States for Capital Investment 2023-24’.

What’s in Today’s Article?

  • What is Capital Expenditure?
  • Why is Capital Expenditure Important?
  • Cautions with the Capital Expenditure
  • The Scheme ‘Special Assistance to States for Capital Investment 2023-24'
  • Components of the Scheme
  • News Summary Regarding Capital Investment Proposals for States

What is Capital Expenditure/Capex?

  • Capital expenditure includes money spent by the government on the following:
    • Development of physical assets like machinery, equipment, building, health facilities, education, etc.
    • Acquiring fixed (land) and intangible assets
    • Upgrading an existing asset
    • Repairing an existing asset
    • Repayment of loan
  • The Budget estimate of the government's capital expenditure for the year 2020-21 was Rs 1,084,748 crore.
  • Capex of government has been considered to be the prime driver of capex in the economy in the last few years.
    • This is because the private sector has not been in a position to invest due to lower demand and high inflation.

Why is Capital Expenditure Important?

  • Capital expenditure, which leads to the creation of assets, is long-term in nature and allows the economy to generate revenue for many years by adding or improving production facilities and boosting operational efficiency.
  • Acquiring fixed assets gives profits or dividends in future, repayment of loan reduces liability.
  • It also increases labour participation, takes stock of the economy and raises its capacity to produce more in future.
  • Unlike capital expenditure, revenue expenditure (salaries of employees, interest payment on past debt, subsidies, pension, etc) is one that neither creates assets nor reduces any liability of the government. It is recurring in nature.

Cautions with the Capital Expenditure:

  • In the FY 2019-20, capital expenditure was 14.2% of Budget Estimates.
  • The government had to cut public spending sharply towards the end of the financial year in order that the deficit target could be met.

The Scheme ‘Special Assistance to States for Capital Investment 2023-24':

  • In view of a higher multiplier effect of capital expenditure and in order to provide a boost to capital spending by States, the scheme was announced in the Union Budget 2023-24.
    • The scheme for financial assistance to States for capital investment/expenditure, first instituted by the Ministry of Finance in 2020-21 in the wake of COVID-19 Pandemic.
    • The flexibility and simplicity of the scheme design has earned praise from CMs and FMs of States in successive pre-budget consultations.
    • A similar scheme was also executed by the Ministry of Finance in the last financial year.
  • Under the scheme, special assistance is being provided to the State Governments in the form of 50-year interest free loan up to an overall sum of Rs. 1.3 lakh crore during the FY 2023-24.

Components of the Scheme:

  • Part-I being the largest with allocation of Rs. 1 lakh crore and has been allocated amongst States in proportion to their share of central taxes & duties as per the award of the 15th Finance Commission.
  • For the Part–II, Rs. 3,000 crores have been set aside for providing incentives to States for scrapping of State Government vehicles and ambulances, etc.
  • Part–III & IV of the scheme aim at providing incentives to States for reforms in Urban Planning and Urban Finance.
  • Part-V of the scheme aims at increasing the housing stock for the police personnel and their families within the police stations in urban areas.
  • The purpose under the Part-VI of the scheme is to promote national integration, Make in India and One District, One Product (ODOP) through construction of Unity Mall in each State.
  • Part-VII of the Scheme provides financial assistance to States for setting up libraries with digital infrastructure at Panchayat and Ward level.

News Summary Regarding Capital Investment Proposals for States:

  • The continued push for capex by the Centre for states is significant given the fact that many states, led by Andhra Pradesh, Maharashtra, UP and Kerala, failed to meet the target in terms of actual capex.
  • According to a Bank of Baroda report, out of 25 states as many as 14 states met less than 75% of the target in FY2023.
  • The Centre had met its target both in terms of actual capex in various areas as well as the loans disbursed to states that were to be used for capex.
  • In FY23, Centre’s capital expenditure exceeded the government’s revised estimate of Rs 7.28 lakh crore by Rs 8,551 crore.

Mains Article
27 Jun 2023

Regulatory Body Tells OTT Platform to Take Down Content

Why in News?

  • For the first time, the Digital Publisher Content Grievances Council (DPCGC), self-regulatory body for online curated content (OTT), has recommended punitive action on a platform invoking the Information Technology Rules (2021).

What’s in Today’s Article?

  • News Summary
  • About IT Rules 2021 (Major modifications introduced through IT Rules for Intermediaries)
  • About Digital Publisher Content Grievances Council (DPCGC)

 News Summary:

  • In an order issued last week, the Digital Publisher Content Grievances Council (DPCGC) has gravely objected to the content being streamed on an OTT platform called ULLU, and ordered take-down of such content in 15 days.
    • DPCGC is self-regulatory body for OTT platforms.
  • The order was pertaining to a complaint on the obscene nature of the content being streamed on ULLU.
  • The complainant had stated that some of the web series only had obscenity and nudity, which is contrary to the law of the land as well as the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
  • In its response, the ULLU denied all allegations and insisted that the viewership is based on discretion, and also cited “freedom of speech and expression” as enshrined in the Constitution.
  • The DPCGC while reprimanding the platform, gave a strong advisory to take off these web series altogether or make suitable edits to the offending scenes to ensure they are in compliance with the IT Rules.

IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021:

  • The rules were notified by the Ministry of Electronics and Information Technology in February, 2021.
  • The Rules provide the due diligence to be followed by an intermediary (including social media intermediary) while discharging its duties, Grievance Redressal Mechanism  and Digital Media Code of Ethics.
  • Due Diligence to be followed by Intermediary:
    • Prominently publish on its website (or mobile based application or both), the rules and regulations, privacy policy and user agreement for access or usage of its computer resource by any person;
    • The rules have modified the categories of content that users are not allowed to upload or share.
    • Periodically (at least once in a year) inform its users of its rules and regulations, privacy policy or user agreement or any change in the rules and regulations, privacy policy or user agreement.
  • Grievance Redressal Mechanism of Intermediary:
    • The intermediary must ensure to prominently publish on its website/mobile based application, the name of the Grievance Officer and his contact details.
    • It must provide a mechanism by which a user or a victim may make complaint against violation of the provisions of this rule or any other matters pertaining to the computer resources made available by it.
    • Grievance Officer shall acknowledge the complaint within twenty four hours and resolve it within fifteen days from its receipt.
  • Additional Due Diligence for Significant Social Media Intermediary:
    • The 2021 Rules define social media intermediaries as intermediaries which primarily or solely enable online interaction between two or more users.
    • Intermediaries with registered users above a notified threshold will be classified as significant social media intermediaries (SSMIs).
    • SSMI shall appoint a Chief Compliance Officer who shall be responsible for ensuring compliance with the Act.
    • SSMI shall appoint a nodal contact person for 24×7 coordination with law enforcement agencies and officers to ensure compliance to their orders or requisitions made in accordance with the provisions of law or rules made thereunder.
  • Identifying the first Originator of Information:
    • An SSMI which primarily provides messaging services (for example WhatsApp), must enable the identification of the first originator of information within India on its platform.
  • Ensuring Online Safety and Dignity of Users:
    • Intermediaries shall remove or disable access within 24 hours of receipt of complaints of contents that exposes the private areas of individuals, show such individuals in full or partial nudity or in sexual act or is in the nature of impersonation including morphed images etc.
    • Such a complaint can be filed either by the individual or by any other person on his/her behalf.
  • Oversight Mechanism:
    • Ministry of Information and Broadcasting shall formulate an oversight mechanism.
    • It shall publish a charter for self-regulating bodies, including Codes of Practices. It shall establish an Inter-Departmental Committee for hearing grievances.

About Digital Publisher Content Grievances Council (DPCGC):

  • The DPCGC is an officially recognized, independent self-regulatory body for online curated content providers (OCCPs).
  • It has been set up under the aegis of Internet and Mobile Association of India (IAMAI), in June 2021.
  • DPCGC aims to usher in a redressal mechanism which ensures a balance between addressing viewer complaints and showcasing content in free-speech environment without ad-hoc interventions.
  • It adheres to IT Rules 2021 and such other existing or new statutes, and rules/regulations/guidelines framed thereunder from time to time, relating to publishing of online curated content.
Polity & Governance

Mains Article
27 Jun 2023

The budding IndiGo-Tata airlines duopoly and what it could mean for consumers

Why in news?

  • It appears that the domestic aviation market in India is now mainly controlled by two major players: IndiGo and the Tata group airlines (Air India, Vistara, and AIX Connect, which is Air Asia India).
    • This situation is due to the fact that Go First is no longer operating and there is little chance of Jet Airways being revived.
  • While it might be good news for IndiGo and the Tata airlines, a duopoly is certainly a cause of concern for consumers already contending with high airfares.

What’s in today’s article?

  • Duopoly
  • News Summary

What is a duopoly and is it bad for consumers?

  • About duopoly
    • A duopoly exists when two players dominate the market for a product or a service.
    • Generally, competition is seen as directly proportional to consumer interest, which means that higher the competition, the better it is for consumers.
    • Going by that logic, a duopoly is theoretically not a very desirable proposition for consumers.
  • Impact on consumers
    • As per basic economic theory, higher competition usually results in lower prices, higher efficiencies, better products and services, and market expansion, among other things.
    • In a duopoly, there is a strong likelihood of relatively higher prices and fewer choices for consumers, and suboptimal innovation and market growth.
    • If allowed to consolidate and strengthen, duopolies can also act as huge impediments for new entrants, which again mean lower competition and choices for consumers on a sustained basis.

News Summary: The budding IndiGo-Tata airlines duopoly and what it could mean for consumers

Current Domestic market share

  • SpiceJet is grappling with fleet-related and financial troubles of its own.
  • Akasa Air do not appear to be in a position currently to mount a formidable challenge.
  • IndiGo has emerged as the biggest beneficiary of the suspension of Go First’s operations, with the former’s domestic market share with respect to passengers carried jumping to 61.4 per cent in May from 57.5 per cent in April.
  • The three Tata group carriers saw a cumulative market share rise of 1.4 percentage points over April to 26.3 per cent in May.
  • Currently, IndiGo and Tata group airlines control a staggering 87.7 per cent of India’s domestic civil aviation market – the third-largest globally and growing rapidly.
    • With an eye on future growth, both airline groups have lined up massive fleet expansion and modernisation plans.
      • Recently, IndiGo ordered 500 Airbus jets – the biggest-ever aircraft order in the history of commercial aviation.
      • The Air India group has also ordered 470 Airbus and Boeing aircraft.

Duopoly in India’s domestic aviation market – the concerns

  • More pricing power in the hands of the dominant airlines
    • India is a highly price-sensitive aviation market that has seen cut-throat competition between carriers over the past few years.
    • A duopolistic structure puts more pricing power in the hands of the dominant airlines.
    • Duopoly could also lead to a scenario in which the leading airlines just do not have enough incentive to compete enough on pricing and service quality.
  • Limit unsustainable cut-throat competition
    • From the aviation sector’s perspective, the duopoly might limit unsustainable cut-throat competition and predatory pricing at an overall level.
  • Cartelisation among Indian carriers
    • In future, the dominant players might be seduced into a mutually beneficial tacit understanding on airfare levels.

Domestic aviation sector

  • Airfares are already heated up in India
    • Suspension of Go First flights, combined with other factors like surging travel demand and capacity constraints, have forced flyers to pay through their noses.
  • Total count of domestic flyers
    • The total count of domestic flyers in May stood at a record high of 1.32 crore, up 15.2% year-on-year.

What lies in future for Indian aviation industry?

  • Depends on how existing dominant players approach the market
    • How IndiGo and the Tata airlines approach the market and the competition between them will play a critical role in shaping India’s civil aviation sector.
      • An approach of intense competition to fight each other for more market share would augur well for consumers.
    • How the less dominant players like Akasa Air and SpiceJet approach the market and competition from here will also be a crucial factor.
  • Entry of new players
    • Entry of another carrier backed by a solid conglomerate or deep-pocketed investors could also alter the contours of India’s aviation market.
      • The example of Akasa Air is for all to see.
      • In less than a year, the carrier has been able to expand its market share from nil to almost 5 per cent and is operating a fleet of 19 aircraft.
  • Competition from other modes of transport
    • A lot will also depend on competition from other modes of transport, like roads and railways, and to some extent, it could keep airfares from overheating too much.
    • With fast-paced highway development and modernisation of railway infrastructure, short- and medium-haul air travel routes in particular could face some heat.
  • Other factors
    • Factors like affordability, duration, and comfort of travel would most certainly be the deciding factors.
  • Government policies and regulations would certainly be critical
    • Moves by the government that are bound to result in more competition in the domestic aviation market include:
      • significantly lower entry barriers for new carriers,
      • attract more investment in existing carriers and lead to creation of new ones,
      • incentivise the sector’s growth, and
      • make airfares more transparent.

Mains Article
27 Jun 2023

What are flash floods, which have also led to landslides in parts of Himachal Pradesh and Haryana?

Why in news?

  • The Chandigarh-Manali highway was blocked on June 26 following flash floods and landslides.
  • Flash floods were witnessed in Khotinallah near Aut (in HP) on the Pandoh–Kullu stretch due to a heavy downpour.

What’s in today’s article?

  • Flash floods

Flash floods

  • About
    • Flash floods are sudden and rapid floods that occur within a short period, typically within hours of heavy rainfall or other intense water accumulation events.
      • According to the US’s meteorological agency, the National Weather Service, flash floods are caused when rainfall creates flooding in less than 6 hours.
    • They are characterized by a swift rise in water levels in rivers, streams, or urban areas, often with little to no warning.
  • Factors responsible
    • Apart from heavy rain, flash floods can also be caused by dam or levee failures, ice or debris jams, or sudden release of water from natural reservoirs such as glacial lakes.
    • In India, flash floods are often associated with cloudbursts – sudden, intense rainfall in a short period of time.
    • Factors such as the intensity and duration of rainfall, the steepness of terrain, the nature of the soil, and the presence of man-made structures that impede water flow are also responsible for flash floods.
  • Features
    • Flash floods are known for their extreme force and velocity, carrying a tremendous amount of water, debris, and sediment.
    • They can overwhelm drainage systems, cause rivers to overflow their banks, and inundate low-lying areas.
    • Flash flooding commonly happens more where rivers are narrow and steep, so they flow more quickly.
    • They can occur in urban areas located near small rivers, since hard surfaces such as roads and concrete do not allow the water to absorb into the ground.

How flash floods are different from floods in general?

  • Speed of Onset:
    • Flash floods have a rapid onset, occurring within a short span of time, often within a few hours or even minutes.
    • On the other hand, floods typically develop gradually over a more extended period, often days or weeks, as a result of sustained rainfall or melting snow.
  • Duration:
    • Flash floods are short-lived events that subside quickly once the intense rainfall or water accumulation event ends.
    • Floods, in general, can last for days, weeks, or even months, as they are the result of prolonged precipitation or continuous water inflow.
  • Intensity:
    • Flash floods are characterized by their high intensity. They involve a sudden surge of water, often leading to significant destruction.
    • Floods, although they can also be powerful and destructive, tend to have a lower peak intensity compared to flash floods due to their longer duration and slower rise in water levels.
  • Warning Time:
    • Flash floods provide little to no warning time since they occur rapidly.
    • In contrast, floods typically offer more advance warning as they develop gradually, allowing for evacuation plans to be implemented and emergency measures to be taken.
  • Geographic Scope:
    • Flash floods are usually localized events, occurring in specific areas where intense rainfall or other factors lead to rapid water accumulation.
    • General floods, on the other hand, can cover larger areas, including river basins, coastal regions, or expansive low-lying areas.

How common are flash floods and floods?

  • Floods
    • According to government data from a project by the Assam State Disaster Management Authority, India is the worst flood-affected country in the world, after Bangladesh.
    • It accounts for one-fifth of the global death count due to floods.
    • Nearly 75 per cent of the total Indian rainfall is concentrated over a short monsoon season of four months (June to September).
      • As a result, the rivers witness a heavy discharge during these months.
    • About 40 million hectares of land in the country are liable to floods according to the National Flood Commission, and an average of 18.6 million hectares of land are affected annually.
  • Flash floods
    • Flash floods have been commonly witnessed in cities like Chennai and Mumbai.
    • Depression and cyclonic storms in the coastal areas of Orissa, West Bengal, Andhra Pradesh, and others also cause flash floods.
    • As per the experts, flash floods may in the future, begin to take place after wildfires that have been taking place more frequently.
    • This is because wildfires destroy forests and other vegetation, which in turn weakens the soil and makes it less permeable for water to seep through.

Ways to deal with flash floods

  • Early warning systems, including weather monitoring, river gauges, and emergency alerts, play a crucial role in mitigating the impact of flash floods.
  • It is essential for individuals and communities in flood-prone areas to be aware of the risks, have emergency plans in place, and follow the guidance provided by local authorities during such events.

Steps taken in India

  • IMD has been using Doppler radars, a flash floods forecasting and warning systems to predict the occurrence of flash floods.
  • The NDMA also advices the inhabitation of low-lying areas along the rivers, nullah and drains to be regulated by the state governments/State Disaster Management Authorities (SDMAs)/ District Disaster Management Authorities (DDMAs) as a preventive measure.
  • Central Water Commission (CWC)/ National Remote Sensing Agency (NRSA)/ state governments/ SDMAs also check for landslides and blockages in rivers with the help of satellite imageries.






June 26, 2023

Mains Article
26 Jun 2023

Why Punjab and Haryana Matter


  • Punjab and Haryana have been India’s breadbasket and crucial contributors to its food security, especially post the Green Revolution.
  • But over the last two decades though, the two states’ combined share in total wheat procurement for the Central food-grain pool has fallen from 90% to 70%. For Rice, it has been from 43-44% to 28-29%.

Reason Behind Decline of Two States’ Share in Central Procurement Pool

  • The Diversification of Procurement
    • Traditionally, the procurement of wheat was concentrated in Punjab and Haryana.
    • For rice, the procurement in central pool was mainly from Punjab, Haryana, Andhra Pradesh, and Tamil Nadu.
    • Now, with the diversification of procurement, other states have started contributing to central pool.
  • State governments are also establishing infrastructure for purchase of grain at minimum support prices (MSP) from farmers.
    • For example, MP briefly overtook Punjab as the top contributor to the Central pool in 2019-20 for wheat.
    • In rice, Telangana has emerged as a clear number two behind Punjab, with Chhattisgarh, Odisha, and UP making impressive strides over the past decade.

Impact of Climatic factors on Procurement

  • Bad monsoon/weather - Low procurement as result of poor harvest: The contribution of most states to wheat procurement has tended to be high largely in “fair-weather” years delivering excellent harvests, such as 2019-20 and 2020-21.
    • The immediate impact of a subnormal monsoon would be on the kharif crops, the sowings of which have barely taken off.
    • Rice crop may face difficulty because it is a highly water-intensive and requires at least 25 irrigations in the absence of rain.
  • Role of El Nino
    • El Niño has been associated with monsoon failures in India. Thus, 2014, 2015 and 2018 recorded subnormal rainfall – and all three were El Niño years.
    • On the other hand, the country enjoyed four consecutive years of good monsoon from 2019 to 2022.
  • Current Situation of El Nino: Its earlier-than-anticipated arrival, and sudden gain in strength between March and May, has cast a shadow over rain in the remaining part of the season. And it will lead to a subnormal rainfall.
    • Moreover, if El Niño is going to get stronger, the impact could extend to the rabi (winter-spring) crops.
    • These, particularly wheat, are grown using groundwater and dam reservoirs that are recharged/refilled during the monsoon.
    • A subnormal monsoon can hit both rice and wheat production which can challenge the food security in the country.

How Can Punjab and Haryana become the saviour states?

  • In Punjab and Haryana farmers have assured access to irrigation.
  • Even in the event of a poor monsoon, farmers would be able to safeguard their crop because of the presence of 15 lakh electric tube-wells in the state.
  • The Punjab government is supplying eight hours of uninterrupted free power daily to run these tube-wells during the four-month paddy season (from transplanting to harvesting).
  • Paddy yields in Punjab actually tend to go up during low rainfall years. That’s because farmers then rely solely on groundwater and irrigate their fields accordingly. 


  • Assured irrigation access has made the two states the most reliable producers of rice and wheat, which will matter in a bad monsoon year.
  • For a long time, policymakers and economists have advocated weaning away Punjab and Haryana farmers from rice and also cutting back wheat acreage.
  • But today, in a scenario of poor government stocks and soaring rice prices globally, it’s these farmers who may play saviour yet again.


Editorial Analysis

Mains Article
26 Jun 2023

Banks readying systems to track spends on outward remittances

Why in news?

  • Starting from July 1, the Reserve Bank of India plans to implement a 20% tax on the Liberalised Remittances Scheme (LRS).
  • As a result, banks are preparing their systems to monitor expenses made with international cards and collect the applicable tax on outward remittances.

What’s in today’s article?

  • Liberalised Remittances Scheme (LRS)
  • News Summary

What is Liberalised Remittance Scheme (LRS)?

  • It was brought out by the RBI in 2004.
  • It allows resident individuals to remit a certain amount of money during a financial year to another country for investment and expenditure.
  • According to the prevailing regulations, resident individuals may remit up to $250,000 per financial year.

Background of LRS:

  • Resident Indians or people resident in India are allowed to transfer foreign currency under the foreign exchange regulations.
    • The transfer of foreign currency outside India is governed by the Foreign Exchange Management Act, 1999 (FEMA).
  • Hence, to regulate transferring of funds within a specified limit, RBI brought the LRS.

Which transactions are allowed under the LRS?

  • Apart from the areas highlighted in the above diagram, the remitted amount can also be invested in shares, debt instruments, and be used to buy immovable properties in overseas market.
  • Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the scheme.

What are the Restrictions under LRS?

  • LRS restricts
    • buying and selling of foreign exchange abroad, or purchase of lottery tickets or sweep stakes, proscribed magazines and so on,
    • or any items that are restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000.
  • Also, one cannot make remittances directly or indirectly to countries identified by the Financial Action Task Force as non-co-operative countries and territories.

Recent Changes in LRS

  • Announcement in Budget 2023-24
    • Budget had proposed hiking the TCS rate to 20 per cent from 5 per cent above Rs 7 lakh threshold for all purposes other than education and medical treatment.
    • Also, for overseas tour packages, the government had proposed hiking the TCS rate to 20 per cent from 5 per cent, without any threshold.
  • Changes made
    • May 2023, the Government amended rules under the FEMA to bring in international credit card spends outside India under the LRS.
    • As a consequence, spending on international credit cards would have then attracted a higher rate of TCS (tax collected at source) at 20% from July 1.
    • However, later, the government clarified that any payments by an individual using their international debit or credit cards up to Rs 7 lakh per financial year will be excluded from the LRS limits and hence, will not attract any TCS.
      • TCS is a direct tax levy, which is collected by the seller of specified goods from the buyer and deposited to the government.
    • TCS can be adjusted against the overall tax liability. It can be claimed as an income tax refund or a person can avail of credit while filing the ITR or calculating the advance taxes.
    • It will not apply on the payments for purchase of foreign goods and services from India.
  • Rationale behind new system
    • Indians are now increasingly using credit and debit cards abroad instead of taking travellers cheques or forex cards.
    • Until now, there is no estimate of money spent through cards abroad.
    • The new system will enable the government to track high-value overseas transactions.

News Summary: Banks readying systems to track spends on outward remittances

Challenges faced by Banks in new regime

  • Banks are facing difficulties in evaluating and collecting TCS exemptions for credit and debit card transactions conducted outside India.
    • RBI has decided to leave it up to the banks to handle the collection of the tax imposed by the government in the FY23-24 budget.
  • Deducting TCS is not a hassle. The hassle is to take into account certain exemptions into the system.
    • The exemption of up to Rs 7 lakh created some confusion.

Outward remittances under LRS

  • There was an outflow of $ 27.14 billion (over Rs 2.22 lakh crore) under the LRS route in FY23.



Mains Article
26 Jun 2023

Does the China-Pakistan Nuclear Deal Flout Global Rules?

Why in News?

  • Recently, China and Pakistan signed an agreement for a 1,200 MW nuclear power plant in Pakistan.

What’s in Today’s Article?

  • About China-Pak Nuclear Deal (Details, Existing Plants, Implications of Deal, etc.)
  • About NSG (Objectives, Members, Why India not a Member?)

About the China-Pakistan Nuclear Deal:

  • On June 20, China and Pakistan signed an agreement for a 1,200 MW nuclear power plant in the Chashma nuclear complex in Pakistan.
    • This is the fifth reactor at the Chashma nuclear complex (C-5).
  • C-5 will be the biggest reactor at Chashma, where China has already constructed four phases of the complex, with four reactors of around 325 MW each.
  • It will use China’s Hualong One reactor, which has also been installed in two plants in Karachi.

How Many Nuclear Power Plants Has China Built for Pakistan?

  • Pakistan is currently operating six China-built nuclear plants, four smaller reactors at the Chashma complex and two at the Karachi Nuclear Power Plant (KANUPP).
  • Pakistan’s oldest reactor, the Canada-built KANUPP-1, is now decommissioned, while KANUPP-2 and KANUPP-3 both use 1,100 MW Chinese Hualong One reactors.
    • KANUPP-3, with a $2.7 billion investment, went fully online in the past year.
  • According to Pakistan’s Ministry of Energy, faced with a continuing energy deficit, financial crisis and rising import bills, the country needs to urgently increase the share of renewables and nuclear energy.
  • Currently, thermal sources account for 61% of the energy mix, while hydropower accounts for 24%, nuclear 12%, and wind and solar only 3%.
    • The Alternative and Renewable Energy Policy rolled out in 2019 envisages increasing the share of renewables to 30% by 2030.

Implications of the Recent China-Pak Nuclear Deal:

  • China’s civilian nuclear projects with Pakistan have come under scrutiny because the Nuclear Suppliers Group (NSG) explicitly prohibits the transfer of nuclear technology by its members to countries that have not signed the nuclear Non-Proliferation Treaty (NPT).
  • China has argued that the Chashma 3 and Chashma 4 reactors were conceived under its earlier Chashma deals with Pakistan that pre-dated its joining of the NSG.

How this deal is different from India-U.S. nuclear deal?

  • India and the U.S. had to seek a waiver from the NSG for their civilian nuclear deal, which was granted in 2008. However, neither Pakistan nor China has got waiver for the current deal.
  • Also, India was granted the waiver after India undertook a number of commitments such as:
    • placing facilities under International Atomic Energy Agency (IAEA) safeguards,
    • separating civilian and military nuclear programmes 
    • a continued moratorium on testing.
  • Pakistan has not given such commitments for this deal.

About Nuclear Suppliers Group (NSG):

  • The Nuclear Suppliers Group (NSG) is a multilateral export control regime and a group of nuclear supplier countries.
  • The group seeks to prevent nuclear proliferation by controlling the export of materials, equipment and technology that can be used to manufacture nuclear weapons.
  • The NSG was founded in response to the Indian nuclear test in May 1974 and first met in November 1975.
  • It is an informal organization, and its guidelines are non-binding. Decisions, including on membership, are made by consensus.
  • Currently, the NSG has 48 participating governments. The NSG chair for 2023 - 2024 is Brazil.

Why is India Not a Member of the NSG?

  • India is a non-signatory to NPT –
    • Non-Proliferation Treaty (NPT) is an international treaty, which came into force in 1970.
    • The main objective of NPT is to prevent the spread of nuclear weapons and weapons technology.
    • All the participants of NSG are the signatory of NPT. India, Pakistan and Israel have not signed NPT.
    • India refused to sign NPT because the NPT defines nuclear weapons states as those that tested devices before 1967.
  • Opposition from China –
    • While a majority of the 48-member group backed India's membership, China along with few other countries have opposed India's admission.
      • Other countries that are opposing India's inclusion in the NSG are Turkey, South Africa, Ireland and New Zealand.
    • Experts believe that China's resistance is to facilitate the entry of Pakistan, a close ally of China, in NSG.
      • China has even argued that if India can be let in without signing NPT, then Pakistan should be granted the membership as well.
      • However, track record of Pakistan is not good. US, in 2018, sanctioned 7 Pakistani nuclear firms for nuclear proliferation.
    • Since, NSG works on the basis of consensus, China's opposition is making it difficult for India to gain entry.
International Relations

Mains Article
26 Jun 2023

Chandrayaan-3: Lander Vikram, rover Pragyan to return for another tryst with the moon

Why in News?

  • The Indian Space Research Organisation (ISRO) plans to retain the names of the Chandrayaan-2 lander (Vikram) and rover (Pragyan) for their Chandrayaan-3 equivalents as well.
  • Following Chandrayaan-2, where a last-minute glitch led to the failure of the lander's (Vikram) soft landing attempt after a successful orbital insertion, another lunar mission (Chandrayaan-3) for demonstrating soft landing was proposed. 

What’s in Today’s Article?

  • The Chandrayaan-3 Mission
  • Chandrayaan-3 Payloads
  • How will the Mission be Implemented?

The Chandrayaan-3 Mission:

  • Chandrayaan-3 ("mooncraft") is a planned 3rd lunar exploration mission by the ISRO to demonstrate end-to-end capability in -
    • Safe landing (through the lander Vikram - after Vikram Sarabhai, the father of the Indian space programme) and
    • Roving (through the rover Pragyan) on the lunar surface.
  • Unlike Chandrayaan-2, it will not have an orbiter and its propulsion module will behave like a communications relay satellite.
  • Chandrayaan-3 interplanetary mission has three major modules: the Propulsion module, Lander module, and Rover.
  • ISRO plans to launch the third moon mission in mid-July aboard the LVM3 (formerly GSLV Mk-III) rocket from Sriharikota.

Chandrayaan-3 Payloads:

  • The propulsion module: It has Spectro-polarimetry of Habitable Planet Earth (SHAPE) payload to study the spectral and polarimetric measurements of Earth from lunar orbit.
  • Lander payloads: It will have 4 payloads -
    • Radio Anatomy of Moon Bound Hypersensitive ionosphere and Atmosphere (RAMBHA) to study the temporal evolution of electron density in the Lunar ionosphere.
    • Chandra’s Surface Thermophysical Experiment (ChaSTE) to measure the thermal conductivity and temperature;
    • Instrument for Lunar Seismic Activity (ILSA) for measuring the seismicity around the landing site;
    • Langmuir Probe (LP) to estimate the plasma density and its variations.
  • Rover payloads: Alpha Particle X-ray Spectrometer (APXS) and Laser Induced Breakdown Spectroscope (LIBS) for deriving the elemental composition in the vicinity of the landing site.

 How will the Mission be Implemented?

  • A propulsion module will carry the lander-rover configuration to a 100-km lunar orbit.
  • Once the ‘Vikram’ lander module makes it safely to the moon, it will deploy ‘Pragyan’.
  • Pragyan will carry out in-situ chemical analysis of the lunar surface during the course of its mobility.
Science & Tech

Mains Article
26 Jun 2023

PM Modi concludes his first State Visit to Egypt

Why in news?

  • PM Modi left for India after concluding his first-ever visit to Egypt where he held talks with President Abdel Fattah El-Sisi.

What’s in today’s article?

  • Why have India and Egypt rekindled their ties with each other?
  • Key highlights of the visit

Why have India and Egypt rekindled their ties with each other?

Imperative for India

  • Push to engage the Global South
    • Indian government is pushing hard to engage the Global South.
  • Rekindling of the principles of non-alignment
    • India also wants to rekindle the principles of non-alignment that have come back to the fore during Russia – Ukraine war.
  • Strategic weight of Egypt
    • With a population of almost 110 million, Egypt is situated at a location that straddles Africa and Asia.
    • It has a standing army that is the largest in the region, a capital that hosts the League of Arab States and a diplomatic presence that punches above its weight in global affairs.
    • India is keen on further expanding its ties with Egypt, a key player in the politics of both the Arab world as well as Africa.
  • Economic importance of Egypt
    • Egypt has boosted its attractiveness through a series of free trade agreements that span Africa (ACFTA; AGADIR; COMESA), Europe (EFTA), Latin America (MERCOSUR) and the Arab world (GAFTA).
    • It is also seen as a major gateway to markets in Africa and Europe.
  • Egypt’s plans to develop the Suez Canal Economic Zone (SCZONE) into a global manufacturing hub
    • The ambitious plans to develop the Suez Canal Economic Zone into a global manufacturing hub are now gathering critical mass.
    • SCZONE sits astride both banks of the Suez Canal, a strategic waterway that connects the Mediterranean with the Red Sea to provide the shortest link between European and Asian markets.
    • China, as usual, has been the first to take advantage of the opportunities presented by SCZONE.
      • China views SCZONE as a vital part of its Belt & Road and Maritime Silk Road projects.
    • A deeper economic engagement with Egypt therefore acquires an additional strategic imperative.
  • Resetting India’s ties with Muslim-majority countries
    • India’s ties with Muslim-majority countries were tested following controversial remarks made by then spokesperson of ruling party in June 2022.
    • That Egypt was one of the few countries from the Arab world which did not react officially to the controversial remarks.
  • Other factors
    • India wants to draw huge amounts of capital from Gulf nations, curtail religious extremism by supporting moderate countries in the region and participate in the security politics of the area.
    • In order to do all this, India has realised that Egypt is a key player.
      • The country has remained fairly moderate over the years.
      • It shares strong ties with the UAE and Saudi Arabia.
      • It is located at a crucial geo-strategic location — 12 per cent of global trade passes through the Suez Canal.

Imperative for Egypt

  • Cairo wants India’s help to tackle its battered economy.
  • The outbreak of the COVID-19 pandemic coupled with the implications of the Russia and Ukraine war has worsened its financial woes.
  • Inflation in the country is at a five-year high of over 30 per cent and it has approached the International Monetary Fund (IMF) for the fourth time in six years for a bailout.

Key highlights of the visit

  • Order of the Nile award to PM Modi
    • Egyptian President Abdel Fattah El-Sisi conferred Modi with ‘Order of the Nile’ award, the country’s highest state honour.
      • This is the 13th such state honour that several countries have conferred upon PM Modi.
    • MoUs/Agreements signed
      • An agreement to elevate the bilateral relationship to a "Strategic Partnership" was signed by the two leaders.
      • Three MoUs in the fields of Agriculture, Archaeology & Antiquities and Competition Law were also signed.
    • PM Modi extended an invitation to the (Egypt) President for the G20 Summit upcoming in September 2023.
    • PM Modi visited the historic 11th-century Al-Hakim Mosque in Cairo
      • Al-Hakim Mosque was restored with the help of India’s Dawoodi Bohra community.
        • The Dawoodi Bohra Muslims are a sect of followers of Islam who adhere to the Fatimi Ismaili Tayyibi school of thought.
        • They are known to have originated from Egypt and later shifted to Yemen, before establishing a presence in India in the 11th century.
        • They renovated the mosque from 1970 onwards and have been maintaining it since then.
      • The historic Mosque has been named after Al-Hakim bi-Amr Allah, the 16th Fatimid caliph and is an important religious and cultural site for the Dawoodi Bohra community.
    • PM visits Heliopolis War Cemetery in Cairo to pay respects to Indian soldiers who laid down their lives during World War I.
International Relations
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