REVENUE SHARING MODEL FOR OIL EXPLORATION IN INDIA

INTRODUCTION:-

 The government has initiated a new approach in the licensing and proceeds-sharing mechanisms with respect to the unutilized natural resources locked away in the 69 small and marginal oilfields lying with the state-owned exploration agencies.

Production Sharing Contract- 

Production sharing contract (PSC) framework allows for cost recovery by exploration and production (E&P) companies before they pay the government its share of revenue. It encouraged investors to take higher exploration risks, and in the event of success, the costs could be recovered.

According to this provision, the government had to audit the various costs incurred by the private companies, which often led to delays, disputes and loss of revenue for government and this promted gov. to  go for new Revenue sharing Model 

NEED

• The recent oil field discoveries could not be monetized for many years due to various reasons such as isolated locations, small size of reserves, high development costs, technological constraints, fiscal regime etc. 
• Around 70% of Indian basins remaining largely under-explored. Even response to the new exploration licensing policy (Nelp) has been tepid.

NEW PROVISIONS

 This policy is based on sharing revenue instead of profits and giving out unified licences for all
hydrocarbons in the field instead of a license for each.

 The move is consistent with the observation of the Comptroller and Auditor General (CAG) that the PSC “does not provide adequate incentives to private contractors to reduce capital expenditure”.

 Under the new regime, the Government will not be concerned with the cost incurred and will receive a share of the gross revenue from the sale of oil, gas etc.

 Another change that the policy brings about is that the license granted to the successful bidder will cover all hydrocarbons found in the field. Earlier, it was limited to one, and a separate license was required if any other hydrocarbon, such as gas, was discovered and exploited.

 The new policy for the marginal fields also allows the successful bidder to sell at the prevailing market price of gas, rather than at an administered price.

BENEFITS

 This is more transparent and market-oriented regime for hydrocarbon exploration and production.

 The revenue-sharing approach is simpler, and is likely to earn the government more money.

 Companies will be allowed to sell crude oil or natural gas at market prices, without any interference from the government. The revenue and royalty-sharing mechanism will be pegged at this market rate. If companies are forced to sell at below-market prices, then the government will still get a royalty share pegged at the market rate.

 If, however, the company manages to sell at higher-than-market prices, then the sharing mechanism will be pegged to this higher price. That’s a win-win for the government: less oversight and an assured minimum income.

INDIA- AUSTRALIA NUCLEAR DEAL

INDIA- AUSTRALIA NUCLEAR DEAL

 India and Australia signed the civil nuclear deal in September 2014, but Australia is unable to supply uranium to India because treaty has not been ratified by Australian parliament.

 Recently the parliamentary committee (Joint Standing committee on Treaties (JSCOT)) has released report about India- Australia nuclear deal.

 The parliamentary committee has “in principle” approved the nuclear deal.

RECOMMENDATIONS OF COMMITTEE

 It recommended that India be encouraged to sign the Nuclear Non Proliferation Treaty (NPT),

 To separate its civilian and military nuclear facilities further, and

 Appoint an “independent national regulator” to oversee the movement of Uranium, also called Australia Obligated Nuclear Material (AONM).

MAJOR ISSUE WITH DEAL

 Under Section 51(2) of the Australian safeguards law, it is mandatory for the government to account for all Australia-Obligated Nuclear Material (AONM), in terms of “location, quantities and intended use,” verified on an annual basis.

 India's position is that all imported nuclear material is subject to safeguards under the guidelines of the International Atomic Energy Agency and further bilateral intrusions are unnecessary.

TRADE

 The bilateral trade between India and Australia, estimated at $15 billion.

 To strengthen bilateral trade and investment, both counties Prime Ministers agreed to conclude a
Comprehensive Economic Cooperation Agreement (CEPA) by the end of the year.

 India –Australia both borders the Indian Ocean and has a shared interest in the maintenance of freedom of navigation and trade.

INDIA’S ‘LOOK WEST’ POLICY

ABOUT:-

India adopted look west policy in 2005. However, the policy did not get much attention since 2005. Prime Minister Narendra Modi’s visit to the United Arab Emirates (UAE) has the potential to transform our engagement with West Asia.
The foundation for PM successful outreach to West Asia was in fact laid by his predecessor when India invited the King of Saudi Arabia to be the chief guest at the Republic Day Parade, in 2006. This was followed by Prime Minister Manmohan Singh’s visit to Riyadh and the India-Saudi defence cooperation agreement signed in 2014.

TRANSFORMATIONAL VISIT

 The Joint Statement between the United Arab Emirates and India is an important articulation of a significant shift in the Arab world’s view of India.

 It talks of historic ties of “commerce, culture and kinship”, drawing attention to the unique history of Arab interaction with Indian communities of the west coast, from Gujarat to Kerala.

 The joint statement, outlining closer government-to-government (G2G) relations, draws attention to the vibrant business-to-business (B2B) and people-to-people (P2P) relationships and commits the UAE to a sharp increase in its investment in India.

GULF COOPERATION COUNCIL (GCC) LOOKS WEST

The new strategic partnership outlined by the UAE and India is not just defined by India’s “Look West” policy but that it is equally defined by the GCC’s “Look East” policy.

Several factors have contributed to this fundamental shift in West Asian strategic thinking.

 First, the structural change in the global energy market with West Asian oil and gas increasingly heading to South and East Asian markets rather than to the Trans-Atlantic markets.

 Second, partly as a consequence of this change in flows and partly owing to the fiscal stress faced by the trans-Atlantic economies, West Asia is looking to India and other Asian powers to step in and offer security guarantees to the region. Many GCC states have welcomed defence cooperation agreements with India.

 Third, in the wake of the Arab Spring and the mess in Egypt and Iraq, the Gulf states find India and China to be more reliable interlocutors than many western states.

 Fourth, under pressure from radical and extremist political forces within West Asia, most states in the region have come to value the Indian principle of seeking and securing regional stability as an over-riding principle of regional security.

CONCLUSION

 “Look East” Policy succeeded because South-East Asia began to “look West” to India, seeking a balancer to China.

 “Look West” Policy will succeed because West Asia is “looking East” worried about the emerging strategic instability in its own neighbourhood and the structural shift in the global energy market.

 India-West Asia relations is the assertion of not just a “shared” past but of shared challenges in the present and a shared future.

NEPAL's FIRST DEMOCRATIC CONSTITUTION

NEPAL ADOPTS FIRST DEMOCRATIC CONSTITUTION

Nepal adopted its first democratic Constitution, a historic step for a nation that has seen war, a palace massacre and devastating earthquakes since a campaign to create a modern state began more than 65 years ago.

IMPORTANT FEATURES OF CONSTITUTION

 The constitution defines Nepal as a secular country, despite widespread protests for it to be declared a Hindu state.

 Federal system: It creates seven states in a secular, federal system.

 Nepal’s constitution divided the country into seven provinces.
o Kathmandu, the capital district, lies in province No. 2 and except this all other provinces have three
geographical divisions:--mountain region, hilly region and southern plains.

 “Entitlement approach” to rights” :---Nepal’s new constitution has been based on the “entitlement approach” to rights.
o It guarantees fundamental rights as well as the right to food, right to education and right to protection from environmental degradation. In a move loaded with meaning, the constitution gives right of protection from human trafficking.

 The needs of marginalized communities, including the Dalits, the disabled and those from the LGBT community, are addressed.

 Confirming social and economic rights as fundamental

 Rejecting the death penalty

 Amendments can be adopted with relative ease over the next two years and four months, as the
Constituent Assembly enjoys a kind of afterlife as a Parliament.

DISCONTENT OVER THE NEW CONSTITUTION:

 The promulgation happened even as violent protests raged in the Terai against “injustice” meted out to the Madhesis.

 The protestors were upset that the federal restructuring of Nepal into seven provinces left the Madhesis divided among five provinces, with only one of them having a majority of plains-origin people.

 Delineation of electoral constituencies in the Terai (where more than 50 per cent of Nepal’s people live) which has not been done on the basis of the population in the plains; this creates a grievance about gerrymandering.

 Other complaints relate to citizenship norms that disallow children of Nepali mothers married to foreigners from inheriting Nepali citizenship.

INDIA GOVERNMENT RESPONSE

According to the government, there are three major problems with the Constitution which prevents India from warmly welcoming the document.

 The federal-provincial demarcation is perceived to be unfair to the people of the Terai region;

 Secondly, the constituency delimitation is skewed against the Madhes population as half the population, that is the Pahadi (Hill) community gets 100 seats but the other half consisting of the Madhesi and the Janjatis get only 65 seats.

 Finally the ‘proportional inclusion’ clause, for reservation includes many forward castes of the Pahadi region, which negates the principle of affirmative action.

 India also feels let down that many of the commitments given by Nepal during the framing of the 2007 interim Constitution have been forgotten.

SRI LANKAN WAR CRIMES

A U.N. report has identified patterns of grave violations in Sri Lanka between 2002 and 2011, strongly indicating that war crimes and crimes against humanity were most likely committed by both sides to the conflict.

KEY FINDINGS

 The U.N. report accuses government forces and LTTE of sub-human atrocities during war.

 Unlawful killings: Sri Lankan forces targeted Tamil politicians, aid workers, journalists while LTTE eliminated Muslims and Sinhalese.

 Deprivation of Liberty: forces used arbitrary arrest, enforced disappearances and extrajudicial killings as a norm

 Gender violence: Lankan forces used rape and sexual violence against men and women as a instrument of torture.

 It concludes that many of the instances established may amount to war crimes or crimes against humanity.

 It also records the killing of civilians by the Liberation Tigers of Tamil Eelam, its forced recruitment of adults and children, and preventing civilians from leaving the conflict zone.

RECOMMENDATIONS

The report recommends the establishment of a hybrid special court, integrating international judges, prosecutors, lawyers and investigators, as an essential step towards justice.

SRI LANKAN GOVERNMENT RESPONSE:

Sri Lankan government have committed to form domestic judicial mechanism to probe alleged war crimes .

UNHRC RESOLUTION

• The United Nations Human Rights Council adopted a resolution on alleged human rights violations during the Eelam War in Sri Lanka
• The resolution envisages the establishment of a Sri Lankan judicial mechanism to investigate allegations of violations and abuses of human rights and violations of international humanitarian law.
• The proposed mechanism will include Commonwealth and other foreign judges, defence lawyers and authorised prosecutors and investigators.
• Sri Lanka has co-sponsored the resolution.
• The Tamil National Alliance (TNA) described the suggestion of involving the foreign and Commonwealth jurists as a “significant victory for justice”.

EUROPE’S REFUGEE CRISIS

About Crisis:-

According to the International Organization for Migration (IOM), more than 3,50,000 migrants and
refugees have tried to cross the Mediterranean sea into
Europe.

The U.N. says 2,500 people have died on the seas so far this year.

Most of them are from West Asia, particularly from the war-ravaged countries of Syria, Iraq and Libya; many are also from the disturbed areas of Africa.
A substantial number of refugees are also from Afghanistan and Pakistan

THE ROLE OF THE EURO-ATLANTIC POWERS TO DESTABILIZE WEST ASIA

West Asia in the past was not like this; despite illusive democracy, there was political stability and economic activities flowed quite smoothly. West Asia was and is geo-economically extremely relevant for the U.S. and its allies due to having an abundance of energy resources.

It was in pursuance of narrow political objectives that Western powers entered West Asian territories and destabilized them.

 Iraq: Iraq is in ruins, even though it does not possess any weapons of mass destruction.

 Libya: Libya was bombed by NATO in 2011 after getting sanctions through the United Nations Security Council Resolution, 1973, and is currently a battleground for different ethnic groups fighting to capture political power.

 Syria: There is enough evidence to prove that on the pretext of supporting pro-democratic forces in Syria,western powers ended up helping the radical groups, providing necessary fodder for the birth of the deadly Islamic State.

 Yemen: western power supporting the Saudi Arabia led coalition forces that are bombing and destroying Yemen.

 Afghanistan: Afghanistan, also one of the known battlefields of the Cold War, was deserted by the West after the disintegration of the Soviet Union. But it was revisited post-9/11 by the Euro-Atlantic powers to destroy Al-Qaeda’s terror network. Yet, even after the death of Osama bin Laden, political instability continues in Afghanistan.

 Afghanistan is caught in an unending civil conflict and Pakistan’s socio-economic condition is continuously deteriorating.

WHY MIGRATION

 Endless conflict has ruined the social, political and economical structures of some countries in West Asia, making it impossible for people to have a secure livelihood. This is what makes people flee their own countries to other parts of the world, in search of peace, employment and stability.
 Freedom from conflict is important reason for large scale migration.

WHY EUROPE

 Europe is the closest wealthy, safe and accessible region from the Mideast and Africa.

 Also, some European countries are known for welcoming asylum seekers and providing benefits to help them get started in their new homes.

 Europe is the most preferred destination for the people from these fragile regions as it is economically prosperous, socially secure and has better immigration laws.

 Europe is experiencing one of the most significant influxes of migrants and refugees in its history.

HOW IS EUROPE RESPONDING

 Faced with a situation of a heavy influx of refugees, Europe is unwilling to welcome people into its territory.
 European countries disagree about how to handle the crisis. Southern countries like Greece and Italy want other countries to take them in. European Union rules say migrants should be settled where they first land, but now enforcement of those rules is becoming impossible.

 The European Union has unveiled a refugee quota plan to address the crisis, but is already facing opposition from eastern members

Way Ahead :- 

 Their irresponsible acts for achieving narrow political objectives have destabilised West Asia, and now European countries cannot turn their backs to the problems of the refugees.
 In this regard, it is also crucial for the EU to involve the U.S. Similarly, the stable countries of West Asia should be contacted to provide some respite to these refugees.
 If the goal is to stop the migration, that would require ending the conflicts in Syria, Iraq and elsewhere

Top ten inventions of India

As a science student, my definition of science is completely different from that we have read in text books. Science, I believe, is a ‘Thick wall’ which separates human beings from animals. All characters of humans were once as similar as those of animals. Later we enhance the understanding of science and began to dominate the world. Firstly we discovered how to start a fire by friction and then the match box, now lighter. Today we have understood the science of nuclear energy so deeply that we can even turn a big city to ashes in a matter of minutes. We are now in the twenty first century which also refers to ‘the age of science’. Scientists from all across the world have contributed their part to mankind. India’s contributions to the field of Science and Technology are indeed significant in many ways. In this article I will show you the top ten inventions of India-


1. THE ATOM ::

The discovery of atom falls at number 1 on the list owing to the importance of an atom to the world. The discovery is attributed to J.J. Thompson for he discovered the modern theory of the atom in 1987. Nevertheless, the origin of the discovery goes back to 600BC when Maharshi Kanad, an Indian scientist and philosopher, wrote ‘Vaisheshik Darshan’ which is considered to be an important scientific contribution. In this book, Maharshi Kanad explained the atomic concept of matter. He said that all things are made of Molecules, which has no independent existence and human senses are unable to detect them. Maharshi named these molecules as “Mool Kananam”. 


2. THE RADIO WAVES ::

Indian scientist Jagdish Chandra Bose invented a technique to transmit radio waves to a distant place even before Herts. But his remarkable achievement is considered that he reduced the size of the waves to Millimetre level, called microwaves. In 1994, Bose publically ignited a lamp and rang a bell from a distant place using micro waves. Bose later wrote an essay ‘Adrisya Alok’ (invisible light) in Bengali, he said, “the waves can easily pass through brick wall, building etc. Therefore human beings will be able to pass on messages through this medium from a long distance even if there are some hurdles in the way”. In 1899 Bose went to London to deliver lectures at a university and met Italian scientist Marconi who had been working on wireless telegraphy. Bose expressed his disinterest in commercial telegraphy in an interview later the same year. 


3. THE ZERO ::

The invention of Zero comes in at No.3 because of the magical values thereof. It has never been clear who actually invented Zero but it has been very much clear that the inventor was an Indian. Brahmagupta, however, is supposed to have given the concept of zero. But the concept also existed in the Vedas in 1500 BC. So far as the importance of zero in our daily life is concerned, it is beyond our imagination. No big calculations would have been possible if there were no Zero. Just imagine what would be the impact on you if a zero is removed from or added to your salary? Furthermore, no computer would work if there were no invention of zero. It must be noted that all computers and mobiles work on binary system i.e. 0 and 1. In other words, the computer understands neither Hindi nor English; it understands only 0 and 1 which is called binary states in computer science. 


4. THE BOSON PARTICLE ::

Boson is named after Indian scientist Satyendra Nath Bose who came up with the theory and predicted the existence of this particle. Bose predicted that there must be particle which is responsible for all mass in the universe. It hardly needs any introduction as it has become the most expensive particle in the human history. The research is still going on in world’s largest laboratory by the name of CERN. 


5. RAMAN EFFECT ::

Sir Chandra Shekhar Venkat Raman carried out extensive studies on scattering of light and finally published his research work ‘Raman Effect’ on February 28, 1928. His study brought about revolutions in the arena of science. For the first time, a scientist explained that light is made of small particles called photons. With the help of Raman Effect, the structure of a photon could be investigated easily. Sir Raman was awarded the Nobel Prize in the year of 1930 for the same work. 


6. THE ALGEBRA ::

Indian contributions to Algebra are comparatively big. At the age of 23, a famous scientist, Aryabhatta, wrote the book ‘Arya Bhatteeyam’ in 499 AD. In this book, he explained square, cube, cube root, side of angle etc. The book was divided into four parts: Gitikpad, Ganitpad, Kal Kriya Pad and Gol Pad. 


7. THE TRIGONOMETRY ::

Aryabhatta did not only make his contributions to the Algebra but also to Trigonometry. In fact, he is known as the originator of the Trigonometry. He was the first in the world to express physical qualities by alphabetic letters. He gave the value of Pie (..) which is surprisingly close to the modern value. The value of Aryabhatta’s pie was 3.141 and the modern value of pie is 3.142.


8. THE SHAPE OF EARTH ::

Aryabhatta’s understanding of the astronomy was so deep that it can not be depicted. He snubbed the prevent belief that the earth was flat and stationary. Examining the movements of stars and planets with his naked eyes as there was no telescope, he propounded that the earth is round in shape and rotates on its axis in his book ‘Gol Pad’. This principle was rejected by the intellectuals of India as well as the world. 


9. THE NUMERICAL ANALYSIS ::

Brahmgupta, the renowned Astronomer and Mathematician of Ujjain, wrote many books in regard to the mentioned fields. He is also known as the originator of Numerical Analysis. He calculated many formulas in the fields of Differential and Integration Equation. In Chapter 17 of Dhyan Grah Upadesh, he dedicated many slokas explaining how to solve differential equations. The impact Brahmagupta made in mathematics is known to the whole world. The book “The Birth of Mathematics” written by noted mathematician Michael John Bradley communicates what role Brahmagupta played in this field. Michael dedicated a whole chapter to Brahagupta. (note: chapter No.7 of the book is Brahmhagupta: Father of Numerical Analysis.)


10. THE CRESCOGRAPH AND COHERER ::

A crescograph is an electronic device used for measuring growth of plants. It was invented by Bengali scientist Jagdish Chndra Bose. The device could even measure as small part of a tree as 1/10,00,000 inch. Later bose invented another device to detect and receive radio waves. This equipment came to be known as Coherer. Above all, Bose was the first scientist in the world who used semiconductor junctions to detect/receive microwaves. 

I have to take a pause since the title is ‘Top Ten inventions of India’. Indian scientists have made all of us feel proud. The Indians are seen as hard working people throughout the world. As a result, Indians are dominating many international firms and companies by virtue of their dedicated toil, talent and honesty. We have always cast a look of kindness towards not only mankind but also animals. Science can be used for the construction of the world as well as the deconstruction. It is just like a lighter which can be used to light a candle and it also has potential to burn down a building. It is all up to how we use it. 

Why Western Ghats in Karnataka receive more monsoon rainfall

The Western Ghats run parallel to the Arabian Sea coast for approximately 1,600 km from the Maharashtra-Gujarat border to the southern tip of Kerala.

There are several reasons for this.

First:-

 the mountain topography in Karnataka is broader than the narrow topography of the Ghats in Maharashtra. Due to the greater width of the mountains, the rain bearing winds have to necessarily travel a longer distance and have more time for the drops to coalesce and precipitate as rainfall, resulting in higher rainfall. In contrast, the narrow width of the Ghats in Maharashtra allows the rain-bearing wind to cross over to the leeward side rapidly before precipitation can occur. As for Kerala, the Ghats there are in the form of isolated mountains, where the rain-bearing winds can easily cross over to the leeward side through the gaps in between without precipitation occurring.

Second:-

 the slope of the mountain has a direct bearing on the possibility of precipitation. This is borne out by the Ghats of Karnataka where the mountains are gently sloping, compared to the steep slopes of the Ghats in Maharashtra and Kerala.

The air parcel will retain its energy and speed for a longer time when the slope is gradual. This will provide sufficient vertical motion to cloud droplets to grow by collision–coalescence process and hence form precipitation.

Third:-

the gentle slope provides a greater area for sunlight absorption and heating leading to greater convection when compared with an abrupt slope i.e. less Ghat area such as that of the Maharashtra and Kerala Ghats.

Fourth:-

the continuous mountain range presents a greater barrier to rain-bearing winds than a range comprising isolated mountains with gaps in between where the winds can easily pass to the leeward side. Unlike in the case of Kerala, the Ghats in Maharashtra and Karnataka are continuous.

Railway Reforms

Gist of Reforms done by Suresh Prabhu :- 

1. e- Procurement

2.E- recruitement

3 . Early completion of projects 

4. Contract execution at lower levels and policy making at higher levels in rail bhawan

5.Social media presence and online grievances  redressal mechanism  and check by top officials 

6. Proper transfer policy for railway employees 

7. Babus have been asked to bring down the operating ratio to 88.5, which was about 91% for the past many years. This is likely to increase profit. 

Corrupt bureaucrats are opposing the reform measures initiated by Railway Minister Suresh Prabhu in the Indian Railways. These measures, aimed at bringing transparency and weeding out corruption, have not gone down well with a section of the bureaucracy, which wants to scuttle them at any cost, say sources.

Babus in New Delhi’s Rail Bhawan are worried with Prabhu’s decision to empower the execution of contracts at the lower level, which so far was being done from the Rail Bhawan. “The minister is of the view that the Railway Board can make the policy of financing here, but its execution should be done at the local level completely,” said a source in the ministry.

“The new style of functioning within the ministry has made the bureaucrats nervous as it has shaken up the status quo. These officers had created a comfort zone for themselves and the changes are making them uncomfortable,” the source added.

Another decision which has rattled the officers is the online recruitment of staffers. Sources said that recruitments were a major source of corruption earlier, but the introduction of the new system has hobbled the corrupt officers completely. Online recruitments started first in August for filling up vacancies of section engineers. As many as 18 lakh applications were received for about 5,000 posts and the final results are likely to be declared next month.

Earlier, the lack of a proper transfer policy of Railway employees led to large-scale corruption, with money exchanging hands for getting special postings. However, Prabhu has decided to introduce a new transfer policy, according to which, fixed periods of postings have been implemented for employees. This is not being liked by those who were posted at a place of their choice for years. 

The Rail Bhawan was a favourite haunt for touts and other such elements, but Prabhu has instructed the installation of CCTV cameras all over the building to check their movements.

Some officers are also upset with the minister’s directive that all general managers (GMs) and divisional railway managers (DRMs) should attend to complaints lodged by passengers on social media, since Indian Railways is a service-oriented organisation. Many officers, who were happy with their job earlier, find themselves “burdened” with this “additional responsibility”.

The ministry has also started the new system of e-procurement, wherein all purchases are being made through online tenders. Tenders worth Rs 100,000 crore are awarded every year. Earlier, it was easy to manipulate the process. However, the new system, which will be fully operational by 31 December, will put a check on this manipulation, sources said. Similarly, the auction of scrap, amounting to around Rs 3,000 crore per year, has gone online, making these corrupt officers uncomfortable. The minister, in order to improve the cash-strapped Railways, has increased the freight loading target by 8%, which was 4% on an average for the past few years. Babus have been asked to bring down the operating ratio to 88.5, which was about 91% for the past many years. This is likely to increase profit.

The corrupt bureaucrats are also unhappy with the minister as he has asked them to pull up their socks to complete pending projects. For example, progress in the Dedicated Freight Corridor project was quite dismal. Contracts worth Rs 10,000 crore were awarded between 2007 and 2014. However, ever since Prabhu has taken charge last year, contracts worth Rs 17,000 crore have already been awarded. By March 2016, contracts worth another Rs 17,000 crore are likely to be awarded. Thus, in just one year, contracts worth Rs 34,000 crore will be awarded to speed up this ambitious project, which will give a major boost to the Indian economy. Prabhu has said in clear terms that the project must be completed by December 2018 for which day-to-day monitoring is being done.

Pulse Price Rise Crisis

Rani Devi, 47, is drying chickpea (chanaa daal) in Kuite Khera village of Uttar Pradesh. She intends to use them as seeds in the coming rabi season (October to December), as she is facing acute shortage of seeds. “I had kept these for consumption but will now use them as seeds,” says Rani. “We neither get quality seeds from the government nor from the market and these seeds are our last hope,” she adds. Rani is not alone. Thousands of farmers across India are facing crop loss and seed deficit even as prices hit the roof. India is the world’s largest pulse producing, consuming and importing country.

Far away, in the African country of Malawi, pulse growers rejoice over a windfall gain they are set to make. To overcome the shortfall in pulse production this year, the Indian government has decided to import 5,000 tonnes of pigeon pea (arhar daal) from Malawi.

These developments raise many questions over the farming of pulses in India, which has emerged as the most politically sensitive crop in recent times. And not without reasons.

Around the time the National Democratic Alliance (NDA) government was celebrating near zero food inflation in its first year in power, consumers across the country felt the pinch of food inflation again. Within a span of one month (May) it rose from 4.8 per cent to 5.48 per cent. In fact, retail prices of pulses have risen by up to 64 per cent in the last one year across the country.

The major driver of food inflation was the hike in prices of pulses, which was caused by the crop loss due to untimely rains. India’s pulses production fell from 19.25 million tonnes in 2013-14 to 17.3 million tonnes in 2014-15, while imports rose from 3.18 million tonnes in 2013-14 to 4.58 million tonnes in 2014-15.

From the prime minister, the finance minister to the agriculture minister, everybody in the government has started talking about pulses. In an interaction with the media in June, Union Agriculture Minister Radha Mohan Singh said that the rise in the price of pulses was a burning issue. To evolve a strategy to check this price rise, the Union government convened a meeting of food ministers of all states in the first week of July. Even Prime Minister Narendra Modi made a statement to farmers: “Grow pulses in one-fifth of your land to overcome the shortage. I want to see India self-sufficient in the pulses sector by 2022.”

But will farmers like Rani Devi heed to Modi’s call? There is a huge gap in demand and supply and the market prices are lucrative. As per estimates made by the Union Ministry of Agriculture, the country requires to produce 28 million tonnes of pulses by 2021 to become self-sufficient. “India needs to grow pulses on an additional 6-7 million hectares (ha) to meet its targets,” says Raghvan Sampatkumar, a Singapore-based pulse trade expert. To meet this target there is a need to improve the yield to 1,100 kg/ha from the current 760 kg/ha. But farmers say they are not prepared to start farming pulses just yet. The reasons are many and they highlight the sorry state of pulse farming in India.

Southward shift

India has not been able see a net increase in land under pulses cultivation since the 1960s. Though land under pulses cultivation has seen an increase in southern and central India, the gains made have been neutralised by the loss in cultivated area in the Indo-Gangetic belt (see ‘Shifting cultivation’). As a result pulse production did not see a major boost for a large part of the past 60 years. Between 1970 and 2008, the production of pulses stagnated at 12-14 million tonnes. The per capita availability of pulses reduced from 61 g to 37 g in the past 60 years.







The scenario has improved a little in the past few years. The production of pulses has risen from 14.5 million tonnes in 2008-09 to 19.25 in 2013-14, primarily due to the government’s efforts to strengthen seed production and distribution, and the continuous increase of minimum support price. But this spurt in pulse production is not enough to meet the demand as the import of pulses has also seen a rise. In 2014-15, India imported 4.58 million tonnes of pulses, against 3.18 million tonnes imported in 2013-14. The reason behind the decline in pulses production in the northern states is improved irrigation facilities, which allowed these states to grow water-intensive crops, such as rice and wheat. These crops also give assured returns because they are procured by the government. Southern states, which were mostly rain-fed and where irrigation facilities are not good, started growing pulses. Development of heat-tolerant varieties, such as JG11 (a chickpea variety), also helped.

“JG-11 had changed the landscape of pulses production in south India,” says A Arvind Reddy, principal scientist, Indian Agricultural Research Institute (IARI). Another reason behind this shift from north to south was a pest. “The attack of pod borer pest is frequent in the Indo-Gangetic plain and causes major losses. Scientists are still trying to find a way to deal with it,” says C Bharadwaj, scientist at IARI’s Pulse Research Centre.

Course correction

Increasing production of pulses in the country can happen either by increasing land under pulses cultivation or by using better quality seeds. But there are major structural issues and demand-supply gaps (see ‘Seed deficit’). The problem begins with the assessment of seeds required by the states. This is done at the panchayat level by an agriculture officer. But their assessments are mostly a rehash of the assessments done in previous years. So on the basis of these incorrect assessments, the states place their orders with the National Seeds Corporation of India (NSCI). When farmers are supplied with seed varieties they don’t wish to grow, they resort to sowing seeds they had saved from previous year’s yield.

Studies say that new seeds should be sown every three years or the yield goes down. This seed replacement ratio (SRR) in the country is currently more than five years. “These assessments are made three years in advance. For instance, the assessment for 2019 will be made in 2016. States need to stick to their plans to get a good produce,” says S S Singh, head of Crop Improvement Division at the Indian Institute of Pulses Research (IIPR).

There is another major reason—centralised seed production. States in India had their own seed farms catering to regional demands. But these were making losses and were merged with NSCI in 2013, which now supplies seeds to all the states in the country.

Experts say that though seed production has increased threefold in the past eight years, there still is a shortage of 50,000 tonnes of seeds. Sanjeev Gupta, director, National Project on Pulses Seeds, IIPR, says that only a decentralised model of seed production is suited for a country as large and climatically diverse as India.

But all hope is not lost. India can substantially increase its area under pulses and across the country. Experts say that between the rabi and kharif seasons there is a window of opportunity (October-December) to cultivate short-duration pulses. “India has 6.7 million ha of rice fallow land (land that has been left uncultivated after the rabi crop of rice) which can be used to grow pulses. This is already being done in West Bengal, where chickpea and lentils are being grown. We need more short-duration varieties,” says Bharadwaj.

To replicate such cropping patterns, the government needs to make production of pulses lucrative. Unlike rice and wheat, the government does not procure pulses, leaving farmers dependent on the vagaries of the market. “If the government decides to start procuring pulses, it would give a big boost to production. It should be made a part of the public distribution system (PDS),” says A Narayanmurthy, professor, Alagappa University, Tamil Nadu. However, Ramesh Chand, director, National Institute of Agricultural Economics and Policy Research, says that every problem cannot be solved through public procurement. “The government should think of encouraging private players and contract farming, and provide competitive markets for pulses like it does for milk.”

S N Pandey, former scientist who works with Delhi-based non-profit Development Alternatives, says that the market supply chain of pulses is quite long and unorganised—farmer to small traders, commission agents, wholesale dealers and retailers before reaching consumers. “In this process, the profit margin of farmers shrinks. This needs to be looked into,” he adds.

Apart from a long supply chain, Reddy raises another important issue. He says that in the past three years, the government has been ordering import of pulses in the months of July and August. The delivery takes around three-four months. When the imports arrive in November-December, the market is already flooded with pulses produced domestically. This brings down the prices and the farmers suffer. If we face crop losses in March-April, like it happened this year, the import order should be placed immediately after the loss. “If the government does not devise a proper strategy, farmers will shift to other crops. This is already happening in Andhra Pradesh, where farmers growing chickpea have shifted to cotton farming,” says Reddy.

Gold monetisation scheme will guide savings towards more productive investments

India’s ‘gold infatuation’ is well-known, with noteworthy statistics on the quantum of gold consumption. According to the World Gold Council, India holds upwards of 22,000 tonnes of physical gold. In terms of value, this amounts to over 200 per cent of India’s FX reserves and nearly 37 per cent of GDP at prevailing market prices.

Curbing of demand through administrative measures could be challenging as any excessive change in policy could indirectly foster illegal activity in gold.

Demand for gold, a dollarised commodity asset, creates current account vulnerabilities a la the 2013 rupee episode.

New schemes

With this background, the Cabinet plans to monetise gold stocks through three different schemes — Gold Monetisation Scheme (GMS) that will replace the existing Gold Deposit and Gold Metal Loan schemes; Sovereign Gold Bond (SGB) that will act as a financial substitute to physical demand for gold; and Indian Gold Coin (IGC) to reduce import demand for coins minted outside India.

The SGB and the IGC are relatively easier to implement. However, the GMS, which has superior impact potential, will require institutional participation.

The draft proposal will require high-level consultation with all key stakeholders to fine-tune certain aspects. One, the current set of 350 BIS certified hallmarking centres in the country suffer from geographical skewness with 71 per cent of the centres located in western and southern states and no hallmarking centre in six states and UTs (except Puducherry). For the scheme to be successful, government authorised or BIS certified hallmarking centres need to be present in other geographically important centres to make it convenient for depositors.

Two, while full disclosure of gold ownership can be a disincentive for many households, lack of any disclosure can abet the black economy. Hence, the government could keep a suitable slab-based disclosure.

Three, dematerialisation of gold holding with banks would enable them to extend internet and mobile banking platforms along with cheque facility.

Banks can also offer the auto roll-over feature with one-year intervals to help reduce transaction costs. They can also improve customer engagement through marketing techniques such as introducing gold-dispensing ATMs (in the form of IGCs with Ashok Chakra).

Additionally, the RBI gives exemption from reserve requirement to special schemes for export credit refinancing, and NRI deposits. The apex bank could consider giving similar exemption to gold deposits, too. This will reduce costs for banks in the range of 50-100 bps. Initiatives such as offering set-offs/exemptions on VAT/stamp duty/octroi for monetised gold, granting regulatory permission for gold coin sales, trading on commodity exchange and assuring a stable import duty regime on gold can be considered.

Many positives

Further, since the GSA will incrementally enhance the banking system’s ability to lend, it will have an impact on bank credit, money multiplier, and overall money supply in the economy. The interplay between money multiplier and money supply will have to be carefully monitored as it can potentially have some bearing on the monetary policy stance.

The price of gold has considerably softened in the last three years from $1,700-1,800/ oz to around $1,100/ oz levels currently. The current benign price environment offers an excellent opportunity for India to ease restrictions on gold import and implement sound structural policy steps to effectively monetise gold holdings. The consumer will benefit from market expansion as financial substitutes for physical gold would be made available with simplified access.

At a macro level, it will unlock savings in unproductive physical assets and thereby help channelize financial savings towards more productive investments. It will also develop expertise in local hallmarking which would drive demand for ‘Made in India’ gold, both locally and internationally. According to the World Gold Council, a credible hallmarking system could potentially generate 2.5 million jobs by 2020 across the entire gold industry value chain.

Higher MSPs not a durable way to raise farm output

What are the key challenges faced by Indian agriculture at present?

Agriculture in India is now facing some new sets of challenges. These have come up because of erratic weather pattern witnessed in the last few years. We have never had three successive seasons of either deficit or unseasonal rains (witnessed in March, 2015). It happened for the first time in the recorded history of agriculture. We witnessed excessive rains in the northern regions in March this year causing huge losses. We had two successive drought years or monsoon rainfall was deficient (2014 and 2015). The wheat output went down by more than six million tonne this year from previous year.

These challenges you cannot address by giving higher price or Minimum Support Price (MSP) to farmers. You can give price as an instrument to give relief to farmers, but you cannot use price to address the deficiency in output.
Given the current situation, we need to use both price as well as non-price factor to impart momentum to the sector.

Could you explain these factors?

The price factor is, of course, the higher MSP or other incentives to farmers. The non-price factors include dealing with this aberration in monsoon or rainfall pattern due to climate change, sudden outbreak of insects and pests (white fly has done so much damage to cotton crops in Punjab recently). These are issues which cannot be addressed through prices. Through price support, you can give compensation to farmers, but you cannot raise output. When we talk of more MSP, it helps in harnessing potential, but it does not create potential.

Potential has to be created through technology, infrastructure, irrigation, modern inputs and seeds.  We will be working on four to five aspects as far as the price factor is concerned. We have to come up with some sort of risk mitigation and adaptation measures like crop insurance. Earlier, we used to go for only insurance of production or output, but now a pilot project is being tried in Madhya Pradesh for income insurance of farmers. You talk of income insurance, both price and production come into the picture. We should have price insurance with production insurance. After evaluating the result of the pilot project, we may scale it up.

Technology is an important non-price factor to boost production. Infrastructure which includes irrigation, requires a lot of investment in land and soil health and there is the need to increase efficiency in fertiliser use.

What about the subsidy required for crop insurance?

Huge subsidy for crop insurance is given across the world. The US provides subsidy of more than 60% while China gives 80% subsidy. The nature of agriculture insurance is such unless it is heavily subsidised, neither farmers nor private companies will show interest. There are issues about compensating farmers for crop losses when damages are not uniform across the country. There are serious problems of errors of inclusion and exclusion of farmers.

What about the method of assessing crop damage for settling insurance claim?

For crop-cutting exercise, increasingly space technology is being used to assess crop losses. Some of the parameters will be different for crop insurance depending on geography. In a meeting with  the finance ministry officials recently, we suggested that rather than using crop insurance mechanism to cover risk of the farmer, we should give compensation to the entire farmer community impacted by crop damage. In the crop insurance model, you collect premium from all, then you pay insurance claims to a few.

Supercritical technology: An issue of ‘ultra-supercritical’

Importance of Supercritical :-

 The concept of supercritical technology was introduced as a national plan in the Integrated Energy Policy report of 2006 issued by the Planning Commission.

 Ultra-supercritical technology is the new paradigm that the Indian power sector is aiming to touch.

What is this new generation technology? 

 Since coal is here to stay for a while, the ultra-super critical technology will help green the process while making it more efficient. 

 It noted that the average fuel conversion efficiency of Indian power plants is just about 30.5 per cent, though the new 500 MW plants have efficiency of 36 per cent.

 State-of-the-art supercritical boilers can reach an efficiency level of 46 per cent depending on plant location.

 Under Indian conditions an efficiency level of 38-40 per cent should be attainable.

This alone can reduce coal requirement by 111 million tonnes. 

How is Super Critical Technology Eco Friendly? 

 Ultra-supercritical technology uses steam with very high temperatures, up to 620°C, and pressure, up to 300 bar, resulting in a much higher efficiency than conventional coal fired plants.

A unit burns much less coal, thereby generating less emission per megawatt of power output.

 Power generation companies are likely to make this technological switch to drive up output and plant load factor, curb variable costs and cut down discharge of pollutants in the atmosphere.

 Efficiency savings will not only reduce operating costs and make better use of fossil fuels; they will reduce the overall liability for emissions.

 Will this provide a needed service to India? 

 This will provide a much-needed service to India, especially for farms and businesses.

 Due to an energy deficit of nearly 160 gigawatts, 400 million Indians do not have regular access to electricity.

 To India's economic planners, thermal power is the only viable option to fulfill India's energy demand.

 What is within our capability is to minimize the carbon footprint of coal-fired plants. This is where the more fuel-efficient ultra-supercritical technology can contribute.

Challenges :-

Way forward :-

  The union government had been taking a number of initiatives to promote the use of super critical technology.

 The government had taken initiative to make easy the manufacturing of component used in the super critical units.

 It is said that in the 13th five-year-plan, only super critical technology-based power plants would be set up in India. 

Bodoland :internal security Issue

Historical Origin

• Rich landlords and Immigrants were acquiring tribal lands
• Little economic aid by central government to Bodos
• Education and Infra was inadequate
• apathy shown by State Govt of Assam

Events in the Past

PTCA

In early 1960s the Plains Tribals Council of Assam (PTCA), a political party representing Bodos
and other plains tribals of Assam demanded a Union Territory called Udayachal, to be carved
out of Assam (it never happened)

 ABSU
In the late 1980s, All Bodo Students' Union's (ABSU) and Bodo political parties jointly demanded a separate state, called Bodoland.

 BLTF
Bodo Liberation Tigers Force (BLTF)/ Bodo Liberation Tigers (BLT) is an armed group in the Bodo dominated regions of Assam
demanded a separate state for the Bodos to be carved out of Assam.
established on June 18, 1996 under the leadership of Prem Singh Brahma.
The leaders of the BLT, together with the leaders of All Bodo Students' Union, formed a political party called BPPF.
laid down arms in 2003, MoU signed and most of the cadres of BLTF were absorbed in CRPF

Current Status : Who Administers Bodoland?

Bodoland Territorial Council (BTC)
BTC was established by a Memorandum of Settlement of February 10, 2003, immediately after surrender of BLTF cadres
The area under the BTC jurisdiction is called the Bodoland Territorial Area District (BTAD).
 That the BTAD is created under the sixth schedule of the Constitution of India

Demographic Reality?

 According to census 2011, there has been a sharp increase in Bengali speaking Muslim population in Bodo areas (This is the main reason and has led to several incidents of violence)

Within the BTAD, (an area covering 35 per cent of Assam), the Bodos constitute less than 30 per cent with no other ethnic group (Assamese speakers, Bengali Muslims, Bengali Hindus, Koch-Rajbanshis) having an absolute majority -- nearly 70 per cent non-Bodo population of the area.
Hence other factions are organizing themselves like Muslims under banners like The All
Bodoland Minority Students’ Union (ABMSU) and ‘Sankhyalagu Aikhya Mancha’
(Minorities United Front)

Telangana Effect
With creation of Telangana as a separate State the Bodos thought it was their right to get a
separate state and intensified the demand again

What can be done?

a large amount of illegal weapons are present in the region, they need to be taken care
of
Modification of the BTC agreement so as to better reflect the demographic realities
How can BTC be modified? By making it more accommodative with a greater share
and proportionate representation to different communities residing in BTAD.
Any other option? Redrawing of BTAD boundaries by removing areas with a
substantial non-Bodo majority (this option will be very sensitive)

National policy on offshore wind energy

Introduction:-

The Union Cabinet has approved the National Offshore Wind Energy Policy to boost renewable energy development in the country.

The consent given by the Cabinet that was chaired by Prime Minister Narendra Modi includes setting up of offshore wind power projects and research and development activities in waters (in or adjacent to the country) up to the seaward distance of 200 nautical miles (about 370 kilometres) or the Exclusive Economic Zone (EEZ) of the country from the base line.

As per the statement released by Government of India, Ministry of New and Renewable Energy (MNRE) has been authorised as nodal ministry for use of offshore areas within the EEZ of the country. 

Similarly, National Institute of Wind Energy (NIWE) has been authorised as the agency for development of offshore wind energy in the country. It will carry out allocation of offshore wind energy blocks, coordination and allied functions with related ministries and agencies. 

Preliminary assessments along the 7,600 kilometre long Indian coastline have indicated prospects of development of offshore wind power. With the introduction of the National Offshore Wind Energy Policy, the Centre is attempting to replicate the success of the onshore wind power development.

Benefits of OFFSHORE Wind :-

Offshore Wind  have some inherent advantages such as a large wind resource, higher wind speeds than onshore wind and more clarity over land tenure. 

Globally, offshore wind has come of age. At the end of 2014 global offshore wind installations reached 8,771 MW. By 2020, this capacity could reach 29,000 MW.

Time to replicate past success

In the early 1990s, MNRE had taken up onshore demonstration projects in various states. A total of 71 megawatt (MW) of demonstration projects in seven states had attracted interest. Since then, India has achieved significant success in the onshore wind power development, with over 23 gigawatt (GW) of wind energy capacity already installed and generating power. Worldwide, offshore wind power projects with total capacity of 7.5 GW have been installed. UK is leading with installations of 4.2 GW.

Going by the success of onshore wind energy development, the government expects a similar result in offshore wind energy development too.

How to Proceed Further ??

the Ministry of New and Renewable Energy (MNRE) released the National Offshore Wind Energy Policy .

The central policy holds the key to a decision-making document on developing offshore wind energy and setting up projects up to 370 km from the shore in what will be known as the Exclusive Economic Zone.

The country's 7,600-km long coastline provides a huge scope for offshore wind energy development. India's target is to develop 60 GW of wind power by 2022 from the current capacity of 24 GW.

The document also includes the environmental impact assessment (EIA) as a necessary part for developing offshore wind energy.

EIA has been mentioned in Stage-I clearance, which means that the clearance will have to be obtained from the environment ministry, before offshore wind energy blocks are notified for international competitive bidding.

The policy document states that project developers have to obtain clearances from 10 ministries to develop offshore wind projects. Among these, five ministerial clearances are in stage I (principle clearances) and another five are in stage II (not required at the initial stage). Apart from the environment ministry, other ministries involved in the offshore wind energy development are the Ministry of Defence, Home Ministry, External Affairs Ministry and Department of Space.

Global Scenario of OFFSHORE WIND ENERGY:--

Worldwide, the total capacity of offshore wind energy stands over 8.7 gigawatt. Around 91 per cent of the installations are located in the Baltic Sea, North Sea, Irish Sea and the English Channel.

 

Sugar industry of india

Sugar industry of india :

India is the world’s  2nd largest producer of sugarcane and second largest producer of sugar after brazil.
This industry involves a total capital investment of Rs. 1,250 crore and provides employment to 2.86 lakh workers. In addition, 2.50 crore sugarcane growers also get benefit from this industry.

Characteristics of sugar industry in india:

1. Sugar industry in India is controlled.

 The price of sugarcane which the farmers receive from the mills is fixed by the government in form of FRP and SAP.
FRP-Fair Remunerative Price fixed by union government and is generally low.
SAP-State Administered Price decided upon by state government and is generally high (the mill owners are compelled to agree with SAP over FRP).
 The mill owners must give 10% of their production to the union government which they use to supply to the state governments for their state Public Distribution Systems (PDSs).
 The market is also heavily government controlled. The export and import of sugar is decided by the government depending upon the domestic demand.


2. Low yield of sugarcane:

 Although India has the largest area under sugarcane cultivation, the yield per hectare is extremely low as compared to some of the major sugarcane producing countries of the world. For example, India’s yield is only 64.5 tonnes/hectare as compared to 90 tonnes in Java and 121 tonnes in Hawaii.

3. Short crushing season:

 Manufacturing of sugar is a seasonal phenomena with a short crushing season varying normally from 4 to 7 months in a year. The mills and its workers remain idle during the remaining period of the year, thus creating financial problems for the industry as a whole.

4. Fluctuating production trends:
 Sugarcane has to compete with several other food and cash crops like cotton, oil seeds, rice, etc. Consequently, the land available to sugarcane cultivation is not the same and the total production of sugarcane fluctuates. This affects the supply of sugarcane to the mills and the production of sugar also varies from year to year.

5. Regional imbalances in distribution:
 Over half of sugar mills are located in Maharashtra and Uttar Pradesh and about 60 per cent of the production comes from these two states. On the other hand, there are several states in the north-east, Jammu and Kashmir and Orissa where there is no appreciable growth of this industry.

6. Low per capita consumption:
 The per capita annual consumption of sugar in India is only 16.3 kg as against 48.8 kg in the USA., 53.6 kg in U.K., 57.1 kg in Australia and 78.2 kg in Cuba and the world average of about 21,1 kg. This result in low market demand and creates problems of sale of sugar.

The turmoil :

 The industry is facing liquidity crunch with unpaid cane prices arrears built up to around Rs 14,000 crores to farmers.
 Falling sugarcane prices due to increased supply in the market.
Due to faulty pricing of FRP and SAP, farmers tend to produce more and thereby a decrease in sugarcane prices.
 Mill owners are not able to export excess sugar due to control from the union government.

Government’s effort to solve the disturbance:

 Looking into Rangarajan committee report on decontrol of sugar industry. The report talks about two-phased cane price payment system which involves paying the FRP to the farmers at the time of the cane delivery and adjusting it later against the final payment amounting to 70 per cent of the total revenue generated fromthe sale of sugar and its by-products. Such a pricing formula would strike a balance between the prices of sugar and sugarcane, on the one hand, and between the demand and supply of sugar on the other.
 Export of surplus sugar to address domestic over-supply and price decrease.
 Increase in mixing ethanol with petrol from the present two per cent to five percent to begin with and 10 per cent subsequently.
 Strengthening co-operative mills w.r.t their structuring and democratic functioning