GS Paper 3

National Income Accounting

Basics of National Income Accounting

Economic Territory: Geographical territory administered by a government within which persons, goods and capital circulate freely. Includes:

Political frontiers including territorial waters & air space.
Embassies, consulates, military bases, etc. located abroad. (Excluding those located within the political frontiers).
Ships, aircrafts etc., operated by residents between two or more countries. For ex., Air India’s services between different countries
Fishing vessels, oil & natural gas rigs and floating platforms operated by residents of the country in the international waters or engaged in extraction in areas where the country has exclusive rights of operation.

Normal Residents’ Vs Indian Citizens

Normal Resident: Person who ordinarily resides in a country and whose centre of economic interest also lies in that country. Include both nationals (such as Indians living in India) and foreigners (non-nationals living in India).
Citizens: Include Indian nationals living within India as well as outside India.

GDP vs GNP

Resident: Economic concept; Person or an institution whose centre of economic interest lies in the economic territory of the country in which he lives.
Citizens: Legal Concept
GDP calculation: All Residents (Includes foreign Residents within India & excludes Indian Citizens outside India.)
GNP Calculation: All the citizens (Includes all Indian Citizens both inside as well as outside India)

Scope of Goods Covered

Covers all Final Goods; does not cover Intermediate Goods since it leads to double accounting.
Does not include sale of secondhand Goods; but services offered on such sales considered.
Includes even those Goods that are not marketed but produced for self-consumption.
Includes even those Goods that remain unsold; considered as addition to Inventories/ Investment.

Scope of Services Covered

Covers all services which are produced within the Country.
Does not include non-marketable services such as household chores, care for elderly etc.
Exception: Imputed rent of a building that is owned and occupied by owners themselves.

Transfer Payments

National Income should consider only the factor incomes i.e., income earned through the provision of factors of production. Hence, transfer payments i.e., old age pensions, education grants, unemployment benefits, gifts not included in the GDP Calculation.
Similarly, remittances are also not accounted for.

Production vs Product Taxes

Production Taxes: Taxes paid on land, labour, assets such as Land revenue, stamp duty, Registration fee, Professional tax. Not taxed on per unit of product.
Product Taxes: Taxes paid on per unit of product such as GST, Excise Duty, Customs duty etc.

Production vs Product Subsidies

Production Subsidies: Subsidies to the entire enterprise and not specific to product. Examples include Subsidies to Railways, Farmers, Small scale Industries etc.
Product Subsidies: Product specific subsidies such as Food, LPG, Kerosene, Fertilisers etc.

Factor Cost vs Basic Price vs Market Price

GDP is calculated by considering 3 different prices

Factor Cost: Cost of factors of Production such as land, Labour & Capital.
Basic Price (Price expected to be received by Producer): Factor Cost + Production Taxes- Production Subsidies.
Market Price (Price expected to be paid by consumer): Basic Price+ Product Taxes- Product Subsidies.
GDP at Market price = GDP at Basic price + Product Taxes- Product Subsidies

GDP at Market Price = GDP at Factor Cost + Production Taxes + Product Taxes – (Production Subsidies + Product Subsidies)

GDP at Market price = GDP at Factor Cost + Indirect Taxes – Subsidies

Methods for GDP Calculation

Expenditure Method

GDP = PFCE + GFCE + GCF + (X-M)

Private Final Consumption Expenditure (PFCE): Expenditure incurred by the households on Goods and Services (only Marketable services).

What does it include?

Expenditure incurred by Residents within India.
Expenditure incurred by Residents outside India (Say, Tourism, Education accounted as Imports)
Expenditure incurred by non-residents within Economic territory of India considered as Exports

Government Final Consumption Expenditure: Compensation of employees (wages and salaries + pensions) + Net purchase of goods and services + Consumption of fixed capital (CFC). Note: Excludes the transfer payment.

Gross Capital Formation (GCF): Calculated as Gross Fixed Capital Formation (GFCF) + Changes in Stocks + Net acquisition of valuables.

Gross Fixed Capital Formation (GFCF) comprises of:

Construction and Maintenance of fixed assets such Infrastructure such as Dwellings, Roads, Railways etc.
Machinery and Equipment (3) Intellectual Property Rights such as R&D, Software etc.
Cultivated biological resources - Increment in Livestock and Plantation.

Exports (X) & Imports (M): Imports need to be subtracted since National Income should consider Goods & Services produced within Economic territory.

GDP By Income Method

Compensation of employees (CE): Total remuneration in cash or in-kind payable by employers to employees for the work done. Direct social transfers such as payments for sickness, educational grants and pensions are also imputed to compensation of employees.

Operating Surplus (OS): Operating surplus for Organised sector: Retained Earnings + Dividend + Interest on Capital

Mixed Income (MI): Mixed Income for Unorganised/ Household sector: Difficult to differentiate between Employment income (Wages) & Profits (Operating Surplus)

Consumption of Fixed Assets: Rent on land, Buildings and other structures

GVA at Basic Prices = (CE+ OS/MI+ CFA) + Production Taxes – Production Subsidies

GDP = GVA at Basic Prices + Product Taxes – Product Subsidies

GDP By Production Method

Gross Value Added (GVA) = Value of Output- Value of Intermediate Consumption.

GDP at Market Price = GDP at basic Price + Product Taxes – Product Subsidies

Nominal GDP Vs Real GDP

Nominal GDP: Refers to GDP at current market prices i.e., the GDP is calculated as per the market prices for the year for which the GDP is calculated.

Real GDP: Refers to GDP at base year prices i.e., GDP is calculated as per market prices in the base year. Thus, the Real GDP negates the inflation in goods and services.

In case of high rate of inflation, nominal GDP would be quite higher than real GDP. However, in case of deflation, real GDP would be higher than nominal GDP.

GDP vs GNP

GNP = GDP + Income earned by Indians outside India – Income earned by Foreigners within India

GNP = GDP + Net Factor Income from abroad (NFIA).

Changes in GDP Estimation

Change in the base year from 2004-05 to 2011-12.
Change in the GDP estimation from the GDP at Factor Cost to GDP at Market Prices
Change in the database for capturing economic activity from RBI's database to the MCA-21 database of the Ministry of Corporate Affairs. This database is used for two purposes:
Estimate the production of goods and services in the organised sector based upon the tax returns
Extrapolate the production of goods and services in the unorganised sector based upon the organised sector activity.

Drivers of Indian Economy

According to Expenditure method, GDP is calculated as C+G+I+ (X-M) where C denotes Private final consumption expenditure (PFCE), G denotes Government Final consumption Expenditure (GFCE), I denotes Investment, X denotes Exports and M denotes Imports. PFCE accounts for the highest contribution followed by Investment.

Table: Share of Sectors in Nominal GDP (per cent)

Sectors	2019-20(1^st RE)	2020-21(PE)	2021-22(1^st AE)
Total Consumption	71.7	71.1	69.7
Government Consumption	11.2	12.5	12.2
Private Consumption	60.5	58.6	57.5
Gross Fixed Capital Formation	28.8	27.1	29.6
Net Export	-2.5	-0.5	-3.0
Exports	18.4	18.7	20.1
Imports	21.0	19.2	23.1
GDP	100.0	100.0	100.0

Trends in India’s GDP & Growth Rates

Both Real GDP and Nominal GDP had registered consistent increases in terms of absolute value before 2020-21. Because of covid-19, both Real GDP and Nominal GDP contracted in 2020-21. However, both Real GDP and Nominal GDP have now come back to pre-COVID levels.

The Real GDP (GDP at base year prices) has increased from 133 lakh crores in 2020-21 to 144 lakh crores in 2021-22. Similarly, the nominal GDP (GDP at current market prices) has increased from 195 lakh crores in 2020-21 to 230 lakh crores in 2021-22.

Both Real GDP & Nominal GDP Growth rate had registered consistent decline before 2020-21. Because of covid-19, both Real GDP & Nominal GDP growth rates contracted in 2020-21. However, both Real GDP & Nominal GDP growth rate have now registered positive growth rates.

Trends in Gross Capital Formation

Gross Capital Formation is calculated as Gross fixed capital formation (GFCF) + Changes in stocks (increase in stocks of inventories) + net acquisition of valuables

Gross fixed capital formation: Creation of new assets, Machinery and Equipment, R&D and Increment in Cultivated Biological Resources
Changes in Stock/Inventories: Increase in Inventory value
Valuables: Valuables include precious metals & stones, antique, other art objects and valuables.

Trends in Gross Capital Formation (GCF)
Components	2010-11	2015-16	2019-20
1. Gross Fixed Capital Formation	Public: 8%	Public: 7.5%	Public: 7%
1. Gross Fixed Capital Formation	Private: 25%	Private: 21%	Private: 22%
2. Change in Stocks	4.5%	2%	1%
3. Valuables	2.2%	1.5%	1%
Total (1+2+3)	40%	32%	31%

Important Observations

There has been a decline in GCF in the last decade from 40% to 31%.
Share of Private Investment is higher than Public Investment.

Trends in Gross Domestic Savings

Trends in Gross Domestic Savings
Sector	2010-11	2015-16	2019-20
Household	24%	18%	20%
Private Corporate Sector	10%	12%	10.5%
Public	3%	1%	1%
Total (1+2+3)	37%	31%	31.5%

Important Observations

Gross Domestic Savings is contributed by the Household sector, Private Corporate and Public Sector.
Decline in Gross Domestic Savings in the last decade from 37% to 31.5%.
The Household Sector contributes the largest share of Savings in India.
The Household Savings is categorised into:

a) Net Financial Savings

b) Physical Savings

Note: Physical Savings of household sector account for the larger share in comparison to Net Financial Savings)

Important Observations

Share of the Agriculture sector has remained stagnant around 18%, except in 2020-21, when its share increased to 20%.
Amongst the sub-sectors in Agriculture, Crops account for the highest share.
Share of the Industrial Sector has steadily declined in the last decade from 32% to 25%.
Share of the manufacturing sector has remained stagnant at 16%-17% in the last decade.
Share of the services sector has increased in the last decade from 49% to 55%.

Contribution of Sectors to India's GDP

Table: Sectoral share in Gross Value Added at Current Basic Prices
(Percentage)
S. No.	Industry	2011-12	2012-13	2013-14	2014-15	2015-16	2016-17	2017-18*	2018-19"	2019-20	2020-21"
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)
I	Agriculture, forestry & fishing	18.5	18.2	18.6	18.2	17.7	18.0	18.3	17.6	18.4	20.2
	Crops	12.1	11.8	12.1	11.2	10.6	10.6	10.5	9.7	10.7	-
	Livestock	4.0	4.0	4.1	4.4	4.6	4.8	5.1	5.1	5.2	-
	Forestry and logging	1.5	1.5	1.5	1.5	1.5	1.5	1.4	1.5	1.3	-
	Fishing and aquaculture	0.8	0.9	0.9	1.0	1.1	1.1	1.2	1.2	1.2	-
II	Industry	32.5	31.8	30.8	30.0	30.0	29.3	29.2	29.0	26.7	25.6
	Mining and quarrying	3.2	3.1	2.9	2.7	2.3	2.3	2.2	2.2	1.9	1.6
	Manufacturing	17.4	17.1	16.5	16.3	17.1	16.7	16.6	16.3	14.7	14.3
	Electricity, gas, water supply & other utility services	2.3	2.3	2.5	2.5	2.7	2.5	2.7	2.6	2.6	2.7
	Construction	9.6	9.2	8.9	8.5	7.9	7.7	7.7	7.9	7.4	7.0
III	Services	49.0	50.0	50.6	51.8	52.3	52.6	52.5	53.4	55.0	54.3
	GVA at basic prices	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0

Economic Recession in India

India has faced economic recession in 2020-21 for the first time in the last 41 years since 1979-80
Recession is defined as a fall in the overall economic activity for two consecutive quarters (six months) accompanied by a decline in income, sales and employment.
In independent India’s history, 5 such years of negative GDP growth were registered. They saw contraction of -1.2% (FY58), -3.66% (FY66), -0.32% (FY73), -5.2% (FY80) and (2020-21).

Major Economies Forum

Context: The leader’s meeting of the Major Economies Forum on Energy and Climate Change, was convened virtually by the United States of America on 20^th April 2023.

About the Major Economies Forum

The group represented 20 major economies of the world including Argentina, Australia, Brazil, Canada, China, Egypt, European Commission, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Saudi Arabia, Turkiye, United Arab Emirates, and the United Kingdom.
The aim of the forum is to deal with climate change
The leaders informed the forum about the steps being taken by different countries toward climate action that varied across sectors.
The forum will foster cooperation among member countries in dealing with climate change.

India’s fighter jet conundrum

Context: The Indian Air Force is trying to keep up its strength of fighter squadrons as its fleet struggles with the gradual phase-out of existing jets as well as delays in the order and procurement of new jets. It is also placing much hope in indigenously manufactured aircraft.

The Present and Future of India’s fighter jets

Against the sanctioned strength of 42 fighter squadrons, the Air Force has 31 squadrons.
Out of the 31 squadrons at present, the three Mig-21 squadrons will be phased by 2025.
MIG-29s, inducted in the late 1980s, will start going out by the early 2040s.
India has an ambitious plan lined up for the acquisition of over 500 fighter jets.

How many aircraft are in Squadron?

Squadrons typically include between 12 and 24 aircraft, depending on the type of aircraft and the branch of the military.
Land-based squadrons with heavy aircraft may have around 12 aircraft in a squadron. However, fighter units may have 18 to 24 aircraft.

Indigenous fighter ecosystem

IAF is supposed to get the 40 LCA from HAL,
Defence Ministry signed a deal with HAL for 83 LCA-MK1A, the first three aircraft in 2024 and 16 aircraft per year for the subsequent five years.
A more capable and larger LCA-MK2, which received sanction from the Cabinet Committee on Security (CCS) in September 2022, is expected to be ready for production by 2027.
There is also a Twin Engine Deck Based Fighter (TEDBF) on the drawing board for the Navy’s aircraft carriers.
Navy Chief said that they may get up to 45 TEDBF by 2040 from HAL.
MRFA is a reincarnation of the earlier Medium Multi-Role Combat Aircraft (MMRCA) contest for 126 jets to be produced in India by a French company.

Characteristics of LCA

A light combat aircraft (LCA) is a light, multirole jet/turboprop military aircraft.
They are typically slower than larger multirole or strike aircraft such as the American F-18, F-15E Strike Eagle, or Russian MiG-29.
Most light combat aircraft are capable only of subsonic speeds, although some are capable of reaching Mach 1+.
An LCA will typically be equipped with bombs, gun pods, or short-range air-to-air missiles used for COIN or CAS missions.
Some aircraft integrate more advanced armaments such as smart bombs, air-to-ground missiles, ECM pods (Electronic Countermeasures), and electronic targeting systems.
These aircraft are usually used for self-defence or anti-hostile aircraft/helicopter missions, not for air-defence missions typically carried out by lightweight fighters.
Some LCAs are capable of air-to-air combat or point air defence missions if equipped with multi-mode radar systems. the majority cannot perform these missions due to their small design and limited capabilities.
LCAs are often used to patrol the skies and implement border patrol or air policing.

Characteristics of Twin Engine Deck Based Fighter (TEDBF)

The HAL Twin Engine Deck Based Fighter (TEDBF) is a canard delta wing, twin-engine, carrier-based, multirole combat aircraft.
The TEDBF is being designed and developed by the Aeronautical Development Agency (ADA) and will be manufactured by Hindustan Aeronautics Limited (HAL).
The TEDBF is intended to perform a multitude of missions, including air supremacy, air interdiction, anti-access/area denial (A2/AD), anti-ship warfare (ASW) and electronic warfare (EW) missions.
The TEDBF is expected to replace the Mikoyan MiG-29K onboard the INS Vikramaditya and the INS Vikrant.
The first flight is expected to be in 2026 with production planned for 2031.
The design's twin engines are expected to allow shorter take-offs from the Indian Navy’s Short Take-Off Barrier Arrested Recovery (STOBAR) aircraft carriers.
As a dedicated deck-based fighter, it will feature foldable wings for more compact storage. The TEDBF will predominantly be equipped with indigenous weapons systems.

Campa Fund

Context: Union Minister of Tourism, Culture, and DoNER has written to Telangana Chief Minister on the “non-utilization” of Rs 610 crores of the allocated amount from CAMPA funds in the last three years in Telangana.

About CAMPA FUND

The Compensatory Afforestation Fund (CAF Act), 2016 and Rules, 2018 provide elaborate guidelines and activities for utilization of CAMPA Fund. The monitoring of CAMPA activities in States/UTs are carried out through Internal and Third Party monitoring and e-Green watch web portal.
Compensatory Afforestation Fund Management and Planning Authority (CAMPA), a National Advisory Council headed by the Union Minister of Environment & Forests for monitoring, technical assistance, and evaluation of compensatory afforestation activities.
The law establishes the National Compensatory Afforestation Fund under the Public Account of India, and a State Compensatory Afforestation Fund under the Public Account of each state.
These Funds will receive payments for: (i) compensatory afforestation, (ii) net present value of forest (NPV), and (iii) other project specific payments.
The National Fund will receive 10% of these funds, and the State Funds will receive the remaining 90%.
The CAMPA funds are utilised for compensating the loss of forest land and ecosystem services by raising of compensatory afforestation, improving quality of forests through assisted natural regeneration, enrichment of biodiversity, improvement of wildlife habitat, control of forest fire, forest protection and soil and water conservation measures.
CAMPA activities are implemented by engaging local communities in afforestation, nursery raising, soil-water conservation and forest protection activities. The National Authority does not maintain any information related to job creation under various Projects/Schemes funded under National Fund, CAMPA.
The Compensatory Afforestation Fund (CAF) Act, 2016 provides for audit of the accounts of both National and States/UTs CAMPA Authorities by the Comptroller and Auditor- General of India (C&AG).

Detection of radio signals from YZ Ceti b

Context: Astronomers have detected a repeating radio signal from exoplanet YZ Ceti b suggesting the presence of a magnetic field — one of the prerequisites for a habitable planet — around it.

Major Highlights

YZ Ceti b is a rocky, earth-sized exoplanet rotating around a small red dwarf star, YZ Ceti, barely 12 light-years from Earth.
Just as energy surges from the sun sometimes disrupt telecommunications on Earth and damage orbiting satellites, intense bursts of energy from the YZ Ceti star-exoplanet exchange produce spectacular auroral lights. This is seen indirectly in the form of the radio emission.
These radio waves, strong enough to be detected from Earth, confirmed the existence of an exoplanetary magnetic field. Such signals can only be produced if the exoplanet orbits very close to its parent star and has its own magnetic field to influence the stellar wind and generate the signals.
Survival of a planet’s atmosphere may depend on its having, or not having, a strong magnetic field, since the field protects its atmosphere from being eroded by the charged particles from its star.

What is the magnetic field of YZ Ceti b?

The discovery of a repeating radio signal from YZ Ceti b suggests that the planet has a magnetic field. This is important because a magnetic field can help to protect a planet from harmful solar radiation. Scientists are still trying to learn more about the magnetic field of YZ Ceti b, and how it could impact the planet's habitability.

How did YZ Ceti b form?

YZ Ceti b is thought to have formed in the same way that Earth did, through the accretion of dust and gas around a young star. However, there are some key differences between the formation of YZ Ceti b and the formation of Earth. For example, YZ Ceti b is orbiting a much smaller star than Earth, and it is also much closer to its star. These factors could have had a significant impact on the way that YZ Ceti b formed, and on its eventual habitability.

Bamboo based bio-refineries

Context: National Thermal Power Corporation, the largest power-generating utility in India, and Chempolis India, a leading Finnish bio-refining technology provider, have signed a Memorandum of Understanding to explore the feasibility of setting up a Bamboo-based Bio-Refinery in Bongaigaon, Assam.

Major Highlights

Chempolis will work with NTPC to conduct the feasibility study for the project which shall utilize bamboo for the production of 2G Ethanol, Bio-Coal for thermal power plant & other value-added products.
The proposed Bio-Refinery is planned as an integration project with NTPC Bongaigaon Power Plant, where all utility requirements such as steam, power, etc., shall be supplied from the power plant and the Bio-Coal produced by the Bio-Refinery shall partly replace coal in the power plant, effectively converting 5% of the generation of the power plant to green.
Significance: The project will support NTPC’s decarbonization efforts, create job opportunities and build a sustainable model by promoting the use of locally available resources.

What is a Bio-Refinery?

Biorefineries are processing facilities that convert biomass to energy and other value-added products such as biofuels, biochemicals, bioenergy/biopower, and other biomaterials.

National Policy on Biofuels

The Ministry of Petroleum and Natural Gas published the “National Policy on Biofuels" in 2018, which was further amended in June 2022.
The policy's objective is to reduce the import of petroleum products by fostering domestic biofuel production.

Salient Features of the National Policy on Biofuels

Oil Companies shall sell Ethanol Blended Petrol (EBP) with a percentage of ethanol up to 20% throughout the country from 01st April 2023.
A target of 20% blending of ethanol in petrol is proposed by Ethanol Supply Year (ESY) 2025-26.
An indicative target of 5% blending of biodiesel in diesel /direct sale of biodiesel is proposed by 2030.
The Policy categorises biofuels as:
- "Basic Biofuels" viz. First Generation (1G) bioethanol & biodiesel
- "Advanced Biofuels" - Second Generation (2G) ethanol, Municipal Solid Waste (MSW) to drop-in fuels
- “Third Generation’’ (3G) biofuels, bio-CNG etc. to enable the extension of appropriate financial and fiscal incentives under each category.
It expands the scope of raw materials for ethanol production by allowing the use of Sugarcane Juice, Sugar containing materials like Sugar Beet, Sweet Sorghum, Starch containing materials like Corn, Cassava, damaged food grains like wheat, broken rice, Rotten Potatoes, unfit for human consumption for ethanol production.
It allows the use of surplus food grains for the production of ethanol for blending with petrol with the approval of the National Biofuel Coordination Committee.
With a thrust on Advanced Biofuels, the Policy indicates a viability gap funding scheme for 2G ethanol Bio refineries of Rs. 5000 crores in 6 years in addition to additional tax incentives, and a higher purchase price as compared to 1G biofuels.
It encourages the setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, Used Cooking Oil, and short gestation crops.

National Quantum Mission

Context: Union Cabinet has approved the National Quantum Mission (NQM) at a cost of Rs 6,003.65 crore. The mission will have defined milestones that are expected to be achieved over the course of eight years (2023-24 to 2030-31).

Quantum Technology

Quantum computers utilise the principles of quantum mechanics to perform certain types of computations much faster than classical computers.
- Quantum mechanics is a theory in physics that deals with the behaviour of matter and energy at the most fundamental level (at the scale of atoms and subatomic particles).
Classical computers process information using bits, which are either 0 or 1, whereas quantum computing uses quantum bits, or qubits, which can be in a superposition of both 0 and 1 states at the same time. This property of superposition allows quantum computers to perform certain types of calculations much faster than classical computers.
The power of a quantum computer scales exponentially with the number of qubits, unlike classical computers, which scale linearly with the number of bits.
The principle is used in semiconductors, lasers, Blu-ray, transistors, mobile phones, USB drives, MRI, electron microscopes, and even the basic light switch.

Major Highlights of the Mission

The new mission targets developing 20-50 physical ‘qubits’ in three years, 50-100 physical qubits in five years and intermediate-scale quantum computers with 50-1,000physical qubits in 8 years.
- In classical computing, the smallest and most basic unit of information that can be processed and stored is called a ‘bit’.
- In quantum computing, the basic unit of information is called a ‘qubit’.
Some of the deliverables of the Mission are:
- Developing satellite-based secure quantum communications between ground stations over a range of 2,000 kilometres within India
- long-distance secure quantum communications with other countries
- inter-city quantum key distribution over 2000 km
- multi-node quantum network with quantum memories.
The mission will help develop magnetometers with high sensitivity in atomic systems, and atomic clocks for precision timing, communications and navigation.
It will support the design and synthesis of quantum materials such as superconductors, novel semiconductor structures and topological materials for the fabrication of quantum devices.
Single photon sources/detectors, and entangled photon sources will also be developed for quantum communications, sensing and metrological applications.
Four Thematic Hubs (T-Hubs) would be set up in top academic and National R&D institutes on the domains of ‘quantum computing’, ‘quantum communication’, ‘quantum sensing and metrology’ and ‘quantum materials and devices’.
- The hubs will focus on the generation of new knowledge through basic and applied research as well as promote R&D in areas that are mandated to them.

Challenges

Qubits are extremely delicate and prone to errors, and increasing the number of qubits while maintaining their stability is a major challenge in the development of quantum computers.

Significance

Presently, only six countries — the US, Finland, Austria, France, China and Canada — have some capability in this domain. The mission will bring India to the forefront along with them.
It will accelerate the development of Quantum Technologies & Applications and technology-led economic growth in the country.
It would greatly benefit communication, health, financial and energy sectors as well as drug design, and space applications.
It will provide a huge boost to “national priorities” like ‘Digital India’, ‘Make in India’, ‘Skill India’, ‘Stand-up India’, ‘Startup India’, ‘Self-reliant India’ and Sustainable Development Goals.
The technology will secure the country’s defence communication but also act as a deterrent, preventing the attempt to hack into India’s communication networks.

India’s quantum mission

India’s quantum mission has been in the works since 2018, when the Department of Science & Technology put out a call for proposals on projects related to the field of quantum computing.
QuEST (Quantum-Enabled Science & Technology) falls under the department’s Interdisciplinary Cyber-Physical Systems (ICPS) division.

FSSAI needs an energy shot to regulate processed food

Context: Recently, the social media influencer drawn into the Cadbury’s Bournvita controversy has a supporter. The Nutrition Advocacy in Public Interest — India (NAPi), a think tank working on nutrition policy, has issued a statement saying it stands by him.

What is the controversy?

Revant Himatsingka, who calls himself @foodpharmer on social media, with 1,35,000 followers on Instagram, drew the ire of Mondelez India, the company that owns Bournvita, with his April 1 video in which he flagged the product’s high sugar content.
In January, the NAPi said that a Bournvita advertisement and product packaging was misleading and did not disclose the sugar content.
The organisation has filed a formal complaint with the Department of Consumers Affairs, working under the Ministry of Consumer Affairs, Food & Public Distribution.
It alleges the ads violate the provision of the Consumer Protection Act, 2019.
However, this has brought to the boil the real issue at hand — the Food Standards and Safety Authority of India (FSSAI) dragging its feet over implementing its own guidelines to regulate packaged and processed food.

Packaging and labelling regulations of FSSAI

As per the food safety and standards (packaging and labelling) regulations, 2011, FSSAI regulations are a complete set of guidelines that all food product brands and manufacturers should abide by. It also inflicts 12 fundamental labelling regulations for any food packaging as given below; –

Food’s name
Ingredients list
Information related to nutrition
Vegetarian or non-vegetarian declaration of food
Food additives used in the declaration
Manufacturer’s name and address
Details for customer care
Quantity
Retail price rate
FSSAI license number and logo
Batch identification number, country of origin, marketing date
Instructions for usage.

What is the permissible limit of sugar content?

The threshold for sugar to avoid warning labels is 6 g per 100 g.
In 2020, the FSSAI looked into 1,306 product samples across 30 food companies, including dairy, confectionery, sweets and snacks. None of the products could meet the requirements.
Hence a panel constituted by FSSAI then proposed increasing the threshold arbitrarily by six times i.e., 36-gram sugar per 100 grams.
Despite this, only 20% of products were found to be meeting the new threshold.

India’s White Revolution: Achievements and the Next Phase

Context: NITI Aayog has released a working paper titled India’s White Revolution: Achievements and the Next Phase.

Trends of India's Milk Production

Phase I - From Independence to White Revolution: Before the introduction of White Revolution, the annual growth of milk production was merely 1.36% between 1950-51 to 1973-74 which was less than the growth in population of India.

This led to decline of per capita milk output from 132 grams in 1955-56 to 110 grams in 1973-74 i.e., a drop of 15% in this period. This led to a serious shortage of milk and milk products in India. The shortage was met partly through import and aid in the form of milk powder.

Phase II - From White Revolution: Dairy sector has shown very impressive growth since the beginning of Operation Flood, launched in 1970 to increase milk production. Operation flood resulted in milk production outpacing population growth after 1973/74. Fast growth in milk output enabled India to raise per capita milk production to 387 grams per person per day by year 2018-19 which is higher than average Recommended Dietary Allowance from India.

Phase III - Recent trend in milk production: In last decade, milk production has increased by 5.3% due to shift in emphasis from exotic breeds to indigenous breeds.

Factors contributing to success of White Revolution

Institution of cooperatives especially for milk marketing: Growth of milk production requires efficient marketing of milk. Wherever marketing outlets were established to procure milk, dairy sector has witnessed impressive growth. Cooperatives have played a major role in this regard.
Investments in milk processing
Artificial insemination in cows
Absence of restrictive regulations on milk marketing & trade

Snapshot India's dairy sector

Dairy sector contributes one-fourth of total income generated in agriculture sector and this share has been rising. Thus, dairy & livestock sector has played a prominent role in growth of agriculture.
Per capita production of milk in India has now exceeded the recommended dietary allowance (RDA). RDA for milk is 377 grams per person per day for India, as recommended by the National Institute for Nutrition under ICMR.
India is the largest milk producing nation in the world with one-fourth of global production. Earlier, USA was the largest producer of milk in the world. However, share of India in world milk output has almost doubled in last 25 years.
Per capita absorption of milk and milk products has almost doubled during the last 20 years. This growth in the intake of milk and milk products implies that milk has made highest contribution to improve nutrition in India.
Growth of dairy sector has been pro-poor and pro-women besides being resilient. Growth of milk does not require particular endowments like irrigation, good soil etc.
Dairy sector has been growing despite input subsidies or output price support.
Much of the growth in milk output during the last 50 years is due to an increase in the population of dairy animals. Number of female bovines in India increased from 122.7 million in 1972 to 246.7 million in 2019 (doubling).

Challenges of Dairy Sector

Low productivity of milch animals:
- According to FAO, milk yield of Indian cows is 2/3rd of World average and it is much less compared to milk yield in developed countries. World average milk yield per cow is 7.2 kg and in India it is 4.87 kg.
- There is wide variation in milk yield across states. Milk yield of cows ranges from 1.49 kg in Assam to 13.31 kg in Punjab. Similarly, daily milk output per buffalo varies from low of 1.61 kg in Odisha to 9.63 kg in Haryana.
Increased emission of greenhouse gases by ruminants: Doubling population of female bovines means GHG emissions by dairy animals has doubled in the last 50 years.
Very low share of export: Success of white revolution has not translated into export of milk products from India. Dairy exports constitute only 2.6% of India's agri-exports which is much lower than 24% share of milk output in value of crop and livestock output. World dairy exports stood at US $63 billion in 2021 whereas India's dairy exports was only US$392 million (0.62% of world dairy exports).
High antibiotic usage in dairy sector: Chemicals are indiscriminately used in commercial dairy which adversely affects quality of livestock and milk. Urine and dung of animals with chemicals affects soil microbes and greenhouse gas emissions.

Way Forward

Increasing productivity of milch animals: There is a need to focus on increasing milk output per animal both on a national basis and on regional basis.
- On the national level, increase in productivity needs breed improvement, improved breeding practices like Artificial Insemination, better feeding and better maintenance and health-care of livestock.
- Regionally, the focus should be on states where per cow milk yield are low as compared to national average i.e., Assam, North-eastern states, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha & West Bengal.
Meeting consumer expectations: Dairy industry needs to evolve to meet consumer preferences for various types and traits of milk. Today, consumers in cities prefer fresh or unprocessed milk or cow milk. Dairy value chain should aim to meet such demand.
Promoting milk exports: As domestic milk production is already crossing recommended dietary allowance for milk and slowing down of population growth with milk production expected to grow by 6%, India is expected to see surplus milk production which can be channelised to some exports. However, dairy exports have seen a big increase in recent years. Milk & milk products has increased four times after 2017-18. Dairy export doubled in 2021-22 to reach Rs. 4742 crore and increased by 64 per cent in volume. Still exports are less than 0.5 percent of total domestic production of milk.

Steps to promote milk exports are:

Investments in milk value chain and tapping markets of high-end developed countries.
Milk as a solution for nutritional deficiency: Milk should be promoted as a critical input for addressing nutritional deficiency and improving health outcomes in India, especially in children & women. Income elasticity of demand for milk and dairy products is high.
Export competitiveness & FTAs involving milk: India’s domestic milk industry is opposed to FTAs that involves liberalisation of trade (import) in dairy products. If India wishes to capture overseas dairy markets than our milk industry needs to export competitive. Thus, India’s dairy industry needs to increase its competitiveness and confidently compete with imports and export markets.
Milk valued added products: Focusing on exports of milk value added and processed products rather than liquid milk alone.
Milk Quality: Compliances with high sanitary & phyto-sanitary standards of countries particularly in developed markets.
Livestock health: Steps to promote vaccination and disease free areas like foot mouth disease free areas, as some developed countries require this.

Adopting food systems approach: Integrated livestock and crop systems are organised in a complementary and in synergy. India’s agriculture is transitioning to natural & organic farming for this animal dung and urine are critical inputs. Using by-products from dairy to produce organic & bio-inputs is a win-win for both dairy and crop sector.
Dairy pricing: Currently, fat content in milk is the sole criteria for pricing of milk. There is a need to develop measurements and standards around other traits like solid-not-fats in milk.
Sustainability of dairy sector: There is a need to monitor the presence of antibiotics and other chemicals in milk and check it.

Maharishi Initiative

G20 Meetings of Agricultural Chief Scientists (MACS) 2023 in Varanasi under India's Presidency saw the launch of MAHARISHI Initiative.

About MAHARISHI

MAHARISHI stands for Millets And otHer Ancient Grains International Research Initiative.
MAHARISHI secretariat shall be housed at Indian Institute of Millets Research (IIMR), Hyderabad with technical support from ICRISAT, One CGIAR Centres and other International organisations.

Focus areas of MAHARISHI are:

Establish mechanisms to connect researchers and institutions working in identified grain crops to enhance the dissemination of research findings and identify research gaps and needs.
Establish web platforms to connect researchers, exchange data, share communication products and thematic briefs to encourage research & information sharing.
Organise capacity building activities and international workshops & conferences.
Performance identification and recognition to scientists.

SATHI Portal for Seed Quality Assurance

Ministry of Agriculture & Farmers Welfare has launched SATHI Portal & Mobile App.

About SATHI Portal

SATHI stands for Seed Traceability, Authentication and Holistic Inventory.
SATHI is a centralised online system for seed traceability, authentication & inventory designed to deal with challenges of seed production, quality seed identification & seed certification.
This portal will ensure seed quality assurance and identify the source of seed in the seed production system.
SATHI portal will consist of integrated 7 verticals of seed chain: Research Organisations, Seed Certification, Seed Licensing, Seed Catalogue, Dealer to Farmer Sales, Farmer Registration and Seed DBT.
Seeds with valid certification can only be sold by valid licensed dealer to centrally registered farmers who will receive subsidy through DBT directly into their pre-validated bank accounts.
There will be QR code under this system, through which the seeds can be traced.

Need for SATHI Portal

Goods Quality Seeds are critical inputs for a robust agriculture. However, inferior quality or spurious seeds affects the agriculture sector output and causes loss to farmers.
It is expected that if farmers have access to newer and quality seeds having resistance against climate change and new types of pests, agricultural production can be increased by 20%.

Parvatmala Pariyojana for Ropeway Development

Union Budget 2022-23 first announced Parvatmala Pariyojana - National Ropeways Development Program. In Budget 2022-23 the focus was on developing 8 ropeways in India. However, Union Ministry for Road Transport & Highways has expanded the scope of the project to 1,200 km of ropeway length in next 5 years.

About PARVATMALA PARIYOJANA

Government of India plans to develop 250+ Ropeway Projects with length of over 1,200 km in 5 years.
The projects under the scheme will be taken under PPP under Hybrid Annuity Model with 60% contribution support by Government of India.
This is a program of Ministry of Road Transport & Highways. (Note: Amendment in Government of India (Allocation of Business) Rules, 1961 empowers Ministry of Road Transport & Highways to look after development of Ropeways and Alternate Mobility Solutions.

Importance of Ropeways

Ropeways are cable propelled transit systems which are an alternative mobility transport solution as compared to roads in difficult hilly areas.
Ropeways will enable mobility to people living in difficult areas and help them become part of mainstream. Villagers/farmers living in such areas will be able to sell their produces in other areas, which in turn help them grow their income.
They are a modern and sustainable system of transportation and connectivity on the mountains, can promote tourism and may also ease access to congested urban areas, where conventional mass transit system is not feasible.
Ideal for difficult/challenging/sensitive terrain: Ropeways are built with long rope spans which helps it cross obstacles like rivers, buildings, ravines or roads without a problem. Also, in ropeways ropes are guided over towers which results in low space requirements on ground and creates no barriers for humans or animals.
Low land acquisition cost: Since ropeways are built in a straight line over a hilly terrain, they can be constructed with lower land acquisition costs. Hence, despite having a higher cost of construction per km than roadways, ropeway projects construction cost may happen to be economical than roadways.
Economical operations: Ropeways have multiple cars propelled by a single power-plant and drive mechanism. This reduces both construction and maintenance costs. The use of a single operator for an entire ropeway is a further saving. On level ground, the cost of ropeways is competitive with narrow-gauge railroads; in the mountains the ropeway is far superior.
Faster mode: Since ropeways are an aerial mode of transportation and built in straight line, transportation over ropeways takes less time in difficult terrain.
Environmentally friendly: Ropeways result in low dust emissions. Material containers can be designed to rule out any soiling of environment.
Last-Mile connectivity: Ropeway projects adopting 3S (a kind of cable car system) or equivalent technologies can transport 6000-8000 passengers per hour.
Ability to handle large slopes: Ropeways and cableways (cable cranes) can handle large slopes and large differences in elevation. While a road or rail needs switchbacks or tunnels, a ropeway travels straight up & down the fall line.
Low footprint: For ropeways only narrow-based vertical supports are needed at intervals, leaving the rest of the ground free. This makes it possible for ropeways to be constructed in built-up areas and in places where there is intense competition for land use.

Way forward

Need to promote manufacturing of ropeway components under Make in India Initiative.
Create standards for safety, auditing and regulatory environment of ropeways.
Partnership with state governments for identifying locations and accelerating development of ropeways.
Development of new technologies and global best practices.
Provision of financing for ropeways.