GS Paper 3

International Big Cat Alliance(IBCA)

Context: Prime Minister Narendra Modi recently launched the International Big Cats Alliance (IBCA) during his visit to Karnataka.

Objective:

  • The alliance aims to reach out to 97 range countries covering the natural habitats of Tiger, Lion, Snow Leopard, Puma, Jaguar, and Cheetah. 
  • It aims to provide a platform for “dissemination of information on benchmarked practices, capacity building, resources repository, research and development, awareness creation”, etc., on the protection and conservation of big cats.

Significance:

  • The alliance will strengthen global efforts and partnerships on big cat conservation while creating a platform for sharing knowledge and best practices. 
  • It will support existing species-specific inter-governmental platforms and provide direct support to recovery efforts in potential range habitats.
  • The alliance aims to strengthen global efforts and partnerships to preserve the natural habitats of big cats, secure ecosystems, and provide food security, livelihood, and sustenance to forest communities. 
  • Big cats will now serve as mascots for sustainable development, leading to environmental resilience and climate change mitigation. 

Governance structure:

  • The IBCA’s governance structure will comprise a General Assembly consisting of all member countries, a council of at least seven but not more than 15 member countries elected by the General Assembly for a term of 5 years, and a Secretariat. 
  • Upon the recommendation of the Council, the General Assembly will appoint the IBCA Secretary General for a specific term.

Funding:

  • After the first five years, which will be supported by India’s “total grant assistance” of $100 million, the IBCA is expected to sustain itself through membership fees, and contributions from bilateral and multilateral institutions and the private sector.

Subsidy burden of states

Context: Comptroller and Auditor General urged states to make a proper accounting of subsidies, remove revenue deficits, reduce fiscal deficits and keep outstanding debt at an acceptable level. In this context, let us discuss the problems with the subsidy regime.

Subsidies & freebies

As per CAG, the state government’s expenditure on subsidies has grown at 12.9 per cent and 11.2 per cent during 2020-21 and 2021-22. 

 In the recent period, state governments have started delivering a portion of their subsidies in the form of freebies.  Though there is no precise definition of freebies, they are different from subsidies provided by the government on public/merit goods, such as the public distribution system, employment guarantee schemes, states’ support for education and health, and expenditure which brings economic benefits.

On the other hand, freebies like the provision of free electricity, free water, free public transportation, waiver of pending utility bills and farm loan waivers often undermine credit culture, and disincentivise work at the current wage rate leading to a drop in labour force participation.

Issues with Subsidies & freebies: 

  • Regressive: Some of the subsidies such as Electricity, Fertilisers, MSP etc. are universal in nature and are given to all households irrespective of their socio-economic status. Being universal in nature, such subsidies benefit the richer households more than the poor households and hence are considered to be regressive in nature.
  • Leakages & Corruption: Inclusion and Exclusion errors; Duplicate and Ghost Beneficiaries; Presence of Middlemen, Poor administrative efficiency etc. E.g., 46% leakage in PDS.
  • Subsidies create distortions and ultimately affect poor people: Farm subsidies like MSP encouraged the production of water-intensive crops like rice & wheat and prevented crop diversification. This ultimately resulted in the low-income growth of the farmers. 
  • Cross-subsidization: Subsidies/Freebies like low/free passenger fares or free electricity for the public result in cross-subsidization through commercial usage. This increases the cost of doing business and hence hinders the growth of a private investment.
  • Distorts credit culture: Freebies like Agricultural loan waivers hampers the credit culture among the public and may result in the accumulation of bad assets in the banking sector. 
  • Revenue deficit: Increasing investments on subsidies & freebies increase the Revenue expenditure and hence the Revenue deficit. This leaves little headroom for the governments to invest in capital expenditure. 

Hence, rationalising subsidies is important for state governments to reduce their debt burden in the long term. 

Depositor Education and Awareness (DEA) Fund

Context: Development of a Centralised Web portal for the Public to Search Unclaimed Deposits

Need of DEA

  • The deposits remaining unclaimed for 10 years in a bank are transferred to the “Depositor Education and Awareness” (DEA) Fund maintained by the Reserve Bank of India. 
  • Depositors’ protection being an overarching objective, RBI has been taking various measures to ensure that newer deposits do not turn unclaimed and existing unclaimed deposits are returned to the rightful owners or beneficiaries after following due procedure. On the second aspect, banks display the list of unclaimed deposits on their website. 
  • In order to improve and widen the access of depositors / beneficiaries to such data, RBI has decided to develop a web portal to enable search across multiple banks for possible unclaimed deposits based on user inputs. The search results will be enhanced by use of certain AI tools.

The Depositor Education and Awareness Fund Scheme

  • The fund was created by RBI as per Section 26A of the Banking Regulation Act, 1949.
  • The amounts to be credited to the Fund by banks shall be deposited in the specified account maintained with the RBI.
  • The amounts to be credited to the Fund shall be the credit balance in any deposit account maintained with banks which have not been operated upon for ten years or more, or any amount remaining unclaimed for ten years or more, which include:-
    • Savings bank deposit accounts
    • Fixed or term deposit accounts
    • Cumulative/recurring deposit accounts
    • Current deposit accounts
    • Other deposit accounts in any form or with any name
    • Cash credit accounts
    • Loan accounts after due appropriation by the banks
    • Margin money against issue of Letter of Credit/Guarantee etc., or any security deposit
    • Outstanding telegraphic transfers, mail transfers, demand drafts, pay orders, bankers cheques, sundry deposit accounts, vostro accounts, inter-bank clearing adjustments, unadjusted National Electronic Funds Transfer (NEFT) credit balances and other such transitory accounts, unreconciled credit balances on account of Automated Teller Machine (ATM) transactions, etc.
    • Undrawn balance amounts remaining in any prepaid card issued by banks but not amounts outstanding against travellers cheques or other similar instruments, which have no maturity period
    • Rupee proceeds of foreign currency deposits held by banks after conversion of foreign currency to rupees in accordance with extant foreign exchange regulations and
    • Such other amounts as may be specified by the Reserve Bank from time to time.
  • Any amount payable in foreign currency under an instrument or a transaction, that has remained unclaimed for ten years or more, shall at the time of transfer to the Fund be converted into Indian Rupees at the exchange rate prevailing on that date and in the event of a claim, the Fund shall be liable to refund only the Indian Rupees received by the Fund with respect to such instrument or transaction.
  • The Fund shall be utilised for promotion of depositors’ interests and for such other purposes which may be necessary for promotion of depositors’ interest as may be specified by the RBI. All expenditure incurred for the promotion of depositors’ education, awareness, interests and other purposes that may be specified by the RBI under Section 26A (4) of the Act, shall be charged to the Fund.

Committee to Administer the Fund

  • There shall be a Committee to administer and manage the Fund in accordance with the Scheme which shall consist of an ex-officio Chairperson (a Deputy Governor of RBI, nominated by Governor) and not more than six members as decided by the RBI.
  • The Committee may from time to time lay down a list of activities, the criteria and procedure, etc. for incurring expenditure and achieving the objectives of the Fund.
  • The Committee shall administer the Fund and shall exercise all powers on behalf of the Fund, including incurring of all expenditure that may be charged to the Fund, and keeping the corpus of the Fund invested.
  • The expenses of the Committee and other expenses for administration of the Fund shall be charged to the Fund as decided by the Committee.
  • For facilitating the RBI for determination of the rate of interest payable by the Fund to the depositors, the Committee shall provide to the Reserve Bank such information on the income and expenditure of the Fund as may be required.
  • For the promotion of depositors’ interests, the Committee may register/recognise from time to time various institutions, organisations or associations, engaged in activities relating to depositor awareness and education, including those proposing to conduct programmes for depositors of banks, organising seminars and symposia for depositors and undertaking projects and research activities relating to these areas.
  • Institutions, organisations or associations registered/recognized by the Committee may be considered for grant of funds as a grant-in-aid either as one time measure or in stages or by way of reimbursement, depending upon the nature of the activity proposed.

Refunds and Interest

  • In case of demand from a customer/ depositor whose unclaimed amount/deposit had been transferred to the Fund, banks shall repay the customer/depositor, along with interest if applicable, and lodge a claim for refund from the Fund for an equivalent amount paid to the customer/depositor.
  • The interest payable, if any, from the Fund on a claim shall accrue only from the date on which the balance in an account was transferred to the Fund to the date of payment to the customer/depositor. No interest shall be payable in respect of amounts refunded from the Fund, in respect of which no interest was payable by the bank to its customer/depositor.
  • Rate of interest, if any, payable on the principal amount transferred to the Fund shall be specified by the RBI from time to time.

‘PRAVAAH’ (Platform for Regulatory Application, Validation And Authorisation)

Need of PRAVAAH Portal

  • Various entities are required to obtain licence / authorization to carry out activities regulated by RBI. Further, regulated entities are required to seek certain regulatory approvals from RBI under various statutes / regulations periodically. 
  • Currently, the application and approval processes for the same take place in varied on-line and off-line modes. 
  • The Union Budget for 2023-24 has announced the need to simplify, ease and reduce cost of compliance by financial sector regulators within laid down time limits to decide the applications under various regulations. 
  • It has been decided to develop a secured web based centralised portal named as ‘PRAVAAH’ which will gradually extend to all types of applications made to RBI across all functions.

What is Monetary Policy?

About Monetary Policy

  • Monetary policy is a set of tools used by a nation's central bank to control the overall money supply and promote economic growth and employ strategies such as revising interest rates and changing bank reserve requirements.
  • Under the Reserve Bank of India, Act,1934 (RBI Act,1934) (as amended in 2016), RBI is entrusted with the responsibility of conducting monetary policy in India with the primary objective of maintaining price stability while keeping in mind the objective of growth.

The Monetary Policy Framework

  • In May 2016, the RBI Act, 1934 was amended to provide a statutory basis for the implementation of the flexible inflation targeting framework.
  • Inflation Target: Under Section 45ZA, the Central Government, in consultation with the RBI, determines the inflation target in terms of the Consumer Price Index (CPI), once in five years and notifies it in the Official Gazette. 
  • Accordingly, the Central Government notified in the Official Gazette 4 per cent Consumer Price Index (CPI) inflation as the target for the period from August 5, 2016 to March 31, 2021 with the upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent. On March 31, 2021, the Central Government retained the inflation target and the tolerance band for the next 5-year period – April 1, 2021 to March 31, 2026.
  • Section 45ZB of the RBI Act provides for the constitution of a six-member Monetary Policy Committee (MPC) to determine the policy rate required to achieve the inflation target.

Failure to Maintain Inflation Target

Maintain Inflation Target
  • The Central Government has notified the following as the factors that constitute a failure to achieve the inflation target:
    • The average inflation is more than the upper tolerance level of the inflation target for any three consecutive quarters; or 
    • The average inflation is less than the lower tolerance level for any three consecutive quarters.
  • Where the Bank fails to meet the inflation target, it shall set out in a report to the Central Government:
    • The reasons for the failure to achieve the inflation target;
    • Remedial actions proposed to be taken by the Bank; and
    • An estimate of the time period within which the inflation target shall be achieved pursuant to the timely implementation of proposed remedial actions.
  • The operating framework of monetary policy aims at aligning the operating target – the weighted average call rate (WACR) – with the policy repo rate through proactive liquidity management to facilitate the transmission of repo rate changes through the entire financial system, which, in turn, influences aggregate demand – a key determinant of inflation and growth.

Monetary Policy Committee

  • Section 45ZB of the amended RBI Act, 1934 provides for an empowered six-member monetary policy committee (MPC) to be constituted by the Central Government by notification in the Official Gazette. The first such MPC was constituted in September 2016. The present MPC members, as notified by the Central Government in the Official Gazette of October, 2020, are as under:
    • Governor of the Reserve Bank of India—Chairperson, ex officio
    • Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy—Member, ex officio
    • One officer of the Reserve Bank of India to be nominated by the Central Board—Member, ex officio
    • Prof. Ashima Goyal, Professor, Indira Gandhi Institute of Development Research —Member
    • Prof. Jayanth R. Varma, Professor, Indian Institute of Management, Ahmedabad—Member
    • Dr. Shashanka Bhide, Senior Advisor, National Council of Applied Economic Research, Delhi—Member
  • Last three persons are to be appointed by the central government. This category of appointments must be from “persons of ability, integrity and standing, having knowledge and experience in the field of economics or banking or finance or monetary policy”. (Section 45ZC)
  • The MPC determines the policy repo rate required to achieve the inflation target.
  • The MPC is required to meet at least four times in a year. The quorum for the meeting of the MPC is four members.
  • Each member of the MPC has one vote, and in the event of an equality of votes, the Governor has a second or casting vote.
  • Each Member of the Monetary Policy Committee writes a statement specifying the reasons for voting in favour of, or against the proposed resolution.

Instruments of Monetary Policy

There are several direct and indirect instruments that are used for implementing monetary policy.

  • Repo Rate: The interest rate at which the Reserve Bank provides liquidity under the liquidity adjustment facility (LAF) to all LAF participants against the collateral of government and other approved securities.
  • Standing Deposit Facility (SDF) Rate: The rate at which the Reserve Bank accepts non collateralized deposits, on an overnight basis, from all LAF participants. The SDF is also a financial stability tool in addition to its role in liquidity management. The SDF rate is placed at 25 basis points below the policy repo rate. With introduction of SDF in April 2022, the SDF rate replaced the fixed reverse repo rate as the floor of the LAF corridor.
  • Marginal Standing Facility (MSF) Rate: The penal rate at which banks can borrow, on an overnight basis, from the Reserve Bank by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a predefined limit (2 percent). This provides a safety valve against unanticipated liquidity shocks to the banking system. The MSF rate is placed at 25 basis points above the policy repo rate.
  • Liquidity Adjustment Facility (LAF): The LAF refers to the Reserve Bank’s operations through which it injects/absorbs liquidity into/from the banking system. It consists of overnight as well as term repo/reverse repos (fixed as well as variable rates), SDF and MSF. Apart from LAF, instruments of liquidity management include outright open market operations (OMOs), forex swaps and market stabilisation scheme (MSS).
  • LAF Corridor: The LAF corridor has the marginal standing facility (MSF) rate as its upper bound (ceiling) and the standing deposit facility (SDF) rate as the lower bound (floor), with the policy repo rate in the middle of the corridor.
  • Main Liquidity Management Tool: A 14-day term repo/reverse repo auction operation at a variable rate conducted to coincide with the cash reserve ratio (CRR) maintenance cycle is the main liquidity management tool for managing frictional liquidity requirements.
  • Fine Tuning Operations: The main liquidity operation is supported by fine-tuning operations, overnight and/or longer tenor, to tide over any unanticipated liquidity changes during the reserve maintenance period. In addition, the Reserve Bank conducts, if needed, longer-term variable rate repo/reverse repo auctions of more than 14 days.
  • Reverse Repo Rate: The interest rate at which the Reserve Bank absorbs liquidity from banks against the collateral of eligible government securities under the LAF. Following the introduction of SDF, the fixed rate reverse repo operations will be at the discretion of the RBI for purposes specified from time to time.
  • Bank Rate: The rate at which the Reserve Bank is ready to buy or rediscount bills of exchange or other commercial papers. The Bank Rate acts as the penal rate charged on banks for shortfalls in meeting their reserve requirements (cash reserve ratio and statutory liquidity ratio). The Bank Rate is published under Section 49 of the RBI Act, 1934. This rate has been aligned with the MSF rate and changes automatically as and when the MSF rate changes alongside policy repo rate changes.
  • Cash Reserve Ratio (CRR): The average daily balance that a bank is required to maintain with the Reserve Bank as a percent of its net demand and time liabilities (NDTL) as on the last Friday of the second preceding fortnight that the Reserve Bank may notify from time to time in the Official Gazette.
  • Statutory Liquidity Ratio (SLR): Every bank shall maintain in India assets, the value of which shall not be less than such percentage of the total of its demand and time liabilities in India as on the last Friday of the second preceding fortnight, as the Reserve Bank may, by notification in the Official Gazette, specify from time to time and such assets shall be maintained as may be specified in such notification (typically in unencumbered government securities, cash and gold).
  • Open Market Operations (OMOs): These include outright purchase/sale of government securities by the Reserve Bank for injection/absorption of durable liquidity in the banking system.

Monetary Policy Process

The Reserve Bank has notified the Reserve Bank of India Monetary Policy Committee and Monetary Policy Process Regulations, 2016 which consists of the following:

  • Meeting schedule: The schedule of monetary policy voting/decision meetings for the entire fiscal year is announced in advance.
  • Meeting notice: Ordinarily, not less than fifteen days’ notice is given to members for meetings of the Committee. Should it be found necessary to convene an emergency meeting, 24 hours’ notice is given to every member to enable him/her to attend, with technology enabled arrangements for even shorter notice period for meetings.
  • Meeting duration: The duration of monetary policy meetings is as decided by the Committee. The policy resolution is publicly released after the conclusion of the MPC meeting keeping in view the functioning and timing of financial markets.
    • The MPC in its meetings reviews the surveys conducted by the Reserve Bank to gauge consumer confidence, households’ inflation expectations, corporate sector performance, credit conditions, the outlook for the industrial, services and infrastructure sectors, and the projections of professional forecasters. 
    • The MPC also reviews in detail the staff’s macroeconomic projections, and alternative scenarios around various risks to the outlook. Drawing on the above and after extensive discussions on the stance of monetary policy, the MPC adopts a resolution.
  • The MPC Resolution: The Bank publishes, after the conclusion of every meeting of the MPC, the resolution adopted by the said Committee. The resolution includes the MPC’s decision on the policy repo rate.
  • Minutes of the MPC meeting: On the 14th day after every meeting of the MPC, the minutes of the proceedings of the MPC are published which include: (a) the resolution adopted by the MPC; (b) the voting of each member on the resolution; and (c) short written statements of individual members justifying the vote, consistent with the provisions of Section 45ZL of the RBI Act. Minutes shall be released at 5 pm on the 14th day from the date of the policy day (or next earliest working day, if a holiday in Mumbai).
  • The Monetary Policy Report: Once in every six months, the Reserve Bank publishes the Monetary Policy Report containing the following elements:
    • Explanation of inflation dynamics in the last six months and the near term inflation outlook.
    • Projections of inflation and growth and the balance of risks.
    • An assessment of the state of the economy, covering the real economy, financial markets and stability, fiscal situation, and the external sector, which may entail a bearing on monetary policy decisions.
    • An updated review of the operating procedure of monetary policy.
    • An assessment of projection performance.

Monetary Policy Stance

The MPC indicates its broader policy approach by guiding the markets with policy stances.

  • Accommodative: means the central bank is prepared to expand the money supply to boost economic growth. The central bank, during an accommodative policy period, is willing to cut the interest rates. A rate hike is ruled out. The central bank typically adopts an accommodative policy when growth needs policy support and inflation is not the immediate concern.
  • Neutral: suggests that the central bank can either cut rate or increase rate. This stance is typically adopted when the policy priority is equal to both inflation and growth. During neutral policy, the central bank doesn’t commit to hiking rates or cuts. The interest rate can move to either side depending on incoming data. The guidance indicates that the market can expect a rate action on either way at any point.
  • Hawkish: indicates that the central bank’s top priority is to keep the inflation low. During such a phase, the central bank is willing to hike interest rates to curb money supply and thus reduce the demand. A hawkish policy also indicates tight monetary policy. A rate cut is nearly certain during such a period. When the central bank increases rates or 'tightens' the monetary policy, banks too increase their rate of interest on loans to end borrowers which, in turn, curbs demand in the financial system.
  • Calibrated tightening: means during the current rate cycle, a cut in the repo rate is off the table. But, the rate hike will happen in a calibrated manner. This means the central bank may not go for a rate increase in every policy meeting but the overall policy stance is tilted towards a rate hike. This can happen outside the policy meetings as well if the situation warrants it.

Over half of the heavy industry eyeing Low Carbon hydrogen

Context: As many as 62% of heavy industrial organisations across sectors are considering using low-carbon hydrogen to replace carbon-intensive systems, according to a recent report from the Capgemini Research Institute titled "Low Carbon Hydrogen - A Path to a Greener Future." According to the report, Energy and Utilities (E&U) companies anticipate Low-Carbon hydrogen to account for 18% of all energy use by 2050, and demand from more than half of organisations has increased by more than 10% in France, India, the United Kingdom, Japan, the United States, Germany, and Sweden.

Hydrogen as a fuel for the future

  • According to the International Energy Agency (IEA), hydrogen has the potential to be a key component of our transition to a clean energy future. 
  • However, for hydrogen to truly contribute to the energy transition, it must be used in industries where it is currently almost non-existent, such as transportation, construction, and power generation.
  • To identify ways to accelerate its adoption, the World Economic Forum developed the Accelerated Clean Hydrogen Initiative as part of its Climate Action Platform, Shaping the Future of Energy, Materials, and Infrastructure. 
  • Generating electricity from hydrogen does not produce pollution because the by-product is only heat and water.

Types of Hydrogen

When burned, hydrogen emits only water, although its production can be carbon intensive. As a result, several methods for reducing this impact have been devised, and depending on production methods, hydrogen can be grey, blue, or green, and sometimes pink, yellow, or turquoise, however naming practises vary across countries and over time.

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Green Hydrogen: 

  • The only variety that is created in a climate-neutral manner. It could be vital in the worldwide effort to achieve net-zero emissions by 2050. 
  • Also referred to as 'Clean hydrogen' is produced by splitting water into two hydrogen atoms and one oxygen (electrolysis process) atom using clean energy from surplus renewable energy sources such as solar or wind power. 
  • It presently accounts for roughly 0.1% of total hydrogen production, but this figure is likely to climb as renewable energy costs continue to fall. 
  • Ideal method to balance the Intermittency of Renewables: Storing excess energy during periods of low demand to be fed back into the grid when need increases, while de-carbonizing the chemical, industrial, and transportation sectors.

Grey hydrogen

  • It is the most prevalent type and is produced from natural gas, or methane, by a process known as "steam reforming". This technology emits far fewer emissions than black or brown hydrogen, which employ black (bituminous) or brown (lignite) coal in the hydrogen-production process. It produces carbon dioxide as a by-product.

Black/Brown Hydrogen

  • The main issue with black/ brown hydrogen is that they still produce a significant amount of greenhouse gases, and there is no Carbon Capture and Storage (CCS) as part of the process to mitigate this. Black and brown hydrogen are produced using fossil fuels. The process involves converting coal into gas.

Blue hydrogen

  • It is produced from hydrocarbons where the emissions generated from the process can be captured and stored. They are stored underground by industrial carbon capture storage (CSS). Therefore, sometimes referred to as being carbon neutral.
  • It is a better alternative compared to grey hydrogen.
  • There are arguments that it should be labelled as “low carbon”, as a more accurate description since 10 to 20% of the generated carbon cannot be captured.

Pink hydrogen

  • Nuclear produced hydrogen, often referred to as pink (or sometimes purple or red) is generated through electrolysis. The very high temperatures from nuclear reactors could also be used in other hydrogen productions by producing steam for more efficient electrolysis or fossil gas-based steam methane reforming.

Yellow hydrogen

  • It is the term used for hydrogen made through electrolysis of water using solar power, although some use it to mean hydrogen generated through electrolysis of water using mixed sources depending on what is available. 

Turquoise hydrogen

  • Its production is still in the experimental phase. It sits between blue and green hydrogen and uses methane pyrolysis as a production method. The outputs of this process are the hydrogen and carbon, however unlike steam reformation the carbon is solid.  This means there’s no requirement for CCS, the solid carbon can be used in other applications such as a soil improver or the manufacturing of goods like tyres.

Challenges

  • Economic Sustainability: One of the major obstacles that the industry faces in commercialising hydrogen is the economic sustainability of harvesting green or blue hydrogen. 
  • The electrolysis process, which is used to make green hydrogen, takes a considerable quantity of electricity, and renewable electricity is quite expensive. 
  • Nascent stage technology: Carbon capture and storage (CCS) and hydrogen fuel cell technologies are in their early stages and are expensive, which raises the cost of hydrogen production.
  • In India, there is currently a scarcity of infrastructure for the generation, storage, and transport of green hydrogen. This includes a scarcity of hydrogen refuelling stations and pipes for hydrogen transport.
  • Limited Adoption: Despite the potential benefits of green hydrogen, adoption of this technology in currently restricted. 
  • This is owing to a lack of public awareness and comprehension of green hydrogen, as well as a lack of incentives for businesses to use this technology.
  • Cost competitiveness: One of the main issues facing the industry in commercialising hydrogen, is the extraction of green hydrogen. 
  • On a per-mile basis, hydrogen must be cost-competitive with conventional fuels and technology for transportation fuel cells.

Way Forward

  • Increasing the use of renewable energy sources, so as to minimise the cost of green hydrogen generation.
  • Improve in infrastructure for its production, storage, and delivery: Construction of hydrogen refuelling stations as well as pipes, for transporting hydrogen and make green hydrogen more accessible. 
  • Role of Governments: By implementing regulatory incentives such as tax credits and subsidies to encourage the production and use of green hydrogen, the government can play a critical role in boosting its acceptance.

National Mission in Interdisciplinary Cyber-Physical Systems

Context: Experts deliberated on ways to strengthen the National Mission in Interdisciplinary Cyber-Physical Systems (NM-ICPS) at the National Workshop on Technology Innovation in Cyber-Physical Systems.

About National Mission on Interdisciplinary Cyber-Physical System

  • The Union Cabinet approved the National Mission on Interdisciplinary Cyber-Physical System (NM-ICPS) in December 2018 at a total outlay of Rs. 3660 Crores for a period of five years.
  • Implemented by: Department of Science and Technology (DST)
  • The Mission aims at technology development, translational research and commercialization in Cyber-Physical Systems (CPS) and associated technologies, adoption of CPS technologies to address India-specific National and regional issues, production of next-generation skilled manpower, and accelerating entrepreneurship and start-up ecosystem development in CPS technologies. 
  • As part of the Mission implementation, 25 Technology Innovation Hubs (TIHs) have been established in advanced technologies in reputed institutes across the country.
    • These Technology Innovation Hubs focus on technology development and translation, human resource and skill development, entrepreneurship and start-ups development, and international collaborative research. 

Cyber-Physical Systems 

  • Cyber-Physical Systems are complex engineered systems that link cyberspace with the physical world through a network of interconnected computational elements, such as sensors, computational processing units etc. These systems are highly automated, intelligent, and collaborative.
  • Applications of cyber-physical systems include energy-neutral buildings, zero-fatality highways, personalized medical devices, smart cities, and smart manufacturing.

Indian-American C.R. Rao wins Nobel Prize equivalent in statistics at the age of 102

Context: The Indian-American statistician Calyampudi Radhakrishna Rao has been awarded the 2023 International Prize in Statistics — the equivalent of the Nobel Prize for statistics. It is awarded once every two years to an individual or team “for major achievements using statistics to advance science, technology and human welfare”.

More on news: The work of Professor Rao, 102, has influenced, in the words of the American Statistical Association, “not just statistics” but also “economics, genetics, anthropology, geology, national planning, demography, biometry and medicine”.

C. R. Rao, the eminent Indian statistician

  • C. R. Rao was born on September 10, 1920 in Andhra Pradesh, India. He is considered the 'Father of Statistics' in India for his pioneering work in statistical theory and applications.
  • He studied mathematics at Andhra University and then at King's College in Cambridge, UK. He began his career as a lecturer in mathematics at Andhra University in 1941. He later served as Head of the Department of Statistics at the Indian Statistical Institute (ISI), Kolkata.
  • His research focused on statistical inference, multivariate analysis, design of experiments, statistical pattern recognition, entropy, and theoretical statistics. He developed concepts like Rao-Blackwell theorem, Fisher-Rao metric, Rao distance, and Rao-Cramer inequality which shaped modern statistics.
  • He advocated the use of statistics in fields like anthropology, economics, education, genetics, geology, medicine, psychology, etc. He pioneered applications of statistics in various branches of knowledge. Under his leadership, the ISI made significant contributions to research and training in statistics.
  • He has published over 400 papers and 20 books including Linear Statistical Inference and Its Applications. He has guided over 50 PhD students, many of whom became leading statisticians. He worked to put Indian statistics on the global map.
  • He was awarded India's highest civilian honor, the Bharat Ratna, in 2002 for his contributions to Indian statistics. He received many other prestigious awards like the Padma Vibhushan, Srinivasa Ramanujan Medal and the National Medal of Science.
  • He advocated for high standards of teaching and research in theoretical and applied statistics. He believed statistics as a discipline deserved to be studied separately rather than as a subordinate field of mathematics. This led him to establish the first Department of Statistics as an independent discipline in India at ISI Kolkata.
  • He was instrumental in the establishment of the Indian Society for Probability and Statistics to promote interaction and collaboration among statisticians. He worked to strengthen statistics education and research across India.
  • He continued his association with ISI Kolkata well into his 90s, devoting over 60 years of his life to building it into a world renowned center of excellence. His commitment to institution-building, promotion of statistics and passion for nurturing talent remain unparalleled.

Related: India gets elected to UN Statistical Commission

C. R. Rao made seminal contributions to statistics through his research, teaching and leadership. His vision and dedication built a strong foundation for statistics in post-independence India. He continues to inspire generations of students and serves as a role model for statisticians worldwide.

PM-DeVINE (Prime Minister’s Development Initiative for North East)

Context: Recently, the Ministry of Development of the North Eastern Region (MDoNER) provided the details of developmental projects in the North East region under the PM DevINE scheme to the Rajya Sabha.

About PM-DeVINE Scheme

  • Launched in Union Budget 2022-23  
  • It is a central sector scheme means fully funded by Union Government
  • It is to be implemented for 4 years between 2022-23 to 2025-26
  • PM-DevINE will enable livelihood activities for youth and women by filling the gaps in various sectors, but it will not be a substitute for existing Central or State schemes.

The objectives of PM-DevINE

  • Fund infrastructure convergently, in the spirit of PM Gati Shakti;
  • Support social development projects based on the felt needs of the NER;
  • Enable livelihood activities for youth and women; and
  • Fill the development gaps in various sectors.

 Initiatives under the scheme

  • Establishment of Dedicated Services for the Management of Paediatric and Adult Haematolymphoid Cancers in North East India, at Dr B. Borooah Cancer Institute (BBCI), Guwahati
  • NECTAR Livelihood Improvement Project (Multi-State): Value Chain on Utilization of Banana Pseudo Stem for Value-Added Products.
  • Promoting Scientific Organic Agriculture in North East India, using Improved Farming Techniques & Digital Data Management through Capacity Building of Farmers and Facilitating Certification. (Multi-State)
  • Construction of Aizawl By-pass on the Western Side of Mizoram
  • Construction and upgradation of Bamboo Link Roads- from Tuirial Airfield to North Chaltlang (18 km) and from Lengpui to Saiphal Bamboo Plantation (41 km) in Mizoram
  • Gap funding for Passenger Ropeway System from Pelling to Sanga-Choeling in West Sikkim
  • Gap funding for Passenger Ropeway from Dhapper to Bhaleydunga in South Sikkim
  • Transformation of 20 schools as Centre of Excellence in the Kamrup District of Assam by Public Works Department, Government of Assam
  • Construction of a new four-lane road and conversion of an existing two-lane road into a four-lane with cycling tracks, utility ducts, footpaths, etc. at New Shillong Township by Directorate of Urban Affairs, Government of Meghalaya
  • Livelihood projects relating to Special Development of Eastern Nagaland by the Department of Under Developed Areas (DUDA), Government of Nagaland
  • Establishment of Solar Micro Grid for the supply of reliable power to Remote Habitations in Tripura by the Department of Power, Government of Tripura

Chidambaram says 83% of MUDRA loans too small for business

Context: Recently Prime Minister MUDRA (Micro Units Development Refinance Agency) Yojana completed 8 years.  Reports say that 83% of loans given under the scheme were under Rs. 50000.

About PM MUDRA Yojana

  • The scheme aimed to provide loans up to 10 lacks to non-corporate, non-farm small/micro enterprises.
  • Under the aegis of PMMY, MUDRA has created three products namely '

1. ‘Shishu' covers loans upto Rs. 50000

2. 'Kishore' covers loans above Rs. 50000 and upto Rs. 5 lakhs

3. 'Tarun’ Covers loans Above 5 lakhs and upto 10 lakhs

  • These loans are given by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs.
  • MUDRA Bank is nodal agency to implement the scheme

What is MUDRA Bank? 

  • It is a refinancing institution and regulator  for micro-finance institutions.
  • It would be in charge of developing and refinancing the micro-enterprise sector by assisting finance institutions that lend to micro/small business entities engaged in manufacturing, trading, and service activities. 
  • It would collaborate with banks, microfinance institutions, and other lending institutions at the state and regional levels to provide microfinance support to the country's microenterprise sector. 

Achievements under PM MUDRA Yojana

  • A total of 60827414 beneficiaries have taken the loan up to the financial year 2022-23
  • A total of Rs. 442296.46 Crore have been disbursed upto the financial house 2022-23

Limitations of MUDRA Yojana

  • There are a number of already existing refinancing agencies
  • There is a potential conflict of interest due to the nature of the roles and responsibilities of Mudra Bank.
  • Mudra Bank seems to promote shadow banking.
  • There is a better solution to finance micro and small businesses in the form of Microfinance institutions
  • It will lead to an increase in the number of regulators for MFIs

Awaiting lift-off into the Second Space Age

Context: The Space Age began in 1957 with the launch of satellite Sputnik 1, and in 1961, cosmonaut Yuri Gagarin became the world’s first person in space. Neil Armstrong made history by walking on the moon in 1969. The First Space Age became reality.. 

Some of the key highlights of space exploration include

  • The first artificial satellite Sputnik 1 launched by Soviet Union in 1957. This marked the beginning of the space age and the space race between the Soviet Union and the United States.
  • The first human spaceflight by Soviet cosmonaut Yuri Gagarin in 1961. This demonstrated the possibility of safe space travel and return to Earth.
  • The Apollo 11 mission in 1969 which landed the first humans on the Moon. Neil Armstrong and Buzz Aldrin became the first men to walk on the lunar surface. This remains one of the greatest technological and scientific achievements in human history.
  • The launch of space stations like Salyut 1, Skylab and Mir that allowed long-duration human habitation in space. This paved the way for today's International Space Station.
  • The exploration of the solar system using robotic spacecraft like the Voyager probes which revealed mysteries of the outer planets. Spacecraft have explored Mars, Venus, Jupiter, Saturn, Uranus and Neptune.
  • Major space-based observatories like the Hubble Space Telescope that have expanded our understanding of the universe. Astronomers have discovered new exoplanets, black holes, dark matter and distant galaxies with these observatories.
  • Commercial spaceflight has now become a reality with companies like SpaceX and Blue Origin developing reusable rockets and spaceships. Space tourism may soon become available to more people.

Today, the Second Space Age is here. Though there is no precise date for its beginning, the contrast in today’s space domain is stark. Between the 1950s to 1991, a period dominated by the Cold War, 60 to 120 space launches took place annually and 93% of these were by the United States and the erstwhile Union of Soviet Socialist Republic (USSR) governments.

Three decades later, there are not only many more actors in the space scene, but a majority are also private companies. Last year, there were 180 rocket/space launches, 61 by Elon Musk’s Space X; 90% of global space launches since 2020 are by and for the private sector.

The 'Second Space Age' refers to the period from the 1990s onwards which saw increased private sector involvement in space exploration. Some key aspects of the Second Space Age:

  • Commercialization of space: Private space companies like SpaceX, Blue Origin, Virgin Galactic, etc. have emerged that offer launch services and space tourism. They are developing reusable rocket technology to lower the cost of access to space. SpaceX's Falcon 9 rocket and Dragon spacecraft have transformed space transportation.
  • Space mining: Companies like Planetary Resources and Deep Space Industries aim to mine asteroids for resources like water and precious metals. Space mining could revolutionize space-based industries if it becomes economically viable.
  • Space tourism: Companies like Virgin Galactic and Blue Origin are developing spacecraft for suborbital space tourism. SpaceX has also announced plans to send tourists on a flight around the Moon aboard its Starship spaceship. Space tourism can make space accessible to more people.
  • Advancements in robotics: Robotic spacecraft have explored much of the solar system. Robotic probes like New Horizons explored Pluto, Dawn explored Ceres and Hayabusa2 explored asteroid Ryugu. Robotic spacecraft can reach distant and harsh environments where humans cannot easily go.
  • Private space stations: Companies like Axiom Space and Bigelow Aerospace are developing private space stations. Axiom Space aims to build a commercial module for the ISS and eventually a free-flying space station. Private space stations can provide more opportunities for tourism, research and manufacturing in space.
  • Space-based solar power: Concepts like space solar power satellites that can harness solar energy in space and transmit it to Earth have been proposed. They could provide a constant source of renewable energy but face major technical and economic hurdles.
  • Space mining and space-based economy: If space mining and space-based solar power become viable, it could lead to a space-based economy with space resources and space-based products. However, we are still far from developing a strong space-based economy.
  • Deep space exploration: Robotic and manned missions are envisioned to destinations like Mars, Venus, asteroids, etc. SpaceX's Starship aims to send humans to Mars. Robotic probes could explore ice giants like Neptune and Uranus. Future space telescopes could study exoplanets and distant galaxies.

India’s space journey begins

India's space program began in the 1960s and has made tremendous progress in the decades since. Some key highlights of India's space journey:

  • The Indian Space Research Organisation (ISRO) was established in 1969 to develop space technology and its application to national development. It replaced the erstwhile Indian National Committee for Space Research (INCOSPAR) set up in 1962.
  • India's first satellite Aryabhata was launched by the Soviet Union in 1975. This marked the beginning of India's space program.
  • The Satellite Launch Vehicle (SLV) program in the 1980s aimed to develop indigenous satellite launch capability. The first SLV rocket successfully launched the Rohini RS-1 satellite in 1980.
  • The Polar Satellite Launch Vehicle (PSLV) program began in the 1990s. PSLV rocket is capable of launching payloads into the Earth’s polar orbit. It has had over 50 successful missions.
  • The Geosynchronous Satellite Launch Vehicle (GSLV) program aims to launch payloads into geostationary orbit. GSLV Mk III, India's most powerful rocket, successfully launched Chandrayaan-2 in 2019.
  • The Indian Remote Sensing (IRS) program has launched several remote sensing satellites used in fields like agriculture, water resources, forestry and disaster management.
  • Chandrayaan-1, launched in 2008, was India's first lunar mission. It provided evidence for water molecules on the Moon's surface.
  • The Mars Orbiter Mission (MOM) or Mangalyaan, launched in 2013, made India the first Asian nation to reach Mars orbit. It is studying the Martian surface and atmosphere.
  • Chandrayaan-2 and Gaganyaan are upcoming missions. Chandrayaan-2 will land a rover on the lunar surface. Gaganyaan aims to send Indian astronauts to space by 2021.
  • Applications of space technology have led to advances in fields like telemedicine, teleeducation, weather forecasting, GIS and navigation. Space technology has become deeply linked with serving societal needs.

India has one of the world's most successful space programs despite its limited resources. Ambitious future goals include human spaceflight, space station, crewed missions to the Moon and Mars, and developing reusable rocket technology. The increasing commercialization of space may provide new opportunities for international collaboration. India's progress in space has established it as a leader in space science and technology across the globe.

Space potential

The origins of the Second Space Age can be traced to the Internet. In India, the process began accelerating as the 1990s saw the emergence of private TV channels, together with cable TV followed by direct-to-home transmissions.

The demand for satellite transponders and ground-based services exploded. Today, more than half the transponders beaming into Indian homes are on foreign satellites.

The last 15 years witnessed another transformation, and this time India was in lockstep with the developed world. The age of mobile telephony, followed by smartphones has shown the world what a data-hungry and data-rich society India is.

Broadband, OTT and now 5G promise a double-digit annual growth in demand for satellite-based services.

In 2020, the global space economy was estimated at $450 billion, growing to $600 billion by 2025. The Indian space economy, estimated at $9.6 billion in 2020, is expected to be $13 billion by 2025. However, the potential is much greater with an enabling policy and regulatory environment. The Indian space industry could easily exceed $60 billion by 2030, directly creating more than two lakh jobs.

Potential of space exploration and space-based technologies

  • Space mining: Asteroids contain precious metals like gold, platinum, cobalt, etc. and water in the form of ice. Space mining could provide resources for space-based industries and space exploration. However, it remains technologically and economically challenging.
  • Space-based solar power: Giant solar panels in geostationary orbit could collect solar energy and beam it to Earth as microwaves. This could provide a constant source of renewable energy. But it requires major technological capabilities and high costs.
  • Space tourism: Suborbital and orbital space tourism could make space accessible to more people. SpaceX, Virgin Galactic, Blue Origin, etc. are developing spacecraft for space tourism. While suborbital tourism is emerging, orbital space tourism remains expensive.
  • Private space stations: Companies are developing private space stations, either modules attached to ISS or independent space stations. They aim to host tourists, researchers, manufacturers, etc. But space stations require huge investments and the demand for their services is still not proven.
  • Space colonization: Establishing long-term human habitation beyond Earth, on the Moon, Mars, space colonies, etc. This could hedge against threats to humanity on Earth and eventually "backup" our species. But space colonization faces daunting technological, economic and physiological challenges.
  • Asteroid mining robots: Robotic spacecraft could explore and mine asteroids to extract resources useful for space-based or Earth-based applications. Robots can reach harsh space environments, but robotic manipulation of resources and transportation back to Earth requires major advancements.
  • Space-based solar power satellites: Satellites in geosynchronous orbit could capture and transmit solar energy as microwaves to receiver stations on Earth. They could provide a constant renewable energy source. But technology for efficient energy conversion, transmission and receival does not yet exist.
  • Space manufacturing: Microgravity environment enables production of materials, composites and biological tissues difficult or impossible to create on Earth. ZBLAN fibers for telescopes and organs grown from stem cells are examples. But space manufacturing and transportation back to Earth needs to become more economically viable. 
  • Space resources for deep space exploration: Access to space resources like water, oxygen, hydrogen, etc. on the Moon and asteroids could make deep space exploration more feasible by reducing the amount of supplies launched from Earth. But we have a long way to go to utilize space resources for human missions into deep space.

In summary, while space offers exciting possibilities, most space-based technologies and concepts remain at an early stage and require major advancements before providing tangible and economically sustainable services. Government and private sector support for space technology development and space exploration will be crucial to harnessing these opportunities. Overall, the potential of space is promising but much work lies ahead to unlock the promise.

Creating an enabling environment

  • The Indian space start-up industry is growing rapidly with increasing investment and number of start-ups. It has the potential to boost the space sector like the IT industry did for the economy.
  • ISRO currently manages limited launches and satellites compared to other space agencies like China. While ISRO has worked with private companies, they were mainly vendors. Space start-ups need a different relationship as their business depends on space.
  • ISRO plays multiple roles as an operator, user, service provider, licensor, regulator and incubator. It needs to now focus on research based on its expertise and resources. The government has taken some steps to promote private participation like draft space laws, NSIL, IN-SPACe, etc.
  • Specific policies for satcom, earth observation and FDI have been proposed but legislation like a space act is needed to provide a legal framework, set up a regulator and enable venture funding for space start-ups.
  • India has an opportunity to be part of the Second Space Age with increased private sector involvement but it needs to act fast before the opportunity is lost.
  • A space act should provide guidelines for licensing of space activities, a regulatory body to oversee compliance, and set the overall framework for public-private partnership in space sector. It can boost investment in space start-ups by providing clarity.
  • The existing and proposed government initiatives show there is willingness to bring private companies into space sector. But a comprehensive space act is vital to give shape to these efforts and transition ISRO's role to open up the space sector.
  • Space start-ups in India want to do more than just build to ISRO's specs. They need freedom and incentives to innovate which can be enabled by a progressive space policy and regulatory environment. Partnership with ISRO remains key but needs to evolve.
  • There is significant interest and talent within the private sector to take up new opportunities in space. An enabling policy and regulatory environment can unleash the potential of space start-ups to support the growth of India's space sector. But the window to do so may be limited.
  • India's space sector is poised for major transformation with increased private participation. ISRO and government's role in providing an enabling environment through policy, regulation and partnership will influence the pace and scope of this transformation. Overall support for innovation and risk-taking can power India's journey to the forefront of the global space race.

Telecom authorities have blocked as many as 120 headers operated by a group linked to a Chinese entity

Context: Telecom authorities have blocked as many as 120 headers operated by a group linked to a Chinese entity in the past two months based on information provided by the Union Home Ministry.

What is a header?

  • A header, also known as sender ID, is a unique combination of characters or numbers representing the brand or company name of the message sender. 
  • Headers are used by banks, marketing companies, utility providers and even government offices to send bulk messages (SMS) to consumers and customers.

Current Issue?

An investigation by the Indian Cyber Crime Coordination Centre (I4C) found that the headers were hosted from China.

  • The particular example in this case was the header of West Bengal State Electricity Distribution Company Ltd.  WBSEDC was compromised and taken over by a Chinese host. 
  • The header was misused to dupe consumers who received messages pertaining to outstanding electricity bills. These SMS contained malicious links, which when clicked would lead to financial loss for the consumer as the hacker would get access to the person’s phone.
  •  Consumers would fall for it as the header genuinely belongs to the electricity distribution company.
  • Further it is for the Threat Analytical Unit (TAU) of the I4C, that analyses the pattern of financial crimes and frauds and sends reports to central agencies such as the National Investigation Agency (NIA), Enforcement Directorate or State police forces.

About Indian Cybercrime Coordination Centre (I4C) 

Indian Cybercrime Coordination Centre (I4C)  is an initiative of the Ministry of Home Affairs, Government of India to deal with cybercrime in the country in a coordinated and comprehensive manner.

I4C focuses on tackling all the issues related to Cybercrime for the citizens, which includes improving coordination between various Law Enforcement Agencies and the stakeholders, driving change in India's overall capability to tackle Cybercrime and to improve citizen satisfaction levels.

Objectives of I4C

  • To act as a nodal point to curb Cybercrime in the country.
  • To strengthen the fight against Cybercrime committed against women and children.
  • Facilitate easy filing Cybercrime related complaints and identifying Cybercrime trends and patterns.
  • To act as an early warning system for Law Enforcement Agencies for proactive Cybercrime prevention and detection.
  • Awareness creation among public about preventing Cybercrime.
  • Assist States/UTs in capacity building of Police Officers, Public Prosecutors and Judicial Officers in the area of cyber forensic, investigation, cyber hygiene, cyber-criminology, etc.

The Components of the I4C Scheme

  • National Cybercrime Threat Analytics Unit (TAU)
  • National Cybercrime Reporting
  • Platform for Joint Cybercrime Investigation Team
  • National Cybercrime Forensic Laboratory (NCFL) Ecosystem
  • National Cybercrime Training Centre (NCTC)
  • Cybercrime Ecosystem Management Unit
  • National Cyber Crime Research and Innovation Centre

About National Cybercrime Threat Analytics Unit (NCTAU)

  • It is a platform for Law Enforcement Agencies (LEAs), persons from private sector, academia and research Organisations to work collaboratively in order to analyse all pieces of information relating to Cybercrime. 
  • This unit collects Cybercrime feeds from open sources, National Cybercrime Reporting Portal, CERT-In, and other agencies working in this field, analyse it and further disseminates it to the concerned agencies for taking further appropriate action.