GS Paper 3

What is the H-1B Visa?

Context: The US President elect Donald Trump’s supporters are locked in a public row about skilled immigration and H-1B visa.

Relevance of the Topic: Prelims: Key facts about H-1B Visa.

What is the H-1B Visa?

The H-1B is a Visa in the United States that allows the US employers to employ high skilled foreign workers in specialised occupations. The programme was started in 1990.
Criterion: Specialty Occupation refers to a job that requires a specific set of specialised skills and educational qualifications.
- Educational Requirement: At least a Bachelor's degree or higher in a specific field of study.
- Specialised Knowledge: Expertise in a particular field like- IT specialists, engineers, scientists, healthcare professionals etc.
- Complex and specialised duties associated with the position.

Eligibility Criteria- Visa Requirements for Employees:

Education: A person should possess a Bachelor’s degree or higher (or its equivalent) in a specific field directly related to the offered position.
Job Offer: A person must have a legitimate job offer from a U.S. employer for a specialty occupation.
Work Experience: Depending on the specific occupation and degree, one may be required to demonstrate relevant work experience in the field.
Licensing: If the occupation requires a license to practice in the state of intended employment, the employee must generally possess that license before the H-1B petition can be approved.

Duration and Cap

Duration:

H-1B status is initially granted for three years but can be extended to another three years (maximum of 6 years).
After 6 years the visa holder has to either leave the US for a period of at least 12 months before returning or apply for and receive permanent residence that is a green card.
There is no capping on the number of H1-B Visas that an individual can have in his/her lifetime.

Cap:

Currently, the annual numerical limit is 85,000 for H-1B visas (65,000 new status visas and extra 20,000 visas available to those with a Master’s degree or higher from the US universities.)
Some H-1B petitions are exempt from the annual cap. (E.g., those for employees of institutions of higher education, non-profit research organisations, or governmental research organisations)

Debate over H-1B Visas

H-1B Visa has been the highly desired pathway for jobseekers including Indians to migrate to the US.
People born in India are the largest beneficiaries of the H-1B programme.
Data from the US government show that Indians account for more than 70% of all H-1B petitions approved each year since 2015.

Immigration is one of the most polarising political issues in the US. Much of the election time anti-immigration rhetoric focused on low skilled labour migration.
- Critics of the H-1B program claim that this program has been misused by tech corporations to staff their low to mid-level workforce for much less pay than what Americans would demand.
- They are of the view that such immigration depresses wages and takes away jobs that would have otherwise gone to the American working class.
- President elect Mr. Trump has encashed on such sentiments and has promised improved conditions for working American Middle Class by curbing immigration.
Proponents of H-1B visa argue that this programme is essential for bridging the skill gaps in the USA and wages are market driven. Since, China and India boast the highest number of STEM graduates (more than 6 million combined) in the World. When compared to the number of STEM graduates in the US (nearly 8 lakh), they become critical and vital for the economy.

Interest rate cuts likely in Small Savings Scheme

Context: The government is likely to cut interest rates on small savings schemes from April 2025, after a significant time period of steady rates since October 2022. The decision is likely influenced by falling G-Sec yields and monetary policy dynamics.

Relevance of the topic:

Prelims: Small Savings Scheme- Prelims-related facts.

Mains: Small Savings Scheme- Benefits, Limitations.

What are Small Savings Schemes?

Small Savings Schemes are a group of government-backed financial instruments intended to encourage people to save regularly at any age.
The depositors get an assured interest on their money. They are the major source of household savings in India.
They are popular as they provide returns higher than bank fixed deposits, sovereign guarantee and tax benefits.

About Small Savings Schemes in India

Small savings instruments can be classified under three heads:
- Postal deposits comprise savings accounts, recurring deposits, time deposits of varying maturities, and monthly income scheme.
- Savings certificates: National Savings Certificates (NSC); Kisan Vikas Patra (KVP)
- Social security schemes: Sukanya Samriddhi Yojana; Public Provident Fund (PPF); Senior Citizens Saving Scheme (SCSS); Mahila Samman Savings Certificate (MSSC).
All collections under the small savings are credited to the National Small Savings Fund (NSSF) in the Public Account of India.
The interest rates are revised every quarter based on the G-Sec yields of the previous three months.
A certain amount of NSSF is invested in the Central and State Government securities.
The fund is administered by the Department of Economic Affairs under the Ministry of Finance.

Kisan Vikas Patra:

KVP was initially launched as a small saving scheme certificate to encourage farmers to save for the long term. However, the scheme is now open to all Indian citizens over 18.

National Savings Certificates:

NSCs can be purchased from any Post Office in India. These are issued for five year maturity and can be pledged to banks as collateral for availing loans. The holder gets the tax benefit under Section 80C of Income Tax Act, 1961.

Sukanya Samriddhi Yojana:

It aims to secure the financial future of girl children under the age of 10. It matures 21 years after opening or at the time of marriage (whichever is earlier). Allows 50% withdrawal of the amount after the girl child turns 18.

Benefits of the Small Savings Schemes

Regular income: The schemes like SCSS provide regular income to vulnerable groups like senior citizens.
Encourages saving habit: Low entry values for savings investment enables even small investors to practice saving.
Financial Inclusion: Postal deposits schemes and Kisan Vikas Patras encourage savings in rural and other un-banked areas.
Tax benefits: Investments in Small Savings schemes are eligible for tax deductions under the Section 80C of the Income Tax Act.
Women Empowerment: Specialised schemes like Sukanya Samriddhi Yojana and Mahila Samman Savings Certificate empower women and girls financially.
Safety and Security: Having sovereign guarantee, small savings schemes are a secure investment option with minimal risk.

Limitations of the Small Savings Schemes

Inflation-related risk: Returns, at times, might not be in line with the prevailing inflation rate, thus reducing the real value of savings.
Taxable returns: Interests earned on certain schemes are taxable.
Lack of flexibility: Most schemes require fixed contributions, hence, there is little flexibility in investment amounts.
Comparatively Lower Returns: Returns are fixed and can be lower than high-yield investments like mutual funds or equities.
Low liquidity: Schemes, like PPF and Sukanya Samriddhi Yojana, have long lock-in periods, restricting premature withdrawals.

Logistics Sector in India

Context: Presently, the logistics sector in India is valued at $250 billion and contributes to 14% to India’s GDP. Given its crucial role in supply chains, experts remain bullish on the future growth prospects of the sector.

Relevance of the Topic: Mains: Logistics Sector- Present scenario, Initiatives, Way Forward

Present Scenario of Logistics Sector in India

Higher logistics cost in India (12-14% of GDP), compared to 8-10% global benchmark.
Logistics cost slid 0.8-0.9 percentage points of GDP between FY14-22.
India is elevated to the 38^th rank (among 139 nations) in the World Bank's Logistics Performance Index Report, 2023.
The logistics sector demonstrated resilience as it accelerated transition from unorganised to a structured industry.

Initiatives to boost the Logistics Sector in India

National Logistics Policy, 2022:
- Aim: achieve ‘quick last-mile delivery', end transport-related challenges.
- Logistics costs to be cut by half to be near global benchmarks by 2030.
- India aims to be among the top 10 in the Logistics Performance Index by 2030.
PM Gati Shakti National Master Plan:
- Essentially, a digital platform that brings 16 ministries together for integrated planning and coordinated implementation of infrastructure connectivity projects.
Unified Logistics Interface Platform (ULIP):
- Aim: to collapse all logistics and transport sector digital services into a single portal.
- ULIP platform enables the industry players to get secure access to information related to logistics and resources available with various Ministries.
Logistics Data Bank:
- It serves as a single-window container logistics visualization system, providing comprehensive tracking using container numbers.
- This system tracks containers between ports and their hinterlands, including Inland Container Depots (ICDs), Container Freight Stations (CFSs), port-associated parking plazas, toll plazas, railway stations, industrial corridors, SEZs, and empty yards, etc. during EXIM and domestic journeys.
National Logistics Portal- Marine (NLP-Marine):
- NLP Marine is a one-stop platform aimed at connecting all the stakeholders of the logistics community using IT.
- The activities of NLP Marine are categorized into four distinct verticals:
  - Carrier
  - Cargo
  - Banking and Finance
  - Regulatory Bodies and Participating Government Agencies (PGAs).

Role of GST in Logistics Sector

GST has played a crucial role in reducing logistics cost.
‘One Nation One Tax’ regime has cut waiting time of trucks at inter-state borders, significantly reducing travel time by 30%.
This has reduced the logistics cost and increased the average distance covered by trucks.

Further Scope for Logistics Development in India

Deeper digital adoption and intensified focus on risk management has resulted in transformative changes in the Indian logistics sector in 2024.
“China-plus-one-strategy” adopted by various multinational companies further reaffirms India’s critical position in global supply chains.
Supporting policies like giving Infrastructure status to ‘Warehousing’ and expanded FDIs accelerate the development of multi-client warehousing facilities.
The 11.1% rise in capital expenditure for infrastructure signals significant growth opportunities in the sector.

Way Forward

Need for skilling
- To fully unlock the potential of the sector, enhancing workforce skills is crucial.
Capitalise on global trade opportunities
- Policies strengthening the growth of e-Commerce, demand for faster delivery, export expansion driven by PLI schemes can accelerate goods movement.
Streamlining Government initiatives
- Initiatives like UDAN (promoting regional air connectivity) and NLP, will cut logistics cost by 4-5%, enhancing competition in global markets.
Multi-modal connectivity
- Strengthen Maritime connectivity projects to hasten transformation from land-based to coastal transportation.
- Implement India Ports Bill for the development of the ports sector and increasing its share in logistics.

Logistics has a crucial role in supply chains — whether road, rail, air, waterways or warehouses. India’s ambition of becoming a $5 trillion economy by 2027, strongly depends on the development of the logistics sector. Government interventions like cutting costs and focusing on reskilling and upskilling can be a game-changer.

What are Endocrine Glands?

About Endocrine glands

Relevance of the Topic: Prelims: Basic understanding of static concepts in Biology.

The endocrine system is a network of glands and organs located throughout the body. It plays a vital role in controlling and regulating many of the body's functions.
Endocrine glands are ductless glands of the endocrine system that secrete their products (hormones) directly into the blood.
Major glands of the endocrine system include the pineal gland, pituitary gland, pancreas, ovaries, testicles, thyroid gland, thymus, parathyroid gland, hypothalamus and adrenal glands.

S.No.	Endocrine glands	Location	Function
1.	Pituitary gland (Master gland)	Base of the Brain	• Releases various hormones like Human growth hormone • Thyroid-Stimulating Hormone (stimulates Thyroxin production) • Prolactin (stimulate milk production post child-birth)
2.	Hypothalamus	Brain	• Links the nervous system to the endocrine system via the Pituitary gland. • Regulates body temperature; hunger, thirst. • Releases Dopamine (feel good hormone), Oxytocin (role in parturition, lactation) and Vasopressin (regulation of water and sodium homeostasis).
3.	Pineal gland	Brain	• Releases Melatonin • Melatonin plays a key role in sleep cycle (regulates circadian rhythm).
4.	Thyroid gland	Neck	• Releases Thyroxine. • Thyroxine controls metabolism, energy production, body temperature and growth.
5.	Parathyroid gland	Neck (behind the Thyroid)	• Releases Parathyroid hormone that regulates calcium, phosphorus and magnesium in the bones and blood.
6.	Thymus	Upper Chest	• Development of Immune system cells (T-cells)
7.	Adrenal gland	Above the Kidneys	• Produces Adrenaline (activates specific physiological reactions or fight-or-flight response) • Produces Cortisol (or stress hormone) which helps the body in responding to stress by increasing heart rate, elevating blood sugar levels etc.
8.	Testes	In the scrotum (only in Males)	• Releases Testosterone • Testosterone promotes growth and development of the male reproductive structures; Increased skeletal and muscular growth; Enlargement of the larynx and voice changes; growth of body hair
9.	Ovaries	In the pelvic region (only in Females)	• Releases Estrogen and Progesterone. • Estrogen promotes development of the breasts; distribution of fat in the hips & legs; maturation of reproductive organs (uterus and vagina). • Progesterone causes the uterine lining to thicken in preparation for pregnancy.
10.	Pancreas	Behind the Stomach	• To control blood sugar levels by producing Insulin and Glucagon.

India-Australia Trade Agreement

Context: The Ministry of Commerce has released data on Indo-Australian Trade relations, as nations visited the 2 year milestone of Indo-Australian Economic Cooperation and Trade Agreement (ETCA) trade deal.

Relevance of the topic:

Prelims: Basics of FTA, CEPA and ETCA.

Mains: Dynamics related to Indo-Australian trade relations; Issues related to CEPA.

Major Highlights:

Export utilisation of Indo-Australian Economic Cooperation and Trade Agreement (ETCA) has reached 79%. While the import utilisation has reached 84%.
- Trade Utilisation of a free trade agreement (FTA) indicates the extent to which the trade benefits from the agreement.
- It provides insights into whether businesses are effectively leveraging the FTA or finding its concession procedures burdensome.
Data also reveals that the trade between India and Australia has declined.
- As compared to $4.89 Billion during six months from April to September 2023, exports to Australia have declined to $3.99 Billion in the same period during 2024, marking a 18% decline.
- Imports also witnessed an 18% decline during the same period.

About Economic Cooperation and Trade Agreement (ECTA)

Economic Cooperation and Trade Agreement is a bilateral trade agreement aimed at enhancing the economic ties between India and Australia.
It was signed on April 2, 2022 and came into force in December 2022
Key aspects of ETCA:
- Tariff Reduction: Australia eliminated 96% tariffs on Indian goods. While India offered concessions in coal, wine and agricultural produce to Australia.
- Market access: Both nations provided market access to sectors like pharmaceuticals, education, healthcare and information technology.
- Enhanced professional mobility: Indian IT and healthcare professionals gain improved access to the Australian market.
- Rule of origin: Agreement includes rules of origin clause to avoid benefits to any third party.
ETCA can be considered as the foundational stone for the upcoming Comprehensive Economic Cooperation Agreement (CECA).

About Comprehensive Economic Cooperation Agreement (CECA)

The Comprehensive Economic Cooperation Agreement is an extension of the ETCA, for which negotiations are undergoing between India and Australia.
It aims at broadening the scope of the agreement including areas like investment protection, intellectual property rights (IPR), digital trade, government procurement and regulatory framework.
Key Goals of CECA:
- Comprehensive access to goods-services across various sectors involving finance, education, medical etc,.
- Enhanced mobility for skilled professionals, students and workers between the two nations.
- Digital trade collaboration to boost e-commerce
- Innovation collaboration in sustainable means like clean energy.
Concerns regarding CECA
- Agriculture and dairy sector farmers in India are apprehensive about increased Australian agriculture products reading their income due to competition.
- Labour mobility issue: India wants IT professionals, paramedic staff, students and workers to have free mobility. But Australia opposes these conceptions due to concerns of locals.
- IPR: Australia wants a strict IPR regime, while India on the other hand is concerned about these stricter norms as it can impact the generic drug market of India.
Current status: Negotiations for the CECA began following the success of the ETCA. Both countries have expressed strong political will to finalise the agreement, though there are certain sensitive issues like agriculture, intellectual property rights and labour mobility that require comprehensive discussion and consensus.

Conclusion: Both ETCA and CECA are crucial for boosting the trade between India and Australia. But concerns of farmers, labourers and professionals need to be taken under consideration with a detailed discussion. A well discussed development of CECA will open a new route for the Indo-Pacific Economic Framework (IPEF).

PM Internship Scheme

Context: As per the Union Ministry of Corporate Affairs, the pilot scheme of the Prime Minister’s Internship Scheme has received approximately 6.21 lakh applications against 1.27 lakh opportunities under the scheme.

Relevance of the Topic: Prelims: Key facts about the Prime Minister’s Internship Scheme.

About Prime Minister’s Internship Scheme

The scheme was announced in the Budget 2024-25.
Initiative of: Ministry of Corporate Affairs
Aim: To provide internship opportunities to one crore youth in top 500 companies in five years.
A Pilot Project of the Scheme targeted at providing 1.25 lakh internship opportunities has been launched for the Financial Year 2024-25.

Selection of Companies:

The internship opportunities span 24 sectors, including oil, gas, energy, travel, hospitality, automotive, banking and financial services, etc.
The companies selected for this pilot were identified based on their corporate social responsibility (CSR) expenditure over the past three years, ensuring that participants are placed in organizations that are committed to social and ethical practices.
Other companies, banks, or financial institutions can also participate with approval from the Ministry of Corporate Affairs (MCA), particularly if they represent underrepresented sectors.
If a partner company cannot provide internship opportunities directly, it may collaborate with: Companies in its forward and backward supply chain (e.g., suppliers, customers, vendors).

Eligibility:

The Pilot Project offers a 12-month internship program designed for youth aged 21 to 24 years, specifically for Indian nationals who are not employed full-time or engaged in full-time education.
Internships can be applied for through the PM Internship Portal (Managed by Ministry of Corporate Affairs)
Candidates who have passed High School or Higher Secondary School, have a certificate from an ITI, have a diploma from a polytechnic institute. Graduated with degrees such as BA, B.Sc, B.Com, BCA, BBA, B.Pharma, etc.

Exclusion:

Graduates from premier institutions like IITs, IIMs, National Law Universities, IISER, NIDs, and IIITs along with holders of qualifications such as CA, CMA, CS, MBBS, BDS, MBA, or any master’s or higher degree are not eligible.
Those undergoing skill, apprenticeships, internships, or student training under Central or State government schemes along with Individuals who have completed apprenticeships under National Apprenticeship Training Scheme (NATS) or National Apprenticeship Promotion Scheme (NAPS) are ineligible.
A candidate is deemed ineligible if the income of any of the family members exceeds Rs 8 Lakh for FY 2023-24.
Family members of permanent or regular government employees are also excluded.

Financial Assistance:

Interns will receive a monthly stipend of ₹5,000 throughout the internship duration.
- This consists of: ₹500 contributed by partner companies, contingent on attendance and conduct.
- The remaining ₹4,500 will be provided by the government via Direct Benefit Transfer (DBT) to the intern’s Aadhaar-seeded bank account.
Additionally, a one-time grant of ₹6,000 will be disbursed after joining the internship, also through DBT.
All interns will be covered under the government’s insurance schemes: Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana, with the premium paid by the government.
Training Costs i.e. expenditures associated with the training of interns under the Scheme, would be borne by the company from its CSR funds, as per the extant rules.

Significance:

Scheme provides an opportunity to the interns to get training, gain experience and skills within the real-life environment of the businesses or organizations that helps in bridging the gap between academic learning and industry requirements, in turn, assisting enhancement of her/his employability.
By partnering with leading companies across diverse sectors, the initiative aims to enhance employability and skills among participants.
With clear eligibility criteria and structured support through Direct Benefit Transfers, this program not only fosters professional growth but also encourages active participation from businesses committed to corporate social responsibility.

Key Initiatives in the field of Skill development:

STRIVE Project focuses on entrepreneurship and mentoring in ITIs and NSTIs.
PM-JANMAN initiative targets skilling and uplifting vulnerable tribal groups.
SANKALP - marginalized communities receive support for entrepreneurship
Initiatives under the Skill India Mission [Ministry of Skill Development and Entrepreneurship (MSDE)}
- Pradhan Mantri Kaushal Vikas Yojana (PMKVY) - offers short-term skill training
- Pradhan Mantri Kaushal Kendra’s (PMKK) - standardizes quality training across India.
- Jan Shikshan Sansthan (JSS) - target non-literate and rural populations,
- Pradhan Mantri YUVA Yojana - promotes entrepreneurship.
- Skill India Digital (SID) - introduces AI-driven tools for job matching and continuous learning.
- The PM Vishwakarma Yojana - supports traditional artisans by modernizing their skills and integrating them into global markets, ensuring sustainable livelihoods.

PSLV-C60: SpaDeX & POEM

Context: Indian Space Research Organisation’s (ISRO) PSLV-C60 mission is scheduled to be launched on December 30, 2024.

Relevance of the Topic: Prelims: Space Docking Experiment (SpaDeX); PSLV Orbital Experimental Module

Major Highlights:

The mission will demonstrate the complex art of satellite docking in space with the Space Docking Experiment (SpaDeX).
- The PSLV rocket will carry two satellites named Chaser (SDX01) and Target (SDX02). Each weighs 220 kg.
- After launch and orbit insertion, the two satellites will attempt to dock at an altitude of 470 kilometers above the Earth.
The mission will also leverage the PSLV's fourth stage (POEM-4) to host 24 scientific experiments, designed by various ISRO centres, academic institutions, and Indian private companies.

Read More: SpaDeX: Space Docking Experiment

Why does SpaDeX matter for India?

The mission is a strategic step towards several ambitious space objectives, including:
- Preparing for the Gaganyaan human spaceflight program
- Enabling Chandrayaan-4 lunar sample return missions
- Developing the Bharatiya Antariksh Station (BAS), India's proposed space station.

PSLV Orbital Experimental Module (POEM)

Developed by: Vikram Sarabhai Space Centre (VSSC).
POEM is an experimental mission or space platform to perform in-orbit experiments using the final (otherwise discarded) stage of ISRO’s PSLV.
- PSLV is a four-stage rocket where the first three spent stages fall back into the ocean, and the final stage (PS4) — after launching the satellite into orbit — often ends up as space junk.
- In POEM, the spent final stage will be utilised as a stabilised platform to perform experiments.
POEM has a dedicated Navigation Guidance and Control (NGC) system to act as the platform’s brain for attitude stabilisation with specified accuracy.
POEM will derive its power from solar panels mounted around the PS4 tank, and a Li-Ion battery. It will navigate using four sun sensors, a magnetometer, gyros & NavIC.

POEM-4’s Payloads:

POEM-4 carries 24 payloads: 14 contributed by various ISRO centres and 10 by academia and private industry. POEM-4 will begin operations after satellite separation.

Some important payloads include:

Relocatable Robotic Manipulator-Technology Demonstrator, a.k.a. ‘Walking Robotic Arm,’ developed by ISRO Inertial Systems Unit (IISU), is expected to demonstrate a robotic arm that can move to defined targets on the POEM using an inchworm walking technique.
Debris Capture Robotic Manipulator to capture tethered space debris with a robotic manipulator.
Compact Research module for Orbital Plant Studies to study the germination and growth of eight cowpea seeds in a five- to seven-day experiment in a controlled environment.
Amity Plant Experimental Module in Space (APEMS) payload. It will compare growth-related changes in plant callus cells using spinach plants in microgravity and earth gravity.
RVSat-1 payload. It will measure the growth of the gut bacterium (Bacteroides thetaiotaomicron) in space. The experiment is expected to provide data to understand human physiology in space and astronaut health during crewed missions.
BGS Amateur Radio Payload for Information Transmission (ARPIT). It can transmit audio, text, and images from a satellite to the ground with frequency modulation in the VHF band. It is designed to provide amateur radio satellite services worldwide.
RUDRA 1.0 HPGP will test a green propulsion system with a thrust of 1 newton and a specific impulse of 220 seconds.
VYOM 2U developed by Manastu Space will test a monopropellant as a safer and better performing alternative to hydrazine (the most widely used propellant in the Indian space programme at present). VYOM has a thrust of 1.1 N and a specific impulse greater than 250 seconds.

PDS posing challenges in CPI calculation

Context: The Ministry of Statistics and Programme Implementation (MoSPI) has floated a discussion paper in a process to revise the base of Consumer Price Index (CPI).

Relevance of the Topic: Prelims: Key aspects about the Consumer Price Index (CPI).

Major Highlights of the discussion paper:

Objective: To revise the base year of CPI by updating weights and basket of CPI by introducing possible improvements in methodology of CPI compilation.
Contention on PDS and free social transfers in context of CPI: The Ministry highlighted two major challenges in free distribution of PDS (Public Distribution System) items in context of CPI compilations:
1. Mid Series Adjustments: How to address the reduction in the price of PDS items from positive value to zero or increase in price of PDS items from zero to some positive amount during an ongoing series?
2. Inclusion in CPI basket at start of series: Should the free PDS items (which involve no out of pocket expenditure) be included in CPI basket or not remains a challenge.

Challenges of including Free items in CPI

Various states and UT distribute various items like Kerosene in PDS for free of cost, which poses a challenge in calculation of such items as the out of pocket expenditure is zero for such items.
- Existing norm- Such goods are assigned with the value of zero. Therefore, these items are effectively excluded from the CPI basket.
- IMF recommendation- International Monetary Fund suggests excluding such items from the index as the index should be restricted to monetary transactions only. Further, such transactions should be ignored as they do not generate any demand for money.
Thus, including free items in CPI could underestimate inflation, while their exclusion might fail to reflect actual consumption patterns of households.

Suggestions given in the discussion paper:

The discussion paper suggests three methods to deal with free PDS items:

Zero value allocation- This method suggests that zero price to be allocated to items and adjusting the weight during the next update. (Method is proposed for next series of CPI)
Redistribution of weight- Method suggests that the weight of items of such items in PDS to be redistributed as other items within the class or section. (Method is used in existing series)
Redistribution across basket- Third method suggests redistribution of weight broadly over all items of basket.

About Retail Inflation Index in India

Consumer Price Index or CPI is the market basket index used to calculate the retail inflation in the country.
RBI uses CPI (Combined) with base year 2012 to calculate the inflation. CPI (Combined) takes into account price changes in both urban and rural areas.
- Base year is a reference year to calculate the value of goods.

About Public Distribution System

PDS is a government led initiative designed to distribute food grains and essential commodities to economically weaker sections.
Key objectives: Ensuring food security, stabilising food prices and reducing poverty.
Notable schemes:
- Antodaya Anna Yojana for the poorest of the poor households with heavily subsidised food grains.
- National Food Security Act 2013 covers 65% of the population of the nation, ensuring their Right to Food.

Conclusion: CPI calculation is a barometer for the inflation in the nation, helping India to calculate its real growth prospects. To address the challenges in the calculation, the suggestions of the experts and agencies like the International Monetary Fund need to be incorporated.

Household Consumption Expenditure Survey: 2023-24

Context: The Ministry of Statistics & Programme Implementation (MoSPI) has recently released the Household Consumption Expenditure Survey: 2023-24, based on the data collected during August 2023 to July 2024 from the entire country.

Relevance of the Topic: Prelims: Key trends in the Household Consumption Expenditure Survey.

What is the Household Consumption Expenditure Survey (HCES)?

HCES is designed to collect information on consumption and expenditure of the households on goods and services.
Conducted by: National Sample Survey Office (NSSO), under the Ministry of Statistics & Programme Implementation.
Utility of the Survey: It provides data required to:
- Assess trends in economic well-being (measure poverty, inequality, and social exclusion).
- Determine and update the basket of consumer goods and services and weights used for the calculation of the Consumer Price Index (CPI).
The Monthly Per Capita Consumption Expenditure (MPCE) compiled from HCES is the primary indicator used for most analytical purposes.
Sample size: The estimates of MPCE of 2023-24 are based on the data collected from over 2.61 lakh households (both urban and rural) spread over all States and Union Territories in the country.

Important Findings of HCES: 2023-24

Average MPCE in rural and urban India in 2023-24 has been estimated to be Rs. 4,122 and Rs. 6,996, respectively, without taking into account the values of items received free of cost by the households through various social welfare programmes.
- In nominal prices, the average MPCE (without imputation) in 2023-24 increases by about 9% in rural areas and 8% in urban areas from the level of 2022-23.
Average MPCE with imputed values of items received free of cost through various social welfare programmes is estimated to be Rs. 4,247 and Rs. 7,078 respectively, for rural and urban areas.
Urban-rural gap in MPCE has declined to 71% in 2022-23 from 84% in 2011-12. It has further come down to 70% in 2023-24 that confirms sustained momentum of consumption growth in rural areas.
Consumption Inequality (measured in terms of the Gini Coefficient), both in rural and urban areas, has declined in 2023-24 from the level of 2022-23.
- The Gini coefficient has declined to 0.237 from 0.266 in 2022-23 for rural areas and to 0.284 from 0.314 in 2022-23 for urban areas.
Non-food items (Rent, conveyance, clothing, bedding, footwear, entertainment) accounted for about 53% of household’s average MPCE in rural areas, up from about 47% in 2011-12, and 60% in urban areas, up from about 57%.

Analysis of the Trends

India’s average household consumption spending rose about 3.5% in real terms through August 2023 to July 2024. This signals a decline in consumption inequality as well as a narrowing gap between urban and rural spending.
Decline in gini coefficient reflects reduction in consumption inequality across both urban and rural sectors. Social welfare schemes like PM-KISAN, PM Garib Kalyan Anna Yojana have contributed to narrowing consumption inequality.
Free items from the social welfare programs contributed significantly to the total expenditure, enhancing rural and urban MPCE.
Dominance of non-food items to the household’s average monthly expenditure highlights India’s ongoing transition towards a consumption-led economy. For rural areas, it means a rise in living standard and access to services. For urban areas, it may indicate lifestyle inflation.

IIT-Bombay develops Needle-free Shock Syringe

Context: A team of researchers at the Indian Institute of Technology, Bombay has developed a needle-free shock syringe.

Relevance of the Topic: Prelims: Key facts about working of shock syringe.

What is the Shock Syringe?

Traditional syringes with needles rely on piercing the skin with a sharp tip. However, the shock syringe does not have a needle.
Principle of Working:
- It uses high-energy pressure waves (shock waves) that can travel faster than the speed of sound to pierce the skin.
- When generated, these waves compress the surrounding medium, such as air or liquid, through which they travel.

Working Mechanism:

The shock syringe uses a tiny tube with three sections (the driver, driven, and drug holder) which work together to create the shockwave-driven microjet to deliver drugs.
- Pressurised nitrogen gas is applied to the driver section of the shock tube.
- The gas forces the liquid drug (held in the drug holder section) through the tube, to create a high-velocity microjet.
  - The microjet travels at a speed nearly twice as fast as a commercial aeroplane at take-off.
- This microjet of drug exits the nozzle of the syringe and penetrates the skin.

Significance:

Minimises tissue damage and ensures consistent and precise drug delivery.
Prevent the occurrence of blood-borne diseases caused by needle-stick injuries due to mishandling or improper disposal.
One shock syringe can perform multiple drug delivery shots (E.g., over 1,000 shots tested) offering cost-effectiveness.
Pain-free injections for patients with fear of needles.
Utilisating shock syringe could make immunisation drives more efficient.

DISCOMs: Challenges and Reforms

Context: 2024 has been seminal for the power sector with the country meeting an unprecedented peak demand of 250 GW in a year. India also added around 30 GW of installed capacity in the last 12 months, three-fourths of which came from renewable energy (RE). However, debt sustainability of DISCOMs is the biggest challenge faced by the power sector.

Relevance of the Topic: Mains: Challenges faced by DISCOMs & Way Forward.

Background:

The International Energy Agency (IEA) expects India’s power demand to grow at 4% annually till 2050. A robust power sector rests on a vibrant DISCOM ecosystem.
Distribution Companies (DISCOMs) act as the link between power producers and consumers, ensuring electricity distribution across the nation.

Challenges faced by the DISCOMs

Higher AT&C losses (22%) on the account of transmission losses, commercial losses due to power theft, absence of metering, inefficiencies in bill collection. Global Average for AT&C losses is much lower at 8%.
Higher Cost of Power Procurement: Power procurement accounts for about 70% of costs incurred by DISCOMs. DISCOMs have entered into expensive and long-term thermal Power Purchase Agreements (PPAs). Also, delays and cost overruns in some projects have increased capital costs.
Debt Unsustainability: The outstanding debt of Discoms stands at ₹7.14 lakh crore as of March 2023 and is likely to increase, as Discoms continue to grapple with ACS-ARR gap (The gap between Average Cost of Supply and the Average Revenue Realised).
Lack of Autonomy: Political interference in fixing tariffs leading to lower tariffs on electricity. DISCOMS end up supplying electricity to households and the agriculture sector at subsidised prices leading to higher losses.
Higher dependence on State Governments: DISCOMs depend on state governments for subsidies. Delays in receiving subsidy reimbursements from the government add to liquidity stresses of DISCOMs.
Monopolisation: Presently, DISCOMs enjoy monopoly in distribution of electricity leading to absence of competition, higher inefficiencies and poor service-delivery.
Slow pace of Transmission Infrastructure: Of the 1,14,687 circuit km of (ckm) transmission lines and 776 GVA (Gigavolt-Ampere) substations to be added between April 2022-March 2027, just 28% and 20%, respectively, have been commissioned as of October 2024.

Distribution Sector Reforms

UDAY Scheme: Aims at improving the financial position of DISCOMs. Under the scheme, states are supposed to take over 75% of the discoms’ debt and the DISCOMs were required to reduce AT&C losses to 15%.
Revamped Distribution Sector Scheme (RDSS):
- RDSS has an outlay of Rs 3,03,758 crores over five years (2021-22 to 2025-26), with an estimated government budgetary support (GBS) of Rs 976.31 billion.
- Aim: To reduce AT&C losses on a pan-India level to 12-15% by 2024-25; reduce the average cost of supply-average revenue realised gap on a pan-India level to zero by 2024-25; and improve the quality, reliability and affordability of power supply to end-consumers.
- RDSS focuses on providing financial support for smart metering systems, distribution infrastructure upgrades, training, capacity building etc.
Financial Support: A total of Rs. 1.4 lakh crores was provided to DISCOMs in 2022–23 by the central and state agencies.
Private Participation and Competition in Distribution: Some of the states have promoted private participation in the DISCOMs through (a) Franchise Model and (b) Privatisation of DISCOMs.
- Under the Franchise model, the private entity has no ownership over the distribution grid assets. The private party manages billing and revenue collection. Example: Bhiwandi, Maharashtra.
- In case of privatisation, the private entity not only manages the billing and revenue collection but also owns the distribution grid. Example: Privatisation of Delhi Vidyut Board in 2002.

Way Forward

Tariff Reform and Direct Subsidy Transfer: Restructuring tariffs to reflect true cost of electricity generation and distribution is essential to ensure financial viability for DISCOMs. Direct transfer of tariff subsidies to beneficiaries may reduce undue financial burden on DISCOMs.
Autonomous Regulatory Bodies: Ensuring independence of regulatory bodies is crucial for effective tariff-regulation. Regulatory bodies should have authority to set tariffs based on actual costs and demand to encourage DISCOMs to operate efficiently.
Private Participation: Introducing competition among DISCOMs by allowing multiple-players to operate in a region can improve efficiency and bring in much-needed investment, innovation and management expertise.
Smart grid and metering can enable real-time monitoring of electricity usage, efficient load management, thereby, reducing transmission and distribution losses. It would also help in Peer-to-Peer energy trading and help utilities and consumers in efficient power utilisation.
Flexible PPAs: Electricity Regulatory Commissions should allow DISCOMs to make flexible, cost-effective procurement instead of continued lock-in under rigid and longer PPAs.

Hence, addressing the challenges faced by DISCOMs is imperative to ensure sustainability and efficiency of India's power distribution system.

Strengthening Fisheries Extension Services

Context: India has witnessed 83% increase in fish production, making India the second largest producer of fishes. Such a rise makes strengthening the fisheries extension services crucial.

Relevance of the Topic: Mains: Fisheries sector in India; Challenges and scope.

About Fisheries Extension Sector

Fisheries extension services are specialised programs and activities aimed at improving the knowledge, skills and practices of fishers and aquaculture stakeholders.
These includes:
- Disseminating information
- Promoting sustainable practices
- Facilitating access to modern technologies.

Government Schemes to Enhance Extension Services

Matasya Sampada Kendra:
- The flagship scheme provides a one-stop solution to the fishers by providing trained professionals sharing their expertise to boost production.
- Government assistance up to 60% is provided to set up such centers for women and weaker sections.
- Notable examples:
  - Kendra at Tissue Kerala provides a well-equipped lab for water, soil and microbial analysis.
  - Kendra at Nashik focuses on capacity building of Fishers and Fish Farmers on various seed/feed inputs.
Sagar Mitra:
- Sagar mitras in coastal areas are a vital interface between government and sea-borne fishers.
- They compile information and data on daily marine catch, price fluctuations, requisite market needs at fish landings harbours.
- They disseminate information on local regulations, weather forecast, natural calamities, hygienic fish handling and potential fishing zones in the sea.

Lacuna in Fisheries Extension Services in India

Limited Reach: Insufficient number of Sagar Mitras and training centers leaves a large section of fishers unaddressed and vulnerable.
Shortage of Infrastructure: There is an acute shortage of refer vans and cold storage to enhance the shelf life of the fishes.
Sustainability Issue: There are issues like overfishing and habitat degradation. Also, practices like electrocution are criticised during fish export.
Quality Issue: Export quality fish production remains a challenge due to pollutants in fishes. E.g., Tamil Nadu fishes were banned by the EU due to the high amount of pollutants in them.

Ways to Improve Extension Services

Institutional Integration: A convergence is needed between the Matasya Kendras and 700 Indian Council of Agricultural Research centers to promote the sharing of machineries.
Promoting Digital Outreach: The National Fisheries Development Board has initiated a nationwide virtual learning platform i.e., 'AquaBazaar’.
Learning from Global Best Practices:
- Norway: Sustainable fishing technology like satellite mapping and digital monitoring. Also, fishing monitoring ensures sustainable yields and boosts exports. (Norway exports 95% of its seafood.)
- Japan Model: Japan's co-management model involving Fisheries Cooperative Associations to educate fishers about sustainable practices.
Promoting Climate Adaptation: As climate change is impacting the fishing grounds and yield of fishing. E.g., FAO’s Blue Growth Initiative is focusing on climate resilient fishing.
Value Addition: Along with the market access, there is a dire need of value addition of the fish production. E.g., Vietnam's focus on value-added shrimp products has enhanced its global competitiveness.

Conclusion: Strengthening fisheries extension services can drive India towards becoming a global leader in sustainable fishing. Adopting best practices from countries like Norway and Japan, along with the localised innovations, can improve productivity, sustainability, and livelihood of millions dependent on this sector.

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