1.Lowest Solar power tariffs
News: India’s solar power tariffs have hit a new record low of ₹2 per unit.
Solar energy in India
- India has an ambitious target to increase its solar power base – by 2022, it wants to quadruple its current solar capacity to 100GW. A number of industrial-scale solar energy plants have come up in the past few years. The government-backed company Solar Energy Corp. of India (SECI) has been auctioning solar energy capacity to various private developers using a bidding process that favours the cheapest tariffs.
- The record low solar tariffs are mainly due to the “reverse bidding” process, which selects the cheapest bidder. India is now said to be considering a ceiling on solar tariffs – a cap of ₹2.5 ($o.035) and ₹2.68 ($0.038) per unit – for solar power companies that use both domestic and imported equipment.
- India imports over 90 per cent of solar equipment including cells and modules from overseas, mainly from China and Malaysia.
- The govt. now is in proves to impose a 25 per cent safeguard duty on solar equipment imports to protect domestic manufacturers, which could further put pressure on the razor margins of solar developers.
- With the steep drop in prices, there are also concerns about the quality of the equipment being deployed, raising questions about future regulation and related costs. The infrastructure of many solar plants in India didn’t meet many environmental stress factors and technical standards, according to a study.
- India also has a target of increasing its rooftop solar capacity to 40,000 megawatts (MW) by 2022 similar to trends in many European countries. But, here too, prohibitive costs of solar equipment have kept many residential property owners from switching to rooftop solar despite a government subsidy.
Solar Energy Corporation of India
- It is a company of the Ministry of New and Renewable Energy, Government of India, established to facilitate the implementation of the National Solar Mission (NSM). It is the only Central Public Sector Undertaking dedicated to the solar energy sector.
- The company’s mandate has been broadened to cover the entire renewable energy domain and the company will be renamed to Renewable Energy Corporation of India (RECI).
- It is responsible for the implementation of number of govt. schemes like the solar park scheme and grid-connected solar rooftop scheme etc. It has a power-trading licence and is active in this domain through the trading of solar power from projects set up under the schemes being implemented by it.
2.Suspension of MPLAD funds
News: Recent Bombay High Court ruling: The Union government was within its powers to suspend the MPLAD scheme and divert such funds to combat Covid-19. Besides, this (Covid-19) is a disaster so the government will have to resort to Disaster Management Act. It is within its powers to invoke the Act.
- The Union government had resorted to Disaster Management Act to suspend the member of Parliament local area development (MPLAD) schemein April this year. A petition was filed against this in the Court.
About MPLAD scheme:
- Launched in December, 1993. Seeks to provide a mechanism for the Members of Parliament to recommend works of developmental nature for creation of durable community assets and for provision of basic facilitiesincluding community infrastructure, based on locally felt needs.
- The MPLADS is a Plan Scheme fully funded by Government of India. The annual MPLADS fund entitlement per MP constituency is Rs. 5 crore.
- MPs are to recommend every year, works costing at least 15 per cent of the MPLADS entitlement for the year for areas inhabited by Scheduled Caste population and 7.5 per cent for areas inhabited by S.T. population.
- In order to encourage trusts and societies for the betterment of tribal people, a ceiling of Rs. 75 lakh is stipulated for building assets by trusts and societies subject to conditions prescribed in the scheme guidelines.
- Funds are released in the form of grants in-aid directly to the district authorities. The funds released under the scheme are non-lapsable. The liability of funds not released in a particular year is carried forward to the subsequent years, subject to eligibility. The MPs have a recommendatory roleunder the scheme.
- The district authority is empowered to examine the eligibility of works,sanction funds and select the implementing agencies, prioritise works, supervise overall execution, and monitor the scheme at the ground level. At least 10% of the projects under implementation in the district are to be inspected every year by the district authority.
- The Lok Sabha Members can recommend works in their respective constituencies. The elected members of the Rajya Sabha can recommend works anywhere in the state from which they are elected. Nominated members of the Lok Sabha and Rajya Sabha may select works for implementation anywhere in the country.
3.Scheme for Creation of Infrastructure for Agro-Processing Cluster
News: Recently, the Union Minister of Food Processing Industries has attended the Independent Management Advisory Committee (IMAC) meeting to consider the proposals received under the Scheme for Creation of Infrastructure for Agro-Processing Cluster (APC) of Pradhan Mantri Kisan Sampada Yojana (PMKSY).
- IMAC approved 7 proposals with a total project cost of Rs. 234.68 croreincluding grants-in-aid of Rs. 60.87 crore in Meghalaya, Gujarat, Madhya Pradesh, Karnataka and Maharashtra.
- These projects will leverage private investmentof Rs. 173.81 crore and are expected to generate employment for 7750 persons.
Scheme for Creation of Infrastructure for Agro-Processing Cluster:
- It was approved in May 2017under the PMKSY, to incentivise the setting up of APCs in the country.
- Aims:To develop modern infrastructure and common facilities to encourage a group of entrepreneurs to set up food processing units based on cluster approach by linking groups of producers/farmers to the processors and markets.
- These clusters will help in reducing the wastage of the surplus produceand add value to the horticultural/agricultural produce which will result in an increase of income of the farmers and create employment at the local level.
Two basic components:
- Basic Enabling Infrastructurelike roads, water supply, power supply, drainage, etc.
- Core Infrastructure/Common Facilitieslike warehouses, cold storages, tetra pack, sorting, grading, etc.
Requirements for Setup:
- At least 5 food processing units with a minimum investment of Rs. 25 crore and at least 10 acres of land is required for at least 50 years.
Pradhan Mantri Kisan Sampada Yojana
- In2016, the Ministry of Food Processing Industries (MoFPI) introduced an umbrella Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters (SAMPADA), which was proposed to be implemented with an allocation of 6,000 crores for the period of 2016-20.
- In2017, it was renamed as the Pradhan Mantri Kisan Sampada Yojana (PMKSY). It is a Central Sector Scheme.
- To supplement agriculture.
- To create processing and preservation capacities.
- To modernise and expand existing food processing units with a view to increasing the level of processing.
- To add value leading to the reduction of wastage.
Seven component schemes under PMKSY:
- Mega Food Parks.
- Integrated Cold Chain and Value Addition Infrastructure.
- Infrastructure for APC.
- Creation of Backward and Forward Linkages.
- Creation/Expansion of Food Processing and Preservation Capacities.
- Food Safety and Quality Assurance Infrastructure.
- Human Resources and Institutions.
- Under PMKSY,capital subsidy in the form of grants-in-aid ranging from 35% to 75% of the eligible project cost subject to a maximum specified limit is provided to investors under the various schemes for undertaking infrastructure, logistic projects and setting up of food processing units in the country.
4.Right policy for Industrial growth
- The goals of the Make in India initiative and now the AatmaNirbharBharat Abhiyan are driving a major shift in policy. Import duties are being raised. Production-linked incentives are being offered to firms across a wide canvas of 10 priority sectors. At the same time, there is considerable unease at therolling back of trade liberalisation. This binary is not very useful.
- It would still take India many years to develop its physical infrastructure to the levels required for international competitiveness.
- Until then, large industrial parks for textiles, electronics, toys or shipbuilding need to be developed by state agencies with soft financing.
- Competitive logisticsare essential.
- This was critical for the success of the information technology (IT)industry where world-class infrastructure was created within the software parks.
- High-speed broadbandreal-time connectivity to the US market was provided through public investment.
- This was done well before general telecom modernisation began.
- Closing the financing gap
- Long-term financing for world-class infrastructure is still a gap.
- The central government can either use one of its existing financial institutions or create a new development financial institution to provide long-term low-interest rate debt.
- The sovereign needs to provide risk-mitigation through an implicit guarantee. It can afford to do so.
- Prevent real exchange rate appreciation
- Before considering specific increases in import duties, real exchange appreciation should be undone.
- This would have the effect of raising tariffs across the board.
- It is high time the government and the Reserve Bank of India (RBI) agreed on this objective.
- Change the regime for SEZ
- Allow SEZ to sell into the domestic area with import duties at the lowest applicable rate with any trading partner and the same value-addition norms.
- Tax exemption on profits could be dispensed with while continuing to provide a duty-free import regime.
- This would create a level-playing field for production vis-à-vis competitive locations overseas.
- Large zones would have to be developed by the state.
- The private sector can be partners in the process, but achievement of scale is only possible by the state.
- Production for the domestic as well as the global market would become easier.
- Encourage domestic value addition
- Domestic value-addition can be incentivised by-
- Reducing duties to zero for all primary raw materials and inputs.
- then progressively higher rates for intermediates with the highest rate for the finished product.
- In short, have just the opposite of the inverted duty structurewe have had for computers.
- This would change investment and production decisions if other costs of production in India have been made competitive.
- Commitment of procurement of full production
- In some industries, commitment of procurement of full production for a few years would suffice to get investment.
- Bids could be invited for solar panels, or for battery storage for the grid, for annual supply for, say, five years with the condition thatfull value-addition has to be done in India.
- Such commitment would provide for amortisationof the capital investment and make it a risk-free investment.
- If the bid size is large enough, the best global firms would come and invest.
- If the bids are repeated, prices would come down and a competitive industry structure would be created.
- Encourage public investment
- Public investment in firms should not be ruled out altogether.
- In some cases, it may be the best way to create competitive capacity.
- Maruti Suzuki is a good example in India.
- Volkswagen was set up by a state government in Germany, which is still a substantial shareholder.
- This is a policy instrument that can be used to create competitive advantage.
- Creation of fund
- There should also be willingness to create a fund that looks at modest returns, but aims at creating national and global champions through start-ups.
- The foundation of China’s incredible success was laid by Deng Xiaoping with the maxim on economic policy that one should not bother about the colour of the cat as long as it caught mice. India’s policies have tended to be doctrinaire. We need a heavy dose of pragmatism to achieve our full potential.
5.Different approach towards Democracy
Historical background of democracy
- In recorded history, the Greeks were the first to experiment with models of government.
- There were monarchies, oligarchies and democraciesamong the Greek city-states of the 5th Century BCE.
- Aristotle wrote that while monarchies were for the benefit of the monarchs and oligarchies for the benefit of men with means, democracies were for the benefit of men without means.
- Democracy has travelled a long way from those times.
- In the world’s successful democracies like the US, UK and India, there is a fine balance between the elected and non-elected institutionswith enough safeguards.
Democracy in India
- There was much scepticism about the idea of universal adult franchise during the making of the Indian Constitution. But Rajendra Prasad assured the Assembly’s members about the raw political wisdom of the average Indian as also the strength of the other institutions to safeguard the democratic process.
- However, the infamous Emergency exposed the flaws in Indian democracy.
Gandhiji’s and B R Ambedkar’s approach
- Mahatma Gandhi was not a big admirer of the parliamentary system. Gandhi’s view was that in the British system, the parliament works only for partisan interest — and not for the national interest.
- He wrote in Harijan in January 1937 that by political independence he meant system suitable to Indian context i.e. Ram Rajya — sovereignty of the people based on pure moral authority.
- B R Ambedkar too described democracy in India as “only a top-dressing” on an Indian soil “which is essentially undemocratic”. He underscored the importance of social democracyfor the success of political democracy.
- Gandhi was referring to the tyranny of the British rule and Ambedkar was responding to the oppressive caste system. Neither was against democracy, but both were against the idea of “majoritarian rule”.
- For Gandhi, democracy meant the weak getting the same chance as the strong. For Ambedkar, it was aboutgiving voice to the voiceless. For democracies to succeed, both believed that the parliamentary majorities need to be restrained through constitutional ethics and public morality.
- Constitutional ethics is about leaders respecting constitutional order, conventions and institutions.
- Gandhi’s greater emphasis was on public morality. He insisted that for India’s democracy to succeed, the Congress should convert itself into a lok sevak sangh and work at the grassroots level.
- India’s democracy, as envisaged by the makers of its Constitution, thrived essentially because of the respect of the leaders for ethical constitutionalism and moral activism of the grassroots activists. Neither should see the other as an enemy and try to bring them down.