Economic Development - 3 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Interest Rates on Small Savings Schemes

• Context:
  The Indian government has recently increased the interest rates on a few Small Savings Schemes such as 2-year and 3-year Time Deposits, Senior Citizens Savings Scheme, and Kisan Vikas Patra for the period of October-December 2022.

Overview of Small Savings Schemes

Introduction:

• Small Savings Schemes are a group of savings tools offered by the Indian government to encourage citizens to save regularly.

Features:

• These schemes provide higher returns than bank fixed deposits and offer a sovereign guarantee and tax benefits.

National Small Savings Fund:

• All deposits received under these schemes are pooled in the National Small Savings Fund.

Purpose:

• The government uses the money in this fund to finance its fiscal deficit.

Small Savings Schemes and their Types

Post Office Deposits:

Post Office deposits are small savings schemes managed by the government. They include:

• Savings Deposit
• Recurring Deposit
• Time deposits with 1, 2, 3 and 5-year maturities
• Monthly Income Account

Savings Certificates:

• Savings Certificates are another type of small savings scheme, which include:

National Savings Certificate: 

• This scheme earns interest that is automatically reinvested into the scheme every year.

Kisan Vikas Patra: 

• This scheme is open to everyone and doubles the one-time investment at the end of 124 months, signifying a return of 6.9% compounded annually.

Social Security Schemes: 

• Social Security Schemes are a set of savings instruments managed by the central government with an aim to provide social security benefits to the people.

Public Provident Fund:

• Public Provident Fund (PPF) is a retirement savings scheme offered by the Government of India with an aim of providing a secure post-retirement life to everyone.

Sukanya Samriddhi Account:

• It was launched in 2015 under the Beti Bachao Beti Padhao campaign exclusively for a girl child.
• The scheme guarantees a return of 7.6% per annum and is eligible for tax benefit under Section 80C of the Income Tax Act.

Senior Citizens Savings Scheme:

• Can be opened by anyone who is over 60 years of age.
• The scheme offers a higher interest rate than most other small savings schemes, providing senior citizens with regular income.

Tax Benefits:

• Social Security Schemes offer tax benefits under various sections of the Income Tax Act, making them an attractive investment option for many people.

Determination of Interest Rates on Small Savings Schemes

Factors Affecting Interest Rates:

• The interest rates on small savings schemes are reset every quarter based on the movement of benchmark government bonds with similar maturity. This system ensures that the rates are in line with the prevailing market conditions.
• The Ministry of Finance periodically reviews the rates and may adjust them if necessary.

Recommendation for Market-Linked Interest Rates:

• In 2010, the Shyamala Gopinath panel suggested a market-linked interest rate system for small savings schemes. This system would have allowed the rates to be determined by the market forces of supply and demand. However, this recommendation has not yet been implemented.

National Technical Textiles Mission

Why in News:

• The National Technical Textiles Mission (NTTM) has been in the spotlight as the Ministry of Textiles has recently approved 23 crucial research projects under its purview.

Details:

• The research projects have a total worth of approximately Rs 60 crores.
• 12 of the approved projects are related to Speciality Fibres, with applications in various sectors like Agriculture, Healthcare, Smart Textiles, Strategic Application, and Protective gears.
• 4 of the projects are focused on Sustainable Textiles, with applications in Agriculture and Healthcare sectors.
• 5 of the projects are based on Geotextile, 1 on Mobiltech, and 1 on Sportech.

What are Technical Textiles?

• Technical textiles are a new age textile with applications in several sectors of the economy.
• Function is the primary criterion for technical textiles, rather than aesthetics.
• Technical textiles include textiles for various applications, such as automotive, medical, geotextiles, agrotextiles, and protective clothing.
• Technical textiles improve efficiencies in various sectors of the economy.

About ‘National Technical Textiles Mission’

• The National Technical Textiles Mission was launched by the Ministry of Textiles.
• The period of the mission is four years (2020-21 to 2023-24).
• The outlay for the mission is Rs. 1480 crores.
• The aim of the mission is to position India as a global leader in Technical Textiles.
• The mission has a target to take the domestic market size of the technical textile sector to $40-50 Bn by the year 2024 with an average growth rate of 15-20% per annum.
• The mission supports the ‘Make in India’ initiative promoting domestic manufacturing of related machinery and equipment.
• The mission has four components: Research, Innovation and Development; Promotion and Market Development; Export Promotion; and Education, Training, Skill Development.

Focus of the National Technical Textiles Mission

• The mission focuses on developing the usage of technical textiles in various flagship missions, programmes of the country including strategic sectors.
• The mission aims to reduce India’s import dependence and promote the domestic manufacturing of capital goods in the sector.

Challenges in the Textile Sector

Shortage of Raw Materials:

• Closure of factories in China and Europe due to environmental regulations has caused a scarcity in raw materials, leading to a rise in prices in international markets.

Rising Cost of Raw Materials:

• Prices have increased due to the shutdown of several manufacturing units in China, resulting from strict pollution norms.

Inflexible Labour Laws:

• India has over 200 labour laws, making the system of regulations complex. Certain laws, such as the Industrial Disputes Act, 1947, limit firm size, preventing the growth of manufacturing firms.

Pressure to Meet Environmental Standards:

• Apparel industry is under pressure to improve environmental compliance efforts to avoid putting the supply chain in jeopardy.

Infrastructure Bottlenecks:

• Poor infrastructure quality in India causes inefficiencies as manual work is still widely practiced.

High Fragmentation:

• The unorganized sector and small and medium industries dominate the Indian textile industry, leading to a highly fragmented sector.

Uneven Regional Development:

• The textile industry in India is concentrated in a few states in the west and south, while a large number of workers come from Bihar, Uttar Pradesh, and West Bengal.

Government Initiatives for Textile Industry

• Production Linked Incentive (PLI) Scheme for Textile Sector:
  • Aims to enhance India's manufacturing capabilities and exports
  • Approved financial outlay of Rs 10,683 crore over a five-year period
  • Incentive will be paid for 5 years after the first year of post-investment operation
  • Promotion of high value Man-Made Fibre (MMF) fabrics, garments and technical textiles
• PM MITRA Park Scheme:
  • Seven Mega Integrated Textile Region and Apparel (PM MITRA) parks will be set up
  • Developed by a Special Purpose Vehicle (SPV) in Public-Private Partnership (PPP) Mode
  • Inspired by the 5F vision of the Prime Minister of India
    (i) farm to fibre;
    (ii) fibre to factory;
    (iii) factory to fashion;
    (iv) fashion to foreign.
• Other:
  • New Textiles Policy 2020 for overall development of the sector
  • 100% FDI allowed in the sector under the automatic route
  • Scheme for Capacity Building in Textile Sector (SCBTS) approved by the Cabinet Committee on Economic Affairs (CCEA)

Key Focus Areas

Bridging the Technological Gap:

• The existing technological gap in the technical textiles sector in India should be addressed on priority, as it can help in improving the quality and competitiveness of products.

Promoting Research and Development:

• There is a need to identify areas for research in technical textiles and encourage industry interaction to promote the use of technical textiles in the country. Activities such as conferences, exhibitions, and buyer-seller meetings should be organized to promote technical textiles and increase exports.

Purple Revolution

Context:

• The Government has acknowledged that the "Purple Revolution" is Jammu & Kashmir's contribution to "Start-ups India".

Lavender Cultivation:

• Lavender, a popular evergreen plant, is cultivated in India, particularly in low rainfall regions and on the slopes of hills in Himachal Pradesh, Uttar Pradesh, and Kashmir valley.
• Lavender's flower and oil have a pleasant scent and are used for medicinal purposes.
• Lavender oil is believed to have calming effects and may relax certain muscles, as well as antibacterial and antifungal effects.
• Although commonly used for treating various conditions, scientific evidence supporting many of these uses is lacking.
• Lavender cultivation is a part of the Aroma Mission, which aims to promote the cultivation of aromatic crops and support India's aromatic crop-based agro-economy.
• The mission aims to reduce imports of aromatic oils and increase homegrown varieties.

Aroma Mission:

• Aroma Mission was launched to promote the cultivation of aromatic crops with medicinal properties, including lavender, damask rose, and mushk bala.
• Aromatic plants are mainly used for extracting oils that are utilized in various industries such as cosmetics, pesticides, flavoring and fragrance, insect repellents, and herbal beverages.
• The mission aims to increase production to meet domestic demand and become a global leader in production and export of aromatic crops.
• CSIR-Central Institute of Medicinal and Aromatic Plants (CSIR-CIMAP), Lucknow provides technical support for the mission.
• The government is promoting cooperatives for marketing activities, cultivation and processing of high-value aromatic plants, development of agro technologies, setting up of processing facilities, promoting skill development, providing infrastructure support, and credit facilities.

Anticipated Results of Aroma Mission

• The mission aims to increase the cultivation of aromatic crops by an additional 5500 hectares.
• Promoting the growth of aromatic crops in rain-fed and degraded lands across the country is another goal of the mission.
• The mission seeks to provide technical and infrastructural support to farmers and growers all over the country.
• A market buy-back mechanism will be promoted to ensure profitable prices for farmers and growers.
• The mission also aims to create jobs, promote rural development, and empower women.
• Increasing the production of aromatic crops is a significant step towards achieving the goal of an 'Atmanirbhar Bharat' or a self-reliant India.

Online Gaming Market in India

Why in News:

• The Ministry of Electronics and Information Technology (MeitY) has established a task force to draft a report outlining recommendations for the regulation of the online gaming industry in India. The task force has now completed its work and submitted its final report.

Recommendations of the Task Force to Regulate the Online Gaming Industry in India

Central-Level Law for Online Gaming

• A central-level law should apply to real money and free games of skill, including e-sports, online fantasy sports contests, and card games among others.
• Casual games with no real money element may be excluded from the rules, unless they have a high number of users in India.

Regulatory Body for the Online Gaming Industry:

• A regulatory body should be created for the online gaming industry.
• The body will determine what qualifies as a game of skill or chance, certify different gaming formats, seek compliance and enforcement.

Three-Tier Dispute Resolution Mechanism:

• A three-tier dispute resolution mechanism consisting of a grievance redressal system at the gaming platform level, self-regulatory body of the industry, and an oversight committee led by the government should be established.

Online Gaming Platform as a Legal Entity:

• Any online gaming platform offering real money online games to Indian users will need to be a legal entity incorporated under Indian law.
• These platforms will be treated as ‘reporting entities’ under the Prevention of Money Laundering Act, 2002.

Regulating the Online Gaming Industry in India:

(a) MeitY as the Nodal Ministry:

• MeitY recommended to act as the nodal ministry to regulate the online gaming industry in India, except for the e-sports category.
• The regulation by MeitY should only cover online gaming, which is based on skill.
• The task force has suggested excluding issues related to online betting and gambling, as they are games of chance.

(b) Department of Sports to Regulate E-sports:

• The Department of Sports has been recommended to take the lead in regulating the e-sports category of online gaming.

(c) Information and Broadcasting Ministry:

• Certain other aspects of online gaming, such as advertisements, code of ethics relating to content classifications, etc., can be regulated by the Information and Broadcasting Ministry.

(d) Consumer Affairs Ministry:

• The Consumer Affairs Ministry has been recommended to regulate the online gaming industry for unfair trade practices.

What is the Purpose of a Law at the Central Level?

Online Gaming as a State Subject:

• Online gaming has been a state subject so far, making it difficult for state governments to enforce certain rules like geo-blocking certain apps or websites within their territory.
• Inconsistency in regulations across different states has also been a concern.
• State governments lack the power to issue blocking orders for offshore betting sites.

Societal Concerns with Proliferation of Online Games:

• The proliferation of online games has raised several societal concerns.
• Incidents of people losing large sums of money on online games have been reported, leading to suicides in different parts of the country.

Need for a Regulatory Framework:

• There is currently no regulatory framework to govern various aspects of online gaming companies.
• The lack of a grievance redressal mechanism, implementation of player protection measures, protection of data and intellectual property rights, and prohibition of misleading advertisements are some of the concerns.

What is the size of India's online gaming market?

Revenue and Industry Growth:

• The Indian online gaming industry has experienced significant growth in recent years.
• It is estimated to surpass USD 1.5 billion in revenue in 2022 and reach USD 5 billion by 2025.
• The industry has grown at a CAGR of 38% from 2017-2020, significantly higher than China's 8% and the US's 10%.
• It is expected to continue growing at a CAGR of 15%, reaching Rs 153 billion in revenue by 2024.

Users Growth:

• The number of online gaming users in India has also seen significant growth.
• The percentage of new paying users (NPUs) has been the fastest growing in the world for two consecutive years, reaching 40% in 2020 and 50% in 2021.
• The number of paying gamers has increased by 17%, from 80 million in 2020 to 95 million in 2021.
• The revenues of transaction-based games have grown by 26% in India, according to a report by EY FICCI.

Way Forward for India's Online Gaming Industry

Robust Policy Framework:

• To fully realize its potential and become a global leader, India's e-gaming industry needs a robust policy framework and digital infrastructure. This includes the establishment of a government body to oversee operations, draft progressive policies, prevent societal issues, classify games of skill or chance, ensure consumer protection, and combat illegality and crime.

Cooperation between Government and Gaming Companies:

• Gaming companies should continue to work with the government to promote responsible gaming. This includes educating gamers and establishing best practices such as conducting KYC checks, user authentication, and other measures to prevent illegal activities and financial dealings on their platforms.

India’s First 24x7 Solar-Powered Village

Why in news

• The Prime Minister has recently announced that Modhera, which is a village located in the Mehsana district of Gujarat, has become the first village in India to be powered entirely by solar energy.

Key Highlights of India's First Solar-Powered Village

Modhera Village in the Mehsana district of Gujarat declared India's first solar-powered village by the Prime Minister.

About :

• Modhera is known for its Sun temple built by King Bhima-I of the Chalukya dynasty in 1026-27.
• A 3-D projection facility will now educate tourists about the history of Modhera.

Solar Power Generation:

• 1000 solar panels installed on village houses will generate electricity round the clock for the villagers.
• Developed through a ground-mounted solar power plant and more than 1300 rooftop solar systems on residential and government buildings.
• All systems are integrated with Battery Energy Storage Systems (BESS) to store and distribute energy in the form of electricity.

Benefits:

• Project showcases India's renewable energy capabilities in empowering people at the grassroots level.
• Villagers can sell excess energy produced by solar panels to the government grid instead of paying for electricity.
• Generates employment at the village level and improves the standard of living.
• Enhances the sustainable implementation of various welfare projects in the area.
• Residents can save 60-100% of their electricity bills.
• Reduces drudgery among rural women and girls who collect fuel wood from long distances and cook in smoky kitchens.
• Minimizes risks of contracting lung and eye ailments.

What is the Status of Solar Energy in India?

India has made significant progress in the solar energy sector in the last few years. Here are some key highlights:

Installed Solar Energy Capacity:

• The installed solar energy capacity has increased by 19.3 times in the last 8 years and stands at 56.6 GW.

Renewable Energy Target:

• India has set an ambitious target to achieve a capacity of 175 GW worth of renewable energy by the end of 2022, which expands to 500 GW by 2030. This is the world’s largest expansion plan for renewable energy.

Ranking in Solar Energy:

• India was the second-largest market in Asia for new solar PV capacity and third globally. It ranked fourth for total installations (60.4 GW), overtaking Germany (59.2 GW) for the first time.

Top States for Large-Scale Solar:

• As of June 2022, Rajasthan and Gujarat were the top states for large-scale solar, accounting for 53% and 14% of installations, respectively, followed by Maharashtra with 9%.

Related Initiatives:

• Solar Park Scheme:
  • The Solar Park Scheme plans to build a number of solar parks, each with a capacity of nearly 500 MW, across several states.
• Rooftop Solar Scheme:
  • The Rooftop Solar Scheme aims to harness solar power by installing solar panels on the roof of houses.
• Atal Jyoti Yojana (AJAY):
  • The AJAY scheme was launched in September 2016 for the installation of solar street lighting (SSL) systems in states with less than 50% of households covered with grid power (as per Census 2011).
• National Solar Mission:
  • It is a major initiative of the Government of India and State Governments to promote ecologically sustainable growth while addressing India's energy security challenge.
• SRISTI Scheme:
  • Sustainable rooftop implementation of Solar transfiguration of India (SRISTI) scheme to promote rooftop solar power projects in India.

Challenges Related to Solar Energy in India

• Heavy Dependence on Imports
  • India's module and PV cell manufacturing capacity is limited
  • Domestic production is around 3.5 GW only
  • Only 3-4 GW of modules are technologically competitive and worthy of deployment in grid-based projects
• Raw Material Supply
  • Silicon wafer, the most expensive raw material, is not manufactured in India
  • India imports 100% silicon wafers and around 80% cells
  • Other key raw materials, such as silver and aluminium metal pastes for making electrical contacts, are also almost 100% imported
• Inefficiencies in Solar PV cells
  • The utility-scale solar PV sector faces challenges like land costs, high T&D losses and other inefficiencies, and grid integration challenges
• Issues related to Biodiversity
  • Conflicts with local communities and biodiversity protection norms
• Pricing Issue
  • India has achieved record low tariffs for solar power generation in the utility-scale segment, but this has not translated into cheaper power for end-consumers.

The Way Forward for Solar Energy Development in India

• Progress in Solar PV Modules Development
  • India has made significant progress in the development of solar PV modules
• Need for Policy Interventions
  • To become a manufacturing hub, India will require more policy interventions
  • Developing home-grown technologies could be a short-term solution
  • Working with the industry to provide trained human resources, process learnings, and root-cause analysis through proper testing can help in the short-term
  • In the long-term, developing India's own technologies will be necessary

Transforming Agrifood System with Forests

• FAO released a report on deforestation, livestock grazing, and farmer field schools
• The report was published by the Food and Agriculture Organization (FAO) of the United Nations
• The report was released at the digital conference FAO-Global Landscapes Forum: Transforming agrifood systems with forests
• Farmer field schools aim to educate farmers, livestock keepers, or fishermen
• The purpose of farmer field schools is to learn how to transition to more sustainable production methods
• Sustainable practices include improving ecosystem services and understanding complicated agro-ecosystems.

Report Highlights:

• Increase in Food Demand: Food demand will increase by 50% by 2050 compared to 2012.
• Need for Additional Land: Crop and animal production will require 165 to 600 million additional hectares of land, which is mostly covered by forests and other ecosystems.
• Agricultural Production and Deforestation: Almost 90% of global deforestation between 2000 and 2018 was caused by increased agricultural production.
• Negative Impact on Ecosystem Services: Deforestation has a negative impact on biodiversity and carbon sequestration, affecting ecosystem services.
• Forest Destruction: According to the FAO's Global Forest Resources Assessment 2022, 420 million hectares of forest have been destroyed worldwide over the past 20 years.
• Importance of Forests: To reduce deforestation, which reached 11 million ha per year between 2000 and 2010, forests are crucial.

Suggested actions from the report

• Tree Positive Building sustainable global agrifood systems that combine agriculture and forestry, can benefit both industries and help produce enough food for the growing population.
• Governments should create favorable conditions for farmers to adapt their methods, increase production, and minimize the damage on forests and biodiversity.
• Special attention should be given to smallholder farmers, who produce a significant portion of the world's food but often live in poverty and face difficulties in affording the costs or disruptions involved in changing their practices.

Importance of Properly Integrated Grazing in Drylands

• Properly integrated grazing can help in stopping desertification, restoring damaged land with trees, and enhancing dryland wildfire protection.
• About 25% of the world's population lives in drylands, which also house 50% of the world's cattle, 27% of its forests, and 60% of the world's agricultural area.
• Silvopastrolism, which is grazing animals among trees, can also improve the food security and economic well-being of nearby populations in drylands.
• In drylands, woody plants can produce fruit, lumber, and food for animals, and help to increase biodiversity and control the soil and water cycles.
• Grazing livestock can aid in regulating vegetation, lowering the danger of wildfires, accelerating nutrient cycles, and enhancing soil fertility.

Restoring Open Tree Cover in Drylands

• Landscape planners and decision-makers should consider livestock as part of the solution to restoring degraded land in drylands.
• Restoring open tree cover between 30 and 70% as part of an integrated landscape approach utilising agroforestry can help halt land degradation.
• Restoring open tree cover in drylands can improve food security and economic well-being of nearby populations, as woody plants can produce fruit, lumber, and food for animals.
• Restoring open tree cover can also help increase biodiversity, control soil and water cycles, and lower the danger of wildfires.

FAO Initiatives and Flagship Publications

FAO, the Food and Agriculture Organization, is a specialized agency of the United Nations working to eradicate hunger globally. Here are some important details about the organization:

Date and Location:

• FAO was established in 1945 and World Food Day is celebrated every year on October 16th to commemorate its foundation.
• FAO is based in Rome, Italy, and is one of the UN food aid organizations.

Initiatives:

• FAO's initiatives include the Globally Important Agricultural Heritage Systems (GIAHS) and monitoring the Desert Locust situation worldwide.
• The Codex Alimentarius Commission (CAC) is responsible for implementing the Joint FAO/WHO Food Standards Programme.
• The International Treaty on Plant Genetic Resources for Food and Agriculture is also an initiative by FAO.

Flagship Publications:

• FAO publishes flagship reports annually.
• The reports provide comprehensive analysis on issues related to food and agriculture.
• State of World Fisheries and Aquaculture (SOFIA) is one of the flagship reports.
• State of the World's Forests (SOFO) is another report.
• State of Food Security and Nutrition in the World (SOFI) is another report.
• State of Food and Agriculture (SOFA) is another report.
• State of Agricultural Commodity Markets (SOCO) is another report.
• World Food Price Index is another report.