India has become part of International Energy Agency

India has become part of IEA Association that will allow the country play a more “visible and influential” role in the global energy landscape.

This does not cast any additional obligation on India, however, gives an opportunity for the country to become the voice of the developing countries.

How will this membership help India?

India’s engagement with the International Energy Agency (IEA) has enhanced over the last two decades and the “Association” status would facilitate it to participate in meetings of the standing groups, committees and working groups that constitute the IEA governance structure.

The “Activation of Association” is expected to serve as a bridge and platform for wider-ranging and deeper co-operation and collaboration between IEA member and Association countries in the future.

India pursues its key development objectives of energy access, energy security and environmental sustainability.

In this context, India has a vision of ensuring 24×7 affordable and environment friendly ‘Power for All’ and deeper engagement with IEA is a component of achieving this vision.

India can also richly gain from IEA’s data gathering processes, survey methodologies and range of energy data, which could enable India in the near future to set up its own robust integrated database agency.

India is home to about a fifth of the world’s population but uses only about 6% of the world’s energy.

But growth in the country’s energy demand is expected to outpace China in the near future, with its energy demand more than doubling over the next 25 years.

International Energy Agency

Founded in 1974, the IEA was initially designed to help countries co-ordinate a collective response to major disruptions in the supply of oil, such as the crisis of 1973/4.

While this remains a key aspect of its work, the IEA has evolved and expanded significantly.

Functions performed by IEA

The IEA examines the full spectrum of energy issues including oil, gas and coal supply and demand, renewable energy technologies, electricity markets, energy efficiency, access to energy, demand side management and much more.

Through its work, the IEA advocates policies that will enhance the reliability, affordability and sustainability of energy in its member countries and beyond.

Publications of IEA

Today, the IEA is at the heart of global dialogue on energy,

providing authoritative analysis through a wide range of publications, including the flagship World Energy Outlook and the IEA Market Reports;

data and statistics, such as Key World Energy Statistics

and the Monthly Oil Data Service;

and a series of training and capacity building workshops, presentations, and resources.

The four main areas of IEA focus are

Energy Security Promoting diversity, efficiency, flexibility and reliability for all fuels and energy sources;

Economic Development Supporting free markets to foster economic growth and eliminate energy poverty;

Environmental Awareness Analysing policy options to offset the impact of energy production and use on the environment, especially for tackling climate change and air pollution; and

Engagement Worldwide Working closely with partner countries, especially major emerging economies, to find solutions to shared energy and environmental concerns.

UDAN (Ude Desh ka Aam Naagrik) Scheme

Five airlines will operate on 128 routes connecting over 30 unserved airports under the regional connectivity scheme wherein fares are capped at Rs 2,500 for one-hour flights.

As many as 70 airports, including 31 unserved and 12 under-served ones, would be connected with the UDAN flights.

The operators are Air India’s subsidiary Airline Allied Services, SpiceJet, Air Deccan, Air Odisha and Turbo Megha.

They would be operating 19-78 seater aircraft.

These flights would connect airports spread across over 20 states and union territories including Punjab, Uttar Pradesh, Madhya Pradesh, Maharashtra, Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Tamil Nadu and Puducherry.

Important Features

Udan is a market-based policy intervention that builds on similar programmes in the US, Canada and Australia.

It is also consistent with universal service approaches established for other network-based services such as railways and telecom.

The objective of the Scheme is to make flying affordable for the masses, to promote tourism, increase employment and promote balanced regional growth.

It also intends to put life into unserved and underserved airports.

It offers viability gap funding to operators to fly smaller aircraft to such airports with a commitment to price tickets for at least half of the seats at ₹2,500 for an hour-long flight.

What is the Need for having the system of UDAN

There are as many as 398 “unserved” airports which have no commercial flights and 18 “underserved” airports host less than seven flights per week.

Besides, a major reason for the poor regional air connectivity in India is that airlines do not find it lucrative to operate from small cities.

The government has tried to address this concern by an adroit combination of subsidies and fare caps.

How Will UDAN Benefit ??

First, commercialising these 416 airports will “democratise” publicly-owned sites which have hitherto been reserved for elite use.

The average citizen would get a participative stake in their use and development.

Second, the government has rightly slashed taxes and charges on regional connectivity flights to narrow the viability gap.

AAI will not charge any landing or parking charge and only 42.5% of the route and navigation facilitation charge.

The owners of these airports will similarly exempt such flights from all charges whilst ensuring the full package of airport facilities.

Third, whilst Udan is branded as a new passenger facility, an additional business opportunity is the potential for moving existing perishable cargo, fragile goods and high-value export-oriented products by air.

It is only a combination of passengers and cargo which can make the scheme sustainable.

Public investments should be leveraged via private management model used for major airports.

Investor consultations in state capitals being planned should include potential investors in airport management and development.

Fourth, some of the additional economic value and jobs are from developing these airports as growth centres.

Providing secure and high quality road links, 24×7 electricity, clean water and sanitation are key for private management to step in with malls, air conditioned warehouses, hotels and new businesses which need secure air connectivity.

Will Airline Operators Benefit from the Scheme ??

The Central Government will support the RCS Scheme by levying an excise duty of only 2% on Aviation Turbine Fuel (ATF) purchased at RCS Airports for a period of three years.

The service tax will be levied at only 10% of the taxable value of tickets for RCS seats for a period of one year.

The operating Airline will be free to enter into code sharing arrangement with domestic and international airlines.

The State Governments will charge Vat of 1% or less on ATF at RCS Airports for a period of 10 years.

It will also provide security and fire services free of cost, besides providing electricity, water and other utility services at concessional rates.

Airline Operators will exempt RCS flights from landing charges, parking charges, and terminal navigation landing charges.

How Will Customers Benefit from the Scheme ??

The benefits for tourist hotspots such as Agra, Shimla, Diu, Pathankot, Mysore and Jaisalmer — that would now be just a short flight away, replacing cumbersome road or rail journeys — are obvious.

There are also significant multiplier effects of aviation activity, including new investments and employment creation for the local economies of other destinations.

How Other Interests Are Safeguarded

It retains the potential for business innovation by limiting the seats at the Udan price to 50% of capacity.

The remaining seats can be sold at market rates. The policy is carefully and explicitly drafted to avoid ex-post disputes.

The policy is market driven.

Flight operators had to do their own due diligence and come forward with proposals which would then be put out to bid.

If a proposer failed to submit the lowest bid, they could still win by agreeing to match the lowest bid.

This provision preserves the incentive for initiating proposals, whilst retaining competitive energy in the bid process.

The policy carries forward the spirit of cooperative federalism.

The Central government will fund 80% (90% in the Northeast) of the subsidy amount to be paid to the operators as VGF.

The state government shall fund the residual marginal amount.

Challenges to be faced while implementing UDAN Scheme

The new policy is, however, not without challenges. For example, there are fears that a flight from an UDAN location will be low priority for air traffic controllers in big cities.

Airports in many Tier 2 and Tier 3 cities do not have big runways, so they can’t take regular aircraft.

That means airlines will need to induct smaller aircraft for short takeoffs and landings.

Such aircraft needs specialised crew.

India produces 200 to 300 pilots every year, and it’s safe to say that training specialised crew will take time.

The government should give serious thought to these issues if its well-intentioned scheme of regional connectivity is to become a success.

Concept of Green Bonds in India

Green bond is an emerging concept in this contemporary world towards Green Economy. Basically green bonds are to finance environmentally friendly businesses and assets. These green bonds have seen extensive participation from Corporates, Financial institutions including sovereign and municipal bodies. Green bonds have grown exponentially and now pegged at over $180 billion.

Issuance of first green bond was done by World Bank and European Investment Bank in 2007. The green bond market is mostly supported by market driven state policies. There has been a rapid growth in issuance of green bonds in India and China which has made the Asian market emerge as a forerunner in this field.

India’s first infrastructure green bond was issued by Yes Bank in February 2015. The first Green Masala bond that means rupee denominated bond, with the IFC (International Finance Corporation), a private arm of World Bank, raised an off-shore rupee bond on London stock exchange. These bonds are used to raise capital, attract foreign investments, and induce momentum in the market. Along with this it will also increase the financial assistance to sun rise sectors like solar energy, wind energy etc.

A recent report by Climate Bond Initiative reveals that 62% of green bonds are processed towards renewable energy projects followed by low carbon transport sector and low carbon buildings each getting 17.5% and 14% respectively. Only 2.2% is processed for Water Management and waste management, this should be addressed by further developments in the field of Research and Development.

Regulatory frameworks should work towards maintaining policy-making more clear on what is “Green”. SEBI (Security and Exchange board of India) and RBI (Reserve Bank of India) passed initial regulatory reforms as national level guidelines.

A very next version of Green bond economy is Blue bond economy which focused on financing water infrastructure, where India is yet to enter. This will address the financial gap in India’s water sector.
Recently Prime Minister of India announced municipal bond for water supply in Pune and Hyderabad under Smart City initiative. In future this may transform into Green Muni (municipal) bond by including corporate sector.

To conclude, India’s green bond has witnessed many milestones but its full potential remains untapped. By making further developments in policy frameworks and bringing in regulatory reforms this untapped potential can reach its fullest.

Challenges before Antonio Guterres the new United Nations Secretary General

Portugal’s former Prime Minister Antonio Guterres has been picked as United Nations General Secretary. The major challenges before him is, Syrian conflict, African war, Refugee crisis in European nations, North Koreas nuclear power and last but not the least, Americas president elect Donald Trump.

Donald Trump mocked United Nations as “A club for people to get together, talk and have good time” when a resolution against Israeli settlements in occupied Palestine’s territory passed 14-0 in the 15 member (5 permanent [USA, UK, Russia, France, China]) +10 non-permanent members]) United Nations Security Council. And he also said, “As to the United Nation, things will be different from January 20th, by mentioning his succession after Obama.

USA is the biggest monetary contributor to UN as 28% of its annual peacekeeping budget comes from USA. In his 100 day action plan for America, Trump vowed to cancel billions of payments to the UN Climate programme and named climate change programmes as “Hoax invented by the Chinese”. His statement jeopardized environmental activists around the world.

Now the important challenge before Guterres after Trump is to reform UN. Peacekeeping force of UN has been severely tainted by several allegations and abuses. Recently Kenyan force commander was made the scapegoat in the midst of failure of UN civilian leadership in south Sudan and so East-African nations were left humiliated. In Liberia, downsizing of peacekeeping force staffs made a biased result. UN has to reform the selection procedure by adding accountability and integrity to its special representatives.

Guterres should pacify the US as early as possible by making initiatives and engagements with Washington. Along with this he can make use of friendly relationship between Trump and Putin through Russia’s foreign minister Sergey Lavrov who was a former Russian ambassador to the UN. Obviously the job of Antonio Guterres is more difficult than his forerunner Ban-ki-Moon. Let’s wait and watch diplomacy game between Trump and Antonio Guterres.

Removing the power of money from electoral politics

Prime minister of India on the eve of New Year, in his much anticipated speech, described demonetization as an attack on Black money, Counterfeit notes and nudge towards cashless society. He called demonetization as a “Historic rite of purification”. Along with this he reiterated simultaneous elections in state and central assembly so that time and money would be saved in huge numbers. But the questions “Is the purification only for ordinary citizens and public officials” and not for political parties.

In a recent proposal, ECI (Election Commission of India) asked political parties to disclose their sources of contribution above rupees 2000. Under existing laws political parties don’t have to disclose contributions less than rupees 20000. ECI also established a team with Indian Chartered Accountant of India to create guidelines for the maintenance of political party accounts so that mandatory rules are formulated by government authenticated third party rather than inter party regulations. This will add accountability to political parties to show and maintain sources of income. Along with this, government should amend Section 29A of RPA (Representation of Peoples Act) to empower ECI to deregister political parties if they are found perpetrating violation of law. Election Commission of India disclosed that out of 1900 registered political parties, only 400 contested elections and the rest are merely used as shell parties to evade taxes. Under the existing laws, when a candidate discloses his asset and liability, Election commission does not have any power to impose the real costs if the information given by the candidate is false or misleading. By amending section 125A of RPA these loop holes will be tightened.

When Prime minister of India says it’s a “Ritual of Purification” political parties also come under cleansing.

If a vegetable vendor can do personal sacrifice to reform his mother land, why not political parties.

Current Affairs 6th January 2017 – Coal Import Overvaluation, Om Puri, Malappuram Digitisation, Aadhaar Private Usage, Sahara Expenses Inflated, Benzene Pollutant in Delhi Air

DRI Upheld Showcause Notice in Coal Import Overvaluation Case –

In 2014, Directorate of Revenue Intelligence raided over around 80 shipping companies and their laboratories across major India states which includes Maharashtra, Delhi, Gujarat, Karnataka, Odisha, West Bengal, Andhra Pradesh and Kerala. During these raids it was said that DRI seized documents which detailed the real cost of the coal imported and the amount shown to the authorities was found to be inflated.

One of these 40 companies named Knowledge Infrastructure Systems Pvt Ltd is currently under news. DRI had passed a showcause notice to Knowledge Infrastructure Systems Pvt Ltd regarding the alleged overvaluation of Indonesian coal imports, collectively pegged at Rs 29,000 crore. This showcause notice was recently upheld by adjudication authority of the Directorate of Revenue Intelligence (DRI).

DRI claimed that it had obtained two Certificates of Sampling and Analysis of Coal (COSA), which detailed different parameters of the coal imported. It is being said that the certificate of coal imported by Switzerland and certificate being provided to MAHAGENCO were different. DRI alleged that the certificates were intentionally faked for creating illegal profits. However Knowledge Infrastructure Systems brushed aside the allegations saying that the testing reports of MAHAGENCO while buying coal and test report of custom authorities while importing coal makes the DRI allegations wrong.

Om Puri passed away –

Veteran and very famous actor Mr. Om Puri passed away on early Friday morning due to a massive heart attack. He was 66 years old. Mahesh Bhatt, Prime Minister Narendra Modi and other members of Bollywood Fraternity including his friends expressed their condolences. Om Puri in his long career in Bollywood had acted in Bollywood, Hollywood and even Pakistani films.

Reality of Digitisation of Malappuram in Kerala –

Malappuram District authorities transferred Rs 5 each digitally to accounts of 27 persons in Nedumkayam, and declared it India’s ‘first cashless tribal village’. Nedumkayam’s digital interaction began and ended with that.

The declaration was made as part of ‘My Malappuram, My Digital’ project, envisaged to make Kerala’s Malappuram the first cashless district in India. Nedumkayam, with its 400-odd population of the Paniya tribe, was provided WiFi to facilitate online payment using the SBI Buddy app in smartphones, and then trained how to use it.

However it is being said that the above steps are a mere formality to showcase that something is happening but the reality is far from what is being shown. The WiFi facilities provided do not work as hardly 10 homes near the WiFi source get signals. Also as most of the people there are daily labourers so they say that digital payments and accounts won’t matter to them as they are not going to deposit there daily wages in these accounts. They say that even there women are defecating in the open so it is important for them that the government first builds toilets for them so that there women can defecate with safety and security. Drinking water facilities are grossly inadequate as they fetch water from a nearby river. The situation gets worse in rainy season as during this season people have to contend with dirty water.

Aadhaar Information in private hands might not be a good idea says SC –

Supreme Court has opined that handling of Aadhaar biometric details by private players doesn’t seems a wise idea. In Supreme Court an urgent hearing regarding the Constitutional validity of Aadhaar was filed saying that if it is not stopped then India will transform in a surveillance State but Supreme Court has denied any urgent hearing. The court said that the interim orders regarding the usage of Aadhaar are already in place and there is no urgent need to temper with them. Important issues on a case by case basis will be taken up in due course of time.

The apex court had earlier permitted voluntary use of Aadhaar cards in social welfare schemes such as LPG subsidy, PDS, MGNREGA, pension schemes and provident fund, besides ambitious flagship programmes like the ‘Pradhan Mantri Jan Dhan Yojna’ of the NDA government.

A Supreme Court Constitutional bench has previously ruled on Aadhaar that it’s usage is purely voluntary and no one will be denied any benefits of government schemes on basis of not having access to Aadhaar. However the passage of Aadhaar Bill Targeting of Subsidies has changed the ground equation. Any change by Supreme Court has to be done by a larger Constitutional bench of the Supreme Court. Also whether the Right to Privacy is a fundamental right or not is still left to be decided.

Sahara India ITSC issue –

Yesterday we provided a brief overview of Sahara diaries case. A new revelation made shows that the expenses which Sahara India has filed with Income Tax Settlement Commission are over 100 times higher than the amount of expenses that Sahara India filed with the Registrar of Companies. This overvaluation of expense has led Sahara India to avoid a tax amount of ₹ 1771 crore in the period of 2008-09 to 2014-15. It is said that Income Tax authorities have the discretion of deciding the expenses of the tax payer.

Presence of Benzene in Delhi’s Air –

The level of Benzene in Delhi’s Air is extraordinarily high specially due to current low temperature of Delhi. It is said that in coming days with temperatures falling further south, the concentration of Benzene carcinogen is set to increase further. The minimum prescribed standard of Benzene in air is said to be 5 µg/m3 but in some areas of Delhi it is being found in excess of 35 µg/m3. The average concentration of Benzene in Gurgaon was 0.22 µg/m3 and that in Rohtak was 0.18 µg/m3. It is being said that Benzene is more dangerous in smaller concentrations than higher concentrations.

Despite of the ill effects of Benzene, it is not included in the National Air Quality Index but the authorities are still aware of the ill effects of the benzene carcinogen. Benzene is known to cause myloid leukaemia which is a sort of blood cancer. Benzene is said to settle down more in areas which have cold temperatures.

What is National Air Quality Index ?? 

National air quality index (AQI) is a number used by Indian Government to communicate to the public how polluted the air currently is or how polluted it is forecast to become.

In India, There are six AQI categories, namely Good, Satisfactory, Moderately polluted, Poor, Very Poor, and Severe.  The proposed AQI will consider eight pollutants (PM10, PM2.5, NO2, SO2, CO, O3, NH3, and Pb) for which short-term (up to 24-hourly averaging period) National Ambient Air Quality Standards are prescribed.

Digital Economy in India – Achievements, Comparison and Limitations

In the aftermath of demonetization, Government of India started encouraging citizens to go for cashless transactions by announcing incentives to encourage digital payments. This will provide various potential benefits to citizens like reduction in transaction costs, increased access to financial services and for the government it will reduce leakage and improve public service delivery. Capturing these benefits requires systematic evidence driven approach. Continue reading

Dual faces of China when it comes to deter global terrorism

On 30th December, China blocked India’s proposal of banning Jaish-e-Mohammed (JeM) chief Masood Azar by using its Veto power in United Nations Security Council. Along with this, China’s decision on blocking India’s membership in Nuclear Suppliers Group, rumblings over South China Sea raises question on stability of bilateral relationship between India and China. Continue reading